[Congressional Record Volume 145, Number 59 (Wednesday, April 28, 1999)]
[Senate]
[Pages S4349-S4352]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LIEBERMAN (for himself, Mr. Santorum, Mr. Durbin, Mr. 
        Abraham, Mr. Robb, and Mr. Kerrey):
  S. 895. A bill to provide for the establishment of Individual 
Development Accounts (IDAs) that will allow individuals and families 
with limited means an opportunity to accumulate assets, to access 
education, to own their own homes and businesses, and ultimately to 
achieve economic self-sufficiency, and for other purposes; to the 
Committee on Finance.


                    savings for working families act

 Mr. LIEBERMAN. Mr. President, with the economy in its 9th year 
of record growth, unemployment the lowest its been in over 25 years, 
and the stock market at an all time high, the following is worth 
noting:
  Fully a third of all American households have no financial assets to 
speak of.
  Another 20 percent have only negligible financial assets.
  Almost half of all American children live in households that have no 
financial assets.
  Over 10 million Americans don't even have a bank account.
  In our efforts to foster policies that encourage economic growth, we 
have not done enough for the group that needs it the most--hardworking 
low income Americans. We have established tax credits for retirement 
plans, for home mortgages, for college education, and so on, all of 
which make for good policy. The problem is that to take advantage of 
these policies, you must already have some wealth. You must already 
have some assets. To put it plainly, you cannot benefit from a home 
mortgage credit if you do not have the wealth to buy a home.
  So the challenge becomes creating a policy that helps low-income 
Americans reach the point where they can take advantage of these 
benefits. Any such policy must start with encouraging saving. Saving is 
empowering. It allows families to weather the bad times, to live 
without aid, and to deal with emergencies. Saving is also the first 
step to building assets.
  And having assets is a prerequisite for taking part in this economy. 
That is because assets offer a way up. Whether it is a home, an 
education, or a small business, assets can be leveraged to deal with 
the bad times and usher in the good. That is why I believe that our tax 
policies should provide more incentives for asset building.
  So Mr. President today along with Senators Santorum, Durbin, Abraham, 
Robb, and Kerrey of Nebraska, I offer tax legislation aimed at building 
assets for low-income families. The Savings for Working Families Act is 
centered around Individual Development Accounts (IDAs), an idea of Dr. 
Michael Sherraden of Washington University: create a savings account 
for low income workers that can be used to acquire assets, and allow 
the saver to receive matching funds towards the purchase of those 
assets.
  The Savings for Working Families Act allows for the creation by 
federally insured banks and credit unions of IDAs for U.S. citizens or 
legal residents aged 18 or over, with a household income of not more 
than 60 percent of area median income, and a household net worth that 
does not exceed $10,000 excluding home equity and the value of one car.
  The federal government will provide tax credits of up to $300 per 
account to financial institutions to reimburse them for providing 
matching funds for IDAs. All other sources of matching funds are 
welcome as well, including employers, charitable organizations, and the 
banks themselves.
  Before an individual can use money from an IDA, he or she must 
complete an economic literacy course that will be offered by 
participating banks and community organizations. The course will teach 
about saving, banking, investing, and IDAs. Two years from its 
establishment the Act requires the Secretary of the Treasury to review 
the program for its cost-effectiveness and make recommendations as 
necessary to the Congress. We expect a cost of $200-500 million per 
year.
  This is not a handout. Because only earned income is matched, IDAs 
only help those who are already trying to help themselves. Small IDA 
programs already exist across the country and have been overwhelmingly 
successfully. IDAs change the outlook of the saver. When you have 
assets, you have a stake in the economy, and you act to protect that 
stake.
  For example, in Stamford, Connecticut a receptionist named Scharlene 
is saving to start her own business through the CTE IDA program. She 
had always thought of her interest in jewelry as a hobby. But after 
working with CTE IDA program she has not only saved over $700, but has 
also learned the basics of running a business. I met Scharlene, and I 
can tell you that win or lose, she is on the path to success. I might 
also add that the Connecticut State Treasurer, Ms. Denise Nappier, is 
also investigating ways to set up a state-side IDA program, and I would 
like to commend her for her efforts.
  In the Sierra Ridge, Texas IDA program describes the case of Charles, 
a 38 year old divorced father of two. He uses that IDA program to save 
money for his children's education. Charles says that since he entered 
the program he thinks more about where his money goes: ``Having to 
commit to a long term goal makes us more aware that our decisions today 
could have consequences for tomorrow.'' His oldest daughter is planning 
on attending college in two years.
  Another example comes from a Bonneville, Kentucky IDA program. There, 
Pam, a 37 year old factory worker and mother of two, has been saving to 
start her own business. ``I want to start a business and I will,'' Pam 
said. Together with the matching funds she has saved over $1700 towards 
a combination dry cleaners/video store. Her reasons are simple: ``I 
want more for my children.''
  IDAs are good for business too. Financial institutions like IDAs 
because they bring some of the 10 million ``unbanked'' Americans into 
the system, and because it allows them to support low-income 
communities in a way that will ultimately be profitable for them. This 
is an idea that gives the right incentives to a deserving group in an 
effective and efficient manner. It is an idea that represents at once 
both our support of equal opportunity and our emphasis on self 
reliance. It is an idea whose time has come.
  Mr. President, with Senators Santorum, Durbin, Abraham, Robb, and 
Kerrey of Nebraska, I introduce the Savings for Working Families Act. I 
ask that the text of this bill be included in the Record.
  The bill follows:

