S T A T E O F N E W Y O R K
________________________________________________________________________
6677
2013-2014 Regular Sessions
I N A S S E M B L Y
April 12, 2013
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Introduced by M. of A. BOYLAND -- read once and referred to the Commit-
tee on Banks
AN ACT to amend the banking law, in relation to creating the individual
development account program to provide savings incentives and opportu-
nities for certain foster children to pursue home ownership, postse-
condary education, and business development
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The banking law is amended by adding a new article 17 to
read as follows:
ARTICLE XVII
ASSET DEVELOPMENT INITIATIVE FOR CERTAIN FOSTER CHILDREN
SECTION 9050. DEFINITIONS.
9051. ESTABLISHMENT OF PROGRAM; RULES.
9052. PARTICIPANT ELIGIBILITY.
9053. CONTRIBUTIONS AND EXPENDITURES BY PARTICIPANT.
9054. DUTIES OF SPONSORING ORGANIZATIONS.
9055. MATCHING FUNDS; LIMITATIONS ON AMOUNT AND AVAILABILITY.
9056. WITHDRAWALS; TERMINATION OF ACCOUNT FOR UNQUALIFIED WITH-
DRAWALS.
9057. FUNDING.
9058. COORDINATION.
9059. INTERAGENCY CONTRACTS.
9060. AGENCY COOPERATION.
S 9050. DEFINITIONS. IN THIS ARTICLE:
1. "ASSETS FOR INDEPENDENCE ACT" MEANS THE FEDERAL ASSETS FOR INDE-
PENDENCE ACT (42 U.S.C. SECTION 604 NOTE).
2. "FINANCIAL INSTITUTION" MEANS A FINANCIAL ENTITY, INCLUDING, BUT
NOT LIMITED TO: A BANK, TRUST COMPANY, NATIONAL BANK, SAVINGS BANK,
FEDERAL MUTUAL SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, FEDERAL
SAVINGS AND LOAN ASSOCIATION, FEDERAL MUTUAL SAVINGS AND LOAN ASSOCI-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10009-01-3
A. 6677 2
ATION, CREDIT UNION, FEDERAL CREDIT UNION, BRANCH OF A FOREIGN BANKING
CORPORATION, PUBLIC PENSION FUND, RETIREMENT SYSTEM, SECURITIES BROKER,
SECURITIES DEALER, SECURITIES FIRM, AND INSURANCE COMPANY.
3. "INDIVIDUAL DEVELOPMENT ACCOUNT" MEANS A DEPOSIT ACCOUNT ESTAB-
LISHED BY A PARTICIPANT AT A FINANCIAL INSTITUTION SELECTED BY A SPON-
SORING ORGANIZATION.
4. "PARTICIPANT" MEANS AN INDIVIDUAL WHO HAS ENTERED INTO AN AGREEMENT
WITH A SPONSORING ORGANIZATION TO PARTICIPATE IN THE PROGRAM.
5. "PROGRAM" MEANS THE INDIVIDUAL DEVELOPMENT ACCOUNT PROGRAM ESTAB-
LISHED UNDER THIS ARTICLE.
6. "SERVICE PROVIDER" MEANS A PERSON TO WHOM A QUALIFIED EXPENDITURE
FROM A PARTICIPANT'S INDIVIDUAL DEVELOPMENT ACCOUNT IS MADE. SERVICE
PROVIDER INCLUDES:
(A) A PUBLIC OR PRIVATE INSTITUTION OF HIGHER EDUCATION;
(B) A PROVIDER OF OCCUPATIONAL OR VOCATIONAL EDUCATION, INCLUDING A
PROPRIETARY SCHOOL;
(C) A MORTGAGE LENDER;
(D) A TITLE INSURANCE COMPANY;
(E) THE LESSOR OR VENDOR OF OFFICE SUPPLIES OR EQUIPMENT OR RETAIL
SPACE, OFFICE SPACE, OR OTHER BUSINESS SPACE; AND
(F) ANY OTHER PROVIDER OF GOODS OR SERVICES USED FOR THE START OF A
BUSINESS.
7. "SPONSORING ORGANIZATION" HAS THE MEANING ASSIGNED TO "QUALIFIED
ENTITY" BY SECTION 404(7), ASSETS FOR INDEPENDENCE ACT, EXCEPT THAT THE
TERM DOES NOT INCLUDE A STATE AGENCY.
