[§257-1]  Definitions.  As used in thischapter:

"Eligible educational institution"means:

(1)  An institution described in sections 481(a)(1) or1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1088(a)(1) or 1141(a)),as such sections are in effect on June 28, 1999; and

(2)  An area vocational education school defined insubparagraph (C) or (D) of section 521(4) of the Carl D. Perkins Vocational andApplied Technology Education Act (20 U.S.C. 2471(4)), as such sections are ineffect on June 28, 1999.

"Fiduciary organization" means anorganization that serves as an intermediary between an individual accountholder and the financial institution holding the individual's individualdevelopment account funds.  Fiduciary organizations may include:

(1)  One or more not-for-profit organizationsdescribed in section 501(c)(3) of the Internal Revenue Code and exempt fromtaxation under section 501(a) of the Code; or

(2)  State or local government agencies submitting anapplication jointly with another organization.

Nothing in this definition shall be construedas preventing an organization described in paragraph (2) from cooperating witha financial institution or for-profit community development corporation tocarry out the purposes of this chapter.

The fiduciary organization's responsibilitiesmay include:

(1)  Marketing participation;

(2)  Soliciting matching contributions;

(3)  Counseling program participants; and

(4)  Conducting required verification and complianceactivities.

"Financial institution" means anorganization authorized to do business pursuant to chapter 412, or underfederal laws relating to financial institutions, and includes a bank, trustcompany, savings bank, building and loan association, savings and loan companyor association, and credit union.

"Household" means adults related byblood, marriage, or adoption, or who are unrelated but have maintained a stablefamily relationship together over a period of time, and individuals undereighteen years of age related to the above adults by marriage, blood, oradoption, who are living together.  Living together refers to domicile asevidence by the parties' intent to maintain a home for their family and doesnot include a temporary visit.

"Individual development account"means an optional, interest bearing, subsidized, tax-benefitted account usedexclusively for the purpose of paying the qualified expenditure of an eligibleindividual as determined by the fiduciary organization.

"Post-secondary educational expenses"means:

(1)  Tuition and fees required for the enrollment orattendance of a student at an eligible educational institution; and

(2)  Fees, books, supplies, and equipment required forcourses of instruction at an eligible educational institution.

"Qualified acquisition costs" meansthe costs of acquiring, constructing, or reconstructing a residence and shallinclude any usual or reasonable settlement, financing, or other closing costs.

"Qualified business" means anybusiness that does not contravene any law or public policy.

"Qualified business capitalizationexpenses" means qualified expenditures for the capitalization of aqualified business pursuant to a qualified plan.

"Qualified expenditures" means anexpense as determined by a fiduciary organization, which may include but not belimited to:

(1)  Costs associated with first homeownership;

(2)  Post-secondary education;

(3)  Vocational training; and

(4)  Small or micro-business capitalization.

"Qualified plan" means a businessplan or a plan to use a business asset purchased, that:

(1)  Is approved by a financial institution, amicro-enterprise development organization, or a nonprofit loan fund havingdemonstrated fiduciary integrity;

(2)  Includes a description of services or goods to besold, a marketing plan, and projected financial statements; and

(3)  May require the eligible individual to obtain theassistance of an experienced entrepreneurial advisor.

"Qualified principal residence" meansa principal residence (within the meaning of section 1034 of the Internal RevenueCode of 1986), the qualified acquisition costs of which do not exceed onehundred per cent of the average area purchase price applicable to suchresidence (determined in accordance with paragraphs (2) and (3) of section143(e) of the Code). [ L 1999, c 160, pt of §25]

 

Revision Note

 

  "June 28,1999" substituted for "the date of the enactment of thischapter".