Legislature(2015 - 2016)HOUSE FINANCE 519

04/07/2016 08:30 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 8:45 a.m. Today --
+ HB 259 RELOCATION ASSISTANCE FOR FED. PROJ/PROG TELECONFERENCED
Moved HB 259 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ HB 188 PERSON W/DISABILITY SAVINGS ACCOUNTS TELECONFERENCED
Moved CSHB 188(FIN) Out of Committee
HOUSE BILL NO. 188                                                                                                            
                                                                                                                                
     "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."                                                                          
                                                                                                                                
9:10:41 AM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute  for  HB  188, Work  Draft  (29-LS0787\G).  There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Representative Thompson  invited his staff, Mr.  Anderson to                                                                    
the table to  explain the differences between  Version I [N]                                                                    
and the committee substitute version G.                                                                                         
                                                                                                                                
BRODIE  ANDERSON,  STAFF,   REPRESENTATIVE  STEVE  THOMPSON,                                                                    
explained  the changes  to the  committee substitute.  There                                                                    
were four changes in the  bill from the previous version. He                                                                    
noted  the  first change  was  on  Page  1 of  the  previous                                                                    
Version P  [N] on  lines 2  and 3 in  the title.  It deleted                                                                    
"Creating a limited property exemption  for money in or paid                                                                    
from a financial  account in the program  with an individual                                                                    
with a disability".  The second change was on  Page 9, lines                                                                    
2-8  of Version  P [N].  It deleted  Section 06.65.260,  the                                                                    
exemption from  creditor claims which removed  the exemption                                                                    
from the  bill. The third change  was also in Version  P [N]                                                                    
on Page 11 [12], lines  20-12 [17-18]. It deleted conforming                                                                    
language from subsection 11. The  final change was all other                                                                    
sections after the deletion were  remunerated to reflect the                                                                    
new sections.                                                                                                                   
                                                                                                                                
9:12:37 AM                                                                                                                    
                                                                                                                                
Representative Munoz asked Mr.  Anderson to repeat the first                                                                    
change. Mr.  Anderson responded that  it was a  title change                                                                    
which  deleted the  sections referencing  the exemption.  In                                                                    
the previous version the lines were on Page 1, lines 2-3.                                                                       
                                                                                                                                
Vice-Chair  Saddler  wanted  to answer  two  questions  from                                                                    
earlier meetings.  There had been  a question  about whether                                                                    
there  was a  need  for  funds in  the  ABLE  account to  be                                                                    
protected  from creditors.  In the  CS before  the committee                                                                    
the  section  was  deleted  that  would  have  provided  the                                                                    
protection against  creditors and state law  including child                                                                    
support  orders.  There  was  no  inhibition  to  prevent  a                                                                    
creditor  from  going  after  the amount  of  funds  in  the                                                                    
account. One of the questions  that had been asked concerned                                                                    
the lack  of a  zero fiscal note  from Department  of Health                                                                    
and  Social Services  (DHSS). The  department had  consulted                                                                    
with Department of  Revenue (DOR) and currently  there was a                                                                    
zero  fiscal note  reflecting the  minimal to  implement the                                                                    
bill.  The  cost  could be  covered  with  the  department's                                                                    
existing budget.  There had been some  discussion about what                                                                    
level  of disability  qualified  a person  to  open an  ABLE                                                                    
account  and how  a disability  was determined.  He answered                                                                    
that a  person had  to either  be eligible  for supplemental                                                                    
security  income or  meet the  same  standard. The  standard                                                                    
stated  that  the  disability   standard  for  children  for                                                                    
claiming  benefits under  the  supplemental security  income                                                                    
program was  based on the  disability which meant  that they                                                                    
had to  have marked  and severe functional  limitations. The                                                                    
certification of  the limitations had  to include a  copy of                                                                    
the  individual's   diagnosis  relating  to   that  person's                                                                    
relative  impairments and  signed  by  a licensed  physician                                                                    
under the penalty of perjury.                                                                                                   
                                                                                                                                
Vice-Chair Saddler  continued that  there was a  question as                                                                    
to how to be sure a  person was using their ABLE account for                                                                    
the appropriate  expenses. The answer  was that they  had to                                                                    
file  the appropriate  paperwork  with the  IRS to  document                                                                    
their  deposits  and  their disbursements  from  their  ABLE                                                                    
account. If  someone were  to lie on  their tax  return they                                                                    
would be subject  to the same penalty that  placed Al Capone                                                                    
in jail.  Lastly, it was  asked at what level  of precedence                                                                    
did the state  have in recovering Medicaid  expenses from an                                                                    
ABLE account.  The state was  fifth. He elaborated  that the                                                                    
order of precedence was that  first their estate went to pay                                                                    
the  costs  and  expenses  for  the  administration  of  the                                                                    
estate; second, the regional  funeral expenses; third, debts                                                                    
and taxes with  a federal preference for  child support past                                                                    
due  payments;  fourth,  reasonable  and  necessary  medical                                                                    
expenses of the last illness  of the person who died; fifth,                                                                    
debts   and  taxes   with   preference  including   Medicaid                                                                    
payments;  and sixth,  all other  claims. If  there was  any                                                                    
other money remaining it would  go to the person's estate to                                                                    
be  disposed  of  by  will  or  through  the  probate  court                                                                    
process.                                                                                                                        
                                                                                                                                
9:15:50 AM                                                                                                                    
                                                                                                                                
Representative Gattis  thanked the sponsor. She  thought the                                                                    
bill  was better  in the  current day  than in  the previous                                                                    
day.                                                                                                                            
                                                                                                                                
