BILL REQ. #:  H-4099.4 

Read first time 01/17/08.   Referred to Committee on Community & Economic Development & Trade.

     AN ACT Relating to expanding asset building strategies to assist low-income working families; amending RCW 43.31.450, 43.31.455, 43.31.460, 43.31.465, 43.31.470, and 43.31.480; adding a new section to chapter 43.31 RCW; creating a new section; and making an appropriation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 43.31.450 and 2005 c 402 s 2 are each amended to read as follows:
     The legislature finds that economic well-being encompasses not only income, spending, and consumption, but also savings, investment, and asset-building. The legislature recognizes that low-income working families often encounter significant barriers as they strive to achieve financial self-sufficiency. Their challenges include acquiring employment that pays enough to cover the costs of daily living, accumulating funds for the down payment on a home, and setting aside money for their children's education or for retirement. The legislature also finds that one in five American households owes more than it owns, and in the event of a job loss, one in four households cannot support itself at the poverty line for three months. Asset-poor families do not have enough cash reserves or equity in their homes or businesses to meet basic needs through a period of joblessness, health emergency, divorce, or other unexpected financial hardship. The building of assets, in particular, can improve individuals' economic independence and stability. The legislature further finds that it is appropriate for the state to institute an asset-based strategy to assist low-income families. It is the purpose of chapter 402, Laws of 2005 and chapter . . . , Laws of 2008 (this act) to promote job training, home ownership, and business development among low-income individuals and to provide assistance in meeting the financial goals of low-income individuals.

Sec. 2   RCW 43.31.455 and 2005 c 402 s 3 are each amended to read as follows:
     The definitions in this section apply throughout RCW 43.31.450 through 43.31.475 unless the context clearly requires otherwise.
     (1) "Asset building" means investment or savings for an investment in a family home, higher education, small business, or other long-term asset that will assist low-income families to attain greater self-sufficiency.
     (2) "Department" means the department of community, trade, and economic development.
     (((2))) (3) "Director" means the director of the department of community, trade, and economic development.
     (((3))) (4) "Foster youth" means a person who is fifteen years of age or older who is a dependent of the department of social and health services; or a person who is at least fifteen years of age, but not more than twenty-three years of age, who was a dependent of the department of social and health services for at least twenty-four months after attaining thirteen years of age.
     (((4))) (5) "Individual development account" or "account" means an account established by contract between a low-income individual and a sponsoring organization for the benefit of the low-income individual and funded through periodic contributions by the low-income individual which are matched with contributions by or through the sponsoring organization.
     (((5))) (6) "Low-income individual" means a person whose household income is equal to or less than either:
     (a) Eighty percent of the median family income, adjusted for household size, for the county or metropolitan statistical area where the person resides; or
     (b) Two hundred percent of the federal poverty guidelines updated periodically in the federal register by the United States department of health and human services under the authority of 42 U.S.C. 9902(2).
     (((6))) (7) "Program" means the individual development account program established pursuant to RCW 43.31.450 through 43.31.475.
     (((7))) (8) "Sponsoring organization" means: (a) A nonprofit, fund-raising organization that is exempt from taxation under section 501(c)(3) of the internal revenue code as amended and in effect on January 1, 2005; (b) a housing authority established under RCW 35.82.030; or (c) a federally recognized Indian tribe.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.31 RCW to read as follows:
     ASSET BUILDING COALITIONS. (1) The Washington asset building coalition is created. Its mission is to provide statewide leadership on initiatives that foster financial self-sufficiency and economic security for low-income working families and foster youth. The Washington asset building coalition shall be staffed by the department and shall work together with the department, community asset building coalitions, and other public and private sector partners to:
     (a) Create private and public prosperity products;
     (b) Develop and promote public and private lending policies that encourage asset building;
     (c) Market savings, smart borrowing, and federal tax credit programs;
     (d) Expand financial literacy opportunities and outcomes; and
     (e) Identify and promote other approaches that will help low-income working families reach self-sufficiency by building and managing their assets.
     (2)(a) Community-based asset building coalitions involve collaboration among local social service, faith-based, governmental, job training, and health care agencies and the private sector, including financial institutions. They are important partners to the department and the statewide coalition because they deliver direct services to low-income working families.
     (b) The department shall help initiate, expand, and strengthen services of community-based asset building coalitions by providing them with technical assistance and grants.
     (c) To the extent that funding is appropriated for this purpose, the department shall conduct an application process and evaluate and select community-based asset building coalitions for grant awards. The application must identify a local lead agency, specific needs, appropriate community partners, and any matching funds or in-kind contributions to complement the state's grant.
     (3) To the extent funding is appropriated for this purpose, for the 2009-2011 biennium, the department shall work with the Washington asset building coalition, relevant state agencies, community-based asset building coalitions, and other partners to design, implement, and fund a statewide public education and outreach campaign. The department shall use state funds to attract matching investments by other public and private sector organizations. The campaign shall feature marketing, self-help tools, and local services, including activities such as:
     (a) Creation of a web site with financial information, savings and investment calculators, credit repair links, and other self-help tools;
     (b) Call-in assistance and referrals through a universal telephone number that provides a directory to local services;
     (c) Public service announcements and other educational outreach through media outlets, WorkFirst agencies, the temporary assistance for needy families program, mailing inserts, and print and electronic materials designed to reach target groups such as seniors, the military, foster youth, former offenders, WorkFirst participants, recipients of temporary assistance for needy families, limited English speakers, and other high-need groups;
     (d) An outreach campaign to increase the number of eligible low-income working families who claim the federal earned income tax credit and the federal child and dependent care tax credit.

