II 

109TH CONGRESS 

1ST SESSION S. 922 

To establish and provide for the treatment of Individual Development 

Accounts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2005 

Mr. SANTORUM (for himself and Mr. LIEBERMAN) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

To establish and provide for the treatment of Individual 

Development Accounts, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

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

5 Families Act of 2005’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are to provide for the estab8 lishment of individual development account programs that 

9 will— 
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1 (1) provide individuals and families with limited 

2 means an opportunity to accumulate assets and to 

3 enter the financial mainstream, 

4 (2) promote education, homeownership, and the 

5 development of small businesses, 

6 (3) stabilize families and build communities, 

7 and 

8 (4) support continued United States economic 

9 expansion. 

10 SEC. 3. DEFINITIONS. 

11 As used in this Act: 

12 (1) ELIGIBLE INDIVIDUAL.— 

13 (A) IN GENERAL.—The term ‘‘eligible indi14 vidual’’ means, with respect to any taxable year, 

15 an individual who— 

16 (i) has attained the age of 18 but not 

17 the age of 61 as of the last day of such 

18 taxable year, 

19 (ii) is a citizen or lawful permanent 

20 resident (within the meaning of section 

21 7701(b)(6) of the Internal Revenue Code 

22 of 1986) of the United States as of the 

23 last day of such taxable year, 
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1 (iii) was not a student (as defined in 

2 section 151(c)(4) of such Code) for the im3 mediately preceding taxable year, 

4 (iv) is not an individual with respect 

5 to whom a deduction under section 151 of 

6 such Code is allowable to another taxpayer 

7 for a taxable year of the other taxpayer 

8 ending during the immediately preceding 

9 taxable year of the individual, 

10 (v) is not a taxpayer described in sub11 section (c), (d), or (e) of section 6402 of 

12 such Code for the immediately preceding 

13 taxable year, 

14 (vi) is not a taxpayer described in sec15 tion 1(d) of such Code for the immediately 

16 preceding taxable year, and 

17 (vii) is a taxpayer the modified ad18 justed gross income of whom for the imme19 diately preceding taxable year does not ex20 ceed— 

21 (I) $20,000, in the case of a tax22 payer described in section 1(c) of such 

23 Code, 
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1 (II) $30,000, in the case of a 

2 taxpayer described in section 1(b) of 

3 such Code, and 

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

5 taxpayer described in section 1(a) of 

6 such Code. 

7 (B) INFLATION ADJUSTMENT.— 

8 (i) IN GENERAL.—In the case of any 

9 taxable year beginning after 2005, each 

10 dollar amount referred to in subparagraph 

11 (A)(vii) shall be increased by an amount 

12 equal to— 

13 (I) such dollar amount, multi14 plied by 

15 (II) the cost-of-living adjustment 

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

17 the Internal Revenue Code of 1986 

18 for the calendar year in which the tax19 able year begins, by substituting 

20 ‘‘2004’’ for ‘‘1992’’. 

21 (ii) ROUNDING.—If any amount as 

22 adjusted under clause (i) is not a multiple 

23 of $50, such amount shall be rounded to 

24 the nearest multiple of $50. 
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1 (C) MODIFIED ADJUSTED GROSS IN2 COME.—For purposes of subparagraph (A)(v), 

3 the term ‘‘modified adjusted gross income’’ 

4 means adjusted gross income— 

5 (i) determined without regard to sec6 tions 86, 893, 911, 931, and 933 of the 

7 Internal Revenue Code of 1986, and 

8 (ii) increased by the amount of inter9 est received or accrued by the taxpayer 

10 during the taxable year which is exempt 

11 from tax. 

12 (2) INDIVIDUAL DEVELOPMENT ACCOUNT.— 

13 The term ‘‘Individual Development Account’’ means 

14 an account established for an eligible individual as 

15 part of a qualified individual development account 

16 program, but only if the written governing instru17 ment creating the account meets the following re18 quirements: 

19 (A) The owner of the account is the indi20 vidual for whom the account was established. 

