IL
Illinois House Bill HB3811

Illinois 2023-2024 Regular Session

Illinois House Bill HB3811 Compare Versions

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1+103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3811 Introduced , by Rep. Kelly M. Burke SYNOPSIS AS INTRODUCED: 15 ILCS 505/16.6 Amends the State Treasurer Act. Provides that any entity may make contributions to an ABLE account. Makes changes concerning privacy of ABLE account information. Provides that the ABLE Account Program may also be referred to as the Senator Scott Bennett ABLE Program. Effective immediately. LRB103 31048 DTM 57666 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3811 Introduced , by Rep. Kelly M. Burke SYNOPSIS AS INTRODUCED: 15 ILCS 505/16.6 15 ILCS 505/16.6 Amends the State Treasurer Act. Provides that any entity may make contributions to an ABLE account. Makes changes concerning privacy of ABLE account information. Provides that the ABLE Account Program may also be referred to as the Senator Scott Bennett ABLE Program. Effective immediately. LRB103 31048 DTM 57666 b LRB103 31048 DTM 57666 b A BILL FOR
2+103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3811 Introduced , by Rep. Kelly M. Burke SYNOPSIS AS INTRODUCED:
3+15 ILCS 505/16.6 15 ILCS 505/16.6
4+15 ILCS 505/16.6
5+Amends the State Treasurer Act. Provides that any entity may make contributions to an ABLE account. Makes changes concerning privacy of ABLE account information. Provides that the ABLE Account Program may also be referred to as the Senator Scott Bennett ABLE Program. Effective immediately.
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8+A BILL FOR
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311 1 AN ACT concerning State government.
412 2 Be it enacted by the People of the State of Illinois,
513 3 represented in the General Assembly:
614 4 Section 5. The State Treasurer Act is amended by changing
7-5 Sections 16.5 and 16.6 as follows:
8-6 (15 ILCS 505/16.5)
9-7 Sec. 16.5. College Savings Pool.
10-8 (a) Definitions. As used in this Section:
11-9 "Account owner" means any person or entity who has opened
12-10 an account or to whom ownership of an account has been
13-11 transferred, as allowed by the Internal Revenue Code, and who
14-12 has authority to withdraw funds, direct withdrawal of funds,
15-13 change the designated beneficiary, or otherwise exercise
16-14 control over an account in the College Savings Pool.
17-15 "Donor" means any person or entity who makes contributions
18-16 to an account in the College Savings Pool.
19-17 "Designated beneficiary" means any individual designated
20-18 as the beneficiary of an account in the College Savings Pool by
21-19 an account owner. A designated beneficiary must have a valid
22-20 social security number or taxpayer identification number. In
23-21 the case of an account established as part of a scholarship
24-22 program permitted under Section 529 of the Internal Revenue
25-23 Code, the designated beneficiary is any individual receiving
15+5 Section 16.6 as follows:
16+6 (15 ILCS 505/16.6)
17+7 Sec. 16.6. ABLE account program.
18+8 (a) As used in this Section:
19+9 "ABLE account" or "account" means an account established
20+10 for the purpose of financing certain qualified expenses of
21+11 eligible individuals as specifically provided for in this
22+12 Section and authorized by Section 529A of the Internal Revenue
23+13 Code.
24+14 "ABLE account plan" or "plan" means the savings account
25+15 plan provided for in this Section.
26+16 "Account administrator" means the person or entity
27+17 selected by the State Treasurer to administer the daily
28+18 operations of the ABLE account plan and provide marketing,
29+19 recordkeeping, investment management, and other services for
30+20 the plan.
31+21 "Aggregate account balance" means the amount in an account
32+22 on a particular date or the fair market value of an account on
33+23 a particular date.
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34-1 benefits accumulated in the account as a scholarship.
35-2 "Eligible educational institution" means public and
36-3 private colleges, junior colleges, graduate schools, and
37-4 certain vocational institutions that are described in Section
38-5 1001 of the Higher Education Resource and Student Assistance
39-6 Chapter of Title 20 of the United States Code (20 U.S.C. 1001)
40-7 and that are eligible to participate in Department of
41-8 Education student aid programs.
42-9 "Member of the family" has the same meaning ascribed to
43-10 that term under Section 529 of the Internal Revenue Code.
44-11 "Nonqualified withdrawal" means a distribution from an
45-12 account other than a distribution that (i) is used for the
46-13 qualified expenses of the designated beneficiary; (ii) results
47-14 from the beneficiary's death or disability; (iii) is a
48-15 rollover to another account in the College Savings Pool; or
49-16 (iv) is a rollover to an ABLE account, as defined in Section
50-17 16.6 of this Act, or any distribution that, within 60 days
51-18 after such distribution, is transferred to an ABLE account of
52-19 the designated beneficiary or a member of the family of the
53-20 designated beneficiary to the extent that the distribution,
54-21 when added to all other contributions made to the ABLE account
55-22 for the taxable year, does not exceed the limitation under
56-23 Section 529A(b) of the Internal Revenue Code; or (v) is a
57-24 rollover to a Roth IRA account to the extent permitted by
58-25 Section 529 of the Internal Revenue Code.
59-26 "Qualified expenses" means: (i) tuition, fees, and the
37+103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3811 Introduced , by Rep. Kelly M. Burke SYNOPSIS AS INTRODUCED:
38+15 ILCS 505/16.6 15 ILCS 505/16.6
39+15 ILCS 505/16.6
40+Amends the State Treasurer Act. Provides that any entity may make contributions to an ABLE account. Makes changes concerning privacy of ABLE account information. Provides that the ABLE Account Program may also be referred to as the Senator Scott Bennett ABLE Program. Effective immediately.
