I 116TH CONGRESS 1ST SESSION H. R. 2112 To establish the Refund to Rainy Day Savings Program. IN THE HOUSE OF REPRESENTATIVES APRIL 4, 2019 Mrs. WATSON COLEMAN (for herself and Mr. HILL of Arkansas) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To establish the Refund to Rainy Day Savings Program. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Refund to Rainy Day 4 Savings Act’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 (1) Approximately 15,000,000 households file 8 tax returns each year with the Internal Revenue 9 Service. 10 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 2 •HR 2112 IH (2) For millions of Americans with low or mod- 1 erate levels of income, their tax refund is the single 2 largest source of income for the entire year. 3 (3) Financial insecurity extends far up the in- 4 come spectrum, as too few Americans have sufficient 5 financial savings, and 1 in every 3 Americans has no 6 financial savings at all. 7 (4) Forty percent of American families do not 8 have enough liquidity to pay for a $400 ‘‘rainy day’’ 9 expense, and 40 percent of Americans are liquid 10 asset poor, with emergency savings that are too 11 small to cover basic needs in the event of a surprise 12 expense or reduction in income. 13 SEC. 3. REFUND TO RAINY DAY SAVINGS PROGRAM. 14 (a) IN GENERAL.—Not later than December 31, 15 2019, the Secretary of the Treasury or the Secretary’s del- 16 egate (referred to in this section as the ‘‘Secretary’’) shall 17 establish and implement a program (referred to in this 18 section as the ‘‘Refund to Rainy Day Savings Program’’) 19 to allow participating taxpayers, pursuant to the require- 20 ments established under this section, to defer payment on 21 20 percent of the amount which would otherwise be re- 22 funded to such taxpayer as an overpayment (as described 23 in section 6401 of the Internal Revenue Code of 1986). 24 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 3 •HR 2112 IH (b) PERIOD OF DEFERRAL.—Except as provided 1 under subsection (c)(5), a participating taxpayer may elect 2 to defer payment of the amount described in subsection 3 (a) and have such amount deposited in the Rainy Day 4 Fund (as described in subsection (c)). 5 (c) RAINY DAY FUND.— 6 (1) IN GENERAL.—The Secretary shall establish 7 a fund, in such manner as the Secretary determines 8 to be appropriate, to be known as the ‘‘Rainy Day 9 Fund’’, consisting of any amounts described in sub- 10 section (a) on which payment has been deferred by 11 participating taxpayers. 12 (2) INVESTMENT.—Any amounts deposited in 13 the Rainy Day Fund shall be invested by the Sec- 14 retary, in coordination with the Bureau of the Fiscal 15 Service of the Department of the Treasury, in 16 United States Treasury bills issued under chapter 17 31 of title 31, United States Code, with maturities 18 suitable for the needs of the Fund and selected so 19 as to provide the highest return on investment for 20 participating taxpayers. 21 (3) DISBURSEMENTS FROM FUND.— 22 (A) IN GENERAL.—On the date that is 180 23 days after receipt of the individual income tax 24 return of a participating taxpayer, the amounts 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 4 •HR 2112 IH in the Rainy Day Fund shall be made available 1 to the Secretary to distribute to such taxpayer 2 in an amount equal to the amount deferred by 3 such taxpayer under subsection (a) and any in- 4 terest accrued on such amount (as determined 5 under paragraph (4)). 6 (B) DISTRIBUTED TO BANK ACCOUNT.— 7 The amounts described in subparagraph (A) 8 shall be distributed to the bank account identi- 9 fied by the participating taxpayer under sub- 10 section (d)(3). 11 (4) INTEREST ACCRUED.—The amount of inter- 12 est accrued on the amount deferred by a partici- 13 pating taxpayer under subsection (a) shall be deter- 14 mined by the Secretary, in coordination with the Bu- 15 reau of the Fiscal Service of the Department of the 16 Treasury, based upon the return on the investment 17 of such amounts under paragraph (2). 18 (5) EARLY WITHDRAWAL.— 19 (A) IN GENERAL.—On any date during the 20 period between the date which is 30 days after 21 receipt by the Secretary of the individual in- 22 come tax return of the participating taxpayer 23 and October 15 of the applicable year, such tax- 24 payer may elect to terminate the deferral of the 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 5 •HR 2112 IH amount described under subsection (a) and re- 1 ceive a distribution from the Rainy Day Fund 2 equal to such amount and any interest which 3 has accrued on such amount up to that date. 4 (B) COMPLETE WITHDRAWAL.