ENROLLED
ACT No. 411
2015 Regular Session
HOUSE BILL NO. 598
BY REPRESENTATIVES FOIL, BARRAS, BARROW, BERTHELOT, WESLEY
BISHOP, BROADWATER, BROWN, BURFORD, HENRY BURNS, CARMODY,
CARTER, CHANEY, CONNICK, GISCLAIR, GUINN, HALL, HARRISON,
HAVARD, HAZEL, HOFFMANN, HOWARD, JEFFERSON, MIKE JOHNSON,
JONES, NANCY LANDRY, LEGER, MONTOUCET, REYNOLDS, SIMON,
SMITH, ST. GERMAIN, THIBAUT, THIERRY, AND WILLMOTT AND
SENATORS ADLEY, ALARIO, ALLAIN, APPEL, BROWN, BUFFINGTON,
CHABERT, CLAITOR, CORTEZ, CROWE, DONAHUE, DORSEY-COLOMB,
ERDEY, GUILLORY, LAFLEUR, MILLS, MORRELL, MORRISH, MURRAY,
NEVERS, PEACOCK, PETERSON, RISER, GARY SMITH, JOHN SMITH,
TARVER, THOMPSON, WALSWORTH, WARD, AND WHITE
1 AN ACT
2 To amend and reenact R.S. 36:802.24 and R.S. 46:1722(1), (2), and (7)(introductory
3 paragraph) and (h), 1723, and 1725(B)(2), to enact R.S. 17:3093.1, R.S.
4 36:651(T)(6), and R.S. 46:1722(8) and (9) and 1726 through 1730, and to repeal R.S.
5 36:259(Y) and R.S. 46:1722(4) through (6), 1724, and 1725(D), relative to the ABLE
6 Account Program established by the Louisiana ABLE Act; to provide for
7 implementation of the ABLE Account Program in conformance with applicable
8 federal laws; to provide relative to the composition and functions of the ABLE
9 Account Authority; to provide for cooperative endeavors between the ABLE
10 Account Authority and the Louisiana Tuition Trust Authority; to provide for
11 concurrent operation and management of the ABLE Account Program and the
12 Louisiana Student Tuition Assistance and Revenue Trust Program; to provide for the
13 duties of the state treasurer relative to the investment of funds in ABLE Accounts;
14 to authorize rulemaking and oversight thereof by certain legislative committees; to
15 provide relative to treatment by certain assistance programs of funds in ABLE
16 Accounts; to provide relative to tax treatment of amounts deposited in ABLE
17 Accounts; to provide for legislative intent; and to provide for related matters.
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1 Be it enacted by the Legislature of Louisiana:
2 Section 1. R.S. 17:3093.1 is hereby enacted to read as follows:
3 §3093.1. START Program and ABLE Account Program; co-location and concurrent
4 operation
5 The authority is hereby authorized to enter into any contract, memorandum
6 of understanding, or other type of agreement as may be necessary to provide for the
7 co-location of administrative and clerical functions and concurrent operation and
8 management of the START Program and the ABLE Account Program of this state
9 established pursuant to Section 529A of the Internal Revenue Code and Chapter 19
10 of Title 46 of the Louisiana Revised Statutes of 1950 and administered by the ABLE
11 Account Authority placed within the Department of Education by the provisions of
12 R.S. 36:651(T).
13 Section 2. R.S. 36:802.24 is hereby amended and reenacted and R.S. 36:651(T)(6)
14 is hereby enacted to read as follows:
15 §651. Transfer of boards, commissions, departments, and agencies to Department
16 of Education; boards, commissions, and agencies within Department of
17 Education
18 * * *
19 T. The following agencies are placed within the Department of Education
20 and shall perform and exercise their powers, duties, functions, and responsibilities
21 as provided by law:
22 * * *
23 (6) The ABLE Account Authority (R.S. 46:1721 et seq.).
