[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1542 Introduced in Senate (IS)]

  1st Session
                                S. 1542

  To amend the Internal Revenue Code of 1986 to enhance the economic 
                      future of Native Americans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 31 (legislative day, July 21), 2003

 Mr. Johnson introduced the following bill; which was read twice and 
        referred to the Committee on FinanceYYYYYYYYYYYYYYYYYYYYYYYYYYY

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to enhance the economic 
                      future of Native Americans.

    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 ``Tribal Economic 
Enhancement Act of 2003''.
    (b) Table of Contents.--
    The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
                  TITLE I--TAX INCENTIVES FOR INDIANS

Sec. 101. Expansion of subchapter S election to include Indian tribal 
                            governments.
Sec. 102. Tax exemption for interest from tribal bonds.
Sec. 103. Exemption of Indian tribes from volume cap limits of private 
                            activity bonds.
Sec. 104. Modifications of authority of Indian tribal governments to 
                            issue tax-exempt bonds.
Sec. 105. Consideration of Indian housing waiting lists for low-income 
                            housing credit allocations.
Sec. 106. Native American set-aside for new markets tax credit.
               TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNTS

Sec. 201. Short title.
Sec. 202. Purposes.
Sec. 203. Definitions.
Sec. 204. Structure and administration of qualified individual 
                            development account programs.
Sec. 205. Procedures for opening and maintaining an individual 
                            development account and qualifying for 
                            matching funds.
Sec. 206. Deposits by qualified individual development account 
                            programs.
Sec. 207. Withdrawal procedures.
Sec. 208. Certification and termination of qualified individual 
                            development account programs.
Sec. 209. Reporting, monitoring, and evaluation.
Sec. 210. Authorization of appropriations.
Sec. 211. Matching funds for individual development accounts provided 
                            through a tax credit for qualified 
                            financial institutions.
Sec. 212. Account funds disregarded for purposes of certain means-
                            tested Federal programs.
                     TITLE III--ACCESSIBLE BANKING

Sec. 301. Authority to establish bank branches on Indian lands.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the United States Constitution, Federal court 
        decisions, and Federal statutes recognize that Indian tribes 
        are governments, retaining sovereign authority over their 
        lands;
            (2) Indian tribal governments have the responsibility and 
        authority to provide governmental services, develop tribal 
        economies, and build community infrastructure to ensure that 
        Indian reservation lands serve as livable and vibrant 
        homelands;
            (3) Congress is vested with the authority to regulate 
        commerce with Indian tribes, and hereby exercises that 
        authority and affirms the United States government-to-
        government relationship with Indian tribes;
            (4) there is a special legal and political relationship 
        between the United States and the Indian tribes that is 
        reflected in Article I, Section 8, Clause 3 of the 
        Constitution, various treaties, Federal statutes, Supreme Court 
        decisions, executive orders, and course of dealing;
            (5) Indian communities continue to lag behind the rest of 
        the United States in quality of life and economic vitality;
            (6) approximately 60 percent of Indian tribes and Native 
        Alaskans live on or adjacent to Indian lands in which 
        unemployment rates frequently exceed 50 percent, and poverty 
        rates often exceed 40 percent;
            (7) the poor performance of Indian economies is due in part 
        to the nearly complete absence of private capital and private 
        capital institutions; and
            (8) the goals of economic self-sufficiency for Native 
        Americans can best be achieved by making available the 
        resources and discipline of the private market, adequate 
        capital, and technical expertise.

                  TITLE I--TAX INCENTIVES FOR INDIANS

SEC. 101. EXPANSION OF SUBCHAPTER S ELECTION TO INCLUDE INDIAN TRIBAL 
              GOVERNMENTS.

    (a) Eligibility To Be Shareholders.--Subparagraph (B) of section 
1361(b)(1) of the Internal Revenue Code of 1986 (defining small 
business corporation) is amended by striking ``or'', and by inserting 
``an Indian government or a subdivision thereof, or''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2003.

SEC. 102. TAX EXEMPTION FOR INTEREST FROM TRIBAL BONDS.

    (a) In General.--Paragraph (3) of section 149(b) of the Internal 
Revenue Code of 1986 (relating to exceptions) is amended by 
redesignating subparagraph (D) as subparagraph (E) and by inserting 
after subparagraph (C) the following new subparagraph:
                    ``(D) Exception for certain bonds issued by indian 
                tribal governments.--Paragraph (1) shall not apply to 
                any bond issued by an Indian tribal government or a 
                subdivision thereof.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 103. EXEMPTION OF INDIAN TRIBES FROM VOLUME CAP LIMITS OF PRIVATE 
              ACTIVITY BONDS.