—A partici- 5 pating taxpayer making an election under sub- 6 paragraph (A) must terminate deferral of the 7 full amount described under subsection (a), and 8 such amount shall be distributed to the bank 9 account identified by the participating taxpayer 10 under subsection (d)(3). 11 (d) PARTICIPATING TAXPAYER.—For purposes of 12 this section, the term ‘‘participating taxpayer’’ means a 13 taxpayer who— 14 (1) has not requested or received an extension 15 of the time for payment of taxes for such taxable 16 year under section 6161 of the Internal Revenue 17 Code of 1986; 18 (2) prior to the due date for filing the return 19 of tax for such taxable year, elects to participate in 20 the Refund to Rainy Day Savings Program; and 21 (3) provides the Secretary with a bank account 22 number and any other financial information deemed 23 necessary by the Secretary for purposes of para- 24 graphs (3)(B) and (5)(B) of subsection (c). 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 6 •HR 2112 IH (e) FORMS.—The Secretary shall ensure that the 1 election to defer payment of the amount described in sub- 2 section (a) may be claimed on Forms 1040, 1040A, and 3 1040EZ. 4 (f) IMPLEMENTATION.— 5 (1) EDUCATIONAL MATERIALS AND OUT- 6 REACH.—The Secretary shall— 7 (A) design educational materials for tax- 8 payers regarding financial savings and the Re- 9 fund to Rainy Day Savings Program; 10 (B) publicly disseminate and distribute 11 such materials during the first calendar quarter 12 of each calendar year and following disburse- 13 ment of amounts described in subsection (c)(3); 14 and 15 (C) engage in outreach regarding the Re- 16 fund to Rainy Day Savings Program to the Vol- 17 unteer Income Tax Assistance program and 18 paid tax preparers. 19 (2) INFORMATION FOR PARTICIPATING TAX- 20 PAYERS.—The Secretary shall ensure that a partici- 21 pating taxpayer is able to electronically verify the 22 status of the amount deferred by such taxpayer 23 under subsection (a), including any interest accrued 24 on such amount and the status of any distribution. 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 7 •HR 2112 IH (3) FEDERALLY FUNDED BENEFITS.—Any 1 amounts described in subsection (a) which are dis- 2 tributed to a participating taxpayer, including any 3 interest accrued on such amount, shall be treated in 4 the same manner as any refund made to such tax- 5 payer under section 32 of the Internal Revenue Code 6 of 1986 for purposes of determining the eligibility of 7 such taxpayer for benefits or assistance, or the 8 amount or extent of benefits or assistance, under 9 any Federal program or under any State or local 10 program financed in whole or in part with Federal 11 funds. 12 SEC. 4. ASSETS FOR INDEPENDENCE INNOVATION DEM- 13 ONSTRATION PROJECTS. 14 (a) REAUTHORIZATION.—The Assets for Independ- 15 ence Act (42 U.S.C. 604 note) is amended— 16 (1) in section 416, by inserting ‘‘, and, subject 17 to section 417, $25,000,000 for each of fiscal years 18 2020, 2021, 2022, 2023, and 2024, to remain avail- 19 able until expended.’’; and 20 (2) by adding at the end the following new sec- 21 tion: 22 ‘‘SEC. 417. RESERVATION OF FUNDS. 23 ‘‘(a) IN GENERAL.—Subject to subsections (b) and 24 (c), from the funds appropriated for each of fiscal years 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 8 •HR 2112 IH 2020, 2021, 2022, 2023, and 2024 under section 416, the 1 Secretary shall reserve— 2 ‘‘(1) $3,000,000 for general research and eval- 3 uation; and 4 ‘‘(2) any amounts remaining after application 5 of paragraph (1) to fund AFI innovation demonstra- 6 tion projects under section 418. 7 ‘‘(b) PILOT PROGRAM FUNDING.—From the amounts 8 reserved under subsection (a) for each of fiscal years 9 2020, 2021, and 2022, the Secretary shall make available 10 for operating the pilot program established under section 11 5 of the Refund to Rainy Day Savings Act— 12 ‘‘(1) 50 percent of the amount reserved for the 13 relevant fiscal year under paragraph (1) of sub- 14 section (a) (after any adjustment under subsection 15 (c)); and 16 ‘‘(2) 25 percent of the amount reserved for the 17 relevant fiscal year under paragraph (2) of sub- 18 section (a) (after any adjustment under subsection 19 (c)). 20 ‘‘(c) PROPORTIONAL ADJUSTMENT.