CHAPTER 28. INDIVIDUAL DEVELOPMENT ACCOUNTS
IC 4-4-28
Chapter 28. Individual Development Accounts
IC 4-4-28-1
"Account" defined
Sec. 1. As used in this chapter, "account" refers to an individualdevelopment account.
As added by P.L.15-1997, SEC.1.
IC 4-4-28-1.5
"Authority" defined
Sec. 1.5. As used in this chapter, "authority" refers to the Indianahousing and community development authority established underIC 5-20-1.
As added by P.L.181-2006, SEC.6.
IC 4-4-28-2
"Community development corporation" defined
Sec. 2. As used in this chapter, "community developmentcorporation" means a private, nonprofit corporation:
(1) whose board of directors consists primarily of communityrepresentatives and business, civic, and community leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community based economic development projects; or
(C) social services;
that primarily benefit low income individuals and communities.
As added by P.L.15-1997, SEC.1. Amended by P.L.4-1999, SEC.1.
IC 4-4-28-3
"Financial institution" defined
Sec. 3. As used in this chapter, "financial institution" means abank, savings association, credit union, or any other institutionregulated under IC 28 or federal law.
As added by P.L.15-1997, SEC.1. Amended by P.L.4-1999, SEC.2.
IC 4-4-28-4
"Fund" defined
Sec. 4. As used in this chapter, "fund" refers to an individualdevelopment account fund established by a community developmentcorporation under section 13 of this chapter.
As added by P.L.15-1997, SEC.1.
IC 4-4-28-5
"Individual development account" defined
Sec. 5. As used in this chapter, "individual development account"means an account in a financial institution administered by acommunity development corporation that allows a qualifyingindividual to deposit money:
(1) to be matched by the state, financial institutions,
corporations, and other entities; and
(2) that will be used by the qualifying individual for one (1) ormore of the following:
(A) To pay for costs (including tuition, laboratory costs,books, computer costs, and other costs associated withattendance) at an accredited postsecondary educationalinstitution or a vocational school that is not a postsecondaryeducational institution, for the individual or for a dependentof the individual.
(B) To pay for the costs (including tuition, laboratory costs,books, computer costs, and other costs) associated with anaccredited or a licensed training program that may lead toemployment for the individual or for a dependent of theindividual.
(C) To purchase a primary residence for the individual or fora dependent of the individual or to reduce the principalamount owed on a primary residence that was purchased bythe individual or a dependent of the individual with moneyfrom an individual development account.
(D) To pay for the rehabilitation (as defined inIC 6-3.1-11-11) of the individual's primary residence.
(E) To begin or to purchase part or all of a business or toexpand an existing small business.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001, SEC.4;P.L.2-2007, SEC.24; P.L.150-2007, SEC.1.
IC 4-4-28-6
"Qualifying individual" defined
Sec. 6. As used in this chapter, "qualifying individual" means anindividual or a member of an individual's household who mayestablish an individual development account because the individual:
(1) receives or is a member of a household that receivesassistance under IC 12-14-2; or
(2) is a member of a household with an annual householdincome that is less than one hundred seventy-five percent(175%) of the federal income poverty level.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001, SEC.5.
IC 4-4-28-7
Establishing account; beneficiaries; limits
Sec. 7. (a) A qualifying individual, including an individual who:
(1) established an individual development account under thischapter before July 1, 2001; and
(2) held the account described in subdivision (1) for less thanfour (4) years;
may establish an account by applying at a community developmentcorporation after June 30, 2001.
(b) At the time of establishing an account under this section, thequalifying individual must name a beneficiary to replace thequalifying individual as the holder of the account if the qualifying
individual dies. If the beneficiary:
(1) is a member of the qualifying individual's family, all fundsin the account remain in the account; and
(2) is not a member of the qualifying individual's family, allfunds in the account provided by the state revert to the state.
The qualifying individual may change the name of the beneficiary atthe qualifying individual's discretion. A beneficiary who becomes theholder of an account under this subsection is subject to this chapterand rules adopted under this chapter regarding withdrawals from theaccount.
(c) Only one (1) member of a qualifying individual's householdmay establish an account.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001, SEC.6.
IC 4-4-28-8
Community development corporation duties
Sec. 8. A community development corporation shall do thefollowing:
(1) Determine whether an individual who wants to establish anaccount is a qualifying individual.
(2) Administer, through a financial institution, and act as trusteefor each account established through the communitydevelopment corporation.
