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S 300. SHORT TITLE. THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE
"SAVINGS FOR WORKING FAMILIES ACT".
S 300-A. LEGISLATIVE FINDINGS. THE LEGISLATURE FINDS THAT THIRTY-THREE
PERCENT OF ALL AMERICANS HAVE NO ASSETS AVAILABLE FOR INVESTMENT AND
THAT ANOTHER TWENTY PERCENT HAVE NEGLIGIBLE ASSETS. THE HOUSEHOLD
SAVINGS RATE OF THE UNITED STATES LAGS FAR BEHIND THAT OF OTHER INDUS-
TRIALIZED NATIONS. THIS PREVENTS MANY AMERICANS FROM ENTERING THE
ECONOMIC MAINSTREAM BY BUYING A HOUSE, OBTAINING AN ADEQUATE EDUCATION,
OR STARTING A BUSINESS.
BY INCREASING THEIR ASSETS, THE AMERICAN PEOPLE CAN IMPROVE THEIR
ECONOMIC INDEPENDENCE AND WORK TOWARD A VIABLE, HOPEFUL FUTURE FOR THEM-
SELVES AND THEIR CHILDREN. ECONOMIC VIABILITY DOES NOT COME SOLELY FROM
INCOME, SPENDING, AND CONSUMPTION, BUT ALSO REQUIRES SAVINGS, INVEST-
MENT, AND ACCUMULATION OF ASSETS.
TRADITIONAL PUBLIC ASSISTANCE PROGRAMS BASED ON INCOME AND CONSUMPTION
HAVE RARELY BEEN SUCCESSFUL IN PROMOTING AND SUPPORTING THE TRANSITION
OF THE AMERICAN PEOPLE TO ECONOMIC SELF-SUFFICIENCY. INCOME-BASED SOCIAL
POLICIES THAT MEET CONSUMPTION NEEDS MUST BE COMPLEMENTED BY ASSET-BASED
POLICIES THAT CAN PROVIDE THE MEANS TO ACHIEVE LONG-TERM INDEPENDENCE
AND WELL-BEING.
PERSONAL DEVELOPMENT ACCOUNTS CAN PROVIDE WORKING AMERICANS WITH (I)
STRONG INCENTIVES TO BUILD ASSETS, (II) BASIC FINANCIAL MANAGEMENT
TRAINING, AND (III) ACCESS TO SECURE AND RELATIVELY INEXPENSIVE BANKING
SERVICES. PERSONAL DEVELOPMENT ACCOUNTS WOULD ALSO FOSTER GREATER
PARTICIPATION IN ELECTRONIC FUND TRANSFERS. THEY WOULD GENERATE FINAN-
CIAL RETURNS, INCLUDING INCREASED INCOME AND TAX REVENUE AND DECREASED
WELFARE CASH ASSISTANCE. THESE BENEFITS WOULD FAR EXCEED THE COST OF
PUBLIC INVESTMENT IN THE PROGRAMS.
S 300-B. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
1. "ELIGIBLE INDIVIDUAL" SHALL MEAN AN INDIVIDUAL WHO IS:
(A) AT LEAST EIGHTEEN YEARS OLD,
(B) A DOMICILE OF THE STATE OF NEW YORK, AND
(C) A MEMBER OF A HOUSEHOLD IN WHICH THE GROSS INCOME DOES NOT EXCEED
EIGHTY PERCENT OF THE AREA MEDIAN INCOME (AS PUBLISHED BY THE UNITED
STATES DEPARTMENT OF HOUSING AND URBAN AFFAIRS).
2. "PERSONAL DEVELOPMENT ACCOUNT" SHALL MEAN A REGULAR INTEREST BEAR-
ING ACCOUNT ESTABLISHED FOR AN ELIGIBLE INDIVIDUAL AS PART OF A QUALI-
FIED PERSONAL DEVELOPMENT ACCOUNT PROGRAM, BUT ONLY IF THE WRITTEN
GOVERNING INSTRUMENT CREATING THE ACCOUNT MEETS THE FOLLOWING CRITERIA:
(A) THE SOLE OWNER OF THE ACCOUNT IS AN ELIGIBLE INDIVIDUAL;
(B) NO CONTRIBUTION WILL BE ACCEPTED UNLESS IT IS IN THE FORM OF CASH,
CHECK, OR ELECTRONIC FUND TRANSFER;
(C) THE HOLDER OF THE ACCOUNT IS A QUALIFIED FINANCIAL INSTITUTION OR
A QUALIFIED NOT-FOR-PROFIT ORGANIZATION;
(D) THE ASSETS OF THE ACCOUNT WILL NOT BE COMMINGLED WITH OTHER PROP-
ERTY EXCEPT IN A COMMON TRUST FUND OR COMMON INVESTMENT FUND; AND
(E) EXCEPT AS PROVIDED IN SECTION THREE HUNDRED-G OF THIS ARTICLE, ANY
AMOUNT IN THE ACCOUNT MAY BE PAID OUT ONLY FOR THE PURPOSE OF PAYING THE
QUALIFIED EXPENSES OF THE ELIGIBLE INDIVIDUAL.
3. "PARALLEL ACCOUNT" SHALL MEAN A SEPARATE, PARALLEL INDIVIDUAL OR
POOLED ACCOUNT FOR ALL MATCHING FUNDS AND EARNINGS DEDICATED TO AN
ELIGIBLE INDIVIDUAL AS PART OF A QUALIFIED PERSONAL DEVELOPMENT ACCOUNT
PROGRAM, THE SOLE OWNER OF WHICH IS A QUALIFIED FINANCIAL INSTITUTION OR
A QUALIFIED NOT-FOR-PROFIT ORGANIZATION.
4. "QUALIFIED FINANCIAL INSTITUTION" SHALL MEAN:
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(A) AN INSURED BANK, AS DEFINED IN SECTION 3(B) OF THE FEDERAL DEPOSIT
INSURANCE ACT, 12 U.S.C. 1813(H);
(B) A COMMERCIAL BANK OR TRUST COMPANY;
(C) A PRIVATE BANKER;
(D) AN AGENCY OR BRANCH OF A FOREIGN BANK IN THE UNITED STATES;
(E) A CREDIT UNION;
(F) A THRIFT INSTITUTION;
(G) A BROKER OR DEALER REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, U.S.C. 78A ET
SEQ.;
(H) A BROKER OR DEALER IN SECURITIES OR COMMODITIES;
(I) AN INVESTMENT BANKER OR INVESTMENT COMPANY;
(J) A CURRENCY EXCHANGE;
(K) AN ISSUER, REDEEMER, OR CASHIER OF TRAVELERS' CHECKS, CHECKS,
MONEY ORDERS, OR SIMILAR INSTRUMENTS;
(L) AN OPERATOR OF A CREDIT CARD SYSTEM;
(M) AN INSURANCE COMPANY;
(N) A DEALER IN PRECIOUS METALS, STONES, OR JEWELS;
(O) A PAWNBROKER;
(P) A LOAN OR FINANCE COMPANY;
(Q) A TRAVEL AGENCY;
(R) A PERSON LICENSED TO ENGAGE IN THE BUSINESS OF RECEIVING MONEY FOR
TRANSMISSION OR TRANSMITTING THE SAME BY WHATEVER MEANS, OR ANY OTHER
PERSON ENGAGED IN SUCH BUSINESS AS AN AGENT OF A LICENSEE OR ENGAGED IN
SUCH BUSINESS WITHOUT A LICENSE;
(S) A TELEGRAPH COMPANY;
(T) A BUSINESS ENGAGED IN VEHICLE SALES, INCLUDING AUTOMOBILE,
AIRPLANE AND BOAT SALES;
(U) PERSONS INVOLVED IN REAL ESTATE CLOSINGS AND SETTLEMENTS;
(V) THE UNITED STATES POSTAL SERVICE;
(W) AN AGENCY OF THE UNITED STATES GOVERNMENT OR OF A STATE OR LOCAL
GOVERNMENT CARRYING OUT A DUTY OR POWER OF A BUSINESS DESCRIBED IN THIS
SUBDIVISION;
(X) A CASINO, GAMBLING CASINO, OR GAMING ESTABLISHMENT WITH AN ANNUAL
GAMING REVENUE OF MORE THAN A MILLION DOLLARS WHICH:
(I) IS LICENSED AS A CASINO, GAMBLING CASINO OR GAMING ESTABLISHMENT
UNDER THE LAWS OF ANY STATE OR ANY POLITICAL SUBDIVISION OF ANY STATE;
OR
(II) IS AN INDIAN GAMING OPERATION CONDUCTED UNDER OR PURSUANT TO THE
INDIAN GAMING REGULATORY ACT OTHER THAN AN OPERATION WHICH IS LIMITED TO
CLASS 1 GAMING AS DEFINED IN SUBDIVISION SIX OF SECTION FOUR OF SUCH
ACT; OR
(Y) ANY BUSINESS OR AGENCY ENGAGED IN ANY ACTIVITY WHICH THE SUPER-
INTENDENT OR THE UNITED STATES SECRETARY OF THE TREASURY DETERMINES, BY
REGULATION, TO BE AN ACTIVITY WHICH IS SIMILAR TO, RELATED TO, OR A
SUBSTITUTE FOR ACTIVITY WHICH ANY BUSINESS AS DESCRIBED IN THIS SUBDIVI-
SION IS AUTHORIZED TO ENGAGE.
5. "QUALIFIED NOT-FOR-PROFIT ORGANIZATION" SHALL MEAN:
(A) A DOMESTIC CORPORATION INCORPORATED PURSUANT TO OR OTHERWISE
SUBJECT TO THE NOT-FOR-PROFIT CORPORATION LAW;
(B) A CHARITABLE ORGANIZATION REGISTERED WITH THE SECRETARY OF STATE;
(C) A RELIGIOUS CORPORATION AS DEFINED IN SECTION SIXTY-SIX OF THE
GENERAL CONSTRUCTION LAW;
(D) A TRUSTEE AS DEFINED IN SECTION 8-1.4 OF THE ESTATES, POWERS AND
TRUSTS LAW;
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(E) AN INSTITUTION OR CORPORATION FORMED PURSUANT TO THE EDUCATION
LAW; AND
(F) ANY FEDERATION OF CHARITABLE ORGANIZATIONS.
6. "QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAM" SHALL MEAN A
PROGRAM ESTABLISHED UNDER SECTION THREE HUNDRED-C OF THIS ARTICLE UNDER
WHICH PERSONAL DEVELOPMENT ACCOUNTS AND PARALLEL ACCOUNTS ARE HELD BY A
QUALIFIED FINANCIAL INSTITUTION OR A QUALIFIED NOT-FOR-PROFIT ORGANIZA-
TION.
7. "QUALIFIED EXPENSE DISTRIBUTION" SHALL MEAN ANY AMOUNT PAID OR
DISTRIBUTED OUT OF A PERSONAL DEVELOPMENT ACCOUNT AND A PARALLEL ACCOUNT
ESTABLISHED FOR AN ELIGIBLE INDIVIDUAL IF SUCH AMOUNT:
(A) IS USED EXCLUSIVELY TO PAY THE QUALIFIED EXPENSES OF SUCH INDIVID-
UAL'S SPOUSE OR DEPENDENTS,
(B) IS PAID BY THE QUALIFIED FINANCIAL INSTITUTION OR QUALIFIED
NOT-FOR-PROFIT ORGANIZATION DIRECTLY TO THE PERSON TO WHOM THE AMOUNT IS
DUE OR TO ANOTHER PERSONAL DEVELOPMENT ACCOUNT, AND
(C) IS PAID AFTER THE HOLDER OF THE PERSONAL DEVELOPMENT ACCOUNT HAS
COMPLETED A FINANCIAL EDUCATION COURSE AS REQUIRED UNDER SECTION THREE
HUNDRED-D OF THIS ARTICLE.
8. "QUALIFIED EXPENSE" SHALL MEAN ONE OF THE FOLLOWING:
(A) A QUALIFIED HIGHER EDUCATION EXPENSE,
(B) A QUALIFIED FIRST-TIME HOME BUYER COST,
(C) A QUALIFIED BUSINESS CAPITALIZATION COST, OR
(D) QUALIFIED PERSONAL DEVELOPMENT ACCOUNT ROLLOVERS.
