[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2768 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2768

            To provide for the retirement of all Americans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 29, 1997

 Mr. Sanford introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
Education and the Workforce, Rules, and Banking and 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 provide for the retirement of all Americans.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Personal 
Retirement Accounts Act of 1997''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Definitions.
         TITLE I--CONTRIBUTIONS TO PERSONAL RETIREMENT ACCOUNTS

Sec. 101. Personal retirement account payroll deduction programs.
Sec. 102. Designation of personal retirement accounts.
Sec. 103. Self-employed individuals.
Sec. 104. Elective participation.
Sec. 105. Penalties.
                 TITLE II--PERSONAL RETIREMENT ACCOUNTS

Sec. 201. General requirements for personal retirement accounts.
Sec. 202. Investment requirements.
Sec. 203. Distribution requirements.
Sec. 204. Insurance requirements.
Sec. 205. Personal retirement account exempt from income tax.
Sec. 206. Tax treatment of distributions.
Sec. 207. Penalty on trustee for failure of personal retirement account 
                            to meet requirement.
Sec. 208. Notification regarding insured depository institutions.
Sec. 209. Reports.
Sec. 210. Study on implementation of early retirement options.
 TITLE III--CERTIFICATION OF FINANCIAL INSTITUTIONS OTHER THAN INSURED 
                        DEPOSITORY INSTITUTIONS

Sec. 301. Certification of financial institutions by the Securities and 
                            Exchange Commission.
Sec. 302. Access to records.
Sec. 303. Revocation of certification.
            TITLE IV--PERSONAL RETIREMENT ACCOUNT INSURANCE

Sec. 401. Guarantees and supplemental minimum benefit payments.
Sec. 402. Assessments of qualified financial institutions by the 
                            Commission.
Sec. 403. Establishment of Social Security Savings Insurance Trust 
                            Fund.
Sec. 404. Institution of termination proceedings by the Commission.
Sec. 405. Liability upon termination of accounts.
Sec. 406. Insurance logo.
Sec. 407. Report by the Commission.
                     TITLE V--ENFORCEMENT AUTHORITY

Sec. 501. Cause of action.
Sec. 502. Jurisdiction and venue.
Sec. 503. Right of Securities and Exchange Commission to intervene.
Sec. 504. Awards of costs and expenses.
Sec. 505. Limitation on actions.
Sec. 506. Penalty for failure to timely provide required information.
Sec. 507. Actions by Securities and Exchange Commission.
TITLE VI--TRANSITION FROM COVERAGE FOR OLD-AGE AND SURVIVORS INSURANCE 
           BENEFITS UNDER TITLE II OF THE SOCIAL SECURITY ACT

Sec. 601. Primary insurance amounts for transitional eligible 
                            individuals.
Sec. 602. Certification of covered status under the old-age, survivors, 
                            and disability insurance program.
Sec. 603. Reduction in FICA and SECA taxes with respect to eligible 
                            individuals.
Sec. 604. Supplemental retirement benefits.
Sec. 605. Phased in increase in social security retirement age.
Sec. 606. Limitation in cost-of-living adjustments.
Sec. 607. Modification of CPI calculation for social security COLAs.
Sec. 608. Phased reduction in spousal benefits other than survivor's 
                            benefits to 33 percent of primary insurance 
                            amount.
Sec. 609. Coverage of newly hired State and local employees.
Sec. 610. Adjustments in formula for determining primary insurance 
                            amount.
Sec. 611. Annual statement of accrued liability of the old-age and 
                            survivors insurance program.
    TITLE VII--PROVISIONS RELATING TO FEDERAL CIVILIAN AND MILITARY 
                               PERSONNEL

Sec. 701. Federal civilian and military personnel.
Sec. 702. Provisions relating to the continued operation of existing 
                            retirement systems.
Sec. 703. Provisions relating to the new system.
           TITLE VIII--SOCIAL SECURITY TRANSITION COMMISSION

Sec. 801. Establishment of Commission.
Sec. 802. Duties.
Sec. 803. Membership.
Sec. 804. Powers.
Sec. 805. Congressional consideration of recommendations.
Sec. 806. Definitions.
Sec. 807. Authorization of appropriations.

SEC. 2. DEFINITIONS.

    For purposes of this Act--
            (1) Account holder.--The term ``account holder'' means, 
        with respect to any personal retirement account, the individual 
        for whose benefit such account is maintained.
            (2) Business day.--The term ``business day'' means any day 
        other than a Saturday, Sunday, or legal holiday in the area 
        involved.
            (3) Covered employer.--The term ``covered employer'' means, 
        for any calendar year, a person for whom an eligible individual 
        is engaged in employment during the year.
            (4) Eligible individual.--The term ``eligible individual'' 
        means any individual who, as of January 1, 2000--
                    (A) is not entitled to an old-age insurance benefit 
                under section 202(a) of the Social Security Act or to a 
                disability insurance benefit under section 223 of such 
                Act, and
                    (B) has made the election under section 104(a).
            (5) Employment.--The term ``employment'' has the meaning 
        provided in section 210 of the Social Security Act.
            (6) Minimum annuity amount; minimum annuity.--
                    (A) Minimum annuity amount.--
                            (i) In general.--The term ``minimum annuity 
                        amount'' means, as of any date, the amount 
                        determined by the trustee (under regulations 
                        issued by appropriate regulatory agency) to be 
                        necessary to purchase on such date an immediate 
                        annuity which is a minimum annuity.
                            (ii) Reduction to account for old-age 
                        insurance benefits.--In the case of an eligible 
                        individual who is entitled to old-age insurance 
                        benefits under section 202 of the Social 
                        Security Act, the minimum annuity amount 
                        determined under clause (i) shall be reduced by 
                        the actuarial present value, as of the date 
                        referred to in clause (ii), of future old-age 
                        insurance benefits payable to such individual 
                        under such section (determined by using 
                        reasonable assumptions which shall be 
                        prescribed by the Commission).
                            (iii) Immediate annuity.--For purposes of 
                        clause (i), the term ``immediate annuity'' 
                        means an annuity--
                                    (I) which is purchased with a 
                                single premium or annuity 
                                consideration,
                                    (II) the annuity starting date (as 
                                defined in section 72(c)(4) of the 
                                Internal Revenue Code of 1986) of which 
                                commences no later than 1 year from the 
                                date of the purchase of the annuity, 
                                and
                                    (III) which provides for a series 
                                of substantially equal periodic 
                                payments (to be made not less 
                                frequently than annually) during the 
                                annuity period, subject to adjustment 
                                under subparagraph (C).
                    (B) Minimum annuity.--
                            (i) In general.--The term ``minimum 
                        annuity'' means an annuity making payments over 
                        the life (or life expectancy) of the account 
                        holder which (on an annual basis) equals 
                        $9,150.
                            (ii) Joint and survivor annuity and 
                        preretirement survivor annuity requirements.--
                        An annuity shall not be treated as a minimum 
                        annuity within the meaning of clause (i) unless 
                        the requirements of section 401(a)(11) of the 
                        Internal Revenue Code of 1986 applicable to 
                        plans are met with respect to such annuity.
                    (C) Cost-of-living adjustment.--
                            (i) In general.--The Securities and 
                        Exchange Commission shall--
                                    (I) assume, in determining any 
                                minimum annuity amount under 
                                subparagraph (A), an annual adjustment 
                                in the equal periodic payments referred 
                                to in subparagraph (A)(iii)(III), and
                                    (II) adjust annually after calendar 
                                year 2000 the dollar amount set forth 
                                in subparagraph (B)(i),
                        for increases in the cost of living in 
                        accordance with regulations prescribed by the 
                        Commission.
                            (ii) Adjustment method.--The regulations 
                        shall provide for--
                                    (I) in the case of assumptions made 
                                pursuant to clause (i)(I), projected 
                                annual adjustments in the periodic 
                                payments with respect to future 
                                calendar years based on projected 
                                increases in the Consumer Price Index 
                                (published by the Bureau of Labor 
                                Statistics) for the last calendar 
                                quarter of each future calendar year 
                                over such Index for the last calendar 
                                quarter of the year in which the 
                                determination is made pursuant to 
                                subparagraph (A)(i),
                                    (II) in the case of adjustments 
                                made pursuant to clause (i)(II), an 
                                adjustment with respect to any calendar 
                                year based on the increase in such 
Consumer Price Index for the calendar quarter ending September 30 of 
the preceding calendar year over such Index for the calendar quarter 
ending with September 30, 1999 (in the case of adjustments made 
pursuant to clause (i)(II)), and
                                    (III) in either case, adjustment 
                                procedures which are similar to the 
                                procedures used to adjust benefit 
                                amounts under section 215(i)(2)(A) of 
                                the Social Security Act.
                Any dollar amount in subparagraph (B)(i), as in effect 
                for any calendar year (taking into account any 
                adjustments under this clause), shall apply with 
                respect to determinations under this paragraph made 
                during such calendar year of minimum annuity amounts 
                and of whether an annuity is a minimum annuity.
            (7) Personal retirement account.--The term ``personal 
        retirement account'' has the meaning provided in section 201.
            (8) Prescribed employee contribution.--The term 
        ``prescribed employee contribution'' means, with respect to any 
        eligible individual who is engaged in employment for a covered 
        employer, an amount equal to 4.0 percent of the wages received 
        by such employee with respect to such employment.
            (9) Prescribed employer contribution.--The term 
        ``prescribed social security employer contribution'' means, 
        with respect to a covered employer for whom an eligible 
        individual is engaged in employment, 4.0 percent of the wages 
        paid by such employer to such individual with respect to 
        employment of such individual.
            (10) Prescribed self-employment contribution.--The term 
        ``prescribed social security self-employment contribution'' 
        means, with respect to the self-employment income of an 
        eligible individual for any calendar year, 8.0 percent of the 
        amount of such self-employment income for such calendar year.
            (11) Qualified financial institution.--The term ``qualified 
        financial institution'' means any financial institution if--
                    (A) such institution is an insured depository 
                institution (as defined in section 3(c)(2) of the 
                Federal Deposit Insurance Act) or an insured credit 
                union (as defined in section 102(7) of the Federal 
                Credit Union Act), or
                    (B) there is in effect a certification of the 
                financial institution by the Securities and Exchange 
                Commission under title III.
            (12) Retirement age.--The term ``retirement age'' has the 
        meaning provided such term by section 216(l).
            (13) Self-employment income.--The term ``self-employment 
        income'' has the meaning provided in section 211(b) of the 
        Social Security Act.
            (14) Trustee-to-trustee transfer.--The term ``trustee-to-
        trustee transfer'' means a transfer by the trustee from a 
        personal retirement account for the benefit of an individual to 
        the trustee of another such account for the benefit of such 
        individual.
            (15) Wages.--The term ``wages'' has the meaning provided in 
        section 209 of the Social Security Act.

         TITLE I--CONTRIBUTIONS TO PERSONAL RETIREMENT ACCOUNTS

SEC. 101. PERSONAL RETIREMENT ACCOUNT PAYROLL DEDUCTION PROGRAMS.

    (a) In General.--Each person who is a covered employer for any 
calendar year shall have in effect throughout such calendar year a 
personal retirement accounts payroll deduction program for such 
person's employees who are eligible individuals.
    (b) Requirements.--For purposes of this title, the term ``personal 
retirement account payroll deduction program'' means a written program 
maintained by a covered employer if--
            (1) under such program, the prescribed employee 
        contribution is deducted from the wages of each employee who is 
        an eligible individual and paid as a contribution on behalf of 
        the employee to a personal retirement account of such employee 
        designated in accordance with section 102,
            (2) under such program, the covered employer makes timely 
        payment of the amount so deducted as a contribution to the 
        designated personal retirement account under regulations of the 
        Securities and Exchange Commission applying the same principles 
        relating to the timeliness of payment as are applicable under 
        chapter 62 of the Internal Revenue Code of 1986 with respect to 
        taxes under chapter 21 of such Code,
            (3) under such program, the covered employer pays as a 
        contribution to the personal retirement account, together with 
        the contribution paid pursuant to paragraph (2), the prescribed 
employer contribution with respect to the employee, and
            (4) the employer receives no compensation for the cost of 
        administering such program.
    (c) Amount Deducted May Be Accumulated by Employer in Certain 
Cases.--If, under the terms of the governing instruments creating a 
personal retirement account selected under section 102, contributions 
below a specified amount will not be accepted, the requirements of 
subsection (b)(2) shall be treated as met if amounts deducted from the 
wages of an employee who is an eligible individual are accumulated by 
the covered employer and paid to such account otherwise in accordance 
with subsection (b)(2) with reference to the first day on which the 
accumulated amount exceeds such specified amount.

SEC. 102. DESIGNATION OF PERSONAL RETIREMENT ACCOUNTS.

    (a) In General.--Except as provided in subsection (b), the personal 
retirement accounts to which contributions with respect to any employee 
who is an eligible individual are required to be paid under section 101 
shall be such an account designated by such employee to such employer 
not later than 10 business days after the date on which such employee 
becomes an employee of such employer. Any such designation shall be 
made in such form and manner as may be prescribed in regulations of the 
Securities and Exchange Commission.
    (b) Designation in Absence of Timely Designation by Employee.--In 
any case in which no timely designation of the personal retirement 
account is made, the covered employer shall designate such account in 
accordance with regulations of the Commission.
    (c) Subsequent Substitution of Accounts.--The Commission shall 
provide by regulation for subsequent designation of a personal 
retirement account by an account holder in lieu of an account 
previously designated by such account holder under this section.

SEC. 103. SELF-EMPLOYED INDIVIDUALS.

    (a) In General.--In the case of an eligible individual who has 
self-employment income for any calendar year, such individual shall 
make timely payments to a personal retirement account designated by 
such individual of the prescribed self-employment contribution with 
respect to such individual for such calendar year in accordance with 
regulations of the Securities and Exchange Commission applying the same 
principles relating to timeliness of payment as are applicable under 
chapter 62 of the Internal Revenue Code of 1986 with respect to taxes 
under chapter 2 of such Code.
    (b) Designation of Account.--The designation of a personal 
retirement account for payment of prescribed self-employment 
contributions shall be made in such form and manner as may be 
prescribed in regulations of the Securities and Exchange Commission.

SEC. 104. ELECTIVE PARTICIPATION.

    (a) Election for Inclusion by Individuals.--
            (1) In general.--Any individual may, during calendar year 
        1998, elect to be included in the definition of ``eligible 
        individual'' under section 2(4), irrespective of whether such 
        individual is (or may be as of January 1, 2000) credited with 
        one or more quarters of coverage under section 213 of the 
        Social Security Act, by filing with the employer, the Social 
        Security Administration, and the Securities and Exchange 
        Commission, in such form and manner as shall be prescribed in 
        regulations of the Administration (in consultation with the 
        Commission), a written and signed declaration of such 
        individual's intention to be treated as an eligible individual 
        for purposes of this title. Any such filing shall not be final 
        in the case of an individual who is engaged in employment as of 
        December 31, 1998, unless a copy of such filing is provided by 
        the individual to the covered employer during such period.
            (2) Irrevocability.--Any election under paragraph (1) shall 
        be irrevocable and shall be effective with respect to wages 
        paid, and self-employment income derived, after December 31, 
        1999.
            (3) Subsequent open seasons.--The Commissioner of Social 
        Security, in consultation with the Securities and Exchange 
        Commission, may provide by regulation for subsequent periods of 
        time during which elections under paragraph (1) may be made 
        periodically (not more frequently that biennially), effective 
        with respect to wages paid, and self-employment income derived, 
        after one year after the close of such periods.

SEC. 105. PENALTIES.

