[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1967 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1967

 To provide administrative ease and incentives for increased saving by 
                   Americans, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 2, 2007

Mrs. Clinton (for herself and Mr. Smith) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide administrative ease and incentives for increased saving by 
                   Americans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``New Savers Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
      TITLE I--SAVINGS AND FINANCIAL EDUCATION AT TAX FILING TIME

Sec. 101. Opening of accounts on tax returns to facilitate savings.
Sec. 102. Purchase of United States savings bonds on tax returns.
Sec. 103. Return preparation clinics for low-income taxpayers.
Sec. 104. Savings as a national performance goal.
         TITLE II--ACCESS TO WEALTH BUILDING FINANCIAL SERVICES

Sec. 201. Electronic transfer accounts.
Sec. 202. Benefit cards and bank services.
Sec. 203. Expansion of accessible and suitable financial services.
                 TITLE III--CHILDREN'S SAVINGS ACCOUNTS

Sec. 301. Young Savers Accounts.
               TITLE IV--EXPANSION OF THE SAVER'S CREDIT

Sec. 401. Credit for contributions to qualified tuition programs and 
                            Coverdell education savings accounts.
                  TITLE V--UNITED STATES SAVINGS BONDS

Sec. 501. Savings bond marketing and access.
Sec. 502. Tax credit to expand payroll savings plan.
                  TITLE VI--QUALIFIED TUITION PROGRAMS

Sec. 601. Reporting of fee information.
Sec. 602. Annual report of performance and participation.
Sec. 603. Grant program to support State innovation in increasing 
                            participation in qualified tuition 
                            programs.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The personal savings rate was negative in 2005 and 2006 
        according to the Department of Commerce, meaning that combined 
        spending outstripped disposable income for the first time since 
        the Great Depression.
            (2) According to the Federal Reserve's 2004 Survey of 
        Consumer Finances, 17 percent of all households had zero or 
        negative net worth, while 30 percent had net worth of less than 
        $10,000.
            (3) Thirty-eight percent of all households are in a state 
        of asset poverty, in that such households lack liquid financial 
        resources to support their families for 3 months at the poverty 
        level.
            (4) According to the Federal Reserve's 2004 Survey of 
        Consumer Finances, 11 percent of households do not have a 
        checking account and 9 percent do not have a transaction 
        account of any kind.
            (5) Tuition and fees at 4-year public universities have 
        increased 57 percent since 2000 according to the College Board, 
        while the relative earnings power of those that receive post-
        secondary education has continued to grow over the past 25 
        years.
            (6) According to the Center for Social Development, the 
        presence of savings and even small asset holdings by a 
        household is associated with a range of positive outcomes, 
        including increased economic stability, educational attainment 
        and performance, and health and psychological well-being.
            (7) Increasing the number of households that save and the 
        amounts that such households save will allow more Americans to 
        achieve greater control, security, independence, and choice in 
        their lives.

      TITLE I--SAVINGS AND FINANCIAL EDUCATION AT TAX FILING TIME

SEC. 101. OPENING OF ACCOUNTS ON TAX RETURNS TO FACILITATE SAVINGS.

    (a) Notification of Option.--
            (1) In general.--The Commissioner of Internal Revenue shall 
        notify individual taxpayers who qualify for a Federal income 
        tax refund but fail to provide an ACH direct deposit number on 
        their return that they have the option of an electronic deposit 
        to a designated account.
            (2) Method of notification.--The notification under 
        paragraph (1) shall be made through--
                    (A) a public awareness program undertaken by the 
                Secretary of the Treasury, in concert with the 
                Commissioner of the Internal Revenue and others as 
                necessary, at least 6 months before January 2009, and
                    (B) the inclusion of such a notice in the 
                instruction material for any Federal income tax return.
    (b) Establishment of Designated Account Program.--The Secretary of 
the Treasury shall develop, in consultation with the Federal Management 
System, a program to minimize the delivery of non-electronic Federal 
income tax refunds by depositing refunds electronically to an account 
held by a depository institution. This program shall include:
            (1) Provisions for such tax refunds to be deposited into a 
        designated account.
            (2) Establishment of account parameters with respect to 
        minimum balance requirements and limitations on overdrafts, 
        overdraft fees, and other requirements.
            (3) Establishment of means for the taxpayer to access the 
        account electronically or through a payment card.
            (4) Provisions to allow taxpayers to open an account with 
        their Federal income tax refunds through financial service 
        providers, so long such account is held at a depository 
        institution that is insured under the Federal Deposit Insurance 
        Act (12 U.S.C. 1811 et seq.).
    (c) Effective Date.--The notification under subsection (a) and the 
program under subsection (b) shall be effective with respect to tax 
returns for taxable years beginning after December 31, 2008.

