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.
AB731-SSA1,1j
16Section 1j. 16.643 (1) (bm) of the statutes is created to read:
AB731-SSA1,5,1717
16.643
(1) (bm) "Board" means the ABLE savings program board.
AB731-SSA1,5,2120
16.643
(1) (c) "Eligible individual" has the meaning given in
26 USC 529A (e)
21(1).
AB731-SSA1,6,324
16.643
(1) (d) "Financial institution" means any bank, savings bank, savings
25and loan association,
or credit union
, investment company, investment trust, trust
1company, insurance company, insurance association, or other person carrying on a
2banking or insurance business that is authorized to do business under state or
3federal laws relating to financial institutions.
AB731-SSA1,6,76
16.643
(1) (e) "Qualified expenses" has the meaning given for "qualified
7disability expenses" under
26 USC 529A (e) (5).
AB731-SSA1,1n
8Section 1n. 16.643 (2m) of the statutes is created to read:
AB731-SSA1,6,99
16.643
(2m) Duties of the board. The board shall do all of the following:
AB731-SSA1,6,1210
(a) Ensure that the program under this section meets the requirements of a
11qualified ABLE program under
26 USC 529A and all other requirements applicable
12to the program under any other state or federal law, rule, or regulation.
AB731-SSA1,6,1413
(b) Establish investment guidelines for contributions to and the earnings on
14accounts established under this section.
AB731-SSA1,6,1815
(c) Seek rulings and guidance from the U.S. department of the treasury, the
16internal revenue service, the securities and exchange commission, and the social
17security administration to ensure the proper implementation and administration of
18the program under this section.
AB731-SSA1,6,2119
(d) Ensure that if the department changes vendors the balances of accounts
20established under this section are promptly transferred into investment
21instruments as similar to the original investment instruments as possible.
AB731-SSA1,6,2522
(e) Keep personal and financial information pertaining to a beneficiary closed
23to the public, except that the board may release to the appropriate state agency
24information necessary in determining a beneficiary's eligibility for any of the
25long-term care programs specified under sub. (5).
AB731-SSA1,7,53
16.643
(3) (a) 2. Change the beneficiary of an account to a
member of the family
4member, as defined in
26 USC 529A (e) (4), of the previous beneficiary, if the new
5beneficiary is an eligible individual.
AB731-SSA1,7,108
16.643
(3) (a) 3. Directly or indirectly, direct the investment of any
9contributions to the account owner's account and any earning on those contributions
10no more than 2 times in any calendar year.
AB731-SSA1,7,2013
16.643
(3) (d) Upon the death of
the beneficiary who is the account owner the
14account shall terminate, and upon the termination of an account
as described in par.
15(a) 3., any amount remaining in the account shall be recoverable by the state under
16s. 49.849 as property of a decedent is recoverable under that statute. Any amount
17that remains in the account following such recovery under s. 49.849 shall be paid to
18the account owner's estate. Recovery authorized under this paragraph may relate
19only to public assistance received by
a beneficiary
an account owner on and after the
20date on which an account is established
under this section.
AB731-SSA1,1r
21Section 1r. 16.644 of the statutes is created to read:
AB731-SSA1,8,2
2216.644 ABLE savings program; repayment to the general fund. (1) The
23secretary shall transfer from the ABLE savings program trust fund to the general
24fund an amount equal to the amount expended from the appropriation under s.
2520.505 (1) (am) when the secretary determines that moneys in that trust fund are
1sufficient to make the transfer. The secretary may make the transfer in
2installments.
AB731-SSA1,8,5
3(2) Annually, by June 1, the secretary shall submit a report to the joint
4committee on finance on the amount available for repayment under sub. (1), the
5amount repaid under sub. (1), and the outstanding balance under sub. (1).
AB731-SSA1,1s
6Section 1s. 20.005 (3) (schedule) of the statutes: at the appropriate place,
7insert the following amounts for the purposes indicated:
-
See PDF for table ![PDF](http://docs.legis.wisconsin.gov/assets/image/file_acrobat.gif)
AB731-SSA1,1t
8Section 1t. 20.505 (1) (am) of the statutes is created to read:
AB731-SSA1,8,119
20.505
(1) (am)
Administrative expenses; ABLE savings program. The
10amounts in the schedule for the administrative expenses of the ABLE savings
11program under s. 16.643, including the expense of promoting the program.
AB731-SSA1,1u
12Section 1u. 20.505 (1) (tr) of the statutes is created to read:
AB731-SSA1,8,1513
20.505
(1) (tr)
Payment of qualified disability expenses; ABLE savings program
14trust fund. From the ABLE savings program trust fund, a sum sufficient for the
15payment of qualified disability expenses under s. 16.643 (4).
AB731-SSA1,1v
16Section 1v. 20.505 (1) (tt) of the statutes is created to read:
AB731-SSA1,9,4
120.505
(1) (tt)
Administrative expenses; ABLE savings program. From the
2ABLE savings program trust fund, the amounts in the schedule for the
3administrative expenses of the ABLE savings program under s. 16.643, including the
4expense of promoting the program.
AB731-SSA1,1w
5Section 1w. 25.14 (1) (a) 20. of the statutes is created to read:
AB731-SSA1,9,66
25.14
(1) (a) 20. The ABLE savings program trust fund.
AB731-SSA1,1x
7Section 1x. 25.17 (1) (ab) of the statutes is created to read:
AB731-SSA1,9,98
25.17
(1) (ab) ABLE savings program trust fund (s. 25.86), but subject to sub.
9(2) (fm).
AB731-SSA1,1y
10Section 1y. 25.17 (2) (fm) of the statutes is created to read:
AB731-SSA1,9,1711
25.17
(2) (fm) Invest the moneys belonging to the ABLE savings program trust
12fund in a manner consistent with the guidelines established under s. 16.643 (2m) (b),
13unless the moneys are under the management and control of a vendor selected under
14s. 16.257. In making investments under this paragraph, the investment board shall
15accept any reasonable terms and conditions that the ABLE savings program board
16specifies and is relieved of any obligations relevant to prudent investment of the
17fund, including the standard of responsibility under s. 25.15 (2).
AB731-SSA1,1z
18Section 1z. 25.86 of the statutes is created to read:
AB731-SSA1,9,23
1925.86 ABLE savings program trust fund. There is established a separate
20nonlapsible trust fund designated as the ABLE savings program trust fund,
21consisting of all revenue from enrollment fees for and contributions to accounts
22established under s. 16.643 and from distributions and fees paid by the vendor under
23s. 16.257 (3).
AB731-SSA1,10,9
171.05
(6) (a) 27. Except as provided in subd. 28.,
to the extent that an amount
2is not included in federal adjusted gross income, any accumulated interest,
3dividends, or other gain that
accrues is withdrawn from an account described under
4s. 16.643
or any amount withdrawn from a qualified ABLE program described under
5section 529A (b) (1) of the Internal Revenue Code, during the taxable year in which
6a withdrawal occurs
from such an account if any amount of the money or other assets
7in the account is withdrawn by, or at the direction of, an account owner for any reason
8other than the payment of qualified
disability expenses, as defined in
s. 16.643 (1)
9(e) section 529A (e) (5) of the Internal Revenue Code, for the account beneficiary.
AB731-SSA1,10,1512
71.05
(6) (a) 28. Upon the termination of an account
as described under s.
1316.643 (3) (d)
, or an account that is part of a qualified ABLE program under section
14529A of the Internal Revenue Code, any amount in the account that is returned to
15an account owner, or an account owner's estate.