Senate Bill 828 (2020) — Florida ABLE program
SB 828
Florida Bills
Florida Senate - 2020 SB 828 By Senator Benacquisto 27-00794-20 2020828__ Page 1 of 13 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1
An act relating to the Florida ABLE program; amending 2 s. 1009.986, F.S.; abrogating the future repeal of 3 provisions relating to the Florida ABLE program; 4 providing an effective date. 5 6 Be It Enacted by the Legislature of the State of Florida: 7 8
Section 1. Subsection (12) of
section 1009.986, Florida 9 Statutes, is amended, and subsections (1) through (11) of that 10
section are republished, to read: 11 1009.986 Florida ABLE program.— 12
(1) LEGISLATIVE INTENT.—It is the intent of the Legislature 13 to establish a qualified ABLE program in this state which will 14 encourage and assist the saving of private funds in tax-exempt 15 accounts in order to pay for the qualified disability expenses 16 of eligible individuals with disabilities. The Legislature 17 intends that the qualified ABLE program be implemented in a 18 manner that is consistent with federal law authorizing the 19 program and that maximizes program efficiency and effectiveness. 20
(2) DEFINITIONS.—As used in ss. 1009.987 and 1009.988 and 21 this section, the term: 22 (a) “ABLE account” means an account established and 23 maintained under the Florida ABLE program. 24 (b) “Contracting state” means a state that has entered into 25 a contract with Florida ABLE, Inc., to provide residents of 26 Florida or that state with access to a qualified ABLE program. 27 (c) “Designated beneficiary” means the eligible individual 28 who established an ABLE account or the eligible individual to 29
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 2 of 13 CODING: Words stricken are deletions; words underlined are additions. whom an ABLE account was transferred. 30 (d) “Eligible individual” has the same meaning as provided 31 in s. 529A of the Internal Revenue Code. 32 (e) “Florida ABLE program” means the qualified ABLE program 33 established and maintained under this
section by Florida ABLE, 34 Inc. 35 (f) “Internal Revenue Code” means the United States 36 Internal Revenue Code of 1986, as defined in s. 220.03(1), and 37 regulations adopted pursuant thereto. 38 (g) “Participation agreement” means the agreement between 39 Florida ABLE, Inc., and a participant in the Florida ABLE 40 program. 41 (h) “Qualified ABLE program” means the program authorized 42 under s. 529A of the Internal Revenue Code which may be 43 established by a state or agency, or instrumentality thereof, to 44 allow a person to make contributions for a taxable year to an 45 ABLE account established for the purpose of meeting the 46 qualified disability expenses of the designated beneficiary of 47 the ABLE account. 48 (i) “Qualified disability expense” has the same meaning as 49 provided in s. 529A of the Internal Revenue Code. 50
(3) DIRECT-SUPPORT ORGANIZATION; FLORIDA ABLE, INC.— 51 (
a) The Florida Prepaid College Board shall establish a 52 direct-support organization to be known as “Florida ABLE, Inc.,” 53 which is: 54 1. A Florida not-for-profit corporation registered, 55 incorporated, organized, and operated in compliance with
chapter 56 617. 57 2. Organized and operated to receive, hold, invest, and 58
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 3 of 13 CODING: Words stricken are deletions; words underlined are additions. administer property and to make expenditures for the benefit of 59 the Florida ABLE program. 60 (
b) Florida ABLE, Inc., shall operate under a written 61 contract with the Florida Prepaid College Board. The contract 62 must include, but is not limited to, provisions that require: 63 1. The articles of incorporation and bylaws of Florida 64 ABLE, Inc., to be approved by the Florida Prepaid College Board. 65 2. Florida ABLE, Inc., to submit an annual budget for 66 approval by the Florida Prepaid College Board. The budget must 67 comply with rules adopted by the Florida Prepaid College Board. 68 3.
Florida ABLE, Inc., to pay reasonable consideration to 69 the Florida Prepaid College Board for products or services 70 provided directly or indirectly by the Florida Prepaid College 71 Board. 72 4. The Florida Prepaid College Board to solicit proposals, 73 to contract or subcontract, or to amend contractual service 74 agreements of the Florida Prepaid College Board for the benefit 75 of Florida ABLE, Inc. 76 5. The Florida Prepaid College Board to maintain the 77 website of Florida ABLE, Inc. 78 6.
