Legislature(2015 - 2016)HOUSE FINANCE 519
04/06/2016 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB124 | |
| HB47 | |
| HB188 | |
| HCR4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 47 | TELECONFERENCED | |
| += | SB 124 | TELECONFERENCED | |
| + | HB 241 | TELECONFERENCED | |
| + | HCR 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 188 | TELECONFERENCED | |
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."
9:56:04 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 188(FIN), Work Draft (29-LS0787\I).There
being NO OBJECTION, it was so ordered.
Co-Chair Thompson called Mr. Anderson to the table to
review the bill changes.
BRODIE ANDERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
indicated there were three changes in the bill. He looked
at page 1, line 2. The bill was amended by adding,
"limited" before the word, "property." He pointed to page
9, lines 2 through 8, which amended the bill by adding an
exemption (b) to Section 06.65.260, an exemption from
creditor claims:
(b) If a designated beneficiary is default for 30 or
more days on a payment due under a child support
judgment or order, the money in the program account is
not exempt from a claim for the payment of child
support that is in default.
9:58:15 AM
AT EASE
10:06:02 AM
RECONVENED
Mr. Anderson pointed to reiterated that the changes were on
page 1, line 2; and the second change was on page 9, lines
2 through 8. The third change was on page 11, line 20,
which amended the bill by adding "except as provided in AS
06.65.260(b)."
Vice-Chair Saddler, bill sponsor, read the sponsor
statement:
HB 188 seeks to help Alaskans cope with the challenges
of living with a disability by allowing individuals
and families to set up tax-free savings accounts,
called "ABLE accounts," to pay for education, housing,
transportation or other disability-related expenses.
The U.S. Congress passed the "Achieving a Better Life
Experience (ABLE) Act" in 2014, authorizing states to
create special savings accounts for disability-related
expenses modeled after the successful "529 college
savings programs," named after the relevant section of
IRS code.
ABLE accounts, also known as "529A" accounts, allow
individuals with disabilities to improve their
financial security by using private investments to
supplement their benefits from insurance, employment,
Supplemental Security Income (SSI), Medicaid, and
other sources. Assets held in an ABLE account would
not be counted under means tests required for Medicaid
or SSI, although SSI cash benefits would be suspended
if the ABLE balance exceeded $100,000.
ABLE accounts could be spent for education,
transportation, job training and support, assistive
technology, health and wellness, legal and other
qualified services. Contributions would be limited to
$14,000 per year, and capped at $400,000. A person
could have only one account.
To be eligible for an ABLE account, a person must have
become blind or disabled before the age of 26. The
Governor's Council on Disabilities and Special
Education estimates that about 13,770 Alaskans - 10
percent of those with a disability - might qualify for
ABLE accounts.
By empowering Alaskans with disabilities and their
families to build their financial independence, HB 188
will help them meet more of their life challenges by
relying on private resources, without eroding the
value of public benefits to which they are entitled.
ABLE accounts will be important tools for helping them
live full, productive lives in their communities.
Representative Wilson queried the number of people that
could qualify, who currently could not qualify.
10:11:01 AM
KIM SKIPPER, STAFF, REPRESENTATIVE DAN SADDLER, deferred to
Patrick Reinhart.
Representative Wilson wondered why there was not a
consideration of those with low income in the legislation.
Vice-Chair Saddler replied that the bill was targeted at
Alaskans with disabilities. He stated that the bill was
designed to equalize the "playing field."
Ms. Skipper furthered that the bill was modeled after
federal legislation.
Representative Wilson felt that the bill was too limiting
to people with disabilities. She stressed that there were
people that had a difficult time sustaining a job, and
added that she did not know the exact definition of
"disabled." She expressed discomfort with the
differentiation of groups. Ms. Skipper replied that there
was a bill in Congress to expand "able" to the age of 46;
and allow anyone with a college savings plan the
opportunity to "roll" the plan into an able account.
Representative Wilson agreed to hear more information from
the department.
Representative Edgmon thanked the sponsor for the bill, and
expressed support of the legislation. He queried a
provision in the bill that would allow the state to adjust
the age limit, should Congress increase the age limit.
Vice-Chair Saddler replied in the negative. He explained
that the federal able legislation set some parameters,
because it dealt with the Internal Revenue Service (IRS)
provisions. The age parameters were set at 26, and the stat
could adapt to that level or not. He restated that the
limit could not be changed at the state level.
