Sen. Scott M. Bennett

Filed: 4/17/2015





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2    AMENDMENT NO. ______. Amend Senate Bill 1383 by replacing
3everything after the enacting clause with the following:
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
11eligible individuals as specifically provided for in this
12Section and authorized by Section 529A of the Internal Revenue
14    "ABLE account plan" or "plan" means the savings account
15plan provided for in this Section.
16    "Account administrator" means the person selected by the



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1State Treasurer to administer the daily operations of the ABLE
2account plan and provide marketing, recordkeeping, investment
3management, and other services for the plan.
4    "Aggregate account balance" means the amount in an account
5on a particular date or the fair market value of an account on
6a 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
10program which has entered into a contract with Illinois to
11provide residents of the contracting state access to a
12qualified ABLE program.
13    "Designated representative" means a person who is
14authorized to act on behalf of an account owner. An account
15owner is authorized to act on his or her own behalf unless the
16account owner is a minor or the account owner has been
17adjudicated to have a disability so that a guardian has been
18appointed. A designated representative acts in a fiduciary
19capacity to the account owner. The State Treasurer shall
20recognize a person as a designated representative without
21appointment 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
10term under Section 529A of the Internal Revenue Code.
11    "Eligible individual" has the meaning given to that term
12under Section 529A of the Internal Revenue Code.
13    "Participation agreement" means an agreement to
14participate in the ABLE account plan between an account owner
15and the State, through its agencies and the State Treasurer.
16    "Qualified disability expenses" has the meaning given to
17that term under Section 529A of the Internal Revenue Code.
18    "Qualified withdrawal" or "qualified distribution" means a
19withdrawal from an ABLE account to pay the qualified disability
20expenses of the beneficiary of the account.
21    (b) The "Achieving a Better Life Experience" or "ABLE"
22account program is hereby created and shall be administered by
23the State Treasurer. The purpose of the ABLE plan is to
24encourage and assist individuals and families in saving private
25funds for the purpose of supporting individuals with
26disabilities to maintain health, independence, and quality of



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1life, and to provide secure funding for disability-related
2expenses on behalf of designated beneficiaries with
3disabilities that will supplement, but not supplant, benefits
4provided through private insurance, federal and State medical
5and disability insurance, the beneficiary's employment, and
6other sources. Under the plan, a person may make contributions
7to an ABLE account to meet the qualified disability expenses of
8the designated beneficiary of the account. The plan must be
9operated as an accounts-type plan that permits persons to save
10for qualified disability expenses incurred by or on behalf of
11an eligible individual.
12    The State Treasurer shall promote awareness of the
13availability and advantages of the ABLE account plan as a way
14to assist individuals and families in saving private funds for
15the purpose of supporting individuals with disabilities. The
16cost of these promotional efforts shall not be funded with fees
17imposed on participants by the State Treasurer.
18    The State Treasurer shall not accept contributions for ABLE
19accounts under this Section until the Internal Revenue Service
20has issued its final regulations concerning ABLE accounts.
21    A separate account must be maintained for each beneficiary
22for whom contributions are made, and no more than one account
23shall be established per beneficiary. If an ABLE account is
24established for a designated beneficiary, no account
25subsequently established for such beneficiary shall be treated
26as an ABLE account. The preceding sentence shall not apply in



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1the case of an ABLE account established for purposes of a
2rollover as permitted under Section 529A of the Internal
3Revenue Code.
4    An ABLE account may be established under this Section only
5for a designated beneficiary who is a resident of Illinois or a
6resident of a contracting state.
7    Prior to the establishment of an ABLE account, an account
8owner must provide documentation to the State Treasurer that
9the account beneficiary is an eligible individual.
10    Annual contributions to an ABLE account on behalf of a
11beneficiary are subject to the requirements of subsection (b)
12of Section 529A of the Internal Revenue Code. No person may
13make a contribution to an ABLE account if such a contribution
14would result in the aggregate account balance of an ABLE
15account exceeding the account balance limit authorized under
16Section 529A of the Internal Revenue Code. The Treasurer shall
17review the contribution limit at least annually.
18    The State Treasurer shall administer the plan, including
19accepting and processing applications, maintaining account
20records, making payments, and undertaking any other necessary
21tasks to administer the plan, including the appointment of an
22account administrator. The State Treasurer may contract with
23one or more third parties to carry out some or all of these
24administrative duties, including, but not limited to,
25providing investment management services, incentives, and
26marketing the plan.



