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.