HR 242 IHCommentsClose CommentsPermalink

To amend the Social Security Act to provide each American child with a KidSave Account, and for other purposes.CommentsClose CommentsPermalink

January 5, 2007

Mr. WELLER of Illinois introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Social Security Act to provide each American child with a KidSave Account, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Social Security KidSave Accounts Act'.CommentsClose CommentsPermalink

SEC. 2. SOCIAL SECURITY KIDSAVE ACCOUNTS.

Title II of the Social Security Act (42 U.S.C. 401 et seq.) is amended--CommentsClose CommentsPermalink





(1) by inserting before section 201 the following:CommentsClose CommentsPermalink

`Part A--Insurance Benefits';

andCommentsClose CommentsPermalink





(2) by adding at the end the following:CommentsClose CommentsPermalink

`Part B--KidSave Accounts

`ESTABLISHMENT OF KIDSAVE ACCOUNTS

`Sec. 251. (a) In General- The Commissioner of Social Security, through the Federal Retirement Thrift Investment Board, shall establish in the name of each individual born on or after January 1, 2008, a KidSave Account in the Thrift Savings Fund under subchapter III of chapter 84 of title 5, United States Code, upon the later of--CommentsClose CommentsPermalink





`(1) the date of enactment of this part; orCommentsClose CommentsPermalink





`(2) the date of the issuance of a social security account number under section 205(c)(2) to such individual.CommentsClose CommentsPermalink





`(b) Identification of Account- The KidSave Account shall be identified to the account holder by means of the account holder's social security account number.CommentsClose CommentsPermalink

`TREATMENT OF KIDSAVE ACCOUNTS

`Sec. 252. (a) In General- For purposes of this part, except as provided in subsection (b), a KidSave Account described in section 251(a) shall be treated in the same manner as an account in the Thrift Savings Fund under subchapter III of chapter 84 of title 5, United States Code.CommentsClose CommentsPermalink





`(b) Exceptions-CommentsClose CommentsPermalink





`(1) CONTRIBUTION RULES-CommentsClose CommentsPermalink





`(A) LOAN CONTRIBUTIONS-CommentsClose CommentsPermalink





`(i) IN GENERAL- In addition to any contributions to a KidSave Account by or on behalf of an individual described in subparagraph (B), the Secretary of the Treasury shall transfer $2,000 to such Account from the Federal Old-Age and Survivors Insurance Trust Fund on the date of the establishment of such Account under subsection (a).CommentsClose CommentsPermalink





`(ii) ADJUSTMENT FOR INFLATION- For any calendar year after 2015, the dollar amount under clause (i) shall be increased by the cost-of-living adjustment determined under section 215(i) for the calendar year.CommentsClose CommentsPermalink





`(B) OTHER CONTRIBUTIONS-CommentsClose CommentsPermalink





`(i) CONTRIBUTION LIMIT- The aggregate amount of contributions by or on behalf of an individual (including rollover contributions) for any taxable year to the KidSave Account of such individual shall not exceed $500 for such year (determined without regard to the amount of the contribution made pursuant to subparagraph (A)).CommentsClose CommentsPermalink





`(ii) ROLLOVER CONTRIBUTIONS- No rollover contribution may be made to a KidSave Account of an individual unless it is from an eligible retirement plan described in clause (i), (ii), or (iii) of section 402(c)(8)(B) of the Internal Revenue Code of 1986 of such individual or of a parent or grandparent of such individual. For purposes of chapters 12 and 13 of the Internal Revenue Code of 1986 (relating to gift tax and tax on generation-skipping transfers), in no event shall a rollover contribution under this clause be treated as a taxable gift.CommentsClose CommentsPermalink





`(iii) NO CONTRIBUTIONS PAST THE AGE OF 18- No contribution (including rollover contribution) may be made to a KidSave Account of an individual after the date on which such individual attains the age of 19.CommentsClose CommentsPermalink





`(iv) DIRECT DEPOSITS- The Secretary of the Treasury shall, under regulations, provide for the direct deposit of any overpayment of Federal tax of an individual or of a parent or grandparent of such individual as a contribution to the KidSave Account of such individual.CommentsClose CommentsPermalink





