Title: An act relating to financial literacy.

Brief Description: Including financial literacy in work activity provisions.

Sponsors: Representatives Dickerson, Morrell, Appleton, Moeller, Lantz, Hasegawa, Williams, Darneille, Santos, Haler, Wallace, Walsh, McIntire and Simpson.

Brief History:

Children & Family Services: 1/16/06, 1/19/06 [DPS].

HOUSE COMMITTEE ON CHILDREN & FAMILY SERVICES

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 9 members: Representatives Kagi, Chair; Roberts, Vice Chair; Walsh, Ranking Minority Member; Hinkle, Assistant Ranking Minority Member; Darneille, Dickerson, Dunn, Haler and Pettigrew.

Staff: Sydney Forrester (786-7120).

Background:

WorkFirst is Washington's program of Temporary Assistance for Needy Families (TANF). Under WorkFirst, recipients of public assistance are assessed prior to referral to job search activities. Information obtained through the assessment is used to develop an individual responsibility plan (IRP) for each recipient. An IRP includes an employment goal; a plan for obtaining employment as quickly as possible; and a description of services available to enable the recipient to obtain and keep employment. Unless a good cause exemption applies, recipients of public assistance must be engaged in work or work activities as a condition of continued eligibility.

Work Activities
Federal laws governing the administration of TANF moneys require a counting of the hours an individual participates in work activities. For the purpose of counting, activities are designated as either core activities or optional activities. In general, most core activities are fully countable with few limitations. Optional activities, however, are countable only after a recipient completes a prescribed number of core activities.

Most work activities are considered core activities, including subsidized and unsubsidized employment in the public or private sector; internships required for vocational training or to obtain a license or certificate; job search and job readiness assistance; and participation in community service programs. Some work activities, however, are considered optional activities, such as job skills training, and education to obtain a diploma or general education development certificate (GED).

K-12 Financial Literacy Public Private Partnership
In 2004, the Legislature established the K-12 Financial Literacy Public Private Partnership for the purpose of assisting school districts in their efforts to ensure students are financially literate. Contributions from private partners have reached approximately $30,000. The partnership meets monthly, and the Office of the Superintendent of Public Instruction is recruiting for a half-time position to assist the partnership in its efforts to coordinate availability of financial literacy resources.

Summary of Substitute Bill:

The assessment used to develop the individual responsibility plan (IRP) for WorkFirst participants must include consideration of the potential benefit to the individual of engaging in financial literacy activities. The definition of work activities is expanded to include financial literacy activities designed to assist a recipient in becoming self-sufficient and financially stable. Financial literacy activities may be included in an IRP as either a core activity or an optional activity. The Department of Social and Health Services is directed to consider the local options available to WorkFirst participants for financial literacy activities, including options and resources made available through the K-12 Financial Literacy Public Private Partnership.

Substitute Bill Compared to Original Bill:

The substitute delays implementation until January 1, 2007, and refers to financial literacy activities instead of financial literacy training.

Appropriation: None.

Fiscal Note: Available.

Effective Date of Substitute Bill: The bill takes effect January 1, 2007.

Testimony For: This bill is the result of a bipartisan effort by the Family Financial Fitness group. We wanted to look at what could be done to assist low-income families build their assets. Financial literacy activities are already built into some work activities. This would increase the possibility for more TANF recipients to participate in up to 10 hours of financial literacy activities.

It makes good sense to include financial literacy with the other components of the individual responsibility plan. Temporary Assistance for Needy Families recipients must make key decisions about how to pay for necessities within a limited budget. Budgeting skills should be required for welfare recipients so that they can take the information and apply it to their own financial challenges. With better financial literacy skills people are better able to achieve and sustain financial stability. This is especially true for single parents and women.

Testimony Against: None.

Persons Testifying: Representative Dickerson, Prime Sponsor; Lonnie Johns-Brown, National Organization of Women; Trisha Rice; and Robin Lester, Washington Women's Employment and Education.

Persons Signed In To Testify But Not Testifying: None.