America Saving for Personal Investment, Retirement, and Education Act of 2004, or the ASPIRE Act of 2004 - Establishes a KIDS Account Fund (KIDS) in the Treasury.
Establishes within the KIDS Account Fund a Kids Investment and Development Savings Account (KIDS Account). Provides that a U.S. citizen born after December 31, 2005, and under 18 years of age, whose modified adjusted gross income is below the applicable national median adjusted gross income amount, is eligible to contribute to such account and to receive a matching Federal contribution.
Establishes the KIDS Account Fund Board to establish a default investment program under which, in a manner similar to a lifecycle investment program, sums in each KIDS Account are allocated to investment funds in the KIDS Account Fund based on the amount of time before the account holder attains the age of 18.
Subjects the Board to the same statutory composition requirements, duties, and responsibilities as the Federal Retirement Thrift Investment Board.
Instructs the Secretary of the Treasury, in coordination with the Financial Literacy and Education Commission, to develop programs to promote the financial literacy of account holders of KIDS Accounts.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4939 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 4939
To encourage savings, promote financial literacy, and expand
opportunities for young adults by establishing KIDS Accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 22, 2004
Mr. Ford (for himself, Mr. Petri, Mr. Kennedy of Rhode Island, and Mr.
English) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To encourage savings, promote financial literacy, and expand
opportunities for young adults by establishing KIDS Accounts.
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 ``America Saving for Personal
Investment, Retirement, and Education Act of 2004'' or the ``ASPIRE Act
of 2004''.
SEC. 2. KIDS ACCOUNT FUND.
(a) Establishment.--There is established in the Treasury of the
United States a KIDS Account Fund.
(b) Amounts Held by Fund.--The KIDS Account Fund consists of the
sum of all amounts paid into the Fund under subsections (d) and (e),
increased by the total net earnings from investments of sums held in
the Fund or reduced by the total net losses from investments of sums
held in the Fund, and reduced by the total amount of payments made from
the Fund (including payments for administrative expenses).
(c) Use of Fund.--
(1) In general.--The sums in the KIDS Account Fund are
appropriated and shall remain available without fiscal year
limitation--
(A) to invest under section 5,
(B) to make distributions under section 6,
(C) to pay the administrative expenses of carrying
out this Act, and
(D) to purchase insurance as provided in section
10(c)(2).
(2) Exclusive purposes.--The sums in the KIDS Account Fund
shall not be appropriated for any purpose other than the
purposes specified in this section and may not be used for any
other purpose.
(d) Government Contributions.--
(1) In general.--The Secretary of the Treasury shall make
transfers from the general fund of the Treasury to the KIDS
Account Fund as follows:
(A) Automatic contributions.--Upon receipt of each
certification under section 3(b), the Secretary of the
Treasury shall transfer $500.
(B) Supplemental contributions.--Upon receipt of
each certification under section 4(a), the Secretary of
the Treasury shall transfer the supplemental amount.
(C) Matching contributions.--Upon receipt of each
certification under section 4(b), the Secretary of the
Treasury shall transfer the matching amount.
(2) Adjustment for inflation.--
(A) In general.--For each fifth calendar year
beginning after 2005, the $500 amount in paragraph
(1)(A) shall be increased by such dollar amount
multiplied by the cost-of-living adjustment determined
under section 1(f)(3) of the Internal Revenue Code of
1986 determined by substituting ``calendar year 2004''
for ``calendar year 1992'' in subparagraph (B) thereof.
(B) Rounding.--If any amount adjusted under
subparagraph (A) is not a multiple of $50, such amount
shall be rounded to the next lowest multiple of $50.
(e) Private Contributions.--The Executive Director shall pay into
the KIDS Account Fund such amounts as are contributed under section
3(f).
SEC. 3. KIDS ACCOUNTS.
(a) Establishment.--The Executive Director shall establish in the
KIDS Account Fund a Kids Investment and Development Savings Account
(hereinafter a ``KIDS Account'') for each eligible individual certified
under subsection (b). Each such account shall be identified to its
account holder by means of the account holder's social security account
number.
(b) Certification of Account Holders.--On the date on which an
eligible individual is issued a social security account number under
section 203(c)(2) of the Social Security Act, the Commissioner of
Social Security shall certify to the Executive Director and the
Secretary of the Treasury the name of, and social security number
issued to, such eligible individual.
