SB0676

SENATE BILL 676

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

Cisco McSorley

AN ACT

RELATING TO CHILDREN'S ECONOMIC SECURITY; ENACTING THE CHILDREN'S DEVELOPMENT ACCOUNT ACT; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 10 of this act may be cited as the "Children's Development Account Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Children's Development Account Act:

A. "account owner" means a person in whose name a children's development account is originally established;

B. "allowable use" means a use that complies with the provisions established by the custodian that establishes children's development accounts;

C. "authorized financial institution" means a financial institution that is federally insured;

D. "children's development account" means an account established and maintained in an authorized financial institution in joint ownership or custodianship between a child under the age of eighteen and a nonprofit corporation for a specified use at a specified time;

E. "custodial account" means an account created for the benefit of a child under the age of eighteen, with an agent, bank, trust company or other organization serving as the custodian in accordance with applicable state law. The adult controls the funds until liquidated for an eligible use;

F. "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;

G. "investment fund" means an account established in an authorized financial institution in which funds are maintained and available to match or incentivize the deposits of the account owner or the account owner's family;

H. "matching funds" means money deposited in a reserve account to match the withdrawals for allowable uses from a children's development account according to a proportionate formula that complies with rules adopted by the treasurer;

I. "nonprofit organization" means 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 or exempt pursuant to Section 7871 of that code for Native American tribes;

J. "office" means the office of the state treasurer;

K. "treasurer" means the state treasurer; and

L. "tribe" means an Indian nation, tribe or pueblo located in whole or in part within New Mexico.

SECTION 3. [NEW MATERIAL] CHILDREN'S DEVELOPMENT ACCOUNT.--A children's development account may be established for an eligible individual as part of a children's development account program if the written instrument creating the account sets forth that the:

A. account owner is an eligible individual according to program requirements at the time the account is established;

B. children's development account is established and maintained in an authorized financial institution;

C. matching amount or incentive will be deposited in the children's development account for each dollar deposited by the account owner or family in the children's development account; and

D. financial institution in which a children's development account is held shall not be liable for withdrawals made for uses other than allowable uses.

SECTION 4. [NEW MATERIAL] ELIGIBLE CHILD.--An eligible child shall be:

A. under the age of eighteen; and

B. a resident of New Mexico.

SECTION 5. [NEW MATERIAL] RESPONSIBILITIES OF THE OFFICE.--

A. The office shall adopt rules implementing the provisions of the Children's Development Account Act.

B. The treasurer shall provide authorization for applicant organizations that are applying to provide children's development accounts pursuant to the Children's Development Account Act."

SECTION 6. [NEW MATERIAL] ADMINISTRATION OF CHILDREN'S DEVELOPMENT ACCOUNT PROGRAMS.--

A. A children's development account may be established for an eligible child provided that:

(1) the purpose of the account is to increase the economic security of the child during the transition into adulthood;

(2) the structure of the account includes financial incentives or funds to match the deposits made into the account;

(3) the account is held in custodianship or in joint ownership between the child and the administering organization;

(4) parameters of the use of the account are designed prior to the opening of the account; and

(5) the account is not accessible to the child or members of the child's family until such time as the account is liquidated for an eligible use.

B. The financial institution shall establish an investment account sufficient to meet the matching fund commitments made to all account owners participating in the children's development account program and shall provide financial incentives or matching funds at least quarterly to each account owner.

C. The financial institution may provide financial education and other training that will enhance the child's economic security.

D. An account owner shall complete the requirements established by the financial institution prior to the withdrawal of money from the account owner's children's development account unless written approval is obtained from the financial institution.

SECTION 7. [NEW MATERIAL] APPROVAL OF CHILDREN'S DEVELOPMENT ACCOUNT PROGRAMS.--

A. The office shall accept applications from eligible program administrators to establish a children's development account program pursuant to the Children's Development Account Act. An application 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 distributions of state money;

(3) describe the source and the amount of private or other public funds, if any, that will be used to match or incentivize the children's development account;

(4) describe the program administrator's administration of the accounts, the frequency of deposits and the requirements of the eligible account owner;

(5) describe the expertise, experience and other qualifications of the program administrator and the program administrator's employees; and

(6) contain other information that is deem to be relevant by the program administrator.

B. The treasurer shall determine if an interested nonprofit organization or a tribe is eligible to be an authorized program administrator under the Children's Development Account Act, and if so, the treasurer shall provide a letter of authorization to the program administrator that declares that the proposed program falls under the authority of the Children's Development Account Act.

SECTION 8. [NEW MATERIAL] LOSS OF AUTHORIZATION UNDER THE CHILDREN'S DEVELOPMENT ACCOUNT ACT.--

A. A children's development account program shall be terminated if the:

(1) office determines that the program is not being operated pursuant to the provisions of the authorization by the office;

(2) provider of the program no longer retains its status as a program administrator; or

(3) program administrator chooses to cease providing a children's development account program.

