Legislature(2021 - 2022)BARNES 124
03/19/2021 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB133 | |
| State Board of Registration for Architects, Engineers & Land Surveyors | |
| Workers' Compensation Appeals Commission | |
| State Board of Physical Therapy & Occupational Therapy | |
| State Board of Registration for Architects, Engineers & Land Surveyors | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| *+ | HB 133 | TELECONFERENCED | |
HB 133-AK ED SAVINGS PROGRAMS/ELIGIBILITY
3:23:54 PM
CO-CHAIR SPOHNHOLZ announced that the first order of business
would be HOUSE BILL NO. 133, "An Act relating to the Alaska
savings program for eligible individuals; relating to education
savings programs; relating to the Education Trust of Alaska;
relating to the Alaska advance college tuition savings fund;
relating to the Alaska education savings program for children;
and relating to the Governor's Council on Disabilities and
Special Education."
3:24:19 PM
CO-CHAIR FIELDS introduced HB 133 on behalf of the House Labor
and Commerce Standing Committee, sponsor, and offered a
PowerPoint presentation entitled, "HB 133 - ABLE Update." He
began on slide 1, "What is an ABLE Account?" which read as
follows [original punctuation provided]:
ABLE: Achieving a Better Life Experience
?Tax-free savings account for individuals with
qualifying disabilities
?Funds may be used to pay for items such as disability
expenses, education, housing, transportation
?Distributions into accounts are not counted against
individual in determining eligibility for Medicaid and
needs-based assistance programs
CO-CHAIR FIELDS proceeded to slide 4, "ABLE Act of 2013," which
read as follows [original punctuation provided]:
Signed into federal law in December 2014 as part of
the Tax Extenders package
?Established 529A (ABLE) savings account exclusively
for individuals with disabilities
CO-CHAIR FIELDS added that following the signing, former Alaska
State Representative Dan Sadler and former Alaska State Senator
Cathy Giessel passed the first iteration of the Alaska ABLE Act.
He proceeded to slide 5, "Alaska ABLE Act," which read as
follows [original punctuation provided]:
?Signed into law in July 2016
?Authorized establishment of a state ABLE program to
be administered by Department of Revenue
?Matched the 2013 ABLE Act passed by Congress
?Alaska joined the National ABLE Alliance, a group of
17 states formed to share information, create
economies of scale and provide a hub for financial
inquiries
3:25:59 PM
CO-CHAIR FIELDS shared that since the passage of this version of
the ABLE Act, there have been significant federal changes. He
stated that the purpose of the bill is to conform to and take
advantage of those federal changes, which will be discussed in
the subsequent slides. He proceeded to slide 7, "ABLE to Work
Act," which read as follows [original punctuation provided]:
?Signed into law in 2017 as part of the Tax Cuts and
Jobs Act
?Increased annual contributions levels
?Incentivized employment by increasing the
contribution level for employed beneficiaries from
$15,000 to $27,060
CO-CHAIR FIELDS paraphrased from slide 8, "ABLE Financial
Planning Act," which read as follows [original punctuation
provided]:
?Signed into law in 2017 as part of the Tax Cuts and
Jobs Act
Allowed college saving account funds (529 accounts)
to roll over into ABLE accounts
?Allowed individuals who incurred disabilities after
they established 529 college savings plan to roll over
savings into ABLE account
CO-CHAIR FIELDS proceeded to slide 9, "ABLE Age Adjustment Act,"
which read as follows [original punctuation provided]:
?Will increase the age of eligibility from 26 to 46
?Will allow more participation in ABLE accounts
CO-CHAIR FIELDS explained that these changes make sense to him
because people with disabilities have a continued need for
updated training to keep abreast of current labor market
opportunities.
3:27:05 PM
CO-CHAIR FIELDS proceeded to slide 10, "HB 133 Proposed
Updates," and asked whether the committee would like to embark
upon the proposed change of reassigning the management of ABLE
to a different department. He stated that he would like to hear
ideas on the best department to house this program. He
paraphrased the slide, which read as follows [original
punctuation provided]:
?Reassigns department responsibility
?Expands age eligibility limits
?Allows greater flexibility in using funds to pay for
education expenses
Allows 529 program accounts to roll into an ABLE
account
?Aligns with federal regulations regarding program
savings accounts
CO-CHAIR FIELDS began the Sectional Analysis on slide 12,
"Section 1," which read as follows [original punctuation
provided]:
?Establishes AS 06.65.020(b)
?Requires the Department of Health and Social Services
to consult with the Governor's Council on Disabilities
and Special Education when overseeing the Alaska
Savings Program
CO-CHAIR FIELDS moved to slide 13, "Section 2," which read as
follows [original punctuation provided]:
?Expands the age of eligibility from 26 to match
proposed federal law age of 46.