(3) Approve or deny an individual's request to make awithdrawal from the individual's account.
(4) Provide or arrange for training in money management,budgeting, and related topics for each individual whoestablishes an account.
As added by P.L.15-1997, SEC.1.
IC 4-4-28-9
Account deposits
Sec. 9. (a) An individual may deposit money from the individual'searned income into the individual's account.
(b) An individual may deposit an unlimited amount of money intothe individual's account. However, only eight hundred dollars ($800)annually is eligible for a state deposit as provided in section 12 ofthis chapter.
As added by P.L.15-1997, SEC.1. Amended by P.L.150-2007, SEC.2.
IC 4-4-28-10
Number of accounts limited
Sec. 10. (a) Not more than eight hundred (800) accounts may beestablished in the state each state fiscal year beginning before July1, 2009.
(b) Not more than one thousand (1,000) accounts may beestablished in the state each state fiscal year beginning after June 30,2009.
(c) A community development corporation shall use money thatis in an individual development account fund established under
section 13 of this chapter to allow a qualified individual on a waitinglist maintained by the community development corporation toestablish an account.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001, SEC.7;P.L.150-2007, SEC.3.
IC 4-4-28-11
Annual reports
Sec. 11. (a) Each community development corporation shallannually provide the authority with information needed to determine:
(1) the number of accounts administered by the communitydevelopment corporation;
(2) the length of time each account under subdivision (1) hasbeen established; and
(3) the amount of money an individual has deposited into eachaccount under subdivision (1) during the preceding twelve (12)months.
(b) The authority shall use the information provided undersubsection (a) to deposit the correct amount of money into eachaccount as provided in section 12 of this chapter.
As added by P.L.15-1997, SEC.1. Amended by P.L.235-2005,SEC.46; P.L.1-2006, SEC.52; P.L.181-2006, SEC.7; P.L.1-2007,SEC.9.
IC 4-4-28-12
Deposits to accounts; matching contributions; use of federal blockgrant money
Sec. 12. (a) The authority shall allocate, for each account that hasbeen established, for not more than four (4) years, three dollars ($3)for each one dollar ($1) of the first four hundred dollars ($400) anindividual deposited into the individual's account during thepreceding twelve (12) months. However, if the amount appropriatedby the general assembly is insufficient to make the deposits requiredby this section for accounts that have been established, the authorityshall proportionately reduce the amounts allocated to and depositedinto each account. The authority may allocate three dollars ($3) foreach one dollar ($1) of any part of an amount above four hundreddollars ($400) an individual deposited into the individual's accountduring the preceding twelve (12) months. However, the authority'sallocation under this subsection may not exceed two thousand fourhundred dollars ($2,400) for each account described in thissubsection.
(b) Not later than June 30 of each year, the authority shall depositinto each account established under this chapter the appropriateamount of money determined under this section. However, if theindividual deposits the maximum amount allowed under this chapteron or before December 31 of each year, the individual may requestin writing that the authority allocate and deposit the matched fundsunder subsection (a) into the individual's account not later thanforty-five (45) days after the authority receives the written request. (c) Money from a federal block grant program under Title IV-Aof the federal Social Security Act may be used by the state to providemoney under this section for deposit into an account held by anindividual who receives assistance under IC 12-14-2.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001, SEC.8;P.L.235-2005, SEC.47; P.L.1-2006, SEC.53; P.L.181-2006, SEC.8;P.L.1-2007, SEC.10; P.L.150-2007, SEC.4.
IC 4-4-28-13
Individual development account fund
Sec. 13. (a) Each community development corporation shallestablish an individual development account fund to provide moneyto be used to finance additional accounts to be administered by thecommunity development corporation under this chapter and to helppay for the community development corporation's expenses relatedto the administration of accounts.
(b) Each community development corporation shall encourageindividuals, financial institutions, corporations, and other entities tocontribute to the fund. A contributor to the fund may qualify for a taxcredit as provided under IC 6-3.1-18.
(c) Each community development corporation may use up totwenty percent (20%) of the first one hundred thousand dollars($100,000) deposited each calendar year in the fund under subsection(b) to help pay for the community development corporation'sexpenses related to the administration of accounts established underthis chapter. All deposits in the fund under subsection (b) of morethan one hundred thousand dollars ($100,000) during each calendaryear may be used only to fund accounts administered by thecommunity development corporation under this chapter.
(d) A community development corporation may allow anindividual to establish a new account as adequate funding becomesavailable.
