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"Board" means the Illinois State Board of Investment. |
"Contracting state" means a state without a qualified ABLE |
program which has entered into a contract with Illinois to |
provide residents of the contracting state access to a |
qualified ABLE program. |
"Designated representative" means a person who is |
authorized to act on behalf of an account owner. An account |
owner is authorized to act on his or her own behalf unless the |
account owner is a minor or the account owner has been |
adjudicated to have a disability so that a guardian has been |
appointed. A designated representative acts in a fiduciary |
capacity to the account owner. The State Treasurer shall |
recognize a person as a designated representative without |
appointment by a court in the following order of priority: |
(1) The account owner's plenary guardian of the estate, |
or the account owner's limited guardian of financial or |
contractual matters. Any guardian acting in this capacity |
shall not be required to seek court approval for any ABLE |
qualified distributions. |
(2) The agent named by the account owner in a property |
power of attorney recognized as a statutory short form |
power of attorney for property. |
(3) Such individual or entity that the account owner so |
designates in writing, in a manner to be established by the |
State Treasurer. |
(4) Such other individual or entity designated by the |
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State Treasurer pursuant to its rules. |
"Disability certification" has the meaning given to that |
term under Section 529A of the Internal Revenue Code. |
"Eligible individual" has the meaning given to that term |
under Section 529A of the Internal Revenue Code. |
"Participation agreement" means an agreement to |
participate in the ABLE account plan between an account owner |
and the State, through its agencies and the State Treasurer. |
"Qualified disability expenses" has the meaning given to |
that term under Section 529A of the Internal Revenue Code. |
"Qualified withdrawal" or "qualified distribution" means a |
withdrawal from an ABLE account to pay the qualified disability |
expenses of the beneficiary of the account. |
(b) The "Achieving a Better Life Experience" or "ABLE" |
account program is hereby created and shall be administered by |
the State Treasurer. The purpose of the ABLE plan is to |
encourage and assist individuals and families in saving private |
funds for the purpose of supporting individuals with |
disabilities to maintain health, independence, and quality of |
life, and to provide secure funding for disability-related |
expenses on behalf of designated beneficiaries with |
disabilities that will supplement, but not supplant, benefits |
provided through private insurance, federal and State medical |
and disability insurance, the beneficiary's employment, and |
other sources. Under the plan, a person may make contributions |
to an ABLE account to meet the qualified disability expenses of |
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the designated beneficiary of the account. The plan must be |
operated as an accounts-type plan that permits persons to save |
for qualified disability expenses incurred by or on behalf of |
an eligible individual. |
The State Treasurer shall promote awareness of the |
availability and advantages of the ABLE account plan as a way |
to assist individuals and families in saving private funds for |
the purpose of supporting individuals with disabilities. The |
cost of these promotional efforts shall not be funded with fees |
imposed on participants by the State Treasurer. |
The State Treasurer shall not accept contributions for ABLE |
accounts under this Section until the Internal Revenue Service |
has issued its final regulations or interim guidance concerning |
ABLE accounts. |
A separate account must be maintained for each beneficiary |
for whom contributions are made, and no more than one account |
shall be established per beneficiary. If an ABLE account is |
established for a designated beneficiary, no account |
subsequently established for such beneficiary shall be treated |
as an ABLE account. The preceding sentence shall not apply in |
the case of an ABLE account established for purposes of a |
rollover as permitted under Section 529A of the Internal |
Revenue Code. |
An ABLE account may be established under this Section for a |
designated beneficiary who is a resident of Illinois, a |
resident of a contracting state, or a resident of any other |
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state. |
Prior to the establishment of an ABLE account, an account |
owner must provide documentation to the State Treasurer that |
the account beneficiary is an eligible individual. |
Annual contributions to an ABLE account on behalf of a |
beneficiary are subject to the requirements of subsection (b) |
of Section 529A of the Internal Revenue Code. No person may |
make a contribution to an ABLE account if such a contribution |
would result in the aggregate account balance of an ABLE |
account exceeding the account balance limit authorized under |
Section 529A of the Internal Revenue Code. The Treasurer shall |
review the contribution limit at least annually. |
The State Treasurer shall administer the plan, including |
accepting and processing applications, maintaining account |
records, making payments, and undertaking any other necessary |
tasks to administer the plan, including the appointment of an |
account administrator. The State Treasurer may contract with |
one or more third parties to carry out some or all of these |
administrative duties, including, but not limited to, |
providing investment management services, incentives, and |
marketing the plan. |
In designing and establishing the plan's requirements and |
in negotiating or entering into contracts with third parties |
under this Section, the State Treasurer shall consult with the |
Board. The State Treasurer shall establish fees to be imposed |
on participants to recover the costs of administration, |
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recordkeeping, and investment management. The State Treasurer |
