I 

113TH CONGRESS 

1ST SESSION H. R. 2917 

To promote savings by providing a tax credit for eligible taxpayers who 

contribute to savings products and to facilitate taxpayers receiving this 

credit and open a designated savings product when they file their Federal 

income tax returns. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 1, 2013 

Mr. SERRANO (for himself, Mr. HINOJOSA, Mr. DOGGETT, Mr. CONYERS, Mr. 

RICHMOND, Mrs. CAROLYN B. MALONEY of New York, Ms. MENG, Mr. 

PIERLUISI, Ms. ROYBAL-ALLARD, Ms. VELA ́ZQUEZ, Mr. GUTIE ́RREZ, Mr. 

CARTWRIGHT, Mr. HONDA, Ms. MCCOLLUM, Mr. SIRES, Mr. GRIJALVA, 

Mr. VARGAS, Mr. NOLAN, Mr. CASTRO of Texas, Mr. JOHNSON of Georgia, and Mr. JEFFRIES) introduced the following bill; which was referred 

to the Committee on Ways and Means 

A BILL 

To promote savings by providing a tax credit for eligible 

taxpayers who contribute to savings products and to 

facilitate taxpayers receiving this credit and open a designated savings product when they file their Federal 

income tax returns. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Financial Security 

5 Credit Act of 2013’’. 


smartinez on DSK6TPTVN1PROD with BILLS
2 

•HR 2917 IH

1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) The personal savings rate reached historic 

4 lows in the past decade, and a lack of personal sav5 ings was a major contributor to the depth and sever6 ity of the recession of 2007–2009. 

7 (2) Households continue to lack the savings or 

8 structures to meet short-term and long-term needs, 

9 as evidenced by the following: 

10 (A) According to the Employee Benefit Re11 search Institute, among full-time, full-year wage 

12 and salary workers ages 21–64, only 54.5 per 

13 cent participated in a retirement plan in 2010. 

14 (B) According to the Federal Deposit In15 surance Corporation’s 2011 Survey of 

16 Unbanked and Underbanked Households, an es17 timated 8.2 percent of United States house18 holds, approximately 10 million households, are 

19 unbanked. These households do not have a 

20 checking or savings account. In total, 29.3 per21 cent of households do not have a savings ac22 count. 

23 (C) More than 1 in 4 American households 

24 lives in ‘‘asset poverty’’, meaning they lack the 

25 savings or other assets to cover basic expenses 

26 (equivalent to what could be purchased with a 


smartinez on DSK6TPTVN1PROD with BILLS
3 

•HR 2917 IH

1 poverty level income) for three months if a lay2 off or other emergency leads to loss of income. 

3 If assets that cannot easily be converted to 

4 cash, are excluded, such as a home or a busi5 ness, as many as 4 in 10 households live in 

6 ‘‘liquid asset poverty’’, meaning they lack the 

7 cash savings to survive three months at the 

8 poverty line. 

9 (3) Savings make families more resilient to fi10 nancial shocks and more upwardly mobile, as evi11 denced by the following: 

12 (A) Even small sums of savings, $2,000 or 

13 less, have been shown to significantly reduce 

14 the incidence of negative financial or material 

15 outcomes, such as foregoing adequate nutrition. 

16 (B) Children born to low-income, high sav17 ing parents are much more likely (71 percent) 

18 to move up the economic ladder than children 

19 born to low-income, low-saving parents (50 per20 cent) over a generation. 

21 (4) Successful pilot programs have been run in 

22 cities as diverse as Houston, Texas; Newark, New 

23 Jersey; New York City, New York; San Antonio, 

24 Texas; and Tulsa, Oklahoma. These programs, run 

25 through Volunteer Income Tax Assistance sites servVerDate Mar 15 2010 23:34 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2917.IH H2917

smartinez on DSK6TPTVN1PROD with BILLS
4 

•HR 2917 IH

1 ing only a fraction of potentially eligible tax filers in 

2 each city, have shown that tax filers with low in3 comes can and will save when presented with the 

4 right incentive at the right moment. 

