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HF 161

as introduced - 89th Legislature (2015 - 2016) Posted on 01/14/2015 11:05am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to human services; establishing accounts for certain persons with
disabilities; amending Minnesota Statutes 2014, section 13.461, by adding a
subdivision; proposing coding for new law as Minnesota Statutes, chapter 256Q.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 13.461, is amended by adding a
subdivision to read:


new text begin Subd. 32. new text end

new text begin ABLE accounts, account owners, and beneficiaries. new text end

new text begin Data on ABLE
accounts, ABLE account owners, and ABLE account beneficiaries are classified under
section 256Q.03, subdivision 8.
new text end

Sec. 2.

new text begin [256Q.01] CITATION AND PURPOSE.
new text end

new text begin This chapter may be cited as the "Achieving a Better Life Experience Act" or
"ABLE Act." The purposes of this act are 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.
new text end

Sec. 3.

new text begin [256Q.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of this chapter, the terms defined in this
section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin ABLE account and account. new text end

new text begin "ABLE account" and "account" means an
account established for the purpose of financing certain qualified expenses of persons with
disabilities as specifically provided in this chapter.
new text end

new text begin Subd. 3. new text end

new text begin ABLE account plan and plan. new text end

new text begin "ABLE account plan" and "plan" means
the savings account plan provided for in this chapter.
new text end

new text begin Subd. 4. new text end

new text begin Account administrator. new text end

new text begin "Account administrator" means the person
selected by the commissioner and the board to administer the daily operations of the
ABLE account plan and provide marketing, record keeping, investment management,
and other services for the plan.
new text end

new text begin Subd. 5. new text end

new text begin Beneficiary. new text end

new text begin "Beneficiary" means the ABLE account owner, or the person
entitled to apply the savings accrued in an ABLE account, if not the account owner.
new text end

new text begin Subd. 6. new text end

new text begin Board. new text end

new text begin "Board" means the State Board of Investment.
new text end

new text begin Subd. 7. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of human
services.
new text end

new text begin Subd. 8. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Human Services.
new text end

new text begin Subd. 9. new text end

new text begin Disability certification. new text end

new text begin "Disability certification" means a verification by
the beneficiary or the parent or guardian of the beneficiary that states the diagnosis of the
individual with a disability, as defined under subdivision 11, and is signed by a physician
meeting the criteria of section 1861(r)(1) of the Social Security Act. The verification must
be made to the commissioner or account administrator in a form and manner prescribed by
the commissioner or account administrator.
new text end

new text begin Subd. 10. new text end

new text begin Executive director. new text end

new text begin "Executive director" means the executive director of
the State Board of Investment.
new text end

new text begin Subd. 11. new text end

new text begin Individual with a disability. new text end

new text begin "Individual with a disability" means an
individual who, before the date on which the individual attains age 26:
new text end

new text begin (1) has a medically determinable physical or mental impairment, which results in
marked and severe functional limitations and which can be expected to result in death
or which has lasted or can be expected to last for a continuous period of not less than
12 months; or
new text end

new text begin (2) is blind.
new text end

new text begin Subd. 12. new text end

new text begin Member of the family. new text end

new text begin "Member of the family" means an individual who
is related to the beneficiary as defined in section 529(e)(2) of the Internal Revenue Code.
new text end

new text begin Subd. 13. new text end

new text begin Participation agreement. new text end

new text begin "Participation agreement" means an agreement
to participate in the ABLE account plan between an account owner and the state, through
its agencies, the office, and the board.
new text end

new text begin Subd. 14. new text end

new text begin Qualified disability expense. new text end

new text begin "Qualified disability expense" means an
expense made for the benefit of an individual with a disability who is the beneficiary,
including the following expenses: education, housing, transportation, employment training
and support, assistive technology and personal support services, health, prevention and
wellness, financial management and administrative services, legal fees, expenses for
oversight and monitoring, funeral and burial expenses, and other expenses consistent with
the purposes of this chapter that are approved by the commissioner and provided for in
duly adopted administrative rules.
new text end

new text begin Subd. 15. new text end

new text begin Qualified withdrawal. new text end

new text begin "Qualified withdrawal" means a withdrawal
from an ABLE account to pay the qualified disability expenses of the beneficiary of the
account. A qualified withdrawal may be made by an agent of the beneficiary who has the
power of attorney or by the beneficiary's legal guardian.
new text end

new text begin Subd. 16. new text end

new text begin Total account balance. new text end

new text begin "Total account balance" means the amount in an
account on a particular date or the fair market value of an account on a particular date.
new text end