`(2) DESIGNATIONS REGARDING KIDSAVE ACCOUNT INVESTMENTS-CommentsClose CommentsPermalink





`(A) INITIAL DESIGNATIONS OF INVESTMENT FUND- A person described in subsection (c) shall, on behalf of the individual described in section 251(a), designate 1 or more investment funds (established under section 8438 of title 5, United States Code) for the KidSave Account to which contributions by or on behalf of such individual are to be deposited. Such designation shall be made on the application for such individual's social security account number.CommentsClose CommentsPermalink





`(B) DEFAULT DESIGNATION- In the absence of any designation under subparagraph (A), the contributions by or on behalf of an individual described in section 251(a) shall be deposited--CommentsClose CommentsPermalink





`(i) 60 percent in the Common Stock Index Investment Fund established under section 8438(b)(1)(C) of title 5, United States Code;CommentsClose CommentsPermalink





`(ii) 20 percent in the Fixed Income Investment Fund established under section 8438(b)(1)(B) of such title; andCommentsClose CommentsPermalink





`(iii) 20 percent in the Government Securities Investment Fund established under section 8438(b)(1)(A) of such title.CommentsClose CommentsPermalink





`(C) CHANGES IN DESIGNATIONS- An individual who has attained age 18 or a person described in subsection (c) on behalf of such individual may change 1 or more investment designations for a KidSave Account of such individual at the same time and in the same manner as provided under subchapter III of chapter 84 of such title.CommentsClose CommentsPermalink





`(3) DISTRIBUTIONS-CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), distributions may only be made from a KidSave Account of an individual on or after the earlier of--CommentsClose CommentsPermalink





`(i) the date on which the individual begins receiving benefits under part A; orCommentsClose CommentsPermalink





`(ii) the date of the individual's death.CommentsClose CommentsPermalink





`(B) REPAYMENT OF CONTRIBUTION LOAN-CommentsClose CommentsPermalink





`(i) IN GENERAL- On the date on which an individual described in section 251(a) attains age 30 and on such date in each succeeding calendar year (as necessary), the Federal Retirement Thrift Investment Board shall transfer from the KidSave Account of such individual to the Federal Old-Age and Survivors Insurance Trust Fund an amount equal to the least of the following amounts:CommentsClose CommentsPermalink





`(I) 20 percent of the applicable amount.CommentsClose CommentsPermalink





`(II) 20 percent of the balance in such KidSave Account.CommentsClose CommentsPermalink





`(III) An amount equal to the excess of the applicable amount over the aggregate amount deducted under this clause in all preceding calendar years with respect to such individual.CommentsClose CommentsPermalink





`(ii) APPLICABLE AMOUNT- With respect to any individual described in clause (i), the applicable amount is equal to the amount transferred by the Secretary of the Treasury to such KidSave Account under paragraph (1)(A).CommentsClose CommentsPermalink





`(c) Treatment of Minors and Incompetent Individuals-CommentsClose CommentsPermalink





`(1) DESIGNATIONS- Any designation under subsection (b)(2) to be made by a minor, or an individual mentally incompetent or under other legal disability, may be made by the person who is constituted guardian or other fiduciary by the law of the State of residence of the individual or is otherwise legally vested with the care of the individual or his estate.CommentsClose CommentsPermalink





`(2) DISTRIBUTIONS- Payment under this part due a minor, or an individual mentally incompetent or under other legal disability, may be made to the person who is constituted guardian or other fiduciary by the law of the State of residence of the claimant or is otherwise legally vested with the care of the claimant or his estate.CommentsClose CommentsPermalink





`(3) OTHER PERSONS DESIGNATED- In any case in which a guardian or other fiduciary of the individual under legal disability has not been appointed under the law of the State of residence of the individual, if any other person, in the judgment of the Commissioner, is responsible for the care of such individual, any designation under subsection (b)(2) which may otherwise be made by such individual may be made by such person, any payment under this part which is otherwise payable to such individual may be made to such person, and the payment of an annuity payment under this part to such person bars recovery by any other person.CommentsClose CommentsPermalink

`TREATMENT OF THRIFT SAVINGS FUND

`Sec. 253. For purposes of subchapter III of chapter 84 of title 5, United States Code, the KidSave Accounts established in the Thrift Savings Fund under section 251 shall be separately maintained and accounted for by the Federal Retirement Thrift Investment Board from the accounts established under such subchapter in such Fund.'.CommentsClose CommentsPermalink

SEC. 3. CONFORMING AMENDMENTS.

