SB1383 Enrolled LRB099 08749 JLK 28917 b
1		AN ACT concerning State government.
2		Be it enacted by the People of the State of Illinois,
3		represented in the General Assembly:
4		Section 5. The State Treasurer Act is amended by adding
5		Section 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
10		for the purpose of financing certain qualified expenses of
11		eligible individuals as specifically provided for in this
12		Section and authorized by Section 529A of the Internal Revenue
13		Code.
14		"ABLE account plan" or "plan" means the savings account
15		plan provided for in this Section.
16		"Account administrator" means the person selected by the
17		State Treasurer to administer the daily operations of the ABLE
18		account plan and provide marketing, recordkeeping, investment
19		management, and other services for the plan.
20		"Aggregate account balance" means the amount in an account
21		on a particular date or the fair market value of an account on
22		a particular date.
23		"Beneficiary" means the ABLE account owner.

SB1383 Enrolled - 2 - LRB099 08749 JLK 28917 b
1		"Board" means the Illinois State Board of Investment.
2		"Contracting state" means a state without a qualified ABLE
3		program which has entered into a contract with Illinois to
4		provide residents of the contracting state access to a
5		qualified ABLE program.
6		"Designated representative" means a person who is
7		authorized to act on behalf of an account owner. An account
8		owner is authorized to act on his or her own behalf unless the
9		account owner is a minor or the account owner has been
10		adjudicated to have a disability so that a guardian has been
11		appointed. A designated representative acts in a fiduciary
12		capacity to the account owner. The State Treasurer shall
13		recognize a person as a designated representative without
14		appointment by a court in the following order of priority:
15		(1) The account owner's plenary guardian of the estate,
16		or the account owner's limited guardian of financial or
17		contractual matters. Any guardian acting in this capacity
18		shall not be required to seek court approval for any ABLE
19		qualified distributions.
20		(2) The agent named by the account owner in a property
21		power of attorney recognized as a statutory short form
22		power of attorney for property.
23		(3) Such individual or entity that the account owner so
24		designates in writing, in a manner to be established by the
25		State Treasurer.
26		(4) Such other individual or entity designated by the

SB1383 Enrolled - 3 - LRB099 08749 JLK 28917 b
1		State Treasurer pursuant to its rules.
2		"Disability certification" has the meaning given to that
3		term under Section 529A of the Internal Revenue Code.
4		"Eligible individual" has the meaning given to that term
5		under Section 529A of the Internal Revenue Code.
6		"Participation agreement" means an agreement to
7		participate in the ABLE account plan between an account owner
8		and the State, through its agencies and the State Treasurer.
9		"Qualified disability expenses" has the meaning given to
10		that term under Section 529A of the Internal Revenue Code.
11		"Qualified withdrawal" or "qualified distribution" means a
12		withdrawal from an ABLE account to pay the qualified disability
13		expenses of the beneficiary of the account.
14		(b) The "Achieving a Better Life Experience" or "ABLE"
15		account program is hereby created and shall be administered by
16		the State Treasurer. The purpose of the ABLE plan is to
17		encourage and assist individuals and families in saving private
18		funds for the purpose of supporting individuals with
19		disabilities to maintain health, independence, and quality of
20		life, and to provide secure funding for disability-related
21		expenses on behalf of designated beneficiaries with
22		disabilities that will supplement, but not supplant, benefits
23		provided through private insurance, federal and State medical
24		and disability insurance, the beneficiary's employment, and
25		other sources. Under the plan, a person may make contributions
26		to an ABLE account to meet the qualified disability expenses of

SB1383 Enrolled - 4 - LRB099 08749 JLK 28917 b
1		the designated beneficiary of the account. The plan must be
2		operated as an accounts-type plan that permits persons to save
3		for qualified disability expenses incurred by or on behalf of
4		an eligible individual.
5		The State Treasurer shall promote awareness of the
6		availability and advantages of the ABLE account plan as a way
7		to assist individuals and families in saving private funds for
8		the purpose of supporting individuals with disabilities. The
9		cost of these promotional efforts shall not be funded with fees
10		imposed on participants by the State Treasurer.
11		The State Treasurer shall not accept contributions for ABLE
12		accounts under this Section until the Internal Revenue Service
13		has issued its final regulations concerning ABLE accounts.
14		A separate account must be maintained for each beneficiary
15		for whom contributions are made, and no more than one account
16		shall be established per beneficiary. If an ABLE account is
17		established for a designated beneficiary, no account
18		subsequently established for such beneficiary shall be treated
19		as an ABLE account. The preceding sentence shall not apply in
20		the case of an ABLE account established for purposes of a
21		rollover as permitted under Section 529A of the Internal
22		Revenue Code.
23		An ABLE account may be established under this Section only
24		for a designated beneficiary who is a resident of Illinois or a
25		resident of a contracting state.
26		Prior to the establishment of an ABLE account, an account

