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 individual
development 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 Indiana
housing and community development authority established under
IC 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 development
corporation" means a private, nonprofit corporation:
(1) whose board of directors consists primarily of community
representatives 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 a
bank, savings association, credit union, or any other institution
regulated 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 individual
development account fund established by a community development
corporation 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 a
community development corporation that allows a qualifying
individual 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) or
more of the following:
(A) To pay for costs (including tuition, laboratory costs,
books, computer costs, and other costs associated with
attendance) at an accredited postsecondary educational
institution or a vocational school that is not a postsecondary
educational institution, for the individual or for a dependent
of the individual.
(B) To pay for the costs (including tuition, laboratory costs,
books, computer costs, and other costs) associated with an
accredited or a licensed training program that may lead to
employment for the individual or for a dependent of the
individual.
(C) To purchase a primary residence for the individual or for
a dependent of the individual or to reduce the principal
amount owed on a primary residence that was purchased by
the individual or a dependent of the individual with money
from an individual development account.
(D) To pay for the rehabilitation (as defined in
IC 6-3.1-11-11) of the individual's primary residence.
(E) To begin or to purchase part or all of a business or to
expand 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 an
individual or a member of an individual's household who may
establish an individual development account because the individual:
(1) receives or is a member of a household that receives
assistance under IC 12-14-2; or
(2) is a member of a household with an annual household
income 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 this
chapter before July 1, 2001; and
(2) held the account described in subdivision (1) for less than
four (4) years;
may establish an account by applying at a community development
corporation after June 30, 2001.
(b) At the time of establishing an account under this section, the
qualifying individual must name a beneficiary to replace the
qualifying 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 funds
in the account remain in the account; and
(2) is not a member of the qualifying individual's family, all
funds in the account provided by the state revert to the state.
The qualifying individual may change the name of the beneficiary at
the qualifying individual's discretion. A beneficiary who becomes the
holder of an account under this subsection is subject to this chapter
and rules adopted under this chapter regarding withdrawals from the
account.
(c) Only one (1) member of a qualifying individual's household
may 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 the
following:
(1) Determine whether an individual who wants to establish an
account is a qualifying individual.
(2) Administer, through a financial institution, and act as trustee
for each account established through the community
development corporation.
(3) Approve or deny an individual's request to make a
withdrawal from the individual's account.
(4) Provide or arrange for training in money management,
budgeting, and related topics for each individual who
establishes 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's
earned income into the individual's account.
(b) An individual may deposit an unlimited amount of money into
the individual's account. However, only eight hundred dollars ($800)
annually is eligible for a state deposit as provided in section 12 of
this 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 be
established in the state each state fiscal year beginning before July
1, 2009.
(b) Not more than one thousand (1,000) accounts may be
established in the state each state fiscal year beginning after June 30,
2009.
(c) A community development corporation shall use money that
is in an individual development account fund established under
section 13 of this chapter to allow a qualified individual on a waiting
list maintained by the community development corporation to
establish 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 shall
annually provide the authority with information needed to determine:
(1) the number of accounts administered by the community
development corporation;
(2) the length of time each account under subdivision (1) has
been established; and
(3) the amount of money an individual has deposited into each
account under subdivision (1) during the preceding twelve (12)
months.
(b) The authority shall use the information provided under
subsection (a) to deposit the correct amount of money into each
account 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 block
grant money
Sec. 12. (a) The authority shall allocate, for each account that has
been established, for not more than four (4) years, three dollars ($3)
for each one dollar ($1) of the first four hundred dollars ($400) an
individual deposited into the individual's account during the
preceding twelve (12) months. However, if the amount appropriated
by the general assembly is insufficient to make the deposits required
by this section for accounts that have been established, the authority
shall proportionately reduce the amounts allocated to and deposited
into each account. The authority may allocate three dollars ($3) for
each one dollar ($1) of any part of an amount above four hundred
dollars ($400) an individual deposited into the individual's account
during the preceding twelve (12) months. However, the authority's
allocation under this subsection may not exceed two thousand four
hundred dollars ($2,400) for each account described in this
subsection.
(b) Not later than June 30 of each year, the authority shall deposit
into each account established under this chapter the appropriate
amount of money determined under this section. However, if the
individual deposits the maximum amount allowed under this chapter
on or before December 31 of each year, the individual may request
in writing that the authority allocate and deposit the matched funds
under subsection (a) into the individual's account not later than
forty-five (45) days after the authority receives the written request.