    (a) Failure To Establish Personal Retirement Account Payroll 
Deduction Program.--Any covered employer who fails to meet the 
requirements of section 101 for any calendar year shall be subject to a 
civil penalty of not to exceed--
            (1) $250,000, in the case of an employer who is an 
        individual, or
            (2) $500,000, in any other case.
    (b) Failure To Make Deductions Required Under Program.--Any covered 
employer who fails to timely deduct in full the amount from the wages 
of an employee who is an eligible individual as required under an 
applicable personal retirement account payroll deduction program shall 
be subject to a civil penalty for each such failure of not to exceed--
            (1) $250,000, in the case of an employer who is an 
        individual, or
            (2) $500,000, in any other case.
    (c) Failure To Pay Deducted Wages to Personal Retirement Account.--
If an amount deducted under a personal retirement account payroll 
deduction program from the wages of an employee who is an eligible 
individual is not timely paid in full to the designated personal 
retirement account in accordance with section 101, the covered employer 
failing to make such payment--
            (1) shall be subject to a civil penalty for each such 
        failure of not to exceed--
                    (A) $250,000, in the case of an employer who is an 
                individual, or
                    (B) $500,000, in any other case, and
            (2) shall be liable to the employee for interest on the 
        unpaid amount at a rate equal to 10 percentage points in excess 
        of the Federal short-term rate under section 1274(d)(1) of the 
        Internal Revenue Code of 1986, calculated from the last day by 
        which such amount was required to be so paid to the date on 
        which such amount is paid into the designated personal 
        retirement account.
    (d) Failure To Pay Prescribed Self-Employment Contributions to 
Personal Retirement Account.--Any eligible individual failing to timely 
pay in full a prescribed self-employment contribution to a designated 
personal retirement account as required under section 103 shall be 
subject to a civil penalty for each such failure of not to exceed 
$250,000, plus interest on the unpaid amount at a rate equal to 10 
percentage points in excess of the Federal short-term rate under 
section 1274(d)(1) of the Internal Revenue Code of 1986, calculated 
from the last day by which such amount was required to be so paid to 
the date on which such amount is paid into the designated personal 
retirement account.
    (e) Rules for Application of Section.--
            (1) Penalties assessed by securities and exchange 
        commission.--Any civil penalty assessed by this section shall 
        be imposed by the Securities and Exchange Commission and 
        collected in a civil action.
            (2) Compromises.--The Commission may compromise the amount 
        of any civil penalty imposed by this section.
            (3) Authority to waive penalty in certain cases.--The 
        Commission may waive the application of this section with 
        respect to any failure if the Commission determines that such 
        failure is due to reasonable cause and not to intentional 
        disregard of rules and regulations.

                 TITLE II--PERSONAL RETIREMENT ACCOUNTS

SEC. 201. GENERAL REQUIREMENTS FOR PERSONAL RETIREMENT ACCOUNTS.

    (a) In General.--For purposes of this Act, the term ``personal 
retirement account'' means a trust created or organized in the United 
States for the exclusive benefit of an eligible individual or his 
beneficiaries, but only if the written governing instrument creating 
the trust meets the following requirements:
            (1) No contribution may be made to such trust unless--
                    (A) such contribution is made pursuant to title I 
                of this Act, subsection (c) or (d) of this section, or 
                section 401 of this Act, or
                    (B) such contribution is a trustee-to-trustee 
                transfer.
            (2) The trustee is a qualified financial institution.
            (3) The investment requirements of section 202 shall be 
        met.
            (4) The distribution limitations of section 203 shall be 
        met.
            (5) The insurance requirements of section 204 are met.
            (6) The interest of an individual in the balance in his 
        account is nonforfeitable.
            (7) The trustee makes an annual disclosure to each 
        beneficiary of all fees and other charges imposed by the 
        trustee with respect to the trust.
            (8) The trustee provides to the beneficiary--
                    (A) on a quarterly basis, an accounting of all 
                activity of the trust during the preceding quarter, and
                    (B) on an annual basis, an accounting of all 
                activity of the trust during the preceding year.
    (b) Aggregation of Accounts.--For purposes of determining whether 
the requirements of sections 202 and 203 are met in a taxable year, a 
predecessor personal retirement account and a successor personal 
retirement account of an account holder shall be treated as 1 account.
    (c) Contributions to Individual's Nonworking Spouse's Personal 
Retirement Account.--
            (1) In general.--In the case of an individual to whom this 
        paragraph applies for the taxable year, there shall be allowed 
        as a deduction from gross income qualified nonworking spousal 
        contributions made by such individual for the taxable year.
            (2) Maximum amount of deduction.--The amount allowable as a 
        deduction under paragraph (1) to any individual for any taxable 
        year shall not exceed--
                    (A) an amount equal to 5 percent of the taxpayer's 
                adjusted gross income for the taxable year, reduced 
                (but not below zero) by
                    (B) the compensation of such individual's spouse 
                that is includible in gross income for the taxable 
                year.
            (3) Individuals to whom paragraph (1) applies.--Paragraph 
        (1) shall apply to any individual if--
                    (A) such individual files a joint return for the 
                taxable year, and
                    (B) the amount of compensation (if any) includible 
                in such individual's gross income for the taxable year 
                is greater than the compensation includible in the 
                gross income of such individual's spouse for the 
                taxable year.
    (d) Additional Contributions to Individual's Own Personal 
Retirement Account.--
            (1) In general.--An individual may make contributions to 
        the personal retirement account of the individual for the 
        taxable year.
            (2) Maximum amount of contributions.--The amount allowable 
        as a contribution under paragraph (1) to any individual for any 
        taxable year shall not exceed the amount in effect under 
        section 415(c)(1) of the Internal Revenue Code of 1986 
        (relating to limitation on contribution to defined contribution 
        plans), determined by substituting ``individual's'' for 
        ``participant's'' in subparagraph (B) of such section 
        415(c)(1).

SEC. 202. INVESTMENT REQUIREMENTS.

    (a) In General.--The investment requirements of this section are 
met with respect to a trust only if--
            (1) the risk limitations of subsection (b) are met,
            (2) no asset of the trust is--
                    (A) a life insurance contract (except as provided 
                in section 204), or
                    (B) a collectible (as defined in section 408(m) of 
                the Internal Revenue Code of 1986) other than a coin 
                described in section 408(m)(3) of such Code,
            (3) no asset of the trust is commingled with other property 
        except in a common trust fund or common investment fund,
            (4) no person borrows any money under or by use of such 
        trust or uses any portion of such trust as security for a loan.
    (b) Risk Limitations.--The risk limitations of this subsection are 
met only if so much of the balance in the trust as does not exceed the 
minimum annuity amount is invested in common stock having a moderate or 
lower risk, as determined under regulations which shall be prescribed 
by the Securities and Exchange Commission, and forming a portfolio 
designed to replicate the performance of a commonly recognized index 
comprised of common stock the aggregate market value of which is a 
reasonably complete representation of the United States equity markets.

SEC. 203. DISTRIBUTION REQUIREMENTS.

    (a) In General.--The distribution requirements of this section are 
met with respect to a trust only if--
            (1) the distribution timing requirements of subsection (b) 
        are met, and
            (2) the distribution amount requirements of subsection (c) 
        are met.
    (b) Timing Requirements.--
            (1) In general.--The distribution timing requirements of 
        this subsection are met only if--
                    (A) no distribution may be made from the trust 
                before the date the account holder attains retirement 
                age, unless the balance in the trust immediately after 
                the distribution is not less than the minimum annuity 
                amount, and
                    (B) no distribution may be made from the trust 
                before the date the account holder attains age 62.
            (2) Exceptions.--Paragraph (1) shall not apply to--
                    (A) any trustee-to-trustee transfer, and
                    (B) any distribution made to a beneficiary (or to 
                the estate of the employee) on or after the death of 
                the account holder.
    (c) Amount Requirements.--
            (1) In general.--The distribution amount requirements of 
        this subsection are met only if no distribution may be made 
        from the trust on or after the date the account holder attains 
        retirement age unless the aggregate amount of distributions for 
        any year does not exceed the amount which would be payable to 
the account holder from the trust under a minimum annuity.
            (2) Exceptions.--Paragraph (1) shall not apply to any 
        distribution if--
                    (A) subsection (b)(1) does not apply to such 
                distribution,
                    (B) the balance in the trust immediately after the 
                distribution is not less than the minimum annuity 
                amount, or
                    (C) the distribution is used to purchase a minimum 
                annuity.
    (d) Cross Reference.--

                                For penalty on trustee for failure of 
trust to meet the distribution requirements of this section, see 
section 207.

SEC. 204. INSURANCE REQUIREMENTS.

    (a) In General.--The insurance requirements of this section are met 
with respect to a trust only if the trustee maintains for each calendar 
year insurance on the life of each account holder who--
            (1) is married, or
            (2) has at least one dependent child with respect to whom 
        the same requirements are met as are applicable under section 
        202(d)(1)(B) of the Social Security Act with respect to an 
        application filed under section 202(d) of such Act.
    (b) Required coverage.--Insurance meets the requirements of 
subsection (a) only if such insurance provides for a benefit payable 
upon the account holder's death to the account holder's spouse (if any) 
and to each dependent child (if any) described in subsection (a). Each 
such benefit shall be equal to at least the product derived by 
multiplying the average indexed monthly earnings (as defined in section 
215(b) of the Social Security Act) of the account holder by 36.

SEC. 205. PERSONAL RETIREMENT ACCOUNT EXEMPT FROM INCOME TAX.

    Any personal retirement account is exempt from taxation under 
subtitle A of the Internal Revenue Code of 1986. Notwithstanding the 
preceding sentence, any such account is subject to the taxes imposed by 
section 511 of such Code (relating to imposition of tax on unrelated 
business income of charitable, etc. organizations).

SEC. 206. TAX TREATMENT OF DISTRIBUTIONS.

    (a) In General.--Except as otherwise provided in this section, any 
amount paid or distributed out of a personal retirement account shall 
be included in the gross income of the account holder for the taxable 
year in which the payment or distribution is received. Notwithstanding 
any other provision of law, the basis of the account holder in such 
account shall be zero.
    (b) Exception for Amounts Used To Acquire Minimum or More Generous 
Immediate Annuity.--No portion of a payment or distribution out of a 
personal retirement account shall be included in gross income so long 
as a sufficient portion of such payment or distribution is used within 
a reasonable period to acquire an immediate annuity which provides 
payments which, on an annual basis, are not less than the payments 
under a minimum annuity purchased on the date of such acquisition.
    (c) Exception for Transfers Incident to Divorce.--The transfer of 
an individual's interest in a personal retirement account to his spouse 
or former spouse under a divorce or separation instrument described in 
subparagraph (A) of section 71(b)(2) of the Internal Revenue Code of 
1986 is not to be considered a taxable transfer for purposes of 
subtitle A of the Internal Revenue Code of 1986, and such interest at 
the time of the transfer is to be treated as a personal retirement 
account of such spouse, and not of such individual. Thereafter such 
spouse shall, for purposes of this title, be treated as the account 
holder of such account.

SEC. 207. PENALTY ON TRUSTEE FOR FAILURE OF PERSONAL RETIREMENT ACCOUNT 
              TO MEET REQUIREMENT.

    For purposes of section 4975 of the Internal Revenue Code of 1986 
(relating to tax on prohibited transactions)--
            (1) a personal retirement account shall be treated as a 
        plan to which such section applies, and
            (2) the term ``prohibited transaction'' includes any 
        failure of a personal retirement account to meet any 
        requirement of section 202 or 203.

SEC. 208. NOTIFICATION REGARDING INSURED DEPOSITORY INSTITUTIONS.

    (a) Notification of Insured Status.--The relevant Federal agency 
shall notify the Securities and Exchange Commission of the identity of 
each financial institution which is an insured depository institution 
or an insured credit union not later than--
            (1) in the case of financial institutions which are insured 
        depository institutions or insured credit unions on the date of 
        the enactment of this Act, 60 days after such date, or
            (2) in any other case, 60 days after the date on which the 
        institution becomes an insured depository institution or an 
        insured credit union.
    (b) Notification of Termination of Insured Status.--The relevant 
Federal agency shall notify the Commission of the termination of a 
financial institution's status as an insured depository institution or 
an insured credit union not later than the effective date of the 
termination of such status.
    (c) Relevant Federal Agency.--For purposes of this section, the 
term ``relevant Federal agency'' means--
            (1) in the case of an insured credit union (as defined in 
        section 101(7) of the Federal Credit Union Act), the National 
        Credit Union Administration Board, and
            (2) in any other case, the appropriate Federal banking 
        agency (as defined in section 3(q) of the Federal Deposit 
        Insurance Act).

SEC. 208. REPORTS.

    (a) In General.--The trustee of a personal retirement account shall 
make such reports regarding such account to the Securities and Exchange 
Commission and to the account holder with respect to contributions (and 
the years to which they relate), distributions, and such other matters 
as the Commission may require under regulations.
    (b) Filing and Furnishing of Reports.--The reports required by this 
section--
            (1) shall be filed at such time and in such manner as the 
        Commission prescribes in the regulations prescribed pursuant to 
        subsection (a), and
            (2) shall be furnished to individuals--
                    (A) not later than January 31 of the calendar year 
                following the calendar year to which such reports 
                relate, and
                    (B) in such manner as the Commission prescribes in 
                such regulations.

SEC. 210. STUDY ON IMPLEMENTATION OF EARLY RETIREMENT OPTIONS.

    (a) In General.--As soon as practicable after the date of the 
enactment of this Act, the Securities and Exchange Commission, in 
consultation with the Commissioner of Social Security, shall conduct a 
study of the best means of providing for options under which 
distributions from a personal retirement account established under this 
Act may commence in advance of the date on which the account holder 
attains retirement age.
    (b) Matters To Be Studied.--The study conducted pursuant to 
subsection (a) shall consider specifically--
            (1) the extent to which minimum levels of assets held in 
        the account may need to be required as a prerequisite for 
        distribution of assets from the account at an age earlier than 
        retirement age, and
            (2) possible forms of distribution to which such early 
        distributions might be restricted,
in order to minimize any adverse affects that such early distributions 
might have on retirement income security and to forestall any 
likelihood of reliance by the account holder in the future on other 
Federal or State benefit programs for financial support.
    (c) Reports.--Not later than December 31 of each calendar year 
beginning after the date of the enactment of this Act and ending with 
2003, the Commission shall transmit to the President and to each House 
of the Congress interim reports on the progress of the study being 
conducted under subsection (a). Not later than December 31, 2004, the 
Commission shall submit to the President and to each House of the 
Congress a final report on the study conducted under subsection (a) 
setting forth the Commission's conclusions and recommendations. The 
report shall include any recommendations for legislation that the 
Commission considers necessary or appropriate, together with suggested 
legislative language necessary to carry out such recommendations.

 TITLE III--CERTIFICATION OF FINANCIAL INSTITUTIONS OTHER THAN INSURED 
                        DEPOSITORY INSTITUTIONS

SEC. 301. CERTIFICATION OF FINANCIAL INSTITUTIONS BY THE SECURITIES AND 
              EXCHANGE COMMISSION.

    (a) In General.--Any financial institution may apply to the 
Securities and Exchange Commission (in such form and manner as shall be 
provided by the Commission by regulation) for certification under this 
title.
    (b) Review Requirements.--In reviewing any application for 
certification under this title and determining whether to approve the 
application for certification, the Commission shall consider the 
following factors:
            (1) The financial history and condition of the financial 
        institution.
            (2) The adequacy of the financial institution's capital 
        structure.
            (3) The future earnings prospects of the financial 
        institution.
            (4) The general character and fitness of the management of 
        the financial institution.
            (5) The risk presented by such financial institution to the 
        Social Security Savings Guaranty Trust Fund.
            (6) The convenience and needs of individuals who are 
        account holders with respect to personal retirement accounts 
        for which the institution is to serve as trustee.
            (7) Whether the financial institution's corporate powers 
        are consistent with the purposes of this Act.
    (c) Notice of Denial of Application for Certification.--If the 
Commission votes to deny any application for certification by any 
financial institution, the Commission shall promptly notify the 
financial institution of the denial of such application, giving 
specific reasons in writing for the Commission's determination with 
reference to the factors described in subsection (b).
    (d) Nondelegation Requirement.--The authority of the Commission to 
make any determination to deny any application under this section may 
not be delegated by the Commission.

SEC. 302. ACCESS TO RECORDS.

    (a) In General.--The Securities and Exchange Commission may from 
time to time require any certified financial institution to file such 
reports as the Commission may deem advisable for purposes of this 
title.
    (b) Reports by Certified Financial Institutions.--
            (1) In general.--Each such report shall contain a 
        declaration by the president, by a vice president, by the 
        cashier or the treasurer, or by any other officer designated by 
        the board of directors or trustees of the reporting certified 
        financial institution to make such declaration, that the report 
        is true and correct to the best of his knowledge and belief. 
        The correctness of such report shall be attested by the 
        signatures of at least two directors or trustees of the 
        reporting certified financial institution other than the 
        officer making such declaration, with a declaration that the 
        report has been examined by them and to be the best of their 
        knowledge and belief is true and correct. At the time of making 
        such reports each certified financial institution shall furnish 
        to the Commission a copy thereof containing such signed 
        declaration and attestations. Nothing in this paragraph shall 
        be construed to preclude any Federal or State agency or 
        instrumentality from requiring a certified financial 
        institution under its jurisdiction to make additional reports 
        at any time.
            (2) Information to be provided.--In the reports required to 
        be made by paragraph (1), each certified financial institution 
        shall report the total amount of the liability of the 
        institution for balances maintained in personal retirement 
        accounts for which such institution serves as trustee.
            (3) Data collections.--In addition to or in connection with 
        any other report required under this subsection, the Commission 
        shall take such action as may be necessary to ensure that--
                    (A) each certified financial institution maintains; 
                and
                    (B) the Commission receives on a regular basis from 
                such institution,
        information on the total amount of all liability of the 
        institution for balances maintained in personal retirement 
        accounts for which such institution serves as trustee. In 
        prescribing reporting and other requirements for the collection 
        of actual and accurate information pursuant to this paragraph, 
        the Commission shall minimize the regulatory burden imposed 
        upon certified financial institutions while taking into account 
        the benefit of the information to the Commission in carrying 
        out its functions under this title.

