Legislature(2015 - 2016)BARNES 124

03/16/2016 03:15 PM LABOR & COMMERCE

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          HB 188-PERSON W/DISABILITY SAVINGS ACCOUNTS                                                                       
3:21:32 PM                                                                                                                    
CHAIR OLSON announced  that the first order of  business would be                                                               
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."                                                                                               
3:22:14 PM                                                                                                                    
REPRESENTATIVE  HUGHES  moved  to adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB 188,  labeled  29-LS0787\E,  Bannister,                                                               
3/9/16,  as the  working document.     There being  no objection,                                                               
Version E was before the committee.                                                                                             
3:22:37 PM                                                                                                                    
KIM  SKIPPER,  Staff  to  Representative  Saddler,  Alaska  State                                                               
Legislature, informed  the committee  the main  change to  HB 188                                                               
from the  original version to  Version E was that  the Department                                                               
of Revenue  would run  the program instead  of the  Department of                                                               
Commerce,  Community &  Economic  Development.   Further  changes                                                               
are:   broader  language has  been  added related  to changes  in                                                               
federal  authorizing  law;  allows  DOR to  contract  with  other                                                               
states  to  join a  consortium  and  share administrative  tasks;                                                               
allows DOR  to have  an equal  vote in  the request  for proposal                                                               
(RFP)  process; allows  DOR to  contract with  its own  financial                                                               
institution under  certain conditions.  She  paraphrased from the                                                               
following sectional analysis [original punctuation provided]:                                                                   
       Sec. 1: Cites this as the Alaska ABLE Act Savings                                                                        
     Program Act                                                                                                                
     Sec.  2:  Creates  a new  chapter  65.  Alaska  Savings                                                                    
     Program for Eligible Individuals                                                                                           
          Sec. 06.65.010: Program authorized. Authorizes                                                                        
     Alaska ABLE  savings program in the  Department - which                                                                    
     is  the  Alaska Department  of  Revenue.  Allows it  to                                                                    
     implement and administer the  program under the Federal                                                                    
     ABLE Act.                                                                                                                  
          Sec.   06.65.020:   General   department   duties.                                                                    
     Outlines the  duties of the department  in implementing                                                                    
     and administering the program.                                                                                             
          Sec. 06.65.030: Modification of program. Gives                                                                        
     the  Department  authority  to modify  the  program  in                                                                    
     accordance to any federal law changes                                                                                      
          Sec. 06.65.040: Additional department powers.                                                                         
     Allows department to set  fees for program transactions                                                                    
     and  services  and  also   develop  marketing  plan  to                                                                    
     promote the ABLE program                                                                                                   
          Sec.     06.65.050:     Contracting     authority;                                                                    
     procurement  exemption. Allows  department to  contract                                                                    
     with a  person to  assist in implementing  the program,                                                                    
     provide  services,  join  other  states  to  obtain  or                                                                    
     provide   services    for   implementation,    join   a                                                                    
     cooperative  effort   with  other  states   to  provide                                                                    
     services for the program  that could include investment                                                                    
     and record-keeping services. Allows  state to join with                                                                    
     other   states  to   allow   an   Alaska  resident   to                                                                    
     participate  in  a  program   in  another  state  under                                                                    
     federal  authorizing law  and for  an outside  state to                                                                    
     participate in a program in  this state. If contracting                                                                    
     with another  state, AS  36.30 (Procurement  Code) will                                                                    
     not apply.                                                                                                                 
     Sec.  06.65.060:   Investment  oversight:   Allows  the                                                                    
     department   to  oversee   and  approve   selection  of                                                                    
     investment managers  and advisors for the  program, and                                                                    
     to  oversee all  investment disclosures  and regulatory                                                                    
     filings related to program investments                                                                                     