24 * * *
25 §802.24. Transfer; ABLE Account Authority
26 The ABLE Account Authority, transferred by the provisions of R.S.
27 36:259(Y) R.S. 36:651(T), is transferred to and placed within the Department of
28 Health and Hospitals Department of Education and shall continue to be composed
29 and selected as provided by law, and shall continue to exercise all of the powers,
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1 duties, functions, and responsibilities as provided in Chapter 19 of Title 46 of the
2 Louisiana Revised Statutes of 1950.
3 Section 3. R.S. 46:1722(1), (2), and (7)(introductory paragraph) and (h), 1723, and
4 1725(B)(2) are hereby amended and reenacted and R.S. 46:1722(8) and (9) and 1726 through
5 1730 are hereby enacted to read as follows:
6 §1722. Definitions
7 As used in this Chapter, the following terms have the meaning ascribed to
8 them in this Section:
9 (1) "ABLE Account" means a special savings account for financing of
10 certain qualified expenses of persons with disabilities as specifically provided in this
11 Chapter that conforms with all applicable standards and requirements set forth for
12 ABLE Accounts in the Stephen Beck, Jr., ABLE Act of 2014 (Public Law 113-295,
13 Division B).
14 (2) "ABLE Account Program" and "program" mean the special savings
15 account program provided for in this Chapter that meets applicable standards and
16 requirements necessary for designation as a "qualified ABLE program" as defined
17 in the Stephen Beck, Jr., ABLE Act of 2014 (Public Law 113-295, Division B).
18 * * *
19 (7) "Qualified disability expense" means any an expense made for a purpose
20 authorized in federal law and regulation relative to ABLE Accounts for the benefit
21 of a person with a disability who is a designated beneficiary as defined and
22 specifically provided for in rules and regulations of the authority. Qualified
23 participating in the ABLE Account Program. If authorized by federal law and
24 regulation, qualified disability expenses may include, without limitation, the
25 following:
26 * * *
27 (h) Any other expenses which that are consistent with the purposes of this
28 Chapter, authorized by federal law, approved by the authority, and provided for in
29 duly promulgated administrative rules.
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1 (8) "Designated beneficiary" shall have the meaning ascribed in 26 U.S.C.
2 529A(e).
3 (9) "Eligible individual" means a person with a disability who meets the
4 criteria necessary to qualify as an eligible individual provided in 26 U.S.C. 529A(e).
5 §1723. ABLE Account Program; creation; purpose; legislative intent
6 A. The ABLE Account Program is hereby created and shall be administered
7 by the ABLE Account Authority, referred to hereafter as "the authority", to
8 encourage and assist individuals and families in saving private funds for the purpose
9 of supporting persons with disabilities in endeavors to maintain health,
10 independence, and quality of life.
11 B. The purposes of the ABLE Account Program, referred to hereafter as the
12 "the program", include all of the following:
13 (1) To pay qualified disability expenses so that persons with disabilities may
14 maintain health, independence, and quality of life.
15 (2) To provide secure funding for disability-related expenses on behalf of
16 designated beneficiaries with disabilities that will supplement, but not supplant,
17 benefits provided through private insurance, the Medicaid medical assistance
18 program under administered by this state in accordance with Title XIX of the Social
19 Security Act, the supplemental security income program under Title XVI of such
20 Act, the beneficiary's employment, and other sources.
21 (3) To comply fully with all provisions of the Stephen Beck, Jr., ABLE Act
22 of 2014 (Public Law 113-295, Division B), and all regulations issued pursuant
23 thereto.
24 C.(1) It is the intention of the legislature that the program shall be treated in
25 the same manner as a qualified tuition ABLE program as defined in Section 529
26 529A of the federal Internal Revenue Code, as amended. Any provision of this
27 Chapter determined to be in conflict with any requirement of the code Internal
28 Revenue Code as applicable to a qualified tuition ABLE program shall be superseded
29 by such code provision to the extent necessary to assure that the program continues
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1 to meet requirements for tax-advantaged status in accordance with the code's
2 definition of a qualified tuition ABLE program.
3 (2) Any requirement of this Chapter determined to be more restrictive than
4 the requirements of the federal Internal Revenue Code as applicable to a qualified
5 tuition ABLE program may be modified by the authority through rules promulgated
6 in accordance with the Administrative Procedure Act to conform with code
7 requirements.
8 §1725. ABLE Account Authority; creation; powers
9 * * *
10 B.
11 * * *
12 (2) The membership of the authority shall consist of the following seven
13 persons:
14 (a) The chairperson of the Louisiana Developmental Disabilities Council or
15 his designee.
