Texas 2015 - 84th Regular

Texas House Bill HB3766 Compare Versions

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1	1	By: Burkett H.B. No. 3766
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the establishment of the Texas Achieving a Better Life
7	7	Experience (ABLE) Program; authorizing the imposition of fees.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 54.602(b), Education Code, is amended to
10	10	read as follows:
11	11	(b) The board shall administer the prepaid higher education
12	12	tuition program established under this subchapter, [and] the higher
13	13	education savings plan established under Subchapter G, and the
14	14	Texas Achieving a Better Life Experience Program created under
15	15	Chapter 162, Human Resources Code.
16	16	SECTION 2. The heading to Section 54.634, Education Code,
17	17	is amended to read as follows:
18	18	Sec. 54.634. ESTABLISHMENT OF TRUST FUND; COLLEGE SAVINGS
19	19	PLAN ACCOUNT; TEXAS ABLE SAVINGS PLAN ACCOUNT.
20	20	SECTION 3. Section 54.634, Education Code, is amended by
21	21	adding Subsection (e) to read as follows:
22	22	(e) The Texas ABLE savings plan account is created within
23	23	the Texas tomorrow constitutional trust fund and is financed
24	24	through administrative fees and service charges as authorized by
25	25	Section 162.004, Human Resources Code.
26	26	SECTION 4. Title 11, Human Resources Code, is amended by
27	27	adding Chapter 162 to read as follows:
28	28	CHAPTER 162. TEXAS ACHIEVING A BETTER
29	29	LIFE EXPERIENCE (ABLE) PROGRAM
30	30	Sec. 162.001. PURPOSES OF PROGRAM. The purposes of this
31	31	chapter are as follows:
32	32	(1) to encourage and assist individuals and families
33	33	in saving private funds for the purpose of supporting individuals
34	34	with disabilities to maintain health, independence, and quality of
35	35	life; and
36	36	(2) to provide secure funding for qualified disability
37	37	expenses on behalf of designated beneficiaries with disabilities
38	38	that will supplement, but not supplant, benefits provided through
39	39	private insurance, the Medicaid program under Title XIX of the
40	40	Social Security Act, the supplemental security income program under
41	41	Title XVI of the Social Security Act, the beneficiary's employment,
42	42	and other sources.
43	43	Sec. 162.002. DEFINITIONS. In this chapter:
44	44	(1) "ABLE account" has the meaning assigned by Section
45	45	529A, Internal Revenue Code.
46	46	(2) "ABLE program" or "program" means the Texas
47	47	Achieving a Better Life Experience Program created under this
48	48	chapter.
49	49	(3) "Benefits" means the payment of qualified
50	50	disability expenses on behalf of a designated beneficiary from an
51	51	ABLE account.
52	52	(4) "Board" means the Prepaid Higher Education Tuition
53	53	Board established under Section 54.602, Education Code.
54	54	(5) "Designated beneficiary" and "eligible
55	55	individual" have the meanings assigned by Section 529A, Internal
56	56	Revenue Code.
57	57	(6) "Financial institution" means a bank, trust
58	58	company, an insurance company, or a registered investment company.
59	59	(7) "Internal Revenue Code" means the Internal Revenue
60	60	Code of 1986.
61	61	(8) "Participant" means a person who has entered into
62	62	a participation agreement under this chapter.
63	63	(9) "Participation agreement" means an agreement
64	64	between a participant and the board under this chapter that
65	65	conforms to the requirements prescribed by this chapter.
66	66	(10) "Qualified disability expenses" has the meaning
67	67	assigned by Section 529A, Internal Revenue Code.
68	68	(11) "Texas ABLE savings plan account" means the Texas
69	69	ABLE savings plan account created under Section 54.634(e),
70	70	Education Code.
71	71	Sec. 162.003. CREATION; ADMINISTRATION. (a) The Texas
72	72	Achieving a Better Life Experience (ABLE) Program is created under
73	73	this chapter.
74	74	(b) The board shall administer the ABLE program.