The Florida Prepaid College Board to annually certify 79 that Florida ABLE, Inc., is complying with the terms of the 80 contract and acting in a manner consistent with this
section and 81 in the best interest of the state. The certification must be 82 reported in the official minutes of a meeting of the Florida 83 Prepaid College Board. 84 7. The disclosure of material provisions in the contract 85 and of the distinction between the Florida Prepaid College Board 86 and Florida ABLE, Inc., to donors of gifts, contributions, or 87
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 4 of 13 CODING: Words stricken are deletions; words underlined are additions. bequests, and the inclusion of such disclosure on all 88 promotional and fundraising publications. 89 8. The fiscal year for Florida ABLE, Inc., to begin on July 90 1 and end on June 30 of the following year. 91 (
c) Florida ABLE, Inc., shall provide for an annual 92 financial audit in accordance with s. 215.981. The Florida 93 Prepaid College Board and the Auditor General may require 94 Florida ABLE, Inc., or its independent auditor, to provide any 95 supplemental data relating to the operation of Florida ABLE, 96 Inc. 97 (d)1. The board of directors of Florida ABLE, Inc., shall 98 consist of: 99 a. The chair of the Florida Prepaid College Board, who 100 shall serve as the chair of the board of directors of Florida 101 ABLE, Inc. 102 b.
One individual who possesses knowledge, skill, and 103 experience in the areas of accounting, risk management, or 104 investment management, who shall be appointed by the Florida 105 Prepaid College Board. A current member of the Florida Prepaid 106 College Board, other than the chair, may be appointed. 107 c. One individual who possesses knowledge, skill, and 108 experience in the areas of accounting, risk management, or 109 investment management, who shall be appointed by the Governor. 110 d.
Two individuals who are advocates of persons with 111 disabilities, one of whom shall be appointed by the President of 112 the Senate and one of whom shall be appointed by the Speaker of 113 the House of Representatives. At least one of the individuals 114 appointed under this sub-subparagraph must be an advocate of 115 persons with developmental disabilities, as that term is defined 116
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 6 of 13 CODING: Words stricken are deletions; words underlined are additions. facilities, and personal services of the Florida Prepaid College 146 Board, provided that Florida ABLE, Inc., offers equal employment 147 opportunities to all persons regardless of race, color, 148 religion, sex, age, or national origin. As used in this 149 paragraph, the term “personal services” means use of the Florida 150 Prepaid College Board’s full-time and part-time personnel, 151 payroll processing services, and other services prescribed by 152 rule of the Florida Prepaid College Board. 153
(4) FLORIDA ABLE PROGRAM.— 154 (
a) On or before July 1, 2016, Florida ABLE, Inc., shall 155 establish and administer the Florida ABLE program. Before 156 implementing the program, Florida ABLE, Inc., must obtain a 157 written opinion from counsel specializing in: 158 1. Federal tax matters which indicates that the Florida 159 ABLE program is designed to comply with s. 529A of the Internal 160 Revenue Code. 161 2. Federal securities law which indicates that the Florida 162 ABLE program and the offering of participation in the program 163 are designed to comply with applicable federal securities law 164 and qualify for the available tax exemptions under such law. 165 (
b) The participation agreement must include provisions 166 specifying that: 167 1. The participation agreement is only a debt or obligation 168 of the Florida ABLE program and the Florida ABLE Program Trust 169 Fund and, as provided under paragraph (f), is not a debt or 170 obligation of the Florida Prepaid College Board or the state. 171 2. Participation in the Florida ABLE program does not 172 guarantee that sufficient funds will be available to cover all 173 qualified disability expenses for any designated beneficiary and 174
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 7 of 13 CODING: Words stricken are deletions; words underlined are additions. does not guarantee the receipt or continuation of any product or 175 service for the designated beneficiary. 176 3. The designated beneficiary must be a resident of this 177 state or a resident of a contracting state at the time the ABLE 178 account is established. 179 4. The establishment of an ABLE account in violation of 180 federal law is prohibited. 181 5. Contributions in excess of the limitations set forth in 182 s. 529A of the Internal Revenue Code are prohibited. 183 6.
The state is a creditor of ABLE accounts as, and to the 184 extent, set forth in s. 529A of the Internal Revenue Code. 185 7. Material misrepresentations by a party to the 186 participation agreement, other than Florida ABLE, Inc., in the 187 application for the participation agreement or in any 188 communication with Florida ABLE, Inc., regarding the Florida 189 ABLE program may result in the involuntary liquidation of the 190 ABLE account.
