HB 577-FN-A-LOCAL - AS AMENDED BY THE SENATE
18Feb2015… 0309h
04/30/2015 1392s
05/28/2015 1917s
2015 SESSION
15-0359
04/05
HOUSE BILL 577-FN-A-LOCAL
AN ACT establishing a children’s savings account program, and relative to the bonding authority of the city of Dover.
SPONSORS: Rep. Gile, Merr 27; Rep. Lovejoy, Rock 36; Rep. Gargasz, Hills 27; Rep. Barry, Hills 21; Rep. Wallner, Merr 10
This bill establishes the children’s savings account program, including a commission and fund, for the purpose of establishing children’s savings accounts for children attending public kindergarten.
This bill also authorizes the city of Dover to establish terms and conditions in the issuance of general obligation bonds.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
18Feb2015… 0309h
04/30/2015 1392s
05/28/2015 1917s
15-0359
04/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Fifteen
AN ACT establishing a children’s savings account program, and relative to the bonding authority of the city of Dover.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose. The general court finds that there is sufficient need and significant scholarly research to support the development of a children’s savings account program that increases opportunities for college and career success for all students; that engages and incentivizes positive postsecondary education savings behavior for low and moderate income families; and that provides financial literacy education for all children and their parents in cooperation with local public school systems.
2 New Chapter; New Hampshire Children’s Savings Account Program. Amend RSA by inserting after chapter 195-H the following new chapter:
CHAPTER 195-I
NEW HAMPSHIRE CHILDREN’S SAVINGS ACCOUNT PROGRAM
195-I:1 Program Established. There is hereby established in the office of the state treasurer the New Hampshire children’s savings account program. The purpose of the program is to increase opportunities for college and career success for all students, to encourage positive postsecondary education savings behavior for low and moderate income families, and to provide, in cooperation with the public schools, financial literacy education for all students and their parents.
195-I:2 Commission Established.
I. The children’s savings account program commission is hereby established to ensure the proper administration, management, and development of the children’s savings account program. The members of the commission shall be as follows:
(a) Two members from the house of representatives, appointed by the speaker of the house of representatives.
(b) One member from the senate, appointed by the president of the senate.
(c) The state treasurer, or designee.
(d) The director of the division of higher education, department of education, or designee.
(e) The chairperson of the university system of New Hampshire board of trustees, or designee.
(f) The director of the New Hampshire financial literacy education program, or designee.
(g) One member from a community philanthropic organization, appointed by the governor.
(h) One member representing the interests of the New Hampshire children’s trust fund, appointed by the governor.
(i) One member from the New Hampshire Higher Education Assistance Foundation, appointed by the foundation.
(j) One member from the Coos Coalition for Young Children and Families, appointed by that organization.
(k) One member representing the Federal Reserve Bank of Boston, appointed by the bank.
(l) One member representing the New Hampshire Community Loan Fund, appointed by that organization.
II. The commission shall elect a chairperson from its membership, and any other officers it deems necessary. The terms of the elected members of the commission shall be coterminous with their terms in office; the terms of all other appointed members shall be 3 years. In the event of a vacancy, a new member shall be appointed for the unexpired term in the same manner as the original appointment. Eight members of the commission shall constitute a quorum.
III. Members of the commission shall serve without compensation, but shall be reimbursed for necessary travel and other necessary expenses. Legislative members shall receive mileage at the legislative rate when attending to the duties of the commission.
IV. The department of education shall provide administrative and clerical support to the commission as may be necessary.
V. The commission shall keep written records of all its proceedings.
VI. No member of the commission shall have any personal interest in the gains or profits of any investment made by the commission; nor shall any member of the commission, directly or indirectly, for such member or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the commission; nor shall any member of the commission become an endorser or surety, or in any manner an obligor, for money loaned to or borrowed from the commission.
VII. Members of the commission shall be held harmless from either criminal or civil liability for any decisions made or services rendered under the provisions of this chapter.
