Full Text of SB1383 99th General Assembly
SB1383sam001 99TH GENERAL ASSEMBLY | Sen. Scott M. Bennett Filed: 4/17/2015
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| 1 | | AMENDMENT TO SENATE BILL 1383
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1383 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The State Treasurer Act is amended by adding | 5 | | Section 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 | 10 | | for the purpose of financing certain qualified expenses of | 11 | | eligible individuals as specifically provided for in this | 12 | | Section and authorized by Section 529A of the Internal Revenue | 13 | | Code. | 14 | | "ABLE account plan" or "plan" means the savings account | 15 | | plan provided for in this Section. | 16 | | "Account administrator" means the person selected by the |
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| 1 | | State Treasurer to administer the daily operations of the ABLE | 2 | | account plan and provide marketing, recordkeeping, investment | 3 | | management, and other services for the plan. | 4 | | "Aggregate account balance" means the amount in an account | 5 | | on a particular date or the fair market value of an account on | 6 | | a particular date. | 7 | | "Beneficiary" means the ABLE account owner. | 8 | | "Board" means the Illinois State Board of Investment. | 9 | | "Contracting state" means a state without a qualified ABLE | 10 | | program which has entered into a contract with Illinois to | 11 | | provide residents of the contracting state access to a | 12 | | qualified ABLE program. | 13 | | "Designated representative" means a person who is | 14 | | authorized to act on behalf of an account owner. An account | 15 | | owner is authorized to act on his or her own behalf unless the | 16 | | account owner is a minor or the account owner has been | 17 | | adjudicated to have a disability so that a guardian has been | 18 | | appointed. A designated representative acts in a fiduciary | 19 | | capacity to the account owner. The State Treasurer shall | 20 | | recognize a person as a designated representative without | 21 | | appointment by a court in the following order of priority: | 22 | | (1) The account owner's plenary guardian of the estate, | 23 | | or the account owner's limited guardian of financial or | 24 | | contractual matters. Any guardian acting in this capacity | 25 | | shall not be required to seek court approval for any ABLE | 26 | | qualified distributions. |
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| 1 | | (2) The agent named by the account owner in a property | 2 | | power of attorney recognized as a statutory short form | 3 | | power of attorney for property. | 4 | | (3) Such individual or entity that the account owner so | 5 | | designates in writing, in a manner to be established by the | 6 | | State Treasurer. | 7 | | (4) Such other individual or entity designated by the | 8 | | State Treasurer pursuant to its rules. | 9 | | "Disability certification" has the meaning given to that | 10 | | term under Section 529A of the Internal Revenue Code. | 11 | | "Eligible individual" has the meaning given to that term | 12 | | under Section 529A of the Internal Revenue Code. | 13 | | "Participation agreement" means an agreement to | 14 | | participate in the ABLE account plan between an account owner | 15 | | and the State, through its agencies and the State Treasurer. | 16 | | "Qualified disability expenses" has the meaning given to | 17 | | that term under Section 529A of the Internal Revenue Code. | 18 | | "Qualified withdrawal" or "qualified distribution" means a | 19 | | withdrawal from an ABLE account to pay the qualified disability | 20 | | expenses of the beneficiary of the account. | 21 | | (b) The "Achieving a Better Life Experience" or "ABLE" | 22 | | account program is hereby created and shall be administered by | 23 | | the State Treasurer. The purpose of the ABLE plan is to | 24 | | encourage and assist individuals and families in saving private | 25 | | funds for the purpose of supporting individuals with | 26 | | disabilities to maintain health, independence, and quality of |
