I

107TH CONGRESS

1ST SESSION H. R. 2160

To provide for the establishment of individual development accounts.

IN THE HOUSE OF REPRESENTATIVES

JUNE 13, 2001

Mr. PITTS (for himself, Mr. STENHOLM, Mr. WATTS of Oklahoma, Mr. HALL

of Ohio, Mr. ENGLISH, Ms. DELAURO, Mr. SOUDER, Mr. DAVIS of Illinois, Mr. RAMSTAD, Mr. FILNER, Mr. WATKINS of Oklahoma, Ms. NORTON, Mr. BRADY of Texas, Ms. MCCARTHY of Missouri, Mr. SCHAFFER,

Mr. DOYLE, Ms. HART, Mr. ABERCROMBIE, Mr. EHLERS, Mr. GONZALEZ, Mr. UPTON, Mr. CLAY, Mr. MCHUGH, Ms. BALDWIN, Mr. BURR

of North Carolina, Mrs. CLAYTON, Mr. JONES of North Carolina, Ms.

SLAUGHTER, Mr. HAYES, Mr. KILDEE, Mrs. MYRICK, Mr. DELAHUNT,

Mr. CALVERT, Mr. ROSS, Mrs. EMERSON, and Mr. HORN) introduced the

following bill; which was referred to the Committee on Ways and Means

A BILL

To provide for the establishment of individual development

accounts.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Savings for Working

5 Families Act’’.
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1 SEC. 2. PURPOSES.

2 The purposes of this Act are to provide for the estab3 lishment of individual development account programs that

4 will—

5 (1) provide individuals and families with limited

6 means an opportunity to accumulate assets and to

7 enter the financial mainstream;

8 (2) promote education, homeownership, and the

9 development of small businesses;

10 (3) stabilize families and build communities;

11 and

12 (4) support United States economic expansion.

13 SEC. 3. DEFINITIONS.

14 As used in this Act:

15 (1) ELIGIBLE INDIVIDUAL.—

16 (A) IN GENERAL.—The term ‘‘eligible indi17 vidual’’ means an individual who—

18 (i) has attained the age of 18 years

19 but not the age of 61;

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

21 United States;

22 (iii) is not a student (as defined in

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

24 (iv) is a taxpayer the adjusted gross

25 income of whom for the preceding taxable

26 year does not exceed—
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1 (I) $20,000, in the case of a tax2 payer described in section 1(c) or 1(d)

3 of the Internal Revenue Code of 1986;

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

5 taxpayer described in section 1(b) of

6 such Code; and

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

8 taxpayer described in section 1(a) of

9 such Code.

10 (B) INFLATION ADJUSTMENT.—

11 (i) IN GENERAL.—In the case of any

12 taxable year beginning after 2002, each

13 dollar amount referred to in subparagraph

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

15 equal to—

16 (I) such dollar amount, multi17 plied by

18 (II) the cost-of-living adjustment

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

20 the Internal Revenue Code of 1986

21 for the calendar year in which the tax22 able year begins, by substituting

23 ‘‘2001’’ for ‘‘1992’’.

24 (ii) ROUNDING.—If any amount as

25 adjusted under clause (i) is not a multiple
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1 of $50, such amount shall be rounded to

2 the nearest multiple of $50.

3 (2) INDIVIDUAL DEVELOPMENT ACCOUNT.—

4 The term ‘‘Individual Development Account’’ means

5 an account established for an eligible individual as

6 part of a qualified individual development account

7 program, but only if the written governing instru8 ment creating the account meets the following re9 quirements:

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

11 individual for whom the account was estab12 lished.

13 (B) No contribution will be accepted unless

14 it is in cash.

15 (C) The holder of the account is a quali16 fied financial institution.

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

18 commingled with other property except in a

19 common trust fund or common investment

20 fund.

21 (E) Except as provided in section 7(b), any

22 amount in the account may be paid out only for

23 the purpose of paying the qualified expenses of

24 the account owner.
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1 (3) PARALLEL ACCOUNT.—The term ‘‘parallel

2 account’’ means a separate, parallel individual or

3 pooled account for all matching funds and earnings

4 dedicated to an Individual Development Account

5 owner as part of a qualified individual development

6 account program, the sole owner of which is a quali7 fied financial institution, a qualified nonprofit orga8 nization, or an Indian tribe.

