H.R. 4895 — Introduced in House

I 117th CONGRESS 1st Session H. R. 4895 IN THE HOUSE OF REPRESENTATIVES July 30, 2021Ms. Omar (for herself, Ms. Bush, Mr. Evans, Mr. Bowman, and Ms. Jayapal) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To direct the Secretary of Treasury to establish a Federal office to oversee local guaranteed income pilots and to implement a national guaranteed income program, and for other purposes. 1. Short title This Act may be cited as the Sending Unconditional Payments to People Overcoming Resistances to Triumph Act of 2021 or the SUPPORT Act of 2021. 2. Table of contents The table of contents for this Act is as follows: Sec. 1. Short title.Sec. 2. Table of contents.Sec. 3. Secretary defined.Title I—Guaranteed Income ProgramsSec. 101. Definitions.Sec. 102. Office of Guaranteed Income Programs.Sec. 103. Guaranteed income pilot program.Title II—Guaranteed Income Tax CreditSec. 201. Establishment of the guaranteed income tax credit.Title III—FedAccountsSec. 301. Creation and integration of FedAccounts. 3. Secretary defined In this Act, the term Secretary means the Secretary of Treasury (or the Secretary’s delegate). I Guaranteed Income Programs 101. Definitions In this title: (1) Community development financial institution The term community development financial institution has the meaning given such term in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702). (2) Director The term Director means the Director of the Office of Guaranteed Income Programs established under section 102. (3) Unit of general local government The term unit of general local government has the meaning given such term in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302). 102. Office of Guaranteed Income Programs (a) Establishment There is established an Office of Guaranteed Income Programs (in this section referred to as the Office). (b) Director The Office shall be headed by a Director, who shall be appointed by the Secretary. (c) Duties The Director shall assist the Secretary in— (1) carrying out the pilot program established in section 103; and (2) implementing the Federal tax credit established in title II. (d) Partnerships with other Federal agencies (1) In general The Secretary may consult with Federal agencies to— (A) establish the organizational structure and functionality of the Office; and (B) meet the purposes of this Act. (2) Specific duties of other Federal agencies (A) Department of Housing and Urban Development In order to assist the Secretary the Secretary of Housing and Urban Development shall provide administrative expertise with respect to grantmaking to units of general local government through the community development block grant program under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.). (B) Department of Health and Human Services The Secretary of Health and Human Services shall provide to the Secretary and the Director research consulting from the Office of Planning, Research, and Evaluation and such Office’s experience with the Temporary Assistance for Needy Families Program. (C) Internal Revenue Service The Commissioner of Internal Revenue shall provide to the Secretary access to tax records to administer and analyze the program under section 103 and to update the Secretary on changes to the taxable income of an individual under this title and title II. (D) Social Security Administration The Commissioner of Social Security shall provide to the Secretary access to identifying records and addresses to identify individuals under this title and title II receiving supplemental security income benefits or social security disability insurance benefits. (e) Data sharing As determined necessary, the Secretary may work with other relevant Federal agencies for the purposes of sharing and updating personal identification information and consolidating a database of individuals who may receive cash payments under this title and title II. (f) National Economic Advisory Council (1) Establishment The Director shall establish within the Office a National Economic Advisory Council to make recommendations with respect to improving performance and coordination of basic income pilot programs. (2) Membership The National Economic Advisory Council shall be composed of 10 members as follows: (A) The Director. (B) The following members appointed by the Director: (i) One representative from a national nonprofit civil rights organization. (ii) One representative from a national labor organization. (iii) One representative from an economic research organization with expertise in cash-transfer programs. (iv) One representative from a community advocacy organization with expertise in cash-transfer programs. (v) One representative from a community development financial institution. (vi) Two individuals eligible for cash payments under this title or title II. (C) Two members appointed by the Secretary. (3) Recommendations The Council shall submit to the Secretary and Congress annual recommendations relating to the policies and regulations of the Office. 