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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1106 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                S. 1106

To provide for the establishment of demonstration projects designed to 
  determine the social, civic, psychological, and economic effects of 
providing to individuals and families with limited means an opportunity 
  to accumulate assets, and to determine the extent to which an asset-
   based policy may be used to enable individuals and families with 
          limited means to achieve economic self-sufficiency.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 31, 1997

   Mr. Coats introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To provide for the establishment of demonstration projects designed to 
  determine the social, civic, psychological, and economic effects of 
providing to individuals and families with limited means an opportunity 
  to accumulate assets, and to determine the extent to which an asset-
   based policy may be used to enable individuals and families with 
          limited means to achieve economic self-sufficiency.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Assets for 
Independence Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
Sec. 5. Applications.
Sec. 6. Demonstration authority; annual grants.
Sec. 7. Reserve fund.
Sec. 8. Eligibility for participation.
Sec. 9. Selection of individuals to participate.
Sec. 10. Deposits by qualified entities.
Sec. 11. Local control over demonstration projects.
Sec. 12. Annual progress reports.
Sec. 13. Sanctions.
Sec. 14. Evaluations.
Sec. 15. Authorizations of appropriations.
Sec. 16. Funds in individual development accounts of demonstration 
                            project participants disregarded for 
                            purposes of all means-tested Federal 
                            programs.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Economic well-being does not come solely from income, 
        spending, and consumption, but also requires savings, 
        investment, and accumulation of assets because assets can 
        improve economic independence and stability, connect 
        individuals with a viable and hopeful future, stimulate 
        development of human and other capital, and enhance the welfare 
        of offspring.
            (2) Fully \1/2\ of all Americans have either no, 
        negligible, or negative assets available for investment, just 
        as the price of entry to the economic mainstream, the cost of a 
        house, an adequate education, and starting a business, is 
        increasing. Further, the household savings rate of the United 
        States lags far behind other industrial nations presenting a 
        barrier to economic growth.
            (3) In the current tight fiscal environment, the United 
        States should invest existing resources in high-yield 
        initiatives. There is reason to believe that the financial 
        returns, including increased income, tax revenue, and decreased 
        welfare cash assistance, resulting from individual development 
        accounts will far exceed the cost of investment in those 
        accounts.
            (4) Traditional public assistance programs concentrating on 
        income and consumption have rarely been successful in promoting 
        and supporting the transition to increased economic self-
        sufficiency. Income-based domestic policy should be 
        complemented with asset-based policy because, while income-
        based policies ensure that consumption needs (including food, 
        child care, rent, clothing, and health care) are met, asset-
        based policies provide the means to achieve greater 
        independence and economic well-being.

SEC. 3. PURPOSES.

    The purposes of this Act are to provide for the establishment of 
demonstration projects designed to determine--
            (1) the social, civic, psychological, and economic effects 
        of providing to individuals and families with limited means an 
        incentive to accumulate assets by saving a portion of their 
        earned income;
            (2) the extent to which an asset-based policy that promotes 
        saving for education, homeownership, and microenterprise 
        development may be used to enable individuals and families with 
        limited means to increase their economic self-sufficiency; and
            (3) the extent to which an asset-based policy stabilizes 
        and improves families and the community in which they live.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Applicable period.--The term ``applicable period'' 
        means, with respect to amounts to be paid from a grant made for 
        a project year, the calendar year immediately preceding the 
        calendar year in which the grant is made.
            (2) Eligible individual.--The term ``eligible individual'' 
        means an individual who is selected to participate by a 
        qualified entity under section 9 of this Act.
            (3) Household.--The term ``household'' means all 
        individuals who share use of a dwelling unit as primary 
        quarters for living and eating separate from other individuals.
            (4) Individual development account.--
                    (A) In general.--The term ``individual development 
                account'' means a trust created or organized in the 
                United States exclusively for the purpose of paying the 
                qualified expenses of an eligible individual, but only 
                if the written governing instrument creating the trust 
                meets the following requirements:
                            (i) No contribution will be accepted unless 
                        it is in cash or by check.
                            (ii) The trustee is a federally insured 
                        financial institution.
                            (iii) The assets of the trust will be 
                        invested in accordance with the direction of 
                        the eligible individual after consultation with 
                        the qualified entity providing deposits for the 
                        individual under section 10 of this Act.
                            (iv) The assets of the trust will not be 
                        commingled with other property except in a 
                        common trust fund or common investment fund.
                            (v) Except as provided in clause (vi), any 
                        amount in the trust which is attributable to a 
                        deposit provided under section 10 of this Act 
                        may be paid or distributed out of the trust 
                        only for the purpose of paying the qualified 
                        expenses of the eligible individual.
                            (vi) Any balance in the trust on the day 
                        after the date on which the individual for 
                        whose benefit the trust is established dies 
                        shall be distributed within 30 days of that 
                        date as directed by that individual to another 
                        individual development account established for 
                        the benefit of an eligible individual.
                    (B) Custodial accounts.--For purposes of 
                subparagraph (A), a custodial account shall be treated 
                as a trust if the assets of the custodial account are 
                held by a bank (as defined in section 408(n) of the 
                Internal Revenue Code of 1986) or another person who 
                demonstrates, to the satisfaction of the Secretary, 
                that the manner in which such person will administer 
                the custodial account will be consistent with the 
                requirements of this Act, and if the custodial account 
                would, except for the fact that it is not a trust, 
                constitute an individual development account described 
                in subparagraph (A). For purposes of this Act, in the 
                case of a custodial account treated as a trust by 
                reason of the preceding sentence, the custodian of that 
                custodial account shall be treated as the trustee 
                thereof.
            (5) Non-federal public sector funds.--The term ``non-
        Federal public sector funds'' includes any non-Federal funds 
        disbursed from a source pursuant to a program operated under 
        the temporary assistance for needy families program under part 
        A of title IV of the Social Security Act (42 U.S.C. 601 et 
        seq.).
            (6) Project year.--The term ``project year'' means, with 
        respect to a demonstration project, any of the 4 consecutive 
        12-month periods beginning on the date the project is 
        originally authorized to be conducted.
            (7) Qualified entity.--
                    (A) In general.--The term ``qualified entity'' 
                means--
                            (i) one or more not-for-profit 
                        organizations described in section 501(c)(3) of 
                        the Internal Revenue Code of 1986 and exempt 
                        from taxation under section 501(a) of such 
                        Code; or
                            (ii) a State or local government agency 
                        submitting an application under section 5 
                        jointly with an organization described in 
                        clause (i).
                    (B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing an 
                organization described in subparagraph (A)(i) from 
                collaborating with a financial institution or for-
                profit community development corporation to carry out 
                the purposes of this Act.
            (8) Qualified expenses.--The term ``qualified expenses'' 
        means 1 or more of the following, as provided by the qualified 
        entity:
                    (A) Postsecondary educational expenses.--
                Postsecondary educational expenses paid from an 
                individual development account directly to an eligible 
                educational institution. In this subparagraph:
                            (i) Post-secondary educational expenses.--
                        The term ``post-secondary educational 
                        expenses'' means the following:
                                    (I) Tuition and fees.--Tuition and 
