S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4472

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             March 23, 2015
                               ___________

Introduced  by Sens. CARLUCCI, ADDABBO, ROBACH -- read twice and ordered
  printed, and when printed to be committed to the Committee on Banks

AN ACT to amend the banking law and the tax law, in relation  to  estab-
  lishing the NY ABLE act

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. This act shall be known and may be cited as the  "New  York
achieving a better life experience (NY ABLE) savings account act".
  S  2.  Legislative  intent.  The  legislative intent of this act is 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 to provide secure  funding
for  disability  related  expenses on behalf of designated beneficiaries
with disabilities that  will  supplement,  but  not  supplant,  benefits
provided through existing sources.
  S 3. The banking law is amended by adding a new article 2-D to read as
follows:
                               ARTICLE 2-D
     NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE SAVINGS ACCOUNT ACT
SECTION 90.   SHORT TITLE.
        90-A. DEFINITIONS.
        90-B. ESTABLISHMENT OF PLAN.
        90-C. NY ABLE ACCOUNT ADVISORY COMMITTEE.
        90-D. PROGRAM REQUIREMENTS.
        90-E. DISTRIBUTION REQUIREMENTS.
        90-F. POWERS OF THE COMPTROLLER.
  S 90. SHORT TITLE.
  THIS  ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE "NEW YORK ACHIEV-
ING A BETTER LIFE EXPERIENCE (NY ABLE) SAVINGS ACCOUNT ACT".
  S 90-A. DEFINITIONS.
  AS USED IN THIS ARTICLE:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10067-01-5
              

S. 4472                             2

  1. "SUPERINTENDENT" MEANS THE NEW YORK STATE SUPERINTENDENT OF  FINAN-
CIAL SERVICES.
  2.  "FINANCIAL  ORGANIZATION"  MEANS  AN ORGANIZATION AUTHORIZED TO DO
BUSINESS IN THE STATE OF NEW YORK AND (A) WHICH IS AN AUTHORIZED FIDUCI-
ARY TO ACT AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS
ENTITLED "EMPLOYEE RETIREMENT INCOME  SECURITY  ACT  OF  1974"  AS  SUCH
PROVISIONS  MAY  BE  AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPANY;
AND (B)(I) IS LICENSED OR CHARTERED BY THE STATE DEPARTMENT OF FINANCIAL
SERVICES, (II) IS CHARTERED BY AN  AGENCY  OF  THE  FEDERAL  GOVERNMENT,
(III)  IS  SUBJECT  TO THE JURISDICTION AND REGULATION OF THE SECURITIES
AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT, OR (IV) IS ANY  OTHER
ENTITY  OTHERWISE  AUTHORIZED TO ACT IN THIS STATE AS A TRUSTEE PURSUANT
TO THE PROVISIONS OF AN ACT OF CONGRESS  ENTITLED  "EMPLOYEE  RETIREMENT
INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME
TO TIME.
  3.  "ACCOUNT"  OR  "NY  ABLE ACCOUNT" SHALL MEAN AN INDIVIDUAL SAVINGS
ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
  4. "ACCOUNT OWNER" SHALL MEAN THE DESIGNATED BENEFICIARY WHO OPENS THE
NY ABLE ACCOUNT OR OTHER PERSON WHO OPENS THE NY ABLE ACCOUNT ON  BEHALF
OF  THE  DESIGNATED  BENEFICIARY IN COMPLIANCE WITH SECTION FIVE HUNDRED
TWENTY-NINE-A.
  5. "COMPTROLLER" SHALL MEAN THE COMPTROLLER OF THE STATE OF NEW YORK.
  6. "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT  OR
ACCOUNTS,  THE  INDIVIDUAL  WITH  A  DISABILITY WHO IS DESIGNATED AS THE
INDIVIDUAL WHOSE QUALIFIED EXPENSES ARE EXPECTED TO  BE  PAID  FROM  THE
ACCOUNT.  THE  "DESIGNATED  BENEFICIARY"  MUST BE A RESIDENT OF NEW YORK
STATE OR A RESIDENT OF A STATE THAT: (A) DOES NOT HAVE A QUALIFIED  ABLE
PROGRAM RECOGNIZED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A, AND (B) HAS
ENTERED  INTO A CONTRACT WITH NEW YORK STATE TO PROVIDE RESIDENTS OF THE
CONTRACTING STATE WITH ACCESS TO NEW YORK STATE'S ABLE PROGRAM.
  7. "QUALIFIED EXPENSES" SHALL MEAN "QUALIFIED DISABILITY EXPENSES"  AS
DEFINED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A.
  8.  "QUALIFIED  WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT TO
PAY FOR THE QUALIFIED EXPENSES OF THE DESIGNATED BENEFICIARY OF  THE  NY
ABLE ACCOUNT.
  9.  "NONQUALIFIED  WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT
OTHER THAN (A) A QUALIFIED WITHDRAWAL, OR (B) A WITHDRAWAL MADE  AS  THE
RESULT OF THE DEATH OF THE DESIGNATED BENEFICIARY OF AN ACCOUNT.
  10.  "MANAGEMENT  CONTRACT"  SHALL  MEAN  THE CONTRACT EXECUTED BY THE
COMPTROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY
AND MANAGER OF THE PROGRAM.
  11. "SAVINGS AGREEMENT" SHALL MEAN  AN  AGREEMENT  BETWEEN  THE  COMP-
TROLLER OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
  12.  "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED BY
THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
  13. "INDIVIDUAL WITH A DISABILITY" SHALL MEAN AN INDIVIDUAL WHO IS  AN
"ELIGIBLE   INDIVIDUAL"   AS   DEFINED   UNDER   SECTION   FIVE  HUNDRED
TWENTY-NINE-A.
  14. "SECTION FIVE HUNDRED TWENTY-NINE-A" MEANS  SECTION  FIVE  HUNDRED
TWENTY-FIVE-A  OF  THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY
SUCCESSOR PROVISION THERETO, AND ANY REGULATIONS PROMULGATED  THEREUNDER
OR  TAX ANNOUNCEMENTS OR OTHER BINDING REGULATORY GUIDANCE PROVIDED WITH
RESPECT THERETO.
  S 90-B. ESTABLISHMENT OF PLAN.
  1. THE SUPERINTENDENT SHALL ESTABLISH A NY ABLE ACCOUNT PLAN  FOR  ALL
ELIGIBLE INDIVIDUALS AND FAMILIES FOR THE PURPOSE OF SUPPORTING INDIVID-

S. 4472                             3

UALS  WITH DISABILITIES TO MAINTAIN HEALTH, INDEPENDENCE, AND QUALITY OF
LIFE. THE SUPERINTENDENT SHALL PROMULGATE ANY AND ALL  RULES  AND  REGU-
LATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE.
  2.  THE SUPERINTENDENT SHALL ENTER INTO WRITTEN AGREEMENTS WITH ONE OR
MORE FINANCIAL ORGANIZATIONS TO ADMINISTER THE NY ABLE  SAVINGS  ACCOUNT
PLAN  FOR  ELIGIBLE  INDIVIDUALS  AND  FAMILIES AND TO INVEST FUNDS HELD
PURSUANT TO SUCH PLAN.  THE  SUPERINTENDENT  SHALL  ESTABLISH  REPORTING
REQUIREMENTS  FOR SUCH FINANCIAL ORGANIZATIONS INCLUDING BUT NOT LIMITED
TO REPORTS TO THE SUPERINTENDENT, PARTICIPATING  INDIVIDUALS  AND  FAMI-
LIES,  PARTICIPATING EMPLOYERS, AND FEDERAL GOVERNMENT AGENCIES, REGARD-
ING THE FISCAL STATUS OF NY ABLE SAVINGS ACCOUNTS.
  3. NY ABLE ACCOUNTS SHALL BE  MAINTAINED  BY  FINANCIAL  ORGANIZATIONS
UNDER  WRITTEN  AGREEMENT WITH THE SUPERINTENDENT. SUCH FINANCIAL ORGAN-
IZATIONS SHALL BE SOLELY RESPONSIBLE FOR DISTRIBUTIONS  TO  PARTICIPANTS
PURSUANT TO THIS ARTICLE.
  4.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS  TO  THE CONTRARY, NY ABLE
ACCOUNTS SHALL NOT BE CONSIDERED  IN  DETERMINING  ELIGIBILITY  FOR  ANY
LOCAL OR STATE MEANS-TESTED PROGRAM.
  S 90-C. NY ABLE ACCOUNT ADVISORY COMMITTEE.
  1.  THE  SUPERINTENDENT  SHALL  ESTABLISH  A  NY ABLE ACCOUNT ADVISORY
COMMITTEE.
  2. THE SUPERINTENDENT SHALL APPOINT MEMBERS OF  THE  NY  ABLE  ACCOUNT
ADVISORY COMMITTEE IN CONSULTATION WITH THE NEW YORK STATE DEPARTMENT OF
HEALTH,  THE  OFFICE  OF  MENTAL HEALTH, AND THE OFFICE FOR PERSONS WITH
DEVELOPMENTAL DISABILITIES. THE MEMBERS SHALL BE APPOINTED FOR A TERM OF
THREE YEARS.
  (A) AT LEAST ONE HALF OF THE MEMBERS OF THE NY ABLE  ACCOUNT  ADVISORY
COMMITTEE MUST HAVE KNOWLEDGE, SKILL AND EXPERTISE IN ISSUES RELATING TO
INDIVIDUALS WITH DISABILITIES.
  (B) THE MEMBERS SHALL BE REPRESENTATIVE OF ALL GEOGRAPHIC AREAS OF THE
STATE.
  3. THE ADVISORY COMMITTEE SHALL:
  (A)  CONSIDER, STUDY AND REVIEW THE WORK OF THE SUPERINTENDENT AND THE
COMPTROLLER IN RELATION TO THE NY ABLE ACCOUNT PROGRAM.
  (B) ADVISE THE SUPERINTENDENT AND COMPTROLLER AND MAKE RECOMMENDATIONS
FOR THE IMPROVEMENT OF THE NY ABLE ACCOUNT PROGRAM.
  4. THE ADVISORY COMMITTEE SHALL MEET AT LEAST TWICE PER YEAR.
  5. THE MEMBERS OF THE ADVISORY COMMITTEE SHALL RECEIVE NO COMPENSATION
FOR THEIR SERVICES AS MEMBERS, BUT EACH SHALL BE ALLOWED  THE  NECESSARY
AND  ACTUAL  EXPENSES  INCURRED  IN THE PERFORMANCE OF HIS OR HER DUTIES
UNDER THIS SECTION.
  6. IN NO EVENT SHALL ANY MEMBER, OFFICER, OR EMPLOYEE OF THE  ADVISORY
COMMITTEE  BE  LIABLE  FOR DAMAGES IN ANY CIVIL ACTION FOR ANY ACT DONE,
FAILURE TO ACT, OR STATEMENT OR OPINION MADE, WHILE DISCHARGING  HIS  OR
HER  DUTIES  AS A MEMBER, OFFICER, OR EMPLOYEE OF THE ADVISORY COMMITTEE
IF HE OR SHE SHALL HAVE ACTED IN GOOD FAITH, WITH REASONABLE CARE.
  S 90-D. PROGRAM REQUIREMENTS.
  1. NY ABLE ACCOUNTS ESTABLISHED PURSUANT TO  THE  PROVISIONS  OF  THIS
ARTICLE SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION.
  2.  A NY ABLE ACCOUNT MAY BE OPENED ONLY BY THE DESIGNATED BENEFICIARY
UNLESS OTHERWISE PERMITTED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A.  IF
THE  DESIGNATED  BENEFICIARY OF THE ACCOUNT IS A MINOR OR HAS A GUARDIAN
OR OTHER FIDUCIARY APPOINTED FOR MANAGING  THE  BENEFICIARY'S  FINANCIAL
AFFAIRS,  THE  GUARDIAN OR FIDUCIARY FOR SUCH DESIGNATED BENEFICIARY MAY
SERVE AS THE ACCOUNT OWNER IF SUCH FORM OF OWNERSHIP IS PERMITTED OR NOT
PROHIBITED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A.

S. 4472                             4

  (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
THE PROGRAM AND CONTAIN THE FOLLOWING:
  (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
CATION NUMBER OF THE ACCOUNT OWNER;
  (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
  (III)  THE  NAME, ADDRESS AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
BENEFICIARY; AND
  (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
  (B) THE COMPTROLLER MAY ESTABLISH A NOMINAL FEE FOR SUCH APPLICATION.
  3. AN ACCOUNT OWNER MAY OWN ONLY ONE NY ABLE ACCOUNT UNLESS  OTHERWISE
PERMITTED BY SECTION FIVE HUNDRED TWENTY-NINE-A.
  4.  ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS TO
THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
  5. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
  6. CONTRIBUTIONS TO A NY ABLE ACCOUNT SHALL NOT EXCEED  THE  LIMIT  ON
ANNUAL    CONTRIBUTIONS   ESTABLISHED   UNDER   SECTION   FIVE   HUNDRED
TWENTY-NINE-A.
  7. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE  BALANCE  FROM  AN
ACCOUNT ON SIXTY DAYS NOTICE OR SUCH SHORTER PERIOD AS MAY BE AUTHORIZED
UNDER  RULES  GOVERNING THE PROGRAM. SUCH RULES SHALL INCLUDE PROVISIONS
THAT WILL GENERALLY ENABLE THE DETERMINATION AS TO WHETHER A  WITHDRAWAL
IS A NONQUALIFIED WITHDRAWAL OR A QUALIFIED WITHDRAWAL.
  8.  AN  ACCOUNT  OWNER  MAY  CHANGE  THE  DESIGNATED BENEFICIARY OF AN
ACCOUNT TO ANOTHER BENEFICIARY WHO IS QUALIFIED UNDER THE PROVISIONS  OF
THIS  ARTICLE  ONLY  TO  THE EXTENT PERMITTED UNDER SECTION FIVE HUNDRED
TWENTY-NINE-A.
  9. THE PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR  EACH  DESIGNATED
BENEFICIARY.
  10.  AN  ACCOUNT  OWNER SHALL BE PERMITTED TO DIRECT THE INVESTMENT OF
ANY CONTRIBUTIONS TO AN ACCOUNT OR THE EARNINGS THEREON NO MORE THAN TWO
TIMES IN ANY CALENDAR YEAR.
  11. NEITHER AN ACCOUNT OWNER NOT A DESIGNATED BENEFICIARY MAY  USE  AN
INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
  12.  THE COMPTROLLER SHALL PROMULGATE RULES AND REGULATIONS TO PREVENT
CONTRIBUTIONS ON BEHALF OF A DESIGNATED  BENEFICIARY  IN  EXCESS  OF  AN
AMOUNT  THAT WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE TO EXCEED A MAXI-
MUM ACCOUNT BALANCE, AS ESTABLISHED FROM  TIME  TO  TIME  BY  THE  COMP-
TROLLER.  SUCH  MAXIMUM AMOUNT SHALL REFLECT REASONABLE EXPENDITURES AND
SHALL REFLECT ANY LIMITATIONS DESCRIBED IN SECTION FIVE HUNDRED  TWENTY-
NINE-A.
  13.  THE  PROGRAM  SHALL ISSUE REPORTS AND NOTICES TO FEDERAL AGENCIES
AND DESIGNATED BENEFICIARIES AS  REQUIRED  UNDER  SECTION  FIVE  HUNDRED
TWENTY-NINE-A.
  14. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
EACH ACCOUNT OWNER AND PROSPECTIVE ACCOUNT OWNER OF A NY ABLE ACCOUNT:
  (A) THE TERMS AND CONDITIONS FOR PURCHASING A NY ABLE ACCOUNT;
  (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
  (C) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE SAVINGS AGREEMENT;
  (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
UNDER THE SAVINGS AGREEMENT;
  (E)  THE  TERMS  AND  CONDITIONS  UNDER  WHICH  MONEY MAY BE WHOLLY OR
PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
  (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
DISTRIBUTIONS FROM ACCOUNTS; AND

