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] ...
accountant to make the determination required by paragraph (2).
The examination shall be conducted in accordance with generally
accepted auditing standards and shall involve such tests of the
accounts, books, and records as the public accountant considers
necessary.
``(2) Determination required.--The public accountant
conducting an examination under paragraph (1) shall determine
whether the accounts, books, and records referred to in such
paragraph have been maintained in conformity with generally
accepted accounting principles applied on a basis consistent
with the manner in which such principles were applied during
the examination conducted under such paragraph during the
preceding year. The public accountant shall transmit to the
Board a report on his examination, including his determination
under this paragraph.
``(3) Reliance on actuarial matter.--In making a
determination under paragraph (2), a public accountant may rely
on the correctness of any actuarial matter certified by an
accredited actuary if the public accountant states his reliance
in the report transmitted to the Board under such paragraph.
``(4) Definition.--In this subsection, the term `qualified
public accountant' shall have the same meaning as provided in
section 103(a)(3)(D) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1023(a)(3)(D)).
``(b) Statements.--
``(1) In general.--The Board shall prescribe regulations
under which each account owner under this part shall be
furnished by the Executive Director with a periodic statement
relating to the account owner's account, setting forth--
``(A) the current account balance,
``(B) a summary description of the investments made
pursuant to section 258, and
``(C) an evaluation of the performance of such
investments over the 5-year period preceding the date
as of which such evaluation is made.
``(2) Timing.--Information under this subsection shall be
provided at least annually.
``account distributions
``Sec. 260. (a) In General.--Subject to this part--
``(1) Availability of withdrawals.--On and after the date
on which an account owner becomes entitled to old-age insurance
benefits under section 202(a), the entire balance in the
account owner's individual social security account shall be
available for withdrawal in a distribution meeting the
requirements of this section.
``(2) Distribution of balances in excess of the
distribution base.--Any amount withdrawn by the account owner
pursuant to paragraph (1) which is in excess of the
distribution base shall be payable to the account owner in such
manner and in such amounts as may be determined by the account
owner (in such form and manner as shall be prescribed in
regulations of the Board to provide for efficient and effective
payment).
``(3) Distribution of balances representing the
distribution base.--On and after the first date as of which an
account owner becomes entitled to old-age insurance benefits
under section 202(a) and has requested commencement of
distribution of the account owner's distribution base, the
Executive Director shall provide for withdrawal of the portion
of the account balance which is not in excess of the
distribution base of the account owner in accordance with
subsections (b) through (e).
``(b) Distribution of Amounts in Distribution Base in Monthly
Annuity Payments.--
``(1) In general.--Except as otherwise provided in this
section, effective upon the date referred to in subsection
(a)(3), the Executive Director shall transfer so much of the
account balance as is not in excess of the distribution base of
the account owner from the account owner's account to amounts
otherwise held in the Savings Fund. In exchange for the amounts
transferred, the Executive Director shall provide, payable from
the Saving Fund--
``(A) if the covered individual is not married on
such date, an immediate single life annuity for the
account owner, payable in monthly installments, or
``(B) if the account owner is married on such date,
an immediate annuity for the joint lives of the covered
individual and the covered individual's spouse, payable
in monthly installments, together with a survivor
annuity to the one of them who survives the other of
them for the life of the survivor payable in monthly
installments equal to 66\2/3\ percent of the monthly
payment of the annuity that would be payable if both
spouses remained alive.
The annuity shall be payable in amounts so as to have an
actuarial present value equal to such distribution base, as
determined on the basis of generally accepted actuarial
assumptions.
``(2) Cost of living adjustments.--Any annuity provided for
under this subsection shall provide for annual indexing of the
monthly payments according to the Consumer Price Index for All
Urban Consumers (United States city average), published by the
Bureau of Labor Statistics.
