HB 133-AK ED SAVINGS PROGRAMS/ELIGIBILITY  3:09:29 PM CO-CHAIR ZULKOSKY 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." 3:09:43 PM REPRESENTATIVE FIELDS presented HB 133, as prime sponsor. He 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 REPRESENTATIVE 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 REPRESENTATIVE FIELDS noted that former Alaska State Senator Cathy Giessel and former Alaska State Representative Dan Saddler championed the Alaska ABLE Act two years after it was signed into federal law which authorized a state ABLE program through the Department of Revenue (DOR). This allowed Alaska to join the National ABLE Alliance, which is a group of states that work together on supporting the ABLE accounts. He shared his understanding that the ABLE program has been successful in Alaska considering the number of individuals that have ABLE accounts. REPRESENTATIVE FIELDS advanced 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 REPRESENTATIVE FIELDS advanced 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 3:13:40 PM REPRESENTATIVE FIELDS continued on slide 10, "HB 133 Proposed Updates," 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 REPRESENTATIVE FIELDS noted that former State of Alaska Senator Cathy Giessel and her staff did most of the work on HB 133, and he said he suspects it would have passed in 2020 had COVID-19 not intervened. 3:15:15 PM CATHY GIESSEL, former State of Alaska Senator, testified in support of HB 133. She reminded the committee that the ABLE Act was signed into federal law in 2014, and wanted to ensure that committee members are aware that the members of U.S. Congress who originally put the bill forward originally on the federal level were family members of individuals with disabilities, and she presumed that these Congress members understood the financial burden for individuals with disabilities, as well as the constraints placed on these individuals. She shared her understanding that these members of Congress wanted to create a program that would increase the opportunities for financial independence and greater self-sufficiency for individuals with disabilities. She explained that this program allows a 529-A ABLE savings account for individuals with disabilities, which she said is a "game changer." She shared that, a few years ago, it was estimated that about 13,000 Alaskans were eligible for this type of account. She said that one of the things that she tries to achieve when speaking with individuals with disabilities is to make them aware of 529-A ABLE accounts. She expressed her enthusiastic support for raising the age of onset of disability from 26 to 46 years. She said that HB 133 would comply with the new federal guidelines that allow even more people to participate in ABLE accounts. She added that former State of Alaska Representative, Dan Saddler had a family member who had a disability, and she shared her understanding that this meant that he knew what the costs associated with having a disability were, and the limited opportunities available to individuals with disabilities. She shared that about a year and a half after the bill had passed and was signed, her sixth grandson was born with significant disabilities, and she now understands firsthand how easy it is for her to contribute to her grandson's ABLE account. She expressed that this is a bi- partisan "win-win" piece of legislation that would be significant in helping individuals with disabilities and the families of those individuals. 3:19:12 PM REPRESENTATIVE KURKA asked Senator Giessel for clarification as to the state's role in ABLE accounts. He opined that it sounded like a "tax shield" due to it starting out as a federal program. REPRESENTATIVE FIELDS responded that the 529 accounts are not for tax shielding but for assisting people experiencing disabilities to be as self-sufficient as possible. The accounts allow those individuals and family members to save money on qualifying expenses such as education, transportation, and housing, he said, without making these individuals ineligible for Medicaid. He made note of Medicaid's low wealth limit of $2,000. He said it would be counterproductive to, for example, bump someone off Medicaid due to an increased money stream that is going to housing or college expenses. REPRESENTATIVE KURKA asked Representative Fields for confirmation that it was not for tax deduction, but instead about preventing the recipient from being precluded from Medicaid benefits. REPRESENTATIVE FIELDS concurred and, regarding Representative Kurka's earlier question about the state's role, explained that the state has to participate in order for Alaskans to be able to participate in the program. 3:21:54 PM REPRESENTATIVE SPOHNHOLZ added that HB 133 would not simply prevent people from losing Medicaid coverage, but would also prevents people from losing access to other programs, such as Social Security Disability Income. She added that some of these programs can take many years to get into, and HB 133 would prevent individuals with disabilities from being kicked out of these programs as well, and would help improve the financial independence of these individuals. She explained that this increased level of independence would prevent institutionalization, or the necessity for these individuals to turn to more expensive levels of care. 3:23:26 PM CO-CHAIR ZULKOSKY opened public testimony on HB 133. After ascertaining that there was no one who wished to testify, she closed public testimony. CO-CHAIR ZULKOSKY announced that HB 133 was held over.