SEC. 102. PURCHASE OF UNITED STATES SAVINGS BONDS ON TAX RETURNS.

    (a) Notice of Option.--The Commissioner of Internal Revenue shall 
notify individual taxpayers that they have the option of purchasing 
United States savings bonds when they file their Federal income tax 
returns. Such notification shall be included in the instruction 
material for any Federal income tax return.
    (b) Establishment of Savings Bond Purchase Program.--
            (1) In general.--The Secretary of the Treasury shall 
        develop, in consultation with a task force, a program for the 
        purchase by individual taxpayers of United States savings bonds 
        on their Federal income tax returns.
            (2) Task force.--The task force described in paragraph (1) 
        shall be appointed by the Secretary of the Treasury from 
        representatives from the Internal Revenue Service and the 
        Bureau of the Public Debt.
            (3) Report by task force.--
                    (A) In general.--The task force described in 
                paragraph (1) shall issue a report and recommendations 
                for implementation of such program to the Secretary of 
                the Treasury not later than March 31, 2008.
                    (B) Contents of report.--The report required under 
                subparagraph (A) shall include a consideration of the 
                following items:
                            (i) Coordination with split Federal income 
                        tax refund process.
                            (ii) Integration with the Treasury Direct 
                        United States savings bond purchase system as 
                        well as other methods of purchasing bonds that 
                        do not require the purchaser to have access to 
                        the Internet.
                            (iii) Purchase of United States savings 
                        bonds with co-owners.
                            (iv) How such purchase affects refunds, 
                        credits, and tax liabilities.
                            (v) Selection of amount and savings bond 
                        series.
                            (vi) Options to encourage repeat bond 
                        purchases in successive tax seasons by tax 
                        refund recipients, including possible 
                        notification to prior purchasers of the 
                        opportunity to purchase additional bonds with 
                        future tax refunds.
                            (vii) Coordination with the designated 
                        account program under section 101(b).
    (c) Effective Date.--The notification under subsection (a) and the 
program under subsection (b) shall be effective with respect to tax 
returns for taxable years beginning after December 31, 2008.

SEC. 103. RETURN PREPARATION CLINICS FOR LOW-INCOME TAXPAYERS.

    (a) Grants for Return Preparation Clinics.--
            (1) In general.--Chapter 77 of the Internal Revenue Code of 
        1986 (relating to miscellaneous provisions) is amended by 
        inserting after section 7526 the following new section:

``SEC. 7526A. RETURN PREPARATION CLINICS FOR LOW-INCOME TAXPAYERS.

    ``(a) In General.--The Secretary may, subject to the availability 
of appropriated funds, make grants to provide matching funds for the 
development, expansion, or continuation of qualified return preparation 
clinics.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified return preparation clinic.--
                    ``(A) In general.--The term `qualified return 
                preparation clinic' means a clinic which--
                            ``(i) does not charge more than a nominal 
                        fee for its services (except for reimbursement 
                        of actual costs incurred), and
                            ``(ii) operates programs which assist low-
                        income taxpayers, including individuals for 
                        whom English is a second language, in preparing 
                        and filing their Federal income tax returns, 
                        including schedules reporting sole 
                        proprietorship or farm income.
                    ``(B) Assistance to low-income taxpayers.--A clinic 
                is treated as assisting low-income taxpayers under 
                subparagraph (A)(ii) if at least 90 percent of the 
                taxpayers assisted by the clinic have incomes which do 
                not exceed 250 percent of the poverty level, as 
                determined in accordance with criteria established by 
                the Director of the Office of Management and Budget.
            ``(2) Clinic.--The term `clinic' includes--
                    ``(A) a clinical program at an eligible educational 
                institution (as defined in section 529(e)(5)) which 
                satisfies the requirements of paragraph (1) through 
                student assistance of taxpayers in return preparation 
                and filing, and
                    ``(B) an organization described in section 501(c) 
                and exempt from tax under section 501(a) which 
                satisfies the requirements of paragraph (1).
    ``(c) Special Rules and Limitations.--
            ``(1) Aggregate limitation.--Unless otherwise provided by 
        specific appropriation, the Secretary shall not allocate more 
        than $25,000,000 per year (exclusive of costs of administering 
        the program) to grants under this section.
            ``(2) Other applicable rules.--Rules similar to the rules 
        under paragraphs (2) through (7) of section 7526(c) shall apply 
        with respect to the awarding of grants to qualified return 
        preparation clinics.''.
            (2) Clerical amendment.--The table of sections for chapter 
        77 of such Code is amended by inserting after the item relating 
        to section 7526 the following new item:

