TABLE OF CONTENTS:
Title I: Individual Development Accounts for Low-Income
Workers
Title II: Individual Development Account Investment Credits
Savings for Working Families Act - States that the purposes of this Act are to provide for the establishment of individual development accounts (IDAs) projects for the following stated objectives: (1) providing individuals and families with limited means an opportunity to accumulate assets and to enter the financial mainstream; (2) promoting education, homeownership, and small business development; and (3) stabilizing families and building communities.
Title I: Individual Development Accounts For Low-Income Workers - Sets forth requirements for IDAs for low-income workers, including the following: (1) the basic structure and administration of IDA programs established by qualified financial institutions (QFIs) either alone or in partnership with community-based, nonprofit organizations; (2) procedures for opening an IDA with a QFI and contributing money (of up to a certain amount, except in the case of qualified rollovers) in accordance with specified guidelines to qualify for matching funds from QFIs, State, local, or private sources to be held in either one of two special separate described accounts; (3) QFI deposits of all matching funds (matched dollar-for-dollar for the first $300 contributed by an eligible individual to an IDA for any taxable year) for each IDA in one such an account which is interest-bearing; (4) withdrawal procedures for IDA holders who have completed a QFI economic literacy course to obtain matching funds to pay for qualified expenses upon obtaining appropriate permission; (5) certification to the Secretary of the Treasury that IDAs and other described accounts are operating pursuant to this Act, and termination of IDA programs if the Secretary determines that a QFI is not operating an IDA program in accordance with this Act; and (6) reporting and evaluation requirements. Authorizes appropriations.
Title II: Individual Development Account Investment Credits - Amends the Internal Revenue Code to allow a tax credit for a QFI's IDA investment during the taxable year, including the aggregate amount of dollar-for-dollar matches under the IDA program, plus the lesser of $100 times the number of IDA accounts maintained by the QFI, or a specified portion of certain costs of providing economic literacy training to IDA holders and underwriting the activities of collaborating community-based, not-for-profit organizations.
(Sec. 202) Declares that QFIs which establish IDA programs shall receive credit for funding, administration, and education expenses under the services test contained in regulations for the Community Reinvestment Act of 1977 for those activities related to IDAs.
(Sec. 203) Authorizes an individual to designate that a specified portion (not less than $1) of any overpayment of tax for a taxable year which is attributable to the earned income credit shall be deposited by the Secretary into the individual's IDA.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 895 Introduced in Senate (IS)]
106th CONGRESS
1st Session
S. 895
To provide for the establishment of Individual Development Accounts
(IDAs) that will allow individuals and families with limited means an
opportunity to accumulate assets, to access education, to own their own
homes and businesses, and ultimately to achieve economic self-
sufficiency, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 28, 1999
Mr. Lieberman (for himself, Mr. Santorum, Mr. Durbin, Mr. Abraham, Mr.
Robb, and Mr. Kerrey) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide for the establishment of Individual Development Accounts
(IDAs) that will allow individuals and families with limited means an
opportunity to accumulate assets, to access education, to own their own
homes and businesses, and ultimately to achieve economic self-
sufficiency, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Savings for
Working Families Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
TITLE I--INDIVIDUAL DEVELOPMENT ACCOUNTS FOR LOW-INCOME WORKERS
Sec. 101. Structure and administration of individual development
account programs.
Sec. 102. Procedures for opening an Individual Development Account and
qualifying for matching funds.
Sec. 103. Contributions to Individual Development Accounts.
Sec. 104. Deposits by qualified financial institutions.
Sec. 105. Withdrawal procedures.
Sec. 106. Certification and termination of individual development
account programs.
Sec. 107. Reporting and evaluation.
Sec. 108. Funds in parallel accounts of program participants
disregarded for purposes of all means-
tested Federal programs.
TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDITS
Sec. 201. Matching funds for Individual Development Accounts provided
through a tax credit for qualified
financial institutions.
Sec. 202. CRA credit provided for individual development account
programs.
