Illinois General Assembly - Full Text of SB2247
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Full Text of SB2247  103rd General Assembly




SB2247 EngrossedLRB103 25759 DTM 57151 b

1    AN ACT concerning assistance to persons with disabilities.
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 changing
5Section 16.6 as follows:
6    (15 ILCS 505/16.6)
7    Sec. 16.6. ABLE account program.
8    (a) As used in this Section:
9    "ABLE account" or "account" means an account established
10for the purpose of financing certain qualified expenses of
11eligible individuals as specifically provided for in this
12Section and authorized by Section 529A of the Internal Revenue
14    "ABLE account plan" or "plan" means the savings account
15plan provided for in this Section.
16    "Account administrator" means the person or entity
17selected by the State Treasurer to administer the daily
18operations of the ABLE account plan and provide marketing,
19recordkeeping, investment management, and other services for
20the plan.
21    "Aggregate account balance" means the amount in an account
22on a particular date or the fair market value of an account on
23a particular date.



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1    "Beneficiary" or "designated beneficiary" means the ABLE
2account owner.
3    "Contracting state" means a state without a qualified ABLE
4program which has entered into a contract with Illinois to
5provide residents of the contracting state access to a
6qualified ABLE program.
7    "Designated representative" means a person or entity who
8is authorized to act on behalf of a "designated beneficiary".
9A designated beneficiary is authorized to act on his or her own
10behalf unless the designated beneficiary is a minor or the
11designated beneficiary has been adjudicated to have a
12disability so that a guardian has been appointed. A designated
13representative acts in a fiduciary capacity to the designated
14beneficiary. A person or entity seeking to open an ABLE
15account on behalf of a designated beneficiary must provide
16certification, subject to penalties of perjury, of the basis
17for the person's or entity's authority to act as a designated
18representative and that there is no other person or entity
19with higher priority to establish the ABLE account under
20Section 529A of the Internal Revenue Code and federal
22    "Disability certification" has the meaning given to that
23term under Section 529A of the Internal Revenue Code.
24    "Eligible individual" has the meaning given to that term
25under Section 529A of the Internal Revenue Code.
26    "Internal Revenue Code" means the federal Internal Revenue



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



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1to save for qualified disability expenses incurred by or on
2behalf of an eligible individual.
3    (c) Promotion of the ABLE Program. The State Treasurer
4shall promote awareness of the availability and advantages of
5the ABLE account plan as a way to assist individuals and
6families in saving private funds for the purpose of supporting
7individuals with disabilities.
8    (d) Availability of the ABLE Program. An ABLE account may
9be established under this Section for a designated beneficiary
10who is a resident of Illinois, a resident of a contracting
11state, or a resident of any other state.
12    Annual contributions to an ABLE account on behalf of a
13beneficiary are subject to the requirements of subsection (b)
14of Section 529A of the Internal Revenue Code. No person or
15entity may make a contribution to an ABLE account if such a
16contribution would result in the aggregate account balance of
17an ABLE account exceeding the account balance limit authorized
18under Section 529A of the Internal Revenue Code. The Treasurer
19shall review the contribution limit at least annually. A
20separate account must be maintained for each beneficiary for
21whom contributions are made, and no more than one account
22shall be established per beneficiary. If an ABLE account is
23established for a designated beneficiary, no account
24subsequently established for such beneficiary shall be treated
25as an ABLE account. The preceding sentence shall not apply in
26the case of an ABLE account established for purposes of a



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1rollover as permitted under Sections 529 and 529A of the
2Internal Revenue Code.
3    (e) Administration of the ABLE Program. The State
4Treasurer shall administer the plan, including accepting and
5processing applications, maintaining account records, making
6payments, and undertaking any other necessary tasks to
7administer the plan, including the appointment of an account
8administrator. The State Treasurer may contract with one or
9more third parties to carry out some or all of these
10administrative duties, including, but not limited to,
11providing investment management services, incentives, and
12marketing the plan. The State Treasurer may enter into
13agreements with other states to either allow Illinois
14residents to participate in a plan operated by another state
15or to allow residents of other states to participate in the
16Illinois ABLE plan. The State Treasurer may require any
17certifications that he or she deems necessary to implement the
18program, including oaths or affirmations made under penalties
19of perjury.
20    (f) Fees. The State Treasurer may establish fees to be
21imposed on participants to cover the costs of administration,
22recordkeeping, and investment management. The State Treasurer
23must use his or her best efforts to keep these fees as low as
24possible, consistent with efficient administration.
25    (g) The Illinois ABLE Accounts Administrative Fund. The
26Illinois ABLE Accounts Administrative Fund is created as a



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1nonappropriated trust fund in the State treasury. The State
2Treasurer shall use moneys in the Administrative Fund to cover
3administrative expenses incurred under this Section. The
4Administrative Fund may receive any grants or other moneys
5designated for administrative purposes from the State, or any
6unit of federal, state, or local government, or any other
7person, firm, partnership, or corporation. Any interest
8earnings that are attributable to moneys in the Administrative
9Fund must be deposited into the Administrative Fund. Any fees
10established by the State Treasurer to cover the costs of
11administration, recordkeeping, and investment management shall
12be deposited into the Administrative Fund.
13    Subject to appropriation, the State Treasurer may pay
14administrative costs associated with the creation and
15management of the plan until sufficient assets are available
16in the Administrative Fund for that purpose.
17    (h) Privacy. Applications for accounts and other records
18obtained or compiled by the Treasurer or the Treasurer's
19agents reflecting , designated beneficiary information data,
20account information data, or designated representative
21information and data on beneficiaries of accounts are
22confidential and exempt from disclosure under the Freedom of
23Information Act.
24    (i) Investment Policy. The Treasurer shall prepare and
25adopt a written statement of investment policy that includes a
26risk management and oversight program which shall be reviewed