21 (B) No contribution will be accepted unless 

22 it is in cash, and, except in the case of any 

23 qualified rollover, contributions will not be ac24 cepted for the taxable year in excess of $1,500 

25 on behalf of any individual. 
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1 (C) The trustee of the account is a quali2 fied financial institution. 

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

4 commingled with other property except in a 

5 common trust fund or common investment 

6 fund. 

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

8 amount in the account may be paid out only for 

9 the purpose of paying the qualified expenses of 

10 the account owner. 

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

12 account’’ means a separate, parallel individual or 

13 pooled account for all matching funds and earnings 

14 dedicated to an Individual Development Account 

15 owner as part of a qualified individual development 

16 account program, the trustee of which is a qualified 

17 financial institution. 

18 (4) QUALIFIED FINANCIAL INSTITUTION.— 

19 (A) IN GENERAL.—The term ‘‘qualified fi20 nancial institution’’ means any person author21 ized to be a trustee of any individual retirement 

22 account under section 408(a)(2) of the Internal 

23 Revenue Code of 1986. 

24 (B) RULE OF CONSTRUCTION.— 
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1 (i) IN GENERAL.—Nothing in this 

2 paragraph shall be construed as preventing 

3 a person described in subparagraph (A) 

4 from collaborating with 1 or more qualified 

5 nonprofit organizations or Indian tribes to 

6 carry out an individual development ac7 count program established under section 4. 

8 (ii) QUALIFIED NONPROFIT ORGANI9 ZATION.—The term ‘‘qualified nonprofit 

10 organization’’ means— 

11 (I) any organization described in 

12 section 501(c)(3) of the Internal Rev13 enue Code of 1986 and exempt from 

14 taxation under section 501(a) of such 

15 Code, 

16 (II) any community development 

17 financial institution certified by the 

18 Community Development Financial 

19 Institution Fund, 

20 (III) any credit union chartered 

21 under Federal or State law, or 

22 (IV) any public housing agency 

23 as defined in section 3(b)(6) of the 

24 United States Housing Act of 1937 

25 (42 U.S.C. 1437a(b)(6)). 
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1 (iii) INDIAN TRIBE.—The term ‘‘In2 dian tribe’’ means any Indian tribe as de3 fined in section 4(12) of the Native Amer4 ican Housing Assistance and Self-Deter5 mination Act of 1996 (25 U.S.C. 

6 4103(12), and includes any tribally des7 ignated housing entity (as defined in sec8 tion 4(21) of such Act (25 U.S.C. 

9 4103(21)), tribal subsidiary, subdivision, 

10 or other wholly owned tribal entity. 

11 (5) QUALIFIED INDIVIDUAL DEVELOPMENT AC12 COUNT PROGRAM.—The term ‘‘qualified individual 

13 development account program’’ means a program es14 tablished upon approval of the Secretary under sec15 tion 4 after December 31, 2006, under which— 

16 (A) Individual Development Accounts and 

17 parallel accounts are held in trust by a qualified 

18 financial institution, and 

19 (B) additional activities determined by the 

20 Secretary, in consultation with the Secretary of 

21 Health and Human Services, as necessary to re22 sponsibly develop and administer accounts, in23 cluding recruiting, providing financial education 

24 and other training to Account owners, and reg-
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1 ular program monitoring, are carried out by the 

2 qualified financial institution. 

3 (6) QUALIFIED EXPENSE DISTRIBUTION.— 

4 (A) IN GENERAL.—The term ‘‘qualified ex5 pense distribution’’ means any amount paid (in6 cluding through electronic payments) or distrib7 uted out of an Individual Development Account 

8 or a parallel account established for an eligible 

9 individual if such amount— 

10 (i) is used exclusively to pay the quali11 fied expenses of the Individual Develop12 ment Account owner or such owner’s 

13 spouse or dependents, 

14 (ii) is paid by the qualified financial 

15 institution— 

16 (I) except as otherwise provided 

17 in this clause, directly to the unre18 lated third party to whom the amount 

19 is due, 

20 (II) in the case of any qualified 

21 rollover, directly to another Individual 

22 Development Account and parallel ac23 count, or 

24 (III) in the case of a qualified 

25 final distribution, directly to the 
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1 spouse, dependent, or other named 

2 beneficiary of the deceased Account 

3 owner, and 

4 (iii) is paid after the Account owner 

5 has completed a financial education course 

6 if required under section 5(b). 

