General Assembly Substitute Bill No. 6738
January Session, 2015 *_____HB06738PRIFIN031315____*
General Assembly
Substitute Bill No. 6738
January Session, 2015
*_____HB06738PRIFIN031315____*
AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE PROGRAM REVIEW AND INVESTIGATIONS COMMITTEE CONCERNING THE FEDERAL ACHIEVING A BETTER LIFE EXPERIENCE ACT.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective October 1, 2015) As used in this section, and sections 2 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act:
(1) "Achieving a better life experience account" or "ABLE account" means an account established and maintained pursuant to sections 2 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act, that is established and owned by an eligible individual for the purposes of qualified disability expenses.
(2) "Designated administrator" means any corporation designated by the Treasurer for the purpose of administering ABLE accounts.
(3) "Disability certification" means, with respect to an individual, a certification by the individual or the parent or guardian of the individual that satisfies the Secretary of the Treasury of the United States that (A) the individual has a medically determinable physical or mental impairment, that results in marked and severe functional limitations, and that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve months, or is blind, within the meaning of Section 1614(a)(2) of the Social Security Act, and (B) such impairment or blindness occurred before the date on which the individual attained the age of twenty-six, and (C) a physician has signed a copy of the individual's diagnosis relating to the individual's relevant impairment or impairments or blindness.
(4) "Eligible individual" means an individual who is entitled to benefits based on blindness or disability under Title II or XVI of the Social Security Act, and such blindness or disability occurred before the date on which the individual attained the age of twenty-six, and a disability certification with respect to such individual is filed with the Treasurer.
(5) "Designated beneficiary" means any individual state resident or resident of a contracting state originally designated in the participation agreement, who is an eligible individual and is the owner of an ABLE account.
(6) "Depositor" means any person making a deposit, payment, contribution, gift or otherwise in an ABLE account pursuant to a participation agreement.
(7) "Internal Revenue Code" means the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.
(8) "Participation agreement" means an agreement between the trust and depositors for participation in an ABLE account for a designated beneficiary.
(9) "Contracting state" means a state without a qualified ABLE program that has entered into a contract with this state to provide residents of the contracting state with access to qualified ABLE programs.
(10) "Physician" means a physician licensed under chapter 370 of the general statutes.
(11) "Qualified disability expenses" means any expenses related to an eligible individual's blindness or disability that are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: 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 that are approved by the Secretary of the Treasury of the United States under regulations and consistent with the purposes of this section and sections 2 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act.
Sec. 2. (NEW) (Effective October 1, 2015) (a) There is established within the Office of the Treasurer the Achieving A Better Life Experience Trust for the purposes of administering ABLE accounts to encourage and assist eligible individuals and families in saving private funds to provide support for individuals with disabilities. Under the trust, a person may make contributions to an ABLE account to meet the qualified disability expenses of the designated beneficiary of the account. The trust shall constitute an instrumentality of the state and shall perform essential governmental functions, as provided in sections 1 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act. The trust shall receive and hold all payments and deposits or contributions intended for ABLE accounts as well as gifts, bequests, endowments or federal, state or local grants and any other funds from any public or private source and all earnings, until disbursed in accordance with sections 1 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act.
(b) The amounts on deposit in the trust shall not constitute property of the state and the trust shall not be construed to be a department, institution or agency of the state. Amounts on deposit in the trust shall not be commingled with state funds and the state shall have no claim to or against, or interest in, such amounts. Any contract entered into by, or any obligation of, the trust shall not constitute a debt or obligation of the state and the state shall have no obligation to any designated beneficiary or any other person on account of the trust and all amounts obligated to be paid from the trust shall be limited to amounts available for such obligation on deposit in the trust. The amounts on deposit in the trust may only be disbursed in accordance with the provisions of sections 1 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act. The trust shall continue in existence as long as it holds any deposits or has any obligations and until its existence is terminated by law, and upon termination any unclaimed assets shall return to the state. Property of the trust shall be governed by section 3-61a of the general statutes.
(c) The Treasurer shall be responsible for the receipt, maintenance, administration, investing and disbursements of amounts from the trust. The trust shall not receive deposits in any form other than cash. No depositor or designated beneficiary may direct the investment of any contributions or amounts held in the trust other than in the specific fund options provided for by the trust and shall not direct investments in such specific fund options more than two times in any calendar year. No interest, or portion of interest, in the program shall be used as security for a loan.
