Ohio Admin. Code 5101:1-3-18 - Individual development account program
(A) What is an individual development account
program?
(1) An "individual development
account" (IDA) is a trust created or organized in the United States to enable
an eligible individual the opportunity to accumulate funds for purposes defined
in paragraph (D)(1) of this rule.
(2) Pursuant to sections
329.11
to
329.14
of the Revised Code, a county agency may establish an IDA program for residents
of the county. The program shall provide for establishment of accounts for
participants and acceptance of contributions from individuals and entities,
including the county agency, to be used as matching funds for deposit in the
accounts.
(B) How can a
county agency establish an IDA program?
(1)
The county agency shall select a fiduciary organization to administer its IDA
program. As described in section
329.11
of the Revised Code, a "fiduciary organization" is defined as a nonprofit
fundraising organization exempt from federal taxation pursuant to
26 U.S.C.
501(a) and (c)(3)
(2006).
(2) The responsibilities of
a fiduciary organization include but are not limited to:
(a) Ensuring that the organization is bonded
for the amount of money the individuals have contributed plus the amount of
interest generated by the account;
(b) Marketing the program to individuals and
matching fund contributors;
(c)
Depositing the individual's contributions and matching contributions in a
financial institution in accordance with section
329.13
of the Revised Code within twenty-four hours of receipt of those
contributions;
(d) Ensuring that
the allowable matching contribution does not exceed four times the deposited
amount and that the account does not exceed ten thousand dollars at any time.
Interest generated by an IDA is part of the IDA;
(e) Creating an investment plan to ensure the
IDA accounts will obtain a return with a minimal risk of loss;
(f) Creating a plan to prevent unauthorized
use of matching contributions and to enforce any penalties pursuant to
paragraph (C) of this rule;
(g)
Providing financial counseling for account holders;
(h) Conducting verification of eligibility
for an IDA;
(i) Complying with
federal and state requirements for IDAs; and
(j) Evaluating the IDA program as required by
the county agency and/or the Ohio department of job and family services
(ODJFS).
(3) Matching
funds may be provided by or through a nonprofit, tax exempt organization, or a
state or local government agency that works cooperatively with a nonprofit,
tax-exempt organization.
(4) When a
fiduciary organization participating in the IDA program wants to terminate its
participation in the program, it shall give thirty days written notice to the
county agency. The county agency shall be responsible for selecting another
fiduciary organization to administer the program. In the event the IDA program
is terminated, the funds in any existing IDA, including matching contributions,
will be disbursed to the individual.
(5) When a fiduciary organization does not
fulfill its responsibilities, the fiduciary organization shall not be allowed
to participate in the IDA program until it can prove to the satisfaction of the
county agency that it can fulfill those responsibilities. When the fiduciary
organization misuses the IDA funds, the organization shall be permanently
excluded from participation and shall be referred to the county prosecutor.
Pursuant to section
329.13
of the Revised Code, a county agency cannot stand alone as a fiduciary
organization. It can however, work in cooperation with a nonprofit fundraising
organization.
(C) Who
can participate in an IDA program?
(1) An
individual whose household income does not exceed two hundred per cent of the
federal poverty level is eligible to participate in an IDA program established
by the county agency that the individual resides.
(2) An individual who does not use IDA funds
in the manner mandated in section
329.14
of the Revised Code shall be:
(a) Terminated
from participation in the IDA program;
(b) Denied participation in any IDA program
for a period of six months for the first occurrence and for one year for the
second or subsequent occurrence. The penalty period shall begin the month
following the month of withdrawal of IDA funds; and
(c) Referred to the county prosecutor for
misuse of the funds.
(3)
Any remaining money in the IDA less matching contributions from outside
entities shall be disbursed to the individual at the beginning of the penalty
period. The remaining contributor matching funds are to be returned to the
contributor.
(D) For
what purposes can an IDA be used?
(1) The
money from an IDA account can only be used for the following purposes:
(a) Postsecondary educational expenses paid
directly from the account to an eligible education institution or vendor on
behalf of the IDA participant;
(b)
Qualified acquisition expenses of a principal residence, as defined in
26
U.S.C. 1034 (2006), paid directly from the
account to the person or government entity to which the expenses are
due;
(c) Qualified business
capitalization expenses made in accordance with a qualified business plan that
has been approved by a financial institution or by a nonprofit microenterprise
program having demonstrated business expertise and paid directly from the
account to the person to whom the expenses are due.
(2) A fiduciary organization shall permit a
participant to withdraw money deposited by the participant when it is needed to
deal with a personal emergency of the participant or a member of the
participant's family or household. Withdrawal shall result in the loss of any
matching funds in an amount equal to the amount of the withdrawal.
(3) Regardless of the reason of the
withdrawal, a withdrawal from an IDA shall be made only with the approval of
the fiduciary organization.
(E) What IDA reports shall be submitted?
(1) When the county agency
establishes an IDA account(s) it shall require the fiduciary organization to
collect and maintain information regarding the IDA program pursuant to the
provisions of section 329.12 of the Revised Code. The fiduciary organization
shall report account information to the county agency on the JFS 05101, "
Individual Development Account Report" (rev. 2/2018).
(2) The county agency shall prepare
a semi-annual report on its IDA program pursuant to the requirements of
division (E) of section 329.12 of the Revised Code.
Notes
Promulgated Under: 119.03
Statutory Authority: 5101.971
Rule Amplifies: 329.11, 329.12, 329.13, 329.14
Prior Effective Dates: 12/01/1999, 01/01/2005, 09/04/2008, 11/01/2013, 01/01/2019
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