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Relating to the establishment of the Texas Achieving a Better Life Experience (ABLE) Program; authorizing the imposition of fees.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1664, As Introduced: an impact of $0 through the biennium ending August 31, 2017.
SB 1664 would establish the Texas Achieving a Better Life Experience (ABLE) Program. The stated purpose of this bill is to encourage and assist individuals with disabilities to save private funds to help pay for future expenses related to the disability. ABLE would supplement a disabled person’s income in conjunction with receiving benefits from the federal Supplemental Security Income (SSI) program and the Medicaid program.
The ABLE savings plan account would be created under the Texas Tomorrow Constitutional Trust Fund. The Prepaid Higher Education Tuition Board (PHETB) would be responsible for administering this program. Its responsibilities would also include investing the funds in the ABLE account.
This legislation would allow family and friends of a disabled person with an ABLE savings account to contribute to that account.
Finally, this bill would permit PHETB to issue fees or service charges to finance the program.
The House committee made changes to this legislation. First, it moved the new section establishing and regulating the ABLE program from Chapter 162, Human Resources Code, to Subchapter J, Education Code. Secondly, it adds new provisions that would pertain to reporting requirements that the ABLE board would have to follow. We still support SB 1664 even with these changes. The House chamber sponsor is Representative Burkett.
First chamber recommendation:
Currently, disabled people are not allowed to have a savings account if they are receiving benefits from Medicaid or SSI programs. These aforementioned programs barely cover the expenses that a disabled person incurs on a regular basis and tend to supplement the costs for care provided by family members.
The United States Congress, with the support of most of the Texas delegation, recently enacted the ABLE Act, which made changes to the Internal Revenue Service (IRS) Code by allowing people with disabilities to have tax-free savings accounts. ABLE would allow a disabled person to save their earned income or contributions in an account that would operate similar to a checking account, except this money would only cover qualified expenses. Although the federal law permitted the ABLE program, it did not require that states participate. Thus, each state may choose to implement enabling legislation at its own discretion.
Federal law would limit the amount of contributions to $14,000 per individual annually, with a maximum account limit of $100,000. Contributions would not be tax deductible. In the fiscal statement for SB 1664, the Legislative Budget Board estimates that the average ABLE account size would be $7,000.
We support SB 1664 because it removes restrictions on disabled people to procure extra funds in addition to the benefits they may receive from Medicaid or SSI. This is a big step forward to improving the individual liberty of a disabled person because it allows them to live more independently and exercise personal responsibility for their own care and needs to a greater degree than the law currently allows.
However, we do not believe the mechanisms to implement this program - having it managed and controlled by government agencies - is the best way to go about it. Still, the program can only operate within the parameters set by the federal government and the benefits to individual liberty and personal responsibility outweigh our concerns about the mechanisms for implementation and management. For these reasons we encourage the adoption of SB 1664.