83R586 MCK-D
 
  By: Dukes H.B. No. 445
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  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.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 40, Human Resources Code, is amended by
  adding Subchapter E to read as follows:
  SUBCHAPTER E.  ASSET DEVELOPMENT INITIATIVE FOR CERTAIN
  FOSTER CHILDREN
         Sec. 40.201.  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 who 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, except that the term does not include a state
  agency.
         Sec. 40.202.  ESTABLISHMENT OF PROGRAM; RULES.  (a)  The
  executive commissioner by rule may develop and implement a program
  under which:
               (1)  individual development accounts are facilitated
  and administered by sponsoring organizations for eligible
  individuals to provide those individuals 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 department 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 executive commissioner.  The executive
  commissioner's rules must include guidelines for contract
  monitoring, reporting, termination, and recapture of state funds.
         (c)  In adopting rules under the program, the executive
  commissioner 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; or
               (2)  a commitment to serve areas of this state that
  currently do not have individual development account programs
  available.
         Sec. 40.203.  PARTICIPANT ELIGIBILITY.  (a)  Only foster
  children who are at least 15 years of age and younger than 23 years
  of age may participate in the program.
         (b)  The executive commissioner 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. 40.204.  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 education or training expenses for
  the account holder;
               (2)  the expenses of purchasing or financing a home for
  the account holder for the first time;
               (3)  the expenses of a self-employment enterprise; and
               (4)  start-up business expenses for the account holder.
         Sec. 40.205.  DUTIES OF SPONSORING ORGANIZATIONS.  (a)  The
  executive commissioner 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
  executive commissioner's rules.
         Sec. 40.206.  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 40.204(c), the
  participant shall receive matching funds from the sponsoring
  organization, payable directly to the service provider.
         (b)  The sponsoring organization shall determine the amount
  of federal matching funds spent for each individual development
  account as limited by the guidelines established by the Assets for
  Independence Act.
         (c)  This subchapter does not 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 money available for that purpose in that year.
         Sec. 40.207.  WITHDRAWALS; TERMINATION OF ACCOUNT FOR
  UNQUALIFIED WITHDRAWALS.  (a)  The executive commissioner 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
  40.204(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
  executive commissioner 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. 40.208.  FUNDING.  (a)  The legislature may appropriate
  money for the purposes of this subchapter.
         (b)  The department may solicit and accept gifts, grants, and
  donations from any public or private source for the purposes of this
  subchapter.
         (c)  If money is not appropriated to the department for the
  purposes of this subchapter, the department is only required to
  implement Section 40.209.
         (d)  Notwithstanding Subsection (a), money from the general
  revenue fund and other state money may not be used for the purposes
  of this subchapter for the state fiscal biennium ending August 31,
  2015.  This subsection expires September 1, 2015.
         Sec. 40.209.  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. 40.210.  INTERAGENCY CONTRACTS.  The department may
  enter into interagency contracts with other state agencies to
  facilitate the effective administration of this subchapter.
         Sec. 40.211.  AGENCY COOPERATION.  To the extent allowed by
  law, the commission shall provide information to the department as
  necessary to implement this subchapter.
         SECTION 2.  This Act takes effect September 1, 2013.