Chapter 23A of the General Laws is hereby amended by adding the following three

sections:-

Section 70. 

(a) As used in this section, the following words shall, unless the context clearly requires

otherwise, have the following meanings:

“Account holder”, a household that is an eligible participant.

“Eligible participant”, a household which has an income that does not exceed 80 percent of the median income for the area, as such median shall be determined from time to time by the secretary of the United States Department of Housing and Urban Development pursuant to 42 U.S.C. 1437(a)(B)(2) or any successor legislation and the regulations promulgated thereunder; provided however, that:

notwithstanding any federal law or rule to contrary, a person shall not be denied assistance under this chapter based wholly or in part on the amount of the person’s assets; 

that any income generated by such assets may be treated as countable income; 

receipt of federal, state or local public assistance of any form shall not make a person ineligible to be an account holder.

“Community-based organization”, a public or private nonprofit organization that is exempt from taxation under 26 U.S.C. 501(c)(3), a community foundation, housing authority, a city or town with demonstrated effectiveness in representing a community or a significant segment of a community and providing educational or related social services to individuals in that community.

“Fiscal intermediary”, a Massachusetts nonprofit organization that is exempt from taxation under 26 U.S.C. 501(c)(3) with demonstrated effectiveness in matched-savings account management.

“Financial institution”, a bank, credit union, any association or corporation chartered by the commonwealth under chapter 168, 170, 171 or 172, or an individual, association, partnership or corporation incorporated or doing a banking business in the commonwealth subject to the supervision of the commissioner.

“Matched-savings account”, a contract between an account holder and a fiscal intermediary to increase their economic mobility. 

(b) (1) A person who qualifies to become an account holder may establish a matched-savings account. The matched-savings account shall permit the account holder to work towards approved savings goals set forth in subsection (c).

(2) A matched-savings account shall provide for the deposit of funds into 2 accounts at a financial institution: (i) a designated account at a financial institution by the account holder and;

(ii) the deposit of matching funds by the fiscal intermediary into a designated account at a financial institution.

(3) Before creating a matched-savings account, a person shall create a savings plan developed by the participant and a community-based organization. The plan shall provide the participant with the appropriate financial education, counseling and asset-specific training designed to increase the economic mobility of the participant’s household. 

(c) Approved savings goals shall serve to increase economic mobility including, but not limited to:

(1) the acquisition of post-secondary education or job training;

(2) if the account holder has established the account for the benefit of a household member who is under the age of 18 years, the payment of extracurricular non-tuition expenses designed to prepare the member for post-secondary education or job training;

3) if the account holder has established a savings plan authorized under 26 U.S.C. 529 or prepaid tuition plan on behalf of a designated beneficiary, the participant shall provide accurate account statements to the fiduciary organization in order to earn match;

(4) the purchase of a primary residence; provided further, that account moneys under this paragraph shall be broadly construed to include, but not be limited to: (i) payment on the purchase price of the residence; and (ii) any usual or reasonable settlement, financing, or other closing costs;

(5) the rental of a primary residence; provided further, that account moneys under this paragraph shall be broadly construed to include, but not be limited to: (i) security deposits; (ii) first month’s rent; (iii) prepayment of last month’s rent; (iv) application fees; (v) major

appliances not included in the lease necessary to move into the primary residence; and (vi) moving expenses;

(6) the capitalization of a small business; provided further, that account moneys under this paragraph shall be broadly construed to include, but not be limited to: (i) capital, plant, equipment, and inventory expenses, (ii) hiring employees upon capitalization of the small business; (iii) working capital;

(7) improvements, repairs, or modifications to a home already owned and occupied as a primary residence in Massachusetts by the account holder;

(8) the purchase of equipment, adaptive technology or specialized training required to become competitive in obtaining or maintaining employment, or to start or maintain a business, or to increase the economic mobility of the account holder;

(9) the purchase or repair of a vehicle, as specified in the account holder’s matched-savings plan for increasing the economic mobility of the person;

(10) the saving of funds for a qualified individual retirement account;

(11) the payment of debts owed when the account holder is saving for another allowable purpose, as specified in the account holder’s matched-savings plan; provided further, a non-profit organization with demonstrated expertise shall provide credit counseling;

(12) the creation or improvement of a credit score by obtaining a secured credit-builder loan or a financial product that is designed to improve credit, as specified in the account holder’s matched-savings plan for increasing the economic independence of the person.