75	75	Sec. 162.004. POWERS AND DUTIES OF BOARD. (a) To establish
76	76	and administer the ABLE program, the board shall:
77	77	(1) develop and implement the program;
78	78	(2) adopt reasonable rules and establish policies and
79	79	procedures to implement this chapter to:
80	80	(A) permit the program to qualify as a qualified
81	81	ABLE program under Section 529A, Internal Revenue Code; and
82	82	(B) ensure the program's compliance with all
83	83	applicable laws;
84	84	(3) either directly or through a contractual
85	85	arrangement with a financial institution for investment services,
86	86	develop and implement educational programs and related
87	87	informational materials for participants and their families,
88	88	including special programs and materials to inform individuals with
89	89	disabilities regarding methods for financing the qualified
90	90	disability expenses of individuals with disabilities to enable
91	91	those individuals to maintain health, independence, and quality of
92	92	life;
93	93	(4) enter into agreements with any financial
94	94	institution or any state or federal agency or entity as required to
95	95	administer the program under this chapter;
96	96	(5) enter into participation agreements with
97	97	participants;
98	98	(6) solicit and accept any gifts, grants, legislative
99	99	appropriations, and other funds from the state, any unit of
100	100	federal, state, or local government, or any other person, firm,
101	101	partnership, or corporation for deposit to the Texas ABLE savings
102	102	plan account;
103	103	(7) invest participant funds in appropriate
104	104	investment instruments;
105	105	(8) appoint members to an advisory committee who are
106	106	stakeholders from the disability community;
107	107	(9) make provision for the payment of costs of
108	108	administering the program; and
109	109	(10) procure insurance, guarantees, or other
110	110	protections against any loss in connection with the assets or
111	111	activities of the program.
112	112	(b) The board has all powers necessary or proper to carry
113	113	out its duties under this chapter and to effectuate the purposes of
114	114	this chapter, including the power to:
115	115	(1) enter into contracts and other necessary
116	116	instruments;
117	117	(2) enter into agreements or other transactions with
118	118	the United States, state agencies, and other entities as necessary;
119	119	(3) appear on its own behalf before governmental
120	120	agencies;
121	121	(4) contract for necessary goods and services,
122	122	including specifying in the contract duties to be performed by the
123	123	provider of a good or service that are a part of or are in addition
124	124	to the person's primary duties under the contract;
125	125	(5) engage the services of private consultants,
126	126	actuaries, trustees, records administrators, managers, legal
127	127	counsel, and auditors for administrative or technical assistance;
128	128	(6) participate in any government program;
129	129	(7) impose charges and fees;
130	130	(8) contract with a person to market the program;
131	131	(9) make reports;
132	132	(10) purchase liability insurance covering the board
133	133	and employees and agents of the board; and
134	134	(11) establish other policies, procedures, and
135	135	eligibility criteria to implement this chapter.
136	136	Sec. 162.005. INVESTMENT OF FUNDS. (a) All money paid by a
137	137	participant in connection with a participation agreement shall be:
138	138	(1) deposited into an individual ABLE account held on
139	139	behalf of that participant in the Texas ABLE savings plan account;
140	140	and
141	141	(2) promptly invested by the board.
142	142	(b) For new contracts entered into after December 1, 2015,
143	143	board members shall study investment plans of other states and
144	144	contract with or negotiate to provide benefit options that are the
145	145	same as or similar to other states' qualified plans for the purpose
146	146	of offering additional options for participants.
147	147	(c) The board may delegate to duly appointed investment
148	148	counselors authority to act on behalf of the board in the
149	149	investment and reinvestment of all or part of the funds and may also
150	150	delegate to those counselors the authority to act on behalf of the
151	151	board in the holding, purchasing, selling, assigning,
152	152	transferring, or disposing of any or all of the securities and
153	153	investments in which the funds in the Texas ABLE savings plan
154	154	account have been invested, as well as the proceeds from the
155	155	investment of those funds. The investment counselors must be
156	156	registered as investment advisors with the United States Securities
157	157	and Exchange Commission.