(c) Money from a federal block grant program under Title IV-A
of the federal Social Security Act may be used by the state to provide
money under this section for deposit into an account held by an
individual 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 shall
establish an individual development account fund to provide money
to be used to finance additional accounts to be administered by the
community development corporation under this chapter and to help
pay for the community development corporation's expenses related
to the administration of accounts.
(b) Each community development corporation shall encourage
individuals, financial institutions, corporations, and other entities to
contribute to the fund. A contributor to the fund may qualify for a tax
credit as provided under IC 6-3.1-18.
(c) Each community development corporation may use up to
twenty 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's
expenses related to the administration of accounts established under
this chapter. All deposits in the fund under subsection (b) of more
than one hundred thousand dollars ($100,000) during each calendar
year may be used only to fund accounts administered by the
community development corporation under this chapter.
(d) A community development corporation may allow an
individual to establish a new account as adequate funding becomes
available.
(e) Only money from the fund may be used to make the deposit
described in subsection (f) into an account established under this
section.
(f) The community development corporation shall annually
deposit at least three dollars ($3) into each account for each one
dollar ($1) an individual has deposited into the individual's account
as of June 30.
(g) A community development corporation may not allow a
qualifying individual to establish an account if the community
development corporation does not have adequate funds to deposit
into 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 is
competitive 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 authorization
from the community development corporation that administers the
individual's account before withdrawing money from the account for
any purpose.
(b) An individual who is denied authorization to withdraw money
under subsection (a) may appeal the community development
corporation's decision to the authority under rules adopted by the
authority 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 not
subject to taxation under IC 6-3-1 through IC 6-3-7 if the money is
used 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 postsecondary
educational institution or a vocational school that is not a
postsecondary educational institution for the individual or for
a dependent of the individual.
(2) To pay for the costs (including tuition, laboratory costs,
books, computer costs, and other costs) associated with an
accredited or a licensed training program that may lead to
employment for the individual or for a dependent of the
individual.
(3) To purchase a primary residence for the individual or for a
dependent of the individual or to reduce the principal amount
owed on a primary residence that was purchased by the
individual or a dependent of the individual with money from an
individual 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 expand
an existing small business.
(b) At the time of requesting authorization under section 15 of this
chapter to withdraw money from an individual's account under
subsection (a)(5), the individual must provide the community
development corporation with a business plan that:
(1) is approved by:
(A) a financial institution; or
(B) a nonprofit loan fund that has demonstrated fiduciary
stability;
(2) includes a description of services or goods to be sold, a
marketing plan, and projected financial statements; and
(3) may require the individual to obtain the assistance of an
experienced 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's
eligibility 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 shall
annually:
(1) evaluate the individual development accounts administered
by the community development corporation; and
(2) submit a report containing the evaluation information to the
authority.
(b) Two (2) or more community development corporations may
work 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 to
implement 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.
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 individual
development 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 Indiana
housing and community development authority established under
IC 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 development
corporation" means a private, nonprofit corporation:
(1) whose board of directors consists primarily of community
representatives 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 a
bank, savings association, credit union, or any other institution
regulated 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 individual
development account fund established by a community development
corporation 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 a
community development corporation that allows a qualifying
individual 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) or
more of the following:
(A) To pay for costs (including tuition, laboratory costs,
books, computer costs, and other costs associated with
attendance) at an accredited postsecondary educational
institution or a vocational school that is not a postsecondary
educational institution, for the individual or for a dependent
of the individual.
(B) To pay for the costs (including tuition, laboratory costs,
books, computer costs, and other costs) associated with an
accredited or a licensed training program that may lead to
employment for the individual or for a dependent of the
individual.
(C) To purchase a primary residence for the individual or for
a dependent of the individual or to reduce the principal
amount owed on a primary residence that was purchased by
the individual or a dependent of the individual with money
from an individual development account.
(D) To pay for the rehabilitation (as defined in
IC 6-3.1-11-11) of the individual's primary residence.
(E) To begin or to purchase part or all of a business or to
expand 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 an
individual or a member of an individual's household who may
establish an individual development account because the individual:
(1) receives or is a member of a household that receives
assistance under IC 12-14-2; or
(2) is a member of a household with an annual household
income 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 this
chapter before July 1, 2001; and
(2) held the account described in subdivision (1) for less than
four (4) years;
may establish an account by applying at a community development
corporation after June 30, 2001.