S 9051. ESTABLISHMENT OF PROGRAM; RULES. 1. THE SUPERINTENDENT MAY
DEVELOP AND IMPLEMENT A PROGRAM UNDER WHICH:
(A) INDIVIDUAL DEVELOPMENT ACCOUNTS ARE FACILITATED AND ADMINISTERED
BY SPONSORING ORGANIZATIONS FOR ELIGIBLE INDIVIDUALS TO PROVIDE THOSE
INDIVIDUALS WITH AN OPPORTUNITY TO ACCUMULATE ASSETS AND TO FACILITATE
AND MOBILIZE SAVINGS;
(B) SPONSORING ORGANIZATIONS ARE PROVIDED GRANT FUNDS FOR USE IN
ADMINISTERING THE PROGRAM AND MATCHING QUALIFIED EXPENDITURES MADE BY
PROGRAM PARTICIPANTS; AND
(C) AT LEAST EIGHTY-FIVE PERCENT OF THE GRANT FUNDS DESCRIBED BY PARA-
GRAPH (B) OF THIS SUBDIVISION MUST BE USED BY THE SPONSORING ORGANIZA-
TION FOR MATCHING QUALIFIED EXPENDITURES.
2. THE DEPARTMENT SHALL CONTRACT WITH SPONSORING ORGANIZATIONS TO
FACILITATE THE ESTABLISHMENT OF AND TO ADMINISTER THE INDIVIDUAL DEVEL-
OPMENT ACCOUNTS IN ACCORDANCE WITH THE PROGRAM IMPLEMENTED BY THE SUPER-
INTENDENT. THE PROGRAM MUST INCLUDE GUIDELINES FOR CONTRACT MONITORING,
REPORTING, TERMINATION, AND RECAPTURE OF STATE FUNDS.
3. THE SUPERINTENDENT SHALL STATE THE SELECTION CRITERIA FOR SPONSOR-
ING ORGANIZATIONS AND SHALL GIVE PRIORITY TO ORGANIZATIONS THAT HAVE
DEMONSTRATED:
(A) A CAPACITY TO ADMINISTER INDIVIDUAL DEVELOPMENT ACCOUNT PROGRAMS;
OR
(B) A COMMITMENT TO SERVE AREAS OF THIS STATE THAT CURRENTLY DO NOT
HAVE INDIVIDUAL DEVELOPMENT ACCOUNT PROGRAMS AVAILABLE.
S 9052. PARTICIPANT ELIGIBILITY. 1. ONLY FOSTER CHILDREN WHO ARE AT
LEAST FIFTEEN YEARS OF AGE AND YOUNGER THAN TWENTY-THREE YEARS OF AGE
MAY PARTICIPATE IN THE PROGRAM.
2. THE SUPERINTENDENT SHALL ESTABLISH ELIGIBILITY CRITERIA FOR PARTIC-
IPATION IN THE PROGRAM THAT ARE CONSISTENT WITH THE PURPOSES OF THE
PROGRAM AND WITH THE ASSETS FOR INDEPENDENCE ACT.
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S 9053. CONTRIBUTIONS AND EXPENDITURES BY PARTICIPANT. 1. A PARTIC-
IPANT MAY CONTRIBUTE TO THE PARTICIPANT'S INDIVIDUAL DEVELOPMENT
ACCOUNT.
2. A PARTICIPANT'S CONTRIBUTIONS TO THE PARTICIPANT'S INDIVIDUAL
DEVELOPMENT ACCOUNT SHALL ACCRUE INTEREST.
3. A PARTICIPANT MAY WITHDRAW MONEY FROM THE PARTICIPANT'S ACCOUNT
ONLY TO PAY FOR THE FOLLOWING QUALIFIED EXPENDITURES:
(A) POSTSECONDARY EDUCATION OR TRAINING EXPENSES FOR THE ACCOUNT HOLD-
ER;
(B) THE EXPENSES OF PURCHASING OR FINANCING A HOME FOR THE ACCOUNT
HOLDER FOR THE FIRST TIME;
(C) THE EXPENSES OF A SELF-EMPLOYMENT ENTERPRISE; AND
(D) START-UP BUSINESS EXPENSES FOR THE ACCOUNT HOLDER.
S 9054. DUTIES OF SPONSORING ORGANIZATIONS. 1. THE SUPERINTENDENT
SHALL ADOPT RULES TO ESTABLISH THE DUTIES OF SPONSORING ORGANIZATIONS
UNDER THE PROGRAM.
2. EACH SPONSORING ORGANIZATION SHALL PROVIDE TO THE DEPARTMENT ANY
INFORMATION NECESSARY TO EVALUATE THE SPONSORING ORGANIZATION'S PERFORM-
ANCE IN FULFILLING THE DUTIES OUTLINED IN THE SUPERINTENDENT'S RULES.
