BILL NUMBER: AB 1553	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  FEBRUARY 29, 2016

INTRODUCED BY   Assembly Member Irwin
    (   Coauthors:  
Assembly Members   Burke,  
  Chiu,    Low,
    and Williams  
) 

                        JANUARY 4, 2016

    An act to amend Section 1785.11.2 of the Civil Code,
relating to consumer credit reports.   An act to amend
Sections 4875 and 4877 of the Welfare and Institutions Code, relating
to taxation. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1553, as amended, Irwin.  Consumer credit reports:
security freezes: protected person.   Savings plans:
qualified ABLE program.  
   Existing federal law, the Stephen Beck, Jr., Achieving a Better
Life Experience Act of 2014 (ABLE Act), 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.  
   Existing law conforms 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. Existing law establishes in state
government the ABLE program trust for purposes of implementing the
federal ABLE Act. Existing law also establishes the ABLE Act Board
and authorizes the board to adopt regulations to implement the
program.  
   This bill would authorize the ABLE Act Board to enter into a
multistate contract with an account servicer in order to implement
these provisions and to enter into a long-term contract with an
account servicer, as provided.  
   Existing state law defines and regulates consumer credit reports
and authorizes a consumer to place a security freeze on his or her
credit report by making a request in writing by mail to a consumer
credit reporting agency. Existing state law requires a consumer
credit reporting agency to place the security freeze on the consumer'
s credit report no later than 3 business days after receiving the
consumer's request.  
   This bill would additionally authorize a representative of a
protected person, defined as an individual who is under 16 years of
age at the time a request for the placement of a security freeze is
made or an incapacitated person or a protected individual for whom a
guardian or conservator has been appointed, to place a security
freeze on the credit report of the protected person by making a
request in writing by mail to a consumer credit reporting agency.
However, irrespective of whether the security freeze was requested by
a representative, the bill would authorize an individual who is
under 16 years of age or an individual over 16 years of age for whom
a security freeze was requested by a representative to act on behalf
of himself or herself with respect to temporarily lifting the freeze
for a specific party or removing the freeze. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 4875 of the   Welfare
and Institutions Code  is amended to read: 
   4875.  For purposes of this chapter:
   (a) "ABLE account" or "account" means the account established and
owned by a designated beneficiary pursuant to this chapter for the
purpose of meeting the qualified disability expenses of the
designated beneficiary of the account.
   (b) "Administrative fund" means the fund used to administer this
chapter.
   (c) "Board" means the California ABLE Act Board established under
this chapter.
   (d) "California ABLE Program Trust" or "ABLE program trust" means
the trust created pursuant to this chapter.
   (e) "Designated beneficiary" means the eligible individual who
established an ABLE account and is the owner of the account.
   (f) "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:   year:

   (1)  The   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.   age; or 
   (2)  A   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.

   (g) "Federal ABLE Act" means the federal Stephen Beck, Jr.,
Achieving a Better Life Experience Act of 2014.
   (h) "Investment management" means the functions performed by a
manager contracted to perform functions delegated by the board.
   (i) "Investment manager" means a manager contracted to perform
functions delegated by the board.
   (j) "Program fund" means the program fund established by this
chapter, which shall be held as a separate fund within the California
ABLE Program Trust.
   (k) "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.
   (  l  ) "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
  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, which are approved by the Secretary of the
Treasury under regulations and consistent with the purposes of the
federal ABLE Act.
   SEC. 2.    Section 4877 of the   Welfare and
Institutions Code   is amended to read: 
   4877.  (a) There is hereby created an instrumentality of the State
of California to be known as the California ABLE Program Trust.
   (b) The purposes, powers, and duties of the California ABLE
Program Trust are vested in, and shall be exercised by, the board.
   (c) The board, in the capacity of trustee, shall have the power
and authority to do all of the following:
   (1) Sue and be sued.
   (2) Make and enter into contracts necessary for the administration
of the ABLE program trust, and engage personnel, including
consultants, actuaries, managers, counsel, and auditors, as necessary
for the purpose of rendering professional, managerial, and technical
assistance and advice.
   (3) Adopt a corporate seal and change and amend it from time to
time.
   (4) Cause moneys in the program fund to be held and invested and
reinvested.
   (5) Accept any grants, gifts, appropriations, and other moneys
from any unit of federal, state, or local government or any other
person, firm, partnership, or corporation for deposit to the
administrative fund or the program fund.
   (6) Enter into agreements with designated beneficiaries or
eligible individuals to establish and maintain an ABLE account.
   (7) Make provisions for the payment of costs of administration and
operation of the ABLE program trust.
   (8) Carry out the duties and obligations of the ABLE program trust
pursuant to this chapter and the federal ABLE Act pursuant to
Section 529A of the Internal Revenue Code and federal regulations
issued pursuant to that code, and have any other powers as may be
reasonably necessary for the effectuation of the purposes,
objectives, and provisions of this chapter.
   (9) Carry out studies and projections in order to advise
designated beneficiaries or eligible individuals regarding present
and estimated future qualified disability expenses and the levels of
financial participation in the ABLE program trust required in order
to assist designated beneficiaries or eligible individuals.
   (10) Participate in any other way in any federal, state, or local
governmental program for the benefit of the ABLE program trust.
   (11) Promulgate, impose, and collect administrative fees and
charges in connection with transactions of the ABLE program trust,
and provide for reasonable service charges, including penalties for
cancellations.
   (12) Set minimum and maximum investment levels.
   (13) Administer the funds of the ABLE program trust.
   (14) Procure insurance against any loss in connection with the
property, assets, or activities of the ABLE program trust.
   (15) Procure insurance indemnifying any member of the board from
personal loss or liability resulting from a member's action or
inaction as a member of the board. 
   (d) (1) The board may enter into a multistate contract with an
account servicer in order to implement this chapter.  
   (2) The board may enter into a long-term contract with an account
servicer that allows the account servicer to recoup costs from
administering ABLE accounts in the first years of administration.
 
