State of Illinois
90th General Assembly
Legislation

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90_HB3387

      305 ILCS 5/12-4.103 new
          Amends the Illinois Public Aid Code.  Provides  that  the
      Department  of Human Services shall administer a program that
      allows eligible low-income individuals to maintain Individual
      Development Accounts with money from employment  earnings  to
      enable  the  individual to accumulate funds for postsecondary
      education, to purchase a first home, or to  finance  business
      capitalization  expenses.   Provides  that  the  funds in the
      account shall be matched by a not-for-profit organization  or
      by a State or local governmental agency acting in cooperation
      with   a  not-for-profit  organization.   Provides  that  the
      Department may match a set percentage of  contributions  made
      by  the  eligible individuals who have established Individual
      Development  Accounts  and  make  grants  to   not-for-profit
      organizations  to  administer  the  accounts.   Provides that
      funds  in  an  Individual  Development   Account   shall   be
      disregarded  for  the  purpose of determining the eligibility
      and benefit levels under this Code.  Effective immediately.
                                                     LRB9009540SMdv
                                               LRB9009540SMdv
 1        AN ACT to amend the Illinois Public Aid  Code  by  adding
 2    Section 12-4.103.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section 5.  The Illinois Public Aid Code  is  amended  by
 6    adding Section 12-4.103 as follows:
 7        (305 ILCS 5/12-4.103 new)
 8        Sec.  12-4.103.   Individual  Development  Accounts.  The
 9    Illinois Department shall  establish and administer a program
10    that allows  eligible  low-income  individuals  to  open  and
11    maintain  Individual  Development Accounts for the purpose of
12    enabling the individual to accumulate funds for  a  qualified
13    purpose.   A qualified purpose for establishing an Individual
14    Development Account shall be one or more of the following:
15        (1)  to pay for postsecondary education expenses  if  the
16    expenses   are  paid  directly  to  an  eligible  educational
17    institution;
18        (2) to acquire a principal residence if the individual is
19    buying a home for the first time and if the  funds  are  paid
20    directly  to  the person to whom the amounts required for the
21    purchase are due; or
22        (3)  to finance business capitalization expenses  if  the
23    funds  are  paid  directly  into  a  business  capitalization
24    account  at a federally insured financial institution and are
25    restricted   to   use   solely   for    qualified    business
26    capitalization expenses.
27        An  individual  may  make  contributions  to  his  or her
28    Individual Development Account only from funds  derived  from
29    earned income as defined in Section 911(d)(2) of the Internal
30    Revenue Code of 1986.
31        An  Individual Development Account established under this
                            -2-                LRB9009540SMdv
 1    Section shall be a trust created or organized in  the  United
 2    States  and  funded  through  periodic  contributions  by the
 3    eligible   low-income   individual   and   matched    by    a
 4    not-for-profit organization described in Section 501(c)(3) of
 5    the  Internal  Revenue  Code of 1986 and exempt from taxation
 6    under Section 501(a) of such Code, or by  a  State  or  local
 7    governmental    agency   acting   in   cooperation   with   a
 8    not-for-profit organization  as  described  herein.   To  the
 9    extent  resources  permit  in any particular fiscal year, the
10    Illinois Department may allocate general  revenue  funds  for
11    the  purpose  of  matching  a set percentage of contributions
12    made  by  the  eligible  individuals  who  have   established
13    Individual Development Accounts.
14        The  Illinois  Department  shall  review and consider for
15    approval  proposals  from  the  not-for-profit  organizations
16    doing  business  with  the  State  to  establish   Individual
17    Development  Account programs.  The Illinois Department shall
18    promulgate  rules  for  the  operation  of   such   programs,
19    including   standards   for  administration  consistent  with
20    applicable federal and State law.  To  the  extent  resources
21    are   available   the  Illinois  Department  may,  through  a
22    request-for-proposal process, award grants to  not-for-profit
23    organizations  to cover all or part of the operating costs of
24    administering Individual Development Account programs  or  to
25    provide   technical   assistance   to   other  not-for-profit
26    organizations seeking  to  establish  Individual  Development
27    Account programs.
28        Notwithstanding  any  other provision of State law, funds
29    in  an  Individual  Development  Account,  including  accrued
30    interest and matching deposits, shall be disregarded for  the
31    purpose  of  determining  the  eligibility and benefit levels
32    under this Code of the individual establishing the Individual
33    Development Account with respect to any period  during  which
34    such individual maintains or makes contributions into such an
                            -3-                LRB9009540SMdv
 1    account.
 2        Section  99.  Effective date.  This Act takes effect upon
 3    becoming law.

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