8 April 2005

Governor signs bill to expand opportunity, help Kansas families save

Governor Kathleen Sebelius today signed a bill that will help working families save for education and job training, a first-time home purchase, or the creation of a business.  The contributions to an Individual Development Account could be matched by contributions from a charity. Contributors to the charity, for this purpose, would be eligible for tax savings.         

“For too many Kansans, the dreams of getting a better education, buying a house, or starting a business seem out of reach.  We’re giving working Kansans a way to save for these expenses.  This expands opportunity and gives more people a chance at achieving the American Dream,” Governor Sebelius said.

A family or individual whose household income is less than or equal to 200 percent of the federal poverty level at the time of application to an individual development account program may open an Individual Development Account. 

The individual contribution per year would be $4,000, with a maximum account balance of $50,000.  A designated charity would recruit matching contributions that would be eligible for a refundable state income tax credit of up 50 percent of the contribution amount.  This program is similar to the popular community service tax credit program that has been in existence since 1994.

“When we help Kansans get a better job by going back to school, or when we encourage more of our neighbors to become home and business owners, our entire state benefits,” the Governor said.

The Individual Development Account could be used to pay for:

Postsecondary educational costs for any family member;

Job training costs for any family member 18 years of age or older at an accredited or licensed training program;

The purchase of a principal residence for a qualified first-time home buyer;

Major repairs or improvements to a primary residence; or

Qualified business capitalization expenses.

The bill number is HB 2222.