S T A T E O F N E W Y O R K
________________________________________________________________________
4472--D
Cal. No. 1461
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 -- committee discharged and
said bill committed to the Committee on Rules -- ordered to a third
reading, amended and ordered reprinted, retaining its place in the
order of third reading
AN ACT to amend the mental hygiene law, the tax law, the social services
law and the state finance 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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10067-09-5
S. 4472--D 2
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.
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
S. 4472--D 3
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, AND THE OFFICE OF TEMPORARY AND DISABILITY ASSISTANCE.
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;
S. 4472--D 4
(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;
(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
S. 4472--D 5
WITH DISABILITIES; EXPERTISE IN SERVICES TO PERSONS WITH DISABILITIES;
OR KNOWLEDGE IN MANAGEMENT AND SUPPORT OF THE FISCAL AFFAIRS OF SUCH
DISABILITIES.
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. NONQUALIFIED
WITHDRAWALS SHALL BE SUBJECT TO ANY PENALTIES IMPOSED UNDER SECTION 529A
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
S. 4472--D 6
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.
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. SUCH
MAXIMUM AMOUNT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS UNLESS
OTHERWISE PERMITTED BY LAW.
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.
S. 4472--D 7
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
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.
18. NOTHING IN THIS ARTICLE SHALL CREATE OR BE CONSTRUED TO CREATE ANY
OBLIGATION OF THE COMPTROLLER, THE STATE, OR ANY AGENCY OR INSTRUMENTAL-
ITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF ANY ACCOUNT OWNER OR
DESIGNATED BENEFICIARY WITH RESPECT TO:
(A) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
(B) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY 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. The state finance law is amended by adding a new section 99-x to
read as follows:
S 99-X. NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE (NY ABLE) SAVINGS
PROGRAM TRUST FUND. 1. THERE IS HEREBY ESTABLISHED IN THE SOLE CUSTODY
OF THE STATE COMPTROLLER A SPECIAL FUND TO BE KNOWN AS THE NEW YORK
ACHIEVING A BETTER LIFE EXPERIENCE (NY ABLE) SAVINGS PROGRAM TRUST FUND.
S. 4472--D 8
ALL PAYMENTS FROM SUCH FUND SHALL BE MADE IN ACCORDANCE WITH ARTICLE
EIGHTY-FOUR OF THE MENTAL HYGIENE LAW.
2. THE FUND SHALL BE A TRUST FUND AND SHALL CONSIST OF A TRUST ACCOUNT
AND AN OPERATING ACCOUNT. THE TRUST ACCOUNT SHALL INCLUDE AMOUNTS
RECEIVED BY THE NY ABLE SAVINGS PROGRAM PURSUANT TO NY ABLE SAVINGS
AGREEMENTS, ADMINISTRATIVE CHARGES, FEES, AND ALL OTHER AMOUNTS RECEIVED
BY THE PROGRAM FROM OTHER SOURCES, AND INTEREST AND INVESTMENT INCOME
EARNED BY THE TRUST FUND. THE COMPTROLLER SHALL, FROM TIME TO TIME, MAKE
TRANSFERS FROM THE TRUST ACCOUNT TO THE OPERATING ACCOUNT FOR THE IMME-
DIATE PAYMENT OF OBLIGATIONS UNDER NY ABLE SAVINGS AGREEMENTS, OPERATING
EXPENSES AND ADMINISTRATIVE COSTS OF THE NY ABLE SAVINGS PROGRAM. ADMIN-
ISTRATIVE COSTS SHALL BE PAID OUT OF THE OPERATING ACCOUNT ACCORDING TO
THE TERMS AND CONDITIONS ESTABLISHED PURSUANT TO THE PROVISIONS OF
SECTION 84.05 OF THE MENTAL HYGIENE LAW.
