(a) (1) There is hereby created within state government the California Hope, Opportunity, Perseverance and Empowerment (HOPE) for Children Trust Account Program Board, which shall consist of nine members, as follows:

(A) The Treasurer, or their designee, who shall serve as the chair.

(B) The Director of Finance, or their designee.

(C) The Controller, or their designee.

(D) An individual with expertise in poverty alleviation and the racial wealth gap appointed by the Senate Committee on Rules.

(E) An individual with investment expertise appointed by the Speaker of the Assembly.

(F) An individual with expertise on financial empowerment and consumer protection appointed by the Governor.

(G) A public member who has experienced childhood poverty appointed by the Governor.

(H) Two additional nonvoting members appointed by the Governor.

(2) Members of the board appointed by the Governor, the Senate Committee on Rules, and the Speaker of the Assembly shall serve at the pleasure of the appointing authority.

(b) All members of the board shall serve without compensation. Members of the board shall be reimbursed for necessary travel expenses incurred in connection with their board duties.

(c) Board members and other staff of the board shall not do any of the following:

(1) Directly or indirectly have any interest in the making of any investment made for the program, or in the gains or profits accruing from any investment made for the program.

(2) Borrow any funds or deposits of the HOPE trust accounts, or use those funds or deposits in any manner, for themselves or as an agent or partner of others.

(3) Become an endorser, surety, or obligor on investments by the board.

(d) The board and staff, including contracted administrators and consultants, shall discharge their duties as fiduciaries with respect to the HOPE trust accounts solely in the interest of the program enrollees as follows:

(1) For the exclusive purposes of providing benefits to program enrollees and defraying reasonable expenses of administering the program.

(2) By investing with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims.

(e) The board, subject to its authority and fiduciary duty, and in consultation with the advisory workgroup established pursuant to Section 18997.54, shall administer the program and the funds appropriated for the program in alignment with the intent of the Legislature to create opportunities, economic autonomy, and hope, and to promote wealth and asset building for an eligible child and eligible youth to address California’s record levels of inequality.

(f) The HOPE trust accounts are an instrumentality of the state. Any security issued, managed, or invested by the board within the HOPE trust accounts on behalf of a program enrollee shall be exempt from Sections 25110, 25120, and 25130 of the Corporations Code.

(g) To achieve the functions specified in this section, the board shall have the power and authority to do all of the following:

(1) Make and enter into contracts necessary for the administration of the program.

(2) Adopt a seal and change and amend it from time to time.

(3) Cause moneys in the HOPE trust accounts to be held and invested and reinvested.

(4) (A) Accept any grants, gifts, legislative appropriation, and other moneys from the state, any unit of federal, state, or local government, or any other person, firm, partnership, philanthropic entity, or corporation for deposit to the HOPE Trust Account Fund.

(B) The board shall provide a way for grants, gifts, appropriations or other moneys to the HOPE Trust Account Program to be made in any amount and with the ability to have the funds targeted to specific subgroups, as defined by the entity giving, granting, or appropriating the funds, provided that they are not limited in such a way that would conflict with the intent of the Legislature in establishing the program.

(5) The Treasurer shall, on behalf of the board, appoint an executive director, who shall not be a member of the board and who shall serve at the pleasure of the Treasurer. The Treasurer shall determine the duties of the executive director and other staff, as appropriate, and set their compensation. The board may authorize the executive director to enter into contracts on behalf of the board or conduct any business necessary for the efficient operation of the board.

(6) Make provisions for the payment of costs of administration and operation of the program.

(7) Employ staff.

(8) Retain and contract with private financial institutions, other financial and service providers, consultants, actuaries, counsel, auditors, third-party administrators, and other professionals, as necessary.

(9) Procure insurance against any loss in connection with the property, assets, or activities of the trust.

(10) Procure insurance indemnifying each member of the board from personal loss or liability resulting from a member’s action or inaction as a member of the board.

(11) Cause expenses incurred to initiate, implement, maintain, and administer the program to be paid from deposits to, or investment returns or assets of, the program or arrangements established under the program, to the extent permitted under state and federal law.

(12) Carry out the duties and obligations of the program pursuant to this chapter and exercise any and all other powers as appropriate for the effectuation of the purposes, objectives, and provisions of this chapter pertaining to the program.

(h) The board may adopt regulations to implement this chapter consistent with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

(Added by Stats. 2022, Ch. 569, Sec. 57. (AB 156) Effective September 27, 2022.)