S 1967 ISCommentsClose CommentsPermalink

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

August 2, 2007

Mrs. CLINTON (for herself and Mr. SMITH) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

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

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `New Savers Act'.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink





Sec. 2. Findings.CommentsClose CommentsPermalink

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

Sec. 101. Opening of accounts on tax returns to facilitate savings.CommentsClose CommentsPermalink





Sec. 102. Purchase of United States savings bonds on tax returns.CommentsClose CommentsPermalink





Sec. 103. Return preparation clinics for low-income taxpayers.CommentsClose CommentsPermalink





Sec. 104. Savings as a national performance goal.CommentsClose CommentsPermalink

TITLE II--ACCESS TO WEALTH BUILDING FINANCIAL SERVICES

Sec. 201. Electronic transfer accounts.CommentsClose CommentsPermalink





Sec. 202. Benefit cards and bank services.CommentsClose CommentsPermalink





Sec. 203. Expansion of accessible and suitable financial services.CommentsClose CommentsPermalink

TITLE III--CHILDREN'S SAVINGS ACCOUNTS

Sec. 301. Young Savers Accounts.CommentsClose CommentsPermalink

TITLE IV--EXPANSION OF THE SAVER'S CREDIT

Sec. 401. Credit for contributions to qualified tuition programs and Coverdell education savings accounts.CommentsClose CommentsPermalink

TITLE V--UNITED STATES SAVINGS BONDS

Sec. 501. Savings bond marketing and access.CommentsClose CommentsPermalink





Sec. 502. Tax credit to expand payroll savings plan.CommentsClose CommentsPermalink

TITLE VI--QUALIFIED TUITION PROGRAMS

Sec. 601. Reporting of fee information.CommentsClose CommentsPermalink





Sec. 602. Annual report of performance and participation.CommentsClose CommentsPermalink





Sec. 603. Grant program to support State innovation in increasing participation in qualified tuition programs.CommentsClose CommentsPermalink

SEC. 2. FINDINGS.

Congress finds the following:CommentsClose CommentsPermalink





(1) The personal savings rate was negative in 2005 and 2006 according to the Department of Commerce, meaning that combined spending outstripped disposable income for the first time since the Great Depression.CommentsClose CommentsPermalink





(2) According to the Federal Reserve's 2004 Survey of Consumer Finances, 17 percent of all households had zero or negative net worth, while 30 percent had net worth of less than $10,000.CommentsClose CommentsPermalink





(3) Thirty-eight percent of all households are in a state of asset poverty, in that such households lack liquid financial resources to support their families for 3 months at the poverty level.CommentsClose CommentsPermalink





(4) According to the Federal Reserve's 2004 Survey of Consumer Finances, 11 percent of households do not have a checking account and 9 percent do not have a transaction account of any kind.CommentsClose CommentsPermalink





(5) Tuition and fees at 4-year public universities have increased 57 percent since 2000 according to the College Board, while the relative earnings power of those that receive post-secondary education has continued to grow over the past 25 years.CommentsClose CommentsPermalink





(6) According to the Center for Social Development, the presence of savings and even small asset holdings by a household is associated with a range of positive outcomes, including increased economic stability, educational attainment and performance, and health and psychological well-being.CommentsClose CommentsPermalink





(7) Increasing the number of households that save and the amounts that such households save will allow more Americans to achieve greater control, security, independence, and choice in their lives.CommentsClose CommentsPermalink

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

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

(a) Notification of Option-CommentsClose CommentsPermalink





(1) IN GENERAL- The Commissioner of Internal Revenue shall notify individual taxpayers who qualify for a Federal income tax refund but fail to provide an ACH direct deposit number on their return that they have the option of an electronic deposit to a designated account.CommentsClose CommentsPermalink





(2) METHOD OF NOTIFICATION- The notification under paragraph (1) shall be made through--CommentsClose CommentsPermalink





