[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1025 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1025
To provide for savings for working families.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 13, 2001
Mr. Lieberman introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide for savings for working families.
Be it enacted by the Senate and House of Representatives 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
2001''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) For the vast majority of households the pathway to the
economic mainstream and financial security is not through
spending and consumption, but through saving, investing, and
the accumulation of assets. Assets promote economic household
stability, decrease economic strain on households, promote
educational attainment, decrease marital dissolution, decrease
the risk of intergenerational poverty transmission, increase
health and satisfaction among adults, increase property values,
decrease residential mobility, increase property maintenance,
and increase local civic involvement.
(2) One-third of all Americans have no assets available for
investment and another 20 percent have only negligible assets.
Assets are distributed far more unevenly than income. Whereas
the top 20 percent of American households earn over 43 percent
of all income, such households hold over 68 percent of net
worth and almost 87 percent of net financial assets. Moreover,
asset poverty and wealth gaps are even higher among minority
households by a ratio of more than 11 to 1. Up to 20 percent of
all households are unbanked and do not have access to the basic
financial tools that make asset accumulation possible.
(3) Public policy has contributed to large asset gaps in
the United States. Traditional public assistance programs based
on income and consumption have rarely been successful in
supporting the transition to economic self-sufficiency. Tax
policy, through $288,000,000,000 in annual tax incentives, has
helped lay the foundation for the great American middle class,
but only for some citizens. Fully 90 percent of such current
tax benefits accrue to households earning more than $50,000 per
year, roughly half of all American households. Lacking an
income tax liability, low-income working families cannot take
advantage of asset development incentives. Moreover, low-income
families seeking public assistance must first spend down their
assets and face severe asset limits once on assistance.
(4) Individual Development Accounts, or IDAs, have proven
to be successful in helping low-income working families save
and accumulate assets. In one national demonstration project,
2,378 low-income families saved a total of $834,442 in one year
which generated another $1,644,510 in private matching funds.
Thus far, IDA savings have been used to purchase long-term,
high-return assets, including homes, post-secondary education
and training, and small businesses. Presently, about 10,000
IDAs are in existence in the United States, held by a very
small fraction of the at least 70 million Americans who are
asset poor.
(5) Therefore, the Federal Government should support,
through the tax code, a significant expansion of Individual
Development Accounts so that millions of low-income working
families across the country can save, accumulate assets, and
move their lives forward, and thus make positive contributions
to the economic and social well-being of the United States, as
well as to its future.
(b) Purposes.--The purposes of this Act are to provide for the
establishment 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 individual''
means an individual who--
(i) has attained the age of 18 years but
not the age of 61;
(ii) is a citizen or legal resident of the
United States;
(iii) is not a student (as defined in
section 151(c)(4)); and
(iv) is a taxpayer the adjusted gross
income of whom for the preceding taxable year
does not exceed--
(I) $20,000, in the case of a
taxpayer described in section 1(c) or
1(d) of the Internal Revenue Code of
1986;
(II) $25,000, 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 2002, each dollar amount
referred to in subparagraph (A)(iv) shall be
increased by an amount equal to--
(I) such dollar amount, multiplied
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 taxable
year begins, by substituting ``2001''
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.
(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
instrument creating the account meets the following
requirements:
(A) The sole owner of the account is the individual
for whom the account was established.
(B) No contribution will be accepted unless it is
in cash.
(C) The holder of the account is a qualified
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 sole owner of which is a
qualified financial institution, a qualified nonprofit
organization, or an Indian tribe.
(4) Qualified financial institution.--
(A) In general.--The term ``qualified financial
institution'' means any person authorized 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.--Nothing in this
paragraph shall be construed as preventing a person
described in subparagraph (A) from collaborating with 1
or more contractual affiliates, qualified nonprofit
organizations, or Indian tribes to carry out an
individual development account program established
under section 4.
(5) Qualified nonprofit organization.--The term ``qualified
nonprofit organization'' means--
(A) any organization described in section 501(c)(3)
of the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code;
(B) any community development financial institution
certified by the Community Development Financial
Institution Fund; or
(C) any credit union chartered under Federal or
State law.
(6) Indian tribe.--The term ``Indian tribe'' means any
Indian tribe as defined in section 4(12) of the Native American
Housing Assistance and Self-Determination Act of 1996 (25
U.S.C. 4103(12), and includes any tribal subsidiary,
subdivision, or other wholly owned tribal entity.
