Florida Senate - 2020 SB 828 By Senator Benacquisto 27-00794-20 2020828__ 1 A bill to be entitled 2 An act relating to the Florida ABLE program; amending 3 s. 1009.986, F.S.; abrogating the future repeal of 4 provisions relating to the Florida ABLE program; 5 providing an effective date. 6 7 Be It Enacted by the Legislature of the State of Florida: 8 9 Section 1. Subsection (12) of section 1009.986, Florida 10 Statutes, is amended, and subsections (1) through (11) of that 11 section are republished, to read: 12 1009.986 Florida ABLE program.— 13 (1) LEGISLATIVE INTENT.—It is the intent of the Legislature 14 to establish a qualified ABLE program in this state which will 15 encourage and assist the saving of private funds in tax-exempt 16 accounts in order to pay for the qualified disability expenses 17 of eligible individuals with disabilities. The Legislature 18 intends that the qualified ABLE program be implemented in a 19 manner that is consistent with federal law authorizing the 20 program and that maximizes program efficiency and effectiveness. 21 (2) DEFINITIONS.—As used in ss. 1009.987 and 1009.988 and 22 this section, the term: 23 (a) “ABLE account” means an account established and 24 maintained under the Florida ABLE program. 25 (b) “Contracting state” means a state that has entered into 26 a contract with Florida ABLE, Inc., to provide residents of 27 Florida or that state with access to a qualified ABLE program. 28 (c) “Designated beneficiary” means the eligible individual 29 who established an ABLE account or the eligible individual to 30 whom an ABLE account was transferred. 31 (d) “Eligible individual” has the same meaning as provided 32 in s. 529A of the Internal Revenue Code. 33 (e) “Florida ABLE program” means the qualified ABLE program 34 established and maintained under this section by Florida ABLE, 35 Inc. 36 (f) “Internal Revenue Code” means the United States 37 Internal Revenue Code of 1986, as defined in s. 220.03(1), and 38 regulations adopted pursuant thereto. 39 (g) “Participation agreement” means the agreement between 40 Florida ABLE, Inc., and a participant in the Florida ABLE 41 program. 42 (h) “Qualified ABLE program” means the program authorized 43 under s. 529A of the Internal Revenue Code which may be 44 established by a state or agency, or instrumentality thereof, to 45 allow a person to make contributions for a taxable year to an 46 ABLE account established for the purpose of meeting the 47 qualified disability expenses of the designated beneficiary of 48 the ABLE account. 49 (i) “Qualified disability expense” has the same meaning as 50 provided in s. 529A of the Internal Revenue Code. 51 (3) DIRECT-SUPPORT ORGANIZATION; FLORIDA ABLE, INC.— 52 (a) The Florida Prepaid College Board shall establish a 53 direct-support organization to be known as “Florida ABLE, Inc.,” 54 which is: 55 1. A Florida not-for-profit corporation registered, 56 incorporated, organized, and operated in compliance with chapter 57 617. 58 2. Organized and operated to receive, hold, invest, and 59 administer property and to make expenditures for the benefit of 60 the Florida ABLE program. 61 (b) Florida ABLE, Inc., shall operate under a written 62 contract with the Florida Prepaid College Board. The contract 63 must include, but is not limited to, provisions that require: 64 1. The articles of incorporation and bylaws of Florida 65 ABLE, Inc., to be approved by the Florida Prepaid College Board. 66 2. Florida ABLE, Inc., to submit an annual budget for 67 approval by the Florida Prepaid College Board. The budget must 68 comply with rules adopted by the Florida Prepaid College Board. 69 3. Florida ABLE, Inc., to pay reasonable consideration to 70 the Florida Prepaid College Board for products or services 71 provided directly or indirectly by the Florida Prepaid College 72 Board. 73 4. The Florida Prepaid College Board to solicit proposals, 74 to contract or subcontract, or to amend contractual service 75 agreements of the Florida Prepaid College Board for the benefit 76 of Florida ABLE, Inc. 77 5. The Florida Prepaid College Board to maintain the 78 website of Florida ABLE, Inc. 79 6. The Florida Prepaid College Board to annually certify 80 that Florida ABLE, Inc., is complying with the terms of the 81 contract and acting in a manner consistent with this section and 82 in the best interest of the state. The certification must be 83 reported in the official minutes of a meeting of the Florida 84 Prepaid College Board. 85 7. The disclosure of material provisions in the contract 86 and of the distinction between the Florida Prepaid College Board 87 and Florida ABLE, Inc., to donors of gifts, contributions, or 88 bequests, and the inclusion of such disclosure on all 89 promotional and fundraising publications. 