(e) Only money from the fund may be used to make the depositdescribed in subsection (f) into an account established under thissection.
(f) The community development corporation shall annuallydeposit at least three dollars ($3) into each account for each onedollar ($1) an individual has deposited into the individual's accountas of June 30.
(g) A community development corporation may not allow aqualifying individual to establish an account if the communitydevelopment corporation does not have adequate funds to depositinto the account under subsection (f).
As added by P.L.15-1997, SEC.1. Amended by P.L.4-1999, SEC.3.
IC 4-4-28-14
Interest rate; tax exemption
Sec. 14. (a) An account must earn interest at a rate that iscompetitive in the county where the account is located.
(b) Interest earned on an account during a taxable year is not
subject to taxation under IC 6-3 or IC 6-5.5.
As added by P.L.15-1997, SEC.1. Amended by P.L.192-2002(ss),SEC.2.
IC 4-4-28-15
Withdrawal of money from account; appeal of denial
Sec. 15. (a) An individual must request and receive authorizationfrom the community development corporation that administers theindividual's account before withdrawing money from the account forany purpose.
(b) An individual who is denied authorization to withdraw moneyunder subsection (a) may appeal the community developmentcorporation's decision to the authority under rules adopted by theauthority under IC 4-22-2.
As added by P.L.15-1997, SEC.1. Amended by P.L.235-2005,SEC.48; P.L.1-2006, SEC.54; P.L.181-2006, SEC.9; P.L.1-2007,SEC.11.
IC 4-4-28-16
Withdrawn money tax exempt; business plan required; rollovers
Sec. 16. (a) Money withdrawn from an individual's account is notsubject to taxation under IC 6-3-1 through IC 6-3-7 if the money isused for at least one (1) of the following:
(1) To pay for costs (including tuition, laboratory costs, books,computer costs, and other costs) at an accredited postsecondaryeducational institution or a vocational school that is not apostsecondary educational institution for the individual or fora dependent of the individual.
(2) To pay for the costs (including tuition, laboratory costs,books, computer costs, and other costs) associated with anaccredited or a licensed training program that may lead toemployment for the individual or for a dependent of theindividual.
(3) To purchase a primary residence for the individual or for adependent of the individual or to reduce the principal amountowed on a primary residence that was purchased by theindividual or a dependent of the individual with money from anindividual development account.
(4) To pay for the rehabilitation (as defined in IC 6-3.1-11-11)of the individual's primary residence.
(5) To begin or to purchase part or all of a business or to expandan existing small business.
(b) At the time of requesting authorization under section 15 of thischapter to withdraw money from an individual's account undersubsection (a)(5), the individual must provide the communitydevelopment corporation with a business plan that:
(1) is approved by:
(A) a financial institution; or
(B) a nonprofit loan fund that has demonstrated fiduciarystability; (2) includes a description of services or goods to be sold, amarketing plan, and projected financial statements; and
(3) may require the individual to obtain the assistance of anexperienced business advisor.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001, SEC.9;P.L.135-2002, SEC.1; P.L.2-2007, SEC.25; P.L.150-2007, SEC.5.
IC 4-4-28-17
Money in account not considered assets
Sec. 17. Money in an account may not be considered:
(1) an asset of an individual when determining the individual'seligibility for assistance under IC 12-14; or
(2) a countable asset (as defined in IC 12-7-2-44.6).
As added by P.L.15-1997, SEC.1.
IC 4-4-28-18
Annual evaluation of accounts; report
Sec. 18. (a) Each community development corporation shallannually:
(1) evaluate the individual development accounts administeredby the community development corporation; and
(2) submit a report containing the evaluation information to theauthority.
(b) Two (2) or more community development corporations maywork together in carrying out the purposes of this chapter.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001,SEC.10; P.L.235-2005, SEC.49; P.L.1-2006, SEC.55; P.L.181-2006,SEC.10; P.L.1-2007, SEC.12.
IC 4-4-28-19
Repealed
(Repealed by P.L.289-2001, SEC.15.)
IC 4-4-28-20
Repealed
(Repealed by P.L.289-2001, SEC.15.)
IC 4-4-28-21
Rules; adoption
Sec. 21. The authority may adopt rules under IC 4-22-2 toimplement this chapter.
As added by P.L.15-1997, SEC.1. Amended by P.L.289-2001,SEC.11; P.L.235-2005, SEC.50; P.L.1-2006, SEC.56; P.L.181-2006,SEC.11; P.L.1-2007, SEC.13.