[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2797 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
2d Session
S. 2797
To establish the Refund to Rainy Day Savings Program.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 13, 2016
Mr. Booker (for himself and Mr. Moran) introduced the following bill;
which was read twice and referred to the Committee on Health,
Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To establish the Refund to Rainy Day Savings Program.
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 ``Refund to Rainy Day Savings Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Over 140,000,000 households file tax returns each year
with the Internal Revenue Service.
(2) For millions of Americans with low or moderate levels
of income, their tax refund is the single largest source of
income for the entire year.
(3) Financial insecurity extends far up the income
spectrum, as too few Americans have sufficient financial
savings, and 1 in every 3 Americans has no financial savings at
all.
(4) 41 percent of American families do not have enough
liquidity to pay for a $2,000 ``rainy day'' expense, and nearly
half of Americans are liquid asset poor, with emergency savings
that are too small to cover basic needs in the event of a
surprise expense or reduction in income.
SEC. 3. REFUND TO RAINY DAY SAVINGS PROGRAM.
(a) In General.--Not later than December 31, 2016, the Secretary of
the Treasury or the Secretary's delegate (referred to in this section
as the ``Secretary'') shall establish and implement a program (referred
to in this section as the ``Refund to Rainy Day Savings Program'') to
allow participating taxpayers, pursuant to the requirements established
under this section, to defer payment on 20 percent of the amount which
would otherwise be refunded to such taxpayer as an overpayment (as
described in section 6401 of the Internal Revenue Code of 1986).
(b) Period of Deferral.--Except as provided under subsection
(c)(5), a participating taxpayer may elect to defer payment of the
amount described in subsection (a) and have such amount deposited in
the Rainy Day Fund (as described in subsection (c)).
(c) Rainy Day Fund.--
(1) In general.--The Secretary shall establish a fund, in
such manner as the Secretary determines to be appropriate, to
be known as the ``Rainy Day Fund'', consisting of any amounts
described in subsection (a) on which payment has been deferred
by participating taxpayers.
(2) Investment.--Any amounts deposited in the Rainy Day
Fund shall be invested by the Secretary, in coordination with
the Bureau of the Fiscal Service of the Department of the
Treasury, in United States Treasury bills issued under chapter
31 of title 31, United States Code, with maturities suitable
for the needs of the Fund and selected so as to provide the
highest return on investment for participating taxpayers.
(3) Disbursements from fund.--
(A) In general.--On the date that is 180 days after
receipt of the individual income tax return of a
participating taxpayer, the amounts in the Rainy Day
Fund shall be made available to the Secretary to
distribute to such taxpayer in an amount equal to the
amount deferred by such taxpayer under subsection (a)
and any interest accrued on such amount (as determined
under paragraph (4)).
(B) Distributed to bank account.--The amounts
described in subparagraph (A) shall be distributed to
the bank account identified by the participating
taxpayer under subsection (d)(3).
(4) Interest accrued.--The amount of interest accrued on
the amount deferred by a participating taxpayer under
subsection (a) shall be determined by the Secretary, in
coordination with the Bureau of the Fiscal Service of the
Department of the Treasury, based upon the return on the
investment of such amounts under paragraph (2).
(5) Early withdrawal.--
(A) In general.--On any date during the period
between the date which is 30 days after receipt by the
Secretary of the individual income tax return of the
participating taxpayer and October 15 of the applicable
year, such taxpayer may elect to terminate the deferral
of the amount described under subsection (a) and
receive a distribution from the Rainy Day Fund equal to
such amount and any interest which has accrued on such
amount up to that date.
(B) Complete withdrawal.--A participating taxpayer
making an election under subparagraph (A) must
terminate deferral of the full amount described under
subsection (a), and such amount shall be distributed to
the bank account identified by the participating
taxpayer under subsection (d)(3).
(d) Participating Taxpayer.--For purposes of this section, the term
``participating taxpayer'' means a taxpayer who--
(1) has not requested or received an extension of the time
for payment of taxes for such taxable year under section 6161
of the Internal Revenue Code of 1986,
(2) prior to the due date for filing the return of tax for
such taxable year, elects to participate in the Refund to Rainy
Day Savings Program, and
(3) provides the Secretary with a bank account number and
any other financial information deemed necessary by the
Secretary for purposes of paragraphs (3)(B) and (5)(B) of
subsection (c).
(e) Forms.--The Secretary shall ensure that the election to defer
payment of the amount described in subsection (a) may be claimed on
Forms 1040, 1040A, and 1040EZ.
