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"Beneficiary" or "designated beneficiary" means the ABLE |
account owner. |
"Contracting state" means a state without a qualified ABLE |
program which has entered into a contract with Illinois to |
provide residents of the contracting state access to a |
qualified ABLE program. |
"Designated representative" means a person who is |
authorized to act on behalf of a "designated beneficiary" an |
account owner. A designated beneficiary An account owner is |
authorized to act on his or her own behalf unless the |
designated beneficiary account owner is a minor or the |
designated beneficiary account owner has been adjudicated to |
have a disability so that a guardian has been appointed. A |
designated representative acts in a fiduciary capacity to the |
designated beneficiary account owner. The State Treasurer |
shall recognize the following as a designated representative |
without appointment by a court: |
(1) The designated beneficiary's account owner's |
guardian of the person, plenary guardian of the estate, |
limited guardian of financial or contractual matters, or |
any other State-appointed guardian. A guardian acting in |
this capacity shall not be required to seek court approval |
for any ABLE account activity. |
(2) The agent named by the designated beneficiary |
account owner in a property power of attorney recognized |
as a statutory short form power of attorney for property. |
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(3) Such individual or entity that the designated |
beneficiary account owner so designates in writing, in a |
manner to be established by the State Treasurer. |
(4) Such other individual or entity designated by the |
State Treasurer pursuant to its rules. |
"Disability certification" has the meaning given to that |
term under Section 529A of the Internal Revenue Code. |
"Eligible individual" has the meaning given to that term |
under Section 529A of the Internal Revenue Code. |
"Participation agreement" means an agreement to |
participate in the ABLE account plan between a designated |
beneficiary an account owner and the State, through its |
agencies and the State Treasurer. |
"Qualified disability expenses" has the meaning given to |
that term under Section 529A of the Internal Revenue Code. |
"Qualified withdrawal" or "qualified distribution" means a |
withdrawal from an ABLE account to pay the qualified |
disability expenses of the beneficiary of the account. |
(b) Establishment of the ABLE Program. The "Achieving a |
Better Life Experience" or "ABLE" account program is hereby |
created and shall be administered by the State Treasurer. The |
purpose of the ABLE program is to encourage and assist |
individuals and families in saving private funds for the |
purpose of supporting individuals with disabilities to |
maintain health, independence, and quality of life, and to |
provide secure funding for disability-related expenses on |
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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. |
Under the plan, a person may make contributions to an ABLE |
account to meet the qualified disability expenses of the |
designated beneficiary of the account. The plan must be |
operated as an accounts-type plan that permits persons to save |
for qualified disability expenses incurred by or on behalf of |
an eligible individual. |
(c) Promotion of the ABLE Program. The State Treasurer |
shall promote awareness of the availability and advantages of |
the ABLE account plan as a way to assist individuals and |
families in saving private funds for the purpose of supporting |
individuals with disabilities. |
(d) Availability of the ABLE Program. An ABLE account may |
be established under this Section for a designated beneficiary |
who is a resident of Illinois, a resident of a contracting |
state, or a resident of any other state. |
Annual contributions to an ABLE account on behalf of a |
beneficiary are subject to the requirements of subsection (b) |
of Section 529A of the Internal Revenue Code. No person may |
make a contribution to an ABLE account if such a contribution |
would result in the aggregate account balance of an ABLE |
account exceeding the account balance limit authorized under |
Section 529A of the Internal Revenue Code. The Treasurer shall |
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review the contribution limit at least annually. A separate |
account must be maintained for each beneficiary for whom |
contributions are made, and no more than one account shall be |
established per beneficiary. If an ABLE account is established |
for a designated beneficiary, no account subsequently |
established for such beneficiary shall be treated as an ABLE |
account. The preceding sentence shall not apply in the case of |
an ABLE account established for purposes of a rollover as |
permitted under Sections 529 and 529A of the Internal Revenue |
Code. |
(e) Administration of the ABLE Program. The State |
Treasurer shall administer the plan, including accepting and |
processing applications, maintaining account records, making |
