I

107TH CONGRESS

1ST SESSION H. R. 1284

To provide incentives for charitable contributions by individuals and businesses, to improve the effectiveness and efficiency of government program

delivery to individuals and families in need, and to enhance the ability

of low-income Americans to gain financial security by building assets.

IN THE HOUSE OF REPRESENTATIVES

MARCH 28, 2001

Mr. WATTS of Oklahoma (for himself, Mr. HALL of Ohio, and Mr. HASTERT)

introduced the following bill; which was referred to the Committee on

Ways and Means, and in addition to the Committee on the Judiciary, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide incentives for charitable contributions by individuals and businesses, to improve the effectiveness and

efficiency of government program delivery to individuals

and families in need, and to enhance the ability of lowincome Americans to gain financial security by building

assets.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Community Solutions Act of 2001’’.

4 (b) TABLE OF CONTENTS.—The table of contents is

5 as follows:

Sec. 1. Short title; table of contents.

TITLE I—CHARITABLE GIVING INCENTIVES PACKAGE

Sec. 101. Deduction for portion of charitable contributions to be allowed to individuals who do not itemize deductions.

Sec. 102. Tax-free distributions from individual retirement accounts for charitable purposes.

Sec. 103. Charitable deduction for contributions of food inventory.

Sec. 104. Charitable donations liability reform for in-kind corporate contributions.

TITLE II—EXPANSION OF CHARITABLE CHOICE

Sec. 201. Provision of assistance under government programs by religious and

community organizations.

TITLE III—INDIVIDUAL DEVELOPMENT ACCOUNTS

Sec. 301. Purposes.

Sec. 302. Definitions.

Sec. 303. Structure and administration of qualified individual development account programs.

Sec. 304. Procedures for opening and maintaining an individual development

account and qualifying for matching funds.

Sec. 305. Deposits by qualified individual development account programs.

Sec. 306. Withdrawal procedures.

Sec. 307. Certification and termination of qualified individual development account programs.

Sec. 308. Reporting, monitoring, and evaluation.

Sec. 309. Authorization of appropriations.

Sec. 310. Account funds disregarded for purposes of certain means-tested Federal programs.

Sec. 311. Matching funds for individual development accounts provided through

a tax credit for qualified financial institutions.
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1 TITLE I—CHARITABLE GIVING

2 INCENTIVES PACKAGE

3 SEC. 101. DEDUCTION FOR PORTION OF CHARITABLE CON4 TRIBUTIONS TO BE ALLOWED TO INDIVID5 UALS WHO DO NOT ITEMIZE DEDUCTIONS.

6 (a) IN GENERAL.—Section 170 of the Internal Rev7 enue Code of 1986 (relating to charitable, etc., contribu8 tions and gifts) is amended by redesignating subsection

9 (m) as subsection (n) and by inserting after subsection

10 (l) the following new subsection:

11 ‘‘(m) DEDUCTION FOR INDIVIDUALS NOT ITEMIZING

12 DEDUCTIONS.—In the case of an individual who does not

13 itemize his deductions for the taxable year, there shall be

14 taken into account as a direct charitable deduction under

15 section 63 an amount equal to the lesser of—

16 ‘‘(1) the amount allowable under subsection (a)

17 for the taxable year, or

18 ‘‘(2) the amount of the standard deduction.’’

19 (b) DIRECT CHARITABLE DEDUCTION.—

20 (1) IN GENERAL.—Subsection (b) of section 63

21 of such Code is amended by striking ‘‘and’’ at the

22 end of paragraph (1), by striking the period at the

23 end of paragraph (2) and inserting ‘‘, and’’, and by

24 adding at the end thereof the following new para25 graph:
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1 ‘‘(3) the direct charitable deduction.’’

2 (2) DEFINITION.—Section 63 of such Code is

3 amended by redesignating subsection (g) as sub4 section (h) and by inserting after subsection (f) the

5 following new subsection:

6 ‘‘(g) DIRECT CHARITABLE DEDUCTION.—For pur7 poses of this section, the term ‘direct charitable deduction’

8 means that portion of the amount allowable under section

9 170(a) which is taken as a direct charitable deduction for

10 the taxable year under section 170(m).’’

11 (3) CONFORMING AMENDMENT.—Subsection (d)

12 of section 63 of such Code is amended by striking

13 ‘‘and’’ at the end of paragraph (1), by striking the

14 period at the end of paragraph (2) and inserting ‘‘,

15 and’’, and by adding at the end thereof the following

16 new paragraph:

17 ‘‘(3) the direct charitable deduction.’’

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

19 this section shall apply to taxable years beginning after

20 the date of the enactment of this Act.

21 SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE22 TIREMENT ACCOUNTS FOR CHARITABLE

23 PURPOSES.

24 (a) IN GENERAL.—Subsection (d) of section 408 of

25 the Internal Revenue Code of 1986 (relating to individual
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1 retirement accounts) is amended by adding at the end the

2 following new paragraph:

3 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR4 POSES.—

5 ‘‘(A) IN GENERAL.—No amount shall be

6 includible in gross income by reason of a quali7 fied charitable distribution from an individual

8 retirement account to an organization described

9 in section 170(c).

10 ‘‘(B) SPECIAL RULES RELATING TO CHARI11 TABLE REMAINDER TRUSTS, POOLED INCOME

12 FUNDS, AND CHARITABLE GIFT ANNUITIES.—

13 ‘‘(i) IN GENERAL.—No amount shall

14 be includible in gross income by reason of

15 a qualified charitable distribution from an

16 individual retirement account—

17 ‘‘(I) to a charitable remainder

18 annuity trust or a charitable remain19 der unitrust (as such terms are de20 fined in section 664(d)),

21 ‘‘(II) to a pooled income fund (as

22 defined in section 642(c)(5)), or

23 ‘‘(III) for the issuance of a chari24 table gift annuity (as defined in sec25 tion 501(m)(5)).
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1 The preceding sentence shall apply only if

2 no person holds an income interest in the

3 amounts in the trust, fund, or annuity at4 tributable to such distribution other than

5 one or more of the following: the individual

6 for whose benefit such account is main7 tained, the spouse of such individual, or

8 any organization described in section

9 170(c).

10 ‘‘(ii) DETERMINATION OF INCLUSION

11 OF AMOUNTS DISTRIBUTED.—In deter12 mining the amount includible in the gross

13 income of any person by reason of a pay14 ment or distribution from a trust referred

15 to in clause (i)(I) or a charitable gift annu16 ity (as so defined), the portion of any

17 qualified charitable distribution to such

18 trust or for such annuity which would (but

19 for this subparagraph) have been includible

20 in gross income—

21 ‘‘(I) shall be treated as income

22 described in section 664(b)(1), and

23 ‘‘(II) shall not be treated as an

24 investment in the contract.
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1 ‘‘(iii) NO INCLUSION FOR DISTRIBU2 TION TO POOLED INCOME FUND.—No

3 amount shall be includible in the gross in4 come of a pooled income fund (as so de5 fined) by reason of a qualified charitable

6 distribution to such fund.