(A) a public awareness program undertaken by the Secretary of the Treasury, in concert with the Commissioner of the Internal Revenue and others as necessary, at least 6 months before January 2009, andCommentsClose CommentsPermalink





(B) the inclusion of such a notice in the instruction material for any Federal income tax return.CommentsClose CommentsPermalink





(b) Establishment of Designated Account Program- The Secretary of the Treasury shall develop, in consultation with the Federal Management System, a program to minimize the delivery of non-electronic Federal income tax refunds by depositing refunds electronically to an account held by a depository institution. This program shall include:CommentsClose CommentsPermalink





(1) Provisions for such tax refunds to be deposited into a designated account.CommentsClose CommentsPermalink





(2) Establishment of account parameters with respect to minimum balance requirements and limitations on overdrafts, overdraft fees, and other requirements.CommentsClose CommentsPermalink





(3) Establishment of means for the taxpayer to access the account electronically or through a payment card.CommentsClose CommentsPermalink





(4) Provisions to allow taxpayers to open an account with their Federal income tax refunds through financial service providers, so long such account is held at a depository institution that is insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).CommentsClose CommentsPermalink





(c) Effective Date- The notification under subsection (a) and the program under subsection (b) shall be effective with respect to tax returns for taxable years beginning after December 31, 2008.CommentsClose CommentsPermalink

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

(a) Notice of Option- The Commissioner of Internal Revenue shall notify individual taxpayers that they have the option of purchasing United States savings bonds when they file their Federal income tax returns. Such notification shall be included in the instruction material for any Federal income tax return.CommentsClose CommentsPermalink





(b) Establishment of Savings Bond Purchase Program-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury shall develop, in consultation with a task force, a program for the purchase by individual taxpayers of United States savings bonds on their Federal income tax returns.CommentsClose CommentsPermalink





(2) TASK FORCE- The task force described in paragraph (1) shall be appointed by the Secretary of the Treasury from representatives from the Internal Revenue Service and the Bureau of the Public Debt.CommentsClose CommentsPermalink





(3) REPORT BY TASK FORCE-CommentsClose CommentsPermalink





(A) IN GENERAL- The task force described in paragraph (1) shall issue a report and recommendations for implementation of such program to the Secretary of the Treasury not later than March 31, 2008.CommentsClose CommentsPermalink





(B) CONTENTS OF REPORT- The report required under subparagraph (A) shall include a consideration of the following items:CommentsClose CommentsPermalink





(i) Coordination with split Federal income tax refund process.CommentsClose CommentsPermalink





(ii) Integration with the Treasury Direct United States savings bond purchase system as well as other methods of purchasing bonds that do not require the purchaser to have access to the Internet.CommentsClose CommentsPermalink





(iii) Purchase of United States savings bonds with co-owners.CommentsClose CommentsPermalink





(iv) How such purchase affects refunds, credits, and tax liabilities.CommentsClose CommentsPermalink





(v) Selection of amount and savings bond series.CommentsClose CommentsPermalink





(vi) Options to encourage repeat bond purchases in successive tax seasons by tax refund recipients, including possible notification to prior purchasers of the opportunity to purchase additional bonds with future tax refunds.CommentsClose CommentsPermalink





(vii) Coordination with the designated account program under section 101(b).CommentsClose CommentsPermalink





(c) Effective Date- The notification under subsection (a) and the program under subsection (b) shall be effective with respect to tax returns for taxable years beginning after December 31, 2008.CommentsClose CommentsPermalink

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

(a) Grants for Return Preparation Clinics-CommentsClose CommentsPermalink





(1) IN GENERAL- Chapter 77 of the Internal Revenue Code of 1986 (relating to miscellaneous provisions) is amended by inserting after section 7526 the following new section:CommentsClose CommentsPermalink

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

`(a) In General- The Secretary may, subject to the availability of appropriated funds, make grants to provide matching funds for the development, expansion, or continuation of qualified return preparation clinics.CommentsClose CommentsPermalink





