This law section defines key terms for the California ABLE Program, which helps eligible individuals save money in a tax-advantaged account for disability-related expenses. An 'ABLE account' is owned by the designated beneficiary and is used for qualified expenses like education, housing, and health. The 'California ABLE Program Trust' manages these accounts under the oversight of the California ABLE Act Board. 'Eligible individuals' are those whose disability or blindness began before age 46 and who meet specific federal criteria. The program aligns with the federal ABLE Act, allowing for tax-free growth of savings meant for expenses that improve the life quality of individuals with disabilities. This section will be active starting January 1, 2026.

This law establishes the California ABLE Act Board, which includes several key state officials or their representatives. The board is chaired by the Treasurer.

This law establishes the California ABLE Program Trust, a state-run organization designed to help individuals with disabilities save money in special accounts without affecting their eligibility for certain public benefits. The organization is managed by a board that can perform various functions such as suing or being sued, entering into necessary contracts, adopting a corporate seal, managing funds, and setting investment levels. The board can also approve agreements with beneficiaries to maintain ABLE accounts and take steps to cover administrative costs. In addition, the board can conduct studies to provide advice on disability expenses, participate in government programs, set fees, procure insurance, and appoint an executive director to oversee operations. The executive director can carry out contracts and business activities to ensure the efficient running of the ABLE Program Trust.

This section outlines how the funds for California's ABLE program, designed to assist individuals with disabilities, are managed. There are two main funds: the program fund, continuously available for the ABLE Board's use, and the administrative fund, which covers administrative costs and cannot exceed certain percentages of incoming funds initially. The program's startup costs are covered by a loan from the General Fund, which the Board must repay within five years. The investment manager reports monthly on investment details, and the board holds a public hearing annually on the investment policy. Moneys from the program fund can cover administrative costs, while funds from beneficiaries are invested for disability-related expenses. Beneficiaries may direct their account investments up to twice a year, and the program's assets are dedicated solely to the program and its beneficiaries.

This law section describes how people can contribute to an ABLE account, which helps cover disability-related expenses for a designated person. Each beneficiary can only have one ABLE account, and it must be set up for a U.S. resident. Contributions must be in cash and not exceed specific limits. These limits include the annual gift tax exclusion and possibly either the beneficiary’s earned income or the federal poverty line for one person, if they apply. The beneficiary owns all contributions and interest, which stay in trust until used for disability expenses. Contributions can't be pledged for loans, and safeguards are in place to prevent exceeding maximum contribution limits across all states.

This law states that money in ABLE accounts, which are savings accounts for disabled individuals, up to $100,000, will not affect eligibility for state or local assistance programs that require income or asset limits.

Additionally, these funds are generally protected from enforcement of money judgments without needing to file a claim. However, the State Department of Health Care Services can recover funds from ABLE accounts if required by federal law or guidance to reimburse Medi-Cal expenses.

This specific regulation came into effect on September 1, 2018.

This law requires the board to report annually on distributions from ABLE accounts to both the Franchise Tax Board and the account holders. The report to the Franchise Tax Board includes details necessary for tax purposes, while the report to designated beneficiaries includes the account value, earned interest, investment return rate, and other financial information. The board must also supply information to help beneficiaries set savings goals and contributions and provide a system for beneficiaries to give feedback on the ABLE program trust.

This law section allows the board to create rules to implement a program that is consistent with the federal tax code. These rules ensure the program qualifies for federal tax-exempt benefits. Furthermore, the board can create emergency regulations, bypassing typical procedures if they see this as necessary for public welfare or safety.

This section emphasizes that the law should be interpreted in a way that broadly fulfills its intended purpose, which aligns with the federal ABLE Act. It instructs that the powers granted by the act should not be seen as limited but be fully utilized to achieve the act's goals.

This law states that the board is responsible for promoting a specific program to U.S. residents, but only if there is funding available for marketing activities.

This law discusses what happens to ABLE accounts, which are savings plans for people with disabilities, after the account holder passes away. It allows the transfer of an ABLE account to a new beneficiary upon the original beneficiary's death, following federal ABLE Act rules.

Importantly, for all CalABLE accounts set up after January 1, 2023, the state will not claim any leftover money in the account to repay Medicaid expenses, even if these were paid for the individual after the account was created.

For accounts created before 2023, the state also won't siphon off any remaining funds for Medicaid expenses or other claims under Section 529A of the IRS code after the beneficiary's death, provided the Centers for Medicare and Medicaid Services approve this exemption.