PUBLIC Law, Chapter 239, An Act To Clarify the Oversight of the Family Development Account Program

An Act To Clarify the Oversight of the Family Development Account Program

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 5 MRSA §12004-I, sub-§18-F is enacted to read:

18-F.

Education: Financial Aid

Advisory Committee on Family Development Accounts

Expenses for members representing account holders; not authorized for all other members

20-A MRSA §10985

Sec. 2. 5 MRSA §12004-I, sub-§25-B, as amended by PL 2003, c. 673, Pt. QQ, §1, is repealed.

Sec. 3. 10 MRSA c. 110, sub-c. 4-A, as amended, is repealed.

Sec. 4. 20-A MRSA c. 412-B is enacted to read:

CHAPTER 412-B

FAMILY DEVELOPMENT ACCOUNT PROGRAM

§ 10981. Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.

1. Account holder. "Account holder" means an eligible person who owns a family development account.

2. Community development organization. "Community development organization" means a charitable organization, a community action agency or a nonprofit organization under the United States Internal Revenue Code of 1986, Section 501(c)(3) approved by the university to administer family development accounts.

3. Eligible person. "Eligible person" means an individual whose family income is below 200% of the nonfarm income official poverty line as defined by the federal Office of Management and Budget and revised annually in accordance with the United States Omnibus Budget Reconciliation Act of 1981, Section 673, subsection 2.

4. Family development account; account. "Family development account" or "account" means a financial instrument established pursuant to this chapter.

5. Family development account reserve fund. "Family development account reserve fund" means the fund created by a community development organization for the purposes of funding the administrative costs of the program and providing matching funds for deposit in family development accounts.

6. Financial institution. "Financial institution" means a credit union or financial institution authorized to do business in this State under Title 9-B and that meets standards established by the university.

7. Program. "Program" means the family development account program administered by the university under this chapter.

8. University. "University" means the University of Maine System.

§ 10982. Family development account program

The university shall administer the family development account program to allow eligible persons to establish savings accounts to be used for education, job training, purchase or repair of a home, purchase or repair of a vehicle for access to work or education, capitalization of a small business, health care costs over $500 not covered by private or public insurance or other basic necessity. The program is designed to encourage savings as a means of investing in the future and investing in the people, institutions and businesses of the State.

1. Soliciting proposals. The university shall, on a schedule established by the university, solicit proposals from community development organizations seeking to administer family development accounts on a nonprofit basis. The university may not limit the number of community development organizations participating based solely upon geographic region. The proposals must include:

A. A process for including account holders in decision making regarding the investment of funds in the accounts;

B. The specific populations the community development organization plans to identify for participation in the program; and

C. A requirement that deposits into accounts must be accepted from account holders with or without matching contributions and from community development organizations.

2. Reviewing proposals. In reviewing the proposal of a community development organization, the university shall establish criteria to use that must include the following factors:

A. The nonprofit status of the community development organization;

B. The fiscal accountability of the community development organization;

C. The ability of the community development organization to provide or raise money for matching contributions and to establish and administer a family development account reserve fund; and

D. The significance and quality of proposed auxiliary services and their relationship to the goals of the family development account program.

3. Administrative costs. No more than 15% of the family development account reserve fund may be used for administrative costs of the program.

4. Establishment of accounts. A financial institution approved by the university may establish family development accounts pursuant to this chapter. The financial institution shall certify to the university in the manner required by the university that accounts have been established pursuant to the provisions of this chapter and that deposits have been made on behalf of account holders. A financial institution establishing a family development account shall:

A. Keep the account in the name of the account holder;

B. Permit deposits to be made into the account by the account holder or a community development organization on behalf of the account holder, including money deposited to match the account holder's deposits. Matching contribution deposits may not exceed $4,000 per year and must be approved in writing by the community development organization. An account with a balance exceeding $10,000 is ineligible for matching contribution deposits;

C. Credit interest to the account at a rate equal to or higher than the rate applicable to comparable accounts within the financial institution;

D. Permit the account holder to withdraw money from the account for any of the purposes listed in section 10983, subsection 1; and

E. Require the account holder to allow the financial institution to provide all account information to the community development organization.

5. Appeals. Any dispute between the account holder and the community development organization may be appealed to the university. Any adverse decision of the university may be appealed to the Superior Court pursuant to Title 5, chapter 375, subchapter 7.

6. Rules; stakeholders. The university may adopt rules to implement and administer the provisions of this chapter. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. In administering the program and periodically assessing its effectiveness, the university may consult with stakeholders from the community, including but not limited to program participants, community development organizations and financial institutions, as well as organizations representing the interests of low-income persons in the State.

§ 10983. Withdrawal of funds

1. Use of funds. An account holder may withdraw funds from the account with the approval of the community development organization administrator without penalty for the following expenditures:

A. Expenses for education or job training or to attend an accredited or approved postsecondary education or training institution;

B. The purchase or repair of a home that is or will be the person's principal residence;

C. The purchase or repair of a vehicle used for transportation to work or to attend an education or training program;

D. Expenses for an emergency that may cause the loss of shelter, employment or other basic necessities;

E. Capital to start or purchase a small business for any family member who is 18 years of age or older; or

F. Health care costs exceeding $500 not covered by public or private insurance.

2. Unauthorized withdrawal; penalty. Money withdrawn from an account by an account holder that is not withdrawn pursuant to subsection 1 may be subject to a penalty of 15%. All penalties must be paid by the account holder and deposited into the family development account reserve fund of the community development organization.