SEC. 303. REVOCATION OF CERTIFICATION.

    (a) Voluntary Revocation.--Any financial institution may revoke 
such institution's status as a certified financial institution if such 
institution provides written notice to the Securities and Exchange 
Commission of the institution's intent to revoke such status not less 
than 90 days before the effective date of such revocation.
    (b) Involuntary Revocation.--
            (1) Notice to primary regulator.--
                    (A) In general.--If the Commission determines 
                that--
                            (i) a certified financial institution or 
                        the directors or trustees of a certified 
                        financial institution have engaged or are 
                        engaging in unsafe or unsound practices in 
                        conducting the business of the institution,
                            (ii) a certified financial institution is 
                        in an unsafe or unsound condition to continue 
                        operations as a certified financial 
                        institution, or
                            (iii) a certified financial institution or 
                        the directors or trustees of the institution 
                        have violated any applicable law, regulation, 
                        order, condition imposed in writing by the 
                        Commission in connection with the approval of 
                        any application or other request by the 
institution, or written agreement entered into between the institution 
and the Commission,
                and the Commission determines that any unsafe or 
                unsound practice or condition or any violation 
                specified in such notice requires the revocation of the 
                certified status of the certified financial 
                institution, the Commission shall take the actions 
                required under subparagraph (B).
                    (B) Required actions.--If the Commission makes the 
                determination under subparagraph (A) with respect to a 
                certified financial institution, the Commission shall--
                            (i) serve written notice to the certified 
                        financial institution of the Commission's 
                        intention to revoke the certified status of the 
                        institution;
                            (ii) provide the certified financial 
                        institution with a statement of the charges on 
                        the basis of which the determination to revoke 
                        such institution's certified status was made; 
                        and
                            (iii) notify the certified financial 
                        institution of the date (not less than 30 days 
                        after notice under this paragraph) and place 
                        for a hearing before the Commission (or any 
                        person designated by the Commission) with 
                        respect to the revocation of the institution's 
                        certified status.
            (2) Hearing; revocation.--If, on the basis of the evidence 
        presented at a hearing before the Commission (or any person 
        designated by the Commission for such purpose), in which all 
        issues shall be determined on the record pursuant to section 
        554 of title 5, United States Code, and the written findings of 
        the Commission (or such person) with respect to such evidence 
        (which shall be conclusive), the Commission finds that any 
        unsafe or unsound practice or condition or any violation 
        specified in the notice to a certified financial institution 
        under paragraph (1) has been established, the Commission may 
        issue an order revoking the certified status of such 
        institution effective as of a date subsequent to such finding.
            (3) Appearance; consent to revocation.--Unless the 
        institution appears at the hearing by a duly authorized 
        representative, it shall be deemed to have consented to the 
        revocation of its status as a certified financial institution 
        and revocation of such status thereupon may be ordered.
            (4) Publication of notice of revocation.--The Commission 
        may publish notice of such revocation and the institution shall 
        give notice of such revocation to the account holder of each 
        personal retirement account for which the institution serves as 
        trustee at his last address of record on the books of the 
        institution, in such manner and at such time as the Commission 
        may find to be necessary and may order for the protection of 
        account holders.
            (5) Temporary continuance of certification as of 
        revocation.--After the Commission has determined under the 
        provisions of this subsection that the certified status of any 
        financial institution is to be revoked, the certification of 
        the institution shall continue for a period of at least 6 
        months or up to 2 years, within the discretion of the 
        Commission. No further contributions may be made to any 
        personal retirement account for which the institution serves as 
        trustee after the date of such determination of the Commission, 
        and the institution shall not advertise or hold itself out as 
        being a qualified financial institution unless in the same 
        connection it shall also state with equal prominence that such 
        contributions may not be made. Such institution shall, in all 
        other respects, be subject to the duties and obligations of a 
        qualified financial institution for the period referred to in 
        the first sentence of this paragraph from the date of such 
        revocation, and the Commission shall have the same powers and 
        rights with respect to such institution as in the case of a 
        qualified financial institution.
            (6) Temporary suspension of certification.--
                    (A) In general.--If the Commission initiates a 
                revocation proceeding under paragraph (1), and the 
                Commission, after consultation with any appropriate 
                regulatory agency with jurisdiction over the financial 
                institution, finds that the institution has no tangible 
                capital under the capital guidelines or regulations of 
                regulatory agency, the Commission may issue a temporary 
                order suspending certification of the institution.
                    (B) Effective period of temporary order.--Any order 
                issued under subparagraph (A) shall become effective 
                not earlier than 10 days from the date of service upon 
                the institution and, unless set aside, limited, or 
                suspended by a court in proceedings authorized under 
                this paragraph, such temporary order shall 
remain effective and enforceable until an order of the Commission under 
paragraph (2) becomes final or until the Commission dismisses the 
proceedings under paragraph (2).
                    (C) Judicial review.--Before the close of the 10-
                day period beginning on the date any temporary order 
                has been served upon the institution under subparagraph 
                (A), the institution may apply to the United States 
                District Court for the District of Columbia, or the 
                United States district court for the judicial district 
                in which the home office of the institution is located, 
                for an injunction setting aside, limiting, or 
                suspending the enforcement, operation, or effectiveness 
                of such order, and such court shall have jurisdiction 
                to issue such injunction.
                    (D) Publication of order.--The institution shall 
                give notice of such order to the account holder of each 
                personal retirement account for which the institution 
                serves as trustee in such manner and at such times as 
                the Commission may find to be necessary and may order 
                for the protection of account holders.
                    (E) Notice by commission.--If the Commission 
                determines that the institution has not substantially 
                complied with the notice to contributors required by 
                the Commission, the Commission may provide such notice 
                in such manner as the Commission may find to be 
                necessary and appropriate.
            (7) Final decisions to revoke certification.--Any decision 
        by the Commission to--
                    (A) issue a temporary order revoking certification; 
                or
                    (B) issue a final order revoking certification;
        shall be made by the Commission and may not be delegated.
            (8) Judicial review.--Any party to any proceeding under 
        this subsection to which a financial institution is a party may 
        obtain a review of any order served pursuant to this subsection 
        by the filing in the court of appeals of the United States for 
        the circuit in which the home office of the financial 
        institution is located, or in the United States Court of 
        Appeals for the District of Columbia Circuit, within 30 days 
        after the date of service of such order, a written petition 
        praying that the order of the Commission be modified, 
        terminated, or set aside. A copy of such petition shall be 
        forthwith transmitted by the clerk of the court to the 
        Commission, and thereupon the Commission shall file in the 
        court the record in the proceeding, as provided in section 2112 
        of title 28, United States Code. Upon the filing of such 
        petition, such court shall have jurisdiction, which upon the 
        filing of the record shall be exclusive, to affirm, modify, 
        terminate, or set aside, in whole or in part, the order of the 
        Commission. Review of such proceedings shall be had as provided 
        in chapter 7 of title 5, United States Code. The judgment and 
        decree of the court shall be final, except that the judgment 
        and decree shall be subject to review by the Supreme Court upon 
        certiorari, as provided in section 1254 of title 28, United 
        States Code. The commencement of proceedings for judicial 
        review under this paragraph shall not, unless specifically 
        ordered by the court, operate as a stay of any order issued by 
        the Commission.

            TITLE IV--PERSONAL RETIREMENT ACCOUNT INSURANCE

SEC. 401. GUARANTEES AND SUPPLEMENTAL MINIMUM BENEFIT PAYMENTS.

    (a) Distributions From Personal Retirement Accounts Guaranteed.--In 
any case in which the Securities and Exchange Commission declares an 
insurable event with respect to a qualified financial institution 
serving as trustee of a personal retirement account, subject to the 
limitations contained in subsection (b), the Commission shall 
guarantee, in accordance with this section, the timely distribution of 
the balance in such account to the account holder in accordance with 
the terms governing such account and the provisions of this Act.
    (b) Limitation.--The amount of any account balance, the 
distribution of which is subject to the Commission's guarantee under 
subsection (a), shall not exceed the minimum annuity amount.
    (c) Aggregate Limit on Amount Guaranteed.--Notwithstanding the 
preceding provisions of this section, no person shall receive from the 
Commission, pursuant to a guarantee by the Commission with respect to 
all personal retirement accounts for which such person is the account 
holder, an amount which, in the aggregate, exceeds the minimum annuity 
amount.
    (d) Insurable Event.--For purposes of subsection (a), any of the 
following shall constitute an insurable event with respect to a 
qualified financial institution serving as trustee of a personal 
retirement account:
            (1) the termination of the qualified status of a the 
        institution;
            (2) inability of the qualified financial institution to 
        make full distributions of the balance in the account when due; 
        and
            (3) termination of the account under section 405.
    (e) Minimum Distribution Level Guarantee.--In addition to the 
guarantee provided under subsection (a), the Commission shall guarantee 
a minimum distribution from the account as of the normal retirement 
date in the amount of the minimum annuity amount, notwithstanding that 
the balance in the account as of such date is less than the minimum 
annuity amount, if--
            (1) the account holder was not credited with any quarters 
        of coverage under section 213 of the Social Security Act as of 
        January 1, 2000,
            (2) as of the normal retirement date, no distributions have 
        been made by the individual from such account holder's personal 
        retirement account,
            (3) the Commission determines that the failure of the 
        balance in the account to attain the level of the minimum 
        annuity amount as of the normal retirement date is due to 
        inadvertent and substantial investment losses occurring during 
        the 90-day period ending with such date.
    (f) Alternative Guarantee Arrangements.--The Commission shall also 
provide for a range of alternative guarantee arrangements providing for 
timely distribution of all, or a larger portion, of the balance in the 
personal retirement account to the account holder, which may be elected 
by the account holder upon payment to the commission of supplemental 
premiums.
    (g) Substitution of Private Insurance.--The Commission shall 
provide by regulation for substitution, at the election of the account 
holder, of private insurance secured by the account holder or by the 
trustee of the account holder's personal retirement account, providing 
for a guarantee of timely distribution of the balance in the account to 
the account holder, which is at least equivalent to the guarantee 
provided for under subsection (a)
    (h) Payment of Guarantees.--To the extent that amounts subject to a 
guarantee provided for under subsection (a), (e), (f), or (g) are not 
payable from the personal retirement account, such amounts shall be 
payable from the Social Security Savings Insurance Trust Fund.
    (i) Entitlement to Supplemental Minimum Benefit Payment to 
Account.--
            (1) In general.--In any case in which--
                    (A) an account holder attains retirement age and, 
                as of the normal retirement date, is a fully insured 
                individual (as defined in section 214(a) of the Social 
                Security Act),
                    (B) as of the normal retirement date, no 
                distributions have been made by the individual from 
                such account holder's personal retirement account,
                    (C) as of the normal retirement date, the balance 
                in the personal retirement account (before any 
                distributions on such date) is less than the minimum 
                annuity amount, and
                    (D) the guarantee under subsection (e) does not 
                apply with respect to the balance in the personal 
                retirement account,
        the account holder, upon application to the Commission filed by 
        the account holder or the trustee of the account on or after 
        the normal retirement date and in such form and manner as shall 
        be prescribed by the Commission, shall be entitled to a 
        supplemental minimum benefit payment to such account. Upon 
        receipt of such application, the Commission shall certify to 
        the Secretary of the Treasury the amount of such payment, and 
        the Secretary shall pay the amount of such payment to such 
        account in accordance with such certification from funds 
        otherwise available in the general fund of the Treasury.
            (2) Amount of supplemental minimum benefit payment.--The 
        amount of a supplemental minimum benefit payment payable to an 
        eligible individual's account under paragraph (1) is the excess 
        (if any) of--
                    (A) the minimum annuity amount as of the normal 
                retirement date, over
                    (B) the balance in such account as of such date.
    (j) Protection From Assignment or Alienation.--Any amount subject 
to any guarantee provided for under subsection (a), (e), (f), or (g) 
and any supplmental minimum benefit payment under subsection (i) may 
not be assigned or alienated.
    (k) Normal Retirement Date.--For purposes of this section, the term 
``normal retirement date'' means, in connection with an account holder, 
the date on which the account holder attains retirement age (or, if 
such date is not a business day, the date which is the first business 
day thereafter).

SEC. 402. ASSESSMENTS OF QUALIFIED FINANCIAL INSTITUTIONS BY THE 
              COMMISSION.

