
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-554 Section 1(a)(1)]
[Document affected by Public Law 106-554 Section 1(a)(1)]
[Document affected by Public Law 106-554 Section 1(a)(1)]
[Document affected by Public Law 106-554 Section 1(a)(1)[608(a)]]
[Document affected by Public Law 107-110 Section 702(h)]
[Document affected by Public Law 106-554 Section 1(a)(1)[607(b)]]
[Document affected by Public Law 106-554 Section 1(a)(1)[608(b)]]
[CITE: 42USC604]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
 SUBCHAPTER IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES 
              WITH CHILDREN AND FOR CHILD-WELFARE SERVICES
 
   Part A--Block Grants to States for Temporary Assistance for Needy 
                                Families
 
Sec. 604. Use of grants


(a) General rules

    Subject to this part, a State to which a grant is made under section 
603 of this title may use the grant--
        (1) in any manner that is reasonably calculated to accomplish 
    the purpose of this part, including to provide low income households 
    with assistance in meeting home heating and cooling costs; or
        (2) in any manner that the State was authorized to use amounts 
    received under part A or F of this subchapter, as such parts were in 
    effect on September 30, 1995, or (at the option of the State) August 
    21, 1996.

(b) Limitation on use of grant for administrative purposes

                           (1) Limitation

        A State to which a grant is made under section 603 of this title 
    shall not expend more than 15 percent of the grant for 
    administrative purposes.

                            (2) Exception

        Paragraph (1) shall not apply to the use of a grant for 
    information technology and computerization needed for tracking or 
    monitoring required by or under this part.

(c) Authority to treat interstate immigrants under rules of former State

    A State operating a program funded under this part may apply to a 
family the rules (including benefit amounts) of the program funded under 
this part of another State if the family has moved to the State from the 
other State and has resided in the State for less than 12 months.

(d) Authority to use portion of grant for other purposes

                           (1) In general

        Subject to paragraph (2), a State may use not more than 30 
    percent of the amount of any grant made to the State under section 
    603(a) of this title for a fiscal year to carry out a State program 
    pursuant to any or all of the following provisions of law:
            (A) Subchapter XX of this chapter.
            (B) The Child Care and Development Block Grant Act of 1990 
        [42 U.S.C. 9858 et seq.].

       (2) Limitation on amount transferable to subchapter XX 
                                  programs

        (A) In general

            A State may use not more than the applicable percent of the 
        amount of any grant made to the State under section 603(a) of 
        this title for a fiscal year to carry out State programs 
        pursuant to subchapter XX of this chapter.

        (B) Applicable percent

            For purposes of subparagraph (A), the applicable percent is 
        4.25 percent in the case of fiscal year 2001 and each succeeding 
        fiscal year.

                        (3) Applicable rules

        (A) In general

            Except as provided in subparagraph (B) of this paragraph, 
        any amount paid to a State under this part that is used to carry 
        out a State program pursuant to a provision of law specified in 
        paragraph (1) shall not be subject to the requirements of this 
        part, but shall be subject to the requirements that apply to 
        Federal funds provided directly under the provision of law to 
        carry out the program, and the expenditure of any amount so used 
        shall not be considered to be an expenditure under this part.

        (B) Exception relating to subchapter XX programs

            All amounts paid to a State under this part that are used to 
        carry out State programs pursuant to subchapter XX of this 
        chapter shall be used only for programs and services to children 
        or their families whose income is less than 200 percent of the 
        income official poverty line (as defined by the Office of 
        Management and Budget, and revised annually in accordance with 
        section 9902(2) of this title) applicable to a family of the 
        size involved.

(e) Authority to reserve certain amounts for assistance

    A State or tribe may reserve amounts paid to the State or tribe 
under this part for any fiscal year for the purpose of providing, 
without fiscal year limitation, assistance under the State or tribal 
program funded under this part.

