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AN ACT

RELATING TO ASSET BUILDING FOR WORKING, LOW-INCOME FAMILIES;

AMENDING THE INDIVIDUAL DEVELOPMENT ACCOUNT ACT TO CHANGE THE

NAME OF THE ACT, CHANGE THE ELIGIBILITY REQUIREMENTS,

ESTABLISH CRITERIA FOR PROGRAM ADMINISTRATORS AND INCREASE

ACCOUNTABILITY; CREATING A FUND.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 58-30-1 NMSA 1978 (being Laws 2003,

Chapter 362, Section 1) is amended to read:

"58-30-1. SHORT TITLE.--Chapter 58, Article 30 NMSA

1978 may be cited as the "Family Opportunity Accounts Act"."

Section 2. Section 58-30-2 NMSA 1978 (being Laws 2003,

Chapter 362, Section 2, as amended) is amended to read:

"58-30-2. DEFINITIONS.--As used in the Family

Opportunity Accounts Act:

A. "account owner" means the person in whose name

a family opportunity account is originally established;

B. "allowable use" means a use that complies with

the provisions of the Family Opportunity Accounts Act, or

rules adopted pursuant to that act;

C. "authorized financial institution" means a

financial institution authorized by the office to hold and

manage family opportunity accounts and reserve accounts;

D. "director" means the director of the office;

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E. "earned income" means wages from employment,

payment in lieu of wages, disability payments, tribal

distributions or earnings from self-employment or acquired

from the provision of services, goods or property, production

of goods, management of property or supervision of services;

F. "eligible individual" means a person who meets

the criteria for opening a family opportunity account;

G. "family opportunity account" means an account

established and maintained in an authorized financial

institution by an eligible individual participating in a

family opportunity accounts program pursuant to the provisions

of the Family Opportunity Accounts Act;

H. "family opportunity accounts program" means a

program approved by the office to establish and administer

family opportunity accounts and reserve accounts for eligible

individuals and to provide financial training required by the

office for account owners;

I. "financial institution" means a bank, bank and

trust, savings bank, savings association or credit union

authorized to be a trustee of individual retirement accounts

as defined by federal law, the deposits of which are insured

by the federal deposit insurance corporation or the national

credit union administration;

J. "indigent" means an individual who, taking into

account the present income and the liquid assets and the

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requirement for other basic necessities of life for himself

and his dependents, is unable to pay the costs of allowable

uses as set forth in the Family Opportunity Accounts Act;

K. "matching funds" means money deposited in a

reserve account to match the withdrawals for allowable uses

from a family opportunity account according to a proportionate

formula that complies with rules adopted by the director;

L. "nonprofit organization" means an

instrumentality of the state or a local government or an

organization described in Section 501(c)(3) of the Internal

Revenue Code of 1986 and exempt from taxation pursuant to

Section 501(a) of that code;

M. "office" means the office of workforce training

and development;

N. "program administrator" means a nonprofit

organization or tribe that is selected pursuant to the Family

Opportunity Accounts Act to offer a family opportunity

accounts program pursuant to a contract with the director;

O. "reserve account" means an account established

pursuant to the Family Opportunity Accounts Act in an

authorized financial institution in which matching funds are

maintained and available for payment for a predetermined

allowable use following completion of all program requirements

by the account owner; and

P. "tribe" means an Indian nation, tribe or pueblo

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located in whole or in part within New Mexico."

Section 3. Section 58-30-3 NMSA 1978 (being Laws 2003,

Chapter 362, Section 3) is amended to read:

"58-30-3. FAMILY OPPORTUNITY ACCOUNTS.--

A. A family opportunity account may be established

for an eligible individual as part of a family opportunity

accounts program if the written instrument creating the

account sets forth the following:

(1) the account owner is an eligible

individual according to program requirements at the time the

account is established;

(2) the family opportunity account is

established and maintained in an authorized financial

institution;

(3) deposits to a family opportunity account

shall be made in accordance with the rules adopted pursuant to

the Family Opportunity Accounts Act;

(4) withdrawals from a family opportunity

account shall only be made in accordance with the Family

Opportunity Accounts Act and rules adopted pursuant to that

act;

(5) the matching amount that will be

deposited in the reserve account for each dollar deposited by

the account owner in the family opportunity account; and

(6) the financial institution in which a

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family opportunity account is held shall not be liable for

withdrawals made for uses other than allowable uses.

B. For purposes of 42 USCA 604(h), a family

opportunity account shall be deemed to be an individual

development account."

