IL
Illinois House Bill HB1432

Illinois 2025-2026 Regular Session

Illinois House Bill HB1432 Compare Versions

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1+104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1432 Introduced , by Rep. Suzanne M. Ness SYNOPSIS AS INTRODUCED: 15 ILCS 505/16.630 ILCS 105/5.1030 new Amends the State Treasurer Act. Provides that, subject to appropriation, the State Treasurer may make a matching contribution of $50 to an ABLE account opened on or after January 1, 2026 for a beneficiary who is a resident of Illinois. Provides that the matching contribution shall be limited to one contribution per beneficiary and shall not be treated differently from any other contributions to the account. Provides that if there are insufficient funds available, the State Treasurer may reduce the matching contribution amount or forgo contributions. Provides that the Illinois ABLE Matching Contribution Fund shall be the official repository of all contributions, appropriated funds, interest, and dividend payments, gifts, or other financial assets received by the State Treasurer in connection with matching contributions to ABLE accounts. Amends the State Finance Act. Creates the Illinois ABLE Matching Contribution Fund. LRB104 07549 SPS 17593 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1432 Introduced , by Rep. Suzanne M. Ness SYNOPSIS AS INTRODUCED: 15 ILCS 505/16.630 ILCS 105/5.1030 new 15 ILCS 505/16.6 30 ILCS 105/5.1030 new Amends the State Treasurer Act. Provides that, subject to appropriation, the State Treasurer may make a matching contribution of $50 to an ABLE account opened on or after January 1, 2026 for a beneficiary who is a resident of Illinois. Provides that the matching contribution shall be limited to one contribution per beneficiary and shall not be treated differently from any other contributions to the account. Provides that if there are insufficient funds available, the State Treasurer may reduce the matching contribution amount or forgo contributions. Provides that the Illinois ABLE Matching Contribution Fund shall be the official repository of all contributions, appropriated funds, interest, and dividend payments, gifts, or other financial assets received by the State Treasurer in connection with matching contributions to ABLE accounts. Amends the State Finance Act. Creates the Illinois ABLE Matching Contribution Fund. LRB104 07549 SPS 17593 b LRB104 07549 SPS 17593 b A BILL FOR
2+104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1432 Introduced , by Rep. Suzanne M. Ness SYNOPSIS AS INTRODUCED:
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6+Amends the State Treasurer Act. Provides that, subject to appropriation, the State Treasurer may make a matching contribution of $50 to an ABLE account opened on or after January 1, 2026 for a beneficiary who is a resident of Illinois. Provides that the matching contribution shall be limited to one contribution per beneficiary and shall not be treated differently from any other contributions to the account. Provides that if there are insufficient funds available, the State Treasurer may reduce the matching contribution amount or forgo contributions. Provides that the Illinois ABLE Matching Contribution Fund shall be the official repository of all contributions, appropriated funds, interest, and dividend payments, gifts, or other financial assets received by the State Treasurer in connection with matching contributions to ABLE accounts. Amends the State Finance Act. Creates the Illinois ABLE Matching Contribution Fund.
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312 1 AN ACT concerning State government.
413 2 Be it enacted by the People of the State of Illinois,
514 3 represented in the General Assembly:
615 4 Section 5. The State Treasurer Act is amended by changing
716 5 Section 16.6 as follows:
817 6 (15 ILCS 505/16.6)
918 7 Sec. 16.6. ABLE account program.
1019 8 (a) As used in this Section:
1120 9 "ABLE account" or "account" means an account established
1221 10 for the purpose of financing certain qualified expenses of
1322 11 eligible individuals as specifically provided for in this
1423 12 Section and authorized by Section 529A of the Internal Revenue
1524 13 Code.
1625 14 "ABLE account plan" or "plan" means the savings account
1726 15 plan provided for in this Section.
1827 16 "Account administrator" means the person or entity
1928 17 selected by the State Treasurer to administer the daily
2029 18 operations of the ABLE account plan and provide marketing,
2130 19 recordkeeping, investment management, and other services for
2231 20 the plan.
2332 21 "Aggregate account balance" means the amount in an account
2433 22 on a particular date or the fair market value of an account on
2534 23 a particular date.