payments, and undertaking any other necessary tasks to |
administer the plan, including the appointment of an account |
administrator. The State Treasurer may contract with one or |
more third parties to carry out some or all of these |
administrative duties, including, but not limited to, |
providing investment management services, incentives, and |
marketing the plan. The State Treasurer may enter into |
agreements with other states to either allow Illinois |
residents to participate in a plan operated by another state |
or to allow residents of other states to participate in the |
Illinois ABLE plan. |
(f) Fees. The State Treasurer may establish fees to be |
imposed on participants to cover the costs of administration, |
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recordkeeping, and investment management. The State Treasurer |
must use his or her best efforts to keep these fees as low as |
possible, consistent with efficient administration. |
(g) The Illinois ABLE Accounts Administrative Fund. The |
Illinois ABLE Accounts Administrative Fund is created as a |
nonappropriated trust fund in the State treasury. The State |
Treasurer shall use moneys in the Administrative Fund to cover |
administrative expenses incurred under this Section. The |
Administrative Fund may receive any grants or other moneys |
designated for administrative purposes from the State, or any |
unit of federal, state, or local government, or any other |
person, firm, partnership, or corporation. Any interest |
earnings that are attributable to moneys in the Administrative |
Fund must be deposited into the Administrative Fund. Any fees |
established by the State Treasurer to cover the costs of |
administration, recordkeeping, and investment management shall |
be deposited into the Administrative Fund. |
Subject to appropriation, the State Treasurer may pay |
administrative costs associated with the creation and |
management of the plan until sufficient assets are available |
in the Administrative Fund for that purpose. |
(h) Privacy. Applications for accounts, designated |
beneficiary account owner data, account data, and data on |
beneficiaries of accounts are confidential and exempt from |
disclosure under the Freedom of Information Act. |
(i) Investment Policy. The Treasurer shall prepare and |
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adopt a written statement of investment policy that includes a |
risk management and oversight program which shall be reviewed |
annually and posted on the Treasurer's website prior to |
implementation. The risk management and oversight program |
shall be designed to ensure that an effective risk management |
system is in place to monitor the risk levels of the ABLE plan, |
to ensure that the risks taken are prudent and properly |
managed, to provide an integrated process for overall risk |
management, and to assess investment returns as well as risk |
to determine if the risks taken are adequately compensated |
compared to applicable performance benchmarks and standards. |
To enhance the safety and liquidity of ABLE accounts, to |
ensure the diversification of the investment portfolio of |
accounts, and in an effort to keep investment dollars in the |
State, the State Treasurer may make a percentage of each |
account available for investment in participating financial |
institutions doing business in the State, except that the |
accounts may be invested without limit in investment options |
from open-ended investment companies registered under Section |
80a of the federal Investment Company Act of 1940. The State |
Treasurer may contract with one or more third parties for |
investment management, recordkeeping, or other services in |
connection with investing the accounts. |
(j) Investment restrictions. The State Treasurer shall |
ensure that the plan meets the requirements for an ABLE |
account under Section 529A of the Internal Revenue Code. The |
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State Treasurer may request a private letter ruling or rulings |
from the Internal Revenue Service and must take any necessary |
steps to ensure that the plan qualifies under relevant |
provisions of federal law. Notwithstanding the foregoing, any |
determination by the Secretary of the Treasury of the United |
States that an account was utilized to make non-qualified |
distributions shall not result in an ABLE account being |
disregarded as a resource. |
(k) Contributions. A person may make contributions to an |
ABLE account on behalf of a beneficiary. Contributions to an |
account made by persons other than the designated beneficiary |
account owner become the property of the designated |
beneficiary account owner. Contributions to an account shall |
be considered as a transfer of assets for fair market value. A |
person does not acquire an interest in an ABLE account by |
making contributions to an account. A contribution to any |
account for a beneficiary must be rejected if the contribution |
would cause either the aggregate or annual account balance of |
the account to exceed the limits imposed by Section 529A of the |