                                 S. 895

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.

    TITLE I--INDIVIDUAL DEVELOPMENT ACCOUNTS FOR LOW-INCOME WORKERS

Sec. 101. Structure and administration of individual development 
              account programs.
Sec. 102. Procedures for opening an Individual Development Account and 
              qualifying for matching funds.
Sec. 103. Contributions to Individual Development Accounts.
Sec. 104. Deposits by qualified financial institutions.
Sec. 105. Withdrawal procedures.
Sec. 106. Certification and termination of individual development 
              account programs.
Sec. 107. Reporting and evaluation.
Sec. 108. Funds in parallel accounts of program participants 
              disregarded for purposes of all means-tested Federal 
              programs.

      TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDITS

Sec. 201. Matching funds for Individual Development Accounts provided 
              through a tax credit for qualified financial 
              institutions.
Sec. 202. CRA credit provided for individual development account 
              programs.
Sec. 203. Designation of earned income tax credit payments for deposit 
              to Individual Development Account.

[[Page S4350]]

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) One-third of all Americans have no assets available for 
     investment, and another 20 percent have only negligible 
     assets. The household savings rate of the United States lags 
     far behind other industrial nations, presenting a barrier to 
     national economic growth and preventing many Americans from 
     entering the economic mainstream by buying a house, obtaining 
     an adequate education, or starting a business.
       (2) By building assets, Americans can improve their 
     economic independence and stability, stimulate the 
     development of human and other capital, and work toward a 
     viable and hopeful future for themselves and their children. 
     Thus, economic well-being does not come solely from income, 
     spending, and consumption, but also requires savings, 
     investment, and accumulation of assets.
       (3) Traditional public assistance programs based on income 
     and consumption have rarely been successful in promoting and 
     supporting the transition to increased economic self-
     sufficiency. Income-based social policies that meet 
     consumption needs (including food, child care, rent, 
     clothing, and health care) should be complemented by asset-
     based policies that can provide the means to achieve long-
     term independence and economic well-being.
       (4) Individual Development Accounts (IDAs) can provide 
     working Americans with strong incentives to build assets, 
     basic financial management training, and access to secure and 
     relatively inexpensive banking services.
       (5) There is reason to believe that Individual Development 
     Accounts would also foster greater participation in electric 
     fund transfers (EFT), generate financial returns, including 
     increased income, tax revenue, and decreased welfare cash 
     assistance, that will far exceed the cost of public 
     investment in the program.

     SEC. 3. PURPOSES.

       The purposes of this Act are to provide for the 
     establishment of individual development accounts projects 
     that will--
       (1) provide individuals and families with limited means an 
     opportunity to accumulate assets and to enter the financial 
     mainstream;
       (2) promote education, homeownership, and the development 
     of small businesses; and
       (3) stabilize families and build communities.

