1.1                          A bill for an act 
  1.2             relating to families; establishing the Minnesota 
  1.3             family asset initiative for education, housing, and 
  1.4             economic development; appropriating money; proposing 
  1.5             coding for new law as Minnesota Statutes, chapter 119C.
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [119C.01] [ESTABLISHMENT.] 
  1.8      The Minnesota family asset initiative is established to 
  1.9   provide incentives for low-income families to accrue assets for 
  1.10  education, housing, and economic development purposes. 
  1.11     Sec. 2.  [119C.02] [DEFINITIONS.] 
  1.12     Subdivision 1.  [FAMILY ASSET ACCOUNT.] "Family asset 
  1.13  account" means a savings account opened by a household 
  1.14  participating in the Minnesota family asset initiative. 
  1.15     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
  1.16  commissioner of children, families, and learning. 
  1.17     Subd. 3.  [COMMUNITY ACTION AGENCY.] "Community action 
  1.18  agency" means an entity that has obtained recognition under 
  1.19  section 268.53. 
  1.20     Subd. 4.  [ELIGIBLE EDUCATIONAL INSTITUTION.] "Eligible 
  1.21  educational institution" means: 
  1.22     (1) an institution described in section 481(a)(1) or 
  1.23  1201(a) of the Higher Education Act of 1965, as those sections 
  1.24  are in effect on the date of the enactment of this section; or 
  1.25     (2) an area vocational education school, as defined in item 
  2.1   (C) or (D) of section 521(4) of the Carl D. Perkins Vocational 
  2.2   and Applied Technology Education Act which is in any state, as 
  2.3   defined in section 521(33) of the act, as those sections are in 
  2.4   effect on the date of the enactment of this subdivision. 
  2.5      Subd. 5.  [FINANCIAL INSTITUTION.] "Financial institution" 
  2.6   means an office of a bank, trust company, savings bank, savings 
  2.7   association, or credit union. 
  2.8      Subd. 6.  [POST-SECONDARY EDUCATIONAL EXPENSES.] 
  2.9   "Post-secondary educational expenses" means: 
  2.10     (1) tuition and fees required for the enrollment or 
  2.11  attendance of a student at an eligible educational institution; 
  2.12  and 
  2.13     (2) fees, books, supplies, and equipment required for 
  2.14  courses of instruction at an eligible educational institution. 
  2.15     Subd. 7.  [QUALIFIED ACQUISITION COSTS.] "Qualified 
  2.16  acquisition costs" means the costs of acquiring, constructing, 
  2.17  or reconstructing a residence, including any usual or reasonable 
  2.18  settlement, financing, or other closing costs. 
  2.19     Subd. 8.  [QUALIFIED BUSINESS CAPITALIZATION 
  2.20  EXPENSES.] "Qualified business capitalization expenses" means 
  2.21  qualified expenditures for the capitalization of a business 
  2.22  pursuant to a qualified plan. 
  2.23     Subd. 9.  [QUALIFIED EXPENDITURES.] "Qualified expenditures"
  2.24  means expenditures included in a qualified plan, including 
  2.25  capital, plant, equipment, working capital, and inventory 
  2.26  expenses. 
  2.27     Subd. 10.  [QUALIFIED PLAN.] "Qualified plan" means a 
  2.28  business plan that: 
  2.29     (1) is approved by a financial institution, or by a 
  2.30  nonprofit loan fund having demonstrated fiduciary integrity; 
  2.31     (2) includes a description of services or goods to be sold, 
  2.32  a marketing plan, and projected financial statements; and 
  2.33     (3) may require the participant to obtain the assistance of 
  2.34  an experienced entrepreneurial advisor. 
  2.35     Subd. 11.  [QUALIFIED PRINCIPAL RESIDENCE.] "Qualified 
  2.36  principal residence" means a principal residence within the 
  3.1   meaning of section 1034 of the Internal Revenue Code of 1986, 
  3.2   the qualified acquisition costs of which do not exceed 100 
  3.3   percent of the average area purchase price applicable to the 
  3.4   residence determined according to paragraphs (2) and (3) of 
  3.5   section 143(e) of the Internal Revenue Code of 1986. 
  3.6      Sec. 3.  [119C.03] [GRANTS APPLICATION.] 
  3.7      Subdivision 1.  [GRANTS AWARDED.] The commissioner shall 
  3.8   award grants to community action agencies to provide family 
  3.9   asset services under this chapter. 
  3.10     Subd. 2.  [APPLICATIONS.] A community action agency may 
  3.11  apply to the commissioner for a grant to provide family asset 
  3.12  services.  The application must be submitted in a form approved 
  3.13  by the commissioner and must include: 
  3.14     (1) a proposal for the provision of family asset services, 
  3.15  including program objectives, number of participating 
  3.16  households, match rate, availability of adequate funding, 
  3.17  appropriateness of the proposed services for the population to 
  3.18  be served, and outreach activities; 
  3.19     (2) a proposed budget; 
  3.20     (3) a plan for collection of required data and the method 
  3.21  to be used for program evaluation; 
  3.22     (4) evidence of the participation in the development of the 
  3.23  application of any agency or governmental body that will provide 
  3.24  services or assistance to the program; and 
  3.25     (5) any other information the commissioner may require. 
