84R19891 LED-F
 
  By: Perry, et al. S.B. No. 1664
 
  (Burkett)
 
  Substitute the following for S.B. No. 1664:  No.
 
 
 
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 following programs:
               (1)  the prepaid higher education tuition program
  established under this subchapter; [and]
               (2)  the higher education savings plan established
  under Subchapter G;
               (3)  the prepaid tuition unit undergraduate education
  program established under Subchapter H;
               (4)  the Texas Save and Match Program established under
  Subchapter I; and
               (5)  the Texas Achieving a Better Life Experience
  Program established under Subchapter J.
         SECTION 2.  Chapter 54, Education Code, is amended by adding
  Subchapter J to read as follows:
  SUBCHAPTER J. TEXAS ACHIEVING A BETTER LIFE EXPERIENCE (ABLE)
  PROGRAM
         Sec. 54.901.  PURPOSES OF PROGRAM. The purposes of this
  subchapter are as follows:
               (1)  to encourage and assist individuals and families
  in saving 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. 54.902.  DEFINITIONS. In this subchapter:
               (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
  subchapter.
               (3)  "Board" means the Prepaid Higher Education Tuition
  Board established under Section 54.602.
               (4)  "Designated beneficiary" means a resident of this
  state with a disability who is an eligible individual and named as
  the designated beneficiary of an ABLE account.
               (5)  "Eligible individual" means a person who has
  certified to the board that the person is eligible to participate in
  the ABLE program.
               (6)  "Financial institution" means a bank, a trust
  company, a depository trust company, an insurance company, a
  broker-dealer, a registered investment company or investment
  manager, the Texas Safekeeping Trust Company, or another similar
  financial institution authorized to transact business in this
  state.
               (7)  "Internal Revenue Code" means the Internal Revenue
  Code of 1986.
               (8)  "Participant" means a designated beneficiary or
  the parent or custodian or other fiduciary of the beneficiary who
  has entered into a participation agreement under this subchapter.
               (9)  "Participation agreement" means an agreement
  between a participant and the board under this subchapter that
  conforms to the requirements prescribed by this subchapter.
               (10)  "Qualified disability expenses" means any
  expenses related to the eligible individual's blindness or
  disability that are made for the benefit of an eligible individual
  who is the designated beneficiary, and includes expenses for
  education, housing, transportation, employment training and
  support, assistive technology and personal support services,
  health, prevention and wellness, financial management and
  administrative services, legal fees, oversight and monitoring, a
  funeral and burial, and other expenses approved under federal
  regulations adopted under Section 529A, Internal Revenue Code.
               (11)  "Texas ABLE savings plan account" means the Texas
  ABLE savings plan account created under Section 54.903.
         Sec. 54.903.  CREATION OF PROGRAM AND ACCOUNT;
  ADMINISTRATION. (a) The Texas Achieving a Better Life Experience
  (ABLE) Program is created under this subchapter.  The Texas ABLE
  savings plan account is established as a trust fund outside of the
  state treasury.
         (b)  The board shall administer the ABLE program.
         (c)  The board, the office of the comptroller, and any
  manager or other contractor that contracts with the board to
  provide services under this subchapter are not covered entities for
  purposes of Chapter 181, Health and Safety Code.
         Sec. 54.904.  POWERS AND DUTIES OF BOARD. (a)  To establish
  and administer the ABLE program, the board shall:
               (1)  develop and implement the program;
               (2)  adopt rules and establish policies and procedures
  to implement this subchapter to:
                     (A)  permit the program to qualify as a qualified
  ABLE program under Section 529A, Internal Revenue Code;
                     (B)  make changes to the program as necessary for
  the participants in the program to obtain or maintain federal
  income tax benefits or treatment provided by Section 529A, Internal
  Revenue Code, and exemptions under federal securities laws; and
                     (C)  make changes to the program as necessary to
  ensure the program's compliance with all other applicable laws and
  regulations;
               (3)  either directly or through a contractual
  arrangement for investment or plan manager services with a
  financial institution or plan manager or another qualified entity,
  develop and provide information for participants and their families
  necessary to establish and maintain an ABLE account;
               (4)  enter into agreements with any financial
  institution or any state or federal agency or contractor or other
  entity as required to administer the program under this subchapter;
               (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;
               (7)  invest participant funds in appropriate
  investment instruments; and
               (8)  make provision for the payment of costs of
  administering the program.
