(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 set forth 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 non nonprofit, tax exempt organization, or a state or local
government agency that works cooperatively with a nonprofit, tax-exempt organization.
(4)If 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)If 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. If 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 in which 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 if 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)The 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,
"The Ohio Department of Job and Family Services,
Individual Development Account Report" (rev. 8/20062/2018).
(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.
Effective: 1/1/2019
Five Year Review (FYR) Dates: 10/10/2018 and 01/01/2024
Certification: CERTIFIED ELECTRONICALLY
Date: 12/19/2018
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