[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2693 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2693

  To amend the Internal Revenue Code of 1986 to encourage retirement 
     savings for individuals by providing a refundable credit for 
individuals to deposit in a Social Security Plus account, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 27, 2002

Mr. Dorgan (for himself and Mr. Corzine) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to encourage retirement 
     savings for individuals by providing a refundable credit for 
individuals to deposit in a Social Security Plus account, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Social Security 
Plus Account (SSPA) Act of 2002''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
                  TITLE I--SOCIAL SECURITY PLUS CREDIT

Sec. 101. Social Security Plus credit.
Sec. 102. Transfer of credit amount to Social Security Plus Account.
                TITLE II--SOCIAL SECURITY PLUS ACCOUNTS

Sec. 201. Establishment of Social Security Plus Account.

                  TITLE I--SOCIAL SECURITY PLUS CREDIT

SEC. 101. SOCIAL SECURITY PLUS CREDIT.

    (a) In General.--Part IV of subchapter A of chapter 1 (relating to 
credits against tax) is amended by adding at the end the following new 
subpart:

               ``Subpart H--Social Security Plus Credits

``Sec. 54. Social Security Plus credit.

``SEC. 54. SOCIAL SECURITY PLUS CREDIT.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as a credit for the taxable year an amount equal 
to the sum of--
            ``(1) 20 percent of any eligible contributions made by the 
        individual to a Social Security Plus Account for the taxable 
        year, and
            ``(2) the matching contribution determined under subsection 
        (c) with respect to such individual for the taxable year.
    ``(b) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means--
                    ``(A) an individual who has received an aggregate 
                amount of wages with respect to employment and self 
                employment income for the taxable year equal to an 
                amount which is not less than $5,000, and
                    ``(B) the spouse of such individual, if--
                            ``(i) such spouse is not an eligible 
                        individual by reason of subparagraph (A), and
                            ``(ii) a joint return is filed for the 
                        taxable year under section 6013 on behalf of 
                        such spouse and individual.
            ``(2) Exclusions.--Such term shall not include an 
        individual--
                    ``(A) who is a full-time student (within the 
                meaning of section 151(c)) during the taxable year,
                    ``(B) with respect to whom a deduction under 
                section 151 is allowable to another taxpayer for the 
                taxable year, or
                    ``(C) the modified adjusted gross income of whom 
                for the taxable year--
                            ``(i) in the case of an individual filing a 
                        joint return, exceeds $300,000,
                            ``(ii) in the case of a head of household 
                        (as defined in section 2(b)), exceeds $225,000, 
                        or
                            ``(iii) in the case of any other 
                        individual, exceeds $150,000.
    ``(c) Determination of Matching Contribution.--
            ``(1) Matching contribution.--
                    ``(A) In general.--For purposes of this section, a 
                matching contribution with respect to an individual 
                shall be an amount equal to the product of the 
                applicable percentage and the amount of any eligible 
                contributions made by the individual to a Social 
                Security Plus Account for the taxable year.
                    ``(B) Eligible contributions.--For purposes of 
                subparagraph (A), the term `eligible contributions' 
                means the lesser of--
                            ``(i) $2,000, or
                            ``(ii) the amount determined under 
                        subparagraph (D).
                Such term does not include any qualified rollover 
                contribution (as defined in section 408B(e).
                    ``(C) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage with 
                respect to an individual shall be determined in 
                accordance with the following tables:
                            ``(i) In the case of an individual filing a 
                        joint return:

``If modified adjusted gross income   The applicable percentage is:
        is:
    $30,000 or less...............................                100. 
    Over $30,000 but not over $60,000.............                 50. 
    Over $60,000 but not over $100,000............                 25. 
    Over $100,000.................................               zero. 
                            ``(ii) In the case of a head of household 
                        (as defined in section 2(b)):

