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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

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.

Spectrum: Slight Partisan Bill (Democrat 3-1)

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

Download: Texas-2011-SB63-Introduced.html

---

82R1075 ALB-F
By: Zaffirini 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
eligible persons to pursue home ownership, postsecondary
education, and business development.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 487, Government Code, is amended by
adding Subchapter M-1 to read as follows:
SUBCHAPTER M-1. ASSET DEVELOPMENT INITIATIVE FOR CERTAIN
ELIGIBLE INDIVIDUALS AND HOUSEHOLDS
Sec. 487.581. 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 or household
that 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.
Sec. 487.582. ESTABLISHMENT OF PROGRAM; RULES. (a) The
board by rule may develop and implement a program under which:
(1) individual development accounts are facilitated
and administered by sponsoring organizations for eligible
individuals and households to provide those individuals and
households 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 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 administer the
individual development accounts in accordance with the rules
adopted by the board. The board's rules must include guidelines for
contract monitoring, reporting, termination, and recapture of
state funds.
(c) In adopting rules under the program, the board shall
state the selection criteria for sponsoring organizations and give
priority to organizations that:
(1) serve rural areas; or
(2) have demonstrated:
(A) a capacity to administer individual
development account programs; or
(B) a commitment to serve areas of this state
that currently do not have individual development account programs
available.
Sec. 487.583. PARTICIPANT ELIGIBILITY. The board by rule
shall establish eligibility criteria for participation in the
program that are consistent with the purposes of the program and the
Assets for Independence Act.
Sec. 487.584. 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
account only to pay for the following qualified expenditures:
(1) postsecondary educational or training expenses
for the adult account holder and dependent children;
(2) the expenses of purchasing or financing a home for
the adult account holder for the first time;
(3) the expenses of a self-employment enterprise; and
(4) start-up business expenses for the adult account
holder.
Sec. 487.585. DUTIES OF SPONSORING ORGANIZATIONS. (a) The
board 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
board's rules.
Sec. 487.586. MATCHING FUNDS; LIMITATIONS ON AMOUNT AND
AVAILABILITY. (a) At the time a participant makes a withdrawal
from the participant's individual development account for a
qualified expenditure described by Section 487.584(c), the
participant shall receive matching funds from the sponsoring
organization, payable directly to the service provider.
(b) The amount of federal matching funds spent for each
individual development account may not exceed the limits
established by the Assets for Independence Act.
(c) This subchapter may not be construed to 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 funds available for that purpose in
that year.
Sec. 487.587. WITHDRAWALS; TERMINATION OF ACCOUNT FOR
UNQUALIFIED WITHDRAWALS. (a) The board 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 487.584(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
board 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. 487.588. FUNDING. (a) The legislature may
appropriate money for the purposes of this subchapter.
(b) The department may accept gifts, grants, and donations
from any public or private source for the purposes of this
subchapter.
Sec. 487.589. 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. 487.590. INTERAGENCY CONTRACTS. The department may
enter into interagency contracts with other state agencies to
facilitate the effective administration of this subchapter.
Sec. 487.591. AGENCY COOPERATION. To the extent allowed by
law, the Health and Human Services Commission shall provide
information to the department as necessary to implement this
subchapter.
SECTION 2. This Act takes effect September 1, 2011.