COMMUNITY OPPORTUNITIES, ACCOUNTABILITY, AND TRAINING AND
EDUCATIONAL SERVICES ACT OF 1998
Public Law 105-285
TITLE IV-- ASSETS FOR INDEPENDENCE
Assets for Independence Act. 42 USC 604 note
As amended by Pub. L. 106-554 on Dec. 21, 2000, Pub. L. 107-110 on Jan. 8, 2002, and Pub. L. 114-95 on Dec. 10, 2015
SEC. 401. SHORT TITLE
SEC. 402. FINDINGS
SEC. 403. PURPOSES
SEC. 404. DEFINITIONS
SEC. 405. APPLICATIONS
SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS
SEC. 407. RESERVE FUND
SEC. 408. ELIGIBILITY FOR PARTICIPATION
SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE
SEC. 410. DEPOSITS BY QUALIFIED ENTITIES
SEC. 411. LOCAL CONTROL OVER DEMONSTRATION PROJECTS
SEC. 412. ANNUAL PROGRESS REPORTS
SEC. 413. SANCTIONS
SEC. 414. EVALUATIONS
SEC. 415. NO REDUCTION IN BENEFITS
SEC. 416. AUTHORIZATION OF APPROPRIATIONS
This title may be cited as the "Assets for Independence Act".
Congress makes the following findings:
(1) Economic well-being does not come solely from income, spending, and consumption, but
also requires savings, investment, and accumulation of assets because assets can improve
economic independence and stability, connect individuals with a viable and hopeful future,
stimulate development of human and other capital, and enhance the welfare of offspring.
(2) Fully 1/2 of all Americans have either no, negligible, or negative assets available for
investment, just as the price of entry to the economic mainstream, the cost of a house, an
adequate education, and starting a business, is increasing. Further, the household savings
rate of the United States lags far behind other industrial nations, presenting a barrier to
(3) In the current tight fiscal environment, the United States should invest existing resources in
high-yield initiatives. There is reason to believe that the financial returns, including
increased income, tax revenue, and decreased welfare cash assistance, resulting from
individual development accounts will far exceed the cost of investment in those accounts.
(4) Traditional public assistance programs concentrating on income and consumption have
rarely been successful in promoting and supporting the transition to increased economic
self-sufficiency. Income-based domestic policy should be complemented with asset-based
policy because, while income-based policies ensure that consumption needs (including
food, child care, rent, clothing, and health care) are met, asset-based policies provide the
means to achieve greater independence and economic well-being.
The purposes of this title are to provide for the establishment of demonstration projects designed to determine--
(1) the social, civic, psychological, and economic effects of providing to individuals and families
with limited means an incentive to accumulate assets by saving a portion of their earned
(2) the extent to which an asset-based policy that promotes saving for postsecondary
education, homeownership, and microenterprise development may be used to enable
individuals and families with limited means to increase their economic self-sufficiency; and
(3) the extent to which an asset-based policy stabilizes and improves families and the
community in which the families live.
In this title:
(1) APPLICABLE PERIOD.--The term "applicable period" means, with respect to amounts to be
paid from a grant made for a project year, the calendar year immediately preceding the
calendar year in which the grant is made.
(2) ELIGIBLE INDIVIDUAL.--The term "eligible individual" means an individual who is selected
to participate in a demonstration project by a qualified entity under section 409.
(3) EMERGENCY WITHDRAWAL.--The term "emergency withdrawal" means a withdrawal by an
eligible individual that--
(A) is a withdrawal of only those funds, or a portion of those funds, deposited by the
individual in the individual development account of the individual;
(B) is permitted by a qualified entity on a case-by-case basis; and
(C) is made for--
(i) expenses for medical care or necessary to obtain medical care, for the individual or a
spouse or dependent of the individual described in paragraph (8)(D);
(ii) payments necessary to prevent the eviction of the individual from the residence of the
individual, or foreclosure on the mortgage for the principal residence of the individual,
as defined in paragraph (8)(B); or
(iii) payments necessary to enable the individual to meet necessary living expenses
following loss of employment.
(4) HOUSEHOLD.--The term "household" means all individuals who share use of a dwelling
unit as primary quarters for living and eating separate from other individuals.
