[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 242 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 242

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 2007

    Mr. Weller of Illinois introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


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

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

SECTION 1. SHORT TITLE.

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

SEC. 2. SOCIAL SECURITY KIDSAVE ACCOUNTS.

    Title II of the Social Security Act (42 U.S.C. 401 et seq.) is 
amended--
            (1) by inserting before section 201 the following:

                    ``Part A--Insurance Benefits'';

            and
            (2) by adding at the end the following:

                       ``Part B--KidSave Accounts

                  ``establishment of kidsave accounts

    ``Sec. 251.  (a) In General.--The Commissioner of Social Security, 
through the Federal Retirement Thrift Investment Board, shall establish 
in the name of each individual born on or after January 1, 2008, a 
KidSave Account in the Thrift Savings Fund under subchapter III of 
chapter 84 of title 5, United States Code, upon the later of--
            ``(1) the date of enactment of this part; or
            ``(2) the date of the issuance of a social security account 
        number under section 205(c)(2) to such individual.
    ``(b) Identification of Account.--The KidSave Account shall be 
identified to the account holder by means of the account holder's 
social security account number.

                    ``treatment of kidsave accounts

    ``Sec. 252.  (a) In General.--For purposes of this part, except as 
provided in subsection (b), a KidSave Account described in section 
251(a) shall be treated in the same manner as an account in the Thrift 
Savings Fund under subchapter III of chapter 84 of title 5, United 
States Code.
    ``(b) Exceptions.--
            ``(1) Contribution rules.--
                    ``(A) Loan contributions.--
                            ``(i) In general.--In addition to any 
                        contributions to a KidSave Account by or on 
                        behalf of an individual described in 
                        subparagraph (B), the Secretary of the Treasury 
                        shall transfer $2,000 to such Account from the 
                        Federal Old-Age and Survivors Insurance Trust 
                        Fund on the date of the establishment of such 
                        Account under subsection (a).
                            ``(ii) Adjustment for inflation.--For any 
                        calendar year after 2015, the dollar amount 
                        under clause (i) shall be increased by the 
                        cost-of-living adjustment determined under 
                        section 215(i) for the calendar year.
                    ``(B) Other contributions.--
                            ``(i) Contribution limit.--The aggregate 
                        amount of contributions by or on behalf of an 
                        individual (including rollover contributions) 
                        for any taxable year to the KidSave Account of 
                        such individual shall not exceed $500 for such 
                        year (determined without regard to the amount 
                        of the contribution made pursuant to 
                        subparagraph (A)).
                            ``(ii) Rollover contributions.--No rollover 
                        contribution may be made to a KidSave Account 
                        of an individual unless it is from an eligible 
                        retirement plan described in clause (i), (ii), 
                        or (iii) of section 402(c)(8)(B) of the 
                        Internal Revenue Code of 1986 of such 
                        individual or of a parent or grandparent of 
                        such individual. For purposes of chapters 12 
                        and 13 of the Internal Revenue Code of 1986 
                        (relating to gift tax and tax on generation-
                        skipping transfers), in no event shall a 
                        rollover contribution under this clause be 
                        treated as a taxable gift.
                            ``(iii) No contributions past the age of 
                        18.--No contribution (including rollover 
                        contribution) may be made to a KidSave Account 
                        of an individual after the date on which such 
                        individual attains the age of 19.
                            ``(iv) Direct deposits.--The Secretary of 
                        the Treasury shall, under regulations, provide 
                        for the direct deposit of any overpayment of 
                        Federal tax of an individual or of a parent or 
                        grandparent of such individual as a 
                        contribution to the KidSave Account of such 
                        individual.
            ``(2) Designations regarding kidsave account investments.--
                    ``(A) Initial designations of investment fund.--A 
                person described in subsection (c) shall, on behalf of 
                the individual described in section 251(a), designate 1 
                or more investment funds (established under section 
                8438 of title 5, United States Code) for the KidSave 
                Account to which contributions by or on behalf of such 
                individual are to be deposited. Such designation shall 
                be made on the application for such individual's social 
                security account number.
                    ``(B) Default designation.--In the absence of any 
                designation under subparagraph (A), the contributions 
                by or on behalf of an individual described in section 
                251(a) shall be deposited--
                            ``(i) 60 percent in the Common Stock Index 
                        Investment Fund established under section 
                        8438(b)(1)(C) of title 5, United States Code;
                            ``(ii) 20 percent in the Fixed Income 
                        Investment Fund established under section 
                        8438(b)(1)(B) of such title; and
                            ``(iii) 20 percent in the Government 
                        Securities Investment Fund established under 
                        section 8438(b)(1)(A) of such title.
                    ``(C) Changes in designations.--An individual who 
                has attained age 18 or a person described in subsection 
                (c) on behalf of such individual may change 1 or more 
                investment designations for a KidSave Account of such 
                individual at the same time and in the same manner as 
                provided under subchapter III of chapter 84 of such 
                title.
            ``(3) Distributions.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), distributions may only be made from a 
                KidSave Account of an individual on or after the 
                earlier of--
                            ``(i) the date on which the individual 
                        begins receiving benefits under part A; or
                            ``(ii) the date of the individual's death.
                    ``(B) Repayment of contribution loan.--
                            ``(i) In general.--On the date on which an 
                        individual described in section 251(a) attains 
                        age 30 and on such date in each succeeding 
                        calendar year (as necessary), the Federal 
                        Retirement Thrift Investment Board shall 
                        transfer from the KidSave Account of such 
                        individual to the Federal Old-Age and Survivors 
                        Insurance Trust Fund an amount equal to the 
                        least of the following amounts:
                                    ``(I) 20 percent of the applicable 
                                amount.
                                    ``(II) 20 percent of the balance in 
                                such KidSave Account.
                                    ``(III) An amount equal to the 
                                excess of the applicable amount over 
                                the aggregate amount deducted under 
                                this clause in all preceding calendar 
                                years with respect to such individual.
                            ``(ii) Applicable amount.--With respect to 
                        any individual described in clause (i), the 
                        applicable amount is equal to the amount 
                        transferred by the Secretary of the Treasury to 
                        such KidSave Account under paragraph (1)(A).
    ``(c) Treatment of Minors and Incompetent Individuals.--
            ``(1) Designations.--Any designation under subsection 
        (b)(2) to be made by a minor, or an individual mentally 
        incompetent or under other legal disability, may be made by the 
        person who is constituted guardian or other fiduciary by the 
        law of the State of residence of the individual or is otherwise 
        legally vested with the care of the individual or his estate.
            ``(2) Distributions.--Payment under this part due a minor, 
        or an individual mentally incompetent or under other legal 
        disability, may be made to the person who is constituted 
        guardian or other fiduciary by the law of the State of 
        residence of the claimant or is otherwise legally vested with 
        the care of the claimant or his estate.
            ``(3) Other persons designated.--In any case in which a 
        guardian or other fiduciary of the individual under legal 
        disability has not been appointed under the law of the State of 
        residence of the individual, if any other person, in the 
        judgment of the Commissioner, is responsible for the care of 
        such individual, any designation under subsection (b)(2) which 
        may otherwise be made by such individual may be made by such 
        person, any payment under this part which is otherwise payable 
        to such individual may be made to such person, and the payment 
        of an annuity payment under this part to such person bars 
        recovery by any other person.

