HOUSE 3rd Reading Unamended April 18, 2016 HOUSE Amended 2nd Reading April 15, 2016Second Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 16-0170.01 Brita Darling x2241 HOUSE BILL 16-1196 HOUSE SPONSORSHIP Pettersen and Rankin, Duran, Hullinghorst SENATE SPONSORSHIP Johnston, House Committees Senate Committees Education Appropriations A BILL FOR AN ACT Concerning the creation of the aspire to college Colorado pilot program for college savings for preschool children, and, in connection therewith, making an appropriation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill creates the aspire to college Colorado pilot program (pilot program) in the department of human services (state department) to provide college savings accounts, as defined in the bill, to preschool-aged children served in an early childhood program. The state department shall administer the pilot program and shall adopt necessary rules for implementation of the pilot program. Within existing appropriations, the state department shall make an initial $50 contribution to a college savings account administered by collegeinvest as part of the college savings program on behalf of an eligible child. The pilot program may serve up to 2,000 eligible children per year for up to 3 years. Through private donations, the pilot program may provide matching dollars for family savings, bonuses to encourage regular savings, family financial education, and an evaluation of the long-term impact of the pilot program. The bill creates the aspire to college Colorado pilot program fund. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 26-1-111, add (2) (v) as follows: 26-1-111. Activities of the state department under the supervision of the executive director - cash fund - report - rules - statewide adoption resource registry. (2) The state department, under the supervision of the executive director, shall: (v) Develop and administer the aspire to college Colorado pilot program established in section 26-1-140. SECTION 2. In Colorado Revised Statutes, add 26-1-140 as follows: 26-1-140. Aspire to college Colorado pilot program - establishment - powers - duties - fund - rules - legislative declaration - definitions. (1) (a) The general assembly finds and declares that: (I) Approximately seventeen percent of children under eighteen years of age in Colorado live in poverty; (II) Approximately thirty-eight percent of all Colorado residents twenty-five years of age and older have a bachelor's degree or higher; however, only about seventeen percent of Coloradans in poverty have a bachelor's degree; (III) The college savings accounts established through the aspire to college Colorado pilot program will provide an innovative opportunity for creating a public-private partnership and state-level plan aimed at transforming the college aspirations and attendance of thousands of Colorado children; (IV) Empirical evidence gathered over the last several years documents the positive impact and potential of children's savings accounts to expand educational and economic opportunity for low- and moderate-income families; (V) Children's savings accounts improve early child development and future financial capability. Children provided a children's savings account at birth score better on socio-emotional development indicators than their counterparts who did not receive a children's savings account. Families with children who are provided a seeded, matched savings account at birth save significantly more for college than families of children who did not receive these accounts. Compared to children without savings, children with savings accumulated a significantly greater level of savings as adults. (VI) Children with college savings have greater college expectations. Children's savings accounts promote the importance of higher education and make the future feel more proximate for children. Children aged twelve to eighteen years of age with a savings account for college were twice as likely to expect to go to college than their counterparts without a college savings account. (VII) Children with college savings do better academically. Children in low-wealth families with college savings have higher math scores than those without college savings. Even a small amount of college savings can have a big effect on college enrollment and graduation. Low- and moderate-income children with five hundred dollars or less in savings were three times more likely to enroll in college than children with no savings and four times more likely to graduate. (VIII) Children's savings accounts help make saving for college part of the collective culture of Colorado by opening the door for economic opportunity for low-income children and their families. These accounts help to better position the state as a pioneer in building family financial capability and aid in developing a stronger, more qualified workforce in Colorado. (b) Therefore, the general assembly declares that establishing the aspire to college Colorado pilot program, which provides a small amount of seed money for children in primarily low-income families, that may be matched by private dollars and the potential for family contributions, will allow the state to determine the efficacy of providing seeded accounts as a means of increasing academic performance and self esteem in a child's early years and college enrollment and degree attainment in the long term. (2) As used in this section, unless the context otherwise requires: (a) "College savings account" means an individual savings account of the college savings program. (b) "College savings program" means the college savings program established pursuant to part 3 of article 3.1 of title 23, C.R.S. (c) "Early childhood program" means a preschool program as defined in rules of the state department. (d) "Eligible child" means a preschool-aged child enrolled in an early childhood program that is a participating pilot site. (e) "Pilot program" means the aspire to college Colorado pilot program created pursuant to this section. (3) There is hereby created in the state department under the supervision of the executive director the aspire to college Colorado pilot program to provide college savings accounts to primarily low-income, preschool-age children served in an early childhood program. The state department shall establish the components of the pilot program. (4) The state department shall make an initial fifty-dollar deposit into a college savings account for the benefit of an eligible child for up to two thousand children per year, for up to three years. (5) If provided through private donations or resources, in addition to any other components of the pilot program, the pilot program may include: (a) Monetary contributions to match family savings; (b) Bonuses to encourage regular savings; and (c) A program for financial education for eligible children and their families. (6) The pilot program is intended to be a public-private partnership, with the state department providing the initial deposits into the college savings accounts and private monetary donations and private resources used to match family contributions, and to provide additional incentives for regular saving, develop a program of financial literacy education, and conduct an evaluation to collect summative data to demonstrate the program's effectiveness over time. The state department may enter into agreements with private foundations or other entities to implement the pilot program. (7) (a) The aspire to college Colorado pilot program fund, referred to in this subsection (7) as the "fund", is created in the state treasury. The fund consists of gifts, grants, and donations credited to the fund pursuant to this section and any other money that the general assembly may appropriate or transfer to the fund. (b) The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the fund. (c) Subject to annual appropriation by the general assembly, the state department may expend money from the fund for purposes of the pilot program created in this section. Any money not appropriated remains in the fund and shall not be transferred or revert to the general fund at the end of the fiscal year. (d) The state department may seek and accept gifts, grants, or donations from private or public sources for the purposes of this section. The state department shall transmit all money received through gifts, grants, or donations to the state treasurer, who shall credit the money to the fund. (8) In accordance with section 24-4-103, C.R.S., the state department shall adopt rules necessary for the administration of the pilot program, including rules relating to eligibility, duties of participating pilot sites, additional monetary contributions and incentives, and data collection necessary to evaluate the pilot program. SECTION 3. Appropriation. For the 2016-17 state fiscal year, $100,000 is appropriated to the department of human services for use by the executive director's office. This appropriation is from the general fund. To implement this act, the department may use this appropriation for college savings for preschool children. SECTION 4. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.