`(b) Definitions- For purposes of this section--CommentsClose CommentsPermalink





`(1) QUALIFIED RETURN PREPARATION CLINIC-CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `qualified return preparation clinic' means a clinic which--CommentsClose CommentsPermalink





`(i) does not charge more than a nominal fee for its services (except for reimbursement of actual costs incurred), andCommentsClose CommentsPermalink





`(ii) operates programs which assist low-income taxpayers, including individuals for whom English is a second language, in preparing and filing their Federal income tax returns, including schedules reporting sole proprietorship or farm income.CommentsClose CommentsPermalink





`(B) ASSISTANCE TO LOW-INCOME TAXPAYERS- A clinic is treated as assisting low-income taxpayers under subparagraph (A)(ii) if at least 90 percent of the taxpayers assisted by the clinic have incomes which do not exceed 250 percent of the poverty level, as determined in accordance with criteria established by the Director of the Office of Management and Budget.CommentsClose CommentsPermalink





`(2) CLINIC- The term `clinic' includes--CommentsClose CommentsPermalink





`(A) a clinical program at an eligible educational institution (as defined in section 529(e)(5)) which satisfies the requirements of paragraph (1) through student assistance of taxpayers in return preparation and filing, andCommentsClose CommentsPermalink





`(B) an organization described in section 501(c) and exempt from tax under section 501(a) which satisfies the requirements of paragraph (1).CommentsClose CommentsPermalink





`(c) Special Rules and Limitations-CommentsClose CommentsPermalink





`(1) AGGREGATE LIMITATION- Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $25,000,000 per year (exclusive of costs of administering the program) to grants under this section.CommentsClose CommentsPermalink





`(2) OTHER APPLICABLE RULES- Rules similar to the rules under paragraphs (2) through (7) of section 7526(c) shall apply with respect to the awarding of grants to qualified return preparation clinics.'.CommentsClose CommentsPermalink





(2) CLERICAL AMENDMENT- The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7526 the following new item:CommentsClose CommentsPermalink





`Sec. 7526A. Return preparation clinics for low-income taxpayers.'.CommentsClose CommentsPermalink





(b) Grants for Taxpayer Representation and Assistance Clinics-CommentsClose CommentsPermalink





(1) INCREASE IN AUTHORIZED GRANTS- Section 7526(c)(1) of the Internal Revenue Code of 1986 (relating to aggregate limitation) is amended by striking `$6,000,000' and inserting `$25,000,000'.CommentsClose CommentsPermalink





(2) PROMOTION OF CLINICS- Section 7526(c) of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(6) PROMOTION OF CLINICS- The Secretary is authorized to promote the benefits of and encourage the use of low-income taxpayer clinics through the use of mass communications, referrals, and other means.'.CommentsClose CommentsPermalink





(3) CLERICAL AMENDMENT- Section 7526(c)(5) of such Code is amended by inserting `qualified' before `low-income'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to grants made after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 104. SAVINGS AS A NATIONAL PERFORMANCE GOAL.

(a) Establishment of Performance Measures-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury shall establish performance measures that evaluate the extent to which Americans save and use the Federal tax filing process to facilitate their savings activities.CommentsClose CommentsPermalink





(2) ELEMENTS OF PERFORMANCE MEASURES- The performance measures described in paragraph (1) shall include:CommentsClose CommentsPermalink





(A) The percentage of Federal income tax refunds returned electronically by direct deposit to tax filers' bank accounts.CommentsClose CommentsPermalink





(B) The percentage of Federal tax filers that deposit into savings products, such as traditional savings accounts, individual retirement accounts, section 529 college savings plans, and others, as a part of the tax filing process.CommentsClose CommentsPermalink





(b) Establishment of Outcome Goals- The Secretary of the Treasury, using the performance measures described in subsection (a) shall identify outcome goals that focus on increasing the United States personal savings rate.CommentsClose CommentsPermalink





(c) Annual Reports- The Secretary of the Treasury shall report to Congress on the performance measures and outcomes goals in the Secretary's annual performance report.CommentsClose CommentsPermalink

TITLE II--ACCESS TO WEALTH BUILDING FINANCIAL SERVICES

SEC. 201. ELECTRONIC TRANSFER ACCOUNTS.