(7) Qualified individual development account program.--The
term ``qualified individual development account program'' means
a program established under section 4 under which--
(A) Individual Development Accounts and parallel
accounts are held by a qualified financial institution;
and
(B) additional activities determined by the
Secretary as necessary to responsibly develop and
administer accounts, including recruiting, providing
financial education and other training to account
owners, and regular program monitoring, are carried out
by the qualified financial institution, a qualified
nonprofit organization, or an Indian tribe.
(8) Qualified expense distribution.--
(A) In general.--The term ``qualified expense
distribution'' means any amount paid (including through
electronic payments) or distributed out of an
Individual Development Account and a parallel account
established for an eligible individual if such amount--
(i) is used exclusively to pay the
qualified expenses of the Individual
Development Account owner or such owner's
spouse or dependents, as approved by the
qualified financial institution, qualified
nonprofit organization, or Indian tribe;
(ii) is paid by the qualified financial
institution, qualified nonprofit organization,
or Indian tribe--
(I) except as otherwise provided in
this clause, directly to the unrelated
third party to whom the amount is due;
(II) in the case of distributions
for working capital under a qualified
business plan (as defined in
subparagraph (B)(iv)(IV)), directly to
the account owner;
(III) in the case of any qualified
rollover, directly to another
Individual Development Account and
parallel account; or
(IV) 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 as
required under section 5(b).
(B) Qualified expenses.--
(i) In general.--The term ``qualified
expenses'' means any of the following:
(I) Qualified higher education
expenses.
(II) Qualified first-time homebuyer
costs.
(III) Qualified business
capitalization 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 72(t)(7) of the Internal
Revenue Code of 1986, determined by
treating postsecondary vocational
educational schools as eligible
educational institutions.
(II) Postsecondary vocational
education school.--The term
``postsecondary vocational educational
school'' means 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(4)))
which is in any State (as defined in
section 521(33) of such Act), as such
sections are in effect on the date of
the enactment of this Act.
(III) Coordination with other
benefits.--The amount of qualified
higher education expenses for any
taxable year shall be reduced as
provided in section 25A(g)(2) of the
Internal Revenue Code of 1986 and may
not be taken into account for purposes
of determining qualified higher
education expenses under section 135,
529, or 530 of such Code.
(iii) Qualified first-time homebuyer
costs.--The term ``qualified first-time
homebuyer costs'' means qualified acquisition
costs (as defined in section 72(t)(8) of such
Code without regard to subparagraph (B)
thereof) with respect to a principal residence
(within the meaning of section 121 of such
Code) for a qualified first-time homebuyer (as
defined in section 72(t)(8) of such Code).
(iv) Qualified business capitalization or
expansion costs.--
(I) In general.--The term
``qualified business capitalization or
expansion costs'' means qualified
expenditures for the capitalization or
expansion of a qualified business
pursuant to a qualified business plan.
(II) Qualified expenditures.--The
term ``qualified expenditures'' means
expenditures included in a qualified
business plan, including capital,
plant, equipment, working capital,
inventory expenses, attorney and
accounting fees, and other costs
normally associated with starting or
expanding a business.
(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 financial institution,
qualified nonprofit organization, or
Indian tribe and which meets such
requirements as the Secretary may
specify.
(v) Qualified rollovers.--The term
``qualified rollover'' means the complete
distribution of the amounts in an Individual
Development Account and parallel account to
another Individual Development Account and
parallel account established in another
qualified financial institution, qualified
nonprofit organization, or Indian tribe for the
benefit of the account owner.
(vi) Qualified final distribution.--The
term ``qualified final distribution'' means, in
the case of a deceased account owner, the
complete distribution of the amounts in an
Individual Development Account and parallel
account directly to the spouse, any dependent,
or other named beneficiary of the deceased.
(9) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
SEC. 4. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL
DEVELOPMENT ACCOUNT PROGRAMS.
(a) Establishment of Qualified Individual Development Account
Programs.--Any qualified financial institution, qualified nonprofit
organization, or Indian tribe may establish 1 or more qualified
individual development account programs which meet the requirements of
this Act.
(b) Basic Program Structure.--
(1) In general.--All qualified individual development
account programs shall consist of the following 2 components:
(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 matching funds
shall be deposited in accordance with section 6.
(2) Tailored ida programs.--A qualified financial
institution, a qualified nonprofit organization, or an Indian
tribe 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) Tax Treatment of Parallel Accounts.--Any account described in
subparagraph (B) of subsection (b)(1) is exempt from taxation under the
Internal Revenue Code of 1986.
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,
a qualified nonprofit organization, or an Indian tribe upon
certification that such individual maintains no other Individual
Development Account (other than an Individual Development Account to be
terminated by a qualified rollover).