``Sec. 7526A. Return preparation clinics for low-income taxpayers.''.
    (b) Grants for Taxpayer Representation and Assistance Clinics.--
            (1) Increase in authorized grants.--Section 7526(c)(1) of 
        the Internal Revenue Code of 1986 (relating to aggregate 
        limitation) is amended by striking ``$6,000,000'' and inserting 
        ``$25,000,000''.
            (2) Promotion of clinics.--Section 7526(c) of such Code is 
        amended by adding at the end the following new paragraph:
            ``(6) Promotion of clinics.--The Secretary is authorized to 
        promote the benefits of and encourage the use of low-income 
        taxpayer clinics through the use of mass communications, 
        referrals, and other means.''.
            (3) Clerical amendment.--Section 7526(c)(5) of such Code is 
        amended by inserting ``qualified'' before ``low-income''.
    (c) Effective Date.--The amendments made by this section shall 
apply to grants made after the date of the enactment of this Act.

SEC. 104. SAVINGS AS A NATIONAL PERFORMANCE GOAL.

    (a) Establishment of Performance Measures.--
            (1) In general.--The Secretary of the Treasury shall 
        establish performance measures that evaluate the extent to 
        which Americans save and use the Federal tax filing process to 
        facilitate their savings activities.
            (2) Elements of performance measures.--The performance 
        measures described in paragraph (1) shall include:
                    (A) The percentage of Federal income tax refunds 
                returned electronically by direct deposit to tax 
                filers' bank accounts.
                    (B) The percentage of Federal tax filers that 
                deposit into savings products, such as traditional 
                savings accounts, individual retirement accounts, 
                section 529 college savings plans, and others, as a 
                part of the tax filing process.
    (b) Establishment of Outcome Goals.--The Secretary of the Treasury, 
using the performance measures described in subsection (a) shall 
identify outcome goals that focus on increasing the United States 
personal savings rate.
    (c) Annual Reports.--The Secretary of the Treasury shall report to 
Congress on the performance measures and outcomes goals in the 
Secretary's annual performance report.

         TITLE II--ACCESS TO WEALTH BUILDING FINANCIAL SERVICES

SEC. 201. ELECTRONIC TRANSFER ACCOUNTS.

    (a) In General.--The Secretary of the Treasury is authorized to use 
such fiscal agent authority as in effect on the date of the enactment 
of this Act to increase payments to financial institutions in order to 
offset costs of opening electronic transfer accounts authorized under 
the Debt Collection Improvement Act of 1996.
    (b) Use of Accounts.--The Secretary of the Treasury shall ensure 
that recipients of Federal income tax refunds shall be eligible to use 
electronic transfer accounts with respect to such refunds.
    (c) Study To Increase Use of Electronic Transfer Accounts and 
Electronic Payments.--
            (1) In general.--The Secretary of the Treasury shall 
        convene a working group comprised of Department of the Treasury 
        officers to explore policy options to increase the use and 
        utility of electronic payments, including electronic transfer 
        accounts. Such group shall consider the size of the subsidy 
        under subsection (a), limitations in the marketing of 
        electronic transfer accounts, and alternative products (with 
        attention to useful product features), risk management factors, 
        and pricing.
            (2) Report.--The Secretary of the Treasury shall report to 
        Congress on the results of the study under paragraph (1) not 
        later than March 31, 2008. Such report shall include 
        recommendations to improve the use of electronic transfer 
        accounts and the electronic delivery of payments, generally, 
        solicited from the financial services industry, consumers, and 
        other groups.

SEC. 202. BENEFIT CARDS AND BANK SERVICES.