Sec. 203. Designation of earned income tax credit payments for deposit
to Individual Development Account.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) One-third of all Americans have no assets available for
investment, and another 20 percent have only negligible assets.
The household savings rate of the United States lags far behind
other industrial nations, presenting a barrier to national
economic growth and preventing many Americans from entering the
economic mainstream by buying a house, obtaining an adequate
education, or starting a business.
(2) By building assets, Americans can improve their
economic independence and stability, stimulate the development
of human and other capital, and work toward a viable and
hopeful future for themselves and their children. Thus,
economic well-being does not come solely from income, spending,
and consumption, but also requires savings, investment, and
accumulation of assets.
(3) Traditional public assistance programs based on income
and consumption have rarely been successful in promoting and
supporting the transition to increased economic self-
sufficiency. Income-based social policies that meet consumption
needs (including food, child care, rent, clothing, and health
care) should be complemented by asset-based policies that can
provide the means to achieve long-term independence and
economic well-being.
(4) Individual Development Accounts (IDAs) can provide
working Americans with strong incentives to build assets, basic
financial management training, and access to secure and
relatively inexpensive banking services.
(5) There is reason to believe that Individual Development
Accounts would also foster greater participation in electric
fund transfers (EFT), generate financial returns, including
increased income, tax revenue, and decreased welfare cash
assistance, that will far exceed the cost of public investment
in the program.
SEC. 3. PURPOSES.
The purposes of this Act are to provide for the establishment of
individual development accounts projects 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; and
(3) stabilize families and build communities.
SEC. 4. DEFINITIONS.
As used in this Act:
(1) Eligible individual.--
(A) In general.--The term ``eligible individual''
means an individual who--
(i) has attained the age of 18 years;
(ii) is a citizen or legal resident of the
United States; and
(iii) is a member of a household--
(I) which is eligible for the
earned income tax credit under section
32 of the Internal Revenue Code of
1986,
(II) which is eligible for
assistance under a State program funded
under part A of title IV of the Social
Security Act, or
(III) the gross income of which
does not exceed 60 percent of the area
median income (as determined by the
Department of Housing and Urban
Affairs) and the net worth of which
does not exceed $10,000.
(B) Household.--The term ``household'' means all
individuals who share use of a dwelling unit as primary
quarters for living and eating separate from other
individuals.
(C) Determination of net worth.--
(i) In general.--For purposes of
subparagraph (A)(iii)(II), the net worth of a
household is the amount equal to--
(I) the aggregate fair market value
of all assets that are owned in whole
or in part by any member of a
household, minus
(II) the obligations or debts of
any member of the household.
(ii) Certain assets disregarded.--For
purposes of determining the net worth of a
household, a household's assets shall not be
considered to include the primary dwelling unit
and 1 motor vehicle owned by the household.
(2) Individual development account.--The term ``Individual
Development Account'' means a custodial account established for
an eligible individual as part of an individual development
account program established under section 101, but only if the
written governing instrument creating the account meets the
following requirements:
(A) No contribution will be accepted unless it is
in cash, by check, or by electronic fund transfer.
(B) The custodian of the account is a qualified
financial institution.
(C) The assets of the account will not be
commingled with other property except in a common trust
fund or common investment fund.
(D) Except as provided in section 105(b), any
amount in the account may be paid out only for the
purpose of paying the qualified expenses of the
eligible individual.
(3) Qualified financial institution.--
(A) In general.--The term ``qualified financial
institution'' means any federally insured financial
institution, including any bank, trust company, savings
bank, building and loan association, savings and loan
company or credit union.
(B) Rule of construction.--Nothing in this
paragraph shall be construed as preventing an
organization described in subparagraph (A) from
collaborating with 1 or more community-based, not-for-
profit organizations described in section 501(c)(3) of
the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code to carry out
an individual development account program established
under section 101, including serving as a custodian for
any Individual Development Account.