7 (B) QUALIFIED EXPENSES.— 

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

9 expenses’’ means any of the following ex10 penses approved by the qualified financial 

11 institution: 

12 (I) Qualified higher education ex13 penses. 

14 (II) Qualified first-time home15 buyer costs. 

16 (III) Qualified business capital17 ization or expansion costs. 

18 (IV) Qualified rollovers. 

19 (V) Qualified final distribution. 

20 (ii) QUALIFIED HIGHER EDUCATION

21 EXPENSES.— 

22 (I) IN GENERAL.—The term 

23 ‘‘qualified higher education expenses’’ 

24 has the meaning given such term by 

25 section 529(e)(3) of the Internal Rev-
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1 enue Code of 1986, determined by 

2 treating the Account owner, the own3 er’s spouse, or one or more of the 

4 owner’s dependents as a designated 

5 beneficiary, and reduced as provided 

6 in section 25A(g)(2) of such Code. 

7 (II) COORDINATION WITH OTHER

8 BENEFITS.—The amount of expenses 

9 which may be taken into account for 

10 purposes of section 135, 529, or 530 

11 of such Code for any taxable year 

12 shall be reduced by the amount of any 

13 qualified higher education expenses 

14 taken into account as qualified ex15 pense distributions during such tax16 able year. 

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)(C) of the Internal Revenue Code 

22 of 1986) with respect to a principal resi23 dence (within the meaning of section 121 

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

2 72(t)(8)(D)(i) 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 normally 

14 associated with starting or expanding 

15 a business and included in a qualified 

16 business plan, including costs for cap17 ital, plant, and equipment, inventory 

18 expenses, and attorney and accounting 

19 fees. 

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 and which meets 

4 such requirements as the Secretary 

5 may specify. 

6 (v) QUALIFIED ROLLOVERS.—The 

7 term ‘‘qualified rollover’’ means the com8 plete distribution of the amounts in an In9 dividual Development Account and parallel 

10 account to another Individual Development 

11 Account and parallel account established in 

12 another qualified financial institution for 

13 the benefit of the Account owner. 

14 (vi) QUALIFIED FINAL DISTRIBU15 TION.—The term ‘‘qualified final distribu16 tion’’ means, in the case of a deceased Ac17 count owner, the complete distribution of 

18 the amounts in the Individual Development 

19 Account and parallel account directly to 

20 the spouse, any dependent, or other named 

21 beneficiary of the deceased. 

22 (7) SECRETARY.—The term ‘‘Secretary’’ means 

23 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 may apply to the Secretary for approval 

7 to establish 1 or more qualified individual development ac8 count programs which meet the requirements of this Act. 

9 (b) BASIC PROGRAM STRUCTURE.— 

10 (1) IN GENERAL.—All qualified individual de11 velopment account programs shall consist of the fol12 lowing 2 components for each participant: 

13 (A) An Individual Development Account to 

14 which an eligible individual may contribute cash 

15 in accordance with section 5. 

16 (B) A parallel account to which all match17 ing funds shall be deposited in accordance with 

18 section 6. 

19 (2) TAILORED IDA PROGRAMS.—A qualified fi20 nancial institution may tailor its qualified individual 

21 development account program to allow matching 

22 funds to be spent on 1 or more of the categories of 

23 qualified expenses. 

24 (c) COORDINATION WITH PUBLIC HOUSING AGENCY

25 INDIVIDUAL SAVINGS ACCOUNTS.—Section 3(e)(2) of the 

26 United States Housing Act of 1937 (42 U.S.C. 
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1 1437a(e)(2)) is amended by inserting ‘‘or in any Indi2 vidual Development Account established under the Sav3 ings for Working Families Act of 2005’’ after ‘‘sub4 section’’. 