S. 4472                             5

  (G) ALL OTHER RIGHTS AND  OBLIGATIONS  PURSUANT  TO  NY  ABLE  SAVINGS
AGREEMENTS,  AND  ANY  OTHER  TERMS,  CONDITIONS,  AND PROVISIONS DEEMED
NECESSARY AND APPROPRIATE BY THE SUPERINTENDENT AND THE COMPTROLLER.
  15.  NY ABLE SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION FOURTEEN-C
OF THIS CHAPTER AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMULGATED THER-
EUNDER.
  S 90-E. DISTRIBUTION REQUIREMENTS.
  1. DESIGNATED BENEFICIARIES SHALL BE ELIGIBLE FOR A DISTRIBUTION  FROM
THE  ACCUMULATED  FUNDS  DEFERRED TO THEIR NY ABLE SAVING ACCOUNT ESTAB-
LISHED PURSUANT TO  THIS  ARTICLE,  IN  FULL  AND  PARTIAL  DISBURSEMENT
OPTIONS FOR QUALIFIED EXPENSES.
  2.  UNDER  THE NY ABLE SAVINGS ACCOUNT PLAN, AMOUNTS SHALL NOT BE MADE
AVAILABLE TO DESIGNATED BENEFICIARIES UNLESS THE DESIGNATED  BENEFICIARY
HAS BEEN DETERMINED TO BE AN INDIVIDUAL WITH A DISABILITY.
  S 90-F. POWERS OF THE COMPTROLLER.
  1.  THE  COMPTROLLER MAY IMPLEMENT THE NY ABLE SAVINGS ACCOUNT PROGRAM
THROUGH USE OF  FINANCIAL  ORGANIZATIONS  AS  ACCOUNT  DEPOSITORIES  AND
MANAGERS. UNDER THE PROGRAM, INDIVIDUALS MAY ESTABLISH ACCOUNTS DIRECTLY
WITH AN ACCOUNT DEPOSITORY.
  2.  THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO ACT AS DEPOSITORIES AND MANGERS FROM THE PROGRAM. FINANCIAL ORGANIZA-
TIONS SUBMITTING PROPOSALS  SHALL  DESCRIBE  THE  INVESTMENT  INSTRUMENT
WHICH  WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS PROGRAM
DEPOSITORIES AND MANGERS THE  FINANCIAL  ORGANIZATION,  FROM  AMONG  THE
BIDDING  FINANCIAL ORGANIZATIONS THAT DEMONSTRATES THE MOST ADVANTAGEOUS
COMBINATION, BOTH TO POTENTIAL PROGRAM PARTICIPANTS AND THIS  STATE,  OF
THE FOLLOWING FACTORS:
  (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
  (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
  (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
OF OBTAINING CARE FOR INDIVIDUALS WITH DISABILITIES;
  (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
AND REPORTING REQUIREMENTS;
  (E)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
  (F) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO  PERSONS  FOR  OPENING
ACCOUNTS;
  (G)  THE  MINIMUM  INITIAL  DEPOSIT AND MINIMUM CONTRIBUTIONS THAT THE
FINANCIAL ORGANIZATION WILL REQUIRE;
  (H) THE ABILITY OF BANKING ORGANIZATIONS TO  ACCEPT  ELECTRONIC  WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
  (I)  OTHER  BENEFITS  TO  THE  STATE  OR ITS RESIDENTS INCLUDED IN THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM.
  3. THE COMPTROLLER MAY ENTER INTO A CONTRACT WITH A  FINANCIAL  ORGAN-
IZATION.  SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR MORE
TYPES OF INVESTMENT INSTRUMENT.
  4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
THE PROGRAM.
  5. A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS  REQUIRING
THE FINANCIAL ORGANIZATION TO:
  (A)  TAKE  ANY  ACTION REQUIRED TO KEEP THE PROGRAM IN COMPLIANCE WITH
REQUIREMENTS OF SECTION 90-C OF THIS ARTICLE;
  (B) KEEP ADEQUATE RECORDS OF EACH ACCOUNT, KEEP  EACH  ACCOUNT  SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND PROVIDE THE COMPTROLLER WITH INFORMA-
TION AS REQUIRED;

S. 4472                             6

  (C) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
WITH SUCH INFORMATION NECESSARY TO DETERMINE COMPLIANCE;
  (D) PROVIDE THE COMPTROLLER OR HIS OR HER DESIGNEE ACCESS TO THE BOOKS
AND  RECORDS  OF  THE  PROGRAM MANAGER TO THE EXTENT NEEDED TO DETERMINE
COMPLIANCE WITH THE CONTRACT;
  (E) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
  (F) BE AUDITED AT  LEAST  ANNUALLY  BY  A  FIRM  OF  CERTIFIED  PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER; AND
  (G)  PROVIDE THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS AND
REPORTS MADE BY IT DURING THE TERM OF THE MANAGEMENT CONTRACT  OR  WHILE
IT  IS  HOLDING ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS OR REPORTS
THAT WILL NOT BECOME PART OF THE PROGRAM. THE PROGRAM MANAGER SHALL MAKE
AVAILABLE FOR REVIEW BY THE COMPTROLLER  THE  RESULTS  OF  ANY  PERIODIC
EXAMINATION  OF SUCH MANAGER BY ANY STATE OF FEDERAL BANKING, INSURANCE,
OR SECURITIES COMMISSION, EXCEPT TO  THE  EXTENT  THAT  SUCH  REPORT  OR
REPORTS  MAY  NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES OF SUCH
COMMISSION.
  6. THE COMPTROLLER MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF THE
OPERATIONS AND FINANCIAL POSITION OF THE PROGRAM DEPOSITORY AND  MANAGER
AT  ANY TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED ABOUT THE
FINANCIAL POSITION,  THE  RECORDKEEPING  PRACTICES,  OR  THE  STATUS  OF
ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
  7.  DURING  THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS. SUCH EXAMINATION SHALL BE CONDUCTED  AT  LEAST  BIENNIALLY  IF
SUCH  MANAGER  IS  NOT  OTHERWISE SUBJECT TO PERIODIC EXAMINATION BY THE
SUPERINTENDENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR OTHER SIMI-
LAR ENTITY.
  8. (A) IF SELECTION OF A FINANCIAL ORGANIZATION AS A  PROGRAM  MANAGER
OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
  (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
  (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
  (III)  NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL ORGANIZATION;
AND
  (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
  (B) IF THE  COMPTROLLER  TERMINATES  A  FINANCIAL  ORGANIZATION  AS  A
PROGRAM  MANAGER OR DEPOSITORY, HE OR SHE SHALL TAKE CUSTODY OF ACCOUNTS
HELD BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY  TRANSFER
SUCH  ACCOUNTS  TO  ANOTHER FINANCIAL ORGANIZATION THAT IS SELECTED AS A
PROGRAM MANAGER OR DEPOSITORY AND INTO INVESTMENT INSTRUMENTS AS SIMILAR
TO THE ORIGINAL INSTRUMENTS AS POSSIBLE.
  9. THE COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECESSARY
AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
  S 4. Section 237 of the banking law is amended by adding a new  subdi-
vision 9 to read as follows:
  9.  SUBJECT  TO  ANY  REGULATIONS  AND  RESTRICTIONS PRESCRIBED BY THE
SUPERINTENDENT OF FINANCIAL SERVICES, A SAVINGS BANK SHALL HAVE POWER TO
ACT AS TRUSTEE OF A NEW YORK ACHIEVING  A  BETTER  LIFE  EXPERIENCE  (NY
ABLE)  SAVINGS  ACCOUNT  ESTABLISHED  PURSUANT  TO ARTICLE TWO-D OF THIS
CHAPTER, PROVIDED THAT THE PROVISIONS OF THE WRITTEN  GOVERNING  INSTRU-
MENT  CREATING  THE TRUST REQUIRE THE FUNDS OF SUCH TRUST TO BE INVESTED
EXCLUSIVELY IN DEPOSITS IN SAVINGS BANKS.

S. 4472                             7

  S 5. Subsection (c) of section 612 of the tax law is amended by adding
two new paragraphs 42 and 43 to read as follows:
  (42) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
ONE  OR  MORE  "NY ABLE" ACCOUNTS ESTABLISHED UNDER ARTICLE TWO-D OF THE
BANKING LAW, PROVIDED, HOWEVER THAT SUCH EXCLUSION  SHALL  BE  AVAILABLE
ONLY TO THE ACCOUNT OWNER AND NOT TO ANY OTHER PERSON.
  (43)  DISTRIBUTIONS FOR QUALIFIED EXPENSES OF A DESIGNATED BENEFICIARY
FROM A "NY ABLE" ACCOUNT ESTABLISHED UNDER ARTICLE TWO-D OF THE  BANKING
LAW,  TO  THE  EXTENT  INCLUDIBLE IN GROSS INCOME FOR FEDERAL INCOME TAX
PURPOSES.
  S 6. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal of any  rules  or  regulations
necessary  for  the implementation of this act on its effective date are
authorized and directed to be made  and  completed  on  or  before  such
effective date.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4472--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             March 23, 2015
                               ___________

Introduced  by  Sens.  CARLUCCI, ADDABBO, AMEDORE, AVELLA, BOYLE, CROCI,
  DIAZ, DILAN, ESPAILLAT, FARLEY, FELDER, FUNKE, GALLIVAN, GOLDEN, GRIF-
  FO, HAMILTON,  HOYLMAN,  KLEIN,  LANZA,  LARKIN,  LATIMER,  MARCHIONE,
  MARTINS, MONTGOMERY, NOZZOLIO, O'MARA, ORTT, PANEPINTO, PARKER, PERAL-
  TA,  RANZENHOFER,  RITCHIE,  RIVERA, ROBACH, SANDERS, SAVINO, SERRANO,
  VALESKY -- read twice and ordered printed,  and  when  printed  to  be
  committed  to  the  Committee  on  Banks -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT  to  amend the banking law, the social services law, the tax law
  and the civil practice law and rules, in relation to establishing  the
  NY ABLE act

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. This act shall be known and may be cited as the  "New  York
achieving a better life experience (NY ABLE) savings account act".
  S  2.  Legislative  intent.  The  legislative intent of this act is 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 to provide secure  funding
for  disability  related  expenses on behalf of designated beneficiaries
with disabilities that  will  supplement,  but  not  supplant,  benefits
provided  through  existing sources, including but not limited to means-
tested federal programs of assistance.
  S 3. The banking law is amended by adding a new article 2-D to read as
follows:
                               ARTICLE 2-D
     NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE SAVINGS ACCOUNT ACT
SECTION 90.   SHORT TITLE.
        90-A. DEFINITIONS.
        90-B. ESTABLISHMENT OF PLAN.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10067-02-5
              

