HB 689-FN-A - AS AMENDED BY THE HOUSE
HOUSE BILL 689-FN-A
SPONSORS: Rep. Heath, Hills. 14; Rep. Cornell, Hills. 18
This bill establishes a student career and college investment program which will be available to any student enrolled in a public school or chartered public school and who completes a financial literacy program in the second grade or later. The bill requires a portion of the registration fee for certain mutual funds to be transferred to the program fund.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
27Feb2019... 0546h 19-0363
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings. The general court finds that New Hampshire has a critical workforce shortage and supports the attainment of a postsecondary degree or high quality credential by 65 percent of the state's working age population by the year 2025. The projections of New Hampshire's demographic future are clear; declining numbers of high school graduates and a rapidly increasing proportion of that population are eligible for the free and reduced price lunch program. Students from families where no one has earned a college degree and/or low income have lower college attendance rates and lower college graduation rates. Moreover, such families have much higher reliance on government assistance programs. Purposeful intervention is required to break these cycles and create a culture of savings and investment, and attainment of postsecondary credentials. Student's savings accounts are a proven vehicle for achieving these goals.
(344) Moneys deposited in the student career and college investment program fund established in RSA 195-J:6.
STUDENT CAREER AND COLLEGE INVESTMENT PROGRAM
195-J:1 Definitions. In this chapter:
I. "Account provider" means an entity that has been procured by the state treasurer and approved by the governor and council to hold student accounts, based upon a finding that the entity is subject to sufficient governmental or regulatory oversight, and possesses suitable internal controls to ensure the safety and soundness of amounts held in student accounts.
II. "Commission" means the student career and college investment program commission established in RSA 195-J:7.
III. "Department" means department of education.
IV. "Eligible student" means a student who is a resident of this state, who is enrolled in a public school or chartered public school in this state, and who complies with the requirements of RSA 195-J:3.
V. "Program" means the student career and college investment program.
VI "Responsible individual" means a parent or legal guardian of an eligible student.
VII. "Student account" means an account established with an account provider on behalf of an eligible student in accordance with this chapter.
195-J:2 Program Established. There is hereby established the student career and college investment program. The purpose of the program is to increase opportunities for college and career success for all students, to encourage positive postsecondary education savings behavior for low and moderate income families, and to provide, in cooperation with the public schools, financial literacy education for all students and their parents.
I. Beginning in the 2019-2020 academic year, a student shall be eligible to participate in the program upon completion of a financial literacy module based on standards and competencies approved by the department and offered at the student's school of attendance, in the second grade or later. If a financial literacy module is not offered at a student's school of attendance, the department shall provide alternate access to an approved financial literacy module. School districts shall maintain a record of each student who has completed a financial literacy module and shall provide that information to the department. The responsible individual shall grant permission for the department to transmit information and documentation evidencing completion of the financial literacy module to the account provider.
II. The responsible individual shall also grant permission to the department of education to collect educational, savings, and demographic data to evaluate the effectiveness of the program and disseminate the results in the form of aggregated data. No personally identifiable information shall be disseminated, collected, or retained in accordance with RSA 189:65-68.
III. Participation in the program pursuant to this chapter shall not result in the loss or suspension of any federally-funded state-administered income-sensitive benefits, assistance, or subsidies received by a family participating in the program or for which such family may qualify.
195-J:4 Establishment of Student Accounts.
I. Beginning with the 2019-2020 academic year, a responsible individual, on behalf of an eligible student, may establish a student account in the New Hampshire college tuition savings plan pursuant to RSA 195-H, that complies with the requirements of section 529 of the Internal Revenue Code of 1986, as amended, and any related federal law applicable to the plan with the eligible student listed as the beneficiary. The student account shall be established in the responsible individual's name and through the account provider. No funds shall be required to establish the student account. The department shall furnish the information necessary to establish the student account to the account provider.
II. Upon establishment of the student account and verification of eligibility of each student by the account provider, the commission shall transfer $250 from the student career and college investment program fund to the account provider for deposit into the student account. The commission shall ensure the proper recordkeeping and reporting procedures regarding the status of student accounts, including records of beginning balances, contributions, earnings, bonuses, and matches earned by each program participant during the fiscal year.
III. When the principal balance of a student account reaches $500, the commission shall transfer an amount, to be determined annually by the commission based on the availability of funds, to the account provider for deposit into the student account.