9. "QUALIFIED HIGHER EDUCATION EXPENSE" SHALL MEAN ANY EXPENSE RELATED
TO EDUCATIONAL SERVICES BEYOND THE LEVEL OF SECONDARY SCHOOL. SUCH
EXPENSES SHALL INCLUDE, BUT NOT BE LIMITED TO, TUITION, BOOKS, ROOM AND
BOARD, TRAVEL TO AND FROM THE EDUCATIONAL INSTITUTION, AND ANY FEES
ASSOCIATED WITH THE FINANCIAL INSTITUTION.
10. "QUALIFIED FIRST-TIME HOME BUYER COST" SHALL MEAN ANY COST ASSOCI-
ATED WITH THE PURCHASE OF A RESIDENCE BY A PERSON OR PERSONS, NONE OF
WHOM HAVE EVER PREVIOUSLY PURCHASED A RESIDENCE. SUCH COSTS SHALL
INCLUDE, BUT NOT BE LIMITED TO, PURCHASE PRICE OF THE RESIDENCE, CLOSING
EXPENSES, TITLE SEARCHES, INSPECTIONS, AND ATTORNEYS' FEES. FOR PURPOSES
OF THIS SUBDIVISION, A RESIDENCE SHALL MEAN A HOUSE, APARTMENT, CONDO-
MINIUM, TOWNHOUSE, TRAILER, MOBILE HOME, OR ANY SIMILAR STRUCTURE THE
PURPOSE OF WHICH IS TO PROVIDE A PLACE FOR ITS OWNER TO SLEEP AND
PERFORM THE FUNCTIONS OF DAILY LIFE.
11. "QUALIFIED BUSINESS CAPITALIZATION COST" SHALL MEAN AN EXPENDITURE
IN ACCORDANCE WITH A BUSINESS PLAN THAT MEETS THE SPECIFICATIONS OF THE
SECRETARY OF STATE, INCLUDING CAPITAL, PLANT, EQUIPMENT, WORKING CAPI-
TAL, AND INVENTORY EXPENSES, FOR THE CAPITALIZATION OF ANY LEGITIMATE
BUSINESS.
12. "QUALIFIED PERSONAL DEVELOPMENT ACCOUNT ROLLOVER" SHALL MEAN WHEN
FUNDS FROM ONE PERSONAL DEVELOPMENT ACCOUNT ARE DISTRIBUTED AND ALL OR
PART OF SUCH FUNDS ARE REPLACED IN THE ACCOUNT OR ARE PLACED IN A SECOND
PERSONAL DEVELOPMENT ACCOUNT WITHIN ONE HUNDRED EIGHTY DAYS OF SUCH
DISTRIBUTION.
S 300-C. STRUCTURE AND ADMINISTRATION OF QUALIFIED PERSONAL DEVELOP-
MENT ACCOUNT PROGRAMS. 1. ANY QUALIFIED FINANCIAL INSTITUTION OR QUALI-
FIED NOT-FOR-PROFIT ORGANIZATION MAY ESTABLISH ONE OR MORE QUALIFIED
PERSONAL DEVELOPMENT ACCOUNT PROGRAMS THAT MEET THE REQUIREMENTS OF THIS
ARTICLE.
2. ALL QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAMS SHALL CONSIST
OF THE FOLLOWING TWO COMPONENTS:
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(A) A PERSONAL DEVELOPMENT ACCOUNT TO WHICH AN ELIGIBLE INDIVIDUAL MAY
CONTRIBUTE MONEY IN ACCORDANCE WITH SECTION THREE HUNDRED-E OF THIS
ARTICLE; AND
(B) A PARALLEL ACCOUNT TO WHICH ALL MATCHING FUNDS SHALL BE DEPOSITED
IN ACCORDANCE WITH SECTION THREE HUNDRED-F OF THIS ARTICLE.
3. A QUALIFIED FINANCIAL INSTITUTION OR A QUALIFIED NOT-FOR-PROFIT
ORGANIZATION MAY TAILOR ITS QUALIFIED PERSONAL DEVELOPMENT ACCOUNT
PROGRAM TO ALLOW MATCHING FUNDS TO BE SPENT ON ONE OR MORE OF THE QUALI-
FIED EXPENSE CATEGORIES.
