Public Act 103-0256
 
SB2247 EnrolledLRB103 25759 DTM 57151 b


  
    AN ACT concerning assistance to persons with disabilities.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The State Treasurer Act is amended  by changing 
Section 16.6 as follows:
 
    (15 ILCS 505/16.6)
    Sec. 16.6. ABLE account program.
    (a) As used in this Section:
    "ABLE account" or "account" means an account established 
for the purpose of financing certain qualified expenses of 
eligible individuals as specifically provided for in this 
Section and authorized by Section 529A of the Internal Revenue 
Code.
    "ABLE account plan" or "plan" means the savings account 
plan provided for in this Section.
    "Account administrator" means the person or entity 
selected by the State Treasurer to administer the daily 
operations of the ABLE account plan and provide marketing, 
recordkeeping, investment management, and other services for 
the plan.
    "Aggregate account balance" means the amount in an account 
on a particular date or the fair market value of an account on 
a particular date.
    "Beneficiary" or "designated beneficiary" means the ABLE 
account owner.
    "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 or entity who 
is authorized to act on behalf of a "designated beneficiary". 
A designated beneficiary is authorized to act on his or her own 
behalf unless the designated beneficiary is a minor or the 
designated beneficiary has been adjudicated to have a 
disability so that a guardian has been appointed. A designated 
representative acts in a fiduciary capacity to the designated 
beneficiary. A person or entity seeking to open an ABLE 
account on behalf of a designated beneficiary must provide 
certification, subject to penalties of perjury, of the basis 
for the person's or entity's authority to act as a designated 
representative and that there is no other person or entity 
with higher priority to establish the ABLE account under 
Section 529A of the Internal Revenue Code and federal 
regulations.
    "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.
    "Internal Revenue Code" means the federal Internal Revenue 
Code. 
    "Participation agreement" means an agreement to 
participate in the ABLE account plan between a designated 
beneficiary 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) Establishment of the ABLE Program.  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 program 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 or entity may make contributions to an 
ABLE account to meet the qualified disability expenses of the 
designated beneficiary of the account. The plan must be 
operated as an accounts-type plan that permits saving persons 
to save for qualified disability expenses incurred by or on 
behalf of an eligible individual.
    (c) Promotion of the ABLE Program. 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.
    (d) Availability of the ABLE Program. 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 state.
    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 or 
entity 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. 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 Sections 529 and 529A of the 
Internal Revenue Code. 
    (e) Administration of the ABLE Program. 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. 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. The State Treasurer may require any 
certifications that he or she deems necessary to implement the 
program, including oaths or affirmations made under penalties 
of perjury.
    (f) Fees. The State Treasurer may establish fees to be 
imposed on participants to cover the costs of administration, 
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.
    (g) The Illinois ABLE Accounts Administrative Fund. 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 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 cover 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.
    (h) Privacy. Applications for accounts and other records 
obtained or compiled by the Treasurer or the Treasurer's 
agents reflecting , designated beneficiary information data, 
account information data, or designated representative 
information  and data on beneficiaries of accounts are 
confidential and exempt from disclosure under the Freedom of 
Information Act.
    (i) Investment Policy. The Treasurer shall prepare and 
adopt a written statement of investment policy that includes a 
risk management and oversight program which shall be reviewed 
annually and posted on the Treasurer's website prior to 
implementation. 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 standards. 
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. 
    (j)  Investment restrictions. 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.
    (k) Contributions. A person or entity may make 
contributions to an ABLE account on behalf of a beneficiary. 
Contributions to an account made by persons or entities other 
than the designated beneficiary become the property of the 
designated beneficiary. Contributions to an account shall be 
considered as a transfer of assets for fair market value. A 
person or entity 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.
    Any change in designated beneficiary must be done in a 
manner consistent with Section 529A of the Internal Revenue 
Code.
    (l) Notice. Notice of any proposed amendments to the rules 
and regulations shall be provided to all designated 
beneficiaries 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.
    (m) Plan assets. All assets of the plan, including any 
contributions to accounts, are held in trust for the exclusive 
benefit of the designated beneficiary and shall be considered 
spendthrift accounts exempt from all of the designated 
beneficiary'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. 
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.
    (n) Taxation. 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.
    (o) Distributions. The designated beneficiary or the 
designated representative of the designated beneficiary may 
make a qualified distribution for the benefit of the 
designated beneficiary. 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 a designated beneficiary'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, or transferred pursuant to a payable on death 
account agreement. A payable on death account agreement may be 
executed by the designated beneficiary or a designated 
representative who has been granted such power. Upon the death 
of a designated beneficiary, prior to distribution of the 
balance to the estate, account for another eligible 
individual, or transfer pursuant to a payable on death account 
agreement, the State Treasurer may require verification that 
the funeral and burial expenses of the designated beneficiary 
have been paid. 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.
    (p) Rules. 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.

    (q) Name. The ABLE Account Program may also be referred to 
as the Senator Scott Bennett ABLE Program. 
(Source: P.A. 101-329, eff. 8-9-19; 102-392, eff. 8-16-21; 
102-1024, eff. 5-27-22.)
  
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.