I 
109TH CONGRESS 
2D SESSION 
H. R. 4751 
To establish and provide for the treatment of Individual Development 
Accounts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 14, 2006 
Mr. PITTS (for himself, Mrs. JONES of Ohio, Mr. ENGLISH of Pennsylvania, 
Mr. MCINTYRE, Ms. HART, and Ms. HARMAN) introduced the following 
bill; which was referred to the Committee on Ways and Means 
A BILL 
To establish and provide for the treatment of Individual 
Development Accounts, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Savings for Working 
Families Act of 2006’’. 
SEC. 2. PURPOSES. 
The purposes of this Act are to provide for the estab-
lishment of individual development account programs that 
will—
(1) provide individuals and families with limited 
means an opportunity to accumulate assets and to 
enter the financial mainstream, 
(2) promote education, homeownership, and the 
development of small businesses, 
(3) stabilize families and build communities, 
and 
(4) support continued United States economic 
expansion. 
SEC. 3. DEFINITIONS. 
As used in this Act: 
(1) ELIGIBLE INDIVIDUAL.— 
(A) IN GENERAL.—The term ‘‘eligible indi-
vidual’’ means, with respect to any taxable year, 
an individual who— 
(i) has attained the age of 18 but not 
the age of 61 as of the last day of such 
taxable year, 
(ii) is a citizen or lawful permanent 
resident (within the meaning of section 
7701(b)(6) of the Internal Revenue Code 
of 1986) of the United States as of the 
last day of such taxable year,
(iii) was not a student (as defined in 
section 151(c)(4) of such Code) for the im-
mediately preceding taxable year, 
(iv) is not an individual with respect 
to whom a deduction under section 151 of 
such Code is allowable to another taxpayer 
for a taxable year of the other taxpayer 
ending during the immediately preceding 
taxable year of the individual, 
(v) is not a taxpayer described in sub-
section (c), (d), or (e) of section 6402 of 
such Code for the immediately preceding 
taxable year, 
(vi) is not a taxpayer described in sec-
tion 1(d) of such Code for the immediately 
preceding taxable year, and 
(vii) is a taxpayer the modified ad-
justed gross income of whom for the imme-
diately preceding taxable year does not ex-
ceed— 
(I) $20,000, in the case of a tax-
payer described in section 1(c) of such 
Code,
(II) $30,000, in the case of a 
taxpayer described in section 1(b) of 
such Code, and 
(III) $40,000, in the case of a 
taxpayer described in section 1(a) of 
such Code. 
(B) INFLATION ADJUSTMENT.— 
(i) IN GENERAL.—In the case of any 
taxable year beginning after 2007, each 
dollar amount referred to in subparagraph 
(A)(vii) shall be increased by an amount 
equal to— 
(I) such dollar amount, multi-
plied by 
(II) the cost-of-living adjustment 
determined under section (1)(f)(3) of 
the Internal Revenue Code of 1986 
for the calendar year in which the tax-
able year begins, by substituting 
‘‘2006’’ for ‘‘1992’’. 
(ii) ROUNDING.—If any amount as 
adjusted under clause (i) is not a multiple 
of $50, such amount shall be rounded to 
the nearest multiple of $50.
(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A)(v), 
the term ‘‘modified adjusted gross income’’ 
means adjusted gross income— 
(i) determined without regard to sec-
tions 86, 893, 911, 931, and 933 of the 
Internal Revenue Code of 1986, and 
(ii) increased by the amount of inter-
est received or accrued by the taxpayer 
during the taxable year which is exempt 
from tax. 
(2) INDIVIDUAL
DEVELOPMENT
ACCOUNT.— 
The term ‘‘Individual Development Account’’ means 
an account established for an eligible individual as 
part of a qualified individual development account 
program, but only if the written governing instru-
ment creating the account meets the following re-
quirements: 
(A) The owner of the account is the indi-
vidual for whom the account was established. 
(B) No contribution will be accepted unless 
it is in cash, and, except in the case of any 
qualified rollover, contributions will not be ac-
cepted for the taxable year in excess of $1,500 
on behalf of any individual.