     Sec.   06.65.070:  Financial   contractor  obligations:                                                                    
     outlines duties/obligations  of the  selected financial                                                                    
     Sec.   06.65.080:   Additional   audits:   Allows   the                                                                    
     department  to  order  an  audit  of  the  contractor's                                                                    
     financial operation and position  in addition to annual                                                                    
     audit if the department has reason to be concerned                                                                         
     Sec.  06.65.090:   Contract  termination;  non-renewal.                                                                    
     Gives  department authority  to not  renew a  financial                                                                    
     contract. If  so it would  take custody of  the program                                                                    
     accounts  and   transfer  them  to   another  financial                                                                    
     contractor that offers similar program accounts                                                                            
     Sec. 06.65.100: Eligible  individuals. Describes who is                                                                    
     eligible to participate in the program.                                                                                    
     Sec.    06.65.110:     Representative    of    eligible                                                                    
     individuals. Describes who may  act as a representative                                                                    
     of  the eligible  individual who  is a  minor or  lacks                                                                    
     decision-making capacity                                                                                                   
     Sec. 06.65.120: Program  account ownership. States that                                                                    
     the  owner of  the  program account  is the  designated                                                                    
     Sec.  06.65.130:  Number  of program  accounts.  Allows                                                                    
     only  one program  account  per designated  beneficiary                                                                    
     under federal authorizing law.                                                                                             
     Sec. 06.65.140:  Program account  application: Outlines                                                                    
     department procedures for  program account applications                                                                    
     and information to be collected in that process                                                                            
     Sec.  06.65.150:  Program  account  establishment  fee.                                                                    
     Allows financial  contractor to charge  a nonrefundable                                                                    
     to   establish  program   account.  That   fee  to   be                                                                    
     determined   in  the   contract   with  the   financial                                                                    
     Sec.   06.65.160:    Program   account   contributions.                                                                    
     Outlines  how a  person  can make  a contribution,  the                                                                    
     limit authorized  by federal law, allows  department to                                                                    
     reject  or withdraw  a contribution  that exceeds  that                                                                    
     annual   limit   or   maximum  limit   established   by                                                                    
     authorizing  law or  if designated  beneficiary is  not                                                                    
     eligible,  and that  financial  contractor must  report                                                                    
     contributions to the IRS.                                                                                                  
     Sec.  06.65.170: Limited  investment direction.  Limits                                                                    
     to  two   the  number   of  times  a   program  account                                                                    
     investment can be changed.                                                                                                 
     Sec.  06.65.180:  Change   of  designated  beneficiary.                                                                    
     Allows  a designated  beneficiary or  representative to                                                                    
     change beneficiary  of an  account to  another eligible                                                                    
     individual in the family.                                                                                                  
     Sec.  06.65.190: Distribution  for qualified  expenses.                                                                    
     States that  withdrawals from the program  accounts may                                                                    
     only be used for  qualified expenses for the designated                                                                    
     Sec.  06.65.200:  Rollover   distribution.  Subject  to                                                                    
     federal law governing rollovers,  a distribution from a                                                                    
     program  account can  be made  to  the same  designated                                                                    
     beneficiary  or  another  eligible  individual  in  the                                                                    
     family, and the timeframe for that to be done.                                                                             
     Sec.  06.65.210: Statements.  Requires that  statements                                                                    
     re: program accounts be issued  4 times a year at times                                                                    
     established  by the  department  and  that the  program                                                                    
     contractor   provide   related   information   at   the                                                                    
     department's request.                                                                                                      
     Sec. 06.65.220: Preparation and  filing. In addition to                                                                    
     other reports a financial  contractor shall prepare and                                                                    
     file statements  required under  state and  federal law                                                                    
     and other agencies.                                                                                                        
     Sec.   06.65.230:  Separate   accounting.  Requires   a                                                                    