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43+A BILL FOR
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70-1 costs of books, supplies, and equipment required for
71-2 enrollment or attendance at an eligible educational
72-3 institution; (ii) expenses for special needs services, in the
73-4 case of a special needs beneficiary, which are incurred in
74-5 connection with such enrollment or attendance; (iii) certain
75-6 expenses, to the extent they qualify as qualified higher
76-7 education expenses under Section 529 of the Internal Revenue
77-8 Code, for the purchase of computer or peripheral equipment or
78-9 Internet access and related services, if such equipment,
79-10 software, or services are to be used primarily by the
80-11 beneficiary during any of the years the beneficiary is
81-12 enrolled at an eligible educational institution, except that,
82-13 such expenses shall not include expenses for computer software
83-14 designed for sports, games, or hobbies, unless the software is
84-15 predominantly educational in nature; (iv) room and board
85-16 expenses incurred while attending an eligible educational
86-17 institution at least half-time; (v) expenses for fees, books,
87-18 supplies, and equipment required for the participation of a
88-19 designated beneficiary in an apprenticeship program registered
89-20 and certified with the Secretary of Labor under the National
90-21 Apprenticeship Act (29 U.S.C. 50); and (vi) amounts paid as
91-22 principal or interest on any qualified education loan of the
92-23 designated beneficiary or a sibling of the designated
93-24 beneficiary, as allowed under Section 529 of the Internal
94-25 Revenue Code. A student shall be considered to be enrolled at
95-26 least half-time if the student is enrolled for at least half
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106-1 the full-time academic workload for the course of study the
107-2 student is pursuing as determined under the standards of the
108-3 institution at which the student is enrolled.
109-4 (b) Establishment of the Pool. The State Treasurer may
110-5 establish and administer the College Savings Pool as a
111-6 qualified tuition program under Section 529 of the Internal
112-7 Revenue Code. The Pool may consist of one or more college
113-8 savings programs. The State Treasurer, in administering the
114-9 College Savings Pool, may: (1) receive, hold, and invest
115-10 moneys paid into the Pool; and (2) perform any other action he
116-11 or she deems necessary to administer the Pool, including any
117-12 other actions necessary to ensure that the Pool operates as a
118-13 qualified tuition program in accordance with Section 529 of
119-14 the Internal Revenue Code.
120-15 (c) Administration of the College Savings Pool. The State
121-16 Treasurer may delegate duties related to the College Savings
122-17 Pool to one or more contractors. The contributions deposited
123-18 in the Pool, and any earnings thereon, shall not constitute
124-19 property of the State or be commingled with State funds and the
125-20 State shall have no claim to or against, or interest in, such
126-21 funds; provided that the fees collected by the State Treasurer
127-22 in accordance with this Act, scholarship programs administered
128-23 by the State Treasurer, and seed funds deposited by the State
129-24 Treasurer under Section 16.8 of the Act are State funds.
130-25 (c-5) College Savings Pool Account Summaries. The State
131-26 Treasurer shall provide a separate accounting for each
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68+1 "Beneficiary" or "designated beneficiary" means the ABLE
69+2 account owner.
70+3 "Contracting state" means a state without a qualified ABLE
71+4 program which has entered into a contract with Illinois to
72+5 provide residents of the contracting state access to a
73+6 qualified ABLE program.
74+7 "Designated representative" means a person or entity who
75+8 is authorized to act on behalf of a "designated beneficiary".
76+9 A designated beneficiary is authorized to act on his or her own
77+10 behalf unless the designated beneficiary is a minor or the
78+11 designated beneficiary has been adjudicated to have a
79+12 disability so that a guardian has been appointed. A designated
80+13 representative acts in a fiduciary capacity to the designated
81+14 beneficiary. A person or entity seeking to open an ABLE
82+15 account on behalf of a designated beneficiary must provide
83+16 certification, subject to penalties of perjury, of the basis
84+17 for the person's or entity's authority to act as a designated
85+18 representative and that there is no other person or entity
86+19 with higher priority to establish the ABLE account under
87+20 Section 529A of the Internal Revenue Code and federal
88+21 regulations.
89+22 "Disability certification" has the meaning given to that
90+23 term under Section 529A of the Internal Revenue Code.
91+24 "Eligible individual" has the meaning given to that term
92+25 under Section 529A of the Internal Revenue Code.
93+26 "Internal Revenue Code" means the federal Internal Revenue
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142-1 designated beneficiary. The separate accounting shall be
143-2 provided to the account owner of the account for the
144-3 designated beneficiary at least annually and shall show the
145-4 account balance, the investment in the account, the investment
146-5 earnings, and the distributions from the account.
147-6 (d) Availability of the College Savings Pool. The State
148-7 Treasurer may permit persons, including trustees of trusts and
149-8 custodians under a Uniform Transfers to Minors Act or Uniform
150-9 Gifts to Minors Act account, and certain legal entities to be
151-10 account owners, including as part of a scholarship program,
152-11 provided that: (1) an individual, trustee or custodian must
153-12 have a valid social security number or taxpayer identification
154-13 number, be at least 18 years of age, and have a valid United
155-14 States street address; and (2) a legal entity must have a valid
156-15 taxpayer identification number and a valid United States
157-16 street address. In-state and out-of-state persons, trustees,
158-17 custodians, and legal entities may be account owners and
159-18 donors, and both in-state and out-of-state individuals may be
160-19 designated beneficiaries in the College Savings Pool.
161-20 (e) Fees. Any fees, costs, and expenses, including
162-21 investment fees and expenses and payments to third parties,
163-22 related to the College Savings Pool, shall be paid from the
164-23 assets of the College Savings Pool. The State Treasurer shall
165-24 establish fees to be imposed on accounts to cover such fees,
166-25 costs, and expenses, to the extent not paid directly out of the
167-26 investments of the College Savings Pool, and to maintain an
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104+1 Code.
105+2 "Participation agreement" means an agreement to
106+3 participate in the ABLE account plan between a designated
107+4 beneficiary and the State, through its agencies and the State
108+5 Treasurer.