must use his or her best efforts to keep these fees as low as |
possible, consistent with efficient administration. |
The Illinois ABLE Accounts Administrative Fund is created |
as a nonappropriated trust fund in the State treasury. The |
State Treasurer shall use moneys in the Administrative Fund to |
pay for administrative expenses he or she incurs in the |
performance of his or her duties under this Section. The State |
Treasurer shall use moneys in the Administrative Fund to cover |
administrative expenses incurred under this Section. The |
Administrative Fund may receive any grants or other moneys |
designated for administrative purposes from the State, or any |
unit of federal, state, or local government, or any other |
person, firm, partnership, or corporation. Any interest |
earnings that are attributable to moneys in the Administrative |
Fund must be deposited into the Administrative Fund. Any fees |
established by the State Treasurer to recover the costs of |
administration, recordkeeping, and investment management shall |
be deposited into the Administrative Fund. |
Subject to appropriation, the State Treasurer may pay |
administrative costs associated with the creation and |
management of the plan until sufficient assets are available in |
the Administrative Fund for that purpose. |
Applications for accounts, account owner data, account |
data, and data on beneficiaries of accounts are confidential |
and exempt from disclosure under the Freedom of Information |
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Act. |
(c) The State Treasurer may invest the moneys in ABLE |
accounts in the same manner and in the same types of |
investments provided for the investment of moneys by the Board. |
To enhance the safety and liquidity of ABLE accounts, to ensure |
the diversification of the investment portfolio of accounts, |
and in an effort to keep investment dollars in the State, the |
State Treasurer may make a percentage of each account available |
for investment in participating financial institutions doing |
business in the State, except that the accounts may be invested |
without limit in investment options from open-ended investment |
companies registered under Section 80a of the federal |
Investment Company Act of 1940. The State Treasurer may |
contract with one or more third parties for investment |
management, recordkeeping, or other services in connection |
with investing the accounts. |
The account administrator shall annually prepare and adopt |
a written statement of investment policy that includes a risk |
management and oversight program. The risk management and |
oversight program shall be designed to ensure that an effective |
risk management system is in place to monitor the risk levels |
of the ABLE plan, to ensure that the risks taken are prudent |
and properly managed, to provide an integrated process for |
overall risk management, and to assess investment returns as |
well as risk to determine if the risks taken are adequately |
compensated compared to applicable performance benchmarks and |
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standards. |
The State Treasurer may enter into agreements with other |
states to either allow Illinois residents to participate in a |
plan operated by another state or to allow residents of other |
states to participate in the Illinois ABLE plan. |
(d) The State Treasurer shall ensure that the plan meets |
the requirements for an ABLE account under Section 529A of the |
Internal Revenue Code. The State Treasurer may request a |
private letter ruling or rulings from the Internal Revenue |
Service and must take any necessary steps to ensure that the |
plan qualifies under relevant provisions of federal law. |
Notwithstanding the foregoing, any determination by the |
Secretary of the Treasury of the United States that an account |
was utilized to make non-qualified distributions shall not |
result in an ABLE account being disregarded as a resource. |
A person may make contributions to an ABLE account on |
behalf of a beneficiary. Contributions to an account made by |
persons other than the account owner become the property of the |
account owner. Contributions to an account shall be considered |
as a transfer of assets for fair market value. A person does |
not acquire an interest in an ABLE account by making |
contributions to an account. A contribution to any account for |
a beneficiary must be rejected if the contribution would cause |
either the aggregate or annual account balance of the account |
to exceed the limits imposed by Section 529A of the Internal |
Revenue Code. |
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Any change in account owner must be done in a manner |
consistent with Section 529A of the Internal Revenue Code. |
Notice of any proposed amendments to the rules and |
regulations shall be provided to all owners or their designated |
representatives prior to adoption. Amendments to rules and |
regulations shall apply only to contributions made after the |
adoption of the amendment. Amendments to this Section |
automatically amend the participation agreement. Any |
amendments to the operating procedures and policies of the plan |
shall automatically amend the participation agreement after |
adoption by the State Treasurer. |
All assets of the plan, including any contributions to |
accounts, are held in trust for the exclusive benefit of the |
account owner and shall be considered spendthrift accounts |
exempt from all of the owner's creditors. The plan shall |
provide separate accounting for each designated beneficiary |
sufficient to satisfy the requirements of paragraph (3) of |
subsection (b) of Section 529A of the Internal Revenue Code. |
Assets must be held in either a state trust fund outside the |
State treasury, to be known as the Illinois ABLE plan trust |
fund, or in accounts with a third-party provider selected |
pursuant to this Section. Amounts contributed to ABLE accounts |
shall not be commingled with State funds and the State shall |
have no claim to or against, or interest in, such funds. |
Plan assets are not subject to claims by creditors of the |
