Connecticut 2016 Regular Session

Connecticut House Bill HB05628 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	General Assembly Raised Bill No. 5628
2	2	February Session, 2016 LCO No. 2876
3	3	02876_______FIN
4	4	Referred to Committee on FINANCE, REVENUE AND BONDING
5	5	Introduced by:
6	6	(FIN)
7	7
8	8	General Assembly
9	9
10	10	Raised Bill No. 5628
11	11
12	12	February Session, 2016
13	13
14	14	LCO No. 2876
15	15
16	16	02876_______FIN
17	17
18	18	Referred to Committee on FINANCE, REVENUE AND BONDING
19	19
20	20	Introduced by:
21	21
22	22	(FIN)
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24	24	AN ACT CONCERNING THE CONVERSION OF COLLEGE SAVINGS ACCOUNTS TO ABLE ACCOUNTS.
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26	26	Be it enacted by the Senate and House of Representatives in General Assembly convened:
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28	28	Section 1. Section 3-22i of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
29	29
30	30	Notwithstanding sections 3-13 to 3-13h, inclusive, the Treasurer shall invest the amounts on deposit in the trust in a manner reasonable and appropriate to achieve the objectives of the 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 the trust until (1) disbursed for qualified educational expenses, (2) expended on expenses incurred by the operations of the trust, [or] (3) refunded to the depositor or designated beneficiary on the conditions provided in the participation agreement, or (4) rolled-over into an achieving a better life experience account, as defined in section 3-39j, on the conditions provided in the participation agreement and to the extent permitted by federal law.
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32	32	Sec. 2. Section 3-22h of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
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34	34	The Treasurer, on behalf of the trust and for purposes of the trust, may:
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36	36	(1) Receive and invest moneys in the trust in any instruments, obligations, securities or property in accordance with section 3-22i, as amended by this act;
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38	38	(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 the trust by payroll deduction, transfer from bank accounts or otherwise, (B) the termination, withdrawal or transfer of payments under the trust, including transfers to or from a qualified tuition program established by another state pursuant to Section 529 of the Internal Revenue Code, (C) penalties for distributions not used or made in accordance with Section 529(b)(3) of the Internal Revenue Code, (D) changing of the identity of the designated beneficiary, [and] (E) any charges or fees in connection with the administration of the trust, and (F) to the extent permitted by federal law, the roll-over of funds from the trust into an achieving a better life experience account, as defined in section 3-39j, including a written statement explaining the tax consequences of such roll-over;
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40	40	(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;
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42	42	(4) Procure insurance in connection with the trust's property, assets, activities, or deposits or contributions to the trust;
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44	44	(5) Apply for, accept and expend gifts, grants, or donations from public or private sources to enable the trust to carry out its objectives;
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46	46	(6) Adopt regulations in accordance with chapter 54 for purposes of sections 3-22f to 3-22p, inclusive;
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48	48	(7) Sue and be sued;
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50	50	(8) Establish one or more funds within the trust and maintain separate accounts for each designated beneficiary; and
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52	52	(9) Take any other action necessary to carry out the purposes of sections 3-22f to 3-22p, inclusive, and incidental to the duties imposed on the Treasurer pursuant to said sections.
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54	54	Sec. 3. Section 3-39l of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
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56	56	The State Treasurer, on behalf of the trust and for purposes of the trust, may:
57	57
58	58	(1) Receive and invest moneys in the trust in any instruments, obligations, securities or property in accordance with section 3-39m;
59	59
60	60	(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 federal ABLE Act, (C) penalties for distributions not used or made in accordance with the federal ABLE Act, [and] (D) the amount of any charges or fees to be assessed in connection with the administration of the trust, and (E) to the extent permitted by federal law, the roll-over of funds from a Connecticut higher education trust account established pursuant to sections 3-22f to 3-22p, inclusive, or from a qualified tuition program established by another state pursuant to Section 529 of the Internal Revenue Code to an ABLE account;
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62	62	(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;
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64	64	(4) Procure insurance in connection with the trust's property, assets, activities or deposits or contributions to the trust;
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66	66	(5) Apply for, accept and expend gifts, grants or donations from public or private sources to enable the Connecticut Achieving A Better Life Experience Trust to carry out its objectives;
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68	68	(6) Sue and be sued;
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70	70	(7) Establish one or more funds within the trust and maintain separate ABLE accounts for each designated beneficiary; and
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72	72	(8) Take any other action necessary to carry out the purposes of sections 3-39j to 3-39q, inclusive, and incidental to the duties imposed on the State Treasurer pursuant to said sections.