    (a) In General.--Subsection (g) of section 146 of the Internal 
Revenue Code of 1986 (relating to exception for certain bonds) is 
amended by striking ``and'' at the end of paragraph (4), by striking 
the period at the end of paragraph (4) and inserting ``, and'', and by 
inserting after paragraph (4) the following new paragraph:
            ``(5) any qualified bond issued by an Indian tribal 
        government or a subdivision thereof.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 104. MODIFICATIONS OF AUTHORITY OF INDIAN TRIBAL GOVERNMENTS TO 
              ISSUE TAX-EXEMPT BONDS.

    (a) In General.--Subsection (c) of section 7871 of the Internal 
Revenue Code of 1986 (relating to Indian tribal governments treated as 
States for certain purposes) is amended to read as follows:
    ``(c) Additional Requirements for Tax-Exempt Bonds.--
            ``(1) In general.--Subsection (a) of section 103 shall 
        apply to any obligation issued by an Indian tribal government 
        (or subdivision thereof) only if--
                    ``(A) such obligation is part of an issue 95 
                percent or more of the net proceeds of which are to be 
                used to finance any facility located on an Indian 
                reservation, or
                    ``(B) such obligation is part of an issue 
                substantially all of the proceeds of which are to be 
                used in the exercise of any essential governmental 
                function.
            ``(2) Exclusion of gaming.--An obligation described in 
        subparagraph (A) or (B) of paragraph (1) may not be used to 
        finance any portion of a building in which class II or III 
        gaming (as defined in section 4 of the Indian Gaming Regulatory 
        Act (25 U.S.C. 2702)) is conducted or housed.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Indian tribe.--The term `Indian tribe' means 
                any Indian tribe, band, nation, pueblo, or other 
                organized group or community, including any Alaska 
                Native village, or regional or village corporation, as 
                defined in or established pursuant to the Alaska Native 
                Claims Settlement Act (43 U.S.C. 1601 et seq.), which 
                is recognized as eligible for the special programs and 
                services provided by the United States to Indians 
                because of their status as Indians.
                    ``(B) Indian reservation.--The term `Indian 
                reservation' means--
                            ``(i) a reservation, as defined in section 
                        4(10) of the Indian Child Welfare Act of 1978 
                        (25 U.S.C. 1903(10)), and
                            ``(ii) lands held under the provisions of 
                        the Alaska Native Claims Settlement Act (43 
                        U.S.C. 1601 et seq.) by a Native corporation as 
                        defined in section 3(m) of such Act (43 U.S.C. 
                        1602(m)).''.
    (b) Exemption From Registration Requirements.--The first sentence 
of section 3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) 
is amended by inserting ``or by any Indian tribal government or 
subdivision thereof (within the meaning of section 7871 of the Internal 
Revenue Code of 1986),'' after ``or Territories,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 105. CONSIDERATION OF INDIAN HOUSING WAITING LISTS FOR LOW-INCOME 
              HOUSING CREDIT ALLOCATIONS.

    (a) In General.--Subparagraph (C) of section 42(m)(1) of the 
Internal Revenue Code of 1986 (relating to certain selection criteria 
must be used) is amended by striking ``and'' at the end of clause 
(vii), by striking the period at the end of clause (viii) and inserting 
``and'', and by inserting at the end the following new clause:
                            ``(ix) waiting lists for American Indians, 
                        Alaska Natives, and Native Hawaiians.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to allocations made after 2003.

SEC. 106. NATIVE AMERICAN SET-ASIDE FOR NEW MARKETS TAX CREDIT.

    (a) In General.--Subsection (f) of section 45D of the Internal 
Revenue Code of 1986 (relating to national limitation on amount of 
investments designated) is amended by redesignating paragraph (3) as 
paragraph (4) and by inserting after paragraph (2) the following new 
paragraph:
            ``(3) Set-aside for qualified indian community development 
        entities.--
                    ``(A) In general.--Not more than 5 percent of the 
                new markets tax credit limitation under paragraph (1) 
                shall be allocated to qualified community development 
                entities other than qualified Indian community 
                development entities.
                    ``(B) Qualified indian community development 
                entities.--For the purpose of this paragraph, the term 
                `qualified Indian community development entity' means a 
                qualified community development entity the primary 
                mission of which is serving, or providing investment 
                capital for, low-income communities or low-income 
                persons on Indian reservations (within the meaning of 
                section 168(j)(6)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to allocations made after 2003.

               TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNTS

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Savings for Working Families Act 
of 2003''.

SEC. 202. PURPOSES.

    The purposes of this title 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. 203. DEFINITIONS.

