| |
| |
|
|
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. |