Vice-Chair  Saddler  appreciated  the  thoroughness  of  the                                                                    
committee process.                                                                                                              
                                                                                                                                
9:16:16 AM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  about  the  fiscal note.  He                                                                    
stated  that part  of  the  ABLE Act  was  to shield  assets                                                                    
within  the  account  for purposes  of  Medicaid  and  other                                                                    
programs. He  thought it would  have a fiscal impact  if the                                                                    
account was no longer an asset of the individual.                                                                               
                                                                                                                                
Vice-Chair Saddler  responded in the negative.  He explained                                                                    
that  Medicaid  was not  a  means  except for  the  original                                                                    
qualification.  He  relayed  that   the  means  testing  was                                                                    
primarily for supplemental security income.                                                                                     
                                                                                                                                
9:17:03 AM                                                                                                                    
                                                                                                                                
Representative Kawasaki asked if  it included other programs                                                                    
the state had  specifically through the group  that also had                                                                    
asset tests.                                                                                                                    
                                                                                                                                
Vice-Chair Saddler responded in the affirmative.                                                                                
                                                                                                                                
9:17:18 AM                                                                                                                    
                                                                                                                                
Representative Gara  remarked that there would  be a certain                                                                    
number of  additional people who would  qualify for Medicaid                                                                    
which he thought was appropriate.  He hoped in the following                                                                    
year the legislature would not  have to make additional cuts                                                                    
to  make up  for  it. He  thought  the individuals  deserved                                                                    
treatment. He asked Vice-Chair Saddler  if he had an opinion                                                                    
on the issue.                                                                                                                   
                                                                                                                                
Vice-Chair  Saddler did  not see  how  it would  add to  the                                                                    
categories of people who qualified for Medicaid.                                                                                
                                                                                                                                
9:17:56 AM                                                                                                                    
                                                                                                                                
Representative  Gara indicated  the bill  would help  shield                                                                    
assets from  being counted which  he thought  was completely                                                                    
fine. He thought some people  would qualify for Medicaid who                                                                    
currently did not.                                                                                                              
                                                                                                                                
9:18:15 AM                                                                                                                    
                                                                                                                                
KIM  SKIPPER, STAFF,  REPRESENTATIVE DAN  SADDLER, responded                                                                    
that the  bill was  intended for  disabled people,  some who                                                                    
could be  on Medicaid  and social security  income. However,                                                                    
she did  not think it would  add to the number  of people on                                                                    
Medicaid  but  would  enable  the  people  in  the  disabled                                                                    
condition to save money.                                                                                                        
                                                                                                                                
Vice-Chair Saddler  added that it  would be people  who were                                                                    
disabled and often  did not have income. He  did not believe                                                                    
there would  be many people  that would be  working, earning                                                                    
income, and  having an ABLE  account sheltering  income. The                                                                    
point of the bill was  to shelter their income from interest                                                                    
on an account.                                                                                                                  
                                                                                                                                
9:19:14 AM                                                                                                                    
                                                                                                                                
Representative Gara  did not have a  problem with additional                                                                    
recipients.  He  just  did  not  want  to  have  to  see  an                                                                    
additional  reduction  to  offset   it.  He  also  asked  if                                                                    
disabled people would no longer  be protected from creditors                                                                    
on the  ABLE account with  the new  version of the  bill. He                                                                    
wondered  if the  representative  was  comfortable with  the                                                                    
change.                                                                                                                         
                                                                                                                                
Vice-Chair  Saddler   stated  that   he  was   correct.  The                                                                    
protections were removed in the  newest version of the bill.                                                                    
He was comfortable because he did  not see much of a risk of                                                                    
someone going  bankrupt. There was  an interest  and concern                                                                    
expressed about people that would  potentially seek to abuse                                                                    
the  account. He  did not  see much  of a  risk and  did not                                                                    
think the  protection was  all that  effective in  the first                                                                    
place.                                                                                                                          
                                                                                                                                
9:20:22 AM                                                                                                                    
                                                                                                                                
Representative Wilson  stated that  the definition  from the                                                                    
previous  day versus  how  it was  depicted  in the  current                                                                    
version of the  bill was much different. She  was in support                                                                    
of the bill. She knew folks  who had wanted to get part time                                                                    
jobs. However,  social security took  $2 away from  a person                                                                    
for every dollar they made which  was not a big incentive to                                                                    
get a job.  She thought  any extra income was a benefit. The                                                                    
bill  would  allow   folks  to  get  a   job  without  being                                                                    
penalized. She really appreciated  a better definition which                                                                    
made  her feel  more comfortable  with the  legislation. She                                                                    
thanked the bill sponsor.                                                                                                       
                                                                                                                                
9:21:28 AM                                                                                                                    
                                                                                                                                
Co-Chair Neuman reviewed the fiscal notes from the bill.                                                                        
                                                                                                                                
9:22:07 AM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  MOVED to  REPORT  CSHB  188 (FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying zero  and fiscal impact  notes. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  188 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass" recommendation  and with one  zero fiscal note  by the                                                                    
Department  of Health  and Social  Services  and one  fiscal                                                                    
impact note by the Department of Revenue.                                                                                       
                                                                                                                                
Co-Chair  Thompson reviewed  the  agenda  for the  following                                                                    
meeting.                                                                                                                        
                                                                                                                                

Document Name Date/Time Subjects
HB 188 NEW FN DOR T&T 4-6-16.pdf HFIN 4/7/2016 8:30:00 AM
HB 188
HB 188 CS WORKDRAFT FIN vG.pdf HFIN 4/7/2016 8:30:00 AM
HB 188