Nebraska State Treasurer Don Stenberg said today that “proposed U.S. Treasury regulations for the ABLE program are a slap in the face of Americans with disabilities and jeopardize the financial viability of the program.”
The U.S. Congress enacted Section 529A of the Internal Revenue Code in December 2014, allowing for a tax-favored savings program for eligible individuals with disabilities to be used to pay qualified disability-related expenses. The name of the law is Achieving a Better Life Experience Act or ABLE.
Earlier this year the Nebraska Legislature passed LB591, sponsored by Sen. Kate Bolz, to create a Nebraska state-sponsored ABLE program. Under LB591, the State Treasurer is the Trustee of the ABLE program. Both the federal and state legislation were modeled on the 529 College Savings program, which in Nebraska is administered by the State Treasurer.
Treasurer Stenberg issued the following statement regarding proposed federal regulations for the ABLE program, which are scheduled to be published today in the Federal Register:
“As I read the proposed regulations, every time individuals with disabilities want to spend even a single dollar of their money, from their own ABLE accounts, they have to file paperwork with the state demonstrating that each is a ‘qualified disability expense.’
“This is a slap in the face of Americans with disabilities, is an unreasonable and unnecessary burden on them, and will create administrative burdens that will increase the costs qualified individuals will need to pay to use the program.
“There is no requirement in the college savings program that the account owner submit proof to the state that withdrawals are for qualified expenses. I do not understand why the U.S. Treasury Department wants to mistreat citizens with disabilities by imposing requirements on them that the department does not impose on any college students and their parents. Frankly, I think that it is shameful.
“The kind of program I would like to have here in Nebraska would allow qualified individuals to write checks or use debit cards to pay qualified disability-related expenses from their ABLE accounts. It is, after all, their own money. Under these proposed federal regulations, we would not be allowed to operate in that way.
“The regulations also require the state to make a determination of whether a person with a disability is an ‘eligible individual.’ The Congress of the United States, at the urging of the College Savings Plan Network, an affiliate of the National Association of State Treasurers, by law, made this the responsibility of the Secretary of the Treasury of the United States, not the responsibility of the state ABLE program. This regulation, which is contrary to law, adds substantial additional administrative costs to the state program, which will be paid by Nebraskans with disabilities.
“I am very concerned that these proposed federal regulations could result in smaller-population states like Nebraska being unable to employ a program manager on terms that Nebraskans with disabilities would be able to afford.
“I strongly urge advocates of people with disabilities here in Nebraska and across the nation to submit comments to the U.S. Treasury Department objecting to these regulations and to send copies to their U.S. Senators and members of the House of Representatives.
“The ABLE bill passed Congress with large bi-partisan margins in both houses. I hope that members of Congress will let the Treasury Department know that these regulations violate their legislative intent and are unacceptable.”
Stenberg said public comments should be sent to the following address:
CC:PA:LPD:PR (REG-102837-15), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044.