Report Title:
Individual Development Accounts
Description:
Repeals the five year limitation on direct state funding to fiduciary organizations; requires the department of human services to provide technical and administrative assistance to fiduciary organizations; allows qualified expenditures for auto purchases; raises the amount that fiduciary organizations may use to cover administrative costs; allows the department of human services to utilize federal funds for matching funds; and appropriates or authorizes temporary assistance for needy families funds for the department of human services to implement chapter 257, Hawaii Revised Statutes. (SD1)
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THE SENATE |
S.B. NO. |
740 |
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TWENTY-FOURTH LEGISLATURE, 2007 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO INDIVIDUAL Development ACCOUNTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 257-1, Hawaii Revised Statutes, is amended by amending the definition of "qualified expenditures" to read as follows:
""Qualified expenditures" means
an expense as determined by a fiduciary organization[, which] that
may include [but not be limited to]:
(1) Costs associated with first homeownership;
(2) Post-secondary education;
(3) Vocational training; [and]
(4) Small or micro-business capitalization[.];
and
(5) One motor vehicle purchase for school or work transportation."
SECTION 2. Section 257-3, Hawaii Revised Statutes, is amended by amending subsections (b), (c), and (d) to read as follows:
"(b) Locally-based organizations shall
enter into a competitive process for the right to become fiduciary
organizations for a portion of the state matching dollars [that would be
authorized initially]. Fiduciary organization proposals shall be evaluated
and participation rights awarded on the basis of [such items as]:
(1) Their ability to market the program to potential individual development account holders and potential matching fund contributors;
(2) Their ability to provide safe and secure investments for individual development accounts;
(3) Their overall administrative capacity, including:
(A) Certifications or verifications required to assure compliance with eligibility requirements;
(B) Authorized uses of the accounts matching contributions by individuals or businesses; and
(C) Penalties for unauthorized distributions;
(4) Their capacity to provide financial counseling and other related services to potential participants; and
(5) Their links to other activities designed to increase the independence of individuals and families through high return investments, including homeownership, education and training, and small business development.
(c) The department of human services shall provide technical and administrative assistance to fiduciary organizations to meet the criteria under subsection (b); provided that the State may expend appropriate federal moneys, including temporary assistance for needy families and community development block grants, for this purpose, as applicable; provided further that the department of human services may contract with one or more agencies, as appropriate, to select, fund, and monitor fiduciary organizations in the administration of this chapter.
[(c)] (d) If the [State] the
department of human services approves an application to fund an individual
development account project under this section, the [State] department
of human services shall[, not later than one month after June 28, 1999,]
authorize the applicant to conduct the project with state funds [for five
project years] in accordance with the approved application and this
section; provided that an applicant may apply for funding during future fiscal
years [for five project years] if [the State lacks the] there
are insufficient resources to fund an individual development account
project pursuant to this subsection.
[(d)] (e) For each individual
development account program approved under this section, the [State] department
of human services shall make a grant to the qualified entity or
collaboration of entities authorized to conduct the project on the first day of
the project year [in an amount not to exceed $100,000 per year for five
years]."
SECTION 3. Section 257-8, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The [State] department of
human services shall match an amount of up to $100,000 per calendar year
for individual development accounts. The department of human services may
expend appropriate federal moneys, including temporary assistance for needy
families and community development block grants, for purposes of this
subsection, in addition to general funds, as permissible under federal law."
SECTION 4. Section 257-11, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) The fiduciary organization running
an individual development account program shall have sole authority over the
administration of the project. The [State] department of human
services may prescribe [only such] regulations with respect to
demonstration projects [under this chapter] as are necessary to ensure
compliance [pursuant to] with this chapter."
2. By amending subsection (d) to read:
"(d) Selected fiduciary organizations may
use no more than [ten] twenty-five per cent of state funds as
appropriated under this [[]chapter[]] to cover administrative
costs in any given year."
SECTION 5. There is appropriated or authorized from temporary assistance for needy families funds the sum of $2,000,000, or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, for the department of human services to implement chapter 257, Hawaii Revised Statutes.
The sums appropriated shall be expended by the department of human services for the purposes of this section.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2007.