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| 1 | | life, and to provide secure funding for disability-related | 2 | | expenses on behalf of designated beneficiaries with | 3 | | disabilities that will supplement, but not supplant, benefits | 4 | | provided through private insurance, federal and State medical | 5 | | and disability insurance, the beneficiary's employment, and | 6 | | other sources. Under the plan, a person may make contributions | 7 | | to an ABLE account to meet the qualified disability expenses of | 8 | | the designated beneficiary of the account. The plan must be | 9 | | operated as an accounts-type plan that permits persons to save | 10 | | for qualified disability expenses incurred by or on behalf of | 11 | | an eligible individual. | 12 | | The State Treasurer shall promote awareness of the | 13 | | availability and advantages of the ABLE account plan as a way | 14 | | to assist individuals and families in saving private funds for | 15 | | the purpose of supporting individuals with disabilities. The | 16 | | cost of these promotional efforts shall not be funded with fees | 17 | | imposed on participants by the State Treasurer. | 18 | | The State Treasurer shall not accept contributions for ABLE | 19 | | accounts under this Section until the Internal Revenue Service | 20 | | has issued its final regulations concerning ABLE accounts. | 21 | | A separate account must be maintained for each beneficiary | 22 | | for whom contributions are made, and no more than one account | 23 | | shall be established per beneficiary. If an ABLE account is | 24 | | established for a designated beneficiary, no account | 25 | | subsequently established for such beneficiary shall be treated | 26 | | as an ABLE account. The preceding sentence shall not apply in |
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| 1 | | the case of an ABLE account established for purposes of a | 2 | | rollover as permitted under Section 529A of the Internal | 3 | | Revenue Code. | 4 | | An ABLE account may be established under this Section only | 5 | | for a designated beneficiary who is a resident of Illinois or a | 6 | | resident of a contracting state. | 7 | | Prior to the establishment of an ABLE account, an account | 8 | | owner must provide documentation to the State Treasurer that | 9 | | the account beneficiary is an eligible individual. | 10 | | Annual contributions to an ABLE account on behalf of a | 11 | | beneficiary are subject to the requirements of subsection (b) | 12 | | of Section 529A of the Internal Revenue Code. No person may | 13 | | make a contribution to an ABLE account if such a contribution | 14 | | would result in the aggregate account balance of an ABLE | 15 | | account exceeding the account balance limit authorized under | 16 | | Section 529A of the Internal Revenue Code. The Treasurer shall | 17 | | review the contribution limit at least annually. | 18 | | The State Treasurer shall administer the plan, including | 19 | | accepting and processing applications, maintaining account | 20 | | records, making payments, and undertaking any other necessary | 21 | | tasks to administer the plan, including the appointment of an | 22 | | account administrator. The State Treasurer may contract with | 23 | | one or more third parties to carry out some or all of these | 24 | | administrative duties, including, but not limited to, | 25 | | providing investment management services, incentives, and | 26 | | marketing the plan. |
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| 1 | | In designing and establishing the plan's requirements and | 2 | | in negotiating or entering into contracts with third parties | 3 | | under this Section, the State Treasurer shall consult with the | 4 | | Board. The State Treasurer shall establish fees to be imposed | 5 | | on participants to recover the costs of administration, | 6 | | recordkeeping, and investment management. The State Treasurer | 7 | | must use his or her best efforts to keep these fees as low as | 8 | | possible, consistent with efficient administration. | 9 | | The Illinois ABLE Accounts Administrative Fund is created | 10 | | as a nonappropriated trust fund in the State treasury. The | 11 | | State Treasurer shall use moneys in the Administrative Fund to | 12 | | pay for administrative expenses he or she incurs in the | 13 | | performance of his or her duties under this Section. The State | 14 | | Treasurer shall use moneys in the Administrative Fund to cover | 15 | | administrative expenses incurred under this Section. The | 16 | | Administrative Fund may receive any grants or other moneys | 17 | | designated for administrative purposes from the State, or any | 18 | | unit of federal or local government, or any other person, firm, | 19 | | partnership, or corporation. Any interest earnings that are | 20 | | attributable to moneys in the Administrative Fund must be | 21 | | deposited into the Administrative Fund. Any fees established by | 22 | | the State Treasurer to recover the costs of administration, | 23 | | recordkeeping, and investment management shall be deposited | 24 | | into the Administrative Fund. | 25 | | Subject to appropriation, the State Treasurer may pay | 26 | | administrative costs associated with the creation and |
