State of Illinois
2015 and 2016


Introduced , by Rep. Laura Fine


15 ILCS 505/16.6 new

    Amends the State Treasurer Act. Creates the "Achieving a Better Life Experience" or "ABLE" account plan to encourage and assist individuals and families in saving private funds for the purpose of supporting persons with disabilities in endeavors to maintain health, independence, and quality of life. and to provide secure funding for disability-related expenses on 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. Provides that the State Treasurer shall be primarily responsible for the plan but shall work with the Illinois State Board of Investment. Sets forth the requirements of the plan. Requires the State Treasurer to adopt rules to implement the program. Defines required terms. Effective immediately.

LRB099 04289 JLK 24314 b





HB3360LRB099 04289 JLK 24314 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The State Treasurer Act is amended by adding
5Section 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" and "account" means an account established
10for the purpose of financing certain qualified expenses of
11persons with disabilities as set forth in this Section.
12    "ABLE account plan" and "plan" mean the savings account
13plan provided for in this Section.
14    "Beneficiary" means the ABLE account owner, or the person
15entitled to apply the savings accrued in an ABLE account, if
16that person is not the account owner.
17    "Executive Director" means the Executive Director of the
18Illinois State Board of Investment.
19    "Individual with a disability" means an individual who,
20before the date on which the individual attains age 26: (1) has
21a medically determinable physical or mental impairment, which
22results in marked and severe functional limitations and which
23can be expected to result in death, or which has lasted or can



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1be expected to last for a continuous period of not less than 12
2months; or (2) is blind.
3     "Participating financial institution" means any financial
4institution insured by the Federal Deposit Insurance
5Corporation and lawfully doing business in the State of
6Illinois and any credit union approved by the State Treasurer
7and lawfully doing business in the State of Illinois that
8agrees to process new accounts in the ABLE account program.
9    "Qualified disability expense" means an expense made for
10the benefit of an individual with a disability who is the
11beneficiary of an ABLE account, which includes, but is not
12limited to, education, housing, transportation, employment
13training and support, assistive technology and personal
14support services, health, prevention, and wellness, financial
15management and administrative services, legal fees, expenses
16for oversight and monitoring, funeral and burial expenses, and
17other expenses consistent with the purpose of this Section that
18are approved by the Treasurer and provided for by rule.
19    "Qualified distribution" means a distribution from an ABLE
20account used to pay for a qualified expense. "Qualified
21distribution" also includes investment earnings generated by
22the ABLE account.
23    "Qualified withdrawal" means a withdrawal from an ABLE
24account to pay a qualified disability expense of the
25beneficiary of the account. A qualified withdrawal may be made
26by an agent of the beneficiary who has the power of attorney or



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1by the beneficiary's legal guardian.
2    (b) The "Achieving a Better Life Experience" or "ABLE"
3account plan is hereby created to encourage and assist
4individuals and families in saving private funds for the
5purpose of supporting persons with disabilities in endeavors to
6maintain health, independence, and quality of life, and to
7provide secure funding for disability-related expenses on
8behalf of designated beneficiaries with disabilities that will
9supplement, but not supplant, benefits provided through
10private insurance, federal and State medical and disability
11insurance, the beneficiary's employment, and other sources.
12The Department of Human Services shall certify to the Treasurer
13that a person qualifies as an individual with a disability
14eligible for an ABLE account.
15    New accounts in the ABLE account program may be processed
16through participating financial institutions. Participating
17financial institutions may charge a processing fee to
18participants to open an account in the program. Every
19contribution received by a financial institution for
20investment in the ABLE account program shall be transferred
21from the financial institution to a location selected by the
22State Treasurer within one business day following the day that
23the funds must be made available in accordance with federal
24law. All communications from the State Treasurer to
25participants and donors shall reference the participating
26financial institution at which the account was processed.



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1    The Treasurer may invest the moneys in the ABLE account
2program in the same manner and in the same types of investments
3provided for the investment of moneys by the Illinois State
4Board of Investment. To enhance the safety and liquidity of the
5ABLE account program, to ensure the diversification of the
6investment portfolio of the pool, and in an effort to keep
7investment dollars in the State of Illinois, the State
8Treasurer may make a percentage of each account available for
9investment in participating financial institutions doing
10business in the State.
11    Under the plan, which must be operated as an accounts-type
12plan, a person may make contributions to an ABLE account to
13meet the qualified disability expenses incurred by or on behalf
14of the designated beneficiary of the account. Contributions to
15and the maximum balance of an ABLE account are subject to the
16requirements of subsection (b) of section 529A of the Internal
17Revenue Code. The beneficiary must be a resident of the state
18in which the ABLE account is opened or in a state that has a
19memorandum of understanding with another state to provide an
20ABLE account. A separate account must be maintained for each
21beneficiary for whom contributions are made, and no more than
22one account shall be established per beneficiary. Qualified
23distributions may be made directly to the account owner or
24beneficiary either before or after a qualified expense is made.
25Distributions from an ABLE account that are not used for a
26qualified expense are subject to income tax on the portion of



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1such distribution attributable to earnings from the account, in
2addition to a 10% penalty. Upon the death of a beneficiary, the
3amount remaining in a beneficiary's ABLE account must be
4distributed in accordance with subsection (f) of section 529A
5of the Internal Revenue Code. The provisions of this Section
6are exempt from taxation under Section 250 of the Illinois
7Income Tax Act and any other tax imposed by the State of
8Illinois or any of its subdivisions so long as distributions
9are used for qualified expenses.
10    In designing and establishing the plan's requirements and
11in negotiating or entering into contracts with third parties,
12the Treasurer shall consult with the Executive Director. The
13Treasurer and the Executive Director shall establish an annual
14fee, equal to a percentage of the average daily assets of the
15plan, to be imposed on participants to recover the costs of
16administration, recordkeeping, and investment management. The
17State Treasurer shall administer the plan, including accepting
18and processing applications, maintaining account records,
19making payments, and undertaking any other necessary tasks to
20administer the plan. Notwithstanding other requirements of
21this Section, the State Treasurer shall adopt rules for
22purposes of implementing and administering the plan and
23obtaining certification of eligible beneficiaries from the
24Department of Human Services.
25    (c) The State Treasurer shall ensure that the plan meets
26the requirements for an ABLE account under Section 529 of the



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1Internal Revenue Code. In doing so, the Treasurer shall adopt
2rules and establish guidelines as necessary to ensure this
4    (d) The State Treasurer shall promote awareness of the
5availability and advantages of the ABLE account program as a
6way to assist individuals and families in saving private funds
7for the purpose of supporting individuals with disabilities.
8The Treasurer's office shall not publicize or otherwise market
9the ABLE account program or accept any moneys into the ABLE
10account program until the Internal Revenue Service issues its
11final regulations concerning State ABLE account programs.
12    (e) The State Treasurer may adopt any other rules necessary
13to implement the requirements of this Section.
14    Section 99. Effective date. This Act takes effect upon
15becoming law.