[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 242 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 242
To amend the Social Security Act to provide each American child with a
KidSave Account, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 5, 2007
Mr. Weller of Illinois introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Social Security Act to provide each American child with a
KidSave Account, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Social Security KidSave Accounts
Act''.
SEC. 2. SOCIAL SECURITY KIDSAVE ACCOUNTS.
Title II of the Social Security Act (42 U.S.C. 401 et seq.) is
amended--
(1) by inserting before section 201 the following:
``Part A--Insurance Benefits'';
and
(2) by adding at the end the following:
``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--
``(1) the date of enactment of this part; or
``(2) the date of the issuance of a social security account
number under section 205(c)(2) to such individual.
``(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.
``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.
``(b) Exceptions.--
``(1) Contribution rules.--
``(A) Loan contributions.--
``(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).
``(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.
``(B) Other contributions.--
``(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)).
``(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.
``(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.
``(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.
``(2) Designations regarding kidsave account investments.--
``(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.
``(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--
``(i) 60 percent in the Common Stock Index
Investment Fund established under section
8438(b)(1)(C) of title 5, United States Code;
``(ii) 20 percent in the Fixed Income
Investment Fund established under section
8438(b)(1)(B) of such title; and
``(iii) 20 percent in the Government
Securities Investment Fund established under
section 8438(b)(1)(A) of such title.
``(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.
``(3) Distributions.--
``(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--
``(i) the date on which the individual
begins receiving benefits under part A; or
``(ii) the date of the individual's death.
``(B) Repayment of contribution loan.--
``(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:
``(I) 20 percent of the applicable
amount.
``(II) 20 percent of the balance in
such KidSave Account.
``(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.
``(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).
``(c) Treatment of Minors and Incompetent Individuals.--
``(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.
``(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.
``(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.
``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.''.
SEC. 3. CONFORMING AMENDMENTS.
(a) Amendments Relating to Rollovers.--
(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.''.
(2) Section 402(c)(5) of such Code is amended by striking
``(i) or (ii)'' and inserting ``(i), (ii), or (vii)''.
(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:
``(vii) a KidSave Account established under
section 251(a) of the Social Security Act.''.
(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''.
(b) Cross References.--
(1) In general.--
(A) The Social Security Act is amended--
(i) in part A of title II (as redesignated
by section 2), by striking ``this title'' each
place it appears and inserting ``this part'';
(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'';
(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'';
(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'';
(v) by striking ``title II, VIII, or'' in
section 1129(a)(3) and inserting ``part A of
title II or title VIII or''; and
(vi) by striking ``title II or VIII'' in
section 1147(b)(1)(A) and inserting ``part A of
title II or title VIII''.
(B) The Internal Revenue Code of 1986 is amended--
(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''; and
(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''.
(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''.
(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).
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