S. 4472--A                          2

        90-C. NY ABLE ACCOUNT ADVISORY COUNCIL.
        90-D. PROGRAM REQUIREMENTS.
        90-E. DISTRIBUTION REQUIREMENTS.
        90-F. POWERS OF THE COMPTROLLER.
  S  90.  SHORT TITLE.   THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "NEW YORK ACHIEVING A  BETTER  LIFE  EXPERIENCE  (NY  ABLE)  SAVINGS
ACCOUNT ACT".
  S 90-A. DEFINITIONS.  AS USED IN THIS ARTICLE:
  1.  "FINANCIAL  ORGANIZATION"  MEANS  AN ORGANIZATION AUTHORIZED TO DO
BUSINESS IN THE STATE OF NEW YORK AND (A) WHICH IS AN AUTHORIZED FIDUCI-
ARY TO ACT AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS
ENTITLED "EMPLOYEE RETIREMENT INCOME  SECURITY  ACT  OF  1974"  AS  SUCH
PROVISIONS  MAY  BE  AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPANY;
AND (B)(I) IS LICENSED OR CHARTERED BY THE STATE DEPARTMENT OF FINANCIAL
SERVICES, (II) IS CHARTERED BY AN  AGENCY  OF  THE  FEDERAL  GOVERNMENT,
(III)  IS  SUBJECT  TO THE JURISDICTION AND REGULATION OF THE SECURITIES
AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT,  (IV)  IS  ANY  OTHER
ENTITY  OTHERWISE  AUTHORIZED TO ACT IN THIS STATE AS A TRUSTEE PURSUANT
TO THE PROVISIONS OF AN ACT OF CONGRESS  ENTITLED  "EMPLOYEE  RETIREMENT
INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME
TO  TIME  OR  AN  ENTITY DESCRIBED IN CLAUSE (VI) OF SUBPARAGRAPH TWO OF
PARAGRAPH (6) OF SUBDIVISION TWO OF SECTION THREE HUNDRED  SIXTY-SIX  OF
THE SOCIAL SERVICES LAW.
  2.  "ACCOUNT"  OR  "NY  ABLE ACCOUNT" SHALL MEAN AN INDIVIDUAL SAVINGS
ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
  3. "ACCOUNT OWNER" SHALL MEAN THE DESIGNATED BENEFICIARY WHO OPENS THE
NY ABLE ACCOUNT OR OTHER PERSON WHO OPENS THE NY ABLE ACCOUNT ON  BEHALF
OF  THE  DESIGNATED  BENEFICIARY IN COMPLIANCE WITH SECTION FIVE HUNDRED
TWENTY-NINE-A.
  4. "COMPTROLLER" SHALL MEAN THE COMPTROLLER OF THE STATE OF NEW YORK.
  5. "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT  OR
ACCOUNTS,  THE  INDIVIDUAL  WITH  A  DISABILITY WHO IS DESIGNATED AS THE
INDIVIDUAL WHOSE QUALIFIED EXPENSES ARE EXPECTED TO  BE  PAID  FROM  THE
ACCOUNT.  THE  "DESIGNATED  BENEFICIARY"  MUST BE A RESIDENT OF NEW YORK
STATE OR A RESIDENT OF A STATE THAT: (A) DOES NOT HAVE A QUALIFIED  ABLE
PROGRAM RECOGNIZED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A, AND (B) HAS
ENTERED  INTO A CONTRACT WITH NEW YORK STATE TO PROVIDE RESIDENTS OF THE
CONTRACTING STATE WITH ACCESS TO NEW YORK STATE'S ABLE PROGRAM.
  6. "QUALIFIED EXPENSES" SHALL MEAN "QUALIFIED DISABILITY EXPENSES"  AS
DEFINED  UNDER  SECTION FIVE HUNDRED TWENTY-NINE-A AS IT SHALL BE INTER-
PRETED AND APPLIED BY REGULATION OF THE UNITED STATES SECRETARY  OF  THE
TREASURY.
  7.  "QUALIFIED  WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT TO
PAY FOR THE QUALIFIED EXPENSES OF THE DESIGNATED BENEFICIARY OF  THE  NY
ABLE ACCOUNT.
  8.  "NONQUALIFIED  WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT
OTHER THAN (A) A QUALIFIED WITHDRAWAL, OR (B) A WITHDRAWAL MADE  AS  THE
RESULT OF THE DEATH OF THE DESIGNATED BENEFICIARY OF AN ACCOUNT.
  9. "MANAGEMENT CONTRACT" SHALL MEAN THE CONTRACT EXECUTED BY THE COMP-
TROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY AND
MANAGER OF THE PROGRAM.
  10.  "SAVINGS  AGREEMENT"  SHALL  MEAN  AN AGREEMENT BETWEEN THE COMP-
TROLLER OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
  11. "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED  BY
THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.

S. 4472--A                          3

  12.  "INDIVIDUAL WITH A DISABILITY" SHALL MEAN AN INDIVIDUAL WHO IS AN
"ELIGIBLE  INDIVIDUAL"   AS   DEFINED   UNDER   SECTION   FIVE   HUNDRED
TWENTY-NINE-A.
  13.  "SECTION  FIVE  HUNDRED TWENTY-NINE-A" MEANS SECTION FIVE HUNDRED
TWENTY-NINE-A OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,  OR  ANY
SUCCESSOR  PROVISION THERETO, AND ANY REGULATIONS PROMULGATED THEREUNDER
OR TAX ANNOUNCEMENTS OR OTHER BINDING REGULATORY GUIDANCE PROVIDED  WITH
RESPECT THERETO.
  S  90-B.  ESTABLISHMENT  OF PLAN.   1. THE COMPTROLLER IN CONSULTATION
WITH THE COMMISSIONERS OF THE OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISA-
BILITIES, OFFICE OF MENTAL HEALTH AND THE  DEPARTMENT  OF  HEALTH  SHALL
ESTABLISH  A NY ABLE ACCOUNT PLAN FOR ALL ELIGIBLE INDIVIDUALS AND FAMI-
LIES FOR THE PURPOSE OF  SUPPORTING  INDIVIDUALS  WITH  DISABILITIES  TO
MAINTAIN  HEALTH,  INDEPENDENCE,  AND  QUALITY  OF LIFE. THE COMPTROLLER
SHALL PROMULGATE ANY AND ALL RULES AND  REGULATIONS  NECESSARY  FOR  THE
IMPLEMENTATION OF THIS ARTICLE.
  2.  THE  COMPTROLLER  SHALL  ENTER INTO WRITTEN AGREEMENTS WITH ONE OR
MORE FINANCIAL ORGANIZATIONS TO ADMINISTER THE NY ABLE  SAVINGS  ACCOUNT
PLAN  FOR  ELIGIBLE  INDIVIDUALS  AND  FAMILIES AND TO INVEST FUNDS HELD
PURSUANT  TO  SUCH  PLAN.  THE  COMPTROLLER  SHALL  ESTABLISH  REPORTING
REQUIREMENTS  FOR SUCH FINANCIAL ORGANIZATIONS INCLUDING BUT NOT LIMITED
TO REPORTS TO THE COMPTROLLER, PARTICIPATING INDIVIDUALS  AND  FAMILIES,
PARTICIPATING  EMPLOYERS, AND FEDERAL GOVERNMENT AGENCIES, REGARDING THE
FISCAL STATUS AND STATUTORY AND REGULATORY COMPLIANCE OF NY ABLE SAVINGS
ACCOUNTS.
  3. NY ABLE ACCOUNTS SHALL BE  MAINTAINED  BY  FINANCIAL  ORGANIZATIONS
UNDER  WRITTEN  AGREEMENT WITH THE COMPTROLLER. SUCH FINANCIAL ORGANIZA-
TIONS SHALL BE SOLELY  RESPONSIBLE  FOR  DISTRIBUTIONS  TO  PARTICIPANTS
PURSUANT TO THIS ARTICLE AND DOCUMENTATION AND REPORTING THEREOF.
  4.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS  TO  THE CONTRARY, NY ABLE
ACCOUNTS SHALL NOT BE CONSIDERED  IN  DETERMINING  ELIGIBILITY  FOR  ANY
FEDERAL, STATE  OR LOCAL MEANS-TESTED PROGRAM.
  S 90-C. NY ABLE ACCOUNT ADVISORY COUNCIL. 1. THE NY ABLE ACCOUNT ADVI-
SORY  COUNCIL  IS  HEREBY ESTABLISHED AND SHALL CONSIST OF THE FOLLOWING
PERSONS OR THEIR DESIGNEES: THE COMPTROLLER,  THE  COMMISSIONER  OF  THE
OFFICE  OF MENTAL HEALTH, THE COMMISSIONER OF THE OFFICE FOR PEOPLE WITH
DEVELOPMENTAL  DISABILITIES,  THE  COMMISSIONER  OF  THE  DEPARTMENT  OF
HEALTH,  THE SUPERINTENDENT, THE COMMISSIONER OF THE DEPARTMENT OF TAXA-
TION AND FINANCE, THE COMMISSIONER OF THE OFFICE OF TEMPORARY DISABILITY
ASSISTANCE. IN ADDITION, THE COUNCIL  SHALL  CONSIST  OF  THE  FOLLOWING
PERSONS: THREE PERSONS APPOINTED BY THE GOVERNOR, TWO EACH BY THE TEMPO-
RARY  PRESIDENT OF THE SENATE AND BY THE SPEAKER OF THE ASSEMBLY.  THESE
INDIVIDUALS MUST HAVE KNOWLEDGE, SKILL AND EXPERTISE IN ISSUES  RELATING
TO  INDIVIDUALS WITH DISABILITIES; EXPERTISE IN SERVICES TO PERSONS WITH
DISABILITIES; AND KNOWLEDGE IN MANAGEMENT  AND  SUPPORT  OF  THE  FISCAL
AFFAIRS OF SUCH PERSONS WITH DISABILITIES.
  2.  THE  MEMBERS  SHALL  BE  APPOINTED FOR A TERM OF THREE YEARS.  THE
MEMBERS SHALL BE REPRESENTATIVE OF ALL GEOGRAPHIC AREAS OF THE STATE.
  3. THE ADVISORY COUNCIL SHALL:
  (A) CONSIDER, STUDY AND REVIEW THE WORK OF THE COMPTROLLER IN RELATION
TO THE ESTABLISHMENT OF THE NY ABLE ACCOUNT PROGRAM.
  (B) ADVISE THE COMPTROLLER AND MAKE RECOMMENDATIONS FOR  THE  IMPROVE-
MENT OF THE NY ABLE ACCOUNT PROGRAM.
  (C)  ADVISE  THE  COMPTROLLER  ON  LEGISLATIVE AND REGULATORY ACTIVITY
WHICH MAY BE REQUIRED FOR COMPLIANCE.
  4. THE ADVISORY COUNCIL SHALL MEET AT LEAST FOUR TIMES PER YEAR.

S. 4472--A                          4

  5. THE MEMBERS OF THE ADVISORY COUNCIL SHALL RECEIVE  NO  COMPENSATION
FOR  THEIR  SERVICES AS MEMBERS, BUT EACH SHALL BE ALLOWED THE NECESSARY
AND ACTUAL EXPENSES INCURRED IN THE PERFORMANCE OF  HIS  OR  HER  DUTIES
UNDER THIS SECTION.
  6.  IN NO EVENT SHALL ANY MEMBER, OFFICER, OR EMPLOYEE OF THE ADVISORY
COUNCIL BE LIABLE FOR DAMAGES IN ANY CIVIL  ACTION  FOR  ANY  ACT  DONE,
FAILURE  TO  ACT, OR STATEMENT OR OPINION MADE, WHILE DISCHARGING HIS OR
HER DUTIES AS A MEMBER, OFFICER, OR EMPLOYEE OF THE ADVISORY COUNCIL  IF
HE OR SHE SHALL HAVE ACTED IN GOOD FAITH, WITH REASONABLE CARE.
  S  90-D. PROGRAM REQUIREMENTS.  1. NY ABLE ACCOUNTS ESTABLISHED PURSU-
ANT TO  THE  PROVISIONS  OF  THIS  ARTICLE  SHALL  BE  GOVERNED  BY  THE
PROVISIONS OF THIS SECTION.
  2.  A NY ABLE ACCOUNT MAY BE OPENED ONLY BY THE DESIGNATED BENEFICIARY
UNLESS OTHERWISE PERMITTED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A.  IF
THE  DESIGNATED  BENEFICIARY OF THE ACCOUNT IS A MINOR OR HAS A GUARDIAN
OR OTHER FIDUCIARY APPOINTED FOR MANAGING  THE  BENEFICIARY'S  FINANCIAL
AFFAIRS,  THE  GUARDIAN OR FIDUCIARY FOR SUCH DESIGNATED BENEFICIARY MAY
SERVE AS THE ACCOUNT OWNER IF SUCH FORM OF OWNERSHIP IS PERMITTED OR NOT
PROHIBITED UNDER SECTION FIVE HUNDRED TWENTY-NINE-A.
  (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
THE PROGRAM AND CONTAIN THE FOLLOWING:
  (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
CATION NUMBER OF THE ACCOUNT OWNER;
  (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
  (III) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OF  THE  DESIGNATED
BENEFICIARY; AND
  (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
  (B)  THE  COMPTROLLER  MAY  ESTABLISH  A  MINIMAL NOMINAL FEE FOR SUCH
APPLICATION TO OFFSET THE ADMINISTRATIVE COSTS OF THIS PROGRAM.
  3. AN ACCOUNT OWNER MAY OWN ONLY ONE NY ABLE ACCOUNT UNLESS  OTHERWISE
PERMITTED  BY  ANY OTHER FEDERAL OR STATE LAW, RULE OR REGULATION TO THE
CONTRARY.
  4. ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS  TO
THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
  5. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
  6.  CONTRIBUTIONS  TO  A NY ABLE ACCOUNT SHALL NOT EXCEED THE LIMIT ON
ANNUAL   CONTRIBUTIONS   ESTABLISHED   UNDER   SECTION   FIVE    HUNDRED
TWENTY-NINE-A.
  7.  AN  ACCOUNT  OWNER MAY WITHDRAW ALL OR PART OF THE BALANCE FROM AN
ACCOUNT ON SIXTY DAYS NOTICE OR SUCH SHORTER PERIOD AS MAY BE AUTHORIZED
UNDER RULES GOVERNING THE PROGRAM. SUCH RULES SHALL  INCLUDE  PROVISIONS
THAT  WILL GENERALLY ENABLE THE DETERMINATION AS TO WHETHER A WITHDRAWAL
IS A NONQUALIFIED WITHDRAWAL OR A QUALIFIED WITHDRAWAL.
  8. AN ACCOUNT OWNER  MAY  CHANGE  THE  DESIGNATED  BENEFICIARY  OF  AN
ACCOUNT  TO ANOTHER BENEFICIARY WHO IS QUALIFIED UNDER THE PROVISIONS OF
THIS ARTICLE ONLY TO THE EXTENT PERMITTED  UNDER  SECTION  FIVE  HUNDRED
TWENTY-NINE-A.
  9.  THE  PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR EACH DESIGNATED
BENEFICIARY.
  10. AN ACCOUNT OWNER SHALL BE PERMITTED TO DIRECT  THE  INVESTMENT  OF
ANY CONTRIBUTIONS TO AN ACCOUNT OR THE EARNINGS THEREON NO MORE THAN TWO
TIMES IN ANY CALENDAR YEAR.
  11.  NEITHER  AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY MAY USE AN
INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.