(C) The trustee of the account is a quali-
fied financial institution. 
(D) The assets of the account will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
(E) Except as provided in section 7(b), any 
amount in the account may be paid out only for 
the purpose of paying the qualified expenses of 
the account owner. 
(3) PARALLEL ACCOUNT.—The term ‘‘parallel 
account’’ means a separate, parallel individual or 
pooled account for all matching funds and earnings 
dedicated to an Individual Development Account 
owner as part of a qualified individual development 
account program, the trustee of which is a qualified 
financial institution. 
(4) QUALIFIED FINANCIAL INSTITUTION.— 
(A) IN GENERAL.—The term ‘‘qualified fi-
nancial institution’’ means any person author-
ized to be a trustee of any individual retirement 
account under section 408(a)(2) of the Internal 
Revenue Code of 1986. 
(B) RULE OF CONSTRUCTION.—
(i) IN
GENERAL.—Nothing in this 
paragraph shall be construed as preventing 
a person described in subparagraph (A) 
from collaborating with 1 or more qualified 
nonprofit organizations or Indian tribes to 
carry out an individual development ac-
count program established under section 4. 
(ii) QUALIFIED
NONPROFIT
ORGANI-
ZATION.—The term ‘‘qualified nonprofit 
organization’’ means— 
(I) any organization described in 
section 501(c)(3) of the Internal Rev-
enue Code of 1986 and exempt from 
taxation under section 501(a) of such 
Code, 
(II) any community development 
financial institution certified by the 
Community Development Financial 
Institution Fund, 
(III) any credit union chartered 
under Federal or State law, or 
(IV) any public housing agency 
as defined in section 3(b)(6) of the 
United States Housing Act of 1937 
(42 U.S.C. 1437a(b)(6)).
(iii) INDIAN TRIBE.—The term ‘‘In-
dian tribe’’ means any Indian tribe as de-
fined in section 4(12) of the Native Amer-
ican Housing Assistance and Self-Deter-
mination 
Act 
of 
1996 
(25 
U.S.C. 
4103(12), and includes any tribally des-
ignated housing entity (as defined in sec-
tion 4(21) of such Act (25 U.S.C. 
4103(21)), tribal subsidiary, subdivision, 
or other wholly owned tribal entity. 
(5) QUALIFIED INDIVIDUAL DEVELOPMENT AC-
COUNT PROGRAM.—The term ‘‘qualified individual 
development account program’’ means a program es-
tablished upon approval of the Secretary under sec-
tion 4 after December 31, 2006, under which— 
(A) Individual Development Accounts and 
parallel accounts are held in trust by a qualified 
financial institution, and 
(B) additional activities determined by the 
Secretary, in consultation with the Secretary of 
Health and Human Services, as necessary to re-
sponsibly develop and administer accounts, in-
cluding recruiting, providing financial education 
and other training to Account owners, and reg-
ular program monitoring, are carried out by the 
qualified financial institution. 
(6) QUALIFIED EXPENSE DISTRIBUTION.— 
(A) IN GENERAL.—The term ‘‘qualified ex-
pense distribution’’ means any amount paid (in-
cluding through electronic payments) or distrib-
uted out of an Individual Development Account 
or a parallel account established for an eligible 
individual if such amount— 
(i) is used exclusively to pay the quali-
fied expenses of the Individual Develop-
ment Account owner or such owner’s 
spouse or dependents, 
(ii) is paid by the qualified financial 
institution— 
(I) except as otherwise provided 
in this clause, directly to the unre-
lated third party to whom the amount 
is due, 
(II) in the case of any qualified 
rollover, directly to another Individual 
Development Account and parallel ac-
count, or 
(III) in the case of a qualified 
final distribution, directly to the
spouse, dependent, or other named 
beneficiary of the deceased Account 
owner, and 
(iii) is paid after the Account owner 
has completed a financial education course 
if required under section 5(b). 
(B) QUALIFIED EXPENSES.— 
(i) IN GENERAL.—The term ‘‘qualified 
expenses’’ means any of the following ex-
penses approved by the qualified financial 
institution: 
(I) Qualified higher education ex-
penses. 
