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

                                  7767

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                              May 26, 2015
                               ___________

Introduced  by M. of A. GUNTHER -- read once and referred to the Commit-
  tee on Mental Health

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.
        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:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10925-05-5
              

A. 7767                             2

  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 ENTERS INTO A SAVINGS
AGREEMENT PURSUANT TO THE PROVISIONS OF THIS ARTICLE, INCLUDING A PERSON
WHO ENTERS INTO SUCH AN AGREEMENT AS A FIDUCIARY OR AGENT ON BEHALF OF A
TRUST, ESTATE, PARTNERSHIP, ASSOCIATION,  COMPANY  OR  CORPORATION.  THE
ACCOUNT OWNER MAY ALSO BE THE DESIGNATED BENEFICIARY OF THE ACCOUNT.
  4.  "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT OR
ACCOUNTS, THE  INTELLECTUALLY  OR  DEVELOPMENTALLY  DISABLED  INDIVIDUAL
DESIGNATED AS THE INDIVIDUAL 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 QUALIFIED 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
OTHER THAN A QUALIFIED WITHDRAWAL 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.
  10. "INTELLECTUALLY OR DEVELOPMENTALLY DISABLED" SHALL MEAN ANY  INDI-
VIDUAL 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 THEREUNDER.
S 84.05 POWERS AND DUTIES OF THE COMPTROLLER.
  1.  THE COMPTROLLER, IN CONSULTATION WITH  THE  COMMISSIONERS  OF  THE
OFFICE  FOR  PEOPLE  WITH  DEVELOPMENTAL  DISABILITIES, OFFICE OF MENTAL
HEALTH AND THE DEPARTMENT OF HEALTH, SHALL ESTABLISH A NY  ABLE  ACCOUNT
PLAN  FOR  ALL  ELIGIBLE  INDIVIDUALS  AND  FAMILIES  FOR THE PURPOSE OF
SUPPORTING INDIVIDUALS WITH DISABILITIES TO MAINTAIN  HEALTH,  INDEPEND-
ENCE,  AND QUALITY OF LIFE. THE COMPTROLLER SHALL PROMULGATE ANY AND ALL
RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE.
  2. 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 DIRECT-
LY 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

A. 7767                             3

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 INTELLECTUALLY OR DEVELOPMENTALLY DISABLED INDI-
VIDUALS;
  (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.
  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;
  (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

A. 7767                             4

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  ONE
INDIVIDUAL  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.
  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.
  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

A. 7767                             5

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 THE DESIGNATED
INTELLECTUALLY OR DEVELOPMENTALLY DISABLED 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.
  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 CONSUL-
TATION WITH THE COMMISSIONER.

A. 7767                             6

  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,  AND  ANY  OTHER  TERMS,  CONDITIONS,  AND PROVISIONS DEEMED
NECESSARY AND APPROPRIATE BY THE COMMISSIONER 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
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.
  1.  DESIGNATED BENEFICIARIES SHALL BE ELIGIBLE FOR A DISTRIBUTION FROM
THE ACCUMULATED FUNDS DEFERRED TO THEIR NY ABLE SAVINGS  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 MENTALLY DISABLED AS DEFINED IN  SECTION  1.03
OF THIS CHAPTER.
  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

A. 7767                             7

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 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
________________________________________________________________________

                                 7767--A

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                              May 26, 2015
                               ___________

Introduced  by  M. of A. GUNTHER, LINARES -- Multi-Sponsored by -- M. of
  A. CUSICK -- read once and referred to the Committee on Mental  Health
  -- reported and referred to the Committee on Ways and Means -- commit-
  tee  discharged, bill amended, ordered reprinted as amended and recom-
  mitted 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
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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10925-08-5

              

A. 7767--A                          2

  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 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.

A. 7767--A                          3

  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;
  (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

A. 7767--A                          4

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.
  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;

A. 7767--A                          5

  (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.
  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.

A. 7767--A                          6

  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
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

A. 7767--A                          7

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.