    As used in this title:
            (1) Eligible individual.--
                    (A) In general.--The term ``eligible individual'' 
                means, with respect to any taxable year, an individual 
                who--
                            (i) has attained the age of 18 but not the 
                        age of 61 as of the last day of such taxable 
                        year,
                            (ii) is a citizen or lawful permanent 
                        resident (within the meaning of section 
                        7701(b)(6) of the Internal Revenue Code of 
1986) of the United States as of the last day of such taxable year,
                            (iii) was not a student (as defined in 
                        section 151(c)(4) of such Code) for the 
                        immediately preceding taxable year,
                            (iv) is not an individual with respect to 
                        whom a deduction under section 151 of such Code 
                        is allowable to another taxpayer for a taxable 
                        year of the other taxpayer ending during the 
                        immediately preceding taxable year of the 
                        individual,
                            (v) is not a taxpayer described in 
                        subsection (c), (d), or (e) of section 6402 of 
                        such Code for the immediately preceding taxable 
                        year,
                            (vi) is not a taxpayer described in section 
                        1(d) of such Code for the immediately preceding 
                        taxable year, and
                            (vii) is a taxpayer the modified adjusted 
                        gross income of whom for the immediately 
                        preceding taxable year does not exceed--
                                    (I) $18,000, in the case of a 
                                taxpayer described in section 1(c) of 
                                such Code,
                                    (II) $30,000, in the case of a 
                                taxpayer described in section 1(b) of 
                                such Code, and
                                    (III) $38,000, 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 2004, each dollar amount 
                        referred to in subparagraph (A)(vii) 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 ``2003'' 
                                for ``1992''.
                            (ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the nearest multiple 
                        of $50.
                    (C) Modified adjusted gross income.--For purposes 
                of subparagraph (A)(v), the term ``modified adjusted 
                gross income'' means adjusted gross income--
                            (i) determined without regard to sections 
                        86, 893, 911, 931, and 933 of the Internal 
                        Revenue Code of 1986, and
                            (ii) increased by the amount of interest 
                        received or accrued by the taxpayer during the 
taxable year which is exempt from tax.
            (2) Individual development account.--The term ``Individual 
        Development Account'' means an account established for an 
        eligible individual as part of a qualified individual 
        development account program, but only if the written governing 
        instrument creating the account meets the following 
        requirements:
                    (A) The owner of the account is the individual for 
                whom the account was established.
                    (B) No contribution will be accepted unless it is 
                in cash, and, except in the case of any qualified 
                rollover, contributions will not be accepted for the 
                taxable year in excess of $1,500 on behalf of any 
                individual.
                    (C) The trustee 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 207(b), any 
                amount in the account may be paid out only for the 
                purpose of paying the qualified expenses of the account 
                owner.
            (3) Parallel account.--The term ``parallel account'' means 
        a separate, parallel individual or pooled account for all 
        matching funds and earnings dedicated to an Individual 
        Development Account owner as part of a qualified individual 
        development account program, the trustee of which is a 
        qualified financial institution.
            (4) Qualified financial institution.--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.
            (5) Qualified individual development account program.--The 
        term ``qualified individual development account program'' means 
        a program established upon approval of the Secretary under 
        section 204 after December 31, 2002, under which--
                    (A) Individual Development Accounts and parallel 
                accounts are held in trust by a qualified financial 
                institution, and
                    (B) additional activities determined by the 
                Secretary, in consultation with the Secretary of Health 
                and Human Services, as necessary to 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.
            (6) 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 or 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,
                            (ii) is paid by the qualified financial 
                        institution--
                                    (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 any qualified 
                                rollover, directly to another 
                                Individual Development Account and 
                                parallel account, or
                                    (III) in the case of a qualified 
                                final distribution, directly to the 
                                spouse, dependent, or other named 
                                beneficiary of the deceased Account 
                                owner, and
                            (iii) is paid after the Account owner has 
                        completed a financial education course if 
                        required under section 205(b).
                    (B) Qualified expenses.--
                            (i) In general.--The term ``qualified 
                        expenses'' means any of the following expenses 
                        approved by the qualified financial 
                        institution:
                                    (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 529(e)(3) of the Internal 
                                Revenue Code of 1986, determined by 
                                treating the Account owner, the owner's 
                                spouse, or one or more of the owner's 
                                dependents as a designated beneficiary, 
                                and reduced as provided in section 
                                25A(g)(2) of such Code.
                                    (II) Coordination with other 
                                benefits.--The amount of expenses which 
                                may be taken into account for purposes 
                                of section 135, 529, or 530 of such 
                                Code for any taxable year shall be 
                                reduced by the amount of any qualified 
                                higher education expenses taken into 
                                account as qualified expense 
                                distributions during such taxable year.
                            (iii) Qualified first-time homebuyer 
                        costs.--The term ``qualified first-time 
                        homebuyer costs'' means qualified acquisition 
                        costs (as defined in section 72(t)(8)(C) of the 
                        Internal Revenue Code of 1986) 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)(D)(i) 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 normally associated with 
                                starting or expanding a business and 
                                included in a qualified business plan, 
                                including costs for capital, plant, and 
                                equipment, inventory expenses, and 
                                attorney and accounting fees.
                                    (III) Qualified business.--The term 
                                ``qualified business'' means any 
                                business that does not contravene any 
                                law.
                                    (IV) Qualified business plan.--The 
                                term ``qualified business plan'' means 
                                a business plan which has been approved 
                                by the qualified financial institution 
                                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 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 the 
                        Individual Development Account and parallel 
                        account directly to the spouse, any dependent, 
                        or other named beneficiary of the deceased.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 204. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Establishment of Qualified Individual Development Account 
Programs.--Any qualified financial institution may apply to the 
Secretary for approval to establish 1 or more qualified individual 
development account programs which meet the requirements of this title 
and for an allocation of the Individual Development Account limitation 
under section 45G(i)(3) of the Internal Revenue Code of 1986 with 
respect to such programs.
    (b) Basic Program Structure.--
            (1) In general.--All qualified individual development 
        account programs shall consist of the following 2 components 
        for each participant:
                    (A) An Individual Development Account to which an 
                eligible individual may contribute cash in accordance 
                with section 205.
                    (B) A parallel account to which all matching funds 
                shall be deposited in accordance with section 206.
            (2) Tailored ida programs.--A qualified financial 
        institution may tailor its qualified individual development 
        account program to allow matching funds to be spent on 1 or 
        more of the categories of qualified expenses.
            (3) No fees may be charged to idas.--A qualified financial 
        institution may not charge any fees to any Individual 
        Development Account or parallel account under a qualified 
        individual development account program.
    (c) Coordination With Public Housing Agency Individual Savings 
Accounts.--Section 3(e)(2) of the United States Housing Act of 1937 (42 
U.S.C. 1437a(e)(2)) is amended by inserting ``or in any Individual 
Development Account established under the Savings for Working Families 
Act of 2003'' after ``subsection''.
    (d) Tax Treatment of Parallel Accounts.--
            (1) In general.--Chapter 77 (relating to miscellaneous 
        provisions) is amended by adding at the end the following new 
        section:

``SEC. 7525. TAX INCENTIVES FOR INDIVIDUAL DEVELOPMENT PARALLEL 
              ACCOUNTS.

    ``For purposes of this title--
            ``(1) any account described in section 204(b)(1)(B) of the 
        Savings for Working Families Act of 2003 shall be exempt from 
        taxation,
            ``(2) except as provided in section 45G, no item of income, 
        expense, basis, gain, or loss with respect to such an account 
        may be taken into account, and
            ``(3) any amount withdrawn from such an account shall not 
        be includible in gross income.''.
            (2) Conforming amendment.--The table of sections for 
        chapter 77 is amended by adding at the end the following new 
        item:

                              ``Sec. 7525. Tax incentives for 
                                        individual development parallel 
                                        accounts.''.
    (e) Coordination of certain expenses.--Section 25A(g)(2) is amended 
by striking ``and'' at the end of subparagraph (C), by striking the 
period at the end of subparagraph (D) and inserting ``, and'', and by 
adding at the end the following new subparagraph:
                    ``(D) a qualified expense distribution with respect 
                to qualified higher education expenses from an 
                Individual Development Account or a parallel account 
                under section 207(a) of the Savings for Working 
                Families Act of 2003.''.

SEC. 205. PROCEDURES FOR OPENING AND MAINTAINING AN INDIVIDUAL 
              DEVELOPMENT ACCOUNT AND QUALIFYING FOR MATCHING FUNDS.

    (a) Opening an Account.--An eligible individual may open an 
Individual Development Account with a qualified financial institution 
upon certification that such individual has never maintained any other 
Individual 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 funds 
        to pay for qualified expenses, owners of Individual Development 
        Accounts must complete 1 or more financial education courses 
        specified in the qualified individual development account 
        program.
            (2) Standard and applicability of course.--The Secretary, 
        in consultation with representatives of qualified individual 
        development account programs and financial educators, shall not 
        later than January 1, 2004, establish minimum quality standards 
        for the contents of financial education courses and providers 
        of such courses described in paragraph (1) and a protocol to 
        exempt individuals from the requirement under paragraph (1) in 
        the case of hardship, lack of need, the attainment of age 65, 
        or a qualified final distribution.
    (c) Proof of Status as an Eligible Individual.--Federal income tax 
forms for the immediately preceding taxable year and any other evidence 
of eligibility which may be required by a qualified financial 
institution shall be presented to such institution at the time of the 
establishment of the Individual Development Account and in any taxable 
year in which contributions are made to the Account to qualify for 
matching funds under section 206(b)(1)(A).
    (d) Special Rule in the Case of Married Individuals.--For purposes 
of this title, if, with respect to any taxable year, 2 married 
individuals file a Federal joint income tax return, then not more than 
1 of such individuals may be treated as an eligible individual with 
respect to the succeeding taxable year.

SEC. 206. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT 
              PROGRAMS.

