I 
117TH CONGRESS 
1ST SESSION H. R. 4986 
To establish the Refund to Rainy Day Savings Program. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 6, 2021 
Mrs. WATSON COLEMAN (for herself, Mr. HILL, and Mr. THOMPSON of Mis-
sissippi) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To establish the Refund to Rainy Day Savings Program. 
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 ‘‘Refund to Rainy Day 
Savings Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Approximately 15,000,000 households file 
tax returns each year with the Internal Revenue 
Service. 
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(2) For millions of Americans with low or mod-
erate levels of income, their tax refund is the single 
largest source of income for the entire year. 
(3) Financial insecurity extends far up the in-
come spectrum, as too few Americans have sufficient 
financial savings, and 1 in every 3 Americans has no 
financial savings at all. 
(4) Forty percent of American families do not 
have enough liquidity to pay for a $400 ‘‘rainy day’’ 
expense, and 40 percent of Americans are liquid 
asset poor, with emergency savings that are too 
small to cover basic needs in the event of a surprise 
expense or reduction in income. 
SEC. 3. REFUND TO RAINY DAY SAVINGS PROGRAM. 
(a) IN GENERAL.—Not later than December 31, 
2021, the Secretary of the Treasury or the Secretary’s del-
egate (referred to in this section as the ‘‘Secretary’’) shall 
establish and implement a program (referred to in this 
section as the ‘‘Refund to Rainy Day Savings Program’’) 
to allow participating taxpayers, pursuant to the require-
ments established under this section, to defer payment on 
20 percent of the amount which would otherwise be re-
funded to such taxpayer as an overpayment (as described 
in section 6401 of the Internal Revenue Code of 1986). 
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(b) PERIOD
OF DEFERRAL.—Except as provided 
under subsection (c)(5), a participating taxpayer may elect 
to defer payment of the amount described in subsection 
(a) and have such amount deposited in the Rainy Day 
Fund (as described in subsection (c)). 
(c) RAINY DAY FUND.— 
(1) IN GENERAL.—The Secretary shall establish 
a fund, in such manner as the Secretary determines 
to be appropriate, to be known as the ‘‘Rainy Day 
Fund’’, consisting of any amounts described in sub-
section (a) on which payment has been deferred by 
participating taxpayers. 
(2) INVESTMENT.—Any amounts deposited in 
the Rainy Day Fund shall be invested by the Sec-
retary, in coordination with the Bureau of the Fiscal 
Service of the Department of the Treasury, in 
United States Treasury bills issued under chapter 
31 of title 31, United States Code, with maturities 
suitable for the needs of the Fund and selected so 
as to provide the highest return on investment for 
participating taxpayers. 
(3) DISBURSEMENTS FROM FUND.— 
(A) IN GENERAL.—On the date that is 180 
days after receipt of the individual income tax 
return of a participating taxpayer, the amounts 
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in the Rainy Day Fund shall be made available 
to the Secretary to distribute to such taxpayer 
in an amount equal to the amount deferred by 
such taxpayer under subsection (a) and any in-
terest accrued on such amount (as determined 
under paragraph (4)). 
(B) DISTRIBUTED TO BANK ACCOUNT.— 
The amounts described in subparagraph (A) 
shall be distributed to the bank account identi-
fied by the participating taxpayer under sub-
section (d)(3). 
(4) INTEREST ACCRUED.—The amount of inter-
est accrued on the amount deferred by a partici-
pating taxpayer under subsection (a) shall be deter-
mined by the Secretary, in coordination with the Bu-
reau of the Fiscal Service of the Department of the 
Treasury, based upon the return on the investment 
of such amounts under paragraph (2). 
(5) EARLY WITHDRAWAL.— 
(A) IN GENERAL.—On any date during the 
period between the date which is 30 days after 
receipt by the Secretary of the individual in-
come tax return of the participating taxpayer 
and October 15 of the applicable year, such tax-
payer may elect to terminate the deferral of the 
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amount described under subsection (a) and re-
ceive a distribution from the Rainy Day Fund 
equal to such amount and any interest which 
has accrued on such amount up to that date. 
(B) COMPLETE WITHDRAWAL.—A partici-
pating taxpayer making an election under sub-
paragraph (A) must terminate deferral of the 
full amount described under subsection (a), and 
such amount shall be distributed to the bank 
account identified by the participating taxpayer 
under subsection (d)(3). 