(a) In General- The Secretary of the Treasury is authorized to use such fiscal agent authority as in effect on the date of the enactment of this Act to increase payments to financial institutions in order to offset costs of opening electronic transfer accounts authorized under the Debt Collection Improvement Act of 1996.CommentsClose CommentsPermalink





(b) Use of Accounts- The Secretary of the Treasury shall ensure that recipients of Federal income tax refunds shall be eligible to use electronic transfer accounts with respect to such refunds.CommentsClose CommentsPermalink





(c) Study To Increase Use of Electronic Transfer Accounts and Electronic Payments-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury shall convene a working group comprised of Department of the Treasury officers to explore policy options to increase the use and utility of electronic payments, including electronic transfer accounts. Such group shall consider the size of the subsidy under subsection (a), limitations in the marketing of electronic transfer accounts, and alternative products (with attention to useful product features), risk management factors, and pricing.CommentsClose CommentsPermalink





(2) REPORT- The Secretary of the Treasury shall report to Congress on the results of the study under paragraph (1) not later than March 31, 2008. Such report shall include recommendations to improve the use of electronic transfer accounts and the electronic delivery of payments, generally, solicited from the financial services industry, consumers, and other groups.CommentsClose CommentsPermalink

SEC. 202. BENEFIT CARDS AND BANK SERVICES.

(a) In General- The Secretary of Health and Human Services shall establish a performance measure for the percentage of each State's benefit recipients that receive their benefits by direct deposit into accounts held at depository institutions insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).CommentsClose CommentsPermalink





(b) Specific Target-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of Health and Human Services shall establish a performance target for fiscal year 2010 that increases the baseline measure determined using the performance measure developed under subsection (a) by 10 percent.CommentsClose CommentsPermalink





(2) INCENTIVE- The Secretary of Health and Human Services shall allow individual States that meet the benchmark target on bank accounts opened under paragraph (1) to use such attainment to qualify for bonus awards under title IV of the Social Security Act.CommentsClose CommentsPermalink





(c) Use of Benefit Cards To Promote Savings- The Secretary of Health and Human Services shall seek to identify and promote innovative uses of benefit cards to promote savings among benefit recipients.CommentsClose CommentsPermalink

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

(a) Establishment of Program- The Secretary of the Treasury shall establish a program to support and promote--CommentsClose CommentsPermalink





(1) the expansion of access to financial services, in particular for persons without bank accounts, with low access to financial services, or low utilization of mainstream financial services,CommentsClose CommentsPermalink





(2) the development of new financial products and services that are adequate to improve access to wealth building financial services which help integrate more Americans into the financial mainstream,CommentsClose CommentsPermalink





(3) education for these persons and depository institutions concerning the availability and use of financial services for and by such persons, andCommentsClose CommentsPermalink





(4) such other activities and projects as the Secretary may determine are consistent with the purpose of this section.CommentsClose CommentsPermalink





(b) Powers and Authority of Secretary-CommentsClose CommentsPermalink





(1) IN GENERAL- In carrying out the program, the Secretary of the Treasury may award grants, enter into cooperative agreements and contracts, and designate depository institutions, nonbank financial service providers, and others as financial agents of the Treasury, in order to provide for technical assistance, education, training, or financial services to further the purpose of this section.CommentsClose CommentsPermalink





(2) SPECIFIC POWERS- The powers of the Secretary of the Treasury under this section shall include the following:CommentsClose CommentsPermalink





(A) FINANCIAL SERVICES- The Secretary of the Treasury may promote access to financial services by providing financial and technical assistance to depository institutions and other organizations for providing reasonably-priced financial services, including--CommentsClose CommentsPermalink