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| 1 | | management of the plan until sufficient assets are available in | 2 | | the Administrative Fund for that purpose. | 3 | | Applications for accounts, account owner data, account | 4 | | data, and data on beneficiaries of accounts are confidential | 5 | | and exempt from disclosure under the Freedom of Information | 6 | | Act. | 7 | | (c) The State Treasurer may invest the moneys in ABLE | 8 | | accounts in the same manner and in the same types of | 9 | | investments provided for the investment of moneys by the Board. | 10 | | To enhance the safety and liquidity of ABLE accounts, to ensure | 11 | | the diversification of the investment portfolio of accounts, | 12 | | and in an effort to keep investment dollars in the State, the | 13 | | State Treasurer may make a percentage of each account available | 14 | | for investment in participating financial institutions doing | 15 | | business in the State, except that the accounts may be invested | 16 | | without limit in investment options from open-ended investment | 17 | | companies registered under Section 4.32 of the federal | 18 | | Investment Company Act of 1940. The State Treasurer may | 19 | | contract with one or more third parties for investment | 20 | | management, recordkeeping, or other services in connection | 21 | | with investing the accounts. | 22 | | The account administrator shall annually prepare and adopt | 23 | | a written statement of investment policy that includes a risk | 24 | | management and oversight program. The risk management and | 25 | | oversight program shall be designed to ensure that an effective | 26 | | risk management system is in place to monitor the risk levels |
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| 1 | | of the ABLE plan, to ensure that the risks taken are prudent | 2 | | and properly managed, to provide an integrated process for | 3 | | overall risk management, and to assess investment returns as | 4 | | well as risk to determine if the risks taken are adequately | 5 | | compensated compared to applicable performance benchmarks and | 6 | | standards. | 7 | | The State Treasurer may enter into agreements with other | 8 | | states to either allow Illinois residents to participate in a | 9 | | plan operated by another state or to allow residents of other | 10 | | states to participate in the Illinois ABLE plan. | 11 | | (d) The State Treasurer shall ensure that the plan meets | 12 | | the requirements for an ABLE account under Section 529A of the | 13 | | Internal Revenue Code. The State Treasurer may request a | 14 | | private letter ruling or rulings from the Internal Revenue | 15 | | Service and must take any necessary steps to ensure that the | 16 | | plan qualifies under relevant provisions of federal law. | 17 | | Notwithstanding the foregoing, any determination by the | 18 | | Secretary of the Treasury of the United States that an account | 19 | | was utilized to make non-qualified distributions shall not | 20 | | result in an ABLE account being disregarded as a resource. | 21 | | A person may make contributions to an ABLE account on | 22 | | behalf of a beneficiary. Contributions to an account made by | 23 | | persons other than the account owner become the property of the | 24 | | account owner. Contributions to an account shall be considered | 25 | | as a transfer of assets for fair market value. A person does | 26 | | not acquire an interest in an ABLE account by making |
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| 1 | | contributions to an account. A contribution to any account for | 2 | | a beneficiary must be rejected if the contribution would cause | 3 | | either the aggregate or annual account balance of the account | 4 | | to exceed the limits imposed by Section 529A of the Internal | 5 | | Revenue Code. | 6 | | Any change in account owner must be done in a manner | 7 | | consistent with Section 529A of the Internal Revenue Code. | 8 | | Notice of any proposed amendments to the rules and | 9 | | regulations shall be provided to all owners or their designated | 10 | | representatives prior to adoption. Amendments to rules and | 11 | | regulations shall apply