Senate Bill sb0350
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Florida Senate - 2001 SB 350
By Senator Dawson
30-1-01
1 A bill to be entitled
2 An act relating to individual development
3 accounts; providing purposes; providing
4 definitions; requiring the Department of
5 Children and Family Services to amend the
6 Temporary Assistance for Needy Families State
7 Plan to provide for use of funds for individual
8 development accounts; specifying criteria and
9 requirements for contributions to such
10 accounts; specifying purposes for use of such
11 accounts; providing for procedures for
12 withdrawals from such accounts; specifying
13 certain organizations to act as fiduciary
14 organizations for certain purposes; providing
15 for penalties for withdrawal of moneys for
16 certain purposes; providing for resolution of
17 certain disputes; providing for transfer of
18 ownership of such accounts under certain
19 circumstances; providing for establishment of
20 such accounts by certain financial institutions
21 under certain circumstances; providing
22 requirements; providing that account funds and
23 matching funds do not affect certain program
24 eligibility; providing an effective date.
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26 Be It Enacted by the Legislature of the State of Florida:
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28 Section 1. (1) The purpose of this act is to provide
29 for the establishment of individual development accounts that
30 can provide families having limited means an opportunity to
31 accumulate assets and to facilitate and mobilize savings; to
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Florida Senate - 2001 SB 350
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1 promote education, homeownership, and microenterprise
2 development; and help to stabilize families and build
3 communities. This section implements the provisions of s.
4 404(h) of the Social Security Act, as amended, 42 U.S.C. s.
5 604(h), related to individual development accounts. Nothing
6 in this section is intended to conflict with the provisions of
7 federal law.
8 (2) As used in this section, the term:
9 (a) "Individual development account" means an account
10 established exclusively to pay the qualified expenses of an
11 eligible individual or family. The account is a trust created
12 or organized in this state and funded through periodic
13 contributions by the establishing individual which are matched
14 by or through a qualified entity for a qualified purpose.
15 (b) "Qualified entity" means:
16 1. A not-for-profit organization described in s.
17 501(c)(3) of the Internal Revenue Code of 1986, as amended,
18 and exempt from taxation under s. 501(a) of such code; or
19 2. A state or local government agency acting in
20 cooperation with an organization described in subparagraph 1.
21 For purposes of this section, a regional workforce board is a
22 government agency.
23 (c) "Financial institution" means an organization
24 authorized to do business under state or federal laws relating
25 to financial institutions, and includes a bank, trust company,
26 savings bank, building and loan association, savings and loan
27 company or association, and credit union.
28 (d) "Eligible educational institution" means:
29 1. An institution described in s. 481(a)(1) or s.
30 1201(a) of the Higher Education Act of 1965, 20 U.S.C. s.
31 1088(a)(1) or s. 1141(a), as such sections are in effect on
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Florida Senate - 2001 SB 350
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1 the date of the enactment of the Personal Responsibility and
2 Work Opportunity Reconciliation Act of 1996, Pub. L. No.
3 104-193.
4 2. An area vocational education school, as defined in
5 s. 521(4)(C) or (D) of the Carl D. Perkins Vocational and
6 Applied Technology Education Act, 20 U.S.C. s. 2471(4), in
7 this state, as such sections are in effect on the date of the
8 enactment of the Personal Responsibility and Work Opportunity
9 Reconciliation Act of 1996, Pub. L. No. 104-193.
10 (e) "Postsecondary educational expenses" means:
11 1. Tuition and fees required for the enrollment or
12 attendance of a student at an eligible educational
13 institution.
14 2. Fees, books, supplies, and equipment required for
15 courses of instruction at an eligible educational institution.
16 (f) "Qualified acquisition costs" means the costs of
17 acquiring, constructing, or reconstructing a residence. The
18 term includes any usual or reasonable settlement, financing,
19 or other closing costs.
20 (g) "Qualified business" means any business that does
21 not contravene any law or public policy.
22 (h) "Qualified business capitalization expenses" means
23 qualified expenditures for the capitalization of a qualified
24 business pursuant to a qualified plan.
25 (i) "Qualified expenditures" means expenditures
26 included in a qualified plan, including capital, plant,
27 equipment, working capital, and inventory expenses.
28 (j)1. "Qualified first-time homebuyer" means a
29 taxpayer and, if married, the taxpayer's spouse, who has no
30 present ownership interest in a principal residence during the
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Florida Senate - 2001 SB 350
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1 3-year period ending on the date of acquisition of the
2 principal residence.
3 2. "Date of acquisition" means the date on which a
4 binding contract to acquire, construct, or reconstruct the
5 principal residence is entered into.
6 (k) "Qualified plan" means a business plan or a plan
7 to use a business asset purchased, which:
8 1. Is approved by a financial institution, a
9 microenterprise development organization, or a nonprofit loan
10 fund having demonstrated fiduciary integrity.
11 2. Includes a description of services or goods to be
12 sold, a marketing plan, and projected financial statements.
13 3. May require the eligible individual to obtain the
14 assistance of an experienced entrepreneurial advisor.
15 (l) "Qualified principal residence" means a principal
16 residence, within the meaning of s. 1034 of the Internal
17 Revenue Code of 1986, as amended, the qualified acquisition
18 costs of which do not exceed 100 percent of the average area
19 purchase price applicable to such residence, determined in
20 accordance with s. 143(e)(2) and (3) of that code.
21 (3) The Department of Children and Family Services
22 shall amend the Temporary Assistance for Needy Families State
23 Plan which was submitted in accordance with s. 402 of the
24 Social Security Act, as amended, 42 U.S.C. s. 602, to provide
25 for the use of funds for individual development accounts in
26 accordance with this section.