S. 4472--A                          5

  12. THE COMPTROLLER SHALL PROMULGATE RULES AND REGULATIONS TO  PREVENT
CONTRIBUTIONS  ON  BEHALF  OF  A  DESIGNATED BENEFICIARY IN EXCESS OF AN
AMOUNT THAT WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE TO EXCEED A  MAXI-
MUM  ACCOUNT  BALANCE,  AS  ESTABLISHED  FROM  TIME TO TIME BY THE COMP-
TROLLER.  SUCH  MAXIMUM AMOUNT SHALL REFLECT REASONABLE EXPENDITURES AND
SHALL REFLECT ANY LIMITATIONS DESCRIBED IN SECTION FIVE HUNDRED  TWENTY-
NINE-A.
  13.  THE  PROGRAM  SHALL ISSUE REPORTS AND NOTICES TO FEDERAL AGENCIES
AND DESIGNATED BENEFICIARIES AS  REQUIRED  UNDER  SECTION  FIVE  HUNDRED
TWENTY-NINE-A.
  14. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
EACH ACCOUNT OWNER AND PROSPECTIVE ACCOUNT OWNER OF A NY ABLE ACCOUNT:
  (A) THE TERMS AND CONDITIONS FOR PURCHASING A NY ABLE ACCOUNT;
  (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
  (C) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE SAVINGS AGREEMENT;
  (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
UNDER THE SAVINGS AGREEMENT;
  (E)  THE  TERMS  AND  CONDITIONS  UNDER  WHICH  MONEY MAY BE WHOLLY OR
PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
  (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
DISTRIBUTIONS FROM ACCOUNTS;
  (G) ALL OTHER RIGHTS AND  OBLIGATIONS  PURSUANT  TO  NY  ABLE  SAVINGS
AGREEMENTS,  AND  ANY  OTHER  TERMS,  CONDITIONS,  AND PROVISIONS DEEMED
NECESSARY AND APPROPRIATE BY THE COMPTROLLER; AND
  (H) PURSUANT TO THE ENACTMENT OF FEDERAL REGULATION THAT, IRRESPECTIVE
OF THE SOURCE OF NY ABLE ACCOUNT DEPOSITIONS, UPON DEATH OF THE  BENEFI-
CIARY OR OTHER TERMINATION OF THE ACCOUNT, THE BALANCE REMAINING WILL BE
SUBJECT  TO  STATE  RECOVERY FOR MEDICAID PAYMENTS MADE ON BEHALF OF THE
BENEFICIARY AFTER THE DATE OF ESTABLISHMENT OF THE ACCOUNT.
  15. NY ABLE SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION  FOURTEEN-C
OF THIS CHAPTER AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMULGATED THER-
EUNDER.
  S  90-E. DISTRIBUTION REQUIREMENTS.  1. DESIGNATED BENEFICIARIES SHALL
BE ELIGIBLE FOR A DISTRIBUTION FROM THE ACCUMULATED  FUNDS  DEFERRED  TO
THEIR  NY  ABLE  SAVING ACCOUNT ESTABLISHED PURSUANT TO THIS ARTICLE, IN
FULL AND PARTIAL DISBURSEMENT OPTIONS FOR QUALIFIED EXPENSES.
  2. UNDER THE NY ABLE SAVINGS ACCOUNT PLAN, AMOUNTS SHALL NOT  BE  MADE
AVAILABLE  TO DESIGNATED BENEFICIARIES UNLESS THE DESIGNATED BENEFICIARY
HAS BEEN DETERMINED TO BE AN INDIVIDUAL WITH A DISABILITY.
  S 90-F. POWERS OF THE COMPTROLLER.  1. THE COMPTROLLER  MAY  IMPLEMENT
THE  NY  ABLE SAVINGS ACCOUNT PROGRAM THROUGH USE OF FINANCIAL ORGANIZA-
TIONS AS ACCOUNT DEPOSITORIES AND MANAGERS. UNDER THE PROGRAM,  INDIVID-
UALS MAY ESTABLISH ACCOUNTS DIRECTLY WITH AN ACCOUNT DEPOSITORY.
  2.  THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO ACT AS DEPOSITORIES AND MANAGERS FROM THE PROGRAM.  FINANCIAL  ORGAN-
IZATIONS  SUBMITTING  PROPOSALS SHALL DESCRIBE THE INVESTMENT INSTRUMENT
WHICH WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS  PROGRAM
DEPOSITORIES  AND  MANAGERS  FROM THE FINANCIAL ORGANIZATION, FROM AMONG
THE BIDDING FINANCIAL ORGANIZATIONS THAT DEMONSTRATES THE MOST  ADVANTA-
GEOUS  COMBINATION,  BOTH  TO  POTENTIAL  PROGRAM  PARTICIPANTS AND THIS
STATE, OF THE FOLLOWING FACTORS:
  (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
  (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
  (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
OF OBTAINING CARE FOR INDIVIDUALS WITH DISABILITIES;

S. 4472--A                          6

  (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
AND REPORTING REQUIREMENTS;
  (E)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
  (F) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO  PERSONS  FOR  OPENING
ACCOUNTS OR FEES RELATED TO THE MANAGEMENT OF ACCOUNTS;
  (G)  THE  MINIMUM  INITIAL  DEPOSIT AND MINIMUM CONTRIBUTIONS THAT THE
FINANCIAL ORGANIZATION WILL REQUIRE;
  (H) THE ABILITY OF BANKING ORGANIZATIONS TO  ACCEPT  ELECTRONIC  WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS;
  (I)  OTHER  BENEFITS  TO  THE  STATE  OR ITS RESIDENTS INCLUDED IN THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM; AND
  (J) THE FAMILIARITY OF THE FINANCIAL ORGANIZATION WITH ALL ASPECTS  OF
FEDERAL  AND  STATE MEANS-TESTED PROGRAMS OF ASSISTANCE INCLUDING ELIGI-
BILITY REQUIREMENTS, AVAILABLE PROGRAM AND THE SUPPORT SERVICES AND  THE
SYSTEMS OF PROVIDERS OF SUCH SERVICES AND SUPPORTS.
  3.  THE  COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR  MORE
TYPES OF INVESTMENT INSTRUMENT.
  4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
THE PROGRAM.
  5.  A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
THE FINANCIAL ORGANIZATION TO:
  (A) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
REQUIREMENTS OF SECTION 90-C OF THIS ARTICLE;
  (B)  KEEP  ADEQUATE  RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND PROVIDE THE COMPTROLLER WITH INFORMA-
TION AS REQUIRED;
  (C) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
WITH SUCH INFORMATION NECESSARY TO DETERMINE COMPLIANCE;
  (D) PROVIDE THE COMPTROLLER OR HIS OR HER DESIGNEE ACCESS TO THE BOOKS
AND RECORDS OF THE PROGRAM MANAGER TO THE  EXTENT  NEEDED  TO  DETERMINE
COMPLIANCE WITH THE CONTRACT;
  (E) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
  (F)  BE  AUDITED  AT  LEAST  ANNUALLY  BY  A  FIRM OF CERTIFIED PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER; AND
  (G) PROVIDE THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS  AND
REPORTS  MADE  BY IT DURING THE TERM OF THE MANAGEMENT CONTRACT OR WHILE
IT IS HOLDING ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS  OR  REPORTS
THAT WILL NOT BECOME PART OF THE PROGRAM. THE PROGRAM MANAGER SHALL MAKE
AVAILABLE  FOR  REVIEW  BY  THE  COMPTROLLER THE RESULTS OF ANY PERIODIC
EXAMINATION OF SUCH MANAGER BY ANY STATE OF FEDERAL BANKING,  INSURANCE,
OR  SECURITIES  COMMISSION,  EXCEPT  TO  THE  EXTENT THAT SUCH REPORT OR
REPORTS MAY NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES  OF  SUCH
COMMISSION.
  6. THE COMPTROLLER MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF THE
OPERATIONS  AND FINANCIAL POSITION OF THE PROGRAM DEPOSITORY AND MANAGER
AT ANY TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED ABOUT  THE
FINANCIAL  POSITION,  THE  RECORDKEEPING  PRACTICES,  OR  THE  STATUS OF
ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
  7. DURING THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER,  THE  COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS.  SUCH  EXAMINATION  SHALL  BE CONDUCTED AT LEAST BIENNIALLY IF
SUCH MANAGER IS NOT OTHERWISE SUBJECT TO  PERIODIC  EXAMINATION  BY  THE

S. 4472--A                          7

SUPERINTENDENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR OTHER SIMI-
LAR ENTITY.
  8.  (A)  IF  THE  COMPTROLLER  TERMINATES A FINANCIAL ORGANIZATION FOR
FRAUD OR MISMANAGEMENT AS A PROGRAM MANAGER OR  DEPOSITORY,  HE  OR  SHE
SHALL  TAKE  CUSTODY OF ACCOUNTS HELD BY SUCH FINANCIAL ORGANIZATION AND
SHALL SEEK TO PROMPTLY  TRANSFER  SUCH  ACCOUNTS  TO  ANOTHER  FINANCIAL
ORGANIZATION  THAT  IS  SELECTED  AS A PROGRAM MANAGER OR DEPOSITORY AND
INTO INVESTMENT INSTRUMENTS AS SIMILAR TO THE  ORIGINAL  INSTRUMENTS  AS
POSSIBLE.
  (B)  IF  SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER OR
DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
  (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
  (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
  (III) NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL  ORGANIZATION;
AND
  (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
  9. THE COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECESSARY
AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
  S  4. Section 237 of the banking law is amended by adding a new subdi-
vision 9 to read as follows:
  9. SUBJECT TO ANY  REGULATIONS  AND  RESTRICTIONS  PRESCRIBED  BY  THE
SUPERINTENDENT OF FINANCIAL SERVICES, A SAVINGS BANK SHALL HAVE POWER TO
ACT  AS  TRUSTEE  OF  A  NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE (NY
ABLE) SAVINGS ACCOUNT ESTABLISHED PURSUANT  TO  ARTICLE  TWO-D  OF  THIS
CHAPTER,  PROVIDED  THAT THE PROVISIONS OF THE WRITTEN GOVERNING INSTRU-
MENT CREATING THE TRUST REQUIRE THE FUNDS OF SUCH TRUST TO  BE  INVESTED
EXCLUSIVELY IN DEPOSITS IN SAVINGS BANKS.
  S  5. Subdivision 7 of section 100-c of the banking law, as amended by
chapter 134 of the laws of 2002, is amended to read as follows:
  7. As used in this section,  subject  to  subdivision  eight  of  this
section  the term "trust company" shall mean any trust company, any bank
duly authorized to exercise  fiduciary  powers  and  any  national  bank
having  a  principal,  branch  or  trust  office  in this state and duly
authorized to exercise fiduciary powers; the term  "estate"  shall  mean
the  assets held by an executor or an administrator, with or without the
will annexed, of the goods, chattels and credits of a decedent, but  not
a temporary administrator; the term "trust" shall mean the assets of any
trust  however created held by the trustee thereof, including, but with-
out limitation, any assets held by a  fiduciary  as  donee  of  a  power
during  minority to manage property vested in an infant; the term "fund"
shall include the assets of an infant held by the guardian thereof,  the
assets of an incompetent person held by the committee thereof, [and] the
assets  of  a  conservatee  held  by  the conservator thereof AND ASSETS
CONSISTING OF A "NY ABLE ACCOUNT" HELD FOR THE BENEFIT  OF  AN  "ACCOUNT
OWNER",  AS  SUCH TERMS ARE DEFINED IN SECTION NINETY-A OF THIS CHAPTER.
The term "donee of a power during minority to manage property vested  in
an infant" shall for the purposes of this section include only a fiduci-
ary  who  has  power  during a period measured by a minority to hold and
invest moneys under the terms of an instrument under which the fiduciary
had theretofore held such moneys as executor or as personal or testamen-
tary trustee.
  S 6. Subsection (c) of section 612 of the tax law is amended by adding
two new paragraphs 42 and 43 to read as follows:

S. 4472--A                          8

  (42) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
ONE OR MORE "NY ABLE" ACCOUNTS ESTABLISHED UNDER ARTICLE  TWO-D  OF  THE
BANKING  LAW,  PROVIDED,  HOWEVER THAT SUCH EXCLUSION SHALL BE AVAILABLE
ONLY TO THE ACCOUNT OWNER AND NOT TO ANY OTHER PERSON.
  (43)  DISTRIBUTIONS FOR QUALIFIED EXPENSES OF A DESIGNATED BENEFICIARY
FROM A "NY ABLE" ACCOUNT ESTABLISHED UNDER ARTICLE TWO-D OF THE  BANKING
LAW,  TO  THE  EXTENT  INCLUDIBLE IN GROSS INCOME FOR FEDERAL INCOME TAX
PURPOSES.
  S 7. Subparagraph 2 of paragraph (b) of subdivision 2 of  section  366
of  the  social  services  law is amended by adding a new clause (vi) to
read as follows:
  (VI) NOTWITHSTANDING THE PROVISIONS OF CLAUSES (I) AND  (II)  OF  THIS
SUBPARAGRAPH,  IN  THE CASE OF AN APPLICANT WHO IS THE ACCOUNT OWNER AND
DESIGNATED BENEFICIARY OF A "NY ABLE ACCOUNT", AS THAT TERM  IS  DEFINED
IN SECTION NINETY-A OF THE BANKING LAW, THE DEPARTMENT MUST NOT CONSIDER
AS  AVAILABLE  INCOME  OR RESOURCES THE CORPUS OF INCOME OF SUCH NY ABLE
ACCOUNT, FOR SO LONG AS AND TO THE EXTENT THAT SUCH ACCOUNT COMPLIES  IN
ALL  RESPECTS  WITH  APPLICABLE FEDERAL AND STATE LAW REQUIREMENTS AS TO
CONTRIBUTIONS  THERETO,  THE  BALANCE  THEREOF  AND  REPORTING,  AND  AS
REQUIRED.  NOTWITHSTANDING  ANY  LAWS  TO THE CONTRARY, A NOT-FOR-PROFIT
CORPORATION MAY, WITH THE APPROVAL OF THE COMPTROLLER AND IN FURTHERANCE
OF OR AS AN ADJUNCT TO ITS  CORPORATE  PURPOSES,  ACT  AS  A  "FINANCIAL
ORGANIZATION",  AS SUCH TERM IS DEFINED IN SECTION NINETY-A OF THE BANK-
ING LAW, IN THE ADMINISTRATION OF A NY ABLE  ACCOUNT,  PROVIDED  THAT  A
TRUST  COMPANY, AS DEFINED IN SUBDIVISION SEVEN OF SECTION ONE HUNDRED-C
OF THE BANKING LAW, ACTS AS A CO-PROGRAM MANAGER OF SUCH ACCOUNT.
  S 8. Subdivision (j) of section 5205 of the  civil  practice  law  and
rules,  as  added by chapter 546 of the laws of 1997, is amended to read
as follows:
  (j) Exemption for  New  York  state  college  choice  tuition  savings
program  trust  fund  payment monies AND FOR QUALIFIED NY ABLE ACCOUNTS.
Monies in an account created  pursuant  to  article  fourteen-A  of  the
education law are exempt from application to the satisfaction of a money
judgment as follows:
  1.  one  hundred  percent  of  monies  in  an  account  established in
connection with a scholarship program established pursuant to such arti-
cle is exempt;
  2. one hundred percent of monies in an account  is  exempt  where  the
judgment  debtor is the account owner and designated beneficiary of such
account and is a minor; and
  3. an amount not exceeding ten thousand dollars in an account,  or  in
the  aggregate  for  more than one account, is exempt where the judgment
debtor is the account owner of such account or accounts.
  MONIES IN A NY ABLE ACCOUNT CREATED  PURSUANT  TO  AND  MAINTAINED  IN
COMPLIANCE  WITH ARTICLE TWO-D OF THE BANKING LAW ARE EXEMPT FROM APPLI-
CATION TO THE SATISFACTION OF A MONEY JUDGEMENT: ONE HUNDRED PERCENT  OF
MONIES  IN  A  QUALIFIED  NY ABLE ACCOUNT, ESTABLISHED AND MAINTAINED IN
COMPLIANCE WITH SUCH ARTICLE WITH THE EXCEPTION OF:
  1. A MONEY JUDGMENT FOR A DEBT INCURRED BY OR ON BEHALF OF THE  DESIG-
NATED BENEFICIARY OF THE ACCOUNT FOR A QUALIFIED DISABILITY EXPENSE; AND
  2.  A  MONEY JUDGMENT ACCRUING FROM A CLAIM BY THE STATE FOR THE TOTAL
MEDICAL ASSISTANCE PAID FOR THE DESIGNATED BENEFICIARY  OF  THE  ACCOUNT
AFTER  THE ESTABLISHMENT OF THE ACCOUNT, NET OF PREMIUMS PAID IN FOR ANY
MEDICAL ASSISTANCE BUY-IN PROGRAM.