7 ‘‘(C) QUALIFIED CHARITABLE DISTRIBU8 TION.—For purposes of this paragraph, the

9 term ‘qualified charitable distribution’ means

10 any distribution from an individual retirement

11 account—

12 ‘‘(i) which is made on or after the

13 date that the individual for whose benefit

14 the account is maintained has attained age

591 15 ⁄2, and

16 ‘‘(ii) which is made directly from the

17 account to—

18 ‘‘(I) an organization described in

19 section 170(c), or

20 ‘‘(II) a trust, fund, or annuity re21 ferred to in subparagraph (B).

22 ‘‘(D) DENIAL OF DEDUCTION.—The

23 amount allowable as a deduction under section

24 170 to the taxpayer for the taxable year shall

25 be reduced (but not below zero) by the sum of
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1 the amounts of the qualified charitable distribu2 tions during such year which would be includ3 ible in the gross income of the taxpayer for

4 such year but for this paragraph.’’

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

6 subsection (a) shall apply to taxable years beginning after

7 the date of the enactment of this Act.

8 SEC. 103. CHARITABLE DEDUCTION FOR CONTRIBUTIONS

9 OF FOOD INVENTORY.

10 (a) IN GENERAL.—Subsection (e) of section 170 of

11 the Internal Revenue Code of 1986 (relating to certain

12 contributions of ordinary income and capital gain prop13 erty) is amended by adding at the end the following new

14 paragraph:

15 ‘‘(7) SPECIAL RULE FOR CONTRIBUTIONS OF

16 FOOD INVENTORY.—For purposes of this section—

17 ‘‘(A) CONTRIBUTIONS BY NON-CORPORATE

18 TAXPAYERS.—In the case of a charitable con19 tribution of food by a taxpayer, paragraph

20 (3)(A) shall be applied without regard to wheth21 er or not the contribution is made by a corpora22 tion.

23 ‘‘(B) LIMIT ON REDUCTION.—In the case

24 of a charitable contribution of food which is a

25 qualified contribution (within the meaning of
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1 paragraph (3)(A), as modified by subparagraph

2 (A) of this paragraph)—

3 ‘‘(i) paragraph (3)(B) shall not apply,

4 and

5 ‘‘(ii) the reduction under paragraph

6 (1)(A) for such contribution shall be no

7 greater than the amount (if any) by which

8 the amount of such contribution exceeds

9 twice the basis of such food.

10 ‘‘(C) DETERMINATION OF BASIS.—For

11 purposes of this paragraph, if a taxpayer uses

12 the cash method of accounting, the basis of any

13 qualified contribution of such taxpayer shall be

14 deemed to be 50 percent of the fair market

15 value of such contribution.

16 ‘‘(D) DETERMINATION OF FAIR MARKET

17 VALUE.—In the case of a charitable contribu18 tion of food which is a qualified contribution

19 (within the meaning of paragraph (3), as modi20 fied by subparagraphs (A) and (B) of this para21 graph) and which, solely by reason of internal

22 standards of the taxpayer, lack of market, or

23 similar circumstances, or which is produced by

24 the taxpayer exclusively for the purposes of

25 transferring the food to an organization de-
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1 scribed in paragraph (3)(A), cannot or will not

2 be sold, the fair market value of such contribu3 tion shall be determined—

4 ‘‘(i) without regard to such internal

5 standards, such lack of market, such cir6 cumstances, or such exclusive purpose, and

7 ‘‘(ii) if applicable, by taking into ac8 count the price at which the same or simi9 lar food items are sold by the taxpayer at

10 the time of the contribution (or, if not so

11 sold at such time, in the recent past).’’.

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

13 subsection (a) shall apply to taxable years beginning after

14 December 31, 2001.

15 SEC. 104. CHARITABLE DONATIONS LIABILITY REFORM

16 FOR IN-KIND CORPORATE CONTRIBUTIONS.

17 (a) DEFINITIONS.—For purposes of this section:

18 (1) AIRCRAFT.—The term ‘‘aircraft’’ has the

19 meaning provided that term in section 40102(6) of

20 title 49, United States Code.

21 (2) BUSINESS ENTITY.—The term ‘‘business

22 entity’’ means a firm, corporation, association, part23 nership, consortium, joint venture, or other form of

24 enterprise.
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1 (3) EQUIPMENT.—The term ‘‘equipment’’ in2 cludes mechanical equipment, electronic equipment,

3 and office equipment.

4 (4) FACILITY.—The term ‘‘facility’’ means any

5 real property, including any building, improvement,

6 or appurtenance.

7 (5) GROSS NEGLIGENCE.—The term ‘‘gross

8 negligence’’ means voluntary and conscious conduct

9 by a person with knowledge (at the time of the con10 duct) that the conduct is likely to be harmful to the

11 health or well-being of another person.

12 (6) INTENTIONAL MISCONDUCT.—The term

13 ‘‘intentional misconduct’’ means conduct by a person

14 with knowledge (at the time of the conduct) that the

15 conduct is harmful to the health or well-being of an16 other person.

17 (7) MOTOR VEHICLE.—The term ‘‘motor vehi18 cle’’ has the meaning provided that term in section

19 30102(6) of title 49, United States Code.

20 (8) NONPROFIT ORGANIZATION.—The term

21 ‘‘nonprofit organization’’ means—

22 (A) any organization described in section

23 501(c)(3) of the Internal Revenue Code of 1986

24 and exempt from tax under section 501(a) of

25 such Code; or
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1 (B) any not-for-profit organization orga2 nized and conducted for public benefit and op3 erated primarily for charitable, civic, edu4 cational, religious, welfare, or health purposes.

5 (9) STATE.—The term ‘‘State’’ means each of

6 the several States, the District of Columbia, the

7 Commonwealth of Puerto Rico, the Virgin Islands,

8 Guam, American Samoa, the Northern Mariana Is9 lands, any other territory or possession of the

10 United States, or any political subdivision of any

11 such State, territory, or possession.

12 (b) LIABILITY.—

13 (1) LIABILITY OF BUSINESS ENTITIES THAT

14 DONATE EQUIPMENT TO NONPROFIT ORGANIZA15 TIONS.—

16 (A) IN GENERAL.—Subject to subsection

17 (c), a business entity shall not be subject to

18 civil liability relating to any injury or death that

19 results from the use of equipment donated by a

20 business entity to a nonprofit organization.

21 (B) APPLICATION.—This paragraph shall

22 apply with respect to civil liability under Fed23 eral and State law.
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1 (2) LIABILITY OF BUSINESS ENTITIES PRO2 VIDING USE OF FACILITIES TO NONPROFIT ORGANI3 ZATIONS.—

4 (A) IN GENERAL.—Subject to subsection

5 (c), a business entity shall not be subject to

6 civil liability relating to any injury or death oc7 curring at a facility of the business entity in

8 connection with a use of such facility by a non9 profit organization, if—

10 (i) the use occurs outside of the scope

11 of business of the business entity;

12 (ii) such injury or death occurs during

13 a period that such facility is used by the

14 nonprofit organization; and

15 (iii) the business entity authorized the

16 use of such facility by the nonprofit orga17 nization.

18 (B) APPLICATION.—This paragraph shall

19 apply—

20 (i) with respect to civil liability under

21 Federal and State law; and

22 (ii) regardless of whether a nonprofit

23 organization pays for the use of a facility.