only to contributions made after the | 12 | | adoption of the amendment. Amendments to this Section | 13 | | automatically amend the participation agreement. Any | 14 | | amendments to the operating procedures and policies of the plan | 15 | | shall automatically amend the participation agreement after | 16 | | adoption by the State Treasurer. | 17 | | All assets of the plan, including any contributions to | 18 | | accounts, are held in trust for the exclusive benefit of the | 19 | | account owner and shall be considered spendthrift accounts | 20 | | exempt from all of the owner's creditors. The plan shall | 21 | | provide separate accounting for each designated beneficiary | 22 | | sufficient to satisfy the requirements of paragraph (3) of | 23 | | subsection (b) of Section 529A of the Internal Revenue Code. | 24 | | Assets must be held in either a state trust fund outside the | 25 | | State treasury, to be known as the Illinois ABLE plan trust | 26 | | fund, or in accounts with a third-party provider selected |
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| 1 | | pursuant to this Section. Amounts contributed to ABLE accounts | 2 | | shall not be commingled with State funds and the State shall | 3 | | have no claim to or against, or interest in, such funds. | 4 | | Plan assets are not subject to claims by creditors of the | 5 | | State and are not subject to appropriation by the State. | 6 | | Payments from the Illinois ABLE account plan shall be made | 7 | | under this Section. | 8 | | The assets of ABLE accounts and their income may not be | 9 | | used as security for a loan. | 10 | | The assets of ABLE accounts and their income and operation | 11 | | shall be exempt from all taxation by the State of Illinois and | 12 | | any of its subdivisions to the extent exempt from federal | 13 | | income taxation. The accrued earnings on investments in an ABLE | 14 | | account once disbursed on behalf of a designated beneficiary | 15 | | shall be similarly exempt from all taxation by the State of | 16 | | Illinois and its subdivisions to the extent exempt from federal | 17 | | income taxation, so long as they are used for qualified | 18 | | expenses. | 19 | | Notwithstanding any other provision of law that requires | 20 | | consideration of one or more financial circumstances of an | 21 | | individual, for the purpose of determining eligibility to | 22 | | receive, or the amount of, any assistance or benefit authorized | 23 | | by such provision to be provided to or for the benefit of such | 24 | | individual, any amount, including earnings thereon, in the ABLE | 25 | | account of such individual, any contributions to the ABLE | 26 | | account of the individual, and any distribution for qualified |
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| 1 | | disability expenses shall be disregarded for such purpose with | 2 | | respect to any period during which such individual maintains, | 3 | | makes contributions to, or receives distributions from such | 4 | | ABLE account. | 5 | | (e) The account owner or the designated representative of | 6 | | the account owner may request that a qualified distribution be | 7 | | made for the benefit of the account owner. Qualified | 8 | | distributions shall be made for qualified disability expenses | 9 | | allowed pursuant to Section 529A of the Internal Revenue Code. | 10 | | Qualified distributions must be withdrawn proportionally from | 11 | | contributions and earnings in an account owner's account on the | 12 | | date of distribution as provided in Section 529A of the | 13 | | Internal Revenue Code. Upon the death of a beneficiary, the | 14 | | amount remaining in the beneficiary's account must be | 15 | | distributed pursuant to subsection (f) of Section 529A of the | 16 | | Internal Revenue Code. | 17 | | (f) The State Treasurer may adopt rules to carry out the | 18 | | purposes of this Section. The State Treasurer shall further | 19 | | have the power to issue peremptory rules necessary to ensure | 20 | | that ABLE accounts meet all of the requirements for a qualified | 21 | | state ABLE program under Section 529A of the Internal Revenue | 22 | | Code and any regulations issued by the Internal Revenue | 23 | | Service. | 24 | | Section 10. The State Finance Act is amended by adding | 25 | | Section 5.866 as follows: |
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| 1 | | (30 ILCS 105/5.866 new) | 2 | | Sec. 5.866. The Illinois ABLE Accounts Administrative | 3 | | Fund. ".
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