    (a) In General.--The Secretary of Health and Human Services shall 
establish a performance measure for the percentage of each State's 
benefit recipients that receive their benefits by direct deposit into 
accounts held at depository institutions insured under the Federal 
Deposit Insurance Act (12 U.S.C. 1811 et seq.).
    (b) Specific Target.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish a performance target for fiscal year 2010 that 
        increases the baseline measure determined using the performance 
        measure developed under subsection (a) by 10 percent.
            (2) Incentive.--The Secretary of Health and Human Services 
        shall allow individual States that meet the benchmark target on 
        bank accounts opened under paragraph (1) to use such attainment 
        to qualify for bonus awards under title IV of the Social 
        Security Act.
    (c) Use of Benefit Cards To Promote Savings.--The Secretary of 
Health and Human Services shall seek to identify and promote innovative 
uses of benefit cards to promote savings among benefit recipients.

SEC. 203. EXPANSION OF ACCESSIBLE AND SUITABLE FINANCIAL SERVICES.

    (a) Establishment of Program.--The Secretary of the Treasury shall 
establish a program to support and promote--
            (1) the expansion of access to financial services, in 
        particular for persons without bank accounts, with low access 
        to financial services, or low utilization of mainstream 
        financial services,
            (2) the development of new financial products and services 
        that are adequate to improve access to wealth building 
        financial services which help integrate more Americans into the 
        financial mainstream,
            (3) education for these persons and depository institutions 
        concerning the availability and use of financial services for 
        and by such persons, and
            (4) such other activities and projects as the Secretary may 
        determine are consistent with the purpose of this section.
    (b) Powers and Authority of Secretary.--
            (1) In general.--In carrying out the program, the Secretary 
        of the Treasury may award grants, enter into cooperative 
        agreements and contracts, and designate depository 
        institutions, nonbank financial service providers, and others 
        as financial agents of the Treasury, in order to provide for 
        technical assistance, education, training, or financial 
        services to further the purpose of this section.
            (2) Specific powers.--The powers of the Secretary of the 
        Treasury under this section shall include the following:
                    (A) Financial services.--The Secretary of the 
                Treasury may promote access to financial services by 
                providing financial and technical assistance to 
                depository institutions and other organizations for 
                providing reasonably-priced financial services, 
                including--
                            (i) electronic transaction accounts,
                            (ii) savings accounts,
                            (iii) pre-paid products, and
                            (iv) other financial services deemed 
                        appropriate by the Secretary to meet the needs 
                        of service areas or service populations.
                    (B) Distribution.--The Secretary of the Treasury 
                may promote access to financial services by providing 
                financial and technical assistance to depository 
                institutions, nonbank financial service providers, 
                financial services electronic networks, or community 
                partners for expanding the distribution of financial 
                services to service areas or service populations, 
                including through financial services electronic 
                networks.
                    (C) Education.--The Secretary of the Treasury may 
                promote access to financial services by--
                            (i) providing financial education to 
                        service areas or service populations,
                            (ii) providing technical assistance or 
                        training to or by depository institutions, 
                        nonbank financial service providers, or 
                        community partners,
                            (iii) providing financial support for 
                        organizations to develop innovative financial 
                        services and products, and
                            (iv) otherwise promoting financial services 
                        to or by service areas, service populations, 
                        depository institutions, nonbank financial 
                        service providers, or community partners.
                    (D) Research and development.--The Secretary of the 
                Treasury may conduct or support such research and 
                development as the Secretary considers appropriate in 
                order to further the purpose of this section, including 
                the collection of information about access to financial 
                services.
            (3) Selection criteria.--In selecting any depository 
        institution, nonbank financial service provider, community 
        partner, financial services electronic network, or organization 
        providing technical assistance to financial institutions as a 
        recipient of a grant or other assistance under this section, 
        the Secretary of the Treasury shall consider--
                    (A) the likelihood of success of such institution, 
                nonbank financial service provider, community partner, 
                network, or organization in achieving the purpose of 
                the grant or assistance and carrying out the purpose of 
                this Act,
                    (B) the experience of such institution, nonbank 
                financial service provider, community partner, network, 
                or organization in undertaking activities similar to 
                the activities to be funded or supported by the 
                proceeds of the grant or other assistance, and
                    (C) such other factors, including management, 
                performance criteria, and the extent of innovation as 
                the Secretary may determine to be appropriate.
            (4) Reports.--Not later than 2 years after the date of 
        enactment of this Act, and annually thereafter, the Secretary 
        of the Treasury shall submit to Congress a report containing--
                    (A) a detailed description of the operation of the 
                program,
                    (B) the findings and conclusions of the Secretary 
                on the extent to which the program established is 
                meeting the purpose of this section and the goals of 
                the Secretary in establishing the program, and
                    (C) such recommendations for legislative or 
                administrative action as the Secretary may consider to 
                be appropriate.
            (5) Authorization of appropriations.--
                    (A) In general.--To carry out this section, there 
                are authorized to be appropriated to the Secretary of 
                the Treasury, to remain available until expended--
                            (i) $50,000,000 for fiscal year 2008, and
                            (ii) such sums as may be necessary for each 
                        of fiscal years 2008 through 2013.
                    (B) Administrative expenses.--
                            (i) In general.--Of amounts appropriated to 
                        the Secretary of the Treasury under this 
                        section, not more than $5,000,000 may be used 
                        in any fiscal year to pay the administrative 
                        costs and expenses of the program established.
                            (ii) Exclusion of certain costs.--Costs 
                        associated with research and development, 
                        training, technical assistance, and education 
                        shall not be considered to be administrative 
                        expenses for purposes of this subparagraph.

