SB 104: "An Act relating to financial accounts for persons with disabilities; relating to financial institutions; relating to property exemptions; relating to securities; and providing for an effective date."
00 SENATE BILL NO. 104 01 "An Act relating to financial accounts for persons with disabilities; relating to financial 02 institutions; relating to property exemptions; relating to securities; and providing for an 03 effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 SHORT TITLE. AS 06.65, enacted by sec. 2 of this Act, may be cited as the Alaska 08 ABLE Savings Program Act. 09 * Sec. 2. AS 06 is amended by adding a new chapter to read: 10 Chapter 65. Alaska Savings Program for Eligible Individuals. 11 Sec. 06.65.010. Program authorized. The Alaska savings program for eligible 12 individuals is created in the department. The department shall implement and 13 administer the program under this chapter and as required by the federal authorizing 14 law.
01 Sec. 06.65.020. Department authority. To implement and administer the 02 program, the department may, in addition to the other authority provided to the 03 department under this chapter, 04 (1) contract with a person to advise and assist the department to 05 implement the program; 06 (2) seek rulings and guidance from the secretary and the federal 07 Internal Revenue Service relating to the program; 08 (3) change the program as required for participants in the program 09 to obtain the federal income tax treatment provided by the federal authorizing 10 statute; 11 (4) charge, impose, and collect fees for administering the program 12 or in connection with a contract or other transaction relating to the program; 13 (5) develop marketing plans and material to promote the program; 14 (6) establish a method for the allocation of money to pay for the 15 administrative costs of the program; 16 (7) notify the secretary when a program account has been opened 17 for a designated beneficiary and submit reports on the program as required by the 18 secretary and this chapter. 19 Sec. 06.65.030. Contracts with financial institutions. The department 20 may contract with one or more financial institutions to provide one or more types 21 of program accounts. 22 Sec. 06.65.040. Procurement code. The department shall comply with 23 AS 36.30 (State Procurement Code) when the department procures a contract 24 under AS 06.65.030. 25 Sec. 06.65.050. Procurement specifications. (a) When procuring a 26 contract under AS 06.65.030, the department shall require a person responding to 27 the solicitation for the contract to describe the types of program accounts that the 28 person is offering. 29 (b) When determining the financial institution offer that is the most 30 advantageous to the state, the department shall consider, in addition to the other 31 requirements of AS 36.30,
01 (1) the financial stability and integrity of the financial organization; 02 (2) the safety of the types of program accounts being offered; 03 (3) the ability of the financial organization to satisfy the record- 04 keeping and reporting requirements of the program; 05 (4) the plan of the financial organization for promoting the program 06 and the investment the financial organization is willing to make to promote the 07 program; 08 (5) the fees, if any, that the financial institution will charge the 09 program account owners; 10 (6) the minimum contribution amount that the financial institution 11 will require for the initial deposit into the program account and the minimum 12 contribution amount that the financial organization will require or accept after the 13 initial deposit; 14 (7) the ability of the financial organization to accept electronic 15 payments, including payroll deductions, for a program account; and 16 (8) other benefits to the state or state residents included in the 17 proposal of a financial institution, including fees that the financial institution will 18 pay to the department to cover expenses of the department's operation of the 19 program. 20 Sec. 06.65.060. Financial contractor obligations. In addition to any other 21 obligations imposed by the contract with the department, a financial contractor 22 shall 23 (1) provide program accounts that comply with the federal 24 authorizing law; 25 (2) take the action necessary to keep the program in compliance 26 with the requirements of this chapter and to manage the program accounts in 27 compliance with the federal authorizing law; 28 (3) keep adequate records of each program account and keep each 29 program account segregated from other program accounts; 30 (4) compile the information contained in statements required to be 31 prepared under AS 06.65.200 and provide the statements and the compiled