Section 4. Section 58-30-4 NMSA 1978 (being Laws 2003,

Chapter 362, Section 4) is amended to read:

"58-30-4. ELIGIBLE INDIVIDUALS.--

A. Except as set forth in Subsection B of this

section, an eligible individual shall have earned income and

shall be:

(1) eighteen years of age or older;

(2) a citizen or legal resident of the

United States;

(3) a resident of New Mexico; and

(4) indigent.

B. A child in foster care is an eligible

individual if the child:

(1) is sixteen years of age or older;

(2) is indigent;

(3) is a citizen or legal resident of the

United States; and

(4) is a resident of New Mexico."

Section 5. Section 58-30-5 NMSA 1978 (being Laws 2003,

Chapter 362, Section 5, as amended) is amended to read:

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"58-30-5. RESPONSIBILITIES OF THE OFFICE.--

A. The office shall adopt rules implementing the

provisions of the Family Opportunity Accounts Act.

B. The director shall make an annual report each

November to the governor and to the legislative finance

committee.

C. The office shall use no more than five percent

of the money appropriated to fund the Family Opportunity

Accounts Act to administer that act."

Section 6. Section 58-30-6 NMSA 1978 (being Laws 2003,

Chapter 362, Section 6, as amended) is amended to read:

"58-30-6. FAMILY OPPORTUNITY ACCOUNTS COUNCIL.--

A. The "family opportunity accounts council" is

created. The council shall:

(1) provide oversight of the administration

of the Family Opportunity Accounts Act; and

(2) suggest possible changes that benefit

account owners or improve the effectiveness of the family

opportunity accounts programs throughout the state.

B. The family opportunity accounts council shall

meet at least two times in a calendar year to perform its

duties.

C. The family opportunity accounts council shall

consist of the lieutenant governor or the lieutenant

governor's designee and eight members appointed by the

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governor to represent the state geographically. The director

or the director's designee shall serve as an ex-officio member

of the council.

D. Appointed members of the family opportunity

accounts council shall receive per diem and mileage pursuant

to the Per Diem and Mileage Act and shall receive no other

compensation, perquisite or allowance for their participation

on the council.

E. The office shall provide adequate staff support

and administrative services for the family opportunity

accounts council."

Section 7. Section 58-30-7 NMSA 1978 (being Laws 2003,

Chapter 362, Section 7, as amended) is amended to read:

"58-30-7. ADMINISTRATION OF FAMILY OPPORTUNITY ACCOUNTS

PROGRAMS.--

A. A family opportunity account may be established

for an eligible individual; provided that the money deposited

in the account is expended for allowable uses for the account

owner or the account owner's spouse or dependents unless

otherwise approved by the program administrator.

B. A family opportunity accounts program shall be

approved and monitored by the director for compliance with

applicable law, the Family Opportunity Accounts Act and rules

adopted pursuant to that act.

C. The program administrator shall establish a

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reserve account sufficient to meet the matching fund

commitments made to all account owners participating in the

family opportunity accounts program and shall report at least

quarterly to each account owner the amount of money available

in the reserve account for use by the program administrator to

match withdrawals for allowable uses. Notwithstanding any

matching commitment otherwise required, the amount of state

funds deposited in a reserve account during a calendar year to

match deposits from any single account owner shall not exceed

the higher of:

(1) two thousand dollars ($2,000); or

(2) an amount determined by rule of the

office.

D. The program administrator shall provide

financial education and other necessary training pertinent to

allowable uses by account owners, develop partnerships with

financial institutions, develop matching funds and manage the

operations of a family opportunity account that is established

within the program.

E. An eligible individual may open a family

opportunity account upon verification by the program

administrator that the individual maintains no other family

opportunity account.

F. More than one eligible individual per household

may hold a family opportunity account.

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G. An account owner shall complete a financial

education program prior to the withdrawal of money from the

account owner's family opportunity account unless written

approval is obtained from the program administrator."