         (b)  The board has all powers necessary or proper to carry
  out its duties under this subchapter and to effectuate the purposes
  of this subchapter, including the power to:
               (1)  sue and be sued;
               (2)  enter into contracts and other necessary
  instruments;
               (3)  enter into agreements or other transactions with
  the United States, state agencies, and other entities as necessary;
               (4)  appear on its own behalf before governmental
  agencies;
               (5)  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;
               (6)  contract with another state that administers a
  qualified ABLE program as authorized by Section 529A, Internal
  Revenue Code, to provide residents of this state with access to a
  qualified ABLE program;
               (7)  engage the services of private consultants,
  trustees, records administrators, managers, legal counsel,
  auditors, and other appropriate parties or organizations for
  administrative or technical assistance;
               (8)  participate in any government program;
               (9)  impose fees and charges;
               (10)  develop marketing plans or promotional materials
  or contract with a consultant to market the program;
               (11)  make reports;
               (12)  purchase liability insurance covering the board
  and employees and agents of the board;
               (13)  make changes to the program as necessary for the
  participants in the program to obtain or maintain federal income
  tax benefits or treatment provided by Section 529A, Internal
  Revenue Code, and exemptions under federal securities laws; and
               (14)  establish other policies, procedures, and
  eligibility criteria to implement this subchapter.
         Sec. 54.9045.  COLLECTION OF FEES. The board shall collect
  administrative fees and service charges in connection with any
  agreement, contract, or transaction relating to the program in
  amounts not exceeding the amount necessary to recover the cost of
  establishing and maintaining the program.
         Sec. 54.905.  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)  The board at least annually shall establish and review
  the asset allocation and selection of the underlying investments of
  the ABLE program.
         (c)  The board may delegate to duly appointed financial
  institutions 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 financial institutions 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.
         (d)  In delegating investment authority to financial
  institutions, the board may authorize the pooling of funds from the
  ABLE accounts with other funds administered by the board to
  maximize returns for participants.  If funds from the ABLE accounts
  are pooled with other funds administered by the board, the board
  shall track, monitor, report, and record separately all investment
  activity related to the ABLE accounts, including any earnings and
  fees associated with each individual ABLE account.
         (e)  The board may select one or more financial institutions
  to serve as custodian of all or part of the program's assets.
         (f)  In the board's discretion, the board may contract with
  one or more financial institutions to serve as plan manager and to
  invest the money in ABLE accounts.
         (g)  A contract between the board and a financial institution
  to act as plan manager under this subchapter may be for a term of up
  to five years and may be renewable.
         (h)  In exercising or delegating 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.
         (i)  In administering this subchapter, the board is subject
  to the board's ethics policy adopted under Section 54.6085.
         Sec. 54.906.  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 subchapter and in accordance
  with the participation agreements entered into under this
  subchapter.
         (b)  Except as provided by Section 529A, Internal Revenue
  Code, the state does not have a property right in the assets of the
  ABLE program.
         Sec. 54.9065.  EXCLUSION OF ABLE ACCOUNT ASSETS FROM CERTAIN
  BENEFIT ELIGIBILITY DETERMINATIONS. Notwithstanding any other
  provision of state law that requires consideration of the financial
  circumstances of an applicant for assistance or a benefit provided
  under that law, the agency making the determination of eligibility
  for the assistance or benefit may not consider the amount in the
  applicant's ABLE account, including earnings on that amount, and
  any distribution for qualified disability expenses in determining
  the applicant's eligibility to receive and the amount of the
  assistance or benefit with respect to the period during which the
  individual maintains the ABLE account.