     SEC. 4. DEFINITIONS.

       As used in this Act:
       (1) Eligible Individual.--
       (A) In general.--The term ``eligible individual'' means an 
     individual who--
       (i) has attained the age of 18 years;
       (ii) is a citizen or legal resident of the United States; 
     and
       (iii) is a member of a household--

       (I) which is eligible for the earned income tax credit 
     under section 32 of the Internal Revenue Code of 1986,
       (II) which is eligible for assistance under a State program 
     funded under part A of title IV of the Social Security Act, 
     or
       (III) the gross income of which does not exceed 60 percent 
     of the area median income (as determined by the Department of 
     Housing and Urban Affairs) and the net worth of which does 
     not exceed $10,000.

       (B) Household.--The term ``household'' means all 
     individuals who share use of a dwelling unit as primary 
     quarters for living and eating separate from other 
     individuals.
       (C) Determination of net worth.--
       (i) In general.--For purposes of subparagraph (A)(iii)(II), 
     the net worth of a household is the amount equal to--

       (I) the aggregate fair market value of all assets that are 
     owned in whole or in part by any member of a household, minus
       (II) the obligations or debts of any member of the 
     household.

       (ii) Certain assets disregarded.--For purposes of 
     determining the net worth of a household, a household's 
     assets shall not be considered to include the primary 
     dwelling unit and 1 motor vehicle owned by the household.
       (2) Individual development account.--The term ``Individual 
     Development Account'' means a custodial account established 
     for an eligible individual as part of an individual 
     development account program established under section 101, 
     but only if the written governing instrument creating the 
     account meets the following requirements:
       (A) No contribution will be accepted unless it is in cash, 
     by check, or by electronic fund transfer.
       (B) The custodian of the account is a qualified financial 
     institution.
       (C) The assets of the account will not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       (D) Except as provided in section 105(b), any amount in the 
     account may be paid out only for the purpose of paying the 
     qualified expenses of the eligible individual.
       (3) Qualified financial institution.--
       (A) In general.--The term ``qualified financial 
     institution'' means any federally insured financial 
     institution, including any bank, trust company, savings bank, 
     building and loan association, savings and loan company or 
     credit union.
       (B) Rule of construction.--Nothing in this paragraph shall 
     be construed as preventing an organization described in 
     subparagraph (A) from collaborating with 1 or more community-
     based, not-for-profit organizations described in section 
     501(c)(3) of the Internal Revenue Code of 1986 and exempt 
     from taxation under section 501(a) of such Code to carry out 
     an individual development account program established under 
     section 101, including serving as a custodian for any 
     Individual Development Account.
       (4) Qualified expenses.--The term ``qualified expenses'' 
     means, with respect to an eligible individual, 1 or more of 
     the following paid from an Individual Development Account and 
     from a separate, parallel individual or pooled account, as 
     provided by a qualified financial institution:
       (A) Post-secondary educational expenses.--Post-secondary 
     educational expenses paid directly to an eligible educational 
     institution. In this subparagraph:
       (i) Post-secondary educational expenses.--The term ``post-
     secondary educational expenses'' means the following:

       (I) Tuition and fees.--Tuition and fees required for the 
     enrollment or attendance of a student at an eligible 
     educational institution.
       (II) Fees, books, supplies and equipment.--Fees, books, 
     supplies, and equipment required for courses of instruction 
     at an eligible educational institution.

       (ii) Eligible educational institution.--The term ``eligible 
     educational institution'' means the following:

       (I) Institution of higher education.--An institution 
     described in section 481(a) or 1201(a) of the Higher 
     Education Act of 1965 (20 U.S.C. 1088(a)(1) or 1141(a)), as 
     such sections are in effect on the date of enactment of this 
     Act.
       (II) Post-secondary vocational education school.--An area 
     vocational education school (as defined in subparagraph (c) 
     or (d) of section 521(4) of the Carl D. Perkins Vocational 
     and Applied Technology Education Act (20 U.S.C. 2471(a))) 
     which is in any State (as defined in section 521(33) of such 
     Act ), as such sections are in effect on the date of 
     enactment of this Act.

