Amended in Assembly May 5, 2015

Amended in Assembly March 19, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 449

Introduced by Assembly Member Irwin

(Principal coauthor: Assembly Member Wilk)

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(Principal coauthor: Senator Pavley)

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

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(Principal coauthor: Senator Pavley)

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(Coauthors: Senators Allen, Anderson, and Vidak)

February 23, 2015

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

LEGISLATIVE COUNSEL’S DIGEST

AB 449, as amended, Irwin. Income taxation: savings plans: Qualified ABLE Program.

The Personal Income Tax Law and the Corporation begin delete Income end delete 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.

Existing federal law, the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014 begin delete (ABLE) Act, end delete begin insert (ABLE Act), end insert 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 begin delete qualified end delete begin insert Qualified end insert ABLE begin delete program end delete begin insert Program end insert established and maintained by a state, as specified.

This bill begin delete would end delete begin insert would, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, end insert conform to these federal income tax law provisions relating to the ABLE Act under the Personal Income Tax Law and the Corporation begin delete Income end delete Tax Law, as provided. The bill would also establish in state government a begin delete qualified end delete begin insert Qualified end insert ABLE begin delete program end delete begin insert Program end insert 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. begin insert This bill would repeal the Qualified ABLE Program as of January 1, 2022. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

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.

SEC. 2.  

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

SEC. 3.  

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

17140.4.  

begin insert For taxable years beginning on or after January 1,
2016, and before January 1, 2021, end insert Section 529A of the Internal
Revenue Code, relating to qualified ABLE programs, begin delete as enacted
by Section 102 of end delete begin insert added by Section 102 of Division B of end insert 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 begin delete 529A(g) of the Internal Revenue
Code end delete begin insert 529A(d) of the Internal Revenue Code, relating to reports, end insert
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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(c) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.

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SEC. 4.  

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

23711.4.  

begin insert For taxable years beginning on or after January 1,
2016, and before January 1, 2021, end insert Section 529A of the Internal
Revenue Code, relating to qualified ABLE programs, begin delete as enacted
by Section 102 of end delete begin insert added by Section 102 of Division B of end insert 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 begin delete 529A(g) of the Internal Revenue
Code end delete begin insert 529A(d) of the Internal revenue Code, relating to reports end insert
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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(c) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.

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SEC. 5.  

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

 

Chapter  15. Qualified ABLE Program

 

4875.  

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 begin delete fund” end delete begin insert Fund” end insert 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 begin delete program” end delete begin insert Program” end insert 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.

4876.  

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

(b) The begin delete qualified ABLE program end delete begin insert Qualified ABLE Program end insert
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.

4877.  

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.

4878.  

Notwithstanding any other law, begin delete money in an ABLE
account end delete begin insert moneys in, contributions to, and any distribution for
qualified disability expenses from, an ABLE account, not to exceed
one hundred thousand dollars ($100,000), end insert shall not count begin delete towards end delete
begin insert toward end insert determining eligibility for a state or local means-tested
program.

4879.  

(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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begin insert 4880. end insert   

This chapter shall remain in effect only until January 1,
2022, and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2022, deletes or extends that
date.

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