24 (3) LIABILITY OF BUSINESS ENTITIES PRO25 VIDING USE OF A MOTOR VEHICLE OR AIRCRAFT.—
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1 (A) IN GENERAL.—Subject to subsection

2 (c), a business entity shall not be subject to

3 civil liability relating to any injury or death oc4 curring as a result of the operation of aircraft

5 or a motor vehicle of a business entity loaned

6 to a nonprofit organization for use outside of

7 the scope of business of the business entity, if—

8 (i) such injury or death occurs during

9 a period that such motor vehicle or aircraft

10 is used by a nonprofit organization; and

11 (ii) the business entity authorized the

12 use by the nonprofit organization of motor

13 vehicle or aircraft that resulted in the in14 jury or death.

15 (B) APPLICATION.—This paragraph shall

16 apply—

17 (i) with respect to civil liability under

18 Federal and State law; and

19 (ii) regardless of whether a nonprofit

20 organization pays for the use of the air21 craft or motor vehicle.

22 (4) LIABILITY OF BUSINESS ENTITIES PRO23 VIDING TOURS OF FACILITIES.—

24 (A) IN GENERAL.—Subject to subsection

25 (c), a business entity shall not be subject to
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1 civil liability relating to any injury to, or death

2 of an individual occurring at a facility of the

3 business entity, if—

4 (i) such injury or death occurs during

5 a tour of the facility in an area of the fa6 cility that is not otherwise accessible to the

7 general public; and

8 (ii) the business entity authorized the

9 tour.

10 (B) APPLICATION.—This paragraph shall

11 apply—

12 (i) with respect to civil liability under

13 Federal and State law; and

14 (ii) regardless of whether an indi15 vidual pays for the tour.

16 (c) EXCEPTIONS.—Subsection (b) shall not apply to

17 an injury or death that results from an act or omission

18 of a business entity that constitutes gross negligence or

19 intentional misconduct, including any misconduct that—

20 (1) constitutes a crime of violence (as that term

21 is defined in section 16 of title 18, United States

22 Code) or act of international terrorism (as that term

23 is defined in section 2331 of title 18, United States

24 Code) for which the defendant has been convicted in

25 any court;
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1 (2) constitutes a hate crime (as that term is

2 used in the Hate Crime Statistics Act (28 U.S.C.

3 534 note));

4 (3) involves a sexual offense, as defined by ap5 plicable State law, for which the defendant has been

6 convicted in any court; or

7 (4) involves misconduct for which the defendant

8 has been found to have violated a Federal or State

9 civil rights law.

10 (d) SUPERSEDING PROVISION.—

11 (1) IN GENERAL.—Subject to paragraph (2)

12 and subsection (e), this title preempts the laws of

13 any State to the extent that such laws are incon14 sistent with this title, except that this title shall not

15 preempt any State law that provides additional pro16 tection for a business entity for an injury or death

17 described in a paragraph of subsection (b) with re18 spect to which the conditions specified in such para19 graph apply.

20 (2) LIMITATION.—Nothing in this title shall be

21 construed to supersede any Federal or State health

22 or safety law.

23 (e) ELECTION OF STATE REGARDING NONAPPLICA24 BILITY.—A provision of this title shall not apply to any

25 civil action in a State court against a business entity in
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1 which all parties are citizens of the State if such State

2 enacts a statute—

3 (1) citing the authority of this section;

4 (2) declaring the election of such State that

5 such provision shall not apply to such civil action in

6 the State; and

7 (3) containing no other provisions.

8 (f) EFFECTIVE DATE.—This section shall apply to in9 juries (and deaths resulting therefrom) occurring on or

10 after the date of the enactment of this Act.

11 TITLE II—EXPANSION OF

12 CHARITABLE CHOICE

13 SEC. 201. PROVISION OF ASSISTANCE UNDER GOVERN14 MENT PROGRAMS BY RELIGIOUS AND COM15 MUNITY ORGANIZATIONS.

16 Title XXIV of the Revised Statutes is amended by

17 inserting after section 1990 (42 U.S.C. 1994) the fol18 lowing:

19 ‘‘SEC. 1994A. CHARITABLE CHOICE.

20 ‘‘(a) SHORT TITLE.—This section may be cited as the

21 ‘Charitable Choice Act of 2001’.

22 ‘‘(b) PURPOSES.—The purposes of this section are—

23 ‘‘(1) to provide assistance to individuals and

24 families in need in the most effective and efficient

25 manner;
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1 ‘‘(2) to prohibit discrimination against religious

2 organizations on the basis of religion in the adminis3 tration and distribution of government assistance

4 under the government programs described in sub5 section (c)(4);

6 ‘‘(3) to allow religious organizations to assist in

7 the administration and distribution of such assist8 ance without impairing the religious character of

9 such organizations; and

10 ‘‘(4) to protect the religious freedom of individ11 uals and families in need who are eligible for govern12 ment assistance, including expanding the possibility

13 of choosing to receive services from a religious orga14 nization providing such assistance.

15 ‘‘(c) RELIGIOUS ORGANIZATIONS INCLUDED AS NON16 GOVERNMENTAL PROVIDERS.—

17 ‘‘(1) IN GENERAL.—

18 ‘‘(A) INCLUSION.—For any program de19 scribed in paragraph (4) that is carried out by

20 the Federal Government, or by a State or local

21 government with Federal funds, the government

22 shall consider, on the same basis as other non23 governmental organizations, religious organiza24 tions to provide the assistance under the pro25 gram, if the program is implemented in a man-
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1 ner that is consistent with the Establishment

2 Clause and the Free Exercise Clause of the

3 first amendment to the Constitution.

4 ‘‘(B) DISCRIMINATION PROHIBITED.—Nei5 ther the Federal Government nor a State or

6 local government receiving funds under a pro7 gram described in paragraph (4) shall discrimi8 nate against an organization that provides as9 sistance under, or applies to provide assistance

10 under, such program, on the basis that the or11 ganization has a religious character.

12 ‘‘(2) FUNDS NOT AID TO RELIGION.—Federal,

13 State, or local government funds or other assistance

14 that is received by a religious organization for the

15 provision of services under this section constitutes

16 aid to individuals and families in need, the ultimate

17 beneficiaries of such services, and not aid to the reli18 gious organization.

19 ‘‘(3) FUNDS NOT ENDORSEMENT OF RELI20 GION.—The receipt by a religious organization of

21 Federal, State, or local government funds or other

22 assistance under this section is not and should not

23 be perceived as an endorsement by the government

24 of religion or the organization’s religious beliefs or

25 practices.
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1 ‘‘(4) PROGRAMS.—For purposes of this section,

2 a program is described in this paragraph—

3 ‘‘(A) if it involves activities carried out

4 using Federal funds—

5 ‘‘(i) related to the prevention and

6 treatment of juvenile delinquency and the

7 improvement of the juvenile justice system,

8 including programs funded under the Juve9 nile Justice and Delinquency Prevention

10 Act of 1974 (42 U.S.C. 5601 et seq.);

11 ‘‘(ii) related to the prevention of

12 crime, including programs funded under

13 title I of the Omnibus Crime Control and

14 Safe Streets Act of 1968 (42 U.S.C. 3701

15 et seq.);

16 ‘‘(iii) under the Federal housing laws;

17 ‘‘(iv) under title I of the Workforce

18 Investment Act of 1998 (29 U.S.C. 2801

19 et seq.)

