SENATE DOCKET, NO. 711        FILED ON: 1/17/2023

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1999

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Paul R. Feeney

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act addressing the racial wealth gap.

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PETITION OF:

SENATE DOCKET, NO. 711        FILED ON: 1/17/2023

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1999

The Commonwealth of Massachusetts

_______________

In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act addressing the racial wealth gap.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Chapter 10 of the General Laws is hereby amended by adding after section 78 the following section:-

Section 79. (a) As used in this section the followings words and terms shall have the following meanings:-

“Accounting”, a designated beneficiary’s pro rata share of the fund, as determined by the state treasurer.

“Board”, means the Massachusetts Baby Bonds Trust Fund Advisory Board.

“Committee”, means the Massachusetts Baby Bonds Community Advisory Committee.

“Designated beneficiary”, means any individual who: (i) is born on or after July 1, 2024; and (ii) receives cash assistance under transitional aid to families with dependent children or is a child under the care or custody of the Massachusetts department of children and families within the first twelve months of their life.

“Eligible expenditure”, means an expenditure associated with any of the following: (i) post-secondary education of a designated beneficiary at a vocational or apprentice program, community college, or university that is located in and licensed, approved, or accredited by the commonwealth; (ii) investment in an entity doing business in the commonwealth by a designated beneficiary; (iii) purchase of a home in the commonwealth by a designated beneficiary; or (iv) any investment in financial assets or personal capital that provides long-term gains to wages or wealth, as defined by regulation promulgated by the state treasurer.

“Fund”, means the Massachusetts Baby Bonds Trust Fund.

(b)(1) There shall be a Massachusetts Baby Bonds Trust Fund for the exclusive purpose of assisting designated beneficiaries in pursuing opportunities for education, housing, and entrepreneurship, in order to create opportunities for financial independence.

(2) The state treasurer shall administer the fund. The state treasurer may contract with practitioners, administrators, investment managers and other entities in order to design, administer and provide investment options for the fund. The provisions of section 38 of chapter 29 of the general laws shall not apply to the investment of the fund.

(3) The state treasurer may accept moneys from public and private sources, including, but not limited to gifts, grants and donations, but not in lieu of contribution by the General Court. The state treasurer may expend moneys from the fund for all reasonable and necessary direct costs and expenses incurred with the management and investment of the fund.

(4) Moneys deposited in the fund shall not be subject to further appropriation and any moneys that are unexpended at the end of a fiscal year shall not revert to the General Fund and shall be available for expenditure in the following fiscal year. No expenditure made from the fund shall cause the fund to become deficient at any point.

(5) The state treasurer shall report annually on or before December 31 to the governor and house and senate committees on ways and means: (i) the balance of the fund and (ii) the total return generated by the principal of said fund during the prior 12-month period ending on June 30. 

(c)(1) There shall be a Baby Bonds Trust Fund Advisory Board. The board shall meet from time to time to assist the state treasurer in the development of general policy regarding the fund and shall provide technical advice and input to the state treasurer. Matters considered by the board shall include, but not be limited to: (i) identification of eligible expenditures; (ii) development of mitigation measures to prevent fraud, scams, or financial exploitation of designated beneficiaries related to eligible expenditures; and (iii) partnerships with individuals and communities disproportionately impacted by the racial wealth gap in program expansion and development, including, but not limited to, regular collaboration with the Massachusetts Baby Bonds Community Advisory Committee established in subsection (d).

(2) The board shall consist of 17 members. There shall be 6 nonvoting members, 2 of whom shall be appointed by the president of the senate, 1 of whom shall be appointed by the minority leader of the senate, 2 of whom shall be appointed by the speaker of the house of representatives and 1 of whom shall be appointed by the minority leader of the house. There shall be 11 voting members: the state treasurer, or a designee, who shall serve as chair; the secretary for administration and finance, or a designee; the secretary of education, or a designee; the attorney general, or a designee; 2 members of the Baby Bonds Community Advisory Committee established in subsection (d), selected by said committee; and 4 members appointed by the state treasurer 2 of whom shall be experts in economics and socio-economic policy and 2 of whom shall be individuals from, or who have experience advocating on behalf of, a census tract where over 20 per cent of the populations fall below the federal poverty line. The appointed members shall each serve for a term of 5 years and shall be eligible for reappointment. The board shall serve without compensation but shall be reimbursed for necessary expenses incurred in the performance of their duties.

(3) The board shall report annually on or before December 31 to the governor and the house and senate committees on ways and means.

(d) There shall be in the office of the treasurer and receiver general a Massachusetts Baby Bonds Community Advisory Committee which shall facilitate regular community engagement and outreach concerning the administration and allocation of the Baby Bonds Trust Fund. The committee shall be comprised of individuals and interested stakeholders from geographically diverse regions of the commonwealth. The committee shall serve without compensation but shall be reimbursed for necessary expenses incurred in the performance of their duties.

(e)(1) At any time upon their reaching the age of 18 and prior to their reaching the age of 35, a designated beneficiary may submit a claim to distribute, in whole or in part, their accounting; provided, however, that the designated beneficiary shall demonstrate that the distribution will be applied toward an eligible expenditure; provided further, that, at the time of the application, the designated beneficiary is a resident of the commonwealth.

(2) A designated beneficiary may not assign, alienate or otherwise dispose of any portion of or interest in such accounting to another individual at any time prior to receiving the full distribution of the amounts in their accounting.

(3) If a designated beneficiary fails to submit a valid claim prior to their reaching age 35, their accounting shall be credited back to the assets of the fund.

(4) In the case of the death of a designated beneficiary prior to their reaching the age of 35, upon receipt of notification of such individual’s death, their accounting shall be credited back to the assets of the fund.

(5) The state treasurer shall seek to develop and make regularly available relevant resources and supports designed to assist in making financial decisions to designated beneficiaries and their households. The state treasurer shall encourage and incentivize designated beneficiaries to utilize said resources and supports prior to the distribution of funds to support an eligible expenditure.

(f) (1) Notwithstanding any general or special law to the contrary, no moneys invested in the fund shall be considered an asset for purposes of determining an individual’s or the individual’s household’s eligibility for, or amount of, any benefit or service, including, but not limited to: temporary assistance for needy families and need-based, institutional aid grants offered to an individual at the public educational institutions in the commonwealth.

(2) Notwithstanding any general or special law to the contrary, contributions to an accounting on behalf of a designated beneficiary shall not be included in calculating the gross income of the designated beneficiary under chapter 62.

(g) To carry out the purposes of this section, the Massachusetts department of transitional assistance, the Massachusetts department of children and families, the Massachusetts department of elementary and secondary education, and the Massachusetts department of public health shall provide to the office of the state treasurer any information it deems necessary to fund, coordinate, and evaluate activities of the fund.  Said agencies shall enter an agreement with the office of the state treasurer to document the data sharing procedures and the information to be shared.

(h) The state treasurer may promulgate rules and regulations as necessary or proper for the administration and enforcement of subsections (a) through (g), inclusive.