(5) INDIVIDUAL DEVELOPMENT ACCOUNT.--
(A) IN GENERAL.--The term "individual development account" means a trust created or
organized in the United States exclusively for the purpose of paying the qualified
expenses of an eligible individual, or enabling the eligible individual to make an
emergency withdrawal, but only if the written governing instrument creating the trust
contains the following requirements:
(i) No contribution will be accepted unless the contribution is in cash or by check.
(ii) The trustee is a federally insured financial institution, or a State insured financial
institution if no federally insured financial institution is available.
(iii) The assets of the trust will be invested in accordance with the direction of the eligible
individual after consultation with the qualified entity providing deposits for the individual
under section 410.
(iv) The assets of the trust will not be commingled with other property except in a common
trust fund or common investment fund.
(v) Except as provided in clause (vi), any amount in the trust that is attributable to a deposit
provided under section 410 may be paid or distributed out of the trust only for the
purpose of paying the qualified expenses of the eligible individual.
(vi) Any balance in the trust on the day after the date on which the individual for whose
benefit the trust is established dies shall be distributed within 30 days of that date as
directed by that individual to another individual development account established for
the benefit of an eligible individual.
(B) CUSTODIAL ACCOUNTS.--For purposes of subparagraph (A), a custodial account shall
be treated as a trust if the assets of the custodial account are held by a bank (as defined
in section 408(n) of the Internal Revenue Code of 1986 [26 U.S.C. 408 (n)]) or another
person who demonstrates, to the satisfaction of the Secretary, that the manner in which
such person will administer the custodial account will be consistent with the requirements
of this title, and if the custodial account would, except for the fact that it is not a trust,
constitute an individual development account described in subparagraph (A). For
purposes of this title, in the case of a custodial account treated as a trust by reason of
the preceding sentence, the custodian of that custodial account shall be treated as the
trustee of the account.
(6) PROJECT YEAR.--The term "project year" means, with respect to a demonstration project,
any of the 5 consecutive 12-month periods beginning on the date the project is originally
authorized to be conducted.
(7) 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 [26 U.S.C. 501 (c)(3)] 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
under section 405 jointly with an organization described in clause (i); or
(iii) an entity that-
(aa) a credit union designated as a low-income credit union by the National Credit Union
Administration (NCUA); or
(bb) an organization designated as a community development financial institution by the
Secretary of the Treasury (or the Community Development Financial Institutions Fund);
(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.
(B) 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
(8) QUALIFIED EXPENSES.--The term "qualified expenses" means one or more of the
following, as provided by a qualified entity:
(A) POSTSECONDARY EDUCATIONAL EXPENSES.-- Postsecondary educational expenses
paid from an individual development account directly to an eligible educational institution.
In this subparagraph:
(i) POSTSECONDARY EDUCATIONAL EXPENSES.--The term "postsecondary educational
expenses" means the following:
(I) TUITION AND FEES.--Tuition and fees required for the enrollment or attendance of a
student at an eligible educational institution.
(II) FEES, BOOKS, SUPPLIES, AND EQUIPMENT.--Fees, books, supplies, and equipment
required for courses of instruction at an eligible educational institution.
(ii) ELIGIBLE EDUCATIONAL INSTITUTION.--The term "eligible educational institution"
means the following:
(I) INSTITUTION OF HIGHER EDUCATION.--An institution described in section 101 or 102
of the Higher Education Act of 1965 [20 U.S.C. 1001,1002].
(II) POSTSECONDARY VOCATIONAL EDUCATION SCHOOL.--An area vocational
education school (as defined in subparagraph (C) or (D) of section 521(4) of the Carl
D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471(4))) which
is in any State (as defined in section 521(33) of such Act), as such sections are in effect
on the date of enactment of this title [Oct. 27, 1998].
(B) FIRST-HOME PURCHASE.--Qualified acquisition costs with respect to a principal
residence for a qualified first-time homebuyer, if paid from individual development
account directly to the persons to whom the amounts are due. In this subparagraph:
(i) PRINCIPAL RESIDENCE.--The term "principal residence" means a main residence, the
qualified acquisition costs of which do not exceed 120 percent of the average area
purchase price applicable to such residence.