   (3) Subdivision (a) of Section 10365.5 of the Public Contract Code
does not apply to this subdivision.  
   (d) 
    (e)  The Treasurer shall, on behalf of the board,
appoint an executive director, who shall not be a member of the board
and who shall serve at the pleasure of the board. The Treasurer
shall determine the duties of the executive director and other staff
as necessary and set his or her compensation. The board may authorize
the executive director to enter into contracts on behalf of the
board or conduct any business necessary for the efficient operation
of the board. 
  SECTION 1.    Section 1785.11.2 of the Civil Code
is amended to read:
   1785.11.2.  (a) (1) A consumer may elect to place a security
freeze on his or her credit report by making a request in writing by
mail to a consumer credit reporting agency. A representative of a
protected person who is a consumer may elect to place a security
freeze on the credit report of a protected person by making a request
in writing by mail to a consumer credit reporting agency. "Security
freeze" means a notice placed in a consumer's credit report, at the
request of the consumer or representative, and subject to certain
exceptions, that prohibits the consumer credit reporting agency from
releasing the consumer's credit report or any information from it
without the express authorization of the consumer. If a security
freeze is in place, information from a consumer's credit report may
not be released to a third party without prior express authorization
from the consumer or representative. This subdivision does not
prevent a consumer credit reporting agency from advising a third
party that a security freeze is in effect with respect to the
consumer's credit report.
   (2) For the purposes of this section, the following definitions
shall apply:
   (A) "Protected person" means an individual who is under 16 years
of age at the time a request for the placement of a security freeze
is made or an incapacitated person or a protected individual for whom
a guardian or conservator has been appointed.
   (B) "Representative" means a person who provides to a consumer
credit reporting agency sufficient proof of authority to act on
behalf of a protected person.
   (C) "Sufficient proof of authority" means documentation that shows
a representative has authority to act on behalf of a protected
person and includes an order issued by a court of law, a lawfully
executed and valid power of attorney, or a written, notarized
statement signed by a representative that expressly describes the
authority of the representative to act on behalf of a protected
person.
   (b) A consumer credit reporting agency shall place a security
freeze on a consumer's credit report no later than three business
days after receiving a written request from the consumer or
representative.
   (c) The consumer credit reporting agency shall send a written
confirmation of the security freeze to the consumer or representative
within 10 business days and shall provide the consumer or
representative with a unique personal identification number or
password to be used by the consumer or representative when providing
authorization for the release of his or her credit for a specific
party or period of time.
   (d) If the consumer or representative wishes to allow his or her
credit report to be accessed for a specific party or period of time
while a freeze is in place, he or she shall contact the consumer
credit reporting agency, request that the freeze be temporarily
lifted, and provide the following:
   (1) Proper identification, as defined in subdivision (c) of
Section 1785.15.
   (2) The unique personal identification number or password provided
by the credit reporting agency pursuant to subdivision (c).
   (3) The proper information regarding the third party who is to
receive the credit report or the time period for which the report
shall be available to users of the credit report.
   (e) A consumer credit reporting agency that receives a request
from a consumer or representative to temporarily lift a freeze on a
credit report pursuant to subdivision (d) shall comply with the
request no later than three business days after receiving the
request.
   (f) A consumer credit reporting agency may develop procedures
involving the use of telephone, fax, the Internet, or other
electronic media to receive and process a request from a consumer or
representative to temporarily lift a freeze on a credit report
pursuant to subdivision (d) in an expedited manner.
   (g) A consumer credit reporting agency shall remove or temporarily
lift a freeze placed on a consumer's credit report only in the
following cases:
   (1) Upon consumer or representative request, pursuant to
subdivision (d) or (j).
   (2) If the consumer's credit report was frozen due to a material
misrepresentation of fact by the consumer or representative. If a
consumer credit reporting agency intends to remove a freeze upon a
consumer's credit report pursuant to this paragraph, the consumer
credit reporting agency shall notify the consumer or representative
in writing prior to removing the freeze on the consumer's credit
report.
   (h) A third party who requests access to a consumer credit report
in connection with an application for credit or any other use may
treat the application as incomplete if a security freeze is in effect
and the consumer or representative does not allow his or her credit