Sec. 4.

new text begin [256Q.03] ABLE ACCOUNT PLAN ESTABLISHED; PLAN
REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Plan established. new text end

new text begin The ABLE account plan is hereby created and
shall be administered by the department or account administrator. 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, who must be a resident of Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Accounts-type plan. new text end

new text begin 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
individual with a disability. 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.
new text end

new text begin Subd. 3. new text end

new text begin Consultation with State Board of Investment. new text end

new text begin In designing and
establishing the plan's requirements and in negotiating or entering into contracts with third
parties under subdivision 5, the commissioner shall consult with the executive director.
The commissioner and the executive director shall establish an annual fee, equal to a
percentage of the average daily net assets of the plan, to be imposed on participants to
recover the costs of administration, record keeping, and investment management as
provided in subdivision 7, and section 256Q.04, subdivision 4.
new text end

new text begin Subd. 4. new text end

new text begin Marketing. new text end

new text begin The commissioner 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.
new text end

new text begin Subd. 5. new text end

new text begin Administration. new text end

new text begin The department shall administer the plan, including
accepting and processing applications, maintaining account records, making payments,
and undertaking any other necessary tasks to administer the plan. Notwithstanding
other requirements of this chapter, the department shall adopt rules for purposes of
implementing and administering the plan. The department may contract with one or more
third parties to carry out some or all of these administrative duties, including providing
incentives and marketing the plan. The department and the board may jointly contract
with third-party providers, if the department and board determine that it is desirable to
contract with the same entity or entities for administration and investment management.
new text end

new text begin Subd. 6. new text end

new text begin Contribution and account requirements. new text end

new text begin Contributions to an ABLE
account are subject to the requirements of section 529A(b) of the Internal Revenue Code.
The maximum balance of an ABLE account may not exceed the limit imposed under
section 136G.09, subdivision 8.
new text end

new text begin Subd. 7. new text end

new text begin Authority to impose fees. new text end

new text begin The department may impose annual fees, as
provided in subdivision 3, on participants in the plan to recover the costs of administration.
The department must use its best efforts to keep these fees as low as possible, consistent
with efficient administration, so that the returns on savings invested in the plan will be
as high as possible.
new text end

new text begin Subd. 8. new text end

new text begin Data. new text end

new text begin Account owner data, account data, and data on beneficiaries of
accounts are private data on individuals or nonpublic data as defined in section 13.02.
new text end

Sec. 5.

new text begin [256Q.04] INVESTMENT OF ABLE ACCOUNTS.
new text end

new text begin Subdivision 1. new text end

new text begin State Board of Investment to invest. new text end

new text begin The State Board of
Investment shall invest the money deposited in accounts in the plan. Except as permitted
by the Internal Revenue Code, neither persons making contributions to an account nor
beneficiaries may direct the investment of contributions to the plan or plan earnings.
new text end

new text begin Subd. 2. new text end

new text begin Permitted investments. new text end

new text begin The board may invest the accounts in any
permitted investment under section 11A.24, except that the accounts may be invested
without limit in investment options from open-ended investment companies registered
under the federal Investment Company Act of 1940, United States Code, title 15, sections
80a-1 to 80a-64.
new text end

new text begin Subd. 3. new text end

new text begin Contracting authority. new text end

new text begin The board may contract with one or more third
parties for investment management, record keeping, or other services in connection with
investing the accounts. The board and department may jointly contract with third-party
providers, if the department and board determine that it is desirable to contract with the
same entity or entities for administration and investment management.
new text end

new text begin Subd. 4. new text end

new text begin Fees. new text end

new text begin The board may impose annual fees, as provided in section 256Q.03,
subdivision 3, on participants in the plan to recover the cost of investment management
and related tasks for the plan. The board must use its best efforts to keep these fees as low
as possible, consistent with high quality investment management, so that the returns on
savings invested in the plan will be as high as possible.
new text end

Sec. 6.