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39+15 ILCS 505/16.630 ILCS 105/5.1030 new 15 ILCS 505/16.6 30 ILCS 105/5.1030 new
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42+Amends the State Treasurer Act. Provides that, subject to appropriation, the State Treasurer may make a matching contribution of $50 to an ABLE account opened on or after January 1, 2026 for a beneficiary who is a resident of Illinois. Provides that the matching contribution shall be limited to one contribution per beneficiary and shall not be treated differently from any other contributions to the account. Provides that if there are insufficient funds available, the State Treasurer may reduce the matching contribution amount or forgo contributions. Provides that the Illinois ABLE Matching Contribution Fund shall be the official repository of all contributions, appropriated funds, interest, and dividend payments, gifts, or other financial assets received by the State Treasurer in connection with matching contributions to ABLE accounts. Amends the State Finance Act. Creates the Illinois ABLE Matching Contribution Fund.
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3471 1 "Beneficiary" or "designated beneficiary" means the ABLE
3572 2 account owner.
3673 3 "Contracting state" means a state without a qualified ABLE
3774 4 program which has entered into a contract with Illinois to
3875 5 provide residents of the contracting state access to a
3976 6 qualified ABLE program.
4077 7 "Designated representative" means a person or entity who
4178 8 is authorized to act on behalf of a "designated beneficiary".
4279 9 A designated beneficiary is authorized to act on his or her own
4380 10 behalf unless the designated beneficiary is a minor or the
4481 11 designated beneficiary has been adjudicated to have a
4582 12 disability so that a guardian has been appointed. A designated
4683 13 representative acts in a fiduciary capacity to the designated
4784 14 beneficiary. A person or entity seeking to open an ABLE
4885 15 account on behalf of a designated beneficiary must provide
4986 16 certification, subject to penalties of perjury, of the basis
5087 17 for the person's or entity's authority to act as a designated
5188 18 representative and that there is no other person or entity
5289 19 with higher priority to establish the ABLE account under
5390 20 Section 529A of the Internal Revenue Code and federal
5491 21 regulations.
5592 22 "Disability certification" has the meaning given to that
5693 23 term under Section 529A of the Internal Revenue Code.
5794 24 "Eligible individual" has the meaning given to that term
5895 25 under Section 529A of the Internal Revenue Code.
5996 26 "Internal Revenue Code" means the federal Internal Revenue
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70107 1 Code.
71108 2 "Participation agreement" means an agreement to
72109 3 participate in the ABLE account plan between a designated
73110 4 beneficiary and the State, through its agencies and the State
74111 5 Treasurer.
75112 6 "Qualified disability expenses" has the meaning given to
76113 7 that term under Section 529A of the Internal Revenue Code.
77114 8 "Qualified withdrawal" or "qualified distribution" means a
78115 9 withdrawal from an ABLE account to pay the qualified
79116 10 disability expenses of the beneficiary of the account.
80117 11 (b) Establishment of the ABLE Program. The "Achieving a
81118 12 Better Life Experience" or "ABLE" account program is hereby
82119 13 created and shall be administered by the State Treasurer. The
83120 14 purpose of the ABLE program is to encourage and assist
84121 15 individuals and families in saving private funds for the
85122 16 purpose of supporting individuals with disabilities to
86123 17 maintain health, independence, and quality of life, and to
87124 18 provide secure funding for disability-related expenses on
88125 19 behalf of designated beneficiaries with disabilities that will
89126 20 supplement, but not supplant, benefits provided through
90127 21 private insurance, federal and State medical and disability
91128 22 insurance, the beneficiary's employment, and other sources.
92129 23 Under the plan, a person or entity may make contributions to an
93130 24 ABLE account to meet the qualified disability expenses of the
94131 25 designated beneficiary of the account. The plan must be
95132 26 operated as an accounts-type plan that permits saving for
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106143 1 qualified disability expenses incurred by or on behalf of an
107144 2 eligible individual.
108145 3 (c) Promotion of the ABLE Program. The State Treasurer
109146 4 shall promote awareness of the availability and advantages of
110147 5 the ABLE account plan as a way to assist individuals and
111148 6 families in saving private funds for the purpose of supporting
112149 7 individuals with disabilities.
113150 8 (c-5) Matching contributions. Subject to appropriation,
114151 9 the State Treasurer may make a matching contribution of $50 to
115152 10 an ABLE account opened on or after January 1, 2026 for a
116153 11 beneficiary who is a resident of Illinois. This amount may be
117154 12 increased by the State Treasurer by rule. The matching
118155 13 contribution shall be limited to one contribution per
119156 14 beneficiary and shall not be treated differently from any
120157 15 other contributions to the account. A matching contribution to
121158 16 an ABLE account becomes the property of the beneficiary. The
122159 17 State Treasurer may use funds appropriated by the General
123160 18 Assembly for the purpose described in this Section. If there
124161 19 are insufficient funds available, the State Treasurer may
125162 20 reduce the matching contribution amount or forgo
126163 21 contributions.
