BILL NUMBER: SB 324	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 15, 2015

INTRODUCED BY   Senator Pavley
    (   Principal   coauthors:  
Assembly Members   Irwin   and Wilk   )

    (   Coauthor:   Senator   Beall
  ) 

                        FEBRUARY 23, 2015

   An act to add Sections 17140.4 and 23711.4 to the Revenue and
Taxation Code, and to add Chapter 15 (commencing with Section 4875)
to Division 4.5 of the Welfare and Institutions Code, relating to
taxation.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 324, as amended, Pavley. Income taxation: savings plans:
Qualified ABLE Program.
   The Personal Income Tax Law and the Corporation  Income
 Tax Law, in specified conformity with federal income tax
laws regarding qualified tuition programs, provide that distributions
from a qualified tuition program are generally not included in the
income of the donor or the beneficiary, as specified.
   Existing federal law, the Stephen Beck Jr., Achieving a Better
Life Experience Act of 2014 (ABLE  act   Act
 ), for taxable years beginning on or after January 1, 2015,
encourages and assists individuals and families to save private funds
for the purpose of supporting persons with disabilities to maintain
their health, independence, and quality of life by excluding from
gross income distributions used for qualified disability expenses by
a beneficiary of a  qualified ABLE program  
Qualified ABLE Program  established and maintained by a state,
as specified.
   This bill would conform to these federal income tax law provisions
relating to the ABLE Act under the Personal Income Tax Law and the
Corporation  Income  Tax Law, as provided. The bill
would also establish in state government a  qualified ABLE
program     Qualified   ABLE Program
 and the Qualified ABLE Fund for purposes of implementing the
federal ABLE act. The bill would require the Treasurer to administer
the program in compliance with the requirements of the federal ABLE
 act   Act  .
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17140.4 is added to the Revenue and Taxation
Code, to read:
   17140.4.  Section 529A of the Internal Revenue Code, relating to
qualified ABLE programs,  as enacted by Section 102 of
  added by Section 102 of Division B of  Public Law
113-295, shall apply, except as otherwise provided.
   (a) Section 529A of the Internal Revenue Code is modified as
follows:
   (1) By substituting the phrase "under this part and Part 11
(commencing with Section 23001)" in lieu of the phrase "under this
subtitle."
   (2) By substituting "Article 2 (commencing with Section 23731)" in
lieu of "Section 511."
   (b) A copy of the report required to be filed with the Secretary
of the Treasury under Section  529A(g) of the Internal
Revenue Code     529A(d) of the Internal
Revenue Code, relating to reports,  shall be filed with the
Franchise Tax Board at the same time and in the same manner as
specified in that section.
  SEC. 2.  Section 23711.4 is added to the Revenue and Taxation Code,
to read:
   23711.4.  Section 529A of the Internal Revenue Code, relating to
qualified ABLE programs,  as enacted by Section 102 of
  added by Section 102 of Division B of  Public Law
113-295, shall apply, except as otherwise provided.
   (a) Section 529A of the internal Revenue Code is modified as
follows:
   (1) By substituting the phrase "under Part 10 (commencing with
Section 17001) and this part" in lieu of the phrase "under this
subtitle."
   (2) By substituting "Article 2 (commencing with Section 23731)" in
lieu of "section 511."
   (b) A copy of the report required to be filed with the Secretary
of the Treasury under Section  529A(g) of the Internal
Revenue Code     529A(d) of the Internal
Revenue Code, relating to reports,  shall be filed with the
Franchise Tax Board at the same time and in the same manner as
specified in that section.
  SEC. 3.  Chapter 15 (commencing with Section 4875) is added to
Division 4.5 of the Welfare and Institutions Code, to read:
      CHAPTER 15.  QUALIFIED ABLE PROGRAM


   4875.  For purposes of this chapter:
   (a) "ABLE account" or "account" means the account an eligible
individual makes contributions to pursuant to this chapter for the
purpose of meeting the qualified disability expenses of the
designated beneficiary of the account.
   (b) "ABLE  fund"   Fund   "  or
"fund" means the fund established by this chapter for purposes of
implementing the federal ABLE act.
   (c) "Designated beneficiary" means the eligible individual who
established an ABLE account and is the owner of the account.
   (d) "Eligible individual" means an individual who is eligible
under the program for a taxable year if during that taxable year all
of the following criteria are met:
   (1) The individual is entitled to benefits based on blindness or
disability under Title II or XVI of the federal Social Security Act,
and that blindness or disability occurred before the date on which
the individual attained 26 years of age.
   (2) A disability certification, as defined in the federal ABLE
act, with respect to the individual is filed pursuant to the
requirements set forth in the federal ABLE act.
   (e) "Federal ABLE act" means the federal Stephen Beck Jr.,
Achieving a Better Life Experience Act of 2014.
   (f) "Qualified ABLE  program"   Program 
 "  or "program" means the program established by this
chapter to implement the federal ABLE act pursuant to Section 529A of
the Internal Revenue Code.
   (g) "Qualified disability expenses" means any expenses related to
the eligible individual's blindness or disability that are made for
the benefit of an eligible individual who is the designated
beneficiary, including expenses related to education, housing,
transportation, employment training and support, assistive technology
and personal support services, health, prevention and wellness,
financial management and administrative services, legal fees,
expenses for oversight and monitoring, funeral and burial expenses,
and other expenses, which are approved by the Secretary of the
Treasury under regulations and consistent with the purposes of the
federal ABLE act.
   4876.  (a) There is hereby established in state government a
 qualified ABLE program   Qualified ABLE Program
 and the Qualified ABLE Fund for purposes of implementing the
federal ABLE act pursuant to Section 529A of the Internal Revenue
Code.
   (b) The  qualified ABLE program   Qualified
ABLE Program  shall be administered by the Treasurer, who shall
be responsible to ensure that the program is administered in
compliance with the requirements of the federal ABLE act.
   4877.  Under the program, a person may make contributions for a
taxable year, for the benefit of an individual who is an eligible
individual for that taxable year, to an ABLE account that is
established for the purpose of meeting the qualified disability
expenses of the designated beneficiary of the account, if all of the
following criteria are met:
   (a) The designated beneficiary is limited to one ABLE account for
purposes of this chapter.
   (b) The ABLE account is established only for a designated
beneficiary who is a resident of this state.
   4878.  The Treasurer may adopt regulations to implement this
chapter. 
   4879.  Notwithstanding any other law, moneys in an ABLE account,
not to exceed one hundred thousand dollars ($100,000) shall not count
toward determining eligibility for the Medi-Cal program pursuant to
Chapter 7 (commencing with Section 14000) of Part 3 of Division 9.