1.
(a)Subchapter I of
chapter 31 of subtitle III of title 31, United States Code, is amended by
inserting after section 3105 the following new section:
3105a.
(a)The Secretary shall establish and
administer a new series of United States savings bonds, to be known as
Buy Back America Bonds
. Proceeds from the bonds shall be used
first solely to reduce the amount of foreign-held public debt, and then to
reduce other public debt.
(b)A Buy Back America Bond shall be subject to
such terms and conditions of issue, conversion, redemption, and maturation as
the Secretary may prescribe, except that a Buy Back America Bond shall not
mature, and may not be redeemed by the holder, earlier than 10 years from the
date of issue and shall mature not more than 20 years from the date of issue.
Interest on a Buy Back America Bond whenever paid shall not be includible in
gross income under the Internal Revenue Code of 1986.
(c)Buy Back America Bonds shall be issued at
face value and in denominations of not less than $25.
(d)The redemption
value of a Buy Back America Bond shall be determined as the Secretary shall
provide—
(1)at a fixed
interest rate equal to the rate applicable to a Series I savings bond for the
rate period during which the Buy Back America Bond is purchased, and
(2)for purposes of
calculating yearly interest, by increasing the purchase price of such Buy Back
America Bond in each calendar year after the year of purchase by an amount
equal to—
(A)such purchase
price, multiplied by
(B)the cost-of-living
adjustment determined under section 1(f)(3) of the Internal Revenue Code of
1986 for such calendar year, determined by substituting the calendar year in
which such bond was purchased for 1992
in subparagraph (B)
thereof.
(e)If during any
fiscal year during which any Buy Back America Bond is outstanding—
(1)the Federal budget
deficit for such fiscal year is less than the amount equal to 3 percent of
gross domestic product (as most recently computed and published by the
Department of Commerce); and
(2)the public debt is
less than the amount equal to 10 percent of gross domestic product (as so
computed and published);
then any
such bond may be redeemed without regard to subsection (b).(f)A Buy Back America Bond may only be held
by—
(1)a citizen or
resident of the United States;
(2)a domestic
partnership, or domestic corporation, not more than 1 percent of the ownership
interest of which is held (directly or indirectly) by a person who is not a
United States person (as defined in section 7701(a)(30) of the Internal Revenue
Code of 1986); or
(3)an estate or trust which is a United States
person (as so defined), unless there is a beneficiary of the trust who is not a
United States person (as so defined),
and may
be purchased only by an individual who provides a valid social security account
number (not including a taxpayer identification number provided by the Internal
Revenue Service).(g)A Buy Back America Bond may be transferred
as provided by the Secretary, but only to an individual who has a valid social
security account number (not including a taxpayer identification number
provided by the Internal Revenue
Service).
.
(b)The table of
sections subchapter I of chapter 31 of subtitle III of title 31, United States
Code, is amended by inserting after section 3105 the following new item:
3105. Buy Back America
Bonds.
.
2.
(a)The Office of Management and Budget shall
calculate the net deficit reduction resulting from the implementation of this
Act and the sale of Buy Back America Bonds for the period beginning on the date
of the sale of the first such Buy Back America Bond and ending on the date that
is 1 year after such date.
(b)Adjustment of
the discretionary capsEffective on the effective date of this
Act, the limit for the appropriate discretionary budget category set forth in
section 251(c) and 251A of the Balanced Budget and Emergency Deficit Control
Act of 1985 for the first fiscal year beginning after the date that is 1 year
after the date of the sale of the first Buy Back America Bond shall be reduced
by the amount of the net deficit reduction calculated pursuant to subsection
(a).