    (a) Risk-Based Assessment System.--
            (1) Risk-based assessment system required.--The Securities 
        and Exchange Commission shall, by regulation, establish a risk-
based assessment system for qualified financial institutions serving as 
trustee of a personal retirement account.
            (2) Private reinsurance authorized.--In carrying out this 
        section, the Commission may--
                    (A) obtain private reinsurance covering not more 
                than 10 percent of any loss the Commission incurs with 
                respect to a qualified financial institution serving as 
                trustee of a personal retirement account; and
                    (B) base that institution's semiannual assessment 
                (in whole or in part) on the cost of the reinsurance.
            (3) Risk-based assessment system defined.--For purposes of 
        this section, the term ``risk-based assessment system'' means a 
        system for calculating a qualified financial institution's 
        semiannual assessment based on--
                    (A) the probability that the Social Security 
                Savings Guarantee Trust Fund will incur a loss with 
                respect to the institution, taking into consideration 
                the risks attributable to--
                            (i) different categories and concentrations 
                        of assets;
                            (ii) different categories and 
                        concentrations of liabilities, both insured and 
                        uninsured, contingent and noncontingent; and
                            (iii) any other factors the Commission 
                        determines are relevant to assessing such 
                        probability;
                    (B) the likely amount of any such loss; and
                    (C) the revenue needs of the Trust Fund.
            (4) Separate assessment systems.--The Commission may 
        establish separate risk-based assessment systems for large and 
        small qualified financial institutions.
    (b) Setting Assessments.--
            (1) Achieving and maintaining designated reserve ratio.--
                    (A) In general.--The Commission shall set 
                semiannual assessments for qualified financial 
                institutions--
                            (i) to maintain the reserve ratio of the 
                        Trust Fund at the designated reserve ratio; or
                            (ii) if the reserve ratio is less than the 
                        designated reserve ratio, to increase the 
                        reserve ratio to the designated reserve ratio 
                        as provided in subsection (c).
                    (B) Factors to be considered.--In carrying out 
                subparagraph (A), the Commission shall consider the 
                Trust Fund's--
                            (i) expected operating expenses,
                            (ii) case resolution expenditures and 
                        income,
                            (iii) the effect of assessments on earnings 
                        and capital of qualified financial 
                        institutions, and
                            (iv) any other factors that the Commission 
                        may deem appropriate.
                    (C) Minimum assessment.--The semiannual assessment 
                for each qualified financial institution shall be not 
                less than $1,000.
                    (D) Designated reserve ratio defined.--The 
                designated reserve ratio of the Trust Fund for each 
                year shall be--
                            (i) 1.25 percent of so much of the total of 
                        the estimated balances in personal retirement 
                        accounts as is subject to the Commission's 
                        guarantee under this title, in the aggregate; 
                        or
                            (ii) a higher percentage of estimated 
                        balances in such accounts that the Commission 
                        determines to be justified for that year by 
                        circumstances raising a significant risk of 
                        substantial future losses to the Trust Fund.
            (2) Notice of assessments.--The Commission shall notify 
        each qualified financial institution of that institution's 
        semiannual assessment.
            (3) Special rule until the trust fund achieves the 
        designated reserve ratio.--Until the Trust Fund achieves the 
        designated reserve ratio, the Commission may provide for 
        uniform percentage increases in assessments on qualified 
        financial institutions under the risk-based assessment system 
        authorized under subsection (a) to not more than 10 basis 
        points above the assessments on qualified financial 
        institutions under that system which would be necessary, if the 
        Trust Fund had achieved the designated reserve ratio, to 
        maintain the reserve ratio of the Trust Fund at the designated 
        reserve ratio.
    (c) Special Rule for Recapitalizing Undercapitalized Trust Fund.--
            (1) In general.--If the reserve ratio of the Trust Fund is 
        less than the designated reserve ratio under subsection 
        (b)(1)(D), the Commission shall set semiannual assessment rates 
for qualified financial institutions--
                    (A) that are sufficient to increase the reserve 
                ratio for the Trust Fund to the designated reserve 
                ratio not later than 1 year after such rates are set; 
                or
                    (B) in accordance with a schedule promulgated by 
                the Commission under paragraph (2).
            (2) Recapitalization schedule.--For purposes of paragraph 
        (1)(B), the Commission shall by regulation promulgate a 
        schedule that specifies, at semiannual intervals, target 
        reserve ratios for the Trust Fund, culminating in a reserve 
        ratio that is equal to the designated reserve ratio not later 
        than 15 years after the date on which the schedule is 
        implemented.
    (d) Semiannual Period Defined.--For purposes of this section, the 
term ``semiannual period'' means a period beginning on January 1 of any 
calendar year and ending on June 30 of the same year, or a period 
beginning on July 1 of any calendar year and ending on December 31 of 
the same year.
    (e) Records To Be Maintained.--Each qualified financial institution 
shall maintain all records that the Commission may require for 
verifying the correctness of the institution's semiannual assessments. 
No qualified financial institution shall be required to retain those 
records for that purpose for a period of more than 5 years from the 
date of the filing of any certified statement, except that when there 
is a dispute between the qualified financial institution and the 
Commission over the amount of any assessment, the institution shall 
retain the records until final determination of the issue.
    (f) Emergency Special Assessments.--In addition to the other 
assessments on qualified financial institutions under this section, the 
Commission may impose one or more special assessments on qualified 
financial institutions in an amount determined by the Commission if the 
amount of any such assessment is necessary--
            (1) to provide sufficient assessment income to repay 
        amounts borrowed from the Secretary of the Treasury under 
        section 403(c) amounts due during the period with respect to 
        which such assessment is imposed; or
            (2) for any other purpose the Commission may deem 
        necessary.
    (g) Certified Statements; Payments.--
            (1) Certified statements required.--
                    (A) In general.--Each qualified financial 
                institution shall file with the Commission a certified 
                statement containing such information as the Commission 
                may require for determining the institution's 
                semiannual assessment.
                    (B) Form of certification.--The certified statement 
                required under subparagraph (A) shall--
                            (i) be in such form and set forth such 
                        supporting information as the Commission shall 
                        prescribe; and
                            (ii) be certified by the president of the 
                        qualified financial institution or any other 
                        officer designated by its board of directors or 
                        trustees that to the best of his or her 
                        knowledge and belief, the statement is true, 
                        correct and complete, and in accordance with 
                        this Act and regulations issued hereunder.
            (2) Payments required.--
                    (A) In general.--Each qualified financial 
                institution shall pay to the Commission the semiannual 
                assessment imposed under subsection (b).
                    (B) Form of payment.--The payments required under 
                subparagraph (A) shall be made in such manner and at 
                such time or times as the Commission shall prescribe by 
                regulation.
            (3) Newly insured institutions.--To facilitate the 
        administration of this section, the Commission may waive the 
        requirements of paragraphs (1) and (2) for the semiannual 
        period in which a financial institution becomes a qualified 
        financial institution.
            (4) Penalty for failure to make accurate certified 
        statement.--
                    (A) First tier.--Any qualified financial 
                institution which--
                            (i) maintains procedures reasonably adapted 
                        to avoid any inadvertent error and, 
                        unintentionally and as a result of such an 
                        error, fails to submit the certified statement 
                        under paragraph (1) within the period of time 
                        required under paragraph (1) or submits a false 
                        or misleading   certified statement; or
                            (ii) submits the statement at a time which 
                        is minimally after the time required in such 
                        paragraph,
                shall be subject to a penalty of not more than $2,000 
                for each day during which such failure continues or 
such false and misleading information is not corrected. The institution 
shall have the burden of proving that an error was inadvertent or that 
a statement was inadvertently submitted late.
                    (B) Second tier.--Any qualified financial 
                institution which fails to submit the certified 
                statement under paragraph (1) within the period of time 
                required under paragraph (1) or submits a false or 
                misleading certified statement in a manner not 
                described in subparagraph (A) shall be subject to a 
                penalty of not more than $20,000 for each day during 
                which such failure continues or such false and 
                misleading information is not corrected.
                    (C) Third tier.--Notwithstanding subparagraphs (A) 
                and (B), if any qualified financial institution 
                knowingly or with reckless disregard for the accuracy 
                of any certified statement described in paragraph (1) 
                submits a false or misleading certified statement under 
                paragraph (1), the Commission may assess a penalty of 
                not more than $1,000,000 or not more than 1 percent of 
                the total assets of the institution, whichever is less, 
                per day for each day during which the failure continues 
                or the false or misleading information in such 
                statement is not corrected.
    (h) Penalties for Late Payment.--If any assessment or penalty under 
this section is not paid when it is due the Commission is authorized to 
assess a late payment charge of not more than 100 percent of the 
payment which was not timely paid. The preceding sentence shall not 
apply to any payment made within 60 days after the date on which a 
payment is due, if before such date, the person required to make such 
payment obtains a waiver from the Commission based upon a showing of 
substantial hardship arising from the timely payment. The Commission is 
authorized to grant a waiver under this subsection upon application 
made by such person, but the Commission may not grant a waiver if it 
appears that such person will be unable to make the payment within 60 
days after the date on which it is due. If any payment is not made by 
the last date prescribed for a payment, interest on the amount of such 
payment at the rate imposed under section 6601(a) of the Internal 
Revenue Code of 1986 (relating to interest on underpayment, nonpayment, 
or extensions of time for payment of tax) shall be paid for the period 
from such last date to the date paid.
    (i) Civil Action.--If any person required to make such payment 
fails to make the payment when due, the Commission is authorized to 
bring a civil action in any district court of the United States within 
the jurisdiction of which the assets of the personal retirement account 
are located, the account is administered, or in which a defendant 
resides or is found for the recovery of the amount of the unpaid amount 
(including penalties and interest), and process may be served in any 
other district. The district courts of the United States shall have 
jurisdiction over actions brought under this subsection by the 
Commission without regard to the amount in controversy.
    (j) Guarantee Preserved.--The Commission shall not cease its 
guarantee on account of the failure of any person to pay any amount 
when due under this section.

SEC. 403. ESTABLISHMENT OF SOCIAL SECURITY SAVINGS INSURANCE TRUST 
              FUND.

    (a) Establishment.--There is established on the books of the 
Treasury of the United States a Social Security Savings Insurance Trust 
Fund to be used by the Securities and Exchange Commission in carrying 
out its duties under this title. Whenever in this title reference is 
made to the term ``Trust Fund'' the reference shall be considered to 
refer to the Trust Fund established under this subsection.
    (b) Flow of Funds.--
            (1) Credits to trust fund.--The Trust Fund shall be 
        credited with the appropriate portion of--
                    (A) funds borrowed under subsection (c),
                    (B) assessments, penalties, and interest collected 
                under this title,
                    (C) earnings on investments of the Trust Fund or on 
                assets credited to the Trust Fund under this 
                subsection,
                    (D) attorney's fees awarded to the Commission, and
                    (E) receipts from any other operations under this 
                title.
            (2) Debits from trust fund.--Subject to the provisions of 
        subsection (a), the Trust Fund shall be available--
                    (A) for making such payments as the Commission 
                determines are necessary to pay amounts guaranteed 
                under section 301,
                    (B) to purchase assets from a qualified financial 
                institution ceasing to be a qualified financial 
                institution when the Commission determines such 
                purchase will best protect the interests of the 
                Commission,
                    (C) to repay to the Secretary of the Treasury such 
                sums as may be borrowed (together with interest 
                thereon) under subsection (c),
                    (D) to pay the operational and administrative 
                expenses of the Commission under this title, including 
                reimbursement of the expenses incurred by the 
                Department of the Treasury in maintaining the funds, 
                and the Comptroller General in auditing the Commission, 
                and
                    (E) to pay to account holders the amounts which are 
                guaranteed by the Commission under this title with 
                respect to any personal retirement account maintained 
                by a financial institution which is unable to pay such 
                amounts when due.
            (3) Investment of trust fund assets.--Whenever the 
        Commission determines that the moneys of the Trust Fund are in 
        excess of current needs, it may request the investment of such 
        amounts as it determines advisable by the Secretary of the 
        Treasury in obligations issued or guaranteed by the United 
        States but, until all borrowings under subsection (c) have been 
        repaid, the obligations in which such excess moneys are 
        invested may not yield a rate of return in excess of the rate 
        of interest payable on such borrowings.
    (c) Issuance of Obligations.--The Commission is authorized to issue 
to the Secretary of the Treasury notes or other obligations in an 
aggregate amount of not to exceed $100,000,000, in such forms and 
denominations, bearing such maturities, and subject to such terms and 
conditions as may be prescribed by the Secretary of the Treasury. Such 
notes or other obligations shall bear interest at a rate determined by 
the Secretary of the Treasury, taking into consideration the current 
average market yield on outstanding marketable obligations of the 
United States of comparable maturities during the month preceding the 
issuance of such notes or other obligations of the Commission. The 
Secretary of the Treasury is authorized and directed to purchase any 
notes or other obligations issued by the Commission under this 
subsection, and for that purpose he is authorized to use as a public 
debt transaction the proceeds from the sale of any securities issued 
under chapter 31 of title 31, United States Code, and the purposes for 
which securities may be issued under that chapter are extended to 
include any purchase of such notes and obligations. The Secretary of 
the Treasury may at any time sell any of the notes or other obligations 
acquired by him under this subsection. All redemptions, purchases, and 
sales by the Secretary of the Treasury of such notes or other 
obligations shall be treated as public debt transactions of the United 
States.
    (d) Dedicated Amounts.--Amounts in the Trust Fund may be used only 
for the purposes for which the Trust Fund was established and may not 
be used to make loans to (or on behalf of) any other fund or to finance 
any other activity of the Commission. None of the funds borrowed under 
subsection (c) may be used to make loans to (or on behalf of) any other 
fund.
    (e) Voting of Stock.--Any stock in a person liable to the 
Commission under this title which is paid to the Commission by such 
person or a member of such person's controlled group in satisfaction of 
such person's liability under this title may be voted only by the 
custodial trustees or outside money managers of the Commission.

SEC. 404. INSTITUTION OF TERMINATION PROCEEDINGS BY THE COMMISSION.

    (a) In General.--The Securities and Exchange Commission may 
institute proceedings under this section to terminate a personal 
retirement account whenever it determines that the possible long-run 
loss of the Commission with respect to the account may reasonably be 
expected to increase unreasonably if the account is not terminated. The 
Commission shall as soon as practicable institute proceedings under 
this section to terminate a personal retirement account whenever the 
Commission determines that an insurable event under paragraph (1) or 
(2) of section 401(d) has occurred. The Commission may prescribe a 
simplified procedure to follow in terminating personal retirement 
accounts as long as that procedure includes substantial safeguards for 
the rights of the account holder. Notwithstanding any other provision 
of this title, the Commission is authorized to pool assets of 
terminated personal retirement accounts for purposes of administration, 
investment, payment of liabilities of all such accounts, and such other 
purposes as it determines to be appropriate in the administration of 
this title.
    (b) Initial Appointment of Alternative Trustee.--
            (1) In general.--Whenever the Commission makes a 
        determination under subsection (a) with respect to a personal 
        retirement account, it may, upon notice to the financial 
        institution serving as trustee of the account, apply to the 
        appropriate United States district court for the appointment of 
        an alternative trustee to administer the account pending the 
        issuance of a decree under subsection (c) ordering the 
        termination of the account. If within 3 business days after the 
        filing of an application under this subsection, or such other 
period as the court may order, the financial institution consents to 
the appointment of an alternative trustee, or fails to show why an 
alternative trustee should not be appointed, the court may grant the 
application and appoint an alternative trustee to administer the 
account in accordance with the terms governing the account until the 
Commission determines that the account should be terminated or that 
termination is unnecessary. The Commission may request that it be 
appointed as trustee of the account in any case.
            (2) Standard for court appointment.--Notwithstanding any 
        other provision of this Act, upon the petition of a qualified 
        financial institution or the Commission, the appropriate United 
        States district court may appoint an alternative trustee in 
        accordance with the provisions of this section if the interests 
        of the account holder with respect to the personal retirement 
        account is maintained would be better served by the appointment 
        of the alternative trustee.
            (3) Appointment by agreement between parties.--The 
        Commission and the qualified financial institution may agree to 
        the appointment of an alternative trustee without proceeding in 
        accordance with the requirements of paragraphs (1) and (2).
    (c) Termination Proceedings.--
            (1) In general.--If the Commission is required under 
        subsection (a) to commence proceedings under this section with 
        respect to a personal retirement account or, after issuing a 
        notice under this section to the qualified financial 
        institution serving as trustee of the account, has determined 
        that the account should be terminated, the Commission may, upon 
        notice to the institution, apply to the appropriate United 
        States district court for a decree adjudicating that the 
        account must be terminated in order to protect the interests of 
        the account holder with respect to the account or to avoid any 
        unreasonable deterioration of the financial condition of the 
        account or any unreasonable increase in the liability of the 
        Trust Fund. If the alternative trustee appointed under 
        subsection (b) disagrees with the determination of the 
        Commission under the preceding sentence, he may intervene in 
        the proceeding relating to the application for the decree, or 
        make application for such decree himself. Upon granting a 
        decree for which the Commission or alternative trustee has 
        applied under this subsection, the court shall authorize the 
        alternative trustee (or appoint an alternative trustee if one 
        has not been appointed under such subsection and authorize him) 
        to assume trusteeship of the personal retirement account, and 
        provide for its liquidation, in accordance with the provisions 
        of this section, and a transfer of its assets to a successor 
        personal retirement account, in accordance with paragraph (2).
            (2) Transfer to successor account.--In any case in which a 
        personal retirement account is terminated under this section, 
        the Commission shall provide by regulation for procedures under 
        which selection for the account holder of an appropriate 
        successor personal retirement account is facilitated and a 
        trustee-to-trustee transfer of the balance in the terminated 
        account to the successor account is made. Whenever an 
        alternative trustee appointed under this section is exercising 
        trusteeship authority over a personal retirement account with 
        discretion as to the date upon which transfer of the assets 
        from the account to a successor account is to be performed, the 
        alternative trustee shall notify the Commission at least 10 
        days before the date on which he proposes to perform such 
        transfer.
    (d) Trusteeship Without Termination.--If the Commission and the 
financial institution agree that trusteeship over the personal 
retirement account should be assumed by an alternative trustee 
appointed under this section and agree to the appointment of an 
alternative trustee without proceeding in accordance with the 
requirements of subsection (c), the alternative trustee shall have the 
power described in subsection (e)(1) of this section and, in addition 
to any other duties imposed on the alternative trustee under law or by 
agreement between the Commission and the financial institution, the 
alternative trustee is subject to the duties described in subsection 
(e)(3).
    (e) Powers and Duties of Alternative Trustee.--
            (1) In general.--An alternative trustee appointed under 
        subsection (b) shall have the power--
                    (A) to do any act authorized by documents governing 
                the personal retirement account or this title to be 
                done by the financial institution as trustee of the 
                account;
                    (B) to require the transfer of all (or any part) of 
                the assets and records of the account to himself as 
                trustee;
                    (C) to invest any assets of the account which he 
                holds in accordance with the documents governing the 
                account, regulations of the Commission and the 
                Securities and Exchange Commission, and applicable 
                rules of law;
                    (D) to limit payment of assets in the account to 
                assets guaranteed under this title as appropriate or to 
                continue payment of some or all of the assets in the 
                account which were being paid prior to his appointment;
                    (E) to do such other acts as he deems necessary to 
                continue operation of the account without increasing 
                the potential liability of the Commission, if such acts 
                may be done under the documents governing the account; 
                and
                    (F) to require the financial institution to furnish 
                any information with respect to the account which the 
                alternative trustee may reasonably need in order to 
                administer the account.
            (2) Time limitation on alternative trusteeship where 
        termination does not ensue.--If the court to which application 
        is made under subsection (c) dismisses the application with 
        prejudice, or if the Commission fails to apply for a decree 
        under subsection (c) within 30 days after the date on which the 
        alternative trustee is appointed under subsection (b), the 
        alternative trustee shall transfer all assets and records of 
the account held by him to the financial institution which had been 
serving as trustee of the account within 3 business days after such 
dismissal or the expiration of such 30-day period, and shall not be 
liable to the financial institution or any other person for his acts as 
alternative trustee except for willful misconduct, or for conduct in 
violation of any other provision of this Act. The 30-day period 
referred to in this paragraph may be extended as provided by agreement 
between the financial institution and the Commission or by court order 
obtained by the Commission.
            (3) Additional powers upon termination.--If the court to 
        which an application is made under subsection (c) issues the 
        decree requested in such application, in addition to the powers 
        described in paragraph (1), the alternative trustee shall have 
        the power--
                    (A) to collect for the account any amounts due the 
                account, including but not limited to the power to 
                collect from the persons obligated to meet the 
                contribution requirements of title I or the terms of 
                the documents governing the account;
                    (B) to receive any payment made by the Commission 
                to the account under this title;
                    (C) to commence, prosecute, or defend on behalf of 
                the financial institution or the account any suit or 
                proceeding involving the account;
                    (D) to issue, publish, or file such notices, 
                statements, and reports as may be required by the 
                Commission or any order of the court;
                    (E) to liquidate the assets of the account and 
                perform the transfer of such assets to a successor 
                personal retirement account as provided in subsection 
                (c)(2);
                    (F) to recover payments inappropriately made from 
                the account; and
                    (G) to do such other acts as may be necessary to 
                comply with this Act or any order of the court and to 
                protect the interests of the account holder of the 
                terminated account.
            (4) Notice of proceedings.--As soon as practicable after 
        his appointment, the alternative trustee shall give notice to 
        interested parties of the institution of proceedings under this 
        section to determine whether the account should be terminated 
        or to terminate the account, whichever is applicable. For 
        purposes of this paragraph, the term ``interested party'' 
        means--
                    (A) the financial institution,
                    (B) the account holder with respect to the account 
                was maintained, including the beneficiary of the 
                account holder who is deceased,
                    (C) each person who may be subject to liability 
                under section 406, and
                    (D) each person who may be liable for payments to 
                the account.
            (5) Additional duties.--Except to the extent inconsistent 
        with the provisions of this Act, or as may be otherwise ordered 
        by the court, an alternative trustee appointed under this 
        section shall be subject to the same duties as those of a 
        trustee under section 704 of title 11, United States Code, and 
        shall be, with respect to the account, a fiduciary within the 
        meaning of paragraph (21) of section 3 of the Employee 
        Retirement Income Security Act of 1974 and under section 
        4975(e) of the Internal Revenue Code of 1986 (except to the 
        extent that the provisions of this title are inconsistent with 
        the requirements applicable under part 4 of subtitle B of title 
        I of such Act and of such section 4975).
    (f) Coordination with Bankruptcy or Other Insolvency Proceedings.--
An application by the Commission under this section may be filed 
notwithstanding the pendency in the same or any other court of any 
bankruptcy, mortgage foreclosure, or equity receivership proceeding, or 
any proceeding to reorganize, conserve, or liquidate the personal 
retirement account or the financial institution, or its assets, or any 
proceeding to enforce a lien against assets of the account or the 
institution.
    (g) Court Jurisdiction.--Upon the filing of an application for the 
appointment of an alternative trustee or the issuance of a decree under 
this section, the court to which an application is made shall have 
exclusive jurisdiction of the account involved and its assets wherever 
located with the powers, to the extent consistent with the purposes of 
this section, of a court of the United States having jurisdiction over 
cases under chapter 11 of title 11 of the United States Code. Pending 
an adjudication under subsection (c), such court shall stay, and upon 
appointment by it of an alternative trustee, as provided in this 
section, such court shall continue the stay of, any pending mortgage 
foreclosure, equity receivership, or other proceeding to reorganize, 
conserve, or liquidate the account or its assets and any other suit 
against any receiver, conservator, or trustee of the account or the 
financial institution, or its assets. Pending such adjudication and 
upon the appointment by it of such alternative trustee, the court may 
stay any proceeding to enforce a lien against property of the account 
or the financial institution or any other suit against the account or 
the financial institution.
    (h) Venue and Process.--An action under this subsection may be 
brought in the judicial district where the financial institution 
serving as trustee of the personal retirement account is located or 
does business or where any asset of the account or the institution is 
situated. A district court in which such action is brought may issue 
process with respect to such action in any other judicial district.
    (i) Compensation and Personnel for Alternative Trustees.--
            (1) Compensation.--The amount of compensation paid to each 
        alternative trustee appointed under the provisions of this 
        section shall require the prior approval of the Commission, 
        and, in the case of an alternative trustee appointed by a 
        court, the consent of that court.
            (2) Appointment and retention of personnel.--Alternative 
        trustees appointed under this section shall appoint, retain, 
        and compensate accountants, actuaries, and other professional 
        service personnel in accordance with regulations prescribed by 
the Commission.