(4) Qualified expenses.--The term ``qualified expenses''
means, with respect to an eligible individual, 1 or more of the
following paid from an Individual Development Account and from
a separate, parallel individual or pooled account, as provided
by a qualified financial institution:
(A) Post-secondary educational expenses.--Post-
secondary educational expenses paid directly to an
eligible educational institution. In this subparagraph:
(i) Post-secondary educational expenses.--
The term ``post-secondary educational
expenses'' means the following:
(I) Tuition and fees.--Tuition and
fees required for the enrollment or
attendance of a student at an eligible
educational institution.
(II) Fees, books, supplies and
equipment.--Fees, books, supplies, and
equipment required for courses of
instruction at an eligible educational
institution.
(ii) Eligible educational institution.--The
term ``eligible educational institution'' means
the following:
(I) Institution of higher
education.--An institution described in
section 481(a) or 1201(a) of the Higher
Education Act of 1965 (20 U.S.C.
1088(a)(1) or 1141(a)), as such sections are in effect on the date of
enactment of this Act.
(II) Post-secondary vocational
education school.--An area vocational
education school (as defined in
subparagraph (c) or (d) of section
521(4) of the Carl D. Perkins
Vocational and Applied Technology
Education Act (20 U.S.C. 2471(a)))
which is in any State (as defined in
section 521(33) of such Act ), as such
sections are in effect on the date of
enactment of this Act.
(B) First-home purchase.--Qualified acquisition
costs with respect to a qualified principal residence
for a qualified first-time home buyer, if paid directly
to the persons to whom the amounts are due. In this
subparagraph:
(i) Qualified acquisition costs.--The term
``qualified acquisition costs'' means the cost
of acquiring, constructing, or reconstructing a
residence. The term includes any usual or
reasonable settlement, financing, or other
closing costs.
(ii) Qualified principal residence.--The
term ``qualified principal residence'' means a
principal residence (within the meaning of
section 121 of the Internal Revenue Code of
1986).
(iii) Qualified first-time home buyer.--
(I) In general.--The term
``qualified first-time home buyer''
means an individual participating in an
individual development account program
(and, if married, the individual's
spouse) who has no present ownership
interest in a principal residence
during the three-year period ending on
the date of acquisition of the
principal residence to which this
subparagraph applies.
(II) Date of acquisition.--The term
``date of acquisition'' means the date
on which a binding contract to acquire,
construct or reconstruct the principal
residence to which this subparagraph
applies is entered into.
(C) Business capitalization.--Amounts paid directly
to a business capitalization account which is
established in a qualified financial institution and is
restricted to use solely for qualified business
capitalization expenses. In this subparagraph:
(i) Qualified business capitalization
expenses.--The term ``qualified business
capitalization expense'' means qualified
expenditures for the capitalization of a
qualified business pursuant to a qualified
plan.
(ii) Qualified expenditures.--The term
``qualified expenditures'' means expenditures
included in a qualified plan, including
capital, plant, equipment, working capital and
inventory expenses.
(iii) Qualified business.--The term
``qualified business'' means any business that
does not contravene any law or public policy
(to be determined by the Secretary).
(iv) Qualified plan.--The term ``qualified
plan'' means a business plan, or a plan to use
a business asset purchased, which--
(I) is approved by a financial
institution, a micro enterprise
development organization, or a
nonprofit loan fund having demonstrated
fiduciary integrity;
(II) includes a description of
services or goods to be sold, a
marketing plan, and projected financial
statements; and
(III) may require the eligible
individual to obtain the assistance of
an experienced entrepreneurial adviser.
(D) Qualified rollovers.--Amounts paid as qualified
rollovers. In this subparagraph, the term ``qualified
rollover'' means any amount paid directly--
(i) to another Individual Development
Account established for the benefit of the
eligible individual in another qualified
financial institution, or
(ii) if such eligible individual dies, to
an Individual Development Account established
for the benefit of another eligible individual
within 30 days of the date of death.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
TITLE I--INDIVIDUAL DEVELOPMENT ACCOUNTS FOR LOW-INCOME WORKERS
SEC. 101. STRUCTURE AND ADMINISTRATION OF INDIVIDUAL DEVELOPMENT
ACCOUNT PROGRAMS.
