HCR78

WHEREAS, economic stability does not arise solely from income; and

WHEREAS, financial assets, such as cash savings, stocks, bonds, and home and business equity, are a critical component of economic security; and

WHEREAS, financial assets offer individuals a viable and hopeful future, stimulate development of human and other capital, and enhance the welfare of children; and

WHEREAS, the rate of family savings is the lowest that it has been since the great depression and research indicates that twenty-five per cent of households in Hawaii are "asset poor"; and

WHEREAS, one of the most novel and promising ways to achieve a universal, progressive asset building system over time is to provide each generation of children with a universal children’s savings account which is a restricted, start-in-life asset account at birth that could be used for education, homeownership, or starting a business; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2007, the Senate concurring, that the Senate Committee on Human Services and Public Housing and the House Committee on Human Services and Housing convene as a legislative interim task force to study and make recommendations regarding the creation of progressively-funded universal children’s savings accounts to be created at birth for every child in Hawaii; and

BE IT FURTHER RESOLVED that the goal of the study is to increase the savings and financial literacy in the State, by increasing the number of Hawaii children who own assets, attend post-secondary education or training, purchase a home, or open a small business through universal children’s savings accounts; and

BE IT FURTHER RESOLVED that the task force shall consider the following in its recommendations for the design of universal children’s savings accounts:

(1) Savings vehicle - rate of return, safety of the investment and insurance for the account, ease of managing the account, ease of making various forms of deposits;

(2) State contributions – the state contribution to the initial deposit, the amount, time frame and eligibility requirements to receive state matching dollars, the mechanisms to distribute state contributions, the estimate costs and benefits;

(3) Ownership of the account - impact on eligibility for student financial aid, public assistance and other public benefits, taxation of the account earnings and distributions;

(4) Financial education - provision of financial education to child and family, access to additional financial services;

(5) Restrictions - withdrawal or distribution prior to the child reaching age eighteen, portability of the account, limits on permissible uses of the account;

(6) Revenue sources - for the initial deposit and any savings match, feasibility of a state match for deposits for children in low-income families;

(7) Mechanisms for data collection and tracking; and

(8) Any other factors that the task force deems important to the program design; and

BE IT FURTHER RESOLVED that the task force include public input from a representative of an organization with expertise in asset building in Hawaii; an operator of an individual development account/matched savings and financial education program; a grassroots organizing entity; a poverty law organization; a business association; a bankers professional association; a child advocacy organization; a rural community action program; organized labor; a bank; a credit union; and an investment services provider; and

BE IT FURTHER RESOLVED that the following officials are requested to serve as ex-officio members of the task force: the Director of Budget and Finance or the Director's designee, the Director of the Department of Commerce and Consumer Affairs or the Director's designee; the Director of Business, Economic Development, and Tourism or the Director's designee; the Director of Human Services or the Director's designee; the Director of Taxation or the Director's designee; and the President of the University of Hawaii or the President's designee; and

BE IT FURTHER RESOLVED that the task force is requested to consult with national organizations such as the Corporation for Enterprise Development, which is currently engaged in a multi-year national initiative, Saving for Education, Entrepreneurship, and Downpayment Policy and Practice Initiative, for the purpose of developing, testing, and implementing matched savings accounts and financial education for children and youth; and

BE IT FURTHER RESOLVED that the task force is requested to submit a report, including any proposed legislation, no later than twenty days prior to the convening of the Regular Session of 2008; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the President of the Senate, the Speaker of the House of Representatives, the Chair of the Senate Committee on Human Services and Public Housing, the Chair of the House Committee on Human Services and Housing, the Director of Commerce and Consumer Affairs, the Director of

Business, Economic Development, and Tourism, the Director of Human Services, the Director of Taxation, and the President of the University of Hawaii.

	OFFERED BY:	_____________________________

Report Title:

Universal Children's Savings Accounts; Legislative Task Force

HOUSE OF REPRESENTATIVES	H.C.R. NO.	78
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII