Committee hears bill to replace low‑income 529 match with $100 ABLE and 529 seed grants

Senate Bill 281, which would establish a Kansas Postsecondary Education Savings Account and a Kansas ABLE Savings Account Grant Incentive Program and eliminate the existing Low Income Family Postsecondary Savings Accounts incentive program (the "kids matching grant"), was the subject of a hearing before the Committee on Government Efficiency.

Tamara Lawrence, reviser for the committee, opened with an overview, saying the bill would create a grant offering up to $100 to participants who have a Kansas‑sponsored 529 account or an ABLE savings account and who complete financial education training. Lawrence said the program would be administered by the state treasurer and that the total annual amount for grants could not exceed $200,000. "Section 1 of the bill does establish a trust fund for the purposes of administering these grants under the program," she said, and added the bill would take effect upon publication in the Kansas Register.

The state treasurer's office provided proponent testimony. Tom Treacy, deputy assistant state treasurer to Treasurer Steven Johnson, summarized the existing kids matching grant program and why the treasurer's office supports revising it. Treacy said the current program is a dollar‑for‑dollar match into a 529 account, that the legislature currently allocates $720,000 a year for the grants, and that those funds are divided among the state's four congressional districts. He said about 300 individuals are eligible each year under the current rules and that eligibility is based on household income at 200 percent of the federal poverty level or below; Treacy gave an example that a household of four with final adjusted gross income below $64,300 would qualify under current rules.

Treacy described administrative burdens tied to the matching program. "The kids program is separate because the kids program was established with state legislation and that state legislation specified that we must verify every dollar," he said, describing extensive receipt verification for past grants, citing examples such as Walmart, KU Bookstore and Chipotle receipts. Treacy said the verification work has fallen largely to program partners and to the treasurer's staff and that the bill seeks to streamline administration and reduce staff hours required to operate the incentive.

Proponents from disability advocacy organizations also testified in support. Megan Shreve, associate director of InterHab, said ABLE accounts provide vital support for Kansans with intellectual and developmental disabilities and that the bill would provide seed money and formalize financial training. "This includes that $100 in seed money for new accounts for Kansans who truly do need them the most," Shreve said. Sarah Hart Weir, executive director of the Kansas Council on Developmental Disabilities, said the council worked with the treasurer's office on outreach and account growth and described a past statewide roadshow; she told the committee the Kansas ABLE program had grown by about 25 percent in the last year and had roughly $8 million in new assets under management following outreach efforts.

A commenter testified in opposition to portions of the bill that would eliminate the kids matching grant. Nick Novelli said he works with low‑income families who rely on the existing match and asked the committee not to "throw the baby out with the bathwater." Novelli said some families had already contributed this year expecting the match to be available and urged the committee to consider preserving the match while pursuing efficiencies.

Lawrence and Treacy answered committee questions about how the treasurer's office would deliver the financial education component. Treacy said the office already offers financial literacy sessions for ABLE account holders via weekly Zoom sessions and that the office would work with its program manager to route funds and reduce manual processing.

The hearing record shows the bill would: create a dedicated trust fund; authorize up to $100 per qualifying account for participants who complete financial education; cap total annual grants at $200,000; require the treasurer to prepare an annual report to the governor and legislature; and take effect upon publication in the Kansas Register.

The committee did not vote on Senate Bill 281 during the hearing; members were told the bill will be revisited when the committee reconvenes. The hearing record includes written proponent testimony by Matthew Golden and a written proponent to be filed by Nick Novelli was noted as forthcoming.