(d) A person may make contributions to an ABLE account to meet the qualified disability expenses of the designated beneficiary of the account, provided the trust and contributions meet the other requirements of this section, the ABLE Act of 2014, P.L. 113-295, as amended from time to time, and any regulations adopted thereunder by the Secretary of the Treasury of the United States.
(e) On or before June 30, 2016, and annually thereafter, the Treasurer shall submit (1) in accordance with the provisions of section 3-37 of the general statutes, a report to the Governor on the operations of the trust, including the receipts, disbursements, assets, investments and liabilities and administrative costs of the trust for the prior fiscal year, and (2) in accordance with the provisions of section 11-4a of the general statutes, a report on the trust to the joint standing committee of the General Assembly having cognizance of matters relating to public health, and shall make such report available to each depositor and designated beneficiary. The report described in subdivision (2) of this subsection shall include, but not be limited to: (A) The number of ABLE accounts, (B) the total amount of contributions to such accounts; (C) the total amount and nature of distributions from such accounts; and (D) a description of issues relating to the abuse of such accounts.
Sec. 3. (NEW) (Effective October 1, 2015) The Treasurer, on behalf of the trust and for purposes of the trust, may:
(1) Receive and invest moneys in the trust in any instruments, obligations, securities or property in accordance with section 4 of this act;
(2) Establish consistent terms for each participation agreement, bulk deposit, coupon or installment payments, including, but not limited to, (A) the method of payment into an ABLE account by payroll deduction, transfer from bank accounts or otherwise, (B) the termination, withdrawal or transfer of payments under an ABLE account, including transfers to or from a qualified ABLE program established by another state pursuant to the ABLE Act of 2014, P.L. 113-295, as amended from time to time, (C) penalties for distributions not used or made in accordance with said act, and (D) any charges or fees in connection with the administration of the trust;
(3) Enter into one or more contractual agreements, including contracts for legal, actuarial, accounting, custodial, advisory, management, administrative, advertising, marketing and consulting services for the trust and pay for such services from the gains and earnings of the trust;
(4) Procure insurance in connection with the trust's property, assets, activities or deposits or contributions to the trust;
(5) Apply for, accept and expend gifts, grants or donations from public or private sources to enable the achieving a better life experience program to carry out its objectives;
(6) Sue and be sued;
(7) Establish one or more funds within the trust and maintain separate ABLE accounts for each designated beneficiary; and
(8) Take any other action necessary to carry out the purposes of sections 1 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act, and incidental to the duties imposed on the Treasurer pursuant to said sections.
Sec. 4. (NEW) (Effective October 1, 2015) Notwithstanding sections 3-13 to 3-13h, inclusive, of the general statutes, the Treasurer shall invest the amounts on deposit in the trust in a manner reasonable and appropriate to achieve the objectives of such trust, exercising the discretion and care of a prudent person in similar circumstances with similar objectives. The Treasurer shall give due consideration to rate of return, risk, term or maturity, diversification of the total portfolio within the trust, liquidity, the projected disbursements and expenditures and the expected payments, deposits, contributions and gifts to be received. The Treasurer shall not require the trust to invest directly in obligations of the state or any political subdivision of the state or in any investment or other fund administered by the Treasurer. The assets of the trust shall be continuously invested and reinvested in a manner consistent with the objectives of such trust until disbursed for qualified disability expenses, expended on expenses incurred by the operations of the trust or refunded to the depositor or designated beneficiary on the conditions provided in the participation agreement.
Sec. 5. (NEW) (Effective October 1, 2015) Participation in the trust and the offering and solicitation of the trust are exempt from sections 36b-16 and 36b-22 of the general statutes. The Treasurer shall obtain written advice of counsel or written advice from the Securities Exchange Commission, or both, that the trust and the offering of participation in the trust are not subject to federal securities laws.
Sec. 6. (NEW) (Effective October 1, 2015) The property of the trust and the earnings on the trust shall be exempt from all taxation by the state and all political subdivisions of the state.
