BILL NUMBER: SB 324	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 15, 2015
	AMENDED IN SENATE  APRIL 15, 2015

INTRODUCED BY   Senator Pavley
   (Principal coauthors: Assembly Members Irwin and Wilk)
   (Coauthor: Senator Beall)
    (   Coauthors:   Assembly Members 
 Dodd   and Kim   ) 

                        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.   taxation, and making an
appropriation therefor. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 324, as amended, Pavley. Income taxation: savings plans:
Qualified ABLE Program.
   The Personal Income Tax Law and the Corporation 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), 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 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 Tax Law, as provided. The bill would also establish in
state government a Qualified ABLE Program and the  Qualified
 ABLE Fund for purposes of implementing the federal ABLE
 act.   Act. The bill would create the ABLE Act
Board. The bill would authorize the Able Fund to accept moneys from
ABLE accounts, to be segregated into the program account and the
administrative account. The bill would continuously appropriate funds
in the accounts to the board for specified purposes, thereby making
an appropriation.  The bill would require the Treasurer to
administer the program in compliance with the requirements of the
federal ABLE Act.
   Vote: majority. Appropriation:  no   yes
 . 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, 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(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, 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(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" or "fund" means the fund established by this
chapter for purposes of implementing the federal ABLE  act.
  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" 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.  There is hereby created the ABLE Act Board that consists of
the Treasurer, the Director of Finance, the Controller, the Director
of Developmental Services, the chairperson of the State Council on
Developmental Disabilities, the Director of Rehabilitation, and the
chair of the State Independent Living Council, or their designees.

    4876.   4877.   (a) There is hereby
established in state government a 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 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. 
   (c) (1) The ABLE Fund shall accept moneys from all ABLE accounts.
 
   (2) The ABLE Act Board shall segregate moneys received by the ABLE
Fund into two accounts, which shall be identified as the program
account and the administrative account.  
   (A) Notwithstanding Section 13340 of the Government Code, the
program account is hereby continuously appropriated, without regard
to fiscal years, to the ABLE Act Board for the purposes specified in
this act.  
   (B) Notwithstanding Section 13340 of the Government Code, the
administrative account is hereby continuously appropriated, without
regard to fiscal years, to the ABLE Act Board for administration of
the act. Administrative costs shall not exceed 1 percent of the
incoming funds for the fiscal year.  
   (d) Funding for startup and first-year administrative costs shall
be appropriated from the General Fund in the annual Budget Act. The
board shall repay, within five years, the amount appropriated, plus
interest calculated at the rate earned by the Pooled Money Investment
Account. Necessary administrative costs in future years shall be
paid out of the administrative fund pursuant to subparagraph (B) of
paragraph (2) of subdivision (c). 
    4877.   4878.   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.   4879.  The Treasurer may adopt
regulations to implement this chapter.
    4879.   4880.   Notwithstanding any
other law, moneys  in   in, contributions to,
and any distribution for qualified disability expenses from,  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.