127164 22 (d) Availability of the ABLE Program. An ABLE account may
128165 23 be established under this Section for a designated beneficiary
129166 24 who is a resident of Illinois, a resident of a contracting
130167 25 state, or a resident of any other state.
131168 26 Annual contributions to an ABLE account on behalf of a
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142179 1 beneficiary are subject to the requirements of subsection (b)
143180 2 of Section 529A of the Internal Revenue Code. No person or
144181 3 entity may make a contribution to an ABLE account if such a
145182 4 contribution would result in the aggregate account balance of
146183 5 an ABLE account exceeding the account balance limit authorized
147184 6 under Section 529A of the Internal Revenue Code. The Treasurer
148185 7 shall review the contribution limit at least annually. A
149186 8 separate account must be maintained for each beneficiary for
150187 9 whom contributions are made, and no more than one account
151188 10 shall be established per beneficiary. If an ABLE account is
152189 11 established for a designated beneficiary, no account
153190 12 subsequently established for such beneficiary shall be treated
154191 13 as an ABLE account. The preceding sentence shall not apply in
155192 14 the case of an ABLE account established for purposes of a
156193 15 rollover as permitted under Sections 529 and 529A of the
157194 16 Internal Revenue Code.
158195 17 (e) Administration of the ABLE Program. The State
159196 18 Treasurer shall administer the plan, including accepting and
160197 19 processing applications, maintaining account records, making
161198 20 payments, and undertaking any other necessary tasks to
162199 21 administer the plan, including the appointment of an account
163200 22 administrator. The State Treasurer may contract with one or
164201 23 more third parties to carry out some or all of these
165202 24 administrative duties, including, but not limited to,
166203 25 providing investment management services, incentives, and
167204 26 marketing the plan. The State Treasurer may enter into
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178215 1 agreements with other states to either allow Illinois
179216 2 residents to participate in a plan operated by another state
180217 3 or to allow residents of other states to participate in the
181218 4 Illinois ABLE plan. The State Treasurer may require any
182219 5 certifications that he or she deems necessary to implement the
183220 6 program, including oaths or affirmations made under penalties
184221 7 of perjury.
185222 8 (f) Fees. The State Treasurer may establish fees to be
186223 9 imposed on participants to cover the costs of administration,
187224 10 recordkeeping, and investment management. The State Treasurer
188225 11 must use his or her best efforts to keep these fees as low as
189226 12 possible, consistent with efficient administration.
190227 13 (g) The Illinois ABLE Accounts Administrative Fund. The
191228 14 Illinois ABLE Accounts Administrative Fund is created as a
192229 15 nonappropriated trust fund in the State treasury. The State
193230 16 Treasurer shall use moneys in the Administrative Fund to cover
194231 17 administrative expenses incurred under this Section. The
195232 18 Administrative Fund may receive any grants or other moneys
196233 19 designated for administrative purposes from the State, or any
197234 20 unit of federal, state, or local government, or any other
198235 21 person, firm, partnership, or corporation. Any interest
199236 22 earnings that are attributable to moneys in the Administrative
200237 23 Fund must be deposited into the Administrative Fund. Any fees
201238 24 established by the State Treasurer to cover the costs of
202239 25 administration, recordkeeping, and investment management shall
203240 26 be deposited into the Administrative Fund.
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214251 1 Subject to appropriation, the State Treasurer may pay
215252 2 administrative costs associated with the creation and
216253 3 management of the plan until sufficient assets are available
217254 4 in the Administrative Fund for that purpose.
218255 5 (g-5) Illinois ABLE Matching Contribution Fund. The
219256 6 Illinois ABLE Matching Contribution Fund is hereby established
220257 7 as a special fund in the State treasury. The Fund shall be the
221258 8 official repository of all contributions, appropriated funds,
222259 9 interest, and dividend payments, gifts, or other financial
223260 10 assets received by the State Treasurer in connection with the
224261 11 matching contributions authorized under subsection (c-5). All
225262 12 moneys received under this subsection (g-5) shall be deposited
226263 13 into the Fund and held by the State Treasurer as custodian. The
227264 14 State Treasurer may accept gifts, grants, awards, matching
228265 15 contributions, interest income, and appropriated funds from
229266 16 individuals, businesses, governments, and other third-party
230267 17 sources to implement the matching contributions on terms that
231268 18 the Treasurer deems advisable. All interest or other earnings
232269 19 accruing or received on amounts in the Illinois ABLE Matching
233270 20 Contribution Fund shall be credited to and retained by the
234271 21 Fund and used for the benefit of the matching contributions.