                                fees required for the enrollment or 
attendance of a student at an eligible educational institution.
                                    (II) Fees, books, supplies, and 
                                equipment.--Fees, books, supplies, and 
                                equipment required for courses of 
                                instruction at an eligible educational 
                                institution.
                            (ii) Eligible educational institution.--The 
                        term ``eligible educational institution'' means 
                        the following:
                                    (I) Institution of higher 
                                education.--An institution described in 
                                section 481(a)(1) or 1201(a) of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1088(a)(1) or 1141(a)), as such 
                                sections are in effect on the date of 
                                enactment of this Act.
                                    (II) Postsecondary vocational 
                                education school.--An area vocational 
                                education school (as defined in 
                                subparagraph (C) or (D) of section 
                                521(4) of the Carl D. Perkins 
                                Vocational and Applied Technology 
                                Education Act (20 U.S.C. 2471(4))) 
                                which is in any State (as defined in 
                                section 521(33) of such Act), as such 
                                sections are in effect on the date of 
                                enactment of this Act.
                    (B) First-home purchase.--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 amounts are due. In this subparagraph:
                            (i) Qualified acquisition costs.--The term 
                        ``qualified acquisition costs'' means the costs 
                        of acquiring, constructing, or reconstructing a 
                        residence. The term includes any usual or 
                        reasonable settlement, financing, or other 
                        closing costs.
                            (ii) Qualified principal residence.--The 
                        term ``qualified principal residence'' means a 
                        principal residence (within the meaning of 
                        section 1034 of the Internal Revenue Code of 
                        1986), the qualified acquisition costs of which 
                        do not exceed 100 percent of the average area 
                        purchase price applicable to such residence 
                        (determined in accordance with paragraphs (2) 
                        and (3) of section 143(e) of such Code).
                            (iii) Qualified first-time homebuyer.--
                                    (I) In general.--The term 
                                ``qualified first-time homebuyer'' 
                                means an individual participating in 
                                the project (and, if married, the 
                                individual'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 principal residence to which this 
                                subparagraph applies.
                                    (II) Date of acquisition.--The term 
                                ``date of acquisition'' means the date 
                                on which a binding contract to acquire, 
                                construct, or reconstruct the principal 
                                residence to which this subparagraph 
                                applies is entered into.
                    (C) Business capitalization.--Amounts paid from an 
                individual development account directly to a business 
                capitalization account which is established in a 
                federally insured financial institution and is 
                restricted to use solely for qualified business 
capitalization expenses. In this subparagraph:
                            (i) Qualified business capitalization 
                        expenses.--The term ``qualified business 
                        capitalization expenses'' means qualified 
                        expenditures for the capitalization of a 
                        qualified business pursuant to a qualified 
                        plan.
                            (ii) Qualified expenditures.--The term 
                        ``qualified expenditures'' means expenditures 
                        included in a qualified plan, including 
                        capital, plant, equipment, working capital, and 
                        inventory expenses.
                            (iii) Qualified business.--The term 
                        ``qualified business'' means any business that 
                        does not contravene any law or public policy 
                        (as determined by the Secretary).
                            (iv) Qualified plan.--The term ``qualified 
                        plan'' means a business plan, or a plan to use 
                        a business asset purchased, which--
                                    (I) is approved by a financial 
                                institution, a microenterprise 
                                development organization, or a 
                                nonprofit loan fund having demonstrated 
                                fiduciary integrity;
                                    (II) includes a description of 
                                services or goods to be sold, a 
                                marketing plan, and projected financial 
                                statements; and
                                    (III) may require the eligible 
                                individual to obtain the assistance of 
                                an experienced entrepreneurial adviser.
                    (D) Transfers to idas of family members.--Amounts 
                paid from an individual development account directly 
                into another such account established for the benefit 
                of an eligible individual who is--
                            (i) the individual's spouse; or
                            (ii) 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.
            (9) Qualified savings of the individual for the period.--
        The term ``qualified savings of the individual for the period'' 
        means the aggregate of the amounts contributed by the 
        individual to the individual development account of the 
        individual during the period.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 5. APPLICATIONS.