20 ‘‘(v) under the Older Americans Act

21 of 1965 (42 U.S.C. 3001 et seq.);

22 ‘‘(vi) under the Child Care Develop23 ment Block Grant Act of 1990 (42 U.S.C.

24 9858 et seq.);
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1 ‘‘(vii) under the Community Develop2 ment Block Grant Program established

3 under title I of the Housing and Commu4 nity Development Act of 1974 (42 U.S.C.

5 5301 et seq.);

6 ‘‘(viii) related to the intervention in

7 and prevention of domestic violence;

8 ‘‘(ix) related to hunger relief activi9 ties; or

10 ‘‘(x) under the Job Access and Re11 verse Commute grant program established

12 under section 3037 of the Federal Transit

13 Act of 1998 (49 U.S.C. 5309 note); or

14 ‘‘(B)(i) if it involves activities to assist stu15 dents in obtaining the recognized equivalents of

16 secondary school diplomas and activities relat17 ing to non-school-hours programs; and

18 ‘‘(ii) except as provided in subparagraph

19 (A) and clause (i), does not include activities

20 carried out under Federal programs providing

21 education to children eligible to attend elemen22 tary schools or secondary schools, as defined in

23 section 14101 of the Elementary and Secondary

24 Education Act of 1965 (20 U.S.C. 8801).
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1 ‘‘(d) ORGANIZATIONAL CHARACTER AND AUTON2 OMY.—

3 ‘‘(1) IN GENERAL.—A religious organization

4 that provides assistance under a program described

5 in subsection (c)(4) shall retain its autonomy from

6 Federal, State, and local governments, including

7 such organization’s control over the definition, devel8 opment, practice, and expression of its religious be9 liefs.

10 ‘‘(2) ADDITIONAL SAFEGUARDS.—Neither the

11 Federal Government nor a State or local government

12 shall require a religious organization in order to be

13 eligible to provide assistance under a program de14 scribed in subsection (c)(4)—

15 ‘‘(A) to alter its form of internal govern16 ance; or

17 ‘‘(B) to remove religious art, icons, scrip18 ture, or other symbols because they are reli19 gious.

20 ‘‘(e) EMPLOYMENT PRACTICES.—

21 ‘‘(1) IN GENERAL.—In order to aid in the pres22 ervation of its religious character, a religious organi23 zation that provides assistance under a program de24 scribed in subsection (c)(4) may, notwithstanding

25 any other provision of law, require that its employ-
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1 ees adhere to the religious practices of the organiza2 tion.

3 ‘‘(2) TITLE VII EXEMPTION.—The exemption of

4 a religious organization provided under section 702

5 or 703(e)(2) of the Civil Rights Act of 1964 (42

6 U.S.C. 2000e–1, 2000e–2(e)(2)) regarding employ7 ment practices shall not be affected by the religious

8 organization’s provision of assistance under, or re9 ceipt of funds from, a program described in sub10 section (c)(4).

11 ‘‘(3) EFFECT ON OTHER LAWS.—Nothing in

12 this section alters the duty of a religious organiza13 tion to comply with the nondiscrimination provisions

14 in title VI of the Civil Rights Act of 1964 (42

15 U.S.C. 2000d et seq.) (prohibiting discrimination on

16 the basis of race, color, and national origin), title IX

17 of the Education Amendments of 1972 (20 U.S.C.

18 1681–1686) (prohibiting discrimination in edu19 cational institutions on the basis of sex and visual

20 impairment), section 504 of the Rehabilitation Act

21 of 1973 (29 U.S.C. 794) (prohibiting discrimination

22 against otherwise qualified disabled individuals), and

23 the Age Discrimination Act of 1975 (42 U.S.C.

24 6101–6107) (prohibiting discrimination on the basis

25 of age).
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1 ‘‘(f) RIGHTS OF BENEFICIARIES OF ASSISTANCE.—

2 ‘‘(1) IN GENERAL.—If an individual described

3 in paragraph (3) has an objection to the religious

4 character of the organization from which the indi5 vidual receives, or would receive, assistance funded

6 under any program described in subsection (c)(4),

7 the appropriate Federal, State, or local govern8 mental entity shall provide to such individual (if oth9 erwise eligible for such assistance) within a reason10 able period of time after the date of such objection,

11 assistance that—

12 ‘‘(A) is an alternative, including a nonreli13 gious alternative, that is accessible to the indi14 vidual; and

15 ‘‘(B) has a value that is not less than the

16 value of the assistance that the individual would

17 have received from such organization.

18 ‘‘(2) NOTICE.—The appropriate Federal, State,

19 or local governmental entity shall guarantee that no20 tice is provided to the individuals described in para21 graph (3) of the rights of such individuals under this

22 section.

23 ‘‘(3) INDIVIDUAL DESCRIBED.—An individual

24 described in this paragraph is an individual who re-
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1 ceives or applies for assistance under a program de2 scribed in subsection (c)(4).

3 ‘‘(g) NONDISCRIMINATION AGAINST BENE4 FICIARIES.—

5 ‘‘(1) GRANTS AND CONTRACTS.—A religious or6 ganization providing assistance through a grant or

7 contract under a program described in subsection

8 (c)(4) shall not discriminate, in carrying out the pro9 gram, against an individual described in subsection

10 (f)(3) on the basis of religion, a religious belief, or

11 a refusal to hold a religious belief.

12 ‘‘(2) INDIRECT FORMS OF DISBURSEMENT.—A

13 religious organization providing assistance through a

14 voucher, certificate, or other form of indirect dis15 bursement under a program described in subsection

16 (c)(4) shall not discriminate, in carrying out the pro17 gram, against an individual described in subsection

18 (f)(3) on the basis of religion, a religious belief, or

19 a refusal to hold a religious belief.

20 ‘‘(h) ACCOUNTABILITY.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), a religious organization providing assist23 ance under any program described in subsection

24 (c)(4) shall be subject to the same regulations as

25 other nongovernmental organizations to account in
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1 accord with generally accepted accounting principles

2 for the use of such funds provided under such pro3 gram.

4 ‘‘(2) LIMITED AUDIT.—Such organization shall

5 segregate government funds provided under such

6 program into a separate account or accounts. Only

7 the government funds shall be subject to audit by

8 the government.

9 ‘‘(i) LIMITATIONS ON USE OF FUNDS FOR CERTAIN

10 PURPOSES.—No funds provided through a grant or con11 tract to a religious organization to provide assistance

12 under any program described in subsection (c)(4) shall be

13 expended for sectarian worship, instruction, or proselytiza14 tion. A certificate shall be signed by such organizations

15 and filed with the government agency that disbursed the

16 funds that gives assurance the organization will comply

17 with this subsection.

18 ‘‘(j) EFFECT ON STATE AND LOCAL FUNDS.—If a

19 State or local government contributes State or local funds

20 to carry out a program described in subsection (c)(4), the

21 State or local government may segregate the State or local

22 funds from the Federal funds provided to carry out the

23 program or may commingle the State or local funds with

24 the Federal funds. If the State or local government com25 mingles the State or local funds, the provisions of this sec-
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1 tion shall apply to the commingled funds in the same man2 ner, and to the same extent, as the provisions apply to

3 the Federal funds.