       (B) First-home purchase.--Qualified acquisition costs with 
     respect to a qualified principal residence for a qualified 
     first-time home buyer, if paid directly to the persons to 
     whom the amounts are due. In this subparagraph:
       (i) Qualified acquisition costs.--The term ``qualified 
     acquisition costs'' means the cost of acquiring, 
     constructing, or reconstructing a residence. The term 
     includes any usual or reasonable settlement, financing, or 
     other closing costs.
       (ii) Qualified principal residence.--The term ``qualified 
     principal residence'' means a principal residence (within the 
     meaning of section 121 of the Internal Revenue Code of 1986).
       (iii) Qualified first-time home buyer.--

       (I) In general.--The term ``qualified first-time home 
     buyer'' means an individual participating in an individual 
     development account program (and, if married, the 
     individual's spouse) who has no present ownership interest in 
     a principal residence during the three-year period ending on 
     the date of acquisition of the principal residence to which 
     this subparagraph applies.
       (II) Date of acquisition.--The term ``date of acquisition'' 
     means the date on which a binding contract to acquire, 
     construct or reconstruct the principal residence to which 
     this subparagraph applies is entered into.

       (C) Business capitalization.--Amounts paid directly to a 
     business capitalization account which is established in a 
     qualified financial institution and is restricted to use 
     solely for qualified business capitalization expenses. In 
     this subparagraph:
       (i) Qualified business capitalization expenses.--The term 
     ``qualified business capitalization expense'' means qualified 
     expenditures for the capitalization of a qualified business 
     pursuant to a qualified plan.
       (ii) Qualified expenditures.--The term ``qualified 
     expenditures'' means expenditures included in a qualified 
     plan, including capital, plant, equipment, working capital 
     and inventory expenses.
       (iii) Qualified business.--The term ``qualified business'' 
     means any business that does not contravene any law or public 
     policy (to be determined by the Secretary).
       (iv) Qualified plan.--The term ``qualified plan'' means a 
     business plan, or a plan to use a business asset purchased, 
     which--

       (I) is approved by a financial institution, a micro 
     enterprise development organization, or a nonprofit loan fund 
     having demonstrated fiduciary integrity;
       (II) includes a description of services or goods to be 
     sold, a marketing plan, and projected financial statements; 
     and
       (III) may require the eligible individual to obtain the 
     assistance of an experienced entrepreneurial adviser.

       (D) Qualified rollovers.--Amounts paid as qualified 
     rollovers. In this subparagraph, the term ``qualified 
     rollover'' means any amount paid directly--
       (i) to another Individual Development Account established 
     for the benefit of the eligible individual in another 
     qualified financial institution, or
       (ii) if such eligible individual dies, to an Individual 
     Development Account established for the benefit of another 
     eligible individual within 30 days of the date of death.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.

[[Page S4351]]

    TITLE I--INDIVIDUAL DEVELOPMENT ACCOUNTS FOR LOW-INCOME WORKERS

     SEC. 101. STRUCTURE AND ADMINISTRATION OF INDIVIDUAL 
                   DEVELOPMENT ACCOUNT PROGRAMS.

       (a) Establishment of Individual Development Account 
     Programs.--Any qualified financial institution may establish 
     1 or more individual development account programs which meet 
     the requirements of this Act either on its own initiative or 
     in partnership with community-based, not-for-profit 
     organizations.
       (b) Basic Program Structure.--
       (1) In general.--All individual development account 
     programs shall consist of the following 2 components:
       (A) An Individual Development Account to which an eligible 
     individual may contribute money in accordance with section 
     103.
       (B) A separate, parallel individual or pooled account to 
     which all matching funds shall be deposited in accordance 
     with section 104.
       (2) Tailored ida programs.--A qualified financial 
     institution may tailor its individual development account 
     program to allow matching funds to be spent on 1 or more of 
     the categories of qualified expenses.
       (c) Number of Accounts.--
       (1) In general.--The average number of active Individual 
     Development Accounts in an individual development account 
     program at any 1 banking office of a qualified financial 
     institution shall be limited to the applicable limit.
       (2) Applicable limit.--For purposes of this title, the 
     applicable limit shall be determined in accordance with the 
     following table:

                                                             Applicable
``Calendar year:                                                 Limit:
  2000.........................................................100 ....