109+6 "Qualified disability expenses" has the meaning given to
110+7 that term under Section 529A of the Internal Revenue Code.
111+8 "Qualified withdrawal" or "qualified distribution" means a
112+9 withdrawal from an ABLE account to pay the qualified
113+10 disability expenses of the beneficiary of the account.
114+11 (b) Establishment of the ABLE Program. The "Achieving a
115+12 Better Life Experience" or "ABLE" account program is hereby
116+13 created and shall be administered by the State Treasurer. The
117+14 purpose of the ABLE program is to encourage and assist
118+15 individuals and families in saving private funds for the
119+16 purpose of supporting individuals with disabilities to
120+17 maintain health, independence, and quality of life, and to
121+18 provide secure funding for disability-related expenses on
122+19 behalf of designated beneficiaries with disabilities that will
123+20 supplement, but not supplant, benefits provided through
124+21 private insurance, federal and State medical and disability
125+22 insurance, the beneficiary's employment, and other sources.
126+23 Under the plan, a person or entity may make contributions to an
127+24 ABLE account to meet the qualified disability expenses of the
128+25 designated beneficiary of the account. The plan must be
129+26 operated as an accounts-type plan that permits saving persons
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178-1 adequate reserve fund in line with industry standards for
179-2 government operated funds. The Treasurer must use his or her
180-3 best efforts to keep these fees as low as possible and
181-4 consistent with administration of high quality competitive
182-5 college savings programs.
183-6 (f) Investments in the State. To enhance the safety and
184-7 liquidity of the College Savings Pool, to ensure the
185-8 diversification of the investment portfolio of the College
186-9 Savings Pool, and in an effort to keep investment dollars in
187-10 the State of Illinois, the State Treasurer may make a
188-11 percentage of each account available for investment in
189-12 participating financial institutions doing business in the
190-13 State.
191-14 (g) Investment policy. The Treasurer shall develop,
192-15 publish, and implement an investment policy covering the
193-16 investment of the moneys in each of the programs in the College
194-17 Savings Pool. The policy shall be published each year as part
195-18 of the audit of the College Savings Pool by the Auditor
196-19 General, which shall be distributed to all account owners in
197-20 such program. The Treasurer shall notify all account owners in
198-21 such program in writing, and the Treasurer shall publish in a
199-22 newspaper of general circulation in both Chicago and
200-23 Springfield, any changes to the previously published
201-24 investment policy at least 30 calendar days before
202-25 implementing the policy. Any investment policy adopted by the
203-26 Treasurer shall be reviewed and updated if necessary within 90
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140+1 to save for qualified disability expenses incurred by or on
141+2 behalf of an eligible individual.
142+3 (c) Promotion of the ABLE Program. The State Treasurer
143+4 shall promote awareness of the availability and advantages of
144+5 the ABLE account plan as a way to assist individuals and
145+6 families in saving private funds for the purpose of supporting
146+7 individuals with disabilities.
147+8 (d) Availability of the ABLE Program. An ABLE account may
148+9 be established under this Section for a designated beneficiary
149+10 who is a resident of Illinois, a resident of a contracting
150+11 state, or a resident of any other state.
151+12 Annual contributions to an ABLE account on behalf of a
152+13 beneficiary are subject to the requirements of subsection (b)
153+14 of Section 529A of the Internal Revenue Code. No person or
154+15 entity may make a contribution to an ABLE account if such a
155+16 contribution would result in the aggregate account balance of
156+17 an ABLE account exceeding the account balance limit authorized
157+18 under Section 529A of the Internal Revenue Code. The Treasurer
158+19 shall review the contribution limit at least annually. A
159+20 separate account must be maintained for each beneficiary for
160+21 whom contributions are made, and no more than one account
161+22 shall be established per beneficiary. If an ABLE account is
162+23 established for a designated beneficiary, no account
163+24 subsequently established for such beneficiary shall be treated
164+25 as an ABLE account. The preceding sentence shall not apply in
165+26 the case of an ABLE account established for purposes of a
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214-1 days following the date that the State Treasurer takes office.
215-2 (h) Investment restrictions. An account owner may,
216-3 directly or indirectly, direct the investment of his or her
217-4 account only as provided in Section 529(b)(4) of the Internal
218-5 Revenue Code. Donors and designated beneficiaries, in those
219-6 capacities, may not, directly or indirectly, direct the
220-7 investment of an account.
221-8 (i) Distributions. Distributions from an account in the
222-9 College Savings Pool may be used for the designated
223-10 beneficiary's qualified expenses, and if not used in that
224-11 manner, may be considered a nonqualified withdrawal. Funds
225-12 contained in a College Savings Pool account may be rolled over
226-13 into:
227-14 (1) an eligible ABLE account, as defined in Section
228-15 16.6 of this Act to the extent permitted by Section 529 of
229-16 the Internal Revenue Code; , or
230-17 (2) another qualified tuition program, to the extent
231-18 permitted by Section 529 of the Internal Revenue Code; or
232-19 (3) a Roth IRA account, to the extent permitted by
233-20 Section 529 of the Internal Revenue Code.
234-21 Distributions made from the College Savings Pool may be
235-22 made directly to the eligible educational institution,
236-23 directly to a vendor, in the form of a check payable to both
237-24 the designated beneficiary and the institution or vendor,
238-25 directly to the designated beneficiary or account owner, or in
239-26 any other manner that is permissible under Section 529 of the
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176+1 rollover as permitted under Sections 529 and 529A of the
177+2 Internal Revenue Code.
