II

106TH CONGRESS

2D SESSION S. 2023

To provide for the establishment of Individual Development Accounts (IDAs)

that will allow individuals and families with limited means an opportunity

to accumulate assets, to access education, to own their own homes

and businesses, and ultimately to achieve economic self-sufficiency, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 2, 2000

Mr. LIEBERMAN (for himself, Mr. SANTORUM, Ms. LANDRIEU, Mr. ABRAHAM,

Mrs. FEINSTEIN, Mr. ROBB, and Mr. BAYH) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To provide for the establishment of Individual Development

Accounts (IDAs) that will allow individuals and families

with limited means an opportunity to accumulate assets,

to access education, to own their own homes and businesses, and ultimately to achieve economic self-sufficiency, and for other purposes.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Savings for Working Families Act of 2000’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Purposes.

Sec. 4. Definitions.

TITLE I—QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNTS FOR

LOW-INCOME WORKERS

Sec. 101. Structure and administration of qualified individual development account programs.

Sec. 102. Procedures for opening an Individual Development Account and

qualifying for matching funds.

Sec. 103. Contributions to Individual Development Accounts.

Sec. 104. Deposits by qualified individual development account programs.

Sec. 105. Withdrawal procedures.

Sec. 106. Certification and termination of qualified individual development account programs.

Sec. 107. Reporting, monitoring, and evaluation.

Sec. 108. Funds in parallel accounts of program participants disregarded for

purposes of certain means-tested Federal programs.

TITLE II—QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT

PROGRAM INVESTMENT CREDITS

Sec. 201. Qualified individual development account program investment credits.

Sec. 202. CRA credit treatment for qualified individual development account

program investments.

Sec. 203. Designation of earned income tax credit payments for deposit to Individual Development Accounts.

3 SEC. 2. FINDINGS.

4 Congress makes the following findings:

5 (1) One-third of all Americans have no assets

6 available for investment, and another 20 percent

7 have only negligible assets. The household savings

8 rate of the United States lags far behind other in9 dustrial nations, presenting a barrier to national

10 economic growth and preventing many Americans

11 from entering the economic mainstream by buying a
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1 house, obtaining an adequate education, or starting

2 a business.

3 (2) By building assets, Americans can improve

4 their economic independence and stability, stimulate

5 the development of human and other capital, and

6 work toward a viable and hopeful future for them7 selves and their children. Thus, economic well-being

8 does not come solely from income, spending, and

9 consumption, but also requires savings, investment,

10 and accumulation of assets.

11 (3) Traditional public assistance programs

12 based on income and consumption have rarely been

13 successful in promoting and supporting the transi14 tion to increased economic self-sufficiency. Income15 based social policies that meet consumption needs

16 (including food, child care, rent, clothing, and health

17 care) should be complemented by asset-based policies

18 that can provide the means to achieve long-term

19 independence and economic well-being.

20 (4) Individual Development Accounts (IDAs)

21 can provide working Americans with strong incen22 tives to build assets, basic financial management

23 training, and access to secure and relatively inexpen24 sive banking services.
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1 (5) There is reason to believe that Individual

2 Development Accounts would also foster greater par3 ticipation in electric fund transfers (EFT), generate

4 financial returns, including increased income, tax

5 revenue, and decreased welfare cash assistance, that

6 will far exceed the cost of public investment in the

7 program.

8 SEC. 3. PURPOSES.

9 The purposes of this Act are to provide for the estab10 lishment of individual development account programs that

11 will—

12 (1) provide individuals and families with limited

13 means an opportunity to accumulate assets and to

14 enter the financial mainstream;

15 (2) promote education, homeownership, and the

16 development of small businesses;

17 (3) stabilize families and build communities;

18 and

19 (4) support continued United States economic

20 expansion.

21 SEC. 4. DEFINITIONS.

22 As used in this Act:

23 (1) ELIGIBLE INDIVIDUAL.—

24 (A) IN GENERAL.—The term ‘‘eligible indi25 vidual’’ means an individual who—
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1 (i) has attained the age of 18 years;

2 (ii) is a citizen or legal resident of the

3 United States; and

4 (iii) is a member of a household the

5 gross income of which does not exceed 80

6 percent of the area median income (as

7 published by the Department of Housing

8 and Urban Affairs).