—In any of fiscal 21 years 2020, 2021, 2022, 2023, and 2024, if the amount 22 appropriated for such fiscal year is greater or less than 23 the amount authorized for such fiscal year under section 24 416, the amounts reserved under subsection (a) shall be 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 9 •HR 2112 IH increased or decreased for such fiscal year so that each 1 such amount bears the same proportion to the amount ap- 2 propriated as each of the amounts reserved under such 3 subsection bears to the amount authorized.’’. 4 (b) ESTABLISHMENT OF INNOVATION PROGRAM.— 5 The Assets for Independence Act (42 U.S.C. 604 note), 6 as amended by subsection (a), is further amended by add- 7 ing at the end the following new section: 8 ‘‘SEC. 418. AFI INNOVATION PROJECTS. 9 ‘‘(a) IN GENERAL.—The Secretary is authorized to 10 make grants to qualified entities to conduct AFI innova- 11 tion projects under this section. 12 ‘‘(b) DEFINITIONS.—For purposes of this section: 13 ‘‘(1) AFI INNOVATION PROJECT.—The term 14 ‘AFI innovation project’ means a demonstration 15 project carried out by a qualified entity under this 16 section. 17 ‘‘(2) INNOVATION DEVELOPMENT ACCOUNT.— 18 The term ‘innovation development account’ means 19 an account that is established in a federally insured 20 financial institution or a State insured financial in- 21 stitution and meets such other requirements as are 22 established by the Secretary. 23 ‘‘(c) APPLICATION.— 24 ‘‘(1) CRITERIA AND PREFERENCES.— 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 10 •HR 2112 IH ‘‘(A) IN GENERAL.—Subject to subpara- 1 graph (B), in considering an application to con- 2 duct an AFI innovation project, the Secretary 3 shall apply subsections (c) and (d) of section 4 405 to the application in the same manner that 5 such subsections apply to an application to con- 6 duct a demonstration project under section 405. 7 ‘‘(B) MODIFICATION.—For purposes of 8 this paragraph, paragraph (1) of section 405(c) 9 shall be applied without regard to the phrase 10 ‘through activities requiring one or more quali- 11 fied expenses’. 12 ‘‘(2) APPROVAL OF AFI INNOVATION 13 PROJECTS.—Not later than 12 months after the 14 date of the enactment of this section, the Secretary 15 shall, on a competitive basis, approve such applica- 16 tions to conduct AFI innovation projects as the Sec- 17 retary considers to be appropriate, taking into ac- 18 count the considerations required by paragraph (1). 19 The Secretary shall ensure, to the maximum extent 20 practicable, that the applications that are approved 21 involve a range of communities (both rural and 22 urban) and diverse populations. 23 ‘‘(d) PROJECT DURATION AND GRANT AMOUNT.— 24 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 11 •HR 2112 IH ‘‘(1) DURATION.—The Secretary shall award 1 grants under this section for a period not to exceed 2 5 project years. 3 ‘‘(2) GRANT AMOUNT.—For each project year 4 of an AFI innovation project approved under this 5 section, the Secretary may make a grant to the 6 qualified entity authorized to conduct the project. In 7 making such a grant, the Secretary shall make the 8 grant on the first day of the project year in an 9 amount not to exceed the lesser of— 10 ‘‘(A) the aggregate amount of funds com- 11 mitted as matching contributions from non- 12 Federal public or private sector sources; or 13 ‘‘(B) $1,000,000. 14 ‘‘(e) ELIGIBILITY AND SELECTION OF INDIVIDUALS 15 TO PARTICIPATE IN AN AFI INNOVATION PROJECT.— 16 ‘‘(1) ELIGIBILITY CRITERIA.—Subject to the 17 approval of the Secretary, each qualified entity con- 18 ducting an AFI innovation project shall establish eli- 19 gibility requirements for participants in the project. 20 Such requirements shall— 21 ‘‘(A) be more expansive than the require- 22 ments established under section 408; and 23 ‘‘(B) ensure that eligibility is limited to 24 low-income individuals. 25 VerDate Sep 11 2014 03:20 Apr 16, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2112.IH H2112 kjohnson on DSK79L0C42 with BILLS 12 •HR 2112 IH ‘‘(2) SELECTION OF INDIVIDUALS TO PARTICI- 1 PATE.—Each qualified entity conducting an AFI in- 2 novation project shall select, from among the indi- 3 viduals that meet the eligibility requirements estab- 4 lished by the entity under paragraph (1), the indi- 5 viduals— 6 ‘‘(A) that the qualified entity determines to 7 be best suited to participate; and 8 ‘‘(B) to whom the qualified entity will 9 make disbursements or deposits in accordance 10 with subsection (f). 11 ‘‘(f) DISBURSEMENTS BY QUALIFIED ENTITIES.— 12 ‘‘(1) IN GENERAL.—Each qualified entity con- 13 ducting an AFI innovation project shall, in a man- 14 ner consistent with the program [Text truncated for display. 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