S. 4472--A                          9

  For purposes of  this  subdivision,  the  terms  "account  owner"  and
"designated  beneficiary"  shall  have  the meanings ascribed to them in
article fourteen-A of the education law.
  S 9. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment and/or repeal of any rules or regulations
necessary for the implementation of this act on its effective  date  are
authorized  and  directed  to  be  made  and completed on or before such
effective date.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4472--B

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             March 23, 2015
                               ___________

Introduced  by  Sens.  CARLUCCI, ADDABBO, AMEDORE, AVELLA, BOYLE, CROCI,
  DIAZ, DILAN, ESPAILLAT, FARLEY, FELDER, FUNKE, GALLIVAN, GOLDEN, GRIF-
  FO,  HAMILTON,  HOYLMAN,  KLEIN,  KRUEGER,  LANZA,  LARKIN,   LATIMER,
  MARCHIONE, MARTINS, MONTGOMERY, MURPHY, NOZZOLIO, O'MARA, ORTT, PANEP-
  INTO,  PARKER, PERALTA, RANZENHOFER, RITCHIE, RIVERA, ROBACH, SANDERS,
  SAVINO, SERRANO, SQUADRON, VALESKY -- read twice and ordered  printed,
  and  when printed to be committed to the Committee on Banks -- commit-
  tee discharged, bill amended, ordered reprinted as amended and  recom-
  mitted to said committee -- reported favorably from said committee and
  committed  to  the  Committee on Finance -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT  to  amend  the  mental  hygiene law, the tax law and the social
  services law, in relation to establishing the NY ABLE act

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  This act shall be known and may be cited as the "New York
achieving a better life experience (NY ABLE) act".
  S 2. Legislative intent. The legislative intent  of  this  act  is  to
encourage  and  assist  individuals and families in saving private funds
for the purpose of supporting individuals with  developmental  disabili-
ties  to  maintain  health,  independence  and  quality  of life; and to
provide secure funding for disability  related  expenses  on  behalf  of
designated beneficiaries with intellectual or developmental disabilities
that will supplement, but not supplant, benefits provided through exist-
ing sources.
  S  3.  The mental hygiene law is amended by adding a new article 84 to
read as follows:
                               ARTICLE 84
     NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE SAVINGS ACCOUNT ACT
SECTION 84.01 SHORT TITLE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10067-06-5
              

S. 4472--B                          2

        84.03 DEFINITIONS.
        84.05 POWERS AND DUTIES OF THE COMPTROLLER.
        84.07 NY ABLE ACCOUNT ADVISORY COUNCIL.
        84.09 PROGRAM REQUIREMENTS.
        84.11 DISTRIBUTION REQUIREMENTS.
S 84.01 SHORT TITLE.
  THIS  ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE "NEW YORK ACHIEV-
ING A BETTER LIFE EXPERIENCE (NY ABLE) SAVINGS ACCOUNT ACT".
S 84.03 DEFINITIONS.
  AS USED IN THIS ARTICLE:
  1. THE TERM "FINANCIAL ORGANIZATION" MEANS AN ORGANIZATION  AUTHORIZED
TO  DO  BUSINESS IN THE STATE OF NEW YORK AND WHICH:  (A) IS LICENSED OR
CHARTERED BY THE DEPARTMENT OF FINANCIAL SERVICES; (B)  IS  LICENSED  OR
CHARTERED  BY  AN AGENCY OF THE FEDERAL GOVERNMENT; OR (C) IS SUBJECT TO
THE JURISDICTION AND REGULATION OF THE SECURITIES AND  EXCHANGE  COMMIS-
SION OF THE FEDERAL GOVERNMENT.
  2.  "ACCOUNT"  OR  "NY  ABLE ACCOUNT" SHALL MEAN AN INDIVIDUAL SAVINGS
ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
  3. "ACCOUNT OWNER" SHALL MEAN A PERSON WHO  OPENS  A  SAVINGS  ACCOUNT
PURSUANT  TO THE PROVISIONS OF THIS ARTICLE.  THE ACCOUNT OWNER MAY ALSO
BE THE DESIGNATED BENEFICIARY OF THE ACCOUNT.
  4. "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT  OR
ACCOUNTS,  ANY  INDIVIDUAL  WHO  IS  AN "ELIGIBLE INDIVIDUAL" AS DEFINED
UNDER PARAGRAPH (1) OF SUBSECTION (E) OF SECTION 529A  OF  THE  INTERNAL
REVENUE  CODE OF 1986, AS AMENDED, OR ANY REGULATIONS PROMULGATED THERE-
UNDER AND WHOSE QUALIFIED EXPENSES ARE EXPECTED  TO  BE  PAID  FROM  THE
ACCOUNT  OR  ACCOUNTS.   A DESIGNATED BENEFICIARY SHALL BE A RESIDENT OF
NEW YORK STATE OR A RESIDENT OF A STATE THAT: (A) DOES NOT HAVE A QUALI-
FIED ABLE PROGRAM RECOGNIZED UNDER SECTION 529-A OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED; AND (B) HAS ENTERED INTO A CONTRACT  WITH  NEW
YORK  STATE TO PROVIDE RESIDENTS OF THE CONTRACTING STATE WITH ACCESS TO
NEW YORK STATE'S ABLE PROGRAM.
  5. "QUALIFIED EXPENSES" SHALL MEAN ANY  QUALIFIED  DISABILITY  EXPENSE
INCLUDED  IN  PARAGRAPH  (5)  OF  SUBSECTION  (E) OF SECTION 529A OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY REGULATIONS PROMULGAT-
ED THEREUNDER.
  6. "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM  AN  ACCOUNT
FOR  OTHER  THAN A QUALIFIED EXPENSE, OR A WITHDRAWAL MADE AS THE RESULT
OF THE DEATH OR DISABILITY OF THE DESIGNATED BENEFICIARY OF AN ACCOUNT.
  7. "MANAGEMENT CONTRACT" SHALL MEAN THE CONTRACT EXECUTED BY THE COMP-
TROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY AND
MANAGER OF THE PROGRAM.
  8. "SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE COMPTROLLER
OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
  9. "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION  SELECTED  BY
THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
S 84.05 POWERS AND DUTIES OF THE COMPTROLLER.
  1.    THE  COMPTROLLER, SHALL ESTABLISH A NY ABLE ACCOUNT PLAN FOR ALL
ELIGIBLE INDIVIDUALS AND FAMILIES FOR THE PURPOSE OF SUPPORTING INDIVID-
UALS WITH DISABILITIES TO MAINTAIN HEALTH, INDEPENDENCE, AND QUALITY  OF
LIFE.  THE  COMPTROLLER  IS  HEREBY AUTHORIZED TO PROMULGATE ANY AND ALL
RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF  THIS  ARTICLE
IN  CONSULTATION  WITH  THE  COMMISSIONERS OF THE OFFICE FOR PEOPLE WITH
DEVELOPMENTAL DISABILITIES, THE OFFICE OF MENTAL HEALTH, THE  DEPARTMENT
OF  HEALTH,  THE  OFFICE OF TEMPORARY AND DISABILITY ASSISTANCE, AND THE
ABLE ACCOUNT ADVISORY COMMITTEE.

S. 4472--B                          3

  2. THE COMPTROLLER MAY IMPLEMENT THE NY ABLE SAVINGS  ACCOUNT  PROGRAM
THROUGH  USE  OF THIRD PARTY VENDORS AS ADMINISTRATORS OF SUCH ACCOUNTS,
AND FINANCIAL ORGANIZATIONS AS ACCOUNT DEPOSITORIES AND MANAGERS.  UNDER
THE PROGRAM, INDIVIDUALS MAY ESTABLISH ACCOUNTS DIRECTLY WITH AN ACCOUNT
DEPOSITORY.
  3.  THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO ACT AS DEPOSITORIES AND MANAGERS FROM THE PROGRAM.  FINANCIAL  ORGAN-
IZATIONS  SUBMITTING  PROPOSALS SHALL DESCRIBE THE INVESTMENT INSTRUMENT
WHICH WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS  PROGRAM
DEPOSITORIES  AND  MANAGERS  THE  FINANCIAL ORGANIZATION, FROM AMONG THE
BIDDING FINANCIAL ORGANIZATIONS, THAT DEMONSTRATES THE MOST ADVANTAGEOUS
COMBINATION, BOTH TO POTENTIAL PROGRAM PARTICIPANTS AND THIS  STATE,  OF
THE FOLLOWING FACTORS:
  (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
  (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
  (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
OF OBTAINING CARE FOR INDIVIDUALS WITH DISABILITIES;
  (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
AND REPORTING REQUIREMENTS;
  (E)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
  (F) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO PERSONS FOR OPENING OR
MAINTAINING ACCOUNTS;
  (G) THE MINIMUM INITIAL DEPOSIT AND  MINIMUM  CONTRIBUTIONS  THAT  THE
FINANCIAL ORGANIZATION WILL REQUIRE;
  (H)  THE  ABILITY  OF BANKING ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
  (I) OTHER BENEFITS TO THE STATE  OR  ITS  RESIDENTS  INCLUDED  IN  THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM.
  4.  THE  COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR  MORE
TYPES OF INVESTMENT INSTRUMENT.
  5. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
THE PROGRAM.
  6.  A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
THE FINANCIAL ORGANIZATION TO:
  (A) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
REQUIREMENTS  OF  SECTION  84.09  OF  THIS  ARTICLE  AND ANY ACTIONS NOT
CONTRARY TO ITS CONTRACT TO MANAGE THE PROGRAM TO QUALIFY AS  A  "QUALI-
FIED ABLE ACCOUNT" UNDER SUBSECTION (1) OF PARAGRAPH (B) OF SECTION 529A
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
  (B)  KEEP  ADEQUATE  RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND PROVIDE THE COMPTROLLER WITH INFORMA-
TION AS REQUIRED;
  (C) COMPILE AND TOTAL INFORMATION CONTAINED IN STATEMENTS REQUIRED  TO
BE  PREPARED UNDER SECTION 84.09 OF THIS ARTICLE AND PROVIDE SUCH COMPI-
LATIONS TO THE COMPTROLLER.
  (D) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
WITH SUCH INFORMATION NECESSARY TO DETERMINE COMPLIANCE;
  (E) PROVIDE THE COMPTROLLER OR HIS OR HER DESIGNEE ACCESS TO THE BOOKS
AND RECORDS OF THE PROGRAM MANAGER TO THE  EXTENT  NEEDED  TO  DETERMINE
COMPLIANCE WITH THE CONTRACT;
  (F) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;