9 (B) HOUSEHOLD.—The term ‘‘household’’

10 means all individuals who share use of a dwell11 ing unit as primary quarters for living and eat12 ing separate from other individuals.

13 (2) INDIVIDUAL DEVELOPMENT ACCOUNT.—

14 The term ‘‘Individual Development Account’’ means

15 a regular interest bearing savings account estab16 lished for an eligible individual as part of a qualified

17 individual development account program, but only if

18 the written governing instrument creating the ac19 count meets the following requirements:

20 (A) The sole owner of the account is the

21 eligible individual.

22 (B) No contribution will be accepted unless

23 it is in cash, by check, or by electronic fund

24 transfer.
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1 (C) The holder of the account is a quali2 fied financial institution or a qualified nonprofit

3 organization.

4 (D) The assets of the account will not be

5 commingled with other property except in a

6 common trust fund or common investment

7 fund.

8 (E) Except as provided in section 105(b),

9 any amount in the account may be paid out

10 only for the purpose of paying the qualified ex11 penses of the eligible individual.

12 (3) PARALLEL ACCOUNT.—The term ‘‘parallel

13 account’’ means a separate, parallel individual or

14 pooled account for all matching funds and earnings

15 dedicated to an eligible individual as part of a quali16 fied individual account program, the sole owner of

17 which is a qualified financial institution or a quali18 fied nonprofit organization

19 (4) QUALIFIED FINANCIAL INSTITUTION.—

20 (A) IN GENERAL.—The term ‘‘qualified fi21 nancial institution’’ means any person author22 ized to be a trustee of any individual retirement

23 account under section 408(a)(2).

24 (B) RULE OF CONSTRUCTION.—Nothing in

25 this paragraph shall be construed as preventing
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1 a person described in subparagraph (A) from

2 collaborating with 1 or more qualified nonprofit

3 organizations to carry out an individual devel4 opment account program established under sec5 tion 101.

6 (5) QUALIFIED NONPROFIT ORGANIZATION.—

7 The term ‘‘qualified nonprofit organization’’

8 means—

9 (A) any organization described in section

10 501(c)(3) of the Internal Revenue Code of 1986

11 and exempt from taxation under section 501(a)

12 of such Code;

13 (B) any community development financial

14 institution as certified by the Community De15 velopment Financial Institution Fund; or

16 (C) any credit union certified by the Na17 tional Credit Union Administration,

18 that meets standards for financial management and

19 fiduciary responsibility as defined by the Secretary

20 or an organization designated by the Secretary.

21 (6) QUALIFIED INDIVIDUAL DEVELOPMENT AC22 COUNT PROGRAM.—The term ‘‘qualified individual

23 development program’’ means a program established

24 under section 101 under which—
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1 (A) individual development accounts and

2 parallel accounts are held by a qualified finan3 cial institution or a qualified nonprofit organi4 zation; and

5 (B) additional activities determined by the

6 Secretary, or an organization designated by the

7 Secretary, as necessary to responsibly develop

8 and administer accounts, including recruiting,

9 providing financial education and other training

10 to account holders, and regular program moni11 toring, are carried out by such institution or

12 nonprofit organization.

13 (7) QUALIFIED EXPENSE DISTRIBUTION.—

14 (A) IN GENERAL.—The term ‘‘qualified ex15 pense distribution’’ means any amount paid or

16 distributed out of an Individual Development

17 Account and a parallel account established for

18 an eligible individual if such amount—

19 (i) is used exclusively to pay the quali20 fied expenses of such individual or such in21 dividual’s spouse or dependents,

22 (ii) is paid by the qualified financial

23 institution or qualified nonprofit organiza24 tion directly to the person to whom the
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1 amount is due or to another Individual De2 velopment Account, and

3 (iii) is paid after the holder of the In4 dividual Development Account has com5 pleted a financial education course as re6 quired under section 102(b).

7 (B) QUALIFIED EXPENSES.—

8 (i) IN GENERAL.—The term ‘‘qualified

9 expenses’’ means any of the following:

10 (I) Qualified higher education ex11 penses.

12 (II) Qualified first-time home13 buyer costs.

