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DEVELUPEMENT
202 622 5672
P.09
Suggested Modifications
The Secretary should be given the authority to issue rules to further define the types of
documentation that IDA holders must submit in order to make a qualified withdrawal Lot
juststrike business capitalization use altogether?
Need to clarify who "the person to whom the amount is due" is. Do we want to make FIs
cut checks to schools/mortgage companies, etc.?
Other qualified distributions like those for Roth IRA (e.g., emergency medical
expenses)? Cars AFIA amendment)?
CRA treatment (p. 231)
Current Bill - S. 2779 specifies that financial institutions would receive no credit under any CRA
test for activities related to offering IDAs under the auspices of this Act.
Suggested Modifications
This provision is unnecessary and should be removed.
Revenue Loss
Current Bill - The JCT scored the IDA provisions of S. 2023 (nearly the same language) at
$5.3B over 10 years, roughly the size of the rest of the New Markets legislation.
Suggested Modifications
There are a few ways the cost of the tax credit could be dialed down:
Stricter eligibility requirements - Lower income limits, higher age requirements
Phase-out match rate - - Phasing out the 1-to-1 match rate as the income limits are approached
Cap credit and allocate - Would increase administrative burden, but would provide firm
ceiling on revenue loss
Other modifications suggested in this memo could affect the score significantly - striking the
non-FI investor credit; making CUSOs eligible to claim credits; increasing match to 100%;
capping education/administration costs at 50% of $150 per account; changing qualified uses.
Recommendations for Other Technical Changes/Clarifications
p. 205, line 3 - why specify eligible form of contribution?
p. 205, line 6 - "holder" here is used to mean the FI, but on p. 208 line 18 is used to mean the
"owner" (i.e., the individual).
p. 205, line 9 - what is meaning of this provision?
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"ocrText": "DEVELUPEMENT\n202 622 5672\nP.09\nSuggested Modifications\nThe Secretary should be given the authority to issue rules to further define the types of\ndocumentation that IDA holders must submit in order to make a qualified withdrawal Lot\njuststrike business capitalization use altogether?\nNeed to clarify who \"the person to whom the amount is due\" is. Do we want to make FIs\ncut checks to schools/mortgage companies, etc.?\nOther qualified distributions like those for Roth IRA (e.g., emergency medical\nexpenses)? Cars AFIA amendment)?\nCRA treatment (p. 231)\nCurrent Bill - S. 2779 specifies that financial institutions would receive no credit under any CRA\ntest for activities related to offering IDAs under the auspices of this Act.\nSuggested Modifications\nThis provision is unnecessary and should be removed.\nRevenue Loss\nCurrent Bill - The JCT scored the IDA provisions of S. 2023 (nearly the same language) at\n$5.3B over 10 years, roughly the size of the rest of the New Markets legislation.\nSuggested Modifications\nThere are a few ways the cost of the tax credit could be dialed down:\nStricter eligibility requirements - Lower income limits, higher age requirements\nPhase-out match rate - - Phasing out the 1-to-1 match rate as the income limits are approached\nCap credit and allocate - Would increase administrative burden, but would provide firm\nceiling on revenue loss\nOther modifications suggested in this memo could affect the score significantly - striking the\nnon-FI investor credit; making CUSOs eligible to claim credits; increasing match to 100%;\ncapping education/administration costs at 50% of $150 per account; changing qualified uses.\nRecommendations for Other Technical Changes/Clarifications\np. 205, line 3 - why specify eligible form of contribution?\np. 205, line 6 - \"holder\" here is used to mean the FI, but on p. 208 line 18 is used to mean the\n\"owner\" (i.e., the individual).\np. 205, line 9 - what is meaning of this provision?"
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