(d) Policy

1. Contributions 

Any earnings an individual contributes to their Matched-savings account are deducted from their wages in determining countable income. An individual's contribution that are deposited in a Matched-savings account are excluded from resources.

2. Matching funds

Any matching funds that are deposited in a Matched-savings account are excluded from income and resources.

3. Interest

Any interest earned on the individual's own contributions and on the matching funds that are deposited in a Matched-savings account is excluded from income and resources.

(e) A fiscal intermediary may qualify as the recipient of account contributions only if the fiscal intermediary structures the accounts to have the following features:

(1) The fiscal intermediary matches amounts deposited by the account holder according

to a formula established by the fiscal intermediary. The fiscal intermediary shall deposit up to $4 into the account for each $1 deposited by the account holder.

(2) The matching deposits by the fiscal intermediary to the matched-savings account are placed in a savings account that is controlled by the fiscal intermediary and is separate from the savings account of the account holder.

(e)(1) If an emergency occurs, an account holder may withdraw all or part of the account holder’s deposits to a matched-savings account for a purpose not described in subsection (c). A financial emergency is a disruption to the account holder’s economic circumstances including, but not limited to: (i) making payments for necessary medical expenses; (ii) avoiding eviction of the account holder from the account holder’s residence; (iii) for necessary living expenses following a change in economic circumstances.

(2) The account holder shall resume contributions to the account holder’s savings account after the account holder deems that the financial emergency has been resolved. The account holder may choose to continue to pursue the savings plan through the appropriate financial education, counseling and asset-specific training in coordination with the account holder’s community-based organization while experiencing the financial emergency.

(3) If an account holder withdraws funds from a matched-savings account for other than an approved purpose, the fiscal intermediary may remove the account holder from the program.

(f)(1) If the account holder of an account established for the purpose set forth in the third paragraph through the tenth paragraph, inclusive, of subsection (c) has achieved the account’s approved purpose in accordance with the matched-savings plan developed by the account holder, the account holder may withdraw, or authorize the withdrawal of, the remaining amount of all deposits, including matching deposits, and interest in the account as follows: (i) for an account established for the purpose set forth in subsection (c)(3) of this section, by rolling over the entire withdrawal amount into one or more savings plans authorized under 26 U.S.C. 529, the establishment of which is the purpose of the matched-savings account; or (ii) for an account established for the purpose set forth in subsection (c)(10) of this section, by rolling over the entire withdrawal amount into an individual retirement account, a retirement plan or a similar account or plan established under the Internal Revenue laws of the United States.

(2) Upon withdrawal of all funds in the matched-savings account as provided in the first paragraph of this subsection, the account relationship shall terminate.

(g) (1) If an account holder moves from the area where the program is conducted or is otherwise unable to continue in the program, the fiscal intermediary may remove the account holder from the program.

(2) If the fiscal intermediary removes an account holder from the program, all matching deposits in the account and all interest earned on matching deposits shall revert to the fiscal intermediary. The fiscal intermediary shall use the reverted funds as a source of matching deposits for other accounts.

(h) (1) The executive office of housing and livable communities may select a fiscal intermediary to administer moneys directed by the commonwealth to matched-savings account purposes.