14 (III) Qualified business capital15 ization costs.

16 (IV) Qualified rollovers.

17 (ii) QUALIFIED HIGHER EDUCATION

18 EXPENSES.—

19 (I) IN GENERAL.—The term

20 ‘‘qualified higher education expenses’’

21 has the meaning given such term by

22 section 72(t)(7) of the Internal Rev23 enue Code of 1986, determined by

24 treating postsecondary vocational edu-
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1 cational schools as eligible educational

2 institutions.

3 (II) POSTSECONDARY VOCA4 TIONAL EDUCATION SCHOOL.—The

5 term ‘‘postsecondary vocational edu6 cational school’’ means an area voca7 tional education school (as defined in

8 subparagraph (C) or (D) of section

9 521(4) of the Carl D. Perkins Voca10 tional and Applied Technology Edu11 cation Act (20 U.S.C. 2471(4)))

12 which is in any State (as defined in

13 section 521(33) of such Act), as such

14 sections are in effect on the date of

15 enactment of this Act.

16 (III) COORDINATION WITH

17 OTHER BENEFITS.—The amount of

18 qualified higher education expenses

19 for any taxable year shall be reduced

20 as provided in section 25A(g)(2) of

21 such Code and by the amount of such

22 expenses for which a credit or exclu23 sion is allowed under chapter 1 of

24 such Code for such taxable year.
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1 (iii) QUALIFIED FIRST-TIME HOME2 BUYER COSTS.—The term ‘‘qualified first3 time homebuyer costs’’ means qualified ac4 quisition costs (as defined in section

5 72(t)(8) of such Code without regard to

6 subparagraph (B) thereof) with respect to

7 a principal residence (within the meaning

8 of section 121 of such Code) for a qualified

9 first-time homebuyer (as defined in section

10 72(t)(8) of such Code).

11 (iv) QUALIFIED BUSINESS CAPITAL12 IZATION COSTS.—

13 (I) IN GENERAL.—The term

14 ‘‘qualified business capitalization

15 costs’’ means qualified expenditures

16 for the capitalization of a qualified

17 business pursuant to a qualified busi18 ness plan.

19 (II) QUALIFIED EXPENDI20 TURES.—The term ‘‘qualified expendi21 tures’’ means expenditures included in

22 a qualified business plan, including

23 capital, plant, equipment, working

24 capital and inventory expenses.
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1 (III) QUALIFIED BUSINESS.—

2 The term ‘‘qualified business’’ means

3 any business that does not contravene

4 any law.

5 (IV) QUALIFIED BUSINESS

6 PLAN.—The term ‘‘qualified business

7 plan’’ means a business plan which

8 meets such requirements as the Sec9 retary or an organization designated

10 by the Secretary may specify.

11 (v) QUALIFIED ROLLOVERS.—The

12 term ‘‘qualified rollover’’ means, with re13 spect to any distribution from an Indi14 vidual Development Account, the payment,

15 within 120 days of such distribution, of all

16 or a portion of such distribution to such

17 account or to another Individual Develop18 ment Account established in another quali19 fied financial institution or qualified non20 profit organization for the benefit of the el21 igible individual. Rules similar to the rules

22 of section 408(d)(3) of such Code (other

23 than subparagraph (C) thereof) shall apply

24 for purposes of this clause.
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1 (8) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of the Treasury.

3 TITLE I—INDIVIDUAL DEVELOP4 MENT ACCOUNTS FOR LOW5 INCOME WORKERS

6 SEC. 101. STRUCTURE AND ADMINISTRATION OF QUALI7 FIED INDIVIDUAL DEVELOPMENT ACCOUNT

8 PROGRAMS.

9 (a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE10 VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan11 cial institution or qualified nonprofit organization may es12 tablish 1 or more qualified individual development account

13 programs which meet the requirements of this Act.

14 (b) BASIC PROGRAM STRUCTURE.—

15 (1) IN GENERAL.—All qualified individual de16 velopment account programs shall consist of the fol17 lowing 2 components:

18 (A) An Individual Development Account to

19 which an eligible individual may contribute

20 money in accordance with section 103.

21 (B) A parallel account to which all match22 ing funds shall be deposited in accordance with

23 section 104.