S. 4472--B                          4

  (G)  BE  AUDITED  AT  LEAST  ANNUALLY  BY  A  FIRM OF CERTIFIED PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER; AND
  (H)  PROVIDE THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS AND
REPORTS MADE BY IT DURING THE TERM OF THE MANAGEMENT CONTRACT  OR  WHILE
IT  IS  HOLDING ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS OR REPORTS
THAT WILL NOT BECOME PART OF THE PROGRAM. THE PROGRAM MANAGER SHALL MAKE
AVAILABLE FOR REVIEW BY THE COMPTROLLER  THE  RESULTS  OF  ANY  PERIODIC
EXAMINATION  OF SUCH MANAGER BY ANY STATE OR FEDERAL BANKING, INSURANCE,
OR SECURITIES COMMISSION, EXCEPT TO  THE  EXTENT  THAT  SUCH  REPORT  OR
REPORTS  MAY  NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES OF SUCH
COMMISSION.
  7. THE COMPTROLLER MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF THE
OPERATIONS AND FINANCIAL POSITION OF THE PROGRAM DEPOSITORY AND  MANAGER
AT  ANY TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED ABOUT THE
FINANCIAL POSITION,  THE  RECORDKEEPING  PRACTICES,  OR  THE  STATUS  OF
ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
  8.  DURING  THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS.  SUCH EXAMINATION SHALL BE CONDUCTED AT  LEAST  BIENNIALLY  IF
SUCH  MANAGER  IS  NOT  OTHERWISE SUBJECT TO PERIODIC EXAMINATION BY THE
SUPERINTENDENT OF FINANCIAL  SERVICES,  THE  FEDERAL  DEPOSIT  INSURANCE
CORPORATION OR OTHER SIMILAR ENTITY.
  9.  (A)  IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER
OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
  (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
  (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
  (III) NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL  ORGANIZATION;
AND
  (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
  (B)  IF  THE  COMPTROLLER  TERMINATES  A  FINANCIAL  ORGANIZATION AS A
PROGRAM MANAGER OR DEPOSITORY, HE OR SHE SHALL TAKE CUSTODY OF  ACCOUNTS
HELD  BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY TRANSFER
SUCH ACCOUNTS TO ANOTHER FINANCIAL ORGANIZATION THAT IS  SELECTED  AS  A
PROGRAM MANAGER OR DEPOSITORY AND INTO INVESTMENT INSTRUMENTS AS SIMILAR
TO THE ORIGINAL INSTRUMENTS AS POSSIBLE.
  10.  THE  COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECES-
SARY AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
S 84.07 NY ABLE ACCOUNT ADVISORY COUNCIL.
  1. THE NY ABLE ACCOUNT ADVISORY  COUNCIL  IS  HEREBY  ESTABLISHED  AND
SHALL  CONSIST  OF  THE  FOLLOWING PERSONS OR THEIR DESIGNEES: THE COMP-
TROLLER, THE COMMISSIONER OF THE OFFICE OF MENTAL  HEALTH,  THE  COMMIS-
SIONER  OF  THE  OFFICE  FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES, THE
COMMISSIONER OF THE DEPARTMENT OF  HEALTH,  THE  SUPERINTENDENT  OF  THE
DEPARTMENT  OF FINANCIAL SERVICES, THE COMMISSIONER OF THE DEPARTMENT OF
TAXATION AND FINANCE, THE COMMISSIONER OF THE OFFICE OF TEMPORARY  DISA-
BILITY  ASSISTANCE, THREE INDIVIDUALS APPOINTED BY THE GOVERNOR, AND TWO
INDIVIDUALS EACH BY THE TEMPORARY PRESIDENT OF THE  SENATE  AND  BY  THE
SPEAKER OF THE ASSEMBLY. SUCH EXECUTIVE AND LEGISLATIVE APPOINTEES SHALL
HAVE  KNOWLEDGE,  SKILL  AND EXPERTISE IN ISSUES RELATING TO INDIVIDUALS
WITH DISABILITIES; EXPERTISE IN SERVICES TO PERSONS  WITH  DISABILITIES;
OR  KNOWLEDGE  IN  MANAGEMENT  AND SUPPORT OF THE FISCAL AFFAIRS OF SUCH
DISABILITIES.

S. 4472--B                          5

  2. THE MEMBERS SHALL BE APPOINTED FOR A TERM OF THREE YEARS AND  SHALL
BE REPRESENTATIVE OF ALL GEOGRAPHIC AREAS OF THE STATE.
  3. THE ADVISORY COUNCIL SHALL:
  (A)  STUDY  AND  REVIEW THE WORK OF THE COMPTROLLER IN RELATION TO THE
ESTABLISHMENT OF THE NY ABLE ACCOUNT PROGRAM;
  (B) ADVISE THE COMPTROLLER AND MAKE RECOMMENDATIONS FOR  THE  IMPROVE-
MENT OF THE NY ABLE ACCOUNT PROGRAM;
  (C)  ADVISE  THE  COMPTROLLER  ON  LEGISLATIVE AND REGULATORY ACTIVITY
WHICH MAY BE REQUIRED FOR COMPLIANCE; AND
  (D) ADVISE THE COMPTROLLER ON  THE  DEVELOPMENT  OF  MATERIALS  TO  BE
PROVIDED  TO  ACCOUNT OWNERS, PROSPECTIVE ACCOUNT OWNERS, AND DESIGNATED
BENEFICIARIES IN ACCORDANCE WITH SUBDIVISION FOURTEEN OF  SECTION  84.09
OF THIS ARTICLE.
  4.  THE  ADVISORY  COUNCIL SHALL MEET AT LEAST FOUR TIMES IN EACH FULL
CALENDAR YEAR DURING THE FIRST THREE YEARS OF THE IMPLEMENTATION OF ABLE
ACCOUNTS, ANNUALLY THEREAFTER, AND ADDITIONALLY UPON THE REQUEST OF  THE
COMPTROLLER.
  5.  THE  MEMBERS OF THE ADVISORY COUNCIL SHALL RECEIVE NO COMPENSATION
FOR THEIR SERVICES AS MEMBERS, BUT EACH SHALL BE ALLOWED  THE  NECESSARY
AND  ACTUAL  EXPENSES  INCURRED  IN THE PERFORMANCE OF HIS OR HER DUTIES
UNDER THIS SECTION.
S 84.09 PROGRAM REQUIREMENTS.
  1. "NY ABLE" ACCOUNTS ESTABLISHED PURSUANT TO THE PROVISIONS  OF  THIS
ARTICLE SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION.
  2.  A  NY ABLE ACCOUNT MAY BE OPENED BY ANY PERSON WHO DESIRES TO SAVE
MONEY FOR THE PAYMENT OF THE QUALIFIED LIVING EXPENSES OF  A  DESIGNATED
BENEFICIARY. SUCH PERSON WHO OPENS A NY ABLE ACCOUNT SHALL BE CONSIDERED
THE ACCOUNT OWNER AS SET FORTH IN THIS ARTICLE.
  (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
THE PROGRAM AND CONTAIN THE FOLLOWING:
  (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
CATION NUMBER OF THE ACCOUNT OWNER;
  (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
  (III)  THE  NAME, ADDRESS AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
BENEFICIARY; AND
  (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
  (B) THE COMPTROLLER MAY ESTABLISH A NOMINAL FEE FOR SUCH APPLICATION.
  3. AN ACCOUNT OWNER MAY OWN ONLY ONE NY ABLE ACCOUNT UNLESS  OTHERWISE
PERMITTED  BY  SECTION  529A  OF  THE  INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
  4. ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS  TO
THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
  5. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
  6.  CONTRIBUTIONS  TO  A NY ABLE ACCOUNT SHALL NOT EXCEED THE LIMIT ON
ANNUAL CONTRIBUTIONS ESTABLISHED UNDER PARAGRAPH (2) OF  SUBSECTION  (B)
OF SECTION 529A OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
  7.  AN  ACCOUNT  OWNER MAY WITHDRAW ALL OR PART OF THE BALANCE FROM AN
ACCOUNT ON SIXTY DAYS NOTICE OR SUCH SHORTER PERIOD AS MAY BE AUTHORIZED
UNDER RULES GOVERNING THE PROGRAM. SUCH RULES SHALL  INCLUDE  PROVISIONS
THAT  WILL GENERALLY ENABLE THE DETERMINATION AS TO WHETHER A WITHDRAWAL
IS A NONQUALIFIED WITHDRAWAL OR A QUALIFIED WITHDRAWAL.
  8. AN ACCOUNT OWNER  MAY  CHANGE  THE  DESIGNATED  BENEFICIARY  OF  AN
ACCOUNT  TO ANOTHER BENEFICIARY WHO IS QUALIFIED UNDER THE PROVISIONS OF
THIS ARTICLE.
  9. THE PROGRAM SHALL PROVIDE A SEPARATE ACCOUNTING FOR EACH DESIGNATED
BENEFICIARY.

S. 4472--B                          6

  10. AN ACCOUNT OWNER SHALL BE PERMITTED TO DIRECT  THE  INVESTMENT  OF
ANY CONTRIBUTIONS TO AN ACCOUNT OR THE EARNINGS THEREON NO MORE THAN TWO
TIMES IN A CALENDAR YEAR.
  11.  NEITHER  AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY MAY USE AN
INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
  12. THE COMPTROLLER SHALL PROMULGATE RULES OR REGULATIONS  TO  PREVENT
CONTRIBUTIONS  ON  BEHALF  OF  A  DESIGNATED BENEFICIARY IN EXCESS OF AN
AMOUNT THAT WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE FOR  ALL  ACCOUNTS
FOR  A  DESIGNATED  BENEFICIARY  TO EXCEED A MAXIMUM ACCOUNT BALANCE, AS
ESTABLISHED FROM TIME TO TIME BY THE COMPTROLLER.  SUCH  MAXIMUM  AMOUNT
SHALL REFLECT REASONABLE EXPENDITURES AND SHALL BE DETERMINED IN ACCORD-
ANCE WITH ANY APPLICABLE STATE OR FEDERAL LAW, RULE, OR REGULATION.
  13. (A) IF THERE IS ANY DISTRIBUTION FROM AN ACCOUNT TO ANY INDIVIDUAL
OR  FOR  THE  BENEFIT  OF  ANY  INDIVIDUAL  DURING A CALENDAR YEAR, SUCH
DISTRIBUTION SHALL BE REPORTED TO THE INTERNAL REVENUE SERVICE  AND  THE
ACCOUNT  OWNER,  THE  DESIGNATED  BENEFICIARY, OR THE DISTRIBUTEE TO THE
EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
  (B) STATEMENTS SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT  LEAST  ONCE
EACH  YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE MONTH PERIOD TO
WHICH THEY RELATE. THE STATEMENT SHALL IDENTIFY THE  CONTRIBUTIONS  MADE
DURING  A PRECEDING TWELVE MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE TO
THE ACCOUNT THROUGH THE END OF THE PERIOD, THE VALUE OF THE  ACCOUNT  AT
THE  END  OF  SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH PERIOD AND ANY
OTHER INFORMATION THAT THE COMPTROLLER SHALL REQUIRE TO BE  REPORTED  TO
THE ACCOUNT OWNER.
  (C)  STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE PREPARED
AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAW.
  14. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
EACH ACCOUNT OWNER AND PROSPECTIVE ACCOUNT OWNER OF A NY ABLE ACCOUNT:
  (A) THE TERMS AND CONDITIONS FOR PURCHASING A NY ABLE ACCOUNT;
  (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
  (C) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE SAVINGS AGREEMENT;
  (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
UNDER THE SAVINGS AGREEMENT;
  (E) THE TERMS AND CONDITIONS  UNDER  WHICH  MONEY  MAY  BE  WHOLLY  OR
PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
  (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
DISTRIBUTIONS FROM ACCOUNTS; AND
  (G)  ALL  OTHER  RIGHTS  AND  OBLIGATIONS  PURSUANT TO NY ABLE SAVINGS
AGREEMENTS, INCLUDING BUT NOT LIMITED TO THE POTENTIAL IMPACT  ON  MEANS
TESTED  PROGRAMS,  THAT  UPON THE DEATH OF THE BENEFICIARY ANY REMAINING
BALANCE MAY BE SUBJECT TO STATE RECOVERY FOR MEDICAID PAYMENTS  AND  ANY
OTHER TERMS, CONDITIONS, AND PROVISIONS DEEMED NECESSARY AND APPROPRIATE
BY THE COMMISSIONER, THE ADVISORY COUNCIL, AND THE COMPTROLLER.
  15.  NY ABLE SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION FOURTEEN-C
OF THE BANKING LAW AND THE  "TRUTH-IN-SAVINGS"  REGULATIONS  PROMULGATED
THEREUNDER.
  16.  NOTWITHSTANDING  ANY OTHER PROVISIONS OF LAW, RULE, OR REGULATION
TO THE CONTRARY, ASSETS CONTAINED IN NY ABLE ACCOUNT, THAT IS IN COMPLI-
ANCE WITH ALL APPLICABLE STATE AND FEDERAL LAWS, RULES, AND REGULATIONS,
SHALL NOT BE USED IN DETERMINING THE ELIGIBILITY OF A DESIGNATED BENEFI-
CIARY FOR ANY FEDERAL, STATE, OR LOCAL MEANS-TESTED PROGRAM.
  17. SUBJECT TO ANY OUTSTANDING PAYMENTS DUE FOR  QUALIFIED  DISABILITY
EXPENSES,  UPON  THE  DEATH  OF  THE DESIGNATED BENEFICIARY, ALL AMOUNTS

S. 4472--B                          7

REMAINING WILL BE SUBJECT  TO  STATE  RECOVERY  FOR  MEDICAL  ASSISTANCE
PAYMENTS  MADE ON BEHALF OF THE BENEFICIARY AFTER THE DATE OF ESTABLISH-
MENT OF THE ACCOUNT.
S 84.11 DISTRIBUTION REQUIREMENTS.
  DESIGNATED BENEFICIARIES SHALL BE ELIGIBLE FOR A DISTRIBUTION FROM THE
ACCUMULATED  FUNDS DEFERRED TO THEIR NY ABLE SAVINGS ACCOUNT ESTABLISHED
PURSUANT TO THIS ARTICLE, IN FULL AND PARTIAL DISBURSEMENT  OPTIONS  FOR
QUALIFIED EXPENSES.
  S 4. Subsection (b) of section 612 of the tax law is amended by adding
a new paragraph 42 to read as follows:
  (42)  DISTRIBUTIONS  RECEIVED  DURING THE TAXABLE YEAR BY A DESIGNATED
BENEFICIARY OF A "NY  ABLE  ACCOUNT"  ESTABLISHED  UNDER  THE  NEW  YORK
ACHIEVING  A  BETTER  LIFE  EXPERIENCE  SAVINGS ACCOUNT ACT PROVIDED FOR
UNDER ARTICLE EIGHTY-FOUR OF THE MENTAL HYGIENE LAW, TO THE EXTENT  SUCH
DISTRIBUTIONS  ARE NONQUALIFIED WITHDRAWALS WITHIN THE MEANING OF SUBDI-
VISION SIX OF SECTION 84.03 OF SUCH LAW.
  S 5. Subsection (c) of section 612 of the tax law is amended by adding
two new paragraphs 42 and 43 to read as follows:
  (42) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
ONE OR MORE "NY ABLE" ACCOUNTS ESTABLISHED UNDER ARTICLE EIGHTY-FOUR  OF
THE  MENTAL  HYGIENE LAW, PROVIDED, HOWEVER THAT SUCH EXCLUSION SHALL BE
AVAILABLE ONLY TO THE ACCOUNT OWNER AND NOT TO ANY OTHER PERSON.
  (43) DISTRIBUTIONS FOR QUALIFIED EXPENSES OF A DESIGNATED  BENEFICIARY
FROM  A  "NY  ABLE" ACCOUNT ESTABLISHED UNDER ARTICLE EIGHTY-FOUR OF THE
MENTAL HYGIENE LAW, TO THE EXTENT INCLUDIBLE IN GROSS INCOME FOR FEDERAL
INCOME TAX PURPOSES.
  S 6. Paragraph (a) of subdivision 2  of  section  366  of  the  social
services  law  is  amended  by  adding  a new subparagraph 11 to read as
follows:
  (11) SUBJECT TO THE AVAILABILITY OF FEDERAL  FINANCIAL  PARTICIPATION,
ANY  AMOUNT,  INCLUDING EARNINGS THEREON, IN A QUALIFIED NY ABLE ACCOUNT
AS ESTABLISHED PURSUANT TO ARTICLE EIGHTY-FOUR  OF  THE  MENTAL  HYGIENE
LAW, ANY CONTRIBUTIONS TO SUCH NY ABLE ACCOUNT, AND ANY DISTRIBUTION FOR
QUALIFIED  DISABILITY EXPENSES FROM SUCH ACCOUNT; PROVIDED HOWEVER, THAT
SUCH EXEMPTION SHALL BE CONSISTENT WITH SECTION  529A  OF  THE  INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
  S 7. This act shall take effect April 1, 2016; provided, however, that
effective  immediately,  the  addition,  amendment  and/or repeal of any
rules or regulations necessary for the implementation of this act on its
effective date are authorized and directed to be made and  completed  on
or before such effective date.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4472--C