103. Guaranteed income pilot program (a) In general The Secretary shall implement a 5-year guaranteed income pilot program (in this section referred to as the Program) to provide grants to eligible entities to assist in carrying out a qualifying pilot program. (b) Qualifying pilot program defined In this section, the term qualifying pilot program means a new or ongoing local basic income pilot program that provides to eligible individuals cash payments that are— (1) not less than $50 per such individual per payment; and (2) made on a bi-weekly, monthly, or quarterly basis. (c) Application A grant under this section may be made only to an eligible entity that submits to the Secretary an application containing such information as the Secretary may require, including— (1) a description of a qualifying pilot program to be carried out using grant amounts; and (2) an explanation of the need for such program. (d) Selection (1) In general The Secretary, in consultation with the Director, shall select not less than 500 eligible entities to participate in the Program based on criteria that the Secretary shall establish. (2) Priority The Secretary, in approving applications under this section, shall give priority to applications submitted by— (A) units of general local government that have never established or do not have an existing program to provide a basic minimum income for individuals; (B) units of general local government that will carry out a qualifying pilot program in low-income geographic areas or persistent poverty counties; (C) community development financial institutions that are minority-owned; and (D) community development financial institutions that serve or are based in low-income geographic areas or persistent poverty counties. (e) Local evaluations Eligible entities may use grant amounts to cover the costs of evaluations, similar to the requirements in subsection (g), through working with partners, such as for-profit, nonprofit, public, or quasi-governmental entities, to design, text, and report on their income pilots. (f) Disregard of cash payments for purposes of all Federal and federally assisted programs Notwithstanding any other provision of law, any payment made to a participating individual under this section shall not be taken into account as income or resources for the period of 12 months from receipt, for purposes of determining the eligibility of such individual for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or any State or local program financed in whole or in part with Federal funds. (g) External partners (1) Selection The Secretary, in consultation with the Director, shall select no more than three external partners to provide assistance with the design, administration, and evaluation of the Program. (2) Qualifications An organization selected to be an external partner shall— (A) have demonstrated experience in— (i) studying or implementing cash-transfer programs; (ii) executing a mixed-methods study that incorporates an experiment or quasi-experiment design; and (iii) holding highly ethical research designs with a consistent track record of approval from institutional review boards; and (B) have no campaign activity as a research organization described under section 501(c)(3) of the Internal Revenue Code of 1986. (3) Confidentiality An external partner, and any employee of an external partner, shall be treated as a Federal employee for purposes of section 6103 of the Internal Revenue Code of 1986. (4) Data collection An external partner shall work with the Director to collect and record data from eligible entities and participating individuals, as necessary, to complete the study and reports required under subsection (g), and to conduct any additional research as the Secretary determines necessary. (h) Reporting (1) Task force The Secretary, in consultation with the Director and external partners, may establish a task force to study the results of the qualifying pilot programs funded with grants under the Program. (2) Information gathering An eligible entity providing cash payments to an eligible individual through a qualifying pilot program, funded through the Program, shall collect, maintain a record of, and promptly submit such record to the task force the following information: (A) If the eligible entity is a community development financial institution, whether the entity itself is a minority-owned, women-owned, or veteran-owned entity. (B) Demographic information of participating individuals, including race and ethnicity, gender, disability status, housing status, family composition, and income level. (3) Evaluation Of the amounts made available to carry out this section, the Secretary, acting through the Director, may use such amounts as may be necessary to evaluate the effectiveness of qualifying pilot programs funded through the Program, using a methodology that— (A) includes a random assignment whenever feasible, or other research methods that allow for the strongest possible casual inferences when a random assignment is not feasible; and (B) generates evidence on the impact of specific qualifying pilot programs and protocols. (4) Interim report Not later than 24 months after cash payments are initially made to participating individuals, the Secretary, in consultation with the Director and external partners, shall issue an interim report on the Program to Congress, including the following information: (A) For each qualifying pilot program, the total number of participating individuals dis­ag­gre­gated by race and ethnicity, gender, disability status, housing status, family composition, and income and assets (including income level as a percentage of the Federal poverty line). (B) With respect to each participating individual, to the extent applicable— (i) such individual’s employment type and job status; (ii) the total amount of cash payments received by such individual; and (iii) such individual’s zip code. (C) Any other information that the Secretary determines to be necessary. (5) Final report Not later than 12 months after the conclusion of the Program, the Secretary, in consultation with the Director and the external partners, shall issue a final report on the Program to Congress, which shall include updated disclosures and calculations of the information provided in the interim report under paragraph (4), and a final assessment comprised of— (A) a quantitative and qualitative analysis of the effects of the income subsidies provided under the qualifying pilot programs on— (i) financial outcomes of participating individuals; (ii) the health and economic well-being of participating individuals; and (iii) the social costs of poverty and income volatility, including connections with income fluctuation and