State of Illinois
2021 and 2022


Introduced 1/21/2022, by Sen. Laura Ellman


15 ILCS 505/16.6

    Amends the State Treasurer Act. In provisions concerning the ABLE account program, provides that a "designated representative" means a person or entity (currently, person only) who is authorized to act on behalf of a "designated beneficiary". Provides that a designated representative must provide certification, subject to penalties of perjury, of the basis for the person's authority to act as a designated representative and that there is no other person or entity with higher priority to establish the ABLE account. Removes provisions allowing the State Treasurer to recognize specified persons or entities as a designated representative without appointment by a court. Defines "Internal Revenue Code". Effective immediately.

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SB3786LRB102 23327 RJF 32493 b

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 changing
5Section 16.6 as follows:
6    (15 ILCS 505/16.6)
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 or entity
17selected by the State Treasurer to administer the daily
18operations of the ABLE account plan and provide marketing,
19recordkeeping, investment management, and other services for
20the plan.
21    "Aggregate account balance" means the amount in an account
22on a particular date or the fair market value of an account on
23a particular date.



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1    "Beneficiary" or "designated beneficiary" means the ABLE
2account owner.
3    "Contracting state" means a state without a qualified ABLE
4program which has entered into a contract with Illinois to
5provide residents of the contracting state access to a
6qualified ABLE program.
7    "Designated representative" means a person or entity who
8is authorized to act on behalf of a "designated beneficiary".
9A designated beneficiary is authorized to act on his or her own
10behalf unless the designated beneficiary is a minor or the
11designated beneficiary has been adjudicated to have a
12disability so that a guardian has been appointed. A designated
13representative acts in a fiduciary capacity to the designated
14beneficiary. A designated representative must provide
15certification, subject to penalties of perjury, of the basis
16for the person's authority to act as a designated
17representative and that there is no other person or entity
18with higher priority to establish the ABLE account under
19Section 529A of the Internal Revenue Code and federal
20regulations. The State Treasurer shall recognize the following
21as a designated representative without appointment by a court:
22        (1) The designated beneficiary's guardian of the
23    person, plenary guardian of the estate, limited guardian
24    of financial or contractual matters, or any other
25    State-appointed guardian. A guardian acting in this
26    capacity shall not be required to seek court approval for



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1    any ABLE account activity.
2        (2) The agent named by the designated beneficiary in a
3    property power of attorney recognized as a statutory short
4    form power of attorney for property.
5        (3) Such individual or entity that the designated
6    beneficiary so designates in writing, in a manner to be
7    established by the State Treasurer.
8        (4) Such other individual or entity designated by the
9    State Treasurer pursuant to its rules.
10    "Disability certification" has the meaning given to that
11term under Section 529A of the Internal Revenue Code.
12    "Eligible individual" has the meaning given to that term
13under Section 529A of the Internal Revenue Code.
14    "Internal Revenue Code" means the federal Internal Revenue
16    "Participation agreement" means an agreement to
17participate in the ABLE account plan between a designated
18beneficiary and the State, through its agencies and the State
20    "Qualified disability expenses" has the meaning given to
21that term under Section 529A of the Internal Revenue Code.
22    "Qualified withdrawal" or "qualified distribution" means a
23withdrawal from an ABLE account to pay the qualified
24disability expenses of the beneficiary of the account.
25    (b) Establishment of the ABLE Program. The "Achieving a
26Better Life Experience" or "ABLE" account program is hereby



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1created and shall be administered by the State Treasurer. The
2purpose of the ABLE program is to encourage and assist
3individuals and families in saving private funds for the
4purpose of supporting individuals with disabilities to
5maintain health, independence, and quality of life, and to
6provide secure funding for disability-related expenses on
7behalf of designated beneficiaries with disabilities that will
8supplement, but not supplant, benefits provided through
9private insurance, federal and State medical and disability
10insurance, the beneficiary's employment, and other sources.
11Under the plan, a person may make contributions to an ABLE
12account to meet the qualified disability expenses of the
13designated beneficiary of the account. The plan must be
14operated as an accounts-type plan that permits persons to save
15for qualified disability expenses incurred by or on behalf of
16an eligible individual.
17    (c) Promotion of the ABLE Program. The State Treasurer
18shall promote awareness of the availability and advantages of
19the ABLE account plan as a way to assist individuals and
20families in saving private funds for the purpose of supporting
21individuals with disabilities.
22    (d) Availability of the ABLE Program. An ABLE account may
23be established under this Section for a designated beneficiary
24who is a resident of Illinois, a resident of a contracting
25state, or a resident of any other state.
26    Annual contributions to an ABLE account on behalf of a