(a) Establishment of Individual Development Account Programs.--Any
qualified financial institution may establish 1 or more individual
development account programs which meet the requirements of this Act
either on its own initiative or in partnership with community-based,
not-for-profit organizations.
(b) Basic Program Structure.--
(1) In general.--All individual development account
programs shall consist of the following 2 components:
(A) An Individual Development Account to which an
eligible individual may contribute money in accordance
with section 103.
(B) A separate, parallel individual or pooled
account to which all matching funds shall be deposited
in accordance with section 104.
(2) Tailored ida programs.--A qualified financial
institution may tailor its individual development account
program to allow matching funds to be spent on 1 or more of the
categories of qualified expenses.
(c) Number of Accounts.--
(1) In general.--The average number of active Individual
Development Accounts in an individual development account
program at any 1 banking office of a qualified financial
institution shall be limited to the applicable limit.
(2) Applicable limit.--For purposes of this title, the
applicable limit shall be determined in accordance with the
following table:
Applicable
``Calendar year: Limit:
2000.......................................... 100
2001.......................................... 200
2002.......................................... 300
2003.......................................... 400
2004 and thereafter........................... 500.
(d) Tax Treatment of Accounts.--Any account described in
subparagraph (B) of subsection (b)(1) is exempt from taxation under the
Internal Revenue Code of 1986 unless such account has ceased to be such
an account by reason of section 105(c) or the termination of the
individual development account program under section 106(b).
SEC. 102. PROCEDURES FOR OPENING AN INDIVIDUAL DEVELOPMENT ACCOUNT AND
QUALIFYING FOR MATCHING FUNDS.
(a) Opening an Account.--An eligible individual must open an
Individual Development Account with a qualified financial institution
and contribute money in accordance with section 103 to qualify for
matching funds in a separate, parallel individual or pooled account.
(b) Required Completion of Economic Literacy Course.--Before
becoming eligible to withdraw matching funds to pay for qualified
expenses, holders of Individual Development Accounts must complete an
economic literacy course offered by the qualified financial
institution, a nonprofit organization, or a government entity.
SEC. 103. CONTRIBUTIONS TO INDIVIDUAL DEVELOPMENT ACCOUNTS.
(a) In General.--Except in the case of a qualified rollover,
individual contributions to an Individual Development Account will not
be accepted for the taxable year in excess of an amount equal to the
compensation (as defined in section 219(f)(1) of the Internal Revenue
Code of 1986) includible in the individual's gross income for such
taxable year.
(b) Proof of Compensation and Status as an Eligible Individual.--
Federal W-2 forms and other forms specified by the Secretary proving
the eligible individual's wages and other compensation and the status
of the individual as an eligible individual shall be presented to the
custodian at the time of the establishment of the Individual
Development Account and at least once annually thereafter.
(c) Time When Contributions Deemed Made.--For purposes of this
section, a taxpayer shall be deemed to have made a contribution to an
Individual Development Account on the last day of the preceding taxable
year if the contribution is made on account of such taxable year and is
made not later than the time prescribed by law for filing the Federal
income tax return for such taxable year (not including extensions
thereof).
(d) Cross Reference.--
For designation of earned income tax
credit payments for deposit to an Individual Development Account, see
section 32(o) of the Internal Revenue Code of 1986.
SEC. 104. DEPOSITS BY QUALIFIED FINANCIAL INSTITUTIONS.
(a) Separate, Parallel Individual or Pooled Accounts.--The
qualified financial institution shall deposit all matching funds for
each Individual Development Account into a separate, parallel
individual or pooled account. The parallel account or accounts shall
earn not less than the market rate of interest.
(b) Regular Deposits of Matching Funds.--
(1) In general.--Subject to paragraph (2), the qualified
financial institution shall deposit not less than quarterly
into the separate, parallel account with respect to each
eligible individual the following:
(A) A dollar-for-dollar match for the first $300
contributed by the eligible individual into an
Individual Development Account with respect to any
taxable year.