health, education, employment, childcare, and other outcomes as determined appropriate by the Secretary; and (B) recommendations by the Secretary on the efficacy and operational pathways of expanding local basic income subsidies into a Federal guaranteed income program. (6) Public availability (A) In general As soon as is practicable after issuing each report under paragraphs (4) and (5), the Secretary shall make all the information contained in each such report publicly available. (B) Confidentiality In making information publicly available under subparagraph (A), the Secretary shall withhold confidential information. (i) Rules and guidance The Secretary, in consultation with the Director, shall issue any rules and guidance that are necessary to carry out this section, including establishing appropriate compliance and reporting requirements in addition to the reporting requirements under subsection (g). (j) Definitions In this section: (1) Eligible entity The term eligible entity means a unit of general local government or a community development financial institution. (2) Eligible individual The term eligible individual means a resident of the United States. (3) Federal poverty line The term Federal poverty line has the meaning given the term poverty line in section 673 of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902). (4) Low-income geographic area The term low-income geographic area has the meaning given such term in section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689). (5) Minority-owned With respect to a community development financial institution, the term minority-owned means a community development financial institution with— (A) more than 50 percent of the ownership or control held by not less than one minority; and (B) more than 50 percent of the net profit or loss of which accrues to not less than one minority. (6) Minority The term minority has the meaning given such term in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note). (7) Participating individual The term participating individual means an eligible individual that has received cash payments under a qualifying pilot program funded through a grant from the Program. (8) Persistent poverty county The term persistent poverty county means any county that has had 20 percent or more of its population living in poverty over the past 30 years, as measured by the most recent decennial census and the most recent Small Area Income and Poverty Estimates of the Bureau of the Census, as of the date of the enactment of this Act. (k) Authorization of appropriations There is authorized to be appropriated to carry out this section $500,000,000 for each of the fiscal years 2023 through 2027. II Guaranteed Income Tax Credit 201. Establishment of the guaranteed income tax credit (a) In general Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 37 the following new section: 37A. Guaranteed income tax credit (a) Allowance of credit In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to— (1) $14,400, plus (2) $600 multiplied by the number of dependents (as defined in section 152) under the age of 18 of the taxpayer. (b) Limitation based on adjusted gross income The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by five percent of so much of the taxpayer's adjusted gross income as exceeds— (1) $150,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)), (2) $112,500 in the case of a head of household, and (3) $75,000 in the case of a taxpayer not described in paragraph (1) or (2). (c) Inflation adjustments (1) In general In the case of any taxable year beginning after 2028, each of the dollar amounts under subsections (a) and (b) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2027 for calendar year 2016 in subparagraph (A)(ii) thereof. (2) Rounding If any increase determined under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. (d) Eligible individual For purposes of this section— (1) In general The term eligible individual means an individual— (A) who attained 18 years of age before the close of the taxable year, (B) whose principal place of abode was in the United States for more than one-half of the taxable year, (C) who is not a dependent for whom a deduction is allowable under section 151 to another taxpayer for any taxable year beginning in the same calendar year as such taxable year, and (D) who did not claim the benefits of section 911 for the preceding taxable year. (2) Limitation on eligibility of nonresident aliens The term eligible individual shall not include any individual who is a nonresident alien individual for any portion of the preceding taxable year, unless such individual is treated for such taxable year as a resident of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. (3) Identification number requirement No credit shall be allowed under this section to an eligible individual who does not include on the return of tax for the taxable year— (A) such individual’s taxpayer identification number, (B) if the individual was married during the preceding taxable year (within the meaning of section 7703), the taxpayer identification number of such individual’s spouse, and (C) taxpayer identification number of such individual’s dependents. (4) Treatment of military personnel stationed outside of the United States For purposes of paragraph (1)(B), the principal place of abode of a member of the Armed Forces of the United States shall be treated as in the United States during any period during which such member is stationed outside the United States while serving on extended active duty with the Armed Forces of the United States. For purposes of the preceding sentence, the term extended active duty means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period. (e) Taxable year must be full taxable year Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months. (f) Restrictions on taxpayer who