Illinois General Assembly - Full Text of SB1383
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Full Text of SB1383  99th General Assembly




State of Illinois
2015 and 2016


Introduced 2/20/2015, by Sen. Scott M. Bennett


15 ILCS 505/16.6 new

    Amends the State Treasurer Act. Creates the "Achieving a Better Life Experience" or "ABLE" account program to encourage and assist individuals and families in saving private funds for the purpose of supporting persons with disabilities in endeavors to maintain health, independence, and quality of life, and to provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, federal and State medical and disability insurance, the beneficiary's employment, and other sources. Provides that the State Treasurer shall be primarily responsible for the plan but shall work with the Illinois State Board of Investment. Sets forth the requirements of the plan. Requires the State Treasurer to adopt rules to implement the program. Defines required terms.

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1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The State Treasurer Act is amended by adding
5Section 16.6 as follows:
6    (15 ILCS 505/16.6 new)
7    Sec. 16.6. ABLE account program.
8    (a) As used in this Section:
9    "ABLE account" or "account" means an account established
10for the purpose of financing certain qualified expenses of
11persons with disabilities as specifically provided for in this
13    "ABLE account plan" or "plan" means the savings account
14plan provided for in this Section.
15    "Account administrator" means the person selected by the
16State Treasurer to administer the daily operations of the ABLE
17account plan and provide marketing, recordkeeping, investment
18management, and other services for the plan.
19    "Beneficiary" means the ABLE account owner, or the person
20entitled to apply the savings accrued in an ABLE account, if
21not the account owner.
22    "Board" means the Illinois State Board of Investment.
23    "Disability certification" means a certification by the



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1beneficiary or the parent or guardian of the beneficiary that
2states the diagnosis of the individual with a disability and is
3signed by a physician meeting the criteria of Section
41861(r)(1) of the federal Social Security Act.
5    "Individual with a disability" means an individual who,
6before the date on which the individual attains age 26: (1) has
7a medically determinable physical or mental impairment, which
8results in marked and severe functional limitations and which
9can be expected to result in death or which has lasted or can
10be expected to last for a continuous period of not less than 12
11months; or (2) is blind.
12    "Participation agreement" means an agreement to
13participate in the ABLE account plan between an account owner
14and the State, through its agencies and the State Treasurer.
15    "Qualified disability expense" means an expense made for
16the benefit of an individual with a disability who is the
17beneficiary, including the following expenses: education,
18housing, transportation, employment training and support,
19assistive technology and personal support services, health,
20prevention and wellness, financial management and
21administrative services, legal fees, expenses for oversight
22and monitoring, funeral and burial expenses, and other expenses
23consistent with the purposes of this Section that are approved
24by the State Treasurer and provided for in duly adopted
25administrative rules.
26    "Qualified withdrawal" or "qualified distribution" means a



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1withdrawal from an ABLE account to pay the qualified disability
2expenses of the beneficiary of the account. A qualified
3withdrawal may be made by an agent of the beneficiary who has
4the power of attorney or by the beneficiary's legal guardian.
5    "Total account balance" means the amount in an account on a
6particular date or the fair market value of an account on a
7particular date.
8    (b) The "Achieving a Better Life Experience" or "ABLE"
9account program is hereby created and shall be administered by
10the State Treasurer. The purpose of the ABLE plan is to
11encourage and assist individuals and families in saving private
12funds for the purpose of supporting individuals with
13disabilities to maintain health, independence, and quality of
14life, and to provide secure funding for disability-related
15expenses on behalf of designated beneficiaries with
16disabilities that will supplement, but not supplant, benefits
17provided through private insurance, federal and State medical
18and disability insurance, the beneficiary's employment, and
19other sources. Under the plan, a person may make contributions
20to an ABLE account to meet the qualified disability expenses of
21the designated beneficiary of the account. The plan must be
22operated as an accounts-type plan that permits persons to save
23for qualified disability expenses incurred by or on behalf of
24an individual with a disability. A separate account must be
25maintained for each beneficiary for whom contributions are
26made, and no more than one account shall be established per



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2    In designing and establishing the plan's requirements and
3in negotiating or entering into contracts with third parties
4under this Section, the State Treasurer shall consult with the
5Board. The State Treasurer shall establish an annual fee to be
6imposed on participants to recover the costs of administration,
7recordkeeping, and investment management. The State Treasurer
8must use his or her best efforts to keep these fees as low as
9possible, consistent with efficient administration, so that
10the returns on savings invested in the plan will be as high as
12    The State Treasurer shall administer the plan, including
13accepting and processing applications, maintaining account
14records, making payments, and undertaking any other necessary
15tasks to administer the plan, including the appointment of an
16account administrator. Notwithstanding other requirements of
17this Section, the State Treasurer shall adopt rules for
18purposes of implementing and administering the plan. The State
19Treasurer may contract with one or more third parties to carry
20out some or all of these administrative duties, including
21providing investment management services, incentives, and
22marketing the plan.
23    Prior to the establishment of an ABLE account, an account
24owner must provide documentation to the State Treasurer that
25the account beneficiary has been certified as an individual
26with a disability. The certification must be signed by a