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1annually and posted on the Treasurer's website prior to
2implementation. The risk management and oversight program
3shall be designed to ensure that an effective risk management
4system is in place to monitor the risk levels of the ABLE plan,
5to ensure that the risks taken are prudent and properly
6managed, to provide an integrated process for overall risk
7management, and to assess investment returns as well as risk
8to determine if the risks taken are adequately compensated
9compared to applicable performance benchmarks and standards.
10To enhance the safety and liquidity of ABLE accounts, to
11ensure the diversification of the investment portfolio of
12accounts, and in an effort to keep investment dollars in the
13State, the State Treasurer may make a percentage of each
14account available for investment in participating financial
15institutions doing business in the State, except that the
16accounts may be invested without limit in investment options
17from open-ended investment companies registered under Section
1880a of the federal Investment Company Act of 1940. The State
19Treasurer may contract with one or more third parties for
20investment management, recordkeeping, or other services in
21connection with investing the accounts.
22    (j) Investment restrictions. The State Treasurer shall
23ensure that the plan meets the requirements for an ABLE
24account under Section 529A of the Internal Revenue Code. The
25State Treasurer may request a private letter ruling or rulings
26from the Internal Revenue Service and must take any necessary



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1steps to ensure that the plan qualifies under relevant
2provisions of federal law. Notwithstanding the foregoing, any
3determination by the Secretary of the Treasury of the United
4States that an account was utilized to make non-qualified
5distributions shall not result in an ABLE account being
6disregarded as a resource.
7    (k) Contributions. A person or entity may make
8contributions to an ABLE account on behalf of a beneficiary.
9Contributions to an account made by persons or entities other
10than the designated beneficiary become the property of the
11designated beneficiary. Contributions to an account shall be
12considered as a transfer of assets for fair market value. A
13person or entity does not acquire an interest in an ABLE
14account by making contributions to an account. A contribution
15to any account for a beneficiary must be rejected if the
16contribution would cause either the aggregate or annual
17account balance of the account to exceed the limits imposed by
18Section 529A of the Internal Revenue Code.
19    Any change in designated beneficiary must be done in a
20manner consistent with Section 529A of the Internal Revenue
22    (l) Notice. Notice of any proposed amendments to the rules
23and regulations shall be provided to all designated
24beneficiaries or their designated representatives prior to
25adoption. Amendments to rules and regulations shall apply only
26to contributions made after the adoption of the amendment.



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



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1and operation shall be exempt from all taxation by the State of
2Illinois and any of its subdivisions to the extent exempt from
3federal income taxation. The accrued earnings on investments
4in an ABLE account once disbursed on behalf of a designated
5beneficiary shall be similarly exempt from all taxation by the
6State of Illinois and its subdivisions to the extent exempt
7from federal income taxation, so long as they are used for
8qualified expenses.
9    Notwithstanding any other provision of law that requires
10consideration of one or more financial circumstances of an
11individual, for the purpose of determining eligibility to
12receive, or the amount of, any assistance or benefit
13authorized by such provision to be provided to or for the
14benefit of such individual, any amount, including earnings
15thereon, in the ABLE account of such individual, any
16contributions to the ABLE account of the individual, and any
17distribution for qualified disability expenses shall be
18disregarded for such purpose with respect to any period during
19which such individual maintains, makes contributions to, or
20receives distributions from such ABLE account.
21    (o) Distributions. The designated beneficiary or the
22designated representative of the designated beneficiary may
23make a qualified distribution for the benefit of the
24designated beneficiary. Qualified distributions shall be made
25for qualified disability expenses allowed pursuant to Section
26529A of the Internal Revenue Code. Qualified distributions



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1must be withdrawn proportionally from contributions and
2earnings in a designated beneficiary's account on the date of
3distribution as provided in Section 529A of the Internal
4Revenue Code. Unless prohibited by federal law, upon the death
5of a designated beneficiary, proceeds from an account may be
6transferred to the estate of a designated beneficiary, or to
7an account for another eligible individual specified by the
8designated beneficiary or the estate of the designated
9beneficiary, or transferred pursuant to a payable on death
10account agreement. A payable on death account agreement may be
11executed by the designated beneficiary or a designated
12representative who has been granted such power. Upon the death
13of a designated beneficiary, prior to distribution of the
14balance to the estate, account for another eligible
15individual, or transfer pursuant to a payable on death account
16agreement, the State Treasurer may require verification that
17the funeral and burial expenses of the designated beneficiary
18have been paid. An agency or instrumentality of the State may
19not seek payment under subsection (f) of Section 529A of the
20federal Internal Revenue Code from the account or its proceeds
21for benefits provided to a designated beneficiary.
22    (p) Rules. The State Treasurer may adopt rules to carry
23out the purposes of this Section. The State Treasurer shall
24further have the power to issue peremptory rules necessary to
25ensure that ABLE accounts meet all of the requirements for a
26qualified state ABLE program under Section 529A of the



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1Internal Revenue Code and any regulations issued by the
2Internal Revenue Service.
3    (q) Name. The ABLE Account Program may also be referred to
4as the Senator Scott Bennett ABLE Program.
5(Source: P.A. 101-329, eff. 8-9-19; 102-392, eff. 8-16-21;
6102-1024, eff. 5-27-22.)
7    Section 99. Effective date. This Act takes effect upon
8becoming law.