improperly claimed credit in prior year Rules similar to subsection (k) of section 32 shall apply for purposes of this section. (g) Reconciliation of credit and advance payments The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the aggregate amount of any advance payments of such credit under section 7527B for such taxable year. . (b) Advance payment of guaranteed income tax credit Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7527A the following new section: 7527B. Advance payment of guaranteed income tax credit (a) In general The Secretary shall establish a program for making advance payments to eligible taxpayers which equal, in the aggregate during any calendar year, the annual advance amount determined with respect to such taxpayer for such calendar year. The advance payments made to such taxpayer for any calendar year shall be in equal amounts. (b) Eligible taxpayer The term eligible taxpayer has the meaning given eligible individual in section 37A and such taxpayer has made an election under subsection (d). (c) Annual advance amount For the purposes of this section, the term annual advance amount means, with respect to an eligible taxpayer for any calendar year, an amount equal to the amount of credit which the Secretary has determined will be allowed to such taxpayer under section 37A for the taxpayer's taxable year beginning in such calendar year. (d) Election of advance payment (1) In general A taxpayer may elect to receive an advance payment of the credit allowed under section 37A for any taxable year— (A) by including such election on a timely filed return for the preceding taxable year, or (B) through the online portal established in paragraph (2). (2) Online portal The Secretary shall establish an online portal which allows non-filing taxpayers to— (A) elect to receive payments under this section, and (B) provide any information the Secretary determines necessary. (e) Internal revenue service notification The Internal Revenue Service shall take such steps as may be appropriate to ensure that taxpayers who are eligible to receive the credit under section 37A are aware of the availability of the advance payment of such credit under this section. (f) Authority The Secretary may prescribe such regulations or other guidance as may be appropriate or necessary for the purposes of carrying out this section. . (c) Other rules (1) Timing and manner of payments (A) Timing The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this section as rapidly as possible. (B) Alternate information For purposes of disbursing refunds payable under this section, if an individual eligible to receive a credit under section 37A (as added by subsection (a)) has not, as of any applicable date, filed a tax return for the applicable taxable year, the Secretary shall— (i) use return information with respect to such individual for the taxable year preceding such applicable taxable year; or (ii) in the case of an individual who has not filed a tax return for the applicable year or the taxable year described in clause (i), use any applicable information provided by relevant agencies. (C) Coordination and notification For purposes of subparagraph (B)(i), the Secretary shall— (i) coordinate with the heads of relevant Federal agencies to receive applicable information with respect to any individuals who may be eligible to receive a refund payment pursuant to this section; and (ii) establish an online portal that individuals described in paragraph (B) may use to report any information required, as determined by the Secretary, to determine the amount of any refund payments for which such individuals may be eligible, including methods specifically designed to identify and account for foster youth and individuals experiencing homelessness or housing insecurity. (D) Delivery of payments Notwithstanding any other provision of law, the Secretary may certify and disburse refunds immediately payable under this subsection— (i) electronically to any account to which the payee authorized the delivery of a refund of taxes under this title or of a Federal payment (as defined in section 3332 of title 31, United States Code); or (ii) through such other means as are determined appropriate by the Secretary including through the use of mailed paper checks, stored value cards, and online payment systems including FedAccounts as established under section 301. (E) Waiver of certain rules Notwithstanding section 3325 of title 31, United States Code, or any other provision of law, with respect to any payment of a refund under this subsection, a disbursing official in the executive branch of the United States Government may modify payment information received from an officer or employee described in section 3325(a)(1)(B) of such title for the purpose of facilitating the accurate and efficient delivery of such payment. Except in cases of fraud or reckless neglect, no liability under sections 3325, 3527, 3528, or 2529 of title 31, United States Code, shall be imposed with respect to payments made under this subparagraph. (2) No interest No interest shall be allowed on any overpayment attributable to a payment deemed made under this section. (3) Notice to taxpayer Not later than 15 days after the date on which the Secretary distributed any payment to a taxpayer pursuant to this section, notice shall be sent by mail to such taxpayer’s last known address. Such notice shall indicate the method by which such payment was made, the amount of such payment, and a phone number or website portal for the appropriate contact at the Internal Revenue Service to report any failure to receive such payment. (4) Treatment of possessions Rules similar to the rules of subsection (c) of section 2201 of the CARES Act (Public Law 116–136) shall apply for the purposes of section 37A of such Code (as added by subsection (a)). (5) Exception from reduction or offset Any credit or