[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 892 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 892
To establish and provide for the treatment of Individual Development
Accounts, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 7, 2007
Mr. Pitts 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
2007''.
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.
As used in this Act:
(1) Eligible individual.--
(A) In general.--The term ``eligible individual''
means, with respect to any taxable year, an individual
who--
(i) has attained the age of 18 but not the
age of 61 as of the last day of such taxable
year,
(ii) is a citizen or lawful permanent
resident (within the meaning of section
7701(b)(6) of the Internal Revenue Code of
1986) of the United States as of the last day
of such taxable year,
(iii) was not a student (as defined in
section 151(c)(4) of such Code) for the
immediately preceding taxable year,
(iv) is not an individual with respect to
whom a deduction under section 151 of such Code
is allowable to another taxpayer for a taxable
year of the other taxpayer ending during the
immediately preceding taxable year of the
individual,
(v) is not a taxpayer described in
subsection (c), (d), or (e) of section 6402 of
such Code for the immediately preceding taxable
year,
(vi) is not a taxpayer described in section
1(d) of such Code for the immediately preceding
taxable year, and
(vii) is a taxpayer the modified adjusted
gross income of whom for the immediately
preceding taxable year does not exceed--
(I) $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 2008, 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 ``2007''
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, 2007, 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).
(B) Qualified expenses.--
(i) In general.--The term ``qualified
expenses'' means any of the following expenses
approved by the qualified financial
institution:
(I) Qualified higher education
expenses.
(II) Qualified first-time homebuyer
costs.
(III) Qualified business
capitalization or expansion costs.
(IV) Qualified rollovers.
(V) Qualified final distribution.
(ii) Qualified higher education expenses.--
(I) In general.--The term
``qualified higher education expenses''
has the meaning given such term by
section 529(e)(3) of the Internal
Revenue Code of 1986, determined by
treating the Account owner, the owner's
spouse, or one or more of the owner's
dependents as a designated beneficiary,
and reduced as provided in section
25A(g)(2) of such Code.
(II) Coordination with other
benefits.--The amount of expenses which
may be taken into account for purposes
of section 135, 529, or 530 of such
Code for any taxable year shall be
reduced by the amount of any qualified
higher education expenses taken into
account as qualified expense
distributions during such taxable year.
(iii) Qualified first-time homebuyer
costs.--The term ``qualified first-time
homebuyer costs'' means qualified acquisition
costs (as defined in section 72(t)(8)(C) of the
Internal Revenue Code of 1986) with respect to
a principal residence (within the meaning of
section 121 of such Code) for a qualified
first-time homebuyer (as defined in section
72(t)(8)(D)(i) of such Code).
(iv) Qualified business capitalization or
expansion costs.--
(I) In general.--The term
``qualified business capitalization or
expansion costs'' means qualified
expenditures for the capitalization or
expansion of a qualified business
pursuant to a qualified business plan.
(II) Qualified expenditures.--The
term ``qualified expenditures'' means
expenditures normally associated with
starting or expanding a business and
included in a qualified business plan,
including costs for capital, plant, and
equipment, inventory expenses, and
attorney and accounting fees.
(III) Qualified business.--The term
``qualified business'' means any
business that does not contravene any
law.
(IV) Qualified business plan.--The
term ``qualified business plan'' means
a business plan which has been approved
by the qualified financial institution
and which meets such requirements as
the Secretary may specify.
(v) Qualified rollovers.--The term
``qualified rollover'' means the complete
distribution of the amounts in an Individual
Development Account and parallel account to
another Individual Development Account and
parallel account established in another
qualified financial institution for the benefit
of the Account owner.
(vi) Qualified final distribution.--The
term ``qualified final distribution'' means, in
the case of a deceased Account owner, the
complete distribution of the amounts in the
Individual Development Account and parallel
account directly to the spouse, any dependent,
or other named beneficiary of the deceased.
(7) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
SEC. 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 2007'' 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 2007 shall be exempt from
taxation,
``(2) except as provided in section 45O, 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 2007.''.
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 45O 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 45O 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 2008, 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 each of fiscal years 2008 through 2015, 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. 45O. 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 2007.
``(b) 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 2007 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).
``(c) Eligible Entity.--For purposes of this section, except as
provided in regulations, the term `eligible entity' means a qualified
financial institution.
``(d) Other Definitions.--For purposes of this section, any term
used in this section and also in the Savings for Working Families Act
of 2007 shall have the meaning given such term by such Act.
``(e) 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 (b)(1)
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 (b)(2)
with respect to the Individual Development Account for the
taxable year.
``(f) 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.
``(g) 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 (f)(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 (h)) in cases where there is a
forfeiture under section 7(b) of the Savings for Working
Families Act of 2007 in a subsequent taxable year of any amount
which was taken into account in determining the amount of such
credit.
``(h) Application of Section.--
``(1) In general.--This section shall apply to any
expenditure made in any taxable year ending after December 31,
2007, and beginning on or before January 1, 2015, with respect
to any Individual Development Account which--
``(A) is opened before January 1, 2013, 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 (b)(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, 2015.
``(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
``plus'' 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 individual development account investment credit
determined under section 45O(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. 45O. 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 45O(c)(2) of the Internal Revenue Code of 1986 (as added by
this section). Not later than December 31, 2011, 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, 2007.
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.
<all>