S T A T E   O F   N E W   Y O R K
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                                  7937

                            I N  S E N A T E

                            September 3, 2014
                               ___________

Introduced  by Sen. CARLUCCI -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the mental hygiene law, the banking law and the tax 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 ESTABLISHMENT OF PLAN.
        84.07 PROGRAM REQUIREMENTS.
        84.09 DISTRIBUTION REQUIREMENTS.
        84.11 POWERS OF THE COMPTROLLER.
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: 1. "COMMISSIONER" MEANS THE COMMISSIONER OF
THE OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES.
  2. THE TERM "FINANCIAL ORGANIZATION" MEANS AN ORGANIZATION  AUTHORIZED
TO  DO  BUSINESS IN THE STATE OF NEW YORK AND (A) WHICH IS AN AUTHORIZED

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

                                                           LBD13325-05-4

S. 7937                             2

FIDUCIARY TO ACT AS A TRUSTEE PURSUANT TO THE PROVISIONS OF  AN  ACT  OF
CONGRESS  ENTITLED  "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS
SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPA-
NY;  AND (B) (I) IS LICENSED OR CHARTERED BY THE STATE INSURANCE DEPART-
MENT, (II) IS LICENSED OR CHARTERED BY  THE  STATE  BANKING  DEPARTMENT,
(III)  IS  CHARTERED  BY  AN  AGENCY  OF THE FEDERAL GOVERNMENT, (IV) IS
SUBJECT TO  THE  JURISDICTION  AND  REGULATION  OF  THE  SECURITIES  AND
EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT, OR (V) IS ANY OTHER ENTI-
TY  OTHERWISE  AUTHORIZED  TO ACT IN THIS STATE AS A TRUSTEE PURSUANT TO
THE PROVISIONS OF AN  ACT  OF  CONGRESS  ENTITLED  "EMPLOYEE  RETIREMENT
INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME
TO TIME.
  3.  "ACCOUNT"  OR  "NY  ABLE ACCOUNT" SHALL MEAN AN INDIVIDUAL SAVINGS
ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
  4. "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.
  5. "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.
  6. "QUALIFIED EXPENSES" SHALL MEAN ANY TUITION,  AND EDUCATION MATERI-
AL AND SERVICES, HOUSING EXPENSES FOR  A  PRIMARY  RESIDENCE,  INCLUDING
RENT,  REAL  PROPERTY TAXES, AND UTILITY CHARGES, MASS TRANSIT, VEHICLE,
AND OTHER TRANSPORTATION EXPENSES, EXPENSES  RELATED  TO  OBTAINING  AND
MAINTAINING  EMPLOYMENT;  HEALTH,  PREVENTION  AND  WELLNESS,  EXPENSES,
INCLUDING INSURANCE PREMIUMS, REHABILITATION SERVICES,  DURABLE  MEDICAL
EQUIPMENT,  AND  NUTRITIONAL  MANAGEMENT;  AND  OTHER EXPENSES WHICH THE
COMMISSIONER SHALL DEEM QUALIFIED IN ACCORDANCE WITH THE PURPOSE OF THIS
ARTICLE AND WHICH ARE USED FOR THE DIRECT BENEFIT OF  AN  INTELLECTUALLY
OR DEVELOPMENTALLY DISABLED INDIVIDUAL.
  7.  "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.
  8. "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.
  9. "SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE COMPTROLLER
OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
  10.  "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED BY
THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
  11. "INTELLECTUALLY OR DEVELOPMENTALLY DISABLED"  AS  DEFINED  BY  THE
COMMISSIONER OF THE OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES IN
CONSULTATION WITH THE COMMISSIONER.
S 84.05 ESTABLISHMENT OF PLAN.
  1.  THE  COMMISSIONER 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  COMMISSIONER  SHALL  PROMULGATE  ANY AND ALL RULES AND REGU-
LATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE.
  2. THE COMMISSIONER SHALL ENTER INTO WRITTEN AGREEMENTS  WITH  ONE  OR
MORE  FINANCIAL  ORGANIZATIONS TO ADMINISTER THE NY ABLE SAVINGS ACCOUNT
PLAN FOR ELIGIBLE INDIVIDUALS AND FAMILIES  AND  TO  INVEST  FUNDS  HELD
PURSUANT  TO  SUCH  PLAN.  THE  COMMISSIONER  SHALL  ESTABLISH REPORTING