4. A PERSONAL DEVELOPMENT ACCOUNT PROGRAM SHALL BE TREATED AS QUALI-
FIED UNDER THIS ARTICLE ONLY IF NOT LESS THAN ONE-THIRD OF THE PERSONAL
DEVELOPMENT ACCOUNTS UNDER SUCH PROGRAM ARE OWNED BY ELIGIBLE INDIVID-
UALS, EACH OF WHOM IS A MEMBER OF A HOUSEHOLD WHERE THE GROSS INCOME OF
SUCH HOUSEHOLD DOES NOT EXCEED FIFTY PERCENT OF THE AREA MEDIAN INCOME
AS PUBLISHED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN
AFFAIRS.
5. ANY ACCOUNT DESCRIBED IN PARAGRAPH (B) OF SUBDIVISION TWO OF THIS
SECTION IS EXEMPT FROM TAXATION UNDER ARTICLE NINE, NINE-A, TWENTY-TWO,
THIRTY-TWO OR THIRTY-THREE OF THE TAX LAW, UNLESS SUCH ACCOUNT HAS
CEASED TO BE SUCH ACCOUNT BY REASON OF SECTION THREE HUNDRED-G OF THIS
ARTICLE OR THE QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAM HAD BEEN
TERMINATED PURSUANT TO SECTION THREE HUNDRED-H OF THIS ARTICLE.
S 300-D. PROCEDURES FOR OPENING A PERSONAL DEVELOPMENT ACCOUNT AND
QUALIFYING FOR MATCHING FUNDS. 1. AN ELIGIBLE INDIVIDUAL MUST OPEN A
PERSONAL DEVELOPMENT ACCOUNT WITH A QUALIFIED FINANCIAL INSTITUTION OR A
QUALIFIED NOT-FOR-PROFIT ORGANIZATION AND CONTRIBUTE MONEY IN ACCORDANCE
WITH SECTION THREE HUNDRED-E OF THIS ARTICLE TO QUALIFY FOR MATCHING
FUNDS IN A PARALLEL ACCOUNT.
2. BEFORE BECOMING ELIGIBLE TO WITHDRAW MATCHING FUNDS TO PAY FOR A
QUALIFIED EXPENSE, OWNERS OF PERSONAL DEVELOPMENT ACCOUNTS MUST COMPLETE
A FINANCIAL EDUCATION COURSE OFFERED BY A QUALIFIED FINANCIAL INSTITU-
TION, A QUALIFIED NOT-FOR-PROFIT ORGANIZATION, OR A GOVERNMENT ENTITY.
THE SECRETARY OF STATE SHALL ESTABLISH THE STANDARDS UNDER WHICH THE
FINANCIAL EDUCATION COURSE MUST BE TAUGHT.
S 300-E. CONTRIBUTIONS TO PERSONAL DEVELOPMENT ACCOUNTS. 1. EXCEPT IN
THE CASE OF A QUALIFIED ROLLOVER, INDIVIDUAL CONTRIBUTIONS TO A PERSONAL
DEVELOPMENT ACCOUNT WILL NOT BE ACCEPTED FOR THE TAXABLE YEAR IN EXCESS
OF THE LESSER OF:
(A) TWO THOUSAND DOLLARS; OR
(B) AN AMOUNT EQUAL TO THE COMPENSATION INCLUDIBLE IN THE INDIVIDUAL'S
GROSS INCOME FOR SUCH TAXABLE YEAR.
2. FEDERAL W-2 FORMS AND OTHER FORMS SPECIFIED BY THE SECRETARY OF
STATE PROVING THE ELIGIBLE INDIVIDUAL'S WAGES AND OTHER COMPENSATION AND
THE STATUS OF THE INDIVIDUAL AS AN ELIGIBLE INDIVIDUAL SHALL BE
PRESENTED AT THE TIME OF THE ESTABLISHMENT OF THE PERSONAL DEVELOPMENT
ACCOUNT AND AT LEAST ONCE ANNUALLY THEREAFTER.