9 (4) QUALIFIED FINANCIAL INSTITUTION.—

10 (A) IN GENERAL.—The term ‘‘qualified fi11 nancial institution’’ means any person author12 ized to be a trustee of any individual retirement

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

14 (B) RULE OF CONSTRUCTION.—Nothing in

15 this paragraph shall be construed as preventing

16 a person described in subparagraph (A) from

17 collaborating with 1 or more contractual affili18 ates, qualified nonprofit organizations, or In19 dian tribes to carry out an individual develop20 ment account program established under sec21 tion 4.

22 (5) QUALIFIED NONPROFIT ORGANIZATION.—

23 The term ‘‘qualified nonprofit organization’’

24 means—
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1 (A) any organization described in section

2 501(c)(3) of the Internal Revenue Code of 1986

3 and exempt from taxation under section 501(a)

4 of such Code;

5 (B) any community development financial

6 institution certified by the Community Develop7 ment Financial Institution Fund; or

8 (C) any credit union chartered under Fed9 eral or State law.

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

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

12 of the Native American Housing Assistance and

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

14 4103(12), and includes any tribal subsidiary, sub15 division, or other wholly owned tribal entity.

16 (7) QUALIFIED INDIVIDUAL DEVELOPMENT AC17 COUNT PROGRAM.—The term ‘‘qualified individual

18 development account program’’ means a program es19 tablished under section 4 under which—

20 (A) Individual Development Accounts and

21 parallel accounts are held by a qualified finan22 cial institution; and

23 (B) additional activities determined by the

24 Secretary as necessary to responsibly develop

25 and administer accounts, including recruiting,
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1 providing financial education and other training

2 to account owners, and regular program moni3 toring, are carried out by the qualified financial

4 institution, a qualified nonprofit organization,

5 or an Indian tribe.

6 (8) QUALIFIED EXPENSE DISTRIBUTION.—

7 (A) IN GENERAL.—The term ‘‘qualified ex8 pense distribution’’ means any amount paid (in9 cluding through electronic payments) or distrib10 uted out of an Individual Development Account

11 and a parallel account established for an eligible

12 individual if such amount—

13 (i) is used exclusively to pay the quali14 fied expenses of the Individual Develop15 ment Account owner or such owner’s

16 spouse or dependents, as approved by the

17 qualified financial institution, qualified

18 nonprofit organization, or Indian tribe;

19 (ii) is paid by the qualified financial

20 institution, qualified nonprofit organiza21 tion, or Indian tribe—

22 (I) except as otherwise provided

23 in this clause, directly to the unre24 lated third party to whom the amount

25 is due;
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1 (II) in the case of distributions

2 for working capital under a qualified

3 business plan (as defined in subpara4 graph (B)(iv)(IV)), directly to the ac5 count owner;

6 (III) in the case of any qualified

7 rollover, directly to another Individual

8 Development Account and parallel ac9 count; or

10 (IV) in the case of a qualified

11 final distribution, directly to the

12 spouse, dependent, or other named

13 beneficiary of the deceased account

14 owner; and

15 (iii) is paid after the account owner

16 has completed a financial education course

17 as required under section 5(b).

18 (B) QUALIFIED EXPENSES.—

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

20 expenses’’ means any of the following:

21 (I) Qualified higher education ex22 penses.

23 (II) Qualified first-time home24 buyer costs.
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1 (III) Qualified business capital2 ization or expansion costs.

3 (IV) Qualified rollovers.

4 (V) Qualified final distribution.

5 (ii) QUALIFIED HIGHER EDUCATION

6 EXPENSES.—

7 (I) IN GENERAL.—The term

8 ‘‘qualified higher education expenses’’

9 has the meaning given such term by

10 section 72(t)(7) of the Internal Rev11 enue Code of 1986, determined by

12 treating postsecondary vocational edu13 cational schools as eligible educational

14 institutions.

15 (II) POSTSECONDARY VOCA16 TIONAL EDUCATION SCHOOL.—The

17 term ‘‘postsecondary vocational edu18 cational school’’ means an area voca19 tional education school (as defined in

20 subparagraph (C) or (D) of section

21 521(4) of the Carl D. Perkins Voca22 tional and Applied Technology Edu23 cation Act (20 U.S.C. 2471(4)))

24 which is in any State (as defined in

25 section 521(33) of such Act), as such
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1 sections are in effect on the date of

2 the enactment of this Act.