(ii) QUALIFIED ACQUISITION COSTS.--The term "qualified acquisition costs" means the
costs of acquiring, constructing, or reconstructing a residence. The term includes any
usual or reasonable settlement, financing, or other closing costs.
(iii) QUALIFIED FIRST-TIME HOMEBUYER.--
(I) IN GENERAL.--The term "qualified first-time homebuyer" means an individual
participating in the project involved (and, if married, the individual's spouse) who has
no present ownership interest in a principal residence during the 3-year period ending
on the date of acquisition of the principal residence to which this subparagraph applies.
(II) DATE OF ACQUISITION.--The term "date of acquisition" means the date on which a
binding contract to acquire, construct, or reconstruct the principal residence to which this
subparagraph applies is entered into.
(C) BUSINESS CAPITALIZATION.--Amounts paid from an individual development account
directly to a business capitalization account that is established in a federally insured
financial institution (or in a State insured financial institution if no federally insured
financial institution is available) and is restricted to use solely for qualified business
In this subparagraph:
(i) QUALIFIED BUSINESS CAPITALIZATION EXPENSES.--The term "qualified business
capitalization expenses" means qualified expenditures for the capitalization of a qualified
business pursuant to a qualified plan.
(ii) QUALIFIED EXPENDITURES.--The term "qualified expenditures" means expenditures
included in a qualified plan, including capital, plant, equipment, working capital, and
(iii) QUALIFIED BUSINESS.--The term "qualified business" means any business that does
not contravene any law or public policy (as determined by the Secretary).
(iv) QUALIFIED PLAN.--The term "qualified plan" means a business plan, or a plan to use a
business asset purchased, which--
(I) is approved by a financial institution, a microenterprise development organization, or a
nonprofit loan fund having demonstrated fiduciary integrity;
(II) includes a description of services or goods to be sold, a marketing plan, and projected
financial statements; and
(III) may require the eligible individual to obtain the assistance of an experienced
(D) TRANSFERS TO IDAS OF FAMILY MEMBERS.--Amounts paid from an individual
development account directly into another such account established for the benefit of an
eligible individual who is --
(i) the individual's spouse; or
(ii) any dependent of the individual with respect to whom the individual is allowed a
deduction under section 151 of the Internal Revenue Code of 1986 [26 U.S.C. 151].
(9) QUALIFIED SAVINGS OF THE INDIVIDUAL FOR THE PERIOD.--The term "qualified
savings of the individual for the period" means the aggregate of the amounts contributed
by an individual to the individual development account of the individual during the period.
(10) SECRETARY.--The term "Secretary" means the Secretary of Health and Human Services,
acting through the Director of Community Services.
(11) TRIBAL GOVERNMENT.--The term "tribal government" means a tribal organization, as
defined in section 4 of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450b) or a Native Hawaiian organization, as defined in section 6207 of the
Native Hawaiian Education Act (20 U.S.C. 7517).
(a) ANNOUNCEMENT OF DEMONSTRATION PROJECTS.-- Not later than 3 months after the
date of enactment of this title [Oct. 27, 1998], the Secretary shall publicly announce the
availability of funding under this title for demonstration projects and shall ensure that
applications to conduct the demonstration projects are widely available to qualified entities.
(b) SUBMISSION.--Not later than 6 months after the date of enactment of this title, a qualified
entity may submit to the Secretary an application to conduct a demonstration project under
(c) CRITERIA.--In considering whether to approve an application to conduct a demonstration
project under this title, the Secretary shall assess the following:
(1) SUFFICIENCY OF PROJECT.-The degree to which the project described in the
application appears likely to aid project participants in achieving economic self-
sufficiency through activities requiring one or more qualified expenses.
(2) ADMINISTRATIVE ABILITY.--The experience and ability of the applicant to responsibly
administer the project.
(3) ABILITY TO ASSIST PARTICIPANTS.--The experience and ability of the applicant in
recruiting, educating, and assisting project participants to increase their economic
independence and general well-being through the development of assets.
(4) COMMITMENT OF NON-FEDERAL FUNDS.--The aggregate amount of direct funds from
non-Federal public sector and from private sources that are formally committed to the
project as matching contributions.
