II 

110TH CONGRESS 

2D SESSION S. 3372 

To promote savings by providing a match for eligible taxpayers who contribute 

to savings products and to facilitate taxpayers receiving this match 

and open a bank account when they file their Federal income tax returns. 

IN THE SENATE OF THE UNITED STATES 

JULY 31, 2008 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To promote savings by providing a match for eligible taxpayers who contribute to savings products and to facilitate taxpayers receiving this match and open a bank 

account 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 ‘‘Saver’s Bonus Act of 

5 2007’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) According to the Department of Commerce, 

2 Americans are currently saving less than 1 percent 

3 of their disposable income. 

4 (2) According to the Federal Reserve’s 2004 

5 Survey of Consumer Finances, 17 percent of all 

6 households have zero or negative net worth, while 30 

7 percent have net worth of less than $10,000. 

8 (3) According to the Federal Reserve’s 2004 

9 Survey of Consumer Finances, 11 percent of house10 holds do not have a checking account and 9 percent 

11 do not have a transaction account of any kind. 

12 (4) According to the Retirement Security 

13 Project, in 2004 more than half of all households 

14 had zero savings in an employer-based 401(k)-type 

15 plan or tax-preferred savings plan account. 

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

17 States to promote savings among all members of so18 ciety, regardless of income. 

19 SEC. 3. SAVER’S BONUS. 

20 (a) IN GENERAL.—The Secretary of the Treasury 

21 shall develop a program to match deposits made by quali22 fying low-income individuals into designated savings prod23 ucts. 

24 (b) QUALIFYING LOW-INCOME INDIVIDUALS.—For 

25 purposes of this Act, the term ‘‘qualifying low-income indiVerDate Aug 31 2005 06:42 Aug 01, 2008 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3372.IS S3372

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1 vidual’’ means any individual determined by the Secretary 

2 of the Treasury to be eligible for the saver’s bonus under 

3 this Act. 

4 (c) DESIGNATED SAVINGS PRODUCTS.—For pur5 poses of this Act, the term ‘‘designated savings product’’ 

6 means any savings product, including— 

7 (1) qualified retirement plans (as defined in 

8 section 4974(c)) of such Code, 

9 (2) qualified tuition programs under section 

10 529 of such Code, 

11 (3) Coverdell education savings accounts under 

12 section 530 of such Code, 

13 (4) United States savings bonds, 

14 (5) certificates of deposits with durations of at 

15 least 6 months, and 

16 (6) other types of savings products considered 

17 appropriate by the Secretary of the Treasury for the 

18 purposes of this Act. 

19 (d) SAVER’S BONUS PROGRAM.—The program estab20 lished under subsection (a) shall provide that— 

21 (1) qualifying low-income individuals who direct 

22 their Federal income tax refund (in its entirety or 

23 a portion thereof) be deposited into any designated 

24 savings product shall be eligible for a dollar-for-dolVerDate Aug 31 2005 06:42 Aug 01, 2008 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3372.IS S3372

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1 lar match or saver’s bonus to be deposited directly 

2 in any designated savings product, 

3 (2) qualifying low-income individuals who claim 

4 (when filing a Federal income tax return) to have 

5 deposited funds into any designated savings product 

6 during the course of the tax year shall be eligible for 

7 a saver’s bonus to be deposited directly into any des8 ignated savings product, and 

9 (3) the saver’s bonus— 

10 (A) shall equal $500 for qualifying low-in11 come individuals who are eligible for the earned 

12 income credit under section 32 of such Code 

13 and shall be phased out (but not below zero) for 

14 such individuals whose earned income exceeds 

15 120 percent of the earned income threshold at 

16 which such eligibility ceases, 

17 (B) shall be indexed for inflation every 5 

18 years, and 

19 (C) shall be considered a refundable credit 

20 for purposes of the Internal Revenue Code of 

21 1986. 

22 (e) CONFORMING AMENDMENT REGARDING FUND23 ING OF SAVER’S BONUS.—Section 1324(b)(2) of title 31, 

24 United States Code, is amended by inserting ‘‘or enacted 

25 by the Saver’s Bonus Act of 2007,’’. 


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1 (f) EFFECTIVE DATE.—The program under, and 

2 amendment made by, this section shall be effective with 

3 respect to Federal income tax returns for taxable years 

4 beginning after December 31, 2008. 

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

6 RETURNS TO FACILITATE SAVINGS. 

7 (a) NOTIFICATION OF OPTION.— 

8 (1) IN GENERAL.—The Commissioner of Inter9 nal Revenue shall notify qualifying low-income indi10 viduals who qualify for a Federal income tax refund 

11 but fail to provide an ACH direct deposit number on 

12 their Federal income tax return that they have the 

13 option of an electronic direct deposit and that they 

14 may be eligible for the saver’s bonus program under 

15 section 3 if they deposit a refund or a portion of 

16 their refund in any designated savings product. 

17 (2) METHOD OF NOTIFICATION.—The notifica18 tion under paragraph (1) shall be made through— 

19 (A) a public awareness program under20 taken by the Secretary of the Treasury, in con21 cert with the Commissioner of the Internal Rev22 enue and others as necessary, at least 6 months 

23 before January 2009, and 


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1 (B) the inclusion of such a notice in the in2 struction material for any Federal income tax 

3 return. 

4 (b) ESTABLISHMENT OF DESIGNATED ACCOUNT

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

6 in consultation with the Federal Management System, a 

7 program to minimize the delivery of non-electronic Federal 

8 income tax refunds by depositing refunds electronically to 

9 an account held by a depository institution. This program 

10 shall include— 

11 (1) provisions for such tax refunds to be depos12 ited into a designated account, 

13 (2) establishment of account parameters with 

14 respect to minimum balance requirements and limi15 tations on overdrafts, overdraft fees, and other re16 quirements, 

17 (3) establishment of means for the taxpayer to 

18 access the account electronically or through a pay19 ment card, and 

20 (4) provisions to allow taxpayers to open an ac21 count with their Federal income tax refunds through 

22 financial service providers, so long such account is 

23 held at a depository institution that is insured under 

24 the Federal Deposit Insurance Act (12 U.S.C. 1811 

25 et seq.). 


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1 (c) EFFECTIVE DATE.—The notification under sub2 section (a) and the program under subsection (b) shall be 

3 effective with respect to Federal income tax returns for 

4 taxable years beginning after December 31, 2008. 

5 SEC. 5. PURCHASE OF SAVINGS BONDS ON FEDERAL IN6 COME TAX RETURNS. 

7 (a) NOTIFICATION OF OPTION.—The Commissioner 

8 of Internal Revenue shall notify individual taxpayers that 

9 they have the option of purchasing United States savings 

10 bonds when they file their Federal income tax returns and 

11 that they may be eligible for the saver’s bonus program 

12 under section 3. Such notification shall be included in the 

13 instruction material for any Federal income tax return. 

14 (b) ESTABLISHMENT OF SAVINGS BOND PURCHASE

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

16 in consultation with a task force, a program for the pur17 chase by individual taxpayers of United States savings 

18 bonds on their Federal income tax returns. 

19 (c) EFFECTIVE DATE.—The notification under sub20 section (a) and the program under subsection (b) shall be 

21 effective with respect to Federal income tax returns for 

22 taxable years beginning after December 31, 2008. 

Æ 


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