(i) electronic transaction accounts,CommentsClose CommentsPermalink





(ii) savings accounts,CommentsClose CommentsPermalink





(iii) pre-paid products, andCommentsClose CommentsPermalink





(iv) other financial services deemed appropriate by the Secretary to meet the needs of service areas or service populations.CommentsClose CommentsPermalink





(B) DISTRIBUTION- The Secretary of the Treasury may promote access to financial services by providing financial and technical assistance to depository institutions, nonbank financial service providers, financial services electronic networks, or community partners for expanding the distribution of financial services to service areas or service populations, including through financial services electronic networks.CommentsClose CommentsPermalink





(C) EDUCATION- The Secretary of the Treasury may promote access to financial services by--CommentsClose CommentsPermalink





(i) providing financial education to service areas or service populations,CommentsClose CommentsPermalink





(ii) providing technical assistance or training to or by depository institutions, nonbank financial service providers, or community partners,CommentsClose CommentsPermalink





(iii) providing financial support for organizations to develop innovative financial services and products, andCommentsClose CommentsPermalink





(iv) otherwise promoting financial services to or by service areas, service populations, depository institutions, nonbank financial service providers, or community partners.CommentsClose CommentsPermalink





(D) RESEARCH AND DEVELOPMENT- The Secretary of the Treasury may conduct or support such research and development as the Secretary considers appropriate in order to further the purpose of this section, including the collection of information about access to financial services.CommentsClose CommentsPermalink





(3) SELECTION CRITERIA- In selecting any depository institution, nonbank financial service provider, community partner, financial services electronic network, or organization providing technical assistance to financial institutions as a recipient of a grant or other assistance under this section, the Secretary of the Treasury shall consider--CommentsClose CommentsPermalink





(A) the likelihood of success of such institution, nonbank financial service provider, community partner, network, or organization in achieving the purpose of the grant or assistance and carrying out the purpose of this Act,CommentsClose CommentsPermalink





(B) the experience of such institution, nonbank financial service provider, community partner, network, or organization in undertaking activities similar to the activities to be funded or supported by the proceeds of the grant or other assistance, andCommentsClose CommentsPermalink





(C) such other factors, including management, performance criteria, and the extent of innovation as the Secretary may determine to be appropriate.CommentsClose CommentsPermalink





(4) REPORTS- Not later than 2 years after the date of enactment of this Act, and annually thereafter, the Secretary of the Treasury shall submit to Congress a report containing--CommentsClose CommentsPermalink





(A) a detailed description of the operation of the program,CommentsClose CommentsPermalink





(B) the findings and conclusions of the Secretary on the extent to which the program established is meeting the purpose of this section and the goals of the Secretary in establishing the program, andCommentsClose CommentsPermalink





(C) such recommendations for legislative or administrative action as the Secretary may consider to be appropriate.CommentsClose CommentsPermalink





(5) AUTHORIZATION OF APPROPRIATIONS-CommentsClose CommentsPermalink





(A) IN GENERAL- To carry out this section, there are authorized to be appropriated to the Secretary of the Treasury, to remain available until expended--CommentsClose CommentsPermalink





(i) $50,000,000 for fiscal year 2008, andCommentsClose CommentsPermalink





(ii) such sums as may be necessary for each of fiscal years 2008 through 2013.CommentsClose CommentsPermalink





(B) ADMINISTRATIVE EXPENSES-CommentsClose CommentsPermalink





(i) IN GENERAL- Of amounts appropriated to the Secretary of the Treasury under this section, not more than $5,000,000 may be used in any fiscal year to pay the administrative costs and expenses of the program established.CommentsClose CommentsPermalink





(ii) EXCLUSION OF CERTAIN COSTS- Costs associated with research and development, training, technical assistance, and education shall not be considered to be administrative expenses for purposes of this subparagraph.CommentsClose CommentsPermalink

TITLE III--CHILDREN'S SAVINGS ACCOUNTS

SEC. 301. YOUNG SAVERS ACCOUNTS.