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                             March 23, 2015
                               ___________

Introduced  by  Sens.  CARLUCCI, ADDABBO, AMEDORE, AVELLA, BOYLE, CROCI,
  DIAZ, DILAN, ESPAILLAT, FARLEY, FELDER, FUNKE, GALLIVAN, GOLDEN, GRIF-
  FO,  HAMILTON,  HOYLMAN,  KLEIN,  KRUEGER,  LANZA,  LARKIN,   LATIMER,
  MARCHIONE, MARTINS, MONTGOMERY, MURPHY, NOZZOLIO, O'MARA, ORTT, PANEP-
  INTO,  PARKER, PERALTA, RANZENHOFER, RITCHIE, RIVERA, ROBACH, SANDERS,
  SAVINO, SERRANO, SQUADRON, VALESKY -- read twice and ordered  printed,
  and  when printed to be committed to the Committee on Banks -- commit-
  tee discharged, bill amended, ordered reprinted as amended and  recom-
  mitted to said committee -- reported favorably from said committee and
  committed  to  the  Committee on Finance -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee  --  committee  discharged,  bill  amended,  ordered  reprinted as
  amended and recommitted to said committee

AN ACT to amend the mental hygiene law,  the  tax  law  and  the  social
  services law, in relation to establishing the NY ABLE act

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. This act shall be known and may be cited as the  "New  York
achieving a better life experience (NY ABLE) act".
  S  2.  Legislative  intent.  The  legislative intent of this act is to
encourage and assist individuals and families in  saving  private  funds
for  the  purpose of supporting individuals with developmental disabili-
ties to maintain health,  independence  and  quality  of  life;  and  to
provide  secure  funding  for  disability  related expenses on behalf of
designated beneficiaries with intellectual or developmental disabilities
that will supplement, but not supplant, benefits provided through exist-
ing sources.
  S 3. The mental hygiene law is amended by adding a new article  84  to
read as follows:
                               ARTICLE 84
     NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE SAVINGS ACCOUNT ACT

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10067-07-5
              

S. 4472--C                          2

SECTION 84.01 SHORT TITLE.
        84.03 DEFINITIONS.
        84.05 POWERS AND DUTIES OF THE COMPTROLLER.
        84.07 NY ABLE ACCOUNT ADVISORY COUNCIL.
        84.09 PROGRAM REQUIREMENTS.
        84.11 DISTRIBUTION REQUIREMENTS.
S 84.01 SHORT TITLE.
  THIS  ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE "NEW YORK ACHIEV-
ING A BETTER LIFE EXPERIENCE (NY ABLE) SAVINGS ACCOUNT ACT".
S 84.03 DEFINITIONS.
  AS USED IN THIS ARTICLE:
  1. THE TERM "FINANCIAL ORGANIZATION" MEANS AN ORGANIZATION  AUTHORIZED
TO  DO  BUSINESS IN THE STATE OF NEW YORK AND WHICH:  (A) IS LICENSED OR
CHARTERED BY THE DEPARTMENT OF FINANCIAL SERVICES; (B)  IS  LICENSED  OR
CHARTERED  BY  AN AGENCY OF THE FEDERAL GOVERNMENT; OR (C) IS SUBJECT TO
THE JURISDICTION AND REGULATION OF THE SECURITIES AND  EXCHANGE  COMMIS-
SION OF THE FEDERAL GOVERNMENT.
  2.  "ACCOUNT"  OR  "NY  ABLE ACCOUNT" SHALL MEAN AN INDIVIDUAL SAVINGS
ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
  3. "ACCOUNT OWNER" SHALL MEAN A PERSON WHO  OPENS  A  SAVINGS  ACCOUNT
PURSUANT  TO THE PROVISIONS OF THIS ARTICLE.  THE ACCOUNT OWNER MAY ALSO
BE THE DESIGNATED BENEFICIARY OF THE ACCOUNT.
  4. "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT  OR
ACCOUNTS,  ANY  INDIVIDUAL  WHO  IS  AN "ELIGIBLE INDIVIDUAL" AS DEFINED
UNDER PARAGRAPH (1) OF SUBSECTION (E) OF SECTION 529A  OF  THE  INTERNAL
REVENUE  CODE OF 1986, AS AMENDED, OR ANY REGULATIONS PROMULGATED THERE-
UNDER AND WHOSE QUALIFIED EXPENSES ARE EXPECTED  TO  BE  PAID  FROM  THE
ACCOUNT  OR  ACCOUNTS.   A DESIGNATED BENEFICIARY SHALL BE A RESIDENT OF
NEW YORK STATE OR A RESIDENT OF A STATE THAT: (A) DOES NOT HAVE A QUALI-
FIED ABLE PROGRAM RECOGNIZED UNDER SECTION 529-A OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED; AND (B) HAS ENTERED INTO A CONTRACT  WITH  NEW
YORK  STATE TO PROVIDE RESIDENTS OF THE CONTRACTING STATE WITH ACCESS TO
NEW YORK STATE'S ABLE PROGRAM.
  5. "QUALIFIED EXPENSES" SHALL MEAN ANY  QUALIFIED  DISABILITY  EXPENSE
INCLUDED  IN  PARAGRAPH  (5)  OF  SUBSECTION  (E) OF SECTION 529A OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY REGULATIONS PROMULGAT-
ED THEREUNDER.
  6. "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM  AN  ACCOUNT
FOR  OTHER  THAN A QUALIFIED EXPENSE, OR A WITHDRAWAL MADE AS THE RESULT
OF THE DEATH OR DISABILITY OF THE DESIGNATED BENEFICIARY OF AN ACCOUNT.
  7. "MANAGEMENT CONTRACT" SHALL MEAN THE CONTRACT EXECUTED BY THE COMP-
TROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY AND
MANAGER OF THE PROGRAM.
  8. "SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE COMPTROLLER
OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
  9. "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION  SELECTED  BY
THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
S 84.05 POWERS AND DUTIES OF THE COMPTROLLER.
  1.  THE  COMPTROLLER,  SHALL  ESTABLISH A NY ABLE ACCOUNT PLAN FOR ALL
ELIGIBLE INDIVIDUALS AND FAMILIES FOR THE PURPOSE OF SUPPORTING INDIVID-
UALS WITH DISABILITIES TO MAINTAIN HEALTH, INDEPENDENCE, AND QUALITY  OF
LIFE.  THE  COMPTROLLER  IS  HEREBY AUTHORIZED TO PROMULGATE ANY AND ALL
RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF  THIS  ARTICLE
IN  CONSULTATION  WITH  THE  COMMISSIONERS OF THE OFFICE FOR PEOPLE WITH
DEVELOPMENTAL DISABILITIES, THE OFFICE OF MENTAL HEALTH, THE  DEPARTMENT

S. 4472--C                          3

OF HEALTH, THE OFFICE OF TEMPORARY AND DISABILITY ASSISTANCE, AND THE NY
ABLE ACCOUNT ADVISORY COUNCIL.
  2.  THE  COMPTROLLER MAY IMPLEMENT THE NY ABLE SAVINGS ACCOUNT PROGRAM
THROUGH USE OF THIRD PARTY VENDORS AS ADMINISTRATORS OF  SUCH  ACCOUNTS,
AND FINANCIAL ORGANIZATIONS AS ACCOUNT DEPOSITORIES AND MANAGERS.  UNDER
THE PROGRAM, INDIVIDUALS MAY ESTABLISH ACCOUNTS DIRECTLY WITH AN ACCOUNT
DEPOSITORY.
  3.  THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO ACT AS DEPOSITORIES AND MANAGERS FROM THE PROGRAM.  FINANCIAL  ORGAN-
IZATIONS  SUBMITTING  PROPOSALS SHALL DESCRIBE THE INVESTMENT INSTRUMENT
WHICH WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS  PROGRAM
DEPOSITORIES  AND  MANAGERS  THE  FINANCIAL ORGANIZATION, FROM AMONG THE
BIDDING FINANCIAL ORGANIZATIONS, THAT DEMONSTRATES THE MOST ADVANTAGEOUS
COMBINATION, BOTH TO POTENTIAL PROGRAM PARTICIPANTS AND THIS  STATE,  OF
THE FOLLOWING FACTORS:
  (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
  (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
  (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
OF OBTAINING CARE FOR INDIVIDUALS WITH DISABILITIES;
  (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
AND REPORTING REQUIREMENTS;
  (E)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
  (F) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO PERSONS FOR OPENING OR
MAINTAINING ACCOUNTS;
  (G) THE MINIMUM INITIAL DEPOSIT AND  MINIMUM  CONTRIBUTIONS  THAT  THE
FINANCIAL ORGANIZATION WILL REQUIRE;
  (H)  THE  ABILITY  OF BANKING ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
  (I) OTHER BENEFITS TO THE STATE  OR  ITS  RESIDENTS  INCLUDED  IN  THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM.
  4.  THE  COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR  MORE
TYPES OF INVESTMENT INSTRUMENT.
  5. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
THE PROGRAM.
  6.  A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
THE FINANCIAL ORGANIZATION TO:
  (A) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
REQUIREMENTS  OF  SECTION  84.09  OF  THIS  ARTICLE  AND ANY ACTIONS NOT
CONTRARY TO ITS CONTRACT TO MANAGE THE PROGRAM TO QUALIFY AS  A  "QUALI-
FIED ABLE ACCOUNT" UNDER SUBSECTION (1) OF PARAGRAPH (B) OF SECTION 529A
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
  (B)  KEEP  ADEQUATE  RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND PROVIDE THE COMPTROLLER WITH INFORMA-
TION AS REQUIRED;
  (C) COMPILE AND TOTAL INFORMATION CONTAINED IN STATEMENTS REQUIRED  TO
BE  PREPARED UNDER SECTION 84.09 OF THIS ARTICLE AND PROVIDE SUCH COMPI-
LATIONS TO THE COMPTROLLER.
  (D) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
WITH SUCH INFORMATION NECESSARY TO DETERMINE COMPLIANCE;
  (E) PROVIDE THE COMPTROLLER OR HIS OR HER DESIGNEE ACCESS TO THE BOOKS
AND RECORDS OF THE PROGRAM MANAGER TO THE  EXTENT  NEEDED  TO  DETERMINE
COMPLIANCE WITH THE CONTRACT;
  (F) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;

S. 4472--C                          4

  (G)  BE  AUDITED  AT  LEAST  ANNUALLY  BY  A  FIRM OF CERTIFIED PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER; AND
  (H)  PROVIDE THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS AND
REPORTS MADE BY IT DURING THE TERM OF THE MANAGEMENT CONTRACT  OR  WHILE
IT  IS  HOLDING ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS OR REPORTS
THAT WILL NOT BECOME PART OF THE PROGRAM. THE PROGRAM MANAGER SHALL MAKE
AVAILABLE FOR REVIEW BY THE COMPTROLLER  THE  RESULTS  OF  ANY  PERIODIC
EXAMINATION  OF SUCH MANAGER BY ANY STATE OR FEDERAL BANKING, INSURANCE,
OR SECURITIES COMMISSION, EXCEPT TO  THE  EXTENT  THAT  SUCH  REPORT  OR
REPORTS  MAY  NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES OF SUCH
COMMISSION.
  7. THE COMPTROLLER MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF THE
OPERATIONS AND FINANCIAL POSITION OF THE PROGRAM DEPOSITORY AND  MANAGER
AT  ANY TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED ABOUT THE
FINANCIAL POSITION,  THE  RECORDKEEPING  PRACTICES,  OR  THE  STATUS  OF
ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
  8.  DURING  THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS.  SUCH EXAMINATION SHALL BE CONDUCTED AT  LEAST  BIENNIALLY  IF
SUCH  MANAGER  IS  NOT  OTHERWISE SUBJECT TO PERIODIC EXAMINATION BY THE
SUPERINTENDENT OF FINANCIAL  SERVICES,  THE  FEDERAL  DEPOSIT  INSURANCE
CORPORATION OR OTHER SIMILAR ENTITY.
  9.  (A)  IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER
OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
  (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
  (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
  (III) NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL  ORGANIZATION;
AND
  (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
  (B)  IF  THE  COMPTROLLER  TERMINATES  A  FINANCIAL  ORGANIZATION AS A
PROGRAM MANAGER OR DEPOSITORY, HE OR SHE SHALL TAKE CUSTODY OF  ACCOUNTS
HELD  BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY TRANSFER
SUCH ACCOUNTS TO ANOTHER FINANCIAL ORGANIZATION THAT IS  SELECTED  AS  A
PROGRAM MANAGER OR DEPOSITORY AND INTO INVESTMENT INSTRUMENTS AS SIMILAR
TO THE ORIGINAL INSTRUMENTS AS POSSIBLE.
  10.  THE  COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECES-
SARY AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
S 84.07 NY ABLE ACCOUNT ADVISORY COUNCIL.
  1. THE NY ABLE ACCOUNT ADVISORY  COUNCIL  IS  HEREBY  ESTABLISHED  AND
SHALL  CONSIST  OF  THE  FOLLOWING PERSONS OR THEIR DESIGNEES: THE COMP-
TROLLER, THE COMMISSIONER OF THE OFFICE OF MENTAL  HEALTH,  THE  COMMIS-
SIONER  OF  THE  OFFICE  FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES, THE
COMMISSIONER OF THE DEPARTMENT OF  HEALTH,  THE  SUPERINTENDENT  OF  THE
DEPARTMENT  OF FINANCIAL SERVICES, THE COMMISSIONER OF THE DEPARTMENT OF
TAXATION AND FINANCE, THE COMMISSIONER OF THE OFFICE OF TEMPORARY  DISA-
BILITY  ASSISTANCE, THREE INDIVIDUALS APPOINTED BY THE GOVERNOR, AND TWO
INDIVIDUALS EACH BY THE TEMPORARY PRESIDENT OF THE  SENATE  AND  BY  THE
SPEAKER OF THE ASSEMBLY. SUCH EXECUTIVE AND LEGISLATIVE APPOINTEES SHALL
HAVE  KNOWLEDGE,  SKILL  AND EXPERTISE IN ISSUES RELATING TO INDIVIDUALS
WITH DISABILITIES; EXPERTISE IN SERVICES TO PERSONS  WITH  DISABILITIES;
OR  KNOWLEDGE  IN  MANAGEMENT  AND SUPPORT OF THE FISCAL AFFAIRS OF SUCH
DISABILITIES.

