Texas 2015 - 84th Regular

Texas House Bill HB3703 Compare Versions

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

Old	New	Differences
1	1	84R12225 KEL-F
2	2	By: Lucio III H.B. No. 3703
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the establishment of the Texas Achieving a Better Life
8	8	Experience (ABLE) Program; authorizing the imposition of fees.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 54.602(b), Education Code, is amended to
11	11	read as follows:
12	12	(b) The board shall administer the prepaid higher education
13	13	tuition program established under this subchapter, [and] the higher
14	14	education savings plan established under Subchapter G, and the
15	15	Texas Achieving a Better Life Experience Program created under
16	16	Chapter 162, Human Resources Code.
17	17	SECTION 2. The heading to Section 54.634, Education Code,
18	18	is amended to read as follows:
19	19	Sec. 54.634. ESTABLISHMENT OF TRUST FUND; COLLEGE SAVINGS
20	20	PLAN ACCOUNT; TEXAS ABLE SAVINGS PLAN ACCOUNT.
21	21	SECTION 3. Section 54.634, Education Code, is amended by
22	22	adding Subsection (e) to read as follows:
23	23	(e) The Texas ABLE savings plan account is created within
24	24	the Texas tomorrow constitutional trust fund and is financed
25	25	through administrative fees and service charges as authorized by
26	26	Section 162.004, Human Resources Code.
27	27	SECTION 4. Title 11, Human Resources Code, is amended by
28	28	adding Chapter 162 to read as follows:
29	29	CHAPTER 162. TEXAS ACHIEVING A BETTER
30	30	LIFE EXPERIENCE (ABLE) PROGRAM
31	31	Sec. 162.001. PURPOSES OF PROGRAM. The purposes of this
32	32	chapter are as follows:
33	33	(1) to encourage and assist individuals and families
34	34	in saving private funds for the purpose of supporting individuals
35	35	with disabilities to maintain health, independence, and quality of
36	36	life; and
37	37	(2) to provide secure funding for qualified disability
38	38	expenses on behalf of designated beneficiaries with disabilities
39	39	that will supplement, but not supplant, benefits provided through
40	40	private insurance, the Medicaid program under Title XIX of the
41	41	Social Security Act, the supplemental security income program under
42	42	Title XVI of the Social Security Act, the beneficiary's employment,
43	43	and other sources.
44	44	Sec. 162.002. DEFINITIONS. In this chapter:
45	45	(1) "ABLE account" has the meaning assigned by Section
46	46	529A, Internal Revenue Code.
47	47	(2) "ABLE program" or "program" means the Texas
48	48	Achieving a Better Life Experience Program created under this
49	49	chapter.
50	50	(3) "Benefits" means the payment of qualified
51	51	disability expenses on behalf of a designated beneficiary from an
52	52	ABLE account.
53	53	(4) "Board" means the Prepaid Higher Education Tuition
54	54	Board established under Section 54.602, Education Code.
55	55	(5) "Designated beneficiary" and "eligible
56	56	individual" have the meanings assigned by Section 529A, Internal
57	57	Revenue Code.
58	58	(6) "Financial institution" means a bank, an insurance
59	59	company, or a registered investment company.
60	60	(7) "Internal Revenue Code" means the Internal Revenue
61	61	Code of 1986.
62	62	(8) "Participant" means a person who has entered into
63	63	a participation agreement under this chapter for the advance
64	64	payment of qualified disability expenses on behalf of a designated
65	65	beneficiary.
66	66	(9) "Participation agreement" means an agreement
67	67	between a participant and the board under this chapter that
68	68	conforms to the requirements prescribed by this chapter.
69	69	(10) "Qualified disability expenses" has the meaning
70	70	assigned by Section 529A, Internal Revenue Code.
71	71	(11) "Texas ABLE savings plan account" means the Texas
72	72	ABLE savings plan account created under Section 54.634(e),
73	73	Education Code.
74	74	Sec. 162.003. CREATION; ADMINISTRATION. (a) The Texas
75	75	Achieving a Better Life Experience (ABLE) Program is created under
76	76	this chapter.
77	77	(b) The board shall administer the ABLE program.
