November 12, 2008, Introduced by Senators JANSEN and HUNTER and referred to the Committee on Families and Human Services.
A bill to amend 2006 PA 513, entitled
"Individual or family development account program act,"
by amending sections 2, 3, and 4 (MCL 206.702, 206.703, and
206.704).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Account holder" means a person who is the owner of an
individual or family development account or the family if the
account is a family account.
(b) "Agency" means the Michigan state housing development
authority of the department of labor and economic growth.
(c) "Contributor" means a person that makes a contribution to
an individual or family development account reserve fund and is not
an account holder.
(d) "Director" means the executive director of the Michigan
state housing development authority of the department of labor and
economic growth.
(e) "Education expenses" means tuition and fees required for
the enrollment or attendance of a student at an eligible
educational institution, and expenses for fees, books, supplies,
and equipment required for courses of instruction at an eligible
educational institution.
(f) "Eligible educational institution" means any of the
following:
(i) A college, university, community college, or junior college
described in section 4, 5, or 6 of article VIII of the state
constitution of 1963 or established under section 7 of article VIII
of the state constitution of 1963.
(ii) An independent nonprofit college or university located in
this state.
(iii) A state-licensed vocational or technical education
program.
(iv) A state-licensed proprietary school.
(g) "Federal poverty level" means the poverty guidelines
published annually in the federal register by the United States
department of health and human services under its authority to
revise the poverty line under section 673(2) of subtitle B of title
VI of the omnibus budget reconciliation act of 1981, Public Law 97-
35, 42 USC 9902.
(h) "Fiduciary organization" or "organization" means a
charitable organization exempt from taxation under section
501(c)(3) of the internal revenue code that is approved by the
director of the agency or his or her designee to manage a reserve
fund. A fiduciary organization may also be a program site.
(i) "Financial institution" means a state chartered bank,
state chartered savings bank, savings and loan association, credit
union, or trust company; or a national banking association or
federal savings and loan association or credit union.
(j) "Financial literacy" means personal financial planning and
education.
(k) "Individual or family development account" or "account"
means
an account established pursuant to under section 4.
(l) "Individual or family development account reserve fund" or
"reserve fund" means an account established and managed by a
fiduciary organization housed at a financial institution. The
reserve fund holds money that will be used to match participant
savings based on a participant savings plan agreement.
(m) "Program" means the individual or family development
account program established in section 3.
(n) "Program site" means a charitable organization exempt from
taxation under section 501(c)(3) or 501(c)(14) of the internal
revenue code that is approved by the director or his or her
designee to implement the individual or family development account
program.
(o) "Qualified home improvement" means the purchase and
installation of any qualified energy star product intended for
residential or noncommercial use that meets or exceeds the
applicable energy star energy efficiency guidelines developed by
the United States environmental protection agency and the United
States department of energy, including, but not limited to,
windows, doors, insulation, high efficiency heating and cooling
equipment, and any appliances such as dishwashers, clothes washers,
and refrigerators.
Sec. 3. (1) The individual or family development account
program is established within the agency. The program shall provide
eligible individuals and families with an opportunity to establish
accounts to be used for education, first-time purchase of a primary
residence, qualified home improvements, or business capitalization
as provided in section 4.
(2) The agency shall establish policies and procedures for the
program taking into consideration the policies and procedures
adopted by the department of human services to implement the
individual development account program under section 57k of the
social welfare act, 1939 PA 280, MCL 400.57k.
(3) In reviewing the qualifications of fiduciary organizations
and program sites, the agency shall consider all of the following
factors:
(a) The not-for-profit status of the organization.
(b) The fiscal accountability of the organization.
(c) The ability of the organization to provide or raise money
for matching contributions.
(d) The significance and quality of proposed auxiliary
services to support the goals of the program.
(e) The availability of a financial literacy program for
account holders.
(f) The ability to maintain and manage necessary program data
for tracking account holders and participants in the program and
for development of reports as required under section 9.
(4) The agency shall select fiduciary organizations to provide
technical assistance and support to program sites and establish and
manage reserve accounts on a not-for-profit basis. In reviewing the
qualifications of fiduciary organizations, the agency shall
consider the ability of the fiduciary organizations to do all of
the following:
(a) Administer 1 or more reserve funds to provide matching
funds
for account holders pursuant according
to participant savings
plan agreements.
(b) Administer any money appropriated by this state for the
purposes of this act.
(c) Collaborate with program sites on a regional basis.
(d) Provide technical assistance and support to program sites
to assist them to effectively administer programs.
(e) Work in conjunction with approved program sites to hold,
manage, and disburse matching funds for accounts as provided in
section 5.
(f) Maintain and manage necessary program data for tracking
account holders and participants in the program and for development
reports as required under section 9.
(5) The agency shall select program sites to administer the
accounts on a not-for-profit basis. In reviewing the qualifications
of program sites, the agency shall consider the ability of the
program site to do all of the following:
(a) Develop and implement participant savings plan agreements
to be used with account holders that include at least all of the
following:
(i) The purpose for which the account holder's account is
established.
(ii) The schedule of deposits that the account holder will make
to the account.
(iii) The agreed-upon amount of matching funds and the projected
date when those matching funds will be provided.
(iv) A plan to provide financial literacy; homeownership
training; education, career, or business planning assistance, if
appropriate; and any other services designed to increase the
independence of the account holder or the account holder's family
through the achievement of the designated purpose of the account.
(b) Develop a partnership with all account holders with whom
the program site has a participant savings plan agreement to assist
the account holder to effectively make financial decisions relating
to the use of the funds available through the account and to offer
support services to maximize the opportunities provided by the
individual or family development account program.
(6) The agency shall work cooperatively with financial
institutions, fiduciary organizations, program sites, and
contributors to implement the programs under this act.
Sec. 4. (1) An individual or family whose household income is
less than or equal to 200% of the federal poverty level for an
individual or for that family's family size may apply to a program
site to establish an individual or family development account.
(2) A program site may approve applications to the extent that
the program site has matching funds available to meet matching
commitments in participant savings plan agreements.
(3) A program site may reject an application made under
subsection (1) if approving the application would result in the
establishment of an individual or family development account by 1
or more of the members of a family that has established an
individual or family development account for the same person for
the same purpose.
(4) A household shall not have more than 1 account for the
same purpose if that purpose is a first-time purchase of a primary
residence or start-up capitalization of a business.
(5) If the program site approves the individual's or the
family's application to establish an individual or family
development account, the individual shall do all of the following:
(a) Establish the individual or family development account
with a financial institution.
(b) Enter into a participant savings plan agreement with a
program site.
(c) Declare, with the approval of the program site, the
purpose for which the account is established.
(d) Any other criteria required by the program site.
(6) An account may be established only to pay qualified
expenses as provided in subsection (7).
(7) An account shall be established for 1 or more of the
following purposes:
(a) To pay educational expenses for the individual account
holder who will be 17 years of age or older when the funds in the
account will be used if the account is an account for educational
purposes.
(b) For the first-time purchase of a primary residence by the
individual account holder if the account is an account for the
purchase of a primary residence.
(c) For start-up capitalization of a business for the
individual account holder who is 18 years of age or older if the
account is an account for capitalization of a business based on a
business plan approved by the program site.
(d) For qualified home improvements.
(8) An account established under this section shall be an
account that requires 2 signatures for withdrawals. The 2 required
signatures shall be those of the account holder and an
administrator of the program site with which the account holder has
a participant savings plan agreement.