SB1383 Enrolled - 5 - LRB099 08749 JLK 28917 b
1		owner must provide documentation to the State Treasurer that
2		the account beneficiary is an eligible individual.
3		Annual contributions to an ABLE account on behalf of a
4		beneficiary are subject to the requirements of subsection (b)
5		of Section 529A of the Internal Revenue Code. No person may
6		make a contribution to an ABLE account if such a contribution
7		would result in the aggregate account balance of an ABLE
8		account exceeding the account balance limit authorized under
9		Section 529A of the Internal Revenue Code. The Treasurer shall
10		review the contribution limit at least annually.
11		The State Treasurer shall administer the plan, including
12		accepting and processing applications, maintaining account
13		records, making payments, and undertaking any other necessary
14		tasks to administer the plan, including the appointment of an
15		account administrator. The State Treasurer may contract with
16		one or more third parties to carry out some or all of these
17		administrative duties, including, but not limited to,
18		providing investment management services, incentives, and
19		marketing the plan.
20		In designing and establishing the plan's requirements and
21		in negotiating or entering into contracts with third parties
22		under this Section, the State Treasurer shall consult with the
23		Board. The State Treasurer shall establish fees to be imposed
24		on participants to recover the costs of administration,
25		recordkeeping, and investment management. The State Treasurer
26		must use his or her best efforts to keep these fees as low as

SB1383 Enrolled - 6 - LRB099 08749 JLK 28917 b
1		possible, consistent with efficient administration.
2		The Illinois ABLE Accounts Administrative Fund is created
3		as a nonappropriated trust fund in the State treasury. The
4		State Treasurer shall use moneys in the Administrative Fund to
5		pay for administrative expenses he or she incurs in the
6		performance of his or her duties under this Section. The State
7		Treasurer shall use moneys in the Administrative Fund to cover
8		administrative expenses incurred under this Section. The
9		Administrative Fund may receive any grants or other moneys
10		designated for administrative purposes from the State, or any
11		unit of federal or local government, or any other person, firm,
12		partnership, or corporation. Any interest earnings that are
13		attributable to moneys in the Administrative Fund must be
14		deposited into the Administrative Fund. Any fees established by
15		the State Treasurer to recover the costs of administration,
16		recordkeeping, and investment management shall be deposited
17		into the Administrative Fund.
18		Subject to appropriation, the State Treasurer may pay
19		administrative costs associated with the creation and
20		management of the plan until sufficient assets are available in
21		the Administrative Fund for that purpose.
22		Applications for accounts, account owner data, account
23		data, and data on beneficiaries of accounts are confidential
24		and exempt from disclosure under the Freedom of Information
25		Act.
26		(c) The State Treasurer may invest the moneys in ABLE

SB1383 Enrolled - 7 - LRB099 08749 JLK 28917 b
1		accounts in the same manner and in the same types of
2		investments provided for the investment of moneys by the Board.
3		To enhance the safety and liquidity of ABLE accounts, to ensure
4		the diversification of the investment portfolio of accounts,
5		and in an effort to keep investment dollars in the State, the
6		State Treasurer may make a percentage of each account available
7		for investment in participating financial institutions doing
8		business in the State, except that the accounts may be invested
9		without limit in investment options from open-ended investment
10		companies registered under Section 80a of the federal
11		Investment Company Act of 1940. The State Treasurer may
12		contract with one or more third parties for investment
13		management, recordkeeping, or other services in connection
14		with investing the accounts.
15		The account administrator shall annually prepare and adopt
16		a written statement of investment policy that includes a risk
17		management and oversight program. The risk management and
18		oversight program shall be designed to ensure that an effective
19		risk management system is in place to monitor the risk levels
20		of the ABLE plan, to ensure that the risks taken are prudent
21		and properly managed, to provide an integrated process for
22		overall risk management, and to assess investment returns as
23		well as risk to determine if the risks taken are adequately
24		compensated compared to applicable performance benchmarks and
25		standards.
26		The State Treasurer may enter into agreements with other

