NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9171A
SPONSOR: Gunther
 
TITLE OF BILL:
An act to amend the mental hygiene law, in relation to NY ABLE account
ownership, contributions and distributions; and to repeal certain
provisions of the tax law relating thereto
 
PURPOSE OF THE BILL:
This bill would encourage and assist individuals and families in saving
private funds for the purpose of supporting individuals with disabili-
ties to maintain health, independence and quality of life; and provide a
secure funding mechanism for qualified individuals with a disability
that will supplement, but not supplant, federal benefits provided
through existing sources.
 
SUMMARY OF PROVISIONS:
Section 1 makes conforming changes to section 84.03 of the mental
hygiene law to reflect Internal Revenue Service regulations. Specif-
ically, it provides that accounts must be established in accordance with
section 529A of the Internal Revenue Code, and that the account owner
must also be the designated beneficiary of the account.
Section 2 amends section 84.05 of the mental hygiene law to further
clarify that an account shall only be established for the designated
beneficiary who must also be the account owner.
Section 3 amends 84.09 of the mental hygiene law to further clarify that
only the designated beneficiary is authorized to open an account.
Section 4 and Section 5 repeal subsection (b) and paragraphs 42 and 43
of subsection (c) of section 612 of the tax law, as added by chapter 576
of the laws of 2015, to disallow the tax deduction provided for deposits
into the account of a designated beneficiary.
Section 6 provides that the act shall take effect on the same date and
in the same manner as chapter 576 of the laws of 2015.
 
PRIOR LEGISLATIVE HISTORY:
This bill is a negotiated chapter amendment to chapter 576 of the laws
of 2015.
 
STATEMENT IN SUPPORT:
Chapter 576 of 2015 authorized the state to establish a NY ABLE savings
account that would allow qualified individuals with developmental disa-
bilities to use non-Medicaid reimbursable expenses during their adult
lives. The funds would accrue interest tax-free and would not be a
factor for Medicaid eligibility. These savings accounts will foster
independence, improved quality of life, and better maintenance of health
for individuals with disabilities and their families.
 
BUDGET IMPLICATIONS:
This chapter amendment significantly limits the fiscal impact on the
state by eliminating the tax deduction provided for deposits into the
account of a designated beneficiary.
 
EFFECTIVE DATE:
This act shall take effect on the same date and in the same manner as
chapter 576 of the laws of 2015.
STATE OF NEW YORK
________________________________________________________________________
9171--A
IN ASSEMBLY
February 1, 2016
___________
Introduced by M. of A. GUNTHER -- read once and referred to the Commit-
tee on Mental Health -- recommitted to the Committee on Ways and Means
in accordance with Assembly Rule 3, sec. 2 -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee
AN ACT to amend the mental hygiene law, in relation to NY ABLE account
ownership, contributions and distributions; and to repeal certain
provisions of the tax law relating thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivisions 2 and 3 of section 84.03 of the mental hygiene
2 law, as added by chapter 576 of the laws of 2015, are amended to read as
3 follows:
4 2. "Account" or "NY ABLE account" shall mean an individual savings
5 account established in accordance with the provisions of [this article]
6 section 529A of the Internal Revenue Code.
7 3. "Account owner" shall mean a person who opens a savings account
8 pursuant to the provisions of [this article] section 529A of the Inter-
9 nal Revenue Code, as amended, or any regulations promulgated thereunder.
10 The account owner [may] must also be the designated beneficiary of the
11 account.
12 § 2. Subdivisions 1 and 2 of section 84.05 of the mental hygiene law,
13 as added by chapter 576 of the laws of 2015, are amended to read as
14 follows:
15 1. The comptroller shall establish a NY ABLE account plan for all
16 eligible individuals [and families] for the purpose of supporting indi-
17 viduals with disabilities to maintain health, independence, and quality
18 of life. The comptroller is hereby authorized to promulgate any and all
19 rules and regulations necessary for the implementation of this article
20 in consultation with the commissioners of the office for people with
21 developmental disabilities, the office of mental health, the department
22 of health, and the office of temporary and disability assistance.
23 2. The comptroller may implement the NY ABLE savings account program
24 through use of third party vendors as administrators of such accounts,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10067-13-6
A. 9171--A 2
1 and financial organizations as account depositories and managers. Under
2 the program, eligible individuals may establish accounts directly with
3 an account depository.
4 § 3. Subdivisions 2 and 8 of section 84.09 of the mental hygiene law,
5 as added by chapter 576 of the laws of 2015, are amended to read as
6 follows:
7 2. [A NY ABLE account may be opened by any person who desires to save
8 money for the payment of the qualified living expenses of a designated
9 beneficiary. Such person who opens a NY ABLE account shall be considered
10 the account owner as set forth in this article.]
11 (a) An application for [such] a NY ABLE account shall be in the form
12 prescribed by the program and contain the following:
13 (i) the name, address and social security number or employer identifi-
14 cation number of the account owner;
15 (ii) the designation of a designated beneficiary;
16 (iii) the name, address and social security number of the designated
17 beneficiary; and
18 (iv) such other information as the program may require.
19 (b) The comptroller may establish a nominal fee for such application.
20 8. An account owner may change the designated beneficiary of an
21 account to another beneficiary [who is qualified under the provisions of
22 this article] only as permitted under section 529A of the Internal
23 Revenue Code.
24 § 4. Paragraph 42 of subsection (b) of section 612 of the tax law is
25 REPEALED.
26 § 5. Paragraphs 42 and 43 of subsection (c) of section 612 of the tax
27 law are REPEALED.
28 § 6. This act shall take effect on the same date and in the same
29 manner as chapter 576 of the laws of 2015 took effect.