Home > 106th Congressional Bills > H.R. 3178 (ih) To amend the Internal Revenue Code of 1986 to make the dependent care credit refundable and to provide for advance payments of such credit. [Introduced in House] ...H.R. 3178 (ih) To amend the Internal Revenue Code of 1986 to make the dependent care credit refundable and to provide for advance payments of such credit. [Introduced in House] ...
subsection (a) on such date.
``(4) Irrevocability.--An election under this subsection
shall be irrevocable.
``individual social security accounts
``Sec. 256. (a) Establishment of a Publicly Administered System of
Individual Social Security Accounts.--As soon as practicable after the
later of January 1, 2004, or the date on which an individual becomes an
eligible individual under this part, the Executive Director shall
establish in the Savings Fund an individual social security account for
such individual. Each account shall be identified to its account owner
by means of the account owner's social security account number. The
Savings Fund shall accept any prescribed social security deposit made
with respect to any eligible individual as provided in section 257. The
Executive Director shall credit such deposit to such individual's
individual social security account.
``(b) Account Balance.--The balance in an account owner's account
at any time is the excess of--
``(1) the sum of all deposits and contributions described
in subsection (a) credited to such account, subject to such
increases and reductions as may result from allocations made to
and reductions made in the account pursuant to subsection (c),
over
``(2) amounts credited to such account and paid out of the
Savings Fund with respect to such account owner under this
part.
``(c) Allocation of Earnings and Losses.--Pursuant to regulations
which shall be prescribed by the Board, the Executive Director shall
allocate to each individual social security account an amount equal to
the net earnings and net losses from each investment of sums in the
Social Security Personal Savings Fund which are attributable, on a pro
rata basis, to sums credited to such account, reduced by an appropriate
share of the administrative expenses paid out of the net earnings, as
determined by the Executive Director.
``prescribed social security deposits
``Sec. 257. (a) In General.--As soon as practicable, the Secretary
of the Treasury shall transfer amounts equivalent to 100 percent of the
prescribed social security deposit for each eligible individual for
each year from the Federal Old-Age and Survivors Insurance Trust Fund
to the Social Security Personal Savings Fund, for subsequent crediting
with respect to such individual under section 256. Such transfers shall
be made in periodic installments, such installments to be determined,
to the extent necessary, on the basis of estimates by the Commissioner
of Social Security of wages and self-employment income, which shall be
certified to the Secretary of the Treasury. Proper adjustments shall be
made in amounts transferred for subsequent periods to the extent that
amounts transferred for prior periods were greater or less than the
proper amounts. Upon determining the actual amount of the prescribed
social security deposit for an eligible individual for each year, the
Executive Director shall promptly credit such amount to such
individual's individual social security account under section 256.
Prior to such crediting of amounts held in the Savings Fund to
individual social security accounts, such amounts shall be invested by
the Executive Director as provided in section 258 in accordance with
regulations of the Board.
``(b) Prescribed Social Security Deposits.--For purposes of this
part, the prescribed social security deposit for an eligible individual
for any calendar year is an amount equal to the sum of--
``(1) the product derived by multiplying--
``(A) such individual's wages paid, and self-
employment income derived, in such calendar year (as
certified to the Secretary of the Treasury by the
Commissioner of Social Security) not in excess of the
contribution and benefit base for such calendar year,
by
``(B) such individual's transfer percentage for
such calendar year, and
``(2) the net return on the investment, in accordance with
section 258, of amounts equivalent to the product determined
under paragraph (1) during the period such amounts were held in
the Savings Fund prior to deposit in such individual's
individual social security account.
``(c) Transfer Percentage.--For purposes of subsection (b)(1)(B),
the term `transfer percentage' of an individual for a calendar year
means the excess of--
``(1) 8.00 percent, over
``(2) the product derived by multiplying--
``(A) 5.00 percent, by
``(B) a fraction--
``(i) the numerator of which is the amount
of such individual's wages paid, and self-
employment income derived, in such calendar
year (as certified to the Secretary of the
Treasury by the Commissioner of Social
Security) not in excess of the contribution and
benefit base (determined under section 230) for
such calendar year, and
``(ii) the denominator of which is the
contribution and benefit base (so determined)
for such calendar year,
rounded, if not a multiple of 0.01 percent, to the nearest
multiple of 0.01 percent.