    (a) Submission.--Not later than 6 months after the date of 
enactment of this Act, a qualified entity may submit to the Secretary 
an application to conduct a demonstration project under this Act.
    (b) Criteria.--In considering whether to approve an application to 
conduct a demonstration project under this Act, the Secretary shall 
assess the following:
            (1) Sufficiency of project.--The degree to which the 
        project described in the application appears likely to aid 
        project participants in achieving economic self-sufficiency 
        through activities requiring qualified expenses. In making such 
        assessment, the Secretary shall consider the overall quality of 
        project activities in making any particular kind or combination 
        of qualified expenses to be an essential feature of any 
        project.
            (2) Administrative ability.--The experience and ability of 
        the applicant to responsibly administer the project.
            (3) Ability to assist participants.--The experience and 
        ability of the applicant in recruiting, educating, and 
        assisting project participants to increase their economic 
        independence and general well-being through the development of 
        assets.
            (4) Commitment of non-federal funds.--The aggregate amount 
        of direct funds from non-Federal public sector and from private 
        sources that are formally committed to the project as matching 
        contributions.
            (5) Adequacy of plan for providing information for 
        evaluation.--The adequacy of the plan for providing information 
        relevant to an evaluation of the project.
            (6) Other factors.--Such other factors relevant to the 
        purposes of this Act as the Secretary may specify.
    (c) Preferences.--In considering an application to conduct a 
demonstration project under this Act, the Secretary shall give 
preference to an application that--
            (1) demonstrates the willingness and ability to select 
        individuals described in section 8 who are predominantly from 
        households in which a child (or children) is living with the 
        child's biological or adoptive mother or father, or with the 
        child's legal guardian;
            (2) provides a commitment of non-Federal funds with a 
        proportionately greater amount of such funds committed by 
        private sector sources; and
            (3) targets such individuals residing within 1 or more 
        relatively well-defined neighborhoods or communities (including 
        rural communities) that experience low rates of income or 
        employment.
    (d) Approval.--Not later than 9 months after the date of enactment 
of this Act, the Secretary shall, on a competitive basis, approve such 
applications to conduct demonstration projects under this Act as the 
Secretary deems appropriate, taking into account the assessments 
required by subsections (b) and (c). The Secretary is encouraged to 
ensure that the applications that are approved involve a range of 
communities (both rural and urban) and diverse populations.
    (e) Contracts With Nonprofit Entities.--The Secretary may contract 
with an entity described in section 501(c)(3) of the Internal Revenue 
Code of 1986 and exempt from taxation under section 501(a) of such Code 
to conduct any responsibility of the Secretary under this section or 
section 12 if--
            (1) such entity demonstrates the ability to conduct such 
        responsibility; and
            (2) the Secretary can demonstrate that such responsibility 
        would not be conducted by the Secretary at a lower cost.

