S 2741 ISCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for disability savings accounts, and for other purposes.CommentsClose CommentsPermalink

March 11, 2008

Mr. DODD introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for disability savings accounts, 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.

This Act may be cited as the `Disability Savings Act of 2008'.CommentsClose CommentsPermalink

SEC. 2. FINDINGS.

Congress makes the following findings:CommentsClose CommentsPermalink





(1) Disability is a natural part of the human experience. Individuals with disabilities have the right to live independently, to exert control and choice over their own lives, and to fully participate in and contribute to their communities through full integration and inclusion in the economic, political, social, cultural, and educational mainstream of American society.CommentsClose CommentsPermalink





(2) Americans with disabilities are more likely to live in poverty than those without disabilities. According to the World Institute on Disability, over one-third of adults with disabilities live in households with income of $15,000 or less compared to only 12 percent of those without disabilities. According to the 2005 American Community Survey, median annual earnings for individuals without a disability were $25,000 compared with $12,800 for those with a severe disability.CommentsClose CommentsPermalink





(3) Families often provide the primary financial assistance necessary for individuals with significant disabilities who cannot support themselves. Families supporting members with disabilities often experience substantial negative effects on the vocational and economic health of the family.CommentsClose CommentsPermalink





(4) Individuals with disabilities often incur significant additional costs related to services and supports necessary to maintain the health and independence needed to fully participate in society.CommentsClose CommentsPermalink





(5) Throughout the years policymakers have provided incentives to Americans to save money for purposes such as home ownership, education and retirement. Many of these benefits do not meet the savings needs of individuals with disabilities and their families.CommentsClose CommentsPermalink





(6) Encouraging individuals with disabilities and their families to save funds will allow them to achieve greater control, choice, participation in community, security, and independence in their lives.CommentsClose CommentsPermalink

SEC. 3. PURPOSES.

The purposes of this Act are as follows:CommentsClose CommentsPermalink





(1) To encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.CommentsClose CommentsPermalink





(2) To provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary's employment, and other sources.CommentsClose CommentsPermalink

SEC. 4. DISABILITY SAVINGS ACCOUNTS.

(a) In General- Subchapter F of chapter 1 of the Internal Revenue Code of 1986 (relating to exempt organizations) is amended by adding at the end the following new part:CommentsClose CommentsPermalink

`PART IX--DISABILITY SAVINGS ENTITIES

`Sec. 530A. Disability savings accounts.CommentsClose CommentsPermalink

`SEC. 530A. DISABILITY SAVINGS ACCOUNTS.

`(a) Disability Savings Account Defined- For purposes of this section, the term `disability savings account' means a trust created or organized in the United States by a qualified individual exclusively for the benefit of a qualified beneficiary, but only if the written governing instrument creating the trust meets the following requirements:CommentsClose CommentsPermalink





`(1) No contribution shall be accepted--CommentsClose CommentsPermalink





`(A) unless it is in cash, orCommentsClose CommentsPermalink





`(B) if such contribution would result in the total aggregate contributions to such account exceeding $1,000,000.CommentsClose CommentsPermalink





`(2) The trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section or who has so demonstrated with respect to any individual retirement plan.CommentsClose CommentsPermalink





`(3) A qualified individual is designated for the purpose of administering requests for distributions from the trust.CommentsClose CommentsPermalink





`(4) No part of the trust assets will be invested in life insurance contracts.CommentsClose CommentsPermalink





`(5) The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund.CommentsClose CommentsPermalink





`(6) Except as provided in subsection (c)(6), in the case that the qualified beneficiary dies or ceases to be a qualified beneficiary, all amounts remaining in the trust up to an amount equal to the total medical assistance paid for the qualified beneficiary under any State Medicaid plan established under title XIX of the Social Security Act shall be distributed to each such State.CommentsClose CommentsPermalink