01 material to the department; 02 (5) provide the department with access to the books and records of 03 the financial contractor to the extent needed to determine compliance with the 04 contract, this chapter, and the federal authorizing law; 05 (6) hold program accounts for the benefit of the program account 06 owner; 07 (7) be audited at least annually by a firm of certified public 08 accountants selected by the department and provide the results of the audits to the 09 department; 10 (8) provide the department with copies of all filings and reports 11 related to the program made by the financial contractor during the contract or 12 while the financial contractor holds program accounts; 13 (9) make available to the department for review the results of 14 periodic examinations of the financial contractor by a state or federal banking, 15 insurance, or securities agency, except to the extent that the report is confidential 16 under state or federal law; and 17 (10) ensure that the descriptions of the program in the media that 18 the financial contractor uses to promote the program are consistent with a 19 marketing plan developed by the department for the program. 20 Sec. 06.65.070. Additional audits. In addition to the annual audit required 21 by AS 06.65.060(7), the department may require a financial contractor to have an 22 audit conducted of the financial contractor's operations and financial position 23 when the department is concerned about the financial position, the record-keeping 24 practices, or the status of the program accounts of the financial contractor. 25 Sec. 06.65.080. Contract termination; nonrenewal. The department may 26 terminate or fail to renew a financial contract. If the department terminates or does 27 not renew a contract with a financial contractor, the department shall take custody 28 of the program accounts held by the financial contractor and transfer the program 29 accounts to another financial contractor as soon as possible and into program 30 accounts that are as similar as possible to the types of program accounts being 31 transferred.
01 Sec. 06.65.090. Eligible individuals. To be eligible for a program account, 02 when an individual or the individual's representative establishes the program 03 account or makes a distribution to another program account under AS 06.65.190, 04 the individual shall 05 (1) have established residency in this state under AS 01.10.055; 06 (2) be an individual who is entitled to benefits based on blindness 07 or disability under 42 U.S.C. 401 - 434 or 42 U.S.C. 1381 - 1383f, and the 08 blindness or disability occurred before the date on which the individual reached 09 the age of 26; and 10 (3) be an individual for whom a disability certification, which 11 satisfies the secretary and the federal authorizing law, is filed with the secretary 12 for the calendar year in which the eligible individual or the eligible individual's 13 representative opens the program account. 14 Sec. 06.65.100. Representative of eligible individual. (a) A person may act as 15 the representative of an eligible individual under this chapter if the eligible individual 16 is a minor or lacks decision-making capacity and if the person is 17 (1) a parent, guardian, or conservator of the eligible individual; in 18 this paragraph, 19 (A) "conservator" has the meaning given in AS 13.06.050; 20 (B) "guardian" has the meaning given in AS 13.06.050; 21 (C) "parent" includes a stepparent; or 22 (2) a trustee of the property of the eligible individual. 23 (b) The representative of an eligible individual may establish a program 24 account for the eligible individual, and the eligible individual is the designated 25 beneficiary of the program account. The representative shall manage the program 26 account for the benefit of the designated beneficiary. 27 (c) In this section, "decision-making capacity" means the ability to 28 understand and appreciate the nature and consequences of a decision and the 29 ability to reach and communicate an informed decision. 30 Sec. 06.65.110. Program account ownership. (a) The owner of a program 31 account is the designated beneficiary of the program account.