90 8. The fiscal year for Florida ABLE, Inc., to begin on July 91 1 and end on June 30 of the following year. 92 (c) Florida ABLE, Inc., shall provide for an annual 93 financial audit in accordance with s. 215.981. The Florida 94 Prepaid College Board and the Auditor General may require 95 Florida ABLE, Inc., or its independent auditor, to provide any 96 supplemental data relating to the operation of Florida ABLE, 97 Inc. 98 (d)1. The board of directors of Florida ABLE, Inc., shall 99 consist of: 100 a. The chair of the Florida Prepaid College Board, who 101 shall serve as the chair of the board of directors of Florida 102 ABLE, Inc. 103 b. One individual who possesses knowledge, skill, and 104 experience in the areas of accounting, risk management, or 105 investment management, who shall be appointed by the Florida 106 Prepaid College Board. A current member of the Florida Prepaid 107 College Board, other than the chair, may be appointed. 108 c. One individual who possesses knowledge, skill, and 109 experience in the areas of accounting, risk management, or 110 investment management, who shall be appointed by the Governor. 111 d. Two individuals who are advocates of persons with 112 disabilities, one of whom shall be appointed by the President of 113 the Senate and one of whom shall be appointed by the Speaker of 114 the House of Representatives. At least one of the individuals 115 appointed under this sub-subparagraph must be an advocate of 116 persons with developmental disabilities, as that term is defined 117 in s. 393.063. 118 2.a. The term of the appointee under sub-subparagraph 1.b. 119 shall be up to 3 years as determined by the Florida Prepaid 120 College Board. Such appointee may be reappointed. 121 b. The term of the appointees under sub-subparagraphs 1.c. 122 and d. shall be 3 years. Such appointees may be reappointed for 123 up to one consecutive term. 124 3. Unless authorized by the board of directors of Florida 125 ABLE, Inc., an individual director has no authority to control 126 or direct the operations of Florida ABLE, Inc., or the actions 127 of its officers and employees. 128 4. The board of directors of Florida ABLE, Inc.: 129 a. Shall meet at least quarterly and at other times upon 130 the call of the chair. 131 b. May use any method of telecommunications to conduct, or 132 establish a quorum at, its meetings or the meetings of a 133 subcommittee or other subdivision if the public is given proper 134 notice of the telecommunications meeting and provided reasonable 135 access to observe and, if appropriate, to participate. 136 5. A majority of the total current membership of the board 137 of directors of Florida ABLE, Inc., constitutes a quorum of the 138 board. 139 6. Members of the board of directors of Florida ABLE, Inc., 140 and the board’s subcommittees or other subdivisions shall serve 141 without compensation; however, the members may be reimbursed for 142 reasonable, necessary, and actual travel expenses pursuant to s. 143 112.061. 144 (e) Subject to rule adopted by the Florida Prepaid College 145 Board, Florida ABLE, Inc., may use property, other than money, 146 facilities, and personal services of the Florida Prepaid College 147 Board, provided that Florida ABLE, Inc., offers equal employment 148 opportunities to all persons regardless of race, color, 149 religion, sex, age, or national origin. As used in this 150 paragraph, the term “personal services” means use of the Florida 151 Prepaid College Board’s full-time and part-time personnel, 152 payroll processing services, and other services prescribed by 153 rule of the Florida Prepaid College Board. 154 (4) FLORIDA ABLE PROGRAM.— 155 (a) On or before July 1, 2016, Florida ABLE, Inc., shall 156 establish and administer the Florida ABLE program. Before 157 implementing the program, Florida ABLE, Inc., must obtain a 158 written opinion from counsel specializing in: 159 1. Federal tax matters which indicates that the Florida 160 ABLE program is designed to comply with s. 529A of the Internal 161 Revenue Code. 162 2. Federal securities law which indicates that the Florida 163 ABLE program and the offering of participation in the program 164 are designed to comply with applicable federal securities law 165 and qualify for the available tax exemptions under such law. 166 (b) The participation agreement must include provisions 167 specifying that: 168 1. The participation agreement is only a debt or obligation 169 of the Florida ABLE program and the Florida ABLE Program Trust 170 Fund and, as provided under paragraph (f), is not a debt or 171 obligation of the Florida Prepaid College Board or the state. 172 2. Participation in the Florida ABLE program does not 173 guarantee that sufficient funds will be available to cover all 174 qualified disability expenses for any designated beneficiary and 175 does not guarantee the receipt or continuation of any product or 176 service for the designated beneficiary. 177 3. The designated beneficiary must be a resident of this 178 state or a resident of a contracting state at the time the ABLE 179 account is established. 180 4. The establishment of an ABLE account in violation of 181 federal law is prohibited. 