Sec. 4   RCW 43.31.460 and 2005 c 402 s 4 are each amended to read as follows:
     An individual development account program is hereby established within the department for the purpose of facilitating the creation by sponsoring organizations of individual development accounts for low-income individuals.
     (1) The department shall select sponsoring organizations to establish and monitor individual development accounts using the following criteria:
     (a) The ability of the sponsoring organization to implement and administer an individual development account program, including the ability to verify a low-income individual's eligibility, certify that matching deposits are used only for approved purposes, and exercise general fiscal accountability;
     (b) The capacity of the sponsoring organization to provide or raise funds to match the contributions made by low-income individuals to their individual development accounts;
     (c) The capacity of the sponsoring organization to provide or arrange for the provision of financial counseling and other related services to low-income individuals;
     (d) The links the sponsoring organization has to other activities and programs related to the purpose of chapter 402, Laws of 2005; and
     (e) Such other criteria as the department determines are consistent with the purpose of chapter 402, Laws of 2005 and ease of administration.
     (2) An individual development account may be established by or on behalf of an eligible low-income individual to enable the individual to accumulate funds for the following purposes:
     (a) The acquisition of postsecondary education or job training;
     (b) The purchase of a primary residence, including any usual or reasonable settlement, financing, or other closing costs;
     (c) The capitalization of a small business. Account moneys may be used for capital, land, plant, equipment, and inventory expenses or for working capital pursuant to a business plan. The business plan must have been developed with a business counselor, trainer, or financial institution approved by the sponsoring organization. The business plan shall include a description of the services or goods to be sold, a marketing strategy, and projected financial statements;
     (d) The purchase of a computer, an automobile if necessary for employment or postsecondary education, or home ((improvements)) repairs; or
     (e) The purchase of assistive technologies that will allow a person with a disability to participate in community and work-related activities.
     (3) An eligible low-income individual participating in the program must contribute to an individual development account. The contributions may be derived from earned income or other income, as provided by the department. Other income shall include child support payments, supplemental security income, and disability benefits.
     (4) A sponsoring organization may authorize a low-income individual for whom an individual development account has been established to withdraw all or part of the individual's deposits for the following emergencies:
     (a) Necessary medical expenses;
     (b) To avoid eviction of the individual from the individual's residence;
     (c) Necessary living expenses following loss of employment; or
     (d) Such other circumstances as the sponsoring organization determines merit emergency withdrawal.
     The low-income individual making an emergency withdrawal shall reimburse the account for the amount withdrawn within twelve months of the date of withdrawal or the individual development account shall be closed.
     (5) Funds held in an individual development account established under RCW 43.31.450 through 43.31.475 shall not be used in the determination of eligibility for, or the amount of, assistance in any state or federal means-tested program.
     (6) The department shall adopt rules as necessary to implement chapter 402, Laws of 2005, including rules regulating the use of individual development accounts by eligible low-income individuals. The department's rules shall require that funds held in an individual development account are to be withdrawn only for the purposes specified in subsection (2) of this section or withdrawn as permitted for emergencies under subsection (4) of this section.
     (7) Nothing in this section shall be construed to create an entitlement to matching moneys.

