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Minutes for SB449 - Committee on Taxation
Short Title
Allowing the transfer upon death and providing for an income tax deduction for contributions to an ABLE account and conforming allowable expenses for 529 plans to federal law.
Minutes Content for Tue, Apr 3, 2018
Mr. Wells provided an overview on SB449 stating the bill makes changes to savings programs that are under Section 529 and 529A of the Internal Revenue Code. Section 1 concerns the ABLE accounts which is the 529A account and makes several changes. The bill allows proceeds from the ABLE account to be transferred upon the death of a designated beneficiary to either the estate of the designated beneficiary or to the account of another individual that is specified by the designated beneficiary or their estate. It would prohibit the State from seeking payment from the account or its proceeds for benefits provided to a designated beneficiary and removes language that would disallow Kansas Medicaid plan to claim proceeds of the account upon the death of the designated beneficiary. Section 2 is the subtraction modification section in the individual income tax act and amends the subtraction modification for the 529 plans to also allow for contributions to 529A account. The cumulative amount of the subtraction modification is $3,000 for individuals and $6,000 for married couples filing a joint return, per year for each designated beneficiary. It removes requirements that the 529a accounts be used at an institution for postsecondary education. Mr. Wells stood for questions from the Committee.
Ms. Smith provided an overview on the fiscal note for SB449 stating the estimated fiscal impact for FY2019 would be $30,000. She noted this is based upon the number of ABLE accounts which is 176 accounts. Ms. Smith stood for questions from the Committee.
Representative Erin Davis testified as a proponent to SB449 noting the ABLE act allows a 529 type account to be used for persons with disabilities. She stated for a long time, we have disincentivized those with disabilities from working and obtaining assets in such a way that they could provide for themselves. The 529A account allows a savings mechanism which is similar to a college savings account but an account for persons with disabilities (Attachment 3). Representative Davis stood for questions from the Committee.
Jake LaTurner, Kansas State Treasurer testified as a proponent to SB449 noting the bill makes positive changes to the Kansas ABLE Act and helps build a culture of saving in our State (Attachment 4). Mr. LaTurner stood for questions from the Committee.
Matt Syverson, Parent and Certified Financial Planner testified as a proponent to SB449 (Attachment 5). Mr. Syverson stood for questions from the Committee.
Mike Burgess, Disability Rights Center of Kansas testified as a proponent to SB449 (Attachment 6). Mr. Burgess stood for questions from the Committee.
Patrick Terick, Cerebral Palsy Research Foundation of Kansas testified as a proponent to SB449 (Attachment 7). Mr. Terick stood for questions from the Committee.
Written testimony was submitted by the following as a proponent of SB449.
Jawanda Mast, Parent (Attachment 8)
Sarah Meitner, Parent (Attachment 9)
Mike Wasmer, Austim Speaks (Attachment 10)
Hearing closed for SB449.