24 (2) TAILORED IDA PROGRAMS.—A qualified fi25 nancial institution or qualified nonprofit organiza-
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1 tion may tailor its qualified individual development

2 account program to allow matching funds to be

3 spent on 1 or more of the categories of qualified ex4 penses.

5 (c) ACCOUNT POPULATION DISTRIBUTION REQUIRE6 MENT.—An individual development account program shall

7 be treated as qualified under this Act only if not less than

8 one third of the Individual Development Accounts under

9 such program are owned by eligible individuals each of

10 whom is a member of a household the gross income of

11 which does not exceed 50 percent of the area median in12 come (as published by the Department of Housing and

13 Urban Affairs).

14 (d) TAX TREATMENT OF ACCOUNTS.—Any account

15 described in subparagraph (B) of subsection (b)(1) is ex16 empt from taxation under the Internal Revenue Code of

17 1986 unless such account has ceased to be such an ac18 count by reason of section 105(c) or the termination of

19 the qualified individual development account program

20 under section 106(b).

21 SEC. 102. PROCEDURES FOR OPENING AN INDIVIDUAL DE22 VELOPMENT ACCOUNT AND QUALIFYING FOR

23 MATCHING FUNDS.

24 (a) OPENING AN ACCOUNT.—An eligible individual

25 must open an Individual Development Account with a
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1 qualified financial institution or qualified nonprofit orga2 nization and contribute money in accordance with section

3 103 to qualify for matching funds in a parallel account.

4 (b) REQUIRED COMPLETION OF FINANCIAL EDU5 CATION COURSE.—

6 (1) IN GENERAL.—Before becoming eligible to

7 withdraw matching funds to pay for qualified ex8 penses, holders of Individual Development Accounts

9 must complete a financial education course offered

10 by a qualified financial institution, a qualified non11 profit organization, or a government entity.

12 (2) STANDARD AND APPLICABILITY OF

13 COURSE.—The Secretary or an organization des14 ignated by the Secretary, in consultation with rep15 resentatives of qualified individual development ac16 count programs and financial educators, shall estab17 lish minimum performance standards for financial

18 education courses offered under paragraph (1) and

19 a protocol to exempt eligible individuals from the re20 quirement under paragraph (1) because of hardship

21 or lack of need.

22 SEC. 103. CONTRIBUTIONS TO INDIVIDUAL DEVELOPMENT

23 ACCOUNTS.

24 (a) IN GENERAL.—Except in the case of a qualified

25 rollover, individual contributions to an Individual Develop-
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1 ment Account will not be accepted for the taxable year

2 in excess of the lesser of—

3 (1) $2,000; or

4 (2) an amount equal to the compensation (as

5 defined in section 219(f)(1) of the Internal Revenue

6 Code of 1986) includible in the individual’s gross in7 come for such taxable year.

8 (b) PROOF OF COMPENSATION AND STATUS AS AN

9 ELIGIBLE INDIVIDUAL.—Federal W–2 forms and other

10 forms specified by the Secretary proving the eligible indi11 vidual’s wages and other compensation and the status of

12 the individual as an eligible individual shall be presented

13 at the time of the establishment of the Individual Develop14 ment Account and at least once annually thereafter.

15 (c) TIME WHEN CONTRIBUTIONS DEEMED MADE.—

16 For purposes of this section, a taxpayer shall be deemed

17 to have made a contribution to an Individual Development

18 Account on the last day of the preceding taxable year if

19 the contribution is made on account of such taxable year

20 and is made not later than the time prescribed by law for

21 filing the Federal income tax return for such taxable year

22 (not including extensions thereof).
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1 (d) CROSS REFERENCE.—

For designation of earned income tax credit payments for deposit to an Individual Development Account, see section 32(o) of the Internal Revenue

Code of 1986.

2 SEC. 104. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP3 MENT ACCOUNT PROGRAMS.

4 (a) PARALLEL ACCOUNTS.—The qualified financial

5 institution or qualified nonprofit organization shall deposit

6 all matching funds for each Individual Development Ac7 count into a parallel account at a qualified financial insti8 tution or qualified nonprofit organization. The parallel ac9 count or accounts shall earn not less than the market rate

10 of interest.