235272 22 Assets of the Fund must at all times be preserved, invested,
236273 23 and expended only for the purposes of the matching
237274 24 contributions and must be held for the benefit of the
238275 25 beneficiaries. Assets may not be transferred or used by the
239276 26 State or the State Treasurer for any purposes other than the
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250287 1 purposes of the matching contributions. In addition, no
251288 2 moneys, interest, or other earnings paid into the Fund shall
252289 3 be used, temporarily or otherwise, for interfund borrowing or
253290 4 shall be otherwise used or appropriated except as expressly
254291 5 authorized by this Act.
255292 6 (h) Privacy. Applications for accounts and other records
256293 7 obtained or compiled by the Treasurer or the Treasurer's
257294 8 agents reflecting designated beneficiary information, account
258295 9 information, or designated representative information are
259296 10 confidential and exempt from disclosure under the Freedom of
260297 11 Information Act.
261298 12 (i) Investment Policy. The Treasurer shall prepare and
262299 13 adopt a written statement of investment policy that includes a
263300 14 risk management and oversight program which shall be reviewed
264301 15 annually and posted on the Treasurer's website prior to
265302 16 implementation. The risk management and oversight program
266303 17 shall be designed to ensure that an effective risk management
267304 18 system is in place to monitor the risk levels of the ABLE plan,
268305 19 to ensure that the risks taken are prudent and properly
269306 20 managed, to provide an integrated process for overall risk
270307 21 management, and to assess investment returns as well as risk
271308 22 to determine if the risks taken are adequately compensated
272309 23 compared to applicable performance benchmarks and standards.
273310 24 To enhance the safety and liquidity of ABLE accounts, to
274311 25 ensure the diversification of the investment portfolio of
275312 26 accounts, and in an effort to keep investment dollars in the
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286323 1 State, the State Treasurer may make a percentage of each
287324 2 account available for investment in participating financial
288325 3 institutions doing business in the State, except that the
289326 4 accounts may be invested without limit in investment options
290327 5 from open-ended investment companies registered under Section
291328 6 80a of the federal Investment Company Act of 1940. The State
292329 7 Treasurer may contract with one or more third parties for
293330 8 investment management, recordkeeping, or other services in
294331 9 connection with investing the accounts.
295332 10 (j) Investment restrictions. The State Treasurer shall
296333 11 ensure that the plan meets the requirements for an ABLE
297334 12 account under Section 529A of the Internal Revenue Code. The
298335 13 State Treasurer may request a private letter ruling or rulings
299336 14 from the Internal Revenue Service and must take any necessary
300337 15 steps to ensure that the plan qualifies under relevant
301338 16 provisions of federal law. Notwithstanding the foregoing, any
302339 17 determination by the Secretary of the Treasury of the United
303340 18 States that an account was utilized to make non-qualified
304341 19 distributions shall not result in an ABLE account being
305342 20 disregarded as a resource.
306343 21 (k) Contributions. A person or entity may make
307344 22 contributions to an ABLE account on behalf of a beneficiary.
308345 23 Contributions to an account made by persons or entities other
309346 24 than the designated beneficiary become the property of the
310347 25 designated beneficiary. Contributions to an account shall be
311348 26 considered as a transfer of assets for fair market value. A
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322359 1 person or entity does not acquire an interest in an ABLE
323360 2 account by making contributions to an account. A contribution
324361 3 to any account for a beneficiary must be rejected if the
325362 4 contribution would cause either the aggregate or annual
326363 5 account balance of the account to exceed the limits imposed by
327364 6 Section 529A of the Internal Revenue Code.
328365 7 Any change in designated beneficiary must be done in a
329366 8 manner consistent with Section 529A of the Internal Revenue
330367 9 Code.
331368 10 (l) Notice. Notice of any proposed amendments to the rules
332369 11 and regulations shall be provided to all designated
333370 12 beneficiaries or their designated representatives prior to
334371 13 adoption. Amendments to rules and regulations shall apply only
335372 14 to contributions made after the adoption of the amendment.
336373 15 Amendments to this Section automatically amend the
337374 16 participation agreement. Any amendments to the operating
338375 17 procedures and policies of the plan shall automatically amend
339376 18 the participation agreement after adoption by the State
340377 19 Treasurer.