    (a) Parallel Accounts.--The qualified financial institution shall 
deposit all matching funds for each Individual Development Account into 
a parallel account at a qualified financial institution.
    (b) Regular Deposits of Matching Funds.--
            (1) In general.--Subject to paragraph (2), the qualified 
        financial institution shall deposit into the parallel account 
        with respect to each eligible individual the following amounts:
                    (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 of such individual.
                    (B) Any matching funds provided by State, local, or 
                private sources in accordance with the matching ratio 
                set by those sources.
            (2) Timing of deposits.--A deposit of the amounts described 
        in paragraph (1) shall be made into a parallel account--
                    (A) in the case of amounts described in paragraph 
                (1)(A), not later than 30 days after the end of the 
                calendar quarter during which the contribution 
                described in such paragraph was made, and
                    (B) in the case of amounts described in paragraph 
                (1)(B), not later than 2 business days after such 
                amounts were provided.
            (3) Cross reference.--

                                For allowance of tax credit for 
Individual Development Account subsidies, including matching funds, see 
section 45G of the Internal Revenue Code of 1986.
    (c) Deposit of Matching Funds Into Individual Development Account 
of Individual Who Has Attained Age 65.--In the case of an Individual 
Development Account owner who attains the age of 65, the qualified 
financial institution shall deposit the funds in the parallel account 
with respect to such individual into the Individual Development Account 
of such individual on the later of--
            (1) the day which is the 1-year anniversary of the deposit 
        of such funds in the parallel account, or
            (2) the first business day of the taxable year of such 
        individual following the taxable year in which such individual 
        attained age 65.
    (d) Uniform Accounting Regulations.--To ensure proper recordkeeping 
and determination of the tax credit under section 45G 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 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. 207. WITHDRAWAL PROCEDURES.

    (a) Withdrawals for Qualified Expenses.--
            (1) In general.--An Individual Development Account owner 
        may withdraw funds in order to pay qualified expense 
        distributions from such individual's--
                    (A) Individual Development Account, but only from 
                funds which have been on deposit in such Account for at 
                least 1 year, and
                    (B) parallel account, but only--
                            (i) from matching funds which have been on 
                        deposit in such parallel account for at least 1 
                        year,
                            (ii) from earnings in such parallel 
                        account, after all matching funds described in 
                        clause (i) have been withdrawn, and
                            (iii) to the extent such withdrawal does 
                        not result in a remaining balance in such 
                        parallel account which is less than the 
                        remaining balance in the Individual Development 
                        Account after such withdrawal.
            (2) Procedure.--Upon receipt of a withdrawal request which 
        meets the requirements of paragraph (1), the qualified 
        financial institution shall directly transfer the funds 
        electronically to the distributees described in section 
        203(6)(A)(ii). If a distributee is not equipped to receive 
        funds electronically, the qualified financial institution may 
        issue such funds by paper check to the distributee.
    (b) Withdrawals for Nonqualified Expenses.--An Individual 
Development Account owner may withdraw any amount of funds from the 
Individual Development Account for purposes other than to pay qualified 
expense distributions, but if, after such withdrawal, the amount in the 
parallel account of such owner (excluding earnings on matching funds) 
exceeds the amount remaining in such Individual Development Account, 
then such owner shall forfeit from the parallel account the lesser of 
such excess or the amount withdrawn.
    (c) Withdrawals From Accounts of 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 206(b)(1)(A) 
for contributions which are made to the Account during any taxable year 
when such individual is not an eligible individual.
    (d) Effect of Pledging Account as Security.--If, during any taxable 
year of the individual for whose benefit an Individual Development 
Account is established, that individual uses the Account, the 
individual's parallel account, or any portion thereof as security for a 
loan, the portion so used shall be treated as a withdrawal of such 
portion from the Individual Development Account for purposes other than 
to pay qualified expenses.

SEC. 208. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Certification Procedures.--Upon establishing a qualified 
individual development account program under section 204, a qualified 
financial institution shall certify to the Secretary at such time and 
in such manner as may be prescribed by the Secretary and accompanied by 
any documentation required by the Secretary, that--
            (1) the accounts described in subparagraphs (A) and (B) of 
        section 204(b)(1) are operating pursuant to all the provisions 
        of this title, and
            (2) the qualified financial institution 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 under this title is 
not operating a qualified individual development account program in 
accordance with the requirements of this title (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 
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. 209. REPORTING, MONITORING, AND EVALUATION.