                 TITLE III--CHILDREN'S SAVINGS ACCOUNTS

SEC. 301. YOUNG SAVERS ACCOUNTS.

    (a) Establishment.--
            (1) In general.--Section 408A of the Internal Revenue Code 
        of 1986 (relating to Roth IRAs) is amended by adding at the end 
        the following new subsection:
    ``(g) Young Savers Accounts.--
            ``(1) In general.--Except as provided in this subsection, a 
        young savers account shall be treated in the same manner as a 
        Roth IRA.
            ``(2) Young savers account.--For purposes of this 
        subsection, the term `young savers account' means, with respect 
        to any taxable year, a Roth IRA that is established and 
        maintained on behalf of an individual who has not attained the 
        age of 21 before the close of the taxable year.
            ``(3) Contribution limits.--In the case of any 
        contributions for any taxable year to 1 or more young savers 
        accounts established and maintained on behalf of an individual, 
        each of the following contribution limits for the taxable year 
        shall be increased as follows:
                    ``(A) The contribution limit applicable to the 
                individual under subsection (c)(2) shall be increased 
                by the aggregate amount of qualified parental 
                contributions to such accounts for the taxable year.
                    ``(B) The contribution limits applicable to the 
                young savers accounts under subsection (a)(1) or 
                (b)(2)(B) of section 408, whichever is appropriate, 
                shall be increased by the dollar amount in effect under 
                section 219(b)(1)(A) for the taxable year.
            ``(4) Qualified parental contributions.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `qualified parental 
                contribution' means, with respect to any taxable year, 
                a contribution by an individual to a young savers 
                account established and maintained on behalf of an 
                individual who--
                            ``(i) is the child of the individual making 
                        the contribution, and
                            ``(ii) with respect to whom a deduction for 
                        an additional exemption is allowable for the 
                        taxable year under section 151(c) to the 
                        individual making the contribution.
                    ``(B) Dollar limitations.--
                            ``(i) In general.--The aggregate amount of 
                        qualified parental contributions which may be 
                        made for any taxable year on behalf of an 
                        individual shall not exceed the dollar amount 
                        in effect under section 219(b)(1)(A) for the 
                        taxable year.
                            ``(ii) Limit on each parent.--The aggregate 
                        amount of qualified parental contributions 
                        which an individual may make for any taxable 
                        year on behalf of 1 or more of the individual's 
                        children shall not exceed the contribution 
                        limit applicable to the individual under 
                        subsection (c)(2) for the taxable year, reduced 
                        by any contributions made by or on behalf of 
                        the individual to any Roth IRA established and 
                        maintained on behalf of the individual.
            ``(5) Coordination with matching credit for retirement 
        savings contributions.--Any qualified parental contributions 
        made by an eligible individual (as defined in section 36(d)) 
        shall be treated as qualified retirement savings contributions 
        for purposes of section 36.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after December 31, 2007.
    (b) Account Funds Disregarded for Purposes of All Means-Tested 
Federal Programs.--Notwithstanding any other provision of Federal law, 
assets accumulated in young savers accounts shall not be taken into 
account in determining any individual's or household's financial 
eligibility for, or amount of, any benefit or service, paid for in 
whole or in part with Federal funds, including student financial aid.

