By: Zaffirini S.B. No. 62
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of the individual development account
  program to provide savings incentives and opportunities to eligible
  low-income individuals and households.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 403, Government Code, is amended by
  adding Subchapter O to read as follows:
  SUBCHAPTER O.  ASSET DEVELOPMENT INITIATIVE FOR CERTAIN
  LOW-INCOME INDIVIDUALS AND HOUSEHOLDS
         Sec. 403.501.  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. 403.502.  ESTABLISHMENT OF PROGRAM; RULES.  (a)  The
  comptroller by rule may develop and implement a program under
  which:
               (1)  individual development accounts are facilitated
  and administered by sponsoring organizations for eligible
  low-income 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 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 comptroller 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 comptroller.  The comptroller's rules must include
  guidelines for contract monitoring, reporting, termination, and
  recapture of state funds.
         (c)  In adopting rules under the program, the comptroller
  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; and
               (2)  a commitment to serve areas of this state that
  currently do not have individual development account programs
  available.
         Sec. 403.503.  PARTICIPANT ELIGIBILITY.  The comptroller 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. 403.504.  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. 403.505.  DUTIES OF SPONSORING ORGANIZATIONS.  (a)  The
  comptroller shall adopt rules to establish the duties of sponsoring
  organizations under the program.
         (b)  Each sponsoring organization shall provide to the
  comptroller any information necessary to evaluate the sponsoring
  organization's performance in fulfilling the duties outlined in the
  comptroller's rules.
         Sec. 403.506.  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 403.504(c), the
  participant shall receive matching funds from the sponsoring
  organization, payable directly to the service provider.
         (b)  If Assets for Independence Act money is used as matching
  funds, the amount of federal matching funds spent for each
  individual development account may not exceed the limits
  established by the Assets for Independence Act.  If money other than
  Assets for Independence Act money is used as matching funds, the
  comptroller by rule may set a different limit on the amount of
  matching funds that may be spent for each account.
         (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. 403.507.  WITHDRAWALS; TERMINATION OF ACCOUNT FOR
  UNQUALIFIED WITHDRAWALS.  (a)  The comptroller 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 403.504(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
  comptroller 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. 403.508.  FUNDING.  (a)  The legislature may
  appropriate money for the purposes of this subchapter.
         (b)  The comptroller may accept gifts, grants, and donations
  from any public or private source for the purposes of this
  subchapter.
         Sec. 403.509.  COORDINATION.  The comptroller shall:
               (1)  serve as a clearinghouse for information relating
  to state and local and public and private programs that facilitate
  asset development among low-income families; and
               (2)  post the information described by Subdivision (1)
  on the comptroller's Internet website.
         Sec. 403.510.  INTERAGENCY CONTRACTS.  The comptroller may
  enter into interagency contracts with other state agencies to
  facilitate the effective administration of this subchapter.
         Sec. 403.511.  AGENCY COOPERATION.  To the extent allowed by
  law, the Health and Human Services Commission shall provide
  information to the comptroller as necessary to implement this
  subchapter.
         SECTION 2.  This Act takes effect September 1, 2007.