LRBs0411/1
MES&GMM:ahe/emw/wlj
2015 - 2016 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO ASSEMBLY BILL 731
March 15, 2016 - Offered by Senators Lassa,
C. Larson, Shilling, L. Taylor, Risser,
Erpenbach, Miller, Ringhand, Wirch, Hansen and Bewley.
AB731-SSA1,1,10
1An Act to repeal 16.643 (1) (a) 1. and 16.643 (1) (a) 2.;
to renumber and amend
216.643 (1) (a) (intro.);
to amend 16.642 (title), 16.643 (title), 16.643 (1) (b),
316.643 (1) (c), 16.643 (1) (d), 16.643 (1) (e), 16.643 (3) (a) 2., 16.643 (3) (d), 71.05
4(6) (a) 27., 71.05 (6) (a) 28., 71.05 (6) (b) 52. and 71.07 (5) (a) 9.;
to repeal and
5recreate 16.643 (3) (a) 3.; and
to create 15.105 (25p), 16.257, 16.643 (1) (ag),
616.643 (1) (bm), 16.643 (2m), 16.644, 20.505 (1) (am), 20.505 (1) (tr), 20.505 (1)
7(tt), 25.14 (1) (a) 20., 25.17 (1) (ab), 25.17 (2) (fm), 25.86 and 71.98 (7) of the
8statutes;
relating to: changing the authority to create ABLE accounts in this
9state, creating tax benefits for contributions to ABLE accounts in other states,
10updating references to the Internal Revenue Code, and making appropriations.
Analysis by the Legislative Reference Bureau
This substitute amendment makes changes to the laws in this state related to
the federal Achieving a Better Life Experience Act of 2014. Under federal law, an
eligible resident of this state may participate in a qualified ABLE program of another
state and establish an ABLE account. The proceeds of an ABLE account may be used
to pay for qualified expenses, such as education, housing, and transportation costs,
for a beneficiary who is an individual with disabilities, as defined under federal law.
2015 Wisconsin Act 55, the state budget bill, authorized the creation of ABLE
accounts in this state. Generally, contributions to such an account could be
subtracted from the contributor's federal adjusted gross income in the calculation of
the taxpayer's Wisconsin taxes. The substitute amendment makes significant
changes to current law and does all of the following:
1. Creates an ABLE savings program board to perform certain functions,
including a) ensuring that the ABLE savings program meets the requirements of a
qualified ABLE program under the Internal Revenue Code and all other legal
requirements applicable to the program; b) establishing investment guidelines for
ABLE savings accounts; and c) seeking rulings and guidance from federal agencies
to ensure the proper implementation and administration of the ABLE savings
program.
2. Expands the types of financial institutions at which an individual may
establish an ABLE savings account to include investment companies, investment
trusts, trust companies, insurance companies, insurance associations, and other
persons carrying on a banking or insurance business. Current law limits those
institutions to banks, savings and loan associations, and credit unions.
3. Provides that the owner and beneficiary of an ABLE savings account are the
same person. Current law provides that when the beneficiary is a minor or is
otherwise incapable of handling his or her financial affairs, the account owner is the
beneficiary's parent or guardian.
4. Requires the Department of Administration to select a nongovernmental
person as a vendor to manage the ABLE savings program and requires the vendor
to, among other things, reimburse the state for all administrative costs that the state
incurs for the program.
5. Establishes a separate, nonlapsible ABLE savings program trust fund,
consisting of all revenues from enrollment fees for contributions to ABLE savings
accounts and from distributions and fees paid by the vendor of the program.
6. Creates a general purpose revenue appropriation to DOA for the
administrative expenses of the ABLE savings program, appropriates $500,000 in
fiscal year 2016-17 for that appropriation, authorizes 2.0 full-time equivalent
positions for DOA for the purpose of administering that program, and requires
repayment to the general fund from the ABLE savings program trust fund of the
amount expended from that appropriation when the secretary of administration
determines that moneys in the trust fund are sufficient to make that repayment.