``If modified adjusted gross income   The applicable percentage is:
        is:
    $22,500 or less...............................                100. 
    Over $22,500 but not over $45,000.............                 50. 
    Over $45,000 but not over $75,000.............                 25. 
    Over $75,000..................................               zero. 
                            ``(iii) In the case of any other 
                        individual:

``If modified adjusted gross income   The applicable percentage is:
        is:
    $15,000 or less...............................                100. 
    Over $15,000 but not over $30,000.............                 50. 
    Over $30,000 but not over $50,000.............                 25. 
    Over $50,000..................................               zero. 
                    ``(D) Limit on eligible contributions taken into 
                account.--The amount of eligible contributions taken 
                into account in determining the matching contribution 
                of an individual under this paragraph shall not exceed 
                an amount equal to--
                            ``(i) $2,000, divided by
                            ``(ii) an amount equal to--
                                    ``(I) 1, plus
                                    ``(II) the applicable percentage 
                                determined under subparagraph (C) for 
                                such individual expressed as a 
                                fraction.
                    ``(E) Cost-of-living adjustment.--In the case of a 
                taxable year beginning after 2003, the $2,000 amount 
                under subparagraph (D) shall be increased by an amount 
                equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2002' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
            ``(2) Minimum contribution to account required.--For 
        purposes of paragraph (1), no contributions shall be taken into 
        account with respect to an individual unless the aggregate 
        amount of contributions made by such individual to Social 
        Security Plus Accounts for the taxable year are in excess of an 
        amount equal to--
                    ``(A) $200, divided by
                    ``(B) an amount equal to--
                            ``(i) 1, plus
                            ``(ii) the applicable percentage determined 
                        under paragraph (1)(C) for such individual 
                        expressed as a fraction.
    ``(d) Other definitions.--For purposes of this section--
            ``(1) Employment.--The term `employment' has the meaning 
        given such term in section 3121(b).
            ``(2) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income--
                    ``(A) determined without regard to this section, 
                and sections 86, 135, 137, 221, 222, 911, 931, and 933, 
                and
                    ``(B) increased by the amount of interest received 
                or accrued by the taxpayer during the taxable year 
                which is exempt from tax.
            ``(3) Self employment income.--The term `self employment 
        income' has the meaning given such term in section 1402(b).
            ``(4) Wages.--The term `wages' has the meaning given such 
        term in section 3121(a).
    ``(e) Treatment of Credit.--For purposes of this title--
            ``(1) Credit for eligible contributions.--The aggregate 
        credits allowed to a taxpayer under subpart C shall be 
        increased by the credit allowed under subsection (a)(1).
            ``(2) Credit for matching contributions used only for 
        social security plus account.--The credit allowed under 
        subsection (a)(2)--
                    ``(A) shall not be treated as a credit allowed 
                under this part, but
                    ``(B) shall be treated as an overpayment of tax 
                under section 6401(b)(3) which may, in accordance with 
                section 6402(l), only be transferred to a Social 
                Security Plus Account (as defined in section 
                408B(b)).''.
    (b) Credit for Matching Contributions Treated as Overpayment of 
Tax.--Subsection (b) of section 6401 (relating to amounts treated as 
overpayments) is amended by adding at the end the following new 
paragraph:
            ``(3) Special rule for credit for matching contributions 
        under section 54.--Subject to the provisions of section 
        6402(l), the amount of any credit allowed under section 
        54(a)(2) (relating to Social Security Plus credit) for any 
        taxable year shall be considered an overpayment.''.
    (c) Notification of Credit Amount.--The Secretary of the Treasury 
shall provide a table to enable an eligible individual (as defined in 
section 54(b) of the Internal Revenue Code of 1986, as added by 
subsection (a)) to determine the amount of credit allowable under 
section 54(a)(2) of such Code, as so added, for such individual for the 
taxable year.
    (d) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by striking ``or'' before ``enacted'' and by inserting 
        before the period at the end ``, or enacted by the Social 
        Security Plus Account (SSPA) Act of 2002''.
            (2) The table of subparts for part IV of subchapter A of 
        chapter 1 is amended by adding at the end the following new 
        item:

``Subpart H. Social Security Plus Credits.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.