Sec. 5   RCW 43.31.465 and 2005 c 402 s 5 are each amended to read as follows:
     (1) A foster youth individual development account program is hereby established within the individual development account program established pursuant to RCW 43.31.460 for the purpose of facilitating the creation by sponsoring organizations of individual development accounts for foster youth.
     (2) The department shall select sponsoring organizations to establish and monitor individual development accounts for foster youth from those entities with whom the department of social and health services contracts for independent living services for youth who are or have been dependents of the department of social and health services.
     (3) An individual development account may be established by or on behalf of a foster youth to enable the individual to accumulate funds for the following purposes:
     (a) The acquisition of postsecondary education or job training;
     (b) Housing needs, including rent, security deposit, and utilities costs;
     (c) The purchase of a computer if necessary for postsecondary education or job training;
     (d) The purchase of a car if necessary for employment or postsecondary education; ((and))
     (e) Payment of health insurance premiums; and
     (f) The purchase of assistive technologies that will allow a person with a disability to participate in community and work-related activities.
     (4) Contributions to an individual development account may be made by a foster youth participating in the program ((must contribute to an individual development account)) or by other sources, including but not limited to, foster parents and community organizations. The contributions may be derived from earned income or other income, as provided by the department. Other income shall include financial incentives for educational achievement provided by entities contracted with the department of social and health services for independent living services for youth who are or have been dependents of the department of social and health services.

Sec. 6   RCW 43.31.470 and 2005 c 402 s 6 are each amended to read as follows:
     (1) An account is created in the custody of the state treasurer to be known as the individual development account program account. The account shall consist of all moneys appropriated to the account by the legislature and any other federal, state, or private funds, appropriated or nonappropriated, as the department receives for the purpose of matching low-income individuals' contributions to their individual development accounts. Expenditures from the account may be used only for the following:
     (a) Grants to sponsoring organizations selected by the department to participate in the individual development account program to assist sponsoring organizations in providing or arranging for the provision of financial counseling and other related services to low-income individuals participating in the program and for program administration purposes;
     (b) A match to be determined by the department of up to four dollars for every dollar deposited by an individual into the individual's individual development account, except that the maximum amount provided as a match for each individual development account shall be four thousand dollars; and
     (c) The department's administrative expenses in carrying out the purposes of chapter 402, Laws of 2005 and chapter . . . , Laws of 2008 (this act).
     (2) Only the director or the director's designee may authorize expenditures from the account.
     (3) The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 7   RCW 43.31.480 and 2005 c 402 s 9 are each amended to read as follows:
     The department shall ((annually)) report biennially to the legislature and the governor on the individual development account program and other financial self-sufficiency programs established pursuant to RCW 43.31.450 through 43.31.475 and section 3 of this act. The report shall include the status of the programs in place, the outcomes achieved since the previous report, and recommendations for changed practices and additional tools that would improve program outcomes. For the report due in 2010, the department shall assess and make a recommendation regarding the need and options for formalizing membership and operations of the Washington asset building coalition.

NEW SECTION.  Sec. 8   APPROPRIATION. The sum of two million dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2009, from the general fund to the individual development account program account in RCW 43.31.470. The department of community, trade, and economic development shall allocate the full amount for the purposes of RCW 43.31.460.

NEW SECTION.  Sec. 9   CAPTIONS NOT LAW. Captions used in this act are not any part of the law.