Amended in Senate July 1, 2015

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)

(Principal begin delete coauthor: Senator end delete begin insert coauthors: Senators Hertzberg and end insert Pavley)

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

(Coauthors: Senators Allen, Anderson, and Vidak)

February 23, 2015

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

LEGISLATIVE COUNSEL’S DIGEST

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

The Personal Income Tax Law and the Corporation 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 (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.

This bill would, for taxable years beginning on or after January 1, 2016, begin delete and before January 1, 2021, end delete conform to these federal income tax law provisions relating to the ABLE Act under the Personal Income Tax Law and the Corporation Tax Law, as provided. The bill would also establish in state government a Qualified ABLE Program and the begin delete Qualified end delete ABLE Fund for purposes of implementing the federal ABLE Act. begin insert The bill would create the ABLE Act Board. The bill would authorize the Able Fund to accept moneys from ABLE Accounts, to be segregated into the program account and the administrative account. The bill would continuously appropriate funds in the accounts to the board for specified purposes, thereby making an appropriation. end insert The bill would require the Treasurer to administer the program in compliance with the requirements of the federal ABLE Act. begin delete This bill would repeal the Qualified ABLE Program as of January 1, 2022. end delete

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . 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.  

For taxable years beginning on or after January 1,
2016, begin delete and before January 1, 2021, end delete Section 529A of the Internal
Revenue Code, relating to qualified ABLE programs, added by
Section 102 of Division B 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(d) of the Internal Revenue
Code, relating to reports, shall be filed with the Franchise Tax
Board at the same time and in the same manner as specified in that
section.

begin delete

(c) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.

end delete

SEC. 4.  

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

23711.4.  

For taxable years beginning on or after January 1,
2016, begin delete and before January 1, 2021, end delete Section 529A of the Internal
Revenue Code, relating to qualified ABLE programs, added by
Section 102 of Division B 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(d) of the Internal revenue
Code, relating to reports shall be filed with the Franchise Tax
Board at the same time and in the same manner as specified in that
section.

begin delete

(c) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.

end delete

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 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.

begin insert

begin insert 4876. end insert   

There is hereby created the ABLE Act Board that consists
of the Treasurer, the Director of Finance, the State Controller,
the Director of Developmental Services, the chairperson of the
State Council on Developmental Disabilities, or their designees.

end insert

begin delete 4876. end delete
begin insert 4877. end insert   

(a) There is hereby established in state government a
Qualified ABLE Program and the begin delete Qualified end delete 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

(c) (1) The ABLE Fund shall accept moneys from all ABLE
accounts.

end insert begin insert

(2) The Able Act Board shall segregate moneys received by the
ABLE Fund into two accounts, which shall be identified as the
program account and the administrative account.

end insert begin insert

(A) Notwithstanding Section 13340 of the Government Code,
the program account is hereby continuously appropriated, without
regard to fiscal years, to the ABLE Act Board for the purposes
specified in this act.

end insert begin insert

(B) Notwithstanding Section 13340 of the Government Code,
the administrative account is hereby continuously appropriated,
without regard to fiscal years, to the ABLE Act Board for
administration of the act. Administrative costs shall not exceed 1
percent of the incoming funds for the fiscal year.

end insert begin insert

(d) Funding for startup and first-year administrative costs shall
be appropriated from the General Fund in the annual Budget Act.
The board shall repay, within five years, the amount appropriated,
plus interest calculated at the rate earned by the Pooled Money
Investment Account. Necessary administrative costs in future years
shall be paid out of the administrative fund pursuant to
subparagraph (B) of paragraph (2) of subdivision (c).

end insert

begin delete 4877. end delete
begin insert 4878. 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.

begin delete 4878. end delete
begin insert 4879. end insert   

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

begin delete 4879. end delete
begin insert 4880. end insert   

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

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

begin delete

4880.  

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.

end delete