State and are not subject to appropriation by the State. |
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Payments from the Illinois ABLE account plan shall be made |
under this Section. |
The assets of ABLE accounts and their income may not be |
used as security for a loan. |
The assets of ABLE accounts and their income and operation |
shall be exempt from all taxation by the State of Illinois and |
any of its subdivisions to the extent exempt from federal |
income taxation. The accrued earnings on investments in an ABLE |
account once disbursed on behalf of a designated beneficiary |
shall be similarly exempt from all taxation by the State of |
Illinois and its subdivisions to the extent exempt from federal |
income taxation, so long as they are used for qualified |
expenses. |
Notwithstanding any other provision of law that requires |
consideration of one or more financial circumstances of an |
individual, for the purpose of determining eligibility to |
receive, or the amount of, any assistance or benefit authorized |
by such provision to be provided to or for the benefit of such |
individual, any amount, including earnings thereon, in the ABLE |
account of such individual, any contributions to the ABLE |
account of the individual, and any distribution for qualified |
disability expenses shall be disregarded for such purpose with |
respect to any period during which such individual maintains, |
makes contributions to, or receives distributions from such |
ABLE account. |
(e) The account owner or the designated representative of |
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the account owner may request that a qualified distribution be |
made for the benefit of the account owner. Qualified |
distributions shall be made for qualified disability expenses |
allowed pursuant to Section 529A of the Internal Revenue Code. |
Qualified distributions must be withdrawn proportionally from |
contributions and earnings in an account owner's account on the |
date of distribution as provided in Section 529A of the |
Internal Revenue Code. Unless prohibited by federal law, upon |
the death of a designated beneficiary, proceeds from an account |
may be transferred to the estate of a designated beneficiary, |
or to an account for another eligible individual specified by |
the designated beneficiary or the estate of the designated |
beneficiary. An agency or instrumentality of the State may not |
seek payment under subsection (f) of Section 529A of the |
federal Internal Revenue Code from the account or its proceeds |
for benefits provided to a designated beneficiary. Upon the |
death of a beneficiary, the amount remaining in the |
beneficiary's account must be distributed pursuant to |
subsection (f) of Section 529A of the Internal Revenue Code. |
(f) The State Treasurer may adopt rules to carry out the |
purposes of this Section. The State Treasurer shall further |
have the power to issue peremptory rules necessary to ensure |
that ABLE accounts meet all of the requirements for a qualified |
state ABLE program under Section 529A of the Internal Revenue |
Code and any regulations issued by the Internal Revenue |
Service.
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(Source: P.A. 99-145, eff. 1-1-16; 99-563, eff. 7-15-16.)
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Section 10. The Trusts and Trustees Act is amended by |
changing Section 15.1 as follows:
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(760 ILCS 5/15.1) (from Ch. 17, par. 1685.1)
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Sec. 15.1. Trust for a beneficiary with a disability. |
(a) A discretionary trust for
the benefit of an individual |
who has a disability that substantially
impairs the |
individual's ability to provide for his or her own care or
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custody and constitutes a substantial disability shall not be |
liable to pay
or reimburse the State or any public agency for |
financial aid or services
to the individual except to the |
extent the trust was created by the
individual or trust |
property has been distributed directly to or is
otherwise under |
the control of the individual, provided that such exception
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shall not apply to a trust created with the property of the |
individual with a disability or property within his or her |
control if the trust complies with
Medicaid reimbursement |
requirements of
federal law.
Notwithstanding any other |
provisions to the contrary, a trust created with
the property |
of the individual with a disability or property within his or |
her control
shall be liable, after reimbursement of Medicaid |
expenditures, to the State for
reimbursement of any other |
service charges outstanding at the death of the
individual with |
a disability.
Property, goods and services
purchased or owned |
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by a trust for and used or consumed by a beneficiary with a |
disability shall not be considered trust property distributed |
to or under
the control of the beneficiary. A discretionary |
trust is one in which the
trustee has discretionary power to |
determine distributions to be made
under the trust. |
(b) The court or a person with a disability may irrevocably |
assign resources of that person to either or both of: (i) an |
ABLE account, as defined under Section 16.6 of the State |
Treasurer Act; or (ii) a discretionary trust that complies with |
the Medicaid reimbursement requirements of federal law. As used |
in this subsection, "resources" includes, but is not limited |
to, any interest in real or personal property, judgment, |
settlement, annuity, maintenance, minor child support, and |
support for non-minor children. Assignment is not authorized if |
otherwise prohibited by law. A court may reserve the right to |
determine the amount, duration, or enforcement of the |
irrevocable assignment.
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(Source: P.A. 99-143, eff. 7-27-15.)
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Section 99. Effective date. This Act takes effect upon |
becoming law.
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