I. The commission shall administer the program, in cooperation with the department of education and the higher education commission.
II. The commission may adopt rules, pursuant to RSA 541-A, relative to the development of financial literacy materials, promotion and marketing of the program, data collection and related research, privacy and reporting requirements related to the program.
195-J:6 Student Career and College Investment Program Fund Established.
I. There is established the student career and college investment program fund which shall be nonlapsing and be kept separate and distinct from all other funds. The fund is established to meet the requirements of the program established in this chapter and shall be administered by the commission.
II. The fund shall consist of all moneys transferred pursuant to RSA 421-B:6-614 (b)(3), all moneys appropriated to the fund, all moneys received under state or federal law, and any gifts, grants, or donations to the state or to the commission by private parties for the purpose of establishing and administering the program.
III. The commission shall include requests for appropriations in the budget submitted pursuant to RSA 9:4.
IV. The commission may accept, budget, and expend moneys in the fund received from any party for the purposes established in this chapter.
V. All moneys in the fund shall be continually appropriated to the commission.
VI. The commission shall establish separate accounts within the fund in order to segregate funds according to funding source.
195-J:7 Commission Established.
I. The student career and college investment program commission is hereby established to ensure the proper administration, management, and development of the program. The members of the commission shall be as follows:
(a) Two members from the house of representatives, appointed by the speaker of the house of representatives.
(b) One member from the senate, appointed by the president of the senate.
(c) The state treasurer, or designee.
(d) The director of the division of educator support and higher education, department of education, or designee.
(e) The chairperson of the university system of New Hampshire board of trustees, or designee.
(f) The director of the New Hampshire financial literacy education program, or designee.
(g) One member from a community philanthropic organization, appointed by the governor.
(h) One member representing the interests of the New Hampshire Children's Fund, appointed by the governor.
(i) One member from the New Hampshire Higher Education Assistance Foundation, appointed by the foundation.
(j) One member from the Coos Coalition for Young Children and Families, appointed by that organization.
(k) One member representing the New Hampshire Community Loan Fund, appointed by that organization.
(l) One member from New Futures, appointed by the president of the organization.
(m) One member from SPARK-NH, appointed by the chairperson of the organization.
(n) Three public members, nominated by the chairperson of the commission and confirmed by the governor.
II. The commission shall elect a chairperson from its membership, and any other officers it deems necessary. The terms of the elected members of the commission shall be coterminous with their terms in office; the terms of all other appointed members shall be 3 years. In the event of a vacancy, a new member shall be appointed for the unexpired term in the same manner as the original appointment. Ten members of the commission shall constitute a quorum.
III. Members of the commission shall serve without compensation, but shall be reimbursed for necessary travel and other necessary expenses. Legislative members shall receive mileage at the legislative rate when attending to the duties of the commission.
IV. The department of education shall provide administrative and clerical support to the commission as may be necessary.
V. The commission shall keep written records of all its proceedings.
VI. No member of the commission shall have any personal interest in the gains or profits of any investment made by the commission; nor shall any member of the commission, directly or indirectly, for such member or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the commission; nor shall any member of the commission become an endorser or surety, or in any manner an obligor, for money loaned to or borrowed from the commission.
VII. Members of the commission shall be held harmless from either criminal or civil liability for any decisions made or services rendered under the provisions of this chapter.
195-J:8 Duties of the Commission. The commission shall:
I. Investigate methods for encouraging increased participation of families with young children, including those of low and moderate income, in the New Hampshire college tuition savings plan as defined in RSA 195-H and other children's savings plans.
II. Develop administrative and operational practices in cooperation with the department for staffing, structuring, managing, marketing, and funding mechanisms to sustain a statewide program and include clearly stated objectives, action plans, and evaluation procedures.
III. Establish recordkeeping and reporting procedures regarding the status of the program consistent with RSA 195-J:4.
I.(a) The commission shall, as needed, issue requests for proposals to evaluate the status of the program.
(b) The commission shall consider and, if appropriate, give preference to proposals which best demonstrate experience in research relating to similar program outcomes.
(c) The final selection of the proposal shall be made by the commission.
II. At least annually, the commission shall make or cause to be made an annual report regarding the status of the program to the speaker of the house of representatives, the senate president, and the state library.
