House Study Bill 227 HOUSE FILE BY (PROPOSED COMMITTEE ON HUMAN RESOURCES BILL BY CHAIRPERSON SMITH) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to individual development accounts available to 2 certain persons with low income and providing effective and 3 applicability date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2441HC 83 6 jp/mg/14 PAG LIN 1 1 Section 1. Section 541A.2, subsection 1, Code 2009, is 1 2 amended to read as follows: 1 3 1. a. To be eligible to open an account, a prospective 1 4 account holder must have a household income that is equal to 1 5 or less than two hundred percent of the federal poverty level. 1 6 b. The accountisshall be kept in the name of an 1 7 individual account holder. 1 8 Sec. 2. Section 541A.2, subsections 4 and 5, Code 2009, 1 9 are amended to read as follows: 1 10 4. During a calendar year, with the approval of the 1 11 operating organization, an account holder maywithdrawmake 1 12 withdrawals from the account holder's accountthe sum of the1 13 for any of the following authorized purposes: 1 14 a.With the approval of the operating organization, 1 15 amounts withdrawn for any of the following approved purposes:1 16(1)Educational costs at an accredited institution of 1 17 higher education. 1 18(2)b. Training costs for an accredited or licensed 1 19 training program. 1 20(3)c. Purchase of a primary residence. 1 21(4)d. Capitalization of a small business start=up. 1 22(5)e. An improvement to a primary residence which 1 23 increases the tax basis of the property. 1 24(6)f. Emergency medical costs for the account holder or 1 25 for a member of the account holder's family. However, a 1 26 withdrawal for this purpose is limited to once during the life 1 27 of the account and the amount of the withdrawal shall not 1 28 exceed ten percent of the account balance at the time of the 1 29 withdrawal. 1 30(7)g. A purposeapprovedauthorized in accordance with 1 31 rule for a refugee individual development account. 1 32(8)h. Purchase of an automobile. 1 33(9)i. Purchase of assistive technology, home or vehicle 1 34 modification, or other device or physical improvement to 1 35 assist an account holder or family member with a disability. 2 1(10)j. Other purposeapprovedauthorized in accordance 2 2 with rule that is intended to move the account holder or a 2 3 family member toward a higher degree of self=sufficiency. 2 4b. At the account holder's discretion, if the account 2 5 holder is at least fifty=nine and one=half years of age, any 2 6 amount.2 75. An account holder shall not withdraw moneys from the 2 8 holder's account unless the withdrawal is authorized under 2 9 subsection 4.2 10 Sec. 3. Section 541A.3, subsection 1, paragraph a, Code 2 11 2009, is amended to read as follows: 2 12 a. Payment by the state of a state savings match on 2 13 amounts of up to two thousand dollars that an account holder 2 14 deposits in the account holder's account.To be eligible to 2 15 receive a state match an account holder must have a household 2 16 income that is equal to or less than two hundred percent of 2 17 the federal poverty level.2 18 Sec. 4. Section 541A.5, subsection 2, paragraph c, Code 2 19 2009, is amended to read as follows: 2 20 c. Subject to the availability of funding, the commission 2 21 may adopt rules implementing an individual development account 2 22 program for refugees. Rules shall identify purposesapproved2 23 authorized for withdrawals to meet the special needs of 2 24 refugee families. 2 25 Sec. 5. EFFECTIVE DATE AND RETROACTIVE APPLICABILITY. 2 26 This Act, being deemed of immediate importance, takes effect 2 27 upon enactment, is retroactively applicable to January 1, 2 28 2009. 2 29 EXPLANATION 2 30 This bill relates to individual development accounts 2 31 available to certain persons with low income under Code 2 32 chapter 541A. Deposits to an account may receive a match 2 33 payment of up to $2,000. 2 34 Under current law in Code section 541A.3, eligibility for 2 35 the match payment is limited to account holders with a 3 1 household income of less than 200 percent of the federal 3 2 poverty level. The bill shifts this income restriction to 3 3 instead be applicable to eligibility to open an account. 3 4 Code section 541A.2, subsections 4 and 5, are amended to 3 5 make a terminology change relating to the purposes authorized 3 6 for making withdrawals from accounts, to consolidate the 3 7 requirements for making withdrawals, and for renumbering. 3 8 Code section 541.5, relating to the rules for the program, is 3 9 amended to include a conforming change to the purposes 3 10 authorized for withdrawals from a refugee account. 3 11 An authorization in Code section 514.2, subsection 4, 3 12 allowing an account holder who is at least 59 and one=half 3 13 years old to withdraw any amount from their account is 3 14 eliminated. 3 15 The bill takes effect upon enactment and is retroactively 3 16 applicable to January 1, 2009. 3 17 LSB 2441HC 83 3 18 jp/mg/14