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1    In designing and establishing the plan's requirements and
2in negotiating or entering into contracts with third parties
3under this Section, the State Treasurer shall consult with the
4Board. The State Treasurer shall establish fees to be imposed
5on participants to recover the costs of administration,
6recordkeeping, and investment management. The State Treasurer
7must use his or her best efforts to keep these fees as low as
8possible, consistent with efficient administration.
9    The Illinois ABLE Accounts Administrative Fund is created
10as a nonappropriated trust fund in the State treasury. The
11State Treasurer shall use moneys in the Administrative Fund to
12pay for administrative expenses he or she incurs in the
13performance of his or her duties under this Section. The State
14Treasurer shall use moneys in the Administrative Fund to cover
15administrative expenses incurred under this Section. The
16Administrative Fund may receive any grants or other moneys
17designated for administrative purposes from the State, or any
18unit of federal or local government, or any other person, firm,
19partnership, or corporation. Any interest earnings that are
20attributable to moneys in the Administrative Fund must be
21deposited into the Administrative Fund. Any fees established by
22the State Treasurer to recover the costs of administration,
23recordkeeping, and investment management shall be deposited
24into the Administrative Fund.
25    Subject to appropriation, the State Treasurer may pay
26administrative costs associated with the creation and



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1management of the plan until sufficient assets are available in
2the Administrative Fund for that purpose.
3    Applications for accounts, account owner data, account
4data, and data on beneficiaries of accounts are confidential
5and exempt from disclosure under the Freedom of Information
7    (c) The State Treasurer may invest the moneys in ABLE
8accounts in the same manner and in the same types of
9investments provided for the investment of moneys by the Board.
10To enhance the safety and liquidity of ABLE accounts, to ensure
11the diversification of the investment portfolio of accounts,
12and in an effort to keep investment dollars in the State, the
13State Treasurer may make a percentage of each account available
14for investment in participating financial institutions doing
15business in the State, except that the accounts may be invested
16without limit in investment options from open-ended investment
17companies registered under Section 4.32 of the federal
18Investment Company Act of 1940. The State Treasurer may
19contract with one or more third parties for investment
20management, recordkeeping, or other services in connection
21with investing the accounts.
22    The account administrator shall annually prepare and adopt
23a written statement of investment policy that includes a risk
24management and oversight program. The risk management and
25oversight program shall be designed to ensure that an effective
26risk management system is in place to monitor the risk levels



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1of the ABLE plan, to ensure that the risks taken are prudent
2and properly managed, to provide an integrated process for
3overall risk management, and to assess investment returns as
4well as risk to determine if the risks taken are adequately
5compensated compared to applicable performance benchmarks and
7    The State Treasurer may enter into agreements with other
8states to either allow Illinois residents to participate in a
9plan operated by another state or to allow residents of other
10states to participate in the Illinois ABLE plan.
11    (d) The State Treasurer shall ensure that the plan meets
12the requirements for an ABLE account under Section 529A of the
13Internal Revenue Code. The State Treasurer may request a
14private letter ruling or rulings from the Internal Revenue
15Service and must take any necessary steps to ensure that the
16plan qualifies under relevant provisions of federal law.
17Notwithstanding the foregoing, any determination by the
18Secretary of the Treasury of the United States that an account
19was utilized to make non-qualified distributions shall not
20result in an ABLE account being disregarded as a resource.
21    A person may make contributions to an ABLE account on
22behalf of a beneficiary. Contributions to an account made by
23persons other than the account owner become the property of the
24account owner. Contributions to an account shall be considered
25as a transfer of assets for fair market value. A person does
26not acquire an interest in an ABLE account by making



