La. Admin. Code tit. 67 § III-5555

Current through Register Vol. 50, No. 11, November 20, 2024

Section III-5555 - Individual Development Account Program (Effective July 1, 2002)

A. OFS shall establish the Individual Development Account (IDA) Program to provide asset and savings opportunities to low-income families for specific purposes as well as provide financial management education. The agency will contract to develop and administer the IDA Program for low-income families.

B. An IDA is a financial account established by, or on behalf of, an individual eligible for assistance to allow that individual to accumulate funds for specific purposes. Funds deposited into the account may be matched by the agency using Temporary Assistance for Needy Families (TANF) Block Grant funds. The balance of the account cannot exceed $6000, including interest, at any time. Funds deposited by the individual into the account must be derived from earned income. All matching contributions must be deposited in a separate matching fund account and used in accordance with the purposes outlined in §5555. C The program will also provide financial management and organization education to eligible families.

C. Effective July 1, 2006, IDA funds may be used for one or more of the following qualified purposes as determined by the secretary:

1. postsecondary educational expenses paid from an IDA directly to an eligible educational institution;

2. first home purchase-qualified acquisition costs with respect to a qualified principal residence for a qualified first-time homebuyer, if paid from an IDA directly to the persons to whom the amounts are due; and

3. business capitalization-amounts paid from an IDA directly to a business capitalization account which is established in a federally-insured financial institution and is restricted to use solely for qualified business capitalization expenses.

D. Definitions

Eligible Educational Institution-

a. an institution described in Section 481(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1088(a)(1) or 1141(a)), as such sections are in effect on the date of the enactment of this Subsection (enacted August 22, 1996);

b. an area vocational education school (as defined in Subparagraph (C) or (D) of Section 521(4) of the Carl D. Perkins Vocational and Applied Technology Education Act [ 20 U.S.C. 2471(4) ], which is in any state (as defined in Section 521(33) of such Act [20 USCS §521(33)], as such Sections are in effect on the date of the enactment of this Subsection (enacted August 22, 1996).

Post-Secondary Educational Expenses-tuition and fees required for the enrollment or attendance of a student at an eligible education institution, and fees, books, supplies, and equipment required for courses of instruction at an eligible educational institution.

Qualified Acquisition Costs-the costs of acquiring, constructing, or reconstructing a residence. The term includes any usual or reasonable settlement, financing, or other closing costs.

Qualified Business-any business that does not contravene any law or public policy (as determined by the federal Secretary of the Department of Health and Human Services).

Qualified Business Capitalization Expenses-qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan.

Qualified Expenditures-expenditures included in a qualified plan including capital, plant, equipment, working capital, and inventory expenses.

Qualified First-Time Homebuyer-a taxpayer (and if married, the taxpayer's spouse), who has no present ownership interest in a principal residence during the three-year period ending on the date of acquisition of the principle residence to which this Subsection applies. Date of acquisition means the date on which a binding contract to acquire, construct, or reconstruct the principal residence to which this Subparagraph applies is entered into.

Qualified Plan-a business plan which:

a. is approved by a financial institution, or by a nonprofit loan fund having demonstrated fiduciary integrity;

b. includes a description of services or goods to be sold, a marketing plan, and projected financial statements; and

c. may require the eligible individual to obtain the assistance of an experienced entrepreneurial advisor.

Qualified Principal Residence- a principal residence (within the meaning of Section 1034 of the Internal Revenue Code of 1986 [26 USCS §1034], the qualified acquisition costs of which do not exceed 100 percent of the average area purchase price applicable to such residence (determined in accordance with Paragraphs (2) and (3) of Section 143(e) of such Code [26 USCS §143(e)]).

E. These services meet TANF goal 1, to provide assistance to needy families so that children may be cared for in their own homes or in homes of relatives. A family consists of minor children living with custodial parents or caretaker relatives of minor children.

F. Eligibility is limited to low-income families at or below 200 percent of the federal poverty level.

G. Services are considered non-assistance by the agency

La. Admin. Code tit. 67, § III-5555

Promulgated by the Department of Social Services, Office of Family Support, LR 29:45 (January 2003), amended LR 32:2099 (November 2006), LR 34:695 (April 2008).

AUTHORITY NOTE: Promulgated in accordance with 42 U.S.C. 601 et seq.; R.S. 36:474 and 46:231; Act 1098, 2001 Reg. Session; Act 84, 2002 First Extraordinary Session; Act 13, Reg. Session; HB 1, 2006 Reg. Session, Act 18, 2007 Reg. Session.