Section 8. Section 58-30-8 NMSA 1978 (being Laws 2003,

Chapter 362, Section 8) is amended to read:

"58-30-8. ALLOWABLE USES--WITHDRAWALS FROM FAMILY

OPPORTUNITY ACCOUNTS--FORFEITURE OF MATCHING FUNDS FROM

RESERVE ACCOUNT--LOSS OF ELIGIBLE INDIVIDUAL STATUS.--

A. Allowable uses of the money withdrawn from a

family opportunity account are limited to the following:

(1) expenses to attend an approved post-

secondary or vocational educational institution, including

payment for tuition, books, supplies and equipment required

for courses;

(2) costs to acquire or construct a

principal residence as defined in rules adopted pursuant to

the Family Opportunity Accounts Act that is the first

principal residence acquired or constructed by the account

owner;

(3) costs of major home improvements or

repairs on the home of the account owner;

(4) capitalization or costs to start or

expand a business, including capital, plant, equipment,

operational and inventory expenses, attorney and accountant

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fees and other costs normally associated with starting or

expanding a business;

(5) acquisition of a vehicle necessary to

obtain or maintain employment by an account owner or the

spouse of an account owner; and

(6) in the case of a deceased account owner,

amounts deposited by the account owner and held in a family

opportunity account shall be distributed directly to the

account owner's spouse, or if the spouse is deceased or there

is no spouse, to a dependent or other named beneficiary of the

deceased or if the recipient is eligible to maintain the

account, the account and matching funds designated for that

account from a reserve account may be transferred and

maintained in the name of the surviving spouse, dependent or

beneficiary.

B. Except as provided in Subsection C of this

section, if an account owner withdraws money from a family

opportunity account for a use other than an allowable use, the

account owner forfeits a proportionate amount of matching

funds from the reserve account, as set forth in the agreement

between the program administrator and the account owner.

C. The program administrator may approve a

withdrawal by an account owner from a family opportunity

account to be used for a purpose other than an allowable use

only for serious emergencies as specified in the rules adopted

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by the office. For such an approved withdrawal, the

proportionate matching funds in the reserve account shall

remain in the reserve account for twelve months following the

withdrawal and, if an amount equal to the withdrawn money is

redeposited in the family opportunity account within the

twelve months, the matching funds shall again be available to

match withdrawals for allowable uses.

D. At the request of the account owner and with

the written approval of the program administrator, amounts may

be withdrawn from the account owner's family opportunity

account and deposited in another family opportunity account

established for an eligible individual who is the account

owner's spouse or dependent."

Section 9. Section 58-30-9 NMSA 1978 (being Laws 2003,

Chapter 362, Section 9, as amended) is amended to read:

"58-30-9. APPROVAL OF FAMILY OPPORTUNITY ACCOUNTS

PROGRAMS.--

A. The office shall issue a request for proposals

from nonprofit organizations or tribes interested in

establishing a family opportunity accounts program. A

proposal submitted in response to the request shall:

(1) describe the geographic area to be

served and the potential individuals who will be assisted by

the program;

(2) state the amount, if any, of requested

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distributions of state money from the family opportunity fund;

(3) describe the source and the amount of

private or other public funds, if any, that will be used to

supplement the requested distributions from the family

opportunity fund;

(4) state the amount, not to be less than

one dollar ($1.00), that will be deposited in the reserve

account for each dollar deposited in a family opportunity

account;

(5) describe the expertise, experience and

other qualifications of the proposer and its employees; and

(6) contain such other information as

required in the request for proposals and rules of the

director.

B. The director shall determine if an interested

nonprofit organization or tribe is eligible to be a program

administrator, determine the legal sufficiency of submitted

proposals, evaluate the proposals and, after consulting with

the family opportunity accounts council, select the program

administrators.

C. In selecting program administrators, the

director shall:

(1) ensure that geographically diverse

populations throughout New Mexico will be served by family

opportunity accounts programs; and

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(2) ensure that a substantial number of

family opportunity accounts will serve families in which one

or more children are living with their biological or adoptive

mother or father, or with their legal guardian.

D. The director shall enter into contracts with

the selected program administrators.

E. The director shall approve a family opportunity

accounts program submitted by a program administrator before

the program establishes family opportunity accounts or reserve

accounts or provides services required by the Family

Opportunity Accounts Act to eligible individuals.

F. A family opportunity account and a reserve

account may be established only in an authorized financial

institution.

G. The director shall monitor all family

opportunity accounts programs to ensure that family

opportunity accounts and reserve accounts are being operated

according to the contract provisions, federal law, the

provisions of the Family Opportunity Accounts Act and rules

adopted pursuant to that act."