(II) Qualified first-time home-
buyer costs. 
(III) Qualified business capital-
ization or expansion costs. 
(IV) Qualified rollovers. 
(V) Qualified final distribution. 
(ii) QUALIFIED
HIGHER
EDUCATION 
EXPENSES.— 
(I) 
IN
GENERAL.—The 
term 
‘‘qualified higher education expenses’’ 
has the meaning given such term by 
section 529(e)(3) of the Internal Rev-
enue Code of 1986, determined by 
treating the Account owner, the own-
er’s spouse, or one or more of the 
owner’s dependents as a designated 
beneficiary, and reduced as provided 
in section 25A(g)(2) of such Code. 
(II) COORDINATION WITH OTHER 
BENEFITS.—The amount of expenses 
which may be taken into account for 
purposes of section 135, 529, or 530 
of such Code for any taxable year 
shall be reduced by the amount of any 
qualified higher education expenses 
taken into account as qualified ex-
pense distributions during such tax-
able year. 
(iii) QUALIFIED
FIRST-TIME
HOME-
BUYER COSTS.—The term ‘‘qualified first- 
time homebuyer costs’’ means qualified ac-
quisition costs (as defined in section 
72(t)(8)(C) of the Internal Revenue Code 
of 1986) with respect to a principal resi-
dence (within the meaning of section 121 
of such Code) for a qualified first-time
homebuyer 
(as 
defined 
in 
section 
72(t)(8)(D)(i) of such Code). 
(iv) QUALIFIED
BUSINESS
CAPITAL-
IZATION OR EXPANSION COSTS.— 
(I) 
IN
GENERAL.—The 
term 
‘‘qualified business capitalization or 
expansion costs’’ means qualified ex-
penditures for the capitalization or ex-
pansion of a qualified business pursu-
ant to a qualified business plan. 
(II) 
QUALIFIED
EXPENDI-
TURES.—The term ‘‘qualified expendi-
tures’’ means expenditures normally 
associated with starting or expanding 
a business and included in a qualified 
business plan, including costs for cap-
ital, plant, and equipment, inventory 
expenses, and attorney and accounting 
fees. 
(III) 
QUALIFIED
BUSINESS.— 
The term ‘‘qualified business’’ means 
any business that does not contravene 
any law. 
(IV) 
QUALIFIED
BUSINESS 
PLAN.—The term ‘‘qualified business
plan’’ means a business plan which 
has been approved by the qualified fi-
nancial institution and which meets 
such requirements as the Secretary 
may specify. 
(v) 
QUALIFIED
ROLLOVERS.—The 
term ‘‘qualified rollover’’ means the com-
plete distribution of the amounts in an In-
dividual Development Account and parallel 
account to another Individual Development 
Account and parallel account established in 
another qualified financial institution for 
the benefit of the Account owner. 
(vi) 
QUALIFIED
FINAL
DISTRIBU-
TION.—The term ‘‘qualified final distribu-
tion’’ means, in the case of a deceased Ac-
count owner, the complete distribution of 
the amounts in the Individual Development 
Account and parallel account directly to 
the spouse, any dependent, or other named 
beneficiary of the deceased. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury.
SEC. 4. STRUCTURE AND ADMINISTRATION OF QUALIFIED 
INDIVIDUAL DEVELOPMENT ACCOUNT PRO-
GRAMS. 
(a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE-
VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan-
cial institution may apply to the Secretary for approval 
to establish 1 or more qualified individual development ac-
count programs which meet the requirements of this Act. 
(b) BASIC PROGRAM STRUCTURE.— 
(1) IN GENERAL.—All qualified individual de-
velopment account programs shall consist of the fol-
lowing 2 components for each participant: 
(A) An Individual Development Account to 
which an eligible individual may contribute cash 
in accordance with section 5. 
(B) A parallel account to which all match-
ing funds shall be deposited in accordance with 
section 6. 