(f) Implementation.--
(1) Educational materials and outreach.--The Secretary
shall--
(A) design educational materials for taxpayers
regarding financial savings and the Refund to Rainy Day
Savings Program,
(B) publicly disseminate and distribute such
materials during the first calendar quarter of each
calendar year and following disbursement of amounts
described in subsection (c)(3), and
(C) engage in outreach regarding the Refund to
Rainy Day Savings Program to the Volunteer Income Tax
Assistance program and paid tax preparers.
(2) Information for participating taxpayers.--The Secretary
shall ensure that a participating taxpayer is able to
electronically verify the status of the amount deferred by such
taxpayer under subsection (a), including any interest accrued
on such amount and the status of any distribution.
(3) Federally funded benefits.--Any amounts described in
subsection (a) which are distributed to a participating
taxpayer, including any interest accrued on such amount, shall
be treated in the same manner as any refund made to such
taxpayer under section 32 of the Internal Revenue Code of 1986
for purposes of determining the eligibility of such taxpayer
for benefits or assistance, or the amount or extent of benefits
or assistance, under any Federal program or under any State or
local program financed in whole or in part with Federal funds.
SEC. 4. ASSETS FOR INDEPENDENCE INNOVATION DEMONSTRATION PROJECTS.
(a) Reauthorization.--The Assets for Independence Act (42 U.S.C.
604 note) is amended--
(1) in section 416, by inserting ``, and, subject to
section 417, $25,000,000 for each of fiscal years 2017, 2018,
2019, 2020, and 2021, to remain available until expended.'';
and
(2) by adding at the end the following new section:
``SEC. 417. RESERVATION OF FUNDS.
``(a) In General.--Subject to subsections (b) and (c), from the
funds appropriated for each of fiscal years 2017, 2018, 2019, 2020, and
2021 under section 416, the Secretary shall reserve--
``(1) $3,000,000 for general research and evaluation; and
``(2) any amounts remaining after application of paragraph
(1) to fund AFI innovation demonstration projects under section
418.
``(b) Pilot Program Funding.--From the amounts reserved under
subsection (a) for each of fiscal years 2017, 2018, and 2019, the
Secretary shall make available for operating the pilot program
established under section 5 of the Refund to Rainy Day Savings Act--
``(1) 50 percent of the amount reserved for the relevant
fiscal year under paragraph (1) of subsection (a) (after any
adjustment under subsection (c)); and
``(2) 25 percent of the amount reserved for the relevant
fiscal year under paragraph (2) of subsection (a) (after any
adjustment under subsection (c)).
``(c) Proportional Adjustment.--In any of fiscal years 2017, 2018,
2019, 2020, or 2021, if the amount appropriated for such fiscal year is
greater or less than the amount authorized for such fiscal year under
section 416, the amounts reserved under subsection (a) shall be
increased or decreased for such fiscal year so that each such amount
bears the same proportion to the amount appropriated as each of the
amounts reserved under such subsection bears to the amount
authorized.''.
(b) Establishment of Innovation Program.--The Assets for
Independence Act (42 U.S.C. 604 note), as amended by subsection (a), is
further amended by adding at the end the following new section:
``SEC. 418. AFI INNOVATION PROJECTS.
``(a) In General.--The Secretary is authorized to make grants to
qualified entities to conduct AFI innovation projects under this
section.
``(b) Definitions.--For purposes of this section:
``(1) AFI innovation project.--The term `AFI innovation
project' means a demonstration project carried out by a
qualified entity under this section.
``(2) Innovation development account.--The term `innovation
development account' means an account that is established in a
federally insured financial institution or a State insured
financial institution and meets such other requirements as are
established by the Secretary.
``(c) Application.--
``(1) Criteria and preferences.--
``(A) In general.--Subject to subparagraph (B), in
considering an application to conduct an AFI innovation
project, the Secretary shall apply subsections (c) and
(d) of section 405 to the application in the same
manner that such subsections apply to an application to
conduct a demonstration project under section 405.
``(B) Modification.--For purposes of this
paragraph, paragraph (1) of section 405(c) shall be
applied without regard to the phrase `through
activities requiring one or more qualified expenses'.
``(2) Approval of afi innovation projects.--Not later than
12 months after the date of the enactment of this section, the
Secretary shall, on a competitive basis, approve such
applications to conduct AFI innovation projects as the
Secretary considers to be appropriate, taking into account the
considerations required by paragraph (1). The Secretary shall
ensure, to the maximum extent practicable, that the
applications that are approved involve a range of communities
(both rural and urban) and diverse populations.