01 (b) If a representative of an eligible individual establishes a program account 02 for an eligible individual, the representative is not an owner of the program account 03 and does not have or acquire an interest in the assets of the program account. 04 Sec. 06.65.120. Number of program accounts. An eligible individual 05 may not be the designated beneficiary on more than one program account. 06 Sec. 06.65.130. Program account application. The application for a 07 program account must be in the form established by the department and contain 08 (1) the name, address, and social security number of the program 09 account owner and the representative who opens the program account for the 10 eligible individual; 11 (2) the name, address, and social security number of the designated 12 beneficiary and the representative who opens the program account for the eligible 13 individual; 14 (3) certification that the program account owner has not contributed 15 an amount that exceeds the program account limits set under AS 06.65.150; and 16 (4) additional information that the department and the secretary 17 determine is necessary. 18 Sec. 06.65.140. Program account establishment fee. The financial 19 contractor may charge an eligible individual a nonrefundable fee for establishing a 20 program account. The department shall establish the amount of the fee by contract 21 with the financial contractor or by regulation. 22 Sec. 06.65.150. Program account contributions. (a) A person may not 23 make a contribution to open or add to a program account unless the person makes 24 the contribution in cash. 25 (b) Any person may make a contribution to a program account after the 26 program account is opened, but the amount that the person may contribute is 27 subject to the limits set by the federal authorizing law. 28 (c) The department or the financial contractor shall reject or withdraw 29 from a program account 30 (1) that part of a contribution that exceeds the limit established 31 under (b) of this section; or
01 (2) the total amount of a contribution, if the department or the 02 financial contractor determines that 03 (A) the value of the program account without the 04 contribution is equal to or greater than the maximum limit established by 05 the federal authorizing statute for the program account; or 06 (B) the designated beneficiary is not an eligible individual 07 during the calendar year in which the contribution is made. 08 (d) If a person makes a distribution from a program account during a 09 calendar year, the financial contractor shall report the distribution to the federal 10 Internal Revenue Service and to the account owner or the representative of the 11 account owner. 12 (e) The report under (d) of this section must include the distribution 13 information required by state and federal law. 14 Sec. 06.65.160. Limited investment direction. A designated beneficiary 15 or the designated beneficiary's representative may not, directly or indirectly, direct 16 the investment of a program account, including the earnings on the program 17 account, more than twice in one calendar year. 18 Sec. 06.65.170. Change of designated beneficiary. A designated 19 beneficiary or the designated beneficiary's representative may change the 20 designated beneficiary of an account to an eligible individual who is a member of 21 the family of the previous designated beneficiary. 22 Sec. 06.65.180. Distributions for qualified expenses. Except as allowed 23 under AS 06.65.190, a designated beneficiary or the representative of the 24 designated beneficiary may not make a withdrawal or other distribution from a 25 program account unless the withdrawal or other distribution is used to pay for the 26 qualified expenses of the designated beneficiary. 27 Sec. 06.65.190. Rollover distribution. (a) Subject to the restrictions in the 28 federal authorizing law for rollover distributions, a designated beneficiary or the 29 designated beneficiary's representative may make a distribution of the money in a 30 program account to another program account if the designated beneficiary of the 31 program account to which the distribution is being made is
01 (1) the same eligible individual; or 02 (2) an eligible individual who is a member of the family of the 03 designated beneficiary from whom the distribution is made. 04 (b) To qualify as a distribution allowed under (a) of this section, the 05 designated beneficiary or the designated beneficiary's representative shall make 06 the distribution to the other program account before the 60th day after the 07 designated beneficiary or the designated beneficiary's representative makes the 08 distribution from the program account. 09 Sec. 06.65.200. Statements. (a) A financial contractor shall provide 10 program account statements to the department, the secretary, and the designated 11 beneficiary of each program account established with the financial contractor at 12 least four times each calendar year and within 30 days after the end of the three- 13 month period to which the statement relates. 