    (a) Responsibilities of Qualified Financial Institutions.--
            (1) In general.--Each qualified financial institution that 
        operates a qualified individual development account program 
        under section 204 shall report annually to the Secretary within 
        90 days after the end of each calendar year on--
                    (A) the number of individuals making contributions 
                into Individual Development Accounts and the amounts 
                contributed,
                    (B) the amounts contributed into Individual 
                Development Accounts by eligible individuals and the 
                amounts deposited into parallel accounts for matching 
                funds,
                    (C) the amounts withdrawn from Individual 
                Development Accounts and parallel accounts, and the 
                purposes for which such amounts were withdrawn,
                    (D) the balances remaining in Individual 
                Development Accounts and parallel accounts, and
                    (E) such other information needed to help the 
                Secretary monitor the effectiveness of the qualified 
                individual development account program (provided in a 
                non-individually-identifiable manner).
            (2) Additional reporting requirements.--Each qualified 
        financial institution that operates a qualified individual 
        development account program under section 204 shall report at 
        such time and in such manner as the Secretary may prescribe any 
        additional information that the Secretary requires to be 
        provided for purposes of administering and supervising the 
        qualified individual development account program. This 
        additional data may include, without limitation, identifying 
        information about Individual Development Account owners, their 
        Accounts, additions to the Accounts, and withdrawals from the 
        Accounts.
    (b) Responsibilities of the Secretary.--
            (1) Monitoring protocol.--Not later than 12 months after 
        the date of the enactment of this Act, the Secretary, in 
        consultation with the Secretary of Health and Human Services, 
        shall develop and implement a protocol and process to monitor 
        the cost and outcomes of the qualified individual development 
        account programs established under section 204.
            (2) Annual reports.--For each year after 2004, the 
        Secretary shall submit a progress report to Congress on the 
        status of such qualified individual development account 
        programs. Such report shall, to the extent data are available, 
        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.
            (3) Reauthorization report on cost and outcomes of idas.--
                    (A) In general.--Not later than July 1, 2008, the 
                Secretary of the Treasury shall submit a report to 
                Congress and the chairmen and ranking members of the 
                Committee on Finance, the Committee on Banking, 
                Housing, and Urban Affairs, and the Committee on 
                Health, Education, Labor, and Pensions of the Senate 
                and the Committee on Ways and Means, the Committee on 
                Banking and Financial Services, and the Committee on 
                Education and the Workforce of the House of 
                Representatives, in which the Secretary shall--
                            (i) summarize the previously submitted 
                        annual reports required under paragraph (2),
                            (ii) from a representative sample of 
                        qualified individual development account 
                        programs, include an analysis of--
                                    (I) the economic, social, and 
                                behavioral outcomes,
                                    (II) the changes in savings rates, 
                                asset holdings, and household debt, and 
                                overall changes in economic stability,
                                    (III) the changes in outlooks, 
                                attitudes, and behavior regarding 
                                savings strategies, investment, 
                                education, and family,
                                    (IV) the integration into the 
                                financial mainstream, including 
                                decreased reliance on alternative 
                                financial services, and increase in 
                                acquisition of mainstream financial 
                                products, and
                                    (V) the involvement in civic 
                                affairs, including neighborhood schools 
                                and associations,
                        associated with participation in qualified 
                        individual development account programs,
                            (iii) from a representative sample of 
                        qualified individual development account 
                        programs, include a comparison of outcomes 
                        associated with such programs with outcomes 
                        associated with other Federal Government social 
                        and economic development programs, including 
                        asset building programs, and
                            (iv) make recommendations regarding the 
                        reauthorization of the qualified individual 
                        development account programs, including--
                                    (I) recommendations regarding 
                                reforms that will improve the cost and 
                                outcomes of the such programs, 
                                including the ability to help low 
                                income families save and accumulate 
                                productive assets,
                                    (II) recommendations regarding the 
                                appropriate levels of subsidies 
to provide effective incentives to financial institutions and Account 
owners under such programs, and
                                    (III) recommendations regarding how 
                                such programs should be integrated into 
                                other Federal poverty reduction, asset 
                                building, and community development 
                                policies and programs.
                    (B) Authorization.--There is authorized to be 
                appropriated $2,500,000, for carrying out the purposes 
                of this paragraph.
            (4) Use of accounts in rural areas encouraged.--The 
        Secretary shall develop methods to encourage the use of 
        Individual Development Accounts in rural areas.

SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to the Secretary $1,000,000 
for fiscal year 2004 and for each fiscal year through 2012, for the 
purposes of implementing this title, including the reporting, 
monitoring, and evaluation required under section 209, to remain 
available until expended.

SEC. 211. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS PROVIDED 
              THROUGH A TAX CREDIT FOR QUALIFIED FINANCIAL 
              INSTITUTIONS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by adding at the end 
the following new section:

``SEC. 45G. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT.

