SENATE BILL REPORT

SB 6221

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Bill

Makes technical changes to the Washington Achieving a Better Life Experience Program (Program) enacting statutes, and clarifies that an investment manager may invest the money collected through the Program.

Background: Achieving a Better Life Experience Act. Congress passed the Achieving a Better Life Experience Act (ABLE) in December 2014. The law amended the Internal Revenue Code to exempt from taxation qualified ABLE savings programs established by states. Individuals can contribute to these savings accounts for eligible people with disabilities that originated before age 26.

Individuals are able to invest up to $14,000 per year in ABLE accounts. Withdrawals from these accounts will not be taxed so long as the money is spent on qualified expenses such as housing, education, transportation, health care, and rehabilitation. An individual generally cannot have more than $2,000 in savings or other assets to be eligible for means-tested federal programs such as Medicaid or Supplemental Security Income (SSI). However, investments up to $100,000 in ABLE accounts will be disregarded as assets for purposes of Medicaid or SSI eligibility.

Washington ABLE Program. The Legislature authorized the creation of the Program in 2016, which is now run by a governing board and operated by the Department of Commerce in consultation with the state treasurer and State Investment Board (SIB).

Summary of Bill: Changes are made to the Program’s enacting statute to clarify what funds must be collected by the Program and how those funds may be used. The requirement that the Program account be a treasurer account is removed. An investment manager, in addition to the SIB, is authorized to invest money in the Program.

Staff Summary of Public Testimony: PRO: This is merely a technical fix to allow another entity to invest money in the Program. This will ensure that the Program can serve the state. The underlying statute followed an Oregon model, but did not allow for entities other than the SIB to operate the program. Allowing other investment entities to invest monies in the Program will create efficiencies and save investors’ money. This bill will allow the Program to launch effectively and efficiently. The partnership with Oregon will provide an affordable and accessible ABLE model. This ABLE program will allow people to save money to live the lives they want.

Persons Testifying: PRO: Senator Maureen Walsh, Prime Sponsor; Leslie Wolff, Washington State Department of Commerce; Brenda Snyder, Office of the State Treasurer; Jeff Manson, Chair, ABLE Governing Board; Emma Patterson, citizen; Amy Patterson, Washington ABLE Program Governing Board member.