                   ``treatment of thrift savings fund

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

SEC. 3. CONFORMING AMENDMENTS.

    (a) Amendments Relating to Rollovers.--
            (1) Section 402(c)(1) of the Internal Revenue Code of 1986 
        is amended by adding at the end the following new sentence: 
        ``For purposes of the preceding sentence, a rollover 
        contribution to a KidSave Account under section 
        252(b)(1)(B)(ii) of the Social Security Act with respect to an 
        employee who is a parent or grandparent of the beneficiary of 
        such account shall be treated as a distribution to such 
        employee.''.
            (2) Section 402(c)(5) of such Code is amended by striking 
        ``(i) or (ii)'' and inserting ``(i), (ii), or (vii)''.
            (3) Section 402(c)(8)(B) of such Code is amended by 
        striking ``and'' at the end of clause (v), by striking the 
        period at the end of clause (vi) and inserting ``, and'', and 
        by adding at the end the following new clause:
                            ``(vii) a KidSave Account established under 
                        section 251(a) of the Social Security Act.''.
            (4) Section 408(d)(3)(A)(i) of such Code is amended by 
        inserting ``, or is paid into a KidSave Account of a 
        beneficiary under section 252(b)(1)(B)(ii) of the Social 
        Security Act with respect to whom such individual is the parent 
        or grandparent,'' after ``such individual''.
    (b) Cross References.--
            (1) In general.--
                    (A) The Social Security Act is amended--
                            (i) in part A of title II (as redesignated 
                        by section 2), by striking ``this title'' each 
                        place it appears and inserting ``this part'';
                            (ii) by striking ``title II'' each place it 
                        appears (except in sections 464(c)(3)(B)(i), 
                        807(b)(2)(F), 807(c)(1), 1110(a)(3), 
                        1110(c)(1), 1129A(d)(2), 1136(g), 
                        1147(b)(1)(A), 1148(h)(4)(A), 1148(j)(1)(A), 
                        1148(k), 1612(b)(18), and 1613(a)(10)) and 
                        inserting ``part A of title II'';
                            (iii) by striking ``title II or XVI'' each 
                        place it appears in sections 464(c)(3)(B)(i), 
                        1110(a)(3), 1110(c)(1), 1129A(d)(2), and 
                        1136(g) and inserting ``part A of title II or 
                        title XVI'';
                            (iv) by striking ``title II, or XVI'' each 
                        place it appears in sections 807(b)(2)(F) and 
                        807(c)(1) and inserting ``part A of title II, 
                        or title XVI'';
                            (v) by striking ``title II, VIII, or'' in 
                        section 1129(a)(3) and inserting ``part A of 
                        title II or title VIII or''; and
                            (vi) by striking ``title II or VIII'' in 
                        section 1147(b)(1)(A) and inserting ``part A of 
                        title II or title VIII''.
                    (B) The Internal Revenue Code of 1986 is amended--
                            (i) by striking ``title II'' each place it 
                        appears (except in sections 30B(b)(2)(C), 
                        30B(h)(3), 35(c)(2), 142(h)(1), 410(b)(3)(B), 
                        451(d), 912(1)(C), 912(2), 4980B(f), and 7442) 
                        and inserting ``part A of title II''; and
                            (ii) by striking ``title II or XVI'' each 
                        place it appears in section 4980B(f) and 
                        inserting ``part A of title II or title XVI''.
                    (C) The Railroad Retirement Act of 1974 is amended 
                by striking ``title II'' each place it appears (except 
                in section 19(d)(3)) and inserting ``part A of title 
                II''.
            (2) Rule of construction.--In each provision of Federal law 
        (other than provisions amended or added by the amendments made 
        by this Act), any reference to title II of the Social Security 
        Act shall be deemed a reference to part A of title II of such 
        Act (as redesignated by section 2).
                                 <all>