``(3) Optional cash distribution.--
``(A) In general.--Effective on the date referred
to in subsection (a)(3), in lieu of a distribution of
the account balance as described in the preceding
provisions of this subsection, the account owner may
elect, in such form and manner as shall be prescribed by the Executive
Director--
``(i) an annuity determined under this
subsection by substituting in paragraph (1) for
references to the distribution base references
to the reduced distribution base described in
subparagraph (B), and
``(ii) a distribution from the account in
cash equal to the excess of the balance in the
account over such reduced distribution base.
``(B) Reduction in amount available for annuity
form of distribution.--For purposes of subparagraph
(A), the amount of the reduced distribution base is an
amount equal to the greater of--
``(i) 35 percent of the balance in the
account, or
``(ii) an amount necessary (as determined
by the Executive Director) to fund an annuity
providing annual payments in the amount of--
``(I) $8,950, in any case in which
no individual other than the account
owner is eligible for benefits under
section 202 based on the wages and
self-employment income of the account
owner, or
``(II) $12,120, in any other case.
``(C) Cost-of-living adjustment.--The Secretary
shall adjust, for 2005 and for each calendar year
thereafter, each dollar amount specified in
subparagraph (B)(ii) for increases in the cost-of-
living in accordance with regulations prescribed by the
Secretary. Such regulations shall provide for an
adjustment with respect to each calendar year based on
the increase in the Consumer Price Index for All Urban
Consumers (United States city average), published by
the Bureau of Labor Statistics, for the calendar
quarter ending September 30 of the preceding calendar
year over such index for the calendar quarter ending
September 30, 2003. Any increase under this clause
which is not a multiple of $10 shall be rounded to the
next higher multiple of $10 where such product is a
multiple of $5 but not of $10 and to the nearest
multiple of $10 in any other case.
``(D) Investment of 35 percent amount in bonds.--In
the case of a cash distribution under this paragraph,
the investment of a portion of the account balance
equivalent to the 35 percent amount determined under
subparagraph (B)(i) shall remain invested solely in the
form described in section 258(d).
``(4) Purchase of annuities.--The Executive Director shall,
on an ongoing basis, survey the availability for purchase in
the private sector of annuity contracts which would effectively
assist in the distribution of individual social security
accounts under this subsection. If the Executive Director
determines that the return on investment of funds held in the
private sector for the purpose of funding such annuity
contracts would be (taking into account applicable
administrative expenses) at least equivalent to the rate of
return on funds held in the Savings Fund pending distribution
as described in paragraph (1), the Executive Director shall
provide by regulation for the purchase of such annuity
contracts as a means of providing for payment of the monthly
payment amounts otherwise prescribed under paragraph (2). Any
such annuity contract shall provide for investment of amounts
held to fund the annuity in the manner prescribed in section
258(b)(1).
``(c) Distribution Base.--For purposes of this section, the
distribution base of an account owner is the actuarial present value of
the expected future benefits payable under section 202 on the basis of
the wages and self-employment income of the account owner (determined
without regard to section 215(a)(8)). The actuarial present value
determined under this subsection shall be determined as of the date
described in subsection (a)(3). In making assumptions under this
subsection, the Executive Director shall take into account the
reasonably anticipated period for which each beneficiary will remain
eligible for benefits under section 202 based on the account owner's
wages and self-employment income and the current expected life
expectancy of such beneficiary.
``(d) Treatment of Divorce, Annulment, and Legal Separation.--
``(1) Reallocation of account balances attributable to
prescribed social security deposits.--
``(A) In general.--Upon the issuance of a court
decree of divorce or annulment in the case of an
account owner and the account owner's spouse before the
date of the commencement of any distribution from the
account owner's individual social security account
under subsections (a) and (b), 50 percent of the amount
in such account which is attributable to prescribed
social security deposits under section 257(b) for
calendar years ending during the period of marriage
(and earnings thereon) shall be transferred from such
account to the individual social security account of
such spouse. In any case in which the spouse is not an
eligible individual, such spouse shall be deemed an
eligible individual upon the date of the decree, and
the transfer provided for under this paragraph shall be
made upon the establishment of the spouse's individual
social security account. This paragraph shall apply in
connection with such a decree only if notice of such
decree was received by the Executive Director before
the date of the commencement of the distribution.
