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A BILL TO BE ENTITLED
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AN ACT
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relating to the establishment of the Texas Achieving a Better Life |
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Experience (ABLE) Program; authorizing the imposition of fees. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 54.602(b), Education Code, is amended to |
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read as follows: |
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(b) The board shall administer the prepaid higher education |
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tuition program established under this subchapter, [and] the higher |
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education savings plan established under Subchapter G, and the |
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Texas Achieving a Better Life Experience Program created under |
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Chapter 162, Human Resources Code. |
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SECTION 2. The heading to Section 54.634, Education Code, |
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is amended to read as follows: |
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Sec. 54.634. ESTABLISHMENT OF TRUST FUND; COLLEGE SAVINGS |
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PLAN ACCOUNT; TEXAS ABLE SAVINGS PLAN ACCOUNT. |
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SECTION 3. Section 54.634, Education Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) The Texas ABLE savings plan account is created within |
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the Texas tomorrow constitutional trust fund and is financed |
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through administrative fees and service charges as authorized by |
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Section 162.004, Human Resources Code. |
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SECTION 4. Title 11, Human Resources Code, is amended by |
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adding Chapter 162 to read as follows: |
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CHAPTER 162. TEXAS ACHIEVING A BETTER |
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LIFE EXPERIENCE (ABLE) PROGRAM |
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Sec. 162.001. PURPOSES OF PROGRAM. The purposes of this |
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chapter are as follows: |
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(1) to encourage and assist individuals and families |
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in saving private funds for the purpose of supporting individuals |
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with disabilities to maintain health, independence, and quality of |
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life; and |
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(2) to provide secure funding for qualified disability |
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expenses on behalf of designated beneficiaries with disabilities |
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that will supplement, but not supplant, benefits provided through |
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private insurance, the Medicaid program under Title XIX of the |
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Social Security Act, the supplemental security income program under |
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Title XVI of the Social Security Act, the beneficiary's employment, |
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and other sources. |
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Sec. 162.002. DEFINITIONS. In this chapter: |
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(1) "ABLE account" has the meaning assigned by Section |
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529A, Internal Revenue Code. |
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(2) "ABLE program" or "program" means the Texas |
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Achieving a Better Life Experience Program created under this |
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chapter. |
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(3) "Benefits" means the payment of qualified |
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disability expenses on behalf of a designated beneficiary from an |
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ABLE account. |
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(4) "Board" means the Prepaid Higher Education Tuition |
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Board established under Section 54.602, Education Code. |
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(5) "Designated beneficiary" and "eligible |
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individual" have the meanings assigned by Section 529A, Internal |
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Revenue Code. |
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(6) "Financial institution" means a bank, trust |
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company, an insurance company, or a registered investment company. |
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(7) "Internal Revenue Code" means the Internal Revenue |
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Code of 1986. |
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(8) "Participant" means a person who has entered into |
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a participation agreement under this chapter. |
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(9) "Participation agreement" means an agreement |
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between a participant and the board under this chapter that |
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conforms to the requirements prescribed by this chapter. |
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(10) "Qualified disability expenses" has the meaning |
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assigned by Section 529A, Internal Revenue Code. |
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(11) "Texas ABLE savings plan account" means the Texas |
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ABLE savings plan account created under Section 54.634(e), |
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Education Code. |
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Sec. 162.003. CREATION; ADMINISTRATION. (a) The Texas |
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Achieving a Better Life Experience (ABLE) Program is created under |
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this chapter. |
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(b) The board shall administer the ABLE program. |
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Sec. 162.004. POWERS AND DUTIES OF BOARD. (a) To |
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establish and administer the ABLE program, the board shall: |
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(1) develop and implement the program; |
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(2) adopt reasonable rules and establish policies and |
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procedures to implement this chapter to: |
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(A) permit the program to qualify as a qualified |
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ABLE program under Section 529A, Internal Revenue Code; and |
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(B) ensure the program's compliance with all |
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applicable laws; |
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(3) either directly or through a contractual |
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arrangement with a financial institution for investment services, |
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develop and implement educational programs and related |
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informational materials for participants and their families, |
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including special programs and materials to inform individuals with |
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disabilities regarding methods for financing the qualified |
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disability expenses of individuals with disabilities to enable |
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those individuals to maintain health, independence, and quality of |
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life; |
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(4) enter into agreements with any financial |
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institution or any state or federal agency or entity as required to |
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administer the program under this chapter; |
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(5) enter into participation agreements with |
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participants; |
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(6) solicit and accept any gifts, grants, legislative |
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appropriations, and other funds from the state, any unit of |
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federal, state, or local government, or any other person, firm, |
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partnership, or corporation for deposit to the Texas ABLE savings |
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plan account; |
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(7) invest participant funds in appropriate |
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investment instruments; |
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(8) appoint members to an advisory committee who are |
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stakeholders from the disability community; |
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(9) make provision for the payment of costs of |
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administering the program; and |
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(10) procure insurance, guarantees, or other |
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protections against any loss in connection with the assets or |
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activities of the program. |
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(b) The board has all powers necessary or proper to carry |
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out its duties under this chapter and to effectuate the purposes of |
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this chapter, including the power to: |
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(1) enter into contracts and other necessary |
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instruments; |
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(2) enter into agreements or other transactions with |
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the United States, state agencies, and other entities as necessary; |
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(3) appear on its own behalf before governmental |
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agencies; |
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(4) contract for necessary goods and services, |
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including specifying in the contract duties to be performed by the |
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provider of a good or service that are a part of or are in addition |
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to the person's primary duties under the contract; |
