A.R.S. tit. 46 ch. 8 — Arizona Revised Statutes Title 46 Chapter 8 — Arizona Able Program

46-901. Definitions In this article, unless the context otherwise requires: 1. "ABLE" means the achieving a better life experience act. 2. "Account" means an individual account in the fund established as prescribed in this article for a single designated beneficiary. 3. "Committee" means the achieving a better life experience act oversight committee. 4. "Department" means the department of economic security. 5. "Designated beneficiary" means the eligible individual who establishes an account and who is the owner of the account. 6. "Eligible individual" means an individual who is entitled to benefits based on blindness or disability under title II or XVI of the social security act, and such blindness or disability occurred before the date on which the individual attained twenty-six years of age or a disability certification with respect to such individual is filed with the United States secretary of the treasury for such taxable year as stipulated in 26 United States Code section 529A. 7. "Financial institution" means any bank, commercial bank, national bank, savings bank, savings and loan association, credit union, insurance company, brokerage firm or other similar entity that is authorized to do business in this state. 8. "Fund" means the ABLE program fund. 9. "Program" means the qualified ABLE program that is established under this article and as defined in 26 United States Code section 529A. 10. "Qualified disability expenses" means any expenses that are related to the eligible individual's blindness or disability and that are for the benefit of an eligible individual who is the designated beneficiary of an account, including education, housing, transportation, employment training and support, assistive technology and personal support services, health care, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring and funeral and burial expenses and any other expenses that are approved by the United States secretary of the treasury as required by 26 United States code section 529A. 46-902. Qualified ABLE program; duties The department shall: 1. Develop and implement the program in a manner consistent with this article through the adoption of rules, guidelines and procedures in consultation with the committee. 2. Retain professional services, if necessary, including accountants, auditors, consultants and other experts. 3. Seek rulings and other guidance from the United States department of the treasury and the internal revenue service relating to the program. 4. Make changes to the program, as necessary, to comply with 26 United States Code section 529A and any regulations issued pursuant to that section. 5. Provide notification to the chairpersons of the senate health and human services committee and the house of representatives children and family affairs committee or their successor committees of any material changes to the federal program that would necessitate changes in this article or rules adopted pursuant to this article. 6. Negotiate and select the financial institution or institutions to act as the depository and manager of the program in accordance with this article. The department shall consult with the committee when selecting the financial institution or institutions. 7. Negotiate a fee with the financial institution or institutions. 8. Maintain the program on behalf of this state as required by 26 United States Code section 529A and any regulations issued pursuant to that section. 9. Develop and implement requirements, in consultation with the committee, for disbursements from accounts for qualified disability expenses. 10. Provide for separate accounting for each designated beneficiary of the designated beneficiary's account. 11. Develop procedures for educating account owners about nonqualified and qualified expenses if the department finds that distributions from any account were made for nonqualified expenses. 12. Develop and provide, in consultation with the committee, educational materials on the program, qualified disability expenses and requirements for being a designated beneficiary. 46-903. Use of contractor as account depository; program manager A. The department shall implement the operation of the program through the use of one or more financial institutions to act as the depositories of the fund and managers of the program. Under the program, persons may submit applications for enrollment in the program and establish accounts in the fund at the financial institution. Monies paid by account owners and other contributors to the fund for deposit in accounts maintained by the fund at a financial institution shall be paid to the financial institution as an agent of the fund and shall provide that all monies paid by account owners and other contributors to fund accounts held at financial institutions are being paid to the fund. B. The department shall solicit proposals from financial institutions to act as the depositories of fund monies and managers of the program. Financial institutions that submit proposals shall describe the financial instruments that will be held in accounts. After review and recommendation from the committee, the department shall select proposals from financial institutions to act as depositories and managers. The solicitation and selection process under this section is exempt from the procurement code requirements of title 41, chapter 23. C. On the recommendation of the committee, the department shall select the financial institution or institutions to implement the program from among bidding financial institutions that demonstrate the most advantageous combination, both to potential program participants and this state, of the following factors: 1. Financial stability and integrity. 2. The safety of the investment instruments being offered, taking into account any insurance provided with respect to these instruments. 3. The ability of the financial institutions, directly or through a subcontract, to satisfy recordkeeping and reporting requirements. 4. The financial institution's plan for promoting the program and the investment it is willing to make to promote the program. 5. The fees, if any, proposed to be charged to eligible individuals for maintaining accounts. 6. The minimum initial deposit that the financial institution will require for the investment of fund monies, if any, and the willingness of the financial institution to accept contributions through payroll deduction plans and other deposit plans. 7. Any other benefits to this state or its residents included in the proposal, including an account opening fee payable to the department by the designated beneficiary and an additional fee from the financial institution for statewide and national program marketing by the department. 8. The ability of the financial institution to develop procedures for educating account owners about qualified and nonqualified expenses. D. The department shall enter into a contract with a financial institution or financial institutions to serve as program managers and depositories. Program management contracts shall provide the terms and conditions by which financial institutions shall sell interests in the fund to designated beneficiaries, invest monies in the fund and manage the program. E. The department may select more than one financial institution and investment for the program if the department concludes that the choice of instrument vehicles is in the best interest of the designated beneficiaries and will not interfere with the promotion of the program. F. A program manager shall: 1. Take all action required to keep the program in compliance with the requirements of this article and all action not contrary to this article or its contract to manage the program so that it is treated as a qualified ABLE program under 26 United States Code section 529A and any regulations issued pursuant to that section. 