Eligibility And Application Requirements

(1) Eligibility. In order for an Eligible Individual to participate in the Program as the owner of an ABLE Account, the Eligible Individual shall meet the following eligibility requirements by providing the following to the State: (a) Proof that the Eligible Individual is a resident of the State or of a Contracting State as of the date of application to participate in the Program; (b) Proof that he or she meets the definition of an Eligible Individual by providing: ACHIEVING A BETTER LIFE EXPERIENCE PROGRAM CHAPTER 1700-08-01 1. A completed and signed certification, affidavit, attestation, verification or declaration indicating that he or she is an Eligible Individual; 2. A completed and signed authorization allowing the State to verify his or her status as an Eligible Individual; or 3. Documentation indicating that he or she is an Eligible Individual. (c) A completed and signed application on a form prescribed by the State; and (d) Any other documentation or information required by the Code. (2) Application. The Eligible Individual or the Eligible Individual’s Legal Representative shall provide the following to the State accompanying the Eligible Individual’s completed and signed application to participate in the Program: (a) Proof that the Eligible Individual has a Legal Representative who/that has the authority to administer the Eligible Individual’s ABLE Account for the benefit of the Eligible Individual, to the extent that the Eligible Individual wishes to participate in the Program through a Legal Representative; (b) A completed and signed certification, affidavit, attestation, verification or declaration signed under penalty of perjury indicating that the Eligible Individual has no other existing ABLE Account, other than an ABLE Account that will terminate with a Rollover or Program-to-Program Transfer into the new ABLE Account; (c) Investment selection(s) made by the Eligible Individual or the Eligible Individual’s Legal Representative. At least one (1) investment option must be selected. If more than one (1) investment option is chosen by the Eligible Individual or the Eligible Individual’s Legal Representative, then the Eligible Individual or the Eligible Individual’s Legal Representative must allocate the Contribution among the chosen investment options; and (d) An initial Contribution of at least twenty-five dollars ($25.00). This initial minimum Contribution amount will also apply to the Contribution of IEA funds into an ABLE Account. (3) Confirmation. If all of the requirements contained in the Code, the Act and this chapter are met to open an ABLE Account, the State shall send a confirmation of acceptance to the Eligible Individual and will credit the Eligible Individual’s ABLE Account with the amount of the initial Contribution made. (4) Rejection. If an Eligible Individual fails to provide all of the information required in this rule within thirty (30) calendar days of the State’s receipt of the Eligible Individual’s application, the State Treasurer may reject the application and refund to the Eligible Individual or the Eligible Individual’s Legal Representative all Contributions made less any applicable fees. Rejection of an application shall not preclude the Eligible Individual from enrolling in the Program in the future. (5) Fraud. The State Treasurer may terminate an Eligible Individual’s Contract if the Eligible Individual or the Eligible Individual’s Legal Representative knowingly makes any false statement or falsifies or permits to be falsified any record or records of the Program. The amount of the refund to which the Designated Beneficiary is entitled shall be equal to the Redemption Value of the ABLE Account at the time the refund is made, minus any applicable fee charged by the State. ACHIEVING A BETTER LIFE EXPERIENCE PROGRAM CHAPTER 1700-08-01 (6) Inactivity. If a period of ten (10) consecutive years passes with no Contributions having been made to the Designated Beneficiary’s ABLE Account, or with no correspondence from the Designated Beneficiary or the Designated Beneficiary’s Legal Representative, the State Treasurer shall report and deliver the amount of any refund payable under the Contract to the Tennessee Department of Treasury’s Unclaimed Property Division pursuant to title 66, chapter 29, part 1. Prior to delivering the refund, the State Treasurer shall make reasonable efforts to locate the Designated Beneficiary or the Designated Beneficiary’s Legal Representative. The refund shall be equal to the Redemption Value of the ABLE Account at the time the refund is delivered, minus any applicable fee charged by the State. Upon payment of the refund to the State Treasurer, the State’s obligations under the Contract shall cease. (7) Fees. The State Treasurer may charge fees to the Designated Beneficiary or collect fees from each ABLE Account for the administration of the Program or for transactions under the State’s Qualified ABLE Program. (8) Separate Accounting. The State shall maintain a separate individual ABLE Account for each Contract, showing the name of the Designated Beneficiary and the Redemption Value of the ABLE Account, including any Distributions made from the ABLE Account. Authority: T.C.A. §§ 71-4-804(b); 71-4-805; 71-4-806; 71-4-807; and Chapter 470 of the 2015 Public Acts. Administrative History: Original rule filed October 8, 2015; effective January 6, 2016. Amendments filed December 4, 2018; effective March 4, 2019 (Withdrawal of amendment to rule 1700- 08-01-.04(1) filed and effective December 21, 2018.). 