(b) At the time of establishing an account under this section, the
qualifying individual must name a beneficiary to replace the
qualifying 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 funds
in the account remain in the account; and
(2) is not a member of the qualifying individual's family, all
funds in the account provided by the state revert to the state.
The qualifying individual may change the name of the beneficiary at
the qualifying individual's discretion. A beneficiary who becomes the
holder of an account under this subsection is subject to this chapter
and rules adopted under this chapter regarding withdrawals from the
account.
(c) Only one (1) member of a qualifying individual's household
may 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 the
following:
(1) Determine whether an individual who wants to establish an
account is a qualifying individual.
(2) Administer, through a financial institution, and act as trustee
for each account established through the community
development corporation.
(3) Approve or deny an individual's request to make a
withdrawal from the individual's account.
(4) Provide or arrange for training in money management,
budgeting, and related topics for each individual who
establishes 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's
earned income into the individual's account.
(b) An individual may deposit an unlimited amount of money into
the individual's account. However, only eight hundred dollars ($800)
annually is eligible for a state deposit as provided in section 12 of
this 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 be
established in the state each state fiscal year beginning before July
1, 2009.
(b) Not more than one thousand (1,000) accounts may be
established in the state each state fiscal year beginning after June 30,
2009.
(c) A community development corporation shall use money that
is in an individual development account fund established under
section 13 of this chapter to allow a qualified individual on a waiting
list maintained by the community development corporation to
establish 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 shall
annually provide the authority with information needed to determine:
(1) the number of accounts administered by the community
development corporation;
(2) the length of time each account under subdivision (1) has
been established; and
(3) the amount of money an individual has deposited into each
account under subdivision (1) during the preceding twelve (12)
months.
(b) The authority shall use the information provided under
subsection (a) to deposit the correct amount of money into each
account 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 block
grant money
Sec. 12. (a) The authority shall allocate, for each account that has
been established, for not more than four (4) years, three dollars ($3)
for each one dollar ($1) of the first four hundred dollars ($400) an
individual deposited into the individual's account during the
preceding twelve (12) months. However, if the amount appropriated
by the general assembly is insufficient to make the deposits required
by this section for accounts that have been established, the authority
shall proportionately reduce the amounts allocated to and deposited
into each account. The authority may allocate three dollars ($3) for
each one dollar ($1) of any part of an amount above four hundred
dollars ($400) an individual deposited into the individual's account
during the preceding twelve (12) months. However, the authority's
allocation under this subsection may not exceed two thousand four
hundred dollars ($2,400) for each account described in this
subsection.
(b) Not later than June 30 of each year, the authority shall deposit
into each account established under this chapter the appropriate
amount of money determined under this section. However, if the
individual deposits the maximum amount allowed under this chapter
on or before December 31 of each year, the individual may request
in writing that the authority allocate and deposit the matched funds
under subsection (a) into the individual's account not later than
forty-five (45) days after the authority receives the written request.
(c) Money from a federal block grant program under Title IV-A
of the federal Social Security Act may be used by the state to provide
money under this section for deposit into an account held by an
individual 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 shall
establish an individual development account fund to provide money
to be used to finance additional accounts to be administered by the
community development corporation under this chapter and to help
pay for the community development corporation's expenses related
to the administration of accounts.
(b) Each community development corporation shall encourage
individuals, financial institutions, corporations, and other entities to
contribute to the fund. A contributor to the fund may qualify for a tax
credit as provided under IC 6-3.1-18.
(c) Each community development corporation may use up to
twenty 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's
expenses related to the administration of accounts established under
this chapter. All deposits in the fund under subsection (b) of more
than one hundred thousand dollars ($100,000) during each calendar
year may be used only to fund accounts administered by the
community development corporation under this chapter.
(d) A community development corporation may allow an
individual to establish a new account as adequate funding becomes
available.
(e) Only money from the fund may be used to make the deposit
described in subsection (f) into an account established under this
section.
(f) The community development corporation shall annually
deposit at least three dollars ($3) into each account for each one
dollar ($1) an individual has deposited into the individual's account
as of June 30.
(g) A community development corporation may not allow a
qualifying individual to establish an account if the community
development corporation does not have adequate funds to deposit
into 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 is
competitive 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 authorization
from the community development corporation that administers the
individual's account before withdrawing money from the account for
any purpose.