`(b) Tax Treatment of Income-CommentsClose CommentsPermalink





`(1) IN GENERAL- A disability savings account which has a value of $250,000 or less for any taxable year shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, a disability savings account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).CommentsClose CommentsPermalink





`(2) TAXABLE ACCOUNTS- Any disability savings account which is not exempt from tax under paragraph (1) shall be taxed in the same manner as a qualified disability trust (as defined in section 642(b)(2)(C)(ii)).CommentsClose CommentsPermalink





`(3) DETERMINATION OF VALUE- The value of a disability savings account shall be deemed to be in excess of $250,000 for a taxable year if the daily balance of such account (determined as of the close of business on any business day) exceeds $250,000 for the majority of business days during such taxable year.CommentsClose CommentsPermalink





`(c) Tax Treatment of Distributions-CommentsClose CommentsPermalink





`(1) IN GENERAL- Any distribution from a disability savings account shall be included in the gross income of the qualified beneficiary in the manner provided in section 72.CommentsClose CommentsPermalink





`(2) DISTRIBUTIONS FOR QUALIFIED SERVICES OR PRODUCTS-CommentsClose CommentsPermalink





`(A) IN GENERAL- No amount shall be included in gross income under paragraph (1) if such amount is distributed--CommentsClose CommentsPermalink





`(i) for a qualified service or product, andCommentsClose CommentsPermalink





`(ii) except as otherwise provided by the Secretary, by means of an electronic fund transfer to the person who provided the qualified service or product.CommentsClose CommentsPermalink





`(B) QUALIFIED SERVICE OR PRODUCT-CommentsClose CommentsPermalink





`(i) IN GENERAL- The term `qualified service or product' means any service or product which is provided to a qualified beneficiary on account of such beneficiary's disability.CommentsClose CommentsPermalink





`(ii) CERTAIN SERVICES AND PRODUCTS INCLUDED- Such term shall include preschool education, postsecondary education, tutoring, special education services, training, employment supports, personal assistance supports, community-based supports, respite care, clothing, assistive technology, home modifications, therapy, nutritional management, out-of-pocket medical, vision, or dental expenses, transportation services, vehicle purchases or modifications, insurance premiums, habilitation and rehabilitation services, funeral and burial expenses, and any other service or product consistent with the purposes of this section and allowed under regulations established by the Secretary, in consultation with the Secretary of Health and Human Services.CommentsClose CommentsPermalink





`(iii) PROHIBITED SERVICES AND PRODUCTS- Such term shall not include any service or product paid for by a third-party payer, such as private insurance or a Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).CommentsClose CommentsPermalink





`(C) DISALLOWANCE OF EXCLUDED AMOUNTS AS DEDUCTION, CREDIT, OR EXCLUSION- No deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified service or product to the extent taken into account in determining the amount of exclusion under this paragraph.CommentsClose CommentsPermalink





`(3) EXCEPTION FOR DISTRIBUTIONS RETURNED BEFORE CERTAIN DATE- Paragraph (1) shall not apply to any distribution made from a disability savings account during a taxable year on behalf of the qualified beneficiary if the qualified beneficiary makes a contribution to such disability savings account in an amount equal to the amount of such distribution before the date that is 180 days after such distribution was made.CommentsClose CommentsPermalink





`(4) ADDITIONAL TAX FOR DISTRIBUTIONS NOT USED FOR QUALIFIED SERVICES OR PRODUCTS- The tax imposed by this chapter for any taxable year on any taxpayer who receives a payment or distribution from an disability savings account which is includible in gross income shall be increased by 10 percent of the amount which is so includible.CommentsClose CommentsPermalink





`(5) ROLLOVER CONTRIBUTIONS- Paragraph (1) shall not apply to any amount paid or distributed from a disability savings account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into--CommentsClose CommentsPermalink





`(A) another disability savings account for the benefit of--CommentsClose CommentsPermalink