5 (5) It is in the economic interests of the United 

6 States to promote savings among all members of so7 ciety, regardless of income. 

8 SEC. 3. FINANCIAL SECURITY CREDIT. 

9 (a) IN GENERAL.—Subpart C of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 is amended by inserting after section 36C the fol12 lowing new section: 

13 ‘‘SEC. 36D. FINANCIAL SECURITY CREDIT. 

14 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al15 lowed as a credit against the tax imposed by this subtitle 

16 for a taxable year an amount equal to the lesser of— 

17 ‘‘(1) $500, or 

18 ‘‘(2) 50 percent of the total amount deposited 

19 or contributed by the taxpayer in accordance with 

20 subsection (b)(1) into designated savings products 

21 during such taxable year. 

22 ‘‘(b) LIMITATIONS.— 

23 ‘‘(1) CREDIT MUST BE DEPOSITED IN OR CON24 TRIBUTED TO DESIGNATED SAVINGS PRODUCT.—No 

25 amount shall be allowed as a credit under subsection 


smartinez on DSK6TPTVN1PROD with BILLS
5 

•HR 2917 IH

1 (a) for a taxable year unless the taxpayer designates 

2 on the taxpayer’s return of tax for the taxable year 

3 that the amount of the credit for such taxable year 

4 be deposited in or contributed to one or more des5 ignated savings products of the taxpayer and the 

6 Secretary makes such deposits or contributions to 

7 the designated savings products. 

8 ‘‘(2) LIMITATION BASED ON ADJUSTED GROSS

9 INCOME.— 

10 ‘‘(A) IN GENERAL.—The amount of the 

11 credit allowable under subsection (a) shall be 

12 reduced (but not below zero) by an amount 

13 which bears the same ratio to the amount of 

14 such credit (determined without regard to this 

15 paragraph) as— 

16 ‘‘(i) the amount by which the tax17 payer’s adjusted gross income exceeds the 

18 threshold amount, bears to 

19 ‘‘(ii) $15,000. 

20 ‘‘(B) THRESHOLD AMOUNT.—For purposes 

21 of subparagraph (A), the term ‘threshold 

22 amount’ means— 

23 ‘‘(i) $55,500 in the case of a joint re24 turn, 


smartinez on DSK6TPTVN1PROD with BILLS
6 

•HR 2917 IH

1 ‘‘(ii) $41,625 in the case of an indi2 vidual who is not married, and 

3 ‘‘(iii) 50 percent of the dollar amount 

4 in effect under clause (i) in the case of a 

5 married individual filing a separate return. 

6 For purposes of this subparagraph, marital sta7 tus shall be determined under section 7703. 

8 ‘‘(c) DESIGNATED SAVINGS PRODUCT.—For pur9 poses of this section, the term ‘designated savings product’ 

10 means any of the following: 

11 ‘‘(1) A qualified retirement plan (as defined in 

12 section 4974(c)). 

13 ‘‘(2) A qualified tuition program (as defined in 

14 section 529). 

15 ‘‘(3) A Coverdell education savings account (as 

16 defined in section 530). 

17 ‘‘(4) A United States savings bond. 

18 ‘‘(5) A certificate of deposit (or similar class of 

19 deposit) with a duration of at least 8 months. 

20 ‘‘(6) A savings account. 

21 ‘‘(7) Any other type of savings product consid22 ered to be appropriate by the Secretary for the pur23 poses of this section. 

24 ‘‘(d) SPECIAL RULES.— 


smartinez on DSK6TPTVN1PROD with BILLS
7 

•HR 2917 IH

1 ‘‘(1) TAX REFUNDS TREATED AS DEPOSITED

2 OR CONTRIBUTED IN CURRENT TAXABLE YEAR.— 

3 For purposes of subsection (a)(2), the amount of 

4 any overpayment of taxes refunded to the taxpayer 

5 (reduced by any amount attributable to the credit al6 lowed under this section by reason of being consid7 ered as an overpayment by section 6401(b)) and 

8 designated for deposit in or contribution to a des9 ignated savings product of the taxpayer shall be 

10 treated as an amount deposited or contributed in the 

11 taxable year in which so deposited or contributed. 