195-I:3 Duties of the Commission. The commission shall:
I. Investigate methods for encouraging increased participation of families with young children, including those of low and moderate income, in the New Hampshire college tuition savings plan as defined in RSA 195-H and other children’s savings plans.
II. Establish and promote kindergarten to college savings plans pilot programs in Coos county and in the city of Manchester no later than September of 2016, which would consist of creating a savings account at a local financial institution with a minimum deposit of $50.00 for each eligible child attending public kindergarten in Coos county and in the city of Manchester, and would include financial literacy education for such children and their families in cooperation with local public schools. The pilot programs shall be funded to the extent of any gifts, grants, or donations received from any source.
III. Establish policies that ensure that children’s savings accounts are accessible and eventually offered on an opt-out basis statewide, are seeded with gifts, grants, or donations from local or private philanthropic foundations, and are connected to local public school financial literacy education programs.
IV. Develop administrative and operational practices such as staffing, structuring, managing, marketing, and funding mechanisms to sustain a statewide children’s savings accounts program and include clearly stated objectives, action plans, and evaluation procedures.
V. Establish recordkeeping and reporting procedures regarding the status of the children's savings account program fund, including records of beginning balances, contributions, earnings, bonuses, and matches earned by each program participant during the fiscal year.
VI. Establish a fund raising plan to secure state matching funds from federal, state, or private sources.
VII. Establish ongoing communication with the New Hampshire college tuition savings plan advisory commission established in RSA 195-H to ensure that more families become educated about the potential of investing in the New Hampshire college tuition savings program, and to facilitate the advisory committee’s future administration and responsibility for the children’s savings account program.
195-I:4 Reports.
I.(a) The treasurer shall, as needed, issue requests for proposals to evaluate and determine proposals which are best suited to the reporting and recordkeeping needs of the children's savings account program and fund.
(b) The commission shall consider and, if appropriate, give preference to proposals which best demonstrate experience in administering financial programs requiring individual account maintenance and reporting.
(c) The final selection of the proposal shall be made by the commission.
II. The state treasurer shall make quarterly reports regarding the status of the children’s savings account program and children’s savings account fund to the commission.
(a) At least annually, the commission shall issue or cause to be issued to each participant, a statement which shall include the participant’s beginning balance, contributions, and earnings credited to their account during the previous fiscal year.
(b) At least annually, the commission shall make or cause to be made an annual report regarding the status of the children’s savings account program to each participant in the program and to the state library.
195-I:5 Children’s Savings Account Fund Established. There is established a children’s savings account fund in the office of the state treasurer. This fund shall be kept distinct and separate from other funds. The fund shall be administered by the children’s savings account commission established in RSA 195-I:2 and shall be nonlapsing and continually appropriated to the commission for the purposes of establishing children’s savings accounts initially through pilot programs, and eventually statewide, pursuant to RSA 195-I:3. The commission may accept and shall deposit any gifts, grants, donations, or other moneys from any source into the fund.
3 Issuance of Bonds; City of Dover Authority.
I. Notwithstanding any general or special law to the contrary, the city of Dover shall have the following authority with respect to bonds or notes issued pursuant to RSA 33, RSA 33-B, or pursuant to any other enabling authority heretofore or hereinafter enacted.
II. In this section:
(a) “City” means the city of Dover.
(b) “City finance director” means the finance director of the city.
(c) “City manager” means the city manager of the city.
III. In connection with the issuance of any bonds or notes of the city issued pursuant to RSA 33, RSA 33-B, or pursuant to any other enabling authority, the city finance director, with the approval of the city manager, may enter into credit enhancement or liquidity agreements on behalf of the city, with such payment, security, default, remedy, and other terms and conditions as the city finance director, with the approval of the city manager, shall determine. Any bonds or notes of the city issued pursuant to RSA 33, RSA 33-B, or pursuant to any other enabling authority, whether heretofore or hereafter enacted, may mature at such times, not exceeding 30 years, or such longer term as may be provided in RSA 33, RSA 33-B, or pursuant to any other provision of law, in such amounts, and may bear interest at such rate or rates as may be determined by the city finance director, with the approval of the city manager. Bonds or notes of the city may be made redeemable before maturity at the option of the city or any holder thereof at such price or prices and upon such other terms and conditions as may be fixed by the city finance director, with the approval of the city manager, prior to the issuance of any such bonds or notes.