``(d) Project Duration and Grant Amount.--
``(1) Duration.--The Secretary shall award grants under
this section for a period not to exceed 5 project years.
``(2) Grant amount.--For each project year of an AFI
innovation project approved under this section, the Secretary
may make a grant to the qualified entity authorized to conduct
the project. In making such a grant, the Secretary shall make
the grant on the first day of the project year in an amount not
to exceed the lesser of--
``(A) the aggregate amount of funds committed as
matching contributions from non-Federal public or
private sector sources; or
``(B) $1,000,000.
``(e) Eligibility and Selection of Individuals To Participate in an
AFI Innovation Project.--
``(1) Eligibility criteria.--Subject to the approval of the
Secretary, each qualified entity conducting an AFI innovation
project shall establish eligibility requirements for
participants in the project. Such requirements shall--
``(A) be more expansive than the requirements
established under section 408; and
``(B) ensure that eligibility is limited to low-
income individuals.
``(2) Selection of individuals to participate.--Each
qualified entity conducting an AFI innovation project shall
select, from among the individuals that meet the eligibility
requirements established by the entity under paragraph (1), the
individuals--
``(A) that the qualified entity determines to be
best suited to participate; and
``(B) to whom the qualified entity will make
disbursements or deposits in accordance with subsection
(f).
``(f) Disbursements by Qualified Entities.--
``(1) In general.--Each qualified entity conducting an AFI
innovation project shall, in a manner consistent with the
program requirements established by such entity, disburse to a
third-party or deposit into the innovation development account
of each individual participating in the project from the funds
described in subsection (d)(2), a matching contribution of not
less than $0.50 and not more than $8 for every $1 deposited in
the account by a project participant.
``(2) Limitation on disbursements for an individual.--Not
more than $5,000 from a grant made under subsection (d)(1)
shall be provided to any one individual over the course of the
AFI innovation project.
``(3) Limitation on disbursements for a household.--Not
more than $10,000 from a grant made under subsection (d)(1)
shall be provided to any one household over the course of the
AFI innovation project.
``(4) Adjustment for inflation.--
``(A) In general.--For each calendar year after
2016, the dollar amounts in paragraphs (2) and (3)
shall be increased by an amount equal to the product
of--
``(i) such dollar amount, and
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year, determined by substituting
`calendar year 2015' for `calendar year 1992'
in subparagraph (B) thereof.
``(B) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $50, such
increase shall be rounded to the next lowest multiple
of $50.''.
(c) Conforming Amendments.--The Assets for Independence Act (42
U.S.C. 604 note), as amended by subsections (a) and (b), is further
amended--
(1) in section 404(2), by inserting ``or section 418''
before the period;
(2) in section 406--
(A) in subsection (a), by striking ``to conduct a
demonstration project under this title'' and inserting
``under section 405''; and
(B) in subsection (b), by striking ``conducted
under this title'' and inserting ``approved under
section 405'';
(3) in section 407--
(A) in subsection (c)--
(i) in paragraph (1)--
(I) in subparagraph (A), by
inserting ``or, in the case of a
participant in a project conducted
under section 418, other permitted
expenses'' after ``qualified
expenses''; and
(II) in subparagraph (B), by
inserting ``or subsection (f) of
section 418'' after ``section 410'';
and
(ii) in paragraph (3), by inserting ``or
section 418(d)(1)''; and
(B) in subsection (d)(2)(A), by inserting ``or
section 418(d)(1)'' after ``section 406(b)'';
(4) in section 408, by striking ``conducted under this
title'' each place it appears and inserting ``approved under
section 405'';
(5) in section 409, by striking ``conducted under this
title'' and inserting ``approved under section 405'';
(6) in section 410, by striking ``under this title'' and
inserting ``conducting a demonstration project approved under
section 405'';
(7) in section 413(a), by inserting ``or section 418(c)''
after ``under section 405''; and
(8) in section 415, by inserting ``or innovation
development account'' after ``individual development account''.
SEC. 5. MATCHED REFUND TO RAINY DAY SAVINGS PILOT PROGRAM.