Section 10. Section 58-30-10 NMSA 1978 (being Laws

2003, Chapter 362, Section 10, as amended) is amended to read:

"58-30-10. TERMINATION OF FAMILY OPPORTUNITY ACCOUNTS

PROGRAMS.--

A. A family opportunity accounts program shall be

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terminated if the:

(1) office determines that the program is

not being operated pursuant to the provisions of the contract

between the program administrator and the director, the Family

Opportunity Accounts Act or rules adopted pursuant to that

act;

(2) provider of the program no longer

retains its status as a program administrator; or

(3) program administrator chooses to cease

providing a family opportunity accounts program.

B. Upon termination of a family opportunity

accounts program, the director shall administer the program

until a qualified program administrator is selected to

administer the program. If, after a reasonable period, the

director is unable to identify and certify a program

administrator to assume the authority to continue to operate a

terminated family opportunity accounts program, money in a

reserve account shall be deposited into the family opportunity

accounts of the account owners for whom the proportionate

share of the reserve account was established as of the first

day of termination of the program."

Section 11. Section 58-30-11 NMSA 1978 (being Laws

2003, Chapter 362, Section 11, as amended) is amended to read:

"58-30-11. REPORTING.--A program administrator

operating a family opportunity accounts program pursuant to

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the Family Opportunity Accounts Act shall report at least

annually to the director, as set forth in the rules of the

office. Individual account owners shall not be identified in

the report. The report shall include:

A. the number of eligible individuals making

contributions to family opportunity accounts;

B. the total money contributed to each family

opportunity account and deposited into each reserve account;

C. the total money in the aggregate deposited in

family opportunity accounts and reserve accounts administered

by the family opportunity accounts program;

D. the amounts withdrawn from family opportunity

accounts for either allowable uses or for uses other than

allowable uses and the amounts withdrawn from reserve

accounts;

E. the balances remaining in family opportunity

accounts and reserve accounts; and

F. other information requested by the director to

monitor the costs and outcomes of the family opportunity

accounts program."

Section 12. Section 58-30-12 NMSA 1978 (being Laws

2003, Chapter 362, Section 12) is amended to read:

"58-30-12. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF

CERTAIN MEANS-TESTED PROGRAMS.--

A. Money deposited into a family opportunity

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account, interest earned on that account and interest and

matching funds deposited in a reserve account for the benefit

of the account owners shall be disregarded for the purposes of

determining eligibility for benefits and for determining

benefit amounts pursuant to the New Mexico Works Act.

B. When determining eligibility for benefits and

determining benefit amounts due under the food stamp program

and medicaid, the human services department shall, pursuant to

the authority granted by 7 USCA 2014 (d) and (g), disregard

money deposited into a family opportunity account, interest

earned on that account and interest and matching funds

deposited in a reserve account for the benefit of the account

owners.

C. Money withdrawn from a family opportunity

account for a purpose other than an allowable use shall be

counted as a resource for purposes of the New Mexico Works Act

or medicaid unless the withdrawal is approved by the program

administrator and an amount equal to the amount withdrawn is

replaced within the twelve-month allowable time period

pursuant to Subsection C of Section 58-30-8 NMSA 1978."

Section 13. A new section of the Family Opportunity

Accounts Act is enacted to read:

"FUND CREATED.--The "family opportunity fund" is created

in the state treasury. The fund shall consist of

appropriations, gifts, grants, donations and bequests made to

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the fund. Income from the fund shall be credited to the fund,

and money in the fund shall not be transferred to any other

fund at the end of a fiscal year. Money in the fund is

appropriated to the office of workforce training and

development for the purposes of carrying out the provisions of

the Family Opportunity Accounts Act. Expenditures shall be

made on warrant of the secretary of finance and administration

on vouchers signed by the director of the office of workforce

training and development."

Section 14. Section 27-2B-7 NMSA 1978 (being Laws 1998,

Chapter 8, Section 7 and Laws 1998, Chapter 9, Section 7, as

amended) is amended to read:

"27-2B-7. FINANCIAL STANDARD OF NEED.--

A. The secretary shall adopt a financial standard

of need based upon the availability of federal and state funds

and based upon appropriations by the legislature of the

available federal temporary assistance for needy families

grant made pursuant to the federal act in the following

categories:

(1) cash assistance;

(2) child care services;

(3) other services; and

(4) administrative costs.

The legislature shall determine the actual percentage of

each category to be used annually of the federal temporary

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assistance for needy families grant made pursuant to the

federal act.

