Sec. 404. DEFINITIONS
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## SEC. 404 DEFINITIONS In this title: ####
(1)Applicable period The term “**applicable period**” means, with respect to amounts to be paid from a grant made for a project year, the calendar year immediately preceding the calendar year in which the grant is made. ####
(2)Eligible individual The term “**eligible individual**” means an individual who is selected to participate in a demonstration project by a qualified entity under section 409. ####
(3)Emergency withdrawal The term “**emergency withdrawal**” means a withdrawal by an eligible individual that— #####
(A)is a withdrawal of only those funds, or a portion of those funds, deposited by the individual in the individual development account of the individual; #####
(B)is permitted by a qualified entity on a case-by-case basis; and #####
(C)is made for— ######
(i)expenses for medical care or necessary to obtain medical care, for the individual or a spouse or dependent of the individual described in paragraph (8)(D); ######
(ii)payments necessary to prevent the eviction of the individual from the residence of the individual, or foreclosure on the mortgage for the principal residence of the individual, as defined in paragraph (8)(B); or ######
(iii)payments necessary to enable the individual to meet necessary living expenses following loss of employment. ####
(4)Household The term “**household**” means all individuals who share use of a dwelling unit as primary quarters for living and eating separate from other individuals. ####
(5)Individual development account #####
(A)In general The term “**individual development account**” means a trust created or organized in the United States exclusively for the purpose of paying the qualified expenses of an eligible individual, or enabling the eligible individual to make an emergency withdrawal, but only if the written governing instrument creating the trust contains the following requirements: ######
(i)No contribution will be accepted unless the contribution is in cash or by check. ######
(ii)The trustee is a federally insured financial institution, or a State insured financial institution if no federally insured financial institution is available. ######
(iii)The assets of the trust will be invested in accordance with the direction of the eligible individual after consultation with the qualified entity providing deposits for the individual under section 410. ######
(iv)The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund. ######
(v)Except as provided in clause (vi), any amount in the trust that is attributable to a deposit provided under section 410 may be paid or distributed out of the trust only for the purpose of paying the qualified expenses of the eligible individual. ######
(vi)Any balance in the trust on the day after the date on which the individual for whose benefit the trust is established dies shall be distributed within 30 days of that date as directed by that individual to another individual development account established for the benefit of an eligible individual. #####
(B)Custodial accounts For purposes of subparagraph (A), a custodial account shall be treated as a trust if the assets of the custodial account are held by a bank (as defined in section 408(n) of the Internal Revenue Code of 1986) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which such person will administer the custodial account will be consistent with the requirements of this title, and if the custodial account would, except for the fact that it is not a trust, constitute an individual development account described in subparagraph (A). For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of that custodial account shall be treated as the trustee of the account. ####
(6)Project year The term “**project year**” means, with respect to a demonstration project, any of the 5 consecutive 12-month periods beginning on the date the project is originally authorized to be conducted. ####
(7)Qualified entity #####
(A)In general The term “**qualified entity**” means— ######
(i)one or more not-for-profit organizations described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; ######
(ii)a State or local government agency, or a tribal government, submitting an application under section 405 jointly with an organization described in clause (i); or ######
(iii)an entity that— ######
(I)is— ######
(aa)a credit union designated as a low-income credit union by the National Credit Union Administration (NCUA); or ######
(bb)an organization designated as a community development financial institution by the Secretary of the Treasury (or the Community Development Financial Institutions Fund); and ######
(II)can demonstrate a collaborative relationship with a local community-based organization whose activities are designed to address poverty in the community and the needs of community members for economic independence and stability. #####
(B)Rule of construction Nothing in this paragraph shall be construed as preventing an organization described in subparagraph (A)(i) from collaborating with a financial institution or for-profit community development corporation to carry out the purposes of this title. ####
(8)Qualified expenses The term “**qualified expenses**” means one or more of the following, as provided by a qualified entity: #####
(A)Postsecondary educational expenses Postsecondary educational expenses paid from an individual development account directly to an eligible educational institution. In this subparagraph: ######
(i)Postsecondary educational expenses The term “**postsecondary educational expenses**” means the following: ######
(I)Tuition and fees Tuition and fees required for the enrollment or attendance of a student at an eligible educational institution. ######
(II)Fees, books, supplies, and equipment Fees, books, supplies, and equipment required for courses of instruction at an eligible educational institution. ######
(ii)Eligible educational institution The term “**eligible educational institution**” means the following: ######
(I)Institution of higher education An institution described in section 101 or 102 of the Higher Education Act of 1965. ######
(II)Postsecondary vocational education school An area vocational education school (as defined in subparagraph
(C)or
(D)of section 521(4) of the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471(4))) which is in any State (as defined in section 521(33) of such Act), as such sections are in effect on the date of enactment of this title. #####
(B)First-home purchase Qualified acquisition costs with respect to a principal residence for a qualified first-time homebuyer, if paid from an individual development account directly to the persons to whom the amounts are due. In this subparagraph: ######
(i)Principal residence The term “**principal residence**” means a main residence, the qualified acquisition costs of which do not exceed 120 percent of the average area purchase price applicable to such residence. ######
(ii)Qualified acquisition costs The term “**qualified acquisition costs**” means the costs of acquiring, constructing, or reconstructing a residence. The term includes any usual or reasonable settlement, financing, or other closing costs. ######
(iii)Qualified first-time homebuyer ######
(I)In general The term “**qualified first-time homebuyer**” means an individual participating in the project involved (and, if married, the individual's spouse) who has no present ownership interest in a principal residence during the 3-year period ending on the date of acquisition of the principal residence to which this subparagraph applies. ######
(II)Date of acquisition The term “**date of acquisition**” means the date on which a binding contract to acquire, construct, or reconstruct the principal residence to which this subparagraph applies is entered into. #####
(C)Business capitalization Amounts paid from an individual development account directly to a business capitalization account that is established in a federally insured financial institution (or in a State insured financial institution if no federally insured financial institution is available) and is restricted to use solely for qualified business capitalization expenses. In this subparagraph: ######
(i)Qualified business capitalization expenses The term “**qualified business capitalization expenses**” means qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan. ######
(ii)Qualified expenditures The term “**qualified expenditures**” means expenditures included in a qualified plan, including capital, plant, equipment, working capital, and inventory expenses. ######
(iii)Qualified business The term “**qualified business**” means any business that does not contravene any law or public policy (as determined by the Secretary). ######
(iv)Qualified plan The term “**qualified plan**” means a business plan, or a plan to use a business asset purchased, which— ######
(I)is approved by a financial institution, a microenterprise development organization, or a nonprofit loan fund having demonstrated fiduciary integrity; ######
(II)includes a description of services or goods to be sold, a marketing plan, and projected financial statements; and ######
(III)may require the eligible individual to obtain the assistance of an experienced entrepreneurial adviser. #####
(D)Transfers to idas of family members Amounts paid from an individual development account directly into another such account established for the benefit of an eligible individual who is— ######
(i)the individual's spouse; or ######
(ii)any dependent of the individual with respect to whom the individual is allowed a deduction under section 151 of the Internal Revenue Code of 1986. ####
(9)Qualified savings of the individual for the period The term “**qualified savings of the individual for the period**” means the aggregate of the amounts contributed by an individual to the individual development account of the individual during the period. ####
(10)Secretary The term “**Secretary**” means the Secretary of Health and Human Services, acting through the Director of Community Services. ####
(11)Tribal government The term “**tribal government**” means a tribal organization, as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b) or a Native Hawaiian organization, as defined in section 6207 of the Native Hawaiian Education Act.
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- 20 USC 2471(4)
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