(5) ADEQUACY OF PLAN FOR PROVIDING INFORMATION FOR EVALUATION.--The
adequacy of the plan for providing information relevant to an evaluation of the
(6) OTHER FACTORS.--Such other factors relevant to the purposes of this title as the
Secretary may specify.
(d) PREFERENCES.--In considering an application to conduct a demonstration project under
this title, the Secretary shall give preference to an application that --
(1) demonstrates the willingness and ability to select individuals described in section 408 who
are predominantly from households in which a child (or children) is living with the child's
biological or adoptive mother or father, or with the child's legal guardian;
(2) provides a commitment of non-Federal funds with a proportionately greater amount of
such funds committed from private sector sources; and
(3) targets such individuals residing within one or more relatively well-defined neighborhoods
or communities (including rural communities) that experience high rates of poverty or
(e) APPROVAL.--Not later than 9 months after the date of enactment of this title [Oct. 27, 1998],
the Secretary shall, on a competitive basis, approve such applications to conduct
demonstration projects under this title as the Secretary considers to be appropriate,
taking into account the assessments required by subsections (c) and (d). 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.
(f) CONTRACTS WITH NONPROFIT ENTITIES.--The Secretary may contract with an entity
described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code to carry out any responsibility of the Secretary
under this section or section 412 if --
(1) such entity demonstrates the ability to carry out such responsibility; and
(2) the Secretary can demonstrate that such responsibility would not be carried out by the
Secretary at a lower cost.
(g) GRANDFATHERING OF EXISTING STATEWIDE PROGRAMS.--Any statewide individual
asset-building program that is carried out in a manner consistent with the purposes of this
title, that is established under State law as of the date of enactment of this Act
[Oct. 27, 1998], and that as of such date is operating with an annual State appropriation of
not less than $1,000,000 in non-Federal funds, shall be deemed to meet the eligibility
requirements of this subtitle, and the entity carrying out the program shall be deemed to
be a qualified entity. The Secretary shall consider funding the statewide program as a
demonstration project described in this subtitle. In considering the statewide program for
funding, the Secretary shall review an application submitted by the entity carrying out such
statewide program under this section, notwithstanding the preference requirements listed in
subsection (d). Any program requirements under sections 407 through 411 that are
inconsistent with State statutory requirements in effect on the date of enactment of this Act,
governing such statewide program, shall not apply to the program.
(a) DEMONSTRATION AUTHORITY.--If the Secretary approves an application to conduct a
demonstration project under this title [Oct. 27, 1998], the Secretary shall, not later than 10
months after the date of enactment of this title, authorize the applicant to conduct the project
for 5 project years in accordance with the approved application and the requirements of this
(b) GRANT AUTHORITY.--For each project year of a demonstration project conducted under
this title, 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--
(1) the aggregate amount of funds committed as matching contributions from non-Federal
public or private sector sources; or
(a) ESTABLISHMENT.--A qualified entity under this title, other than a State or local government
agency or a tribal government, shall establish a Reserve Fund that shall be maintained in
accordance with this section.
(b) AMOUNTS IN RESERVE FUND.--
(1) IN GENERAL.--As soon after receipt as is practicable, a qualified entity shall deposit in
the Reserve Fund established under subsection (a)--
(A) all funds provided to the qualified entity from any public or private source in connection
with the demonstration project; and
(B) the proceeds from any investment made under subsection (c)(2).
(2) UNIFORM ACCOUNTING REGULATIONS.--The Secretary shall prescribe regulations
with respect to accounting for amounts in the Reserve Fund established under subsection
(c) USE OF AMOUNTS IN THE RESERVE FUND.--
(1) IN GENERAL.--A qualified entity shall use the amounts in the Reserve Fund established
under subsection (a) to--
(A) assist participants in the demonstration project in obtaining the skills (including
economic literacy, budgeting, credit, and counseling skills) and information necessary
to achieve economic self-sufficiency through activities requiring qualified expenses;
(B) provide deposits in accordance with section 410 for individuals selected by the
qualified entity to participate in the demonstration project;
(C) administer the demonstration project; and
(D) provide the research organization evaluating the demonstration project under section
414 with such information with respect to the demonstration project as may be
required for the evaluation.
