substitute for

House BILL NO. 4750

A bill to amend 1994 PA 203, entitled

"Foster care and adoption services act,"

(MCL 722.951 to 722.960) by adding section 8f.

the peoplE of the state of michigan enact:

Sec. 8f. (1) This section applies to children in foster care.

(2) Within 60 days after a child enters foster care and annually thereafter while a child in foster care is in foster care, the department shall screen a child in foster care for potential eligibility for benefits and apply for benefits for which a child in foster care may be eligible and is not already receiving. When applying for benefits under this section for a child in foster care, the department shall, in cooperation with the child in foster care's attorney, identify a representative payee or fiduciary in accordance with the requirements of 20 CFR 404.2021 and 416.621, as applicable, and shall apply to become the representative payee only if no other suitable candidate is available to be a representative payee. If the department acts as the representative payee, the department shall, on an annual basis, review if someone other than the department is available to apply to assume the role of representative payee and could better serve in that role in the best interests of the child in foster care.

(3) Consistent with federal law, when the department serves as the representative payee or in any other fiduciary capacity for a child in foster care receiving benefits, the department shall do all the following:

(a) Use or conserve the benefits of a child in foster care in the best interests of the child in foster care, including using the benefits for services for special needs not otherwise provided by the department or conserving the benefits for the child in foster care's reasonably foreseeable future needs. The department shall not use any benefits of the child in foster care to reimburse this state for the cost of care for the child in foster care.

(b) Ensure that when the child in foster care attains the age of 14 years and until the department no longer serves as the representative payee or fiduciary, a minimum percentage of the benefits of the child in foster care is conserved in accordance with subdivisions (c) and (d), as follows:

(i) From age 14 through age 15, at least 40%.

(ii) From age 16 through age 17, at least 80%.

(iii) From age 18 through age 20, 100%.

(c) For the benefits or resources of the child in foster care that are below or not subject to any federal asset or resource limit, exercise discretion in accordance with federal law and in the best interests of the child in foster care to conserve the funds or use the funds for services for special needs not otherwise provided by the department, including choosing 1 or more of the options listed under subdivision (d).

(d) Appropriately monitor any federal asset or resource limits for the benefits and ensure that the best interests of the child in foster care are served by using or conserving the benefits in a way that avoids violating any federal asset or resource limits that would affect the eligibility of the child in foster care to receive the benefits, including all the following:

(i) Applying to the Social Security Administration to establish a plan for achieving self-support (PASS) account for the child in foster care under the social security act, 42 USC 301 to 1397mm, and determining whether it is in the best interests of the child in foster care to conserve all or part of the benefits in the PASS account.

(ii) Establishing a plan under section 529A of the internal revenue code of 1986, 26 USC 529A, for the child in foster care and conserving the benefits of the child in foster care in that account in a manner that appropriately avoids any federal asset or resource limits.

(iii) Establishing an individual development account for the child in foster care and conserving the benefits of the child in foster care in that account in a manner that appropriately avoids any federal asset or resource limits.

(iv) Establishing a special needs trust for the child in foster care and conserving the benefits of the child in foster care in the trust in a manner that is consistent with federal requirements for special needs trusts and that appropriately avoids any federal asset or resource limits.

(v) If the department determines that using the benefits for services for current special needs not already provided by the department is in the best interests of the child in foster care, using the benefits for those services.

(vi) If federal law requires certain back payments of benefits to be placed in a dedicated account, complying with the requirements for dedicated accounts under 20 CFR 416.640(e).

(vii) Applying any other exclusions from federal asset or resource limits available under federal law and using or conserving the benefits of the child in foster care in a manner that appropriately avoids any federal asset or resource limits.

(e) Provide an annual accounting to the child in foster care, the appropriate contact at the supervising child placement agency, and the attorney of the child in foster care of how the resources of the child in foster care, including benefits, have been used or conserved in accordance with this section.

(f) Provide the child in foster care with financial literacy training when the child in foster care has attained the age of 14 years. The financial literacy training required under this subdivision must include all of the following:

(i) A definition of personal finance and consideration of how personal finance concepts fit into key life events or stages and an explanation of the importance of personal financial planning using information sources, including, but not limited to, instructional materials, news articles, blogs from reputable sources, personal narratives, and industry publications.

(ii) The writing of short-term, mid-term, and long-term personal financial goals. The personal financial goals must define the child in foster care's desired education, career, and earning milestones, and saving and spending plans, and must involve the child in foster care evaluating factors that may influence the child in foster care's personal financial goals, including, but not limited to, family responsibilities, individual values, financial factors, and economic conditions. As used in this subparagraph:

(A) "Long-term" means greater than 5 years from the time of writing.

(B) "Mid-term" means 1 to 5 years from the time of writing.

(iii) The completion of 1 or more career aptitude surveys and an analysis of the career aptitude survey results and how the survey results align with the child in foster care's strengths and interests. The analysis must evaluate education and training path options to prepare the child in foster care for the identified jobs or careers of interest.

(iv) The creation of an annotated chart, table, or graphic based on the career of interest identified in subparagraph (iii) that evaluates all of the following:

(A) Education and training, including, but not limited to, admission requirements and tuition requirements.

(B) Available positions.

(D) Costs and benefits of education and training.

(E) Potential lifetime earnings.

(F) Employer benefits.

(G) Possible need for relocation to advance.

(v) An exploration and evaluation of the options for financing postsecondary education, including, but not limited to, an evaluation of the Free Application for Federal Student Aid (FAFSA) requirements to apply for postsecondary financial aid, and identification of strategies for reducing the overall cost of postsecondary education. The evaluation described under this subparagraph must also discuss the impact of scholarships, grants, work study, and other forms of assistance and the application processes for each.