3. FOR THE PURPOSES OF THIS SECTION, A TAXPAYER SHALL BE DEEMED TO
HAVE MADE A CONTRIBUTION TO A PERSONAL DEVELOPMENT ACCOUNT ON THE LAST
DAY OF THE PRECEDING TAXABLE YEAR IF THE CONTRIBUTION IS MADE ON ACCOUNT
OF SUCH TAXABLE YEAR AND IS MADE NOT LATER THAN THE TIME PRESCRIBED BY
LAW FOR FILING THE FEDERAL INCOME TAX RETURN FOR SUCH TAXABLE YEAR.
S 300-F. DEPOSITS BY QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAMS.
1. THE QUALIFIED FINANCIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT
ORGANIZATION SHALL DEPOSIT ALL MATCHING FUNDS FOR EACH PERSONAL DEVELOP-
MENT ACCOUNT INTO A PARALLEL ACCOUNT AT A QUALIFIED FINANCIAL INSTITU-
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TION OR QUALIFIED NOT-FOR-PROFIT ORGANIZATION. THE PARALLEL ACCOUNT OR
ACCOUNTS SHALL EARN NOT LESS THAN THE MARKET OF INTEREST.
2. SUBJECT TO SUBDIVISION THREE OF THIS SECTION, THE QUALIFIED FINAN-
CIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT ORGANIZATION SHALL DEPOSIT
NOT LESS THAN QUARTERLY INTO THE PARALLEL ACCOUNT WITH RESPECT TO EACH
ELIGIBLE INDIVIDUAL THE FOLLOWING:
(A) A DOLLAR-FOR-DOLLAR MATCH FOR THE FIRST FIVE HUNDRED DOLLARS
CONTRIBUTED BY THE ELIGIBLE INDIVIDUAL INTO A PERSONAL DEVELOPMENT
ACCOUNT WITH RESPECT TO ANY TAXABLE YEAR; AND
(B) ANY MATCHING FUNDS PROVIDED BY STATE, LOCAL OR PRIVATE RESOURCES
IN ACCORDANCE TO THE MATCHING RATIO SET BY THOSE SOURCES.
3. MATCHING FUNDS THAT ARE FORFEITED UNDER SECTION THREE HUNDRED-G OF
THIS ARTICLE SHALL BE USED BY THE QUALIFIED FINANCIAL INSTITUTION OR
QUALIFIED NOT-FOR-PROFIT ORGANIZATION TO PAY MATCHES FOR OTHER PERSONAL
DEVELOPMENT ACCOUNT CONTRIBUTIONS BY ELIGIBLE INDIVIDUALS.
4. ANY QUALIFIED FINANCIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT
ORGANIZATION SHALL REPORT THE BALANCES IN ANY PERSONAL DEVELOPMENT
ACCOUNT AND PARALLEL ACCOUNT OF AN ELIGIBLE INDIVIDUAL ON NOT LESS THAN
A QUARTERLY BASIS.
S 300-G. WITHDRAWAL PROCEDURES. 1. TO WITHDRAW MONEY FROM AN ELIGIBLE
INDIVIDUAL'S PERSONAL DEVELOPMENT ACCOUNT TO PAY QUALIFIED EXPENSES OF
SUCH INDIVIDUAL OR OF SUCH INDIVIDUAL'S SPOUSE OR DEPENDENTS, THE QUALI-
FIED FINANCIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT ORGANIZATION
SHALL DIRECTLY TRANSFER SUCH FUNDS FROM THE PERSONAL DEVELOPMENT
ACCOUNT, AND, IF APPLICABLE, FROM THE PARALLEL ACCOUNT, ELECTRONICALLY
TO THE VENDOR OR OTHER PERSONAL DEVELOPMENT ACCOUNT. IF THE VENDOR IS
NOT EQUIPPED TO RECEIVE FUNDS ELECTRONICALLY, THE QUALIFIED FINANCIAL
INSTITUTION OR QUALIFIED NOT-FOR-PROFIT ORGANIZATION MAY ISSUE SUCH
FUNDS BY PAPER CHECK TO THE VENDOR.