4 ‘‘(k) TREATMENT OF INTERMEDIATE CONTRAC5 TORS.—If a nongovernmental organization (referred to in

6 this subsection as an ‘intermediate contractor’), acting

7 under a contract or other agreement with the Federal Gov8 ernment or a State or local government, is given the au9 thority under the contract or agreement to select non10 governmental organizations to provide assistance under

11 the programs described in subsection (c)(4), the inter12 mediate contractor shall have the same duties under this

13 section as the government when selecting or otherwise

14 dealing with subcontractors, but the intermediate con15 tractor, if it is a religious organization, shall retain all

16 other rights of a religious organization under this section.

17 ‘‘(l) COMPLIANCE.—A party alleging that the rights

18 of the party under this section have been violated by a

19 State or local government may bring a civil action pursu20 ant to section 1979 against the official or government

21 agency that has allegedly committed such violation. A

22 party alleging that the rights of the party under this sec23 tion have been violated by the Federal Government may

24 bring a civil action for appropriate relief in Federal dis-
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1 trict court against the official or government agency that

2 has allegedly committed such violation.’’.

3 TITLE III—INDIVIDUAL

4 DEVELOPMENT ACCOUNTS

5 SEC. 301. PURPOSES.

6 The purposes of this title are to provide for the estab7 lishment of individual development account programs that

8 will—

9 (1) provide individuals and families with limited

10 means an opportunity to accumulate assets and to

11 enter the financial mainstream;

12 (2) promote education, homeownership, and the

13 development of small businesses;

14 (3) stabilize families and build communities;

15 and

16 (4) support United States economic expansion.

17 SEC. 302. DEFINITIONS.

18 As used in this title:

19 (1) ELIGIBLE INDIVIDUAL.—

20 (A) IN GENERAL.—The term ‘‘eligible indi21 vidual’’ means an individual who—

22 (i) has attained the age of 18 years

23 but not the age of 61;

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

25 United States;
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1 (iii) is not a student (as defined in

2 section 151(c)(4)); and

3 (iv) is a taxpayer the adjusted gross

4 income of whom for the preceding taxable

5 year does not exceed—

6 (I) $20,000, in the case of a tax7 payer described in section 1(c) or 1(d)

8 of the Internal Revenue Code of 1986;

9 (II) $25,000, in the case of a

10 taxpayer described in section 1(b) of

11 such Code; and

12 (III) $40,000, in the case of a

13 taxpayer described in section 1(a) of

14 such Code.

15 (B) INFLATION ADJUSTMENT.—

16 (i) IN GENERAL.—In the case of any

17 taxable year beginning after 2002, each

18 dollar amount referred to in subparagraph

19 (A)(iv) shall be increased by an amount

20 equal to—

21 (I) such dollar amount, multi22 plied by

23 (II) the cost-of-living adjustment

24 determined under section (1)(f)(3) of

25 the Internal Revenue Code of 1986
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1 for the calendar year in which the tax2 able year begins, by substituting

3 ‘‘2001’’ for ‘‘1992’’.

4 (ii) ROUNDING.—If any amount as

5 adjusted under clause (i) is not a multiple

6 of $50, such amount shall be rounded to

7 the nearest multiple of $50.

8 (2) INDIVIDUAL DEVELOPMENT ACCOUNT.—

9 The term ‘‘Individual Development Account’’ means

10 an account established for an eligible individual as

11 part of a qualified individual development account

12 program, but only if the written governing instru13 ment creating the account meets the following re14 quirements:

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

16 individual for whom the account was estab17 lished.

18 (B) No contribution will be accepted unless

19 it is in cash.

20 (C) The holder of the account is a quali21 fied financial institution.

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

23 commingled with other property except in a

24 common trust fund or common investment

25 fund.
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1 (E) Except as provided in section 306(b),

2 any amount in the account may be paid out

3 only for the purpose of paying the qualified ex4 penses of the account owner.

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

6 account’’ means a separate, parallel individual or

7 pooled account for all matching funds and earnings

8 dedicated to an Individual Development Account

9 owner as part of a qualified individual development

10 account program, the sole owner of which is a quali11 fied financial institution, a qualified nonprofit orga12 nization, or an Indian tribe.

13 (4) QUALIFIED FINANCIAL INSTITUTION.—

14 (A) IN GENERAL.—The term ‘‘qualified fi15 nancial institution’’ means any person author16 ized to be a trustee of any individual retirement

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

18 (B) RULE OF CONSTRUCTION.—Nothing in

19 this paragraph shall be construed as preventing

20 a person described in subparagraph (A) from

21 collaborating with 1 or more contractual affili22 ates, qualified nonprofit organizations, or In23 dian tribes to carry out an individual develop24 ment account program established under sec25 tion 303.
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1 (5) QUALIFIED NONPROFIT ORGANIZATION.—

2 The term ‘‘qualified nonprofit organization’’

3 means—

4 (A) any organization described in section

5 501(c)(3) of the Internal Revenue Code of 1986

6 and exempt from taxation under section 501(a)

7 of such Code;

8 (B) any community development financial

9 institution certified by the Community Develop10 ment Financial Institution Fund; or

11 (C) any credit union chartered under Fed12 eral or State law.

13 (6) INDIAN TRIBE.—The term ‘‘Indian tribe’’

14 means any Indian tribe as defined in section 4(12)

15 of the Native American Housing Assistance and

16 Self-Determination Act of 1996 (25 U.S.C.

17 4103(12), and includes any tribal subsidiary, sub18 division, or other wholly owned tribal entity.

19 (7) QUALIFIED INDIVIDUAL DEVELOPMENT AC20 COUNT PROGRAM.—The term ‘‘qualified individual

21 development account program’’ means a program es22 tablished under section 303 under which—

23 (A) Individual Development Accounts and

24 parallel accounts are held by a qualified finan25 cial institution; and
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1 (B) additional activities determined by the

2 Secretary as necessary to responsibly develop

3 and administer accounts, including recruiting,

4 providing financial education and other training

5 to account owners, and regular program moni6 toring, are carried out by the qualified financial

7 institution, a qualified nonprofit organization,

8 or an Indian tribe.

9 (8) QUALIFIED EXPENSE DISTRIBUTION.—

10 (A) IN GENERAL.—The term ‘‘qualified ex11 pense distribution’’ means any amount paid (in12 cluding through electronic payments) or distrib13 uted out of an Individual Development Account

14 and a parallel account established for an eligible

15 individual if such amount—

16 (i) is used exclusively to pay the quali17 fied expenses of the Individual Develop18 ment Account owner or such owner’s

19 spouse or dependents, as approved by the

20 qualified financial institution, qualified

21 nonprofit organization, or Indian tribe;

22 (ii) is paid by the qualified financial

23 institution, qualified nonprofit organiza24 tion, or Indian tribe—
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1 (I) except as otherwise provided

2 in this clause, directly to the unre3 lated third party to whom the amount

4 is due;

5 (II) in the case of distributions

6 for working capital under a qualified

7 business plan (as defined in subpara8 graph (B)(iv)(IV)), directly to the ac9 count owner;

10 (III) in the case of any qualified

11 rollover, directly to another Individual

12 Development Account and parallel ac13 count; or

14 (IV) in the case of a qualified

15 final distribution, directly to the

16 spouse, dependent, or other named

17 beneficiary of the deceased account

18 owner; and

19 (iii) is paid after the account owner

20 has completed a financial education course

21 as required under section 304(b).

