An Act To Clarify the Oversight of the Family Development Account Program
Maine Legislature, Session 129, LD 1217
Committee: Innovation, Development, Economic Advancement and Business
Sponsors: VITELLI, JORGENSEN, LIBBY, MILLETT, MOORE, POULIOT, McCREIGHT, RECKITT, WARREN
Amends: 5 MRSA §12004-I, 20-A MRSA §10985, 22 MRSA §3769-D

Legislative Document
No. 1217
S.P. 379
In Senate, March 12, 2019
An Act To Clarify the Oversight of the Family Development 
Account Program
Reference to the Committee on Innovation, Development, Economic Advancement and 
Business suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator VITELLI of Sagadahoc.
Cosponsored by Representative JORGENSEN of Portland and
Senators: LIBBY of Androscoggin, MILLETT of Cumberland, MOORE of Washington, 
POULIOT of Kennebec, Representatives: McCREIGHT of Harpswell, RECKITT of South 
Portland, WARREN of Hallowell.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §12004-I, sub-§18-F is enacted to read:
18-F.   
Sec. 2.  5 MRSA §12004-I, sub-§25-B, as amended by PL 2003, c. 673, Pt. QQ, 
§1, is repealed.
Sec. 3.  10 MRSA c. 110, sub-c. 4-A, as amended, is repealed.
Sec. 4.  20-A MRSA c. 412-B is enacted to read:
CHAPTER 412-B
FAMILY DEVELOPMENT ACCOUNT PROGRAM
§10981.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Account holder.  "Account holder" means a person, whose family income is 
below 200% of the nonfarm income official poverty line as defined by the federal Office 
of Management and Budget and revised annually in accordance with the United States 
Omnibus Budget Reconciliation Act of 1981, Section 673, subsection 2, who owns a 
family development account.
2.  Community development organization.  "Community development 
organization" means a charitable organization, a community action agency or a nonprofit 
organization under the United States Internal Revenue Code of 1986, Section 501(c)(3) 
approved by the university to administer family development accounts.
3.  Family development account; account.  "Family development account" or 
"account" means a financial instrument established pursuant to this chapter.
4.  Family development account reserve fund.  "Family development account 
reserve fund" means the fund created by an approved community development 
organization for the purposes of funding the administrative costs of the program and 
providing matching funds for deposit in family development accounts.
Education: 
Financial Aid
Advisory Committee 
on Family 
Development 
Accounts
Expenses for 
members 
representing account 
holders; not 
authorized for all 
other members
20-A MRSA §10985
5.  Financial institution.  "Financial institution" means a credit union or financial 
institution authorized to do business in this State under Title 9-B and that meets standards 
established by the university.
6.  Program.  "Program" means the family development account program established 
in this chapter.
7.  University.  "University" means the University of Maine System.
§10982.  Family development account program
There is established the family development account program to allow eligible 
persons to establish savings accounts to be used for education, job training, purchase or 
repair of a home, purchase or repair of a vehicle for access to work or education, 
capitalization of a small business, health care costs over $500 not covered by private or 
public insurance or other basic necessity.  The program is designed to encourage savings 
as a means of investing in the future and investing in the people, institutions and 
businesses of the State.
1.  Soliciting proposals.  The university shall solicit proposals from community 
development organizations seeking to administer family development accounts on a 
nonprofit basis.  The university may not limit the number of community development 
organizations participating based solely upon geographic region.  The proposals must 
include:
A.  A process for including account holders in decision making regarding the 
investment of funds in the accounts;
B.  The specific populations the community development organization plans to 
identify for participation in the program; and
C.  A requirement that deposits into accounts must be accepted from account holders 
with or without matching contributions and from community development 
organizations.
2.  Reviewing proposals.  In reviewing the proposal of a community development 
organization, the university shall establish criteria to use that must include the following 
factors:
A.  The nonprofit status of the community development organization;
B.  The fiscal accountability of the community development organization;
C.  The ability of the community development organization to provide or raise money 
for matching contributions and to establish and administer a family development 
account reserve fund; and
D.  The significance and quality of proposed auxiliary services and their relationship 
to the goals of the family development account program.
3.  Administrative costs.  Administrative costs may not exceed 15% of the family 
development account reserve fund.
4.  Establishment of accounts.  A financial institution approved by the university 
may establish family development accounts pursuant to this chapter.  The financial 
institution shall certify to the university in the manner required by the university that 
accounts have been established pursuant to the provisions of this chapter and that deposits 
have been made on behalf of account holders.  A financial institution establishing a 
family development account shall:
A.  Keep the account in the name of the account holder;
B.  Permit deposits to be made into the account by the account holder or a community 
development organization on behalf of the account holder, including money 
deposited to match the account holder's deposits.  Matching contribution deposits 
may not exceed $4,000 per year and must be approved in writing by the community 
development organization.  An account with a balance exceeding $10,000 is 
ineligible for matching contribution deposits;
C.  Credit interest to the account at a rate equal to or higher than the rate applicable to 
comparable accounts within the financial institution;
D.  Permit the account holder to withdraw money from the account for any of the 
purposes listed in section 10983, subsection 1; and
E.  Require the account holder to allow the financial institution to provide all account 
information to the community development organization.
5.  Appeals.  Any dispute between the account holder and the community 
development organization may be appealed to the university.  Any adverse decision of the 
university may be appealed to the Superior Court pursuant to Title 5, chapter 375, 
subchapter 7.