         Sec. 54.907.  EXEMPTION FROM SECURITIES LAWS. An ABLE
  account is not a security within the meaning of the term as defined
  by Section 4, The Securities Act (Article 581-4, Vernon's Texas
  Civil Statutes), and is exempt from the provisions of The
  Securities Act (Article 581-1 et seq., Vernon's Texas Civil
  Statutes).
         Sec. 54.908.  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 may include the following
  terms:
               (1)  the requirements and applicable restrictions for:
                     (A)  opening an ABLE account;
                     (B)  making contributions to an ABLE account; and
                     (C)  directly or indirectly, directing the
  investment of the contributions or balance of the ABLE account;
               (2)  the eligibility requirements for a participant to
  enter into a participation agreement and the rights of that
  participant;
               (3)  the administrative fee and other fees and charges
  applicable to an ABLE account;
               (4)  the terms and conditions under which an ABLE
  account or participation agreement may be modified, transferred, or
  terminated;
               (5)  the method of disposition of abandoned ABLE
  accounts; and
               (6)  any other terms and conditions the board considers
  necessary or appropriate, including those necessary to conform the
  ABLE account to the requirements of Section 529A, Internal Revenue
  Code, or other applicable federal law.
         (c)  The participation agreement may be amended throughout
  the term of the agreement, including to allow a participant to
  increase or decrease the level of participation and to change the
  designated beneficiary or other matters authorized by this section
  and Section 529A, Internal Revenue Code.
         (d)  If the board finds a participant has made a material
  misrepresentation in the application for a participation agreement
  or in any communication regarding the ABLE program, the board may
  liquidate the participant's ABLE account. If the board liquidates
  an ABLE account under this subsection, the participant is entitled
  to a refund, subject to any charges or fees provided by the
  participation agreement and the Internal Revenue Code.
         Sec. 54.9085.  ENCUMBRANCE OR TRANSFER OF ACCOUNT
  PROHIBITED. (a) An ABLE account may not be assigned for the benefit
  of creditors, used as security or collateral for any loan, or
  otherwise subject to alienation, sale, transfer, assignment,
  pledge, encumbrance, or charge.
         (b)  Notwithstanding Subsection (a), the state is a
  permissible creditor upon the death of a designated beneficiary for
  the purposes set forth in Section 529A, Internal Revenue Code.
         Sec. 54.909.  USE OF FUND ASSETS. The assets of the program
  may only be used to:
               (1)  make distributions to designated beneficiaries;
               (2)  pay the costs of program administration and
  operations;
               (3)  make refunds for cancellations, excess
  contributions, liquidation under Section 54.908(d), and death, in
  accordance with a computation method determined by the board;
               (4)  roll over funds to another ABLE account to the
  extent authorized by Section 529A, Internal Revenue Code; and
               (5)  make distributions to the state as authorized by
  Section 529A, Internal Revenue Code.
         Sec. 54.910.  DESIGNATED BENEFICIARY. (a) The participant
  is the designated beneficiary and the owner 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.
         (c)  A designated beneficiary may own only one ABLE account,
  and each ABLE account may have only one owner, except as otherwise
  permitted by Section 529A, Internal Revenue Code.
         Sec. 54.911.  VERIFICATION UNDER OATH. The board may
  require a participant to verify under oath:
               (1)  the participant's certification as an eligible
  individual;
               (2)  the participant's selection to change a designated
  beneficiary;
               (3)  the participant's selection to cancel a
  participation agreement; and
               (4)  any other information the board may require.
         Sec. 54.912.  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.
         Sec. 54.913.  REPORTS. (a) The board shall comply with the
  reporting requirements in Section 529A, Internal Revenue Code.
         (b)  The board shall report financial information related to
  the ABLE program in an annual financial report in accordance with
  the comptroller's requirements and guidelines for state agencies.