(a) Establishment-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 408A of the Internal Revenue Code of 1986 (relating to Roth IRAs) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(g) Young Savers Accounts-CommentsClose CommentsPermalink





`(1) IN GENERAL- Except as provided in this subsection, a young savers account shall be treated in the same manner as a Roth IRA.CommentsClose CommentsPermalink





`(2) YOUNG SAVERS ACCOUNT- For purposes of this subsection, the term `young savers account' means, with respect to any taxable year, a Roth IRA that is established and maintained on behalf of an individual who has not attained the age of 21 before the close of the taxable year.CommentsClose CommentsPermalink





`(3) CONTRIBUTION LIMITS- In the case of any contributions for any taxable year to 1 or more young savers accounts established and maintained on behalf of an individual, each of the following contribution limits for the taxable year shall be increased as follows:CommentsClose CommentsPermalink





`(A) The contribution limit applicable to the individual under subsection (c)(2) shall be increased by the aggregate amount of qualified parental contributions to such accounts for the taxable year.CommentsClose CommentsPermalink





`(B) The contribution limits applicable to the young savers accounts under subsection (a)(1) or (b)(2)(B) of section 408, whichever is appropriate, shall be increased by the dollar amount in effect under section 219(b)(1)(A) for the taxable year.CommentsClose CommentsPermalink





`(4) QUALIFIED PARENTAL CONTRIBUTIONS- For purposes of this subsection--CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `qualified parental contribution' means, with respect to any taxable year, a contribution by an individual to a young savers account established and maintained on behalf of an individual who--CommentsClose CommentsPermalink





`(i) is the child of the individual making the contribution, andCommentsClose CommentsPermalink





`(ii) with respect to whom a deduction for an additional exemption is allowable for the taxable year under section 151(c) to the individual making the contribution.CommentsClose CommentsPermalink





`(B) DOLLAR LIMITATIONS-CommentsClose CommentsPermalink





`(i) IN GENERAL- The aggregate amount of qualified parental contributions which may be made for any taxable year on behalf of an individual shall not exceed the dollar amount in effect under section 219(b)(1)(A) for the taxable year.CommentsClose CommentsPermalink





`(ii) LIMIT ON EACH PARENT- The aggregate amount of qualified parental contributions which an individual may make for any taxable year on behalf of 1 or more of the individual's children shall not exceed the contribution limit applicable to the individual under subsection (c)(2) for the taxable year, reduced by any contributions made by or on behalf of the individual to any Roth IRA established and maintained on behalf of the individual.CommentsClose CommentsPermalink





`(5) COORDINATION WITH MATCHING CREDIT FOR RETIREMENT SAVINGS CONTRIBUTIONS- Any qualified parental contributions made by an eligible individual (as defined in section 36(d)) shall be treated as qualified retirement savings contributions for purposes of section 36.'.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink





(b) Account Funds Disregarded for Purposes of All Means-Tested Federal Programs- Notwithstanding any other provision of Federal law, assets accumulated in young savers accounts shall not be taken into account in determining any individual's or household's financial eligibility for, or amount of, any benefit or service, paid for in whole or in part with Federal funds, including student financial aid.CommentsClose CommentsPermalink

TITLE IV--EXPANSION OF THE SAVER'S CREDIT

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

(a) In General- Paragraph (1) of section 25B(d) of the Internal Revenue Code of 1986 (relating to qualified retirement savings contributions) is amended by striking `and' at the end of subparagraph (B)(ii), by striking the period at the end of subparagraph (C), and by inserting after subparagraph (C) the following new subparagraphs:CommentsClose CommentsPermalink





`(D) the amount of purchases or contributions made by such individual to a qualified tuition program (as defined under section 529(b)), andCommentsClose CommentsPermalink





`(E) the amount of contributions made by such individual to a Coverdell education savings account (as defined under section 530(b)).'.CommentsClose CommentsPermalink





(b) Conforming Amendment- Subclause (i) of section 25B(d)(2)(C) of such Code (relating to excepted distributions) is amended by striking `or 408(d)(4)' and inserting `408(d)(4), 529(c), or 530(d)'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink

TITLE V--UNITED STATES SAVINGS BONDS

SEC. 501. SAVINGS BOND MARKETING AND ACCESS.