  2001.........................................................200 ....

  2002.........................................................300 ....

  2003.........................................................400 ....

  2004 and thereafter..........................................500.....

       (d) Tax Treatment of Accounts.--Any account described in 
     subparagraph (B) of subsection (b)(1) is exempt from taxation 
     under the Internal Revenue Code of 1986 unless such account 
     has ceased to be such an account by reason of section 105(c) 
     or the termination of the individual development account 
     program under section 106(b).

     SEC. 102. PROCEDURES FOR OPENING AN INDIVIDUAL DEVELOPMENT 
                   ACCOUNT AND QUALIFYING FOR MATCHING FUNDS.

       (a) Opening an Account.--An eligible individual must open 
     an Individual Development Account with a qualified financial 
     institution and contribute money in accordance with section 
     103 to qualify for matching funds in a separate, parallel 
     individual or pooled account.
       (b) Required Completion of Economic Literacy Course.--
     Before becoming eligible to withdraw matching funds to pay 
     for qualified expenses, holders of Individual Development 
     Accounts must complete an economic literacy course offered by 
     the qualified financial institution, a nonprofit 
     organization, or a government entity.

     SEC. 103. CONTRIBUTIONS TO INDIVIDUAL DEVELOPMENT ACCOUNTS.

       (a) In General.--Except in the case of a qualified 
     rollover, individual contributions to an Individual 
     Development Account will not be accepted for the taxable year 
     in excess of an amount equal to the compensation (as defined 
     in section 219(f)(1) of the Internal Revenue Code of 1986) 
     includible in the individual's gross income for such taxable 
     year.
       (b) Proof of Compensation and Status as an Eligible 
     Individual.--Federal W-2 forms and other forms specified by 
     the Secretary proving the eligible individual's wages and 
     other compensation and the status of the individual as an 
     eligible individual shall be presented to the custodian at 
     the time of the establishment of the Individual Development 
     Account and at least once annually thereafter.
       (c) Time When Contributions Deemed Made.--For purposes of 
     this section, a taxpayer shall be deemed to have made a 
     contribution to an Individual Development Account on the last 
     day of the preceding taxable year if the contribution is made 
     on account of such taxable year and is made not later than 
     the time prescribed by law for filing the Federal income tax 
     return for such taxable year (not including extensions 
     thereof).
       (d) Cross Reference.--

  For designation of earned income tax credit payments for deposit to 
an Individual Development Account, see section 32(o) of the Internal 
Revenue Code of 1986.

     SEC. 104. DEPOSITS BY QUALIFIED FINANCIAL INSTITUTIONS.

       (a) Separate, Parallel Individual or Pooled Accounts.--The 
     qualified financial institution shall deposit all matching 
     funds for each Individual Development Account into a 
     separate, parallel individual or pooled account. The parallel 
     account or accounts shall earn not less than the market rate 
     of interest.
       (b) Regular Deposits of Matching Funds.--
       (1) In general.--Subject to paragraph (2), the qualified 
     financial institution shall deposit not less than quarterly 
     into the separate, parallel account with respect to each 
     eligible individual the following:
       (A) A dollar-for-dollar match for the first $300 
     contributed by the eligible individual into an Individual 
     Development Account with respect to any taxable year.
       (B) Any matching funds provided by State, local, or private 
     sources in accordance to the matching ratio set by those 
     sources.
       (2) Cross reference.--

  For allowance of tax credit to qualified financial institutions for 
Individual Development Account subsidies, including matching funds, see 
section 30B of the Internal Revenue Code of 1986.

       (c) Forfeiture of Matching Funds.--Matching funds that are 
     forfeited under section 105(b) shall be used by the qualified 
     financial institution to pay matches for other Individual 
     Development Account contributions by eligible individuals.
       (d) Exclusion From Income.--Gross income of an eligible 
     individual shall not include any matching fund deposited into 
     a parallel account under subsection (b) on behalf of such 
     individual.
       (e) Uniform Accounting Regulations.--The Secretary shall 
     prescribe regulations with respect to accounting for matching 
     funds from all possible sources in the parallel accounts.
       (f) Regular Reporting of Matching Deposits.--Any qualified 
     financial institution shall report matching fund deposits to 
     eligible individuals with Individual Development Accounts on 
     not less than a quarterly basis.