(2) AUTHORITY TO INVEST FUNDS.--
(A) GUIDELINES.--The Secretary shall establish guidelines for investing amounts in the
Reserve Fund established under subsection (a) in a manner that provides an
appropriate balance between return, liquidity, and risk.
(B) INVESTMENT.--A qualified entity shall invest the amounts in its Reserve Fund that are
not immediately needed to carry out the provisions of paragraph (1), in accordance
with the guidelines established under subparagraph (A).
(3) LIMITATION ON USES.--Not more than 15 percent of the amounts provided to a qualified
entity under section 406(b) shall be used by the qualified entity for the purposes
described in subparagraphs (A), (C), and (D) of paragraph (1), of which not less than
2 percent of the amounts shall be used by the qualified entity for the purposes described
in paragraph (1)(D). Of the total amount specified in this paragraph, not more than 7.5
percent shall be used for administrative functions under paragraph (1)(C), including
program management, reporting requirements, recruitment and enrollment of individuals,
and monitoring. The remainder of the total amount specified in this paragraph (not
including the amount specified for use for the purposes described in paragraph (1)(D))
shall be used for nonadministrative functions described in paragraph (1)(A), including
case management, budgeting. economic literacy, and credit counseling. If the cost of
nonadministrative functions described in paragraph (1)(A) is less than 5.5 percent of the
total amount specified in this paragraph, such excess funds may be used for
administrative functions. If two or more qualified entities are jointly administering a project,
no qualified entity shall use more than its proportional share for the purposes described
in subparagraphs (A), (C), and (D) of paragraph (1).
(d) UNUSED FEDERAL GRANT FUNDS TRANSFERRED TO THE SECRETARY WHEN
PROJECT TERMINATES.-- Notwithstanding subsection (c), upon the termination of any
demonstration project authorized under this section, the qualified entity conducting the
project shall transfer to the Secretary an amount equal to--
(1) the amounts in its Reserve Fund at the time of the termination; multiplied by
(2) a percentage equal to--
(A) the aggregate amount of grants made to the qualified entity under section 406(b);
(B) the aggregate amount of all funds provided to the qualified entity from all sources to
conduct the project.
(a) IN GENERAL.-- Any individual who is a member of a household that is eligible for assistance
under the State temporary assistance for needy families program established under part A
of title IV of the Social Security Act (42 U.S.C. 601 et seq.), or that meets each of the
following requirements shall be eligible to participate in a demonstration project conducted
under this title:
(1) INCOME TEST.--The adjusted gross income of the household is equal to or less than 200
percent of the poverty line (as determined by the Office of Management and Budget) or
the earned income amount described in section 32 of the Internal Revenue Code of 1986
[26 U.S.C. 32] (taking into account the size of the household).
(2) NET WORTH TEST.--
(A) IN GENERAL.--The net worth of the household, as of the end of the calendar year
preceding the determination of eligibility, does not exceed $10,000.
(B) DETERMINATION OF NET WORTH.--For purposes of subparagraph (A), the net worth
of a household is the amount equal to--
(i) the aggregate market value of all assets that are owned in whole or in part by any
member of the household; minus
(ii) the obligations or debts of any member of the household.
(C) EXCLUSIONS.--For purposes of determining the net worth of a household, a
household's assets shall not be considered to include the primary dwelling unit and
one motor vehicle owned by a member of the household.
(b) INDIVIDUALS UNABLE TO COMPLETE THE PROJECT.--The Secretary shall establish
such regulations as are necessary to ensure compliance with this title if an individual
participating in the demonstration project moves from the community in which the project is
conducted or is otherwise unable to continue participating in that project, including regulations
prohibiting future eligibility to participate in any other demonstration project conducted under
From among the individuals eligible to participate in a demonstration project conducted under this title, each qualified entity shall select the individuals--
(1) that the qualified entity determines to be best suited to participate; and
(2) to whom the qualified entity will provide deposits in accordance with section 410.