``(B) Revocation of status by spouse.--A spouse who
is deemed an eligible individual under subparagraph (A)
may, during the 540-day period beginning on the date of
the decree of divorce or annulment, revoke his or her
status as an eligible individual in a form and manner
which shall be prescribed in regulations of the Board.
Upon such a revocation, the spouse's individual social
security account shall be closed and any amounts
theretofore deposited in the account shall be
transferred to the Federal Old-Age and Survivors
Insurance Trust Fund.
``(2) Treatment of annuity payments.--
``(A) In general.--Subsections (a) and (b) shall be
subject to the terms of any court decree, order, or
agreement described in subparagraph (B).
``(B) Court decree, order, or agreement
described.--A court decree, order, or agreement
described in this clause is, with respect to an account
owner, a court decree of divorce, annulment, or legal
separation issued in the case of such account owner and
such account owner's spouse or any court order or
court-approved property settlement agreement incident
to such decree if--
``(i) the decree, order, or agreement
expressly relates to any annuity under
subsection (b)(3), and
``(ii) notice of the decree, order, or
agreement has been received by the Executive
Director and, with respect to any annuity
payment, such notice was received before the
date on which payment is made.
``(3) 2 or more cases.--The Board shall prescribe
regulations under which this subsection shall be
applied in any case in which the Executive Director
receives notice of 2 or more decrees, orders, or
agreements referred to in paragraph (1) or (2).
``(e) Lump-Sum Payment Required for Minimal Amounts.--
Notwithstanding the preceding provisions of this section, if, upon
entitlement of an account owner to old-age insurance benefits under
section 202(a), the account balance is below $5,000, the entire account
balance shall be distributed to the account owner in a single lump-sum
amount.
``payments upon death of account owner
``Sec. 261. (a) Distribution in the Absence of Eligible Widow or
Widower.--
``(1) In general.--Except as otherwise provided in this
section, upon the account owner's death prior to the date
described in section 260(a)(3), the account shall be payable in
equal monthly installments (subject to paragraph (3)) to each
individual (if any) who is a potential beneficiary under
section 202 based on the wages and self-employment income of
the account owner.
``(2) Determination of monthly payment amounts.--
``(A) In general.--The amounts payable to each
individual under paragraph (1) in connection with an
individual social security account shall be determined
so that the actuarial present value (as of the date
referred to in subsection (a)(3)) of the future
payments to each individual bears the same ratio to the
actuarial present value (as of such date) of the total
amount to be so payable to all individuals in
connection with such account as the actuarial present
value (as of such date) of the benefits for which such
individual is (or will be) eligible based on such wages
and self-employment income (determined without regard
to section 215(a)(8)) bears to the account owner's
distribution base (determined as if the date of the
account owner's death were a date described in section
260(a)(3) and without any applicable reduction under
section 260(b)(4)).
``(B) Assumptions.--In determining the monthly
amount to be payable to each individual, the Executive
Director shall take into account the reasonably
anticipated period for which such individual will
remain eligible for benefits under section 202 based on
the account owner's wages and self-employment income
and the current expected life expectancy of such
individual.
``(b) Treatment of Surviving Spouses Eligible for Widow's or
Widower's Insurance Benefits.--
``(1) In general.--In any case in which the account owner
is survived by a spouse who is an eligible individual and who
is also eligible for widow's or widower's insurance benefits
under subsection (e) or (f) of section 202 based on the account
owner's wages and self-employment income, subsection (a) shall
not apply, and the account balance remaining at the time of the
account owner's death shall be transferred to the individual
social security account of such surviving spouse.
``(2) Spouses who are not eligible individuals.--
``(A) In general.--In any case in which the
surviving spouse is eligible for widow's or widower's
insurance benefits under subsection (e) or (f) of
section 202 based on the account owner's wages and
self-employment income but is not an eligible
individual, such spouse shall be deemed an eligible
individual upon the date of the account owner's death,
and the transfer provided for under this subsection
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