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2-10-06 HB 112/aHGUAC/aHAFC/aHFL#1
SHORT TITLE Family Opportunity Accounts
Duplicates SB279, Relates to SB067, Conflicts with, Companion to
Relates to Appropriation in the General Appropriation Act – Special Appropriations – Executive
recommends $2,000.0, LFC recommends $500.0, HAFC recommends $1,000.0, SFC recom-
mends $1,500.0
LFC Files
Responses Received From
Office of Workforce Training and Development (OWTD)
Children, Youth and Families Department (CYFD)
Human Services Department (HSD)
Synopsis of HB 112/a HFL#1
This House Floor Amendment #1 contains four items:
Item numbered 1, reverses the House Government and Urban Affairs Committee
(HGUAC) amendment 4 and 5 which deleted certain language and inserted new language
to make all public funds, not just federal, available for matching. This item is
inconsequential because item number four below, deletes this whole paragraph.
Item numbered 2, deletes certain language. The revision attempts to improve the defini-
tion of “indigent”. The revised definition is more inclusive than exclusive.
Item numbered 3, on page 4 line 2, deletes the word “other” and inserts the word “basic”.
This language restores some of the eligibility limitation; however, the language remains
somewhat vague.
Item numbered 4, deletes paragraph 2 on page 15 line 22. This removes the language
which was giving preference to family opportunity account programs which had the abil-
ity to match state funds with other funds. The removal of this paragraph opens the oppor-
tunity to more vendors/providers in more areas of the state, especially rural areas.
Although the language concerning the definition of “indigent” has improved, there still remains
some question concerning who is eligible to participate. The original change in eligibility crite-
ria is due to a narrow interpretation of the “anti-donation clause” by attorneys at DFA. Ques-
tions pertaining to the “anti-donation” clause may need to be investigated further, perhaps by the
Attorney General. This bill has not been reviewed by the Judiciary committee; therefore, the
House Bill 112/a HGUAC/aHAFC/aHFL#1– Page
DFA attorney’s anti-donation interpretation hasn’t been reviewed by another legal authority.
The administrative allocation which was changed from ten percent to five percent is not suffi-
cient to adequately administer the program. Currently, HAFC substitute for HB2 contains a
non-recurring appropriation of $500.0, which will allow for $25.0 for administering the program.
Synopsis of HB 112/a HAFC
This House Appropriations and Finance Committee amendment removes the $2,000.0 appropria-
tion in the bill. The amendment strikes the word “Making an Appropriation” and Section 18
which was the appropriation amount and language.
Synopsis of HB 112/a HGUAC
This House Government and Urban Affairs Committee amendment allows other local govern-
mental entities to provide the matching funds, not just the federal or state government. This will
allow local municipalities and counties to provide matching funds. The amendment also makes
one technical correction for an item which was marked as new material incorrectly.
SB379 which is the duplicate of this bill, must include the same amendment if it is continue to be
the companion bill.
If this amendment is not passed – only state funds or federal funds will be able to be used for
matching portions of the accounts – this amendment allows other sources of matching funds to
be utilized – such as HUD monies from the county and municipalities.
Synopsis of original bill
House Bill 112 appropriates $2,000.0 from the GENERAL FUND to the family opportunity fund
for the purpose of carrying out the provisions of the Family Opportunity Accounts Act
The bill amends the Individual Development Account Act to be entitled the Family Opportunity
Accounts Act, changes the eligibility requirements removing the earned income requirement be-
ing less than 200% of federal poverty and replaces it with a newly defined requirement of indi-
gence, establishes criteria for program administrators, creates the Family Opportunity Accounts
Council charged with the oversight administration of the Act, and adds language for approval of
the Family Opportunity Accounts Programs.
The bill creates the family opportunity fund in the state treasury. The provisions of the Individ-
ual Development Account Act currently are administered by the Office of Workforce Training
and Development, which would continue to administer the provisions of this bill.
The appropriation of $2,000.0 contained in this bill is a RECURRING expense to the family op-
portunity fund. The family opportunity fund is non-reverting.
This bill creates a new fund and provides for continuing appropriations. The LFC has concerns
with including continuing appropriation language in the statutory provisions for newly created
funds, as earmarking reduces the ability of the legislature to establish spending priorities.
House Bill 112/a HGUAC/aHAFC/aHFL#1– Page
Funds used for allowable purposes do not impact Medicaid income eligibility.
The state matching funds have been capped at $2,000 per year per individual.
The eligibility criterion is being changed significantly. The current statute uses an income stan-
dard of 200% of the federal poverty level (FPL). This proposes to change the eligibility re-
quirement to a definition of “indigent” mostly derived from a New Mexico Supreme Court ruling
in Humana of New Mexico, Inc vs. Board of County Commissioners of the County of Lea, New
FPL is a cut and dry eligibility standard which works well for almost all social programs
The definition of indigent is vague and may allow individuals with income levels higher
than 200% participate. An individual who earns an adequate living but is in debt and un-
able to pay the costs to purchase a home, car, or start a business may qualify.
The change in eligibility criteria is due to a narrow interpretation of the “anti-donation
clause” by DFA.
Questions pertaining to the “anti-donation” clause may need to be investigated further.
Reduces the amount available for administration from 10% to 5%. Depending on the size of
the appropriation, this may be a significant issue for OWTD. OWTD needs a sufficient
amount of administrative budget to administer and monitor these accounts, as well as provide
for the financial training programming. The statute requires a nine member advisory council
which meets twice a year with per diem and mileage reimbursement.
The responsibility to provide the financial training has been passed to the program administra-
tor. It is unclear if the program administrator will also take an additional administrative allo-
cation for providing the training or if it is a component of the 10% or 5% OWTD allocation.
