Governor signs savings plan legislation

Gov. Kathleen Sebelius today signed a bill designed to help low income working Kansas working families save money for post-high school education or for a first-time home or a business.

The bill allows the creation of individual development accounts, which can not only receive contributions from the family, but be matched by tax-exempt contributions from charities.

“For too many Kansans, the dreams of getting a better education, buying a house or starting a business seem out of reach,” the governor said in signing HB 2222. “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.”

Under the bill, a family or individual whose household income is less than or equal to 200 percent of the federal poverty level can open such an account.

The maximum contribution per year is $4,000, with a maximum account balance of $50,000.

The accounts could be used to pay for:

  • Postsecondary educational costs for any family member.
  • Job training costs for any family members 18 years of age or older at an accredited or licenses training program.
  • The purchases of a principal residence for a qualified first-time home buyer.
  • Major repairs or improvements to a primary residence, or
  • Qualified business capitalization expenses.