SEC. 102. TRANSFER OF CREDIT AMOUNT TO SOCIAL SECURITY PLUS ACCOUNT.

    (a) In General.--Section 6402 (relating to authority to make 
credits or refunds) is amended by adding at the end the following:
    ``(l) Overpayments Attributable to Social Security Plus Credit.--
            ``(1) In general.--In the case of any overpayment described 
        in section 6401(b)(3), the Secretary shall transfer an amount 
        equal to the amount of such overpayment to the Social Security 
        Plus Account designated under paragraph (2) by the individual 
        entitled to the overpayment.
            ``(2) Designation of account.--An eligible individual (as 
        defined in section 54(b)) shall file a designation including 
        the information described in paragraph (3) along with the 
        return of the individual for the taxable year of the 
        overpayment (or if no return is required to be filed, on a form 
        prescribed by the Secretary) not later than the later of--
                    ``(A) the due date (including extensions) for 
                filing such return (if applicable), or
                    ``(B) the 15th day of April following the close of 
                the taxable year.
            ``(3) Required Information.--For purposes of paragraph (2), 
        the information described in this paragraph is--
                    ``(A) the designation of a Social Security Plus 
                Account (as defined in section 408B(b)) maintained on 
                behalf of the individual to which the transfer shall be 
                made and such information as the Secretary may require 
                to enable electronic transfer of the overpayment amount 
                to such account, and
                    ``(B) the amount of eligible contributions (as 
                defined in section 54) for the taxable year with 
                respect to the individual.''.
    (b) Reporting Requirements for Eligible Contribution Amounts.--
Section 6047 is amended by redesignating subsection (f) as subsection 
(g) and by inserting after subsection (e) the following new subsection:
    ``(f) Eligible Contributions.--The Secretary shall require the 
trustee of each Social Security Plus Account (as defined in section 
408B(b)) to make such returns and reports regarding eligible 
contributions (as defined in section 54) of a participant to the 
Secretary, participants, and beneficiaries of the plan, and such other 
persons as the Secretary may prescribe.''.
    (c) Direct Deposit of Refund Amounts.--The Secretary of the 
Treasury shall promulgate such regulations as necessary to allow--
            (1) an eligible individual (as defined in section 54(b) of 
        the Internal Revenue Code of 1986, as added by section 101(a)) 
        to designate an otherwise allowable amount (or portion of such 
        amount) which is allowable as a refund on the return of the 
        individual for any taxable year to be treated as an eligible 
        contribution (as defined in subsection (c) of such section 54) 
        with respect to the taxable year to which such return relates, 
        and
            (2) such contributions to be electronically transferred to 
        a Social Security Plus Account (as defined in section 408B(b) 
        of the Internal Revenue Code of 1986, as added by section 201) 
        maintained for the benefit of the individual, along with any 
        matching amount (as defined in such section 54) with respect to 
        such contribution.
    (d) Conforming Amendment.--Section 6402(a) is amended by striking 
``In the case'' and inserting ``Except as provided in subsection (l), 
in the case''.

                TITLE II--SOCIAL SECURITY PLUS ACCOUNTS

SEC. 201. ESTABLISHMENT OF SOCIAL SECURITY PLUS ACCOUNT.

    (a) In General.--Subpart A of part I of subchapter D of chapter 1 
(relating to pension, profit-sharing, stock bonus plans, etc.) is 
amended by inserting after section 408A the following new section:

``SEC. 408B. SOCIAL SECURITY PLUS ACCOUNT.