(2) TAILORED IDA PROGRAMS.—A qualified fi-
nancial institution may tailor its qualified individual 
development account program to allow matching 
funds to be spent on 1 or more of the categories of 
qualified expenses. 
(c) COORDINATION WITH PUBLIC HOUSING AGENCY 
INDIVIDUAL SAVINGS ACCOUNTS.—Section 3(e)(2) of the 
United States Housing Act of 1937 (42 U.S.C.
1437a(e)(2)) is amended by inserting ‘‘or in any Indi-
vidual Development Account established under the Sav-
ings for Working Families Act of 2006’’ after ‘‘sub-
section’’. 
(d) TAX TREATMENT OF PARALLEL ACCOUNTS.— 
(1) IN GENERAL.—Chapter 77 of the Internal 
Revenue Code of 1986 (relating to miscellaneous 
provisions) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOP-
MENT PARALLEL ACCOUNTS. 
‘‘For purposes of this title— 
‘‘(1) 
any 
account 
described 
in 
section 
4(b)(1)(B) of the Savings for Working Families Act 
of 2006 shall be exempt from taxation, 
‘‘(2) except as provided in section 45N, no item 
of income, expense, basis, gain, or loss with respect 
to such an account may be taken into account, and 
‘‘(3) any amount withdrawn from such an ac-
count shall not be includible in gross income.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for chapter 77 of such Code is amended by 
adding at the end the following new item: 
‘‘Sec. 7529. Tax incentives for Individual Development Parallel Accounts.’’. 
(e) COORDINATION OF CERTAIN EXPENSES.—Sec-
tion 25A(g)(2) of the Internal Revenue Code of 1986 is
(e) COORDINATION OF CERTAIN EXPENSES.—Sec-
tion 25A(g)(2) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ at the end of subparagraph 
(B), by striking the period at the end of subparagraph 
(C) and inserting ‘‘, and’’, and by adding at the end the 
following new subparagraph: 
‘‘(C) a qualified expense distribution with 
respect to qualified higher education expenses 
from an Individual Development Account or a 
parallel account under section 7(a) of the Sav-
ings for Working Families Act of 2006.’’. 
SEC. 5. PROCEDURES FOR OPENING AND MAINTAINING AN 
INDIVIDUAL DEVELOPMENT ACCOUNT AND 
QUALIFYING FOR MATCHING FUNDS. 
(a) OPENING AN ACCOUNT.—An eligible individual 
may open an Individual Development Account with a 
qualified financial institution upon certification that such 
individual has never maintained any other Individual De-
velopment Account (other than an Individual Development 
Account to be terminated by a qualified rollover). 
(b) REQUIRED COMPLETION OF FINANCIAL EDU-
CATION COURSE.— 
(1) IN GENERAL.—Before becoming eligible to 
withdraw funds to pay for qualified expenses, owners 
of Individual Development Accounts must complete
1 or more financial education courses specified in 
the qualified individual development account pro-
gram. 
(2) 
STANDARD
AND
APPLICABILITY
OF 
COURSE.—The Secretary, in consultation with rep-
resentatives of qualified individual development ac-
count programs and financial educators, shall not 
later than the date on which the Secretary approves 
the first qualified Individual Development Account 
program, establish minimum quality standards for 
the contents of financial education courses and pro-
viders of such courses described in paragraph (1) 
and a protocol to exempt individuals from the re-
quirement under paragraph (1) in the case of hard-
ship, lack of need, the attainment of age 65, or a 
qualified final distribution. 
(c) PROOF
OF STATUS
AS
AN ELIGIBLE INDI-
VIDUAL.—Federal income tax forms for the immediately 
preceding taxable year and any other evidence of eligibility 
which may be required by a qualified financial institution 
shall be presented to such institution at the time of the 
establishment of the Individual Development Account and 
in any taxable year in which contributions are made to 
the Account to qualify for matching funds under section 
6(b)(1)(A).
(d) SPECIAL RULE IN THE CASE OF MARRIED INDI-
VIDUALS.—For purposes of this Act, if, with respect to 
any taxable year, 2 married individuals file a Federal joint 
income tax return, then not more than 1 of such individ-
uals may be treated as an eligible individual with respect 
to the succeeding taxable year. 
