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Public Act 100-0713 | ||||
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AN ACT concerning State government.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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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 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" means the ABLE account owner. |
"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 |
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 |
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 |
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, |
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 |
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 |
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. |
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. |
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 |
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.) | ||
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 |
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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