2015 -- S 0413

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LC001466

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO HUMAN SERVICES -- ABLE ACCOUNTS

     

     Introduced By: Senators Kettle, Ottiano, Algiere, Gee, and Morgan

     Date Introduced: February 25, 2015

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 40 of the General Laws entitled "HUMAN SERVICES" is hereby

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amended by adding thereto the following chapter:

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CHAPTER 23

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ABLE ACCOUNTS

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     40-23-1. Legislative findings. – The general assembly finds and declares the following:

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     (1) The blind, disabled, and persons of this state suffering from a physical or mental

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impairment resulting in severe functional limitations need not only state financial assistance but

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also private financial assistance in achieving a better life experience.

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     (2) A federal program exists which allows those individuals to receive contributions from

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contributors that may be deposited in an account for their care which amount can grow free of

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any income tax consequences if the contributions are used for qualifying expenses pursuant to §

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529A of the Internal Revenue Code of 1986, as amended (26 U.S.C. §529A).

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     (3) These accounts may be utilized by those individuals for disbursements relating to

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education, housing, transportation, employment training and support, assistive technology and

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personal support services, health prevention and wellness, financial management and

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administrative services, legal fees, expenses for oversight and monitoring, funeral and burial

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expenses and any other expenses approved under regulations promulgated by the Secretary of the

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Treasury.

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     (4) This federal program is found to be a financial option worthy of consideration by

 

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persons of this state suffering from physical or mental disabilities and/or impairments.

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     40-23-2. Definitions. – As used in this chapter, the following words shall, unless the

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context clearly requires otherwise, have the following meanings:

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     (1) "Achieving a better life experience account" or "ABLE account" means an account

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established under the program pursuant to this section and any implementing regulations for the

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purposes of funding future qualified disability expenses of a designated beneficiary.

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     (2) "Achieving a better life experience program" or "program" means the qualified ABLE

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program established and administered by department of human services and, to the extent so

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delegated or contracted by the department of human services, one or more designated

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administrators.

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     (3) "Contracting state" means a "contracting state" as defined under 26 U.S.C. § 529A.

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     (4) "Designated administrator" means any corporation or other entity whose powers and

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privileges are provided for in any general or special law, whether for profit or not, designated or

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retained by the department of human services for the purpose of administering, subject to the

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department's ongoing supervision, all or any portion of the investment, marketing, recordkeeping,

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administrative or other functions of the program.

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     (5) "Designated beneficiary" means the individual with a disability named as the

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beneficiary of an ABLE account.

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     (6) "Individual with a disability" means an individual who is an "eligible individual" as

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defined under § 529A.

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     (7) "Qualified ABLE program" means a "qualified ABLE program" as defined under 26

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U.S.C. § 529A.

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     (8) "Qualified disability expenses" means "qualified disability expenses" as defined under

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26 U.S.C. § 529A.

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     (9) "Section 529A" means § 529A of the Internal Revenue Code of 1986, as amended,

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(26 U.S.C.§ 529A) or any successor provision thereto, and any regulations promulgated

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thereunder or tax announcements or other binding regulatory guidance provided with respect

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thereto.

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     (10) "State" means the state of Rhode Island.

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     40-23-3. Creation of program. – (a) There shall be established within the department of

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human services the achieving a better life experience program for the purposes of administering

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achieving a better life experience accounts established to encourage and assist individuals and

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families in saving private funds for the purpose of supporting individuals with disabilities. Under

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the program, one or more persons may make contributions to an ABLE account to meet the

 

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qualified disability expenses of the designated beneficiary of the account.

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     (b) Unless otherwise permitted under 26 U.S.C. § 529A, the owner of an ABLE account

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shall be the designated beneficiary of the account; provided that if the designated beneficiary of

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the account is a minor or has a custodian or other fiduciary appointed for the purposes of

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managing such beneficiary's financial affairs, a custodian or fiduciary for such designated

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beneficiary may serve as the account owner if such form of ownership is permitted or not

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prohibited under 26 U.S.C. § 529A.

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     (c) Unless otherwise permitted under 26 U.S.C. § 529A, the designated beneficiary of an

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ABLE account shall be a resident of the state or of a contracting state. The department shall

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determine residency for such purpose in such manner as may be required or permissible under 26

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U.S.C. § 529A or, in the absence of any guidance under 26 U.S.C. § 529A, by such other means

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as the department shall consider advisable for purposes of satisfying the requirements of 26

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U.S.C. § 529A.

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     (d) Any person may make contributions to an ABLE account to meet the qualified

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disability expenses of the designated beneficiary of the account; provided that the account and

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contributions meet the other requirements of this section and regulations promulgated by the

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department.

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     (e) The department and, to the extent required by the terms of such designation, any

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designated administrator shall operate the program so that it shall constitute a qualified ABLE

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program in compliance with the requirements of 26 U.S.C. § 529A.

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     (f) The department and any designated administrator shall provide investment options for

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the investment of amounts contributed to an ABLE account.

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     40-23-4. Contributions to be held in trust. -- Funds contributed to the program shall be

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held in trust in a special account to be created by the department and shall not be co-mingled with

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any state funds appropriated by the general assembly for the support of or the programs

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administered by the department

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     40-23-5. Rules and regulations. – The department shall have the power and authority to

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promulgate rules and regulations, enter into contracts and agreements, charge fees and expenses

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to the funds held under the program or to persons establishing or owning ABLE accounts, make

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reports, retain designated administrators, employees, experts and consultants and do all other

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things necessary or convenient to implement this section.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HUMAN SERVICES -- ABLE ACCOUNTS

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     This act would establish a private savings (ABLE) account for qualifying disabled

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persons allowing contributions to grow tax free if used for qualifying expenses pursuant to §

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529A of the Internal Revenue Service Code of 1986, as amended.

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     This act would take effect upon passage.

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