158	158	(d) In exercising or delegating its investment powers and
159	159	authority, members of the board shall exercise ordinary business
160	160	care and prudence under the facts and circumstances prevailing at
161	161	the time of the action or decision. A member of the board is not
162	162	liable for any action taken or omitted with respect to the exercise
163	163	of, or delegation of, those powers and authority if the member
164	164	discharged the duties of the member's position in good faith and
165	165	with the degree of diligence, care, and skill that a prudent person
166	166	acting in a like capacity and familiar with those matters would use
167	167	in the conduct of an enterprise of a like character and with like
168	168	aims.
169	169	(e) A company or firm in which a member of the board has a
170	170	substantial interest may not handle an investment transaction
171	171	authorized by the board. A member of the board may not profit
172	172	directly or indirectly from an investment transaction authorized by
173	173	the board.
174	174	(f) A member of the board or an employee or agent of the ABLE
175	175	program may not receive any gain or profit from any funds or
176	176	transactions of the ABLE program. A member's, employee's, or
177	177	agent's acceptance of any gratuity or compensation for the purpose
178	178	of influencing an action taken with respect to the investment or
179	179	management of the funds of the ABLE program is grounds for removal
180	180	or termination of the member, employee, or agent, as applicable.
181	181	Sec. 162.006. TREATMENT OF ASSETS. (a) The assets of the
182	182	ABLE program shall at all times be preserved, invested, and spent
183	183	only for the purposes provided by this chapter and in accordance
184	184	with the participation agreements entered into under this chapter.
185	185	(b) The state does not have a property right in the assets of the
186	186	ABLE program.
187	187	Sec. 162.007. PARTICIPATION AGREEMENTS. (a) Under the ABLE
188	188	program, the board may enter into participation agreements with
189	189	participants on behalf of designated beneficiaries.
190	190	(b) A participation agreement must:
191	191	(1) stipulate the terms and conditions of the ABLE
192	192	program in which the participant makes contributions;
193	193	(2) specify the method for calculating the return on
194	194	the contribution made by the participant;
195	195	(3) clearly and prominently disclose to participants
196	196	the risk associated with depositing funds with the board;
197	197	(4) be organized and presented in a way and with
198	198	language that is easily understandable by the general public; and
199	199	(5) clearly and prominently disclose to participants
200	200	the existence of any load charge or similar charge assessed against
201	201	the ABLE accounts of the participants for administration or
202	202	services.
203	203	(c) Consistent with Section 529A, Internal Revenue Code,
204	204	the board shall establish:
205	205	(1) the maximum annual amount that a participant may
206	206	contribute with respect to a designated beneficiary; and
207	207	(2) a total contribution limit for ABLE accounts
208	208	established under the ABLE program with respect to a designated
209	209	beneficiary.
210	210	(d) The board may establish other requirements that the
211	211	board considers appropriate to provide adequate safeguards to
212	212	prevent contributions on behalf of a designated beneficiary from
213	213	exceeding the amount that is necessary to provide for the qualified
214	214	disability expenses of the beneficiary.
215	215	Sec. 162.008. QUALIFIED DISABILITY EXPENSES.
216	216	Contributions to an ABLE account and the earnings on those
217	217	contributions may be used, as provided in the participation
218	218	agreement, to pay the qualified disability expenses of a
219	219	designated beneficiary.
220	220	Sec. 162.009. DESIGNATED BENEFICIARY. (a) The participant
221	221	is the designated beneficiary of the ABLE account except as
222	222	described by Subsection (b) and as otherwise permitted by Section
223	223	529A, Internal Revenue Code.
224	224	(b) If the designated beneficiary of the account is a minor
225	225	or has a custodian or other fiduciary appointed for the purpose of
226	226	managing the minor's financial affairs, the parent or custodian or
227	227	other fiduciary of the beneficiary may serve as the participant if
228	228	that form of ownership is permitted or not prohibited by Section
229	229	529A, Internal Revenue Code.
230	230	Sec. 162.010. CANCELLATION. (a) A participant may cancel a
231	231	participation agreement at will.
232	232	(b) Each participation agreement must provide that the
233	233	agreement may be canceled on the terms and conditions and on payment
234	234	of applicable fees and costs as provided by rule.
235	235	SECTION 5. This Act takes effect December 1, 2015.