               TITLE IV--EXPANSION OF THE SAVER'S CREDIT

SEC. 401. CREDIT FOR CONTRIBUTIONS TO QUALIFIED TUITION PROGRAMS AND 
              COVERDELL EDUCATION SAVINGS ACCOUNTS.

    (a) In General.--Paragraph (1) of section 25B(d) of the Internal 
Revenue Code of 1986 (relating to qualified retirement savings 
contributions) is amended by striking ``and'' at the end of 
subparagraph (B)(ii), by striking the period at the end of subparagraph 
(C), and by inserting after subparagraph (C) the following new 
subparagraphs:
                    ``(D) the amount of purchases or contributions made 
                by such individual to a qualified tuition program (as 
                defined under section 529(b)), and
                    ``(E) the amount of contributions made by such 
                individual to a Coverdell education savings account (as 
                defined under section 530(b)).''.
    (b) Conforming Amendment.--Subclause (i) of section 25B(d)(2)(C) of 
such Code (relating to excepted distributions) is amended by striking 
``or 408(d)(4)'' and inserting ``408(d)(4), 529(c), or 530(d)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

                  TITLE V--UNITED STATES SAVINGS BONDS

SEC. 501. SAVINGS BOND MARKETING AND ACCESS.

    (a) Advisory Board.--The Secretary of the Treasury shall convene a 
Federal advisory board to explore ways to expand access to United 
States savings bonds in a cost effective manner. The advisory board 
shall make recommendations to make United States savings bonds more 
useful for purchasers of low denomination bonds. The advisory board 
shall consider, among other things, whether the savings bond holding 
period can be shortened, whether and how the policy for redemption of 
savings bonds before the 1-year minimum holding period under certain 
emergency situations can be clarified or expanded, whether additional 
outlets can be used to sell savings bonds (including retail stores, 
post offices, schools, and other nonprofit organizations), whether the 
electronic purchase system can be amended, and in what manner the 
purchase of paper bonds can be amended.
    (b) Report.--The Secretary of the Treasury shall submit the 
findings of the advisory board under subsection (a) in a report to 
Congress within 180 days after the date of the enactment of this Act.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated $35,000,000 to the Bureau of the Public Debt to market 
United States savings bonds, especially for small savers.

SEC. 502. TAX CREDIT TO EXPAND PAYROLL SAVINGS PLAN.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45O. PAYROLL SAVINGS PLAN TAX CREDIT.

    ``(a) Amount of Credit.--For purposes of section 38, the payroll 
savings plan credit determined under this section with respect to each 
employee of the taxpayer for any taxable year is an amount equal to 1 
percent of the first $500 of expenditures in each month during such 
taxable year by the eligible employee for United States savings bonds 
under the taxpayer's payroll savings plan within the Bureau of the 
Public Debt's payroll savings plan program.
    ``(b) Additional Credit for Automatic Purchases.--The Secretary 
through TreasuryDirect shall establish a method whereby unused amounts 
resulting from payroll deductions at the end of a 12-month period are 
automatically used to purchase a savings bond in the accountholder's 
name. The credit under subsection (a) for the employer of the 
accountholder shall be increased by the value of the purchased bond.
    ``(c) Termination.--This section shall not apply to taxable years 
beginning more than 10 years after the date of the enactment of this 
section.''.
    (b) Credit Made Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 is amended by striking ``and'' at the 
end of paragraph (30), by striking the period at the end of paragraph 
(31) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(32) the payroll savings plan credit determined under 
        section 45O(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 45O. Payroll savings plan tax credit.''.

                  TITLE VI--QUALIFIED TUITION PROGRAMS

SEC. 601. REPORTING OF FEE INFORMATION.

    (a) Reporting.--
            (1) In general.--Subpart A of part III of subchapter A of 
        chapter 61 of the Internal Revenue Code of 1986 (relating to 
        information concerning persons subject to special provisions) 
        is amended by inserting after section 6039I the following new 
        section:

``SEC. 6039J. INFORMATION WITH RESPECT TO QUALIFIED TUITION PROGRAMS.