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1beneficiary are subject to the requirements of subsection (b)
2of Section 529A of the Internal Revenue Code. No person may
3make a contribution to an ABLE account if such a contribution
4would result in the aggregate account balance of an ABLE
5account exceeding the account balance limit authorized under
6Section 529A of the Internal Revenue Code. The Treasurer shall
7review the contribution limit at least annually. A separate
8account must be maintained for each beneficiary for whom
9contributions are made, and no more than one account shall be
10established per beneficiary. If an ABLE account is established
11for a designated beneficiary, no account subsequently
12established for such beneficiary shall be treated as an ABLE
13account. The preceding sentence shall not apply in the case of
14an ABLE account established for purposes of a rollover as
15permitted under Sections 529 and 529A of the Internal Revenue
17    (e) Administration of the ABLE Program. The State
18Treasurer shall administer the plan, including accepting and
19processing applications, maintaining account records, making
20payments, and undertaking any other necessary tasks to
21administer the plan, including the appointment of an account
22administrator. The State Treasurer may contract with one or
23more 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. The State Treasurer may enter into



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1agreements with other states to either allow Illinois
2residents to participate in a plan operated by another state
3or to allow residents of other states to participate in the
4Illinois ABLE plan.
5    (f) Fees. The State Treasurer may establish fees to be
6imposed on participants to cover 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.
10    (g) The Illinois ABLE Accounts Administrative Fund. The
11Illinois ABLE Accounts Administrative Fund is created as a
12nonappropriated trust fund in the State treasury. The State
13Treasurer shall use moneys in the Administrative Fund to cover
14administrative expenses incurred under this Section. The
15Administrative Fund may receive any grants or other moneys
16designated for administrative purposes from the State, or any
17unit of federal, state, or local government, or any other
18person, firm, partnership, or corporation. Any interest
19earnings that are attributable to moneys in the Administrative
20Fund must be deposited into the Administrative Fund. Any fees
21established by the State Treasurer to cover the costs of
22administration, recordkeeping, and investment management shall
23be deposited into the Administrative Fund.
24    Subject to appropriation, the State Treasurer may pay
25administrative costs associated with the creation and
26management of the plan until sufficient assets are available



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1in the Administrative Fund for that purpose.
2    (h) Privacy. Applications for accounts, designated
3beneficiary data, account data, and data on beneficiaries of
4accounts are confidential and exempt from disclosure under the
5Freedom of Information Act.
6    (i) Investment Policy. The Treasurer shall prepare and
7adopt a written statement of investment policy that includes a
8risk management and oversight program which shall be reviewed
9annually and posted on the Treasurer's website prior to
10implementation. The risk management and oversight program
11shall be designed to ensure that an effective risk management
12system is in place to monitor the risk levels of the ABLE plan,
13to ensure that the risks taken are prudent and properly
14managed, to provide an integrated process for overall risk
15management, and to assess investment returns as well as risk
16to determine if the risks taken are adequately compensated
17compared to applicable performance benchmarks and standards.
18To enhance the safety and liquidity of ABLE accounts, to
19ensure the diversification of the investment portfolio of
20accounts, and in an effort to keep investment dollars in the
21State, the State Treasurer may make a percentage of each
22account available for investment in participating financial
23institutions doing business in the State, except that the
24accounts may be invested without limit in investment options
25from open-ended investment companies registered under Section
2680a of the federal Investment Company Act of 1940. The State



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1Treasurer may contract with one or more third parties for
2investment management, recordkeeping, or other services in
3connection with investing the accounts.
4    (j) Investment restrictions. The State Treasurer shall
5ensure that the plan meets the requirements for an ABLE
6account under Section 529A of the Internal Revenue Code. The
7State Treasurer may request a private letter ruling or rulings
8from the Internal Revenue Service and must take any necessary
9steps to ensure that the plan qualifies under relevant
10provisions of federal law. Notwithstanding the foregoing, any
11determination by the Secretary of the Treasury of the United
12States that an account was utilized to make non-qualified
13distributions shall not result in an ABLE account being
14disregarded as a resource.
15    (k) Contributions. A person may make contributions to an
16ABLE account on behalf of a beneficiary. Contributions to an
17account made by persons other than the designated beneficiary
18become the property of the designated beneficiary.
19Contributions to an account shall be considered as a transfer
20of assets for fair market value. A person does not acquire an
21interest in an ABLE account by making contributions to an
22account. A contribution to any account for a beneficiary must
23be rejected if the contribution would cause either the
24aggregate or annual account balance of the account to exceed
25the limits imposed by Section 529A of the Internal Revenue



