The IRS was told Wednesday that proposed rules could stifle the number of participants in the coming 529-like disability savings plans.

State officials in line to run the plans warned at an Internal Revenue Service hearing the regulations could make it unduly hard for individuals to sign up for the programs and unnecessarily costly to administer the savings vehicles.

Popularly known as the ABLE law, the Stephen Beck Jr. Achieving a Better Life Experience Act was designed to spur state programs that would give relatives and friends the ability to help pay for a disabled individual’s long-term needs the way the 529 college program helps parents save for a college education.

A key benefit of ABLE is it provides financial support for participants while keeping them eligible for Supplemental Security and other government aid by not being counted against asset limits for eligibility.

Close to three dozen states have passed legislation to set up the plans. The first are expected to be in operation by the middle of next year.

Kathleen McGrath, who testified on behalf of the National Association of State Treasurers’ College Savings Plans Network, said the states are being asked to set up the programs in the dark: No one knows how many people will participate or what the costs will be.

State offices that administer 529 plans would usually operate ABLE as well.

With sizeable fixed costs, the programs could be hampered by the low $14,000 maximum that can be put into an account (with the same limit for yearly contributions), as well as the possibility few of the disabled will opt to participate.

Administrative expenses are likely be higher than the 529 programs because of monthly reports that have to be sent to the Social Security Administration, the need to create a computer program to kick out contributions above the annual limit, and the need to ensure the person opening the account has the authority to do so.

In addition in the rules currently under consideration by the IRS, there is a need for administrators to certify persons are eligible to participate in ABLE (a task they don’t have to perform with 529 plans), but state officials and disabled advocates are hoping people will be allowed to self-certify