,i  #aaeth ,,congress  #b;d ,session    
,h4 ,r4 #gcdi  ,,in ,,the ,,house ,,of  
,,representatives  ,december #ai1       
#bjah,mr4 ,sessions introduced the      
following bill2 which was referred to   
the ,committee on ,ways and ,means1 and 
in addition to the ,committee on        
,oversight and ,government ,reform1 for 
a period to be subsequently determined  
by the ,speaker1 in each case for       
consideration of such provisions as fall
 within the jurisdiction of the         
committee concerned  ,a ,,bill  ,to     
provide for each ,american the          
opportunity to provide for his or her   
retirement through a ,s4,a4,f4,e4       
account1 and for other purposes4  #a4   
,short title and table of contents  7a7 
,short title ,this ,act may be cited as 
the ,savings ,account for ,every        
,american ,act of #bjah4  7b7 ,table of 
contents ,the table of contents is as   
follows3  ,sec4 #a4 ,short title and    
table of contents4 ,,title ,i--,personal
 retirement program ,sec4 #aja4         

,definitions4 ,sec4 #ajb4 ,s4,a4,f4,e4  
account payroll deduction programs4     
,sec4 #ajc4 ,designation of ,s4,a4,f4,e4
 accounts4 ,sec4 #ajd4 ,self-employed   
individuals4 ,sec4 #aje4 ,elective      
participation4 ,sec4 #ajf4 ,penalties4  
,sec4 #ajg4 ,federal civilian and       
military personnel4 ,,title             
,,ii--,tax-exempt ,s4,a4,f4,e4 accounts 
,sec4 #bja4 ,s4,a4,f4,e4 accounts4 ,sec4
 #bjb4 ,effective date4 ,,title         
,,iii--,conforming amendments to the    
,social ,security ,act and the ,internal
 ,revenue ,code of #aihf ,sec4 #cja4    
,reductions in and exemptions from      
,,fica taxes and ,,seca taxes with      
respect to eligible individuals4 ,sec4  
#cjb4 ,exclusion of eligible individuals
 from old-age1 survivors1 and disability
 insurance coverage4 ,sec4 #cjc4        
,information provided in social security
 account statements4  ,i ,personal      
retirement program  #aja4 ,definitions  
,for purposes of this title-- 7#a7      
,account holder ,the term account holder

 means1 with respect to any ,s4,a4,f4,e4
 account1 the individual for whose      
benefit such account is maintained4     
7#b7 ,business day ,the term business   
day means any day other than a          
,saturday1 ,sunday1 or legal holiday in 
the area involved4  7#c7 ,covered       
employer ,the term covered employer     
means1 for any calendar year1 a person  
for whom an eligible individual is      
engaged in employment during the year4  
7#d7 ,eligible individual ,the term     
eligible individual means any individual
 with respect to whom there is in effect
 an election under section #aje7;a74    
7#e7 ,employment ,the term employment   
has the meaning provided in section #baj
 of the ,social ,security ,act4  7#f7   
,prescribed employee contribution ,the  
term prescribed employee contribution   
means1 with respect to any eligible     
individual who is engaged in employment 
for a covered employer during any       
calendar year1 an amount equal to #f4b  
percent of the wages received by such   

employee with respect to such           
employment4 ,the ,commissioner of       
,social ,security shall provide by      
regulation for exclusion of remuneration
 paid to any employee during any        
calendar year from the total amount of  
remuneration treated under this         
paragraph as wages paid to such employee
 during such calendar year to the extent
 that such total amount exceeds the     
contribution and benefit base for such  
calendar year under section #bcj of the 
,social ,security ,act4  7#g7           
,prescribed self-employment contribution
 ,the term prescribed self-employment   
contribution means1 with respect to the 
self-employment income of an eligible   
individual for any calendar year1 the   
excess 7if any7 of--  7,a7 #f4b percent 
of the amount of such self-employment   
income for such calendar year1 to the   
extent that such self-employment income 
does not exceed1 for such calendar year1
 the contribution and benefit base for  
such calendar year under section #bcj of

 the ,social ,security ,act1 over  7,b7 
the total of all prescribed employee    
contributions and prescribed employer   
contributions payable with respect to   
such eligible individual for such       
calendar year4  ,effective with the     
commencement of the #afth calendar year 
for which the eligible individual's     
election under section #aje is in       
effect1 #ab4d percent shall be          
substituted for #f4b percent in         
subparagraph 7,a74  7#h7 ,prescribed    
employer contribution ,the term         
prescribed employer contribution means1 
with respect to any eligible individual 
who is engaged in employment for a      
covered employer during any calendar    
year1 an amount equal to #f4b percent of
 the wages received by such employee    
with respect to such employment1 to the 
extent that such wages do not exceed1   
for such calendar year1 the contribution
 and benefit base for such calendar year
 under section #bcj of the ,social      
,security ,act4  7#i7 ,s4,a4,f4,e4      