(f) Authority to operate employment placement program

    A State to which a grant is made under section 603 of this title may 
use the grant to make payments (or provide job placement vouchers) to 
State-approved public and private job placement agencies that provide 
employment placement services to individuals who receive assistance 
under the State program funded under this part.

(g) Implementation of electronic benefit transfer system

    A State to which a grant is made under section 603 of this title is 
encouraged to implement an electronic benefit transfer system for 
providing assistance under the State program funded under this part, and 
may use the grant for such purpose.

(h) Use of funds for individual development accounts

                           (1) In general

        A State to which a grant is made under section 603 of this title 
    may use the grant to carry out a program to fund individual 
    development accounts (as defined in paragraph (2)) established by 
    individuals eligible for assistance under the State program funded 
    under this part.

                 (2) Individual development accounts

        (A) Establishment

            Under a State program carried out under paragraph (1), an 
        individual development account may be established by or on 
        behalf of an individual eligible for assistance under the State 
        program operated under this part for the purpose of enabling the 
        individual to accumulate funds for a qualified purpose described 
        in subparagraph (B).

        (B) Qualified purpose

            A qualified purpose described in this subparagraph is 1 or 
        more of the following, as provided by the qualified entity 
        providing assistance to the individual under this subsection:
            (i) Postsecondary educational expenses

                Postsecondary educational expenses paid from an 
            individual development account directly to an eligible 
            educational institution.
            (ii) First home purchase

                Qualified acquisition costs with respect to a qualified 
            principal residence for a qualified first-time homebuyer, if 
            paid from an individual development account directly to the 
            persons to whom the amounts are due.
            (iii) Business capitalization

                Amounts paid from an individual development account 
            directly to a business capitalization account which is 
            established in a federally insured financial institution and 
            is restricted to use solely for qualified business 
            capitalization expenses.

        (C) Contributions to be from earned income

            An individual may only contribute to an individual 
        development account such amounts as are derived from earned 
        income, as defined in section 911(d)(2) of the Internal Revenue 
        Code of 1986.

        (D) Withdrawal of funds

            The Secretary shall establish such regulations as may be 
        necessary to ensure that funds held in an individual development 
        account are not withdrawn except for 1 or more of the qualified 
        purposes described in subparagraph (B).

                          (3) Requirements

        (A) In general

            An individual development account established under this 
        subsection shall be a trust created or organized in the United 
        States and funded through periodic contributions by the 
        establishing individual and matched by or through a qualified 
        entity for a qualified purpose (as described in paragraph 
        (2)(B)).

        (B) ``Qualified entity'' defined

            As used in this subsection, the term ``qualified entity'' 
        means--
                (i) a not-for-profit organization described in section 
            501(c)(3) of the Internal Revenue Code of 1986 and exempt 
            from taxation under section 501(a) of such Code; or
                (ii) a State or local government agency acting in 
            cooperation with an organization described in clause (i).

                    (4) No reduction in benefits

        Notwithstanding any other provision of Federal law (other than 
    the Internal Revenue Code of 1986) 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 subsection shall be 
    disregarded for such purpose with respect to any period during which 
    such individual maintains or makes contributions into such an 
    account.

                           (5) Definitions

        As used in this subsection--

        (A) Eligible educational institution

            The term ``eligible educational institution'' means the 
        following:
                (i) An institution described in section 1088(a)(1) or 
            1141(a) of title 20, as such sections are in effect on 
            August 22, 1996.
                (ii) An area vocational education school (as defined in 
            subparagraph (C) or (D) of section 2471(4) of title 20) 
            which is in any State (as defined in section 2471(33) of 
            title 20), as such sections are in effect on August 22, 
            1996.

        (B) Post-secondary educational expenses

            The term ``post-secondary educational expenses'' means--
                (i) tuition and fees required for the enrollment or 
            attendance of a student at an eligible educational 
            institution, and
                (ii) fees, books, supplies, and equipment required for 
            courses of instruction at an eligible educational 
            institution.