11 (b) REGULAR DEPOSITS OF MATCHING FUNDS.—

12 (1) IN GENERAL.—Subject to paragraph (2),

13 the qualified financial institution or qualified non14 profit organization shall deposit not less than quar15 terly into the parallel account with respect to each

16 eligible individual the following:

17 (A) A dollar-for-dollar match for the first

18 $500 contributed by the eligible individual into

19 an Individual Development Account with re20 spect to any taxable year.

21 (B) Any matching funds provided by State,

22 local, or private sources in accordance to the

23 matching ratio set by those sources.
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1 (2) CROSS REFERENCE.—

For allowance of tax credit to qualified financial

institutions for Individual Development Account

subsidies, including matching funds, see section 30B

of the Internal Revenue Code of 1986.

2 (c) FORFEITURE OF MATCHING FUNDS.—Matching

3 funds that are forfeited under section 105(b) shall be used

4 by the qualified financial institution or qualified nonprofit

5 organization to pay matches for other Individual Develop6 ment Account contributions by eligible individuals.

7 (d) UNIFORM ACCOUNTING REGULATIONS.—The

8 Secretary shall prescribe regulations with respect to ac9 counting for matching funds from all possible sources in

10 the parallel accounts.

11 (e) REGULAR REPORTING OF ACCOUNTS.—Any

12 qualified financial institution or qualified nonprofit orga13 nization shall report the balances in any Individual Devel14 opment Account and parallel account of an eligible indi15 vidual on not less than a quarterly basis.

16 SEC. 105. WITHDRAWAL PROCEDURES.

17 (a) WITHDRAWALS FOR QUALIFIED EXPENSES.—To

18 withdraw money from an eligible individual’s Individual

19 Development Account to pay qualified expenses of such

20 individual or such individual’s spouse or dependents, the

21 qualified financial institution or qualified nonprofit orga22 nization shall directly transfer such funds from the Indi23 vidual Development Account, and, if applicable, from the
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1 parallel account electronically to the vendor or other Indi2 vidual Development Account. If the vendor is not equipped

3 to receive funds electronically, the qualified financial insti4 tution or qualified nonprofit organization may issue such

5 funds by paper check to the vendor.

6 (b) WITHDRAWALS FOR NONQUALIFIED EX7 PENSES.—An Individual Development Account holder may

8 unilaterally withdraw funds from the Individual Develop9 ment Account for purposes other than to pay qualified ex10 penses, but shall forfeit the corresponding matching funds

11 and interest earned on the matching funds by doing so,

12 unless such withdrawn funds are recontributed to such Ac13 count within 1 year of withdrawal.

14 (c) DEEMED WITHDRAWALS FROM ACCOUNTS OF

15 NONELIGIBLE INDIVIDUALS.—If the individual for whose

16 benefit an Individual Development Account is established

17 ceases to be an eligible individual, such account shall cease

18 to be an Individual Development Account as of the first

19 day of the taxable year of such individual and any balance

20 in such account shall be deemed to have been withdrawn

21 on such first day by such individual for purposes other

22 than to pay qualified expenses.

23 (d) TAX TREATMENT OF MATCHING FUNDS.—Any

24 amount withdrawn from a parallel account shall not be

25 includible in an eligible individual’s gross income.
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1 SEC. 106. CERTIFICATION AND TERMINATION OF QUALI2 FIED INDIVIDUAL DEVELOPMENT ACCOUNT

3 PROGRAMS.

4 (a) CERTIFICATION PROCEDURES.—Upon estab5 lishing a qualified individual development account pro6 gram under section 101, a qualified financial institution

7 or qualified nonprofit organization shall certify to the Sec8 retary, or an organization designated by the Secretary, on

9 forms prescribed by the Secretary or such organization

10 and accompanied by any documentation required by the

11 Secretary or such organization, that—

12 (1) the accounts described in subparagraphs

13 (A) and (B) of section 101(b)(1) are operating pur14 suant to all the provisions of this Act; and

15 (2) the qualified financial institution or quali16 fied nonprofit organization agrees to implement an

17 information system necessary to monitor the cost

18 and outcomes of the qualified individual development

19 account program.