SEC. 6. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP-
MENT ACCOUNT PROGRAMS. 
(a) PARALLEL ACCOUNTS.—The qualified financial 
institution shall deposit all matching funds for each Indi-
vidual Development Account into a parallel account at a 
qualified financial institution. 
(b) REGULAR DEPOSITS OF MATCHING FUNDS.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the qualified financial institution shall deposit into 
the parallel account with respect to each eligible in-
dividual the following amounts: 
(A) A dollar-for-dollar match for the first 
$500 contributed by the eligible individual into 
an Individual Development Account with re-
spect to any taxable year of such individual. 
(B) Any matching funds provided by State, 
local, or private sources in accordance with the 
matching ratio set by those sources.
(2) TIMING OF DEPOSITS.—A deposit of the 
amounts described in paragraph (1) shall be made 
into a parallel account— 
(A) in the case of amounts described in 
paragraph (1)(A), not later than 30 days after 
the end of the calendar quarter during which 
the contribution described in such paragraph 
was made, and 
(B) in the case of amounts described in 
paragraph (1)(B), not later than 2 business 
days after such amounts were provided. 
(3) CROSS REFERENCE.—For allowance of tax 
credit for Individual Development Account subsidies, 
including matching funds, see section 45N of the In-
ternal Revenue Code of 1986. 
(c) DEPOSIT
OF MATCHING FUNDS INTO INDI-
VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL WHO 
HAS ATTAINED AGE 65.—In the case of an Individual De-
velopment Account owner who attains the age of 65, the 
qualified financial institution shall deposit the funds in the 
parallel account with respect to such individual into the 
Individual Development Account of such individual on the 
later of— 
(1) the day which is the 1-year anniversary of 
the deposit of such funds in the parallel account, or
(2) the first business day of the taxable year of 
such individual following the taxable year in which 
such individual attained age 65. 
(d) UNIFORM ACCOUNTING REGULATIONS.—To en-
sure proper recordkeeping and determination of the tax 
credit under section 45N of the Internal Revenue Code 
of 1986, the Secretary shall prescribe regulations with re-
spect to accounting for matching funds in the parallel ac-
counts. 
(e) REGULAR
REPORTING
OF
ACCOUNTS.—Any 
qualified financial institution shall report the balances in 
any Individual Development Account and parallel account 
of an individual on not less than an annual basis to such 
individual. 
SEC. 7. WITHDRAWAL PROCEDURES. 
(a) WITHDRAWALS FOR QUALIFIED EXPENSES.— 
(1) IN GENERAL.—An Individual Development 
Account owner may withdraw funds in order to pay 
qualified expense distributions from such individ-
ual’s— 
(A) Individual Development Account, but 
only from funds which have been on deposit in 
such Account for at least 1 year, and 
(B) parallel account, but only—
(i) from matching funds which have 
been on deposit in such parallel account 
for at least 1 year, 
(ii) from earnings in such parallel ac-
count, after all matching funds described 
in clause (i) have been withdrawn, and 
(iii) to the extent such withdrawal 
does not result in a remaining balance in 
such parallel account which is less than the 
remaining balance in the Individual Devel-
opment Account after such withdrawal. 
(2) PROCEDURE.—Upon receipt of a with-
drawal request which meets the requirements of 
paragraph (1), the qualified financial institution 
shall directly transfer the funds electronically to the 
distributees described in section 3(6)(A)(ii). If a dis-
tributee is not equipped to receive funds electroni-
cally, the qualified financial institution may issue 
such funds by paper check to the distributee. 
(b) 
WITHDRAWALS
FOR
NONQUALIFIED
EX-
PENSES.—An Individual Development Account owner may 
withdraw any amount of funds from the Individual Devel-
opment Account for purposes other than to pay qualified 
expense distributions, but if, after such withdrawal, the 
amount in the parallel account of such owner (excluding
earnings on matching funds) exceeds the amount remain-
ing in such Individual Development Account, then such 
owner shall forfeit from the parallel account the lesser of 
such excess or the amount withdrawn. 