S. 4472--C                          5

  2. THE MEMBERS SHALL BE APPOINTED FOR A TERM OF THREE YEARS AND  SHALL
BE REPRESENTATIVE OF ALL GEOGRAPHIC AREAS OF THE STATE.
  3. THE ADVISORY COUNCIL SHALL:
  (A)  STUDY  AND  REVIEW THE WORK OF THE COMPTROLLER IN RELATION TO THE
ESTABLISHMENT OF THE NY ABLE ACCOUNT PROGRAM;
  (B) ADVISE THE COMPTROLLER AND MAKE RECOMMENDATIONS FOR  THE  IMPROVE-
MENT OF THE NY ABLE ACCOUNT PROGRAM;
  (C)  ADVISE  THE  COMPTROLLER  ON  LEGISLATIVE AND REGULATORY ACTIVITY
WHICH MAY BE REQUIRED FOR COMPLIANCE; AND
  (D) ADVISE THE COMPTROLLER ON  THE  DEVELOPMENT  OF  MATERIALS  TO  BE
PROVIDED  TO  ACCOUNT OWNERS, PROSPECTIVE ACCOUNT OWNERS, AND DESIGNATED
BENEFICIARIES IN ACCORDANCE WITH SUBDIVISION FOURTEEN OF  SECTION  84.09
OF THIS ARTICLE.
  4.  THE  ADVISORY  COUNCIL SHALL MEET AT LEAST FOUR TIMES IN EACH FULL
CALENDAR YEAR DURING THE FIRST THREE YEARS OF THE IMPLEMENTATION OF ABLE
ACCOUNTS, ANNUALLY THEREAFTER, AND ADDITIONALLY UPON THE REQUEST OF  THE
COMPTROLLER.
  5.  THE  MEMBERS OF THE ADVISORY COUNCIL SHALL RECEIVE NO COMPENSATION
FOR THEIR SERVICES AS MEMBERS, BUT EACH SHALL BE ALLOWED  THE  NECESSARY
AND  ACTUAL  EXPENSES  INCURRED  IN THE PERFORMANCE OF HIS OR HER DUTIES
UNDER THIS SECTION.
S 84.09 PROGRAM REQUIREMENTS.
  1. "NY ABLE" ACCOUNTS ESTABLISHED PURSUANT TO THE PROVISIONS  OF  THIS
ARTICLE SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION.
  2.  A  NY ABLE ACCOUNT MAY BE OPENED BY ANY PERSON WHO DESIRES TO SAVE
MONEY FOR THE PAYMENT OF THE QUALIFIED LIVING EXPENSES OF  A  DESIGNATED
BENEFICIARY. SUCH PERSON WHO OPENS A NY ABLE ACCOUNT SHALL BE CONSIDERED
THE ACCOUNT OWNER AS SET FORTH IN THIS ARTICLE.
  (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
THE PROGRAM AND CONTAIN THE FOLLOWING:
  (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
CATION NUMBER OF THE ACCOUNT OWNER;
  (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
  (III)  THE  NAME, ADDRESS AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
BENEFICIARY; AND
  (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
  (B) THE COMPTROLLER MAY ESTABLISH A NOMINAL FEE FOR SUCH APPLICATION.
  3. AN ACCOUNT OWNER MAY OWN ONLY ONE NY ABLE ACCOUNT UNLESS  OTHERWISE
PERMITTED  BY  SECTION  529A  OF  THE  INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
  4. ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS  TO
THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
  5. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
  6.  CONTRIBUTIONS  TO  A NY ABLE ACCOUNT SHALL NOT EXCEED THE LIMIT ON
ANNUAL CONTRIBUTIONS ESTABLISHED UNDER PARAGRAPH (2) OF  SUBSECTION  (B)
OF SECTION 529A OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
  7.  AN  ACCOUNT  OWNER MAY WITHDRAW ALL OR PART OF THE BALANCE FROM AN
ACCOUNT ON SIXTY DAYS NOTICE OR SUCH SHORTER PERIOD AS MAY BE AUTHORIZED
UNDER RULES GOVERNING THE PROGRAM. SUCH RULES SHALL  INCLUDE  PROVISIONS
THAT  WILL GENERALLY ENABLE THE DETERMINATION AS TO WHETHER A WITHDRAWAL
IS A NONQUALIFIED WITHDRAWAL OR A QUALIFIED WITHDRAWAL.
  8. AN ACCOUNT OWNER  MAY  CHANGE  THE  DESIGNATED  BENEFICIARY  OF  AN
ACCOUNT  TO ANOTHER BENEFICIARY WHO IS QUALIFIED UNDER THE PROVISIONS OF
THIS ARTICLE.
  9. THE PROGRAM SHALL PROVIDE A SEPARATE ACCOUNTING FOR EACH DESIGNATED
BENEFICIARY.

S. 4472--C                          6

  10. AN ACCOUNT OWNER SHALL BE PERMITTED TO DIRECT  THE  INVESTMENT  OF
ANY CONTRIBUTIONS TO AN ACCOUNT OR THE EARNINGS THEREON NO MORE THAN TWO
TIMES IN A CALENDAR YEAR.
  11.  NEITHER  AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY MAY USE AN
INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
  12. THE COMPTROLLER SHALL PROMULGATE RULES OR REGULATIONS  TO  PREVENT
CONTRIBUTIONS  ON  BEHALF  OF  A  DESIGNATED BENEFICIARY IN EXCESS OF AN
AMOUNT THAT WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE FOR  ALL  ACCOUNTS
FOR  A  DESIGNATED  BENEFICIARY  TO EXCEED A MAXIMUM ACCOUNT BALANCE, AS
ESTABLISHED FROM TIME TO TIME BY THE COMPTROLLER.  SUCH  MAXIMUM  AMOUNT
SHALL REFLECT REASONABLE EXPENDITURES AND SHALL BE DETERMINED IN ACCORD-
ANCE WITH ANY APPLICABLE STATE OR FEDERAL LAW, RULE, OR REGULATION.
  13. (A) IF THERE IS ANY DISTRIBUTION FROM AN ACCOUNT TO ANY INDIVIDUAL
OR  FOR  THE  BENEFIT  OF  ANY  INDIVIDUAL  DURING A CALENDAR YEAR, SUCH
DISTRIBUTION SHALL BE REPORTED TO THE INTERNAL REVENUE SERVICE  AND  THE
ACCOUNT  OWNER,  THE  DESIGNATED  BENEFICIARY, OR THE DISTRIBUTEE TO THE
EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
  (B) STATEMENTS SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT  LEAST  ONCE
EACH  YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE MONTH PERIOD TO
WHICH THEY RELATE. THE STATEMENT SHALL IDENTIFY THE  CONTRIBUTIONS  MADE
DURING  A PRECEDING TWELVE MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE TO
THE ACCOUNT THROUGH THE END OF THE PERIOD, THE VALUE OF THE  ACCOUNT  AT
THE  END  OF  SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH PERIOD AND ANY
OTHER INFORMATION THAT THE COMPTROLLER SHALL REQUIRE TO BE  REPORTED  TO
THE ACCOUNT OWNER.
  (C)  STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE PREPARED
AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAW.
  14. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
EACH ACCOUNT OWNER AND PROSPECTIVE ACCOUNT OWNER OF A NY ABLE ACCOUNT:
  (A) THE TERMS AND CONDITIONS FOR PURCHASING A NY ABLE ACCOUNT;
  (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
  (C) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE SAVINGS AGREEMENT;
  (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
UNDER THE SAVINGS AGREEMENT;
  (E) THE TERMS AND CONDITIONS  UNDER  WHICH  MONEY  MAY  BE  WHOLLY  OR
PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
  (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
DISTRIBUTIONS FROM ACCOUNTS; AND
  (G)  ALL  OTHER  RIGHTS  AND  OBLIGATIONS  PURSUANT TO NY ABLE SAVINGS
AGREEMENTS, INCLUDING BUT NOT LIMITED TO THE POTENTIAL IMPACT  ON  MEANS
TESTED  PROGRAMS,  THAT  UPON THE DEATH OF THE BENEFICIARY ANY REMAINING
BALANCE MAY BE SUBJECT TO STATE RECOVERY FOR MEDICAID PAYMENTS  AND  ANY
OTHER TERMS, CONDITIONS, AND PROVISIONS DEEMED NECESSARY AND APPROPRIATE
BY THE COMMISSIONER, THE ADVISORY COUNCIL, AND THE COMPTROLLER.
  15.  NY ABLE SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION FOURTEEN-C
OF THE BANKING LAW AND THE  "TRUTH-IN-SAVINGS"  REGULATIONS  PROMULGATED
THEREUNDER.
  16.  NOTWITHSTANDING  ANY OTHER PROVISIONS OF LAW, RULE, OR REGULATION
TO THE CONTRARY, ASSETS CONTAINED IN NY ABLE ACCOUNT, THAT IS IN COMPLI-
ANCE WITH ALL APPLICABLE STATE AND FEDERAL LAWS, RULES, AND REGULATIONS,
SHALL NOT BE USED IN DETERMINING THE ELIGIBILITY OF A DESIGNATED BENEFI-
CIARY FOR ANY FEDERAL, STATE, OR LOCAL MEANS-TESTED PROGRAM.
  17. SUBJECT TO ANY OUTSTANDING PAYMENTS DUE FOR  QUALIFIED  DISABILITY
EXPENSES,  UPON  THE  DEATH  OF  THE DESIGNATED BENEFICIARY, ALL AMOUNTS

S. 4472--C                          7

REMAINING WILL BE SUBJECT  TO  STATE  RECOVERY  FOR  MEDICAL  ASSISTANCE
PAYMENTS  MADE ON BEHALF OF THE BENEFICIARY AFTER THE DATE OF ESTABLISH-
MENT OF THE ACCOUNT.
S 84.11 DISTRIBUTION REQUIREMENTS.
  DESIGNATED BENEFICIARIES SHALL BE ELIGIBLE FOR A DISTRIBUTION FROM THE
ACCUMULATED  FUNDS DEFERRED TO THEIR NY ABLE SAVINGS ACCOUNT ESTABLISHED
PURSUANT TO THIS ARTICLE, IN FULL AND PARTIAL DISBURSEMENT  OPTIONS  FOR
QUALIFIED EXPENSES.
  S 4. Subsection (b) of section 612 of the tax law is amended by adding
a new paragraph 42 to read as follows:
  (42)  DISTRIBUTIONS  RECEIVED  DURING THE TAXABLE YEAR BY A DESIGNATED
BENEFICIARY OF A "NY  ABLE  ACCOUNT"  ESTABLISHED  UNDER  THE  NEW  YORK
ACHIEVING  A  BETTER  LIFE  EXPERIENCE  SAVINGS ACCOUNT ACT PROVIDED FOR
UNDER ARTICLE EIGHTY-FOUR OF THE MENTAL HYGIENE LAW, TO THE EXTENT  SUCH
DISTRIBUTIONS  ARE NONQUALIFIED WITHDRAWALS WITHIN THE MEANING OF SUBDI-
VISION SIX OF SECTION 84.03 OF SUCH LAW.
  S 5. Subsection (c) of section 612 of the tax law is amended by adding
two new paragraphs 42 and 43 to read as follows:
  (42) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
ONE OR MORE "NY ABLE" ACCOUNTS ESTABLISHED UNDER ARTICLE EIGHTY-FOUR  OF
THE  MENTAL  HYGIENE LAW, PROVIDED, HOWEVER THAT SUCH EXCLUSION SHALL BE
AVAILABLE ONLY TO THE ACCOUNT OWNER AND NOT TO ANY OTHER PERSON.
  (43) DISTRIBUTIONS FOR QUALIFIED EXPENSES OF A DESIGNATED  BENEFICIARY
FROM  A  "NY  ABLE" ACCOUNT ESTABLISHED UNDER ARTICLE EIGHTY-FOUR OF THE
MENTAL HYGIENE LAW, TO THE EXTENT INCLUDIBLE IN GROSS INCOME FOR FEDERAL
INCOME TAX PURPOSES.
  S 6. Paragraph (a) of subdivision 2  of  section  366  of  the  social
services  law  is  amended  by  adding  a new subparagraph 11 to read as
follows:
  (11) SUBJECT TO THE AVAILABILITY OF FEDERAL  FINANCIAL  PARTICIPATION,
ANY  AMOUNT,  INCLUDING EARNINGS THEREON, IN A QUALIFIED NY ABLE ACCOUNT
AS ESTABLISHED PURSUANT TO ARTICLE EIGHTY-FOUR  OF  THE  MENTAL  HYGIENE
LAW, ANY CONTRIBUTIONS TO SUCH NY ABLE ACCOUNT, AND ANY DISTRIBUTION FOR
QUALIFIED  DISABILITY EXPENSES FROM SUCH ACCOUNT; PROVIDED HOWEVER, THAT
SUCH EXEMPTION SHALL BE CONSISTENT WITH SECTION  529A  OF  THE  INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
  S 7. This act shall take effect April 1, 2016; provided, however, that
effective  immediately,  the  addition,  amendment  and/or repeal of any
rules or regulations necessary for the implementation of this act on its
effective date are authorized and directed to be made and  completed  on
or before such effective date.