HB 496 - SB 452
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 16, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
HB 496 - SB 452
SUMMARY OF BILL: Increases, from 26 to 46, the disability onset age as it pertains to the
Achieving a Better Life Experience (ABLE) Act. Effective January 1, 2026.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY25-26 $173,900
FY26-27 & Subsequent Years $347,700
Assumptions:
• Pursuant to Tenn. Code Ann. § 71-4-803(5) and (6):
o A disability certification means that the eligible individual has a medically
determinable physical or mental disability that has occurred before the individual
attained the age of 26; and
o An eligible individual is an individual entitled to benefits based on blindness or
disability under Title II or XVI of the Social Security Act, and such blindness or
disability has occurred before the individual attained the age of 26.
• The state of Tennessee participates in ABLE by providing a savings program designed to
help Tennessee residents with disabilities set aside tax-protected money to pay for certain
qualified expenses.
• The federal ABLE Act of 2014 was amended through the ABLE Age Adjustment Act and
signed into law on December 29, 2022. Effective January 1, 2026, the age of disability onset
for ABLE account eligibility extends from 26 to 46 years old.
• The proposed legislation keeps Tennessee compliant with federal law and preserves the
ABLE program’s tax-qualified status by raising the age of disability onset from 26 to 46
years old.
• In the absence of the proposed legislation, Tennessee residents currently participating in the
ABLE program could lose benefits including the tax-exempt status of their accounts,
Supplemental Security Income, and TennCare benefits.
• The fees charged to maintain investments and account management are insufficient to
cover the total operational costs associated with participating in the program. As a result,
the Department of the Treasury (Treasury) has received state appropriations to subsidize
the operating and administration costs, fees, and expenses for all participants. The
appropriations are as follows:
o FY21-22: $269,553;
HB 496 - SB 452 2
o FY22-23: $274,371;
o FY23-24: $295,771; and
o FY24-25: $300,262.
• According to the Treasury, the total ABLE program cost was approximately $287,297 in
FY23-24 to operate. The estimated cost per account is $78.
• Increasing the age of disability onset will increase the number of Tennesseans eligible to
participate in the ABLE program. It is estimated approximately 4,458 newly eligible persons
will participate in the program. Due to the effective date of January 1, 2026, the first-year
impact in FY25-26 will be equal to one-half of a full year.
• Therefore, the recurring increase in state expenditures is estimated to be $173,862 [(4,458
new accounts x $78 operational costs) x 50%] in FY25-26 and $347,724 (4,458 new
accounts x $78 operational costs) in FY26-27 and subsequent years.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director