new text begin [256Q.05] ABLE ACCOUNT PLAN REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Plan to comply with federal law. new text end

new text begin The commissioner shall ensure that
the plan meets the requirements for an ABLE account under section 529A of the Internal
Revenue Code. The commissioner may request a private letter ruling or rulings from the
Internal Revenue Service or Secretary of Health and Human Services and must take any
necessary steps to ensure that the plan qualifies under relevant provisions of federal law.
new text end

new text begin Subd. 2. new text end

new text begin Contributions to an account. new text end

new text begin 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. A person does
not acquire an interest in an ABLE account by making contributions to an account.
new text end

new text begin Subd. 3. new text end

new text begin Contribution and account limitations. new text end

new text begin Contributions to an ABLE
account are subject to the requirements of section 529A(b) of the Internal Revenue Code.
The maximum balance of an ABLE account may not exceed the limit imposed under
section 136G.09, subdivision 8. A contribution to any account for a beneficiary must be
rejected if the contribution would cause the total account balance of the account to exceed
the limit imposed under section 136G.09, subdivision 8.
new text end

new text begin Subd. 4. new text end

new text begin Authority of account owner. new text end

new text begin Except as provided for minor trust accounts
in subdivision 9, an account owner is the only person entitled to:
new text end

new text begin (1) select or change a beneficiary or a contingent account owner; or
new text end

new text begin (2) request distributions or rollover distributions from an account.
new text end

new text begin Subd. 5. new text end

new text begin Naming of beneficiary. new text end

new text begin The account owner must designate the beneficiary
of an account, who has been certified as an individual with a disability, when the account
is established.
new text end

new text begin Subd. 6. new text end

new text begin Change of beneficiary. new text end

new text begin Except as provided for minor trust accounts in
subdivision 9, an account owner may change the beneficiary of an ABLE account to a
member of the family of the current beneficiary if the beneficiary to whom the ABLE
account is transferred has been certified as an individual with a disability.
new text end

new text begin Subd. 7. new text end

new text begin Effect of plan changes on participation agreement. new text end

new text begin Amendments to
this chapter 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 department or the board.
new text end

new text begin Subd. 8. new text end

new text begin Special account to hold plan assets in trust. new text end

new text begin All assets of the plan,
including contributions to accounts, are held in trust for the exclusive benefit of account
owners and beneficiaries. Assets must be held in a separate account in the state treasury
to be known as the Minnesota ABLE plan account or in accounts with the third-party
provider selected pursuant to section 256Q.03, subdivision 5. Plan assets are not subject
to claims by creditors of the state, are not part of the general fund, and are not subject to
appropriation by the state. Payments from the Minnesota ABLE plan account shall be
made under this chapter.
new text end

new text begin Subd. 9. new text end

new text begin Minor trust accounts. new text end

new text begin In the case of a plan account in which funds of a
minor trust account are invested, the account owner may not be changed to any person
other than a successor custodian or the beneficiary, unless a court order directing the
change of ownership is provided to the account administrator. The custodian must sign all
forms and requests submitted to the account administrator in the custodian's representative
capacity. The custodian must notify the account administrator in writing if the beneficiary
becomes legally entitled to be the account owner. An account owner under this section
may not select a contingent account owner.
new text end

Sec. 7.

new text begin [256Q.06] ACCOUNT DISTRIBUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Qualified distribution methods. new text end

new text begin (a) Qualified distributions may
be made:
new text end

new text begin (1) directly to participating providers of goods and services that are qualified
disability expenses, if purchased for a beneficiary;
new text end

new text begin (2) in the form of a check payable to both the beneficiary and provider of goods or
services that are qualified disability expenses; or
new text end

new text begin (3) directly to the account owner or beneficiary, if the account owner or beneficiary
has already paid qualified disability expenses.
new text end

new text begin (b) 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.
new text end

new text begin Subd. 2. new text end

new text begin Distributions upon death of a beneficiary. new text end

new text begin Upon the death of a
beneficiary, the amount remaining in the beneficiary's account must be distributed pursuant
to section 529A(f) of the Internal Revenue Code.
new text end

Sec. 8. new text beginEFFECTIVE DATE.new text end

new text begin
Sections 1 to 7 are effective ....
new text end