178+3 (e) Administration of the ABLE Program. The State
179+4 Treasurer shall administer the plan, including accepting and
180+5 processing applications, maintaining account records, making
181+6 payments, and undertaking any other necessary tasks to
182+7 administer the plan, including the appointment of an account
183+8 administrator. The State Treasurer may contract with one or
184+9 more third parties to carry out some or all of these
185+10 administrative duties, including, but not limited to,
186+11 providing investment management services, incentives, and
187+12 marketing the plan. The State Treasurer may enter into
188+13 agreements with other states to either allow Illinois
189+14 residents to participate in a plan operated by another state
190+15 or to allow residents of other states to participate in the
191+16 Illinois ABLE plan. The State Treasurer may require any
192+17 certifications that he or she deems necessary to implement the
193+18 program, including oaths or affirmations made under penalties
194+19 of perjury.
195+20 (f) Fees. The State Treasurer may establish fees to be
196+21 imposed on participants to cover the costs of administration,
197+22 recordkeeping, and investment management. The State Treasurer
198+23 must use his or her best efforts to keep these fees as low as
199+24 possible, consistent with efficient administration.
200+25 (g) The Illinois ABLE Accounts Administrative Fund. The
201+26 Illinois ABLE Accounts Administrative Fund is created as a
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250-1 Internal Revenue Code.
251-2 (j) Contributions. Contributions to the College Savings
252-3 Pool shall be as follows:
253-4 (1) Contributions to an account in the College Savings
254-5 Pool may be made only in cash.
255-6 (2) The Treasurer shall limit the contributions that
256-7 may be made to the College Savings Pool on behalf of a
257-8 designated beneficiary, as required under Section 529 of
258-9 the Internal Revenue Code, to prevent contributions for
259-10 the benefit of a designated beneficiary in excess of those
260-11 necessary to provide for the qualified expenses of the
261-12 designated beneficiary. The Pool shall not permit any
262-13 additional contributions to an account as soon as the sum
263-14 of (i) the aggregate balance in all accounts in the Pool
264-15 for the designated beneficiary and (ii) the aggregate
265-16 contributions in the Illinois Prepaid Tuition Program for
266-17 the designated beneficiary reaches the specified balance
267-18 limit established from time to time by the Treasurer.
268-19 (k) Illinois Student Assistance Commission. The Treasurer
269-20 and the Illinois Student Assistance Commission shall each
270-21 cooperate in providing each other with account information, as
271-22 necessary, to prevent contributions in excess of those
272-23 necessary to provide for the qualified expenses of the
273-24 designated beneficiary, as described in subsection (j).
274-25 The Treasurer shall work with the Illinois Student
275-26 Assistance Commission to coordinate the marketing of the
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212+1 nonappropriated trust fund in the State treasury. The State
213+2 Treasurer shall use moneys in the Administrative Fund to cover
214+3 administrative expenses incurred under this Section. The
215+4 Administrative Fund may receive any grants or other moneys
216+5 designated for administrative purposes from the State, or any
217+6 unit of federal, state, or local government, or any other
218+7 person, firm, partnership, or corporation. Any interest
219+8 earnings that are attributable to moneys in the Administrative
220+9 Fund must be deposited into the Administrative Fund. Any fees
221+10 established by the State Treasurer to cover the costs of
222+11 administration, recordkeeping, and investment management shall
223+12 be deposited into the Administrative Fund.
224+13 Subject to appropriation, the State Treasurer may pay
225+14 administrative costs associated with the creation and
226+15 management of the plan until sufficient assets are available
227+16 in the Administrative Fund for that purpose.
228+17 (h) Privacy. Applications for accounts and other records
229+18 obtained or compiled by the Treasurer or the Treasurer's
230+19 agents reflecting , designated beneficiary information data,
231+20 account information data, or designated representative
232+21 information and data on beneficiaries of accounts are
233+22 confidential and exempt from disclosure under the Freedom of
234+23 Information Act.
235+24 (i) Investment Policy. The Treasurer shall prepare and
236+25 adopt a written statement of investment policy that includes a
237+26 risk management and oversight program which shall be reviewed
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286-1 College Savings Pool and the Illinois Prepaid Tuition Program
287-2 when considered beneficial by the Treasurer and the Director
288-3 of the Illinois Student Assistance Commission.
289-4 (l) Prohibition; exemption. No interest in the program, or
290-5 any portion thereof, may be used as security for a loan. Moneys
291-6 held in an account invested in the College Savings Pool shall
292-7 be exempt from all claims of the creditors of the account
293-8 owner, donor, or designated beneficiary of that account,
294-9 except for the non-exempt College Savings Pool transfers to or
295-10 from the account as defined under subsection (j) of Section
296-11 12-1001 of the Code of Civil Procedure.
297-12 (m) Taxation. The assets of the College Savings Pool and
298-13 its income and operation shall be exempt from all taxation by
299-14 the State of Illinois and any of its subdivisions. The accrued
300-15 earnings on investments in the Pool once disbursed on behalf
301-16 of a designated beneficiary shall be similarly exempt from all
302-17 taxation by the State of Illinois and its subdivisions, so
303-18 long as they are used for qualified expenses. Contributions to
304-19 a College Savings Pool account during the taxable year may be
305-20 deducted from adjusted gross income as provided in Section 203
306-21 of the Illinois Income Tax Act. The provisions of this
307-22 paragraph are exempt from Section 250 of the Illinois Income
308-23 Tax Act.
309-24 (n) Rules. The Treasurer shall adopt rules he or she
310-25 considers necessary for the efficient administration of the
311-26 College Savings Pool. The rules shall provide whatever
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248+1 annually and posted on the Treasurer's website prior to
249+2 implementation. The risk management and oversight program
250+3 shall be designed to ensure that an effective risk management
251+4 system is in place to monitor the risk levels of the ABLE plan,
252+5 to ensure that the risks taken are prudent and properly
253+6 managed, to provide an integrated process for overall risk
254+7 management, and to assess investment returns as well as risk
255+8 to determine if the risks taken are adequately compensated
256+9 compared to applicable performance benchmarks and standards.