SEC. 6. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.

    (a) Demonstration Authority.--If the Secretary approves an 
application to conduct a demonstration project under this Act, the 
Secretary shall, not later than 10 months after the date of enactment 
of this Act, authorize the applicant to conduct the project for 4 
project years in accordance with the approved application and the 
requirements of this Act.
    (b) Grant Authority.--For each project year of a demonstration 
project conducted under this Act, the Secretary shall make a grant to 
the qualified entity authorized to conduct the project on the first day 
of the project year in an amount not to exceed the lesser of--
            (1) the aggregate amount of funds committed as matching 
        contributions by non-Federal public or private sector sources; 
        or
            (2) $1,000,000.

SEC. 7. RESERVE FUND.

    (a) Establishment.--A qualified entity under this Act, other than a 
State or local government agency, shall establish a Reserve Fund which 
shall be maintained in accordance with this section.
    (b) Amounts in Reserve Fund.--
            (1) In general.--As soon after receipt as is practicable, a 
        qualified entity shall deposit in the Reserve Fund established 
        under subsection (a)--
                    (A) all funds provided to the qualified entity by 
                any public or private source in connection with the 
                demonstration project; and
                    (B) the proceeds from any investment made under 
                subsection (c)(2).
            (2) Uniform accounting regulations.--The Secretary shall 
        prescribe regulations with respect to accounting for amounts in 
        the Reserve Fund established under subsection (a).
    (c) Use of Amounts in the Reserve Fund.--
            (1) In general.--A qualified entity shall use the amounts 
        in the Reserve Fund established under subsection (a) to--
                    (A) assist participants in the demonstration 
                project in obtaining the skills (including economic 
                literacy, budgeting, credit, and counseling) and 
                information necessary to achieve economic self-
                sufficiency through activities requiring qualified 
                expenses;
                    (B) provide deposits in accordance with section 10 
                for individuals selected by the qualified entity to 
                participate in the demonstration project;
                    (C) administer the demonstration project; and
                    (D) provide the research organization evaluating 
                the demonstration project under section 14 with such 
                information with respect to the demonstration project 
                as may be required for the evaluation.
            (2) Authority to invest funds.--
                    (A) Guidelines.--The Secretary shall establish 
                guidelines for investing amounts in the Reserve Fund 
                established under subsection (a) in a manner that 
                provides an appropriate balance between return, 
                liquidity, and risk.
                    (B) Investment.--A qualified entity shall invest 
                the amounts in its Reserve Fund that are not 
                immediately needed to carry out the provisions of 
                paragraph (1), in accordance with the guidelines 
                established under subparagraph (A).
            (3) Limitation on uses.--Not more than 7.5 percent of the 
        amounts provided to a qualified entity under section 6(b) shall 
        be used by the qualified entity for the purposes described in 
        subparagraphs (A), (C), and (D) of paragraph (1), except that 
        if 2 or more qualified entities are jointly administering a 
project, no qualified entity shall use more than its proportional share 
for such purposes.
    (d) Unused Federal Grant Funds Transferred to the Secretary When 
Project Terminates.--Notwithstanding subsection (c), upon the 
termination of any demonstration project authorized under this section, 
the qualified entity conducting the project shall transfer to the 
Secretary an amount equal to--
            (1) the amounts in its Reserve Fund at time of the 
        termination; multiplied by
            (2) a percentage equal to--
                    (A) the aggregate amount of grants made to the 
                qualified entity under section 6(b); divided by
                    (B) the aggregate amount of all funds provided to 
                the qualified entity by all sources to conduct the 
                project.

SEC. 8. ELIGIBILITY FOR PARTICIPATION.

    (a) In General.--Any individual who is a member of a household that 
is eligible for assistance under the State temporary assistance for 
needy families program established under part A of title IV of the 
Social Security Act (42 U.S.C. 601 et seq.), or that meets the 
following requirements shall be eligible to participate in a 
demonstration project conducted under this Act:
            (1) Income test.--The adjusted gross income of the 
        household does not exceed the income limits established under 
        section 32(b)(2) of the Internal Revenue Code of 1986.
            (2) Net worth test.--
                    (A) In general.--The net worth of the household, as 
                of the end of the calendar year preceding the 
                determination of eligibility, does not exceed $10,000.
                    (B) Determination of net worth.--For purposes of 
                subparagraph (A), the net worth of a household is the 
                amount equal to--
                            (i) the aggregate market value of all 
                        assets that are owned in whole or in part by 
                        any member of the household; minus
                            (ii) the obligations or debts of any member 
                        of the household.
                    (C) Exclusions.--For purposes of determining the 
                net worth of a household, a household's assets shall 
                not be considered to include the primary dwelling unit 
                and 1 motor vehicle owned by the household.
    (b) Individuals Unable to Complete the Project.--The Secretary 
shall establish such regulations as are necessary, including 
prohibiting future eligibility to participate in any other 
demonstration project conducted under this Act, to ensure compliance 
with this Act if an individual participating in the demonstration 
project moves from the community in which the project is conducted or 
is otherwise unable to continue participating in that project.

SEC. 9. SELECTION OF INDIVIDUALS TO PARTICIPATE.

    From among the individuals eligible to participate in a 
demonstration project conducted under this Act, each qualified entity 
shall select the individuals--
            (1) that the qualified entity deems to be best suited to 
        participate; and
            (2) to whom the qualified entity will provide deposits in 
        accordance with section 10.

SEC. 10. DEPOSITS BY QUALIFIED ENTITIES.