    ``(a) In General.--Each person managing a qualified tuition program 
(as defined by section 529) shall make a return for each taxable year 
containing--
            ``(1) the name and address of such person;
            ``(2) information with respect to any guarantee offered 
        under the program;
            ``(3) information with respect to any risk factors 
        associated with investments under the program;
            ``(4) information with respect to the performance of 
        investments of the program;
            ``(5) information with respect to any generally applicable 
        fees and costs for the program over 1, 5, and 10-year periods;
            ``(6) information with respect to any initial and on-going 
        fees and with respect to the total fees and costs associated 
        with particular investment under the program, including a fee 
        table listing fees and expenses for--
                    ``(A) annual asset-based fees (including any 
                estimated underlying fund expenses, any program manager 
                fee, any State fee, and any annual distribution fee);
                    ``(B) additional investor expenses (including 
                maximum deferred sales charges and annual account 
                maintenance fees);
                    ``(C) sales charges;
                    ``(D) application fees;
                    ``(E) cancellation fees;
                    ``(F) fees for changing beneficiaries;
                    ``(G) fees for changing investment options; and
                    ``(H) any other fees or expenses;
            ``(7) information with respect to the basis for determining 
        the amount of any such fees; and
            ``(8) a description of the tax treatment of contributions, 
        investments, and distributions under the program under relevant 
        State law.
    ``(b) Form and Manner.--The return required under subsection (a) 
shall be in such form and manner as the Secretary may require.''.
            (2) Clerical amendment.--The table of sections for subpart 
        A of part III of subchapter A of chapter 61 of such Code is 
        amended by inserting after the item relating to section 6039I 
        the following new item:

``Sec. 6039J. Information with respect to qualified tuition 
                            programs.''.
    (b) Dissemination of Information.--
            (1) In general.--The Secretary of Treasury shall make 
        available to the public--
                    (A) the information collected under section 6039J 
                of the Internal Revenue Code of 1986 in a manner that 
                allows comparison between different qualified tuition 
                programs (as defined by section 529 of the Internal 
                Revenue Code of 1986); and
                    (B) information regarding the tax treatment of 
                contributions, investments, and distributions under 
                qualified tuition programs under such Code.
            (2) Conforming amendment.--Subsection (b) of section 6104 
        of the Internal Revenue Code of 1986 is amended by inserting 
        ``6039J,'' after ``6034,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 602. ANNUAL REPORT OF PERFORMANCE AND PARTICIPATION.

    (a) In General.--Each year, the Secretary of the Treasury or his 
designee shall publish a report on the use of qualified tuition 
programs in assisting taxpayers in paying tuition and other education 
costs at colleges and universities.
    (b) Contents.--The report under subsection (a) shall include--
            (1) an assessment of the performance of qualified tuition 
        programs;
            (2) an analysis of which taxpayers are participating in 
        such programs--
                    (A) on a regional basis;
                    (B) by income level; and
                    (C) by level of educational attainment; and
            (3) a description of tax benefits provided by States in 
        connection with such programs.
    (c) Consultation With Program Administrators.--The Secretary or his 
designee shall consult with the administrators of qualified tuition 
programs to obtain such information as necessary for the report under 
subsection (a).
    (d) Qualified Tuition Program.--For purposes of this section, the 
term ``qualified tuition program'' has the meaning given such term 
under section 529(b) of the Internal Revenue Code of 1986.

SEC. 603. GRANT PROGRAM TO SUPPORT STATE INNOVATION IN INCREASING 
              PARTICIPATION IN QUALIFIED TUITION PROGRAMS.

    (a) In General.--The Secretary of the Treasury is authorized to 
provided grants to States for the purpose of increasing the 
participation in qualified tuition programs of--
            (1) moderate-income and low-income families; and
            (2) other families that may face additional barriers to 
        accessing and utilizing post-secondary education.
    (b) Use of Funds.--Grants awarded pursuant to subsection (a) may be 
used--
            (1) to provide information to taxpayers described in 
        paragraph (1) and (2) of subsection (a) about the availability 
        and use of qualified tuition programs;
            (2) to reduce fees for such taxpayers under qualified 
        tuition programs; and
            (3) in any other manner which the Secretary determines is 
        consistent with the purpose of this section.
    (c) Qualified Tuition Program.--For purposes of this section, the 
term ``qualified tuition program'' has the meaning given such term 
under section 529(b) of the Internal Revenue Code of 1986.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated $50,000,000 for fiscal year 2007 and each subsequent 
fiscal year to carry out the provisions of this section.
                                 <all>