5 (d) TAX TREATMENT OF PARALLEL ACCOUNTS.— 

6 (1) IN GENERAL.—Chapter 77 (relating to mis7 cellaneous provisions) is amended by adding at the 

8 end the following new section: 

9 ‘‘SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOP10 MENT PARALLEL ACCOUNTS. 

11 ‘‘For purposes of this title— 

12 ‘‘(1) any account described in section 

13 4(b)(1)(B) of the Savings for Working Families Act 

14 of 2005 shall be exempt from taxation, 

15 ‘‘(2) except as provided in section 45G, no item 

16 of income, expense, basis, gain, or loss with respect 

17 to such an account may be taken into account, and 

18 ‘‘(3) any amount withdrawn from such an ac19 count shall not be includible in gross income.’’. 

20 (2) CONFORMING AMENDMENT.—The table of 

21 sections for chapter 77 is amended by adding at the 

22 end the following new item: 

‘‘Sec. 7529. Tax incentives for individual development parallel accounts.’’. 

23 (e) COORDINATION OF CERTAIN EXPENSES.—Sec24 tion 25A(g)(2) is amended by striking ‘‘and’’ at the end 

25 of subparagraph (C), by striking the period at the end of 
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1 subparagraph (D) and inserting ‘‘, and’’, and by adding 

2 at the end the following new subparagraph: 

3 ‘‘(D) a qualified expense distribution with 

4 respect to qualified higher education expenses 

5 from an Individual Development Account or a 

6 parallel account under section 7(a) of the Sav7 ings for Working Families Act of 2005.’’. 

8 SEC. 5. PROCEDURES FOR OPENING AND MAINTAINING AN 

9 INDIVIDUAL DEVELOPMENT ACCOUNT AND 

10 QUALIFYING FOR MATCHING FUNDS. 

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

12 may open an Individual Development Account with a 

13 qualified financial institution upon certification that such 

14 individual has never maintained any other Individual De15 velopment Account (other than an Individual Development 

16 Account to be terminated by a qualified rollover). 

17 (b) REQUIRED COMPLETION OF FINANCIAL EDU18 CATION COURSE.— 

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

20 withdraw funds to pay for qualified expenses, owners 

21 of Individual Development Accounts must complete 

22 1 or more financial education courses specified in 

23 the qualified individual development account pro24 gram. 
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1 (2) STANDARD AND APPLICABILITY OF

2 COURSE.—The Secretary, in consultation with rep3 resentatives of qualified individual development ac4 count programs and financial educators, shall not 

5 later than January 1, 2006, establish minimum 

6 quality standards for the contents of financial edu7 cation courses and providers of such courses de8 scribed in paragraph (1) and a protocol to exempt 

9 individuals from the requirement under paragraph 

10 (1) in the case of hardship, lack of need, the attain11 ment of age 65, or a qualified final distribution. 

12 (c) PROOF OF STATUS AS AN ELIGIBLE INDI13 VIDUAL.—Federal income tax forms for the immediately 

14 preceding taxable year and any other evidence of eligibility 

15 which may be required by a qualified financial institution 

16 shall be presented to such institution at the time of the 

17 establishment of the Individual Development Account and 

18 in any taxable year in which contributions are made to 

19 the Account to qualify for matching funds under section 

20 6(b)(1)(A). 

21 (d) SPECIAL RULE IN THE CASE OF MARRIED INDI22 VIDUALS.—For purposes of this Act, if, with respect to 

23 any taxable year, 2 married individuals file a Federal joint 

24 income tax return, then not more than 1 of such individ-
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1 uals may be treated as an eligible individual with respect 

2 to the succeeding taxable year. 

3 SEC. 6. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP4 MENT ACCOUNT PROGRAMS. 

5 (a) PARALLEL ACCOUNTS.—The qualified financial 

6 institution shall deposit all matching funds for each Indi7 vidual Development Account into a parallel account at a 

8 qualified financial institution. 

9 (b) REGULAR DEPOSITS OF MATCHING FUNDS.— 

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

11 the qualified financial institution shall deposit into 

12 the parallel account with respect to each eligible in13 dividual the following amounts: 

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

15 $500 contributed by the eligible individual into 

16 an Individual Development Account with re17 spect to any taxable year of such individual. 