CO-CHAIR FIELDS paraphrased slide 14, "Sections 3-4," which read
as follows [original punctuation provided]:
?Expands eligibility of contributors and the amount of
contributions to program accounts to match guidelines
in AS 14.40.802(f)(3) from Section 10
?Expanded to include:
?Contributions for the beneficiary or for a new
individual who is a member of the family of the former
beneficiary and an eligible individual under AS
06.65.100.
CO-CHAIR FIELDS proceeded to slide 15, "Section 5," and
explained that this section anticipates future federal changes
so that state law may not need to be updated as frequently. The
slide read as follows [original punctuation provided]:
Specifies that a rollover may occur between a program
account to another account if the new account is
authorized by federal law
3:28:28 PM
CO-CHAIR FIELDS paraphrased slide 16, "Section 6," and explained
that it shifts departmental responsibility from the Department
of Revenue (DOR) to the Department of Health and Social Services
(DHSS). He reminded the committee that the question of whether
or not this should be done remains unanswered and he would like
to hear feedback on this aspect of the proposed bill. The slide
read as follows [original punctuation provided]:
Redefines "department" to mean the Department of
Health and Social Services to mark the shift in
supervising authority between the two departments
CO-CHAIR FIELDS proceeded to slide 17, "Section 7," which read
as follows [original punctuation provided]:
Replaces "higher education" with "education" when
referring to an education savings account
CO-CHAIR FIELDS moved to slide 18, "Section 8," which read as
follows [original punctuation provided]:
?Removes the distinction of postsecondary education
when referring to an education savings account
?Renames the "Alaska Higher Education Savings Trust"
to the "Education Trust of Alaska"
CO-CHAIR FIELDS briefly summarized slide 19, "Section 9," which
read as follows [original punctuation provided]:
?Removes the distinction of postsecondary education
when referring to an education savings account
?Renames the "Alaska Higher Education Savings Trust"
to the "Education Trust of Alaska"
?Removes the allowance that education savings accounts
can be used to pay for room and board when using funds
for education costs as this language is already
included in Section 14
3:29:15 PM
CO-CHAIR FIELDS continued to slide 20, "Section 10," which read
as follows [original punctuation provided]:
?Establishes AS 14.40.802(f)(3)
?ABLE participants were previously only able to change
beneficiary of an account to eligible family members
with 529 account or other ABLE account
?Participants are now able to change beneficiary of an
account to any person, not just family members, who
are eligible individuals
?A common reason that transfers happen is that the
funds are no longer needed by original beneficiary
?Eligible individuals are defined as those with
qualifying disabilities, including blindness
CO-CHAIR FIELDS identified that the important item in Section 10
is that Alaskans are not losing savings when they pass away. He
skipped slide 21, "Section 11" and proceeded to slide 22,
"Section 12," which read as follows [original punctuation
provided]:
Allows a program participant to designate a successor
participant to their account and allows changes to
take effect immediately
CO-CHAIR FIELDS explained that slide 23, "Section 13," included
more information on "designated beneficiaries" related to 529
accounts and proceeded to slide 24, "Section 14," which read as
follows [original punctuation provided]:
Defines "designated beneficiary" to have the same
definition given in 26 U.S.C. 529(e)
"Designated beneficiary" means:
(A)the individual designated at the commencement of
participation in the qualified tuition program as the
beneficiary of amounts paid (or to be paid) to the
program,
(B)in the case of a change in beneficiaries described
in subsection (c)(3)(C), the individual who is the new
beneficiary, and
(C)in the case of an interest in a qualified tuition
program purchased by a State or local government (or
agency or instrumentality thereof) or an organization
described in section 501(c)(3) and exempt from
taxation under section 501(a) as part of a scholarship
program operated by such government or organization,
the individual receiving such interest as a
scholarship.
3:31:17 PM
CO-CHAIR FIELDS advanced to slide 29, "Section 15," and
explained that it relates back to 529 accounts and ABLE Act
transfer issues.