2. Keep adequate records of each of the fund's accounts, keep each account segregated from each other account and provide the department with the information necessary to prepare statements required by 26 United States Code section 529A and any regulations issued pursuant to that section and any annual reports prepared by the department. 3. Provide representatives of the department or other state agencies with access to the program manager's books and records to the extent needed to determine compliance with the contract. 4. Hold all operating monies in the fund in the name of and for the benefit of the fund and this state. G. Any contract executed between the department and a financial institution pursuant to this section shall be for a term of at least three years and not more than seven years. H. The department may terminate a contract with a financial institution at any time for good cause on the recommendation of the committee. If a contract is terminated pursuant to this subsection, the department shall take custody of accounts held at that financial institution and shall seek to promptly transfer the accounts to another financial institution that is selected as a program manager and into investment instruments as similar to the original investments as possible. 46-904. Incapacitated or minor eligible individual A. If an eligible individual is a minor or an incapacitated adult, the account may be opened and managed by any of the following as long as the individuals listed are not in conflict with 26 United States Code section 529A and any regulations issued pursuant to that section: 1. An agent under a valid power of attorney signed by the eligible individual at a time when the eligible individual had capacity to execute the power. 2. A parent of a minor child who is an eligible individual. 3. A court-appointed conservator of the estate of the eligible individual. 4. A court-appointed guardian of the eligible individual, with express authorization. B. In any case in which a court authorizes the conservator or guardian of the eligible individual to open and manage the account, the court, in its discretion, may waive any requirement of further accounting pursuant to section 14-5419 or inclusion in any bond established for the conservatorship pursuant to section 14-5411. 46-905. Program requirements A. The program shall require: 1. A designated beneficiary to have only one account. 2. A designated beneficiary to direct the investment of any contributions to the program or any earnings not more than two times in any calendar year. 3. Contributions to accounts to be made only in cash. 4. That any excess contributions with respect to a designated beneficiary be rejected pursuant to 26 United States Code section 529A and any regulations issued pursuant to that section. B. Contributions to and earnings on a designated beneficiary's account in this or any other state shall not be counted as income or resources of the designated beneficiary for the purposes of eligibility for any program under this title or title 36, chapter 29. C. Subject to any outstanding payments due for qualified disability expenses, on the death of the designated beneficiary, a claim may be filed for payment of all amounts remaining in the account not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after establishment of the account as authorized by 26 United States Code section 529A and any regulations issued pursuant to that section. D. An account may be opened by a designated beneficiary by completing an application in the form prescribed by the department. Separate records and accounting shall be maintained for each account for each designated beneficiary. E. A designated beneficiary may not use an interest in an account as security for a loan. Any pledge of an interest in an account is of no force and effect. F. The financial institution shall provide statements to each designated beneficiary at least once each year within thirty-one days after 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 through the end of the period, the value of the account as of the end of this period, distributions made during this period and any other matters that the department requires be reported to the account owner. G. Statements and information returns relating to accounts shall be prepared and filed to the extent required by federal or state law. H. Any social security numbers, addresses or telephone numbers of designated beneficiaries that come into the possession of the department are confidential, are not public records and shall not be released by the department. 46-906. Limitations of article A. This article does not: 1. Give any designated beneficiary any rights or legal interest in an account unless the designated beneficiary is the account owner. 2. Guarantee that an eligible individual will receive services from a department or agency of this state related to the eligible individual's disability. 3. Guarantee that the amounts deposited in an eligible individual's account and any earnings on that account pursuant to the program will be sufficient to cover any qualified disability expense of the eligible individual. B. This article does not establish any obligation of this state or any agency of this state to guarantee for the benefit of any eligible individual, contributor to an account or designated beneficiary any of the following: 1. The return of any amounts contributed to an account. 2. The rate of interest or other return on any account. 3. The payment of interest or other return on any account. C. Every contract, application, deposit slip or other similar document that may be used in connection with a contribution to an account shall clearly indicate that the account is not insured by this state and neither the principal deposited nor the investment return is guaranteed by this state. 46-907. Achieving a better life experience act oversight committee A. The achieving a better life experience act oversight committee is established in the department consisting of the following members: 1. The director of the department or the director's designee. 2. The state treasurer or the state treasurer's designee. 3. One member who has knowledge, skill and experience in investment, asset management or financial-related experience and who is appointed by the governor. 4. One member who is a licensed attorney in this state, who has knowledge, skill and experience in special needs trusts and disability issues and who is appointed by the governor. 5. One member who is an eligible individual and who is appointed by the governor. 6. One member who is a family member of an eligible individual and who is appointed by the governor. 7. One representative of a community-based organization that supports or advocates for individuals with disabilities who is appointed by the governor. B. The committee shall select a chairperson from the committee's membership. The committee shall meet at least once each calendar quarter. C. Appointed committee members are eligible to receive compensation pursuant to section 38-611 for each day of attendance at committee meetings. D. The committee shall: 1. Make recommendations and provide guidance for the establishment, implementation and improvement of the program, including statutory and rule changes. 2. Make recommendations regarding the selection of one or more financial institutions to act as depositories and managers of the accounts. 3. Review regulations adopted by the United States secretary of the treasury and identify changes necessary for program compliance. 4. Provide advice regarding requirements for disbursements from accounts for qualified disability expenses. 5. Monitor the use and effectiveness of the program, including the number of accounts established and used, the number of designated beneficiaries being served, a description of the types of disabilities the designated beneficiaries have and the types of expenses for which disbursements have been made. E. Members of the committee are immune from personal liability with respect to all actions that are taken in good faith and within the scope of the committee's authority. F. Appointed committee members serve four-year terms and may not serve more than two terms on the committee.