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74	74	Sec. 4. Section 3-39k of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
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76	76	(a) (1) The State Treasurer shall establish a qualified ABLE program pursuant to the federal ABLE Act and sections 3-39j to 3-39q, inclusive. Under the program: (A) The State Treasurer shall administer individual ABLE accounts to encourage and assist eligible individuals and their families in saving private funds to provide support for eligible individuals, and (B) a person may make contributions to an individual ABLE account to meet the qualified disability expenses of the designated beneficiary of the account.
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78	78	(2) For the purposes of the program, there is established within the Office of the State Treasurer the Connecticut Achieving A Better Life Experience Trust. The trust shall constitute an instrumentality of the state and shall perform essential governmental functions, as provided in sections 3-39j to 3-39q, inclusive. The trust shall receive and hold all payments and deposits intended for ABLE accounts as well as gifts, bequests, endowments or federal, state or local grants and any other funds from public or private sources and all earnings, until disbursed in accordance with sections 3-39j to 3-39q, inclusive.
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80	80	(b) (1) 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, except as provided in subdivision (2) of this subsection. 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 3-39j to 3-39q, inclusive.
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82	82	(2) The trust shall continue in existence as long as it holds any deposits or other funds or has any obligations and until its existence is terminated by law, and upon termination of the trust, any unclaimed assets of the trust shall return to the state. Property of the trust shall be governed by section 3-61a.
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84	84	(c) The State Treasurer shall be responsible for the receipt, maintenance, administration, investment 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 any interest, in the program shall be used as security for a loan.
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86	86	(d) A person may make deposits to an ABLE account to meet the qualified disability expenses of the designated beneficiary of the account, provided the trust and deposits meet the other requirements of this section, the federal ABLE Act and any regulations adopted pursuant to the federal ABLE Act by the Secretary of the Treasury of the United States. Such deposits may include, to the extent permitted by federal law, the roll-over of funds from a Connecticut higher education trust account established pursuant to sections 3-22f to 3-22p, inclusive, or from a qualified tuition program established by another state pursuant to Section 529 of the Internal Revenue Code to an ABLE account.
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88	88	(e) On or before December 31, 2016, and annually thereafter, the State Treasurer shall submit (1) in accordance with the provisions of subsection (a) of section 3-37, 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, a report on the trust to the joint standing committees of the General Assembly having cognizance of matters relating to finance and public health, and shall make such report available to each depositor and designated beneficiary. The report required under subdivision (2) of this subsection shall include, but need 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, if any.
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93	93	This act shall take effect as follows and shall amend the following sections:
94	94	Section 1 October 1, 2016 3-22i
95	95	Sec. 2 October 1, 2016 3-22h
96	96	Sec. 3 October 1, 2016 3-39l
97	97	Sec. 4 October 1, 2016 3-39k
98	98
99	99	This act shall take effect as follows and shall amend the following sections:
100	100
101	101	Section 1
102	102
103	103	October 1, 2016
104	104
105	105	3-22i
106	106
107	107	Sec. 2
108	108
109	109	October 1, 2016
110	110
111	111	3-22h
112	112
113	113	Sec. 3
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115	115	October 1, 2016
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117	117	3-39l
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119	119	Sec. 4
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121	121	October 1, 2016
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123	123	3-39k
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125	125	Statement of Purpose:
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127	127	To allow for the roll-over of funds from a college savings account into an ABLE account.
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129	129	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]