The legislature finds that persistent and disproportionate wealth inequities exist in Washington state. As wealth is the key indicator of long-term economic stability and well-being, those born into families of limited means face additional and substantial barriers to accessing reliable pathways out of poverty such as owning a home, completing postsecondary education, or starting a small business. The legislature declares that it is the public policy of the state and a recognized governmental function to assist individuals who are born into families of limited means to overcome economic and other disadvantages that would otherwise limit their opportunities as adults, making them better able to contribute to the general welfare.
Nearly half of all births in Washington state occur with a public subsidy. This indicates that a significant population of Washingtonians are born every year without financial stability.
The legislature recognizes that the effects of economic hardship are well-documented. Poverty causes negative outcomes for children, adults, and families. Further, financial hardship to individuals can result in state expenditures that could have been avoided if affected individuals were empowered to be more financially independent.
The purpose of this chapter is to establish a Washington future fund trust fund program housed in the office of the state treasurer to provide a sum of money in a savings and investment account for individuals who are born into families of limited means, and experiencing persistent poverty, to assist them in pursuing opportunities for education, housing, and entrepreneurship by starting a small business. The legislature also intends for this chapter to create opportunities that will foster financial independence and correspondingly reduce the need for certain state support.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Designated beneficiary" means an individual:
Born on or after January 1, 2024, in Washington state;
Whose birth was eligible for or subject to medical assistance as described in RCW 74.09.470; and
Who is facing financial hardship at the time of making a claim for funds provided in this chapter.
"Eligible expenditure" means an expenditure associated with any of the following:
Postsecondary education of a designated beneficiary in Washington state, including universities, colleges, community and technical schools, trade schools, apprenticeships, and technical certifications and licensures;
Purchase of a home in Washington state by a designated beneficiary; or
The formation of a business in Washington state by a designated beneficiary.
"Facing financial hardship" means having an income that is less than 215 percent of the federal poverty level.
"Washington future fund trust fund" or "trust" means the fund established in the custody of the state treasurer by section 5 of this act, comprised of private, public, or private and public sources, to finance benefits for designated beneficiaries.
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A committee on the Washington future fund trust fund is established, with members as provided in this subsection:
The president of the senate shall appoint one member of the senate from each of the two largest caucuses;
The speaker of the house of representatives shall appoint one member of the house of representatives from each of the two largest caucuses;
The state treasurer, or the state treasurer's designee;
The state treasurer shall appoint three members representing underrepresented communities;
The state treasurer shall appoint one member representing an economic empowerment organization; and
The director of the Washington health care authority, or the director's designee;
The executive director of the Washington housing finance commission, or the executive director's designee;
The secretary of the department of social and health services, or the secretary's designee; and
ix. The director of the department of commerce, or the director's designee.
The committee shall be chaired by the state treasurer. The state treasurer must convene the initial meeting of the committee by June 1, 2023. Subsequent meetings shall be held as follows:
At least annual meetings through 2034;
Twice annual meetings in 2035 through 2039; and
Quarterly meetings in 2040 through 2042.
All appointed members shall serve two-year terms that begin January 1st unless appointed to fill a mid-year vacancy.
The committee shall review the following topics and report to the legislature on:
Efficient distribution of funds in accordance with the intent of the trust;
Direct distribution of funds to entities as directed by beneficiaries in accordance with this chapter;
The adequacy of the definition of financial hardship to achieve programmatic goals;
The designated beneficiary's use of funds to ensure compliance with program requirements;
The program's impact on generational wealth inequities based on consulting with experts to study issues of generational wealth inequity and how the program impacts generational wealth inequities;
An evaluation of fund solvency and performance relative to programmatic objectives and goals; and
Other policy considerations that may arise and be pertinent to the programmatic elements of the trust.
Committee reports to the legislature as required under this section may include recommendations for legislative action.
Staff support for the committee is provided by the office of the state treasurer.
Legislative members of the committee are reimbursed for travel expenses in accordance with RCW 44.04.120. Nonlegislative members are not entitled to be reimbursed for travel expenses if they are elected officials or are participating on behalf of an employer, governmental entity, or other organization. Stipends may be provided to cover the costs of attending meetings including transportation, lodging, and child care, if these costs are not covered by a committee member's employer. Any reimbursement for other nonlegislative members is subject to chapter 43.03 RCW.
Committee expenditures are subject to approval by the senate facilities and operations committee and the house of representatives executive rules committee, or their successor committees.
In compliance with RCW 43.01.036, the committee shall provide annual updates on the progress of its work including any legislative recommendations to the appropriate committees of the legislature annually starting December 1, 2023, through December 1, 2039, as well as provide a final report of its findings and recommendations to the appropriate committees of the legislature by December 1, 2040.
This section expires December 31, 2044.
The Washington future fund trust fund program is administered under the office of the state treasurer.
The state treasurer may adopt rules to implement this chapter, including rules on all technical aspects related to the Washington future fund trust fund program including:
A claims process for receipt of funds including distribution of funds;
Balancing the right of the parent giving birth to opt out of disclosing information relevant for the designated beneficiary while allowing a person who believes oneself to be qualified to be a designated beneficiary alternative methods of proving eligibility to be considered a designated beneficiary;
Determination of eligibility at the time of the claim including identification verification;
Implementation of automated eligibility processes for designated beneficiaries where applicable;
Creation of promotional campaigns to increase public awareness of beneficiary eligibility for the program;
The identification and approval of financial education course offerings or equivalent; and
Other technical considerations that may arise and be pertinent to the administration of the trust.