(c) Account Balance.--The balance in an account holder's KIDS
Account at any time is the excess of--
(1) the sum of--
(A) all deposits made into the KIDS Account Fund
and credited to the account under subsection (d), and
(B) the total amount of allocations made to and
reductions made in the account pursuant to subsection
(e), over
(2) the amounts paid out of the account with respect to
such individual under section 6.
(d) Crediting of Contributions.--Pursuant to regulations which
shall be prescribed by the Executive Director, the Executive Director
shall credit to each KIDS Account the amounts paid into the KIDS
Account Fund under subsections (d) and (e) of section 2 which are
attributable to the account holder of such account.
(e) Allocation of Earnings and Losses.--The Executive Director
shall allocate to each KIDS Account an amount equal to the net earnings
and net losses from each investment of sums in the KIDS Account 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.
(f) Private Contributions.--
(1) In general.--The Executive Director shall accept cash
contributions for payment into the KIDS Account Fund if such
contribution is identified (in such manner as the Executive
Director may require) with the account holder of a KIDS Account
to whom it is to be credited at the time the contribution is
made.
(2) Alternative methods of contribution.--
(A) Payroll deduction.--Under regulations
prescribed by the Executive Director and at the
election of the employer, contributions under paragraph
(1) may be made through payroll deductions.
(B) Tax refunds.--Under regulations prescribed by
the Secretary of the Treasury, contributions under
paragraph (1) may be made by an election to contribute
all or a portion of the tax refund of the contributor.
(3) Annual limitation.--
(A) Account holders under age 18.--In the case of
an account holder who has not attained age 18 at the
end of a calendar year--
(i) the limitation under section 219(b)(1)
of the Internal Revenue Code of 1986 shall not
apply, and
(ii) the Executive Director shall not
accept any contribution identified with such
account holder if such contribution, when added
to all other contributions made under this
subsection during such calendar year with
respect to such account holder, exceeds $1,000.
(B) Account holders age 18 or older.--In the case
of an account holder who is age 18 or older at the end
of a calendar year, any contribution identified with
such account holder shall be taken into account under
section 219(b)(1) of the Internal Revenue Code of 1986
for such year.
(C) Adjustment for inflation.--
(i) In general.--For each fifth calendar
year beginning after 2005, the $1,000 amount
under subparagraph (A)(ii) shall be increased
by such dollar amount multiplied by the cost-
of-living adjustment determined under section
1(f)(3) of the Internal Revenue Code of 1986
determined by substituting ``calendar year
2004'' for ``calendar year 1992'' in
subparagraph (B) thereof.
(ii) Rounding.--If any amount adjusted
under clause (i) is not a multiple of $50, such
amount shall be rounded to the next lowest
multiple of $50.
(g) Eligible Individual.--For purposes of this Act, the term
``eligible individual'' means any individual who is--
(1) a United States citizen or a person described in
paragraph (1) of section 431(b) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996,
(2) born after December 31, 2005, and
(3) less than 18 years of age.
(h) Repayment of Automatic Contribution.--Beginning with the year
in which an account holder of a KIDS Account attains the age of 30,
such account holder shall repay, in such form and manner as the
Executive Director shall prescribe by regulation, the amount
transferred under section 2(d)(1)(A) and credited to the account of the
account holder under subsection (d).
(i) Rights of Legal Guardian.--Until the account holder of a KIDS
Account attains age 18, any rights or duties of the account holder
under this Act with respect to such account shall be exercised or
performed by the legal guardian of such account holder.
SEC. 4. CERTIFICATIONS RELATED TO GOVERNMENT CONTRIBUTIONS.
(a) Supplemental Government Contributions.--
(1) In general.--Upon such showing as the Executive
Director may require to establish the basis for certification,
the Executive Director shall, with respect to each eligible
account holder, certify to the Secretary of the Treasury the
supplemental amount with respect to such account holder.
(2) Eligible account holder.--For purposes of this
subsection, the term ``eligible account holder'' means an
account holder of a KIDS Account who, for the last taxable year
ending before such account holder's certification under section
3(b), has a modified adjusted gross income which is below the
applicable national median adjusted gross income amount.
(3) Supplemental amount.--
(A) In general.--For purposes of this Act, the term
``supplemental amount'' means $500.
