H.B. 2125
By: Maxey 
Committee Report (Substituted)


An important component of building economic security can be the
accumulation of assets. Across the country, states such as Virginia,
Arizona, and Massachusetts have implemented Individual Development
Accounts (IDAs) as a mechanism for welfare recipients to accumulate
savings for specific purposes without being penalized for accruing
resources.  IDAs are based on the idea that economic growth and long-term
security are achieved through savings and asset accumulation rather than
through income and consumption.  IDAs build families, communities, and
economies, increase savings, and develop assets and enduring escapes from

Individual Development Accounts (IDAs) are dedicated savings accounts,
similar in structure to Individual Retirement Accounts (IRAs).  IDAs may
be used only for educational and medical expenses, work-related expenses,
purchasing a first home, capitalizing a small business and moving
expenses.  IDAs were first introduced in Texas as a pilot project in HB
1863 from the 74th Legislature. 


This legislation directs the Texas Workforce Commission to develop and
implement a pilot project that would set up an individual development
account for employees in work subsidy programs and directs the Workforce
Commission to work with local community organizations to encourage these
organizations to contribute to the individual development accounts. 


This legislation provides rulemaking authority to the commission in
SECTION 1, Section 31.067(a) and in SECTION 2, Section 31.0321(b). 


Sec. 301.067.  Pilot Program: Individual Development Accounts for Certain

(a)Directs the Texas Workforce Commission, by rule, to establish
individual development accounts (IDAs) for individuals participating in
subsidized work programs.  

(b)Directs the commission to establish and administer the account or
contract with an outside organization to establish and administer the

(c)Directs the commission to encourage the following to match deposits
made to individual development accounts (IDAs): 
 (1)private employers; 
 (2)community groups; and
 (3)financial institutions.

(d)Limits the items on which the money in the account may be spent.

(e)Directs the commission to report to the governor and the legislature
not later than December 1, 1998 and December 1, 2000. 
(f)Expiration Date: September 1, 2001.

SECTION 2.Subchapter B, Chapter 31, Human Resources Code, amends Section
31.0321 as follows: 

Sec. 31.0321.Exclusion of Certain Income and Resources. 

(a)The Department of Human Services may not consider the money contributed
to the individual development account (IDA) when determining eligibility
for financial assistance, except as provided in Subsection (b). 

(b)After consulting with the Texas Workforce Commission, the Department of
Human Services (DHS), by rule, may place limits on the amount of money not
considered as income under Subsection (a). 

(c)Expiration Date: September 1, 2001.

SECTION 3.Allows DHS to postpone implementation of the program if it is
determined that a federal waiver is necessary for implementation.  

SECTION 4.Emergency Clause.


1)SECTION 1.The bill now refers to Subchapter D, Chapter 301, Labor Code
because the responsibility for the pilot project was given to the Texas
Workforce Commission.  

2)SECTION 1.Section 301.067 is added, which sets up the individual
development accounts (IDAs) as a pilot project rather than as a statewide
initiative.  Language is added to this section which defines the
parameters of the pilot project.  The Workforce Commission, rather than
the private employer, is directed to set up the IDAs.  The employer is no
longer required to contribute to the IDAs. Instead, the Workforce
Commission is directed to work with the community to encourage
organizations to contribute voluntarily to IDAs.  

3)SECTION 2.This section is changed to direct the Department of Human
Services (DHS) to develop, by rule, how much of the income in the account
may be considered when determining eligibility for financial assistance.
Additionally, it allows DHS to place limits on the amount of money placed
in the account.