AB 384: The Qualified ABLE Program: tax-advantaged savings accounts.

Existing federal law, the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act), encourages and assists individuals and families to save private funds in a tax-advantaged savings account for the purpose of supporting persons with disabilities to maintain their health, independence, and quality of life by excluding from gross income distributions used for qualified disability expenses by a beneficiary of a qualified ABLE program established and maintained by a state, as specified. Existing law establishes the Qualified ABLE Program, administered by the California ABLE Act Board, in this state for purposes of implementing the federal ABLE Act. Existing law requires the board to segregate the moneys coming into the ABLE program trust into 2 funds: the program fund, which is continuously appropriated, and the administrative fund, which is available upon appropriation by the Legislature. All moneys paid by designated beneficiaries or eligible individuals in connection with ABLE accounts are required to be deposited, as received, into the program fund, promptly invested, and accounted for separately.

Existing law requires that an ABLE account only be established for a designated beneficiary who is a resident of this state, and that the board market the program to residents of this state to the extent funds are available. Existing law also provides that moneys in, contributions to, and any distribution for qualified disability expenses from, an ABLE account, not to exceed $100,000, do not count toward determining eligibility for a state or local means-tested program.

This bill would expand the residency requirement for a designated beneficiary to being a resident of the United States, and as a result, would expand the purposes of a continuously appropriated fund, thereby making an appropriation. The bill would require the board to market the program to residents of the United States to the extent funds are available. The bill would clarify that specified existing provisions of law exempting the moneys in, and qualified distributions from, an ABLE account from being included as income for certain federal means-tested programs also apply.

This bill would incorporate additional changes to Section 4880 of the Welfare and Institutions Code proposed by AB 688 to be operative only if this bill and AB 688 are enacted and this bill is enacted last.