(B) Income phase-out.--With respect to any account
holder who has a modified adjusted gross income for the
last taxable year ending before such account holder's
certification under section 3(b) which is in excess of
50 percent of the applicable national median adjusted
gross income amount, the $500 amount in subparagraph
(A) shall be reduced (but not below zero) by an amount
which bears the same ratio to $500 as such excess bears
to 50 percent of the applicable national median
adjusted gross income amount.
(C) Adjustment for inflation.--
(i) In general.--For each fifth calendar
year beginning after 2005, each of the $500
amounts under subparagraphs (A) and (B) shall
be increased by such dollar amount multiplied
by the cost-of-living adjustment determined
under section 1(f)(3) of the Internal Revenue
Code of 1986 determined by substituting
``calendar year 2004'' for ``calendar year
1992'' in subparagraph (B) thereof.
(ii) Rounding.--If any amount adjusted
under clause (i) is not a multiple of $50, such
amount shall be rounded to the next lowest
multiple of $50.
(b) Government Matching Contribution.--
(1) In general.--Upon such showing as the Executive
Director may require to establish the basis for certification,
the Executive Director shall, with respect to each private
contribution to the account of an account holder which is made
before such account holder attains age 18, certify to the
Secretary of the Treasury the matching amount with respect to
such contribution.
(2) Matching amount.--
(A) In general.--For purposes of this subsection,
the term ``matching amount'' means, with respect to the
first $500 of private contributions to an account
during any calendar year, an amount equal to 100
percent of such contribution.
(B) Income phase-out.--With respect to any account
holder who has a modified adjusted gross income for the
last taxable year ending before such contribution which
is in excess of 100 percent of the applicable national
median adjusted gross income amount, the $500 amount in
subparagraph (A) shall be reduced (but not below zero)
by an amount which bears the same ratio to $500 as such
excess bears to 5 percent of the applicable national
median adjusted gross income amount.
(C) Adjustment for inflation.--
(i) In general.--For each fifth calendar
year beginning after 2005, each of the $500
amounts under subparagraphs (A) and (B) shall
be increased by such dollar amount multiplied
by the cost-of-living adjustment determined
under section 1(f)(3) of the Internal Revenue
Code of 1986 determined by substituting
``calendar year 2004'' for ``calendar year
1992'' in subparagraph (B) thereof.
(ii) Rounding.--If any amount adjusted
under clause (i) is not a multiple of $50, such
amount shall be rounded to the next lowest
multiple of $50.
(3) Private contribution.--For purposes of this subsection,
the term ``private contribution'' means a contribution accepted
under section 3(f).
(c) Definitions and Rules Relating to Modified Adjusted Gross
Income.--For purposes of this section--
(1) Special rule for account holders who can be claimed as
dependents.--In the case of an account holder of a KIDS Account
for whom a deduction is allowable under section 151 of the
Internal Revenue Code of 1986 to another taxpayer, any
reference in this section to the modified adjusted gross income
of the account holder for any taxable year shall be treated as
a reference to the modified adjusted gross income of such other
taxpayer.
(2) Modified adjusted gross income.--The term ``modified
adjusted gross income'' has the meaning given such term in
section 221(b) of the Internal Revenue Code of 1986.
(3) Applicable national median adjusted gross income.--
(A) In general.--The term ``applicable national
median adjusted gross income'' means, with respect to
any calendar year, the median amount of adjusted gross
income (as defined in section 62 of the Internal
Revenue Code of 1986) for individual taxpayers for
taxable years ending in the prior calendar year as
determined by the Secretary of the Treasury.
(B) Joint returns.--The applicable national median
adjusted gross income shall be calculated and applied
separately with respect to joint returns and all other
returns.
SEC. 5. RULES GOVERNING KIDS ACCOUNTS RELATING TO INVESTMENT,
ACCOUNTING, AND REPORTING.
(a) Default Investment Program.--The KIDS Account Fund Board shall
establish a default investment program under which, in a manner similar
to a lifecycle investment program, sums in each KIDS Account are
allocated to investment funds in the KIDS Account Fund based on the
amount of time before the account holder attains the age of 18. Each
account holder of a KIDS Account shall be enrolled in such program
unless such account holder, in such form and manner as prescribed by
the Executive Director, elects otherwise.
