109th CONGRESS
2d Session
H. R. 4751
To establish and provide for the treatment of Individual Development
Accounts, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
February 14, 2006
Mr. PITTS (for himself, Mrs. JONES of Ohio, Mr. ENGLISH of Pennsylvania,
Mr. MCINTYRE, Ms. HART, and Ms. HARMAN) introduced the following bill; which
was referred to the Committee on Ways and Means
A BILL
To establish and provide for the treatment of Individual Development
Accounts, 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.
This Act may be cited as the `Savings for Working Families Act of 2006'.
SEC. 2. PURPOSES.
The purposes of this Act are to provide for the establishment of individual
development account programs that will--
(1) provide individuals and families with limited means an opportunity
to accumulate assets and to enter the financial mainstream,
(2) promote education, homeownership, and the development of small businesses,
(3) stabilize families and build communities, and
(4) support continued United States economic expansion.
SEC. 3. DEFINITIONS.
(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) $20,000, 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) $40,000, in the case of a taxpayer described in section 1(a)
of such Code.
(B) INFLATION ADJUSTMENT-
(i) IN GENERAL- In the case of any taxable year beginning after 2007,
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 `2006' 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 7(b), any amount in the account may
be paid out only for the purpose of paying the qualified expenses of
the account owner.
(3) PARALLEL ACCOUNT- The term `parallel account' means a separate, parallel
individual or pooled account for all matching funds and earnings dedicated
to an Individual Development Account owner as part of a qualified individual
development account program, the trustee of which is a qualified financial
institution.
(4) QUALIFIED FINANCIAL INSTITUTION-
(A) IN GENERAL- The term `qualified financial institution' means any
person authorized to be a trustee of any individual retirement account
under section 408(a)(2) of the Internal Revenue Code of 1986.
(B) RULE OF CONSTRUCTION-
(i) IN GENERAL- Nothing in this paragraph shall be construed as preventing
a person described in subparagraph (A) from collaborating with 1 or
more qualified nonprofit organizations or Indian tribes to carry out
an individual development account program established under section
4.
(ii) QUALIFIED NONPROFIT ORGANIZATION- The term `qualified nonprofit
organization' means--
(I) any organization described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from taxation under section 501(a)
of such Code,
(II) any community development financial institution certified by
the Community Development Financial Institution Fund,
(III) any credit union chartered under Federal or State law, or
(IV) any public housing agency as defined in section 3(b)(6) of
the United States Housing Act of 1937 (42 U.S.C. 1437a(b)(6)).
(iii) INDIAN TRIBE- The term `Indian tribe' means any Indian tribe
as defined in section 4(12) of the Native American Housing Assistance
and Self-Determination Act of 1996 (25 U.S.C. 4103(12), and includes
any tribally designated housing entity (as defined in section 4(21)
of such Act (25 U.S.C. 4103(21)), tribal subsidiary, subdivision,
or other wholly owned tribal entity.
(5) QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT PROGRAM- The term `qualified
individual development account program' means a program established upon
approval of the Secretary under section 4 after December 31, 2006, 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 5(b).
(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. 4. 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 Act.
(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 5.
(B) A parallel account to which all matching funds shall be deposited
in accordance with section 6.
(2) TAILORED IDA PROGRAMS- A qualified financial institution may tailor
its qualified individual development account program to allow matching
funds to be spent on 1 or more of the categories of qualified expenses.
(c) 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 2006' after `subsection'.
(d) Tax Treatment of Parallel Accounts-
(1) IN GENERAL- Chapter 77 of the Internal Revenue Code of 1986 (relating
to miscellaneous provisions) is amended by adding at the end the following
new section:
`SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOPMENT PARALLEL ACCOUNTS.
`For purposes of this title--
`(1) any account described in section 4(b)(1)(B) of the Savings for Working
Families Act of 2006 shall be exempt from taxation,
`(2) except as provided in section 45N, 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 of such
Code is amended by adding at the end the following new item:
`Sec. 7529. Tax incentives for Individual Development Parallel Accounts.'.
(e) Coordination of Certain Expenses- Section 25A(g)(2) of the Internal
Revenue Code of 1986 is amended by striking `and' at the end of subparagraph
(B), by striking the period at the end of subparagraph (C) and inserting
`, and', and by adding at the end the following new subparagraph:
`(C) a qualified expense distribution with respect to qualified higher
education expenses from an Individual Development Account or a parallel
account under section 7(a) of the Savings for Working Families Act of
2006.'.
SEC. 5. PROCEDURES FOR OPENING AND MAINTAINING AN INDIVIDUAL DEVELOPMENT
ACCOUNT AND QUALIFYING FOR MATCHING FUNDS.