         (c)  The board shall include financial information for the
  ABLE program in the board's annual report posted on the board's
  website.
         (d)  The board shall prepare any other reports required by
  state or federal rules and regulations.
         Sec. 54.914.  CONFIDENTIALITY OF RECORDS. (a) Except as
  otherwise provided by this section, all information relating to the
  program is public and subject to disclosure under Chapter 552,
  Government Code.
         (b)  Information relating to a prospective or current
  participant or designated beneficiary or to a participation
  agreement, including any personally identifiable information, is
  confidential except that the board may disclose that information
  to:
               (1)  a participant regarding the participant's account;
  or
               (2)  a state or federal agency as necessary to
  administer the program or as required by Section 529A, Internal
  Revenue Code, or other federal or state requirements.
         Sec. 54.915.  PROGRAM LIMITATIONS. (a) Nothing in this
  subchapter or in any participation agreement entered into under
  this subchapter may be construed to guarantee that amounts saved
  under the program will be sufficient to cover the qualified
  disability expenses of a designated beneficiary.
         (b)  Nothing in this subchapter or in any participation
  agreement entered into under this subchapter may be construed to
  create any obligation of the state, any agency or instrumentality
  of the state, or a plan manager to guarantee for the benefit of a
  participant:
               (1)  the return of any amount contributed to an
  account;
               (2)  the rate of interest or other return on an account;
  or
               (3)  the payment of interest or other return on an
  account.
         (c)  The board by rule shall require that informational
  materials used in connection with a contribution to an ABLE account
  clearly indicate that the account is not insured by this state and
  that neither the principal deposited nor the investment return is
  guaranteed by the state.
         Sec. 54.916.  TERMINATION OR MODIFICATION OF PROGRAM. (a)
  If the comptroller determines that the ABLE program is not
  financially feasible, the comptroller shall notify the governor and
  the legislature and recommend that the board not administer an ABLE
  program or that the program be modified or terminated.
         (b)  If the comptroller determines that the ABLE program is
  not financially feasible, the board may adjust the terms of
  participation agreements as necessary to ensure the financial
  feasibility of the program.
         (c)  If the ABLE program is terminated, the balance of each
  ABLE account shall be paid to the participant, to the extent
  possible.
         Sec. 54.917.  ABLE PROGRAM ADVISORY COMMITTEE. (a) The ABLE
  program advisory committee is established to review rules and
  procedures related to the ABLE program, to provide guidance,
  suggest changes, and make recommendations for the administration of
  the program, and to provide assistance as needed to the board and
  comptroller during the creation of the program.
         (b)  The comptroller shall appoint the members of the
  advisory committee, including:
               (1)  persons with a disability who qualify for the
  program;
               (2)  family members of a person with a disability who
  qualifies for the program;
               (3)  representatives of disability advocacy
  organizations; and
               (4)  representatives of the financial community.
         (c)  The comptroller shall appoint a presiding officer.
         (d)  The advisory committee shall meet quarterly or more
  frequently as the presiding officer determines is necessary to
  carry out the responsibilities of the committee.
         (e)  A member of the advisory committee is not entitled to
  compensation or reimbursement for travel expenses.
         (f)  Chapter 2110, Government Code, does not apply to this
  section.
         (g)  This section expires and the advisory committee is
  abolished December 1, 2019.
         SECTION 3.  If before implementing any provision of this Act
  a state agency determines that a waiver or authorization from a
  federal agency is necessary for implementation of that provision,
  the agency affected by the provision shall request the waiver or
  authorization and may delay implementing that provision until the
  waiver or authorization is granted.
         SECTION 4.  The Prepaid Higher Education Tuition Board may
  begin enrollment in the ABLE program as soon as reasonably
  practical to allow sufficient time for successful development and
  implementation of the ABLE program.
         SECTION 5.  Not later than December 1, 2015, the comptroller
  shall appoint the members of the ABLE program advisory committee as
  required by Section 54.917, Education Code, as added by this Act.
         SECTION 6.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2015.