`(i) the same qualified beneficiary, orCommentsClose CommentsPermalink





`(ii) an individual who--CommentsClose CommentsPermalink





`(I) is the spouse of the qualified beneficiary or bears a relationship to the qualified beneficiary which is described in section 152(d)(2), andCommentsClose CommentsPermalink





`(II) is a qualified beneficiary, orCommentsClose CommentsPermalink





`(B) any trust which is described in subparagraph (A) or (C) of section 1917(d)(4) of the Social Security Act and which is for the benefit of and individual described in clause (i) or (ii) of subparagraph (A).CommentsClose CommentsPermalink





The preceding sentence shall not apply to any payment or distribution if it applied to any prior payment or distribution during the 12-month period ending on the date of the payment or distribution.CommentsClose CommentsPermalink





`(6) CHANGE IN BENEFICIARY- Any change in the beneficiary of a disability savings account shall not be treated as a distribution for purposes of paragraph (1) if the new beneficiary is an individual described in paragraph (5)(A)(ii) as of the date of the change.CommentsClose CommentsPermalink





`(d) Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





`(1) QUALIFIED BENEFICIARY- The term `qualified beneficiary' means any individual who--CommentsClose CommentsPermalink





`(A) is under the age of 65, andCommentsClose CommentsPermalink





`(B) has--CommentsClose CommentsPermalink





`(i) been determined by the Commissioner of Social Security or the Disability Determination Service of a State to be--CommentsClose CommentsPermalink





`(I) blind (as determined under section 1614(a)(2) of the Social Security Act, but without regard to any income or asset eligibility requirements that apply under such title), orCommentsClose CommentsPermalink





`(II) disabled (as determined under section 1614(a)(3) of the Social Security Act, but without regard to any income or asset eligibility requirements that apply under such title, or under section 216(d) of such Act), andCommentsClose CommentsPermalink





`(ii) not been determined by the Commissioner of Social Security or the Disability Determination Service of a State to be no longer blind or disabled (as so defined).CommentsClose CommentsPermalink





The term `Disability Determination Service' means, with respect to each State, the entity that has an agreement with the Commissioner of Social Security to make disability determinations for purposes of title II or XVI of the Social Security Act.CommentsClose CommentsPermalink





`(2) QUALIFIED INDIVIDUAL- The term `qualified individual' means, with respect to any disability savings account--CommentsClose CommentsPermalink





`(A) the qualified beneficiary,CommentsClose CommentsPermalink





`(B) any individual--CommentsClose CommentsPermalink





`(i) who is the spouse of the qualified beneficiary or bears a relationship to the qualified beneficiary which is described in section 152(d)(2), orCommentsClose CommentsPermalink





`(ii) provides over one half of such qualified beneficiary's support,CommentsClose CommentsPermalink





`(C) the legal guardian of the qualified beneficiary, orCommentsClose CommentsPermalink





`(D) in the case of any qualified beneficiary who is in the legal custody of a State or any agency thereof, any individual appointed for purposes of this paragraph by a court of competent jurisdiction.CommentsClose CommentsPermalink





`(3) ACCOUNT TERMINATIONS, ETC-CommentsClose CommentsPermalink





`(A) PROHIBITED TRANSACTIONS- If, during any taxable year of the qualified individual designated under subsection (a)(3), such qualified individual or the qualified beneficiary of the disability savings account engages in any transaction prohibited under section 4975, such account ceases to be an disability savings account as of the first day of such taxable year.CommentsClose CommentsPermalink





`(B) EFFECT OF PLEDGING ACCOUNT AS SECURITY- If, during any taxable year of the qualified beneficiary, the qualified beneficiary uses the account or any portion thereof as security for a loan, the portion so used is treated as distributed to the qualified beneficiary.CommentsClose CommentsPermalink





`(4) ONLY 1 ACCOUNT PER QUALIFIED BENEFICIARY- No individual who is a qualified beneficiary may have more than 1 disability savings account. The Secretary may promulgate regulations necessary to carry out the purposes of this paragraph.CommentsClose CommentsPermalink