``investments in common stock and government obligations
``Sec. 258. (a) In General.--Any balance held in an individual
social security account under this part and the balance of any other
amounts held by the Savings Fund which are not necessary for immediate
withdrawal shall be invested as provided in this section.
``(b) Investment Mix Between Stock and Bonds.--Except to the extent
otherwise elected by the account owner under subsection (e) with
respect to the balance credited to the account owner's account, the
Executive Director shall invest each balance referred to in subsection
(a) under regulations which shall be prescribed by the Board so as to
ensure, to the maximum extent practicable, that, of the total balance
available for investment (after allowing for administrative expenses)--
``(1) 35 percent is invested in United States Government
obligations in accordance with subsection (c), and
``(2) the remainder is invested in common stock in
accordance with subsection (d).
``(c) Investment in Social Security Transition Bonds and Other
United States Treasury Obligations.--
``(1) Purchase by the board of social security transition
bonds.--To the extent necessary to provide for investment of
the portion of the account balance required to be invested as
provided in subsection (b)(1), the Executive Director shall
purchase Social Security Transition Bonds made available by the
Managing Trustee of the Federal Old-Age and Survivors Insurance
Trust Fund for purchase pursuant to paragraph (2) .
``(2) Issuance of bonds.--To the extent determined
necessary by the Managing Trustee of the Federal Old-Age and
Survivors Insurance Trust Fund to avoid a negative cash flow
for such Trust Fund, the Managing Trustee shall issue special
obligations of such Trust Fund (to be known as `Social Security
Transition Bonds') for purchase by the Executive Director under
paragraph (1), in such forms and denominations, bearing such
maturities, and subject to such terms and conditions as may be
prescribed by the Managing Trustee.
``(3) Purchase of outstanding marketable long-term treasury
securities.--To the extent that purchase of Social Security
Transition Bonds made available pursuant to paragraph (2) is
insufficient to provide for investment in full of the portion
of the account balance required to be invested as provided in
subsection (b)(1), the Executive Director shall invest the
account balance in United States Treasury bills issued under
chapter 31 of title 31, United States Code, bearing interest at
a rate at least equal to the average market yield (computed by
the Managing Trustee on the basis of market quotations as of
the end of the calendar month next preceding the date of issue
of such obligations) on all marketable interest-bearing
obligations of the United States then forming a part of the
public debt which are not due or callable earlier than 4 years
after the end of such calendar month.
``(d) Investment in Common Stock.--
``(1) In general.--The Board shall establish by regulation
standards which must be met by common stock selected for
investment of the portion of any balance required to be
invested in common stock under subsection (b).
``(2) Standard option.--In conformity with such standards,
the Board shall select, for purposes of such investment, an
index which is 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.
Except to the extent otherwise elected by an account owner
under subsection (e) with respect to the balance credited to
the account owner's account, the amount of any balance which is
required to be invested in common stock under subsection (b)(2)
shall be invested in a portfolio designed to replicate the
performance of such index. Such portfolio shall be referred to
as the `Standard Option' for such calendar year.
``(e) Annual Opportunity to Elect Alternative Investment Options.--
``(1) Election of applicable portfolios.--
``(A) In general.--In any case in which, as of the
end of the second quarter of any calendar year, the
balance of an individual social security account
exceeds the election threshold specified in
subparagraph (B) for such calendar year, the Board
shall provide by regulation for an opportunity, during
the third quarter of such calendar year, for such
account owner to elect one or both portfolios described
in paragraph (2) as applicable portfolios, in
connection with such account, for the following
calendar year, in lieu of or in addition to the
Standard Option. In the case of such an election,
amounts in the account invested in stock shall be
allocated during such calendar year among the portfolio
or portfolios so elected for such calendar year, in
percentages specified in the election by the account
owner for each applicable portfolio.
``(B) Election threshold.--The election threshold
specified in this subparagraph for calendar year 2005
is $5,000. The Executive Director shall, on or before
November 1 of 2005 and of every year thereafter,
determine and publish in the Federal Register the
election threshold for the succeeding calendar year.
