Foster Kids’ Trust Accounts Earn Interest. The State Can Keep It.

The text as introduced · 560 words

89R1527 MM-D

By: West
S.B. No. 577

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of the foster child trust account

program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 264, Family Code, is

amended by adding Section 264.0112 to read as follows:

Sec. 264.0112. FOSTER CHILD TRUST ACCOUNT PROGRAM. (a) The

department in cooperation with the comptroller shall establish and

administer a foster child trust account program to hold federal

benefits described by Subsection (b) received by children in the

department's conservatorship.

(b) For a child in the department's conservatorship who

receives or is eligible to receive United States Department of

Veterans Affairs benefits, Supplemental Security Income (SSI)

benefits under 42 U.S.C. Section 1381 et seq., or Social Security

Disability Insurance (SSDI) benefits under 42 U.S.C. Section 401 et

seq., the department shall:

(1) serve as the representative payee for the benefits

received by the child;

(2) deposit any benefits received by the department on

behalf of the child into an interest-bearing trust account

maintained by the comptroller and manage the account until all

money in the account is disbursed to the child;

(3) save the benefits in a manner that avoids

violating federal asset or resource limits that would negatively

affect the child's eligibility to receive the benefits; and

(4) provide an accounting to the child and the child's

legal representative regarding the saving of the child's resources

under the program on the date the child is discharged from or

otherwise leaves foster care.

(c) The comptroller may contract with one or more financial

institutions to establish and manage an account for each child who

receives benefits described by Subsection (b).

(d) The comptroller shall make funds in the account

available to a child in accordance with Subsection (e) as soon as

practicable after:

(1) the date the child leaves the department's

conservatorship if on that date the child:

(A) is at least 18 years of age; or

(B) has had the disabilities of minority removed;

or

(2) the child's 18th birthday if the child is younger

than 18 years of age on the date the child leaves the department's

conservatorship.

(e) On the date provided by Subsection (d), the comptroller

shall make the entire balance of the account available to the child

using a debit card or an online or electronic transfer payment

service if the balance of the account does not exceed $5,000. If

the balance of the account exceeds $5,000, the comptroller shall

make $5,000 available to the child on the date provided by

Subsection (d), and pay the remaining balance of the account to the

child in increments not to exceed $5,000 each quarter after the

initial disbursement until no money remains in the account.

(f) Neither the state nor a child's guardian may access

money in the child's account except that the state may deduct an

amount equal to any interest earned on money in the account.

(g) On the date on which all money has been disbursed from a

child's account, the child's account is closed.

SECTION 2. Not later than January 1, 2026, the Department of

Family and Protective Services shall adopt rules necessary to

establish and administer the accounts required under Section

264.0112, Family Code, as added by this Act.

SECTION 3. This Act takes effect September 1, 2025.