18 (B) Any matching funds provided by State, 

19 local, or private sources in accordance with the 

20 matching ratio set by those sources. 

21 (2) TIMING OF DEPOSITS.—A deposit of the 

22 amounts described in paragraph (1) shall be made 

23 into a parallel account— 

24 (A) in the case of amounts described in 

25 paragraph (1)(A), not later than 30 days after 
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1 the end of the calendar quarter during which 

2 the contribution described in such paragraph 

3 was made, and 

4 (B) in the case of amounts described in 

5 paragraph (1)(B), not later than 2 business 

6 days after such amounts were provided. 

7 (3) CROSS REFERENCE.— 

For allowance of tax credit for Individual Development Account subsidies, including matching funds, see section 45J of the Internal Revenue Code of 1986. 

8 (c) DEPOSIT OF MATCHING FUNDS INTO INDI9 VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL WHO

10 HAS ATTAINED AGE 65.—In the case of an Individual De11 velopment Account owner who attains the age of 65, the 

12 qualified financial institution shall deposit the funds in the 

13 parallel account with respect to such individual into the 

14 Individual Development Account of such individual on the 

15 later of— 

16 (1) the day which is the 1-year anniversary of 

17 the deposit of such funds in the parallel account, or 

18 (2) the first business day of the taxable year of 

19 such individual following the taxable year in which 

20 such individual attained age 65. 

21 (d) UNIFORM ACCOUNTING REGULATIONS.—To en22 sure proper recordkeeping and determination of the tax 

23 credit under section 45J of the Internal Revenue Code of 

24 1986, the Secretary shall prescribe regulations with re-
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1 spect to accounting for matching funds in the parallel ac2 counts. 

3 (e) REGULAR REPORTING OF ACCOUNTS.—Any 

4 qualified financial institution shall report the balances in 

5 any Individual Development Account and parallel account 

6 of an individual on not less than an annual basis to such 

7 individual. 

8 SEC. 7. WITHDRAWAL PROCEDURES. 

9 (a) WITHDRAWALS FOR QUALIFIED EXPENSES.— 

10 (1) IN GENERAL.—An Individual Development 

11 Account owner may withdraw funds in order to pay 

12 qualified expense distributions from such individ13 ual’s— 

14 (A) Individual Development Account, but 

15 only from funds which have been on deposit in 

16 such Account for at least 1 year, and 

17 (B) parallel account, but only— 

18 (i) from matching funds which have 

19 been on deposit in such parallel account 

20 for at least 1 year, 

21 (ii) from earnings in such parallel ac22 count, after all matching funds described 

23 in clause (i) have been withdrawn, and 

24 (iii) to the extent such withdrawal 

25 does not result in a remaining balance in 
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1 such parallel account which is less than the 

2 remaining balance in the Individual Devel3 opment Account after such withdrawal. 

4 (2) PROCEDURE.—Upon receipt of a with5 drawal request which meets the requirements of 

6 paragraph (1), the qualified financial institution 

7 shall directly transfer the funds electronically to the 

8 distributees described in section 3(6)(A)(ii). If a dis9 tributee is not equipped to receive funds electroni10 cally, the qualified financial institution may issue 

11 such funds by paper check to the distributee. 

12 (b) WITHDRAWALS FOR NONQUALIFIED EX13 PENSES.—An Individual Development Account owner may 

14 withdraw any amount of funds from the Individual Devel15 opment Account for purposes other than to pay qualified 

16 expense distributions, but if, after such withdrawal, the 

17 amount in the parallel account of such owner (excluding 

18 earnings on matching funds) exceeds the amount remain19 ing in such Individual Development Account, then such 

20 owner shall forfeit from the parallel account the lesser of 

21 such excess or the amount withdrawn. 

22 (c) WITHDRAWALS FROM ACCOUNTS OF NON23 ELIGIBLE INDIVIDUALS.—If the individual for whose ben24 efit an Individual Development Account is established 

25 ceases to be an eligible individual, such account shall re-
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1 main an Individual Development Account, but such indi2 vidual shall not be eligible for any further matching funds 

3 under section 6(b)(1)(A) for contributions which are made 

4 to the Account during any taxable year when such indi5 vidual is not an eligible individual. 