IV. Any premium received by the city may, in the discretion of the city finance director, be:
(a) Applied to the payment of the costs of preparing, issuing, and marketing any such bonds or notes;
(b) Applied to the cost of the project or projects for which such bonds or notes were issued, resulting in a like reduction of the amount of bonds or notes issued to finance such project;
(c) Deposited in the general fund of the city and available to be appropriated for any lawful purpose of the city; or
(d) Applied in any combination of the subparagraphs (a) - (c).
V. The city may authorize and issue its general obligation bonds or notes for any purpose for which it may raise money.
VI. The city may authorize the issuance of general obligation refunding bonds in order to pay all or part of any issue of its outstanding general obligation bonds and for the payment of any redemption premium thereon, all or part of the interest coming due on or prior to the date on which the outstanding general obligation bonds are redeemed, and the costs of issuing and marketing any such general obligation refunding bonds. Any general obligation refunding bonds issued by the city shall mature at such time or times and in such amounts as the city finance director, with the approval of the city manager, shall determine; provided, however, that the present value of the principal and interest payments due on any issue of general obligation refunding bonds of the city shall not exceed the present value of the principal and interest payments to be paid on the general obligation bonds to be refunded by such issue of general obligation refunding bonds.
VII. The requirements of RSA 33:11 regarding the authentication of bonds shall not apply to the city.
VIII. The authority granted in this section shall be in addition to, and not in place of the authority granted to the city of Dover by any other general or special law.
4 Effective Date.
I. Sections 1 and 2 of this act shall take effect July 1, 2015.
II. The remainder of this act shall take effect upon its passage.
LBAO
15-0359
Amended 06/01/15
HB 577-FN-A-LOCAL FISCAL NOTE
AN ACT establishing a children’s savings account program, and relative to the bonding authority of the city of Dover.
FISCAL IMPACT:
The Treasury Department and Department of Education state this bill, as amended by the Senate (Amendment #2015-1917s), may increase state restricted revenue and expenditures by an indeterminable amount in FY 2016 and each year thereafter. There will be no fiscal impact on county and local revenue and expenditures.
METHODOLOGY:
The Treasury Department states this bill establishes the children’s savings account program commission and the children’s savings account (CSA) program. The commission would be responsible for administering the CSA program, including two pilot programs in Coos County and Manchester, no later than September 2016. The pilot programs will provide each eligible child with a minimum deposit of $50. The Department states this bill also creates the CSA Fund, a nonlapsing fund within the Department, administered by and continually appropriated to the commission. The bill also allows the commission to accept gifts, grants and donations for deposit into the CSA fund. Any revenue from these sources cannot be determined at this time. The pilot programs shall be funded to the extent of any gifts, grants, or donations received. The Department states it currently does not possess the staffing resources necessary to deliver the administrative functions required under this bill.
The Department of Education states there are approximately 1,300 children entering public kindergarten in Coos County and Manchester each year. Consequently, if all children were to receive the minimum deposit of $50 then the cost of the pilot program for one year would be $65,000 ($50*1,300). However, it is not clear whether all 1,300 children would be eligible for the program. The Department states this bill also includes financial literacy support for such children and their families, and it estimates such costs to be less than $5,000. The Department estimates it will cost $30,000 to pay a contractor to draft associated policies, operational practices, record keeping procedures, and fund raising plans. The Department reports the amount of revenue generated for the CSA program is indeterminable at this time.
Section 3 of this bill authorizes the city of Dover to establish terms and conditions in the issuance of general obligation bonds. The Treasury Department states this section will have no fiscal impact.