refund allowed or made to any individual by reason of section 37A of the Internal Revenue Code of 1986 (as added by subsection (a)) or by reason of paragraph (1) of this subsection shall not be— (A) subject to reduction or offset pursuant to section 3716 or 3720A of title 31, United States Code; (B) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 of the Internal Revenue Code of 1986; or (C) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection. (6) Prohibition on garnishment (A) Definitions In this paragraph, the terms financial institution, freeze, garnish, and garnishment order have the meanings given the terms in section 212.3 of title 31, Code of Federal Regulations, as in effect on the date of enactment of this Act. (B) Prohibition No financial institution may garnish or freeze any portion of a refund made by any debtor by reason of section 37A of the Internal Revenue Code of 1986 (as added by subsection (a)) or by reason of paragraph (1) pursuant to a garnishment order. (7) Waiver of fees by insured depository institutions No insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), may impose a fee on a person for cashing any check for a refund payable under section 37A of the Internal Revenue Code of 1986 (as added by subsection (a)). (8) Public awareness campaign Rules similar to the rules of subsection (e) of section 2201 of the CARES Act shall apply for the purposes of section 37A of such Code (as added by subsection (a)). (9) Regulations The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including any such measures are deemed appropriate to avoid allowing duplicative payments to a taxpayer. (d) Conforming amendments (1) Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting 37A, after 36B,. (2) Section 6213(g)(2) of such Code is amended— (A) in subparagraph (F), by inserting or section 37A after credit); (B) in subparagraph (G), by inserting or 37A after section 32; (C) by amending subparagraph (K) to read as follows: (K) an omission of information required by section 32(k)(2) or 36(e) or an entry on the return claiming— (i) the credit under section 32 for a taxable year for which the credit is disallowed under subsection (k)(1) thereof, or (ii) the credit under section 37A for a taxable year for which the credit is disallowed under subsection (d) thereof, ; and (D) in subparagraph (L), by 37A, after 32,. (3) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 37 the following: Sec. 37A. Guaranteed income tax credit. . (4) The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527A the following: Sec. 7527B. Advance payment of guaranteed income tax credit. . (e) Effective date The amendments made by this section shall apply to the taxable years beginning after January 1, 2027. III FedAccounts 301. Creation and integration of FedAccounts (a) Definitions In this section: (1) Digital dollars The term digital dollars means dollar balances consisting of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank. (2) FedAccount The term FedAccount means a personal, no-fee central bank account supported by a Federal Reserve bank for any eligible individuals or on behalf of any person for the purpose of holding digital dollar balances. (3) Member bank The term member bank means any national bank, State bank, or bank or trust company that is a member of a Federal Reserve bank. (4) Pass-through FedAccount The term pass-through FedAccount means a FedAccount maintained by a member bank on behalf of any person, entitling that person to a pro rata share of a pooled reserve balance that the member bank maintains at any Federal Reserve bank. (5) Postal retail facility The term postal retail facility— (A) means a post office, post office branch, post office classified station, or other facility that is operated by the Postal Service, the primary function of which is to provide retail postal services; and (B) does not include a contractor-operated facility offering postal services. (6) Postal service The term Postal Service means the United States Postal Service. (b) Authority and Mandate for Federal Reserve Banks To Establish and Maintain Fed­Accounts for the General Public (1) Authorization Subject to restrictions, limitations, and regulations that may be imposed by the Board of Governors of the Federal Reserve System, a Federal Reserve bank shall maintain Fed­Accounts. (2) Mandate Not later than January 1, 2027, a Federal Reserve bank shall make available FedAccounts to— (A) residents of the United States; and (B) businesses domiciled in the United States. (3) Terms of FedAccounts FedAccounts— (A) shall not be subject to any account fees, minimum balances, or maximum balances, and shall pay interest at a rate not below the greater of the rate of interest on required reserves and the rate of interest on excess reserves; (B) shall provide debit cards, online account access, automatic bill-pay, mobile banking, customer service and other such services as the Board of Governors of the Federal Reserve System determines appropriate in the public interest, provided that FedAccounts shall not include overdraft coverage; (C) shall provide access to automatic teller machines to be maintained on behalf of the Board of Governors of the Postal Service at postal retail facilities; (D) shall be branded in all account statements, marketing materials, and other communications as FedAccounts maintained by the Federal Reserve bank on behalf of the United States of America; (E) may not be closed or restricted on the basis of profitability considerations; and (F) shall provide account holders with reasonable protections against losses caused by fraud or security breaches. (4) Bank Secrecy Act In establishing and maintaining FedAccounts, each Federal Reserve shall comply with— (A) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b); (B) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and (C) subchapter II of