20 (b) AUTHORITY TO TERMINATE QUALIFIED IDA

21 PROGRAM.—If the Secretary, or an organization des22 ignated by the Secretary, determines that a qualified fi23 nancial institution or qualified nonprofit organization

24 under this Act is not operating a qualified individual devel25 opment account program in accordance with the require26 ments of this Act (and has not implemented any corrective
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1 recommendations directed by the Secretary or such orga2 nization), the Secretary or such organization shall termi3 nate such institution’s or nonprofit organization’s author4 ity to conduct the program. If the Secretary, or an organi5 zation designated by the Secretary, is unable to identify

6 a qualified financial institution or qualified nonprofit orga7 nization to assume the authority to conduct such program,

8 then any account established for the benefit of any eligible

9 individual under such program shall cease to be an Indi10 vidual Development Account as of the first day of such

11 termination and any balance in such account shall be

12 deemed to have been withdrawn on such first day by such

13 individual for purposes other than to pay qualified ex14 penses.

15 SEC. 107. REPORTING, MONITORING, AND EVALUATION.

16 (a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN17 STITUTIONS AND QUALIFIED NONPROFIT ORGANIZA18 TIONS.—Each qualified financial institution or qualified

19 nonprofit organization that establishes a qualified indi20 vidual development account program under section 101

21 shall report annually to the Secretary, directly or through

22 an organization designated by the Secretary, within 90

23 days after the end of each calendar year on—

24 (1) the number of eligible individuals making

25 contributions into Individual Development Accounts;
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1 (2) the amounts contributed into Individual De2 velopment Accounts and deposited into parallel ac3 counts for matching funds;

4 (3) the amounts withdrawn from Individual De5 velopment Accounts and parallel accounts, and the

6 purposes for which such amounts were withdrawn;

7 (4) the balances remaining in Individual Devel8 opment Accounts and parallel accounts; and

9 (5) such other information needed to help the

10 Secretary, or an organization designated by the Sec11 retary, monitor the cost and outcomes of the quali12 fied individual development account program.

13 (b) RESPONSIBILITIES OF THE SECRETARY OR DES14 IGNATED ORGANIZATION.—

15 (1) MONITORING PROTOCOL.—Not later than

16 12 months after the date of enactment of this Act,

17 the Secretary, or an organization designated by the

18 Secretary, shall develop and implement a protocol

19 and process to continually monitor the cost and out20 comes of the qualified individual development ac21 count programs established under section 101.

22 (2) ANNUAL REPORTS.—In each year after the

23 date of enactment of this Act, the Secretary, or an

24 organization designated by the Secretary, shall issue
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1 a progress report on the status of such qualified in2 dividual development account programs.

3 (3) APPROPRIATIONS FOR MONITORING.—There

4 is authorized to be appropriated $5,000,000 for the

5 purposes of monitoring qualified individual develop6 ment account programs established under section

7 101, to remain available until expended.

8 SEC. 108. FUNDS IN PARALLEL ACCOUNTS OF PROGRAM

9 PARTICIPANTS DISREGARDED FOR PUR10 POSES OF CERTAIN MEANS-TESTED FEDERAL

11 PROGRAMS.

12 Notwithstanding any provision of the Internal Rev13 enue Code of 1986 or the Social Security Act that requires

14 consideration of 1 or more financial circumstances of an

15 individual, for the purposes of determining eligibility to

16 receive, or the amount of, any assistance or benefit author17 ized by such provision to be provided to or for the benefit

18 of such individual, the lesser of—

19 (1) the sum of all contributions by an eligible

20 individual (including earnings thereon) to any Indi21 vidual Development Account and matching deposits

22 made on behalf of such individual (including earn23 ings thereon) in any parallel account; or

24 (2) $10,000,
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1 shall be disregarded for such purpose with respect to any

2 period during which the individual participates in a quali3 fied individual development account program established

4 under section 101.

5 TITLE II—QUALIFIED INDI6 VIDUAL DEVELOPMENT AC7 COUNT PROGRAM INVEST8 MENT CREDITS

9 SEC. 201. QUALIFIED INDIVIDUAL DEVELOPMENT AC10 COUNT PROGRAM INVESTMENT CREDITS.

11 (a) IN GENERAL.—Subpart B of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of

13 1986 (relating to other credits) is amended by inserting

14 after section 30A the following:

15 ‘‘SEC. 30B. QUALIFIED INDIVIDUAL DEVELOPMENT AC16 COUNT PROGRAM INVESTMENT CREDIT.