(d) PARTICIPATING TAXPAYER.—For purposes of 
this section, the term ‘‘participating taxpayer’’ means a 
taxpayer who— 
(1) has not requested or received an extension 
of the time for payment of taxes for such taxable 
year under section 6161 of the Internal Revenue 
Code of 1986; 
(2) prior to the due date for filing the return 
of tax for such taxable year, elects to participate in 
the Refund to Rainy Day Savings Program; and 
(3) provides the Secretary with a bank account 
number and any other financial information deemed 
necessary by the Secretary for purposes of para-
graphs (3)(B) and (5)(B) of subsection (c). 
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(e) FORMS.—The Secretary shall ensure that the 
election to defer payment of the amount described in sub-
section (a) may be claimed on Forms 1040, 1040A, and 
1040EZ. 
(f) IMPLEMENTATION.— 
(1) 
EDUCATIONAL
MATERIALS
AND
OUT-
REACH.—The Secretary shall— 
(A) design educational materials for tax-
payers regarding financial savings and the Re-
fund to Rainy Day Savings Program; 
(B) publicly disseminate and distribute 
such materials during the first calendar quarter 
of each calendar year and following disburse-
ment of amounts described in subsection (c)(3); 
and 
(C) engage in outreach regarding the Re-
fund to Rainy Day Savings Program to the Vol-
unteer Income Tax Assistance program and 
paid tax preparers. 
(2) INFORMATION
FOR
PARTICIPATING
TAX-
PAYERS.—The Secretary shall ensure that a partici-
pating taxpayer is able to electronically verify the 
status of the amount deferred by such taxpayer 
under subsection (a), including any interest accrued 
on such amount and the status of any distribution. 
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(3) 
FEDERALLY
FUNDED
BENEFITS.—Any 
amounts described in subsection (a) which are dis-
tributed to a participating taxpayer, including any 
interest accrued on such amount, shall be treated in 
the same manner as any refund made to such tax-
payer under section 32 of the Internal Revenue Code 
of 1986 for purposes of determining the eligibility of 
such taxpayer for benefits or assistance, or the 
amount or extent of benefits or assistance, under 
any Federal program or under any State or local 
program financed in whole or in part with Federal 
funds. 
SEC. 4. ASSETS FOR INDEPENDENCE INNOVATION DEM-
ONSTRATION PROJECTS. 
(a) REAUTHORIZATION.—The Assets for Independ-
ence Act (42 U.S.C. 604 note) is amended— 
(1) in section 416, by inserting ‘‘, and, subject 
to section 417, $25,000,000 for each of fiscal years 
2022, 2023, 2024, 2025, and 2026, to remain avail-
able until expended.’’; and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 417. RESERVATION OF FUNDS. 
‘‘(a) IN GENERAL.—Subject to subsections (b) and 
(c), from the funds appropriated for each of fiscal years 
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2022, 2023, 2024, 2025, and 2026 under section 416, the 
Secretary shall reserve— 
‘‘(1) $3,000,000 for general research and eval-
uation; and 
‘‘(2) any amounts remaining after application 
of paragraph (1) to fund AFI innovation demonstra-
tion projects under section 418. 
‘‘(b) PILOT PROGRAM FUNDING.—From the amounts 
reserved under subsection (a) for each of fiscal years 
2022, 2023, and 2024, the Secretary shall make available 
for operating the pilot program established under section 
5 of the Refund to Rainy Day Savings Act— 
‘‘(1) 50 percent of the amount reserved for the 
relevant fiscal year under paragraph (1) of sub-
section (a) (after any adjustment under subsection 
(c)); and 
‘‘(2) 25 percent of the amount reserved for the 
relevant fiscal year under paragraph (2) of sub-
section (a) (after any adjustment under subsection 
(c)). 
‘‘(c) PROPORTIONAL ADJUSTMENT.—In any of fiscal 
years 2022, 2023, 2024, 2025, and 2026, if the amount 
appropriated for such fiscal year is greater or less than 
the amount authorized for such fiscal year under section 
416, the amounts reserved under subsection (a) shall be 
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increased or decreased for such fiscal year so that each 
such amount bears the same proportion to the amount ap-
propriated as each of the amounts reserved under such 
subsection bears to the amount authorized.’’. 
(b) ESTABLISHMENT OF INNOVATION PROGRAM.— 
The Assets for Independence Act (42 U.S.C. 604 note), 
as amended by subsection (a), is further amended by add-
ing at the end the following new section: 
‘‘SEC. 418. AFI INNOVATION PROJECTS. 
‘‘(a) IN GENERAL.—The Secretary is authorized to 
make grants to qualified entities to conduct AFI innova-
tion projects under this section. 
‘‘(b) DEFINITIONS.—For purposes of this section: 
‘‘(1) AFI INNOVATION
PROJECT.—The term 
‘AFI innovation project’ means a demonstration 
project carried out by a qualified entity under this 
section. 