        (C) 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.

        (D) Qualified business

            The term ``qualified business'' means any business that does 
        not contravene any law or public policy (as determined by the 
        Secretary).

        (E) 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.

        (F) Qualified expenditures

            The term ``qualified expenditures'' means expenditures 
        included in a qualified plan, including capital, plant, 
        equipment, working capital, and inventory expenses.

        (G) Qualified first-time homebuyer

            (i) In general

                The term ``qualified first-time homebuyer'' means a 
            taxpayer (and, if married, the taxpayer'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 subsection 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.

        (H) Qualified plan

            The term ``qualified plan'' means a business plan which--
                (i) is approved by a financial institution, or by 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 entrepreneurial advisor.

        (I) Qualified principal residence

            The term ``qualified principal residence'' means a principal 
        residence (within the meaning of section 1034 of the Internal 
        Revenue Code of 1986), the qualified acquisition costs of which 
        do not exceed 100 percent of the average area purchase price 
        applicable to such residence (determined in accordance with 
        paragraphs (2) and (3) of section 143(e) of such Code).

(i) Sanction welfare recipients for failing to ensure that minor 
        dependent children attend school

    A State to which a grant is made under section 603 of this title 
shall not be prohibited from sanctioning a family that includes an adult 
who has received assistance under any State program funded under this 
part attributable to funds provided by the Federal Government or under 
the food stamp program, as defined in section 2012(h) of title 7, if 
such adult fails to ensure that the minor dependent children of such 
adult attend school as required by the law of the State in which the 
minor children reside.

(j) Requirement for high school diploma or equivalent

    A State to which a grant is made under section 603 of this title 
shall not be prohibited from sanctioning a family that includes an adult 
who is older than age 20 and younger than age 51 and who has received 
assistance under any State program funded under this part attributable 
to funds provided by the Federal Government or under the food stamp 
program, as defined in section 2012(h) of title 7, if such adult does 
not have, or is not working toward attaining, a secondary school diploma 
or its recognized equivalent unless such adult has been determined in 
the judgment of medical, psychiatric, or other appropriate professionals 
to lack the requisite capacity to complete successfully a course of 
study that would lead to a secondary school diploma or its recognized 
equivalent.

(k) Limitations on use of grant for matching under certain Federal 
        transportation program

                         (1) Use limitations

        A State to which a grant is made under section 603 of this title 
    may not use any part of the grant to match funds made available 
    under section 3037 of the Transportation Equity Act for the 21st 
    Century, unless--
            (A) the grant is used for new or expanded transportation 
        services (and not for construction) that benefit individuals 
        described in subparagraph (C), and not to subsidize current 
        operating costs;
            (B) the grant is used to supplement and not supplant other 
        State expenditures on transportation;
            (C) the preponderance of the benefits derived from such use 
        of the grant accrues to individuals who are--
                (i) recipients of assistance under the State program 
            funded under this part;
                (ii) former recipients of such assistance;
                (iii) noncustodial parents who are described in section 
            603(a)(5)(C)(iii) of this title; and
                (iv) low-income individuals who are at risk of 
            qualifying for such assistance; and

            (D) the services provided through such use of the grant 
        promote the ability of such recipients to engage in work 
        activities (as defined in section 607(d) of this title).

                        (2) Amount limitation

        From a grant made to a State under section 603(a) of this title, 
    the amount that a State uses to match funds described in paragraph 
    (1) of this subsection shall not exceed the amount (if any) by which 
    30 percent of the total amount of the grant exceeds the amount (if 
    any) of the grant that is used by the State to carry out any State 
    program described in subsection (d)(1) of this section.

                     (3) Rule of interpretation

        The provision by a State of a transportation benefit under a 
    program conducted under section 3037 of the Transportation Equity 
    Act for the 21st Century, to an individual who is not otherwise a 
    recipient of assistance under the State program funded under this 
    part, using funds from a grant made under section 603(a) of this 
    title, shall not be considered to be the provision of assistance to 
    the individual under the State program funded under this part.