17 ‘‘(a) DETERMINATION OF AMOUNT.—There shall be

18 allowed as a credit against the applicable tax for the tax19 able year an amount equal to the qualified individual de20 velopment account program investment provided by an eli21 gible taxpayer during the taxable year under a qualified

22 individual development account program established under

23 section 101 of the Savings for Working Families Act.
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1 ‘‘(b) APPLICABLE TAX.—For the purposes of this

2 section, the term ‘applicable tax’ means the excess (if any)

3 of—

4 ‘‘(1) the sum of—

5 ‘‘(A) the tax imposed under this chapter

6 (other than the taxes imposed under the provi7 sions described in subparagraphs (C) through

8 (Q) of section 26(b)(1)), plus

9 ‘‘(B) the tax imposed under section 3111,

10 over

11 ‘‘(2) the credits allowable under subparts B and

12 D of this part.

13 ‘‘(c) QUALIFIED INDIVIDUAL DEVELOPMENT AC14 COUNT PROGRAM INVESTMENT.—For purposes of this

15 section, the term ‘qualified individual development account

16 program investment’ means, with respect to a qualified in17 dividual development account program of an eligible tax18 payer in any taxable year, an amount equal to—

19 ‘‘(1) in the case of an eligible taxpayer which is

20 a qualified financial institution, the sum of—

21 ‘‘(A) the lesser of—

22 ‘‘(i) 90 percent of the aggregate

23 amount of dollar-for-dollar matches under

24 such program by such taxpayer under sec-
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1 tion 104 of the Savings for Working Fami2 lies Act for such taxable year, or

3 ‘‘(ii) $90,000,000, plus

4 ‘‘(B) the lesser of—

5 ‘‘(i) 50 percent of the aggregate costs

6 paid or incurred under such program by

7 the eligible taxpayer during such taxable

8 year—

9 ‘‘(I) to provide financial edu10 cation courses to Individual Develop11 ment Account holders under section

12 102(b) of such Act, and

13 ‘‘(II) to underwrite program ac14 tivities described in section 4(6)(B) of

15 such Act), or

16 ‘‘(ii) $5,000,000, and

17 ‘‘(2) in the case of an eligible taxpayer which is

18 not a qualified financial institution, the lesser of—

19 ‘‘(A) the sum of—

20 ‘‘(i) 50 percent of the aggregate

21 amount of such dollar-for-dollar matches

22 by such taxpayer for such taxable year,

23 plus

24 ‘‘(ii) 50 percent of the aggregate costs

25 described in paragraph (1)(B)(i) paid or
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1 incurred under such program by the eligi2 ble taxpayer during such taxable year, or

3 ‘‘(B) $5,000,000.

4 ‘‘(d) ELIGIBLE TAXPAYER.—For purposes of this

5 section, a taxpayer shall be considered an eligible taxpayer

6 if at least 70 percent of the expenditures by such taxpayer

7 with respect to any qualified individual development ac8 count program for any taxable year are described in sub9 section (c)(1)(A).

10 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—

11 ‘‘(1) OTHER DEFINITIONS.—For purposes of

12 this section, the terms ‘Individual Development Ac13 count’ , ‘qualified individual development account

14 program’, and ‘qualified financial institution’ have

15 the meanings given such terms by section 4 of the

16 Savings for Workings Families Act.

17 ‘‘(2) CERTAIN RULES MADE APPLICABLE.—

18 Rules similar to the rules of paragraphs (1) and (2)

19 of section 41(f) shall apply for purposes of this sec20 tion.

21 ‘‘(f) REGULATIONS.—The Secretary may prescribe

22 such regulations as may be necessary or appropriate to

23 carry out this section, including regulations providing for

24 a recapture of the credit allowed under this section in

25 cases where there is a forfeiture under section 105(b) of
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1 the Savings for Workings Families Act in a subsequent

2 taxable year of any amount which was taken into account

3 in determining the amount of such credit.