(a) IN GENERAL.--Not less than once every 3 months during each project year, each qualified
entity under this title shall deposit in the individual development account of each individual
participating in the project, or into a parallel account maintained by the qualified entity--
(1) from the non-Federal funds described in section 405(c)(4), a matching contribution of not
less than $0.50 and not more than $4 for every $1 of earned income (as defined in
section 911(d)(2) of the Internal Revenue Code of 1986 [26 U.S.C 911 (d)(2)]) deposited in
the account by a project participant during that period;
(2) from the grant made under section 406(b), an amount equal to the matching contribution
made under paragraph (1); and
(3) any interest that has accrued on amounts deposited under paragraph (1) or (2) on behalf
of that individual into the individual development account of the individual or into a
parallel account maintained by the qualified entity.
(b) LIMITATION ON DEPOSITS FOR AN INDIVIDUAL.--Not more than $2,000 from a grant
made under section 406(b) shall be provided to any one individual over the course of the
(c) LIMITATION ON DEPOSITS FOR A HOUSEHOLD.--Not more than $4,000 from a grant
made under section 406(b) shall be provided to any one household over the course of
the demonstration project.
(d) WITHDRAWAL OF FUNDS.--The Secretary shall establish such guidelines as may be
necessary to ensure that funds held in an individual development account are not
withdrawn, except for one or more qualified expenses, or for an emergency withdrawal.
Such guidelines shall include a requirement that a responsible official of the qualified entity
conducting a project approve a withdrawal from such an account in writing. The guidelines
shall provide that no individual may withdraw funds from an individual development account
earlier than 6 months after the date on which the individual first deposits funds in the
(e) REIMBURSEMENT.--An individual shall reimburse an individual development account for
any funds withdrawn from the account for an emergency withdrawal, not later than 12
months after the date of the withdrawal. If the individual fails to make the reimbursement,
the qualified entity administering the account shall transfer the funds deposited into the
account or a parallel account under this section to the Reserve Fund of the qualified entity,
and use the funds to benefit other individuals participating in the demonstration project
A qualified entity under this title, other than a State or local government agency or a tribal government, shall, subject to the provisions of section 413, have sole authority over the administration of the project. The Secretary may prescribe only such regulations or guidelines with respect to demonstration projects conducted under this title as are necessary to ensure compliance with the approved applications and the requirements of this title.
(a) IN GENERAL.--Each qualified entity under this title shall prepare an annual report on the
progress of the demonstration project. Each report shall include both program and
participant information and shall specify for the period covered by the report the following
(1) The number and characteristics of individuals making a deposit into an individual
(2) The amounts in the Reserve Fund established with respect to the project.
(3) The amounts deposited in the individual development accounts.
(4) The amounts withdrawn from the individual development accounts and the purposes for
which such amounts were withdrawn.
(5) The balances remaining in the individual development accounts.
(6) The savings account characteristics (such as threshold amounts and match rates)
required to stimulate participation in the demonstration project, and how such
characteristics vary among different populations or communities.
(7) What service configurations of the qualified entity (such as configurations relating to
peer support, structured planning exercises, mentoring, and case management)
increased the rate and consistency of participation in the demonstration project and
how such configurations varied among different populations or communities.
(8) Such other information as the Secretary may require to evaluate the demonstration
(b) SUBMISSION OF REPORTS.--The qualified entity shall submit each report required to be
prepared under subsection (a) to--
(1) the Secretary; and
(2) the Treasurer (or equivalent official) of the State in which the project is conducted, if the
State or a local government or a tribal government committed funds to the demonstration
(c) TIMING.--The first report required by subsection (a) shall be submitted not later than 60
days after the end of the project year in which the Secretary authorized the qualified entity
to conduct the demonstration project, and subsequent reports shall be submitted every
12 months thereafter, until the conclusion of the project.
(a) AUTHORITY TO TERMINATE DEMONSTRATION PROJECT.--If the Secretary determines
that a qualified entity under this title is not operating a demonstration project in accordance
with the entity's approved application under section 405 or the requirements of this title
(and has not implemented any corrective recommendations directed by the Secretary), the
Secretary shall terminate such entity's authority to conduct the demonstration project.