(a) Advisory Board- The Secretary of the Treasury shall convene a Federal advisory board to explore ways to expand access to United States savings bonds in a cost effective manner. The advisory board shall make recommendations to make United States savings bonds more useful for purchasers of low denomination bonds. The advisory board shall consider, among other things, whether the savings bond holding period can be shortened, whether and how the policy for redemption of savings bonds before the 1-year minimum holding period under certain emergency situations can be clarified or expanded, whether additional outlets can be used to sell savings bonds (including retail stores, post offices, schools, and other nonprofit organizations), whether the electronic purchase system can be amended, and in what manner the purchase of paper bonds can be amended.CommentsClose CommentsPermalink





(b) Report- The Secretary of the Treasury shall submit the findings of the advisory board under subsection (a) in a report to Congress within 180 days after the date of the enactment of this Act.CommentsClose CommentsPermalink





(c) Authorization of Appropriations- There is authorized to be appropriated $35,000,000 to the Bureau of the Public Debt to market United States savings bonds, especially for small savers.CommentsClose CommentsPermalink

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

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

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

`(a) Amount of Credit- For purposes of section 38, the payroll savings plan credit determined under this section with respect to each employee of the taxpayer for any taxable year is an amount equal to 1 percent of the first $500 of expenditures in each month during such taxable year by the eligible employee for United States savings bonds under the taxpayer's payroll savings plan within the Bureau of the Public Debt's payroll savings plan program.CommentsClose CommentsPermalink





`(b) Additional Credit for Automatic Purchases- The Secretary through TreasuryDirect shall establish a method whereby unused amounts resulting from payroll deductions at the end of a 12-month period are automatically used to purchase a savings bond in the accountholder's name. The credit under subsection (a) for the employer of the accountholder shall be increased by the value of the purchased bond.CommentsClose CommentsPermalink





`(c) Termination- This section shall not apply to taxable years beginning more than 10 years after the date of the enactment of this section.'.CommentsClose CommentsPermalink





(b) Credit Made Part of General Business Credit- Section 38(b) of the Internal Revenue Code of 1986 is amended by striking `and' at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting `, plus', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(32) the payroll savings plan credit determined under section 45O(a).'.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





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

TITLE VI--QUALIFIED TUITION PROGRAMS

SEC. 601. REPORTING OF FEE INFORMATION.

(a) Reporting-CommentsClose CommentsPermalink





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

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

`(a) In General- Each person managing a qualified tuition program (as defined by section 529) shall make a return for each taxable year containing--CommentsClose CommentsPermalink





`(1) the name and address of such person;CommentsClose CommentsPermalink





`(2) information with respect to any guarantee offered under the program;CommentsClose CommentsPermalink





`(3) information with respect to any risk factors associated with investments under the program;CommentsClose CommentsPermalink





`(4) information with respect to the performance of investments of the program;CommentsClose CommentsPermalink





`(5) information with respect to any generally applicable fees and costs for the program over 1, 5, and 10-year periods;CommentsClose CommentsPermalink





`(6) information with respect to any initial and on-going fees and with respect to the total fees and costs associated with particular investment under the program, including a fee table listing fees and expenses for--CommentsClose CommentsPermalink





`(A) annual asset-based fees (including any estimated underlying fund expenses, any program manager fee, any State fee, and any annual distribution fee);CommentsClose CommentsPermalink





`(B) additional investor expenses (including maximum deferred sales charges and annual account maintenance fees);CommentsClose CommentsPermalink