(b) Required Completion of Financial Education Course.--
(1) In general.--Before becoming eligible to withdraw
matching funds to pay for qualified expenses, owners of
Individual Development Accounts must complete a financial
education course offered by a qualified financial institution,
a qualified nonprofit organization, an Indian tribe, or a
government entity.
(2) Standard and applicability of course.--The Secretary,
in consultation with representatives of qualified individual
development account programs and financial educators, shall
establish minimum quality standards for the contents of
financial education courses and providers of such courses
offered under paragraph (1) and a protocol to exempt
individuals from the requirement under paragraph (1) because of
hardship or lack of need.
(c) Proof of Status as an Eligible Individual.--Federal income tax
forms from the preceding taxable year (or in the absence of such forms,
such documentation as specified by the Secretary proving the eligible
individual's adjusted gross income and the status of the individual as
an eligible individual) shall be presented to the qualified financial
institution, qualified nonprofit organization, or Indian tribe 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) Direct Deposits.--The Secretary may, under regulations, provide
for the direct deposit of any portion (not less than $1) of any
overpayment of Federal tax of an individual as a contribution to the
Individual Development Account of such individual.
SEC. 6. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT PROGRAMS.
(a) Parallel Accounts.--The qualified financial institution,
qualified nonprofit organization, or Indian tribe shall deposit all
matching funds for each Individual Development Account into a parallel
account at a qualified financial institution, a qualified nonprofit
organization, or an Indian tribe.
(b) Regular Deposits of Matching Funds.--
(1) In general.--Subject to paragraph (2), the qualified
financial institution, qualified nonprofit organization, or
Indian tribe shall not less than quarterly (or upon a proper
withdrawal request under section 7, if necessary) deposit into
the parallel account with respect to each eligible individual
the following:
(A) A dollar-for-dollar match for the first $500
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) Inflation adjustment.--
(A) In general.--In the case of any taxable year
beginning after 2002, the dollar amount referred to in
paragraph (1)(A) shall be increased by an amount equal
to--
(i) such dollar amount, multiplied 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 taxable year begins, by
substituting ``2001'' for ``1992''.
(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $20, such amount
shall be rounded to the nearest multiple of $20.
(3) Cross reference.--
For allowance of tax credit for
Individual Development Account subsidies, including matching funds, see
section 30B of the Internal Revenue Code of 1986.
(c) Deposit of Matching Funds Into Individual Development Account
of Individual Who Has Attained Age 61.--In the case of an Individual
Development Account owner who attains the age of 61, the qualified
financial institution, qualified nonprofit organization, or Indian
tribe which holds the parallel account for such individual shall
deposit the funds in such parallel account into the Individual
Development Account of such individual on the first day of the
succeeding taxable year of such individual.
(d) Uniform Accounting Regulations.--To ensure proper recordkeeping
and determination of the tax credit under section 30B of the Internal
Revenue Code of 1986, the Secretary shall prescribe regulations with
respect to accounting for matching funds in the parallel accounts.
(e) Regular Reporting of Accounts.--Any qualified financial
institution, qualified nonprofit organization, or Indian tribe 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.--To withdraw money from an
individual's Individual Development Account to pay qualified expenses
of such individual or such individual's spouse or dependents, the
qualified financial institution, qualified nonprofit organization, or
Indian tribe shall directly transfer such funds from the Individual
Development Account, and, if applicable, from the parallel account
electronically to the distributees described in section 3(8)(A)(ii). If
the distributee is not equipped to receive funds electronically, the
qualified financial institution, qualified nonprofit organization, or
Indian tribe may issue such funds by paper check to the distributee.
(b) Withdrawals for Nonqualified Expenses.--An Individual
Development Account owner may unilaterally withdraw any amount of funds
from the Individual Development Account for purposes other than to pay
qualified expenses, but shall forfeit a proportionate amount of
matching funds from the individual's parallel account by doing so,
unless such withdrawn funds are recontributed to such Account by
September 30 following the withdrawal.
(c) Withdrawals From Accounts of Noneligible Individuals.--If the
individual for whose benefit an Individual Development Account is
established ceases to be an eligible individual, such account shall
remain an Individual Development Account, but such individual shall not
be eligible for any further matching funds under section 6(b)(1)(A)
during the period--
(1) beginning on the first day of the taxable year of such
individual following the beginning of such ineligibility, and
(2) ending on the last day of the taxable year of such
individual in which such ineligibility ceases.
(d) Tax Treatment of Matching Funds.--Any amount withdrawn from a
parallel account shall not be includible in an eligible individual's
gross income.
(e) Withdrawal Liability Rests Only With Eligible Individuals.--
Nothing in this Act may be construed to impose liability on a qualified
financial institution, a qualified nonprofit organization, or an Indian
tribe for non-compliance with the requirements of this Act related to
withdrawals from Individual Development Accounts.