(Aug. 14, 1935, ch. 531, title IV, Sec. 404, as added Pub. L. 104-193, 
title I, Sec. 103(a)(1), Aug. 22, 1996, 110 Stat. 2124; amended Pub. L. 
105-33, title V, Secs. 5002(a), 5503, 5514(c), Aug. 5, 1997, 111 Stat. 
593, 609, 620; Pub. L. 105-178, title VIII, Sec. 8401(b), June 9, 1998, 
112 Stat. 499; Pub. L. 105-200, title IV, Sec. 403(a), July 16, 1998, 
112 Stat. 670; Pub. L. 106-113, div. B, Sec. 1000(a)(4) [title VIII, 
Sec. 801(d)], Nov. 29, 1999, 113 Stat. 1535, 1501A-283; Pub. L. 106-169, 
title IV, Sec. 401(l), Dec. 14, 1999, 113 Stat. 1858.)

                       References in Text

    Part F of this subchapter, referred to in subsec. (a)(2), was 
classified to section 681 et seq. of this title, prior to repeal by Pub. 
L. 104-193, title I, Sec. 108(e), Aug. 22, 1996, 110 Stat. 2167.
    The Child Care and Development Block Grant Act of 1990, referred to 
in subsec. (d)(1)(B), is subchapter C (Sec. 658A et seq.) of chapter 8 
of subtitle A of title VI of Pub. L. 97-35, as added by Pub. L. 101-508, 
title V, Sec. 5082(2), Nov. 5, 1990, 104 Stat. 1388-236, as amended, 
which is classified generally to subchapter II-B (Sec. 9858 et seq.) of 
chapter 105 of this title. For complete classification of this Act to 
the Code, see Short Title note set out under section 9801 of this title 
and Tables.
    The Internal Revenue Code of 1986, referred to in subsec. (h)(2)(C), 
(3)(B)(i), (4), (5)(I), is classified generally to Title 26, Internal 
Revenue Code.
    Section 1088(a) of title 20, referred to in subsec. (h)(5)(A)(i), 
was repealed and section 1088(d) was redesignated section 1088(a), by 
Pub. L. 105-244, title I, Sec. 101(c), Oct. 7, 1998, 112 Stat. 1617. 
Provisions similar to those in former section 1088(a)(1) are now 
contained in section 1002(a)(1) of Title 20, Education.
    Section 1141(a) of title 20, referred to in subsec. (h)(5)(A)(i), 
was repealed by Pub. L. 105-244, Sec. 3, title I, Sec. 101(b), title 
VII, Sec. 702, Oct. 7, 1998, 112 Stat. 1585, 1616, 1803, effective Oct. 
1, 1998.
    Section 2471 of title 20, referred to in subsec. (h)(5)(A)(ii), was 
omitted in the general amendment of chapter 44 (Sec. 2301 et seq.) of 
Title 20, Education, by Pub. L. 105-332, Sec. 1(b), Oct. 31, 1998, 112 
Stat. 3076.
    Section 3037 of the Transportation Equity Act for the 21st Century, 
referred to in subsec. (k)(1), (3), is section 3037 of Pub. L. 105-178, 
title III, June 9, 1998, 112 Stat. 387, which is set out as a note under 
section 5309 of Title 49, Transportation.