22 (B) QUALIFIED EXPENSES.—

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

24 expenses’’ means any of the following:
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1 (I) Qualified higher education ex2 penses.

3 (II) Qualified first-time home4 buyer costs.

5 (III) Qualified business capital6 ization or expansion costs.

7 (IV) Qualified rollovers.

8 (V) Qualified final distribution.

9 (ii) QUALIFIED HIGHER EDUCATION

10 EXPENSES.—

11 (I) IN GENERAL.—The term

12 ‘‘qualified higher education expenses’’

13 has the meaning given such term by

14 section 72(t)(7) of the Internal Rev15 enue Code of 1986, determined by

16 treating postsecondary vocational edu17 cational schools as eligible educational

18 institutions.

19 (II) POSTSECONDARY VOCA20 TIONAL EDUCATION SCHOOL.—The

21 term ‘‘postsecondary vocational edu22 cational school’’ means an area voca23 tional education school (as defined in

24 subparagraph (C) or (D) of section

25 521(4) of the Carl D. Perkins Voca-
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1 tional and Applied Technology Edu2 cation Act (20 U.S.C. 2471(4)))

3 which is in any State (as defined in

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

5 sections are in effect on the date of

6 the enactment of this Act.

7 (III) COORDINATION WITH

8 OTHER BENEFITS.—The amount of

9 qualified higher education expenses

10 for any taxable year shall be reduced

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

12 such Code and may not be taken into

13 account for purposes of determining

14 qualified higher education expenses

15 under section 135 or 530 of the Inter16 nal Revenue Code of 1986.

17 (iii) QUALIFIED FIRST-TIME HOME18 BUYER COSTS.—The term ‘‘qualified first19 time homebuyer costs’’ means qualified ac20 quisition costs (as defined in section

21 72(t)(8) of such Code without regard to

22 subparagraph (B) thereof) with respect to

23 a principal residence (within the meaning

24 of section 121 of such Code) for a qualified
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1 first-time homebuyer (as defined in section

2 72(t)(8) of such Code).

3 (iv) QUALIFIED BUSINESS CAPITAL4 IZATION OR EXPANSION COSTS.—

5 (I) IN GENERAL.—The term

6 ‘‘qualified business capitalization or

7 expansion costs’’ means qualified ex8 penditures for the capitalization or ex9 pansion of a qualified business pursu10 ant to a qualified business plan.

11 (II) QUALIFIED EXPENDI12 TURES.—The term ‘‘qualified expendi13 tures’’ means expenditures included in

14 a qualified business plan, including

15 capital, plant, equipment, working

16 capital, inventory expenses, attorney

17 and accounting fees, and other costs

18 normally associated with starting or

19 expanding a business.

20 (III) QUALIFIED BUSINESS.—

21 The term ‘‘qualified business’’ means

22 any business that does not contravene

23 any law.

24 (IV) QUALIFIED BUSINESS

25 PLAN.—The term ‘‘qualified business
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1 plan’’ means a business plan which

2 has been approved by the qualified fi3 nancial institution, qualified nonprofit

4 organization, or Indian tribe and

5 which meets such requirements as the

6 Secretary may specify.

7 (v) QUALIFIED ROLLOVERS.—The

8 term ‘‘qualified rollover’’ means the com9 plete distribution of the amounts in an In10 dividual Development Account and parallel

11 account to another Individual Development

12 Account and parallel account established in

13 another qualified financial institution,

14 qualified nonprofit organization, or Indian

15 tribe for the benefit of the account owner.

16 (vi) QUALIFIED FINAL DISTRIBU17 TION.—The term ‘‘qualified final distribu18 tion’’ means, in the case of a deceased ac19 count owner, the complete distribution of

20 the amounts in an Individual Development

21 Account and parallel account directly to

22 the spouse, any dependent, or other named

23 beneficiary of the deceased.

24 (9) SECRETARY.—The term ‘‘Secretary’’ means

25 the Secretary of the Treasury.
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1 SEC. 303. STRUCTURE AND ADMINISTRATION OF QUALI2 FIED INDIVIDUAL DEVELOPMENT ACCOUNT

3 PROGRAMS.

4 (a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE5 VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan6 cial institution, qualified nonprofit organization, or Indian

7 tribe may establish 1 or more qualified individual develop8 ment account programs which meet the requirements of

9 this title.

10 (b) BASIC PROGRAM STRUCTURE.—

11 (1) IN GENERAL.—All qualified individual de12 velopment account programs shall consist of the fol13 lowing 2 components:

14 (A) An Individual Development Account to

15 which an eligible individual may contribute cash

16 in accordance with section 304.

17 (B) A parallel account to which all match18 ing funds shall be deposited in accordance with

19 section 305.

20 (2) TAILORED IDA PROGRAMS.—A qualified fi21 nancial institution, a qualified nonprofit organiza22 tion, or an Indian tribe may tailor its qualified indi23 vidual development account program to allow match24 ing funds to be spent on 1 or more of the categories

25 of qualified expenses.
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1 (c) TAX TREATMENT OF PARALLEL ACCOUNTS.—

2 Any account described in subparagraph (B) of subsection

3 (b)(1) is exempt from taxation under the Internal Revenue

4 Code of 1986.

5 SEC. 304. PROCEDURES FOR OPENING AND MAINTAINING

6 AN INDIVIDUAL DEVELOPMENT ACCOUNT

7 AND QUALIFYING FOR MATCHING FUNDS.

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

9 may open an Individual Development Account with a

10 qualified financial institution, a qualified nonprofit organi11 zation, or an Indian tribe upon certification that such indi12 vidual maintains no other Individual Development Ac13 count (other than an Individual Development Account to

14 be terminated by a qualified rollover).

15 (b) REQUIRED COMPLETION OF FINANCIAL EDU16 CATION COURSE.—

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

18 withdraw matching funds to pay for qualified ex19 penses, owners of Individual Development Accounts

20 must complete a financial education course offered

21 by a qualified financial institution, a qualified non22 profit organization, an Indian tribe, or a government

23 entity.

24 (2) STANDARD AND APPLICABILITY OF

25 COURSE.—The Secretary, in consultation with rep-
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1 resentatives of qualified individual development ac2 count programs and financial educators, shall estab3 lish minimum quality standards for the contents of

4 financial education courses and providers of such

5 courses offered under paragraph (1) and a protocol

6 to exempt individuals from the requirement under

7 paragraph (1) because of hardship or lack of need.

8 (c) STATUS AS AN ELIGIBLE INDIVIDUAL.—Federal

9 income tax forms from the preceding taxable year (or in

10 the absence of such forms, such documentation as speci11 fied by the Secretary proving the eligible individual’s ad12 justed gross income and the status of the individual as

13 an eligible individual) shall be presented to the qualified

14 financial institution, qualified nonprofit organization, or

15 Indian tribe at the time of the establishment of the Indi16 vidual Development Account and in any taxable year in

17 which contributions are made to the Account to qualify

18 for matching funds under section 305(b)(1)(A).