Such election threshold shall be the larger of--
``(i) the amount in effect for the calendar
year in which the determination under this
subparagraph is made, or
``(ii) the product of $5,000 and the ratio
of the national average wage index (as defined
in section 209(k)(1)) for the calendar year
before the year in which the determination
under this subparagraph is made to the national
average wage index (as so defined) for 2003,
with such product, if not a multiple of $10, being
rounded to the next higher multiple of $10 where such
amount is a multiple of $5 but not of $10 and to the
nearest multiple of $10 in any other case.
``(2) Additional options.--For purposes of paragraph (1)--
``(A) Small capitalization option.--The Board shall
select an index which is a commonly recognized index
comprised of small capitalization stock the aggregate
market value of which is a representation of publicly
held companies whose shares are traded on the small
capitalization equity markets of the United States. The
Board shall select for each calendar year a portfolio
of stock included in such index designed to replicate
the performance of such index. Such portfolio shall be
referred to as the `Small Capitalization Option' for
such calendar year. The portfolio shall be designed
such that, to the extent practicable, the percentage of
the total amount of the Savings Fund invested in such
portfolio that is invested in each stock is the same as
the percentage determined by dividing the aggregate
market value of all shares of that stock by the
aggregate market value of all shares of all stocks
included in such index.
``(B) Medium capitalization option.--The Board
shall select an index which is a commonly recognized
index comprised of medium capitalization stock the
aggregate market value of which is a representation of
publicly held companies whose shares are traded on the
medium capitalization equity markets of the United
States. The Board shall select for each calendar year a
portfolio of stock included in such index designed to
replicate the performance of such index. Such portfolio
shall be referred to as the `Medium Capitalization
Option' for such calendar year. The portfolio shall be
designed such that, to the extent practicable, the
percentage of the total amount of the Savings Fund
invested in such portfolio that is invested in each
stock is the same as the percentage determined by
dividing the aggregate market value of all shares of
that stock by the aggregate market value of all shares
of all stocks included in such index.
``(3) Publication of available portfolios.--
``(A) In general.--The Board shall publish, prior
to the third quarter of each calendar year, the Board's
determination of the relative breadth of
diversification represented by the Standard Option, the
Small Capitalization Option, and the Medium
Capitalization Option for the following calendar year
pursuant to this subsection.
``(B) Default portfolio.--The Board shall clearly
identify, in each publication of the 3 options for a
calendar year, the portfolio which is the Standard
Option for such calendar year. In any case in which an
account owner fails to make an election for a calendar
year for any portion of the balance in the account,
the portfolio so identified by the Board as the Standard Option shall
serve as the applicable portfolio for such calendar year in connection
with such portion of the account.
``(4) Variation from the standard mix between stocks and
bonds.--In accordance with regulations of the Board, in
connection with any election under paragraph (1) for a calendar
year, the account owner may also elect to vary for such
calendar year, from the Standard Mix specified in subsection
(b), the allocation of the total balance in the account
available for investment (after allowing for administrative
expenses) between Social Security Transition Bonds and stock.
``(5) Elections effective for subsequent years.--Any
election made under this subsection for any calendar year shall
remain in effect for subsequent calendar years until an
election providing otherwise is made under this subsection.
``(6) Informational election forms.--Elections under this
subsection shall be made on a form which shall be prescribed by
the Board. Such form shall include a statement, in language
formulated so as to be understood by the typical eligible
individual, which describes the extent to which risk of loss
under the program established under this part may be avoided
under section 235 by maintaining investments under the Standard
Option and in accordance with the Standard Mix. Each eligible
individual who elects to invest in the Small Capitalization
Option or the Medium Capitalization Option, or to vary the
allocation of investment from the Standard Mix under subsection
(b), shall sign an acknowledgement contained in such form which
states that the individual understands that, while there is a
chance that an election to invest in either such option or an
election of such a variance may result in increased returns on
investment, such an election is made at the individual's risk,
that the individual is not protected against any loss on such
investment or by reason of such variance, and that a return on
any such investment is not guaranteed by the Government.
``(f) Limitation on Voting Rights.--The Board, the Executive
Director, and any account owner may not exercise voting rights
associated with the ownership of securities held in the Savings Fund.
``accounting and information
``Sec. 259. (a) Annual, Independent Audits.--
``(1) Independent accountant.--The Executive Director shall
annually engage, on behalf of all account owners under this
part, an independent qualified public accountant, who shall
conduct an examination of all accounts and other books and
records maintained by the Executive Director under this part as
the public accountant considers necessary to enable the public
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