14 (b) The statements required by (a) of this section must 15 (1) identify each contribution made to the program account during 16 the reporting period; 17 (2) give the total amount of the contributions made to the program 18 account during the reporting period; 19 (3) give the value of the program account at the end of the 20 reporting period; 21 (4) identify each distribution made from the program account 22 during the reporting period; 23 (5) identify contributions that exceed the limits set by the federal 24 authorizing law; and 25 (6) provide other information that the department or the secretary 26 requires to be included in the report. 27 Sec. 06.65.210. Preparation and filing. In addition to the other reporting 28 requirements of this chapter, a program depository shall prepare and file 29 statements and program account information as required by state and federal law. 30 Sec. 06.65.220. Separate accounting. A financial contractor shall provide 31 separate accounting for each program account established with the financial
01 contractor. 02 Sec. 06.65.230. Annual fee. A financial contractor may impose an annual 03 fee on the program account owner for the maintenance of a program account. 04 Sec. 06.65.240. Use as security. A person may not use a program account 05 or an interest in a program account as security for a loan. If a person pledges a 06 program account or an interest in a program account as security for a loan, the 07 pledge is void. 08 Sec. 06.65.250. Exemption from creditor claims. The money in a 09 program account and money paid out of a program account are exempt from a 10 claim by the creditors of the designated beneficiary of the program account. 11 Sec. 06.65.260. No state obligation. (a) This chapter may not be construed 12 to create an obligation of the state, the department, or an agency or instrumentality 13 of the state to guarantee for the benefit of a designated beneficiary 14 (1) the return of the principal deposited in the program account; 15 (2) a rate of interest or other return on the principal in a program 16 account; or 17 (3) the payment of interest or other return on the principal in a 18 program account. 19 (b) Every contract, application, and other document that may be used in 20 connection with opening a program account must clearly state that the state does 21 not insure a program account or guarantee the items described in (a) of this 22 section. 23 Sec. 06.65.270. Confidentiality. The department and the Department of 24 Health and Social Services shall maintain the confidentiality of the information 25 they receive or exchange under this chapter about eligible individuals, designated 26 beneficiaries, and program accounts as required by state and federal law. 27 Sec. 06.65.280. Exchange of information. The department may exchange 28 information with the Department of Health and Social Services to determine 29 whether an individual is an eligible individual. 30 Sec. 06.65.290. Contracts with other states. (a) Notwithstanding the other 31 provisions of this chapter, instead of establishing the program in this state, the
01 department may enter into a contract with another state to allow the residents of 02 this state to participate in a program established by another state under the federal 03 authorizing law. 04 (b) The department may enter into a contract with another state to allow 05 the residents of that contracting state to participate in the program in this state. 06 (c) The procurement of a contract under this section is not subject to 07 AS 36.30 (State Procurement Code). 08 Sec. 06.65.300. Program expense fund. (a) The program expense fund is 09 established as a separate fund of the state in the general fund. 10 (b) The program expense fund consists of money appropriated to the fund 11 to pay the expenses of the program. 12 (c) The department shall pay the expenses incurred by the department to 13 implement and administer the program from the program expense fund. 14 (d) The department shall manage the fund. 15 (e) Except as provided otherwise by the appropriation for the money, the 16 money remaining in the program expense fund at the end of a fiscal year does not 17 lapse and remains available for expenditure under this section in successive fiscal 18 years. 19 Sec. 06.65.310. Regulations. The department shall adopt regulations under 20 AS 44.62 (Administrative Procedure Act) to implement this chapter. 21 Sec. 06.65.320. Annual report. The department shall evaluate the program 22 each year. The department shall submit an annual report containing the evaluation 23 to the senate secretary and chief clerk of the house of representatives on or before 24 the first day of each regular session of the legislature and shall notify the 25 legislature that the report is available. 26 Sec. 06.65.390. Definitions. In this chapter, 27 (1) "department" means the Department of Commerce, 28 Community, and Economic Development; 29 (2) "designated beneficiary" means the eligible individual for 30 whom a program account for qualified expenses is established under this chapter; 31 (3) "eligible individual" means an individual who is eligible under