     SEC. 105. WITHDRAWAL PROCEDURES.

       (a) Withdrawals for Qualified Expenses.--
       (1) Request for withdrawal.--To withdraw money from an 
     eligible individual's Individual Development Account to pay 
     qualified expenses of such individual or such individual's 
     spouse or dependents, an eligible individual shall obtain 
     permission from the custodian of the individual development 
     account program. Such permission may include a request to 
     withdraw matching funds from the applicable parallel account.
       (2) Disbursement of funds.--Once permission to withdraw 
     funds is granted under paragraph (1), the qualified financial 
     institution shall directly transfer such funds from the 
     Individual Development Account, and, if applicable, from the 
     parallel account electronically to the vendor or other 
     Individual Development Account. If the vendor is not equipped 
     to receive funds electronically, the qualified financial 
     institution may issue such funds by paper check to the 
     vendor.
       (3) Resolution of disputes.--The qualified financial 
     institution shall establish a grievance procedure to hear, 
     review, and decide in writing any grievance made by an 
     Individual Development Account holder who disputes a decision 
     of the operating organization that a withdrawal is not for 
     qualified expenses.
       (b) Withdrawals for Nonqualified Expenses.--An Individual 
     Development Account holder may unilaterally withdraw funds 
     from the Individual Development Account for purposes other 
     than to pay qualified expenses, but shall forfeit the 
     corresponding matching funds and interest earned on the 
     matching funds by doing so, unless such withdrawn funds are 
     recontributed to such Account within 1 year of withdrawal.
       (c) Deemed Withdrawals From Accounts of Noneligible 
     Individuals.--If, during any taxable year of the individual 
     for whose benefit an Individual Development Account is 
     established, such individual ceases to be an eligible 
     individual, such account shall cease to be an Individual 
     Development Account as of the first day of such taxable year 
     and any balance in such account shall be deemed to have been 
     withdrawn on such first day by such individual for purposes 
     other than to pay qualified expenses.
       (d) Tax Treatment of Withdrawn Amounts.--Any amount 
     withdrawn from an Individual Development Account or any 
     matching funds withdrawn from a parallel account shall be 
     includible in gross income to the extent such amount has not 
     previously been so includible.

     SEC. 106. CERTIFICATION AND TERMINATION OF INDIVIDUAL 
                   DEVELOPMENT ACCOUNT PROGRAMS.

       (a) Certification Procedures.--Upon establishing an 
     individual development account program under section 101, a 
     qualified financial institution shall certify to the 
     Secretary on forms prescribed by the Secretary and 
     accompanied by any documentation required by the Secretary, 
     that--
       (1) the accounts described in subparagraphs (A) and (B) of 
     section 101(b)(1) are operating pursuant to all the 
     provisions of this Act; and
       (2) the qualified financial institution agrees to implement 
     an information system necessary to permit the Secretary to 
     evaluate the cost and effectiveness of the individual 
     development account program.
       (b) Authority To Terminate IDA Program.--If the Secretary 
     determines that a qualified financial institution under this 
     Act is not operating an individual development account 
     program in accordance with the requirements of this Act (and 
     has not implemented any corrective recommendations directed 
     by the Secretary), the Secretary shall terminate such 
     institution's authority to conduct the program. If the 
     Secretary is unable to identify a qualified financial 
     institution to assume the authority to conduct such program, 
     then any account established for the benefit of any eligible 
     individual under such program shall cease to be an Individual 
     Development Account as of the first day of such termination 
     and any balance in such account shall be deemed to have been 
     withdrawn on such first day by such individual for purposes 
     other than to pay qualified expenses.

[[Page S4352]]

     SEC. 107. REPORTING AND EVALUATION.