3. Death of account holder. When opening an account an account holder may name a beneficiary and contingent beneficiaries. An account holder may change beneficiaries at any time. When an account holder dies the account must be transferred to the ownership of the designated beneficiary or, if there is none or if the transfer is not possible, the account must be transferred to the estate of the deceased.

4. Exempt from taxation. Account balances and withdrawals are exempt from taxation pursuant to Title 36, chapter 803.

§ 10984. No reduction in benefits

Notwithstanding any other rule or provision of state law, the first $10,000 of funds and any accrued interest in an account under this chapter are excluded from consideration in determining eligibility or benefit levels for any assistance or benefit granted under state law.

§ 10985. Advisory committee

The Advisory Committee on Family Development Accounts, established in Title 5, section 12004-I, subsection 18-F, is referred to in this section as "the committee."

1. Committee membership. The committee consists of 10 members as follows:

A. Four members appointed by the Governor, including one representative of the Maine State Housing Authority, one representative of the Department of Health and Human Services and 2 representatives of financial institutions participating in the program;

B. Three members appointed by the President of the Senate, including one representative of a statewide community development foundation, one person who is an account holder or is eligible to be an account holder or is a program graduate and one representative of a financial institution participating in the program; and

C. Three members appointed by the Speaker of the House of Representatives, including one person who is an account holder or is eligible to be an account holder or is a program graduate, one representative of a contributor of matching funds to the program and one representative of a financial institution participating in the program.

Members from state departments serve at the pleasure of their appointing authorities. All other members serve 3-year terms and may continue to serve beyond their terms until their successors are appointed. If a vacancy occurs before a term has expired, the vacancy must be filled for the remainder of the unexpired term by the authority who made the original appointment. If a member is absent for 2 consecutive meetings and has not been excused by the chair from either meeting, the committee may remove the member by majority vote.

2. Chair. The committee shall elect a chair from its members.

3. Duties; report. The committee shall meet at least 2 times per year to study and evaluate the effectiveness of family development accounts in this State and other states; make recommendations with respect to changes in law, rule or policy that will enhance the ability of account holders to improve their economic security; and advise the university, relevant state agencies, community development organizations and the Legislature as to its findings. The committee shall provide a comprehensive report to the joint standing committee of the Legislature having jurisdiction over business and economic development matters and the joint standing committee of the Legislature having jurisdiction over health and human services matters by March 1st of each year.

4. Freedom of access; confidential information. Meetings of the committee are public meetings and records and papers of the committee are public records for the purposes of the freedom of access laws in Title 1, chapter 13, subchapter 1, except that information obtained about account holders and their families that is confidential under state or federal law, rule or regulation is confidential and may not be disclosed.

5. Staffing. The university shall provide staffing to the committee and may, within existing resources, obtain technical assistance from appropriate sources with expertise in asset development for low-income households.

6. Voluntary service. Members of the committee serve without compensation or reimbursement for expenses, except that members representing account holders may be reimbursed for expenses.

§ 10986. Support of advisory committee

The university shall provide support to the Advisory Committee on Family Development Accounts under section 10985, certify participating financial institutions and review proposals from community development organizations seeking to manage family development accounts.

Sec. 5. 22 MRSA §3769-D, as enacted by PL 2015, c. 267, Pt. RRRR, §4, is amended to read:

§ 3769-D. Temporary Assistance for Needy Families block grant; family development accounts

In fiscal year 2016-17 and annually thereafter, the Department of Health and Human Services may use $500,000 in funds provided under the Temporary Assistance for Needy Families block grant to promote financial literacy and healthy savings habits of families with income less than 200% of the federal poverty guidelines through the placement of funds in family development accounts established pursuant to Title 10 20-A, chapter 110 412-B , subchapter 4-A.

Sec. 6. Transition of family development account program. The following provisions govern the transition of the family development account program, referred to in this section as "the program," from the Finance Authority of Maine, referred to in this section as "FAME," to the University of Maine System, referred to in this section as "the university."

1. The university is the successor in every way to the powers, duties, responsibilities, programs, services and functions assigned to FAME in the administration of the program.

2. All rules of FAME, as they pertain to the administration of the program, that are in effect on the effective date of this Act remain in effect until rescinded, revised or amended.

3. All contracts, agreements and compacts of FAME, as they pertain to the powers, duties, responsibilities, programs, services and functions of the program that are in effect on the effective date of this Act remain in effect until the contracts, agreements and compacts expire or are altered by the parties involved in the contracts, agreements or compacts.

4. All records of FAME as they pertain to the powers, duties, responsibilities, programs, services and functions of FAME in the administration of the program are transferred to the university as necessary to implement the transition.

Effective 90 days following adjournment of the 129th Legislature, First Regular Session, unless otherwise indicated.

SP0379 LD 1217	PUBLIC Law, Chapter 239 on - Session - 129th Maine Legislature
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