01 AS 06.65.090; 02 (4) "federal authorizing law" means 26 U.S.C. 529A (Internal 03 Revenue Code) and the regulations issued under that statute; 04 (5) "financial contractor" means a financial institution that enters 05 into a contract with the department under AS 06.65.030; 06 (6) "financial institution" means a person that provides financial 07 services and is 08 (A) organized under this title or authorized to do business in 09 the state under this title; 10 (B) chartered by an agency of the federal government; or 11 (C) subject to the jurisdiction and regulation of the United 12 States Securities and Exchange Commission; 13 (7) "member of the family" has the meaning given in the federal 14 authorizing statute; 15 (8) "program" means the Alaska savings program for eligible 16 individuals established under AS 06.65.010; 17 (9) "program account" means a savings account used by the 18 program to meet the qualified disability expenses of the designated beneficiary of 19 the account; 20 (10) "program account owner" means the designated beneficiary of 21 a program account; 22 (11) "qualified expense" means a qualified disability expense as 23 defined by the federal authorizing law; 24 (12) "representative" means a person who is a representative of an 25 eligible individual under AS 06.65.100(a); 26 (13) "savings account" means a financial account; 27 (14) "secretary" means the United States Secretary of the Treasury. 28 * Sec. 3. AS 09.38.015(a) is amended to read: 29 (a) An individual is entitled to exemption of the following property: 30 (1) a burial plot for the individual and the individual's family; 31 (2) health aids reasonably necessary to enable the individual or a
01 dependent to work or to sustain health; 02 (3) benefits paid or payable for medical, surgical, or hospital care to 03 the extent they are or will be used to pay for the care; 04 (4) an award under AS 18.67 (Violent Crimes Compensation Board) or 05 a crime victim's reparations act of another jurisdiction; 06 (5) benefits paid or payable as a longevity bonus under AS 47.45; 07 (6) compensation or benefits paid or payable and exempt under federal 08 law; 09 (7) liquor licenses granted under AS 04; 10 (8) tuition credit or savings accounts under a higher education savings 11 account established under AS 14.40.802 or an advance college tuition savings contract 12 authorized under AS 14.40.809(a); 13 (9) a permanent fund dividend to the extent allowed under 14 AS 43.23.065; 15 (10) [REPEALED 16 (11)] benefits paid or payable under AS 47.45.301 - 47.45.309; 17 (11) the money in or paid from a program account established 18 under AS 06.65, including interest. 19 * Sec. 4. AS 40.25.120(a) is amended to read: 20 (a) Every person has a right to inspect a public record in the state, including 21 public records in recorders' offices, except 22 (1) records of vital statistics and adoption proceedings, which shall be 23 treated in the manner required by AS 18.50; 24 (2) records pertaining to juveniles unless disclosure is authorized by 25 law; 26 (3) medical and related public health records; 27 (4) records required to be kept confidential by a federal law or 28 regulation or by state law; 29 (5) to the extent the records are required to be kept confidential under 30 20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure 31 or retain federal assistance;
01 (6) records or information compiled for law enforcement purposes, but 02 only to the extent that the production of the law enforcement records or information 03 (A) could reasonably be expected to interfere with enforcement 04 proceedings; 05 (B) would deprive a person of a right to a fair trial or an 06 impartial adjudication; 07 (C) could reasonably be expected to constitute an unwarranted 08 invasion of the personal privacy of a suspect, defendant, victim, or witness; 09 (D) could reasonably be expected to disclose the identity of a 10 confidential source; 11 (E) would disclose confidential techniques and procedures for 12 law enforcement investigations or prosecutions; 13 (F) would disclose guidelines for law enforcement 14 investigations or prosecutions if the disclosure could reasonably be expected to 15 risk circumvention of the law; or 16 (G) could reasonably be expected to endanger the life or 17 physical safety of an individual; 18 (7) names, addresses, and other information identifying a person as a 19 participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the 20 advance college tuition savings program under AS 14.40.803 - 14.40.817; 21 (8) public records containing information that would disclose or might 22 lead to the disclosure of a component in the process used to execute or adopt an 23 electronic signature if the disclosure would or might cause the electronic signature to 24 cease being under the sole control of the person using it; 25 (9) reports submitted under AS 05.25.030 concerning certain 26 collisions, accidents, or other casualties involving boats; 27 (10) records or information pertaining to a plan, program, or 28 procedures for establishing, maintaining, or restoring security in the state, or to a 29 detailed description or evaluation of systems, facilities, or infrastructure in the state, 30 but only to the extent that the production of the records or information 31 (A) could reasonably be expected to interfere with the
