Future fund pilot project

AN ACT Relating to the Washington future fund pilot project; 1
amending RCW 43.08.190; adding new sections to chapter 43.08 RCW; 2
adding a new section to chapter 74.09 RCW; and creating a new 3
section. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. (1) In 2022, the legislature directed the 6
office of the state treasurer to study wealth inequity in the state 7
and explore how a baby bond program could address these inequities.8
(2) The study: 9
(a) Found that almost half of Washingtonians are born into 10
households qualifying for medicaid, a key poverty indicator;11
(b) Found that those born into poverty face life-long impacts 12
including lower rates of homeownership, educational attainment, and 13
entrepreneurship which interfere with their ability to obtain 14
financial stability; and 15
(c) Suggested that a baby bond program, such as the 2023 16
Washington future fund proposal, could interrupt the 17
intergenerational cycle of poverty and address the aforementioned 18
opportunity deficit by providing Washingtonians who were born into 19
and experience persistent poverty the seed capital to invest in 20
Z-0331.1
HOUSE BILL 1661
State of Washington 69th Legislature 2025 Regular Session
By Representatives Stonier, Waters, Goodman, Reeves, Fosse, Bronoske,
Paul, Salahuddin, Leavitt, Doglio, Obras, Street, Reed, Cortes,
Ramel, Thomas, Parshley, Simmons, Timmons, and Shavers; by request of
State Treasurer
Read first time 01/28/25. Referred to Committee on Early Learning &
Human Services.
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themselves and their communities by purchasing a home, pursuing 1
education, or starting a small business. 2
(3) Therefore, it is the intent of the legislature to further 3
investigate the finding with the Washington future fund pilot 4
project: An opportunity to evaluate the impact a baby bond-level 5
grant can have on the economic stability of a sample of eligible 6
Washingtonians. 7
NEW SECTION. Sec. 2. A new section is added to chapter 43.08 8
RCW to read as follows: 9
The definitions in this section apply through this chapter unless 10
the context clearly requires otherwise. 11
(1) "Accountable community of health" or "region" means a 12
regional nonprofit designated by the health care authority to improve 13
the health equity of their communities as part of Sec. 1115 medicaid 14
demonstration project number 11-W-00304/0. 15
(2) "Application" means a formal request made by an applicant, or 16
the applicant's legal guardian, to participate in the pilot project, 17
in the manner required by the office by rule. 18
(3) "Designated institution" means an entity that may receive a 19
grant from the state, on behalf of a project participant, after an 20
application to the office is approved. Applicants select a designated 21
institution during the application process. 22
(4) "Eligible expenditure" means an expenditure associated with 23
any of the following: 24
(a) Education, training, and professional development of an 25
applicant at an institution of higher education, as defined in RCW 26
28B.92.030; 27
(b) Purchase of a residence in Washington state by an applicant; 28
or 29
(c) The creation or purchase of a business in Washington state by 30
an applicant. 31
(5) "Grant" means a distribution of $25,000 to a designated 32
institution on behalf of a project participant to be used on eligible 33
expenditures. A grant shall not be considered assets or income for 34
purposes of state public assistance or financial aid eligibility and 35
calculation of benefit amount. 36
(6) "Legal guardian" has the same meaning as "guardian" as 37
defined in RCW 11.130.010. 38
(7) "Office" means the office of the state treasurer.39
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(8) "Pilot project" means the Washington future fund pilot 1
project, established under section 2 of this act. 2
(9) "Project participant" means an eligible applicant who 3
received a grant to use on eligible expenditures, pursuant to this 4
act. 5
NEW SECTION. Sec. 3. A new section is added to chapter 43.08 6
RCW to read as follows: 7
(1) The Washington future fund pilot project is established in 8
the office. 9
(a) Eligible applicants may submit an application to participate 10
in the pilot project. An eligible applicant is one who:11
(i) Was born in Washington; 12
(ii) Is enrolled in a medical assistance program under chapter 13
74.09 RCW and Title XIX of the federal social security act or in the 14
children's health insurance program under chapter 74.09 RCW and Title 15
XXI of the federal social security act, both: 16
(A) Before their first birthday; and 17
(B) At the time of application; 18
(iii) Is a resident of Washington; and 19
(iv) Is at least 18 years old and less than 36 years old.20
(b) Project participants will be randomly selected among eligible 21
applicants. To ensure statewide participation in the pilot project:22
(i) Two grants are allocated to applicants within the geographic 23
bounds of each region; and 24
(ii) The remaining grants will be allocated to applicants within 25
geographic bounds of each region, by multiplying the:26
(A) The percentage of statewide apple health enrollees that are 27
served by each region; and 28
(B) The number of remaining grants. 29
(c) The results of the calculation provided in (b)(ii) of this 30
subsection must be rounded to the nearest whole number.31
(d) The office shall disperse one grant on behalf of each project 32
participant to the designated institution identified on the 33
application. The grant may only be used for an eligible expenditure. 34
Allowable designated institutions are based on a participant's chosen 35
eligible expenditure and are as follows: 36