The Washington future fund trust fund is created in the custody of the state treasurer. Expenditures from the fund may be used only for the purposes of the Washington future fund trust fund established under this chapter. All receipts from all sources for the Washington future fund trust fund program must be deposited into the fund. An appropriation is not required for expenditures and the fund is not subject to allotment procedures under chapter 43.88 RCW. Only the state treasurer or the state treasurer's designee may authorize expenditures from the fund.
All moneys in the fund, all property and rights purchased from the fund, and all income attributable to the fund, shall be held in trust by the state investment board, as provided in RCW 43.33A.030, for the exclusive benefit of fund beneficiaries.
The legislature must provide general fund appropriation authority for the state treasurer for the Washington future fund trust fund program administration costs.
The state investment board has the full power to invest, reinvest, manage, contract, sell, or exchange investment money in the trust. All of the earnings from the investment of the money shall be retained by the trust.
All investment and operating costs associated with the investment of money shall be paid under RCW 43.33A.160 and 43.84.160.
All investments made by the state investment board shall be made with the exercise of judgment and care required by RCW 43.33A.140 and consistent with the investment policy established by the state investment board.
As deemed appropriate by the state investment board, money in the trust may be commingled for investment with other funds subject to investment by the board.
The authority to establish all policies relating to the trust, other than the investment policies as set forth in subsections (1) through (3) of this section, resides with the state treasurer.
The state investment board shall routinely consult and communicate with the state treasurer on the investment policy, earnings of the trust, and related needs of the program.
The state treasurer shall administer the Washington future fund trust fund. To the extent that funds are appropriated for this purpose, the office of the state treasurer shall provide staff and administrative support to the state treasurer.
The state treasurer, the office of the state treasurer, and the state investment board shall not be considered an insurer of the funds or assets of the trust or the individual trust accounts. Neither the state treasurer, the office of the state treasurer, nor the state investment board are liable for the action or inaction of the other.
The state treasurer, the office of the state treasurer, and the state investment board are not liable to the state, to the trust, or to any other person as a result of their activities relating to this chapter, whether those activities are ministerial or discretionary, except for willful dishonesty or intentional violations of law. The state treasurer may purchase liability insurance for the state treasurer and the office of the state treasurer, and the state investment board may purchase liability insurance for its members.
Any person denied benefits under this chapter may file a complaint with the state treasurer. Such complaints shall be resolved as provided by chapter 34.05 RCW. All complaints must: Be in writing, include the complainant's name, telephone number, and mailing address, and include a clear and concise description of the alleged error.
Where applicable, state treasurer staff may provide assistance in preparing a written complaint.
Nothing in this chapter creates any other remedy for the erroneous denial of benefits.
The applicant or recipient must file the application for an adjudicative proceeding with the state treasurer within 90 days after receiving notice of the aggrieving decision unless good cause is shown. For the purpose of this subsection, good cause is defined as a substantive reason or legal justification for failing to meet a hearing deadline. Good cause to fail to meet a hearing deadline may include, but is not limited to: Military deployment, medical reasons, housing instability, language barriers, or domestic violence.
The adjudicative proceeding is governed by chapter 34.05 RCW and this section.
Beginning on a designated beneficiary's 18th birthday and before the designated beneficiary's 31st birthday, a designated beneficiary is eligible to receive the total sum of the initial investment and investment earnings to be used for an eligible expenditure. The designated beneficiary may submit a claim for benefits subject to the following conditions:
The designated beneficiary must be a resident of the state of Washington;
The designated beneficiary must have successfully completed a financial education course or a comparable financial education offering as determined by the state treasurer; and
The designated beneficiary must be facing financial hardship.
If a designated beneficiary is deceased before submitting a valid claim or does not submit a valid claim before the designated beneficiary's 31st birthday, such accounting shall be credited back to the assets of the trust.
Subject to federal and state laws governing the disclosure of confidential information related to designated beneficiaries, the state treasurer and the Washington health care authority shall enter into a memorandum of understanding to establish information-sharing practices in order to carry out the purposes of this chapter. Disclosure under this subsection is mandatory for the purpose of the federal health insurance portability and accountability act.
On or before the first day of September in each year, beginning September 1, 2022, the state treasurer shall submit to the office of financial management the total number of Washington births eligible for medical assistance, as described in RCW 74.09.470, in the prior year.
The legislature must appropriate from the state general fund into the Washington future fund trust fund for the fiscal year ending June 30, 2022, and each fiscal year thereafter, a total amount based on the number of Washington births eligible for medical assistance, as described in RCW 74.09.470, in the previous year multiplied by $3,200.
The state treasurer may solicit or receive gifts, grants, and endowments from public or private sources as may be made from time to time, in trust or otherwise, for the use and benefit of the purposes of the Washington future fund trust fund, and the state treasurer may expend the gifts, grants, and endowments according to their terms.
Trust assets are not considered assets for purposes of determining an individual's eligibility for assistance under any program administered by the department of social and health services.
Trust assets are not considered assets for purposes of determining an individual's eligibility for need-based, institutional aid grants offered to an individual at the public educational institutions in the state.
This section adds a new section to an existing chapter 74.09. Here is the modified chapter for context.
The authority must enter into a data-sharing agreement with the office of the state treasurer to share the necessary data to facilitate the Washington future fund trust fund under chapter 43.--- RCW (the new chapter created in section 15 of this act). To effectuate this agreement, the authority must retain client eligibility records for children whose births were covered under medical assistance, as described in RCW 74.09.470, until they turn 31 years old. Disclosure under this section is mandatory for the purpose of the federal health insurance portability and accountability act.