Sec. 106. Assets for Independence Act
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Section 416 of the Assets for Independence Act ( 42 U.S.C. 604 note) is amended by striking and 2003, and inserting 2003, 2015, 2016, 2017, 2018, 2019, and 2020, . The Assets for Independence Act is amended by adding at the end the following new section: In this title: The term eligible newborn means an individual who meets the eligibility criteria in subsection
(c)and is selected by a qualified entity to participate in a newborn development account demonstration project. The term newborn development account means a trust created or organized in the United States exclusively for the purpose of paying the qualified expenses of an eligible newborn, or enabling the eligible newborn to make an emergency withdrawal, but only if the written governing instrument creating the trust contains the requirements described in clauses (i), (ii), and
(iv)through
(vi)of section 404(a)(5). Subject to clause (ii), the assets of a newborn development account shall be invested in accordance with the direction of the eligible newborn after consultation with the qualified entity providing deposits for the eligible newborn under subsection (e). The assets of a newborn development account shall be invested in accordance with the direction of the qualified entity providing deposits for the eligible newborn under subsection (e), in a manner that provides an appropriate balance between return, liquidity, and risk, until the eligible newborn attains age 18. 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) 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 a newborn 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. The term newborn development account demonstration project means a demonstration project conducted under this section. Not later than 3 months after the date of enactment of this section, the Secretary shall publicly announce the availability of funding under this title for newborn development account demonstration projects and shall ensure that applications to conduct such demonstration projects are widely available to qualified entities. Not later than 6 months after the date of enactment of this section, a qualified entity may submit to the Secretary an application to conduct a demonstration project under this section. In considering whether to approve an application to conduct a demonstration project under this section, the Secretary shall assess the criteria described in section 405(c) and give preferences to applications with the elements described in section 405(d). Not later than 9 months after the date of enactment of this section, the Secretary shall, on a competitive basis, approve such applications to conduct demonstration projects under this section as the Secretary considers to be appropriate, taking into account the assessments required by paragraph (3). 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. An individual shall be eligible to participate in a demonstration project under this section if the individual meets the following criteria: The individual is born on or after October 1, 2016, and is selected by a qualified entity to participate in a demonstration project under this section within 1 year of the date of the individual's birth. The individual is a member of a household with an adjusted gross income that does not exceed 400 percent of the poverty line (as determined by the Office of Management and Budget) and a net worth, as of the end of the calendar year preceding the determination of eligibility, that does not exceed $1,000,000. The parent or legal guardian of the individual has agreed to the individual's participation in the demonstration project. For purposes of determining the net worth of a household under paragraph (1)(B), 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. The Secretary shall establish such regulations as are necessary to ensure compliance with this title if an individual participating in a newborn development account 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. If the Secretary approves an application to conduct a demonstration project under this section, the Secretary shall, not later than 10 months after the date of enactment of this section, authorize the applicant to conduct the project for 5 project years in accordance with the approved application and the requirements of this title. For each project year of a demonstration project conducted under this section, the Secretary may make a grant to the qualified entity authorized to conduct the project. In making such a grant, the Secretary shall make the grant on the first day of the project year in an amount not to exceed the lesser of— the aggregate amount of funds committed as matching contributions from non-Federal public or private sector sources; or $1,000,000. Not less than once every 3 months during each project year, each qualified entity under this title shall deposit in the newborn development account of each individual participating in a project under this section, or into a parallel account maintained by the qualified entity— 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) deposited in the account by a project participant during that period; from the grant made under subsection (d)(2), an amount equal to the matching contribution made under subparagraph (A); and any interest that has accrued on amounts deposited under subparagraph
(A)or
(B)on behalf of that individual. Upon the establishment of a newborn development account, the qualified entity providing deposits for such account shall deposit in the account $1,000 from the grant made under subsection (d)(2). In the case of an individual who is selected by a qualified entity to participate in a newborn development account demonstration project and does not have a social security account number, the Secretary shall coordinate with the Commissioner of Social Security to ensure that such individual is assigned a social security account number as required under section 205(c)(2)(B)(i)(II) of the Social Security Act ( 42 U.S.C. 405(c)(2)(B)(i)(II) ). Except as otherwise provided, all requirements of this title shall— apply to newborn development accounts in the same manner in which they apply to individual development accounts; and apply to newborn development demonstration projects in the same manner in which they apply to other demonstration projects conducted under this title. . Section 202(q) of the Social Security Act ( 42 U.S.C. 402(q) ) is amended by adding at the end the following new paragraph: In the case of an individual who participated in a newborn development account demonstration project under section 417 of the Assets for Independence Act, beginning with the first month for which such individual is entitled to an old-age, wife's, husband's, widow's, or widow's insurance benefit, the amount of such benefit shall be reduced by up to 25 percent each month until the total amount by which such individual's benefits have been reduced equals $1,000. . Section 404 of the Assets for Independence Act is amended— in paragraph (3)— by inserting or eligible newborn after eligible individual ; in subparagraph (A), by inserting or newborn development account after individual development account ; and by inserting or newborn after the individual each place it appears; in paragraph (5)(A)(vi)— by inserting or newborn development account after individual development account ; and by inserting or eligible newborn after eligible individual ; in paragraph (8)— by inserting or newborn development account after individual development account each place it appears; by inserting or eligible newborn after eligible individual each place it appears; in subparagraph (D), by inserting or NDAs after IDAs in the subparagraph heading; and by adding at the end the following new subparagraph: In the case of an eligible newborn who has attained early retirement age (as defined in section 216(l) of the Social Security Act ( 42 U.S.C. 416 )), amounts paid from the newborn development account of such eligible newborn directly to the eligible newborn for purposes of enabling the eligible newborn to meet necessary living expenses. ; and in paragraph (9)— by inserting or newborn after an individual ; by inserting or newborn development account after individual development account ; and by inserting or newborn before during the period . Section 416 of the Assets for Independence Act is amended— by inserting and section 202(q)(12) of the Social Security Act after Internal Revenue Code of 1986 ; and by inserting or newborn development account after individual development account .
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