Representative Kawasaki surmised that the underage person
with the account would have a parent file the taxes. Vice-
Chair Saddler agreed.
Representative Pruitt remarked that there was a recently
added provision which allowed for a deceased person's
remaining funds be used to offset the costs of Medicaid. He
wondered where the program fell in the priority of paying
out of a person's estate. Ms. Skipper agreed to provide
that information. She remarked that Medicaid automatically
had a "claw back" provision, but she did not know the
priority.
Vice-Chair Saddler furthered that the "claw back" provision
was not unique to the legislation. He deferred the
Department of Law (DOL) for more information. He announced
that there was a provision in current Medicaid law that
said if a person received value or benefit from the
Medicaid program during their life, the state could recover
as much as possible to cover the cost after death.
10:17:56 AM
Representative Pruitt wondered if the state made effort to
recover the cost after death. Vice-Chair Saddler replied in
the affirmative.
Representative Edgmon asked if the sponsor would be open to
a conceptual amendment that would enable the program to
adapt to the possible congressional changes.
Vice-Chair Saddler thought the bill already incorporated
that language.
Ms. Skipper announced that the proposed language was
already built into the legislation.
Representative Edgmon surmised that his concerns were
already addressed in the bill.
10:20:14 AM
PATRICK REINHART, GOVERNOR'S COUNCIL ON DISABILITIES AND
SPECIAL ED, ANCHORAGE (via teleconference), testified in
strong support of the bill. He remarked that the effort
began to include all people with disabilities of all ages,
but Congress chose to limit it to those people who had
acquired their disability before the age of 26. He shared
that there was an effort in Congress to increase the age to
46, to rollover the 529 accounts, and to increase the
deposit amounts based on poverty level guidelines. He
stated that there was bipartisan support for those changes,
but felt that those changes probably would not occur in the
current Congress. He appreciated that the legislation
included language to anticipate changes.
10:23:10 AM
LORI KING, SELF, JUNEAU (via teleconference), supported HB
188. She shared that she was the mother of a 25-year-old
daughter with autism, developmental delays, and was losing
her sight. Her daughter was a recipient of social security
and public assistance. She explained that her daughter used
budgeting skills, but her income was only $1095. She
announced that the bills with rent, food, and utilities
totaled $1015.
10:27:15 AM
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY, spoke in support of the bill. He announced
that the trustees had approved funding the fiscal note. He
felt that the bill provided a tremendous opportunity for
its beneficiaries.
Co-Chair Thompson OPENED public Testimony.
10:29:03 AM
SARA KUECIM, SELF, JUNEAU, spoke in favor of the bill. She
felt that the bill would help individuals with supported
employment while also receiving Medicaid support. She
stressed that the bill helped to provide dignity to
individuals with disabilities.
10:30:52 AM
STUART SPIELMAN, AUTISM SPEAKS, WASHINGTON DC (via
teleconference), spoke in favor of HB 188. He shared that
he had been working on the issue at the federal level for
over 10 years. He remarked that his interest in the issue
was not only professional, because he has a severely
autistic 21-year-old son. He pointed out that the
legislation was embraced at the federal level as well as
other states throughout the country. He shared that 36
states and the District of Columbia had authorized their
own state able programs.
Co-Chair Thompson CLOSED public testimony.
Vice-Chair Saddler reviewed the fiscal notes.
10:33:19 AM
Representative Wilson felt that the indeterminate fiscal
note should really be a zero fiscal note. She noted that
the Department of Health and Social Services (DHSS) would
be covering the count, rather than the Department of
Revenue (DOR).
Ms. Skipper explained that DHSS would be a small component
of the program. She deferred to Ms. Leary for more
information.
PAM LEARY, DIRECTOR, DIVISION OF TREASURY, DEPARTMENT OF
REVENUE, stated that it was an administrative issue for the
pending fiscal note from DOR, because the CS was not
available. She felt that there would be similar fiscal note
as the one from the Labor and Commerce Committee. The
fiscal note assigned $60,000 in FY 17; and $40,000 in FY 18
from Mental Health Trust receipts.
Representative Wilson looked at the fiscal note component
number 2077, which stated that staff would be required to
monitor and track accounts and file claims; and
administration of accounts would involve account deposits
and balances to confirm that they did not exceed allowable
amounts; and monitoring account dispersements to confirm
that they were qualifying expenses. She felt that the
fiscal note was not related to eligibility. Ms. Leary
replied that DOR would oversee the program, but was not
sure of the form of oversight it would need. She remarked
that there were a number of states that had their own
programs, and also a number of states that were creating a
consortium program. She explained that it was envisioned
that most of the work, including the determination of
benefits, would happen at the vender level. She believed
that it was a requirement at the federal level for the
vender to be responsible for identifying the records of the
individuals.