1700-08-01-05 CONTRIBUTIONS. (1) Who May Make Contributions. One (1) or more Persons may make Contributions for a taxable year into an ABLE Account for the benefit for a Designated Beneficiary who is also an Eligible Individual during that taxable year. The Designated Beneficiary shall be an Eligible Individual at the time the ABLE Account is established, at the time of any Contribution to the ABLE Account, and at the time of a Distribution from the ABLE Account for Qualified Disability Expenses. All Contributions made to a Designated Beneficiary’s ABLE Account are pooled and are subject to the terms and conditions of the Designated Beneficiary’s Contract. (2) How Contributions May be Made. All Contributions to an ABLE Account shall be made in cash and not in property, except for Program-to-Program Transfers. For the purposes of these rules, “cash” means United States dollars in the form of negotiable checks. Cash Contributions may be made in the form of a check, electronic transfer or similar methods acceptable to the State. The State will only accept Contributions in the form of travelers’ checks; starter checks; or money orders if required by a court order. Contributions may also be made through a Rollover; through a Program-to-Program Transfer; or as otherwise permitted by the Code. (3) Limit on Amount of Contributions. (a) Contributions made to a Designated Beneficiary’s ABLE Account shall not include Excess Contributions. The State shall return the Excess Contributions to the Contributor, including all net income attributable to that Excess Contribution. The State shall return the Excess Contribution to the Contributor on a last-in-first-out basis until the entire Excess Contribution, along with all net income attributable to the Excess Contribution has been returned. The State shall ensure that the returned Excess Contributions are received by the Contributor on or before the due date, including extensions, for the Designated Beneficiary’s federal income tax return for the taxable year in which the Excess Contribution was made. If an Excess Contribution and the net ACHIEVING A BETTER LIFE EXPERIENCE PROGRAM CHAPTER 1700-08-01 income attributable to the Excess Contribution are returned to a Contributor other than the Designated Beneficiary, the State shall notify the Designated Beneficiary of the Excess Contribution return at the same time the Excess Contribution is returned to the Contributor. For the purpose of the Contribution limitation contained in this subparagraph (a), Contributions do not include Rollovers or Program-to-Program Transfers. (b) Contributions made to a Designated Beneficiary’s ABLE Account contributed since the establishment of the ABLE Account shall not exceed the limitation in effect under 26 U.S.C. § 529(b)(6). The Contributions toward the limitation shall include Contributions to any prior ABLE Account maintained by any State or its agency or instrumentality for the same Designated Beneficiary or any prior Designated Beneficiary. The State shall not accept any Excess Aggregate Contributions, and shall return all Excess Aggregate Contributions to the Contributor on a last-in-first-out basis until the entire Excess Aggregate Contribution, along with the net income attributable to the Excess Aggregate Contribution has been returned. The State shall ensure that the returned Excess Aggregate Contributions are received by the Contributor on or before the due date, including, extensions, for the Designated Beneficiary’s federal income tax return for the taxable year in which the Excess Aggregate Contribution was made. If an Excess Aggregate Contribution and the net income attributable to the Excess Aggregate Contribution are returned to a Contributor other than the Designated Beneficiary, the State shall notify the Designated Beneficiary of the Excess Aggregate Contribution return at the same time the Excess Aggregate Contribution is returned to the Contributor. (4) Individualized Education Account Contributions into an ABLE Account. In the event that an Eligible Individual or an Eligible Individual’s Legal Representative contributes funds from the Eligible Individual’s IEA to the Eligible Individual’s ABLE Account, the contributed IEA funds shall only be used for the Eligible Individual’s educational expenses that constitute Qualified Disability Expenses. The limitation on using the Eligible Individual’s IEA funds for educational expenses only shall be in effect until the Eligible Individual reaches the age of thirty (30). If the IEA funds in an Eligible Individual’s ABLE Account have not been expended for educational expenses by the time the Eligible Individual reaches the age of thirty (30), then the unused IEA funds may be utilized by the Eligible Individual or the Eligible Individual’s Legal Representative for any of the Eligible Individual’s Qualified Disability Expenses.