       (a) Responsibilities of Qualified Financial Institutions.--
     Each qualified financial institution that establishes an 
     individual development account program under section 101 
     shall report annually to the Secretary within 90 days after 
     the end of each calendar year on--
       (1) the number of eligible individuals making contributions 
     into Individual Development Accounts;
       (2) the amounts contributed into Individual Development 
     Accounts and deposited into the separate, parallel accounts 
     for matching funds;
       (3) the amounts withdrawn from Individual Development 
     Accounts and the separate, parallel accounts, and the 
     purposes for which such amounts were withdrawn;
       (4) the balances remaining in Individual Development 
     Accounts and separate, parallel accounts; and
       (5) such other information needed to help the Secretary 
     evaluate the cost and effectiveness of the individual 
     development account program.
       (b) Responsibilities of the Secretary.--
       (1) Two-year evaluation.--Not later than 24 months after 
     the date of enactment of this Act, the Secretary shall 
     evaluate the cost and effectiveness of the individual 
     development account programs established under section 101. 
     In addition, the Secretary shall evaluate the effect of the 
     account limitation under section 101(c) on each banking 
     office of a qualified financial institution and make 
     recommendations for its adjustment or removal.
       (2) Four-year evaluation.--Not later than 48 months after 
     the date of enactment of this Act, the Secretary shall 
     evaluate the effect of the individual development account 
     programs established under section 101 on the eligible 
     individuals.
       (3) Subsequent annual evaluations.--In each subsequent year 
     after the first evaluation under paragraph (1) or (2), the 
     Secretary shall issue an update on the status of such 
     individual development account programs.
       (4) Appropriations for evaluations.--There is authorized to 
     be appropriated $5,000,000 for the purposes of evaluating 
     individual development account programs established under 
     section 101, to remain available until expended.

     SEC. 108. FUNDS IN PARALLEL ACCOUNTS OF PROGRAM PARTICIPANTS 
                   DISREGARDED FOR PURPOSES OF ALL MEANS-TESTED 
                   FEDERAL PROGRAMS.

       Notwithstanding any other provision of law that requires 
     consideration of 1 or more financial circumstances of an 
     individual, for the purposes of determining eligibility to 
     receive, or the amount of, any assistance or benefit 
     authorized by such law to be provided to or for the benefit 
     of such individual, funds (including interest accruing) in 
     any parallel account shall be disregarded for such purpose 
     with respect to any period during which the individual 
     participates in an individual development account program 
     established under section 101.

      TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDITS

     SEC. 201. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS 
                   PROVIDED THROUGH A TAX CREDIT FOR QUALIFIED 
                   FINANCIAL INSTITUTIONS.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     other credits) is amended by inserting after section 30A the 
     following:

     ``SEC. 30B. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT 
                   FOR QUALIFIED FINANCIAL INSTITUTIONS.