`(e) Reports- The trustee of a disability savings account shall make such reports regarding such account to the Secretary and to the qualified individual designated under subsection (a)(3) with respect to contributions, distributions, fees (including the maximum, minimum, and average fees for such accounts), and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required.CommentsClose CommentsPermalink





`(f) Regulations- The Secretary, in consultation with the Secretary of Health and Human Services, shall prescribe such regulations as may be necessary to carry out the purposes of this section and to prevent the abuse of such purposes.'.CommentsClose CommentsPermalink





(b) Rollovers From Qualified Tuition Programs- Paragraph (3) of section 529(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





`(E) ROLLOVERS TO DISABILITY SAVINGS ACCOUNTS-CommentsClose CommentsPermalink





`(i) IN GENERAL- Subparagraph (A) shall not apply to that portion of any distribution which, within 60 days of such distribution, is transferred to a disability savings account with respect to which the designated beneficiary is the qualified beneficiary (as defined by section 530A(d)(1)).CommentsClose CommentsPermalink





`(ii) LIMITATION- Clause (i) shall not apply to any transfer if a prior transfer described in clause (i) has occurred at any time preceding such transfer.'.CommentsClose CommentsPermalink





(c) Tax on Prohibited Transactions-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (1) of section 4975(e) of the Internal Revenue Code of 1986 is amended by striking `or' at the end of subparagraph (F), by redesignating subparagraph (G) as subparagraph (F), and by inserting after subparagraph (F) the following new subparagraph:CommentsClose CommentsPermalink





`(G) a disability savings account described in section 530A(a), or'.CommentsClose CommentsPermalink





(2) SPECIAL RULE- Section 4975(c) of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(7) SPECIAL RULE FOR DISABILITY SAVINGS ACCOUNTS- A qualified beneficiary (as defined by section 530A(d)(1)) shall be exempt from the tax imposed by this section with respect to any transaction concerning a disability savings account (as defined by section 530A(a)) which would otherwise be taxable under this section if, with respect to such transaction, the account ceases to be a disability savings account by reason of the application of section 530A(d)(3)(A) to such account.'.CommentsClose CommentsPermalink





(d) Failure To Provide Reports on Disability Savings Accounts- Paragraph (2) of section 6693(a) of the Internal Revenue Code of 1986 is amended by striking `and' at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting `and', and by inserting after subparagraph (E) the following new subparagraph:CommentsClose CommentsPermalink





`(F) section 530A(e) (relating to disability savings accounts).'.CommentsClose CommentsPermalink





(e) Annual Reports to Congress- The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services and the Commissioner of Social Security, shall report annually to Congress on the usage of disability savings accounts.CommentsClose CommentsPermalink





(f) Authorization of Appropriations- There are authorized to be appropriated to the Commissioner of Social Security for fiscal years beginning with fiscal year 2007, such sums as may be necessary for certifying and recertifying individuals as qualified beneficiaries for purposes of section 530A(d)(1) of the Internal Revenue Code of 1986 (as added by subsection (a)). Amounts appropriated pursuant to the preceding sentence may be used by the Commissioner, as appropriate, for making payments to States for certifications and recertifications of individuals as such beneficiaries that are made under an agreement entered into between the Commissioner and by the Disability Determination Service for the State.CommentsClose CommentsPermalink





(g) Clerical Amendment- The table of parts for subchapter F of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:CommentsClose CommentsPermalink

`PART IX--Disability Savings Entities'.

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

SEC. 5. MATCHING TAX CREDIT FOR CONTRIBUTIONS TO DISABILITY SAVINGS ACCOUNTS.

(a) In General- Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section:CommentsClose CommentsPermalink

`SEC. 36. DISABILITY SAVINGS ACCOUNT MATCHING CONTRIBUTIONS.

