HB 133-AK ED SAVINGS PROGRAMS/ELIGIBILITY  2:41:34 PM CHAIR WILSON reconvened the meeting and announced the consideration of SENATE BILL NO. 133 "An Act relating to the sale or lease of state land for remote recreational sites; relating to permits for remote recreational sites; and providing for an effective date." 2:41:54 PM REPRESENTATIVE ZACK FIELDS, Alaska State Legislator, Juneau, Alaska, speaking as co-chair of the House Labor and Commerce Standing Committee, described HB 133 as a team effort. He advised that the presentation would include the substance as well as related history of the legislation. REPRESENTATIVE FIELDS explained that ABLE is the acronym for Achieving a Better Life Experience Act. An ABLE account is a tax-free savings account for individuals with qualifying disabilities. Funds deposited to the account may be used to pay for items such as disability expenses, education, housing, and transportation. Further, deposits into the account are not counted against an individual in determining eligibility for Medicaid and needs-based assistance programs. The intention is to help people with disabilities work, support themselves, and live as independently as possible. 2:42:51 PM REPRESENTATIVE FIELDS stated that the ABLE Act of 2013 was signed into federal law in December 2014. Thereafter, Representative Saddler and Senator Giessel introduced legislation to establish ABLE accounts in Alaska. He reported that since the legislation passed [in 2016], 787 Alaska families have established ABLE accounts. About 180 of those accounts were opened since HB 133 was heard last, and the assets in all the accounts totals $7 million. He recognized Pam Leary with the Department of Revenue (DOR) who has overseen the program since its inception. REPRESENTATIVE FIELDS relayed that since the initial law passed, the federal government updated and expanded ABLE authorities. He noted that one of the changes increased the contribution level [for employed beneficiaries] from $15,000 to [$27,060]. The federal law also allowed college saving account funds [529 accounts] to roll over into ABLE accounts. Additionally, the age of eligibility for an ABLE account was increased from 26 to 46. He described the latter change as sensible because a disability can occur at any time. 2:45:14 PM REPRESENTATIVE FIELDS summarized that updates proposed in HB 133 conform to federal law by: expanding the age eligibility limits; allowing greater flexibility in using funds to pay for educational expenses; allowing 529 program accounts to roll into an ABLE account; and aligning with federal regulations regarding program savings accounts 2:46:08 PM CHAIR WILSON noted who was available to answer questions. He asked Mr. Walsh to walk through the sectional analysis. 2:46:29 PM TRISTAN WALSH, Staff, Representative Zack Fields, Alaska State Legislature, Juneau, Alaska, provided a summary of the sectional analysis for HB 133. The full analysis read as follows: [Original punctuation provided with some formatting changes.] Section 1 Establishes AS 06.65.020(b).  Directs 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. Section 2 Amends AS 06.65.100. Expands the age of eligibility for a program account from age 26 to match that in the federal authorizing law. This effectively removes an age cap that prevented those who became disabled after 26 years of age from being eligible. 2:47:40 PM Section 3 Amends AS 06.65.160(a). Expands the rules allowing a person to make a contribution for a designated beneficiary to match the guidelines in AS 14.40.802(f)(3). Section 4 Amends AS 06.65.160(c).  Expands the rules regarding who is eligible to make a program account contribution to match the guidelines in AS 14.40.802(f)(3). Section 5 Amends AS 06.65.200(a). Specifies that rollover may occur between a program account to another account as long as the new account is authorized by federal law. Section 6 Amends AS 09.38.015(a)(8). Replaces "higher education" savings account with "education savings account". Section 7 Amends AS 14.10.170(a). Replaces "postsecondary education" with "education" when referring to an education savings account and renames the "Alaska Higher Education Savings Trust" to the "Education Trust of Alaska". Section 8 Amends AS 14.40.802(a). Renames the "Alaska Higher Education Savings Trust" to the "Education Trust of Alaska" and replaces "postsecondary education" with "education" when referring to education savings accounts. 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 included already included federal law. Section 9 Establishes AS 14.40.802(f)(3).  Allows a participant of an account to change the beneficiary of their account to any individual, not just a family member. Allows participants to transfer all or a portion of their account as a contribution to another account if it does not exceed federal limits when added to any other contributions and is for the beneficiary of that new account or for a family member who is an eligible individual as well. Section 10 Amends AS 14.40.802(g).  Makes transfers between accounts limitable or deniable if the transfer does not meet the guidelines established in AS 14.40.802(f)(3). 2:48:26 PM Section 11 Amends AS 14.40.802(j).  Removes the restriction that when a beneficiary designates a successor participant to their account the change cannot take effect until after the death or mental incapacity of the beneficiary. Section 12 Amends AS 14.40.802(n)(2).  