Universal Savings Account Act
This bill amends the Internal Revenue Code to allow for the establishment of Universal Savings Accounts. These accounts shall be tax-exempt and may be opened by any individual who is at least 18 years of age and a U.S. citizen or legal permanent resident. Contributions to these accounts must be in cash and may not exceed $5,500 (adjusted annually for inflation) in any calendar year. Distributions from a Universal Savings Account are excluded from the gross income of the account holder for income tax purposes.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 937 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 937
To amend the Internal Revenue Code of 1986 to create Universal Savings
Accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 7, 2017
Mr. Brat (for himself, Mr. Franks of Arizona, and Mr. Griffith)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to create Universal Savings
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 ``Universal Savings Account Act''.
SEC. 2. UNIVERSAL SAVINGS ACCOUNTS.
(a) In General.--Subchapter F of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new part:
``PART IX--UNIVERSAL SAVINGS ACCOUNTS
``SEC. 530A. UNIVERSAL SAVINGS ACCOUNTS.
``(a) General Rule.--A Universal Savings Account shall be exempt
from taxation under this subtitle. Notwithstanding the preceding
sentence, such account shall be subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated business income of
charitable organizations).
``(b) Universal Savings Account.--For purposes of this section, the
term `Universal Savings Account' means a trust created or organized in
the United States by an eligible individual for the exclusive benefit
of such eligible individual or his beneficiaries and which is
designated (in such manner as the Secretary shall prescribe) at the
time of the establishment of the trust as a Universal Savings Account,
but only if the written governing instrument creating the trust meets
the following requirements:
``(1) Except in the case of a qualified rollover
contribution described in subsection (e)--
``(A) no contribution will be accepted unless it is
in cash, and
``(B) contributions will not be accepted for the
calendar year in excess of the contribution limit
specified in subsection (d)(1).
``(2) The trustee is a bank (as defined in section 408(n))
or another person who demonstrates to the satisfaction of the
Secretary that the manner in which that person will administer
the trust will be consistent with the requirements of this
section or who has so demonstrated with respect to any
individual retirement plan.
``(3) No part of the trust assets will be invested in life
insurance contracts.
``(4) The interest of an individual in the balance of his
account is nonforfeitable.
``(5) The assets of the trust shall not be commingled with
other property except in a common trust fund or common
investment fund.
``(c) Eligible Individual.--For purposes of this section, the term
`eligible individual' means any individual who is--
``(1) not less than 18 years of age, and
``(2) a citizen or legal permanent resident of the United
States.
``(d) Treatment of Contributions and Distributions.--
``(1) Contribution limit.--
``(A) In general.--The aggregate amount of
contributions (other than qualified rollover
contributions described in subsection (e)) for any
calendar year to all Universal Savings Accounts
maintained for the benefit of an eligible individual
shall not exceed $5,500.
``(B) Cost-of-living adjustment.--
``(i) In general.--In the case of any
calendar year after 2018, the $5,500 amount
under subparagraph (A) shall be increased by an
amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year,
determined by substituting `calendar
year 2017' for `calendar year 1992' in
subparagraph (B) thereof.
``(ii) Rounding rules.--If any amount after
adjustment under clause (i) is not a multiple
of $500, such amount shall be rounded to the
next lower multiple of $500.
``(2) Distributions.--Any distribution from a Universal
Savings Account shall not be includible in gross income.
``(e) Qualified Rollover Contribution.--For purposes of this
section, the term `qualified rollover contribution' means a
contribution to a Universal Savings Account from another such account
of the same beneficiary, but only if such amount is contributed not
later than the 60th day after the distribution from such other account.
``(f) Treatment of Account Upon Death.--Upon death of any
individual for whose benefit a Universal Savings Account has been
established--
``(1) all amounts in such account shall be treated as
distributed on the date of such individual's death, and
``(2) such account shall cease to be treated as a Universal
Savings Account.
``(g) Loss of Taxation Exemption of Account Where Beneficiary
Engages in Prohibited Transaction; Effect of Pledging Account as
Security.--Rules similar to the rules of paragraphs (2) and (4) of
section 408(e) shall apply to any Universal Savings Account.
``(h) Limitation to One Account Per Individual.--
``(1) In general.--Except as provided in paragraph (2), no
trust created for the benefit of an eligible individual shall
be treated as a Universal Savings Account under subsection (b)
if such eligible individual has in existence another Universal
Savings Account at the time such trust was established.
``(2) Exception.--Under regulations established by the
Secretary, paragraph (1) shall not apply with respect to any
trust created for the purposes of receiving a qualified
rollover contribution consisting of all amounts in the
previously established Universal Savings Account.
``(i) Reports.--The trustee of a Universal Savings Account shall
make such reports regarding such account to the Secretary and to the
beneficiary of the account with respect to contributions,
distributions, and such other matters as the Secretary may require. The
reports required by this subsection shall be filed at such time and in
such manner and furnished to such individuals at such time and in such
manner as may be required.''.
(b) Tax on Excess Contributions.--
(1) In general.--Subsection (a) of section 4973 of the
Internal Revenue Code of 1986 is amended by striking ``or'' at
the end of paragraph (5), by inserting ``or'' at the end of
paragraph (6), and by inserting after paragraph (6) the
following new paragraph:
``(7) a Universal Savings Account (as defined in section
530A),''.
(2) Excess contribution.--Section 4973 of such Code is
amended by adding at the end the following new subsection:
``(i) Excess Contributions to Universal Savings Accounts.--For
purposes of this section--
``(1) In general.--In the case of Universal Savings
Accounts (within the meaning of section 530A), the term `excess
contributions' means the sum of--
``(A) the amount by which the amount contributed
for the calendar year to such accounts (other than
qualified rollover contributions (as defined in section
530A(e))) exceeds the contribution limit under section
530A(d)(1) for such calendar year, and
``(B) the amount determined under this subsection
for the preceding calendar year, reduced by the excess
(if any) of the maximum amount allowable as a
contribution under section 530A(d)(1) for the calendar
year over the amount contributed to the accounts for
the calendar year.
``(2) Special rule.--A contribution shall not be taken into
account under paragraph (1) if such contribution (together with
the amount of net income attributable to such contribution) is
returned to the beneficiary before July 1 of the year following
the year in which the contribution is made.''.
(c) Failure To Provide Reports on Universal Savings Accounts.--
Paragraph (2) of section 6693(a) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of subparagraph (E), by
striking the period at the end of subparagraph (F) and inserting ``,
and'', and by inserting after subparagraph (F) the following new
subparagraph:
``(G) section 530A(i) (relating to Universal
Savings Accounts).''.
(d) Conforming Amendment.--The table of parts for subchapter F of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Part IX. Universal Savings Accounts''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2017.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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