SB1383 Enrolled - 8 - LRB099 08749 JLK 28917 b
1		states to either allow Illinois residents to participate in a
2		plan operated by another state or to allow residents of other
3		states to participate in the Illinois ABLE plan.
4		(d) The State Treasurer shall ensure that the plan meets
5		the requirements for an ABLE account under Section 529A of the
6		Internal Revenue Code. The State Treasurer may request a
7		private letter ruling or rulings from the Internal Revenue
8		Service and must take any necessary steps to ensure that the
9		plan qualifies under relevant provisions of federal law.
10		Notwithstanding the foregoing, any determination by the
11		Secretary of the Treasury of the United States that an account
12		was utilized to make non-qualified distributions shall not
13		result in an ABLE account being disregarded as a resource.
14		A person may make contributions to an ABLE account on
15		behalf of a beneficiary. Contributions to an account made by
16		persons other than the account owner become the property of the
17		account owner. Contributions to an account shall be considered
18		as a transfer of assets for fair market value. A person does
19		not acquire an interest in an ABLE account by making
20		contributions to an account. A contribution to any account for
21		a beneficiary must be rejected if the contribution would cause
22		either the aggregate or annual account balance of the account
23		to exceed the limits imposed by Section 529A of the Internal
24		Revenue Code.
25		Any change in account owner must be done in a manner
26		consistent with Section 529A of the Internal Revenue Code.

SB1383 Enrolled - 9 - LRB099 08749 JLK 28917 b
1		Notice of any proposed amendments to the rules and
2		regulations shall be provided to all owners or their designated
3		representatives prior to adoption. Amendments to rules and
4		regulations shall apply only to contributions made after the
5		adoption of the amendment. Amendments to this Section
6		automatically amend the participation agreement. Any
7		amendments to the operating procedures and policies of the plan
8		shall automatically amend the participation agreement after
9		adoption by the State Treasurer.
10		All assets of the plan, including any contributions to
11		accounts, are held in trust for the exclusive benefit of the
12		account owner and shall be considered spendthrift accounts
13		exempt from all of the owner's creditors. The plan shall
14		provide separate accounting for each designated beneficiary
15		sufficient to satisfy the requirements of paragraph (3) of
16		subsection (b) of Section 529A of the Internal Revenue Code.
17		Assets must be held in either a state trust fund outside the
18		State treasury, to be known as the Illinois ABLE plan trust
19		fund, or in accounts with a third-party provider selected
20		pursuant to this Section. Amounts contributed to ABLE accounts
21		shall not be commingled with State funds and the State shall
22		have no claim to or against, or interest in, such funds.
23		Plan assets are not subject to claims by creditors of the
24		State and are not subject to appropriation by the State.
25		Payments from the Illinois ABLE account plan shall be made
26		under this Section.

SB1383 Enrolled - 10 - LRB099 08749 JLK 28917 b
1		The assets of ABLE accounts and their income may not be
2		used as security for a loan.
3		The assets of ABLE accounts and their income and operation
4		shall be exempt from all taxation by the State of Illinois and
5		any of its subdivisions to the extent exempt from federal
6		income taxation. The accrued earnings on investments in an ABLE
7		account once disbursed on behalf of a designated beneficiary
8		shall be similarly exempt from all taxation by the State of
9		Illinois and its subdivisions to the extent exempt from federal
10		income taxation, so long as they are used for qualified
11		expenses.
12		Notwithstanding any other provision of law that requires
13		consideration of one or more financial circumstances of an
14		individual, for the purpose of determining eligibility to
15		receive, or the amount of, any assistance or benefit authorized
16		by such provision to be provided to or for the benefit of such
17		individual, any amount, including earnings thereon, in the ABLE
18		account of such individual, any contributions to the ABLE
19		account of the individual, and any distribution for qualified
20		disability expenses shall be disregarded for such purpose with
21		respect to any period during which such individual maintains,
22		makes contributions to, or receives distributions from such
23		ABLE account.
24		(e) The account owner or the designated representative of
25		the account owner may request that a qualified distribution be
26		made for the benefit of the account owner. Qualified

SB1383 Enrolled - 11 - LRB099 08749 JLK 28917 b
1		distributions shall be made for qualified disability expenses
2		allowed pursuant to Section 529A of the Internal Revenue Code.
3		Qualified distributions must be withdrawn proportionally from
4		contributions and earnings in an account owner's account on the
5		date of distribution as provided in Section 529A of the
6		Internal Revenue Code. Upon the death of a beneficiary, the
7		amount remaining in the beneficiary's account must be
8		distributed pursuant to subsection (f) of Section 529A of the
9		Internal Revenue Code.
10		(f) The State Treasurer may adopt rules to carry out the
11		purposes of this Section. The State Treasurer shall further
12		have the power to issue peremptory rules necessary to ensure
13		that ABLE accounts meet all of the requirements for a qualified
14		state ABLE program under Section 529A of the Internal Revenue
15		Code and any regulations issued by the Internal Revenue
16		Service.
17		Section 10. The State Finance Act is amended by adding
18		Section 5.866 as follows: