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  By: Burkett H.B. No. 3766
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of the Texas Achieving a Better Life
  Experience (ABLE) Program; authorizing the imposition of fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 54.602(b), Education Code, is amended to
  read as follows:
         (b)  The board shall administer the prepaid higher education
  tuition program established under this subchapter, [and] the higher
  education savings plan established under Subchapter G, and the
  Texas Achieving a Better Life Experience Program created under
  Chapter 162, Human Resources Code.
         SECTION 2.  The heading to Section 54.634, Education Code,
  is amended to read as follows:
         Sec. 54.634.  ESTABLISHMENT OF TRUST FUND; COLLEGE SAVINGS
  PLAN ACCOUNT; TEXAS ABLE SAVINGS PLAN ACCOUNT.
         SECTION 3.  Section 54.634, Education Code, is amended by
  adding Subsection (e) to read as follows:
         (e)  The Texas ABLE savings plan account is created within
  the Texas tomorrow constitutional trust fund and is financed
  through administrative fees and service charges as authorized by
  Section 162.004, Human Resources Code.
         SECTION 4.  Title 11, Human Resources Code, is amended by
  adding Chapter 162 to read as follows:
  CHAPTER 162. TEXAS ACHIEVING A BETTER
  LIFE EXPERIENCE (ABLE) PROGRAM
         Sec. 162.001.  PURPOSES OF PROGRAM. The purposes of this
  chapter are as follows:
               (1)  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
               (2)  to provide secure funding for qualified disability
  expenses on behalf of designated beneficiaries with disabilities
  that will supplement, but not supplant, benefits provided through
  private insurance, the Medicaid program under Title XIX of the
  Social Security Act, the supplemental security income program under
  Title XVI of the Social Security Act, the beneficiary's employment,
  and other sources.
         Sec. 162.002.  DEFINITIONS. In this chapter:
               (1)  "ABLE account" has the meaning assigned by Section
  529A, Internal Revenue Code.
               (2)  "ABLE program" or "program" means the Texas
  Achieving a Better Life Experience Program created under this
  chapter.
               (3)  "Benefits" means the payment of qualified
  disability expenses on behalf of a designated beneficiary from an
  ABLE account.
               (4)  "Board" means the Prepaid Higher Education Tuition
  Board established under Section 54.602, Education Code.
               (5)  "Designated beneficiary" and "eligible
  individual" have the meanings assigned by Section 529A, Internal
  Revenue Code.
               (6)  "Financial institution" means a bank, trust
  company, an insurance company, or a registered investment company.
               (7)  "Internal Revenue Code" means the Internal Revenue
  Code of 1986.
               (8)  "Participant" means a person who has entered into
  a participation agreement under this chapter.
               (9)  "Participation agreement" means an agreement
  between a participant and the board under this chapter that
  conforms to the requirements prescribed by this chapter.
               (10)  "Qualified disability expenses" has the meaning
  assigned by Section 529A, Internal Revenue Code.
               (11)  "Texas ABLE savings plan account" means the Texas
  ABLE savings plan account created under Section 54.634(e),
  Education Code.
         Sec. 162.003.  CREATION; ADMINISTRATION.  (a)  The Texas
  Achieving a Better Life Experience (ABLE) Program is created under
  this chapter.
         (b)  The board shall administer the ABLE program.
         Sec. 162.004.  POWERS AND DUTIES OF BOARD. (a) To establish
  and administer the ABLE program, the board shall:
               (1)  develop and implement the program;
               (2)  adopt reasonable rules and establish policies and
  procedures to implement this chapter to:
                     (A)  permit the program to qualify as a qualified
  ABLE program under Section 529A, Internal Revenue Code; and
                     (B)  ensure the program's compliance with all
  applicable laws;
               (3)  either directly or through a contractual
  arrangement with a financial institution for investment services,
  develop and implement educational programs and related
  informational materials for participants and their families,
  including special programs and materials to inform individuals with
  disabilities regarding methods for financing the qualified
  disability expenses of individuals with disabilities to enable
  those individuals to maintain health, independence, and quality of
  life;
               (4)  enter into agreements with any financial
  institution or any state or federal agency or entity as required to
  administer the program under this chapter;
               (5)  enter into participation agreements with
  participants;
               (6)  solicit and accept any gifts, grants, legislative
  appropriations, and other funds from the state, any unit of
  federal, state, or local government, or any other person, firm,
  partnership, or corporation for deposit to the Texas ABLE savings
  plan account;
               (7)  invest participant funds in appropriate
  investment instruments;
               (8)  appoint members to an advisory committee who are
  stakeholders from the disability community;
               (9)  make provision for the payment of costs of
  administering the program; and
               (10)  procure insurance, guarantees, or other
  protections against any loss in connection with the assets or
  activities of the program.
         (b)  The board has all powers necessary or proper to carry
  out its duties under this chapter and to effectuate the purposes of
  this chapter, including the power to:
               (1)  enter into contracts and other necessary
  instruments;
               (2)  enter into agreements or other transactions with
  the United States, state agencies, and other entities as necessary;
               (3)  appear on its own behalf before governmental
  agencies;
               (4)  contract for necessary goods and services,
  including specifying in the contract duties to be performed by the
  provider of a good or service that are a part of or are in addition
  to the person's primary duties under the contract;
               (5)  engage the services of private consultants,
  actuaries, trustees, records administrators, managers, legal
  counsel, and auditors for administrative or technical assistance;
               (6)  participate in any government program;
               (7)  impose charges and fees;
               (8)  contract with a person to market the program;
               (9)  make reports;
               (10)  purchase liability insurance covering the board
  and employees and agents of the board; and
               (11)  establish other policies, procedures, and
  eligibility criteria to implement this chapter.
         Sec. 162.005.  INVESTMENT OF FUNDS. (a) All money paid by a
  participant in connection with a participation agreement shall be:
               (1)  deposited into an individual ABLE account held on
  behalf of that participant in the Texas ABLE savings plan account;
  and
               (2)  promptly invested by the board.
         (b)  For new contracts entered into after December 1, 2015,
  board members shall study investment plans of other states and
  contract with or negotiate to provide benefit options that are the
  same as or similar to other states' qualified plans for the purpose
  of offering additional options for participants.
         (c)  The board may delegate to duly appointed investment
  counselors authority to act on behalf of the board in the
  investment and reinvestment of all or part of the funds and may also
  delegate to those counselors the authority to act on behalf of the
  board in the holding, purchasing, selling, assigning,
  transferring, or disposing of any or all of the securities and
  investments in which the funds in the Texas ABLE savings plan
  account have been invested, as well as the proceeds from the
  investment of those funds. The investment counselors must be
  registered as investment advisors with the United States Securities
  and Exchange Commission.
         (d)  In exercising or delegating its investment powers and
  authority, members of the board shall exercise ordinary business
  care and prudence under the facts and circumstances prevailing at
  the time of the action or decision. A member of the board is not
  liable for any action taken or omitted with respect to the exercise
  of, or delegation of, those powers and authority if the member
  discharged the duties of the member's position in good faith and
  with the degree of diligence, care, and skill that a prudent person
  acting in a like capacity and familiar with those matters would use
  in the conduct of an enterprise of a like character and with like
  aims.
         (e)  A company or firm in which a member of the board has a
  substantial interest may not handle an investment transaction
  authorized by the board. A member of the board may not profit
  directly or indirectly from an investment transaction authorized by
  the board.
         (f)  A member of the board or an employee or agent of the ABLE
  program may not receive any gain or profit from any funds or
  transactions of the ABLE program. A member's, employee's, or
  agent's acceptance of any gratuity or compensation for the purpose
  of influencing an action taken with respect to the investment or
  management of the funds of the ABLE program is grounds for removal
  or termination of the member, employee, or agent, as applicable.
         Sec. 162.006.  TREATMENT OF ASSETS.  (a) The assets of the
  ABLE program shall at all times be preserved, invested, and spent
  only for the purposes provided by this chapter and in accordance
  with the participation agreements entered into under this chapter.
  (b) The state does not have a property right in the assets of the
  ABLE program.
         Sec. 162.007.  PARTICIPATION AGREEMENTS. (a) Under the ABLE
  program, the board may enter into participation agreements with
  participants on behalf of designated beneficiaries.
         (b)  A participation agreement must:
               (1)  stipulate the terms and conditions of the ABLE
  program in which the participant makes contributions;
               (2)  specify the method for calculating the return on
  the contribution made by the participant;
               (3)  clearly and prominently disclose to participants
  the risk associated with depositing funds with the board;
               (4)  be organized and presented in a way and with
  language that is easily understandable by the general public; and
               (5)  clearly and prominently disclose to participants
  the existence of any load charge or similar charge assessed against
  the ABLE accounts of the participants for administration or
  services.
         (c)  Consistent with Section 529A, Internal Revenue Code,
  the board shall establish:
               (1)  the maximum annual amount that a participant may
  contribute with respect to a designated beneficiary; and
               (2)  a total contribution limit for ABLE accounts
  established under the ABLE program with respect to a designated
  beneficiary.
         (d)  The board may establish other requirements that the
  board considers appropriate to provide adequate safeguards to
  prevent contributions on behalf of a designated beneficiary from
  exceeding the amount that is necessary to provide for the qualified
  disability expenses of the beneficiary.
         Sec. 162.008.  QUALIFIED DISABILITY EXPENSES.
  Contributions to an ABLE account and the earnings on those
  contributions may be used, as provided in the participation
  agreement, to pay the qualified disability expenses of a
  designated beneficiary.
         Sec. 162.009.  DESIGNATED BENEFICIARY. (a) The participant
  is the designated beneficiary of the ABLE account except as
  described by Subsection (b) and as otherwise permitted by Section
  529A, Internal Revenue Code.
         (b)  If the designated beneficiary of the account is a minor
  or has a custodian or other fiduciary appointed for the purpose of
  managing the minor's financial affairs, the parent or custodian or
  other fiduciary of the beneficiary may serve as the participant if
  that form of ownership is permitted or not prohibited by Section
  529A, Internal Revenue Code.
         Sec. 162.010.  CANCELLATION. (a) A participant may cancel a
  participation agreement at will.
         (b)  Each participation agreement must provide that the
  agreement may be canceled on the terms and conditions and on payment
  of applicable fees and costs as provided by rule.
         SECTION 5.  This Act takes effect December 1, 2015.