`(C) sales charges;CommentsClose CommentsPermalink





`(D) application fees;CommentsClose CommentsPermalink





`(E) cancellation fees;CommentsClose CommentsPermalink





`(F) fees for changing beneficiaries;CommentsClose CommentsPermalink





`(G) fees for changing investment options; andCommentsClose CommentsPermalink





`(H) any other fees or expenses;CommentsClose CommentsPermalink





`(7) information with respect to the basis for determining the amount of any such fees; andCommentsClose CommentsPermalink





`(8) a description of the tax treatment of contributions, investments, and distributions under the program under relevant State law.CommentsClose CommentsPermalink





`(b) Form and Manner- The return required under subsection (a) shall be in such form and manner as the Secretary may require.'.CommentsClose CommentsPermalink





(2) CLERICAL AMENDMENT- The table of sections for subpart A of part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to section 6039I the following new item:CommentsClose CommentsPermalink





`Sec. 6039J. Information with respect to qualified tuition programs.'.CommentsClose CommentsPermalink





(b) Dissemination of Information-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of Treasury shall make available to the public--CommentsClose CommentsPermalink





(A) the information collected under section 6039J of the Internal Revenue Code of 1986 in a manner that allows comparison between different qualified tuition programs (as defined by section 529 of the Internal Revenue Code of 1986); andCommentsClose CommentsPermalink





(B) information regarding the tax treatment of contributions, investments, and distributions under qualified tuition programs under such Code.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Subsection (b) of section 6104 of the Internal Revenue Code of 1986 is amended by inserting `6039J,' after `6034,'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 602. ANNUAL REPORT OF PERFORMANCE AND PARTICIPATION.

(a) In General- Each year, the Secretary of the Treasury or his designee shall publish a report on the use of qualified tuition programs in assisting taxpayers in paying tuition and other education costs at colleges and universities.CommentsClose CommentsPermalink





(b) Contents- The report under subsection (a) shall include--CommentsClose CommentsPermalink





(1) an assessment of the performance of qualified tuition programs;CommentsClose CommentsPermalink





(2) an analysis of which taxpayers are participating in such programs--CommentsClose CommentsPermalink





(A) on a regional basis;CommentsClose CommentsPermalink





(B) by income level; andCommentsClose CommentsPermalink





(C) by level of educational attainment; andCommentsClose CommentsPermalink





(3) a description of tax benefits provided by States in connection with such programs.CommentsClose CommentsPermalink





(c) Consultation With Program Administrators- The Secretary or his designee shall consult with the administrators of qualified tuition programs to obtain such information as necessary for the report under subsection (a).CommentsClose CommentsPermalink





(d) Qualified Tuition Program- For purposes of this section, the term `qualified tuition program' has the meaning given such term under section 529(b) of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink

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

(a) In General- The Secretary of the Treasury is authorized to provided grants to States for the purpose of increasing the participation in qualified tuition programs of--CommentsClose CommentsPermalink





(1) moderate-income and low-income families; andCommentsClose CommentsPermalink





(2) other families that may face additional barriers to accessing and utilizing post-secondary education.CommentsClose CommentsPermalink





(b) Use of Funds- Grants awarded pursuant to subsection (a) may be used--CommentsClose CommentsPermalink





(1) to provide information to taxpayers described in paragraph (1) and (2) of subsection (a) about the availability and use of qualified tuition programs;CommentsClose CommentsPermalink





(2) to reduce fees for such taxpayers under qualified tuition programs; andCommentsClose CommentsPermalink





(3) in any other manner which the Secretary determines is consistent with the purpose of this section.CommentsClose CommentsPermalink





(c) Qualified Tuition Program- For purposes of this section, the term `qualified tuition program' has the meaning given such term under section 529(b) of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(d) Authorization of Appropriations- There are authorized to be appropriated $50,000,000 for fiscal year 2007 and each subsequent fiscal year to carry out the provisions of this section.CommentsClose CommentsPermalink