2007-2008 California Legislative Summary

July 24, 2008 |

The purpose of New America's Asset Building Program is to significantly broaden savings and assets ownership in America, thereby providing all Americans both with the means to get ahead and with a direct stake in the overall success of our economy. While pursuing an ambitious policy agenda at the federal level, we recognize that it is at the state level, in our nation's ‘laboratories of democracy', where the most innovative policies are often enacted.

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Assembly Bill 752 (Steinberg) California Kids' Investment and Development (KIDS) Accounts

This measure aimed to make a saver out of every Californian. The bill established a KIDS Account at birth for every child born in California, starting in 2009. Every newborn would receive a starter deposit of $500 from the state and family and friends are encouraged to deposit into the account as the child grows. At age 18, every Californian would have the capital to begin their adult life—the money saved can be withdrawn for college or technical job training, homeownership, or a jump start on retirement savings.

Assembly Bill 167 (Bass) CalWORKs Savings Act

This measure repealed the asset limit on CalWORKs applicants and recipients to encourage low-income families to build the savings they need to permanently exit CalWORKs. The eligibility rules currently penalize low-income families for saving with a reduction or loss of benefits thereby discouraging families from building the personal safety net they so desperately need to climb out of poverty and become self sufficient.

Assembly Bill 1693 (Eng) The Refunds to Savings Act

This measure aimed to make it easier for Californians to save their tax refunds, for many their best savings resource. The measure amended the state income tax form to allow filers to purchase savings bonds with a portion of their refund. This bill provided another opportunity for California’s families to save and build a personal safety net or a ladder to social mobility. As the bill text states, "Californian’s savings may be at their lowest levels ever. Nationally, the savings rate recently dipped below zero and stayed there for over a year. The last time it was that low was during the Great Depression."

Assembly Joint Resolution 59 (Garcia, Solorio)

This bipartisan resultion urged the California Legislature, the United States Congress, and the President to take immediate action on the current foreclosure crisis to help California families keep their homes, strengthen communities, and bolster the economy.

Assembly Bill 2123 (Lieu) The California Financial Literacy Initiative

This measure represented a much-needed commitment by the state to start addressing the root causes of personal and state economic struggles precipitated by a lack of financial education. Through the establishment of a dedicated Financial Literacy Advocate and a Financial Literacy Advisory Committee, this bill codifed the state’s financial interest in reducing consumer debt, bolstering savings, and deterring financial predicaments like those evident in the current foreclosure crisis. It created an information warehouse where Californians can turn for answers on basic financial questions and for referral to other, more specific resources close to home. Finally, the bill established the Financial Services Corps, a dedicated cadre of financial planner volunteers committed to helping low and middle-income Californians make sound financial decisions.

Assembly Bill 2940 (de Leon) California Employee Savings Program (CalESP)

This measure created a voluntary, universal, portable retirement account (UVRA) for California workers who do not have access to retirement savings plan. The account would supplement the current employer-based system and Social Security. It promoted expanded retirement security for working Californians by making it easier for them to save while providing small businesses with an affordable basic retirement plan to offer their employees.

Assembly Bill 1502 (Lieu) Banking Development Districts

This measure identified specific “Banking Development Districts” (BDDs) where businesses will receive certain incentives to develop enhanced and expanded products for lower income consumers. The proposal encouraged banks to locate in underserved communities and help unbanked Californians establish bank accounts, build credit, and enter the financial mainstream. AB 1502 was later amended to specifically address financial literacy (as described above).