3. (A) THE COMPTROLLER, AS TRUSTEE, SHALL INVEST THE ASSETS OF THE
TRUST FUND IN INVESTMENTS AUTHORIZED BY ARTICLE FOUR-A OF THE RETIREMENT
AND SOCIAL SECURITY LAW, PROVIDED HOWEVER, THAT: (I) THE PROVISIONS OF
PARAGRAPH (A) OF SUBDIVISION TWO OF SECTION ONE HUNDRED SEVENTY-SEVEN OF
THE RETIREMENT AND SOCIAL SECURITY LAW SHALL NOT APPLY EXCEPT FOR THE
FIRST CLAUSE OF SUBPARAGRAPH (II) OF SUCH PARAGRAPH; AND (II) NOTWITH-
STANDING THE PROVISIONS OF SUBDIVISION SEVEN OF SECTION ONE HUNDRED
SEVENTY-SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW OR ANY OTHER LAW
TO THE CONTRARY, THE ASSETS OF THE TRUST FUND MAY BE INVESTED IN ANY
FUNDING AGREEMENT ISSUED IN ACCORDANCE WITH SECTION THREE THOUSAND TWO
HUNDRED TWENTY-TWO OF THE INSURANCE LAW BY A DOMESTIC LIFE INSURANCE
COMPANY OR A FOREIGN LIFE INSURANCE COMPANY DOING BUSINESS IN THIS
STATE, SUBJECT TO THE FOLLOWING: (1) SUCH A FUNDING AGREEMENT MAY
PROVIDE FOR A GUARANTEED MINIMUM RATE OF RETURN; (2) SUCH A FUNDING
AGREEMENT MAY BE ALLOCATED AS EITHER A SEPARATE ACCOUNT OR A GENERAL
ACCOUNT OF THE ISSUER, AS THE COMPTROLLER MAY DECIDE; (3) TOTAL INVEST-
MENTS OF THE TRUST FUND PURSUANT TO THIS PARAGRAPH IN ANY FUNDING AGREE-
MENTS ISSUED BY A SINGLE LIFE INSURANCE COMPANY WHICH ARE ALLOCATED AS A
GENERAL ACCOUNT OF THE ISSUER SHALL NOT, IN THE AGGREGATE, EXCEED THREE
HUNDRED FIFTY MILLION DOLLARS; AND (4) NO ASSETS OF THE TRUST FUND SHALL
BE INVESTED IN ANY SUCH FUNDING AGREEMENT UNLESS, AT THE TIME OF SUCH
INVESTMENT, THE GENERAL OBLIGATIONS OR FINANCIAL STRENGTH OF THE ISSUER
HAVE RECEIVED EITHER THE HIGHEST OR SECOND HIGHEST RATING BY TWO
NATIONALLY RECOGNIZED RATING SERVICES OR BY ONE NATIONALLY RECOGNIZED
RATING SERVICE IN THE EVENT THAT ONLY ONE SUCH SERVICE RATES SUCH OBLI-
GATIONS.
(B) TRUST FUND ASSETS SHALL BE KEPT SEPARATE AND SHALL NOT BE COMMIN-
GLED WITH OTHER ASSETS, EXCEPT AS PROVIDED HEREIN. THE COMPTROLLER MAY
ENTER INTO CONTRACTS TO PROVIDE FOR INVESTMENT ADVICE AND MANAGEMENT,
CUSTODIAL SERVICES, AND OTHER PROFESSIONAL SERVICES FOR THE ADMINIS-
TRATION AND INVESTMENT OF THE PROGRAM. ADMINISTRATIVE FEES, COSTS AND
EXPENSES, INCLUDING INVESTMENT FEES AND EXPENSES, SHALL BE PAID FROM THE
ASSETS OF THE FUND.
4. THE COMPTROLLER SHALL PROVIDE FOR THE ADMINISTRATION OF THE TRUST
FUND, INCLUDING MAINTAINING PARTICIPANT RECORDS AND ACCOUNTS, AND
PROVIDING ANNUAL AUDITED REPORTS. THE COMPTROLLER MAY ENTER INTO
CONTRACTS TO PROVIDE ADMINISTRATIVE SERVICES AND REPORTING.
S 8. 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.
