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SENATE DOCKET, NO. 2106 FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 737
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
James B. Eldridge
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to promote economic mobility through matched savings.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :James B. EldridgeMiddlesex and Worcester 1 of 11
SENATE DOCKET, NO. 2106 FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 737
By Mr. Eldridge, a petition (accompanied by bill, Senate, No. 737) of James B. Eldridge for
legislation to promote economic mobility through matched savings. Financial Services.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 628 OF 2023-2024.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
_______________
An Act to promote economic mobility through matched savings.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 Chapter 23A of the General Laws is hereby amended by adding the following three
2 sections:-
3 Section 70.
4 (a) As used in this section, the following words shall, unless the context clearly requires
5 otherwise, have the following meanings:
6 “Account holder”, a household that is an eligible participant.
7 “Eligible participant”, a household which has an income that does not exceed 80 percent
8of the median income for the area, as such median shall be determined from time to time by the
9secretary of the United States Department of Housing and Urban Development pursuant to 42 2 of 11
10U.S.C. 1437(a)(B)(2) or any successor legislation and the regulations promulgated thereunder;
11provided however, that:
12 (1) notwithstanding any federal law or rule to contrary, a person shall not be denied
13assistance under this chapter based wholly or in part on the amount of the person’s assets;
14 (2) that any income generated by such assets may be treated as countable income;
15 (3) receipt of federal, state or local public assistance of any form shall not make a
16person ineligible to be an account holder.
17 “Community-based organization”, a public or private nonprofit organization that is
18exempt from taxation under 26 U.S.C. 501(c)(3), a community foundation, housing authority, a
19city or town with demonstrated effectiveness in representing a community or a significant
20segment of a community and providing educational or related social services to individuals in
21that community.
22 “Fiscal intermediary”, a Massachusetts nonprofit organization that is exempt from
23taxation under 26 U.S.C. 501(c)(3) with demonstrated effectiveness in matched-savings account
24management.
25 “Financial institution”, a bank, credit union, any association or corporation chartered by
26the commonwealth under chapter 168, 170, 171 or 172, or an individual, association, partnership
27or corporation incorporated or doing a banking business in the commonwealth subject to the
28supervision of the commissioner.
29 “Matched-savings account”, a contract between an account holder and a fiscal
30intermediary to increase their economic mobility. 3 of 11
31 (b) (1) A person who qualifies to become an account holder may establish a matched-
32savings account. The matched-savings account shall permit the account holder to work towards
33approved savings goals set forth in subsection (c).
34 (2) A matched-savings account shall provide for the deposit of funds into 2 accounts at a
35financial institution: (i) a designated account at a financial institution by the account holder and;
36 (ii) the deposit of matching funds by the fiscal intermediary into a designated account at a
37financial institution.
38 (3) Before creating a matched-savings account, a person shall create a savings plan
39developed by the participant and a community-based organization. The plan shall provide the
40participant with the appropriate financial education, counseling and asset-specific training
41designed to increase the economic mobility of the participant’s household.
42 (c) Approved savings goals shall serve to increase economic mobility including, but not
43limited to:
44 (1) the acquisition of post-secondary education or job training;
45 (2) if the account holder has established the account for the benefit of a household
46member who is under the age of 18 years, the payment of extracurricular non-tuition expenses
47designed to prepare the member for post-secondary education or job training;
48 3) if the account holder has established a savings plan authorized under 26 U.S.C. 529 or
49prepaid tuition plan on behalf of a designated beneficiary, the participant shall provide accurate
50account statements to the fiduciary organization in order to earn match; 4 of 11
51 (4) the purchase of a primary residence; provided further, that account moneys under this
52paragraph shall be broadly construed to include, but not be limited to: (i) payment on the
53purchase price of the residence; and (ii) any usual or reasonable settlement, financing, or other
54closing costs;
55 (5) the rental of a primary residence; provided further, that account moneys under this
56paragraph shall be broadly construed to include, but not be limited to: (i) security deposits; (ii)
57first month’s rent; (iii) prepayment of last month’s rent; (iv) application fees; (v) major
58 appliances not included in the lease necessary to move into the primary residence; and
59(vi) moving expenses;
60 (6) the capitalization of a small business; provided further, that account moneys under
61this paragraph shall be broadly construed to include, but not be limited to: (i) capital, plant,
62equipment, and inventory expenses, (ii) hiring employees upon capitalization of the small
63business; (iii) working capital;
64 (7) improvements, repairs, or modifications to a home already owned and occupied as a
65primary residence in Massachusetts by the account holder;
66 (8) the purchase of equipment, adaptive technology or specialized training required to
67become competitive in obtaining or maintaining employment, or to start or maintain a business,
68or to increase the economic mobility of the account holder;
69 (9) the purchase or repair of a vehicle, as specified in the account holder’s matched-
70savings plan for increasing the economic mobility of the person;
71 (10) the saving of funds for a qualified individual retirement account; 5 of 11
72 (11) the payment of debts owed when the account holder is saving for another allowable
73purpose, as specified in the account holder’s matched-savings plan; provided further, a non-profit
74organization with demonstrated expertise shall provide credit counseling;
75 (12) the creation or improvement of a credit score by obtaining a secured credit-builder
76loan or a financial product that is designed to improve credit, as specified in the account holder’s
77matched-savings plan for increasing the economic independence of the person.