     financial  contractor  to provide  separate  accounting                                                                    
     for each program account.                                                                                                  
     Sec.   06.65.240:  Annual   fee.  Allows   a  financial                                                                    
     contractor may charge an annual  fee for maintenance of                                                                    
     a program account.                                                                                                         
     Sec. 06.65.250:  Use as  security. Prohibits  a program                                                                    
     account from being used as security for a loan                                                                             
     Sec. 06.65.260: Exemption  from creditor claims. States                                                                    
     that  a program  account is  exempt from  a claim  by a                                                                    
     Sec. 06.65.270: No state  obligation. Declares that the                                                                    
     program  does not  create an  obligation of  the state,                                                                    
     department, or  any agency to  guarantee the  return of                                                                    
     principal  or  pay  interest  on  the  principal  in  a                                                                    
     program account                                                                                                            
     Sec.   06.65.280:   Confidentiality.   Specifies   that                                                                    
     program account information is confidential                                                                                
     Sec.  06.65.290: Exchange  of  information. Allows  the                                                                    
     Department to exchange  information with the Department                                                                    
     of Health and Social  Services and other state agencies                                                                    
     to determine whether an individual is eligible                                                                             
     Sec.  06.65.300: Treatment  under means  test programs.                                                                    
     Specifies   the  program   account   amounts  must   be                                                                    
     disregarded  in  determining   eligibility  for  means-                                                                    
     tested programs                                                                                                            
     Sec. 06.65.310:  Deposit from permanent  fund dividend.                                                                    
     Allows deposits to program  accounts from the permanent                                                                    
     fund dividend                                                                                                              
     Sec.  06.65.320:  Program   expense  fund.  Establishes                                                                    
     program  expense  fund  and describes  it  purpose  and                                                                    
     Sec. 06.65.330: Medicaid claims:  Allows that the state                                                                    
     may  file a  claim  against the  program  account of  a                                                                    
     beneficiary who dies.                                                                                                      
     Sec. 06.65.340: Governing  law. Establishes federal law                                                                    
     as governing to  the extent of any  conflict with state                                                                    
     Sec.  06.65.350: Regulations.  Requires the  department                                                                    
     to adopt implementing regulations                                                                                          
     Sec. 06.65.360: Annual  report. Requires the department                                                                    
     to evaluate  the program each  year and file  an annual                                                                    
     report  on  or before  the  start  of each  legislative                                                                    
     session beginning in 2018                                                                                                  
     Sec. 06.65.390: Definitions.                                                                                               
     Sec. 3:                                                                                                                    
     AS 09.38.015(a): Creates an exemption  for amounts in a                                                                    
     program account                                                                                                            
     Sec.  4: AS  36.30.850(b):  Adds  ABLE program  account                                                                    
     oversight as  a responsibility  of the  Commissioner of                                                                    
     Sec  5:  AS  40.25.120(a)   is  amended  to  create  an                                                                    
     exception  to public  inspection for  names, addresses,                                                                    
     and other program account identifying information                                                                          
     Sec.  6  AS  45.55.990(32): Excludes  program  accounts                                                                    
     from the definition of "security"                                                                                          
     Sec. 7: AS 47.07.055: Allows  the state to file a claim                                                                    
     against  the designated  beneficiary's program  account                                                                    
     after the individual dies                                                                                                  
     Sec. 8: Transition                                                                                                         
     Requires  the Department  to file  its first  report on                                                                    
     the program  on or before  the first day of  the Second                                                                    
     Regular Session  of Thirtieth Alaska  State Legislature                                                                    
     Sec. 9: Transition                                                                                                         
     Allows  the Department  to adopt  regulations, but  not                                                                    
     before   the   effective   date   of   the   provisions                                                                    