CO-CHAIR FIELDS paraphrased slide 30, "Sections 16-23," which
read as follows [original punctuation provided]:
?Renames the "Alaska Higher Education Savings Trust"
to the "Education Trust of Alaska"
?Removes the distinction of higher education when
referring to the Alaska education savings program or
an education investment program
?Replaces "University of Alaska college savings plan"
and "college savings account" with "education savings
plan
CO-CHAIR FIELDS explained that slide 31, "Section 24," refers to
more on conforming changes for educational programs, and that
slide 32, "Section 25," continues with these conforming changes.
CO-CHAIR FIELDS concluded that the conforming changes in the
bill are the increase in age, rollovers from 529 accounts to the
ABLE Act, the expanded beneficiaries, and the expanded amount of
savings in the ABLE Act account to pay for education and
training.
3:32:58 PM
REPRESENTATIVE NELSON asked if Co-Chair Fields could return to
slide 21, "Section 11," in his presentation and explain it.
CO-CHAIR FIELDS responded that he wanted to ask one of the
invited testifiers to explain it.
3:33:21 PM
PAMELA LEARY, Director, Treasury Division, Department of
Revenue, explained that there are certain limits as to what
money can go into ABLE funds. There are a variety of people
that can add money to an account on behalf of someone who has an
ABLE account, and the limit refers to the maximum amount of
money that can go into the account.
3:33:41 PM
CO-CHAIR SPOHNHOLZ asked whether there are any concerns about
exploitation in turning assets over to non-family members. She
also asked whether the bill would allow 529 [accounts] to be
used for[expenditures related to] kindergarten through twelfth
grade ("K-12") and Pre-K.
MS. LEARY deferred the question to another testifier, Tammi
Weaver.
3:35:48 PM
TAMMERA "TAMMI" WEAVER, Trust Administrator, Education Trust of
Alaska, University of Alaska, Fairbanks, responded that the
modifications to the bill do incorporate the changes in the
federal tax law which allow 529 accounts to be used for K-12
education as well as apprenticeship and limited repayments of
student loans.
CO-CHAIR SPOHNHOLZ asked whether that applies only to those with
a disability or to all Alaskans.
MS. WEAVER responded that it applies to anyone who invests in a
529 education savings plan.
CO-CHAIR SPOHNHOLZ commented that that is a huge policy call
change.
MS. WEAVER responded that this change is just to bring the state
statutes in compliance with the federal law, which has been
modified to allow those expenditures.
3:37:07 PM
CHAD HAMPTON, Attorney, Disability Law Center of Alaska (DLCA),
shared that the DCLA is involved every day in advocacy for
people with disabilities, and that the center hears concerns
from these individuals about how to maintain their benefits.
The solution for many of these individuals, he continued, is an
ABLE account. Regarding the earlier question about the
potential for exploitation, he said that there has been a trend
recently in helping individuals with disabilities that may not
have family members to help them, and he gave supportive
decision-making agreements as an example of this. He explained
that these agreements involve finding people in an individual
with disability's network to help the individual understand
information and make decisions. He said that he understands
that there is a concern that this might lead to some
exploitation and that there is no way to necessarily rule out
that exploitation wouldn't happen within the family as well, but
that's why there are backstops in place to protect people with
disabilities such as Adult Protective Services. In advocating
for people with disabilities, he said there is a big distinction
between a person's ability to make unwise decisions, which
everyone has the right to do, and exploitation.
MR. HAMPTON opined that it is a great idea to tie the state ABLE
statutes more directly to the federal ABLE statutes. He shared
that this would allow Alaskans to immediately benefit from
changes in the federal law without waiting for Alaska to catch
up on national disability norms as they may change. He added
that the age extension from 26 to 46 mentioned in the
presentation would be excellent as well as the general
additional flexibility for how ABLE accounts are used.
3:40:27 PM
MR. HAMPTON shared that another challenge to individuals with
disabilities is lack of individualized solutions that can lead
to segregation from the general community. This can come in the
form of separate classrooms for people with disabilities,
sheltered workshops where people don't have the same employment
options, or universal accommodations that aren't tailored to
specific individual needs. Granting more flexibility to make
these decisions will allow Alaskans with ABLE accounts greater
authority over important decisions.
