Terms and conditions of participation agreements

(a) Each participation agreement entered into pursuant to this chapter shall include the following terms and conditions: (1) The participation agreement shall not constitute a debt or obligation of the state; (2) Participation in the Georgia ABLE Program does not guarantee that sufficient funds will be available to cover all qualified disability 844 30-9-7 ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) 30-9-7 expenses for any designated beneficiary and does not guarantee the receipt or continuation of any product or service for the designated beneficiary; (3) The establishment of an ABLE account in violation of federal law is prohibited; (4) Contributions in excess of the limitations set forth in Section 529A of the Internal Revenue Code are prohibited; (5) The state is a creditor of ABLE accounts as, and to the extent, set forth in Section 529A of the Internal Revenue Code; and (6) Material misrepresentations by a party to the participation agreement, other than the Georgia ABLE Program Corporation, in the application for the participation agreement or in any communication with the Georgia ABLE Program Corporation regarding the Georgia ABLE Program may result in the involuntary liquidation of the ABLE account. If an account is involuntarily liquidated, the designated beneficiary is entitled to a refund, subject to any fees or penalties provided by the participation agreement and the Internal Revenue Code. (b) A participation agreement entered into pursuant to this chapter may include terms and conditions specifying: (1) The requirements and applicable restrictions for opening an ABLE account; (2) The eligibility requirements for a party to the participation agreement and the rights of the party; (3) The requirements and applicable restrictions for making contributions to an ABLE account; (4) The requirements and applicable restrictions for directing the investment of the contributions or balance of the ABLE account; (5) The administrative fee and other fees and penalties applicable to an ABLE account; (6) The terms and conditions under which an ABLE account or a participation agreement may be modified, transferred, or terminated; and (7) Any other terms and conditions that the board deems necessary or appropriate, including without limitation those necessary to conform the participation agreement with the requirements of Section 529A of the Internal Revenue Code or other applicable federal laws. (c) A participation agreement may be amended throughout its term for purposes that include, but are not limited to, allowing a participant 845 30-9-8 to increase or decrease the level of participation and to change designated beneficiaries and other matters authorized by this Code section and Section 529A of the Internal Revenue Code. (Code 1981, § 30-9-7, enacted by Ga. L. 2016, p. 588, § 1/HB 768.) 30-9-8. ABLE Program Trust Fund created; administration of funds. (a)(1) The board shall be authorized to create the Georgia ABLE Program Trust Fund. The trust fund shall be administered by the state treasurer. The state treasurer shall credit to the trust fund all amounts transferred to such fund. The trust fund shall consist of money remitted in accordance with participation agreements and shall receive and hold all payments, contributions, and deposits intended for it as well as gifts, bequests, endowments, grants and any other public or private source of funds, and all earnings on the fund until disbursed as provided under this Code section. The amounts on deposit in the trust fund shall not constitute property of the state. Amounts on deposit in the trust fund shall not be commingled with state funds, and the state shall have no claim to or interest in such funds other than the amount of reasonable fees and charges assessed to cover administration costs. Participation agreements or any other contract entered into by or on behalf of the trust fund shall not constitute a debt or obligation of the state, and no account contributor shall be entitled to any amounts except for those amounts on deposit in or accrued to the account of such contributor. (2) The trust fund shall continue in existence so long as it holds any funds belonging to an account contributor or otherwise has any obligations to any person or entity until its existence is terminated by law and remaining assets on deposit in the trust fund are returned to designated beneficiaries or other eligible persons pursuant to the terms of the participation agreement or transferred to the state in accordance with unclaimed property laws. (b) The official location of the trust fund shall be the Office of the State Treasurer, and unless otherwise authorized by the board, the facilities of the Office of the State Treasurer shall be used and employed in the administration of the fund, including without limitation the keeping of records, the management of bank accounts and other investments, the transfer of funds, and the safekeeping of securities evidencing investments. These functions may be administered pursuant to a management agreement with a qualified entity or entities. (c) Payments received by the board on behalf of designated beneficiaries from account contributors, other payors, or any other source, public or private, shall be placed in the trust fund, and the board shall 846 30-9-8 ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) 30-9-10 cause there to be maintained separate records and accounts for individual beneficiaries as may be required under Section 529A of the Internal Revenue Code or other applicable federal laws. (d) Account contributors shall only be permitted to contribute cash except as otherwise permitted under Section 529A of the Internal Revenue Code. The board shall establish appropriate safeguards against contributions to an ABLE account in excess of the limitations set forth in Section 529A of the Internal Revenue Code. (e) Earnings derived from investment of the contributions shall be considered to be held in trust in the same manner as contributions. Amounts on deposit in an ABLE account shall be available for administrative fees and expenses and penalties imposed by the board as delineated in the participation agreement. (f ) The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this chapter and shall not be loaned or otherwise transferred or used by the state for any other purpose. (Code 1981, § 30-9-8, enacted by Ga. L. 2016, p. 588, § 1/HB 768.) 30-9-9. Taxation by state pursuant to Code Section 48-7-27; exempt from taxation by political subdivisions. The trust fund and ABLE account property and income shall be subject to taxation by the state only as provided by paragraph (10.1) of subsection (b) of Code Section 48-7-27 and shall not be subject to taxation by any of the state’s political subdivisions. (Code 1981, § 30-9-9, enacted by Ga. L. 2016, p. 588, § 1/HB 768.) 30-9-10. Comprehensive investment plan.