Sec. 7. (NEW) (Effective October 1, 2015) The state pledges to depositors, designated beneficiaries and with any party who enters into contracts with the trust, pursuant to the provisions of this section, sections 1 to 6, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act, that the state will not limit or alter the rights under said sections vested in the trust or contract with the trust until such obligations are fully met and discharged and such contracts are fully performed on the part of the trust, provided nothing contained in this section shall preclude such limitation or alteration if adequate provision is made by law for the protection of such depositors and designated beneficiaries pursuant to the obligations of the trust or parties who entered into such contracts with the trust. The trust, on behalf of the state, may include this pledge and undertaking for the state in participation agreements and such other obligations or contracts.
Sec. 8. Section 3-22o of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
The Treasurer shall take any action necessary to ensure that the trust complies with all applicable requirements of federal and state laws, rules and regulations to the extent necessary for the trust to constitute a qualified state tuition program and be exempt from taxation under Section 529 of the Internal Revenue Code and the ABLE Act of 2014, P.L. 113-295.
Sec. 9. (NEW) (Effective October 1, 2015) Notwithstanding any provision of the general statutes, moneys invested in an ABLE account, contributions to an ABLE account of an individual and distributions for qualified disability expenses shall be disregarded for purposes of determining an individual's eligibility for assistance under the temporary family assistance program, as described in section 17b-112 of the general statutes, programs funded under the federal Low Income Home Energy Assistance Program block grant and any other federally funded assistance or benefit program, including the state's medical assistance program, that requires consideration of one or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit.
Sec. 10. Subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 of the general statutes, as amended by section 50 of public act 14-47, is repealed and the following is substituted in lieu thereof (Effective October 1, 2015 and applicable to taxable years commencing on or after January 1, 2015):
(B) There shall be subtracted therefrom (i) to the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law, (ii) to the extent allowable under section 12-718, exempt dividends paid by a regulated investment company, (iii) the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia, to the extent properly includable in gross income for federal income tax purposes, (iv) to the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits, (v) to the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years, (vi) to the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, (vii) to the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized, (viii) any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual, (ix) ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual, (x) (I) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and (II) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code, (xi) to the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746, (xii) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiii) to the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiv) to the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim, (xv) to the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder, (xvi) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive, (xvii) to the extent properly includable in gross income for federal income tax purposes, fifty per cent of the income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code, (xviii) to the extent properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(x) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year, (xix) to the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made, [and] (xx) to the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, for the taxable year commencing January 1, 2016, twenty-five per cent of the income received from the state teachers' retirement system, and for the taxable year commencing January 1, 2017, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system, and (xxi) to the extent properly includable in gross income for federal income tax purposes the amount of any contribution to an ABLE account, as defined in section 1 of this act, in the taxable year that such contribution is made.
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2015 New section
Sec. 2 October 1, 2015 New section
Sec. 3 October 1, 2015 New section
Sec. 4 October 1, 2015 New section
Sec. 5 October 1, 2015 New section
Sec. 6 October 1, 2015 New section
Sec. 7 October 1, 2015 New section
Sec. 8 October 1, 2015 3-22o
Sec. 9 October 1, 2015 New section
Sec. 10 October 1, 2015 and applicable to taxable years commencing on or after January 1, 2015 12-701(a)(20)(B)
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2015
New section
Sec. 2
October 1, 2015
New section
Sec. 3
October 1, 2015
New section
Sec. 4
October 1, 2015
New section
Sec. 5
October 1, 2015
New section
Sec. 6
October 1, 2015
New section
Sec. 7
October 1, 2015
New section
Sec. 8
October 1, 2015
3-22o
Sec. 9
October 1, 2015
New section
Sec. 10
October 1, 2015 and applicable to taxable years commencing on or after January 1, 2015
12-701(a)(20)(B)
Statement of Legislative Commissioners:
In Section 1, "this section and sections 2 to 8, inclusive, of this act" was changed to "this section, sections 2 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act"; in Section 1(1) and 1(11), "sections 2 to 8, inclusive, of this act" was changed to "sections 2 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act"; in Sections 2(a) and 2(b), "sections 1 to 8, inclusive, of this act" was changed to "sections 1 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act"; in Section 3(8), "sections 1 to 8, inclusive, of this act" was changed to sections 1 to 7, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act,"; in Section 7, "sections 1 to 8, inclusive, of this act" was changed to "this section, "sections 1 to 6, inclusive, and section 9 of this act and section 3-22o of the general statutes, as amended by this act", for accuracy and internal consistency.
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