                            Prior Provisions

    A prior section 604, acts Aug. 14, 1935, ch. 531, title IV, 
Sec. 404, 49 Stat. 628; Aug. 28, 1950, ch. 809, title III, pt. 6, 
Sec. 361(c), (d), 64 Stat. 558; May 8, 1961, Pub. L. 87-31, Sec. 4, 75 
Stat. 77; July 25, 1962, Pub. L. 87-543, title I, Secs. 104(a)(5)(B), 
107(b), 76 Stat. 185, 189; Jan. 2, 1968, Pub. L. 90-248, title II, 
Secs. 241(b)(4), 245, 81 Stat. 916, 918; Jan. 4, 1975, Pub. L. 93-647, 
Sec. 101(c)(6)(B), 88 Stat. 2360; July 18, 1984, Pub. L. 98-369, title 
VI, Sec. 2663(l)(1), 98 Stat. 1171, related to deviation from State 
plan, prior to repeal by Pub. L. 104-193, Sec. 103(a)(1), as amended by 
Pub. L. 105-33, title V, Sec. 5514(c), Aug. 5, 1997, 111 Stat. 620.


                               Amendments

    1999--Subsec. (e). Pub. L. 106-169 inserted ``or tribe'' after ``A 
State'' and ``to the State'' and inserted ``or tribal'' after ``under 
the State''.
    Subsec. (k)(1)(C)(iii). Pub. L. 106-113 substituted ``section 
603(a)(5)(C)(iii) of this title'' for ``item (aa) or (bb) of section 
603(a)(5)(C)(ii)(II) of this title''.
    1998--Subsec. (d)(2). Pub. L. 105-178 amended heading and text of 
par. (2) generally. Prior to amendment, text read as follows: ``A State 
may use not more than 10 percent of the amount of any grant made to the 
State under section 603(a) of this title for a fiscal year to carry out 
State programs pursuant to subchapter XX of this chapter.''
    Subsec. (k). Pub. L. 105-200 added subsec. (k).
    1997--Pub. L. 105-33, Sec. 5514(c), made technical amendment to 
directory language of Pub. L. 104-193, Sec. 103(a)(1), which enacted 
this section.
    Subsec. (a)(2). Pub. L. 105-33, Sec. 5503, inserted ``, or (at the 
option of the State) August 21, 1996'' before period.
    Subsec. (d)(1). Pub. L. 105-33, Sec. 5002(a)(1), substituted 
``Subject to paragraph (2), a State may'' for ``A State may''.
    Subsec. (d)(2). Pub. L. 105-33, Sec. 5002(a)(2), amended heading and 
text of par. (2) generally. Prior to amendment, text read as follows: 
``Notwithstanding paragraph (1), not more than \1/3\ of the total amount 
paid to a State under this part for a fiscal year that is used to carry 
out State programs pursuant to provisions of law specified in paragraph 
(1) may be used to carry out State programs pursuant to subchapter XX of 
this chapter.''


                    Effective Date of 1999 Amendments

    Pub. L. 106-169, title IV, Sec. 401(l), Dec. 14, 1999, 113 Stat. 
1858, provided that the amendment made by section 401(l) is effective 
Dec. 14, 1999.
    For effective date of amendment by Pub. L. 106-113, see section 
1000(a)(4) [title VIII, Sec. 801(e)] of Pub. L. 106-113, set out as a 
note under section 603 of this title.


                    Effective Date of 1998 Amendment

    Pub. L. 105-178, title VIII, Sec. 8401(c), June 9, 1998, 112 Stat. 
499, provided that: ``The amendments made by this section [amending this 
section and section 1397b of this title] take effect on October 1, 
1998.''


                    Effective Date of 1997 Amendment

    Section 5002(b) of Pub. L. 105-33 provided that: ``The amendments 
made by subsection (a) of this section [amending this section] shall 
take effect as if included in the enactment of section 103(a) of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
[Pub. L. 104-193].''
    Amendment by section 5503 of Pub. L. 105-33 effective as if included 
in section 103(a) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, Pub. L. 104-193, at the time such section 
103(a) became law, see section 5518(a) of Pub. L. 105-33, set out as a 
note under section 602 of this title.
    Amendment by section 5514(c) of Pub. L. 105-33 effective as if 
included in the provision of Pub. L. 104-193 amended at the time the 
provision became law, see section 5518(d) of Pub. L. 105-33, set out as 
a note under section 862a of Title 21, Food and Drugs.


