New Jersey § 44:10-90

§ 44:10-90.

a. An eligible individual may, in agreement with a community-based organization selected

by the commissioner pursuant to section 4 of this act, open an individual development

account for the purpose of accumulating and withdrawing moneys for specified expenditures

pursuant to this section. Upon satisfaction of the organization's requirements for economic literacy by an

account holder, the organization shall certify to the commissioner that the account

holder may withdraw moneys from the account on the approval of the organization, without

penalty, for any of the expenditures listed in subsection c. of this section. b. The commissioner shall establish by regulation: (1) the minimum monthly deposit amount that each account holder shall be required

to maintain and the maximum monthly deposit amount that each account holder shall

be permitted to make, during their participation in the program; (2) the minimum time period the account holder shall maintain an individual development

account, pursuant to section 4 of this act, in order to be eligible to withdraw the

moneys deposited and receive the State matching funds, pursuant to this subsection

and subsections c., d. and e. of this section; (3) the prior notice of the account holder's intent to, and purpose for, withdrawing

individual development account funds and the minimum time period that an account holder

shall give notice to the individual development account trustee community-based organization

prior to an approved withdrawal in order to be eligible to receive State matching

funds pursuant to this subsection and subsections c., d. and e. of this section;

and (4) the maximum length of time an account holder may participate in the program. c. Upon satisfaction of the provisions of subsections a. and b. of this section by

the community-based organization: (1) the account holder may, upon the approval of the community-based organization,

withdraw moneys from the account holder's individual development account in the form

of a joint check or transfer of funds made payable to the account holder and the payee

of the approved withdrawal, pursuant to 45 C.F.R. s.263.22 , for any of the following purposes: (a) post-secondary educational expenses as defined in 42 U.S.C. s.604(h)(5) and 45 C.F.R. s.263.20 , which may include the purchase of a personal computer ; (b) qualified acquisition costs of a primary residence as defined in 42 U.S.C. s.604(h)(5) and 45 C.F.R. s.263.20 ; (c) qualified business capitalization expenses, as defined in 42 U.S.C. s.604(h)(5) and 45 C.F.R. s.263.20 , which may include the purchase of a personal computer and a motor vehicle; and (d) for deposit into an account established for the benefit of an eligible individual

who is the individual's spouse or any dependent of the individual with respect to

whom the individual is allowed a deduction under section 151 of the Internal Revenue Code of 1986 ( 26 U.S.C. 151 ) . (2) if the account holder withdraws any moneys from the account and uses those moneys,

or any part of those moneys, for a purpose other than that permitted pursuant to this

subsection, the account holder shall forfeit all matching funds associated with the

unapproved withdrawal. The account holder shall receive only the moneys which the account holder has deposited

into the account. (3) the commissioner, in consultation with the Commissioner of Human Services, shall

establish procedures to ensure that funds held in an individual development account

under this act are withdrawn for qualified purposes only, as defined in this subsection. Penalties for unapproved withdrawals may include taxing the withdrawal as income

and, as applicable, including the withdrawal as income or resources in determining

eligibility for federal and State public assistance pursuant to 45 C.F.R. s.263.23 . d. Community-based organizations approved by the department shall establish an individual

development account in trust for an eligible individual in a financial institution

as required pursuant to this act. Organizations may, with the approval of the commissioner, employ methods to maximize

the efficiency of multiple individual development accounts, such as pooling deposits

into a single account held by the financial institution, with individual account information

maintained by the organization. In addition, with the approval of the commissioner, organizations shall develop

an efficient means of providing the match portion of an individual development account,

such as matching deposits at the time of approved withdrawal only. Organizations acting as trustees under this act shall, at all times, maintain current

account information, without regard to the chosen method of administration, on all

individual development accounts, which shall include: the individual development

account balance, a time indexed record of deposits and withdrawals made by the account

holder and the current match level. Community-based organizations under this act shall certify to the department that

the accounts have been established pursuant to the provisions of this act in trust

for the account holder in the manner approved by the commissioner. e. A community-based organization establishing an individual development account shall: (1) sign an agreement with an eligible individual to the effect that the account shall

be kept in the name of the eligible individual as the account holder and that the

eligible individual shall have an officer of the organization as a trustee of the

account; (2) open and keep the account in the name of the eligible individual, with an officer

of the organization as trustee; (3) permit the account holder to deposit earned income, as defined in 42 U.S.C. s.604(h)(2)(C) , into an individual development account which shall be matched by the organization

when withdrawn for an approved expenditure, pursuant to subsection c. of this section; (4) maintain the records of individual development accounts in a manner that enables

the organization to determine the amounts deposited by the account holder and amounts

paid by the organization as matching funds; (5) require the individual development account to earn a rate of interest that reasonably

reflects the prevailing market rate paid on like deposits by financial institutions

in this State, which shall be credited to the account holder; (6) permit the account holder, after obtaining the signature of the trustee, to withdraw

moneys from the account for any of the purposes listed in subsection c. of this section; (7) remit matching funds in the form of a joint check or transfer of funds made payable

to the account holder and the payee of the approved withdrawal, pursuant to 45 C.F.R. s.263.22 at the time the account holder withdraws funds for a purpose permitted pursuant to

subsection c. of this section; (8) work with other community-based organizations and State agencies to coordinate

the program with other private and public programs designed for asset accumulation

and self-sufficiency, such as transportation, child care and health care services,

New Jersey Housing and Mortgage Finance Agency programs, Federal National Mortgage

Association (Fannie Mae) mortgage programs and other programs under the direction

of the Department of Human Services, such as the Family Loan Pilot Program and Entrepreneur

Development Services Pilot Program; (9) provide financial counseling to account holders and assist them in establishing

a secure, low-risk, effective savings opportunity, for the purposes of an individual

development account, for income that is in excess of the individual development account

maximum match of $2,000 per year or income that does not meet the definition of earned income, as defined

in paragraph (3) of this subsection, such as federal and State earned income tax credits,

homestead and property tax rebates, inheritance, monetary damages recovered in a legal

proceeding and income from the sale of an asset. The account shall be tailored to each account holder's resources and financial goals

and shall be held in a separate account from the individual development account. Accounts investigated may include money market accounts, individual retirement accounts,

certificates of deposit and individual development accounts that do not include matching

federal or State funds; and (10) be deemed to have a fiduciary duty with respect to moneys in an individual development

account or reserve fund. The commissioner may require that an organization post and maintain a fidelity bond

or other security with regard to the position of the organization as fiduciary for

the moneys in an individual development account or reserve fund.