78	78	Sec. 162.004. POWERS AND DUTIES OF BOARD. (a) To establish
79	79	and administer the ABLE program, the board shall:
80	80	(1) develop and implement the program;
81	81	(2) adopt reasonable rules and establish policies and
82	82	procedures to implement this chapter to:
83	83	(A) permit the program to qualify as a qualified
84	84	ABLE program under Section 529A, Internal Revenue Code; and
85	85	(B) ensure the program's compliance with all
86	86	applicable laws;
87	87	(3) either directly or through a contractual
88	88	arrangement with a financial institution for investment services,
89	89	develop and implement educational programs and related
90	90	informational materials for participants and their families,
91	91	including special programs and materials to inform individuals with
92	92	disabilities regarding methods for financing the qualified
93	93	disability expenses of individuals with disabilities to enable
94	94	those individuals to maintain health, independence, and quality of
95	95	life;
96	96	(4) enter into agreements with any financial
97	97	institution or any state or federal agency or entity as required to
98	98	administer the program under this chapter;
99	99	(5) enter into participation agreements with
100	100	participants;
101	101	(6) solicit and accept any gifts, grants, legislative
102	102	appropriations, and other funds from the state, any unit of
103	103	federal, state, or local government, or any other person, firm,
104	104	partnership, or corporation for deposit to the Texas ABLE savings
105	105	plan account;
106	106	(7) invest participant funds in appropriate
107	107	investment instruments to achieve long-term total return through a
108	108	combination of capital appreciation and current income;
109	109	(8) make appropriate payments and distributions on
110	110	behalf of designated beneficiaries under participation agreements;
111	111	(9) make refunds to participants on the cancellation
112	112	of participation agreements in accordance with the provisions,
113	113	limitations, and restrictions provided by this chapter and the
114	114	rules adopted by the board under this chapter;
115	115	(10) make provision for the payment of costs of
116	116	administering the program; and
117	117	(11) procure insurance, guarantees, or other
118	118	protections against any loss in connection with the assets or
119	119	activities of the program.
120	120	(b) The board has all powers necessary or proper to carry
121	121	out its duties under this chapter and to effectuate the purposes of
122	122	this chapter, including the power to:
123	123	(1) sue and be sued;
124	124	(2) enter into contracts and other necessary
125	125	instruments;
126	126	(3) enter into agreements or other transactions with
127	127	the United States, state agencies, and other entities as necessary;
128	128	(4) appear on its own behalf before governmental
129	129	agencies;
130	130	(5) contract for necessary goods and services,
131	131	including specifying in the contract duties to be performed by the
132	132	provider of a good or service that are a part of or are in addition
133	133	to the person's primary duties under the contract;
134	134	(6) engage the services of private consultants,
135	135	actuaries, trustees, records administrators, managers, legal
136	136	counsel, and auditors for administrative or technical assistance;
137	137	(7) participate in any government program;
138	138	(8) impose charges and fees;
139	139	(9) contract with a person to market the program;
140	140	(10) purchase liability insurance covering the board
141	141	and employees and agents of the board; and
142	142	(11) establish other policies, procedures, and
143	143	eligibility criteria to implement this chapter.
144	144	Sec. 162.005. INVESTMENT OF FUNDS. (a) All money paid by a
145	145	participant in connection with a participation agreement shall be:
146	146	(1) deposited into an individual ABLE account held on
147	147	behalf of that participant in the Texas ABLE savings plan account;
148	148	and
149	149	(2) promptly invested by the board.
150	150	(b) For new contracts entered into after December 1, 2015,
151	151	board members shall study investment plans of other states and
152	152	contract with or negotiate to provide benefit options that are the
153	153	same as or similar to other states' qualified plans for the purpose
154	154	of offering additional options for participants.
155	155	(c) The board may delegate to duly appointed investment
156	156	counselors authority to act on behalf of the board in the investment
157	157	and reinvestment of all or part of the funds and may also delegate
158	158	to those counselors the authority to act on behalf of the board in
159	159	the holding, purchasing, selling, assigning, transferring, or
160	160	disposing of any or all of the securities and investments in which
161	161	the funds in the Texas ABLE savings plan account have been invested,
162	162	as well as the proceeds from the investment of those funds. The
163	163	investment counselors must be registered as investment advisors
164	164	with the United States Securities and Exchange Commission.
165	165	(d) In exercising or delegating its investment powers and
166	166	authority, members of the board shall exercise ordinary business
167	167	care and prudence under the facts and circumstances prevailing at
168	168	the time of the action or decision. A member of the board is not
169	169	liable for any action taken or omitted with respect to the exercise
170	170	of, or delegation of, those powers and authority if the member
171	171	discharged the duties of the member's position in good faith and
172	172	with the degree of diligence, care, and skill that a prudent person
173	173	acting in a like capacity and familiar with those matters would use
174	174	in the conduct of an enterprise of a like character and with like
175	175	aims.