                             Effective Date

    Section effective July 1, 1997, with transition rules relating to 
State options to accelerate such date, rules relating to claims, 
actions, and proceedings commenced before such date, rules relating to 
closing out of accounts for terminated or substantially modified 
programs and continuance in office of Assistant Secretary for Family 
Support, and provisions relating to termination of entitlement under 
AFDC program, see section 116 of Pub. L. 104-193, as amended, set out as 
a note under section 601 of this title.


                         Assets for Independence

    Pub. L. 105-285, title IV, Oct. 27, 1998, 112 Stat. 2759, provided 
that:
``SEC. 401. SHORT TITLE.
    ``This title may be cited as the `Assets for Independence Act'.
``SEC. 402. FINDINGS.
    ``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 economic growth.
        ``(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.
``SEC. 403. PURPOSES.
    ``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 
    income;
        ``(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.
``SEC. 404. DEFINITIONS.
    ``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, or enabling the eligible individual to 
            make an emergency withdrawal.
                ``(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; or
                ``(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).
            ``(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 this title.
        ``(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 an 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 100 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 capitalization expenses. 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 inventory expenses.
                ``(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 entrepreneurial adviser.
            ``(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 9212 of the 
    Native Hawaiian Education Act (20 U.S.C. 7912).
``SEC. 405. APPLICATIONS.
    ``(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 this title.
    ``(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 project.
        ``(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 
    unemployment.
    ``(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 [26 U.S.C. 501(c)(3)] 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 [title], 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 [title]. 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.
``SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.
    ``(a) Demonstration Authority.--If the Secretary approves an 
application to conduct a demonstration project under this title, the 
Secretary shall, not later than 10 months after the date of enactment of 
this title [Oct. 27, 1998], authorize the applicant to conduct the 
project for 5 project years in accordance with the approved application 
and the requirements of this title.
    ``(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
        ``(2) $1,000,000.
``SEC. 407. RESERVE FUND.
    ``(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 (a).
    ``(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 9.5 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). 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); divided by
            ``(B) the aggregate amount of all funds provided to the 
        qualified entity from all sources to conduct the project.
``SEC. 408. ELIGIBILITY FOR PARTICIPATION.
    ``(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 
    does not exceed 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 this title.
``SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE.
    ``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.
``SEC. 410. DEPOSITS BY QUALIFIED ENTITIES.
    ``(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 demonstration project.
    ``(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 account.
    ``(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 involved.
``SEC. 411. LOCAL CONTROL OVER DEMONSTRATION PROJECTS.
    ``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.
``SEC. 412. ANNUAL PROGRESS REPORTS.
    ``(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 
information:
        ``(1) The number and characteristics of individuals making a 
    deposit into an individual development account.
        ``(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 project.
    ``(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 project.
    ``(c) Timing.--The first report required by subsection (a) shall be 
submitted not later than 60 days after the end of the calendar 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.
``SEC. 413. SANCTIONS.
    ``(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 (3), shall--
            ``(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.
``SEC. 414. EVALUATIONS.
    ``(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 income.
        ``(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 calendar 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 this title.
    ``(e) Evaluation Expenses.--The Secretary shall expend 2 percent of 
the amount appropriated under section 416 for a fiscal year, to carry 
out the objectives of this section.
``SEC. 415. TREATMENT OF FUNDS.
    ``Of the funds deposited in individual development accounts for 
eligible individuals, only the funds deposited by the individuals 
(including interest accruing on those funds) may be considered to be the 
income, assets, or resources of the individuals, for purposes of 
determining eligibility for, or the amount of assistance furnished 
under, any Federal or federally assisted program based on need.
``SEC. 416. AUTHORIZATION OF APPROPRIATIONS.
    ``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.''

                  Section Referred to in Other Sections

    This section is referred to in sections 603, 609, 1308 of this 
title; title 5 section 552a.