(b) Other Rules.--Under regulations which shall be prescribed by
the Executive Director, and subject to the provisions of this Act, the
provisions of--
(1) section 8438 of title 5, United States Code (relating
to investment of the Thrift Savings Fund),
(2) section 8439(b) of such title (relating to engagement
of independent qualified public accountant),
(3) section 8439(c) of such title (relating to periodic
statements and summary descriptions of investment options), and
(4) section 8439(d) of such title (relating to assumption
of risk),
shall apply with respect to the KIDS Account Fund and accounts
maintained in such Fund in the same manner and to the same extent as
such provisions relate to the Thrift Savings Fund and the accounts
maintained in the Thrift Savings Fund. For purposes of this subsection,
references in such sections 8438 and 8439 to an employee, Member,
former employee, or former Member shall be deemed references to an
account holder of a KIDS Account in the KIDS Account Fund.
SEC. 6. DISTRIBUTIONS FROM KIDS ACCOUNTS.
(a) In General.--Under regulations prescribed by the Executive
Director, amounts in a KIDS Account shall, at the request of the
account holder, be distributed to the account holder if the account
holder demonstrates to the satisfaction of the Executive Director that
such amount will be used for qualified expenses.
(b) Age Limitation.--
(1) Early distributions.--No distribution shall be made
under subsection (a) with respect to any account holder of a
KIDS Account before such account holder attains age 18.
(2) Exception.--Paragraph (1) shall not apply with respect
to amounts distributed for qualified higher education expenses
(as defined in section 529(e)(3) of the Internal Revenue Code
of 1986).
(c) Qualified Expenses.--For purposes of this Act, the term
``qualified expenses'' means, with respect to any account holder--
(1) qualified distributions (within the meaning of section
408A(d)(2) of the Internal Revenue Code of 1986),
(2) qualified higher education expenses (as defined in
section 529(e)(3) of such Code), and
(3) amounts which within 60 days of distribution are
transferred to a qualified tuition program under section 529 of
the Internal Revenue Code of 1986 for the benefit of the
account holder or a member of the family (within the meaning of
section 529(e)(2) of such Code) of such account holder.
SEC. 7. TAX TREATMENT OF KIDS ACCOUNTS.
(a) In General.--Except as otherwise provided in this Act, for
purposes of the Internal Revenue Code of 1986--
(1) each KIDS Account shall be treated in the same manner
as a Roth IRA (within the meaning of section 408A of such
Code), and
(2) any distribution from such account shall be treated in
the same manner as a distribution from a Roth IRA, except that
distributions described in paragraphs (2) and (3) of section
6(c) shall be treated as qualified distributions under section
408A(d) of such Code.
(b) Qualified Rollovers Contributions.--
(1) In general.--Except as provided in paragraph (2), no
qualified rollover contribution (as defined in section 408A(e)
of the Internal Revenue Code of 1986) shall be allowed with
respect to a KIDS Account.
(2) Qualified rollovers.--Under regulations prescribed by
the Secretary of the Treasury in consultation with the
Executive Director, after an account holder of a KIDS Account
attains the age of 18, such account holder may elect to make a
rollover contribution from such account holder's account to--
(A) a privately managed KIDS Account, or
(B) a Roth IRA.
(c) 100 Percent Tax on Government Contributions.--
(1) KIDS accounts.--
(A) In general.--In the case of any amount
distributed from a KIDS Account which is attributable
to contributions made under section 2(d) and which
would be includible in gross income (but for this
paragraph)--
(i) such amount shall not be includible in
gross income, and
(ii) the tax imposed under chapter 1 of the
Internal Revenue Code of 1986 on the
distributee for the taxable year in which such
amount is distributed shall be increased by 100
percent of such amount.
(B) Ordering rules.--For purposes of this
paragraph, distributions from KIDS Accounts shall be
treated as made from amounts attributable to
contributions made under section 3(f) and from earnings
before made from amounts attributable to contributions
made under section 2(d).
(2) Roth iras.--Section 408A(d) of the Internal Revenue
Code of 1986 (relating to distribution rules) is amended by
adding at the end the following new paragraph:
``(8) 100 percent tax on distributions related to certain
government contributions.--
``(A) In general.--In the case of any distribution
which is attributable to contributions made under
section 2(d) of the America Saving for Personal
Investment, Retirement, and Education Act of 2004 and
which would be includible in gross income (but for this
paragraph)--
``(i) such amount shall not be includible
in gross income, and
``(ii) the tax imposed under chapter 1 on
the distributee for the taxable year in which
such amount is distributed shall be increased
by 100 percent of such amount.