27 (4)(a) Any family subject to time limits and fully
28 complying with work requirements of the WAGES Program that
29 enters into an agreement with an approved fiduciary
30 organization is eligible to participate in an individual
31 development account.
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1 (b) Contributions to the individual development
2 account by an individual may be derived only from earned
3 income, as defined in s. 911(d)(2) of the Internal Revenue
4 Code of 1986, as amended.
5 (c) The individual or family must enter into an
6 individual development account agreement with a certified
7 fiduciary organization as described in subsection (7).
8 (d) Eligible participants may receive matching funds
9 for contributions to the individual development account,
10 pursuant to the strategic plan for workforce development. When
11 not restricted to the contrary, matching funds may be paid
12 from state and federal funds under the control of the regional
13 workforce board, from local agencies, or from private
14 donations.
15 (e) Eligible participants may receive bonus payments
16 for program compliance, to the extent provided in the
17 strategic plan for workforce development and the plan of the
18 regional workforce board. Such bonus payments may provide for
19 a matching proportion higher than that of matching funds
20 described in paragraph (d).
21 (5) Individual development accounts may be available
22 once the family no longer receives cash assistance for any of
23 the following uses:
24 (a) Postsecondary educational expenses paid from an
25 individual development account directly to an eligible
26 educational institution;
27 (b) Qualified acquisition costs with respect to a
28 qualified principal residence for a qualified first-time
29 homebuyer, if paid from an individual development account
30 directly to the persons to whom the amounts are due; or
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1 (c) Amounts paid from an individual development
2 account directly to a business capitalization account that is
3 established in a federally insured financial institution and
4 is restricted to use solely for qualified business
5 capitalization.
6 (6) Workforce Florida, Inc., shall establish policies
7 and procedures that are necessary to ensure that funds held in
8 an individual development account are not withdrawn except for
9 one or more of the qualified purposes described in this
10 section.
11 (7) Fiduciary organizations shall be the regional
12 workforce board or other community-based organizations
13 designated by the regional workforce board to serve as
14 intermediaries between individual account holders and
15 financial institutions holding accounts. Responsibilities of
16 such fiduciary organizations may include marketing
17 participation, soliciting matching contributions, counseling
18 program participants, and conducting verification and
19 compliance activities.
20 (8) Workforce Florida, Inc., shall establish penalties
21 and procedures to enforce compliance, with penalties for the
22 withdrawal of moneys from individual development accounts
23 under false pretenses or for the use of such moneys for other
24 than approved purposes. The fiduciary organization shall make
25 arrangements with the financial institution to impose any
26 penalties or loss of matching funds as specified by Workforce
27 Florida, Inc., on moneys withdrawn. Workforce Florida, Inc.,
28 may specify conditions under which an account must be closed.
29 (9) A fiduciary organization shall establish a
30 grievance committee and a procedure for hearing, reviewing,
31 and responding in writing to any grievance filed by a holder
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1 of an individual development account who disputes a decision
2 of the operating organization that a withdrawal is subject to
3 penalty.
4 (10) Upon an account holder's death, his or her
5 account may be transferred to the ownership of a contingent
6 beneficiary. An account holder shall name contingent
7 beneficiaries at the time the account is established and may
8 change such beneficiaries at any time.
9 (11) Financial institutions approved by Workforce
10 Florida, Inc., may establish individual development accounts
11 pursuant to this section. A financial institution shall
12 certify to the local WAGES coalition, on forms prescribed by
13 Workforce Florida, Inc., and accompanied by any documentation
14 required by Workforce Florida, Inc., that such accounts have
15 been established and that deposits have been made on behalf of
16 the account holder. A financial institution establishing an
17 individual development account shall:
18 (a) Keep the account in the name of the account
19 holder.
20 (b) Subject to the indicated conditions, permit
21 deposits to be made into the account:
22 1. By the account holder; or
23 2. By means of contributions made on behalf of the
24 account holder. Such deposits may include moneys to match the
25 account holder's deposits.
26 (c) Require the account to earn the market rate of
27 interest.
28 (d) Permit the account holder to withdraw moneys from
29 the account for any permissible use, pursuant to procedures
30 adopted by Workforce Florida, Inc.
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1 (12) In accordance with s. 404(h)(4) of the Social
2 Security Act, as amended, 42 U.S.C. s. 604(h)(4), and
3 notwithstanding any other provision of law, other than the
4 Internal Revenue Code of 1986, as amended, funds in an
5 individual development account, including interest accruing in
6 such account, shall be disregarded in determining eligibility
7 for any federal or state program. Matching contributions paid
8 directly into such account and contributions by an individual
9 from earnings shall similarly be disregarded in determining
10 eligibility for any state or federal program.
11 Section 2. This act shall take effect October 1, 2001.
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14 SENATE SUMMARY
15 Provides for the establishment of individual development
accounts for families of limited means. Provides purposes
16 of such accounts. Provides definitions. Requires the
Department of Children and Family Services to amend the
17 Temporary Assistance for Needy Families State Plan to
provide for using funds for individual development
18 accounts. Specifies the criteria and requirements for
contributions to such accounts. Specifies the permissible
19 uses of such accounts. Provides procedures for
withdrawals from the accounts. Specifies certain
20 organizations to act as fiduciary organizations for
certain purposes. Provides penalties for withdrawal of
21 moneys for certain purposes. Provides for the resolution
of disputes. Provides for transfer of the ownership of
22 such accounts in certain circumstances. Provides for the
establishment of such accounts by certain financial
23 institutions in certain circumstances. Provides
requirements. Provides that account funds and matching
24 funds do not affect eligibility for certain programs.
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