The financial training curriculum has not been addressed. There should be a minimum
amount of class or course hours required taught by a degreed instructor.
Clarifies the RFP process for selecting program administrators.
The bill adds language to guide the selection of program administrators to ensure geographi-
cally diverse populations are served. This may limit the ability of some non-profits to respond
to the RFP if their population is concentrated such as Native Americans living on tribal lands
or densely populated Hispanic locations.
Another program administrator preference is given to those which can ensure the highest pos-
sible match. This may limit rural area non-profits who do not have the expertise to obtain
federal funds to match with state funds.
Another program administrator preference is given to one which will benefit families with
children. Foster children who may be eligible to participate beginning at age 16, may be lim-
ited from participating in the program.
Counting money as a resource one year after withdrawal, if not approved by the program ad-
House Bill 112/a HGUAC/aHAFC/aHFL#1– Page
ministrator, is problematic for eligibility determination.
HSD will need to amend state rules to mirror the new terminology, e.g., “family opportunity
accounts” instead of IDA, indigent, etc.
After an account has been established, an account holder may be eligible to keep the account
even after his/her income has increased.
This bill refers to childcare as a support category available for temporary assistance and a
monthly maximum amount allowable.
Page 7 line 9 – 12 deletes language providing eligibility for a child in foster care at 200% of the
federal poverty level and replaces it with “indigent” eligibility. The use of the definition of “in-
digent” in relation to a child in foster care may eliminate many foster children. Few children in
foster care would qualify as being indigent as they do not typically have liabilities in excess of
State general fund dollars used in matching family Opportunity Accounts might be credited to-
ward the TANF Maintenance of Effort (MOE) requirement; however, under the federal Budget
Reconciliation Bill for TANF reauthorization which is likely to pass this spring and become ef-
fective on October 1, 2006, families must be meeting the federal work participation rates. This
might be difficult to track the credit for MOE for participants under the Family Opportunity Ac-
counts Act. HSD may opt to exclude some or all of these general fund dollars form the MOE re-
OWTD will need an employee responsible for RFP, monitoring and assessing the success of this
OWTD will be required to fund the financial training aspect of the IDA concept out of the ad-
ministrative allocation.
A nine member advisory council which meets twice a year is entitled to per diem and mileage
and the administrative support of OWTD staff. The proposed administrative allocation change to
5% may not be sufficient.
Relates to an appropriation in the General Appropriation Act – Special Appropriations – Execu-
tive recommends $2,000.0, LFC recommends $500.0,
This bill relates to SB067 which appropriates $1,000.0 from the general fund for expenditure in
2007 – 2010 with no more than $250.0 expended per year for the purpose of implementing the
individual development account program. At the end of 2010, any unexpended or unencumbered
balance shall revert to the general fund. SB067 does not change the current IDA statutes, it pro-
vides for phased-in funding.
House Bill 112/a HGUAC/aHAFC/aHFL#1– Page
The bill creates a family opportunity fund to carry out the provisions of the Family Opportunity
Accounts Act. The language in this section states “… and money in the fund shall not be trans-
ferred to any other fund at the end of a fiscal year”. The Section 58-30-5 of the current statute
allows 10% of the money appropriated for the Individual Development Account Act to be used
to administer the act. Limiting the ability to transfer the 10% administrative allocation to the Of-
fice of Workforce Training and Development to one fiscal year reduces the Department’s ability
to properly use the funds.
HSD has identified a number of legal issues:
Section 58-30-2(J): The definition of “indigent” is vague and ambiguous and open to
different interpretations that are or may be inconsistent with existing statutes and regu-
lations governing the Department’s public assistance programs.
HB 112 allows the account holder to establish sub-accounts that, without more specific
guidelines, could open the door to abuse of the program.
HB 112 would essentially require a retroactive determination of eligibility. If an im-
proper withdrawal of account funds is not repaid within a given 12-month period, the
withdrawn amount would then be countable as a resource. There is no retroactive de-
nial in Medicaid, and ISD would have no way of retroactively determining eligibility
in such a situation. (e. g., See Section 58-30-12.)
In Sections 58-30-(A) and (B), the financial eligibility standards have been removed
without identifying what constitutes an eligible individual.
In Section 58-30-5(B), it is not clear whether the director may report orally to the gov-
ernor or is required to submit a written annual report, which would be preferable.
Section 58-30-6 has been improperly amended. Language that appears in the original
statute should be restated and lined out to indicate deletion. That step has been omitted.
The “family opportunity accounts council” should be defined in the Definitions
Section (58-30-2).
Section 58-30-7(C) allows the office of workforce training and development to estab-
lish a matching amount exceeding the maximum two thousands dollars, without any
stating any legal justification or program criteria.
In Section 58-30-8(A)(6), the use of the term “recipient” is ambiguous and confusing.
10. Section 58-30-10(B) allows money in a reserve account to be deposited into a family
opportunity account, without proper safeguarding and tracking, in the event the direc-
tor is unable to obtain and certify a new program administrator
House Bill 112/a HGUAC/aHAFC/aHFL#1– Page
Fund the IDA program as it currently exists in statute in a phased-in process. Additional legal
council can be sought to determine if a confilict exists with the anti-donation clause, as well as,
the best eligibility criteria to use.
If this bill is not passed – the original act (IDA’s) will continue to be an unfunded Act/Program.
Federal money is continuing to be held unused because the Act requires matching funds for fed-
eral money to be spent. Also, if the changes in the original Act are not passed, but an appropria-
tion alone is passed, the original bill may violate the anti-donation clause –which DFA has
warned about.