Committee considers bill to hold federal benefits for youth in state custody in accounts for transition to adulthood

The House Committee on Human Services heard H269, a short-form bill proposing that federal benefits paid on behalf of youth in state custody be invested in accounts for those youth rather than used by the state to offset foster-care costs.

"I got 3 bills in order here that I put in this session, for consideration. The first one is H269 . . . it's your act relating to Federal benefits of youth in the custody of the state," said Dan, the legislator who presented the proposal. The presenter said estimates of the funds now used by the Department for Children and Families (DCF) to help pay for foster-care costs range from about $800,000 to $1 million a year, and that roughly 10% of youth in care are eligible for the benefit.

Under the proposal, those federal payments would be set aside in a dedicated account for the youth, allowed to grow, and distributed in a structured way as the youth transition to adulthood to help with expenses such as housing, transportation or education. The presenter told the committee the Office of the Child Advocate, represented in conversation by Matthew Bernstein, identified a federal funding opportunity DCF could apply for to offset costs to the state if the program stores and manages funds differently.

Committee members asked detailed questions about legal and operational issues. Members asked whether representative-payee rules or other legal restrictions would affect the state's ability to encumber the funds; the presenter said those questions remain and that this is a short-form concept bill intended to prompt committee testimony and to develop a distribution structure. Members raised concerns about giving youth lump sums and suggested staged or restricted disbursements tied to housing or education expenses. "I wouldn't like telling people how to spend their money," said Todd, a committee member, who cautioned against overly prescriptive restrictions; others favored a structured release model.

Members compared the proposal to Vermont's baby-bonds concept: baby bonds would provide a separate, legislatively funded deposit at birth for certain children (the committee noted baby-bonds legislation has been authorized in concept but not funded). Committee members and the presenter discussed whether youth could receive both their own federal benefit and a future baby-bonds allocation if baby bonds were funded.

The committee did not take formal action on H269 during the introduction. The presenter said the bill would be fleshed out with testimony, legal review of representative-payee and trust options, and options for investment or deposit of the funds in the State Treasurer's office if the committee elects to move forward.