B. The following income sources are exempt from

the gross income test, the net income test and the cash

payment calculation:

(1) medicaid;

(2) food stamps;

(3) government-subsidized foster care

payments if the child for whom the payment is received is also

excluded from the benefit group;

(4) supplemental security income;

(5) government-subsidized housing or housing

payments;

(6) federally excluded income;

(7) educational payments made directly to an

educational institution;

(8) government-subsidized child care;

(9) earned income that belongs to a person

seventeen years of age or younger who is not the head of

household;

(10) fifty dollars ($50.00) of collected

child support passed through to the participant by the

department's child support enforcement program;

(11) earned income deposited in a family

opportunity account by a member of the benefit group or money

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received as matching funds for allowable uses by the owner of

the family opportunity account pursuant to the Family

Opportunity Accounts Act; and

(12) other income sources as determined by

the department.

C. The total countable gross earned and unearned

income of the benefit group cannot exceed eighty-five percent

of the federal poverty guidelines for the size of the benefit

group.

D. For a benefit group to be eligible to

participate:

(1) gross countable income that belongs to

the benefit group must not exceed eighty-five percent of the

federal poverty guidelines for the size of the benefit group;

and

(2) net countable income that belongs to the

benefit group must not equal or exceed the financial standard

of need after applying the disregards set out in Paragraphs

(1) through (4) of Subsection E of this section.

E. Subject to the availability of state and

federal funds, the department shall determine the cash payment

of the benefit group by applying the following disregards to

the benefit group's earned income and then subtracting that

amount from the benefit group's financial standard of need:

(1) for the first two years of receiving

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cash assistance or services, if a participant works over the

work requirement rate set by the department pursuant to the

New Mexico Works Act, one hundred percent of the income earned

by the participant beyond that rate;

(2) for the first two years of receiving

cash assistance or services, for a two-parent benefit group in

which one parent works over thirty-five hours per week and the

other works over twenty-four hours per week, one hundred

percent of income earned by each participant beyond the work

requirement rate set by the department;

(3) one hundred twenty-five dollars ($125)

of monthly earned income and one-half of the remainder, or for

a two-parent family, two hundred twenty-five dollars ($225) of

monthly earned income and one-half of the remainder for each

parent;

(4) monthly payments made for child care at

a maximum of two hundred dollars ($200) for a child under two

years of age and at a maximum of one hundred seventy-five

dollars ($175) for a child two years of age or older;

(5) costs of self-employment income; and

(6) business expenses.

F. The department may recover overpayments of cash

assistance on a monthly basis not to exceed fifteen percent of

the financial standard of need applicable to the benefit

group."

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Section 15. Section 27-2B-8 NMSA 1978 (being Laws 1998,

Chapter 8, Section 8 and Laws 1998, Chapter 9, Section 8, as

amended by Laws 2003, Chapter 311, Section 4 and Laws 2003,

Chapter 432, Section 4) is amended to read:

"27-2B-8. RESOURCES.--

A. Liquid and nonliquid resources owned by the

benefit group shall be counted in the eligibility

determination.

B. A benefit group may at a maximum own the

following resources:

(1) two thousand dollars ($2,000) in

nonliquid resources;

(2) one thousand five hundred dollars

($1,500) in liquid resources;

(3) the value of the principal residence of

the participant;

(4) the value of burial plots and funeral

contracts for family members;

(5) family opportunity accounts; and

(6) the value of work-related equipment up

to one thousand dollars ($1,000).

C. Vehicles owned by the benefit group shall not

be considered in the determination of resources attributed to

the benefit group."

Section 16. Section 27-2B-10 NMSA 1978 (being Laws

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1998, Chapter 8, Section 10 and Laws 1998, Chapter 9, Section

10, as amended) is amended to read:

"27-2B-10. FAMILY OPPORTUNITY ACCOUNTS.--A participant

may establish a family opportunity account pursuant to the

Family Opportunity Accounts Act."

Section 17. Section 27-2D-6 NMSA 1978 (being Laws 2003,

Chapter 317, Section 6) is amended to read:

"27-2D-6. RESOURCES.--

A. Liquid and nonliquid resources owned by the

benefit group shall be counted in the eligibility

determination.

B. A benefit group may at a maximum own the

following resources:

(1) two thousand dollars ($2,000) in

nonliquid resources;

(2) one thousand five hundred dollars

($1,500) in liquid resources;

(3) the value of the principal residence of

the recipient;

(4) the value of burial plots and funeral

contracts for family members;

(5) family opportunity accounts; and

(6) the value of work-related equipment up

to one thousand dollars ($1,000).

C. Vehicles owned by the benefit group shall not

be considered in the determination of resources attributed to

the benefit group."

Section 18. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2006. HB 112

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