``(B) Ordering rules.--For purposes of this
paragraph, distributions shall be treated as made from
amounts attributable to other contributions and from
earnings before made from amounts attributable to
contributions made under section 2(d) of the America
Saving for Personal Investment, Retirement, and
Education Act of 2004.''.
(3) Qualified tuition programs.--Section 529(c)(3) of the
Internal Revenue Code of 1986 (relating to distributions) is
amended by adding at the end the following new subparagraph:
``(E) 100 percent tax on distributions related to
certain government contributions.--
``(i) In general.--In the case of any
distribution which is attributable to
contributions made under section 2(d) of the
America Saving for Personal Investment,
Retirement, and Education Act of 2004 and which
would be includible in gross income (but for
this subparagraph)--
``(I) such amount shall not be
includible in gross income, and
``(II) the tax imposed under
chapter 1 on the distributee for the
taxable year in which such amount is
distributed shall be increased by 100
percent of such amount.
``(ii) Ordering rules.--For purposes of
this subparagraph, distributions shall be
treated as made from amounts attributable to
other contributions and from earnings before
made from amounts attributable to contributions
made under section 2(d) of the America Saving
for Personal Investment, Retirement, and
Education Act of 2004.''.
SEC. 8. PRIVATE MANAGEMENT OF KIDS ACCOUNTS.
(a) In General.--Part I of subchapter D of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
408A the following new section:
``SEC. 408B. PRIVATELY MANAGED KIDS ACCOUNTS.
``(a) In General.--Except as provided in this section, a privately
managed KIDS Account shall be treated in the same manner as a Roth IRA,
except that:
``(1) Qualified distributions shall include--
``(A) qualified higher education expenses (as
defined in section 529(e)(3)) of the beneficiary of a
privately managed KIDS Account, and
``(B) amounts which within 60 days of distribution
are transferred to a qualified tuition program under
section 529 for the benefit of the account holder of a
privately managed KIDS Account or a member of the
family (within the meaning of section 529(e)(2)) of
such account holder.
``(2) Section 408A(d)(2)(B) shall not apply.
``(3) In lieu of the definition given the term `qualified
rollover contribution' under section 408A(e), such term shall
mean a rollover contribution to a privately managed KIDS
Account from another such account or from a KIDS Account under
section 7(b)(2)(A) of the America Saving for Personal
Investment, Retirement, and Education Act of 2004, but only if
such rollover contribution meets the requirements of section
408(d)(3).
``(4) In the case of any distribution which is attributable
to contributions made under section 2(d) of the America Saving
for Personal Investment, Retirement, and Education Act of 2004
and which would be includible in gross income (but for this
paragraph)--
``(A) such amount shall not be includible in gross
income, and
``(B) the tax imposed under chapter 1 on the
distributee for the taxable year in which such amount
is distributed shall be increased by 100 percent of
such amount.
For purposes of this paragraph, distributions from privately
managed KIDS Accounts shall be treated as made from amounts
attributable to contributions made under section 3(f) of the
America Saving for Personal Investment, Retirement, and
Education Act of 2004 and from earnings before made from
amounts attributable to contributions made under section 2(d)
of such Act.
``(b) Privately Managed KIDS Account.--For purposes of this title,
the term `privately managed KIDS Account' means an individual
retirement plan (as defined in section 7701(a)(37)) which is designated
(in such manner as the Secretary may prescribe) as a privately managed
KIDS Account.''.
(b) Conforming Amendment.--The table of sections for part I of
subchapter D of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item related to section 408A the
following new item:
``Sec. 408B. Privately managed KIDS Accounts.''.
SEC. 9. KIDS ACCOUNT FUND BOARD.
(a) In General.--There is established in the Executive branch of
the Government a KIDS Account Fund Board.
(b) Composition, Duties, and Responsibilities.--Subject to the
provisions of this Act, the provisions of--
(1) section 8472 of title 5, United States Code (relating
to composition of Federal Retirement Thrift Investment Board),
(2) section 8474 of such title (relating to Executive
Director),
(3) section 8475 of such title (relating to investment
policies), and
(4) section 8476 of such title (relating to administrative
provisions),
shall apply with respect to the KIDS Account Fund Board in the same
manner and to the same extent as such provisions relate to the Federal
Retirement Thrift Investment Board.