    ``(a) Determination of Amount.--For purposes of section 38, the 
individual development account investment credit determined under this 
section with respect to any eligible entity for any taxable year is an 
amount equal to the individual development account investment provided 
by such eligible entity during the taxable year under an individual 
development account program established under section 204 of the 
Savings for Working Families Act of 2003.
    ``(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.--For purposes of 
this section, the term `individual development account investment' 
means, with respect to an individual development account program in any 
taxable year, an amount equal to the sum of--
            ``(1) the aggregate amount of dollar-for-dollar matches 
        under such program under section 206(b)(1)(A) of the Savings 
        for Working Families Act of 2003 for such taxable year, plus
            ``(2) $50 with respect to each Individual Development 
        Account maintained--
                    ``(A) as of the end of such taxable year, but only 
                if such taxable year is within the 7-taxable-year 
                period beginning with the taxable year in which such 
                Account is opened, and
                    ``(B) with a balance of not less than $100 (other 
                than the taxable year in which such Account is opened).
    ``(d) Eligible Entity.--For purposes of this section, except as 
provided in regulations, the term `eligible entity' means a qualified 
financial institution.
    ``(e) Other Definitions.--For purposes of this section, any term 
used in this section and also in the Savings for Working Families Act 
of 2003 shall have the meaning given such term by such Act.
    ``(f) Denial of Double Benefit.--
            ``(1) In general.--No deduction or credit (other than under 
        this section) shall be allowed under this chapter with respect 
        to any expense which--
                    ``(A) is taken into account under subsection 
                (c)(1)(A) in determining the credit under this section, 
                or
                    ``(B) is attributable to the maintenance of an 
                Individual Development Account.
            ``(2) Determination of amount.--Solely for purposes of 
        paragraph (1)(B), the amount attributable to the maintenance of 
        an Individual Development Account shall be deemed to be the 
        dollar amount of the credit allowed under subsection (c)(l)(B) 
        for each taxable year such Individual Development Account is 
        maintained.
    ``(g) Credit May Be Transferred.--
            ``(1) In general.--An eligible entity may transfer any 
        credit allowable to the eligible entity under subsection (a) to 
        any person other than to another eligible entity which is 
        exempt from tax under this title. The determination as to 
        whether a credit is allowable shall be made without regard to 
the tax-exempt status of the eligible entity.
            ``(2) Consent required for revocation.--Any transfer under 
        paragraph (1) may be revoked only with the consent of the 
        Secretary.
    ``(h) Regulations.--The Secretary may prescribe such regulations as 
may be necessary or appropriate to carry out this section, including
            ``(1) such regulations as necessary to insure that any 
        credit described in subsection (g)(1) is claimed once and not 
        retransferred by a transferee, and
            ``(2) regulations providing for a recapture of the credit 
        allowed under this section (notwithstanding any termination 
        date described in subsection (i)) in cases where there is a 
        forfeiture under section 207(b) of the Savings for Working 
        Families Act of 2003 in a subsequent taxable year of any amount 
        which was taken into account in determining the amount of such 
        credit.
    ``(i) Application of Section.--
            ``(1) In general.--This section shall apply to any 
        expenditure made in any taxable year ending after December 31, 
        2004, and beginning on or before January 1, 2012, with respect 
        to any Individual Development Account which--
                    ``(A) is opened before January 1, 2012, and
                    ``(B) as determined by the Secretary, when added to 
                all of the previously opened Individual Development 
                Accounts, does not exceed--
                            ``(i) 100,000 Accounts if opened after 
                        December 31, 2004, and before January 1, 2007,
                            ``(ii) an additional 100,000 Accounts if 
                        opened after December 31, 2006, and before 
                        January 1, 2009, but only if, except as 
                        provided in paragraph (4), the total number of 
                        Accounts described in clause (i) are opened and 
                        the Secretary determines that such Accounts are 
                        being reasonably and responsibly administered, 
                        and
                            ``(iii) an additional 100,000 Accounts if 
                        opened after December 31, 2008, and before 
                        January 1, 2012, but only if the total number 
                        of Accounts described in clauses (i) and (ii) 
                        are opened and the Secretary makes a 
                        determination described in paragraph (2).
        Notwithstanding the preceding sentence, this section shall 
        apply to amounts which are described in subsection (c)(1)(A) 
        and which are timely deposited into a parallel account during 
        the 30-day period following the end of last taxable year 
beginning before January 1, 2012.
            ``(2) Determination with respect to third group of 
        accounts.--A determination is described in this paragraph if 
        the Secretary determines that--
                    ``(A) substantially all of the previously opened 
                Accounts have been reasonably and responsibly 
                administered prior to the date of the determination,
                    ``(B) the individual development account programs 
                have increased net savings of participants in the 
                programs,
                    ``(C) participants in the individual development 
                account programs have increased Federal income tax 
                liability and decreased utilization of Federal 
                assistance programs relative to similarly situated 
                individuals that did not participate in the individual 
                development account programs, and
                    ``(D) the sum of the estimated increased Federal 
                tax liability and reduction of Federal assistance 
                program benefits to participants in the individual 
                development account programs is greater than the cost 
                of the individual development account programs to the 
                Federal government.
            ``(3) Determination of limitation.--The limitation on the 
        number of Individual Development Accounts under paragraph 
        (1)(B) shall be allocated by the Secretary among qualified 
        individual development account programs selected by the 
        Secretary and, in the case of the limitation under clause (iii) 
        of such paragraph, shall be equally divided among the States.
            ``(4) Special rule if smaller number of accounts are 
        opened.--For purposes of paragraph (1)(B)(ii)--
                            ``(i) In general.--If less than 100,000 
                        Accounts are opened before January 1, 2007, 
                        such paragraph shall be applied by substituting 
                        `applicable number of Accounts' for `100,000 
                        Accounts'.
                            ``(ii) Applicable number.--For purposes of 
                        clause (i), the applicable number equals the 
                        lesser of--
                                    ``(I) 75,000, or
                                    ``(II) 3 times the number of 
                                Accounts opened before January 1, 
                                2007.''.
    (b) Credit Treated as Business Credit.--Section 38(b) (relating to 
current year business credit) is amended by striking ``plus'' at the 
end of paragraph (14), by striking the period at the end of paragraph 
(15) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(16) the individual development account investment credit 
        determined under section 45G(a).''.
    (c) No Carrybacks.--Subsection (d) of section 39 (relating to 
carryback and carryforward of unused credits) is amended by adding at 
the end the following:
            ``(11) No carryback of section 45g credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the individual development 
        account investment credit determined under section 45G may be 
        carried back to a taxable year ending before January 1, 
        2004.''.
    (d) Conforming Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