257+10 To enhance the safety and liquidity of ABLE accounts, to
258+11 ensure the diversification of the investment portfolio of
259+12 accounts, and in an effort to keep investment dollars in the
260+13 State, the State Treasurer may make a percentage of each
261+14 account available for investment in participating financial
262+15 institutions doing business in the State, except that the
263+16 accounts may be invested without limit in investment options
264+17 from open-ended investment companies registered under Section
265+18 80a of the federal Investment Company Act of 1940. The State
266+19 Treasurer may contract with one or more third parties for
267+20 investment management, recordkeeping, or other services in
268+21 connection with investing the accounts.
269+22 (j) Investment restrictions. The State Treasurer shall
270+23 ensure that the plan meets the requirements for an ABLE
271+24 account under Section 529A of the Internal Revenue Code. The
272+25 State Treasurer may request a private letter ruling or rulings
273+26 from the Internal Revenue Service and must take any necessary
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322-1 additional parameters and restrictions are necessary to ensure
323-2 that the College Savings Pool meets all the requirements for a
324-3 qualified tuition program under Section 529 of the Internal
325-4 Revenue Code.
326-5 Notice of any proposed amendments to the rules and
327-6 regulations shall be provided to all account owners prior to
328-7 adoption.
329-8 (o) Bond. The State Treasurer shall give bond with at
330-9 least one surety, payable to and for the benefit of the account
331-10 owners in the College Savings Pool, in the penal sum of
332-11 $10,000,000, conditioned upon the faithful discharge of his or
333-12 her duties in relation to the College Savings Pool.
334-13 (p) The changes made to subsections (c) and (e) of this
335-14 Section by Public Act 101-26 are intended to be a restatement
336-15 and clarification of existing law.
337-16 (Source: P.A. 101-26, eff. 6-21-19; 101-81, eff. 7-12-19;
338-17 102-186, eff. 7-30-21.)
339-18 (15 ILCS 505/16.6)
340-19 Sec. 16.6. ABLE account program.
341-20 (a) As used in this Section:
342-21 "ABLE account" or "account" means an account established
343-22 for the purpose of financing certain qualified expenses of
344-23 eligible individuals as specifically provided for in this
345-24 Section and authorized by Section 529A of the Internal Revenue
346-25 Code.
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284+1 steps to ensure that the plan qualifies under relevant
285+2 provisions of federal law. Notwithstanding the foregoing, any
286+3 determination by the Secretary of the Treasury of the United
287+4 States that an account was utilized to make non-qualified
288+5 distributions shall not result in an ABLE account being
289+6 disregarded as a resource.
290+7 (k) Contributions. A person or entity may make
291+8 contributions to an ABLE account on behalf of a beneficiary.
292+9 Contributions to an account made by persons or entities other
293+10 than the designated beneficiary become the property of the
294+11 designated beneficiary. Contributions to an account shall be
295+12 considered as a transfer of assets for fair market value. A
296+13 person or entity does not acquire an interest in an ABLE
297+14 account by making contributions to an account. A contribution
298+15 to any account for a beneficiary must be rejected if the
299+16 contribution would cause either the aggregate or annual
300+17 account balance of the account to exceed the limits imposed by
301+18 Section 529A of the Internal Revenue Code.
302+19 Any change in designated beneficiary must be done in a
303+20 manner consistent with Section 529A of the Internal Revenue
304+21 Code.
305+22 (l) Notice. Notice of any proposed amendments to the rules
306+23 and regulations shall be provided to all designated
307+24 beneficiaries or their designated representatives prior to
308+25 adoption. Amendments to rules and regulations shall apply only
309+26 to contributions made after the adoption of the amendment.
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357-1 "ABLE account plan" or "plan" means the savings account
358-2 plan provided for in this Section.
359-3 "Account administrator" means the person or entity
360-4 selected by the State Treasurer to administer the daily
361-5 operations of the ABLE account plan and provide marketing,
362-6 recordkeeping, investment management, and other services for
363-7 the plan.
364-8 "Aggregate account balance" means the amount in an account
365-9 on a particular date or the fair market value of an account on
366-10 a particular date.
367-11 "Beneficiary" or "designated beneficiary" means the ABLE
368-12 account owner.
369-13 "Contracting state" means a state without a qualified ABLE
370-14 program which has entered into a contract with Illinois to
371-15 provide residents of the contracting state access to a
372-16 qualified ABLE program.
373-17 "Designated representative" means a person or entity who
374-18 is authorized to act on behalf of a "designated beneficiary".
375-19 A designated beneficiary is authorized to act on his or her own
376-20 behalf unless the designated beneficiary is a minor or the
377-21 designated beneficiary has been adjudicated to have a
378-22 disability so that a guardian has been appointed. A designated
379-23 representative acts in a fiduciary capacity to the designated
380-24 beneficiary. A person or entity seeking to open an ABLE
381-25 account on behalf of a designated beneficiary must provide
382-26 certification, subject to penalties of perjury, of the basis
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320+1 Amendments to this Section automatically amend the
321+2 participation agreement. Any amendments to the operating
322+3 procedures and policies of the plan shall automatically amend
323+4 the participation agreement after adoption by the State
324+5 Treasurer.
325+6 (m) Plan assets. All assets of the plan, including any
326+7 contributions to accounts, are held in trust for the exclusive
327+8 benefit of the designated beneficiary and shall be considered
328+9 spendthrift accounts exempt from all of the designated
329+10 beneficiary's creditors. The plan shall provide separate
330+11 accounting for each designated beneficiary sufficient to
331+12 satisfy the requirements of paragraph (3) of subsection (b) of
332+13 Section 529A of the Internal Revenue Code. Assets must be held
333+14 in either a state trust fund outside the State treasury, to be
334+15 known as the Illinois ABLE plan trust fund, or in accounts with
335+16 a third-party provider selected pursuant to this Section.
336+17 Amounts contributed to ABLE accounts shall not be commingled
337+18 with State funds and the State shall have no claim to or
338+19 against, or interest in, such funds.