Representative Wilson restated that the fiscal note should
be zero. She felt that the work would be done by DOR, and
paid out with the receipts from payments. She did not feel
that DHSS should be giving an indeterminate amount of money
to provide service that would not have a cost. She wondered
whether an individual must receive social security
disability benefits to be considered "disabled", or was it
any type of diagnosis before age 26. Ms. Skipper responded
that a person did not have to receive social security
disability benefits, rather have a doctor certificate
declaring a disability.
Representative Wilson felt that there would be many more
people added to Medicaid.
Co-Chair Neuman requested a comment from the bill sponsor.
Mr. Reinhart shared that he could not fully answer
Representative Wilson's question. He stated that the
eligibility program was more related to the applicant's
relationship with the IRS. He remarked that there was not
much eligibility determination by the state.
10:39:54 AM
Representative Wilson shared that her son with Attention
Deficit Hyperactivity Disorder (ADHD) would qualify for the
program. She stressed that there could be a great fiscal
impact to the state with a broad definition of
"disability."
Vice-Chair Saddler replied that the savings in the able
account would be increase tax free, but would not reduce
his taxable income below the point to which he would
qualify for Medicaid.
Representative Wilson surmised that the money in the able
account would not count against Medicaid eligibility.
Representative Munoz wondered if the means test was $2000
for Medicaid. Ms. Leary stated that it was $2000, and was
the social security amount. She explained that it was the
total number of assets that an individual could have,
before their benefits were reduced.
10:42:33 AM
Representative Pruitt felt that the fund was modeled after
a 529 account. He shared that a 529 accounts offered that a
parent could start the account, but at the age of 18 the
child could receive the account or the parent could
maintain ownership of the account. Therefore, the parent
was given the ability to ensure that the money was
appropriately spent. He remarked that, at a certain point,
unspent money could be rolled into a new 529 account or the
money became taxable. He noted that the difference with the
proposed legislation is that the owner of the account was
the actual designee. He queried an advantage of the
importance to place the money in the hands of a parent.
Vice-Chair Saddler asked Representative Pruitt to restate
the question.
Representative Pruitt felt that there was a major
difference in the proposal and a 529 account. Ms. Skipper
thought that Representative Pruitt was correct. She
explained that the account holder could have a
representative to make the decisions.
Representative Pruitt felt that the parent should have the
ability to maintain some control. He surmised that the only
claim that could go against the program was child support.
He queried the development of the provision. Ms. Skipper
replied that in any situation of child support, the
judgment would overrule. She explained that similar
legislation included exemptions from creditor claims
without the need for child support. She furthered that an
individual had asked that the specification be included in
the bill.
10:47:18 AM
Representative Pruitt remarked that the provision was not a
federal policy. Ms. Skipper replied in the affirmative.
Representative Pruitt stressed that the $100,000 could not
be used to make restitution. Ms. Skipper responded that the
account could technically have a maximum of $400,000,
because of the college savings plan contribution limit. She
furthered that the money was more fluid, because it would
be used for expenses that were not covered by Medicaid.
Representative Pruitt stressed that the focus should not be
on what would likely happen, rather there needed to be an
examination of all the potential occurrences. He remarked
that the bill did not specifically mention that the
individual was the only person that could deposit into the
account. Ms. Skipper replied that anyone could contribute
up to $14,000 per year.
Vice-Chair Saddler felt that it would take $14,000 to
achieve the $40,000 cap on the account.
Co-Chair Thompson would be gaveling out in about 5 minutes.
Representative Wilson wanted to amend the fiscal note. She
thought it should be zero.
Vice-Chair Saddler indicated that the fees associated by
the program were the fees could be covered by the fees set
by the investment company that managed the accounts. He
remarked that the indeterminate note was because the number
of applicants was unknown.
10:52:40 AM
AT EASE
10:53:15 AM
RECONVENED
Co-Chair Thompson indicated that the committee would be
recessing to accommodate floor session.
10:53:27 AM
RECESSED
1:25:19 PM
RECONVENED
Co-Chair Thompson indicated HB 188 would be set aside for a
moment.
HB 188 was HEARD and HELD in committee for further
consideration.