(3) Annual non-refundable registration fee for each class of an issuer of open end mutual funds, due on or before May 1 of each year, if required to register under RSA 421-B:3-301 [$1,000] $1,100, from which the secretary of state shall transfer $100 to the student career and college investment program fund established in RSA 195-J:6.
HB 689-FN-A- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2019-0546h)
FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None
Estimated Increase / (Decrease)
[ ] General [ ] Education [ ] Highway [ X ] Other - Student Career and College Investment Program Fund
Indeterminable Minimal Increase
Indeterminable Minimal Increase
This bill amends the Children’s Savings Account Program under RSA 195-J by making the program eligible to children who participate in a financial literacy program approved by the Department of Education. The account of an eligible child would initially receive $250 from the Student Career and College Investment Program Fund and receive another fund deposit, at an amount to be determined by the Student Career and College Investment Program Commission annually, once the principal amount in the account reaches $500. This bill also raises the annual registration fee for each class of an issuer of open end mutual funds from $1,000 to $1,100. The $100 increase in the fee is transfered to the Student Career and College Investment Fund. All money in the Student Career and College Investment Fund is continually appropriated to the Commission.
In estimating the costs, the Department of Education assumes: one common financial literacy program approved by the Department for the entire state, the use of an online module would lower the fiscal burden, not more than 77.5% in the first year of the 12,000 eligible second graders in the state would participate in the program with any remaining funds being applied to subsequent years, and the participation rate in the program is expected to be closer to less than 70 percent. The estimated startup, ongoing, and disbursement cost for FY 2020 and FY 2021 are as follows:
Financial Literacy Module
Communication Materials ($1/eligible student)
Various forms and agreements
Employee with Benefits
Communications, forms, and updates to program/course
Disbursements ($250 per 70% of 12,000 participating student)
Total Disbursement Costs
Total Estimated Expenditures
While assumptions can be made to estimate the FY 2020 and FY 2021 initial expenditures, state expenditures in the years thereafter would depend on: 1) how many participating students achieve an account balance of at least $500 to be eligible for additional disbursements, 2) the annual additional disbursement amount determined by the Commission, and 3) the amount of ongoing costs to maintain the program.
The Bureau of Securities Regulation states there were approximately 25,133 active open end mutual fund filings in New Hampshire in FY 2018. The Bureau estimates this number will remain relatively constant from FY 2019-2023 and will result in $2,513,300 ($100 X 25,133) in FY 2020 and each year thereafter. The Bureau reports it currently does not have the ability through its fee processing system to allocate the additional $100 fee to a different account and this bill will increase Bureau expenditures by an indeterminable amount to update the system.
Department of Education and Bureau of Securities Regulation
|Jan. 3, 2019||Introduced 01/03/2019 and referred to Education HJ 3 P. 26|
|Jan. 29, 2019||==CANCELLED== Public Hearing: 01/29/2019 01:30 pm LOB 207|
|Jan. 30, 2019||==RECESSED== Public Hearing: 01/30/2019 01:30 pm LOB 207|
|Feb. 12, 2019||==RECESSED== Public Hearing: 02/12/2019 10:00 am LOB 207|
|Feb. 12, 2019||==RECESSED== Executive Session: 02/12/2019 10:30 am LOB 207|
|Feb. 19, 2019||==CONTINUED== Executive Session: 02/19/2019 10:00 am LOB 207|
|Feb. 27, 2019||Majority Committee Report: Ought to Pass with Amendment # 2019-0546h for 02/27/2019 (Vote 14-4; RC) HC 13 P. 18|
|Majority Committee Report: Ought to Pass with Amendment # 2019-0546h (Vote 14-4; RC)|
|Minority Committee Report: Inexpedient to Legislate|
|Feb. 27, 2019||Amendment # 2019-0546h: AA VV 02/27/2019|
|Feb. 27, 2019||Ought to Pass with Amendment 2019-0546h: MA RC 216-126 02/27/2019|
|March 14, 2019||Introduced 03/14/2019 and Referred to Education and Workforce Development; SJ 9|
|Jan. 29, 2019||House||Hearing|
|Jan. 30, 2019||House||Hearing|
|Feb. 12, 2019||House||Hearing|
|Feb. 12, 2019||House||Exec Session|
|Feb. 19, 2019||House||Exec Session|
|Feb. 27, 2019||House||Floor Vote|