339+20 Plan assets are not subject to claims by creditors of the
340+21 State and are not subject to appropriation by the State.
341+22 Payments from the Illinois ABLE account plan shall be made
342+23 under this Section.
343+24 The assets of ABLE accounts and their income may not be
344+25 used as security for a loan.
345+26 (n) Taxation. The assets of ABLE accounts and their income
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393-1 for the person's or entity's authority to act as a designated
394-2 representative and that there is no other person or entity
395-3 with higher priority to establish the ABLE account under
396-4 Section 529A of the Internal Revenue Code and federal
397-5 regulations.
398-6 "Disability certification" has the meaning given to that
399-7 term under Section 529A of the Internal Revenue Code.
400-8 "Eligible individual" has the meaning given to that term
401-9 under Section 529A of the Internal Revenue Code.
402-10 "Internal Revenue Code" means the federal Internal Revenue
403-11 Code.
404-12 "Participation agreement" means an agreement to
405-13 participate in the ABLE account plan between a designated
406-14 beneficiary and the State, through its agencies and the State
407-15 Treasurer.
408-16 "Qualified disability expenses" has the meaning given to
409-17 that term under Section 529A of the Internal Revenue Code.
410-18 "Qualified withdrawal" or "qualified distribution" means a
411-19 withdrawal from an ABLE account to pay the qualified
412-20 disability expenses of the beneficiary of the account.
413-21 (b) Establishment of the ABLE Program. The "Achieving a
414-22 Better Life Experience" or "ABLE" account program is hereby
415-23 created and shall be administered by the State Treasurer. The
416-24 purpose of the ABLE program is to encourage and assist
417-25 individuals and families in saving private funds for the
418-26 purpose of supporting individuals with disabilities to
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356+1 and operation shall be exempt from all taxation by the State of
357+2 Illinois and any of its subdivisions to the extent exempt from
358+3 federal income taxation. The accrued earnings on investments
359+4 in an ABLE account once disbursed on behalf of a designated
360+5 beneficiary shall be similarly exempt from all taxation by the
361+6 State of Illinois and its subdivisions to the extent exempt
362+7 from federal income taxation, so long as they are used for
363+8 qualified expenses.
364+9 Notwithstanding any other provision of law that requires
365+10 consideration of one or more financial circumstances of an
366+11 individual, for the purpose of determining eligibility to
367+12 receive, or the amount of, any assistance or benefit
368+13 authorized by such provision to be provided to or for the
369+14 benefit of such individual, any amount, including earnings
370+15 thereon, in the ABLE account of such individual, any
371+16 contributions to the ABLE account of the individual, and any
372+17 distribution for qualified disability expenses shall be
373+18 disregarded for such purpose with respect to any period during
374+19 which such individual maintains, makes contributions to, or
375+20 receives distributions from such ABLE account.
376+21 (o) Distributions. The designated beneficiary or the
377+22 designated representative of the designated beneficiary may
378+23 make a qualified distribution for the benefit of the
379+24 designated beneficiary. Qualified distributions shall be made
380+25 for qualified disability expenses allowed pursuant to Section
381+26 529A of the Internal Revenue Code. Qualified distributions
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429-1 maintain health, independence, and quality of life, and to
430-2 provide secure funding for disability-related expenses on
431-3 behalf of designated beneficiaries with disabilities that will
432-4 supplement, but not supplant, benefits provided through
433-5 private insurance, federal and State medical and disability
434-6 insurance, the beneficiary's employment, and other sources.
435-7 Under the plan, a person or entity may make contributions to an
436-8 ABLE account to meet the qualified disability expenses of the
437-9 designated beneficiary of the account. The plan must be
438-10 operated as an accounts-type plan that permits saving persons
439-11 to save for qualified disability expenses incurred by or on
440-12 behalf of an eligible individual.
441-13 (c) Promotion of the ABLE Program. The State Treasurer
442-14 shall promote awareness of the availability and advantages of
443-15 the ABLE account plan as a way to assist individuals and
444-16 families in saving private funds for the purpose of supporting
445-17 individuals with disabilities.
446-18 (d) Availability of the ABLE Program. An ABLE account may
447-19 be established under this Section for a designated beneficiary
448-20 who is a resident of Illinois, a resident of a contracting
449-21 state, or a resident of any other state.
450-22 Annual contributions to an ABLE account on behalf of a
451-23 beneficiary are subject to the requirements of subsection (b)
452-24 of Section 529A of the Internal Revenue Code. No person or
453-25 entity may make a contribution to an ABLE account if such a
454-26 contribution would result in the aggregate account balance of
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392+1 must be withdrawn proportionally from contributions and
393+2 earnings in a designated beneficiary's account on the date of
394+3 distribution as provided in Section 529A of the Internal
395+4 Revenue Code. Unless prohibited by federal law, upon the death
396+5 of a designated beneficiary, proceeds from an account may be
397+6 transferred to the estate of a designated beneficiary, or to
398+7 an account for another eligible individual specified by the
399+8 designated beneficiary or the estate of the designated
400+9 beneficiary, or transferred pursuant to a payable on death
401+10 account agreement. A payable on death account agreement may be
402+11 executed by the designated beneficiary or a designated
403+12 representative who has been granted such power. Upon the death
404+13 of a designated beneficiary, prior to distribution of the
405+14 balance to the estate, account for another eligible
406+15 individual, or transfer pursuant to a payable on death account
407+16 agreement, the State Treasurer may require verification that
408+17 the funeral and burial expenses of the designated beneficiary
409+18 have been paid. An agency or instrumentality of the State may
410+19 not seek payment under subsection (f) of Section 529A of the
411+20 federal Internal Revenue Code from the account or its proceeds
412+21 for benefits provided to a designated beneficiary.