chapter 53 of title 31, United States Code. (5) Privacy (A) FedAccounts Section 552a of title 5, United States Code (commonly known as the Privacy Act of 1974), shall apply to Fed­Accounts. (B) Federal Reserve banks The privacy obligations applicable to each Federal Reserve bank and its employees, including with respect to criminal and civil penalties, shall mirror those applicable to Federal tax returns under sections 6103, 7213(a)(1), 7213A, and 7431 of the Internal Revenue Code of 1986. (6) Regulations The Board of Governors of the Federal Reserve, in consultation with the Secretary, shall promulgate regulations in order to carry out this subsection. (c) Authority and Mandate for Member Banks, State Nonmember Banks and Credit Unions To Offer and Maintain Pass-Through FedAccounts (1) Obligations of member banks (A) In general Member banks shall open and maintain pass-through FedAccounts for all interested persons who elect to deposit funds into pass-through FedAccounts, including persons eligible to receive guaranteed income tax credit payments from the United States pursuant to section 301 of this Act. (B) Maintenance of assets (i) In general Each member bank shall establish and maintain a separate legal entity for the exclusive purpose of holding all assets and maintaining all liabilities associated with pass-through Fed­Accounts. (ii) Contents The assets of any entity described in clause (i) shall consist exclusively of a balance maintained in a master account at a Federal Reserve bank, and the liabilities or obligations of the entity shall consist exclusively of an equal quantity of balances maintained by holders of pass-through FedAccounts. (iii) Capital or liquidity regulation The assets and liabilities of any legal entity described in clause (i) shall not be deemed assets or liabilities of the member bank or its affiliates for the purposes of any capital or liquidity regulation promulgated by Federal or State banking authorities. (iv) Online application requirement for large banks Member banks with total consolidated assets greater than $10,000,000,000 shall promptly offer application, through online or telephonic means, for pass-through FedAccounts. (2) Terms of pass-through FedAccounts Pass-through FedAccounts offered by member banks— (A) shall not be subject to any account fees, minimum balances, or maximum balances, and shall pay interest at a rate not below the greater of the rate of interest on required reserves and the rate of interest on excess reserves; (B) shall provide functionality and service levels no less favorable than those that the member bank offers for its existing transaction accounts, including with respect to debit cards, automated teller machines, online account access, automatic bill pay, mobile banking, customer service and such other services as the Board of Governors of the Federal Reserve System determines appropriate in the public interest, provided that FedAccounts shall not include overdraft coverage; (C) shall be prominently branded in all account statements, marketing materials, and other communications as pass-through Fed­Accounts maintained by the member bank on behalf of the Federal Reserve; (D) may not be closed or restricted by the bank on the basis of profitability considerations; and (E) shall provide account holders with reasonable protection against losses caused by fraud or security breaches. (3) Reimbursement for costs at member banks (A) In general Each member bank with total consolidated assets of not greater than $10,000,000,000 shall be reimbursed each calendar quarter by the relevant Federal Reserve bank for the operational costs incurred by the member bank in offering pass-through FedAccounts. (B) Regulations The Board of Governors of the Federal Reserve System shall promulgate such regulations as necessary to carry out this subsection. (4) Obligations of State nonmember banks and credit unions (A) In general The Federal Reserve banks shall permit State nonmember banks and credit unions to open master accounts for the exclusive purpose of offering pass-through FedAccounts with the separate entity structure described in paragraph (1), if the pass-through FedAccount complies with the terms set forth in paragraph (2). (B) Reimbursement Each State nonmember bank or credit union electing to offer pass-through FedAccounts shall be entitled to cost reimbursement in accordance with paragraph (3). (5) Authority of the board Member banks shall be subject to such regulations and obligations as may be imposed by the Board of Governors of the Federal Reserve System in connection with maintaining pass-through FedAccounts. (d) Limited branches In areas where access to physical member bank branches is limited, including in low- or moderate-income geographies, designated disaster areas, distressed or underserved non-metropolitan middle-income geographies, as designated by the Federal Financial Institutions Examination Council, Federal Reserve banks may partner with postal retail facilities to ensure access and availability to application and account services for all residents and citizens of the United States and to businesses domiciled in the United States. (e) Coordination of FedAccounts and postal banking The Board of Governors of the Federal Reserve System, after consultation with the Postermaster General, shall work to improve public banking options to all individuals, and specifically making sure that payments from the guaranteed income tax credit are able to reach the most people in a timely manner by expanding such financial services to the unbanked and underbanked. (f) Annual reporting The Comptroller General of the United States, in consultation with the Secretary, shall submit to Congress an annual report that includes the demographics, number of participants, and average balances and uses for all the new products and services established under this section.