By: Perry, et al.	S.B. No. 1664

	A BILL TO BE ENTITLED
	AN ACT
	relating to the establishment of the Texas Achieving a Better Life
	Experience (ABLE) Program; authorizing the imposition of fees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 54.602(b), Education Code, is amended to
	read as follows:
	(b)  The board shall administer the prepaid higher education
	tuition program established under this subchapter, [and] the higher
	education savings plan established under Subchapter G, and the
	Texas Achieving a Better Life Experience Program created under
	Chapter 162, Human Resources Code.
	SECTION 2.  The heading to Section 54.634, Education Code,
	is amended to read as follows:
	Sec. 54.634.  ESTABLISHMENT OF TRUST FUND; COLLEGE SAVINGS
	PLAN ACCOUNT; TEXAS ABLE SAVINGS PLAN ACCOUNT.
	SECTION 3.  Section 54.634, Education Code, is amended by
	adding Subsection (e) to read as follows:
	(e)  The Texas ABLE savings plan account is created within
	the Texas tomorrow constitutional trust fund and is financed
	through administrative fees and service charges as authorized by
	Section 162.004, Human Resources Code.
	SECTION 4.  Title 11, Human Resources Code, is amended by
	adding Chapter 162 to read as follows:
	CHAPTER 162. TEXAS ACHIEVING A BETTER
	LIFE EXPERIENCE (ABLE) PROGRAM
	Sec. 162.001.  PURPOSES OF PROGRAM. The purposes of this
	chapter are as follows:
	(1)  to encourage and assist individuals and families
	in saving private funds for the purpose of supporting individuals
	with disabilities to maintain health, independence, and quality of
	life; and
	(2)  to provide secure funding for qualified disability
	expenses on behalf of designated beneficiaries with disabilities
	that will supplement, but not supplant, benefits provided through
	private insurance, the Medicaid program under Title XIX of the
	Social Security Act, the supplemental security income program under
	Title XVI of the Social Security Act, the beneficiary's employment,
	and other sources.
	Sec. 162.002.  DEFINITIONS. In this chapter:
	(1)  "ABLE account" has the meaning assigned by Section
	529A, Internal Revenue Code.
	(2)  "ABLE program" or "program" means the Texas
	Achieving a Better Life Experience Program created under this
	chapter.
	(3)  "Benefits" means the payment of qualified
	disability expenses on behalf of a designated beneficiary from an
	ABLE account.
	(4)  "Board" means the Prepaid Higher Education Tuition
	Board established under Section 54.602, Education Code.
	(5)  "Designated beneficiary" and "eligible
	individual" have the meanings assigned by Section 529A, Internal
	Revenue Code.
	(6)  "Financial institution" means a bank, trust
	company, an insurance company, or a registered investment company.
	(7)  "Internal Revenue Code" means the Internal Revenue
	Code of 1986.
	(8)  "Participant" means a person who has entered into
	a participation agreement under this chapter.
	(9)  "Participation agreement" means an agreement
	between a participant and the board under this chapter that
	conforms to the requirements prescribed by this chapter.
	(10)  "Qualified disability expenses" has the meaning
	assigned by Section 529A, Internal Revenue Code.
	(11)  "Texas ABLE savings plan account" means the Texas
	ABLE savings plan account created under Section 54.634(e),
	Education Code.
	Sec. 162.003.  CREATION; ADMINISTRATION. (a)  The Texas
	Achieving a Better Life Experience (ABLE) Program is created under
	this chapter.
	(b)  The board shall administer the ABLE program.
	Sec. 162.004.  POWERS AND DUTIES OF BOARD. (a)  To
	establish and administer the ABLE program, the board shall:
	(1)  develop and implement the program;
	(2)  adopt reasonable rules and establish policies and
	procedures to implement this chapter to:
	(A)  permit the program to qualify as a qualified
	ABLE program under Section 529A, Internal Revenue Code; and
	(B)  ensure the program's compliance with all
	applicable laws;
	(3)  either directly or through a contractual
	arrangement with a financial institution for investment services,
	develop and implement educational programs and related
	informational materials for participants and their families,
	including special programs and materials to inform individuals with
	disabilities regarding methods for financing the qualified
	disability expenses of individuals with disabilities to enable
	those individuals to maintain health, independence, and quality of
	life;
	(4)  enter into agreements with any financial
	institution or any state or federal agency or entity as required to
	administer the program under this chapter;
	(5)  enter into participation agreements with
	participants;
	(6)  solicit and accept any gifts, grants, legislative
	appropriations, and other funds from the state, any unit of
	federal, state, or local government, or any other person, firm,
	partnership, or corporation for deposit to the Texas ABLE savings
	plan account;
	(7)  invest participant funds in appropriate
	investment instruments;
	(8)  appoint members to an advisory committee who are
	stakeholders from the disability community;
	(9)  make provision for the payment of costs of
	administering the program; and
	(10)  procure insurance, guarantees, or other
	protections against any loss in connection with the assets or
	activities of the program.