(B) Any matching funds provided by State, local, or
private sources in accordance to the matching ratio set
by those sources.
(2) Cross reference.--
For allowance of tax credit to
qualified financial institutions for Individual Development Account
subsidies, including matching funds, see section 30B of the Internal
Revenue Code of 1986.
(c) Forfeiture of Matching Funds.--Matching funds that are
forfeited under section 105(b) shall be used by the qualified financial
institution to pay matches for other Individual Development Account
contributions by eligible individuals.
(d) Exclusion From Income.--Gross income of an eligible individual
shall not include any matching fund deposited into a parallel account
under subsection (b) on behalf of such individual.
(e) Uniform Accounting Regulations.--The Secretary shall prescribe
regulations with respect to accounting for matching funds from all
possible sources in the parallel accounts.
(f) Regular Reporting of Matching Deposits.--Any qualified
financial institution shall report matching fund deposits to eligible
individuals with Individual Development Accounts on not less than a
quarterly basis.
SEC. 105. WITHDRAWAL PROCEDURES.
(a) Withdrawals for Qualified Expenses.--
(1) Request for withdrawal.--To withdraw money from an
eligible individual's Individual Development Account to pay
qualified expenses of such individual or such individual's
spouse or dependents, an eligible individual shall obtain
permission from the custodian of the individual development
account program. Such permission may include a request to
withdraw matching funds from the applicable parallel account.
(2) Disbursement of funds.--Once permission to withdraw
funds is granted under paragraph (1), the qualified financial
institution shall directly transfer such funds from the
Individual Development Account, and, if applicable, from the parallel
account electronically to the vendor or other Individual Development
Account. If the vendor is not equipped to receive funds electronically,
the qualified financial institution may issue such funds by paper check
to the vendor.
(3) Resolution of disputes.--The qualified financial
institution shall establish a grievance procedure to hear,
review, and decide in writing any grievance made by an
Individual Development Account holder who disputes a decision
of the operating organization that a withdrawal is not for
qualified expenses.
(b) Withdrawals for Nonqualified Expenses.--An Individual
Development Account holder may unilaterally withdraw funds from the
Individual Development Account for purposes other than to pay qualified
expenses, but shall forfeit the corresponding matching funds and
interest earned on the matching funds by doing so, unless such
withdrawn funds are recontributed to such Account within 1 year of
withdrawal.
(c) Deemed Withdrawals From Accounts of Noneligible Individuals.--
If, during any taxable year of the individual for whose benefit an
Individual Development Account is established, such individual ceases
to be an eligible individual, such account shall cease to be an
Individual Development Account as of the first day of such taxable year
and any balance in such account shall be deemed to have been withdrawn
on such first day by such individual for purposes other than to pay
qualified expenses.
(d) Tax Treatment of Withdrawn Amounts.--Any amount withdrawn from
an Individual Development Account or any matching funds withdrawn from
a parallel account shall be includible in gross income to the extent
such amount has not previously been so includible.
SEC. 106. CERTIFICATION AND TERMINATION OF INDIVIDUAL DEVELOPMENT
ACCOUNT PROGRAMS.
(a) Certification Procedures.--Upon establishing an individual
development account program under section 101, a qualified financial
institution shall certify to the Secretary on forms 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 101(b)(1) are operating pursuant to all the provisions
of this Act; and
(2) the qualified financial institution agrees to implement
an information system necessary to permit the Secretary to
evaluate the cost and effectiveness of the individual
development account program.
(b) Authority To Terminate IDA Program.--If the Secretary
determines that a qualified financial institution under this Act is not
operating an individual development account program in accordance with
the requirements of this Act (and has not implemented any corrective
recommendations directed by the Secretary), the Secretary shall
terminate such institution's authority to conduct the program. If the
Secretary is unable to identify a qualified financial institution to
assume the authority to conduct such program, then any account
established for the benefit of any eligible individual under such
program shall cease to be an Individual Development Account as of the
first day of such termination and any balance in such account shall be
deemed to have been withdrawn on such first day by such individual for
purposes other than to pay qualified expenses.