12 ‘‘(2) MAINTENANCE OF DEPOSIT.—No con13 tribution or deposit shall be taken into account 

14 under subsection (a) unless such contribution or de15 posit remains in the designated savings product for 

16 not less than 8 continuous months. 

17 ‘‘(3) REDUCTION IN DEPOSITS IN DESIGNATED

18 SAVINGS PRODUCTS.— 

19 ‘‘(A) IN GENERAL.—The amount of depos20 its or contributions taken into account under 

21 subsection (a) shall be reduced (but not below 

22 zero) by the aggregate amount of distributions 

23 (other than interest from designated savings 

24 products specified in paragraphs (4), (5), (6), 

25 and (7) of subsection (c)) from all designated 


smartinez on DSK6TPTVN1PROD with BILLS
8 

•HR 2917 IH

1 savings products of the taxpayer during the 

2 testing period. The preceding sentence shall not 

3 apply to the portion of any distribution which 

4 is not includible in gross income by reason of 

5 a trustee-to-trustee transfer or a rollover dis6 tribution. 

7 ‘‘(B) TESTING PERIOD.—For purposes of 

8 subparagraph (A), the testing period, with re9 spect to a taxable year, is the period which in10 cludes— 

11 ‘‘(i) such taxable year, 

12 ‘‘(ii) the 2 preceding taxable years, 

13 and 

14 ‘‘(iii) the period after such taxable 

15 year and before the due date (including ex16 tensions) for filing the return of tax for 

17 such taxable year. 

18 ‘‘(C) OTHER RULES.—Rules similar to 

19 subparagraphs (C) and (D) of section 

20 25B(d)(2) shall apply for purposes of this para21 graph. 

22 ‘‘(4) DENIAL OF DOUBLE BENEFIT.—No credit 

23 shall be allowed under section 25B with respect to 

24 any deposit for which a credit is allowed under this 

25 section. 


smartinez on DSK6TPTVN1PROD with BILLS
9 

•HR 2917 IH

1 ‘‘(5) COORDINATION WITH OTHER REFUND2 ABLE CREDITS.—The credit allowed by subsection 

3 (a) shall be taken into account after taking into ac4 count the credits allowed by (or treated as allowed 

5 by) this subpart (other than this section). 

6 ‘‘(e) INFLATION ADJUSTMENTS.— 

7 ‘‘(1) CREDIT LIMIT.—In the case of any taxable 

8 year beginning in a calendar year after 2023, the 

9 dollar amount in subsection (a)(1) shall be increased 

10 by an amount equal to— 

11 ‘‘(A) such dollar amount, multiplied by 

12 ‘‘(B) the cost-of-living adjustment deter13 mined under section 1(f)(3) for the calendar 

14 year in which the taxable year begins, deter15 mined by substituting ‘calendar year 2012’ for 

16 ‘calendar year 1992’ in subparagraph (B) 

17 thereof. 

18 ‘‘(2) AGI THRESHOLDS.—In the case of any 

19 taxable year beginning in a calendar year after 

20 2013, each of the dollar amounts in clauses (i) and 

21 (ii) of subsection (b)(2)(B) shall be increased by an 

22 amount equal to— 

23 ‘‘(A) such dollar amount, multiplied by 

24 ‘‘(B) the cost-of-living adjustment deter25 mined under section 1(f)(3) for the calendar 


smartinez on DSK6TPTVN1PROD with BILLS
10 

•HR 2917 IH

1 year in which the taxable year begins, deter2 mined by substituting ‘calendar year 2012’ for 

3 ‘calendar year 1992’ in subparagraph (B) 

4 thereof. 

5 ‘‘(3) ROUNDING.— 

6 ‘‘(A) CREDIT LIMIT.—If any increase 

7 under paragraph (1) is not a multiple of $10, 

8 such increase shall be rounded to the next low9 est multiple of $10. 

10 ‘‘(B) AGI THRESHOLDS.—If any increase 

11 under paragraph (1) is not a multiple of $100, 

12 such increase shall be rounded to the next low13 est multiple of $100. 