(c) WITHDRAWALS
FROM
ACCOUNTS
OF
NON-
ELIGIBLE INDIVIDUALS.—If the individual for whose ben-
efit an Individual Development Account is established 
ceases to be an eligible individual, such account shall re-
main an Individual Development Account, but such indi-
vidual shall not be eligible for any further matching funds 
under section 6(b)(1)(A) for contributions which are made 
to the Account during any taxable year when such indi-
vidual is not an eligible individual. 
(d) EFFECT
OF PLEDGING ACCOUNT
AS SECU-
RITY.—If, during any taxable year of the individual for 
whose benefit an Individual Development Account is es-
tablished, that individual uses the Account, the individ-
ual’s parallel account, or any portion thereof as security 
for a loan, the portion so used shall be treated as a with-
drawal of such portion from the Individual Development 
Account for purposes other than to pay qualified expenses.
SEC. 8. CERTIFICATION AND TERMINATION OF QUALIFIED 
INDIVIDUAL DEVELOPMENT ACCOUNT PRO-
GRAMS. 
(a) CERTIFICATION
PROCEDURES.—Upon estab-
lishing a qualified individual development account pro-
gram under section 4, a qualified financial institution shall 
certify to the Secretary at such time and in such manner 
as may be prescribed by the Secretary and accompanied 
by any documentation required by the Secretary, that— 
(1) the accounts described in subparagraphs 
(A) and (B) of section 4(b)(1) are operating pursu-
ant to all the provisions of this Act, and 
(2) the qualified financial institution agrees to 
implement an information system necessary to mon-
itor the cost and outcomes of the qualified individual 
development account program. 
(b) AUTHORITY
TO TERMINATE QUALIFIED IDA 
PROGRAM.—If the Secretary determines that a qualified 
financial institution under this Act is not operating a 
qualified individual development account program in ac-
cordance with the requirements of this Act (and has not 
implemented any corrective recommendations directed by 
the Secretary), the Secretary shall terminate such institu-
tion’s authority to conduct the program. If the Secretary 
is unable to identify a qualified financial institution to as-
sume the authority to conduct such program, then any
funds in a parallel account established for the benefit of 
any individual under such program shall be deposited into 
the Individual Development Account of such individual as 
of the first day of such termination. 
SEC. 9. REPORTING, MONITORING, AND EVALUATION. 
(a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN-
STITUTIONS.—Each qualified financial institution that op-
erates a qualified individual development account program 
under section 4 shall report annually to the Secretary 
within 90 days after the end of each calendar year on— 
(1) the number of individuals making contribu-
tions into Individual Development Accounts and the 
amounts contributed, 
(2) the amounts contributed into Individual De-
velopment Accounts by eligible individuals and the 
amounts deposited into parallel accounts for match-
ing funds, 
(3) the amounts withdrawn from Individual De-
velopment Accounts and parallel accounts, and the 
purposes for which such amounts were withdrawn, 
(4) the balances remaining in Individual Devel-
opment Accounts and parallel accounts, and 
(5) such other information needed to help the 
Secretary monitor the effectiveness of the qualified
individual development account program (provided in 
a non-individually-identifiable manner). 
(b) RESPONSIBILITIES OF THE SECRETARY.— 
(1) MONITORING
PROTOCOL.—Not later than 
12 months after the date of the enactment of this 
Act, the Secretary, in consultation with the Sec-
retary of Health and Human Services, shall develop 
and implement a protocol and process to monitor the 
cost and outcomes of the qualified individual devel-
opment account programs established under section 
4. 
(2) ANNUAL
REPORTS.—For each year after 
2007, the Secretary shall submit a progress report 
to Congress on the status of such qualified indi-
vidual development account programs. Such report 
shall, to the extent data are available, include from 
a representative sample of qualified individual devel-
opment account programs information on— 
(A) the characteristics of participants, in-
cluding age, gender, race or ethnicity, marital 
status, number of children, employment status, 
and monthly income, 
(B) deposits, withdrawals, balances, uses 
of Individual Development Accounts, and par-
ticipant characteristics,
(C) the characteristics of qualified indi-
vidual development account programs, including 
match rate, economic education requirements, 
permissible uses of accounts, staffing of pro-
grams in full time employees, and the total 
costs of programs, and 
(D) process information on program imple-
mentation and administration, especially on 
problems encountered and how problems were 
solved. 