	(b)  The board has all powers necessary or proper to carry
	out its duties under this chapter and to effectuate the purposes of
	this chapter, including the power to:
	(1)  enter into contracts and other necessary
	instruments;
	(2)  enter into agreements or other transactions with
	the United States, state agencies, and other entities as necessary;
	(3)  appear on its own behalf before governmental
	agencies;
	(4)  contract for necessary goods and services,
	including specifying in the contract duties to be performed by the
	provider of a good or service that are a part of or are in addition
	to the person's primary duties under the contract;
	(5)  engage the services of private consultants,
	actuaries, trustees, records administrators, managers, legal
	counsel, and auditors for administrative or technical assistance;
	(6)  participate in any government program;
	(7)  impose charges and fees;
	(8)  contract with a person to market the program;
	(9)  make reports;
	(10)  purchase liability insurance covering the board
	and employees and agents of the board; and
	(11)  establish other policies, procedures, and
	eligibility criteria to implement this chapter.
	Sec. 162.005.  INVESTMENT OF FUNDS. (a)  All money paid by a
	participant in connection with a participation agreement shall be:
	(1)  deposited into an individual ABLE account held on
	behalf of that participant in the Texas ABLE savings plan account;
	and
	(2)  promptly invested by the board.
	(b)  For new contracts entered into after December 1, 2015,
	board members shall study investment plans of other states and
	contract with or negotiate to provide benefit options that are the
	same as or similar to other states' qualified plans for the purpose
	of offering additional options for participants.
	(c)  The board may delegate to duly appointed investment
	counselors authority to act on behalf of the board in the investment
	and reinvestment of all or part of the funds and may also delegate
	to those counselors the authority to act on behalf of the board in
	the holding, purchasing, selling, assigning, transferring, or
	disposing of any or all of the securities and investments in which
	the funds in the Texas ABLE savings plan account have been invested,
	as well as the proceeds from the investment of those funds.  The
	investment counselors must be registered as investment advisors
	with the United States Securities and Exchange Commission.
	(d)  In exercising or delegating its investment powers and
	authority, members of the board shall exercise ordinary business
	care and prudence under the facts and circumstances prevailing at
	the time of the action or decision. A member of the board is not
	liable for any action taken or omitted with respect to the exercise
	of, or delegation of, those powers and authority if the member
	discharged the duties of the member's position in good faith and
	with the degree of diligence, care, and skill that a prudent person
	acting in a like capacity and familiar with those matters would use
	in the conduct of an enterprise of a like character and with like
	aims.
	(e)  A company or firm in which a member of the board has a
	substantial interest may not handle an investment transaction
	authorized by the board. A member of the board may not profit
	directly or indirectly from an investment transaction authorized by
	the board.
	(f)  A member of the board or an employee or agent of the ABLE
	program may not receive any gain or profit from any funds or
	transactions of the ABLE program. A member's, employee's, or
	agent's acceptance of any gratuity or compensation for the purpose
	of influencing an action taken with respect to the investment or
	management of the funds of the ABLE program is grounds for removal
	or termination of the member, employee, or agent, as applicable.
	Sec. 162.006.  TREATMENT OF ASSETS. (a)  The assets of the
	ABLE program shall at all times be preserved, invested, and spent
	only for the purposes provided by this chapter and in accordance
	with the participation agreements entered into under this chapter.
	(b)  The state does not have a property right in the assets of
	the ABLE program.
	Sec. 162.007.  PARTICIPATION AGREEMENTS. (a)  Under the
	ABLE program, the board may enter into participation agreements
	with participants on behalf of designated beneficiaries.
	(b)  A participation agreement must:
	(1)  stipulate the terms and conditions of the ABLE
	program in which the participant makes contributions;
	(2)  specify the method for calculating the return on
	the contribution made by the participant;
	(3)  clearly and prominently disclose to participants
	the risk associated with depositing funds with the board;
	(4)  be organized and presented in a way and with
	language that is easily understandable by the general public; and
	(5)  clearly and prominently disclose to participants
	the existence of any load charge or similar charge assessed against
	the ABLE accounts of the participants for administration or
	services.
	(c)  Consistent with Section 529A, Internal Revenue Code,
	the board shall establish:
	(1)  the maximum annual amount that a participant may
	contribute with respect to a designated beneficiary; and
	(2)  a total contribution limit for ABLE accounts
	established under the ABLE program with respect to a designated
	beneficiary.
	(d)  The board may establish other requirements that the
	board considers appropriate to provide adequate safeguards to
	prevent contributions on behalf of a designated beneficiary from
	exceeding the amount that is necessary to provide for the qualified
	disability expenses of the beneficiary.
	Sec. 162.008.  QUALIFIED DISABILITY EXPENSES.
	Contributions to an ABLE account and the earnings on those
	contributions may be used, as provided in the participation
	agreement, to pay the qualified disability expenses of a designated
	beneficiary.
	Sec. 162.009.  DESIGNATED BENEFICIARY. (a)  The
	participant is the designated beneficiary of the ABLE account
	except as described by Subsection (b) and as otherwise permitted by
	Section 529A, Internal Revenue Code.
	(b)  If the designated beneficiary of the account is a minor
	or has a custodian or other fiduciary appointed for the purpose of
	managing the minor's financial affairs, the parent or custodian or
	other fiduciary of the beneficiary may serve as the participant if
	that form of ownership is permitted or not prohibited by Section
	529A, Internal Revenue Code.
	Sec. 162.010.  CANCELLATION. (a)  A participant may cancel
	a participation agreement at will.
	(b)  Each participation agreement must provide that the
	agreement may be canceled on the terms and conditions and on payment
	of applicable fees and costs as provided by rule.
	SECTION 5.  This Act takes effect December 1, 2015.