S. 7937                             3

REQUIREMENTS FOR SUCH FINANCIAL ORGANIZATIONS INCLUDING BUT NOT  LIMITED
TO  REPORTS TO THE COMMISSIONER, PARTICIPATING INDIVIDUALS AND FAMILIES,
AND PARTICIPATING EMPLOYERS, REGARDING THE  FISCAL  STATUS  OF  NY  ABLE
SAVINGS ACCOUNTS.
  3.  THE  RULES  AND  REGULATIONS PROMULGATED BY THE COMMISSIONER SHALL
ESTABLISH STANDARDS FOR THE SELECTION OF FINANCIAL ORGANIZATIONS AUTHOR-
IZED TO DO BUSINESS IN THIS STATE TO ADMINISTER IN SUCH  PLANS,  INCLUD-
ING,  BUT  NOT  LIMITED TO, THE FOLLOWING CRITERIA: (A) RATES OF COMMIS-
SION, BROKERAGE AND OTHER  FEES,  ADMINISTRATIVE  EXPENSES  AND  RELATED
SERVICE  CHARGES  IMPOSED  BY THE FINANCIAL ORGANIZATION; (B) VARIETY OF
TYPES OF INVESTMENT OPPORTUNITIES OFFERED BY THE FINANCIAL  ORGANIZATION
AND/OR  AMONG  THE  FINANCIAL  ORGANIZATIONS SELECTED AND THE ABILITY TO
TRANSFER AMONG SUCH OPPORTUNITIES; (C) THE STABILITY  OF  THE  FINANCIAL
ORGANIZATION  AS  EVIDENCED  BY EXPERIENCE, REPUTATION, ASSETS AND HOLD-
INGS, ABILITY TO GUARANTEE SPECIFIC RATES  OF  RETURN;  (D)  ABILITY  TO
COMPLY  WITH  REPORTING  REQUIREMENTS TO THE COMMISSIONER AND TO PARTIC-
IPANTS IN SUCH A PLAN; AND (E) SUCH OTHER FACTORS WHICH WOULD BE CONSID-
ERED BY A PRUDENT INVESTOR IN SUCH A PLAN.
  4. NY ABLE SAVINGS ACCOUNTS SHALL BE MAINTAINED BY FINANCIAL ORGANIZA-
TIONS UNDER WRITTEN AGREEMENT  WITH  THE  COMMISSIONER.  SUCH  FINANCIAL
ORGANIZATIONS  SHALL  BE SOLELY RESPONSIBLE FOR DISTRIBUTIONS TO PARTIC-
IPANTS PURSUANT TO THIS ARTICLE.
  5. THE COMMISSIONER SHALL ESTABLISH A  PROCESS  FOR  CERTIFICATION  OF
MENTAL  DISABILITY  FOR  THE  PURPOSE  OF  ESTABLISHING  THE VALIDITY OF
ACCOUNTS AND EXPENDITURES FROM ACCOUNTS ESTABLISHED UNDER THIS ARTICLE.
S 84.07 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.  ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS TO
THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
  4. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
  5. 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.
  6.  (A)  AN  ACCOUNT OWNER MAY CHANGE THE DESIGNATED BENEFICIARY OF AN
ACCOUNT TO ANOTHER BENEFICIARY WHO IS QUALIFIED UNDER THE PROVISIONS  OF
THIS ARTICLE.
  (B)  CHANGES  IN  DESIGNATED  BENEFICIARIES  AND  TRANSFERS UNDER THIS
SUBDIVISION SHALL NOT BE PERMITTED TO THE EXTENT THAT THEY  WOULD  CAUSE

