As used in this article:
(1) "Palmetto ABLE account" or "account" means an individual savings account established in accordance with the provisions of this article and pursuant to Section 529A of the federal Internal Revenue Code of 1986, as amended.
(2) "Account owner" means the person who enters into a Palmetto ABLE account agreement pursuant to the provisions of this article. The account owner also must be the designated beneficiary; however, a trustee, guardian, or conservator may be appointed as an account owner for a designated beneficiary who is a minor or lacks capacity to enter into an agreement. Also, the agent of the designated beneficiary acting under durable power of attorney may open and manage an account on behalf of and in the name of a designated beneficiary who lacks capacity.
(3) "Designated beneficiary" means an eligible individual whose qualified disability expenses may be paid from the account. The designated beneficiary must be an eligible individual at the time the account is established. The account owner may change the designated beneficiary so long as the new beneficiary is an eligible individual who is a qualified member of the family of the designated beneficiary at the time of the change.
(4) "Eligible individual", as defined in Section 529A(e)(1) of the federal Internal Revenue Code of 1986, as amended, means:
(a) an individual who is entitled to benefits based on blindness or disability pursuant to 42 U.S.C. Section 401, et seq., or 42 U.S.C. Section 1381, as amended, and the blindness or disability occurred before the date on which the individual attained age twenty-six; or
(b) an individual with respect to which a disability certification, as defined in Section 529A(e)(2) of the federal Internal Revenue Code of 1986, as amended, to the satisfaction of the Secretary of the United States Treasury is filed with the Secretary for a taxable year and the blindness or disability occurred before the date on which the individual attained age twenty-six.
(5) "Financial organization" means an organization authorized to do business in this State and is:
(a) licensed or chartered by the Director of Insurance;
(b) licensed or chartered by the State Commissioner of Banking;
(c) chartered by an agency of the federal government; or
(d) subject to the jurisdiction and regulation of the federal Securities and Exchange Commission.
(6) "Management contract" means a contract executed by the State Treasurer and a program manager selected to act as a depository or manager of the program, or both.
(7) "Member of the family" has the meaning defined in Section 529A of the federal Internal Revenue Code of 1986, as amended.
(8) "Nonqualified withdrawal" means a withdrawal from an account which is not:
(a) a qualified withdrawal; or
(b) a rollover distribution.
(9) "Program" means the Palmetto ABLE Savings Program established pursuant to this article.
(10) "Program manager" means a financial organization or an agency or department of another state that has been designated to administer a qualified ABLE Program selected by the State Treasurer to act as a depository or manager of the program, or both.
(11) "Qualified disability expense" means any qualified disability expense included in Section 529A of the federal Internal Revenue Code of 1986, as amended.
(12) "Qualified withdrawal" means a withdrawal from an account to pay the qualified disability expenses of the designated beneficiary of the account.
(13) "Rollover distribution" means a rollover distribution as defined in Section 529A of the federal Internal Revenue Code of 1986, as amended.
(14) "Savings agreement" means an agreement between the program manager or the State Treasurer and the account owner.
(15) "Secretary" means the Secretary of the United States Treasury.
HISTORY: 2016 Act No. 165 (H.3768), Section 1, eff April 29, 2016; 2019 Act No. 88 (H.3986), Section 1, eff May 24, 2019.
Editor's Note
2016 Act No. 165, Section 4, provides as follows:
"SECTION 4. This act takes effect upon approval by the Governor and applies for tax years beginning after 2015."
Effect of Amendment
2019 Act No. 88, Section 1, in (1), substituted "Palmetto ABLE account" for "ABLE savings account"; in (2), in the first sentence, substituted "a Palmetto ABLE account" for "an ABLE savings"; in (4)(a), made a nonsubstantive change; in (9), substituted "Palmetto ABLE Savings Program" for "South Carolina ABLE Savings Program"; and in (10), substituted "ABLE Program" for "ABLE Savings Program".