    ``(a) General Rule.--Except as provided in this section, a Social 
Security Plus Account shall be treated for purposes of this title in 
the same manner as an individual retirement plan.
    ``(b) Social Security Plus Account.--For purposes of this title, 
the term `Social Security Plus Account' means an individual retirement 
plan (as defined in section 7701(a)(37)) which is designated (in such 
manner as the Secretary may prescribe) at the time of establishment of 
the plan as a Social Security Plus Account.
    ``(c) Treatment of Contributions.--For purposes of this title--
            ``(1) In general.--The aggregate amount of contributions 
        for any taxable year to a Social Security Plus Account shall 
        not exceed--
                    ``(A) the maximum amount of contributions from an 
                eligible individual (as defined in section 54(b)) that 
                may be taken into account under section 54(c)(1)(D) for 
                such taxable year,
                    ``(B) amounts transferred under section 6402(l) on 
                behalf of the individual for whom the account is 
                maintained for such taxable year, and
                    ``(C) any qualified rollover contribution.
            ``(2) Prohibition on contributions.--No contribution may be 
        made to a Social Security Plus Account in any taxable year in 
        which--
                    ``(A) the individual for whom the account is 
                maintained attains age 70\1/2\, or
                    ``(B) any distribution from such account is made.
            ``(3) Tax treatment of contributions.--
                    ``(A) No deduction allowed.--No deduction shall be 
                allowed under section 219 with respect to any 
                contribution made by an eligible individual or any 
                matching contribution transferred under section 6402(l) 
                to an individual's Social Security Plus Account.
                    ``(B) Exclusion.--Gross income shall not include 
                any amount transferred under section 6402(l) to an 
                individual's Social Security Plus Account.
            ``(4) Rollover contributions.--No rollover contribution may 
        be made to a Social Security Plus Account unless it is a 
        qualified rollover contribution.
            ``(5) Coordination with contribution limits.--In the case 
        of any contribution or transfer, including a qualified rollover 
        contribution, to an account under paragraph (1) such 
        contribution or transfer shall not, with respect to the year in 
        which the contribution or transfer is made--
                    ``(A) be subject to any otherwise applicable 
                limitation contained in section 408 or 219, or
                    ``(B) be taken into account in applying such 
                limitations to other contributions or benefits under 
                such account or any other such account.
    ``(d) Distribution Rules.--For purposes of this title--
            ``(1) General rules.--
                    ``(A) Application of section 86.--Any qualified 
                distribution shall be treated for purposes of this 
                title as the receipt of social security benefits (as 
                defined in section 86).
                    ``(B) Exception from penalty tax.--Section 72(t) 
                shall not apply to any qualified distribution from a 
                Social Security Plus Account.
            ``(2) Qualified distribution.--For purposes of this 
        subsection, the term `qualified distribution' means any payment 
        or distribution--
                    ``(A) made on or after the date on which the 
                individual attains early retirement age (as determined 
                under section 216(l)(2) of the Social Security Act),
                    ``(B) made to a beneficiary (or to the estate of 
                the individual) on or after the death of the 
                individual,
                    ``(C) attributable to the account holder's being 
                disabled within the meaning of section 72(m)(7), or
                    ``(D) described in section 72(t)(2)(B).
            ``(3) Rollovers.--Paragraph (1) shall not apply to any 
        distribution which is transferred in a qualified rollover 
        contribution to a Social Security Plus Account.
            ``(4) Matching contributions may be used only for certain 
        distributions.--Any distribution (other than a qualified 
        distribution described in subparagraph (A), (B), or (C) of 
        paragraph (2) or a distribution transferred in a qualified 
        rollover contribution) may be made, but only to the extent such 
        distribution does not exceed the balance in the account as of 
        the date of such distribution, reduced by any amount 
        transferred under section 6402(l) to such account.
    ``(e) Qualified Rollover Contribution.--For purposes of this 
section, the term `qualified rollover contribution' means a rollover 
contribution to a Social Security Plus Account from another such 
account, but only if such rollover contribution meets the requirements 
of section 408(d)(3).''.
    (b) Conforming Amendment.--The table of sections for subpart A of 
part I of subchapter D of chapter 1 is amended by inserting after the 
item relating to section 408A the following new item:

                              ``Sec. 408B. Social Security Plus 
                                        Account.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.
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