(b) An individual who is denied authorization to withdraw money
under subsection (a) may appeal the community development
corporation's decision to the authority under rules adopted by the
authority 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 not
subject to taxation under IC 6-3-1 through IC 6-3-7 if the money is
used 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 postsecondary
educational institution or a vocational school that is not a
postsecondary educational institution for the individual or for
a dependent of the individual.
(2) To pay for the costs (including tuition, laboratory costs,
books, computer costs, and other costs) associated with an
accredited or a licensed training program that may lead to
employment for the individual or for a dependent of the
individual.
(3) To purchase a primary residence for the individual or for a
dependent of the individual or to reduce the principal amount
owed on a primary residence that was purchased by the
individual or a dependent of the individual with money from an
individual 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 expand
an existing small business.
(b) At the time of requesting authorization under section 15 of this
chapter to withdraw money from an individual's account under
subsection (a)(5), the individual must provide the community
development corporation with a business plan that:
(1) is approved by:
(A) a financial institution; or
(B) a nonprofit loan fund that has demonstrated fiduciary
stability;
(2) includes a description of services or goods to be sold, a
marketing plan, and projected financial statements; and
(3) may require the individual to obtain the assistance of an
experienced 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's
eligibility 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 shall
annually:
(1) evaluate the individual development accounts administered
by the community development corporation; and
(2) submit a report containing the evaluation information to the
authority.
(b) Two (2) or more community development corporations may
work 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 to
implement 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.
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 individual
development 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 Indiana
housing and community development authority established under
IC 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 development
corporation" means a private, nonprofit corporation:
(1) whose board of directors consists primarily of community
representatives 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 a
bank, savings association, credit union, or any other institution
regulated 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 individual
development account fund established by a community development
corporation 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 a
community development corporation that allows a qualifying
individual 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) or
more of the following:
(A) To pay for costs (including tuition, laboratory costs,
books, computer costs, and other costs associated with
attendance) at an accredited postsecondary educational
institution or a vocational school that is not a postsecondary
educational institution, for the individual or for a dependent
of the individual.
(B) To pay for the costs (including tuition, laboratory costs,
books, computer costs, and other costs) associated with an
accredited or a licensed training program that may lead to
employment for the individual or for a dependent of the
individual.
(C) To purchase a primary residence for the individual or for
a dependent of the individual or to reduce the principal
amount owed on a primary residence that was purchased by
the individual or a dependent of the individual with money
from an individual development account.
(D) To pay for the rehabilitation (as defined in
IC 6-3.1-11-11) of the individual's primary residence.
(E) To begin or to purchase part or all of a business or to
expand 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 an
individual or a member of an individual's household who may
establish an individual development account because the individual:
(1) receives or is a member of a household that receives
assistance under IC 12-14-2; or
(2) is a member of a household with an annual household
income 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 this
chapter before July 1, 2001; and
(2) held the account described in subdivision (1) for less than
four (4) years;
may establish an account by applying at a community development
corporation after June 30, 2001.
(b) At the time of establishing an account under this section, the
qualifying individual must name a beneficiary to replace the
qualifying 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 funds
in the account remain in the account; and
(2) is not a member of the qualifying individual's family, all
funds in the account provided by the state revert to the state.
The qualifying individual may change the name of the beneficiary at
the qualifying individual's discretion. A beneficiary who becomes the
holder of an account under this subsection is subject to this chapter
and rules adopted under this chapter regarding withdrawals from the
account.
(c) Only one (1) member of a qualifying individual's household
may 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 the
following:
(1) Determine whether an individual who wants to establish an
account is a qualifying individual.
(2) Administer, through a financial institution, and act as trustee
for each account established through the community
development corporation.
(3) Approve or deny an individual's request to make a
withdrawal from the individual's account.
(4) Provide or arrange for training in money management,
budgeting, and related topics for each individual who
establishes 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's
earned income into the individual's account.
(b) An individual may deposit an unlimited amount of money into
the individual's account. However, only eight hundred dollars ($800)
annually is eligible for a state deposit as provided in section 12 of
this 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 be
established in the state each state fiscal year beginning before July
1, 2009.
(b) Not more than one thousand (1,000) accounts may be
established in the state each state fiscal year beginning after June 30,
2009.