3 (III) COORDINATION WITH

4 OTHER BENEFITS.—The amount of

5 qualified higher education expenses

6 for any taxable year shall be reduced

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

8 such Code and may not be taken into

9 account for purposes of determining

10 qualified higher education expenses

11 under section 135 or 530 of the Inter12 nal Revenue Code of 1986.

13 (iii) QUALIFIED FIRST-TIME HOME14 BUYER COSTS.—The term ‘‘qualified first15 time homebuyer costs’’ means qualified ac16 quisition costs (as defined in section

17 72(t)(8) of such Code without regard to

18 subparagraph (B) thereof) with respect to

19 a principal residence (within the meaning

20 of section 121 of such Code) for a qualified

21 first-time homebuyer (as defined in section

22 72(t)(8) of such Code).

23 (iv) QUALIFIED BUSINESS CAPITAL24 IZATION OR EXPANSION COSTS.—
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1 (I) IN GENERAL.—The term

2 ‘‘qualified business capitalization or

3 expansion costs’’ means qualified ex4 penditures for the capitalization or ex5 pansion of a qualified business pursu6 ant to a qualified business plan.

7 (II) QUALIFIED EXPENDI8 TURES.—The term ‘‘qualified expendi9 tures’’ means expenditures included in

10 a qualified business plan, including

11 capital, plant, equipment, working

12 capital, inventory expenses, attorney

13 and accounting fees, and other costs

14 normally associated with starting or

15 expanding a business.

16 (III) QUALIFIED BUSINESS.—

17 The term ‘‘qualified business’’ means

18 any business that does not contravene

19 any law.

20 (IV) QUALIFIED BUSINESS

21 PLAN.—The term ‘‘qualified business

22 plan’’ means a business plan which

23 has been approved by the qualified fi24 nancial institution, qualified nonprofit

25 organization, or Indian tribe and
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1 which meets such requirements as the

2 Secretary may specify.

3 (v) QUALIFIED ROLLOVERS.—The

4 term ‘‘qualified rollover’’ means the com5 plete distribution of the amounts in an In6 dividual Development Account and parallel

7 account to another Individual Development

8 Account and parallel account established in

9 another qualified financial institution,

10 qualified nonprofit organization, or Indian

11 tribe for the benefit of the account owner.

12 (vi) QUALIFIED FINAL DISTRIBU13 TION.—The term ‘‘qualified final distribu14 tion’’ means, in the case of a deceased ac15 count owner, the complete distribution of

16 the amounts in an Individual Development

17 Account and parallel account directly to

18 the spouse, any dependent, or other named

19 beneficiary of the deceased.

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

21 the Secretary of the Treasury.
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1 SEC. 4. STRUCTURE AND ADMINISTRATION OF QUALIFIED

2 INDIVIDUAL DEVELOPMENT ACCOUNT PRO3 GRAMS.

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 Act.

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 5.

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

19 section 6.

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. 5. PROCEDURES FOR OPENING AND MAINTAINING AN

6 INDIVIDUAL DEVELOPMENT ACCOUNT AND

7 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 6(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. 6. 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 7, 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. 7. 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 3(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 6(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 Act 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 Act re9 lated to withdrawals from Individual Development Ac10 counts.

11 SEC. 8. CERTIFICATION AND TERMINATION OF QUALIFIED

12 INDIVIDUAL DEVELOPMENT ACCOUNT PRO13 GRAMS.

14 (a) CERTIFICATION PROCEDURES.—Upon estab15 lishing a qualified individual development account pro16 gram under section 4, a qualified financial institution, a

17 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 4(b)(1) are operating pursu23 ant to all the provisions of this Act; 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 Act is not operating a qualified

8 individual development account program in accordance

9 with the requirements of this Act (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. 9. 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 4 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 4.
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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. 10. 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 Act, including the reporting, monitoring, and evaluation

6 required under section 9, to remain available until ex7 pended.

8 SEC. 11. 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 4 of the Savings for

18 Working Families Act.

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 6(b)(1)(A) of the Savings for Working

14 Families Act 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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•HR 2160 IH

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(b)

7 of the Savings for Working Families Act in a subsequent

8 taxable year of any amount which was taken into account

9 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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