6 (d) EFFECT OF PLEDGING ACCOUNT AS SECU7 RITY.—If, during any taxable year of the individual for 

8 whose benefit an Individual Development Account is es9 tablished, that individual uses the Account, the individ10 ual’s parallel account, or any portion thereof as security 

11 for a loan, the portion so used shall be treated as a with12 drawal of such portion from the Individual Development 

13 Account for purposes other than to pay qualified expenses. 

14 SEC. 8. CERTIFICATION AND TERMINATION OF QUALIFIED 

15 INDIVIDUAL DEVELOPMENT ACCOUNT PRO16 GRAMS. 

17 (a) CERTIFICATION PROCEDURES.—Upon estab18 lishing a qualified individual development account pro19 gram under section 4, a qualified financial institution shall 

20 certify to the Secretary at such time and in such manner 

21 as may be prescribed by the Secretary and accompanied 

22 by any documentation required by the Secretary, that— 

23 (1) the accounts described in subparagraphs 

24 (A) and (B) of section 4(b)(1) are operating pursu25 ant to all the provisions of this Act, and 
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1 (2) the qualified financial institution agrees to 

2 implement an information system necessary to mon3 itor the cost and outcomes of the qualified individual 

4 development account program. 

5 (b) AUTHORITY TO TERMINATE QUALIFIED IDA 

6 PROGRAM.—If the Secretary determines that a qualified 

7 financial institution under this Act is not operating a 

8 qualified individual development account program in ac9 cordance with the requirements of this Act (and has not 

10 implemented any corrective recommendations directed by 

11 the Secretary), the Secretary shall terminate such institu12 tion’s authority to conduct the program. If the Secretary 

13 is unable to identify a qualified financial institution to as14 sume the authority to conduct such program, then any 

15 funds in a parallel account established for the benefit of 

16 any individual under such program shall be deposited into 

17 the Individual Development Account of such individual as 

18 of the first day of such termination. 

19 SEC. 9. REPORTING, MONITORING, AND EVALUATION. 

20 (a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN21 STITUTIONS.—Each qualified financial institution that op22 erates a qualified individual development account program 

23 under section 4 shall report annually to the Secretary 

24 within 90 days after the end of each calendar year on— 
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1 (1) the number of individuals making contribu2 tions into Individual Development Accounts and the 

3 amounts contributed, 

4 (2) the amounts contributed into Individual De5 velopment Accounts by eligible individuals and the 

6 amounts deposited into parallel accounts for match7 ing funds, 

8 (3) the amounts withdrawn from Individual De9 velopment Accounts and parallel accounts, and the 

10 purposes for which such amounts were withdrawn, 

11 (4) the balances remaining in Individual Devel12 opment Accounts and parallel accounts, and 

13 (5) such other information needed to help the 

14 Secretary monitor the effectiveness of the qualified 

15 individual development account program (provided in 

16 a non-individually-identifiable manner). 

17 (b) RESPONSIBILITIES OF THE SECRETARY.— 

18 (1) MONITORING PROTOCOL.—Not later than 

19 12 months after the date of the enactment of this 

20 Act, the Secretary, in consultation with the Sec21 retary of Health and Human Services, shall develop 

22 and implement a protocol and process to monitor the 

23 cost and outcomes of the qualified individual devel24 opment account programs established under section 

25 4. 
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1 (2) ANNUAL REPORTS.—For each year after 

2 2007, the Secretary shall submit a progress report 

3 to Congress on the status of such qualified indi4 vidual development account programs. Such report 

5 shall, to the extent data are available, include from 

6 a representative sample of qualified individual devel7 opment 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) process information on program imple22 mentation and administration, especially on 

23 problems encountered and how problems were 

24 solved. 
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1 (3) USE OF ACCOUNTS IN RURAL AREAS EN2 COURAGED.—The Secretary shall develop methods to 

3 encourage the use of Individual Development Ac4 counts in rural areas. 