       ``(a) Determination of Amount.--There shall be allowed as a 
     credit against the applicable tax for the taxable year an 
     amount equal to the individual development account investment 
     provided by a qualified financial institution during the 
     taxable year under an individual development account program 
     established under section 101 of the Savings for Working 
     Families Act.
       ``(b) Applicable Tax.--For the purposes of this section, 
     the term `applicable tax' means the excess (if any) of--
       ``(1) the sum of--
       ``(A) the tax imposed under this chapter (other than the 
     taxes imposed under the provisions described in subparagraphs 
     (C) through (Q) of section 26(b)(1)), plus
       ``(B) the tax imposed under section 3111, over
       ``(2) the credits allowable under subparts B and D of this 
     part.
       ``(c) Individual Development Account Investment.--For 
     purposes of this section, the term `individual development 
     account investment' means, with respect to an individual 
     development account program of a qualified financial 
     institution in any taxable year, an amount equal to the sum 
     of--
       ``(1) the aggregate amount of dollar-for-dollar matches 
     under such program by such institution under section 104 of 
     the Savings for Working Families Act for such taxable year, 
     plus
       ``(2) an amount equal to the lesser of--
       ``(A) 50 percent of the aggregate costs paid or incurred 
     under such program by such institution during such taxable 
     year--
       ``(i) to provide economic literacy training to Individual 
     Development Account holders under section 102(b) of such Act, 
     either directly or indirectly through nonprofit organizations 
     or government entities, and
       ``(ii) to underwrite the activities of collaborating 
     community-based, not-for-profit organizations (within the 
     meaning of section 4(3)(B) of such Act), or
       ``(B) $100, times the total number of Individual 
     Development Accounts maintained by such institution under 
     such program during such taxable year.
       ``(d) Other Definitions.--For purposes of this section, the 
     terms `Individual Development Account' and `qualified 
     financial institution' have the meanings given such terms by 
     section 4 of the Savings for Workings Families Act.
       ``(e) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section, including regulations providing for a recapture 
     of the credit allowed under this section in cases where there 
     is a forfeiture under section 105(b) of the Savings for 
     Workings Families Act in a subsequent taxable year of any 
     amount which was taken into account in determining the amount 
     of such credit.''
       (b) Transfer to Trust Funds.--The Secretary of the Treasury 
     shall transfer from the general fund of the United States 
     Treasury to the Federal Old-Age and Survivors Insurance Trust 
     Fund, the Federal Disability Insurance Trust Fund, and the 
     Federal Hospital Insurance Trust Fund amounts equivalent to 
     the amount of the reduction in taxes imposed by section 3111 
     of the Internal Revenue Code of 1986 by reason of the credit 
     determined under section 30B (relating to the individual 
     development account investment credit for qualified financial 
     institutions). Any such transfer shall be made at the same 
     time that the reduced taxes would have been deposited in such 
     Trust Funds.
       (c) Conforming Amendment.--The table of sections for 
     subpart B of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 30A the following:

``Sec. 30B. Individual development account investment credit for 
              qualified financial institutions.''

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 202. CRA CREDIT PROVIDED FOR INDIVIDUAL DEVELOPMENT 
                   ACCOUNT PROGRAMS.

       Qualified financial institutions which establish individual 
     development account programs under section 101 shall receive 
     credit for funding, administration, and education expenses 
     under the services test contained in regulations for the 
     Community Reinvestment Act of 1977 for those activities 
     related to Individual Development Accounts.

     SEC. 203. DESIGNATION OF EARNED INCOME TAX CREDIT PAYMENTS 
                   FOR DEPOSIT TO INDIVIDUAL DEVELOPMENT ACCOUNT.

       (a) In General.--Section 32 of the Internal Revenue Code of 
     1986 (relating to earned income credit) is amended by adding 
     at the end the following:
       ``(o) Designation of Credit for Deposit to Individual 
     Development Account.--
       ``(1) In general.--With respect to the return of any 
     eligible individual (as defined in section 4(1) of the 
     Savings for Working Families Act) for the taxable year of the 
     tax imposed by this chapter, such individual may designate 
     that a specified portion (not less than $1) of any 
     overpayment of tax for such taxable year which is 
     attributable to the credit allowed under this section shall 
     be deposited by the Secretary into an Individual Development 
     Account (as defined in section 4(2) of such Act) of such 
     individual. The Secretary shall so deposit such portion 
     designated under this paragraph.
       ``(2) Manner and time of designation.--A designation under 
     paragraph (1) may be made with respect to any taxable year--
       ``(A) at the time of filing the return of the tax imposed 
     by this chapter for such taxable year, or
       ``(B) at any other time (after the time of filing the 
     return of the tax imposed by this chapter for such taxable 
     year) specified in regulations prescribed by the Secretary.

     Such designation shall be made in such manner as the 
     Secretary prescribes by regulations.
       ``(3) Portion attributable to earned income tax credit.--
     For purposes of paragraph (1), an overpayment for any taxable 
     year shall be treated as attributable to the credit allowed 
     under this section for such taxable year to the extent that 
     such overpayment does not exceed the credit so allowed.
       ``(4) Overpayments treated as refunded.--For purposes of 
     this title, any portion of an overpayment of tax designated 
     under paragraph (1) shall be treated as being refunded to the 
     taxpayer as of the last date prescribed for filing the return 
     of tax imposed by this chapter (determined without regard to 
     extensions) or, if later, the date the return is filed.
       ``(5) Termination.--This subsection shall not apply to any 
     taxable year beginning after December 31, 2006.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.
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