SEC. 107. REPORTING AND EVALUATION.
(a) Responsibilities of Qualified Financial Institutions.--Each
qualified financial institution that establishes an individual
development account program under section 101 shall report annually to
the Secretary within 90 days after the end of each calendar year on--
(1) the number of eligible individuals making contributions
into Individual Development Accounts;
(2) the amounts contributed into Individual Development
Accounts and deposited into the separate, parallel accounts for
matching funds;
(3) the amounts withdrawn from Individual Development
Accounts and the separate, parallel accounts, and the purposes
for which such amounts were withdrawn;
(4) the balances remaining in Individual Development
Accounts and separate, parallel accounts; and
(5) such other information needed to help the Secretary
evaluate the cost and effectiveness of the individual
development account program.
(b) Responsibilities of the Secretary.--
(1) Two-year evaluation.--Not later than 24 months after
the date of enactment of this Act, the Secretary shall evaluate
the cost and effectiveness of the individual development
account programs established under section 101. In addition,
the Secretary shall evaluate the effect of the account
limitation under section 101(c) on each banking office of a
qualified financial institution and make recommendations for
its adjustment or removal.
(2) Four-year evaluation.--Not later than 48 months after
the date of enactment of this Act, the Secretary shall evaluate
the effect of the individual development account programs
established under section 101 on the eligible individuals.
(3) Subsequent annual evaluations.--In each subsequent year
after the first evaluation under paragraph (1) or (2), the
Secretary shall issue an update on the status of such
individual development account programs.
(4) Appropriations for evaluations.--There is authorized to
be appropriated $5,000,000 for the purposes of evaluating
individual development account programs established under
section 101, to remain available until expended.
SEC. 108. FUNDS IN PARALLEL ACCOUNTS OF PROGRAM PARTICIPANTS
DISREGARDED FOR PURPOSES OF ALL MEANS-TESTED FEDERAL
PROGRAMS.
Notwithstanding any other provision of law that requires
consideration of 1 or more financial circumstances of an individual,
for the purposes of determining eligibility to receive, or the amount
of, any assistance or benefit authorized by such law to be provided to
or for the benefit of such individual, funds (including interest
accruing) in any parallel account shall be disregarded for such purpose
with respect to any period during which the individual participates in
an individual development account program established under section
101.
TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDITS
SEC. 201. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS PROVIDED
THROUGH A TAX CREDIT FOR QUALIFIED FINANCIAL
INSTITUTIONS.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to other credits) is
amended by inserting after section 30A the following:
``SEC. 30B. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT FOR
QUALIFIED FINANCIAL INSTITUTIONS.
``(a) Determination of Amount.--There shall be allowed as a credit
against the applicable tax for the taxable year an amount equal to the
individual development account investment provided by a qualified
financial institution during the taxable year under an individual
development account program established under section 101 of the
Savings for Working Families Act.
``(b) Applicable Tax.--For the purposes of this section, the term
`applicable tax' means the excess (if any) of--
``(1) the sum of--
``(A) the tax imposed under this chapter (other
than the taxes imposed under the provisions described
in subparagraphs (C) through (Q) of section 26(b)(1)),
plus
``(B) the tax imposed under section 3111, over
``(2) the credits allowable under subparts B and D of this
part.
``(c) Individual Development Account Investment.--For purposes of
this section, the term `individual development account investment'
means, with respect to an individual development account program of a
qualified financial institution in any taxable year, an amount equal to
the sum of--
``(1) the aggregate amount of dollar-for-dollar matches
under such program by such institution under section 104 of the
Savings for Working Families Act for such taxable year, plus
``(2) an amount equal to the lesser of--
``(A) 50 percent of the aggregate costs paid or
incurred under such program by such institution during
such taxable year--
``(i) to provide economic literacy training
to Individual Development Account holders under
section 102(b) of such Act, either directly or
indirectly through nonprofit organizations or
government entities, and
``(ii) to underwrite the activities of
collaborating community-based, not-for-profit
organizations (within the meaning of section
4(3)(B) of such Act), or
``(B) $100, times the total number of Individual
Development Accounts maintained by such institution
under such program during such taxable year.