16 (b) The executive director of the governor's office of disability affairs or his
17 designee.
18 (c) The executive director of The Arc of Louisiana or his designee.
19 (d) The executive director of People First of Louisiana or his designee.
20 (e) A person with a disability selected by the executive director of People
21 First of Louisiana.
22 (f) A parent or family member of a person with a disability selected by the
23 chairperson of the Louisiana Developmental Disabilities Council.
24 (c) (g) One member who is affiliated with Louisiana Rehabilitation Services
25 or the Disability Navigator Program, or any successors of these, appointed by the
26 executive director of the Louisiana Workforce Commission.
27 (d) (h) An officer of a bank in Louisiana who is a member of the Louisiana
28 Bankers Association and who is nominated by the association.
29 (e) (i) One member of the House of Representatives appointed by the
30 speaker.
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1 (f) (j) One member of the Senate appointed by the president.
2 (g) (k) The state treasurer who shall be an ex officio voting member of the
3 authority.
4 * * *
5 §1726. ABLE Account Program and START Program; co-location and concurrent
6 operation
7 The authority is hereby authorized to enter into any contract, memorandum
8 of understanding, or other type of agreement as may be necessary to provide for the
9 co-location of administrative and clerical functions and concurrent operation and
10 management of the ABLE Account Program and the Louisiana Student Tuition
11 Assistance and Revenue Trust Program of this state, also known as the START
12 Program, established pursuant to Section 529 of the Internal Revenue Code and
13 Chapter 22-A of Title 17 of the Louisiana Revised Statutes of 1950 and administered
14 by the Louisiana Tuition Trust Authority placed within the Department of Education
15 by the provisions of R.S. 36:651(T).
16 §1727. Rulemaking; compliance with federal requirements; legislative oversight
17 A. The authority shall, by adoption of rules pursuant to the Administrative
18 Procedure Act, provide for the following functions, policies, and requirements of the
19 program and shall ensure through such rules that all of the following aspects of the
20 program comply with all applicable provisions of Section 529A of the Internal
21 Revenue Code and with any regulations pertaining to qualified ABLE programs
22 issued pursuant thereto:
23 (1) Individual eligibility factors, including the age limit before which a
24 person's disability must have occurred in order to be deemed an eligible individual
25 for purposes of the program.
26 (2) Applicant documentation and other standards relating to determination
27 of eligibility for the program.
28 (3) The establishment and imposition of reasonable residency requirements
29 for beneficiaries of those applying to establish an ABLE Account.
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1 (4) The establishment and imposition of reasonable limits on the number of
2 ABLE Account participants.
3 (5) The number of ABLE Accounts per eligible individual.
4 (6) The establishment and imposition of limits on maximum annual
5 contributions to an ABLE Account.
6 (7) The establishment and imposition of limits on the amount that may
7 accrue in an ABLE Account on behalf of any designated beneficiary.
8 (8) Separate accounting for each designated beneficiary.
9 (9) A limitation on the number of times per year a designated beneficiary
10 may direct the investment of contributions made to his ABLE Account.
11 (10) A prohibition on pledging of any interest in an ABLE Account or any
12 portion thereof to be used as security for a loan.
13 (11) Safeguards to prevent aggregate contributions on behalf of a designated
14 beneficiary in excess of the limit provided for in 26 U.S.C. 529A(b).
15 (12) The establishment and imposition of restrictions on the substitution of
16 one designated beneficiary for another.
17 (13) The establishment and imposition of restrictions on the transfer of
18 ownership of ABLE Accounts.
19 (14) The determination of the rate of interest to be paid on ABLE Accounts
20 of record at the close of a calendar year, provided that such rate is not a negative rate
21 and is approved by the state treasurer.
22 (15) Types and categories of qualified disability expenses.
23 (16) Prevention of fraud and abuse with respect to amounts claimed as
24 qualified disability expenses.
25 (17) The disposition of abandoned accounts in compliance with federal and
26 state law.
27 (18) The establishment and imposition of restrictions on investment of
28 deposits in an ABLE Account and the interest earned thereon.