01 implementation or enforcement of the security plan, program, or procedures; 02 (B) would disclose confidential guidelines for investigations or 03 enforcement and the disclosure could reasonably be expected to risk 04 circumvention of the law; or 05 (C) could reasonably be expected to endanger the life or 06 physical safety of an individual or to present a real and substantial risk to the 07 public health and welfare; 08 (11) the written notification regarding a proposed regulation provided 09 under AS 24.20.105 to the Department of Law and the affected state agency and 10 communications between the Legislative Affairs Agency, the Department of Law, and 11 the affected state agency under AS 24.20.105; 12 (12) records that are 13 (A) proprietary, privileged, or a trade secret in accordance with 14 AS 43.90.150 or 43.90.220(e); 15 (B) applications that are received under AS 43.90 until notice is 16 published under AS 43.90.160; 17 (13) information of the Alaska Gasline Development Corporation 18 created under AS 31.25.010 or a subsidiary of the Alaska Gasline Development 19 Corporation that is confidential by law or under a valid confidentiality agreement; 20 (14) information under AS 38.05.020(b)(11) that is subject to a 21 confidentiality agreement under AS 38.05.020(b)(12); 22 (15) names, addresses, and other information identifying a person 23 as a participant in the Alaska savings program for eligible individuals under 24 AS 06.65. 25 * Sec. 5. AS 45.55.990(32) is amended to read: 26 (32) "security" means a note; stock; treasury stock; bond; debenture; 27 evidence of indebtedness; certificate of interest or participation in any profit-sharing 28 agreement; limited liability company interest under AS 10.50, notwithstanding the 29 limitations of AS 45.08.103(c); collateral-trust certificate; preorganization certificate 30 or subscription; transferable share; investment contract; voting-trust certificate; 31 certificate of deposit for a security; viatical settlement interest; certificate of interest or
01 participation in an oil, gas, or mining title or lease or in payments out of production 02 under the title or lease or in any sale of or indenture or bond or contract for the 03 conveyance of land or any interest in land; an option on a contract for the future 04 delivery of agricultural or mineral commodities or any other commodity offered or 05 sold to the public and not regulated by the Commodity Futures Trading Commission; 06 however, the contract or option is not subject to the provisions of AS 45.55.070 if it is 07 sold or purchased on the floor of a bona fide exchange or board of trade and offered or 08 sold to the public by a broker-dealer or agent registered under this chapter; investment 09 of money or money's worth including goods furnished or services performed in the 10 risk capital of a venture with the expectation of some benefit to the investor where the 11 investor has no direct control over the investment or policy decision of the venture; or, 12 in general, any interest or instrument commonly known as a "security," or any 13 certificate of interest or participation in, temporary or interim certificate for, receipt 14 for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing; 15 "security" does not include a participation agreement entered into under AS 14.40.802, 16 a program account established under AS 06.65, or an insurance or endowment 17 policy or annuity contract under which an insurance company promises to pay a fixed 18 or variable sum of money either in a lump sum or periodically for life or for some 19 other specified period; 20 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION. The Department of Commerce, Community, and Economic 23 Development shall file its first report required by AS 06.65.320, added by sec. 2 of this Act, 24 on or before the first day of each regular session of the legislature. 25 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 28 Economic Development may adopt regulations authorized by AS 06.65.310, added by sec. 2 29 of this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but 30 not before the effective date of sec. 2 of this Act. 31 * Sec. 8. Section 7 of this Act takes effect immediately under AS 01.10.070(c).