SB265 (2015) Detail

Establishing the achieving a better life experience (ABLE) savings account program.


SB 265-FN - AS AMENDED BY THE HOUSE

15Apr2015… 1222h

2015 SESSION

15-1031

04/09

SENATE BILL 265-FN

AN ACT establishing the achieving a better life experience (ABLE) savings account program.

SPONSORS: Sen. Bradley, Dist 3; Sen. Birdsell, Dist 19; Sen. Lasky, Dist 13; Sen. Little, Dist?8; Sen. Stiles, Dist 24; Sen. Watters, Dist 4

COMMITTEE: Ways and Means

AMENDED ANALYSIS

This bill establishes the New Hampshire Achieving a Better Life Experience (ABLE) savings account program.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

15Apr2015… 1222h

15-1031

04/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Fifteen

AN ACT establishing the achieving a better life experience (ABLE) savings account program.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Achieving a Better Life Experience (ABLE) Savings Account Program. Amend RSA by inserting after chapter 195-I the following new chapter:

CHAPTER 195-J

ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) SAVINGS ACCOUNT PROGRAM

195-J:1 Definitions. In this chapter:

I. “Achieving a Better Life Experience Act of 2014” means the federal Achieving a Better Life Experience (ABLE) Act of 2014 which allows individuals with disabilities to establish tax-free 529-A savings accounts to save for medical, housing, transportation, employment training, education and other quality of life expenses.

II. “Commission” means the New Hampshire Achieving a Better Life Experience (ABLE) savings account program advisory commission.

III. “Savings plan” means any plan administered as the New Hampshire ABLE savings account program.

195-J:2 Achieving a Better Life Experience (ABLE) Savings Account Program.

I. The commission shall establish, implement, and administer a qualified ABLE savings account program as established in the Achieving a Better Life Experience Act of 2014, in accordance with provisions of section 529A of the United States Internal Revenue Code of 1986, as amended, and may enter into such contracts as the commission deems necessary to achieve this purpose, subject to the approval of the governor and council.

II. The commission shall adopt rules relative to the administration, management, promotion, and marketing of the qualified ABLE program and ensure that the qualified ABLE program complies with section 529A of the Internal Revenue Code of 1986, as amended, and any related federal law applicable to the qualified ABLE program.

195-J:3 Advisory Commission Established; Reports.

I.(a) There is established the New Hampshire Achieving a Better Life Experience (ABLE) savings account program advisory commission which shall ensure the proper administration and management of the savings plan. The advisory commission shall ensure that the savings plan complies with the requirements of section 529A of the Internal Revenue Code of 1986, as amended, and any related federal law applicable to the savings plan. The commission shall consist of the following members:

(1) The state treasurer, or designee.

(2) One member of the house of representatives, appointed by the speaker of the house of representatives.

(3) One member of the senate, appointed by the senate president.

(4) The governor, or designee.

(5) The attorney general, or designee

(6) The commissioner of the department of health and human services, or designee,

(7) One public member, who shall have business experience, appointed by the governor.

(8) One member representing the Governor’s Commission on Disability, appointed by the commission.

(9) One member of representing the New Hampshire Council on Developmental Disabilities, appointed by the council.

(10) One member representing Granite State Independent Living, appointed by Granite State Independent Living.

(11) One member representing the New Hampshire Bar Association, appointed by the association.

(b) Except for the members appointed under subparagraphs (a)(1)-(4), members shall be appointed for 2-year terms.

II. Members of the commission shall serve without compensation, except that legislative members shall receive mileage at the legislative rate.

III. The commission shall keep written records of all its proceedings.

IV. No member of the commission shall have any personal interest in the gains or profits of any investment made by the commission; nor shall any member of the commission, directly or indirectly, for such member or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the commission; nor shall any member of the commission become an endorser or surety, or in any manner an obligor, for money loaned to or borrowed from the commission.

V. Members of the commission shall be held harmless from either criminal or civil liability for any decisions made or services rendered under the provisions of this chapter.

VI.(a) The state treasurer shall make quarterly reports regarding the status of the savings plan to the commission.