6.  Rules; stakeholders.  The university shall adopt rules to implement and 
administer the provisions of this chapter.  Rules adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.  In 
administering the program and periodically assessing its effectiveness, the university may 
consult with stakeholders from the community, including but not limited to program 
participants, community development organizations and financial institutions, as well as 
organizations representing the interests of low-income persons in the State.
§10983.  Withdrawal of funds
1.  Use of funds.  An account holder may withdraw funds from the account with the 
approval of the community development organization administrator without penalty for 
the following expenditures:
A.  Expenses for education or job training or to attend an accredited or approved 
postsecondary education or training institution;
B.  The purchase or repair of a home that is or will be the person's principal 
residence;
C.  The purchase or repair of a vehicle used for transportation to work or to attend an 
education or training program;
D.  Expenses for an emergency that may cause the loss of shelter, employment or 
other basic necessities;
E.  Capital to start a small business for any family member who is 18 years of age or 
older; or
F.  Health care costs exceeding $500 not covered by public or private insurance.
2.  Unauthorized withdrawal; penalty.  Money withdrawn from an account by an 
account holder that is not withdrawn pursuant to subsection 1 is subject to a penalty of 
15%.  When a penalty is assessed, the account holder must be paid the funds that the 
account holder deposited less any penalties, plus interest on that amount.  All matching 
contribution deposits and the interest on them are forfeited.  All penalties and forfeited 
funds must be paid into the family development account reserve fund of the community 
development organization.
3.  Death of account holder.  When opening an account an account holder may name 
a beneficiary and contingent beneficiaries.  An account holder may change beneficiaries 
at any time.  When an account holder dies the account must be transferred to the 
ownership of the designated beneficiary or, if there is none or if the transfer is not 
possible, the account must be transferred to the estate of the deceased.
4.  Exempt from taxation.  Account balances and withdrawals are exempt from 
taxation pursuant to Title 36, chapter 803.
§10984.  No reduction in benefits
Notwithstanding any other rule or provision of state law, the first $10,000 of funds 
and any accrued interest in an account under this chapter are excluded from consideration 
in determining eligibility or benefit levels for any assistance or benefit granted under state 
law.
§10985.  Advisory committee
The Advisory Committee on Family Development Accounts, established in Title 5, 
section 12004-I, subsection 18-F, is referred to in this section as "the committee."
1.  Committee membership.  The committee consists of 12 members as follows:
A.  Four members appointed by the Governor, including one representative of the 
Maine State Housing Authority, one representative of the Department of Health and 
Human Services and 2 representatives of financial institutions participating in the 
program;
B.  Four members appointed by the Speaker of the House of Representatives, 
including one person who is an account holder or is eligible to be an account holder, 
representatives of contributors of matching funds to the program and one 
representative of a community development organization; and
C.  Four members appointed by the President of the Senate, including one 
representative of a contributor of matching funds to the program, one representative 
of a statewide community development foundation, one person who is an account 
holder or is eligible to be an account holder and one representative of a community 
development organization.
Members from state departments serve at the pleasure of their appointing authorities.  All 
other members serve 3-year terms and may continue to serve beyond their terms until 
their successors are appointed.  If a vacancy occurs before a term has expired, the 
vacancy must be filled for the remainder of the unexpired term by the authority who 
made the original appointment.  If a member is absent for 2 consecutive meetings and has 
not been excused by the chair from either meeting, the committee may remove the 
member by majority vote.
2.  Chair.  The committee shall elect a chair from its members.
3.  Duties; report.  The committee shall meet at least 2 times per year to study and 
evaluate the effectiveness of family development accounts in this State and other states; 
make recommendations with respect to changes in law, rule or policy that will enhance 
the ability of account holders to improve their economic security; and advise the 
university, relevant state agencies, community development organizations and the 
Legislature as to its findings. The committee shall provide a comprehensive report to the 
joint standing committee of the Legislature having jurisdiction over business and 
economic development matters and the joint standing committee of the Legislature 
having jurisdiction over health and human services matters by March 1st of each year.
4.  Freedom of access; confidential information.  Meetings of the committee are 
public meetings and records and papers of the committee are public records for the 
purposes of the freedom of access laws in Title 1, chapter 13, subchapter 1, except that 
information obtained about account holders and their families that is confidential under 
state or federal law, rule or regulation is confidential and may not be disclosed.
5.  Staffing.  The university shall provide staffing to the committee and may, within 
existing resources, obtain technical assistance from appropriate sources with expertise in 
asset development for low-income households.
6.  Voluntary service.  Members of the committee serve without compensation or 
reimbursement for expenses, except that members representing account holders may be 
reimbursed for expenses.
Sec. 5.  22 MRSA §3769-D, as enacted by PL 2015, c. 267, Pt. RRRR, §4, is 
amended to read:
§3769-D.  Temporary Assistance for Needy Families block grant; family 
development accounts
In fiscal year 2016-17 and annually thereafter, the Department of Health and Human 
Services may use $500,000 in funds provided under the Temporary Assistance for Needy 
Families block grant to promote financial literacy and healthy savings habits of families 
with income less than 200% of the federal poverty guidelines through the placement of 
funds in family development accounts established pursuant to Title 10 20-A, chapter 110 
412-B, subchapter 4-A. 
SUMMARY
This bill amends the family development account program by transferring 
administration from the Finance Authority of Maine to the University of Maine System.  
The bill also allows the University of Maine System to consult key stakeholders such as 
program participants, community development organizations and financial institutions, as 
well as organizations representing the interests of low-income persons in the State, as part 
of administering the program and assessing its effectiveness.