78 (d) Policy
79 1. Contributions
80 Any earnings an individual contributes to their Matched-savings account are deducted
81from their wages in determining countable income. An individual's contribution that are
82deposited in a Matched-savings account are excluded from resources.
83 2. Matching funds
84 Any matching funds that are deposited in a Matched-savings account are excluded from
85income and resources.
86 3. Interest
87 Any interest earned on the individual's own contributions and on the matching funds that
88are deposited in a Matched-savings account is excluded from income and resources.
89 (e) A fiscal intermediary may qualify as the recipient of account contributions only if the
90fiscal intermediary structures the accounts to have the following features:
91 (1) The fiscal intermediary matches amounts deposited by the account holder according 6 of 11
92 to a formula established by the fiscal intermediary. The fiscal intermediary shall deposit
93up to $4 into the account for each $1 deposited by the account holder.
94 (2) The matching deposits by the fiscal intermediary to the matched-savings account are
95placed in a savings account that is controlled by the fiscal intermediary and is separate from the
96savings account of the account holder.
97 (e)(1) If an emergency occurs, an account holder may withdraw all or part of the account
98holder’s deposits to a matched-savings account for a purpose not described in subsection (c). A
99financial emergency is a disruption to the account holder’s economic circumstances including,
100but not limited to: (i) making payments for necessary medical expenses; (ii) avoiding eviction of
101the account holder from the account holder’s residence; (iii) for necessary living expenses
102following a change in economic circumstances.
103 (2) The account holder shall resume contributions to the account holder’s savings account
104after the account holder deems that the financial emergency has been resolved. The account
105holder may choose to continue to pursue the savings plan through the appropriate financial
106education, counseling and asset-specific training in coordination with the account holder’s
107community-based organization while experiencing the financial emergency.
108 (3) If an account holder withdraws funds from a matched-savings account for other than
109an approved purpose, the fiscal intermediary may remove the account holder from the program.
110 (f)(1) If the account holder of an account established for the purpose set forth in the third
111paragraph through the tenth paragraph, inclusive, of subsection (c) has achieved the account’s
112approved purpose in accordance with the matched-savings plan developed by the account holder,
113the account holder may withdraw, or authorize the withdrawal of, the remaining amount of all 7 of 11
114deposits, including matching deposits, and interest in the account as follows: (i) for an account
115established for the purpose set forth in subsection (c)(3) of this section, by rolling over the entire
116withdrawal amount into one or more savings plans authorized under 26 U.S.C. 529, the
117establishment of which is the purpose of the matched-savings account; or (ii) for an account
118established for the purpose set forth in subsection (c)(10) of this section, by rolling over the
119entire withdrawal amount into an individual retirement account, a retirement plan or a similar
120account or plan established under the Internal Revenue laws of the United States.
121 (2) Upon withdrawal of all funds in the matched-savings account as provided in the first
122paragraph of this subsection, the account relationship shall terminate.
123 (g) (1) If an account holder moves from the area where the program is conducted or is
124otherwise unable to continue in the program, the fiscal intermediary may remove the account
125holder from the program.
126 (2) If the fiscal intermediary removes an account holder from the program, all matching
127deposits in the account and all interest earned on matching deposits shall revert to the fiscal
128intermediary. The fiscal intermediary shall use the reverted funds as a source of matching
129deposits for other accounts.