5 SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 

6 (a) IN GENERAL.—There is authorized to be appro7 priated to the Secretary $1,000,000 for fiscal year 2007 

8 and for each fiscal year through 2014, for the purposes 

9 of implementing this Act, including the reporting, moni10 toring, and evaluation required under section 9, to remain 

11 available until expended. 

12 (b) GRANTS.—There is authorized to be appropriated 

13 to the Secretary $20,000,000— 

14 (1) to make grants to qualified nonprofit orga15 nizations and Indian tribes to help defray the ad16 ministrative costs associated with the operation of 

17 individual development account programs, including 

18 the required financial education courses, and 

19 (2) to provide technical assistance to qualified 

20 nonprofit organizations and Indian tribes in meeting 

21 such program requirements. 
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1 SEC. 11. MATCHING FUNDS FOR INDIVIDUAL DEVELOP2 MENT ACCOUNTS PROVIDED THROUGH A TAX 

3 CREDIT FOR QUALIFIED FINANCIAL INSTITU4 TIONS. 

5 (a) IN GENERAL.—Subpart D of part IV of sub6 chapter A of chapter 1 (relating to business related cred7 its) is amended by adding at the end the following new 

8 section: 

9 ‘‘SEC. 45J. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST10 MENT CREDIT. 

11 ‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 

12 section 38, the individual development account investment 

13 credit determined under this section with respect to any 

14 eligible entity for any taxable year is an amount equal to 

15 the individual development account investment provided 

16 by such eligible entity during the taxable year under an 

17 individual development account program established under 

18 section 4 of the Savings for Working Families Act of 

19 2005. 

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

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

22 of— 

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

24 than the taxes imposed under the provisions de25 scribed in subparagraphs (C) through (Q) of section 

26 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.—For purposes of this section, the term ‘individual 

5 development account investment’ means, with respect to 

6 an individual development account program in any taxable 

7 year, an amount equal to the sum of— 

8 ‘‘(1) the aggregate amount of dollar-for-dollar 

9 matches under such program under section 

10 6(b)(1)(A) of the Savings for Working Families Act 

11 of 2005 for such taxable year, plus 

12 ‘‘(2) $50 with respect to each Individual Devel13 opment Account maintained— 

14 ‘‘(A) as of the end of such taxable year, 

15 but only if such taxable year is within the 7- 

16 taxable-year period beginning with the taxable 

17 year in which such Account is opened, and 

18 ‘‘(B) with a balance of not less than $100 

19 (other than the taxable year in which such Ac20 count is opened). 

21 ‘‘(d) ELIGIBLE ENTITY.—For purposes of this sec22 tion, except as provided in regulations, the term ‘eligible 

23 entity’ means a qualified financial institution. 

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

25 section, any term used in this section and also in the Sav-
29 

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1 ings for Working Families Act of 2005 shall have the 

2 meaning given such term by such Act. 

3 ‘‘(f) DENIAL OF DOUBLE BENEFIT.— 

4 ‘‘(1) IN GENERAL.—No deduction or credit 

5 (other than under this section) shall be allowed 

6 under this chapter with respect to any expense 

7 which— 

8 ‘‘(A) is taken into account under sub9 section (c)(1)(A) in determining the credit 

10 under this section, or 

11 ‘‘(B) is attributable to the maintenance of 

12 an Individual Development Account. 

13 ‘‘(2) DETERMINATION OF AMOUNT.—Solely for 

14 purposes of paragraph (1)(B), the amount attrib15 utable to the maintenance of an Individual Develop16 ment Account shall be deemed to be the dollar 

17 amount of the credit allowed under subsection 

18 (c)(l)(B) for each taxable year such Individual De19 velopment Account is maintained. 

20 ‘‘(g) CREDIT MAY BE TRANSFERRED.— 

21 ‘‘(1) IN GENERAL.—An eligible entity may 

22 transfer any credit allowable to the eligible entity 

23 under subsection (a) to any person other than to an24 other eligible entity which is exempt from tax under 

25 this title. The determination as to whether a credit 
30 

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1 is allowable shall be made without regard to the tax2 exempt status of the eligible entity. 