  3.26     Subd. 3.  [DUTIES.] A community action agency that receives 
  3.27  a grant under this chapter shall: 
  3.28     (1) establish an account in which all funds provided to the 
  3.29  agency for the purpose of the family asset initiative are 
  3.30  deposited; 
  3.31     (2) determine whether an applicant household is eligible to 
  3.32  participate in the Minnesota family asset initiative; 
  3.33     (3) select, from eligible households, the households best 
  3.34  suited to participate, with preference given to individuals 
  3.35  residing within neighborhoods or communities that experience low 
  3.36  rates of income or employment; 
  4.1      (4) develop, with the household, a family asset agreement; 
  4.2      (5) provide households with economic literacy education, 
  4.3   including information on budgeting, use of credit, 
  4.4   homeownership, and long-term financial planning; 
  4.5      (6) provide matching deposits for households selected to 
  4.6   participate; 
  4.7      (7) coordinate with homeownership, small business, and 
  4.8   related programs administered by the commissioner of trade and 
  4.9   economic development and the commissioner of the Minnesota 
  4.10  housing finance agency; 
  4.11     (8) establish a grievance committee and a procedure to 
  4.12  hear, review, and decide in writing any grievance made by a 
  4.13  household; and 
  4.14     (9) comply with all requirements of this chapter and of the 
  4.15  commissioner related to administration of the grants. 
  4.16     Sec. 4.  [119C.04] [HOUSEHOLD ELIGIBILITY; PARTICIPATION.] 
  4.17     Subdivision 1.  [INITIAL ELIGIBILITY.] To be eligible for 
  4.18  the family asset initiative, the household's income must be 
  4.19  below 200 percent of the federal poverty level.  In verifying 
  4.20  income eligibility, the community action agency shall apply 
  4.21  procedures and policies consistent with procedures and policies 
  4.22  used under the low-income home energy assistance program. 
  4.23     Subd. 2.  [PARTICIPATION.] To participate in the family 
  4.24  asset initiative, a household must: 
  4.25     (1) be selected by a community action agency; 
  4.26     (2) enter into a family asset agreement with a community 
  4.27  action agency; and 
  4.28     (3) open a savings account at a financial institution. 
  4.29     Subd. 3.  [FAMILY ASSET AGREEMENT; CONTENTS.] The community 
  4.30  action agency and the household must develop a family asset 
  4.31  agreement for the household.  The family asset agreement must 
  4.32  include the amount of the household's regularly scheduled 
  4.33  contribution to their savings account, the household's savings 
  4.34  goal, and how the household will use savings and matching funds 
  4.35  for one or more permissible uses.  A family asset agreement may 
  4.36  be amended upon agreement by the household and the agency. 
  5.1      Subd. 4.  [INDIVIDUAL CONTRIBUTIONS.] A household may only 
  5.2   deposit in a family asset account such amounts as are derived 
  5.3   from earned income of members of the household and income from 
  5.4   state and federal earned income credits of members of the 
  5.5   household.  
  5.6      Sec. 5.  [119C.05] [WITHDRAWAL; MATCHING; PERMISSIBLE 
  5.7   USES.] 
  5.8      Subdivision 1.  [WITHDRAWAL OF FUNDS.] To receive a match 
  5.9   upon withdrawal of funds from a family asset account, a 
  5.10  participant must make a request for withdrawal of funds and 
  5.11  agree to transfer withdrawn funds to the community action 
  5.12  agency.  The community action agency must determine whether the 
  5.13  request for withdrawal of funds is for a permissible use 
  5.14  consistent with this section and the household's family asset 
  5.15  agreement.  A "permissible use" means using funds to pay for: 
  5.16     (1) post-secondary educational expenses; 
  5.17     (2) qualified home acquisition costs; or 
  5.18     (3) qualified business capitalization expenses. 
  5.19     Subd. 2.  [MATCHING.] If the request for withdrawal is 
  5.20  approved, a household's account shall be matched at the time of 
  5.21  withdrawal based on the balance in the household's account, 
  5.22  including interest, at the time of withdrawal.  Matches must be 
  5.23  provided as follows: 
  5.24     (1) from the funds provided by the commissioner, a matching 
  5.25  contribution of no less than $2 and no more than $4 for every $1 
  5.26  of funds withdrawn from the family asset account; 
  5.27     (2) from funds other than those provided by the 
  5.28  commissioner, a matching contribution of no less than $2 for 
  5.29  every $1 of funds withdrawn from the family asset account. 
  5.30     Subd. 3.  [VENDOR PAYMENT OF WITHDRAWN FUNDS.] Upon receipt 
  5.31  of withdrawn funds, the agency shall make a direct payment to 
  5.32  the vendor of the goods or services being purchased by the 
  5.33  household. 
  5.34     Sec. 6.  [119C.06] [EXCLUSION OF PARTICIPANT INCOME AND 
  5.35  ASSETS.] 
  5.36     The commissioner of human services shall exclude money in 
  6.1   family asset accounts when calculating assets and shall exclude 
  6.2   interest income from those accounts when calculating eligibility 
  6.3   for general assistance, general assistance medical care, and the 
  6.4   statewide Minnesota family investment program.  Up to $25 a 
  6.5   month in earned income deposited in a family asset account shall 
  6.6   be disregarded in calculating initial income eligibility and an 
  6.7   assistance unit's assistance payment under the statewide 
  6.8   Minnesota family investment program. 
  6.9      Sec. 7.  [119C.07] [EVALUATION.] 
  6.10     The commissioner shall conduct an evaluation of the family 
  6.11  asset initiative.  The commissioner shall evaluate the 
  6.12  initiative's impact on savings rates, homeownership, level of 
  6.13  education attained, and self-employment, and how such impacts 
  6.14  vary among different populations and communities. 
  6.15     Sec. 8.  [119C.08] [ECONOMIC LITERACY CURRICULUM.] 
  6.16     The commissioner shall develop an economic literacy 
  6.17  curriculum for use by agencies participating in the family asset 
  6.18  initiative. 
  6.19     Sec. 9.  [APPROPRIATION.] 
  6.20     $....... is appropriated from the general fund to the 
  6.21  commissioner of children, families, and learning to establish 
  6.22  the Minnesota family asset initiative.  The appropriation is 
  6.23  available until expended.