‘‘(2) INNOVATION DEVELOPMENT ACCOUNT.— 
The term ‘innovation development account’ means 
an account that is established in a federally insured 
financial institution or a State insured financial in-
stitution and meets such other requirements as are 
established by the Secretary. 
‘‘(c) APPLICATION.— 
‘‘(1) CRITERIA AND PREFERENCES.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in considering an application to con-
duct an AFI innovation project, the Secretary 
shall apply subsections (c) and (d) of section 
405 to the application in the same manner that 
such subsections apply to an application to con-
duct a demonstration project under section 405. 
‘‘(B) MODIFICATION.—For purposes of 
this paragraph, paragraph (1) of section 405(c) 
shall be applied without regard to the phrase 
‘through activities requiring one or more quali-
fied expenses’. 
‘‘(2) 
APPROVAL
OF
AFI
INNOVATION 
PROJECTS.—Not later than 12 months after the 
date of the enactment of this section, the Secretary 
shall, on a competitive basis, approve such applica-
tions to conduct AFI innovation projects as the Sec-
retary considers to be appropriate, taking into ac-
count the considerations required by paragraph (1). 
The Secretary shall ensure, to the maximum extent 
practicable, that the applications that are approved 
involve a range of communities (both rural and 
urban) and diverse populations. 
‘‘(d) PROJECT DURATION AND GRANT AMOUNT.— 
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‘‘(1) DURATION.—The Secretary shall award 
grants under this section for a period not to exceed 
5 project years. 
‘‘(2) GRANT AMOUNT.—For each project year 
of an AFI innovation project approved under this 
section, the Secretary may make a grant to the 
qualified entity authorized to conduct the project. In 
making such a grant, the Secretary shall make the 
grant on the first day of the project year in an 
amount not to exceed the lesser of— 
‘‘(A) the aggregate amount of funds com-
mitted as matching contributions from non- 
Federal public or private sector sources; or 
‘‘(B) $1,000,000. 
‘‘(e) ELIGIBILITY AND SELECTION OF INDIVIDUALS 
TO PARTICIPATE IN AN AFI INNOVATION PROJECT.— 
‘‘(1) ELIGIBILITY
CRITERIA.—Subject to the 
approval of the Secretary, each qualified entity con-
ducting an AFI innovation project shall establish eli-
gibility requirements for participants in the project. 
Such requirements shall— 
‘‘(A) be more expansive than the require-
ments established under section 408; and 
‘‘(B) ensure that eligibility is limited to 
low-income individuals. 
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‘‘(2) SELECTION OF INDIVIDUALS TO PARTICI-
PATE.—Each qualified entity conducting an AFI in-
novation project shall select, from among the indi-
viduals that meet the eligibility requirements estab-
lished by the entity under paragraph (1), the indi-
viduals— 
‘‘(A) that the qualified entity determines to 
be best suited to participate; and 
‘‘(B) to whom the qualified entity will 
make disbursements or deposits in accordance 
with subsection (f). 
‘‘(f) DISBURSEMENTS BY QUALIFIED ENTITIES.— 
‘‘(1) IN GENERAL.—Each qualified entity con-
ducting an AFI innovation project shall, in a man-
ner consistent with the program requirements estab-
lished by such entity, disburse to a third-party or de-
posit into the innovation development account of 
each individual participating in the project from the 
funds described in subsection (d)(2), a matching 
contribution of not less than $0.50 and not more 
than $8 for every $1 deposited in the account by a 
project participant. 
‘‘(2) LIMITATION ON DISBURSEMENTS FOR AN 
INDIVIDUAL.—Not more than $5,000 from a grant 
made under subsection (d)(1) shall be provided to 
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any one individual over the course of the AFI inno-
vation project. 
‘‘(3) LIMITATION ON DISBURSEMENTS FOR A 
HOUSEHOLD.—Not more than $10,000 from a grant 
made under subsection (d)(1) shall be provided to 
any one household over the course of the AFI inno-
vation project. 
‘‘(4) ADJUSTMENT FOR INFLATION.— 
‘‘(A) IN
GENERAL.—For each calendar 
year after 2020 the dollar amounts in para-
graphs (2) and (3) shall be increased by an 
amount equal to the product of— 
‘‘(i) such dollar amount, and 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
‘calendar year 2017’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
‘‘(B) ROUNDING.—If any increase deter-
mined under subparagraph (A) is not a multiple 
of $50, such increase shall be rounded to the 
next lowest multiple of $50.’’. 
(c) CONFORMING AMENDMENTS.—The Assets for 
Independence Act (42 U.S.C. 604 note), as amended by 
subsections (a) and (b), is further amended— 
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