`(a) Allowance of Credit- In the case of a qualified individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 50 percent of so much of the qualified disability savings contributions made during the taxable year as do not exceed $2,000.CommentsClose CommentsPermalink





`(b) Limitations-CommentsClose CommentsPermalink





`(1) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME-CommentsClose CommentsPermalink





`(A) IN GENERAL- The amount which would (but for this paragraph) be taken into account under subsection (a) for the taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B).CommentsClose CommentsPermalink





`(B) AMOUNT OF REDUCTION- The amount determined under this subparagraph is the amount which bears the same ratio to the amount which would be so taken into account as--CommentsClose CommentsPermalink





`(i) the excess of--CommentsClose CommentsPermalink





`(I) the taxpayer's modified adjusted gross income for the taxable year, overCommentsClose CommentsPermalink





`(II) the applicable amount, bears toCommentsClose CommentsPermalink





`(ii) the phaseout amount.CommentsClose CommentsPermalink





`(C) APPLICABLE AMOUNT; PHASEOUT AMOUNT- For purposes of subparagraph (B), the applicable amount and the phaseout amount shall be determined as follows:CommentsClose CommentsPermalink

-------------------------------------------------------------------------------- CommentsClose CommentsPermalink

 `                                 The applicable amount is: The phaseout amount is: CommentsClose CommentsPermalink

-------------------------------------------------------------------------------- CommentsClose CommentsPermalink

In the case of a joint return                        $60,000                 $10,000 CommentsClose CommentsPermalink

In the case of a head of household                   $45,000                  $7,500 CommentsClose CommentsPermalink

In any other case                                    $30,000                 $5,000. CommentsClose CommentsPermalink

-------------------------------------------------------------------------------- CommentsClose CommentsPermalink

`(D) MODIFIED ADJUSTED GROSS INCOME- For purposes of this paragraph, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.CommentsClose CommentsPermalink





`(E) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2008, each of the applicable amounts in the second column of the table in subparagraph (C) shall be increased by an amount equal to--CommentsClose CommentsPermalink





`(i) such dollar amount, multiplied byCommentsClose CommentsPermalink





`(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `calendar year 2007' for `calendar year 1992' in subparagraph (B) thereof.CommentsClose CommentsPermalink





Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $500.CommentsClose CommentsPermalink





`(2) EARNED INCOME LIMITATION- The amount of the credit allowable under subsection (a) to any taxpayer for any taxable year shall not exceed the earned income (as defined by section 32(c)(2)) of such taxpayer for such taxable year.CommentsClose CommentsPermalink





`(c) Qualified Individual- For purposes of this section, the term `qualified individual' means the individual designated as the qualified individual of the disability savings account (as defined in section 530A(a)).CommentsClose CommentsPermalink





`(d) Qualified Disability Savings Contributions- The term `qualified disability savings contributions' means, with respect to any taxable year, the aggregate contributions made by the taxpayer to the disability savings account (as so defined) with respect to which such taxpayer is the qualified individual.CommentsClose CommentsPermalink





`(e) Treatment of Contributions by Dependent- If a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins--CommentsClose CommentsPermalink





`(1) no credit shall be allowed under subsection (a) to such individual for such individual's taxable year, andCommentsClose CommentsPermalink





`(2) any qualified disability savings contributions made by such individual during such taxable year shall be treated for purposes of this section as made by such other taxpayer.'.CommentsClose CommentsPermalink





(b) Refundable Amount Credited to Individual Disability Account-CommentsClose CommentsPermalink





(1) TRANSFER OF AMOUNT TO DISABILITY SAVINGS ACCOUNTS- Section 6402 of the Internal Revenue Code of 1986 (relating to authority to make credits or refunds) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(l) Special Rule for Overpayments Attributable to Credit for Contributions to Disability Savings Funds-CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of any overpayment attributable to the credit allowed under section 36, the Secretary shall transfer such amount to the disability savings account to which the taxpayer made a qualified disability savings contribution.CommentsClose CommentsPermalink