130
131 (h) (1) The executive office of housing and livable communities may select a fiscal
132intermediary to administer moneys directed by the commonwealth to matched-savings account
133purposes. 8 of 11
134 (2) In making the selection, the executive office of housing and livable communities shall
135consider factors related to its effectiveness including, but not limited to: (i) the ability of the
136fiscal intermediary to implement and administer the matched-savings program, including the
137ability to verify account holder eligibility, certify that matching deposits are used only for
138approved purposes and exercise general fiscal accountability; (ii) the capacity of the fiscal
139intermediary to convene and provide professional development opportunities that increase the
140capacity of community-based organizations to provide financial education, counseling, and asset-
141related training to account holders; (iii) the partnerships that the fiscal intermediary maintains
142with like-minded community-based organizations, government agencies, and other entities that
143support asset-building and wealth creation among the lower-income households across the
144commonwealth; (iv) Subject to executive office of housing and livable communities rules, a
145fiscal intermediary has sole authority over, and responsibility for, the administration of matched-
146savings accounts.
147 (3) The fiscal intermediary may use at least 5 percent of the allocated moneys to the
148matched-savings program for account management, compliance, and participation in audits.
149 (4) (i) The fiscal intermediary shall ensure that account holders include people of color
150and women, at least in such proportion as these groups exist in the commonwealth’s population
151as periodically determined by the state secretary as the commonwealth’s chief census officer. (ii)
152The fiscal intermediary shall ensure that account holders represent diverse geographic areas of
153the commonwealth, including urban, rural and suburban areas.
154 (5) The fiscal intermediary shall provide the executive office of housing and livable
155communities with an annual report of the fiscal intermediary's matched-savings account program 9 of 11
156activity. The fiscal intermediary shall file the report with the executive office of housing and
157livable communities no later than 90 days after the end of the fiscal intermediary’s fiscal year.
158The report shall include, but is not limited to: (i) the number of matched-savings accounts
159administered by the fiscal intermediary; (ii) the amount of deposits and matching deposits for
160each account; (iii) the purpose of each account; (iv) the number of withdrawals made; and (v)
161participant demographics including, but not limited to, race, ethnicity, age, gender identity and
162sexual orientation, and any other information the executive office of housing and livable
163communities may require for the purpose of making a return-on-investment analysis.
164 (i) (1) Subject to executive office of housing and livable communities rules, the
165responsibility of the community-based organization extends to all aspects of operating the
166matched-savings program, including, but not limited to: (i) marketing and outreach; (ii)
167verification and enrollment of participants; (iii) financial education; (iv) one-on-one counseling;
168(v) conducting asset-specific training; (vi) indirect costs; (vii) and other required verification and
169compliance activities.
170 (2) There is no limit to how many community-based organizations work with the selected
171fiscal intermediary if they satisfy the required qualifications. The executive office of housing and
172livable communities can set how many community-based organizations participating in offering
173the program.
174 (3) A community-based organization shall receive no more than 25 per cent of the
175allocated monies for providing all activities set forth in the first paragraph. (j) The executive
176office of housing and livable communities may issue regulations to implement this section. 10 of 11
177 Section 70. (a) There shall be a Matched Savings Trust Fund, which shall be administered
178by the secretary of housing and livable communities. Monies in the trust fund shall be deposited
179with the state treasurer in a manner that will secure the highest interest rate available consistent
180with the safety of the trust fund.
181 (b) The secretary shall appoint the trustee of the fund, who shall serve until a successor is
182appointed.
183 (c) There shall be credited to the trust fund:
184 (1) all funds appropriated by the general court; (2) federal funds directed to the trust fund;
185(3) grants and any other funds directed to the trust fund; and (5) all interest earned on monies in
186the trust fund.
187 (d) Expenditures from the fund shall not be subject to appropriation and balances
188remaining at the end of a fiscal year shall not revert to the General Fund. Expenditures from the
189fund shall be made for promoting economic mobility among account holders as defined in
190section 70. Expenditures from the fund may be made for satisfying the objectives of section,
191including but limited to, providing matches to account holder contributions to their accounts,
192financial education, counseling, asset-specific training, for program administration, the fiscal
193intermediary and for oversight by the executive office of housing and livable communities.
194 (e) Not later than August 1 of each fiscal year, the secretary shall submit a spending plan
195to the secretary of administration and finance and the house and senate committees on ways and
196means. For the purpose of accommodating discrepancies between the receipt of revenues and
197related expenditures, the secretary may incur obligations and the comptroller may certify
198payment amounts not to exceed the most recent revenue estimate submitted by the secretary and 11 of 11
199approved by the secretary of administration and finance but the fund shall be in balance by the
200close of each fiscal year.