Internal Revenue Code. |
Any change in designated beneficiary account owner must be |
done in a manner consistent with Section 529A of the Internal |
Revenue Code. |
(l) Notice. Notice of any proposed amendments to the rules |
and regulations shall be provided to all designated |
beneficiaries owners or their designated representatives prior |
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to adoption. Amendments to rules and regulations shall apply |
only to contributions made after the adoption of the |
amendment. Amendments to this Section automatically amend the |
participation agreement. Any amendments to the operating |
procedures and policies of the plan shall automatically amend |
the participation agreement after adoption by the State |
Treasurer. |
(m) Plan assets. All assets of the plan, including any |
contributions to accounts, are held in trust for the exclusive |
benefit of the designated beneficiary account owner and shall |
be considered spendthrift accounts exempt from all of the |
designated beneficiary's owner's creditors. The plan shall |
provide separate accounting for each designated beneficiary |
sufficient to satisfy the requirements of paragraph (3) of |
subsection (b) of Section 529A of the Internal Revenue Code. |
Assets must be held in either a state trust fund outside the |
State treasury, to be known as the Illinois ABLE plan trust |
fund, or in accounts with a third-party provider selected |
pursuant to this Section. Amounts contributed to ABLE accounts |
shall not be commingled with State funds and the State shall |
have no claim to or against, or interest in, such funds. |
Plan assets are not subject to claims by creditors of the |
State and are not subject to appropriation by the State. |
Payments from the Illinois ABLE account plan shall be made |
under this Section. |
The assets of ABLE accounts and their income may not be |
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used as security for a loan. |
(n) Taxation. The assets of ABLE accounts and their income |
and operation shall be exempt from all taxation by the State of |
Illinois and any of its subdivisions to the extent exempt from |
federal income taxation. The accrued earnings on investments |
in an ABLE account once disbursed on behalf of a designated |
beneficiary shall be similarly exempt from all taxation by the |
State of Illinois and its subdivisions to the extent exempt |
from federal income taxation, so long as they are used for |
qualified expenses. |
Notwithstanding any other provision of law that requires |
consideration of one or more financial circumstances of an |
individual, for the purpose of determining eligibility to |
receive, or the amount of, any assistance or benefit |
authorized by such provision to be provided to or for the |
benefit of such individual, any amount, including earnings |
thereon, in the ABLE account of such individual, any |
contributions to the ABLE account of the individual, and any |
distribution for qualified disability expenses shall be |
disregarded for such purpose with respect to any period during |
which such individual maintains, makes contributions to, or |
receives distributions from such ABLE account. |
(o) Distributions. The designated beneficiary account |
owner or the designated representative of the designated |
beneficiary account owner may make a qualified distribution |
for the benefit of the designated beneficiary account owner. |
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Qualified distributions shall be made for qualified disability |
expenses allowed pursuant to Section 529A of the Internal |
Revenue Code. Qualified distributions must be withdrawn |
proportionally from contributions and earnings in a designated |
beneficiary's an account owner's account on the date of |
distribution as provided in Section 529A of the Internal |
Revenue Code. Unless prohibited by federal law, upon the death |
of a designated beneficiary, proceeds from an account may be |
transferred to the estate of a designated beneficiary, or to |
an account for another eligible individual specified by the |
designated beneficiary or the estate of the designated |
beneficiary, or transferred pursuant to a payable on death |
account agreement. A payable on death account agreement may be |
executed by the designated beneficiary or a designated |
representative who has been granted such power. Upon the death |
of a designated beneficiary, prior to distribution of the |
balance to the estate, account for another eligible |
individual, or transfer pursuant to a payable on death account |
agreement, the State Treasurer may require verification that |
the funeral and burial expenses of the designated beneficiary |
have been paid. An agency or instrumentality of the State may |
not seek payment under subsection (f) of Section 529A of the |
federal Internal Revenue Code from the account or its proceeds |
for benefits provided to a designated beneficiary. |
(p) Rules. The State Treasurer may adopt rules to carry |
out the purposes of this Section. The State Treasurer shall |