(3) USE OF ACCOUNTS IN RURAL AREAS EN-
COURAGED.—The Secretary shall develop methods to 
encourage the use of Individual Development Ac-
counts in rural areas. 
SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 
(a) IN GENERAL.—There is authorized to be appro-
priated to the Secretary $1,000,000 for fiscal year 2007 
and for each fiscal year through 2014, for the purposes 
of implementing this Act, including the reporting, moni-
toring, and evaluation required under section 9, to remain 
available until expended. 
(b) GRANTS.—There is authorized to be appropriated 
to the Secretary $20,000,000— 
(1) to make grants to qualified nonprofit orga-
nizations and Indian tribes to help defray the ad-
ministrative costs associated with the operation of 
individual development account programs, including 
the required financial education courses, and 
(2) to provide technical assistance to qualified 
nonprofit organizations and Indian tribes in meeting 
such program requirements. 
SEC. 11. MATCHING FUNDS FOR INDIVIDUAL DEVELOP-
MENT ACCOUNTS PROVIDED THROUGH A TAX 
CREDIT FOR QUALIFIED FINANCIAL INSTITU-
TIONS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
adding at the end the following new section: 
‘‘SEC. 45N. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST-
MENT CREDIT. 
‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 
section 38, the individual development account investment 
credit determined under this section with respect to any 
eligible entity for any taxable year is an amount equal to 
the individual development account investment provided 
by such eligible entity during the taxable year under an 
individual development account program established under 
section 4 of the Savings for Working Families Act of 
2006.
‘‘(b) APPLICABLE TAX.—For the purposes of this 
section, the term ‘applicable tax’ means the excess (if any) 
of— 
‘‘(1) the tax imposed under this chapter (other 
than the taxes imposed under the provisions de-
scribed in subparagraphs (C) through (Q) of section 
26(b)(2)), over 
‘‘(2) the credits allowable under subpart B 
(other than this section) and subpart D of this part. 
‘‘(c) INDIVIDUAL DEVELOPMENT ACCOUNT INVEST-
MENT.—For purposes of this section, the term ‘individual 
development account investment’ means, with respect to 
an individual development account program in any taxable 
year, an amount equal to the sum of— 
‘‘(1) the aggregate amount of dollar-for-dollar 
matches 
under 
such 
program 
under 
section 
6(b)(1)(A) of the Savings for Working Families Act 
of 2006 for such taxable year, plus 
‘‘(2) $50 with respect to each Individual Devel-
opment Account maintained— 
‘‘(A) as of the end of such taxable year, 
but only if such taxable year is within the 7- 
taxable-year period beginning with the taxable 
year in which such Account is opened, and
‘‘(B) with a balance of not less than $100 
(other than the taxable year in which such Ac-
count is opened). 
‘‘(d) ELIGIBLE ENTITY.—For purposes of this sec-
tion, except as provided in regulations, the term ‘eligible 
entity’ means a qualified financial institution. 
‘‘(e) OTHER DEFINITIONS.—For purposes of this 
section, any term used in this section and also in the Sav-
ings for Working Families Act of 2006 shall have the 
meaning given such term by such Act. 
‘‘(f) DENIAL OF DOUBLE BENEFIT.— 
‘‘(1) IN
GENERAL.—No deduction or credit 
(other than under this section) shall be allowed 
under this chapter with respect to any expense 
which— 
‘‘(A) is taken into account under sub-
section (c)(1)(A) in determining the credit 
under this section, or 
‘‘(B) is attributable to the maintenance of 
an Individual Development Account. 