(c) A community development corporation shall use money that
is in an individual development account fund established under
section 13 of this chapter to allow a qualified individual on a waiting
list maintained by the community development corporation to
establish 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 shall
annually provide the authority with information needed to determine:
(1) the number of accounts administered by the community
development corporation;
(2) the length of time each account under subdivision (1) has
been established; and
(3) the amount of money an individual has deposited into each
account under subdivision (1) during the preceding twelve (12)
months.
(b) The authority shall use the information provided under
subsection (a) to deposit the correct amount of money into each
account 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 block
grant money
Sec. 12. (a) The authority shall allocate, for each account that has
been established, for not more than four (4) years, three dollars ($3)
for each one dollar ($1) of the first four hundred dollars ($400) an
individual deposited into the individual's account during the
preceding twelve (12) months. However, if the amount appropriated
by the general assembly is insufficient to make the deposits required
by this section for accounts that have been established, the authority
shall proportionately reduce the amounts allocated to and deposited
into each account. The authority may allocate three dollars ($3) for
each one dollar ($1) of any part of an amount above four hundred
dollars ($400) an individual deposited into the individual's account
during the preceding twelve (12) months. However, the authority's
allocation under this subsection may not exceed two thousand four
hundred dollars ($2,400) for each account described in this
subsection.
(b) Not later than June 30 of each year, the authority shall deposit
into each account established under this chapter the appropriate
amount of money determined under this section. However, if the
individual deposits the maximum amount allowed under this chapter
on or before December 31 of each year, the individual may request
in writing that the authority allocate and deposit the matched funds
under subsection (a) into the individual's account not later than
forty-five (45) days after the authority receives the written request.
(c) Money from a federal block grant program under Title IV-A
of the federal Social Security Act may be used by the state to provide
money under this section for deposit into an account held by an
individual 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 shall
establish an individual development account fund to provide money
to be used to finance additional accounts to be administered by the
community development corporation under this chapter and to help
pay for the community development corporation's expenses related
to the administration of accounts.
(b) Each community development corporation shall encourage
individuals, financial institutions, corporations, and other entities to
contribute to the fund. A contributor to the fund may qualify for a tax
credit as provided under IC 6-3.1-18.
(c) Each community development corporation may use up to
twenty 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's
expenses related to the administration of accounts established under
this chapter. All deposits in the fund under subsection (b) of more
than one hundred thousand dollars ($100,000) during each calendar
year may be used only to fund accounts administered by the
community development corporation under this chapter.
(d) A community development corporation may allow an
individual to establish a new account as adequate funding becomes
available.
(e) Only money from the fund may be used to make the deposit
described in subsection (f) into an account established under this
section.
(f) The community development corporation shall annually
deposit at least three dollars ($3) into each account for each one
dollar ($1) an individual has deposited into the individual's account
as of June 30.
(g) A community development corporation may not allow a
qualifying individual to establish an account if the community
development corporation does not have adequate funds to deposit
into 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 is
competitive 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 authorization
from the community development corporation that administers the
individual's account before withdrawing money from the account for
any purpose.
(b) An individual who is denied authorization to withdraw money
under subsection (a) may appeal the community development
corporation's decision to the authority under rules adopted by the
authority 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 not
subject to taxation under IC 6-3-1 through IC 6-3-7 if the money is
used 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 postsecondary
educational institution or a vocational school that is not a
postsecondary educational institution for the individual or for
a dependent of the individual.
(2) To pay for the costs (including tuition, laboratory costs,
books, computer costs, and other costs) associated with an
accredited or a licensed training program that may lead to
employment for the individual or for a dependent of the
individual.
(3) To purchase a primary residence for the individual or for a
dependent of the individual or to reduce the principal amount
owed on a primary residence that was purchased by the
individual or a dependent of the individual with money from an
individual 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 expand
an existing small business.
(b) At the time of requesting authorization under section 15 of this
chapter to withdraw money from an individual's account under
subsection (a)(5), the individual must provide the community
development corporation with a business plan that:
(1) is approved by:
(A) a financial institution; or
(B) a nonprofit loan fund that has demonstrated fiduciary
stability;
(2) includes a description of services or goods to be sold, a
marketing plan, and projected financial statements; and
(3) may require the individual to obtain the assistance of an
experienced 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's
eligibility 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 shall
annually:
(1) evaluate the individual development accounts administered
by the community development corporation; and
(2) submit a report containing the evaluation information to the
authority.
(b) Two (2) or more community development corporations may
work 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 to
implement 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.