(i) For education, training, and professional development of the 37
participant: 38
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(A) The educational, training, or professional development 1
institution providing services to the participant; 2
(B) The financial institution that issued, or is in the process 3
of issuing, student loans to the participant; and 4
(C) Additional institutions defined by rule by the office;5
(ii) For purchase of a residence in Washington state:6
(A) The financial institution that issued, or is in the process 7
of issuing, the participant a mortgage or other real estate loan; and8
(B) Additional institutions defined by rule by the office; and9
(iii) For the creation or purchase of a business in Washington 10
state: 11
(A) The financial institution that issued, or is in the process 12
of issuing, the participant a business loan; and 13
(B) Additional institutions defined by rule by the office.14
(e) Project participants must participate in at least two impact 15
evaluation study interviews, as provided in subsection (2) of this 16
section. 17
(f) Project participants must participate in financial coaching 18
during the study period. For the purposes of this subsection, 19
financial coaching is individual or small group classes or counseling 20
that helps an individual reach their financial goals, specifically 21
related to one or more eligible expenditures. Additional requirements 22
of financial coaching must be defined by rule by the office.23
(g) The application must include information necessary to verify 24
the eligibility of the applicant, a plan for the eligible 25
expenditure, and any other information required by the office. The 26
application must be available in multiple languages and formats, 27
including paper, online, and in-person assistance.28
(2) The office: 29
(a) Shall contract with a third-party vendor to operate the pilot 30
project including, but not limited to: 31
(i) Receiving and processing applications; 32
(ii) Determining if an applicant is an eligible applicant;33
(iii) Facilitating the random selection process in a transparent 34
and accountable manner; and 35
(iv) Sharing administrative data with the office;36
(b) Shall contract with the University of Washington to:37
(i) Assist the office and the third-party vendor on project 38
design and implementation including, but not limited to, recruitment 39
and intake strategies; 40
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(ii) Evaluate the impact of the grant on project participant's 1
economic and financial stability, perceptions, and decision making by 2
performing baseline and follow-up interviews; 3
(iii) Work with the office to draft the final legislative report; 4
and 5
(iv) Assist with additional tasks necessary to complete the pilot 6
project; 7
(c) May adopt rules necessary to implement the pilot project; and8
(d) Shall submit a final report to the relevant committees of the 9
legislature by June 30, 2027. 10
(3) The legal guardian of an eligible applicant or project 11
participant may act on their behalf for purposes of this project.12
(4) The health care authority and any successor agency 13
responsible for implementing the medical assistance program under 14
chapter 74.09 RCW and Title XIX of the federal social security act 15
and the children's health insurance program under chapter 74.09 RCW 16
and Title XXI of the federal social security act shall assist the 17
office and the third-party vendor to verify if an applicant is an 18
eligible applicant. 19
Sec. 4. RCW 43.08.190 and 2022 c 157 s 13 are each amended to 20
read as follows: 21
There is hereby created a fund within the state treasury to be 22
known as the "state treasurer's service fund." Such fund shall be 23
used solely for the payment of costs and expenses incurred ((in)):24
(1) In the operation and administration of the state treasurer's 25
office; and26
(b) Administering the pilot project and study established under 27
this act. 28
Moneys shall be allocated monthly and placed in the state 29
treasurer's service fund equivalent to a maximum of one percent of 30
the trust and treasury average daily cash balances from the earnings 31
generated under the authority of RCW 43.79A.040 and 43.84.080 other 32
than earnings generated from investment of balances in funds and 33
accounts specified in RCW 43.79A.040(4)(c). The allocation shall 34
precede the distribution of the remaining earnings as prescribed 35
under RCW 43.79A.040 and 43.84.092. The state treasurer shall 36
establish a uniform allocation rate for all funds and accounts; 37
except that the state treasurer may negotiate a different allocation 38
rate with any state agency that has independent authority over funds 39
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not statutorily required to be held in the state treasury or in the 1
custody of the state treasurer. In no event shall the rate be less 2
than the actual costs incurred by the state treasurer's office. If no 3
rate is separately negotiated, the default rate for any funds held 4
shall be the rate set for funds held pursuant to statute.5
The legislature may direct the state treasurer to make transfers 6
of money in the state treasurer's service fund to the state general 7
fund. 8
NEW SECTION. Sec. 5. A new section is added to chapter 74.09 9
RCW to read as follows: 10
Subject to federal and state laws governing the disclosure of 11
confidential information, the office of the state treasurer, the 12
department of health, and the authority shall enter into a memorandum 13
of understanding to establish information sharing practices necessary 14
to carry out the purposes of this act by September 30, 2025.15
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