[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>