HOUSE BILL No. 4786 May 14, 1997, Introduced by Reps. Price, Profit, Mans, LaForge, Hanley, Martinez, Baird, Hale, DeHart, Parks, Schauer, Palamara and Brater and referred to the Committee on Human Services and Children. A bill to amend 1939 PA 280, entitled "The social welfare act," (MCL 400.1 to 400.119b) by adding section 57k. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 SEC. 57K. (1) THE DEPARTMENT SHALL OPERATE A PROGRAM ALLOW- 2 ING AN INDIVIDUAL ELIGIBLE FOR FAMILY INDEPENDENCE ASSISTANCE TO 3 ESTABLISH AN INDIVIDUAL DEVELOPMENT ACCOUNT FOR FIRST-TIME HOME- 4 BUYERS IN ACCORDANCE WITH THIS SECTION. THE DEPARTMENT SHALL 5 DISREGARD FUNDS, INCLUDING ACCRUED INTEREST, IN AN INDIVIDUAL 6 DEVELOPMENT ACCOUNT IN DETERMINING THE INDIVIDUAL'S ELIGIBILITY 7 FOR FAMILY INDEPENDENCE ASSISTANCE AND THE AMOUNT OF THE GRANT 8 THE INDIVIDUAL RECEIVES. 9 (2) AN INDIVIDUAL WHO IS ELIGIBLE TO RECEIVE FAMILY 10 INDEPENDENCE ASSISTANCE, OR ANOTHER PERSON ON BEHALF OF THAT 11 INDIVIDUAL, MAY ESTABLISH AN INDIVIDUAL DEVELOPMENT ACCOUNT FOR 03472'97 MGM 2 1 THE PURPOSE OF ACCUMULATING FUNDS FOR A QUALIFIED PURPOSE 2 DESCRIBED IN SUBSECTION (3). AN INDIVIDUAL SHALL ONLY CONTRIBUTE 3 MONEY TO THE INDIVIDUAL DEVELOPMENT ACCOUNT THAT IS DERIVED FROM 4 EARNED INCOME, AS THAT TERM IS DEFINED IN SECTION 911(d)(2) OF 5 THE INTERNAL REVENUE CODE OF 1986. THE INDIVIDUAL SHALL WITHDRAW 6 MONEY FROM THE INDIVIDUAL DEVELOPMENT ACCOUNT ONLY FOR A QUALI- 7 FIED PURPOSE DESCRIBED IN SUBSECTION (3). 8 (3) AN INDIVIDUAL WHO HAS ESTABLISHED AN INDIVIDUAL DEVELOP- 9 MENT ACCOUNT UNDER THIS SECTION MAY WITHDRAW AND EXPEND FUNDS 10 FROM THE INDIVIDUAL DEVELOPMENT ACCOUNT ONLY FOR PAYMENT OF QUAL- 11 IFIED ACQUISITION COSTS WITH RESPECT TO A QUALIFIED PRINCIPAL 12 RESIDENCE FOR A QUALIFIED FIRST-TIME HOMEBUYER, IF PAID FROM AN 13 INDIVIDUAL DEVELOPMENT ACCOUNT DIRECTLY TO THE PERSONS TO WHOM 14 THE QUALIFIED ACQUISITION COSTS ARE DUE. 15 (4) AS USED IN THIS SECTION: 16 (A) "DATE OF ACQUISITION" MEANS THE DATE ON WHICH A QUALI- 17 FIED FIRST-TIME HOMEBUYER ENTERS INTO A BINDING CONTRACT TO 18 ACQUIRE, CONSTRUCT, OR RECONSTRUCT THE QUALIFIED FIRST-TIME 19 HOMEBUYER'S PRINCIPAL RESIDENCE. 20 (B) "INDIVIDUAL DEVELOPMENT ACCOUNT" MEANS A TRUST CREATED 21 OR ORGANIZED IN THE UNITED STATES THAT IS FUNDED THROUGH PERIODIC 22 CONTRIBUTIONS BY THE ESTABLISHING INDIVIDUAL IN ACCORDANCE WITH 23 THIS SECTION AND THAT MAY BE MATCHED BY OR THROUGH A QUALIFIED 24 ENTITY FOR A QUALIFIED PURPOSE DESCRIBED IN SUBSECTION (3). 25 (C) "QUALIFIED ACQUISITION COSTS" MEANS THE COSTS OF ACQUIR- 26 ING, CONSTRUCTING, OR RECONSTRUCTING A QUALIFIED PRINCIPAL 03472'97 3 1 RESIDENCE. THE TERM INCLUDES ANY USUAL OR REASONABLE SETTLEMENT, 2 FINANCING, OR OTHER CLOSING COSTS. 3 (D) "QUALIFIED ENTITY" MEANS EITHER OF THE FOLLOWING: 4 (i) A NOT-FOR-PROFIT ORGANIZATION DESCRIBED IN SECTION 5 501(c)(3) OF THE INTERNAL REVENUE CODE OF 1986 AND EXEMPT FROM 6 TAXATION UNDER SECTION 501(a) OF THAT CODE. 7 (ii) A STATE OR LOCAL GOVERNMENTAL AGENCY ACTING IN COOPERA- 8 TION WITH AN ORGANIZATION DESCRIBED IN SUBPARAGRAPH (i). 9 (E) "QUALIFIED FIRST-TIME HOMEBUYER" MEANS A TAXPAYER AND, 10 IF MARRIED, THE TAXPAYER'S SPOUSE WHO HAS NO PRESENT OWNERSHIP 11 INTEREST IN A PRINCIPAL RESIDENCE DURING THE 3-YEAR PERIOD ENDING 12 ON THE DATE OF ACQUISITION OF THE QUALIFIED PRINCIPAL RESIDENCE 13 TO WHICH THIS SECTION APPLIES. 14 (F) "QUALIFIED PRINCIPAL RESIDENCE" MEANS A PRINCIPAL RESI- 15 DENCE WITHIN THE MEANING OF SECTION 1034 OF THE INTERNAL REVENUE 16 CODE OF 1986, THE QUALIFIED ACQUISITION COSTS OF WHICH DO NOT 17 EXCEED 100% OF THE AVERAGE AREA PURCHASE PRICE APPLICABLE TO THAT 18 RESIDENCE, DETERMINED IN ACCORDANCE WITH PARAGRAPHS (2) AND (3) 19 OF SECTION 143(e) OF THE INTERNAL REVENUE CODE OF 1986. 03472'97 Final page. MGM