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2007 Legislative Session Wrap-Up

Texas governor Rick Perry signed a bill on June 15 to revive and improve the state’s pre-paid tuition plan, to be called the Texas Tomorrow Fund II. The bill includes language for the development of the Texas Save and Match program, which would allow for matching funds for contributions to the Texas Tomorrow Fund II by families with incomes below the state median household income. Click here to read HB 3900 (see relevant section on pp. 4-5).

Arkansas became the eighth state to establish a matching grant program for 529 college savings accounts when Governor Mike Beebe signed into law Act 597 in March. The act authorizes the creation of the Aspiring Scholars Matching Grant Program, a pilot program that will match low-income families’ deposits into 529 accounts. The law excludes 529 accounts from asset tests used to determine eligibility in TANF, Medicaid, and Food Stamps. Click here to read Act 597.

Both the Illinois House and Senate unanimously passed legislation to create a Children's Savings Account Task Force.  The Task Force would review and make recommendations about children's savings account program options, with the goal of increasing the levels of financial literacy and savings in the state and increasing the number of children in Illinois who own assets and who attend post-secondary education or training, purchase a home, or open a small business.  The legislation awaits the governor’s signature.  Click here to read HB 1662.

Legislation was introduced in California in February to establish Kids Investment and Development Savings (KIDS) Accounts for every child born in the state. The accounts would feature a $500 initial deposit by the state, beginning in 2008. Funds from the accounts would be available for withdrawal upon the child’s 18th birthday, and could be used for post-secondary education and training, first home purchase, or retirement. Soon after the bill’s introduction, conservative and anti-immigrant networks were activated to voice their opposition to the bill, and the Republican co-sponsor withdrew his support. Advocates do not expect further action on the bill until the second year of the legislation session, which begins in January. Click here to read SB 752.  

Both houses of the Missouri General Assembly introduced bills to establish the Legacy Initiative, which would provide matching grants to low- and moderate-income Missouri families that invest in MOST, Missouri’s 529 college savings plan.  The proposal, which state treasurer Sarah Steelman championed and helped craft, called for the use of excess funds from the state’s unclaimed property funds account to fund the 529 matching grants. The Senate bill passed out of the Senate Education Committee; however, neither chamber passed its respective version of the bill before the close of the legislative session in May. Click here to read SB 254. 

The Hawaii Senate introduced an Asset Building Package of bills covering refund splitting, regulating check cashing, microenterprise, medical assistance, homeownership, and matched 529s (Click here to view a description of the components of the package).  The bill to provide matching grant funds for the state’s 529 college savings plan would provide every child born in Hawaii with a $1,000 voucher to be deposited in a Hawaii 529 account, and would include additional “periodic investments.”  None of the seven bills in the package passed.  Click here to read SB 1936 on the 529 matching grants.  The Senate also introduced an omnibus bill on asset building that died when the Senate and the House could not come to agreement on amendments.  Click here to read SB 1919.

Legislation to establish a time-limited children’s savings account task force in Hawaii also did not pass before the close of the 2007 legislative session.  The Senate passed their version of the resolution, and it passed two committees on the House side, but the bill never made it to the House floor for a vote.  Click here to read HCR 78.

New Mexico Lieutenant Governor Diane Denish signed into law the Individual Development Accounts Act (HB 140) on April 4. The new law provides language allowing those 15 years old and above to open IDAs, and changes the name of the accounts from Family Opportunity Accounts back to individual development accounts. Family Opportunity Accounts were established in 2006, through legislation that provided $1.5 million in funding for IDAs in New Mexico. Click here to read HB 140.

Reports.  The Finance Project, with support from the Foster Care Work Group, released Connected by 25: Financing Asset-Building and Financial Education Programs for Youth Transitioning out of Foster Care.  This publication is one of a series of briefs exploring strategies for financing supports and services that help youth in foster care make successful transitions to adulthood.  The brief explores the range of partners and resources that community leaders and program developers can engage to support asset-building and financial education programs for youth transitioning from foster care.  Click here to read the brief.

The first issue of the FDIC’s new publication, FDIC Quarterly, focuses on the business case for banks to offer IDAs.  The report, "IDAs and Banks: A Solid ‘Match,’" is the first in a series of articles looking at underbanked consumers and the delivery of alternative financial services.  Click here to read the report.

Paying for College
New York Times
Editorial
May 22, 2007

Mayor Bloomberg Releases Incentives Schedule for Opportunity NYC
States News Service
June 18, 2007

A “gathering storm" of violent crime: Are the bad old days back?
Stateline.org
By Neal Peirce
June 17, 2007

Emanuel, Ramstad to Expand Retirement Savings
States News Service
June 14, 2007

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