Amended in Assembly March 19, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 449

Introduced by Assembly Member Irwin

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(Principal coauthor: Assembly Member Wilk)

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(Coauthors: Assembly Members begin insert Brown, end insert Chávez, Maienschein, Steinorth, and Waldron)

begin delete (Coauthors: Senators Allen and Anderson) end delete

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(Principal coauthor: Senator Pavley)

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(Coauthors: Senators Allen, Anderson, and Vidak)

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February 23, 2015

An act begin insert to add Sections 17140.4 and 23711.4 to the Revenue and Taxation Code, and to add Chapter 15 (commencing with Section 4875) to Division 4.5 of the Welfare and Institutions Code, end insert relating to begin delete public social services. end delete begin insert taxation. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 449, as amended, Irwin. begin delete Individuals with disabilities: savings accounts. end delete begin insert Income taxation: savings plans: Qualified ABLE Program. end insert

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The Personal Income Tax Law and the Corporation Income Tax Law, in specified conformity with federal income tax laws regarding qualified tuition programs, provide that distributions from a qualified tuition program are generally not included in the income of the donor or the beneficiary, as specified.

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Existing federal law, the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014 (ABLE) Act, for taxable years beginning on or after January 1, 2015, encourages and assists individuals and families to save private funds for the purpose of supporting persons with disabilities to maintain their health, independence, and quality of life by excluding from gross income distributions used for qualified disability expenses by a beneficiary of a qualified ABLE program established and maintained by a state, as specified.

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This bill would conform to these federal income tax law provisions relating to the ABLE Act under the Personal Income Tax Law and the Corporation Income Tax Law, as provided. The bill would also establish in state government a qualified ABLE program and the Qualified ABLE Fund for purposes of implementing the federal ABLE Act. The bill would require the Treasurer to administer the program in compliance with the requirements of the federal ABLE Act.

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Existing law provides for the State Supplementary Program for the Aged, Blind and Disabled (SSP), which requires the State Department of Social Services to contract with the United States Secretary of Health and Human Services to make payments to SSP recipients to supplement supplemental security income (SSI) payments made available pursuant to the federal Social Security Act. Existing law also declares that an array of services and supports should be established that is sufficiently complete to meet the needs and choices of each person with developmental disabilities to support their integration into the mainstream life of the community. Existing federal law, the Achieving a Better Life Experience (ABLE) Act, would create tax-free savings accounts for individuals with disabilities. The ABLE Act aims to ease financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses.

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This bill would express the intent of the Legislature to enact legislation that would implement the federal ABLE Act in California to ensure that people with disabilities can save for the future to achieve greater independence.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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It is the intent of the Legislature to further the
purposes of the federal Stephen Beck Jr., Achieving a Better Life
Experience Act to ensure that people with disabilities may save
for the future to achieve greater independence.

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begin insert SEC. 2. end insert   

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This act shall be known, and may be cited, as the
California Achieving a Better Life Experience Act.

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begin insert SEC. 3. end insert   

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begin insert Section 17140.4 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 17140.4. end insert   

Section 529A of the Internal Revenue Code, relating
to qualified ABLE programs, as enacted by Section 102 of Public
Law 113-295, shall apply, except as otherwise provided.

(a) Section 529A of the Internal Revenue Code is modified as
follows:

(1) By substituting the phrase “under this part and Part 11
(commencing with Section 23001)” in lieu of the phrase “under
this subtitle.”

(2) By substituting “Article 2 (commencing with Section 23731)”
in lieu of “Section 511.”

(b) A copy of the report required to be filed with the Secretary
of the Treasury under Section 529A(g) of the Internal Revenue
Code shall be filed with the Franchise Tax Board at the same time
and in the same manner as specified in that section.

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begin insert SEC. 4. end insert   

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begin insert Section 23711.4 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 23711.4. end insert   

Section 529A of the Internal Revenue Code, relating
to qualified ABLE programs, as enacted by Section 102 of Public
Law 113-295, shall apply, except as otherwise provided.

(a) Section 529A of the internal Revenue Code is modified as
follows:

(1) By substituting the phrase “under Part 10 (commencing
with Section 17001) and this part” in lieu of the phrase “under
this subtitle.”

(2) By substituting “Article 2 (commencing with Section 23731)”
in lieu of “Section 511.”

(b) A copy of the report required to be filed with the Secretary
of the Treasury under Section 529A(g) of the Internal Revenue
Code shall be filed with the Franchise Tax Board at the same time
and in the same manner as specified in that section.

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begin insert SEC. 5. end insert   

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begin insert Chapter 15 (commencing with Section 4875) is added
to Division 4.5 of the end insert begin insert Welfare and Institutions Code end insert begin insert , to read: end insert

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Chapter   begin insert 15. end insert Qualified ABLE Program

 

begin insert 4875. end insert   

For purposes of this chapter:

(a) “ABLE account” or “account” means the account an
eligible individual makes contributions to pursuant to this chapter
for the purpose of meeting the qualified disability expenses of the
designated beneficiary of the account.

(b) “ABLE fund” or “fund” means the fund established by this
chapter for purposes of implementing the federal ABLE Act.

(c) “Designated beneficiary” means the eligible individual who
established an ABLE account and is the owner of the account.

(d) “Eligible individual” means an individual who is eligible
under the program for a taxable year if during that taxable year
both of the following criteria are met:

(1) The individual is entitled to benefits based on blindness or
disability under Title II or XVI of the federal Social Security Act,
and that blindness or disability occurred before the date on which
the individual attained 26 years of age.

(2) A disability certification, as defined in the federal ABLE
Act, with respect to the individual is filed pursuant to the
requirements set forth in the federal ABLE Act.

(e) “Federal ABLE Act” means the federal Stephen Beck Jr.,
Achieving a Better Life Experience Act of 2014.

(f) “Qualified ABLE program” or “program” means the
program established by this chapter to implement the federal ABLE
act pursuant to Section 529A of the Internal Revenue Code.

(g) “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, including expenses related to 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, which are approved by the Secretary
of the Treasury under regulations and consistent with the purposes
of the federal ABLE Act.

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(a) There is hereby established in state government a
qualified ABLE program and the Qualified ABLE Fund for
purposes of implementing the federal ABLE Act pursuant to Section
529A of the Internal Revenue Code.

(b) The qualified ABLE program shall be administered by the
Treasurer, who shall be responsible for ensuring that the program
is administered in compliance with the requirements of the federal
ABLE Act.

begin insert 4877. end insert   

Under the program, a person may make contributions
for a taxable year, for the benefit of an individual who is an eligible
individual for that taxable year, to an ABLE account that is
established for the purpose of meeting the qualified disability
expenses of the designated beneficiary of the account, if both of
the following criteria are met:

(a) The designated beneficiary is limited to one ABLE account
for purposes of this chapter.

(b) The ABLE account is established only for a designated
beneficiary who is a resident of this state.

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Notwithstanding any other law, money in an ABLE
account shall not count towards determining eligibility for a state
or local means-tested program.

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(a) The Treasurer may adopt regulations to implement
this chapter.

(b) The Treasurer shall adopt regulations to track all ABLE
accounts in California.

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SECTION 1.  

It is the intent of the Legislature to enact
legislation that would implement the federal Achieving Better Life
Experience (ABLE) Act in California to ensure that people with
disabilities may save for the future to achieve greater independence.

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