(b)(1) At least annually, the commission shall issue to each participant, a statement which shall include the participant’s beginning balance, contributions, and earnings credited to their account during the previous fiscal year.

(2) At least annually, the commission shall make a report regarding the status of the savings program to each participant in the savings plan and to the state library.

195-J:4 ABLE Savings Plan.

I.(a) The commission shall, as needed, issue requests for proposals to evaluate and determine the vehicle for investments of the savings plan and its administration.

(b) The commission shall consider and, if appropriate, give preference to proposals best meeting the following criteria:

(1) Ability to administer financial programs with individual account maintenance and reporting.

(2) Ability to develop and administer an investment program of a nature similar to the objectives of the ABLE savings plan.

(3) Ability to augment the ABLE savings plan with other programs or informational services considered beneficial by the commission.

(c) The final selection of the vehicle for investments and its administration shall be made by the commission.

II. The commission shall determine and make recommendations regarding the use of personnel in the treasurer’s office with costs for such administrative support to be funded from the savings plan.

III. The savings plan shall be on a “cash only” basis, and shall include provisions for automatic deductions.

IV. The savings plan shall be established in such form as shall be determined by the commission and may be established as a trust to be declared by the state treasurer. The savings plan or such trust may be divided into multiple investment portfolios. If so divided, and if distinct records are maintained for any such portfolio and the assets associated with any such portfolio are accounted for separately from the other assets of the trust, then the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a particular portfolio shall be enforceable against the assets of such portfolio only, and not against the assets of the trust generally.

195-J:5 Funds Exempt From Interest and Dividends Tax. Income and distributions from any qualified ABLE program as defined in the Internal Revenue Code of 1986, as amended, shall be exempt from the interest and dividends tax pursuant to RSA 77:4-e, provided that distributions from the plan which are subject to federal income tax shall be subject to the interest and dividends tax pursuant to RSA 77 on the accrued income portion of the savings plan distribution.

2 Effective Date. This act shall take effect 60 days after its passage.

LBAO

15-1031

Revised 04/24/15

Amended 04/23/15

SB 265-FN FISCAL NOTE

AN ACT establishing the achieving a better life experience (ABLE) savings account program.

FISCAL IMPACT:

    The Departments of Treasury and Revenue Administration state this bill, as amended by the House (Amendment #2015-1222h), will decrease state general fund revenue and increase state restricted expenditures by an indeterminable amount in FY 2016 and each year thereafter. There will be no impact on county or local revenue and expenditures.

METHODOLOGY:

    The Department of Treasury states this bill creates the Achieving a Better Life Experience (ABLE) savings account program as established in the Federal ABLE act of 2014. The ABLE act allows individuals with disabilities to set up tax-free 529A savings accounts to save for medical, housing, transportation, employment training, education and other quality of life expenses. The Department anticipates the program will be managed similarly to the current 529 savings plan program, with a plan administrator procured and responsible for day-to-day operations, and state oversight provided by the newly-established advisory commission. The Department notes that under the terms of the bill, administrative costs of the program will be funded by the savings plan. As a result, the bill will result in an indeterminable increase in state restricted expenditures.

The Department of Revenue Administration states this bill creates a new section, RSA 195-J:5, that exempts the income and distributions from any qualified ABLE program from the interest and dividends tax pursuant to RSA 77:4-e, provided that distributions from the ABLE program that are subject to federal income tax shall be subject to the interest and dividends tax on the accrued income portion of the ABLE savings plan distribution. The Department notes that while the bill exempts income and distributions from qualified ABLE plans from the interest and dividends tax under RSA 77:4-e, RSA 77:4-e as currently written contemplates only college tuition savings plans under section 529 of the Internal Revenue Code of 1986, as amended, as that section was in effect on July 1, 2003. The bill’s fiscal impact will derive from savings or trust accounts that were in existence prior to the effective date of the act and on which the interest and dividends tax may currently be paid, if those accounts are converted to ABLE savings accounts. The Department is unable to determine how many such accounts may be converted, but assumes there will be some resulting decrease in state general fund revenue.