report to be accessed for that specific party or period of time.
   (i) If a consumer or representative requests a security freeze,
the consumer credit reporting agency shall disclose the process of
placing and temporarily lifting a freeze and the process for allowing
access to information from the consumer's credit report for a
specific party or period of time while the freeze is in place.
   (j) A security freeze shall remain in place until the consumer or
representative requests that the security freeze be removed. A
consumer credit reporting agency shall remove a security freeze
within three business days of receiving a request for removal from
the consumer or representative if the consumer or representative
provides both of the following:
   (1) Proper identification, as defined in subdivision (c) of
Section 1785.15.
   (2) The unique personal identification number or password provided
by the credit reporting agency pursuant to subdivision (c).
   (k) A consumer credit reporting agency shall require proper
identification, as defined in subdivision (c) of Section 1785.15, of
the person making a request to place or remove a security freeze.
   (l) The provisions of this section do not apply to the use of a
consumer credit report by any of the following:
   (1) (A) (i) A person or entity with which the consumer has or had,
prior to any assignment, an account or contract, including a demand
deposit account, or to which the consumer issued a negotiable
instrument, for the purpose of reviewing the account or collecting
the financial obligation owing for the account, contract, or
negotiable instrument.
   (ii) A subsidiary, affiliate, or agent of a person or entity
described in clause (i), an assignee of a financial obligation owing
by the consumer to such a person or entity, or a prospective assignee
of a financial obligation owing by the consumer to such a person or
entity in conjunction with the proposed purchase of the financial
obligation, for the purpose of reviewing the account or collecting
the financial obligation owing for the account, contract, or
negotiable instrument.
   (B) For purposes of this paragraph, "reviewing the account"
includes activities related to account maintenance, monitoring,
credit line increases, and account upgrades and enhancements.
   (2) A subsidiary, affiliate, agent, assignee, or prospective
assignee of a person to whom access has been granted under
subdivision (d) for purposes of facilitating the extension of credit
or other permissible use.
   (3) Any state or local agency, law enforcement agency, trial
court, or private collection agency acting pursuant to a court order,
warrant, or subpoena.
   (4) A child support agency acting pursuant to Chapter 2
(commencing with Section 17400) of Division 17 of the Family Code or
Title IV-D of the Social Security Act (42 U.S.C. et seq.).
   (5) The State Department of Health Care Services or its agents or
assigns acting to investigate Medi-Cal fraud.
   (6) The Franchise Tax Board or its agents or assigns acting to
investigate or collect delinquent taxes or unpaid court orders or to
fulfill any of its other statutory responsibilities.
   (7) The use of credit information for the purposes of prescreening
as provided for by the federal Fair Credit Reporting Act.
   (8) Any person or entity administering a credit file monitoring
subscription service to which the consumer has subscribed.
   (9) Any person or entity for the purpose of providing a consumer
with a copy of his or her credit report upon the consumer's request.
   (m) (1) Except as provided in paragraph (2), this title does not
prevent a consumer credit reporting agency from charging a fee of no
more than ten dollars ($10) to a consumer or representative for the
placement of each freeze, the removal of the freeze, the temporary
lift of the freeze for a period of time, or the temporary lift of the
freeze for a specific party, regarding access to a consumer credit
report, except that a consumer credit reporting agency may not charge
a fee to a victim of identity theft who has submitted a valid police
report or valid Department of Motor Vehicles investigative report
that alleges a violation of Section 530.5 of the Penal Code.
   (2) With respect to a consumer who is 65 years of age or older and
who has provided identification confirming his or her age, a
consumer credit reporting agency shall not charge a fee for the
placement of an initial security freeze, but may charge a fee not to
exceed five dollars ($5) for the removal of the freeze, the temporary
lift of the freeze for a period of time, the temporary lift of the
freeze for a specific party, or replacing the freeze.
   (n) Regardless of the existence of a security freeze, a consumer
reporting agency may disclose public record information lawfully
obtained by, or for, the consumer reporting agency from an open
public record to the extent otherwise permitted by law. This
subdivision does not prohibit a consumer reporting agency from
electing to apply a valid security freeze to the entire contents of a
credit report.
   (o) Notwithstanding any other law and irrespective of whether the
security freeze was requested by a representative pursuant to
subdivision (a), an individual who is under 16 years of age or an
individual for whom a security freeze was requested by a
representative who is over 16 years of age may act on behalf of
himself or herself with respect to subdivisions (d) and (j).