(a) Amendments Relating to Rollovers-CommentsClose CommentsPermalink





(1) Section 402(c)(1) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: `For purposes of the preceding sentence, a rollover contribution to a KidSave Account under section 252(b)(1)(B)(ii) of the Social Security Act with respect to an employee who is a parent or grandparent of the beneficiary of such account shall be treated as a distribution to such employee.'.CommentsClose CommentsPermalink





(2) Section 402(c)(5) of such Code is amended by striking `(i) or (ii)' and inserting `(i), (ii), or (vii)'.CommentsClose CommentsPermalink





(3) Section 402(c)(8)(B) of such Code is amended by striking `and' at the end of clause (v), by striking the period at the end of clause (vi) and inserting `, and', and by adding at the end the following new clause:CommentsClose CommentsPermalink





`(vii) a KidSave Account established under section 251(a) of the Social Security Act.'.CommentsClose CommentsPermalink





(4) Section 408(d)(3)(A)(i) of such Code is amended by inserting `, or is paid into a KidSave Account of a beneficiary under section 252(b)(1)(B)(ii) of the Social Security Act with respect to whom such individual is the parent or grandparent,' after `such individual'.CommentsClose CommentsPermalink





(b) Cross References-CommentsClose CommentsPermalink





(1) IN GENERAL-CommentsClose CommentsPermalink





(A) The Social Security Act is amended--CommentsClose CommentsPermalink





(i) in part A of title II (as redesignated by section 2), by striking `this title' each place it appears and inserting `this part';CommentsClose CommentsPermalink





(ii) by striking `title II' each place it appears (except in sections 464(c)(3)(B)(i), 807(b)(2)(F), 807(c)(1), 1110(a)(3), 1110(c)(1), 1129A(d)(2), 1136(g), 1147(b)(1)(A), 1148(h)(4)(A), 1148(j)(1)(A), 1148(k), 1612(b)(18), and 1613(a)(10)) and inserting `part A of title II';CommentsClose CommentsPermalink





(iii) by striking `title II or XVI' each place it appears in sections 464(c)(3)(B)(i), 1110(a)(3), 1110(c)(1), 1129A(d)(2), and 1136(g) and inserting `part A of title II or title XVI';CommentsClose CommentsPermalink





(iv) by striking `title II, or XVI' each place it appears in sections 807(b)(2)(F) and 807(c)(1) and inserting `part A of title II, or title XVI';CommentsClose CommentsPermalink





(v) by striking `title II, VIII, or' in section 1129(a)(3) and inserting `part A of title II or title VIII or'; andCommentsClose CommentsPermalink





(vi) by striking `title II or VIII' in section 1147(b)(1)(A) and inserting `part A of title II or title VIII'.CommentsClose CommentsPermalink





(B) The Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(i) by striking `title II' each place it appears (except in sections 30B(b)(2)(C), 30B(h)(3), 35(c)(2), 142(h)(1), 410(b)(3)(B), 451(d), 912(1)(C), 912(2), 4980B(f), and 7442) and inserting `part A of title II'; andCommentsClose CommentsPermalink





(ii) by striking `title II or XVI' each place it appears in section 4980B(f) and inserting `part A of title II or title XVI'.CommentsClose CommentsPermalink





(C) The Railroad Retirement Act of 1974 is amended by striking `title II' each place it appears (except in section 19(d)(3)) and inserting `part A of title II'.CommentsClose CommentsPermalink





(2) RULE OF CONSTRUCTION- In each provision of Federal law (other than provisions amended or added by the amendments made by this Act), any reference to title II of the Social Security Act shall be deemed a reference to part A of title II of such Act (as redesignated by section 2).CommentsClose CommentsPermalink