SEC. 405. LIABILITY UPON TERMINATION OF ACCOUNTS.

    (a) In General.--In any case in which a personal retirement account 
is terminated in a proceeding instituted by the Securities and Exchange 
Commission under section 405, each person who is the financial 
institution serving as trustee of the account on the termination date 
or a member of the financial institution's controlled group shall incur 
liability to the Commission under this section. The liability under 
this section of all such persons shall be joint and several.
    (b) Amount of Liability.--The liability to the Commission of a 
person described in subsection (a) shall be the total amount of the 
assets of the account which are guaranteed by the Commission and which 
are not available for payment from the account, calculated from the 
termination date in accordance with regulations prescribed by the 
Commission.
    (c) Payment of Liability.--
            (1) In general.--Except as provided in paragraph (2), the 
        liability to the Commission under this section shall be due and 
        payable to the Commission as of the termination date, in cash 
        or securities acceptable to the Commission.
            (2) Special rule.--Payment of so much of the liability as 
        exceeds 30 percent of the collective net worth of all persons 
        described in subsection (a) (including interest) shall be made 
        under commercially reasonable terms prescribed by the 
        Commission. The parties involved shall make a reasonable effort 
        to reach agreement on such commercially reasonable terms. Any 
        such terms prescribed by the Commission shall provide for 
        deferral of 50 percent of any amount of liability otherwise 
        payable for any year under this paragraph if a person subject 
        to such liability demonstrates to the satisfaction of the 
        Commission that no person subject to such liability has any 
        individual pre-tax profits for such person's fiscal year ending 
        during such year.
            (3) Alternative arrangements.--The Commission and any 
        person liable under this section may agree to alternative 
        arrangements for the satisfaction of liability to the 
        Commission under this subsection.
    (d) Definitions.--
            (1) Collective net worth of persons subject to liability.--
                    (A) In general.--The collective net worth of 
                persons subject to liability in connection with the 
                termination of a personal retirement account consists 
                of the sum of the individual net worths of all persons 
                who--
                            (i) have individual net worths which are 
                        greater than zero, and
                            (ii) are (as of the termination date) the 
                        financial institution or members of the 
                        financial institution's controlled group.
                    (B) Determination of net worth.--For purposes of 
                this paragraph, the net worth of a person is--
                            (i) determined on whatever basis best 
                        reflects, in the determination of the 
                        Commission, the current status of the person's 
                        operations and prospects at the time chosen for 
                        determining the net worth of the person, and
                            (ii) increased by the amount of any 
                        transfers of assets made by the person which 
                        are determined by the Commission to be improper 
                        under the circumstances, including any such 
                        transfers which would be inappropriate under 
                        title 11, United States Code, if the person 
                        were a debtor in a case under chapter 7 of such 
                        title.
                    (C) Timing of determination.--For purposes of this 
                paragraph, determinations of net worth shall be made as 
                of a day chosen by the Commission (during the 120-day 
                period ending with the termination date) and shall be 
                computed without regard to any liability under this 
                section.
            (2) Pre-tax profits.--The term ``pre-tax profits'' means, 
        for any fiscal year of any person, such person's consolidated 
        net income (excluding any extraordinary charges to income and 
        including any extraordinary credits to income) for such fiscal 
        year, as shown on audited financial statements prepared in 
        accordance with generally accepted accounting principles, 
        before provision for or deduction of Federal or other income 
        tax and any amounts required to be paid for such fiscal year 
        under this section. The Commission may by regulation require 
        such information to be filed on such forms as may be necessary 
        to determine the existence and amount of such pre-tax profits.
            (3) Controlled group.--
                    (A) In general.--The term ``controlled group'' 
                means, in connection with any person, a group 
                consisting of such person and all other persons under 
common control with such person.
                    (B) Common control.--The determination of whether 
                two or more persons are under ``common control'' shall 
                be made under regulations of the Commission which are 
                consistent and coextensive with regulations prescribed 
                for similar purposes by the Secretary of the Treasury 
                under subsections (b) and (c) of section 414 of the 
                Internal Revenue Code of 1986.
            (4) Termination date.--The term ``termination date'' 
        means--
                    (A) the date established by the Commission (or the 
                alternative trustee appointed under section 405(b)(2), 
                if any) and agreed to by the financial institution 
                serving as trustee of the terminated personal 
                retirement account immediately before the termination, 
                or
                    (B) if no agreement is reached, the date 
                established by the court.

SEC. 406. INSURANCE LOGO.

    (a) In General.--Each qualified financial institution, while 
serving as trustee for a personal retirement account subject to the 
guarantee of the Securities and Exchange Commission under this title, 
shall display at each place of business maintained by such institution 
a sign containing only the following items:
            (1) A statement that insured contributions to personal 
        retirement accounts maintained by the institution are backed by 
        the full faith and credit of the United States Government.
            (2) A statement that amounts contributed to such accounts 
        are federally insured to the amount necessary to purchase a 
        minimum annuity.
            (3) A patriotic symbol defined by the Commission by 
        regulation.
The sign shall not contain any reference to a Government agency and 
shall accord each item substantially equal prominence. No person may 
display such a sign unless such person is a qualified financial 
institution.
    (b) Regulations.--The Commission shall prescribe regulations to 
carry out the purposes of this section, including regulations governing 
the manner of display or use of such signs. Initial regulations under 
this section shall be prescribed not later than December 31, 1998.
    (c) Penalties.--For each day a qualified financial institution 
continues to violate any provision of this section or any lawful 
provisions of regulations prescribed under this section, it shall be 
subject to a penalty of not more than $100, which the Commission shall 
recover for its use.

SEC. 407. REPORT BY THE COMMISSION.

    As soon as practicable after the close of each fiscal year the 
Securities and Exchange Commission shall transmit to the President and 
the Congress a report relative to the conduct of its business under 
this title for that fiscal year. The report shall include financial 
statements setting forth the result of its operations under this title 
(including the source and application of its funds) for the fiscal year 
and shall include an actuarial evaluation of the expected operations 
and status of the Trust Fund for the next five years (including a 
detailed statement of the actuarial assumptions and methods used in 
making such evaluation).

                     TITLE V--ENFORCEMENT AUTHORITY

SEC. 501. CAUSE OF ACTION.

    The account holder with respect to a personal retirement account 
who is adversely affected by an act or practice of any party (other 
than the Securities and Exchange Commission or any officer or employee 
thereof) in violation of any provision of this Act, may bring an 
action--
            (1) to enjoin such act or practice, or
            (2) to obtain other appropriate equitable relief (A) to 
        redress such violation or (B) to enforce such provision.

SEC. 502. JURISDICTION AND VENUE.

    The district courts of the United States shall have exclusive 
jurisdiction of civil actions under this title. Such actions may be 
brought in the district where the personal retirement account is 
administered, where the violation took place, or where a defendant 
resides or may be found, and process may be served in any other 
district where a defendant resides or may be found. The district courts 
of the United States shall have jurisdiction, without regard to the 
amount in controversy or the citizenship of the parties, to grant the 
relief provided for in section 501 in any action.

SEC. 503. RIGHT OF SECURITIES AND EXCHANGE COMMISSION TO INTERVENE.

    A copy of the complaint or notice of appeal in any action under 
this title shall be served upon the Securities and Exchange Commission 
by certified mail. The relevant Federal agency, the Commission, and the 
Commission shall have the right in its discretion to intervene in any 
action.

SEC. 504. AWARDS OF COSTS AND EXPENSES.

    In any action brought under this title, the court in its discretion 
may award all or a portion of the costs and expenses incurred in 
connection with such action, including reasonable attorney's fees, to 
any party who prevails or substantially prevails in such action.

SEC. 505. LIMITATION ON ACTIONS.

    (f) In General.--Except as provided in subsection (c), an action 
under this title may not be brought after the later of--
            (1) 6 years after the date on which the cause of action 
        arose, or
            (2) 3 years after the applicable date specified in 
        subsection (b).
    (b) Applicable Date.--The applicable date specified in this 
subsection is the earliest date on which the plaintiff acquired or 
should have acquired actual knowledge of the existence of such cause of 
action.
    (c) Cases of Fraud or Concealment.--In the case of fraud or 
concealment, the period described in subsection (a)(2) shall be 
extended to 6 years after the applicable date specified in subsection 
(b).

SEC. 506. PENALTY FOR FAILURE TO TIMELY PROVIDE REQUIRED INFORMATION.

    The Securities and Exchange Commission may assess a penalty, 
payable to it, against any person who fails to provide any notice or 
other material information required under this Act or any regulations 
prescribed under this Act within the applicable time limit specified 
therein. Such penalty shall not exceed $1,000 for each day for which 
such failure continues.

SEC. 507. ACTIONS BY SECURITIES AND EXCHANGE COMMISSION.

    If any person is assessed under this Act and fails to pay the 
assessment when due, or any person otherwise fails to meet any 
requirement of this Act, the Securities and Exchange Commission may 
bring a civil action in any district court of the United States within 
the jurisdiction of which such person's assets are located or in which 
such person resides or is found for the recovery of the amount of the 
assessment or for appropriate equitable relief to redress the violation 
or enforce the provisions of this Act, and process may be served in any 
other district. The district courts of the United States shall have 
jurisdiction over actions brought under this subsection by the 
Commission without regard to the amount in controversy.

TITLE VI--TRANSITION FROM COVERAGE FOR OLD-AGE AND SURVIVORS INSURANCE 
           BENEFITS UNDER TITLE II OF THE SOCIAL SECURITY ACT

SEC. 601. PRIMARY INSURANCE AMOUNTS FOR TRANSITIONAL ELIGIBLE 
              INDIVIDUALS.

    (a) In General.--Section 215(a) of the Social Security Act (42 
U.S.C. 415(a)) is amended by adding at the end the following new 
paragraph:
    ``(8) Notwithstanding the preceding provisions of this subsection, 
the primary insurance amount of an eligible individual (as defined in 
section 2(4) of the Personal Retirement Accounts Act of 1997) shall be 
determined, effective for January 2000, as otherwise provided under 
this section--
            ``(A) if such individual has not attained age 62 as of 
        January 1, 2000, as though such individual had attained such 
        age on such date, and
            ``(B) as though such individual had filed application for 
        old-age insurance benefits in January 2000.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to monthly insurance benefits under part A of title 
II of the Social Security Act (as redesignated by this Act) for which 
applications are filed after December 31, 1999.

SEC. 602. CERTIFICATION OF COVERED STATUS UNDER THE OLD-AGE, SURVIVORS, 
              AND DISABILITY INSURANCE PROGRAM.

    Not later than July 1, 2000, the Commissioner of Social Security 
shall provide a written certification to each individual who has a 
social security account number, who has been credited with wages or net 
earnings from self-employment. Such certification shall indicate to 
each recipient whether such recipient is or is not an eligible 
individual and a description of the benefits available to such 
individual under part A of title II of the Social Security Act based on 
such individual's status as an eligible individual or otherwise.

SEC. 603. REDUCTION IN FICA AND SECA TAXES WITH RESPECT TO ELIGIBLE 
              INDIVIDUALS.

    (a) Tax on Employees.--Section 3101 of the Internal Revenue Code of 
1986 (relating to OASDI tax on employees) is amended--
            (1) in subsection (a), by striking ``In addition'' and 
        inserting ``Subject to subsection (c), in addition'';
            (2) by redesignating subsection (c) as subsection (d); and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Reduction in OASDI Tax.--In the case of an eligible 
individual (as defined in section 104(3) of the Personal Retirement 
Accounts Act of 1997), the rate of tax under subsection (a) shall be 
2.90 percent.''
    (b) Tax on Employers.--Section 3111 of such Code (relating to OASDI 
tax on employers) is amended--
            (1) in subsection (a), by striking ``In addition'' and 
        inserting ``Subject to subsection (c), in addition'';
            (2) by redesignating subsection (c) as subsection (d); and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(d) Reduction in OASDI Tax.--The rate of tax under subsection (a) 
with respect to having in the employer's employ an eligible individual 
(as defined in section 104(3) of the Personal Retirement Accounts Act 
of 1997) shall be 2.90 percent.''
    (c) Self-Employment Tax.--Subsection (a) of section 1401 of such 
Code (relating to OASDI tax on self-employment income) is amended--
            (1) in subsection (a), by striking ``In addition'' and 
        inserting ``Subject to subsection (c), in addition'';
            (2) by redesignating subsection (c) as subsection (d); and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Reduction in OASDI Tax.--In the case of an eligible 
individual (as defined in section 104(3) of the Personal Retirement 
Accounts Act of 1997), the rate of tax under subsection (a) with 
respect to self-employment income for taxable years ending after 
December 31, 1999, shall be 5.80 percent.''
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to wages received after December 31, 1999, and with 
respect to self-employment income for taxable years ending after such 
date.