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1physician and meet the criteria established by Section
21861(r)(1) of the federal Social Security Act and any federal
3regulations issued pursuant to Section 529A of the Internal
4Revenue Code.
5    Contributions to an ABLE account are subject to the
6requirements of Section 529A(b) of the Internal Revenue Code.
7The maximum balance of an ABLE account may not exceed the limit
8established by the federal ABLE Act of 2014.
9    The State Treasurer shall promote awareness of the
10availability and advantages of the ABLE account plan as a way
11to assist individuals and families in saving private funds for
12the purpose of supporting individuals with disabilities. The
13cost of these promotional efforts shall not be funded with fees
14imposed on participants. The State Treasurer shall not promote
15ABLE accounts until the Internal Revenue Service has issued its
16final regulations concerning ABLE accounts.
17    Account owner data, account data, and data on beneficiaries
18of accounts are confidential and exempt from disclosure under
19the Freedom of Information Act.
20    (c) The State Treasurer may invest the moneys in ABLE
21accounts in the same manner and in the same types of
22investments provided for the investment of moneys by the Board.
23To enhance the safety and liquidity of ABLE accounts, to ensure
24the diversification of the investment portfolio of accounts,
25and in an effort to keep investment dollars in the State, the
26State Treasurer may make a percentage of each account available



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1for investment in participating financial institutions doing
2business in the State, except that the accounts may be invested
3without limit in investment options from open-ended investment
4companies registered under Section 4.32 of the federal
5Investment Company Act of 1940. The State Treasurer may
6contract with one or more third parties for investment
7management, recordkeeping, or other services in connection
8with investing the accounts.
9    The State Treasurer may impose annual fees on participants
10in the plan to recover the cost of investment management and
11related tasks for the plan. The State Treasurer shall use his
12or her best efforts to keep these fees as low as possible,
13consistent with high quality investment management, so that the
14returns on savings invested in the plan will be as high as
16    (d) The State Treasurer shall ensure that the plan meets
17the requirements for an ABLE account under Section 529A of the
18Internal Revenue Code. The State Treasurer may request a
19private letter ruling or rulings from the Internal Revenue
20Service or Secretary of Health and Human Services and must take
21any necessary steps to ensure that the plan qualifies under
22relevant provisions of federal law.
23    A person may make contributions to an ABLE account on
24behalf of a beneficiary. Contributions to an account made by
25persons other than the account owner become the property of the
26account owner. A person does not acquire an interest in an ABLE



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1account by making contributions to an account. Contributions to
2an ABLE account are subject to the requirements of Section
3529A(b) of the Internal Revenue Code. The maximum balance of an
4ABLE account may not exceed the limit imposed by the Internal
5Revenue Service. A contribution to any account for a
6beneficiary must be rejected if the contribution would cause
7the total account balance of the account to exceed the limit
8imposed by the Internal Revenue Service.
9    An account owner shall have the authority to manage the
10account consistent with the requirements of Section 529A of the
11Internal Revenue Code and federal regulations issued pursuant
12thereto. Any change in account owners or beneficiaries must be
13done in a manner consistent with Section 529A of the Internal
14Revenue Code.
15    Notice of any proposed amendments to the rules and
16regulations shall be provided to all participants prior to
17adoption. Amendments to rules and regulations shall apply only
18to contributions made after the adoption of the amendment.
19Amendments to this Section automatically amend the
20participation agreement. Any amendments to the operating
21procedures and policies of the plan shall automatically amend
22the participation agreement after adoption by the State
24    All assets of the plan, including contributions to
25accounts, are held in trust for the exclusive benefit of
26account owners and beneficiaries. Assets must be held in a



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1separate account in the State treasury to be known as the
2Illinois ABLE plan account or in accounts with a third-party
3provider selected pursuant to this Section. Plan assets are not
4subject to claims by creditors of the State, are not part of
5the general fund, and are not subject to appropriation by the
6State. Payments from the Illinois ABLE account plan shall be
7made under this Section.
8    The assets of ABLE accounts and their income and operation
9shall be exempt from all taxation by the State of Illinois and
10any of its subdivisions. The accrued earnings on investments in
11an ABLE account once disbursed on behalf of a designated
12beneficiary shall be similarly exempt from all taxation by the
13State of Illinois and its subdivisions, so long as they are
14used for qualified expenses.
15    (e) Qualified distributions may be made: (1) directly to
16participating providers of goods and services that are
17qualified disability expenses, if purchased for a beneficiary;
18(2) in the form of a check payable to both the beneficiary and
19provider of goods or services that are qualified disability
20expenses; or (3) directly to the account owner or beneficiary,
21if the account owner or beneficiary has already paid qualified
22disability expenses. Qualified distributions must be withdrawn
23proportionally from contributions and earnings in an account
24owner's account on the date of distribution as provided in
25Section 529A of the Internal Revenue Code. Upon the death of a
26beneficiary, the amount remaining in the beneficiary's account



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1must be distributed pursuant to Section 529A(f) of the Internal
2Revenue Code.
3    (f) The State Treasurer shall adopt rules he or she
4considers necessary for the efficient administration of ABLE
5accounts. The rules shall provide whatever additional
6parameters and restrictions are necessary to ensure that ABLE
7accounts meet all of the requirements for a qualified state
8ABLE program under Section 529A of the Internal Revenue Code.