3 ‘‘(2) CONSENT REQUIRED FOR REVOCATION.— 

4 Any transfer under paragraph (1) may be revoked 

5 only with the consent of the Secretary. 

6 ‘‘(h) REGULATIONS.—The Secretary may prescribe 

7 such regulations as may be necessary or appropriate to 

8 carry out this section, including 

9 ‘‘(1) such regulations as necessary to insure 

10 that any credit described in subsection (g)(1) is 

11 claimed once and not retransferred by a transferee, 

12 and 

13 ‘‘(2) regulations providing for a recapture of 

14 the credit allowed under this section (notwith15 standing any termination date described in sub16 section (i)) in cases where there is a forfeiture under 

17 section 7(b) of the Savings for Working Families 

18 Act of 2005 in a subsequent taxable year of any 

19 amount which was taken into account in determining 

20 the amount of such credit. 

21 ‘‘(i) APPLICATION OF SECTION.— 

22 ‘‘(1) IN GENERAL.—This section shall apply to 

23 any expenditure made in any taxable year ending 

24 after December 31, 2006, and beginning on or be-
31 

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1 fore January 1, 2014, with respect to any Individual 

2 Development Account which— 

3 ‘‘(A) is opened before January 1, 2012, 

4 and 

5 ‘‘(B) as determined by the Secretary, when 

6 added to all of the previously opened Individual 

7 Development Accounts, does not exceed 

8 900,000 Accounts. 

9 Notwithstanding the preceding sentence, this section 

10 shall apply to amounts which are described in sub11 section (c)(1) and which are timely deposited into a 

12 parallel account during the 30-day period following 

13 the end of the last taxable year beginning on or be14 fore January 1, 2014. 

15 ‘‘(2) DETERMINATION OF LIMITATION.—The 

16 limitation on the number of Individual Development 

17 Accounts under paragraph (1)(B) shall be allocated 

18 by the Secretary among eligible individuals as such 

19 individuals open such Accounts under qualified indi20 vidual development account programs, except that, 

21 in the case of 300,000 Accounts, such limitation 

22 shall be equally allocated among the States.’’. 

23 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec24 tion 38(b) (relating to current year business credit) is 

25 amended by striking ‘‘plus’’ at the end of paragraph (18), 
32 

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1 by striking the period at the end of paragraph (19) and 

2 inserting ‘‘, plus’’, and by adding at the end the following 

3 new paragraph: 

4 ‘‘(20) the individual development account in5 vestment credit determined under section 45J(a).’’. 

6 (c) CONFORMING AMENDMENT.—The table of sec7 tions for subpart C of part IV of subchapter A of chapter 

8 1 is amended by adding at the end the following new item: 

‘‘Sec. 45J. Individual development account investment credit.’’. 

9 (d) REPORT REGARDING ACCOUNT MAINTENANCE

10 FEES.—The Secretary of the Treasury shall study the 

11 adequacy of the amount specified in section 45J(c)(2) of 

12 the Internal Revenue Code of 1986 (as added by this sec13 tion). Not later than December 31, 2010, the Secretary 

14 of the Treasury shall report the findings of the study de15 scribed in the preceding sentence to Congress. 

16 (e) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years ending after De18 cember 31, 2006. 

19 SEC. 12. ACCOUNT FUNDS DISREGARDED FOR PURPOSES 

20 OF CERTAIN MEANS-TESTED FEDERAL PRO21 GRAMS. 

22 Notwithstanding any other provision of Federal law 

23 (other than the Internal Revenue Code of 1986) that re24 quires consideration of 1 or more financial circumstances 

25 of an individual, for the purpose of determining eligibility 
33 

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1 to receive, or the amount of, any assistance or benefit au2 thorized by such provision to be provided to or for the 

3 benefit of such individual, any amount (including earnings 

4 thereon) in any Individual Development Account of such 

5 individual and any matching deposit made on behalf of 

6 such individual (including earnings thereon) in any par7 allel account shall be disregarded for such purpose with 

8 respect to any period during which such individual main9 tains or makes contributions into such Individual Develop10 ment Account. 

Æ