2. A PERSONAL DEVELOPMENT ACCOUNT OWNER MAY UNILATERALLY WITHDRAW
FUNDS FROM THE PERSONAL DEVELOPMENT ACCOUNT FOR PURPOSES OTHER THAN TO
PAY QUALIFIED EXPENSES, BUT SHALL FORFEIT ANY CORRESPONDING MATCHING
FUNDS AND INTEREST EARNED ON THE MATCHING FUNDS BY DOING SO, UNLESS SUCH
FUNDS ARE RECONTRIBUTED TO SUCH ACCOUNT WITHIN ONE HUNDRED EIGHTY DAYS
OF THEIR WITHDRAWAL.
3. IF THE INDIVIDUAL FOR WHOSE BENEFIT A PERSONAL DEVELOPMENT ACCOUNT
IS ESTABLISHED CEASES TO BE AN ELIGIBLE INDIVIDUAL, SUCH ACCOUNT SHALL
CEASE TO BE A PERSONAL DEVELOPMENT ACCOUNT AS OF THE FIRST DAY OF THE
TAXABLE YEAR OF SUCH INDIVIDUAL AND ANY BALANCE IN SUCH ACCOUNT SHALL BE
DEEMED TO HAVE BEEN WITHDRAWN ON SUCH FIRST DAY BY SUCH INDIVIDUAL FOR
PURPOSES OTHER THAN TO PAY QUALIFIED EXPENSES.
4. ANY AMOUNTS WITHDRAWN FROM A PARALLEL ACCOUNT SHALL NOT BE INCLUDED
IN AN ELIGIBLE INDIVIDUAL'S GROSS INCOME.
S 300-H. CERTIFICATION AND TERMINATION OF QUALIFIED PERSONAL DEVELOP-
MENT ACCOUNT PROGRAMS. 1. UPON ESTABLISHING A QUALIFIED PERSONAL DEVEL-
OPMENT ACCOUNT PROGRAM, A QUALIFIED FINANCIAL INSTITUTION OR QUALIFIED
NOT-FOR-PROFIT ORGANIZATION SHALL CERTIFY TO THE SECRETARY OF STATE
THAT:
(A) THE ACCOUNTS DESCRIBED IN SECTION THREE HUNDRED-C OF THIS ARTICLE
ARE OPERATING PURSUANT TO ALL THE PROVISIONS OF THIS ARTICLE; AND
(B) THE QUALIFIED FINANCIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT
ORGANIZATION AGREES TO IMPLEMENT AN INFORMATION SYSTEM NECESSARY TO
MONITOR THE COST AND OUTCOMES OF THE QUALIFIED PERSONAL DEVELOPMENT
ACCOUNT PROGRAM.
2. IF THE SECRETARY OF STATE DETERMINES THAT A QUALIFIED FINANCIAL
INSTITUTION OR A QUALIFIED NOT-FOR-PROFIT ORGANIZATION UNDER THIS ARTI-
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CLE IS NOT OPERATING A QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAM IN
ACCORDANCE WITH THE REQUIREMENTS OF THIS ARTICLE, THE SECRETARY OF STATE
SHALL TERMINATE SUCH INSTITUTION'S OR NOT-FOR-PROFIT ORGANIZATION'S
AUTHORITY TO OPERATE THE PROGRAM. IF THE SECRETARY OF STATE IS UNABLE TO
IDENTIFY A QUALIFIED FINANCIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT
ORGANIZATION TO ASSUME THE AUTHORITY TO CONDUCT SUCH PROGRAM, THEN ANY
ACCOUNT ESTABLISHED FOR THE BENEFIT OF ANY INDIVIDUAL UNDER SUCH PROGRAM
SHALL CEASE TO BE A PERSONAL DEVELOPMENT ACCOUNT AS OF THE FIRST DAY OF
SUCH TERMINATION AND ANY BALANCE IN SUCH ACCOUNT SHALL BE DEEMED TO HAVE
BEEN WITHDRAWN ON SUCH DAY BY SUCH INDIVIDUAL FOR PURPOSES OTHER THAN TO
PAY QUALIFIED EXPENSES.