(2) In making the selection, the executive office of housing and livable communities shall consider factors related to its effectiveness including, but not limited to: (i) the ability of the fiscal intermediary to implement and administer the matched-savings program, including the ability to verify account holder eligibility, certify that matching deposits are used only for approved purposes and exercise general fiscal accountability; (ii) the capacity of the fiscal intermediary to convene and provide professional development opportunities that increase the capacity of community-based organizations to provide financial education, counseling, and asset-related training to account holders; (iii) the partnerships that the fiscal intermediary maintains with like-minded community-based organizations, government agencies, and other entities that support asset-building and wealth creation among the lower-income households across the commonwealth; (iv) Subject to executive office of housing and livable communities rules, a fiscal intermediary has sole authority over, and responsibility for, the administration of matched-savings accounts.

(3) The fiscal intermediary may use at least 5 percent of the allocated moneys to the matched-savings program for account management, compliance, and participation in audits.

(4) (i) The fiscal intermediary shall ensure that account holders include people of color and women, at least in such proportion as these groups exist in the commonwealth’s population as periodically determined by the state secretary as the commonwealth’s chief census officer. (ii) The fiscal intermediary shall ensure that account holders represent diverse geographic areas of the commonwealth, including urban, rural and suburban areas.

(5) The fiscal intermediary shall provide the executive office of housing and livable communities with an annual report of the fiscal intermediary's matched-savings account program activity. The fiscal intermediary shall file the report with the executive office of housing and livable communities no later than 90 days after the end of the fiscal intermediary’s fiscal year. The report shall include, but is not limited to: (i) the number of matched-savings accounts administered by the fiscal intermediary; (ii) the amount of deposits and matching deposits for each account; (iii) the purpose of each account; (iv) the number of withdrawals made; and (v) participant demographics including, but not limited to, race, ethnicity, age, gender identity and sexual orientation, and any other information the executive office of housing and livable communities may require for the purpose of making a return-on-investment analysis. 

(i) (1) Subject to executive office of housing and livable communities rules, the responsibility of the community-based organization extends to all aspects of operating the matched-savings program, including, but not limited to: (i) marketing and outreach; (ii) verification and enrollment of participants; (iii) financial education; (iv) one-on-one counseling; (v) conducting asset-specific training; (vi) indirect costs; (vii) and other required verification and compliance activities.

(2) There is no limit to how many community-based organizations work with the selected fiscal intermediary if they satisfy the required qualifications. The executive office of housing and livable communities can set how many community-based organizations participating in offering the program.

(3) A community-based organization shall receive no more than 25 per cent of the allocated monies for providing all activities set forth in the first paragraph. (j) The executive office of housing and livable communities may issue regulations to implement this section.

Section 70. (a) There shall be a Matched Savings Trust Fund, which shall be administered by the secretary of housing and livable communities. Monies in the trust fund shall be deposited with the state treasurer in a manner that will secure the highest interest rate available consistent with the safety of the trust fund.

(b) The secretary shall appoint the trustee of the fund, who shall serve until a successor is appointed.

(c) There shall be credited to the trust fund:

(1) all funds appropriated by the general court; (2) federal funds directed to the trust fund; (3) grants and any other funds directed to the trust fund; and (5) all interest earned on monies in the trust fund.

(d) Expenditures from the fund shall not be subject to appropriation and balances remaining at the end of a fiscal year shall not revert to the General Fund. Expenditures from the fund shall be made for promoting economic mobility among account holders as defined in section 70. Expenditures from the fund may be made for satisfying the objectives of section, including but limited to, providing matches to account holder contributions to their accounts, financial education, counseling, asset-specific training, for program administration, the fiscal intermediary and for oversight by the executive office of housing and livable communities.

(e) Not later than August 1 of each fiscal year, the secretary shall submit a spending plan to the secretary of administration and finance and the house and senate committees on ways and means. For the purpose of accommodating discrepancies between the receipt of revenues and related expenditures, the secretary may incur obligations and the comptroller may certify payment amounts not to exceed the most recent revenue estimate submitted by the secretary and approved by the secretary of administration and finance but the fund shall be in balance by the close of each fiscal year.