     authorizing the Alaska ABLE savings program                                                                                
     Sec. 10: Effective Date                                                                                                    
     Section 9 takes effect immediately                                                                                         
3:32:46 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  returned attention to  proposed Section                                                               
06.65.180   [text  previously   provided],  and   questioned  why                                                               
accounts should  be transferred  from the  designated beneficiary                                                               
to another member of the family.                                                                                                
MS. SKIPPER deferred to legal counsel for Autism Speaks.                                                                        
3:33:42 PM                                                                                                                    
STUART  SPIELMAN,  Senior  Policy  Advisor  and  Counsel,  Autism                                                               
Speaks,  stated that  this provision  is consistent  with federal                                                               
law  that provides  for  rollovers  between affected  [qualified]                                                               
family  members.    It  is not  uncommon  that  individuals  with                                                               
disabilities have affected family members.                                                                                      
REPRESENTATIVE JOSEPHSON  returned attention to  proposed Section                                                               
06.65.260  [text  previously  provided],   and  asked  whether  a                                                               
disabled person can enter into a  contract that is lawful, and if                                                               
so, whether the contract is attachable in the case of a dispute.                                                                
MR. SPIELMAN  advised this  is another  provision in  the federal                                                               
law.    An  individual  with  a  disability  is  presumed  to  be                                                               
competent  in most  states; however,  such as  in bankruptcy  law                                                               
that protects  one's housing, there  are certain  protections for                                                               
REPRESENTATIVE  LEDOUX  directed  attention to  proposed  Section                                                               
06.65.260 [text  previously provided],  and pointed out  that the                                                               
account  can  hold  up  to   $400,000,  which  is  a  significant                                                               
exemption, and  presuming that individuals with  disabilities can                                                               
enter into contracts, she expressed her concern.                                                                                
CHAIR  OLSON  opined  that  most  accounts  would  be  for  lower                                                               
REPRESENTATIVE LEDOUX  agreed, but  the exemption  includes those                                                               
who do have $400,000, and she suggested a cap at a lower level.                                                                 
3:40:33 PM                                                                                                                    
The committee took an at ease from 3:40 p.m. to 3:43 p.m.                                                                       
3:43:12 PM                                                                                                                    
MR.  SPIELMAN,  in response  to  Representative  LeDoux, said  he                                                               
would respond  in writing  to the question  as to  whether states                                                               
could reduce the cap.                                                                                                           
REPRESENTATIVE  HUGHES  directed  attention to  proposed  Section                                                               
06.65.160 [text  previously provided],  and asked  whether excess                                                               
funds must be returned to the designated beneficiary.                                                                           
MS. SKIPPER said correct.                                                                                                       
REPRESENTATIVE  HUGHES  directed  attention to  proposed  Section                                                               
06.65.310 [text  previously provided], and asked  for the purpose                                                               
of  including  a provision  that  allows  for  the deposit  of  a                                                               
permanent fund dividend.                                                                                                        
MS.  SKIPPER  stated  the  sponsor intended  "to  just  like  the                                                               
college savings plan, to have  a check-off box"; however, at this                                                               
time  beneficiaries  would  follow  the procedure  for  a  direct                                                               
3:45:40 PM                                                                                                                    
CHAIR OLSON,  after ascertaining no  one else wished  to testify,                                                               
closed public testimony,                                                                                                        
[HB 188 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB188 Draft Proposed Blank CS ver E.pdf HL&C 3/16/2016 3:15:00 PM
HB 188
HB188 Sectional Analysis for Draft Proposed Blank CS ver E.pdf HL&C 3/16/2016 3:15:00 PM
HB 188
HB188 Sponsor Statement.pdf HL&C 3/16/2016 3:15:00 PM
HB 188
HB188 Supporting Documents-Written Testimony Edith McCusker 03-09-16.pdf HL&C 3/16/2016 3:15:00 PM
HB 188
HB337 Draft Proposed Blank CS ver H.pdf HL&C 3/16/2016 3:15:00 PM
HB 337
HB313 Draft Proposed Amendment A.2.pdf HL&C 3/16/2016 3:15:00 PM
HB 313
HB133 Amendment A.2 Sectional Analysis.pdf HL&C 3/16/2016 3:15:00 PM
HB 133
HB313 Opposing Documents-Letter-Teamsters Local 959 03-15-16.pdf HL&C 3/16/2016 3:15:00 PM
HB 313
HB313 Opposing Documents-Written Testimony Wesley Canfield 03-14-16.pdf HL&C 3/16/2016 3:15:00 PM
HB 313
HB313 Supporting Documents-Letter-NFIB 03-14-16.PDF HL&C 3/16/2016 3:15:00 PM
HB 313
HB313 Opposing Documents-Letter-International Union of Operating Engineers 03-14-16.PDF HL&C 3/16/2016 3:15:00 PM
HB 313
HB263 ver A.pdf HL&C 3/16/2016 3:15:00 PM
HB 263
HB263 Transmittal Letter.pdf HL&C 3/16/2016 3:15:00 PM
HB 263
HB263 Sectional Analysis.pdf HL&C 3/16/2016 3:15:00 PM
HB 263
HB263 Fiscal Note-DOLWD-OSH-11-17-15.pdf HL&C 3/16/2016 3:15:00 PM
HB 263
HB313 Sectional Analysis Amendment A.2 .pdf HL&C 3/16/2016 3:15:00 PM
HB 313