S 9055. MATCHING FUNDS; LIMITATIONS ON AMOUNT AND AVAILABILITY. 1. AT
THE TIME A PARTICIPANT IN THE PROGRAM MAKES A WITHDRAWAL FROM THE
PARTICIPANT'S INDIVIDUAL DEVELOPMENT ACCOUNT FOR A QUALIFIED EXPENDITURE
DESCRIBED BY SUBDIVISION THREE OF SECTION NINE THOUSAND FIFTY-THREE OF
THIS ARTICLE, THE PARTICIPANT SHALL RECEIVE MATCHING FUNDS FROM THE
SPONSORING ORGANIZATION, PAYABLE DIRECTLY TO THE SERVICE PROVIDER.
2. THE SPONSORING ORGANIZATION SHALL DETERMINE THE AMOUNT OF FEDERAL
MATCHING FUNDS SPENT FOR EACH INDIVIDUAL DEVELOPMENT ACCOUNT AS LIMITED
BY THE GUIDELINES ESTABLISHED BY THE ASSETS FOR INDEPENDENCE ACT.
3. THIS ARTICLE DOES NOT CREATE AN ENTITLEMENT OF A PARTICIPANT TO
RECEIVE MATCHING FUNDS. THE NUMBER OF PARTICIPANTS WHO RECEIVE MATCHING
FUNDS UNDER THE PROGRAM IN ANY YEAR IS LIMITED BY THE AMOUNT OF MONEY
AVAILABLE FOR THAT PURPOSE IN THAT YEAR.
S 9056. WITHDRAWALS; TERMINATION OF ACCOUNT FOR UNQUALIFIED WITH-
DRAWALS. 1. THE SUPERINTENDENT SHALL ESTABLISH GUIDELINES TO ENSURE
THAT A PARTICIPANT DOES NOT WITHDRAW MONEY FROM THE PARTICIPANT'S INDI-
VIDUAL DEVELOPMENT ACCOUNT EXCEPT FOR A QUALIFIED EXPENDITURE DESCRIBED
BY SUBDIVISION THREE OF SECTION NINE THOUSAND FIFTY-THREE OF THIS ARTI-
CLE.
2. THE SPONSORING ORGANIZATION SHALL INSTRUCT THE FINANCIAL INSTITU-
TION TO TERMINATE A PARTICIPANT'S ACCOUNT IF THE PARTICIPANT DOES NOT
COMPLY WITH THE GUIDELINES ESTABLISHED BY THE SUPERINTENDENT.
3. A PARTICIPANT WHOSE INDIVIDUAL DEVELOPMENT ACCOUNT IS TERMINATED
UNDER THIS SECTION IS ENTITLED TO WITHDRAW FROM THE PARTICIPANT'S
ACCOUNT THE AMOUNT OF MONEY THE PARTICIPANT CONTRIBUTED TO THE ACCOUNT
AND ANY INTEREST THAT HAS ACCRUED ON THAT AMOUNT.
S 9057. FUNDING. 1. THE LEGISLATURE MAY APPROPRIATE MONEY FOR THE
PURPOSES OF THIS ARTICLE.
2. THE DEPARTMENT MAY SOLICIT AND ACCEPT GIFTS, GRANTS, AND DONATIONS
FROM ANY PUBLIC OR PRIVATE SOURCE OF THE PURPOSES OF THIS ARTICLE.
3. IF MONEY IS NOT APPROPRIATED TO THE DEPARTMENT FOR THE PURPOSES OF
THIS ARTICLE THE DEPARTMENT IS ONLY REQUIRED TO IMPLEMENT SECTION NINE
THOUSAND FIFTY-EIGHT OF THIS ARTICLE.
S 9058. COORDINATION. THE DEPARTMENT SHALL:
1. SERVE AS A CLEARINGHOUSE FOR INFORMATION RELATING TO STATE AND
LOCAL AND PUBLIC AND PRIVATE PROGRAMS THAT FACILITATE ASSET DEVELOPMENT;
AND
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2. POST THE INFORMATION DESCRIBED BY SUBDIVISION ONE OF THIS SECTION
ON THE DEPARTMENT'S WEBSITE.
S 9059. INTERAGENCY CONTRACTS. THE DEPARTMENT MAY ENTER INTO INTERA-
GENCY CONTRACTS WITH OTHER STATE AGENCIES TO FACILITATE THE EFFECTIVE
ADMINISTRATION OF THIS ARTICLE.
S 9060. AGENCY COOPERATION. TO THE EXTENT ALLOWED BY LAW, THE SUPER-
INTENDENT SHALL PROVIDE INFORMATION TO THE DEPARTMENT AS NECESSARY TO
IMPLEMENT THIS ARTICLE.
S 2. This act shall take effect September 1, 2013.