State Treasurer Don Stenberg today sent a letter to the Internal Revenue Service (IRS) in which he identified his major concerns over proposed federal regulations for the Achieving a Better Life Experience (ABLE) program. By state law, Stenberg is Trustee of the Nebraska ABLE program.
The State Treasurer’s Office and the Nebraska Investment Council have issued a Request for Proposals for a program manager to administer the ABLE program in Nebraska. Proposals are due Sept. 10.
The ABLE program will allow Nebraskans with certain disabilities to create tax-advantaged ABLE savings accounts to use to pay for qualified disability-related expenses, similar to state-sponsored college savings programs like the Nebraska Educational Savings Trust (NEST), a division of the State Treasurer’s Office. While the program will be administered by the Treasurer’s Office, the Nebraska Investment Council will have final authority over investment options and investments.
In his letter, Stenberg said he shares the concerns raised by the College Savings Plans Network (CSPN) in its July 29 letter to the IRS and also supports many of the network’s suggested revisions of the federal regulations. Nebraska is a member of CSPN.
“The concern expressed by the College Savings Plans Network should be taken very seriously,” Stenberg wrote, agreeing with the CSPN statement that “there are three provisions which, if not clarified now—in advance of the completion of the formal regulatory process, may substantially slow down and perhaps even halt the launch of ABLE programs anxiously awaited by families of individuals with disabilities.”
The text of the letter follows:
Dear Internal Revenue Service Rulemaking Staff:
I am writing in support of the comments filed with you by the College Savings Plans Network (“CSPN”) in a letter dated July 29, 2015, concerning proposed regulations for Section 529A which relate to state sponsored ABLE programs. Nebraska is a member of the College Savings Plans Network.
Under the laws of the State of Nebraska, as State Treasurer, I am responsible for the implementation of the Nebraska ABLE Plan. To the best of my knowledge and belief, the State of Nebraska was the first state in the country to issue a Request For Proposals for implementation of an ABLE Program. Responses to that Request For Proposals are due September 10, 2015.
I strongly agree with the CSPN statement that “there are three provisions which, if not clarified now – in advance of the completion of the formal regulatory process, may substantially slow down and perhaps even halt the launch of ABLE programs anxiously awaited by families of individuals with disabilities.”
This concern expressed by the College Savings Plans Network should be taken very seriously. In addition to the state members, the College Savings Plans Network is made up of College Savings plan administrators. These potential ABLE program managers are telling you that if these proposed regulations are not revised soon, experienced program managers may not be able to offer their services to the states for an indefinite period of time. As a result, ABLE programs nationwide may not be implemented as the Congress and state legislatures have intended.
It would be a great tragedy if persons with disabilities all across the nation were denied the benefits of the ABLE legislation for an extended period of time because of unworkable federal rules.
Let me now address the three specific items of greatest concern.
1.Filing of Eligibility Certifications.
I agree with the CSPN proposed solution that:
The portion of the proposed regulations “deeming” disability certifications filed with Treasury when filed with a state program should be withdrawn and replaced with required filings with Treasury as specified by the ABLE statute. If Treasury wishes to expedite account opening, it should expressly authorize state ABLE agencies to rely on a “check the box” certification by the eligible individual or the person with signature authority that the certification, including the required physician’s diagnosis, has been filed with Treasury. Similarly, Treasury should expressly authorize state ABLE agencies to rely on a “check the box” certification by the eligible individual or the person with signature authority that the proposed account owner is eligible for SSI or SSDI benefits.
2.Distinguishing Among Types of Distributions.
I agree with the CSPN proposed solution as follows:
The portion of the proposed regulations requiring state programs to identify distributions for qualified disability expenses and for housing expenses should be deleted, as should the preamble’s suggestion that monthly reporting to the SSA should include such information.
I do not agree with CSPN’s alternative on this issue. Rather, as an alternative, the Social Security Administration should require an ABLE account owner receiving SSI/SSDI to report to the Social Security Administration if he or she uses any portion of his or her ABLE account for housing expenses.
3.Requirement to Obtain TINs for all Contributors.
I agree with the College Savings Plans Network proposal that:
Collecting a third-party contributor’s TIN should be required only if a program does not have systems in place that prevent acceptance and investment of excess contributions.
I respectfully request that the Department of the Treasury make some public statement resolving these issues by the end of August so that potential program managers responding to Nebraska’s Request For Proposals for its ABLE program can properly deal with these issues in their September 10, 2015, responses.
Nebraska State Treasurer
Cc: U.S. Senator Deb Fischer, U.S. Senator Ben Sasse, U.S. Congressman Jeff Fortenberry, U.S. Congressman Brad Ashford, U.S. Congressman Adrian Smith, Nebraska Senator Mike Gloor, Nebraska Senator Kate Bolz