182 5. Contributions in excess of the limitations set forth in 183 s. 529A of the Internal Revenue Code are prohibited. 184 6. The state is a creditor of ABLE accounts as, and to the 185 extent, set forth in s. 529A of the Internal Revenue Code. 186 7. Material misrepresentations by a party to the 187 participation agreement, other than Florida ABLE, Inc., in the 188 application for the participation agreement or in any 189 communication with Florida ABLE, Inc., regarding the Florida 190 ABLE program may result in the involuntary liquidation of the 191 ABLE account. If an account is involuntarily liquidated, the 192 designated beneficiary is entitled to a refund, subject to any 193 fees or penalties provided by the participation agreement and 194 the Internal Revenue Code. 195 (c) The participation agreement may include provisions 196 specifying: 197 1. The requirements and applicable restrictions for opening 198 an ABLE account. 199 2. The eligibility requirements for a party to a 200 participation agreement and the rights of the party. 201 3. The requirements and applicable restrictions for making 202 contributions to an ABLE account. 203 4. The requirements and applicable restrictions for 204 directing the investment of the contributions or balance of the 205 ABLE account. 206 5. The administrative fee and other fees and penalties 207 applicable to an ABLE account. 208 6. The terms and conditions under which an ABLE account or 209 participation agreement may be modified, transferred, or 210 terminated. 211 7. The disposition of abandoned ABLE accounts. 212 8. Other terms and conditions determined to be necessary or 213 proper. 214 (d) The participation agreement may be amended throughout 215 its term for purposes that include, but are not limited to, 216 allowing a participant to increase or decrease the level of 217 participation and to change designated beneficiaries and other 218 matters authorized by this section and s. 529A of the Internal 219 Revenue Code. 220 (e) If an ABLE account is determined to be abandoned 221 pursuant to rules adopted by the Florida Prepaid College Board, 222 Florida ABLE, Inc., may use the balance of the account to 223 operate the Florida ABLE program. 224 (f) A contract or participation agreement entered into by 225 or an obligation of Florida ABLE, Inc., on behalf of and for the 226 benefit of the Florida ABLE program does not constitute a debt 227 or obligation of the Florida Prepaid College Board or the state, 228 but is only a debt or obligation of the Florida ABLE program and 229 the Florida ABLE Program Trust Fund. The state does not have an 230 obligation to a designated beneficiary or any other person as a 231 result of the Florida ABLE program. The obligation of the 232 Florida ABLE program is limited solely to amounts in the Florida 233 ABLE Program Trust Fund. All amounts obligated to be paid from 234 the Florida ABLE Program Trust Fund are limited to the amounts 235 available for such obligation. The amounts held in the Florida 236 ABLE program may be disbursed only in accordance with this 237 section. 238 (g) Notwithstanding any other provision of law, Florida 239 ABLE, Inc., may enter into an agreement with a contracting state 240 which allows Florida ABLE, Inc., to participate under the 241 design, operation, and rules of the contracting state’s 242 qualified ABLE program or which allows the contracting state to 243 participate under the Florida ABLE program. 244 (h) The Florida ABLE program shall continue in existence 245 until terminated by law. If the state determines that the 246 program is financially infeasible, the state may terminate the 247 program. Upon termination, amounts in the Florida ABLE Program 248 Trust Fund held for designated beneficiaries shall be returned 249 in accordance with the participation agreement. 250 (i) The state pledges to the designated beneficiaries that 251 the state will not limit or alter their rights under this 252 section which are vested in the Florida ABLE program until the 253 program’s obligations are met and discharged. However, this 254 paragraph does not preclude such limitation or alteration if 255 adequate provision is made by law for the protection of the 256 designated beneficiaries pursuant to the obligations of Florida 257 ABLE, Inc., and does not preclude termination of the Florida 258 ABLE program if the state determines that the program is not 259 financially feasible. This pledge and undertaking by the state 260 may be included in participation agreements. 261 (5) COMPREHENSIVE INVESTMENT PLAN.