(vi) An explanation of the impact that borrowing money to finance postsecondary education could have on future financial stability and security. The explanation described under this subparagraph must include an assessment of research from multiple viewpoints that either supports or questions the use of student loan debt in paying for postsecondary education.

(vii) A requirement that the child in foster care craft an argumentative essay, citing specific textual evidence, that either supports or opposes the use of student loan debt to finance postsecondary education and develops both sides of the argument.

(viii) A description of factors that affect take-home pay, including, but not limited to, insurance benefits, retirement options, tax withholdings, and other payroll deductions. As part of the instruction on factors that affect take-home pay, the child in foster care must analyze how to complete a 1040 and a W-4 employee's withholding allowance paperwork and review a W-2 wage and tax statement.

(ix) Instruction on the use of money management tools, including, but not limited to, online and paper budgeting tools and cost-of-living calculators. As part of the instruction on the use of money management tools, the child in foster care must create a personal balance sheet, determine assets and liabilities, and calculate net worth for an identified career.

(x) The creation, using research from local sources including, but not limited to, newspapers, chambers of commerce, local governments, and company websites, of a monthly personal budget that reflects hypothetical household living expenses, taxes, potential savings, and an emergency fund.

(xi) The creation, using research from local sources including, but not limited to, newspapers, chambers of commerce, local governments, and company websites, of a monthly personal budget that reflects hypothetical household living expenses, taxes, potential savings, and an emergency fund.

(xii) Development, by the child in foster care, of a savings and spending plan for a week. The child in foster care must compare the plan to the child in foster care's actual spending for the week.

(xiii) Instruction on the availability and reliability of consumer protection laws, agencies, and resources that assist consumers in making buying decisions, including national, state, and local resources, as appropriate.

(xiv) Information on a variety of financial institutions, including digital financial services and how to reconcile an account, write a check, and verify account accuracy. As part of the instruction on financial institutions, the child in foster care must compare and contrast services and products, including, but not limited to, checking accounts, savings accounts, and certificates of deposit.

(xv) An evaluation of the various sources and types of consumer credit, including, but not limited to, student loans, auto loans, store credit cards, flex loans, consumer installment loans, title loans, payday loans, and instruction on the impact that taking on debt early in life will have on financial stability later in life.

(xvi) An overview of credit reporting agencies, including, but not limited to, Equifax, Experion, TransAmerica, and federal organizations, that describes credit reports and credit scores. The overview provided under this subparagraph must do all of the following:

(A) Describe the relationship between consumers, credit reports, and credit scores and discuss the importance of this relationship using specific textual evidence from research.

(B) Analyze a sample credit report and interpret how the contents may affect the credit score.

(D) Summarize specific activities used to maintain a good credit score.

(xvii) A comparison and contrast of the various types of credit and a calculation of the real cost of borrowing and an explanation of factors that can affect the approval process associated with each type of credit and identification of the typical information and procedures required as part of the credit application process.

(xviii) An analysis of factors associated with the purchase of an automobile. This analysis must include:

(A) A definition and understanding of factors most often included in negotiations, such as cash payment compared to financing and the inclusion of a trade-in.

(B) An evaluation of costs and benefits of different service contracts and warranty options.

(C) A comparison and contrast of available financing options based on consumer characteristics and the amount of the down payment.

(D) A discussion of the differences between owning and leasing a car, including, but not limited to, down payment, terms, and contracts.

(xix) An analysis of the benefits and costs associated with various types of insurance, including, but not limited to, health, life, property, and automobile insurance, and a description of the risks associated with a lack of appropriate coverage in specific situations. This analysis must also discuss the role of insurance in personal financial planning to preserve and build wealth with financial stability and security.

(xx) An assessment of various types of identity theft situations and scams, and strategies and plans to safeguard and protect against identity theft, and a discussion of steps that should be taken by a victim of identity theft to report the incident and reestablish the victim's identity.

(xxi) An explanation of how saving and investing contribute to financial well-being, building wealth, and helping meet personal financial goals. The instruction on saving and investing must compare and contrast saving and investment strategies, including, but not limited to, savings accounts, certificates of deposit, stocks, bonds, mutual funds, employer-sponsored savings plans, physical assets, and commodities.

(4) The department shall immediately notify the child in foster care through the attorney of the child in foster care and the appropriate contact at the supervising child placement agency of any of the following:

(a) An application for benefits made on behalf of the child in foster care or any application to become representative payee for those benefits on behalf of the child in foster care.

(b) A decision or communication from this state or the federal government regarding an application for benefits.

(5) If the department serves as the representative payee or otherwise receives benefits on behalf of the child in foster care, the department must provide notice to the child in foster care through the attorney of the child in foster care and the appropriate contact at the supervising child placement agency of both the following before each juvenile court hearing regarding the child in foster care:

(a) The date and the amount of benefit funds received on behalf of the child in foster care since any previous notification to the child in foster care's attorney.

(b) Information regarding all of the child in foster care's assets and resources, including the child in foster care's benefits, insurance, cash assets, trust accounts, earnings, and other resources.

(6) All payments from benefits received under this section are the property of the child in foster care. Notwithstanding any provision of law to the contrary, on termination of the department's responsibility for the child in foster care under this section, the department shall release any funds remaining to the child's credit under the requirements of the funding source or, in the absence of any requirements, release the remaining funds as follows:

(a) To the child, if the child is at least 18 years of age or is emancipated.

(b) To the person responsible for the child in foster care if the child is under 18 years of age and is not emancipated.

(7) This section does not affect any additional notice required by a court of this state.

(8) As used in this section, "benefits" means all of the following:

(a) Federal Supplemental Security Income.

(b) Social Security benefits.

(d) Other applicable benefits for which the child in foster care is eligible.