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1    Any change in designated beneficiary must be done in a
2manner consistent with Section 529A of the Internal Revenue
4    (l) Notice. Notice of any proposed amendments to the rules
5and regulations shall be provided to all designated
6beneficiaries or their designated representatives prior to
7adoption. Amendments to rules and regulations shall apply only
8to contributions made after the adoption of the amendment.
9Amendments to this Section automatically amend the
10participation agreement. Any amendments to the operating
11procedures and policies of the plan shall automatically amend
12the participation agreement after adoption by the State
14    (m) Plan assets. All assets of the plan, including any
15contributions to accounts, are held in trust for the exclusive
16benefit of the designated beneficiary and shall be considered
17spendthrift accounts exempt from all of the designated
18beneficiary's creditors. The plan shall provide separate
19accounting for each designated beneficiary sufficient to
20satisfy the requirements of paragraph (3) of subsection (b) of
21Section 529A of the Internal Revenue Code. Assets must be held
22in either a state trust fund outside the State treasury, to be
23known as the Illinois ABLE plan trust fund, or in accounts with
24a third-party provider selected pursuant to this Section.
25Amounts contributed to ABLE accounts shall not be commingled
26with State funds and the State shall have no claim to or



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1against, or interest in, such funds.
2    Plan assets are not subject to claims by creditors of the
3State and are not subject to appropriation by the State.
4Payments from the Illinois ABLE account plan shall be made
5under this Section.
6    The assets of ABLE accounts and their income may not be
7used as security for a loan.
8    (n) Taxation. The assets of ABLE accounts and their income
9and operation shall be exempt from all taxation by the State of
10Illinois and any of its subdivisions to the extent exempt from
11federal income taxation. The accrued earnings on investments
12in an ABLE account once disbursed on behalf of a designated
13beneficiary shall be similarly exempt from all taxation by the
14State of Illinois and its subdivisions to the extent exempt
15from federal income taxation, so long as they are used for
16qualified expenses.
17    Notwithstanding any other provision of law that requires
18consideration of one or more financial circumstances of an
19individual, for the purpose of determining eligibility to
20receive, or the amount of, any assistance or benefit
21authorized by such provision to be provided to or for the
22benefit of such individual, any amount, including earnings
23thereon, in the ABLE account of such individual, any
24contributions to the ABLE account of the individual, and any
25distribution for qualified disability expenses shall be
26disregarded for such purpose with respect to any period during



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1which such individual maintains, makes contributions to, or
2receives distributions from such ABLE account.
3    (o) Distributions. The designated beneficiary or the
4designated representative of the designated beneficiary may
5make a qualified distribution for the benefit of the
6designated beneficiary. Qualified distributions shall be made
7for qualified disability expenses allowed pursuant to Section
8529A of the Internal Revenue Code. Qualified distributions
9must be withdrawn proportionally from contributions and
10earnings in a designated beneficiary's account on the date of
11distribution as provided in Section 529A of the Internal
12Revenue Code. Unless prohibited by federal law, upon the death
13of a designated beneficiary, proceeds from an account may be
14transferred to the estate of a designated beneficiary, or to
15an account for another eligible individual specified by the
16designated beneficiary or the estate of the designated
17beneficiary, or transferred pursuant to a payable on death
18account agreement. A payable on death account agreement may be
19executed by the designated beneficiary or a designated
20representative who has been granted such power. Upon the death
21of a designated beneficiary, prior to distribution of the
22balance to the estate, account for another eligible
23individual, or transfer pursuant to a payable on death account
24agreement, the State Treasurer may require verification that
25the funeral and burial expenses of the designated beneficiary
26have been paid. An agency or instrumentality of the State may



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1not seek payment under subsection (f) of Section 529A of the
2federal Internal Revenue Code from the account or its proceeds
3for benefits provided to a designated beneficiary.
4    (p) Rules. The State Treasurer may adopt rules to carry
5out the purposes of this Section. The State Treasurer shall
6further have the power to issue peremptory rules necessary to
7ensure that ABLE accounts meet all of the requirements for a
8qualified state ABLE program under Section 529A of the
9Internal Revenue Code and any regulations issued by the
10Internal Revenue Service.
11(Source: P.A. 101-329, eff. 8-9-19; 102-392, eff. 8-16-21.)
12    Section 99. Effective date. This Act takes effect upon
13becoming law.