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(5) engage the services of private consultants, |
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actuaries, trustees, records administrators, managers, legal |
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counsel, and auditors for administrative or technical assistance; |
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(6) participate in any government program; |
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(7) impose charges and fees; |
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(8) contract with a person to market the program; |
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(9) make reports; |
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(10) purchase liability insurance covering the board |
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and employees and agents of the board; and |
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(11) establish other policies, procedures, and |
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eligibility criteria to implement this chapter. |
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Sec. 162.005. INVESTMENT OF FUNDS. (a) All money paid by a |
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participant in connection with a participation agreement shall be: |
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(1) deposited into an individual ABLE account held on |
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behalf of that participant in the Texas ABLE savings plan account; |
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and |
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(2) promptly invested by the board. |
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(b) For new contracts entered into after December 1, 2015, |
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board members shall study investment plans of other states and |
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contract with or negotiate to provide benefit options that are the |
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same as or similar to other states' qualified plans for the purpose |
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of offering additional options for participants. |
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(c) The board may delegate to duly appointed investment |
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counselors authority to act on behalf of the board in the investment |
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and reinvestment of all or part of the funds and may also delegate |
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to those counselors the authority to act on behalf of the board in |
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the holding, purchasing, selling, assigning, transferring, or |
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disposing of any or all of the securities and investments in which |
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the funds in the Texas ABLE savings plan account have been invested, |
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as well as the proceeds from the investment of those funds. The |
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investment counselors must be registered as investment advisors |
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with the United States Securities and Exchange Commission. |
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(d) In exercising or delegating its investment powers and |
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authority, members of the board shall exercise ordinary business |
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care and prudence under the facts and circumstances prevailing at |
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the time of the action or decision. A member of the board is not |
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liable for any action taken or omitted with respect to the exercise |
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of, or delegation of, those powers and authority if the member |
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discharged the duties of the member's position in good faith and |
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with the degree of diligence, care, and skill that a prudent person |
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acting in a like capacity and familiar with those matters would use |
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in the conduct of an enterprise of a like character and with like |
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aims. |
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(e) A company or firm in which a member of the board has a |
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substantial interest may not handle an investment transaction |
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authorized by the board. A member of the board may not profit |
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directly or indirectly from an investment transaction authorized by |
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the board. |
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(f) A member of the board or an employee or agent of the ABLE |
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program may not receive any gain or profit from any funds or |
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transactions of the ABLE program. A member's, employee's, or |
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agent's acceptance of any gratuity or compensation for the purpose |
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of influencing an action taken with respect to the investment or |
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management of the funds of the ABLE program is grounds for removal |
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or termination of the member, employee, or agent, as applicable. |
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Sec. 162.006. TREATMENT OF ASSETS. (a) The assets of the |
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ABLE program shall at all times be preserved, invested, and spent |
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only for the purposes provided by this chapter and in accordance |
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with the participation agreements entered into under this chapter. |
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(b) The state does not have a property right in the assets of |
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the ABLE program. |
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Sec. 162.007. PARTICIPATION AGREEMENTS. (a) Under the |
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ABLE program, the board may enter into participation agreements |
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with participants on behalf of designated beneficiaries. |
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(b) A participation agreement must: |
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(1) stipulate the terms and conditions of the ABLE |
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program in which the participant makes contributions; |
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(2) specify the method for calculating the return on |
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the contribution made by the participant; |
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(3) clearly and prominently disclose to participants |
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the risk associated with depositing funds with the board; |
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(4) be organized and presented in a way and with |
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language that is easily understandable by the general public; and |
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(5) clearly and prominently disclose to participants |
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the existence of any load charge or similar charge assessed against |
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the ABLE accounts of the participants for administration or |
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services. |
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(c) Consistent with Section 529A, Internal Revenue Code, |
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the board shall establish: |
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(1) the maximum annual amount that a participant may |
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contribute with respect to a designated beneficiary; and |
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(2) a total contribution limit for ABLE accounts |
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established under the ABLE program with respect to a designated |
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beneficiary. |
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(d) The board may establish other requirements that the |
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board considers appropriate to provide adequate safeguards to |
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prevent contributions on behalf of a designated beneficiary from |
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exceeding the amount that is necessary to provide for the qualified |
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disability expenses of the beneficiary. |
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Sec. 162.008. QUALIFIED DISABILITY EXPENSES. |
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Contributions to an ABLE account and the earnings on those |
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contributions may be used, as provided in the participation |
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agreement, to pay the qualified disability expenses of a designated |
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beneficiary. |
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Sec. 162.009. DESIGNATED BENEFICIARY. (a) The |
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participant is the designated beneficiary of the ABLE account |
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except as described by Subsection (b) and as otherwise permitted by |
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Section 529A, Internal Revenue Code. |
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(b) If the designated beneficiary of the account is a minor |
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or has a custodian or other fiduciary appointed for the purpose of |
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managing the minor's financial affairs, the parent or custodian or |
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other fiduciary of the beneficiary may serve as the participant if |
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that form of ownership is permitted or not prohibited by Section |
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529A, Internal Revenue Code. |
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Sec. 162.010. CANCELLATION. (a) A participant may cancel |
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a participation agreement at will. |
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(b) Each participation agreement must provide that the |
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agreement may be canceled on the terms and conditions and on payment |
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of applicable fees and costs as provided by rule. |
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SECTION 5. This Act takes effect December 1, 2015. |
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* * * * * |