If an account is involuntarily liquidated, the 191 designated beneficiary is entitled to a refund, subject to any 192 fees or penalties provided by the participation agreement and 193 the Internal Revenue Code. 194 (
c) The participation agreement may include provisions 195 specifying: 196 1. The requirements and applicable restrictions for opening 197 an ABLE account. 198 2. The eligibility requirements for a party to a 199 participation agreement and the rights of the party. 200 3. The requirements and applicable restrictions for making 201 contributions to an ABLE account. 202 4. The requirements and applicable restrictions for 203
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 8 of 13 CODING: Words stricken are deletions; words underlined are additions. directing the investment of the contributions or balance of the 204 ABLE account. 205 5. The administrative fee and other fees and penalties 206 applicable to an ABLE account. 207 6. The terms and conditions under which an ABLE account or 208 participation agreement may be modified, transferred, or 209 terminated. 210 7. The disposition of abandoned ABLE accounts. 211 8. Other terms and conditions determined to be necessary or 212 proper. 213 (
d) The participation agreement may be amended throughout 214 its term for purposes that include, but are not limited to, 215 allowing a participant to increase or decrease the level of 216 participation and to change designated beneficiaries and other 217 matters authorized by this
section and s. 529A of the Internal 218 Revenue Code. 219 (
e) If an ABLE account is determined to be abandoned 220 pursuant to rules adopted by the Florida Prepaid College Board, 221 Florida ABLE, Inc., may use the balance of the account to 222 operate the Florida ABLE program. 223 (
f) A contract or participation agreement entered into by 224 or an obligation of Florida ABLE, Inc., on behalf of and for the 225 benefit of the Florida ABLE program does not constitute a debt 226 or obligation of the Florida Prepaid College Board or the state, 227 but is only a debt or obligation of the Florida ABLE program and 228 the Florida ABLE Program Trust Fund. The state does not have an 229 obligation to a designated beneficiary or any other person as a 230 result of the Florida ABLE program. The obligation of the 231 Florida ABLE program is limited solely to amounts in the Florida 232
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 9 of 13 CODING: Words stricken are deletions; words underlined are additions. ABLE Program Trust Fund. All amounts obligated to be paid from 233 the Florida ABLE Program Trust Fund are limited to the amounts 234 available for such obligation. The amounts held in the Florida 235 ABLE program may be disbursed only in accordance with this 236 section. 237 (
g) Notwithstanding any other provision of law, Florida 238 ABLE, Inc., may enter into an agreement with a contracting state 239 which allows Florida ABLE, Inc., to participate under the 240 design, operation, and rules of the contracting state’s 241 qualified ABLE program or which allows the contracting state to 242 participate under the Florida ABLE program. 243 (
h) The Florida ABLE program shall continue in existence 244 until terminated by law. If the state determines that the 245 program is financially infeasible, the state may terminate the 246 program. Upon termination, amounts in the Florida ABLE Program 247 Trust Fund held for designated beneficiaries shall be returned 248 in accordance with the participation agreement. 249 (
i) The state pledges to the designated beneficiaries that 250 the state will not limit or alter their rights under this 251
section which are vested in the Florida ABLE program until the 252 program’s obligations are met and discharged. However, this 253 paragraph does not preclude such limitation or alteration if 254 adequate provision is made by law for the protection of the 255 designated beneficiaries pursuant to the obligations of Florida 256 ABLE, Inc., and does not preclude termination of the Florida 257 ABLE program if the state determines that the program is not 258 financially feasible. This pledge and undertaking by the state 259 may be included in participation agreements. 260
(5) COMPREHENSIVE INVESTMENT PLAN.—Florida ABLE, Inc., 261
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 10 of 13 CODING: Words stricken are deletions; words underlined are additions. shall establish a comprehensive investment plan for the Florida 262 ABLE program, subject to the approval of the Florida Prepaid 263 College Board. The comprehensive investment plan must specify 264 the investment policies to be used by Florida ABLE, Inc., in its 265 administration of the program. Florida ABLE, Inc., may place 266 assets of the program in investment products and in such 267 proportions as may be designated or approved in the 268 comprehensive investment plan.