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1 B. Administrative rules promulgated by the authority shall be subject to
2 legislative oversight by the Senate Committee on Finance and the House Committee
3 on Appropriations.
4 §1728. ABLE Account funds; investment
5 The state treasurer shall invest monies deposited in the ABLE Accounts in
6 the same manner as prescribed by R.S. 17:3091 et seq. for the investment of monies
7 deposited in START Program accounts. Funds in ABLE accounts shall be invested
8 in such investment options and subject to the same requirements and limitations for
9 funds deposited in START Program accounts provided in R.S. 17:3091 et seq.,
10 except as otherwise provided in this Chapter.
11 §1729. ABLE Account funds; treatment under certain federal assistance programs
12 In accordance with Section 103 of Title I of Division B of Public Law
13 113-295, for the purpose of determining eligibility to receive, or the amount of, any
14 assistance or benefit authorized to be provided to or for the benefit of a designated
15 beneficiary by a means-tested federal assistance program, the following amounts
16 shall be disregarded for such purpose with respect to any period during which the
17 beneficiary maintains, makes contributions to, or receives distributions from an
18 ABLE Account:
19 (1) Any amount, including earnings thereon, in the ABLE Account of the
20 designated beneficiary.
21 (2) Any contributions to the ABLE Account of the designated beneficiary.
22 (3) Any distribution from the ABLE Account for a qualified disability
23 expense.
24 §1730. Amounts deposited in ABLE Accounts; Louisiana income tax; tax table
25 income
26 For tax years beginning on and after January 1, 2016, amounts deposited in
27 an ABLE Account on behalf of any designated beneficiary may be excluded from
28 tax table income for purposes of Louisiana income tax if authorized by the
29 provisions of R.S. 47:293(9)(a).
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1 Section 4. R.S. 36:259(Y) and R.S. 46:1722(4) through (6), 1724, and 1725(D) are
2 hereby repealed in their entirety.
3 Section 5.(A) Internal Revenue Service Notice 2015-18, issued on March 23, 2015,
4 provides the following statements concerning implementation of state ABLE account
5 programs such as the program provided for in this Act:
6 (1) The United States Department of the Treasury (Treasury Department) and the
7 Internal Revenue Service (IRS) are aware that several state legislatures are in the process of
8 enacting enabling legislation in order to ensure that their citizens may create ABLE accounts
9 during 2015.
10 (2) While the Treasury Department and the IRS are working on guidance related to
11 Section 529A of the Internal Revenue Code providing for qualified ABLE programs as of
12 the date of issuance of IRS Notice 2015-18, it is anticipated that ABLE programs may be in
13 operation in some states before such guidance can be issued.
14 (3) The Treasury Department and the IRS do not intend for the lack of guidance to
15 discourage states from enacting their enabling legislation and creating their ABLE programs.
16 (4) The Treasury Department and the IRS are assuring states that enact legislation
17 creating an ABLE program in accordance with Section 529A of the Internal Revenue Code,
18 and individuals establishing ABLE accounts in accordance with such legislation, that they
19 will not fail to receive the benefits of Section 529A merely because the state legislation or
20 the account documents do not fully comport with the guidance when it is issued.
21 (5) The Treasury Department and the IRS intend to provide transition relief with
22 regard to necessary changes to ensure that state programs and accounts meet the
23 requirements in the guidance to be issued, including providing sufficient time after issuance
24 of the guidance in order for changes to be implemented.
25 (B) In consideration of the foregoing, the legislature hereby declares that this Act
26 is intended to comply to the maximum extent possible with all federal laws, regulations, and
27 policies relative to ABLE accounts in effect on the effective date of this Act.
28 Section 6. The executive director of The Arc of Louisiana shall take all such actions
29 as are necessary to ensure that the members of the ABLE Account Authority are seated on
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1 or before September 1, 2015, and that the initial convening of the authority occurs no later
2 than December 1, 2015.
3 Section 7. This Act shall become effective upon signature by the governor or, if not
4 signed by the governor, upon expiration of the time for bills to become law without signature
5 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
6 vetoed by the governor and subsequently approved by the legislature, this Act shall become
7 effective on the day following such approval.
SPEAKER OF THE HOUSE OF REPRESENTATIVES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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