``(d) Other Definitions.--For purposes of this section, the terms
`Individual Development Account' and `qualified financial institution'
have the meanings given such terms by section 4 of the Savings for
Workings Families Act.
``(e) Regulations.--The Secretary may prescribe such regulations as
may be necessary or appropriate to carry out this section, including
regulations providing for a recapture of the credit allowed under this
section in cases where there is a forfeiture under section 105(b) of
the Savings for Workings Families Act in a subsequent taxable year of
any amount which was taken into account in determining the amount of
such credit.''
(b) Transfer to Trust Funds.--The Secretary of the Treasury shall
transfer from the general fund of the United States Treasury to the
Federal Old-Age and Survivors Insurance Trust Fund, the Federal
Disability Insurance Trust Fund, and the Federal Hospital Insurance
Trust Fund amounts equivalent to the amount of the reduction in taxes
imposed by section 3111 of the Internal Revenue Code of 1986 by reason
of the credit determined under section 30B (relating to the individual
development account investment credit for qualified financial
institutions). Any such transfer shall be made at the same time that
the reduced taxes would have been deposited in such Trust Funds.
(c) Conforming Amendment.--The table of sections for subpart B of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 30A the
following:
``Sec. 30B. Individual development account investment credit for
qualified financial institutions.''
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1999.
SEC. 202. CRA CREDIT PROVIDED FOR INDIVIDUAL DEVELOPMENT ACCOUNT
PROGRAMS.
Qualified financial institutions which establish individual
development account programs under section 101 shall receive credit for
funding, administration, and education expenses under the services test
contained in regulations for the Community Reinvestment Act of 1977 for
those activities related to Individual Development Accounts.
SEC. 203. DESIGNATION OF EARNED INCOME TAX CREDIT PAYMENTS FOR DEPOSIT
TO INDIVIDUAL DEVELOPMENT ACCOUNT.
(a) In General.--Section 32 of the Internal Revenue Code of 1986
(relating to earned income credit) is amended by adding at the end the
following:
``(o) Designation of Credit for Deposit to Individual Development
Account.--
``(1) In general.--With respect to the return of any
eligible individual (as defined in section 4(1) of the Savings
for Working Families Act) for the taxable year of the tax
imposed by this chapter, such individual may designate that a
specified portion (not less than $1) of any overpayment of tax
for such taxable year which is attributable to the credit
allowed under this section shall be deposited by the Secretary
into an Individual Development Account (as defined in section
4(2) of such Act) of such individual. The Secretary shall so
deposit such portion designated under this paragraph.
``(2) Manner and time of designation.--A designation under
paragraph (1) may be made with respect to any taxable year--
``(A) at the time of filing the return of the tax
imposed by this chapter for such taxable year, or
``(B) at any other time (after the time of filing
the return of the tax imposed by this chapter for such
taxable year) specified in regulations prescribed by
the Secretary.
Such designation shall be made in such manner as the Secretary
prescribes by regulations.
``(3) Portion attributable to earned income tax credit.--
For purposes of paragraph (1), an overpayment for any taxable
year shall be treated as attributable to the credit allowed
under this section for such taxable year to the extent that
such overpayment does not exceed the credit so allowed.
``(4) Overpayments treated as refunded.--For purposes of
this title, any portion of an overpayment of tax designated
under paragraph (1) shall be treated as being refunded to the
taxpayer as of the last date prescribed for filing the return
of tax imposed by this chapter (determined without regard to
extensions) or, if later, the date the return is filed.
``(5) Termination.--This subsection shall not apply to any
taxable year beginning after December 31, 2006.''
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 1999.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S4349)
Read twice and referred to the Committee on Finance.
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