—Florida ABLE, Inc., 262 shall establish a comprehensive investment plan for the Florida 263 ABLE program, subject to the approval of the Florida Prepaid 264 College Board. The comprehensive investment plan must specify 265 the investment policies to be used by Florida ABLE, Inc., in its 266 administration of the program. Florida ABLE, Inc., may place 267 assets of the program in investment products and in such 268 proportions as may be designated or approved in the 269 comprehensive investment plan. Such products shall be 270 underwritten and offered in compliance with the applicable 271 federal and state laws or regulations or exemptions therefrom. A 272 designated beneficiary may not direct the investment of any 273 contributions to the Florida ABLE program, unless specific fund 274 options are offered by Florida ABLE, Inc. Directors, officers, 275 and employees of Florida ABLE, Inc., may enter into 276 participation agreements, notwithstanding their fiduciary 277 responsibilities or official duties related to the Florida ABLE 278 program. 279 (6) EXEMPTION FROM CLAIMS OF CREDITORS.—Moneys paid into or 280 out of the Florida ABLE Program Trust Fund by or on behalf of a 281 designated beneficiary are exempt, as provided by s. 222.22, 282 from all claims of creditors of the designated beneficiary if 283 the participation agreement has not been terminated. Moneys paid 284 into the Florida ABLE program and benefits accrued through the 285 program may not be pledged for the purpose of securing a loan. 286 (7) MEDICAID RECOVERY; PRIORITY OF DISTRIBUTIONS.— 287 (a) Unless prohibited by federal law, upon the death of a 288 designated beneficiary, funds in the ABLE account must first be 289 distributed for qualified disability expenses then transferred 290 to the estate of the designated beneficiary or an ABLE account 291 of another eligible individual specified by the designated 292 beneficiary or by the estate of the designated beneficiary. 293 (b) Except as required by federal law, the state Medicaid 294 program may not file a claim for Medicaid recovery of funds in 295 an ABLE account. 296 (c) Florida ABLE, Inc., shall assist and cooperate with the 297 Agency for Health Care Administration and Medicaid programs in 298 other states by providing the agency and programs with the 299 information needed to accomplish the purpose and objective of 300 this subsection. 301 (8) PAYROLL DEDUCTION AUTHORITY.—The payroll deduction 302 authority provided under s. 1009.975 applies to the Florida 303 Prepaid College Board and Florida ABLE, Inc., for purposes of 304 administering this section. 305 (9) REPORTS.— 306 (a) On or before November 1, 2015, Florida ABLE, Inc., 307 shall prepare a report on the status of the establishment of the 308 Florida ABLE program by Florida ABLE, Inc. The report must also 309 include, if warranted, recommendations for statutory changes to 310 enhance the effectiveness and efficiency of the program. Florida 311 ABLE, Inc., shall submit copies of the report to the Governor, 312 the President of the Senate, and the Speaker of the House of 313 Representatives. 314 (b) On or before March 31 of each year, Florida ABLE, Inc., 315 shall prepare or cause to be prepared a report setting forth in 316 appropriate detail an accounting of the Florida ABLE program 317 which includes a description of the financial condition of the 318 program at the close of the fiscal year. Florida ABLE, Inc., 319 shall submit copies of the report to the Governor, the President 320 of the Senate, the Speaker of the House of Representatives, and 321 the minority leaders of the Senate and the House of 322 Representatives and shall make the report available to each 323 designated beneficiary. The accounts of the Florida ABLE program 324 are subject to annual audit by the Auditor General. 325 (10) RULES.—The Florida Prepaid College Board shall adopt 326 rules to administer this section. Such rules must include, but 327 are not limited to: 328 (a) Specifying the procedures by which Florida ABLE, Inc., 329 shall be governed and operate, including requirements for the 330 budget of Florida ABLE, Inc., and conditions with which Florida 331 ABLE, Inc., must comply to use property, facilities, or personal 332 services of the Florida Prepaid College Board. 333 (b) The procedures for determining that an ABLE account has 334 been abandoned. 335 (c) Adoption of provisions determined necessary by the 336 Florida Prepaid College Board for the Florida ABLE program to 337 retain its status as a qualified ABLE program or the tax-exempt 338 status or other similar status of the program or its 339 participants under the Internal Revenue Code. Florida ABLE, 340 Inc., shall inform participants in the Florida ABLE program of 341 changes to the tax or securities status of their interests in 342 the ABLE program and participation agreements. 343 (11) STATE OUTREACH PARTNERS.—The Agency for Health Care 344 Administration, the Agency for Persons with Disabilities, the 345 Department of Children and Families, and the Department of 346 Education shall assist, cooperate, and coordinate with Florida 347 ABLE, Inc., in the provision of public information and outreach 348 for the Florida ABLE program. 349(12) REPEAL.—In accordance with s. 20.058, this section is350repealed October 1, 2020, unless reviewed and saved from repeal351by the Legislature.352 Section 2. This act shall take effect upon becoming a law.