    (a) In General.--Not less than once every 3 months during each 
project year, each qualified entity under this Act shall deposit in the 
individual development account of each individual participating in the 
project, or into a parallel account maintained by the qualified 
entity--
            (1) from the non-Federal funds described in section 
        5(b)(4), a matching contribution of not less than $0.50 and not 
more than $4 for every $1 of earned income (as defined in section 
911(d)(2) of the Internal Revenue Code of 1986) deposited in the 
account by a project participant during that period;
            (2) from the grant made under section 6(b), an amount equal 
        to the matching contribution made under paragraph (1); and
            (3) any interest that has accrued on amounts deposited 
        under paragraph (1) or (2) on behalf of that individual into 
        the individual development account of the individual or into a 
        parallel account maintained by the qualified entity.
    (b) Limitation on Deposits for an Individual.--Not more than $2,000 
from a grant made under section 6(b) shall be provided to any 1 
individual over the course of the demonstration project.
    (c) Limitation on Deposits for a Household.--Not more than $4,000 
from a grant made under section 6(b) shall be provided to any 1 
household over the course of the demonstration project.
    (d) Withdrawal of Funds.--The Secretary shall establish such 
guidelines as may be necessary to ensure that funds held in an 
individual development account are not withdrawn, except for 1 or more 
qualified expenses. Such guidelines shall include a requirement that a 
responsible official of the qualified entity conducting a project 
approve such withdrawal in writing.

SEC. 11. LOCAL CONTROL OVER DEMONSTRATION PROJECTS.

    A qualified entity under this Act, other than a State or local 
government agency, shall, subject to the provisions of section 13, have 
sole authority over the administration of the project. The Secretary 
may prescribe only such regulations or guidelines with respect to 
demonstration projects conducted under this Act as are necessary to 
ensure compliance with the approved applications and the requirements 
of this Act.

SEC. 12. ANNUAL PROGRESS REPORTS.

    (a) In General.--Each qualified entity under this Act shall prepare 
an annual report on the progress of the demonstration project. Each 
report shall specify for the period covered by the report the following 
information:
            (1) The number of individuals making a deposit into an 
        individual development account.
            (2) The amounts in the Reserve Fund established with 
        respect to the project.
            (3) The amounts deposited in the individual development 
        accounts.
            (4) The amounts withdrawn from the individual development 
        accounts and the purposes for which such amounts were 
        withdrawn.
            (5) The balances remaining in the individual development 
        accounts.
            (6) Such other information as the Secretary may require to 
        evaluate the demonstration project.
    (b) Submission of Reports.--The qualified entity shall submit each 
report required to be prepared under subsection (a) to--
            (1) the Secretary; and
            (2) the Treasurer (or equivalent official) of the State in 
        which the project is conducted, if the State or a local 
        government committed funds to the demonstration project.
    (c) Timing.--The first report required by subsection (a) shall be 
submitted not later than 60 days after the end of the calendar year in 
which the Secretary authorized the qualified entity to conduct the 
demonstration project, and subsequent reports shall be submitted every 
12 months thereafter, until the conclusion of the project.

SEC. 13. SANCTIONS.

    (a) Authority to Terminate Demonstration Project.--If the Secretary 
determines that a qualified entity under this Act is not operating the 
demonstration project in accordance with the entity's application or 
the requirements of this Act (and has not implemented any corrective 
recommendations directed by the Secretary), the Secretary shall 
terminate such entity's authority to conduct the demonstration project.
    (b) Actions Required Upon Termination.--If the Secretary terminates 
the authority to conduct a demonstration project, the Secretary--
            (1) shall suspend the demonstration project;
            (2) shall take control of the Reserve Fund established 
        pursuant to section 7;
            (3) shall make every effort to identify another qualified 
        entity (or entities) willing and able to conduct the project in 
        accordance with the approved application (or, as modified, if 
        necessary to incorporate the recommendations) and the 
        requirements of this Act;
            (4) shall, if the Secretary identifies an entity (or 
        entities) described in paragraph (3)--
                    (A) authorize the entity (or entities) to conduct 
                the project in accordance with the approved application 
                (or, as modified, if necessary, to incorporate the 
                recommendations) and the requirements of this Act;
                    (B) transfer to the entity (or entities) control 
                over the Reserve Fund established pursuant to section 
                7; and
                    (C) consider, for purposes of this Act--
                            (i) such other entity (or entities) to be 
                        the qualified entity (or entities) originally 
                        authorized to conduct the demonstration 
                        project; and
                            (ii) the date of such authorization to be 
                        the date of the original authorization; and
            (5) if, by the end of the 1-year period beginning on the 
        date of the termination, the Secretary has not found a 
        qualified entity (or entities) described in paragraph (3), 
        shall--
                    (A) terminate the project; and
                    (B) from the amount remaining in the Reserve Fund 
                established as part of the project, remit to each 
                source that provided funds under section 5(b)(4) to the 
                entity originally authorized to conduct the project, an 
                amount that bears the same ratio to the amount so 
                remaining as the amount provided by the source under 
                section 5(b)(4) bears to the amount provided by all 
                such sources under that section.