4 ‘‘(g) TERMINATION.—This section shall not apply to

5 any taxable year beginning after December 31, 2005.’’.

6 (b) TRANSFER TO TRUST FUNDS.—The Secretary of

7 the Treasury shall transfer from the general fund of the

8 United States Treasury to the Federal Old-Age and Sur9 vivors Insurance Trust Fund, the Federal Disability In10 surance Trust Fund, and the Federal Hospital Insurance

11 Trust Fund amounts equivalent to the amount of the re12 duction in taxes imposed by section 3111 of the Internal

13 Revenue Code of 1986 by reason of the credit determined

14 under section 30B (relating to the qualified individual de15 velopment account program investment credit). Any such

16 transfer shall be made at the same time that the reduced

17 taxes would have been deposited in such Trust Funds.

18 (c) CONFORMING AMENDMENT.—The table of sec19 tions for subpart B of part IV of subchapter A of chapter

20 1 of the Internal Revenue Code of 1986 is amended by

21 inserting after the item relating to section 30A the fol22 lowing:

‘‘Sec. 30B. Qualified individual development account program investment

credit.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2000.

4 SEC. 202. CRA CREDIT TREATMENT FOR QUALIFIED INDI5 VIDUAL DEVELOPMENT ACCOUNT PROGRAM

6 INVESTMENTS.

7 Qualified financial institutions which establish quali8 fied individual development account programs under sec9 tion 101 shall not receive credit for funding, administra10 tion, and education expenses under any test contained in

11 regulations for the Community Reinvestment Act of 1977

12 for those activities and expenses related to such programs

13 and taken into account for purposes of the tax credit al14 lowed under section 30B of the Internal Revenue Code of

15 1986.

16 SEC. 203. DESIGNATION OF EARNED INCOME TAX CREDIT

17 PAYMENTS FOR DEPOSIT TO INDIVIDUAL DE18 VELOPMENT ACCOUNTS.

19 (a) IN GENERAL.—Section 32 of the Internal Rev20 enue Code of 1986 (relating to earned income credit) is

21 amended by adding at the end the following:

22 ‘‘(o) DESIGNATION OF CREDIT FOR DEPOSIT TO IN23 DIVIDUAL DEVELOPMENT ACCOUNT.—

24 ‘‘(1) IN GENERAL.—With respect to the return

25 of any eligible individual (as defined in section 4(1)
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1 of the Savings for Working Families Act) for the

2 taxable year of the tax imposed by this chapter, such

3 individual may designate that a specified portion

4 (not less than $1) of any overpayment of tax for

5 such taxable year which is attributable to the credit

6 allowed under this section shall be deposited by the

7 Secretary into an Individual Development Account

8 (as defined in section 4(2) of such Act) of such indi9 vidual. The Secretary shall so deposit such portion

10 designated under this paragraph.

11 ‘‘(2) MANNER AND TIME OF DESIGNATION.—A

12 designation under paragraph (1) may be made with

13 respect to any taxable year—

14 ‘‘(A) at the time of filing the return of the

15 tax imposed by this chapter for such taxable

16 year, or

17 ‘‘(B) at any other time (after the time of

18 filing the return of the tax imposed by this

19 chapter for such taxable year) specified in regu20 lations prescribed by the Secretary.

21 Such designation shall be made in such manner as

22 the Secretary prescribes by regulations.

23 ‘‘(3) PORTION ATTRIBUTABLE TO EARNED IN24 COME TAX CREDIT.—For purposes of paragraph (1),

25 an overpayment for any taxable year shall be treated
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1 as attributable to the credit allowed under this sec2 tion for such taxable year to the extent that such

3 overpayment does not exceed the credit so allowed.

4 ‘‘(4) OVERPAYMENTS TREATED AS RE5 FUNDED.—For purposes of this title, any portion of

6 an overpayment of tax designated under paragraph

7 (1) shall be treated as being refunded to the tax8 payer as of the last date prescribed for filing the re9 turn of tax imposed by this chapter (determined

10 without regard to extensions) or, if later, the date

11 the return is filed.

12 ‘‘(5) TERMINATION.—This subsection shall not

13 apply to any taxable year beginning after December

14 31, 2005.’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 this section shall apply to taxable years beginning after

17 December 31, 2000.

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