S. 7937                             4

ALL  ACCOUNTS FOR THE SAME BENEFICIARY TO EXCEED THE PERMITTED AGGREGATE
MAXIMUM ACCOUNT BALANCE.
  7.  THE  PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR EACH DESIGNATED
BENEFICIARY.
  8. NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF ANY ACCOUNT SHALL  BE
PERMITTED TO DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR
THE EARNINGS THEREON.
  9.  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.
  10. 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.
  11. (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.
  12. 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 PROBABLY 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.
  13.  NY ABLE SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION FOURTEEN-C
OF THE BANKING LAW AND THE  "TRUTH-IN-SAVINGS"  REGULATIONS  PROMULGATED
THEREUNDER.
S 84.09 DISTRIBUTION REQUIREMENTS.
  1.  (A)  PARTICIPANTS  SHALL  BE  ELIGIBLE FOR A DISTRIBUTION FROM THE
ACCUMULATED FUNDS DEFERRED TO THEIR NY ABLE SAVINGS ACCOUNT  ESTABLISHED
PURSUANT  TO  THIS ARTICLE, IN FULL AND PARTIAL DISBURSEMENT OPTIONS FOR
QUALIFIED EXPENSES.

S. 7937                             5

  (B) THE COMMISSIONER SHALL PROMULGATE RULES AND  REGULATIONS  DEFINING
QUALIFIED  EXPENSES  WHICH SHALL, AT A MINIMUM, INCLUDE EXPENSES ASSOCI-
ATED WITH:  TUITION  AND  EDUCATIONAL  MATERIAL  AND  SERVICES;  HOUSING
EXPENSES  FOR  A PRIMARY RESIDENCE, INCLUDING RENT, REAL PROPERTY TAXES,
AND  UTILITY  CHARGES;  MASS  TRANSIT, VEHICLE, AND OTHER TRANSPORTATION
EXPENSES; EXPENSES RELATED  TO  OBTAINING  AND  MAINTAINING  EMPLOYMENT;
HEALTH, PREVENTION, AND WELLNESS EXPENSES, INCLUDING INSURANCE PREMIUMS,
REHABILITATION  SERVICES,  DURABLE  MEDICAL  EQUIPMENT,  AND NUTRITIONAL
MANAGEMENT; AND OTHER EXPENSES WHICH THE COMMISSIONER SHALL DEEM  QUALI-
FIED IN ACCORDANCE WITH THE PURPOSES OF THIS ARTICLE.
  2.  UNDER  THE NY ABLE SAVINGS ACCOUNT PLAN, AMOUNTS SHALL NOT BE MADE
AVAILABLE TO PARTICIPANTS OR BENEFICIARIES  UNLESS  THE  PARTICIPANT  OR
BENEFICIARY  HAS  BEEN  DETERMINED TO BE MENTALLY DISABLED AS DEFINED IN
SECTION 1.03 OF THIS CHAPTER.
S 84.11 POWERS OF THE COMPTROLLER.
  1. 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.
  2. 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 HIGHER EDUCATION;
  (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.
  3. 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.
  4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
THE PROGRAM.
  5. 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 84.07 OF THIS ARTICLE;
  (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;

S. 7937                             6

  (C) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
WITH SUCH INFORMATION NECESSARY TO DETERMINE COMPLIANCE;
  (D) 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;
  (E) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
  (F) 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
  (G)  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
REPORTS  MAY  NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES OF SUCH
COMMISSION.
  6. 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.
  7.  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.
  8.  (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.
  9. THE COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECESSARY
AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
  S  4. Section 237 of the banking law is amended by adding a new subdi-
vision 9 to read as follows:
  9. SUBJECT TO ANY  REGULATIONS  AND  RESTRICTIONS  PRESCRIBED  BY  THE
SUPERINTENDENT OF FINANCIAL SERVICES, A SAVINGS BANK SHALL HAVE POWER TO
ACT  AS  TRUSTEE  OF  A  NEW YORK ACHIEVING A BETTER LIFE EXPERIENCE (NY
ABLE) SAVINGS ACCOUNT ESTABLISHED PURSUANT TO ARTICLE EIGHTY-FOUR OF THE
MENTAL HYGIENE LAW, PROVIDED THAT THE PROVISIONS OF THE WRITTEN  GOVERN-
ING  INSTRUMENT CREATING THE TRUST REQUIRE THE FUNDS OF SUCH TRUST TO BE
INVESTED EXCLUSIVELY IN DEPOSITS IN SAVINGS BANKS.

S. 7937                             7

  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. 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.