B. Upon loss of authorization of a children's development account program, the treasurer shall administer the program until a qualified program administrator is selected to administer the program. If, after a reasonable period, the treasurer is unable to identify and certify a program administrator to assume the authority to continue to operate a children's development account program, money in a reserve account shall be deposited into the children's development account 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 9. [NEW MATERIAL] REPORTING.--A program administrator operating a children's development account program pursuant to the Children's Development Account Act shall report at least annually to the treasurer, as set forth by the office. Children's development account owners shall not be identified in the report. The report shall include the:

A. number of eligible individuals making contributions to children's development accounts;

B. total money contributed by the program administrator to each children's development account; and

C. number of children's development accounts that have been liquidated.

SECTION 10. [NEW MATERIAL] ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-TESTED PROGRAMS.--

A. Money deposited into a children's development account, interest earned on that account and interest and matching funds deposited into the 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 federal supplemental nutrition assistance 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 children's development 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 children's development 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.

SECTION 11. 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 assistance for needy families grant made pursuant to the federal act. Within the New Mexico works program, the department may provide cash assistance or services to specific categories of benefit groups from general funds appropriated to cash assistance or services. The department may exclude these funds from temporary assistance for needy families maintenance of effort. The department shall identify alternative state spending to claim as maintenance of effort and make necessary arrangements to allow reporting of that spending.

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] the federal supplemental nutrition assistance program;

(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) child support passed through to the participant by the child support enforcement division of the department in the following amounts:

(a) fifty dollars ($50.00) per month through December 31, 2008; and

(b) no later than January 1, 2009, a minimum of one hundred dollars ($100) for one child and two hundred dollars ($200) for two or more children as based on the availability of state or federal funds;

(11) earned income deposited in an individual development account by a member of the benefit group or money received as matching funds for allowable uses by the owner of the individual development account pursuant to the Individual Development Account Act; [and]

(12) savings in a children's development account by a member of the benefit group or money received as matching funds for allowable uses by the owner of the children's development account pursuant to the Children's Development Account Act; and

[(12)] (13) 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) 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;

(2) 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;

(3) costs of self-employment income; and

(4) business expenses.

F. In addition to the disregards specified in Subsection E of this section, and between June 28, 2007 and June 30, 2008, or until implementation of the employment retention and advancement bonus program described in Subsection G of this section, the department shall apply the following income disregards to the benefit group's earned income and then subtract that amount from the benefit group's financial standard of need:

(1) for the first two years of receiving 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; and

(2) for the first two years of receiving cash assistance or services, for a two-parent benefit group in which one parent works more than thirty-five hours per week and the other works more than twenty-four hours per week, one hundred percent of income earned by each participant beyond the work requirement rate set by the department.

G. No later than July 1, 2008, New Mexico employment incentives shall be as follows:

(1) the department shall implement an employment retention and advancement bonus program based on availability of state or federal funds that includes financial incentives to encourage a participant to:

(a) leave the New Mexico works program and move into an employment retention and advancement bonus incentive program;

(b) maintain a minimum of thirty hours per week employment; and

(c) leave the employment retention and advancement bonus incentive program due to increased earnings above the income eligibility standard and continue employment;

(2) the employment retention and advancement bonus incentive program shall provide a cash bonus and employment services to a former participant who, upon application:

(a) is currently engaged in paid work for a minimum of thirty hours per week;

(b) has received cash assistance for at least three months and one of the last three months;

(d) has participated in the employment retention and advancement bonus incentive program for no longer than eighteen months;

(3) for continued eligibility in the employment retention and advancement bonus incentive program, a participant shall:

(a) be engaged in paid work for thirty hours per week for at least one of the past three months;

(b) be engaged in paid work for thirty hours per week for at least four of the past six months;

(d) have participated in the program no more than eighteen months;

(4) the department shall provide employment services to assist participants in gaining access to available work supports, maintain employment and advance to higher-paying employment; and

(5) the department shall:

(a) establish the amount of bonus to be paid to participants in the employment retention and advancement bonus program based on availability of state and federal funds;

(b) propose rules to implement the employment retention and advancement bonus incentive program of this subsection no later than January 1, 2008; and

(c) begin implementation of the employment retention and advancement bonus incentive program of this subsection no later than July 1, 2008.

H. 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.

I. Based upon the availability of funds and in accordance with the federal act, the secretary may establish a separate temporary assistance for needy families cash assistance program that may waive certain New Mexico Works Act requirements due to a specific situation.

J. Subject to the availability of state and federal funds, the department may limit the eligibility of benefit groups that are eligible because a legal guardian is not included in the benefit group."

SECTION 12. Section 27-2B-8 NMSA 1978 (being Laws 1998, Chapter 8, Section 8 and Laws 1998, Chapter 9, Section 8, as amended) 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) children's development accounts;

[(5)] (6) individual development accounts; and

[(6)] (7) 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 13. Section 27-2D-6 NMSA 1978 (being Laws 2003, Chapter 317, Section 6, as amended) is amended to read:

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