As used in this act:

1. "Department" means the Department of Human Services;

2. "Eligible educational institution" means the following:

a.an institution described in 20 U.S.C., Section 1088(a)(1) or 1141(a), as such sections are in effect on November 1, 1998, and

b.an area vocational education school, as defined in 20 U.S.C., Section 2471(4), subparagraph (C) or (D), as such section is in effect on November 1, 1998;

3. "Federal poverty level" means the poverty income guidelines published for a calendar year by the United States Department of Health and Human Services;

4. "Fiduciary organization" means the organization that will serve as an intermediary between an individual account holder and a financial institution holding account funds. Fiduciary organizations may include:

a.not-for-profit organizations described in Section 501(c)(3) of the Internal Revenue Code of 1986, 26 U.S.C., Section 501(c)(3),

b.state or local government agencies submitting an application jointly with another entity described in this paragraph,

c.community development financial institutions as defined pursuant to federal law,

d.for-profit financial institutions and community development corporations,

e.credit unions, or

f.partnerships involving any of the above;

5. "Financial institution" means an organization authorized to do business under state or federal laws relating to financial institutions, and includes but is not limited to a bank, trust company, savings bank, building and loan association, savings and loan company or association, or credit union;

6. "Individual development account" or "IDA" means an account created pursuant to this act exclusively for the purpose of paying the expenses of an eligible individual or family for the purposes set forth in Section 7 of this act;

7. "Operating costs" includes, but is not limited to, administrative costs and costs of training IDA participants in economic and financial literacy and IDA uses;

8. "Postsecondary educational expenses" means:

a.tuition and fees required for the enrollment or attendance of an IDA account holder or immediate family member thereof who is a student at an eligible educational institution, and

b.fees, books, supplies, and equipment required for courses of instruction for an IDA account holder or immediate family member thereof who is a student at an eligible educational institution;

9. "Qualified acquisition costs" means the costs of acquiring, constructing, or reconstructing a residence to be occupied by an IDA account holder or an immediate family member thereof, including, but not limited to, any usual or reasonable settlement, financing, or other closing costs;

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

11. "Qualified business capitalization expenses" means qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan;

12. "Qualified expenditures" means expenditures included in a qualified plan, including but not limited to capital, plant, equipment, working capital, and inventory expenses;

13. "Qualified plan" means a plan for the operation of a business by an IDA account holder or an immediate family member thereof which:

a.is approved by a financial institution, or by a nonprofit microenterprise program having demonstrated business expertise,

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

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

d.is approved by the Department of Human Services; and

14. "Qualified principal residence" means a principal residence within the meaning of Section 1034 of the Internal Revenue Code of 1986, 26 U.S.C., Section 1034, of an IDA account holder or an immediate family member thereof, the qualified acquisition costs of which do not exceed the average area purchase price applicable to such residence, determined in accordance with paragraphs (2) and (3) of Section 143(e) of the Internal Revenue Code, 26 U.S.C., Section 143(e)(2) and (3).

Added by Laws 1998, c. 429, § 4, eff. Nov. 1, 1998.