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1contributions to an account. A contribution to any account for
2a beneficiary must be rejected if the contribution would cause
3either the aggregate or annual account balance of the account
4to exceed the limits imposed by Section 529A of the Internal
5Revenue Code.
6    Any change in account owner must be done in a manner
7consistent with Section 529A of the Internal Revenue Code.
8    Notice of any proposed amendments to the rules and
9regulations shall be provided to all owners or their designated
10representatives prior to adoption. Amendments to rules and
11regulations shall apply only to contributions made after the
12adoption of the amendment. Amendments to this Section
13automatically amend the participation agreement. Any
14amendments to the operating procedures and policies of the plan
15shall automatically amend the participation agreement after
16adoption by the State Treasurer.
17    All assets of the plan, including any contributions to
18accounts, are held in trust for the exclusive benefit of the
19account owner and shall be considered spendthrift accounts
20exempt from all of the owner's creditors. The plan shall
21provide separate accounting for each designated beneficiary
22sufficient to satisfy the requirements of paragraph (3) of
23subsection (b) of Section 529A of the Internal Revenue Code.
24Assets must be held in either a state trust fund outside the
25State treasury, to be known as the Illinois ABLE plan trust
26fund, or in accounts with a third-party provider selected



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1pursuant to this Section. Amounts contributed to ABLE accounts
2shall not be commingled with State funds and the State shall
3have no claim to or against, or interest in, such funds.
4    Plan assets are not subject to claims by creditors of the
5State and are not subject to appropriation by the State.
6Payments from the Illinois ABLE account plan shall be made
7under this Section.
8    The assets of ABLE accounts and their income may not be
9used as security for a loan.
10    The assets of ABLE accounts and their income and operation
11shall be exempt from all taxation by the State of Illinois and
12any of its subdivisions to the extent exempt from federal
13income taxation. The accrued earnings on investments in an ABLE
14account once disbursed on behalf of a designated beneficiary
15shall be similarly exempt from all taxation by the State of
16Illinois and its subdivisions to the extent exempt from federal
17income taxation, so long as they are used for qualified
19    Notwithstanding any other provision of law that requires
20consideration of one or more financial circumstances of an
21individual, for the purpose of determining eligibility to
22receive, or the amount of, any assistance or benefit authorized
23by such provision to be provided to or for the benefit of such
24individual, any amount, including earnings thereon, in the ABLE
25account of such individual, any contributions to the ABLE
26account of the individual, and any distribution for qualified



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1disability expenses shall be disregarded for such purpose with
2respect to any period during which such individual maintains,
3makes contributions to, or receives distributions from such
4ABLE account.
5    (e) The account owner or the designated representative of
6the account owner may request that a qualified distribution be
7made for the benefit of the account owner. Qualified
8distributions shall be made for qualified disability expenses
9allowed pursuant to Section 529A of the Internal Revenue Code.
10Qualified distributions must be withdrawn proportionally from
11contributions and earnings in an account owner's account on the
12date of distribution as provided in Section 529A of the
13Internal Revenue Code. Upon the death of a beneficiary, the
14amount remaining in the beneficiary's account must be
15distributed pursuant to subsection (f) of Section 529A of the
16Internal Revenue Code.
17    (f) The State Treasurer may adopt rules to carry out the
18purposes of this Section. The State Treasurer shall further
19have the power to issue peremptory rules necessary to ensure
20that ABLE accounts meet all of the requirements for a qualified
21state ABLE program under Section 529A of the Internal Revenue
22Code and any regulations issued by the Internal Revenue
24    Section 10. The State Finance Act is amended by adding
25Section 5.866 as follows:



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1    (30 ILCS 105/5.866 new)
2    Sec. 5.866. The Illinois ABLE Accounts Administrative