176	176	(e) A company or firm in which a member of the board has a
177	177	substantial interest may not handle an investment transaction
178	178	authorized by the board. A member of the board may not profit
179	179	directly or indirectly from an investment transaction authorized by
180	180	the board.
181	181	(f) A member of the board or an employee or agent of the ABLE
182	182	program may not receive any gain or profit from any funds or
183	183	transactions of the ABLE program. A member's, employee's, or
184	184	agent's acceptance of any gratuity or compensation for the purpose
185	185	of influencing an action taken with respect to the investment or
186	186	management of the funds of the ABLE program is grounds for removal
187	187	or termination of the member, employee, or agent, as applicable.
188	188	Sec. 162.006. TREATMENT OF ASSETS. (a) The assets of the
189	189	ABLE program shall at all times be preserved, invested, and spent
190	190	only for the purposes provided by this chapter and in accordance
191	191	with the participation agreements entered into under this chapter.
192	192	(b) The state does not have a property right in the assets of
193	193	the ABLE program.
194	194	Sec. 162.007. PARTICIPATION AGREEMENTS. (a) Under the
195	195	ABLE program, the board may enter into participation agreements
196	196	with participants on behalf of designated beneficiaries.
197	197	(b) A participation agreement must:
198	198	(1) stipulate the terms and conditions of the ABLE
199	199	program in which the participant makes contributions;
200	200	(2) specify the method for calculating the return on
201	201	the contribution made by the participant;
202	202	(3) clearly and prominently disclose to participants
203	203	the risk associated with depositing funds with the board;
204	204	(4) be organized and presented in a way and with
205	205	language that is easily understandable by the general public; and
206	206	(5) clearly and prominently disclose to participants
207	207	the existence of any load charge or similar charge assessed against
208	208	the ABLE accounts of the participants for administration or
209	209	services.
210	210	(c) Consistent with Section 529A, Internal Revenue Code,
211	211	the board shall establish:
212	212	(1) the maximum annual amount that a participant may
213	213	contribute with respect to a designated beneficiary; and
214	214	(2) a total contribution limit for ABLE accounts
215	215	established under the ABLE program with respect to a designated
216	216	beneficiary.
217	217	(d) The board may establish other requirements that the
218	218	board considers appropriate to provide adequate safeguards to
219	219	prevent contributions on behalf of a designated beneficiary from
220	220	exceeding the amount that is necessary to provide for the qualified
221	221	disability expenses of the beneficiary.
222	222	(e) Consistent with Section 529A, Internal Revenue Code,
223	223	the board shall establish the minimum period for which
224	224	contributions and earnings must be held by the ABLE program. Any
225	225	contributions or earnings that are withdrawn or distributed from an
226	226	ABLE account before the expiration of that minimum period are
227	227	subject to a penalty under Section 162.011.
228	228	Sec. 162.008. QUALIFIED DISABILITY EXPENSES.
229	229	Contributions to an ABLE account and the earnings on those
230	230	contributions may be used, as provided in the participation
231	231	agreement, to pay the qualified disability expenses of a designated
232	232	beneficiary.
233	233	Sec. 162.009. DESIGNATED BENEFICIARY. (a) The participant
234	234	is the designated beneficiary of the ABLE account except as
235	235	described by Subsection (b) and as otherwise permitted by Section
236	236	529A, Internal Revenue Code.
237	237	(b) If the designated beneficiary of the account is a minor
238	238	or has a custodian or other fiduciary appointed for the purpose of
239	239	managing the minor's financial affairs, the parent or custodian or
240	240	other fiduciary of the beneficiary may serve as the participant if
241	241	that form of ownership is permitted or not prohibited by Section
242	242	529A, Internal Revenue Code.
243	243	Sec. 162.010. CANCELLATION. (a) A participant may cancel a
244	244	participation agreement at will.
245	245	(b) Each participation agreement must provide that the
246	246	agreement may be canceled on the terms and conditions and on payment
247	247	of applicable fees and costs as provided by rule.
248	248	Sec. 162.011. PENALTIES. The board shall impose a penalty
249	249	equal to or greater than 10 percent of the earnings of an ABLE
250	250	account for any distribution that is not:
251	251	(1) used exclusively for qualified disability
252	252	expenses of a designated beneficiary;
253	253	(2) made because of death of a designated beneficiary;
254	254	or
255	255	(3) held in the fund for the minimum period
256	256	established by the board.
257	257	SECTION 5. This Act takes effect December 1, 2015.