Also under the substitute amendment, ABLE accounts in this state and
contributions to another state's ABLE account continue to be tax-advantaged. The
substitute amendment also adopts for Wisconsin purposes certain parts of the
Internal Revenue Code related to ABLE accounts.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB731-SSA1,1a
1Section 1a. 15.105 (25p) of the statutes is created to read:
AB731-SSA1,3,42
15.105
(25p) ABLE savings program board. There is created in the department
3of administration an ABLE savings program board. The board shall consist of all of
4the following members:
AB731-SSA1,3,55
(a) The secretary of administration or his or her designee.
AB731-SSA1,3,66
(b) The chairperson of the investment board or his or her designee.
AB731-SSA1,3,77
(c) A representative of the board for people with developmental disabilities.
AB731-SSA1,3,88
(d) Four other members, appointed for 4-year terms.
AB731-SSA1,1b
9Section 1b. 16.257 of the statutes is created to read:
AB731-SSA1,3,12
1016.257 ABLE savings program vendor. (1) The department shall
11determine the factors to be considered in selecting a vendor of the ABLE savings
12program under s. 16.643, which factors shall include all of the following:
AB731-SSA1,3,1313
(a) The person's ability to satisfy record-keeping and reporting requirements.
AB731-SSA1,3,1414
(b) The fees, if any, that the person proposes to charge account owners.
AB731-SSA1,3,1615
(c) The person's plan for promoting the ABLE savings program and the
16investment that the person is willing to make to promote the program.
AB731-SSA1,3,1817
(d) The minimum initial contribution or minimum contributions that the
18person will require.
AB731-SSA1,3,1919
(e) The ability and willingness of the person to accept electronic contributions.
AB731-SSA1,3,2120
(f) The ability of the person to augment the ABLE savings program with
21additional, beneficial services related to the program.
AB731-SSA1,4,4
1(2) The department shall solicit competitive sealed proposals under s. 16.75
2(2m) from nongovernmental persons to serve as vendor of the ABLE savings
3program. The department shall select the vendor based upon factors determined by
4the department under sub. (1).
AB731-SSA1,4,6
5(3) The contract between the department and the vendor shall ensure all of the
6following:
AB731-SSA1,4,87
(a) That the vendor reimburses the state for all administrative costs that the
8state incurs for the ABLE savings program.
AB731-SSA1,4,119
(b) That a firm of certified public accountants selected by the vendor annually
10audits the ABLE savings program and provides a copy of the audit to the ABLE
11savings program board.
AB731-SSA1,4,1612
(c) That each account owner receives a quarterly statement that identifies the
13contributions to the owner's ABLE savings account during the preceding quarter, the
14total contributions to and the value of the owner's ABLE savings account through the
15end of the preceding quarter, and any distributions made during the preceding
16quarter.
AB731-SSA1,4,1817
(d) That the vendor communicate to the beneficiary and account owner the
18provisions of s. 16.643 (3) to (5).
AB731-SSA1,1c
19Section 1c. 16.642 (title) of the statutes is amended to read:
AB731-SSA1,4,21
2016.642 (title)
Repayment College savings program; repayment to the
21general fund.
AB731-SSA1,4,25
2416.643 (title)
Support accounts ABLE savings program for individuals
25with disabilities.
AB731-SSA1,5,43
16.643
(1) (am) "Account owner" means an individual who establishes, and
4owns, an account under this section
and who is one of the following:.
AB731-SSA1,1h
9Section 1h. 16.643 (1) (ag) of the statutes is created to read:
AB731-SSA1,5,1110
16.643
(1) (ag) "ABLE savings program" has the meaning given for "qualified
11ABLE program" under
26 USC 529A (b) (1).
AB731-SSA1,5,1514
16.643
(1) (b) "Beneficiary" means an eligible individual
for whom who has
15established an account
is established under this section.