19 (d) DIRECT DEPOSITS.—The Secretary may, under

20 regulations, provide for the direct deposit of any portion

21 (not less than $1) of any overpayment of Federal tax of

22 an individual as a contribution to the Individual Develop23 ment Account of such individual.
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1 SEC. 305. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP2 MENT ACCOUNT PROGRAMS.

3 (a) PARALLEL ACCOUNTS.—The qualified financial

4 institution, qualified nonprofit organization, or Indian

5 tribe shall deposit all matching funds for each Individual

6 Development Account into a parallel account at a qualified

7 financial institution, a qualified nonprofit organization, or

8 an Indian tribe.

9 (b) REGULAR DEPOSITS OF MATCHING FUNDS.—

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

11 the qualified financial institution, qualified nonprofit

12 organization, or Indian tribe shall not less than

13 quarterly (or upon a proper withdrawal request

14 under section 306, if necessary) deposit into the par15 allel account with respect to each eligible individual

16 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.

24 (2) INFLATION ADJUSTMENT.—

25 (A) IN GENERAL.—In the case of any tax26 able year beginning after 2002, the dollar
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1 amount referred to in paragraph (1)(A) shall be

2 increased by an amount equal to—

3 (i) such dollar amount, multiplied by

4 (ii) the cost-of-living adjustment de5 termined under section (1)(f)(3) of the In6 ternal Revenue Code of 1986 for the cal7 endar year in which the taxable year be8 gins, by substituting ‘‘2001’’ for ‘‘1992’’.

9 (B) ROUNDING.—If any amount as ad10 justed under subparagraph (A) is not a multiple

11 of $20, such amount shall be rounded to the

12 nearest multiple of $20.

13 (3) CROSS REFERENCE.—

For allowance of tax credit for Individual Development Account subsidies, including matching

funds, see section 30B of the Internal Revenue Code

of 1986.

14 (c) DEPOSIT OF MATCHING FUNDS INTO INDI15 VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL WHO

16 HAS ATTAINED AGE 61.—In the case of an Individual De17 velopment Account owner who attains the age of 61, the

18 qualified financial institution, qualified nonprofit organi19 zation, or Indian tribe which holds the parallel account

20 for such individual shall deposit the funds in such parallel

21 account into the Individual Development Account of such

22 individual on the first day of the succeeding taxable year

23 of such individual.
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1 (d) UNIFORM ACCOUNTING REGULATIONS.—To en2 sure proper recordkeeping and determination of the tax

3 credit under section 30B of the Internal Revenue Code

4 of 1986, the Secretary shall prescribe regulations with re5 spect to accounting for matching funds in the parallel ac6 counts.

7 (e) REGULAR REPORTING OF ACCOUNTS.—Any

8 qualified financial institution, qualified nonprofit organi9 zation, or Indian tribe shall report the balances in any

10 Individual Development Account and parallel account of

11 an individual on not less than an annual basis to such

12 individual.

13 SEC. 306. WITHDRAWAL PROCEDURES.

14 (a) WITHDRAWALS FOR QUALIFIED EXPENSES.—To

15 withdraw money from an individual’s Individual Develop16 ment Account to pay qualified expenses of such individual

17 or such individual’s spouse or dependents, the qualified

18 financial institution, qualified nonprofit organization, or

19 Indian tribe shall directly transfer such funds from the

20 Individual Development Account, and, if applicable, from

21 the parallel account electronically to the distributees de22 scribed in section 302(8)(A)(ii). If the distributee is not

23 equipped to receive funds electronically, the qualified fi24 nancial institution, qualified nonprofit organization, or In-
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1 dian tribe may issue such funds by paper check to the

2 distributee.

3 (b) WITHDRAWALS FOR NONQUALIFIED EX4 PENSES.—An Individual Development Account owner may

5 unilaterally withdraw any amount of funds from the Indi6 vidual Development Account for purposes other than to

7 pay qualified expenses, but shall forfeit a proportionate

8 amount of matching funds from the individual’s parallel

9 account by doing so, unless such withdrawn funds are re10 contributed to such Account by September 30 following

11 the withdrawal.

12 (c) WITHDRAWALS FROM ACCOUNTS OF NON13 ELIGIBLE INDIVIDUALS.—If the individual for whose ben14 efit an Individual Development Account is established

15 ceases to be an eligible individual, such account shall re16 main an Individual Development Account, but such indi17 vidual shall not be eligible for any further matching funds

18 under section 305(b)(1)(A) during the period—

19 (1) beginning on the first day of the taxable

20 year of such individual following the beginning of

21 such ineligibility, and

22 (2) ending on the last day of the taxable year

23 of such individual in which such ineligibility ceases.
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1 (d) TAX TREATMENT OF MATCHING FUNDS.—Any

2 amount withdrawn from a parallel account shall not be

3 includible in an eligible individual’s gross income.

4 (e) WITHDRAWAL LIABILITY RESTS ONLY WITH EL5 IGIBLE INDIVIDUALS.—Nothing in this title may be con6 strued to impose liability on a qualified financial institu7 tion, a qualified nonprofit organization, or an Indian tribe

8 for non-compliance with the requirements of this title re9 lated to withdrawals from Individual Development Ac10 counts.

11 SEC. 307. CERTIFICATION AND TERMINATION OF QUALI12 FIED INDIVIDUAL DEVELOPMENT ACCOUNT

13 PROGRAMS.

14 (a) CERTIFICATION PROCEDURES.—Upon estab15 lishing a qualified individual development account pro16 gram under section 303, a qualified financial institution,

17 a qualified nonprofit organization, or an Indian tribe shall

18 certify to the Secretary on forms prescribed by the Sec19 retary and accompanied by any documentation required

20 by the Secretary, that—

21 (1) the accounts described in subparagraphs

22 (A) and (B) of section 303(b)(1) are operating pur23 suant to all the provisions of this title; and

24 (2) the qualified financial institution, qualified

25 nonprofit organization, or Indian tribe agrees to im-
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1 plement an information system necessary to monitor

2 the cost and outcomes of the qualified individual de3 velopment account program.

4 (b) AUTHORITY TO TERMINATE QUALIFIED IDA

5 PROGRAM.—If the Secretary determines that a qualified

6 financial institution, a qualified nonprofit organization, or

7 an Indian tribe under this title is not operating a qualified

8 individual development account program in accordance

9 with the requirements of this title (and has not imple10 mented any corrective recommendations directed by the

11 Secretary), the Secretary shall terminate such institu12 tion’s, nonprofit organization’s, or Indian tribe’s authority

13 to conduct the program. If the Secretary is unable to iden14 tify a qualified financial institution, a qualified nonprofit

15 organization, or an Indian tribe to assume the authority

16 to conduct such program, then any funds in a parallel ac17 count established for the benefit of any individual under

18 such program shall be deposited into the Individual Devel19 opment Account of such individual as of the first day of

20 such termination.