(a) Opening an Account- An eligible individual may open an Individual Development
Account with a qualified financial institution 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 the date on which the Secretary
approves the first qualified Individual Development Account program, 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 6(b)(1)(A).
(d) Special Rule in the Case of Married Individuals- For purposes of this
Act, 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. 6. 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 45N 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 45N 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. 7. 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 3(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 6(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. 8. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL DEVELOPMENT
ACCOUNT PROGRAMS.
(a) Certification Procedures- Upon establishing a qualified individual development
account program under section 4, a qualified financial institution 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 4(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 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 Act is not operating a
qualified individual development account program in accordance with the
requirements of this Act (and has not implemented any corrective recommendations
directed by the Secretary), the Secretary shall terminate such institution's
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. 9. REPORTING, MONITORING, AND EVALUATION.
(a) Responsibilities of Qualified Financial Institutions- Each qualified
financial institution that operates a qualified individual development account
program under section 4 shall report annually to the Secretary within 90
days after the end of each calendar year on--
(1) the number of individuals making contributions into Individual Development
Accounts and the amounts contributed,
(2) the amounts contributed into Individual Development Accounts by eligible
individuals and the amounts deposited into parallel accounts for matching
funds,
(3) the amounts withdrawn from Individual Development Accounts and parallel
accounts, and the purposes for which such amounts were withdrawn,
(4) the balances remaining in Individual Development Accounts and parallel
accounts, and
(5) such other information needed to help the Secretary monitor the effectiveness
of the qualified individual development account program (provided in a
non-individually-identifiable manner).
(b) Responsibilities of the Secretary-
(1) MONITORING PROTOCOL- Not later than 12 months after the date of the
enactment of this Act, the Secretary, 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 4.
(2) ANNUAL REPORTS- For each year after 2007, 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) USE OF ACCOUNTS IN RURAL AREAS ENCOURAGED- The Secretary shall develop
methods to encourage the use of Individual Development Accounts in rural
areas.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
(a) In General- There is authorized to be appropriated to the Secretary
$1,000,000 for fiscal year 2007 and for each fiscal year through 2014, for
the purposes of implementing this Act, including the reporting, monitoring,
and evaluation required under section 9, to remain available until expended.
(b) Grants- There is authorized to be appropriated to the Secretary $20,000,000--
(1) to make grants to qualified nonprofit organizations and Indian tribes
to help defray the administrative costs associated with the operation
of individual development account programs, including the required financial
education courses, and
(2) to provide technical assistance to qualified nonprofit organizations
and Indian tribes in meeting such program requirements.
SEC. 11. 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 of the
Internal Revenue Code of 1986 (relating to business related credits) is
amended by adding at the end the following new section:
`SEC. 45N. 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 4 of the Savings for Working Families Act of 2006.
`(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 6(b)(1)(A) of the Savings for Working Families Act of 2006
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 2006 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 7(b) of the Savings
for Working Families Act of 2006 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, 2006, and beginning on or before
January 1, 2014, 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 900,000 Accounts.
Notwithstanding the preceding sentence, this section shall apply to amounts
which are described in subsection (c)(1) and which are timely deposited
into a parallel account during the 30-day period following the end of
the last taxable year beginning on or before January 1, 2014.
`(2) DETERMINATION OF LIMITATION- The limitation on the number of Individual
Development Accounts under paragraph (1)(B) shall be allocated by the
Secretary among eligible individuals as such individuals open such Accounts
under qualified individual development account programs, except that,
in the case of 300,000 Accounts, such limitation shall be equally allocated
among the States.'.
(b) Credit Treated as Business Credit- Section 38(b) of such Code (relating
to current year business credit) is amended by striking `and' at the end
of paragraph (25), by striking the period at the end of paragraph (26) and
inserting `, and', and by adding at the end the following new paragraph:
`(27) the individual development account investment credit determined
under section 45N(a).'.
(c) Conforming Amendment- The table of sections for subpart C of part IV
of subchapter A of chapter 1 of such Code is amended by adding at the end
the following new item:
`Sec. 45N. Individual development account investment credit.'.
(d) Report Regarding Account Maintenance Fees- The Secretary of the Treasury
shall study the adequacy of the amount specified in section 45N(c)(2) of
the Internal Revenue Code of 1986 (as added by this section). Not later
than December 31, 2010, the Secretary of the Treasury shall report the findings
of the study described in the preceding sentence to Congress.
(e) Effective Date- The amendments made by this section shall apply to taxable
years ending after December 31, 2006.
SEC. 12. 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.
END