Such products shall be 269 underwritten and offered in compliance with the applicable 270 federal and state laws or regulations or exemptions therefrom. A 271 designated beneficiary may not direct the investment of any 272 contributions to the Florida ABLE program, unless specific fund 273 options are offered by Florida ABLE, Inc. Directors, officers, 274 and employees of Florida ABLE, Inc., may enter into 275 participation agreements, notwithstanding their fiduciary 276 responsibilities or official duties related to the Florida ABLE 277 program. 278
(6) EXEMPTION FROM CLAIMS OF CREDITORS.—Moneys paid into or 279 out of the Florida ABLE Program Trust Fund by or on behalf of a 280 designated beneficiary are exempt, as provided by s. 222.22, 281 from all claims of creditors of the designated beneficiary if 282 the participation agreement has not been terminated. Moneys paid 283 into the Florida ABLE program and benefits accrued through the 284 program may not be pledged for the purpose of securing a loan. 285
(7) MEDICAID RECOVERY; PRIORITY OF DISTRIBUTIONS.— 286 (
a) Unless prohibited by federal law, upon the death of a 287 designated beneficiary, funds in the ABLE account must first be 288 distributed for qualified disability expenses then transferred 289 to the estate of the designated beneficiary or an ABLE account 290
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 11 of 13 CODING: Words stricken are deletions; words underlined are additions. of another eligible individual specified by the designated 291 beneficiary or by the estate of the designated beneficiary. 292 (
b) Except as required by federal law, the state Medicaid 293 program may not file a claim for Medicaid recovery of funds in 294 an ABLE account. 295 (
c) Florida ABLE, Inc., shall assist and cooperate with the 296 Agency for Health Care Administration and Medicaid programs in 297 other states by providing the agency and programs with the 298 information needed to accomplish the purpose and objective of 299 this subsection. 300
(8) PAYROLL DEDUCTION AUTHORITY.—The payroll deduction 301 authority provided under s. 1009.975 applies to the Florida 302 Prepaid College Board and Florida ABLE, Inc., for purposes of 303 administering this section. 304
(9) REPORTS.— 305 (
a) On or before November 1, 2015, Florida ABLE, Inc., 306 shall prepare a report on the status of the establishment of the 307 Florida ABLE program by Florida ABLE, Inc. The report must also 308 include, if warranted, recommendations for statutory changes to 309 enhance the effectiveness and efficiency of the program. Florida 310 ABLE, Inc., shall submit copies of the report to the Governor, 311 the President of the Senate, and the Speaker of the House of 312 Representatives. 313 (
b) On or before March 31 of each year, Florida ABLE, Inc., 314 shall prepare or cause to be prepared a report setting forth in 315 appropriate detail an accounting of the Florida ABLE program 316 which includes a description of the financial condition of the 317 program at the close of the fiscal year. Florida ABLE, Inc., 318 shall submit copies of the report to the Governor, the President 319
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 12 of 13 CODING: Words stricken are deletions; words underlined are additions. of the Senate, the Speaker of the House of Representatives, and 320 the minority leaders of the Senate and the House of 321 Representatives and shall make the report available to each 322 designated beneficiary. The accounts of the Florida ABLE program 323 are subject to annual audit by the Auditor General. 324
(10) RULES.—The Florida Prepaid College Board shall adopt 325 rules to administer this section. Such rules must include, but 326 are not limited to: 327 (
a) Specifying the procedures by which Florida ABLE, Inc., 328 shall be governed and operate, including requirements for the 329 budget of Florida ABLE, Inc., and conditions with which Florida 330 ABLE, Inc., must comply to use property, facilities, or personal 331 services of the Florida Prepaid College Board. 332 (
b) The procedures for determining that an ABLE account has 333 been abandoned. 334 (
c) Adoption of provisions determined necessary by the 335 Florida Prepaid College Board for the Florida ABLE program to 336 retain its status as a qualified ABLE program or the tax-exempt 337 status or other similar status of the program or its 338 participants under the Internal Revenue Code. Florida ABLE, 339 Inc., shall inform participants in the Florida ABLE program of 340 changes to the tax or securities status of their interests in 341 the ABLE program and participation agreements. 342
(11) STATE OUTREACH PARTNERS.—The Agency for Health Care 343 Administration, the Agency for Persons with Disabilities, the 344 Department of Children and Families, and the Department of 345 Education shall assist, cooperate, and coordinate with Florida 346 ABLE, Inc., in the provision of public information and outreach 347 for the Florida ABLE program. 348
Florida Senate - 2020 SB 828 27-00794-20 2020828__ Page 13 of 13 CODING: Words stricken are deletions; words underlined are additions.
(12) REPEAL.—In accordance with s. 20.058, this
section is 349 repealed October 1, 2020, unless reviewed and saved from repeal 350 by the Legislature. 351