‘‘(2) DETERMINATION OF AMOUNT.—Solely for 
purposes of paragraph (1)(B), the amount attrib-
utable to the maintenance of an Individual Develop-
ment Account shall be deemed to be the dollar 
amount of the credit allowed under subsection
(c)(l)(B) for each taxable year such Individual De-
velopment Account is maintained. 
‘‘(g) CREDIT MAY BE TRANSFERRED.— 
‘‘(1) IN
GENERAL.—An eligible entity may 
transfer any credit allowable to the eligible entity 
under subsection (a) to any person other than to an-
other eligible entity which is exempt from tax under 
this title. The determination as to whether a credit 
is allowable shall be made without regard to the tax- 
exempt status of the eligible entity. 
‘‘(2) CONSENT REQUIRED FOR REVOCATION.— 
Any transfer under paragraph (1) may be revoked 
only with the consent of the Secretary. 
‘‘(h) REGULATIONS.—The Secretary may prescribe 
such regulations as may be necessary or appropriate to 
carry out this section, including 
‘‘(1) such regulations as necessary to insure 
that any credit described in subsection (g)(1) is 
claimed once and not retransferred by a transferee, 
and 
‘‘(2) regulations providing for a recapture of 
the credit allowed under this section (notwith-
standing any termination date described in sub-
section (i)) in cases where there is a forfeiture under 
section 7(b) of the Savings for Working Families
Act of 2006 in a subsequent taxable year of any 
amount which was taken into account in determining 
the amount of such credit. 
‘‘(i) APPLICATION OF SECTION.— 
‘‘(1) IN GENERAL.—This section shall apply to 
any expenditure made in any taxable year ending 
after December 31, 2006, and beginning on or be-
fore January 1, 2014, with respect to any Individual 
Development Account which— 
‘‘(A) is opened before January 1, 2012, 
and 
‘‘(B) as determined by the Secretary, when 
added to all of the previously opened Individual 
Development 
Accounts, 
does 
not 
exceed 
900,000 Accounts. 
Notwithstanding the preceding sentence, this section 
shall apply to amounts which are described in sub-
section (c)(1) and which are timely deposited into a 
parallel account during the 30-day period following 
the end of the last taxable year beginning on or be-
fore January 1, 2014. 
‘‘(2) DETERMINATION
OF
LIMITATION.—The 
limitation on the number of Individual Development 
Accounts under paragraph (1)(B) shall be allocated 
by the Secretary among eligible individuals as such
individuals open such Accounts under qualified indi-
vidual development account programs, except that, 
in the case of 300,000 Accounts, such limitation 
shall be equally allocated among the States.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of such Code (relating to current year business 
credit) is amended by striking ‘‘and’’ at the end of para-
graph (25), by striking the period at the end of paragraph 
(26) and inserting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(27) the individual development account in-
vestment credit determined under section 45N(a).’’. 
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subpart C of part IV of subchapter A of chapter 
1 of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45N. Individual development account investment credit.’’. 
(d) REPORT REGARDING ACCOUNT MAINTENANCE 
FEES.—The Secretary of the Treasury shall study the 
adequacy of the amount specified in section 45N(c)(2) of 
the Internal Revenue Code of 1986 (as added by this sec-
tion). Not later than December 31, 2010, the Secretary 
of the Treasury shall report the findings of the study de-
scribed in the preceding sentence to Congress.
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2006. 
SEC. 12. ACCOUNT FUNDS DISREGARDED FOR PURPOSES 
OF CERTAIN MEANS-TESTED FEDERAL PRO-
GRAMS. 
Notwithstanding any other provision of Federal law 
(other than the Internal Revenue Code of 1986) that re-
quires consideration of 1 or more financial circumstances 
of an individual, for the purpose of determining eligibility 
to receive, or the amount of, any assistance or benefit au-
thorized by such provision to be provided to or for the 
benefit of such individual, any amount (including earnings 
thereon) in any Individual Development Account of such 
individual and any matching deposit made on behalf of 
such individual (including earnings thereon) in any par-
allel account shall be disregarded for such purpose with 
respect to any period during which such individual main-
tains or makes contributions into such Individual Develop-
ment Account. 
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