(a) In General.--Not later than 6 months after the date of the
enactment of this Act and using the funds made available pursuant to
section 417(b) of the Assets for Independence Act, the Secretary of
Health and Human Services, acting through the Director of Community
Services (in this section referred to as ``the Secretary''), shall
establish under this section a matched savings account pilot program to
encourage saving by eligible individuals. Under the pilot program, a
qualified entity may apply to the Secretary for a grant to conduct a
pilot project described in subsection (b) (in this section referred to
as a ``pilot project''). The pilot program shall operate for a period
of 3 years.
(b) Pilot Project Described.--
(1) In general.--A pilot project is a project in which a
qualified entity establishes a matched savings program that
meets the requirements of paragraph (2) for eligible
individuals who are selected by the entity to participate in
the program.
(2) Requirements.--
(A) Deposits into direct deposit accounts.--
(i) In general.--A matched savings program
established as part of a pilot project shall
match amounts saved by each eligible individual
participating in the pilot project, with such
match amount to be equal to or less than the
amount of any payment deferred by such
individual under the Refund to Rainy Day
Savings Program established in section 3(a).
(ii) Timing.--Any amount described in
clause (i) shall not be distributed to an
eligible individual until the amounts described
in paragraphs (3)(B) or (5)(B) of section 3(c)
have been distributed to the bank account
identified by such individual.
(B) Evaluation of program by independent research
organization.--
(i) In general.--From amounts made
available under section 417(b)(2) of the Assets
for Independence Act, as added by section
4(a)(2) of this Act, the Secretary shall enter
into a contract with an independent research
organization for purposes of evaluating pilot
projects conducted under this section.
(ii) Coordination.--Each qualified entity
that establishes a matched savings program as
part of a pilot project shall collaborate with
the independent research organization described
in clause (i) to evaluate the outcomes and
impact of the project.
(iii) Impact on different groups.--The
evaluation described in clause (i) shall
include an examination of the demographic
characteristics of the individuals
participating in the pilot project, such as
gender, race, age, geographic location, and
family makeup, and how the impacts of the
project vary among different demographic
groups.
(iv) Program features.--The program
features to be evaluated through the pilot
projects conducted under this section may
include--
(I) different levels of matching
contributions by qualified entities;
(II) lock-out periods during which
an eligible individual may not make
withdrawals from their account; and
(III) educational materials
intended to promote savings.
(3) Duration.--A pilot project shall be for a duration of
not more than 3 years.
(4) Federally funded benefits.--Any amounts described in
paragraph (2)(A) which are distributed to an eligible
individual shall be treated in the same manner as any refund
made to such taxpayer under section 32 of the Internal Revenue
Code of 1986 for purposes of determining the eligibility of
such taxpayer for benefits or assistance, or the amount or
extent of benefits or assistance, under any Federal program or
under any State or local program financed in whole or in part
with Federal funds.
(c) Strategic Communications Plan.--The Secretary shall devise a
strategic communications plan to ensure a strong pilot program.
(d) Annual Report to Congress.--The Secretary shall submit an
annual report to Congress on the progress and outcomes of the pilot
program established under this section.
(e) Definitions.--In this section:
(1) Eligible individual.--The term ``eligible individual''
means an individual who--
(A) has deferred payment of the amount described in
section 3(a) under the Refund to Rainy Day Savings
Program established in such section, and
(B) meets the eligibility requirements under
section 408 of the Assets for Independence Act, except
that subsection (a)(2) of such section shall not apply.
(2) Qualified entity.--
(A) In general.--The term ``qualified entity''
means--
(i) one or more not-for-profit
organizations described in section 501(c)(3) of
the Internal Revenue Code of 1986 and exempt
from taxation under section 501(a) of such
Code;
(ii) a State or local government agency, or
a tribal government, submitting an application
to conduct a pilot project jointly with an
organization described in clause (i);
(iii) a site that offers free tax help to
individuals who qualify through the Internal
Revenue Service's Voluntary Income Tax
Assistance or Tax Counseling for the Elderly
programs; or
(iv) an entity that--
(I) is--
(aa) a credit union
designated as a low-income
credit union by the National
Credit Union Administration; or
(bb) an organization
designated as a community
development financial
institution by the Secretary of
the Treasury (or the Community
Development Financial
Institutions Fund); and
(II) can demonstrate a
collaborative relationship with a local
community-based organization whose
activities are designed to address
poverty in the community and the needs
of community members for economic
independence and stability.
(v) Rule of construction.--Nothing in this
paragraph shall be construed as preventing an
organization described in subparagraph (A)(i)
from collaborating with a financial institution
or for-profit community development corporation
to carry out the purposes of this section.
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