341378 20 (m) Plan assets. All assets of the plan, including any
342379 21 contributions to accounts, are held in trust for the exclusive
343380 22 benefit of the designated beneficiary and shall be considered
344381 23 spendthrift accounts exempt from all of the designated
345382 24 beneficiary's creditors. The plan shall provide separate
346383 25 accounting for each designated beneficiary sufficient to
347384 26 satisfy the requirements of paragraph (3) of subsection (b) of
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358395 1 Section 529A of the Internal Revenue Code. Assets must be held
359396 2 in either a state trust fund outside the State treasury, to be
360397 3 known as the Illinois ABLE plan trust fund, or in accounts with
361398 4 a third-party provider selected pursuant to this Section.
362399 5 Amounts contributed to ABLE accounts shall not be commingled
363400 6 with State funds and the State shall have no claim to or
364401 7 against, or interest in, such funds.
365402 8 Plan assets are not subject to claims by creditors of the
366403 9 State and are not subject to appropriation by the State.
367404 10 Payments from the Illinois ABLE account plan shall be made
368405 11 under this Section.
369406 12 The assets of ABLE accounts and their income may not be
370407 13 used as security for a loan.
371408 14 (n) Taxation. The assets of ABLE accounts and their income
372409 15 and operation shall be exempt from all taxation by the State of
373410 16 Illinois and any of its subdivisions to the extent exempt from
374411 17 federal income taxation. The accrued earnings on investments
375412 18 in an ABLE account once disbursed on behalf of a designated
376413 19 beneficiary shall be similarly exempt from all taxation by the
377414 20 State of Illinois and its subdivisions to the extent exempt
378415 21 from federal income taxation, so long as they are used for
379416 22 qualified expenses.
380417 23 Notwithstanding any other provision of law that requires
381418 24 consideration of one or more financial circumstances of an
382419 25 individual, for the purpose of determining eligibility to
383420 26 receive, or the amount of, any assistance or benefit
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394431 1 authorized by such provision to be provided to or for the
395432 2 benefit of such individual, any amount, including earnings
396433 3 thereon, in the ABLE account of such individual, any
397434 4 contributions to the ABLE account of the individual, and any
398435 5 distribution for qualified disability expenses shall be
399436 6 disregarded for such purpose with respect to any period during
400437 7 which such individual maintains, makes contributions to, or
401438 8 receives distributions from such ABLE account.
402439 9 (o) Distributions. The designated beneficiary or the
403440 10 designated representative of the designated beneficiary may
404441 11 make a qualified distribution for the benefit of the
405442 12 designated beneficiary. Qualified distributions shall be made
406443 13 for qualified disability expenses allowed pursuant to Section
407444 14 529A of the Internal Revenue Code. Qualified distributions
408445 15 must be withdrawn proportionally from contributions and
409446 16 earnings in a designated beneficiary's account on the date of
410447 17 distribution as provided in Section 529A of the Internal
411448 18 Revenue Code. Unless prohibited by federal law, upon the death
412449 19 of a designated beneficiary, proceeds from an account may be
413450 20 transferred to the estate of a designated beneficiary, or to
414451 21 an account for another eligible individual specified by the
415452 22 designated beneficiary or the estate of the designated
416453 23 beneficiary, or transferred pursuant to a payable on death
417454 24 account agreement. A payable on death account agreement may be
418455 25 executed by the designated beneficiary or a designated
419456 26 representative who has been granted such power. Upon the death
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430467 1 of a designated beneficiary, prior to distribution of the
431468 2 balance to the estate, account for another eligible
432469 3 individual, or transfer pursuant to a payable on death account
433470 4 agreement, the State Treasurer may require verification that
434471 5 the funeral and burial expenses of the designated beneficiary
435472 6 have been paid. An agency or instrumentality of the State may
436473 7 not seek payment under subsection (f) of Section 529A of the
437474 8 federal Internal Revenue Code from the account or its proceeds
438475 9 for benefits provided to a designated beneficiary.
439476 10 (p) Rules. The State Treasurer may adopt rules to carry
440477 11 out the purposes of this Section. The State Treasurer shall
441478 12 further have the power to issue peremptory rules necessary to
442479 13 ensure that ABLE accounts meet all of the requirements for a
443480 14 qualified state ABLE program under Section 529A of the
444481 15 Internal Revenue Code and any regulations issued by the
445482 16 Internal Revenue Service.
446483 17 (q) Name. The ABLE Account Program may also be referred to
447484 18 as the Senator Scott Bennett ABLE Program.
448485 19 (Source: P.A. 102-392, eff. 8-16-21; 102-1024, eff. 5-27-22;
449486 20 103-256, eff. 6-30-23.)
450487 21 Section 10. The State Finance Act is amended by adding
451488 22 Section 5.1030 as follows:
452-23 (30 ILCS 105/5.1030 new)
453-24 Sec. 5.1030. The Illinois ABLE Matching Contribution Fund.
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