`(2) TRANSFERS TO MORE THAN 1 ACCOUNT- If the taxpayer made qualified disability savings contributions to more than 1 disability savings account, the Secretary shall transfer the overpayment described in paragraph (1) to each such disability savings account in an amount that bears the same ratio to the amount of such overpayment as--CommentsClose CommentsPermalink





`(A) the amount of qualified disability savings contributions made by such taxpayer to such disability savings account, bears toCommentsClose CommentsPermalink





`(B) the amount of qualified disability savings contribution made by such taxpayer to all disability savings accounts.CommentsClose CommentsPermalink





`(3) QUALIFIED DISABILITY SAVINGS CONTRIBUTION- For purposes of this subsection, the term `qualified disability savings contribution' has the meaning given such term by section 36(d).'.CommentsClose CommentsPermalink





(2) SEPARATE ACCOUNTING FOR REFUNDABLE AMOUNTS-CommentsClose CommentsPermalink





(A) IN GENERAL- Section 530A(a) of such Code, as added by this Act, is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(7) The trust provides a separate accounting for contributions transferred by the Secretary under section 6402(l).'.CommentsClose CommentsPermalink





(B) SPECIAL RULES FOR CONTRIBUTIONS ATTRIBUTABLE TO DISABILITY SAVINGS ACCOUNT CREDIT- Section 530A of such Code, as added by this Act, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(g) Special Rules for Contributions Attributable to Credit for Disability Savings Account Contributions-CommentsClose CommentsPermalink





`(1) INCREASE IN ADDITIONAL TAX- In the case of a distribution which includes an amount transferred by the Secretary under section 6402(l) (including any earnings attributable to such amount) and which, but for this paragraph, would be includible in gross income--CommentsClose CommentsPermalink





`(A) such amount shall not be included in gross income, andCommentsClose CommentsPermalink





`(B) subsection (c)(4) shall be applied by substituting `100 percent' for `10 percent'.CommentsClose CommentsPermalink





`(2) ORDERING RULES- For purposes of applying this subsection to any distribution from a disability savings account--CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), such distribution shall be treated as made--CommentsClose CommentsPermalink





`(i) first from amounts contributed to the account other than by reason of section 6402(l), andCommentsClose CommentsPermalink





`(ii) second from amounts transferred by the Secretary under section 6402(l).CommentsClose CommentsPermalink





`(B) EXCEPTION FOR DISTRIBUTIONS FOR QUALIFIED SERVICES OR PRODUCTS- In the case of a distribution for qualified services or products, such distribution shall be treated as made--CommentsClose CommentsPermalink





`(i) first from amounts transferred by the Secretary under section 6402(l), andCommentsClose CommentsPermalink





`(ii) second from other amounts contributed to the account.'.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 1324(b)(2) of title 31, United States Code, is amended by inserting before the period at the end `, or enacted by the Disability Savings Act of 2008'.CommentsClose CommentsPermalink





(2) The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 36 and inserting the following:CommentsClose CommentsPermalink





`Sec. 36. Disability savings account matching contributions.CommentsClose CommentsPermalink





`Sec. 37. Overpayments of tax.'.CommentsClose CommentsPermalink





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

SEC. 6. CREDIT TO INSTITUTIONS FOR MAINTAINING DISABILITY SAVINGS ACCOUNTS.

(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. DISABILITY SAVINGS ACCOUNT INVESTMENT CREDIT.