S 300-I. REPORTING, MONITORING, AND EVALUATION. 1. EACH QUALIFIED
FINANCIAL INSTITUTION OR QUALIFIED NOT-FOR-PROFIT ORGANIZATION THAT
ESTABLISHES A QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAM SHALL
REPORT ANNUALLY TO THE SECRETARY OF STATE WITHIN NINETY DAYS AFTER THE
END OF EACH CALENDAR YEAR ON:
(A) THE NUMBER OF ELIGIBLE INDIVIDUALS MAKING CONTRIBUTIONS INTO
PERSONAL DEVELOPMENT ACCOUNTS;
(B) THE AMOUNTS CONTRIBUTED INTO PERSONAL DEVELOPMENT ACCOUNTS AND
DEPOSITED INTO PARALLEL ACCOUNTS FOR MATCHING FUNDS;
(C) THE AMOUNTS WITHDRAWN FROM PERSONAL DEVELOPMENT ACCOUNTS AND
PARALLEL ACCOUNTS, AND THE PURPOSES FOR WHICH SUCH AMOUNTS WERE WITH-
DRAWN;
(D) THE BALANCES REMAINING IN PERSONAL DEVELOPMENT ACCOUNTS AND PARAL-
LEL ACCOUNTS; AND
(E) SUCH OTHER INFORMATION AS THE SECRETARY OF STATE MAY DEEM NECES-
SARY TO HELP MONITOR THE COSTS AND OUTCOMES OF THE PERSONAL DEVELOPMENT
ACCOUNT PROGRAM.
2. NOT LATER THAN JANUARY FIRST, NEXT SUCCEEDING THE EFFECTIVE DATE OF
THIS SECTION, THE SECRETARY OF STATE SHALL DEVELOP AND IMPLEMENT A
PROTOCOL AND PROCESS TO CONTINUALLY MONITOR THE COST AND OUTCOMES OF THE
QUALIFIED PERSONAL DEVELOPMENT ACCOUNT PROGRAMS ESTABLISHED UNDER
SECTION THREE HUNDRED-C OF THIS ARTICLE.
3. BEGINNING JANUARY FIRST, NEXT SUCCEEDING THE EFFECTIVE DATE OF THIS
SECTION AND EVERY JANUARY FIRST THEREAFTER, THE SECRETARY OF STATE SHALL
ISSUE A PROGRESS REPORT ON THE STATUS OF SUCH QUALIFIED PERSONAL DEVEL-
OPMENT ACCOUNT PROGRAMS.
S 300-J. FUNDS IN PARALLEL ACCOUNTS OF PROGRAM PARTICIPANTS DISRE-
GARDED FOR PURPOSES OF CERTAIN MEANS-TESTED STATE PROGRAMS. NOTWITH-
STANDING ANY PROVISION OF LAW TO THE CONTRARY, IN ANY INSTANCE IN WHICH
THE AMOUNT OF FINANCIAL OR OTHER ASSISTANCE PROVIDED TO AN INDIVIDUAL
RELIES UPON HIS OR HER INCOME, THE LESSER OF (I) THE SUM OF ALL CONTRIB-
UTIONS BY AN ELIGIBLE INDIVIDUAL TO A PERSONAL DEVELOPMENT ACCOUNT AND
ANY MATCHING DEPOSITS MADE ON BEHALF OF SUCH INDIVIDUAL INTO A PARALLEL
ACCOUNT; OR (II) TWO THOUSAND DOLLARS, SHALL NOT BE INCLUDED IN SUCH
PERSON'S INCOME.
S 300-K. DESIGNATION OF EARNED INCOME TAX CREDIT PAYMENTS FOR DEPOSIT
INTO PERSONAL DEVELOPMENT ACCOUNTS. WITH RESPECT TO THE TAX RETURN OF
ANY ELIGIBLE INDIVIDUAL FOR THE TAXABLE YEAR OF THE TAX IMPOSED BY ARTI-
CLE TWENTY-TWO OF THE TAX LAW, SUCH INDIVIDUAL MAY DESIGNATE THAT A
SPECIFIED PORTION OF ANY OVERPAYMENT OF TAX FOR SUCH TAXABLE YEAR THAT
IS ATTRIBUTABLE TO AN EARNED INCOME CREDIT SHALL BE DEPOSITED INTO A
PERSONAL DEVELOPMENT ACCOUNT.
S 2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.