MR. HAMPTON concluded that he has a couple of concerns about HB
133. He considers it a logical change, but did note that even
with the governor's plan for splitting the Department of Health
and Social Services (DHSS) tabled, he asked the committee to
consider potential consequences of implementing ABLE accounts
under HB 133. Another concern he identified regards Section 1
of the bill, which would require the department to consult with
the Governor's Council on Disabilities and Special Education
(GCDSE). He shared that the DLCA understands the intent of this
addition, but he said that a potential ambiguous reading of that
same statutory language might commit the GCDSE to provide
technical support on complex financial matters that it doesn't
have the expertise or staffing to provide. He explained that
the ambiguity arises out of the word "shall" coupled with the
lack of definition on the purpose for consulting with the GCDSE.
He concluded by reiterating that the DLCA supports the changes
that the bill proposes.
3:42:54 PM
CO-CHAIR FIELDS shared that he and his staff talked with the
GCDSE, and that the council's perspective was that it can
continue to support this program through important outreach and
coordination, but agreed that the council is probably not the
most logical entity to support complex financial interactions;
such interactions would better be housed in another department.
He added that the testimony makes him think that although the
council should remain in a supporting role, it does not have the
capacity to "own" the program.
3:43:43 PM
CO-CHAIR SPOHNHOLZ asked Mr. Hampton to provide the committee
with a concrete or specific recommendation if he has one.
3:44:11 PM
CO-CHAIR FIELDS asked if the departments could provide insight
as to whether ABLE accounts would be more appropriately housed
in DOR or DHSS.
3:44:43 PM
MS. LEARY responded that she was present at the birth of the
program, and that it was quite the challenge. The program
joined an alliance of 17 states and developed a request for
proposal (RFP) to find a vendor for assistance in creating and
administering the program. Program coordinators now meet
monthly to talk about issues that impact the constituents of the
program. She shared that there are aspects of investment
involved in the program, which is why it was housed in DOR
initially, but the six investment types in which people can
invest are fairly well identified and have been the same for the
past five years. She added that the alliance of states meets
regularly and if there is any discussion about changes, all
members of the alliance are given equal input. She shared her
opinion that the program in its current state is beyond the
capacity of DOR and the department doesn't have "the touch," but
transferring it to DHSS will help it to continue and give it
that "touch" she identified as missing. She added that she
would be happy to continue having discussions surrounding
investments but that she thinks that the program would have its
needs better served under DHSS.
CO-CHAIR SPOHNHOLZ offered her understanding that finding a way
to create a combination of the financial expertise of DOR and
the programmatic and relational outreach expertise of the GCDSE
is going to be important in the final drafting of the bill. She
asked if Ms. Leary agrees or if she has another suggestion.
MS. LEARY responded that participating in the alliance and
discussing issues like self-certification and relevant federal
legislation would be better served not within DOR, but in DHSS.
She explained that DHSS is much closer to those issues and
understands the needs of constituents. She reiterated that she
would always be available as would her investment staff to
discuss investment choices.
3:48:29 PM
MR. HAMPTON added that there is a potential for a finance and
management services division within DHSS to oversee the
financial management aspects. The GCDSE could be on hand to
handle the disability outreach and implementation focus of it.
CO-CHAIR SPOHNHOLZ asked whether there might not be a
Restructuring Support Agreement (RSA) between DOR and DHSS. She
concluded that the committee understands the issue and can
dedicate some time to coming up with the right structure for the
program during the next meeting.
3:49:41 PM
CO-CHAIR FIELDS acknowledged that former State of Alaska Senate
President Cathy Giessel did all the "leg work" on this bill and
that he and has staff worked to update it.
3:50:06 PM
CO-CHAIR SPOHNHOLZ announced that HB 133 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Jeffrey Garness Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Jodi Pfeiffer Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Lisa Radley Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Lisa Radley Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Loren Leman Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Nathan Missler Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Randall Rozier Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Rebecca Dean Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Rebecca Dean Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Robert Bob Bell Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Tyler Andrews Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Tyler Andrews Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Amy Steele Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Arpad Bruce Magyar Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Arpad Magyar Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Deirdre Ford Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Edward Leonetti Board Application 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Edward Leonetti Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Fred Wallis Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| Jake Maxwell Resume 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HL&C Confirmations 2021 |
| HB 133 Sponsor Presentation 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 Sectional Analysis 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 Sponsor Statement 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 Supporting Document - 10 Things You Should Know About ABLE 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 Supporting Document - IRS ABLE Accounts Info 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 Supporting Document - UA Press Release 3.18.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 v. A 3.10.21.PDF |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |
| HB 133 Fiscal Note UA-SYSBRA 3.13.21.pdf |
HL&C 3/19/2021 3:15:00 PM |
HB 133 |