413+22 (p) Rules. The State Treasurer may adopt rules to carry
414+23 out the purposes of this Section. The State Treasurer shall
415+24 further have the power to issue peremptory rules necessary to
416+25 ensure that ABLE accounts meet all of the requirements for a
417+26 qualified state ABLE program under Section 529A of the
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465-1 an ABLE account exceeding the account balance limit authorized
466-2 under Section 529A of the Internal Revenue Code. The Treasurer
467-3 shall review the contribution limit at least annually. A
468-4 separate account must be maintained for each beneficiary for
469-5 whom contributions are made, and no more than one account
470-6 shall be established per beneficiary. If an ABLE account is
471-7 established for a designated beneficiary, no account
472-8 subsequently established for such beneficiary shall be treated
473-9 as an ABLE account. The preceding sentence shall not apply in
474-10 the case of an ABLE account established for purposes of a
475-11 rollover as permitted under Sections 529 and 529A of the
476-12 Internal Revenue Code.
477-13 (e) Administration of the ABLE Program. The State
478-14 Treasurer shall administer the plan, including accepting and
479-15 processing applications, maintaining account records, making
480-16 payments, and undertaking any other necessary tasks to
481-17 administer the plan, including the appointment of an account
482-18 administrator. The State Treasurer may contract with one or
483-19 more third parties to carry out some or all of these
484-20 administrative duties, including, but not limited to,
485-21 providing investment management services, incentives, and
486-22 marketing the plan. The State Treasurer may enter into
487-23 agreements with other states to either allow Illinois
488-24 residents to participate in a plan operated by another state
489-25 or to allow residents of other states to participate in the
490-26 Illinois ABLE plan. The State Treasurer may require any
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428+1 Internal Revenue Code and any regulations issued by the
429+2 Internal Revenue Service.
430+3 (q) Name. The ABLE Account Program may also be referred to
431+4 as the Senator Scott Bennett ABLE Program.
432+5 (Source: P.A. 101-329, eff. 8-9-19; 102-392, eff. 8-16-21;
433+6 102-1024, eff. 5-27-22.)
434+7 Section 99. Effective date. This Act takes effect upon
435+8 becoming law.
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501-1 certifications that he or she deems necessary to implement the
502-2 program, including oaths or affirmations made under penalties
503-3 of perjury.
504-4 (f) Fees. The State Treasurer may establish fees to be
505-5 imposed on participants to cover the costs of administration,
506-6 recordkeeping, and investment management. The State Treasurer
507-7 must use his or her best efforts to keep these fees as low as
508-8 possible, consistent with efficient administration.
509-9 (g) The Illinois ABLE Accounts Administrative Fund. The
510-10 Illinois ABLE Accounts Administrative Fund is created as a
511-11 nonappropriated trust fund in the State treasury. The State
512-12 Treasurer shall use moneys in the Administrative Fund to cover
513-13 administrative expenses incurred under this Section. The
514-14 Administrative Fund may receive any grants or other moneys
515-15 designated for administrative purposes from the State, or any
516-16 unit of federal, state, or local government, or any other
517-17 person, firm, partnership, or corporation. Any interest
518-18 earnings that are attributable to moneys in the Administrative
519-19 Fund must be deposited into the Administrative Fund. Any fees
520-20 established by the State Treasurer to cover the costs of
521-21 administration, recordkeeping, and investment management shall
522-22 be deposited into the Administrative Fund.
523-23 Subject to appropriation, the State Treasurer may pay
524-24 administrative costs associated with the creation and
525-25 management of the plan until sufficient assets are available
526-26 in the Administrative Fund for that purpose.
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537-1 (h) Privacy. Applications for accounts and other records
538-2 obtained or compiled by the Treasurer or the Treasurer's
539-3 agents reflecting , designated beneficiary information data,
540-4 account information data, or designated representative
541-5 information and data on beneficiaries of accounts are
542-6 confidential and exempt from disclosure under the Freedom of
543-7 Information Act.
544-8 (i) Investment Policy. The Treasurer shall prepare and
545-9 adopt a written statement of investment policy that includes a
546-10 risk management and oversight program which shall be reviewed
547-11 annually and posted on the Treasurer's website prior to
548-12 implementation. The risk management and oversight program
549-13 shall be designed to ensure that an effective risk management
550-14 system is in place to monitor the risk levels of the ABLE plan,
551-15 to ensure that the risks taken are prudent and properly
552-16 managed, to provide an integrated process for overall risk
553-17 management, and to assess investment returns as well as risk
554-18 to determine if the risks taken are adequately compensated
555-19 compared to applicable performance benchmarks and standards.
556-20 To enhance the safety and liquidity of ABLE accounts, to
557-21 ensure the diversification of the investment portfolio of
558-22 accounts, and in an effort to keep investment dollars in the
559-23 State, the State Treasurer may make a percentage of each
560-24 account available for investment in participating financial
561-25 institutions doing business in the State, except that the
562-26 accounts may be invested without limit in investment options
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573-1 from open-ended investment companies registered under Section
574-2 80a of the federal Investment Company Act of 1940. The State
575-3 Treasurer may contract with one or more third parties for
576-4 investment management, recordkeeping, or other services in
577-5 connection with investing the accounts.
578-6 (j) Investment restrictions. The State Treasurer shall
579-7 ensure that the plan meets the requirements for an ABLE
580-8 account under Section 529A of the Internal Revenue Code. The
581-9 State Treasurer may request a private letter ruling or rulings
582-10 from the Internal Revenue Service and must take any necessary
583-11 steps to ensure that the plan qualifies under relevant
584-12 provisions of federal law. Notwithstanding the foregoing, any
585-13 determination by the Secretary of the Treasury of the United
586-14 States that an account was utilized to make non-qualified
587-15 distributions shall not result in an ABLE account being
588-16 disregarded as a resource.
589-17 (k) Contributions. A person or entity may make
590-18 contributions to an ABLE account on behalf of a beneficiary.