SEC. 604. SUPPLEMENTAL RETIREMENT BENEFITS.

    (a) In General.--Section 202 of the Social Security Act (42 U.S.C. 
402) is amended by adding at the end the following new subsection:

                   ``Supplemental Retirement Benefits

    ``(y)(1) Every individual--
            ``(A) who is a fully insured individual
            ``(B) who has attained retirement age (as defined in 
        section 216(l)),
            ``(C) who is an eligible individual (as defined in section 
        104(3) of the Personal Retirement Accounts Act of 1997),
            ``(D) to whom no distribution has been made from any 
        personal retirement account established under title I of the 
        Personal Retirement Accounts Act of 1997, and
            ``(E) whose personal retirement account holds, as of the 
        date on which the individual attains retirement age, total 
        assets equal, in the aggregate, to less than the minimum 
        annuity amount (as defined in section 2(b) of the Personal 
        Retirement Accounts Act of 1997),
shall be entitled to a supplemental old-age benefit for each month, 
beginning with the month in which such individual attains retirement 
age and ending with the month preceding the month in which he dies.
    ``(2) Such individual's supplemental retirement benefit for any 
month shall be equal to the excess of--
            ``(A) the minimum annuity amount (as defined in section 
        2(6)(A) of the Personal Retirement Accounts Act of 1997) for 
        the month, over
            ``(B) the amount which would be payable as a monthly 
        periodic payment of an immediate annuity (as defined in section 
        202(b)(5) of the Personal Retirement Accounts Act of 1997) 
        purchased with the total balance, in the aggregate, of all 
        personal retirement accounts maintained for such individual 
        under title I of such Act, determined as of the date on which 
        such individual attains retirement age.
    ``(3) There are authorized to be appropriated sums sufficient to 
carry out this section.''.
    (b) Conforming Amendment.--Section 201(h) of such Act (42 U.S.C. 
401(h)) is amended by striking ``section 226'' and inserting ``sections 
202(y) and 226''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to months beginning on or after January 1, 2000.

SEC. 605. PHASED IN INCREASE IN SOCIAL SECURITY RETIREMENT AGE.

    Section 216(l) of the Social Security Act (42 U.S.C. 416(l) is 
amended--
            (1) by striking subparagraphs (B), (C), (D), and (E) of 
        paragraph (1) and inserting the following new subparagraphs:
            ``(B) with respect to an individual who attains early 
        retirement age (as determined under paragraph (2)) after 
        December 31, 1999, and before January 1, 2029, 65 years of age 
        plus \2/12\ of the number of months in the period beginning 
        with January 2000 and ending with December of the year in which 
        the individual attains early retirement age (as so determined); 
        and
            ``(C) with respect to an individual who attains early 
        retirement age (as so determined) after December 31, 2028, 70 
        years of age.''; and
            (2) by striking paragraph (3).

SEC. 606. LIMITATION IN COST-OF-LIVING ADJUSTMENTS.

    (a) Reduction in Increases Applied to Higher Primary Insurance 
Amounts.--
            (1) In general.--Section 215(i)(2)(A) of the Social 
        Security Act (42 U.S.C. 415(i)(2)(A)) is amended--
                    (A) by redesignating clause (iii) as clause (vii); 
                and
                    (B) in clause (ii), by striking ``The increase 
                shall'' in the matter following subclause (III) and all 
                that follows through ``Any increase'' and inserting the 
                following:
    ``(iii) With respect to the amounts described in subclauses (I) and 
(III) of clause (ii) and primary insurance amounts described in 
subclause (II) of clause (ii) of individuals initially becoming 
entitled to monthly insurance benefits based on their own wages and 
self-employment income as disability insurance benefits, the increase 
shall be derived by multiplying each of such amounts (including each of 
those amounts as previously increased under this subparagraph) by the 
applicable increase percentage.
    ``(iv) With respect to primary insurance amounts described in 
subclause (II) of clause (ii) (other than primary insurance amounts 
described in clause (iii) of this subparagraph), the increase shall be 
derived by--
            ``(I) multiplying each of such amounts (including each such 
        amount as previously increased under this subparagraph) by the 
        applicable increase percentage,
            ``(II) determining among all such amounts as increased 
        under subclause (I) the primary insurance amount which is at 
        the 30th percentile of such amounts, and
            ``(III) reducing each primary insurance amount as increased 
        under subclause (I) to the sum of such amount determined as if 
        there had been no reduction in such amount under this subclause 
        in any preceding year and the amount of the increase under 
        subclause (I) in the primary insurance amount described in 
        subclause (II).
    ``(v) Any amount increased under clause (iii) or clause (iv) which 
is not a multiple of $0.10 shall be decreased to the next lower 
multiple of $0.10.
    ``(vi) Any increase''.
            (2) Conforming amendment.--The last sentence of section 
        215(a)(4) of such Act (42 U.S.C. 415(a)(4)) is amended, in 
        subclause (I), by striking ``clause (iii) of subsection 
        (i)(2)(A)'' and inserting ``clause (vii) of subsection 
        (i)(2)(A)''.
            (3) Conforming amendments to maintain current levels of 
        cost-of-living adjustment under other programs.--
                    (A) Supplemental security income for the aged, 
                blind, and disabled.--Section 1617(a)(2) of the Social 
                Security Act (42 U.S.C. 1382f(a)(2)) is amended by 
                striking ``by the same percentage'' and all that 
                follows through ``percentage,'' and inserting the 
                following: ``by the applicable increase percentage 
                (within the meaning of section 215(i)(1)(C)) used in 
                determining the amount by which benefit amounts under 
                title II are increased for such month''.
                    (B) Supplementary medical insurance.--Section 
                1839(a)(3)(B) of such Act (42 U.S.C. 1395r(a)(3)(B)) is 
amended by striking ``by a percentage'' and all that follows through 
``November 1'' and inserting the following: ``by the applicable 
increase percentage (within the meaning of section 215(i)(1)(C)) used 
in determining the amount by which benefit amounts under title II are 
increased for the month of December preceding the year of the 
promulgation''.
                    (C) Certain veteran's benefits.--Section 3112 of 
                title 38, United States Code, is amended--
                            (i) in subsection (a), by striking ``by the 
                        same percentage by which such benefit amounts 
                        are increased'' and inserting ``by the 
                        applicable increase percentage (within the 
                        meaning of section 215(i)(1)(C) of such Act) 
                        used in determining the amount by which such 
                        benefit amounts are increased''; and
                            (ii) in subsection (b)(1), by striking ``by 
                        the same percentage as the percentage by which 
                        such benefit amounts are increased'' and 
                        inserting ``by the applicable increase 
                        percentage (within the meaning of section 
                        215(i)(1)(C) of such Act) used in determining 
                        the amount by which such benefit amounts are 
                        increased''.
                    (D) Cost-of-living adjustments to limitations on 
                benefits and contributions under qualified plans.--
                Subsection (d) of section 415 of the Internal Revenue 
                Code of 1986 (relating to cost-of-living adjustments) 
                is amended by striking ``section 215(i)(2)(A)'' and 
                inserting ``section 215(i)(2)(A)(iii)''.
            (4) Amendment to prior applicable law.--Section 215(i)(4) 
        of the Social Security Act (42 U.S.C. 415(i)(4)) is amended by 
        adding at the end the following new sentence: ``The Secretary 
        shall provide by regulation for the continued application of 
        this subsection as in effect in December 1978 as provided by 
        the preceding provisions of this paragraph and the amendments 
        referred to therein. Such regulations shall provide for the 
        application of the amendments to the preceding provisions of 
        this subsection made by section 606 of the Personal Retirement 
        Accounts Act of 1997 so as to have the same effect on the 
        corresponding provisions of this subsection as in effect in 
        December 1978 and applicable in accordance with this 
        paragraph.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to adjustments effective with months after November 
1999.

SEC. 607. MODIFICATION OF CPI CALCULATION FOR SOCIAL SECURITY COLAS.

    For purposes of section 215(i) of the Social Security Act, 
effective for cost-of-living computation quarters occurring after 1997 
and before the year following the year in which there takes effect a 
revision by the Bureau of Labor Statistics in the method of computing 
the Consumer Price Index referred to in section 215(i)(1)(D) of such 
Act, the Consumer Price Index referred to in such section 215(i)(1)(D) 
shall be reduced by 0.5 percentage points.

SEC. 608. PHASED REDUCTION IN SPOUSAL BENEFITS OTHER THAN SURVIVOR'S 
              BENEFITS TO 33 PERCENT OF PRIMARY INSURANCE AMOUNT.

    (a) Wife's Insurance Benefits.--Section 202(b)(2) of the Social 
Security Act (42 U.S.C. 402(b)(2)) is amended to read as follows:
    ``(2)(A) Except as provided in subsection (q) and paragraph (4) of 
this subsection, such wife's insurance benefit for each month shall be 
equal to the applicable percentage of the primary insurance amount of 
her husband (or, in the case of a divorced wife, her former husband) in 
connection with the calendar year in which such individual becomes 
eligible for such benefit, as specified in the following table:

``If the calendar year in which the The applicable percentage shall be:
        individual becomes eligible 
        is:
        Before calendar year 2000....................       50 percent 
        Calendar year 2000...........................       49 percent 
        Calendar year 2001...........................       48 percent 
        Calendar year 2002...........................       47 percent 
        Calendar year 2003...........................       46 percent 
        Calendar year 2004...........................       45 percent 
        Calendar year 2005...........................       44 percent 
        Calendar year 2006...........................       43 percent 
        Calendar year 2007...........................       42 percent 
        Calendar year 2008...........................       41 percent 
        Calendar year 2009...........................       40 percent 
        Calendar year 2010...........................       39 percent 
        Calendar year 2011...........................       38 percent 
        Calendar year 2012...........................       37 percent 
        Calendar year 2013...........................       36 percent 
        Calendar year 2014...........................       35 percent 
        Calendar year 2015...........................       34 percent 
        After calendar year 2015.....................    33 percent.''.
    ``(B) For purposes of subparagraph (A)--
            ``(i) an individual shall be treated as eligible for a 
        wife's insurance benefit if such individual meets the 
        requirements of subparagraphs (B), (C), and (D) of paragraph 
        (1), and
            ``(ii) in determining when an individual becomes eligible 
        for a wife's insurance benefit, any break in eligibility of 
        less than 12 consecutive months shall not be taken into 
        account.''.
    (b) Husband's Insurance Benefits.--Section 202(c)(3) of such Act 
(42 U.S.C. 402(c)(3)) is amended to read as follows:
    ``(3)(A) Except as provided in subsection (q) and paragraph (2) of 
this subsection, such husband's insurance benefit for each month shall 
be equal to the applicable percentage of the primary insurance amount 
of his wife (or, in the case of a divorced husband, his former wife) in 
connection with the calendar year in which such individual becomes 
eligible for such benefit, as specified in the following table:

``If the calendar year in which the The applicable percentage shall be:
        individual becomes eligible 
        is:
        Before calendar year 2000....................       50 percent 
        Calendar year 2000...........................       49 percent 
        Calendar year 2001...........................       48 percent 
        Calendar year 2002...........................       47 percent 
        Calendar year 2003...........................       46 percent 
        Calendar year 2004...........................       45 percent 
        Calendar year 2005...........................       44 percent 
        Calendar year 2006...........................       43 percent 
        Calendar year 2007...........................       42 percent 
        Calendar year 2008...........................       41 percent 
        Calendar year 2009...........................       40 percent 
        Calendar year 2010...........................       39 percent 
        Calendar year 2011...........................       38 percent 
        Calendar year 2012...........................       37 percent 
        Calendar year 2013...........................       36 percent 
        Calendar year 2014...........................       35 percent 
        Calendar year 2015...........................       34 percent 
        After calendar year 2015.....................    33 percent.''.
    ``(B) For purposes of subparagraph (A)--
            ``(i) an individual shall be treated as eligible for a 
        husband's insurance benefit if such individual meets the 
        requirements of subparagraphs (B), (C), and (D) of paragraph 
        (1), and
            ``(ii) in determining when an individual becomes eligible 
        for a husband's insurance benefit, any break in eligibility of 
        less than 12 consecutive months shall not be taken into 
        account.''.

SEC. 609. COVERAGE OF NEWLY HIRED STATE AND LOCAL EMPLOYEES.

    (a) Amendments to the Social Security Act.--
            (1) In general.--Paragraph (7) of section 210(a) of the 
        Social Security Act (42 U.S.C. 410(a)(7)) is amended to read as 
        follows:
            ``(7) Excluded State or local government employment (as 
        defined in subsection (s));''.
            (2) Excluded state or local government employment.--
                    (A) In general.--Section 210 of such Act (42 U.S.C. 
                410) is amended by adding at the end the following new 
                subsection:

            ``Excluded State or Local Government Employment

    ``(s)(1) In General.--The term `excluded State or local government 
employment' means any service performed in the employ of a State, of 
any political subdivision thereof, or of any instrumentality of any one 
or more of the foregoing which is wholly owned thereby, if--
            ``(A)(i) such service would be excluded from the term 
        `employment' for purposes of this title if the preceding 
        provisions of this section as in effect in October 1997 had 
        remained in effect, and (ii) the requirements of paragraph (2) 
        are met with respect to such service, or
            ``(B) the requirements of paragraph (3) are met with 
        respect to such service.
    ``(2) Exception for Current Employment Which Continues.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the requirements of this paragraph are met with respect to 
        service for any employer if--
                    ``(i) such service is performed by an individual--
                            ``(I) who was performing substantial and 
                        regular service for remuneration for that 
                        employer before January 1, 2000,
                            ``(II) who is a bona fide employee of that 
                        employer on December 31, 1999, and
                            ``(III) whose employment relationship with 
                        that employer was not entered into for purposes 
                        of meeting the requirements of this 
                        subparagraph, and
                    ``(ii) the employment relationship with that 
                employer has not been terminated after December 31, 
                1999.
            ``(B) Elections for inclusion.--The requirements of this 
        paragraph shall be deemed not met with respect to service 
        performed by an individual if such individual elects in writing 
        before January 1, 2000, in such form and manner as shall be 
        prescribed in regulations of the Commissioner of Social 
        Security, that the requirements of this paragraph be deemed not 
        to be met with respect to such service.
            ``(C) Treatment of multiple agencies and 
        instrumentalities.--For purposes of subparagraph (A), under 
        regulations (consistent with regulations established under 
        section 3121(t)(2)(B) of the Internal Revenue Code of 1986)--
                    ``(i) all agencies and instrumentalities of a State 
                (as defined in section 218(b)) or of the District of 
                Columbia shall be treated as a single employer, and
                    ``(ii) all agencies and instrumentalities of a 
                political subdivision of a State (as so defined) shall 
                be treated as a single employer and shall not be 
                treated as described in clause (i).
    ``(3) Exception for Certain Services.--
            ``(A) In general.--The requirements of this paragraph are 
        met with respect to service if such service is performed--
                    ``(i) by an individual who is employed by a State 
                or political subdivision thereof to relieve such 
                individual from unemployment,
                    ``(ii) in a hospital, home, or other institution by 
                a patient or inmate thereof as an employee of a State 
                or political subdivision thereof or of the District of 
                Columbia,
                    ``(iii) by an individual, as an employee of a State 
                or political subdivision thereof or of the District of 
                Columbia, serving on a temporary basis in case of fire, 
                storm, snow, earthquake, flood, or other similar 
                emergency,
                    ``(iv) by any individual as an employee included 
                under section 5351(2) of title 5, United States Code 
                (relating to certain interns, student nurses, and other 
                student employees of hospitals of the District of 
                Columbia Government), other than as a medical or dental 
                intern or a medical or dental resident in training,
                    ``(v) by an election official or election worker if 
                the remuneration paid in a calendar year for such 
                service is less than $1,000 with respect to service 
                performed during calendar year 2000, and the adjusted 
                amount determined under subparagraph (C) for any 
                subsequent year with respect to service performed 
                during such subsequent year, except to the extent that 
                service by such election official or election worker is 
                included in employment under an agreement under section 
                218, or
                    ``(vi) by an employee in a position compensated 
                solely on a fee basis which is treated pursuant to 
                section 211(c)(2)(E) as a trade or business for 
                purposes of inclusion of such fees in net earnings from 
                self-employment.
            ``(B) Definitions.--As used in this paragraph, the terms 
        `State' and `political subdivision' have the meanings given 
        those terms in section 218(b).
            ``(C) Adjustments to dollar amount for election officials 
        and election workers.--For each year after 2000, the 
        Commissioner of Social Security shall adjust the amount 
        referred to in subparagraph (A)(v) at the same time and in the 
        same manner as is provided under section 215(a)(1)(B)(ii) with 
        respect to the amounts referred to in section 215(a)(1)(B)(i), 
        except that--
                    ``(i) for purposes of this subparagraph, 1997 shall 
                be substituted for the calendar year referred to in 
                section 215(a)(1)(B)(ii)(II), and
                    ``(ii) such amount as so adjusted, if not a 
                multiple of $100, shall be rounded to the next higher 
                multiple of $100 where such amount is a multiple of $50 
                and to the nearest multiple of $100 in any other case.
        The Commissioner of Social Security shall determine and publish 
        in the Federal Register each adjusted amount determined under 
        this subparagraph not later than November 1 preceding the year 
        for which the adjustment is made.''.
                    (B) Conforming amendments.--
                            (i) Subsection (k) of section 210 of such 
                        Act (42 U.S.C. 410(k)) (relating to covered 
                        transportation service) is repealed.
                            (ii) Section 210(p) of such Act (42 U.S.C. 
                        410(p)) is amended--
                                    (I) in paragraph (2), by striking 
                                ``service is performed'' and all that 
                                follows and inserting ``service is 
                                service described in subsection 
                                (s)(3)(A).''; and
                                    (II) in paragraph (3)(A), by 
                                inserting ``under subsection (a)(7) as 
                                in effect in December 1999'' after 
                                ``section''.
                            (iii) Section 218(c)(6) of such Act (42 
                        U.S.C. 418(c)(6)) is amended--
                                    (I) by striking subparagraph (C);
                                    (II) by redesignating subparagraphs 
                                (D) and (E) as subparagraphs (C) and 
                                (D), respectively; and
                                    (III) by striking subparagraph (F) 
                                and inserting the following:
            ``(E) service which is included as employment under section 
        210(a).''
    (b) Amendments to the Internal Revenue Code of 1986.--
            (1) In general.--Paragraph (7) of section 3121(b) of the 
        Internal Revenue Code of 1986 (relating to employment) is 
        amended to read as follows:
            ``(7) excluded State or local government employment (as 
        defined in subsection (t));''.
            (2) Excluded state or local government employment.--Section 
        3121 of such Code is amended by inserting after subsection (s) 
        the following new subsection:
    ``(t) Excluded State or Local Government Employment.--
            ``(1) In general.--For purposes of this chapter, the term 
        `excluded State or local government employment' means any 
service performed in the employ of a State, of any political 
subdivision thereof, or of any instrumentality of any one or more of 
the foregoing which is wholly owned thereby, if--
                    ``(A)(i) such service would be excluded from the 
                term `employment' for purposes of this chapter if the 
                provisions of subsection (b)(7) as in effect in 
                December 1999 had remained in effect, and
                    ``(ii) the requirements of paragraph (2) are met 
                with respect to such service, or
                    ``(B) the requirements of paragraph (3) are met 
                with respect to such service.
            ``(2) Exception for current employment which continues.--
                    ``(A) In general.--The requirements of this 
                paragraph are met with respect to service for any 
                employer if--
                            ``(i) such service is performed by an 
                        individual--
                                    ``(I) who was performing 
                                substantial and regular service for 
                                remuneration for that employer before 
                                January 1, 2000,
                                    ``(II) who is a bona fide employee 
                                of that employer on December 31, 2000, 
                                and
                                    ``(III) whose employment 
                                relationship with that employer was not 
                                entered into for purposes of meeting 
                                the requirements of this subparagraph, 
                                and
                            ``(ii) the employment relationship with 
                        that employer has not been terminated after 
                        December 31, 1999.
                    ``(B) Treatment of multiple agencies and 
                instrumentalities.--For purposes of subparagraph (A), 
                under regulations--
                            ``(i) all agencies and instrumentalities of 
                        a State (as defined in section 218(b) of the 
                        Social Security Act) or of the District of 
                        Columbia shall be treated as a single employer, 
                        and
                            ``(ii) all agencies and instrumentalities 
                        of a political subdivision of a State (as so 
                        defined) shall be treated as a single employer 
                        and shall not be treated as described in clause 
                        (i).
            ``(3) Exception for certain services.--
                    ``(A) In general.--The requirements of this 
                paragraph are met with respect to service if such 
                service is performed--
                            ``(i) by an individual who is employed by a 
                        State or political subdivision thereof to 
                        relieve such individual from unemployment,
                            ``(ii) in a hospital, home, or other 
                        institution by a patient or inmate thereof as 
                        an employee of a State or political subdivision 
                        thereof or of the District of Columbia,
                            ``(iii) by an individual, as an employee of 
                        a State or political subdivision thereof or of 
                        the District of Columbia, serving on a 
                        temporary basis in case of fire, storm, snow, 
                        earthquake, flood, or other similar emergency,
                            ``(iv) by any individual as an employee 
                        included under section 5351(2) of title 5, 
                        United States Code (relating to certain 
                        interns, student nurses, and other student 
                        employees of hospitals of the District 
of Columbia Government), other than as a medical or dental intern or a 
medical or dental resident in training,
                            ``(v) by an election official or election 
                        worker if the remuneration paid in a calendar 
                        year for such service is less than $1,000 with 
                        respect to service performed during 2000, and 
                        the adjusted amount determined under section 
                        210(s)(3)(C) of the Social Security Act for any 
                        subsequent year with respect to service 
                        performed during such subsequent year, except 
                        to the extent that service by such election 
                        official or election worker is included in 
                        employment under an agreement under section 218 
                        of the Social Security Act, or
                            ``(vi) by an employee in a position 
                        compensated solely on a fee basis which is 
                        treated pursuant to section 1402(c)(2)(E) as a 
                        trade or business for purposes of inclusion of 
                        such fees in net earnings from self-employment.
                    ``(B) Definitions.--As used in this paragraph, the 
                terms `State' and `political subdivision' have the 
                meanings given those terms in section 218(b) of the 
                Social Security Act.''.
            (3) Conforming amendments.--
                    (A) Subsection (j) of such section 3121 (relating 
                to covered transportation service) is repealed.
                    (B) Paragraph (2) of section 3121(u) of such Code 
                (relating to application of hospital insurance tax to 
                Federal, State, and local employment) is amended--
                            (i) in subparagraph (B), by striking 
                        ``service is performed'' in clause (ii) and all 
                        that follows through the end of such 
                        subparagraph and inserting ``service is service 
                        described in subsection (t)(3)(A).''; and
                            (ii) in subparagraph (C)(i), by inserting 
                        ``under subsection (b)(7) as in effect in July 
                        1996'' after ``chapter''.
    (c) Effective Date.--Except as otherwise provided in this section, 
the amendments made by this section shall apply with respect to service 
performed after December 31, 1997.

SEC. 610. ADJUSTMENTS IN FORMULA FOR DETERMINING PRIMARY INSURANCE 
              AMOUNT.

    (a) Additional Earnings Bracket.--Section 215(a)(1)(A) of the 
Social Security Act (42 U.S.C. 415(a)(1)(A)) is amended--
            (1) in clause (ii), by striking ``and'';
            (2) in clause (iii), by striking ``clause (ii),'' and 
        inserting the following: ``clause (ii), but, in the case of an 
        individual who initially becomes eligible for old-age insurance 
        benefits (other than solely by reason of prior entitlement to 
        disability insurance benefits), or who dies (before becoming 
        eligible for such benefits), after calendar year 2001, do not 
        exceed the amount established for purposes of this clause by 
        subparagraph (B), and''; and
            (3) by inserting after clause (iii) the following new 
        clause:
            ``(iv) in the case of an individual who initially becomes 
        eligible for old-age insurance benefits (other than solely by 
        reason of prior entitlement to disability insurance benefits), 
        or who dies (before becoming eligible for such benefits), after 
        calendar year 2001, 10 percent of the individual's average 
        indexed monthly earnings to the extent that such earnings 
        exceed the amount established for purposes of clause (iii),''.
    (b) Bend Point Amounts.--Section 215(a)(1)(B) of the Social 
Security Act (42 U.S.C. 415(a)(1)(B)) is amended--
            (1) in clause (ii), by inserting ``and before 2002'' after 
        ``1979'' the first place it appears, and by striking ``by 
        dividing--'' and all that follows and inserting ``under clause 
        (ix) of this subparagraph.'';
            (2) by redesignating clause (iii) as clause (xii);
            (3) by inserting after clause (ii) the following new 
        clauses:
    ``(iii) For individuals who initially become eligible for old-age 
insurance benefits (other than solely by reason of prior entitlement to 
disability insurance benefits), or who die (before becoming eligible 
for such benefits), in any calendar year after 2001, the amount 
established for purposes of clause (i) of subparagraph (A) shall be an 
amount equal to the product of the following factors:
            ``(I) the amount established with respect to calendar year 
        1979 under clause (i) of this subparagraph for purposes of 
        clause (i) of subparagraph (A), and
            ``(II) the quotient obtained under clause (ix) of this 
        subparagraph.
    ``(iv) For individuals who initially become eligible for old-age 
insurance benefits (other than solely by reason of prior entitlement to 
disability insurance benefits), or who die (before becoming eligible 
for such benefits), in any calendar year after 2001 and before 2026, 
the amount established for purposes of clause (ii) of subparagraph (A) 
shall be an amount equal to the product of the following factors:
            ``(I) the amount established with respect to the preceding 
        calendar year under this subparagraph for purposes of clause 
        (ii) of subparagraph (A),
            ``(II) the quotient obtained under clause (x) of this 
        subparagraph, and
            ``(III) 0.99.
    ``(v) For individuals who initially become eligible for old-age 
insurance benefits (other than solely by reason of prior entitlement to 
disability insurance benefits), or who die (before becoming eligible 
for such benefits), in any calendar year after 2025, the amount 
established for purposes of clause (ii) of subparagraph (A) shall be an 
amount equal to the product of the following factors:
            ``(I) the amount established with respect to the calendar 
        year 2025 under clause (iv) of this subparagraph for purposes 
        of clause (ii) of subparagraph (A), and
            ``(II) the quotient obtained under clause (xi) of this 
        subparagraph.
    ``(vi) For individuals who initially become eligible for old-age 
insurance benefits (other than solely by reason of prior entitlement to 
disability insurance benefits), or who die (before becoming eligible 
for such benefits), in the calendar year 2002, the amount established 
for purposes of clause (iii) of subparagraph (A) shall be an amount 
equal to the quotient derived by dividing--
            ``(I) the amount established with respect to the calendar 
        year 2002 under clause (iv) of this subparagraph for purposes 
        of clause (ii) of subparagraph (A), by
            ``(II) 0.99<SUP>50</SUP>.
    ``(vii) For individuals who initially become eligible for old-age 
insurance benefits (other than solely by reason of prior entitlement to 
disability insurance benefits), or who die (before becoming eligible 
for such benefits), in any calendar year after 2002 and before 2026, 
the amount established for purposes of clause (iii) of subparagraph (A) 
shall be an amount equal to the product of the following factors:
            ``(I) the amount established with respect to the preceding 
        calendar year under this subparagraph for purposes of clause 
        (iii) of subparagraph (A),
            ``(II) the quotient obtained under clause (x) of this 
        subparagraph, and
            ``(III) 0.99.
    ``(viii) For individuals who initially become eligible for old-age 
insurance benefits (other than solely by reason of prior entitlement to 
disability insurance benefits), or who die (before becoming eligible 
for such benefits), in any calendar year after 2025, the amount 
established for purposes of clause (iii) of subparagraph (A) shall be 
an amount equal to the product of the following factors:
            ``(I) the amount established with respect to calendar year 
        2025 under clause (vii) of this subparagraph for purposes of 
        clause (iii) of subparagraph (A), and
            ``(II) the quotient obtained under clause (xi) of this 
        subparagraph.
    ``(ix) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the deemed average total wages (as defined in section 
        209(k)(1)) for the second calendar year preceding the calendar 
        year for which the determination is made, by
            ``(II) the average of the total wages (as defined in 
        regulations of the Secretary and computed without regard to the 
        limitations specified in section 209(a)(1)) reported to the 
        Secretary of the Treasury or his delegate for the calendar year 
        1977.
    ``(x) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the deemed average total wages (as defined in section 
        209(k)(1)) for the second calendar year preceding the calendar 
        year for which the determination is made, by
            ``(II) the deemed average total wages (as defined in 
        section 209(k)(1)) for the third calendar year preceding the 
        calendar year for which the determination is made.
    ``(xi) The quotient obtained under this clause is the quotient 
obtained by dividing--
            ``(I) the deemed average total wages (as defined in section 
        209(k)(1)) for the second calendar year preceding the calendar 
        year for which the determination is made, by
            ``(II) the average of the total wages (as defined in 
        regulations of the Secretary and computed without regard to the 
        limitations specified in section 209(a)(1)) reported to the 
        Secretary of the Treasury or his delegate for the calendar year 
        2024.''; and
            (4) in clause (xii) (as redesignated), by striking ``clause 
        (ii)'' and inserting ``the preceding clauses of this 
        subparagraph''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to individuals who initially become eligible (within 
the meaning of section 215(a)(3)(B) of the Social Security Act) for 
old-age insurance benefits under title II of the Social Security Act, 
or who die (before becoming eligible for such benefits), in any 
calendar year after 2001.

SEC. 611. ANNUAL STATEMENT OF ACCRUED LIABILITY OF THE OLD-AGE AND 
              SURVIVORS INSURANCE PROGRAM.

    (a) In General.--Section 1105(a) of title 31, United States Code 
(relating to budget contents and submission to Congress) is amended by 
adding at the end the following new paragraph:
            ``(31) a statement of the current accrued liability of the 
        Federal Government for future benefit payments under the Old-
        Age and Survivors Insurance Program under title II of the 
        Social Security Act.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to budgets submitted for fiscal years beginning on 
or after October 1, 1998.

    TITLE VII--PROVISIONS RELATING TO FEDERAL CIVILIAN AND MILITARY 
                               PERSONNEL

SEC. 701. FEDERAL CIVILIAN AND MILITARY PERSONNEL.

    (a) In General.--Not later than December 31, 1998, the Office of 
Personnel Management, after appropriate study, shall submit to the 
President and each House of Congress a written report containing 
recommendations on how to provide for the application of this Act with 
respect to Federal civilian and military personnel.
    (b) Requirements.--The report--
            (1) shall be prepared in consultation with the Social 
        Security Administration, the Securities and Exchange 
        Commission, and other appropriate agencies; and
            (2) shall be accompanied by draft legislation which, if 
        enacted, would carry out the recommendations contained in such 
        report.

SEC. 702. PROVISIONS RELATING TO THE CONTINUED OPERATION OF EXISTING 
              RETIREMENT SYSTEMS.

    To the extent that the report and draft legislation relate to 
provisions of law in effect before the date of enactment of this Act, 
each shall address at least the following:
            (1) Federal employees' retirement system.--
                    (A) Section 8401(11) of title 5, United States Code 
                (relating to the definition of an ``employee''), which 
                includes the requirement that the individual concerned 
                be someone whose civilian service is employment for the 
                purposes of title II of the Social Security Act and 
                chapter 21 of the Internal Revenue Code of 1986.
                    (B) Section 8421 of such title (relating to annuity 
                supplement), which includes provisions incorporating 
                the notion of the period of time for which the 
                individual is or would be entitled to old-age insurance 
                benefits under title II of the Social Security Act, and 
                provisions for computing the amount of such supplement 
                based on the amount of certain benefits to which the 
                individual would be entitled under such Act.
                    (C) Section 8442 of such title (relating to rights 
                of a widow or widower), which includes provisions under 
                which a supplementary annuity for a widow or widower is 
                not payable to anyone who would not be entitled to 
                certain benefits under the Social Security Act, and 
                provisions for the computation of any such annuity 
                based on the amount of certain benefits which would be 
                payable to that individual under the Social Security 
                Act.
                    (D) Section 8443 of such title (relating to rights 
                of a child), which includes provisions under which, as 
                part of the formula for computing the amount of a 
                survivor annuity for a child, there is incorporated the 
                notion of the amount of child's insurance benefits 
                which are or would be payable under title II of the 
                Social Security Act.
            (2) Civil service retirement system.--
                    (A) Section 8334(k) of such title (relating to 
                special rules for determining deductions and 
                contributions for individuals subject to ``offset-83'' 
                treatment), which incorporates the notion of the OASDI 
                contribution made from Federal wages of the individual 
                concerned.
                    (B) Section 8349 of such title (relating to offset 
                based on certain benefits under the Social Security 
                Act), which incorporates notions relating to actual or 
                constructive eligibility for benefits under the Social 
                Security Act, and the amount of those benefits.
            (3) Coordination provisions.--Provisions of law involving a 
        reduction or other adjustment in retirement benefits (or 
        eligibility therefor), based on any individual's eligibility 
        for benefits under title II of the Social Security Act.
            (4) Other retirement systems.--Similar provisions of law 
        under other retirement systems covering Federal civilian or 
        military personnel.