SEC. 10. FIDUCIARY RESPONSIBILITIES.
(a) In General.--Under regulations of the Secretary of Labor, the
provisions of sections 8477 and 8478 of title 5, United States Code,
shall apply in connection with the KIDS Account Fund and the accounts
maintained in such Fund in the same manner and to the same extent as
such provisions apply in connection with the Thrift Savings Fund and
the accounts maintained in the Thrift Savings Fund.
(b) Investigative Authority.--Any authority available to the
Secretary of Labor under section 504 of the Employee Retirement Income
Security Act of 1974 is hereby made available to the Secretary of
Labor, and any officer designated by the Secretary of Labor, to
determine whether any person has violated, or is about to violate, any
provision applicable under subsection (a).
(c) Exculpatory Provisions; Insurance.--
(1) In general.--Any provision in an agreement or
instrument which purports to relieve a fiduciary from
responsibility or liability for any responsibility, obligation,
or duty under this Act shall be void.
(2) Insurance.--Amounts in the KIDS Account Fund available
for administrative expenses shall be available and may be used
at the discretion of the Executive Director to purchase
insurance to cover potential liability of persons who serve in
a fiduciary capacity with respect to the Fund and accounts
maintained therein, without regard to whether a policy of
insurance permits recourse by the insurer against the fiduciary
in the case of a breach of a fiduciary obligation.
SEC. 11. ASSIGNMENT, ALIENATION, AND TREATMENT OF DECEASED INDIVIDUALS.
(a) Assignment and Alienation.--Under regulations which shall be
prescribed by the Executive Director, rules relating to assignment and
alienation applicable under chapter 84 of title 5, United States Code,
with respect to amounts held in accounts in the Thrift Savings Fund
shall apply with respect to amounts held in KIDS Accounts in the KIDS
Account Fund.
(b) Treatment of Accounts of Deceased Individuals.--In the case of
a deceased account holder of a KIDS Account which has an account
balance greater than zero, upon receipt of notification of such
individual's death, the Executive Director shall close the account and
shall transfer the balance in such account to the KIDS Account of such
account holder's surviving spouse or, if there is no such account of a
surviving spouse, to the duly appointed legal representative of the
estate of the deceased account holder, or if there is no such
representative, to the person or persons determined to be entitled
thereto under the laws of the domicile of the deceased account holder.
SEC. 12. ACCOUNTS DISREGARDED IN DETERMINING ELIGIBILITY FOR FEDERAL
BENEFITS.
Amounts in any KIDS Account shall not be taken into account in
determining any individual's eligibility for any federally funded
benefit, including student financial aid.
SEC. 13. REPORTS.
(a) Annual Report.--The Executive Director, in consultation with
the Secretary of the Treasury, shall annually transmit a written report
to the Congress. Such report shall include--
(1) a detailed description of the status and operation of
the KIDS Account Fund and the management of the KIDS Accounts,
and
(2) a detailed accounting of the administrative expenses in
carrying out this Act, including the ratio of such
administrative expenses to the balance of the KIDS Account Fund
and the methodology adopted by the Executive Director for
allocating such expenses among the KIDS Accounts.
(b) Repayment of Automatic Contributions.--Not later than 2 years
before the issuance of any final regulation under section 3(h), the
Executive Director shall transmit a written report to the Congress.
Such report shall include a draft of the proposed regulation to be
issued under such section and a description of the conclusions and
recommendations of the Executive Director regarding the implementation
of the following repayment options:
(1) Repayment through service or employment in high-need
professions or areas.
(2) Increasing the Federal income tax liability of each
account holder of a KIDS Account by $100 per year for 5 years
after the account holder attains age 30.
(3) Repayment from the account or other sources before the
account holder of a KIDS Account attains age 30.
(4) Alternatives for individuals facing financial hardship,
including deferred repayment and forgiveness.
SEC. 14. PROGRAMS FOR PROMOTING FINANCIAL LITERACY.
The Secretary of the Treasury, in coordination with the Financial
Literacy and Education Commission, shall develop programs to promote
the financial literacy of account holders of KIDS Accounts and the
legal guardians of such account holders who have the rights with
respect to such accounts under section 3(i).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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