Bill Text: TX SB63 | 2011-2012 | 82nd Legislature | Engrossed

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Bill Title: Relating to the creation of the individual development account program to provide savings incentives and opportunities for certain foster children to pursue home ownership, postsecondary education, and business development.

Sponsorship: Slight Partisan Bill (Democrat 3-1)

Status: (Engrossed - Dead) 2011-05-17 - Corrected committee report sent to Calendars [SB63 Detail]

Download: Texas-2011-SB63-Engrossed.html

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By: Zaffirini, Davis S.B. No. 63

A BILL TO BE ENTITLED
AN ACT
relating to the creation of the individual development account
program to provide savings incentives and opportunities for certain
foster children to pursue home ownership, postsecondary education,
and business development.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 40, Human Resources Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. ASSET DEVELOPMENT INITIATIVE FOR CERTAIN
FOSTER CHILDREN
Sec. 40.201. DEFINITIONS. In this subchapter:
(1) "Assets for Independence Act" means the federal
Assets for Independence Act (42 U.S.C. Section 604 note).
(2) "Financial institution" has the meaning assigned
by Section 201.101, Finance Code.
(3) "Individual development account" means a deposit
account established by a participant at a financial institution
selected by a sponsoring organization.
(4) "Participant" means an individual who has entered
into an agreement with a sponsoring organization to participate in
the program.
(5) "Program" means the individual development
account program established under this subchapter.
(6) "Service provider" means a person to whom a
qualified expenditure from a participant's individual development
account is made. The term includes:
(A) a public or private institution of higher
education;
(B) a provider of occupational or vocational
education, including a proprietary school;
(C) a mortgage lender;
(D) a title insurance company;
(E) the lessor or vendor of office supplies or
equipment or retail space, office space, or other business space;
and
(F) any other provider of goods or services used
for the start of a business.
(7) "Sponsoring organization" has the meaning
assigned to "qualified entity" by Section 404(7), Assets for
Independence Act, except that the term does not include a state
agency.
Sec. 40.202. ESTABLISHMENT OF PROGRAM; RULES. (a) The
executive commissioner by rule may develop and implement a program
under which:
(1) individual development accounts are facilitated
and administered by sponsoring organizations for eligible
individuals to provide those individuals with an opportunity to
accumulate assets and to facilitate and mobilize savings;
(2) sponsoring organizations are provided grant funds
for use in administering the program and matching qualified
expenditures made by program participants; and
(3) at least 85 percent of the grant funds described by
Subdivision (2) must be used by the sponsoring organization for
matching qualified expenditures.
(b) The department shall contract with sponsoring
organizations to facilitate the establishment of and to administer
the individual development accounts in accordance with the rules
adopted by the executive commissioner. The executive
commissioner's rules must include guidelines for contract
monitoring, reporting, termination, and recapture of state funds.
(c) In adopting rules under the program, the executive
commissioner shall state the selection criteria for sponsoring
organizations and give priority to organizations that have
demonstrated:
(1) a capacity to administer individual development
account programs; or
(2) a commitment to serve areas of this state that
currently do not have individual development account programs
available.
Sec. 40.203. PARTICIPANT ELIGIBILITY. (a) Only foster
children who are at least 15 years of age and younger than 23 years
of age may participate in the program.
(b) The executive commissioner by rule shall establish
eligibility criteria for participation in the program that are
consistent with the purposes of the program and with the Assets for
Independence Act.
Sec. 40.204. CONTRIBUTIONS AND EXPENDITURES BY
PARTICIPANT. (a) A participant may contribute to the
participant's individual development account.
(b) A participant's contributions to the participant's
individual development account shall accrue interest.
(c) A participant may withdraw money from the participant's
individual development account only to pay for the following
qualified expenditures:
(1) postsecondary education or training expenses for
the account holder;
(2) the expenses of purchasing or financing a home for
the account holder for the first time;
(3) the expenses of a self-employment enterprise; and
(4) start-up business expenses for the account holder.
Sec. 40.205. DUTIES OF SPONSORING ORGANIZATIONS. (a) The
executive commissioner shall adopt rules to establish the duties of
sponsoring organizations under the program.
(b) Each sponsoring organization shall provide to the
department any information necessary to evaluate the sponsoring
organization's performance in fulfilling the duties outlined in the
executive commissioner's rules.
Sec. 40.206. MATCHING FUNDS; LIMITATIONS ON AMOUNT AND
AVAILABILITY. (a) At the time a participant in the program makes a
withdrawal from the participant's individual development account
for a qualified expenditure described by Section 40.204(c), the
participant shall receive matching funds from the sponsoring
organization, payable directly to the service provider.
(b) The sponsoring organization shall determine the amount
of federal matching funds spent for each individual development
account as limited by the guidelines established by the Assets for
Independence Act.
(c) This subchapter does not create an entitlement of a
participant to receive matching funds. The number of participants
who receive matching funds under the program in any year is limited
by the amount of money available for that purpose in that year.
Sec. 40.207. WITHDRAWALS; TERMINATION OF ACCOUNT FOR
UNQUALIFIED WITHDRAWALS. (a) The executive commissioner by rule
shall establish guidelines to ensure that a participant does not
withdraw money from the participant's individual development
account except for a qualified expenditure described by Section
40.204(c).
(b) The sponsoring organization shall instruct the
financial institution to terminate a participant's account if the
participant does not comply with the guidelines established by
executive commissioner rule.
(c) A participant whose individual development account is
terminated under this section is entitled to withdraw from the
participant's account the amount of money the participant
contributed to the account and any interest that has accrued on that
amount.
Sec. 40.208. FUNDING. (a) The legislature may appropriate
money for the purposes of this subchapter.
(b) The department may solicit and accept gifts, grants, and
donations from any public or private source for the purposes of this
subchapter.
(c) If money is not appropriated to the department for the
purposes of this subchapter, the department is only required to
implement Section 40.209.
(d) Notwithstanding Subsection (a), money from the general
revenue fund and other state money may not be used for the purposes
of this subchapter for the state fiscal biennium ending August 31,
2013. This subsection expires September 1, 2013.
Sec. 40.209. COORDINATION. The department shall:
(1) serve as a clearinghouse for information relating
to state and local and public and private programs that facilitate
asset development; and
(2) post the information described by Subdivision (1)
on the department's Internet website.
Sec. 40.210. INTERAGENCY CONTRACTS. The department may
enter into interagency contracts with other state agencies to
facilitate the effective administration of this subchapter.
Sec. 40.211. AGENCY COOPERATION. To the extent allowed by
law, the commission shall provide information to the department as
necessary to implement this subchapter.
SECTION 2. This Act takes effect September 1, 2011.