(b) ACTIONS REQUIRED UPON TERMINATION.--If the Secretary terminates the authority to
conduct a demonstration project, the Secretary--
(1) shall suspend the demonstration project;
(2) shall take control of the Reserve Fund established pursuant to section 407;
(3) shall make every effort to identify another qualified entity (or entities) willing and able to
conduct the project in accordance with the approved application (or, if modification is
necessary to incorporate the recommendations, the application as modified) and the
requirements of this title;
(4) shall, if the Secretary identifies an entity (or entities) described in paragraph (3)--
(A) authorize the entity (or entities) to conduct the project in accordance with the approved
application (or, if modification is necessary to incorporate the recommendations, the
application as modified) and the requirements of this title;
(B) transfer to the entity (or entities) control over the Reserve Fund established pursuant
to section 407; and
(C) consider, for purposes of this title--
(i) such other entity (or entities) to be the qualified entity (or entities) originally
authorized to conduct the demonstration project; and
(ii) the date of such authorization to be the date of the original authorization; and(5) if, by
the end of the 1-year period beginning on the date of the termination, the Secretary
has not found a qualified entity (or entities) described in paragraph
(A) terminate the project; and
(B) from the amount remaining in the Reserve Fund established as part of the project,
remit to each source that provided funds under section 405(c)(4) to the entity
originally authorized to conduct the project, an amount that bears the same ratio to the
amount so remaining as the amount provided from the source under section 405(c)(4)
bears to the amount provided from all such sources under that section.
(a) IN GENERAL.--Not later than 10 months after the date of enactment of this title [Oct. 27, 1998], the
Secretary shall enter into a contract with an independent research organization to evaluate
the demonstration projects conducted under this title, individually and as a group, including
evaluating all qualified entities participating in and sources providing funds for the
demonstration projects conducted under this title.
(b) FACTORS TO EVALUATE.--In evaluating any demonstration project conducted under this
title, the research organization shall address the following factors:
(1) The effects of incentives and organizational or institutional support on savings behavior
in the demonstration project.
(2) The savings rates of individuals in the demonstration project based on demographic
characteristics including gender, age, family size, race or ethnic background, and
(3) The economic, civic, psychological, and social effects of asset accumulation, and how
such effects vary among different populations or communities.
(4) The effects of individual development accounts on savings rates, homeownership, level
of postsecondary education attained, and self-employment, and how such effects vary
among different populations or communities.
(5) The potential financial returns to the Federal Government and to other public sector and
private sector investors in individual development accounts over a 5-year and 10-year
period of time.
(6) The lessons to be learned from the demonstration projects conducted under this title and
if a permanent program of individual development accounts should be established.
(7) Such other factors as may be prescribed by the Secretary.
(c) METHODOLOGICAL REQUIREMENTS.--In evaluating any demonstration project conducted
under this title, the research organization shall--
(1) for at least one site, use control groups to compare participants with nonparticipants;
(2) before, during, and after the project, obtain such quantitative data as are necessary to
evaluate the project thoroughly; and
(3) develop a qualitative assessment, derived from sources such as in-depth interviews, of
how asset accumulation affects individuals and families.
(d) REPORTS BY THE SECRETARY.--
(1) INTERIM REPORTS.--Not later than 90 days after the end of the project year in which the
Secretary first authorizes a qualified entity to conduct a demonstration project under this
title, and every 12 months thereafter until all demonstration projects conducted under this
title are completed, the Secretary shall submit to Congress an interim report setting forth
the results of the reports submitted pursuant to section 412(b).
(2) FINAL REPORTS.--Not later than 12 months after the conclusion of all demonstration
projects conducted under this title, the Secretary shall submit to Congress a final report
setting forth the results and findings of all reports and evaluations conducted pursuant to
(e) EVALUATION EXPENSES.- Of the amount appropriated under section 416 for a fiscal year,
the Secretary may expend not more than $500,000 for such fiscal year to carry out the
objectives of this section.
Notwithstanding any other provision of Federal law (other than the Internal Revenue Code of 1986 [26 U.S.C. 1 et seq]) that requires consideration of 1 or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit authorized by such law to be provided to or for the benefit of such individual, funds (including interest accruing) in an individual development account under this Act [see Short Title of 1998 Amendment note set out under section 9801 of this title] shall be disregarded for such purpose with respect to any period during which such individual maintains or makes contributions into such an account.
There is authorized to be appropriated to carry out this title, $25,000,000 for each of fiscal years 1999, 2000, 2001, 2002, and 2003, to remain available until expended. Approved October 27, 1998; Amended December 21, 2000.