SEC. 703. PROVISIONS RELATING TO THE NEW SYSTEM.

    To the extent that the report and draft legislation relate to the 
implementation of any other title of this Act, each shall address at 
least the following:
            (1) What the specifications for the personal retirement 
        account payroll deduction program or programs covering Federal 
        civilian and military personnel shall be or, alternatively, how 
        those specifications shall be developed.
            (2) Which agencies or instrumentalities of the Federal 
        Government shall be responsible for operating or maintaining 
        which aspects of the program or programs referred to in 
        paragraph (1).
            (3) Which penalty provisions are appropriate or 
        inappropriate with respect to the Federal Government in its 
        capacity as a ``covered employer'', subject to what 
        modifications (if any).
            (4) With respect to the enforcement provisions under title 
        V, issues similar to those referred to in paragraph (3).

           TITLE VIII--SOCIAL SECURITY TRANSITION COMMISSION

SEC 801. ESTABLISHMENT OF COMMISSION.

    There is established a commission to be known as the Social 
Security Transition Commission (in this title referred to as the 
``Commission'').

SEC. 802. DUTIES.

    (a) Findings.--The Commission shall make findings regarding the 
most appropriate actions which should be taken, together with the 
implementation of the provisions of this Act, so that any increases in 
budget outlays resulting from the implementation of such provisions are 
minimized and are adequately funded. Such findings shall include 
specific findings with respect to each of the following possible 
actions:
            (1) The sale of Federal assets.
            (2) Budget outlay reductions.
            (3) Increases in revenue.
            (4) Issuance of additional obligations.
    (b) Recommendations.--
            (1) In general.--The Commission shall make specific 
        recommendations to the Congress regarding its findings under 
        subsection (a) not later than January 1, 2001, and shall 
        include with such recommendations legislative language 
        necessary for carrying out such recommendations. The Commission 
        shall develop such legislative language after conducting such 
        public hearings regarding the issues addressed as the 
        Commission considers appropriate. The Commission shall actively 
        consult with the appropriate Committees of each House of the 
        Congress, the Comptroller General of the United States, and the 
        Director of the Office of Management and Budget in compiling 
        such legislative language. The Commission shall promptly 
        provide, upon request, to any Member of Congress a description 
        of any information used by the Commission in making its 
        recommendations.
            (2) Budget outlay reductions permanent.--All reductions in 
        obligational authority contained in the legislative language 
        included in the Commission's recommendations shall be done in a 
        manner that makes such reductions permanent.
            (3) Accompanying report by cbo.--The Comptroller General of 
        the United States shall provide appropriate assistance to the 
        Commission in the preparation of the Commission's report and 
        shall transmit to each House of the Congress at the time of the 
        Commission's transmittal a report containing a detailed 
        analysis of the Commission's recommendations.

SEC. 803. MEMBERSHIP.

    (a) Appointment.--
            (1) In general.--The Commission shall be composed of 7 
        members appointed by the President, by and with the advice and 
        consent of the Senate.
            (2) Transmittal of nominations.--The President shall 
        transmit to the Senate the nominations for appointment to the 
        Commission by no later than June 30, 1999.
            (3) Recommendations.--In selecting individuals for 
        nominations for appointments to the Commission, the President 
        shall take into consideration--
                    (A) with respect to the nomination of 3 of the 
                members of the Commission, recommendations which shall 
                be jointly submitted by the Speaker of the House of 
                Representatives and the minority leader of the House of 
                Representatives, and
                    (B) with respect to the nomination of 3 other 
                members of the Commission, recommendations which shall 
                be jointly submitted by the majority leader of the 
                Senate and the minority leader of the Senate.
        Not more than 4 members of the Commission may be of the same 
        political party.
    (b) Chairman.--At the time the President nominates individuals for 
appointment to the Commission, the President shall designate one such 
individual who shall serve as Chairman of the Commission.
    (c) Disqualification.--No individual may serve as a member of the 
Commission while such individual serves as a Member of Congress or as 
an officer or employee of the Executive branch. No individual may serve 
as a member of the Commission if such individual is or has been a 
registered lobbyist.
    (d) Vacancies.--Any vacancy in the membership of the Commission 
shall be filled in the manner in which the original appointment was 
made and shall not affect the power of the remaining members to execute 
the duties of the Commission.
    (e) Quorum.--A quorum shall consist of 4 members of the Commission, 
except that 3 members may conduct a hearing under section 804(a).
    (f) Meetings.--The Commission shall meet at the call of the 
Chairman or a majority of its members. Each meeting of the Commission, 
other than meetings in which classified information is to be discussed, 
shall be open to the public. All the proceedings, information, and 
deliberations of the Commission shall be open, upon request, to the 
Chairmen and the ranking minority members of the Committee on 
Government Reform and Oversight, the Committee on the Budget, and the 
Committee on Appropriations of the House of Representatives and the 
Committee on Governmental Affairs, the Committee on the Budget, and the 
Committee on Appropriations of the Senate.
    (g) Compensation and Reimbursement of Expenses.--
            (1) Compensation.--The members of the Commission shall be 
        paid for each day (including travel time) during which they are 
        engaged in the actual performance of duties vested in the 
        Commission. The members shall be paid--
                    (A) in the case of the Chairman, at a rate not to 
                exceed the daily equivalent of the minimum annual rate 
                of basic pay payable for level III of the Executive 
                Schedule under section 5314 of title 5, United States 
                Code, and
                    (B) in the case of the other members, at a rate not 
                to exceed the daily equivalent of the minimum annual 
                rate of basic pay payable for level IV of the Executive 
                Schedule under section 5315 of such title.
            (2) Reimbursement of expenses.--Members of the Commission 
        shall receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with sections 5702 and 5703 of title 
        5, United States Code.
    (h) Staff Director and Staff.--
            (1) Staff Director.--The Commission shall appoint a Staff 
        Director who is not otherwise, and has not during the 1-year 
        period preceding the date of such appointment served as, an 
        officer or employee in the Executive branch and who is not and 
        has not been Member of Congress or a registered lobbyist. The 
        Staff Director shall be paid at a rate not to exceed the rate 
        of basic pay payable for level IV of the Executive Schedule 
        under section 5315 of title 5, United States Code.
            (2) Staff.--
                    (A) In general.--The Staff Director, with the 
                approval of the Commission, may appoint and fix pay of 
                additional personnel. The Staff Director may take such 
                appointments without regard to the provisions of title 
                5, United States Code, governing appointment in the 
                competitive service, and any personnel so appointed may 
                be paid without regard to the provisions of chapter 51 
                and subchapter III of chapter 53 of such title relating 
                to classification and General Schedule pay rates, 
                except that an individual so appointed may not receive 
                pay in excess of the annual rate of basic pay payable 
                for level V of the Executive Schedule under section 
                5316 of such title.
                    (B) Detailees.--Upon request of the Staff Director, 
                the head of any Federal department or agency may detail 
                any of the personnel of that department or agency to 
                the Commission to assist the Commission in carrying out 
                its duties under this Act. Not more than one-third of 
                the personnel employed by or detailed to the Commission 
                may be on detail from any Government agency.
            (3) Experts and consultants.--The Commission may procure by 
        contract, to the extent funds are available, the temporary or 
        intermittent services of experts or consultants pursuant to 
        section 3109 of title 5, United States Code.
    (i) Offices and Property.--The Commission may lease space and 
acquire personal property to the extent funds are available.
    (j) Assistance from GAO.--The Comptroller General of the United 
States shall provide assistance, including the detailing of employees, 
to the Commission in accordance with an agreement entered into with the 
Commission.
    (k) Termination.--The Commission shall terminate 30 days after the 
date of submission of the report required in section 802(b).

SEC. 804. POWERS.

    (a) Hearings and Other Activities.--For the purpose of carrying out 
its duties, the Commission may hold such hearings and undertake such 
other activities as the Commission determines to be necessary to carry 
out its duties.
    (b) Studies by General Accounting Office.--Upon the request of the 
Commission, the Comptroller General shall conduct such studies or 
investigations as the Commission determines to be necessary to carry 
out its duties.
    (c) Cost Estimates by Congressional Budget Office.--
            (1) In general.--Upon the request of the Commission, the 
        Director of the Congressional Budget Office shall provide to 
        the Commission such cost estimates as the Commission determines 
        to be necessary to carry out its duties.
            (2) Reimbursement.--The Commission shall reimburse the 
        Director of the Congressional Budget Office for expenses 
        relating to the employment in the office of the Director of 
        such additional staff as may be necessary for the Director to 
comply with requests by the Commission under paragraph (1).
    (d) Technical Assistance.--Upon the request of the Commission, the 
head of a Federal agency shall provide such technical assistance to the 
Commission as the Commission determines to be necessary to carry out 
its duties.
    (e) Use of Mails.--The Commission may use the United States mails 
in the same manner and under the same conditions as Federal agencies, 
and shall, for purposes of the frank, be considered a commission of 
Congress as described in section 3215 of title 39, United States Code.
    (f) Obtaining Information.--The Commission may secure directly from 
any Federal agency information necessary to enable it to carry out its 
duties, if the information may be disclosed under section 552 of title 
5, United States Code. Upon request of the Chairman of the Commission, 
the head of such agency shall furnish such information to the 
Commission.
    (g) Administrative Support Services.--Upon the request of the 
Commission, the Administrator of General Services shall provide to the 
Commission on a reimbursable basis such administrative support services 
as the Commission may request.
    (h) Acceptance of Donations.--The Commission may accept, use, and 
dispose of gifts or donations of services or property.
    (i) Printing.--For purposes of costs relating to printing and 
binding, including the costs of personnel detailed from the Government 
Printing Office, the Commission shall be deemed to be a committee of 
the Congress.

SEC. 805. CONGRESSIONAL CONSIDERATION OF RECOMMENDATIONS.

    (a) Introduction of Recommendations.--The legislative language 
transmitted pursuant to section 802 with the recommendations of the 
Commission shall be in the form of a joint resolution. Such joint 
resolution may be introduced in either House of the Congress by any 
member thereof.
    (b) Terms of the Resolution.--For purposes of this section, the 
term ``joint resolution'' means a joint resolution that--
            (1) does not have a preamble;
            (2) sets forth after the resolving clause only the 
        legislative language contained in the report from the 
        Commission; and
            (3) is entitled a ``Joint resolution approving the 
        recommendations of the Social Security Transition 
        Commission.''.
    (c) Expedited Procedure.--
            (1) Referral.--A joint resolution that is introduced in the 
        House of Representatives shall be referred to the Committee on 
        Government Operations of the House of Representatives. A joint 
        resolution that is introduced in the Senate shall be referred 
        to the Committee on Governmental Affairs of the Senate.
            (2) Discharge.--If the committee to which a joint 
        resolution is referred has not reported the resolution (or an 
        identical resolution) by the end of the 30-day period beginning 
        on the date on which the Commission transmits the report to the 
        Congress, such committee shall, at the end of that period, be 
        discharged from further consideration of the resolution, and 
        the resolution shall be placed on the appropriate calendar of 
        the House of Representatives or the Senate, as the case may be.
            (3) Consideration.--
                    (A) In general.--On or after the first day after 
                the date on which the committee to which a joint 
                resolution is referred has reported, or has been 
                discharged (under paragraph (3)) from further 
                consideration of, such a resolution, it is in order 
                (even though a previous motion to the same effect has 
                been disagreed to) for any member of the House of 
                Representatives or the Senate, respectively, to move to 
                proceed to the consideration of the resolution (but 
                only on the date after the calendar day on which the 
                member announces to the House concerned the member's 
                intention to do so).
                    (B) Points of order waived.--All points of order 
                against a joint resolution (and against consideration 
                of the resolution) are waived.
                    (C) Motion to proceed.--A motion to proceed to the 
                consideration of a joint resolution is highly 
                privileged in the House of Representatives and is 
                privileged in the Senate and is not debatable. The 
                motion is not subject to amendment, to a motion to 
                postpone consideration of the resolution, or to a 
                motion to proceed to the consideration of other 
                business. A motion to reconsider the vote by which the 
                motion to proceed is agreed to or not agreed to shall 
                not be in order. If the motion to proceed is agreed to, 
                the House of Representatives or the Senate, as the case 
                may be, shall immediately proceed to consideration of 
                the joint resolution without intervening motion, order, 
                or other business, and the resolution shall remain the 
                unfinished business of the House of Representatives or 
                the Senate, as the case may be, until disposed of.
                    (D) Limited debate.--Debate on a joint resolution 
                and on all debatable motions and appeals in connection 
                therewith shall be limited to not more than 5 hours, 
                which shall be divided equally between those favoring 
                and those opposing the resolution. A motion further to 
                limit debate on a joint resolution is in order and not 
                debatable.
                    (E) Amendments not in order.--An amendment to a 
                joint resolution is not in order.
                    (F) Other motions not in order.--A motion to 
                postpone consideration of a joint resolution, a motion 
                to proceed to the consideration of other business, or a 
                motion to recommit the resolution is not in order. A 
                motion to reconsider the vote by which a joint 
                resolution is agreed to or not agreed to is not in 
                order.
                    (G) Vote on final passage.--Immediately following 
                the conclusion of the debate on a joint resolution and 
a single quorum call at the conclusion of the debate if requested in 
accordance with the rules of the House of Representatives or the 
Senate, as the case may be, the vote on final passage of the resolution 
shall occur.
                    (H) Appeals.--Appeals from the decisions of the 
                Chair relating to the application of the rules of the 
                House of Representatives or of the Senate, as the case 
                may be, to the procedure relating to a joint resolution 
                shall be decided without debate.
            (4) Consideration by other house.--If, before the passage 
        by one House of a joint resolution that was introduced in such 
        House, such House receives from the other House a joint 
        resolution as passed by such other House--
                    (A) the resolution of the other House shall not be 
                referred to a committee and may not be considered in 
                the House that receives it otherwise than on final 
                passage under subparagraph (C);
                    (B) the procedure in the House in receipt of the 
                resolution of the other House, with respect to the 
                joint resolution that was introduced in House in 
                receipt of the resolution of the other House, shall be 
                the same as if no resolution had been received from the 
                other House; and
                    (C) notwithstanding subparagraph (B), the vote on 
                final passage shall be on the resolution of the other 
                House.
        Upon disposition of a joint resolution that is received by one 
        House from the other House, it shall no longer be in order to 
        consider the joint resolution that was introduced in the 
        receiving House.
            (5) Date certain.--If the Senate and the House of 
        Representatives have not acted upon the joint resolution by 
        September 30, 2001, then on that day or the next day of session 
        thereafter the joint resolution shall be called up by the 
        Presiding Officer of each House upon convening and a roll call 
        vote shall be conducted on passage. If the joint resolution 
        passes one House a vote on final passage shall be immediately 
        conducted in the other House.
            (6) Rules of the senate and house of representatives.--This 
        subsection is enacted by Congress--
                    (A) as an exercise of the rulemaking power of the 
                Senate and House of Representatives, respectively, and 
                is deemed to be part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of a 
                joint resolution, and it supersedes other rules only to 
                the extent that it is inconsistent with such rules; and
                    (B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                they relate to the procedure of that House) at any 
                time, in the same manner, and to the same extent as in 
                the case of any other rule of that House.

SEC. 806. DEFINITIONS.

    As used in this title, the terms ``budget outlay'', ``outlay'', 
``new budget authority'', ``direct spending'', and ``OMB'' have the 
meanings given to such terms by section 250(c) of the Balanced Budget 
and Emergency Deficit Control Act of 1985.

SEC. 807. AUTHORIZATION OF APPROPRIATIONS.

    There is hereby authorized to be made available for fiscal years 
1999, 2000, and 2001, from amounts not otherwise appropriated in the 
general fund of the Treasury, such sums as are necessary to carry out 
the provisions of this title.

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