Tax-free savings for the disabled advanced
Senators advanced a bill from general file May 12 that would authorize tax-free savings accounts for disabled individuals in Nebraska.
LB591, introduced by Lincoln Sen. Kate Bolz, would establish Achieving a Better Life Experience (ABLE) accounts for individuals with disabilities that developed prior to age 26. ABLE accounts would offer tax-free savings options for education, housing, assistive technology and other needs.
Bolz said the accounts are similar to traditional college savings plans that Nebraska families have been able to utilize for years.
“LB591 helps to empower individuals with disabilities to pursue higher education, jobs and other goals and dreams,” Bolz said.
A Revenue Committee amendment, adopted 38-0, made several technical changes and became the bill.
Under a qualified program, any person could make contributions to an account to meet the qualified disability expenses of the designated beneficiary of an account.
The state treasurer and any designated administrator would provide investment options for the investment of amounts contributed to an account. The state investment officer would have fiduciary responsibility to make all decisions regarding the investment of money in the administrative fund, expense fund and program fund including selection of all investment options.
Calling it one of the most important measures that lawmakers could pass this session, Lincoln Sen. Colby Coash said the bill would save money in the long term.
He said LB591 would give parents a way to financially assist their children with disabilities without jeopardizing the children’s ability to qualify for public benefits such as Medicaid. In addition, he said, it would incentivize parents to plan for their children’s security when the parents are no longer able to provide for them.
“They need a tool for their children with disabilities to help plan for the future,” Coash said.
Bolz offered an amendment, adopted 37-0, to authorize the transfer of start-up funds from the State Investment Officer’s Cash Fund to the ABLE Expense Fund. The funds would be reimbursed when the program becomes self-sustaining, she said.
Bolz said the amendment would remove any general fund impact from the bill by using cash funds to launch the ABLE program.
Senators advanced the bill to select file 43-0.