Redefines "beneficiary" to match what is defined under federal law. Section 13 Amends AS 14.40.802(n)(7). Replaces "qualified higher education expenses" with "qualified education expenses" and redefines the phrase to mean qualified higher education expenses as defined in federal law. Section 14 Amends AS 14.40.802(n)(8). Redefines "trust" to reflect the name change of "Alaska Higher Education Savings Trust" to the "Education Trust of Alaska". Section 15 Amends AS 14.40.809(b). Renames the "Alaska Higher Education Savings Trust" to the "Education Trust of Alaska". Section 16 Amends AS 40.25.120(a).  Renames the "Alaska Higher Education Savings Trust" to the "Education Trust of Alaska". Section 17 Amends AS 47.10.093(b).  Removes the distinction of higher education when referring to the Alaska education savings program. Section 18 Amends AS 47.12.310(b). Removes the distinction of higher education when referring to the Alaska education savings program. Section 19 Amends AS 47.14.400(a). Removes the distinction of higher education when referring to an education investment program and replaces "University of Alaska college savings plan" with "education savings plan". Section 20 Amends AS 47.14.400(b). Removes the distinction of higher education when referring to an education investment program. Section 21 Amends AS 47.14.400(c). Replaces "college savings plan" with "education savings plan" and replaces "University of Alaska College savings plan" with "education savings plan". Section 22 Amends AS 47.14.400(e)(3). Replaces "higher education savings program" with "education savings program" and "college savings account" with "education savings plan". Section 23 Establishes AS 47.14.400(e)(5). Defines "education savings plan" to mean an education savings program. Section 24 Repeals AS 47.14.400(e)(2).  2:49:25 PM CHAIR WILSON turned to invited testimony. 2:49:55 PM CATHY TAYLOR, Board Member, Alaska Behavioral Health, Kenai, Alaska, stated that she has served on the board for more than ten years. She has two sons with disabilities and the ABLE program has been very beneficial but the $2,000 limit on resources has made it difficult for family and friends to offer support to help her sons be more self-sufficient. 2:51:36 PM MS. TAYLOR stated that raising the contribution level from $15,000 to $27,060 has been helpful for one of her sons who experiences mental illness and finds it difficult to maintain employment. With the higher limit, he will be able to put additional funds aside when he is working so he can draw on them in the future if he is no longer employed. It will help him maintain a measure of independence. She stated support for the provision that allows rolling college savings into an ABLE account. She explained that the onset of mental illness often is in a person's 20s when they are in college. If their college funds are rolled into an ABLE account, they will be able to use them to help stabilize their life and get back on their education track if that is what they want to do. MS. TAYLOR agreed with the sponsor that it made sense to increase the age of eligibility for an ABLE account from 26 to 46 because disability can strike at any time. She mentioned the flexibility to pay for higher education and offered her view that it may be easier to get one's arms around vocational or associate degree programs than a four-year degree program. But in any event, the flexibility allows someone to keep their resources then use them when they get back on their feet. MS. TAYLOR shared that she has been able to incorporate the ABLE accounts for her sons into her estate planning and the changes reflected in SB 133 will make the program even better for people experiencing disability to improve their life situation. 2:56:12 PM DAN SADLER, former Representative, Alaska State Legislature, Eagle River, Alaska, reminded the committee that he sponsored the original legislation in 2016 that authorized ABLE accounts. He shared that he supported ABLE as a legislator and a parent. His son Danny has autism and at age 23 is transitioning into adult life. He needs special behavioral support, special equipment for his physical needs, supplementary educational services, employment support services, and healthy recreational outlets. He said these are qualified disability expenses that will help him achieve a better life experience. He highlighted how important it is that deposits into an ABLE account would not disqualify his son from Medicaid or Supplemental Social Security (SSI) benefits, because both are critical in meeting his life needs. MR. SADDLER opined that that ABLE accounts clearly have been successful in Alaska. According to a report in the bill packets, there are 787 ABLE accounts in Alaska and the private distributions to those accounts totals $7 million. He posited that this has kept many individual from seeking support from the state. He mentioned the other conforming changes and described HB 133 as legislation that makes the existing law better. MR. SADDLER concluded his comments with the observation that legislators often are faced with how to allocate limited public assets among limitless needs. The value of HB 133 is that it empowers private citizens to use their own money to take better care of loved ones without cost or burden to the state. CHAIR WILSON thanked former Representative Saddler for his service to the state and his testimony. 3:00:14 PM CHAIR WILSON held HB 133 in committee.