21 SEC. 308. REPORTING, MONITORING, AND EVALUATION.

22 (a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN23 STITUTIONS, QUALIFIED NONPROFIT ORGANIZATIONS,

24 AND INDIAN TRIBES.—Each qualified financial institu25 tion, qualified nonprofit organization, or Indian tribe that
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1 operates a qualified individual development account pro2 gram under section 303 shall report annually to the Sec3 retary within 90 days after the end of each calendar year

4 on—

5 (1) the number of eligible individuals making

6 contributions into Individual Development Accounts;

7 (2) the amounts contributed into Individual De8 velopment Accounts and deposited into parallel ac9 counts for matching funds;

10 (3) the amounts withdrawn from Individual De11 velopment Accounts and parallel accounts, and the

12 purposes for which such amounts were withdrawn;

13 (4) the balances remaining in Individual Devel14 opment Accounts and parallel accounts; and

15 (5) such other information needed to help the

16 Secretary monitor the cost and outcomes of the

17 qualified individual development account program

18 (provided in a non-individually-identifiable manner).

19 (b) RESPONSIBILITIES OF THE SECRETARY.—

20 (1) MONITORING PROTOCOL.—Not later than

21 12 months after the date of the enactment of this

22 Act, the Secretary shall develop and implement a

23 protocol and process to monitor the cost and out24 comes of the qualified individual development ac25 count programs established under section 303.
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1 (2) ANNUAL REPORTS.—In each year after the

2 date of the enactment of this Act, the Secretary

3 shall submit a progress report to Congress on the

4 status of such qualified individual development ac5 count programs. Such report shall include from a

6 representative sample of qualified individual develop7 ment account programs information on—

8 (A) the characteristics of participants, in9 cluding age, gender, race or ethnicity, marital

10 status, number of children, employment status,

11 and monthly income;

12 (B) deposits, withdrawals, balances, uses

13 of Individual Development Accounts, and par14 ticipant characteristics;

15 (C) the characteristics of qualified indi16 vidual development account programs, including

17 match rate, economic education requirements,

18 permissible uses of accounts, staffing of pro19 grams in full time employees, and the total

20 costs of programs; and

21 (D) information on program implementa22 tion and administration, especially on problems

23 encountered and how problems were solved.
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1 SEC. 309. AUTHORIZATION OF APPROPRIATIONS.

2 There is authorized to be appropriated to the Sec3 retary $1,000,000 for fiscal year 2002 and for each fiscal

4 year through 2008, for the purposes of implementing this

5 title, including the reporting, monitoring, and evaluation

6 required under section 308, to remain available until ex7 pended.

8 SEC. 310. ACCOUNT FUNDS DISREGARDED FOR PURPOSES

9 OF CERTAIN MEANS-TESTED FEDERAL PRO10 GRAMS.

11 Notwithstanding any other provision of Federal law

12 that requires consideration of 1 or more financial cir13 cumstances of an individual, for the purposes of deter14 mining eligibility to receive, or the amount of, any assist15 ance or benefit authorized by such provision to be provided

16 to or for the benefit of such individual, an amount equal

17 to the sum of—

18 (1) all amounts (including earnings thereon) in

19 any Individual Development Account; plus

20 (2) the matching deposits made on behalf of

21 such individual (including earnings thereon) in any

22 parallel account,

23 shall be disregarded for such purposes.
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1 SEC. 311. MATCHING FUNDS FOR INDIVIDUAL DEVELOP2 MENT ACCOUNTS PROVIDED THROUGH A TAX

3 CREDIT FOR QUALIFIED FINANCIAL INSTITU4 TIONS.

5 (a) IN GENERAL.—Subpart B of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to other credits) is amended by inserting

8 after section 30A the following new section:

9 ‘‘SEC. 30B. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST10 MENT CREDIT FOR QUALIFIED FINANCIAL IN11 STITUTIONS.

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

13 allowed as a credit against the applicable tax for the tax14 able year an amount equal to the individual development

15 account investment provided by an eligible entity during

16 the taxable year under an individual development account

17 program established under section 303 of the Community

18 Solutions Act of 2001.

19 ‘‘(b) APPLICABLE TAX.—For the purposes of this

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

21 of—

22 ‘‘(1) the tax imposed under this chapter (other

23 than the taxes imposed under the provisions de24 scribed in subparagraphs (C) through (Q) of section

25 26(b)(2)), over
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1 ‘‘(2) the credits allowable under subpart B

2 (other than this section) and subpart D of this part.

3 ‘‘(c) INDIVIDUAL DEVELOPMENT ACCOUNT INVEST4 MENT.—

5 ‘‘(1) IN GENERAL.—For purposes of this sec6 tion, the term ‘individual development account in7 vestment’ means, with respect to an individual devel8 opment account program of a qualified financial in9 stitution in any taxable year, an amount equal to the

10 sum of—

11 ‘‘(A) the aggregate amount of dollar-for12 dollar matches under such program under sec13 tion 305(b)(1)(A) of the Community Solutions

14 Act of 2001 for such taxable year, plus

15 ‘‘(B) an amount equal to the sum of—

16 ‘‘(i) with respect to each Individual

17 Development Account opened during such

18 taxable year, $100, plus

19 ‘‘(ii) with respect to each Individual

20 Development Account maintained during

21 such taxable year, $30.

22 ‘‘(2) INFLATION ADJUSTMENT.—

23 ‘‘(A) IN GENERAL.—In the case of any

24 taxable year beginning after 2002, each dollar
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1 amount referred to in paragraph (1)(B) shall be

2 increased by an amount equal to—

3 ‘‘(i) such dollar amount, multiplied by

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section (1)(f)(3) for the

6 calendar year in which the taxable year be7 gins, by substituting ‘2001’ for ‘1992’.

8 ‘‘(B) ROUNDING.—If any amount as ad9 justed under subparagraph (A) is not a multiple

10 of $5, such amount shall be rounded to the

11 nearest multiple of $5.

12 ‘‘(d) ELIGIBLE ENTITY.—For purposes of this sec13 tion, the term ‘eligible entity’ means a qualified financial

14 institution, or 1 or more contractual affiliates of such an

15 institution as defined by the Secretary in regulations.

16 ‘‘(e) OTHER DEFINITIONS.—For purposes of this

17 section, any term used in this section and also in the Com18 munity Solutions Act shall have the meaning given such

19 term by such Act.

20 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction

21 or credit (other than under this section) shall be allowed

22 under this chapter with respect to any expense which is

23 taken into account under subsection (c)(1)(A) in deter24 mining the credit under this section.
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1 ‘‘(g) REGULATIONS.—The Secretary may prescribe

2 such regulations as may be necessary or appropriate to

3 carry out this section, including regulations providing for

4 a recapture of the credit allowed under this section (not5 withstanding any termination date described in subsection

6 (h)) in cases where there is a forfeiture under section

7 306(b) of the Community Solutions Act of 2001 in a sub8 sequent taxable year of any amount which was taken into

9 account in determining the amount of such credit.

10 ‘‘(h) APPLICATION OF SECTION.—This section shall

11 apply to any expenditure made in any taxable year begin12 ning after December 31, 2001, and before January 1,

13 2009, with respect to any Individual Development Account

14 opened before January 1, 2007.’’.

15 (b) CONFORMING AMENDMENT.—The table of sec16 tions for subpart B of part IV of subchapter A of chapter

17 1 is amended by inserting after the item relating to section

18 30A the following new item:

‘‘Sec. 30B. Individual development account investment credit for qualified financial institutions.’’.

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

20 this section shall apply to taxable years beginning after

21 December 31, 2001.

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