14 ‘‘(f) REGULATIONS.—Not later than 12 months from 

15 date of enactment of this section, the Secretary shall issue 

16 such regulations or other guidance as the Secretary deter17 mines necessary or appropriate to carry out this section, 

18 including regulations or guidance— 

19 ‘‘(1) to ensure that designated savings products 

20 are subject to appropriate reporting requirements, 

21 including the reporting of contributions and other 

22 deposits during the calendar year, end of calendar 

23 year account balances, and earnings from designated 

24 savings products specified in paragraphs (4), (5), 

25 (6), and (7) of subsection (c), 


smartinez on DSK6TPTVN1PROD with BILLS
11 

•HR 2917 IH

1 ‘‘(2) to carry out the maintenance of deposit 

2 provisions under subsection (d)(2), and 

3 ‘‘(3) to prevent avoidance of the purposes of 

4 this subsection.’’. 

5 (b) CONFORMING AMENDMENTS.— 

6 (1) Section 1324(b)(2) of title 31, United 

7 States Code, is amended by inserting ‘‘36D,’’ after 

8 ‘‘36B,’’. 

9 (2) The table of sections for subpart C of part 

10 IV of subchapter A of chapter 1 of the Internal Rev11 enue Code of 1986 is amended by inserting after the 

12 item relating to section 36C the following new item: 

‘‘Sec. 36D. Financial security credit.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2013. 

16 SEC. 4. OPENING OF ACCOUNTS ON FEDERAL INCOME TAX 

17 RETURNS TO FACILITATE SAVINGS. 

18 (a) NOTIFICATION OF OPTION.— 

19 (1) IN GENERAL.—The Commissioner of Inter20 nal Revenue shall notify individuals who may qualify 

21 for a credit under section 36D of the Internal Rev22 enue Code of 1986 but fail to provide sufficient in23 formation to allow the Secretary to deposit or con24 tribute the credit amount to a designated savings 

25 product that they have the option of an electronic diVerDate Mar 15 2010 23:34 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2917.IH H2917

smartinez on DSK6TPTVN1PROD with BILLS
12 

•HR 2917 IH

1 rect deposit and that they may be eligible for the fi2 nancial security credit under section 36D of the In3 ternal Revenue Code of 1986 if they deposit a re4 fund or a portion of their refund in any designated 

5 savings product. 

6 (2) METHOD OF NOTIFICATION.—The notifica7 tion under paragraph (1) shall be made through— 

8 (A) a public awareness program under9 taken by the Secretary of the Treasury, in con10 cert with the Commissioner of the Internal Rev11 enue and others as necessary, beginning not 

12 later than 6 months after the date of the enact13 ment of this Act; 

14 (B) tax return preparers and low-income 

15 taxpayer clinics; and 

16 (C) the inclusion of such a notice in the in17 struction material for any Federal income tax 

18 return. 

19 (b) ESTABLISHMENT OF DESIGNATED ACCOUNT

20 PROGRAM.—The Secretary of the Treasury shall develop, 

21 in consultation with the Federal Management System, a 

22 program to minimize the delivery of non-electronic Federal 

23 income tax refunds by depositing refunds electronically to 

24 a safe, low-cost account held by a depository institution. 

25 This program shall include— 


smartinez on DSK6TPTVN1PROD with BILLS
13 

•HR 2917 IH

1 (1) provisions for such tax refunds to be depos2 ited into a designated account; 

3 (2) establishment of account parameters with 

4 respect to minimum balance requirements, limita5 tions on overdrafts, overdraft fees, other fees, and 

6 additional requirements; 

7 (3) establishment of means for the taxpayer to 

8 access the account electronically and to have timely, 

9 direct access to the funds in the account; and 

10 (4) provisions to allow taxpayers to open an ac11 count with their Federal income tax refunds through 

12 financial service providers, so long such account is 

13 held at a depository institution insured under the 

14 Federal Deposit Insurance Act or a credit union in15 sured under the Federal Credit Union Act. 

16 (c) EFFECTIVE DATE.—The notification under sub17 section (a) and the program under subsection (b) shall be 

18 effective with respect to Federal income tax returns for 

19 taxable years beginning after December 31, 2013. 

Æ 


smartinez on DSK6TPTVN1PROD with BILLS