                              ``Sec. 45G. Individual development 
                                        account investment credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2004.

SEC. 212. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-
              TESTED FEDERAL PROGRAMS.

    Notwithstanding any other provision of Federal law (other than the 
Internal Revenue Code of 1986) that requires consideration of 1 or more 
financial circumstances of an individual, for the purpose of 
determining eligibility to receive, or the amount of, any assistance or 
benefit authorized by such provision to be provided to or for the 
benefit of such individual, any amount (including earnings thereon) in 
any Individual Development Account of such individual and any matching 
deposit made on behalf of such individual (including earnings thereon) 
in any parallel account shall be disregarded for such purpose with 
respect to any period during which such individual maintains or makes 
contributions into such Individual Development Account.

                     TITLE III--ACCESSIBLE BANKING

SEC. 301. AUTHORITY TO ESTABLISH BANK BRANCHES ON INDIAN LANDS.

    (a) National Banks.--Section 5155(g) of the Revised Statutes of the 
United States (12 U.S.C. 36(g)) is amended--
            (1) by redesignating paragraph (3) as paragraph (4);
            (2) by inserting after paragraph (2) the following:
            ``(3) Exception for de novo branches on indian lands.--
                    ``(A) Approval authorized.--Notwithstanding 
                paragraph (1)(A)(i), but subject to paragraph (2), the 
                Comptroller of the Currency may approve an application 
                by a national bank to establish and operate a de novo 
                branch on Indian lands located in a State (other than 
                the home State of the bank) in which the bank does not 
                maintain a branch, without regard to any provision of 
                the laws of the host State prohibiting or otherwise 
                relating to the establishment of such a branch.
                    ``(B) `Indian lands' defined.--For purposes of this 
                paragraph, the term `Indian lands' has the same meaning 
                as in section 2103(a) of the Revised Statutes of the 
                United States (25 U.S.C. 81) or section 3 of the Indian 
                Tribal Regulatory Reform and Business Development Act 
                of 2000 (25 U.S.C. 4301 note).''; and
            (3) in paragraph (2)(A), by striking ``in a host State'' 
        and inserting ``under this subsection''.
    (b) State Banks.--Section 18(d)(4) of the Federal Deposit Insurance 
Act (12 U.S.C. 1828(d)(4)) is amended--
            (1) in subparagraphs (D) and (E), by striking ``The term'' 
        each place that term appears and inserting ``For purposes of 
        this paragraph, the term'';
            (2) by redesignating subparagraphs (C) through (E) as 
        subparagraphs (D) through (F), respectively;
            (3) by inserting after subparagraph (B) the following:
                    ``(C) Exception for de novo branches on Indian 
                lands.--
                            ``(i) Approval authorized.--Notwithstanding 
                        subparagraph (A)(i), but subject to 
                        subparagraph (B), the Corporation may approve 
                        an application by an insured State nonmember 
                        bank to establish and operate a de novo branch 
                        on Indian lands located in a State (other than 
                        the home State of the bank) in which the bank 
                        does not maintain a branch, without regard to 
                        any provision of the laws of the host State 
                        prohibiting or otherwise relating to the 
                        establishment of such a branch.
                            ``(ii) `Indian lands' defined.--For 
                        purposes of this subparagraph, the term `Indian 
                        lands' has the same meaning as in section 
                        2103(a) of the Revised Statutes of the United 
                        States (25 U.S.C. 81) or section 3 of the 
                        Indian Tribal Regulatory Reform and Business 
                        Development Act of 2000 (25 U.S.C. 4301 
                        note).''; and
            (4) in subparagraph (B)(i), by striking ``in a host State'' 
        and inserting ``under this paragraph''.
                                 <all>