Bill Text: IL SB3071 | 2019-2020 | 101st General Assembly | Engrossed

---

Bill Title: Amends the State Treasurer Act. Makes a technical change in a Section concerning bond.

Spectrum: Strong Partisan Bill (Democrat 15-1)

Status: (Failed) 2021-01-13 - Session Sine Die [SB3071 Detail]

Download: Illinois-2019-SB3071-Engrossed.html

---

SB3071 Engrossed LRB101 17167 RJF 66568 b
AN ACT concerning State government.
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.

SB3071 Engrossed - 2 - LRB101 17167 RJF 66568 b
"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 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 the following as a designated representative without
appointment by a court:
(1) The account owner's guardian of the person, plenary
guardian of the estate, limited guardian of financial or
contractual matters, or any other State-appointed
guardian. A guardian acting in this capacity shall not be
required to seek court approval for any ABLE account
activity.
(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.

SB3071 Engrossed - 3 - LRB101 17167 RJF 66568 b
(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) 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.

SB3071 Engrossed - 4 - LRB101 17167 RJF 66568 b
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.
(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 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

SB3071 Engrossed - 5 - LRB101 17167 RJF 66568 b
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.
(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

SB3071 Engrossed - 6 - LRB101 17167 RJF 66568 b
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, account owner
data, account data, 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

SB3071 Engrossed - 7 - LRB101 17167 RJF 66568 b
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

SB3071 Engrossed - 8 - LRB101 17167 RJF 66568 b
account was utilized to make non-qualified distributions shall
not result in an ABLE account being disregarded as a resource.
(k) Contributions. 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.
(l) Notice. 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.
(m) Plan assets. All assets of the plan, including any
contributions to accounts, are held in trust for the exclusive

SB3071 Engrossed - 9 - LRB101 17167 RJF 66568 b
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.
(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.

SB3071 Engrossed - 10 - LRB101 17167 RJF 66568 b
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 account owner or the designated
representative of the account owner may make a qualified
distribution 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, or transferred pursuant to a payable on death

SB3071 Engrossed - 11 - LRB101 17167 RJF 66568 b
account agreement executed by the designated beneficiary or
designated representative. 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.
(Source: P.A. 100-713, eff. 8-3-18; 101-329, eff. 8-9-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.