H.R. 4586 — AIDA

This section sets forth congressional findings on the economic, intellectual, and cultural contributions of approximately 6.6 million first-generation African and Caribbean immigrants within the broader 46 million African American population, including their remittances totaling over $91 billion to Africa and $19.5 billion to the Caribbean in 2023 that support families, education, healthcare, businesses, and infrastructure. The findings further note that Sub-Saharan Africa has the highest global remittance costs at an average of 7.73% to send $200 (compared to 5.97% for Latin America and the Caribbean in Q1 2024); reducing costs to the 3% Sustainable Development Goal target could save developing countries $5 billion to $32 billion annually; the global remittance market is projected to grow from $784.25 billion in 2022 to $1.33 trillion by 2032; and the U.S. lacks a coherent framework to channel diaspora economic power into formal investment.

This section declares it to be the policy of the United States to (1) recognize African and Caribbean diaspora communities as legitimate partners in U.S. foreign economic policy, development assistance, and national investment strategy; (2) recognize the role of regional and country-specific diasporas in cultural diplomacy, people-to-people ties, and diasporas' contributions to socioeconomic development; (3) endeavor to reduce remittance costs through increased competition in international financial transfers, reduced taxes or administrative costs, and maximization of remittances' potential for inclusive economic growth; (4) safeguard the integrity and affordability of remittance flows, including by prohibiting taxation on personal remittances; (5) promote financial inclusion and reduce transaction costs through market competition, fintech innovation, and diaspora-owned remittance platforms; (6) incentivize formal, productive investment in diaspora countries of origin through targeted U.S. tax policy, finance instruments, and legal safeguards; and (7) pursue the global Sustainable Development Goal of reducing average remittance costs to 3 percent—especially for low-value transfers and high-cost corridors—through market incentives, innovation, and competition rather than price controls.

This section directs the Chief Executive Officer of the U.S. International Development Finance Corporation (DFC) to carry out a program, in coordination with the Secretary of the Treasury, providing matching funds of up to $5,000 (adjusted for inflation) per taxpayer for investments by the African diaspora in Africa or in Caribbean countries that meet measurable development goals in health, education, agriculture, clean energy, or youth employment; requires the Securities and Exchange Commission (SEC) to issue rules treating non-accredited African diaspora members as accredited investors for securities offered by issuers in which DFC or another qualified development finance institution invests (subject to no more than 25% of offering funds from such diaspora members and public disclosure of those amounts); and directs the DFC CEO to establish a special window, using authorities under the BUILD Act of 2018, to support diaspora-led investment funds, social enterprises, and infrastructure projects in African and Caribbean countries.

This section authorizes the Secretary of the Treasury and the United States International Development Finance Corporation to support the issuance of diaspora bonds by African and Caribbean nations through credit enhancement, technical assistance, and co-marketing with diaspora investment vehicles.

This section directs the Secretary of the Treasury to issue rules removing undue regulatory barriers applicable to remittance providers (i.e., entities facilitating financial transfers) that are owned by members of the African Diaspora and are fintech-driven. The section also establishes the Remittance Innovation Fund in the Treasury, to be used by the Secretary to promote low-cost, secure, and traceable financial transfers by providing technical support to such remittance providers and seed funding to persons seeking to establish them.

This section establishes an above-the-line tax deduction of up to $3,000 for qualified remittance transfers made by individuals to recipients residing in a covered country (i.e., a member state of the African Union or Caribbean Community (CARICOM)) during the taxable year, if used for housing, agriculture, education, healthcare, or small enterprise support. The provision directs the Secretary of the Treasury to issue necessary regulations and applies to remittances made after enactment.

This section establishes an exclusion from gross income for dividend and interest payments received from qualified diaspora investments (i.e., equity, debt, or blended capital investments in a company or project based in a covered country, as defined in section 223A of the Internal Revenue Code, that are registered with the country's securities authority or channeled through a fund recognized by a U.S. development finance institution). It further provides that the basis of such investments equals their fair market value on the date sold or exchanged, with the combined amount of excluded payments and basis step-up limited to $12,000 per taxable year (inflation-adjusted after 2025 using a cost-of-living adjustment with calendar year 2024 as the base year, rounded to the nearest $100). The provision applies to investments made after enactment.

This section repeals the excise tax on remittance transfers (i.e., 1% tax on the amount of specified remittance transfers sent by non-U.S. persons to foreign recipients) for transfers made after December 31, 2025. (Thus, the tax applies only to transfers on or before that date.)

This section directs the Secretary of the Treasury (acting through the Director of the Consumer Financial Protection Bureau), the Board of Governors of the Federal Reserve, and the Secretary of State, in consultation with U.S., African, and Caribbean private sector and civil society stakeholders, the African diaspora, relevant agencies, state, local, and Tribal governments, and other U.S. development entities, to submit to relevant congressional committees not later than one year after enactment and annually thereafter a report addressing (1) progress toward and a strategy for encouraging remittances and reducing transaction costs; (2) remittance cost trends and barriers; (3) the impact of U.S. tax policy on diaspora investments; (4) institutional collaboration with African governments, governments of Caribbean countries, and diaspora-led ventures; (5) uptake and effectiveness of financial instruments created under this Act; (6) challenges and obstacles to these goals; and (7) recommendations for programmatic or appropriations measures, including legislative or executive policy changes. This section further requires the President to submit to the appropriate congressional committees not later than 10 years after submission of the initial report a final report assessing 10-year progress on the strategy's goals, successes and challenges in its implementation, recommended policy changes to address shortcomings, and related programmatic or appropriations recommendations.

This section defines terms used in the Act, including (1) appropriate congressional committees as specified committees in the House (Foreign Affairs, Ways and Means, Financial Services) and Senate (Foreign Relations, Finance, Banking, Housing, and Urban Affairs); (2) Africa as the 54 countries recognized by the African Union; (3) African diaspora as individuals of African or Caribbean descent residing outside their countries of origin, including first-generation immigrants and descendants; (4) Caribbean countries as the 15 countries of the Caribbean Community (CARICOM); and (5) remittances as personal transfers made across borders for family support or micro-investment (excluding corporate or institutional capital flows).