SEC. 8. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL
DEVELOPMENT ACCOUNT PROGRAMS.
(a) Certification Procedures.--Upon establishing a qualified
individual development account program under section 4, a qualified
financial institution, a qualified nonprofit organization, or an Indian
tribe 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 4(b)(1) are operating pursuant to all the provisions of
this Act; and
(2) the qualified financial institution, qualified
nonprofit organization, or Indian tribe agrees to implement an
information system necessary to monitor 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, a qualified
nonprofit organization, or an Indian tribe under this Act is not
operating a qualified 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, nonprofit organization's,
or Indian tribe's authority to conduct the program. If the Secretary is
unable to identify a qualified financial institution, a qualified
nonprofit organization, or an Indian tribe to assume 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 Institutions, Qualified
Nonprofit Organizations, and Indian Tribes.--Each qualified financial
institution, qualified nonprofit organization, or Indian tribe that
operates 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 eligible individuals making contributions
into Individual Development Accounts;
(2) the amounts contributed into Individual Development
Accounts and deposited into parallel accounts for matching
funds;
(3) the amounts withdrawn from Individual Development
Accounts and parallel accounts, and the purposes for which such
amounts were withdrawn;
(4) the balances remaining in Individual Development
Accounts and parallel accounts; and
(5) such other information needed to help the Secretary
monitor the cost and outcomes 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 shall
develop and implement a protocol and process to monitor the
cost and outcomes of the qualified individual development
account programs established under section 4.
(2) Annual reports.--In each year after the date of the
enactment of this Act, the Secretary shall submit a progress
report to Congress on the status of such qualified individual
development account programs. Such report shall include from a
representative sample of qualified individual development
account programs information on--
(A) the characteristics of participants, including
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 participant
characteristics;
(C) the characteristics of qualified individual
development account programs, including match rate,
economic education requirements, permissible uses of accounts, staffing
of programs in full time employees, and the total costs of programs;
and
(D) process information on program implementation
and administration, especially on problems encountered
and how problems were solved.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Secretary $1,000,000
for fiscal year 2002 and for each fiscal year through 2008, for the
purposes of implementing this Act, including the reporting, monitoring,
and evaluation required under section 9, to remain available until
expended.
SEC. 11. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-TESTED
FEDERAL PROGRAMS.
Notwithstanding any other provision of Federal 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 provision to be
provided to or for the benefit of such individual, an amount equal to
the sum of--
(1) all amounts (including earnings thereon) in any
Individual Development Account; plus
(2) the matching deposits made on behalf of such individual
(including earnings thereon) in any parallel account,
shall be disregarded for such purposes.
SEC. 12. 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 new section:
``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 an eligible
entity during the taxable year under an individual development account
program established under section 4 of the Savings for Working Families
Act of 2001.
``(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 described 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 Investment.--
``(1) In general.--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--
``(A) 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 2001 for such
taxable year, plus
``(B) an amount equal to the sum of--
``(i) with respect to each Individual
Development Account opened during such taxable
year, $100, plus
``(ii) with respect to each Individual
Development Account maintained during such
taxable year, $30.
``(2) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2002, each dollar amount referred to in
paragraph (1)(B) shall be increased by an amount equal
to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section (1)(f)(3) for the
calendar year in which the taxable year begins,
by substituting `2001' for `1992'.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $5, such amount
shall be rounded to the nearest multiple of $5.
``(d) Eligible Entity.--For purposes of this section, the term
`eligible entity' means a qualified financial institution, or 1 or more
contractual affiliates of such an institution as defined by the
Secretary in regulations.
``(e) Other Definitions.--For purposes of this section, any term
used in this section and also in the Savings for Working Families Act
of 2001 shall have the meaning given such term by such Act.
``(f) Denial of Double Benefit.--No deduction or credit (other than
under this section) shall be allowed under this chapter with respect to
any expense which is taken into account under subsection (c)(1)(A) in
determining the credit under this section.
``(g) 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 (notwithstanding any termination date described in subsection
(h)) in cases where there is a forfeiture under section 7(b) of the
Savings for Working Families Act of 2001 in a subsequent taxable year
of any amount which was taken into account in determining the amount of
such credit.
``(h) Application of Section.--This section shall apply to any
expenditure made in any taxable year beginning after December 31, 2001,
and before January 1, 2009, with respect to any Individual Development
Account opened before January 1, 2007.''.
(b) 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 new item:
``Sec. 30B. Individual development account investment credit for
qualified financial institutions.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
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