591-19 Contributions to an account made by persons or entities other
592-20 than the designated beneficiary become the property of the
593-21 designated beneficiary. Contributions to an account shall be
594-22 considered as a transfer of assets for fair market value. A
595-23 person or entity does not acquire an interest in an ABLE
596-24 account by making contributions to an account. A contribution
597-25 to any account for a beneficiary must be rejected if the
598-26 contribution would cause either the aggregate or annual
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609-1 account balance of the account to exceed the limits imposed by
610-2 Section 529A of the Internal Revenue Code.
611-3 Any change in designated beneficiary must be done in a
612-4 manner consistent with Section 529A of the Internal Revenue
613-5 Code.
614-6 (l) Notice. Notice of any proposed amendments to the rules
615-7 and regulations shall be provided to all designated
616-8 beneficiaries or their designated representatives prior to
617-9 adoption. Amendments to rules and regulations shall apply only
618-10 to contributions made after the adoption of the amendment.
619-11 Amendments to this Section automatically amend the
620-12 participation agreement. Any amendments to the operating
621-13 procedures and policies of the plan shall automatically amend
622-14 the participation agreement after adoption by the State
623-15 Treasurer.
624-16 (m) Plan assets. All assets of the plan, including any
625-17 contributions to accounts, are held in trust for the exclusive
626-18 benefit of the designated beneficiary and shall be considered
627-19 spendthrift accounts exempt from all of the designated
628-20 beneficiary's creditors. The plan shall provide separate
629-21 accounting for each designated beneficiary sufficient to
630-22 satisfy the requirements of paragraph (3) of subsection (b) of
631-23 Section 529A of the Internal Revenue Code. Assets must be held
632-24 in either a state trust fund outside the State treasury, to be
633-25 known as the Illinois ABLE plan trust fund, or in accounts with
634-26 a third-party provider selected pursuant to this Section.
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645-1 Amounts contributed to ABLE accounts shall not be commingled
646-2 with State funds and the State shall have no claim to or
647-3 against, or interest in, such funds.
648-4 Plan assets are not subject to claims by creditors of the
649-5 State and are not subject to appropriation by the State.
650-6 Payments from the Illinois ABLE account plan shall be made
651-7 under this Section.
652-8 The assets of ABLE accounts and their income may not be
653-9 used as security for a loan.
654-10 (n) Taxation. The assets of ABLE accounts and their income
655-11 and operation shall be exempt from all taxation by the State of
656-12 Illinois and any of its subdivisions to the extent exempt from
657-13 federal income taxation. The accrued earnings on investments
658-14 in an ABLE account once disbursed on behalf of a designated
659-15 beneficiary shall be similarly exempt from all taxation by the
660-16 State of Illinois and its subdivisions to the extent exempt
661-17 from federal income taxation, so long as they are used for
662-18 qualified expenses.
663-19 Notwithstanding any other provision of law that requires
664-20 consideration of one or more financial circumstances of an
665-21 individual, for the purpose of determining eligibility to
666-22 receive, or the amount of, any assistance or benefit
667-23 authorized by such provision to be provided to or for the
668-24 benefit of such individual, any amount, including earnings
669-25 thereon, in the ABLE account of such individual, any
670-26 contributions to the ABLE account of the individual, and any
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681-1 distribution for qualified disability expenses shall be
682-2 disregarded for such purpose with respect to any period during
683-3 which such individual maintains, makes contributions to, or
684-4 receives distributions from such ABLE account.
685-5 (o) Distributions. The designated beneficiary or the
686-6 designated representative of the designated beneficiary may
687-7 make a qualified distribution for the benefit of the
688-8 designated beneficiary. Qualified distributions shall be made
689-9 for qualified disability expenses allowed pursuant to Section
690-10 529A of the Internal Revenue Code. Qualified distributions
691-11 must be withdrawn proportionally from contributions and
692-12 earnings in a designated beneficiary's account on the date of
693-13 distribution as provided in Section 529A of the Internal
694-14 Revenue Code. Unless prohibited by federal law, upon the death
695-15 of a designated beneficiary, proceeds from an account may be
696-16 transferred to the estate of a designated beneficiary, or to
697-17 an account for another eligible individual specified by the
698-18 designated beneficiary or the estate of the designated
699-19 beneficiary, or transferred pursuant to a payable on death
700-20 account agreement. A payable on death account agreement may be
701-21 executed by the designated beneficiary or a designated
702-22 representative who has been granted such power. Upon the death
703-23 of a designated beneficiary, prior to distribution of the
704-24 balance to the estate, account for another eligible
705-25 individual, or transfer pursuant to a payable on death account
706-26 agreement, the State Treasurer may require verification that
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717-1 the funeral and burial expenses of the designated beneficiary
718-2 have been paid. An agency or instrumentality of the State may
719-3 not seek payment under subsection (f) of Section 529A of the
720-4 federal Internal Revenue Code from the account or its proceeds
721-5 for benefits provided to a designated beneficiary.
722-6 (p) Rules. The State Treasurer may adopt rules to carry
723-7 out the purposes of this Section. The State Treasurer shall
724-8 further have the power to issue peremptory rules necessary to
725-9 ensure that ABLE accounts meet all of the requirements for a
726-10 qualified state ABLE program under Section 529A of the
727-11 Internal Revenue Code and any regulations issued by the
728-12 Internal Revenue Service.
729-13 (q) Name. The ABLE Account Program may also be referred to
730-14 as the Senator Scott Bennett ABLE Program.
731-15 (Source: P.A. 101-329, eff. 8-9-19; 102-392, eff. 8-16-21;
732-16 102-1024, eff. 5-27-22.)
733-
734-
735-
736-
737-
738- HB3811 Engrossed - 21 - LRB103 31048 DTM 57666 b
441+ HB3811 - 12 - LRB103 31048 DTM 57666 b