HB-5943, As Passed House, December 7, 2006

HOUSE BILL No. 5943

March 30, 2006, Introduced by Rep. Hunter and referred to the Committee on Banking and Financial Services.

     A bill to amend 1939 PA 280, entitled

"The social welfare act,"

by amending section 57k (MCL 400.57k), as amended by 2004 PA 445.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 57k. (1) The department shall operate a program allowing

an individual eligible for family independence assistance to

establish an individual development account for postsecondary

education, business capitalization, or a first-time home purchase

in accordance with this section. The department shall disregard all

savings deposited, including accrued interest, in an individual

development account and individual or family development account in

determining the individual's eligibility for family independence

assistance and the amount of the grant the individual receives.

     (2) An individual who is eligible to receive family

independence assistance, or another person on behalf of that

individual, may establish an individual development account for the

purpose of accumulating funds for a qualified purpose described in

subsection (3). An individual shall only contribute money to the

individual development account that is derived from earned income,

as that term is defined in section 911(d)(2) of the internal

revenue code.  of 1986.  The individual shall withdraw money from

the individual development account only for a qualified purpose

described in subsection (3).

     (3) An individual who has established an individual

development account under this section may withdraw and expend

funds from the individual development account only for payment

toward postsecondary education or business capitalization, or for

payment of qualified acquisition costs with respect to a qualified

principal residence for a qualified first-time homebuyer, if paid

from an individual development account directly to the persons to

whom the qualified acquisition costs are due.

     (4) The department shall operate the program authorized by

this section in coordination with the individual or family

development account program of the Michigan state housing

development authority established under the individual or family

development account program act.

(5)  (4) As used in this section:

     (a) "Date of acquisition" means the date on which a qualified

first-time homebuyer enters into a binding contract to acquire,

construct, or reconstruct the qualified first-time homebuyer's

principal residence.

     (b) "Individual development account" means a trust created or

organized in the United States that is funded through periodic

contributions by the establishing individual in accordance with

this section and that may be matched by or through a qualified

entity for a qualified purpose described in subsection (3).

     (c) "Individual or family development account" means that term

as defined in the individual or family development account program

act.

(d)  (c) "Qualified acquisition costs" means the costs of

acquiring, constructing, or reconstructing a qualified principal

residence. The term includes any usual or reasonable settlement,

financing, or other closing costs.

(e)  (d) "Qualified entity" means either of the following:

     (i) A not-for-profit organization described in section

501(c)(3) of the internal revenue code  of 1986 and exempt from

taxation under section 501(a) of the internal revenue code.  of

1986.

     (ii) A state or local governmental agency acting in cooperation

with an organization described in subparagraph (i).

(f)  (e) "Qualified first-time homebuyer" means a taxpayer

and, if married, the taxpayer'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 qualified principal residence to

which this section applies.

(g)  (f) "Qualified principal residence" means a principal

residence within the meaning of former section 1034 of the internal

revenue code,  of 1986, the qualified acquisition costs of which

House Bill No. 5943 as amended December 7, 2006

do not exceed 100% of the average area purchase price applicable to

that residence, determined in accordance with paragraphs (2) and

(3) of section 143(e) of the internal revenue code.  of 1986.

     [Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 93rd Legislature are enacted into law:

     (a) Senate Bill No. 640.

     (b) House Bill No. 5022.]