`(a) Determination of Amount- For purposes of section 38, the disability savings account investment credit determined under this section with respect to any eligible entity for any taxable year is an amount equal to the disability savings account investment provided by such eligible entity during the taxable year.CommentsClose CommentsPermalink





`(b) Disability Savings Account Investment- For purposes of this section, the term `disability savings account investment' means an amount equal to $50 with respect to each disability savings account (as defined in section 530A(a)) maintained--CommentsClose CommentsPermalink





`(1) 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, andCommentsClose CommentsPermalink





`(2) with a balance of not less than $100 (other than the taxable year in which such account is opened).CommentsClose CommentsPermalink





`(c) Eligible Entity- For purposes of this section, except as provided in regulations, the term `eligible entity' means any entity which is the trustee of a disability savings account (as so defined).CommentsClose CommentsPermalink





`(d) Denial of Double Benefit-CommentsClose CommentsPermalink





`(1) IN GENERAL- No deduction or credit (other than under this section) shall be allowed under this chapter with respect to any expense which is attributable to the maintenance of a disability savings account.CommentsClose CommentsPermalink





`(2) DETERMINATION OF AMOUNT- Solely for purposes of paragraph (1), the amount attributable to the maintenance of a disability savings account shall be deemed to be the dollar amount of the credit allowed under this section for each taxable year such disability savings account is maintained.'.CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





`(32) the disability savings account investment credit determined under section 45O(a).'.CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





`Sec. 45O. Disability savings account investment credit.'.CommentsClose CommentsPermalink





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

SEC. 7. TREATMENT OF DISABILITY SAVINGS ACCOUNTS UNDER CERTAIN FEDERAL PROGRAMS.

(a) Treatment as a Medicaid Excepted Trust- Paragraph (4) of section 1917(d) of the Social Security Act (42 U.S.C. 1396p(d)(4)) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





`(D) A trust which is a disability savings account described in section 530A(a) of the Internal Revenue Code of 1986.'.CommentsClose CommentsPermalink





(b) Account Funds Disregarded for Purposes of Certain Other Means-Tested Federal Programs-CommentsClose CommentsPermalink





(1) IN GENERAL- For purposes of determining eligibility for any applicable program, any amount (including earnings thereon) in any disability savings account (as defined in section 530A(a) of the Internal Revenue Code of 1986) established for the benefit of such individual and any distribution for qualified services or products (as defined in section 530A(c)(2)(B)) from such account shall be disregarded with respect to any period during which such individual maintains, makes contributions to, or receives distributions from such disability savings account.CommentsClose CommentsPermalink





(2) APPLICABLE PROGRAM- For purposes of this subsection, the term `applicable program' means--CommentsClose CommentsPermalink





(A) the temporary assistance for needy families program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);CommentsClose CommentsPermalink





(B) a State program funded under part B or E of title IV of such Act (42 U.S.C. 621 et seq., 670 et seq.);CommentsClose CommentsPermalink





(C) a State program funded under part D of title IV of such Act (42 U.S.C. 651 et seq.);CommentsClose CommentsPermalink





(D) the supplemental security income program established under title XVI of such Act (42 U.S.C. 1381 et seq.);CommentsClose CommentsPermalink





(E) the Medicaid program under title XIX of the such Act (42 U.S.C. 1396 et seq.);CommentsClose CommentsPermalink





(F) the State children's health insurance program under title XXI of such Act (42 U.S.C. 1397aa et seq.);CommentsClose CommentsPermalink





(G) the food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);CommentsClose CommentsPermalink





(H) the special supplemental nutrition program for women, infants, and children established by section 17 of the Child Nutrition Act of 1966 (422 U.S.C. 1786);CommentsClose CommentsPermalink





(I) a child nutrition program, as defined in section 25(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769f(b)); andCommentsClose CommentsPermalink





(J) any Federal low-income housing assistance program.CommentsClose CommentsPermalink

SEC. 8. MARKETING, OUTREACH, AND EDUCATION FOR DISABILITY SAVINGS ACCOUNTS.

(a) In General- Not later than 180 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall establish a program for marketing, outreach, and education related to disability savings accounts (as defined in section 530A(a) of the Internal Revenue Code of 1986). Such program may utilize contracts with nonprofit organizations established for the purpose of assisting individuals with disabilities.CommentsClose CommentsPermalink





(b) Authorization of Appropriations- There are authorized to be appropriated such sums as may be necessary to carry out the program established under subsection (a).CommentsClose CommentsPermalink