SEC. 14. EVALUATIONS.

    (a) In General.--Not later than 10 months after the date of 
enactment of this Act, the Secretary shall enter into a contract with 
an independent research organization to evaluate, individually and as a 
group, all qualified entities and sources participating in the 
demonstration projects conducted under this Act.
    (b) Factors to Evaluate.--In evaluating any demonstration project 
conducted under this Act, the research organization shall address the 
following factors:
            (1) The savings account characteristics (such as threshold 
        amounts and match rates) required to stimulate participation in 
        the demonstration project, and how such characteristics vary 
        among different populations or communities.
            (2) What service configurations of the qualified entity 
        (such as peer support, structured planning exercises, 
        mentoring, and case management) increase the rate and 
        consistency of participation in the demonstration project and 
        how such configurations vary among different populations or 
        communities.
            (3) The economic, civic, psychological, and social effects 
        of asset accumulation, and how such effects vary among 
        different populations or communities.
            (4) The effects of individual development accounts on 
        savings rates, homeownership, level of education attained, and 
        self-employment, and how such effects vary among different 
        populations or communities.
            (5) The potential financial returns to the Federal 
        Government and to other public sector and private sector 
        investors in individual development accounts over a 5-year and 
        10-year period of time.
            (6) The lessons to be learned from the demonstration 
        projects conducted under this Act and if a permanent program of 
        individual development accounts should be established.
            (7) Such other factors as may be prescribed by the 
        Secretary.
    (c) Methodological Requirements.--In evaluating any demonstration 
project conducted under this Act, the research organization shall--
            (1) to the extent possible, use control groups to compare 
        participants with nonparticipants;
            (2) before, during, and after the project, obtain such 
        quantitative data as are necessary to evaluate the project 
        thoroughly; and
            (3) develop a qualitative assessment, derived from sources 
        such as in-depth interviews, of how asset accumulation affects 
        individuals and families.
    (d) Reports By the Secretary.--
            (1) Interim reports.--Not later than 90 days after the end 
        of the calendar year in which the Secretary first authorizes a 
        qualified entity to conduct a demonstration project under this 
        Act, and every 12 months thereafter until all demonstration 
        projects conducted under this Act are completed, the Secretary 
        shall submit to Congress an interim report setting forth the 
        results of the reports submitted pursuant to section 12(b).
            (2) Final reports.--Not later than 12 months after the 
        conclusion of all demonstration projects conducted under this 
        Act, the Secretary shall submit to Congress a final report 
        setting forth the results and findings of all reports and 
        evaluations conducted pursuant to this Act.
    (e) Evaluation Expenses.--The Secretary shall expend such sums as 
may be necessary to carry out the purposes of this section.

SEC. 15. AUTHORIZATIONS OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this Act, 
$25,000,000 for each of fiscal years 1998, 1999, 2000, and 2001, to 
remain available until expended.

SEC. 16. FUNDS IN INDIVIDUAL DEVELOPMENT ACCOUNTS OF DEMONSTRATION 
              PROJECT PARTICIPANTS DISREGARDED FOR PURPOSES OF ALL 
              MEANS-TESTED FEDERAL PROGRAMS.

    Notwithstanding any other provision of law that requires 
consideration of 1 or more financial circumstances of an individual, 
for the purpose of determining eligibility to receive, or the amount 
of, any assistance or benefit authorized by such law to be provided to 
or for the benefit of such individual, funds (including interest 
accruing) in an individual development account (as defined in section 
4(4)) shall be disregarded for such purpose with respect to any period 
during which the individual participates in a demonstration project 
conducted under this Act (or would be participating in such a project 
but for the suspension of the project).
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