account ,the term ,s4,a4,f4,e4 account  
has the meaning provided in section     
#bbb7;c7 of the ,internal ,revenue ,code
 of #aihf4  7#aj7 ,self-employment      
income ,the term self-employment income 
has the meaning provided in section     
#baa7;b7 of the ,social ,security ,act4 
7#aa7 ,wages ,the term wages has the    
meaning provided in section #bji of the 
,social ,security ,act4  #ajb4          
,s4,a4,f4,e4 account payroll deduction  
programs  7a7 ,in general ,each person  
who is a covered employer for any       
calendar year shall have in effect      
throughout such calendar year a         
,s4,a4,f4,e4 account payroll deduction  
program for such person's employees who 
are eligible individuals4  7b7          
,requirements ,for purposes of this     
,act1 the term ,s4,a4,f4,e4 account     
payroll deduction program means a       
written program maintained by a covered 
employer if-- 7#a7 under such program1  
the prescribed employee contribution is 
deducted from the wages of each employee

 who is an eligible individual and paid 
as a contribution on behalf of the      
employee to a ,s4,a4,f4,e4 account of   
such employee designated in accordance  
with section #ajc1  7#b7 under such     
program1 the covered employer-- 7,a7    
makes timely payment of the amount so   
deducted as a contribution to the       
designated ,s4,a4,f4,e4 account1 and    
7,b7 effective upon receipt from the    
eligible individual of certification 7in
 accordance with regulations which shall
 be prescribed by the ,commissioner of  
,social ,security7 of the commencement  
of the #afth calendar year for which the
 eligible employee's election under     
section #aje has been in effect1 makes  
timely payment1 together with the amount
 so deducted1 of the prescribed employer
 contribution with respect to the       
eligible individual1  under regulations 
of the ,commissioner of ,social         
,security applying the same principles  
relating to the timeliness of payment as
 are applicable under chapter #fb of the

 ,internal ,revenue ,code of #aihf with 
respect to taxes under chapter #ba of   
such ,code1 and  7#c7 the employer      
receives no compensation for the cost of
 administering such program4  7c7       
,amounts otherwise payable may be       
accumulated by employer in certain cases
 ,if1 under the terms of the governing  
instruments creating a ,s4,a4,f4,e4     
account designated under section #ajc1  
contributions below a specified amount  
will not be accepted1 the requirements  
of subsection 7b77#b7 shall be treated  
as met if amounts deducted from the     
wages of an employee who is an eligible 
individual1 together with prescribed    
employer contributions 7if any71 are    
accumulated by the covered employer and 
paid to such account otherwise in       
accordance with subsection 7b77#b7 with 
reference to the first day on which the 
accumulated amount exceeds such         
specified amount4  #ajc4 ,designation of
 ,s4,a4,f4,e4 accounts  7a7 ,in general 
,except as provided in subsection 7b71 a

 ,s4,a4,f4,e4 account to which          
contributions with respect to any       
employee who is an eligible individual  
are required to be paid under section   
#ajb shall be such an account designated
 by such employee to such employer not  
later than #aj business days after the  
date on which such employee becomes an  
employee of such employer4 ,any such    
designation shall be made in such form  
and manner as may be prescribed in      
regulations of the ,commissioner of     
,social ,security4  7b7 ,designation in 
absence of timely designation by        
employee ,in any case in which no timely
 designation of a ,s4,a4,f4,e4 account  
is made1 the covered employer shall     
designate such account in accordance    
with regulations of the ,commissioner of
 ,social ,security4  7c7 ,subsequent    
substitution of accounts ,the           
,commissioner of ,social ,security shall
 provide by regulation for subsequent   
designation of a ,s4,a4,f4,e4 account by
 an account holder in lieu of an account

 previously designated by such account  
holder under this section4  #ajd4       
,self-employed individuals  7a7 ,in     
general ,in the case of an eligible     
individual who has self-employment      
income for any calendar year1 such      
individual shall make timely payments to
 a ,s4,a4,f4,e4 account designated by   
such individual of the prescribed       
self-employment contribution with       
respect to such individual for such     
calendar year in accordance with        
regulations of the ,commissioner of     
,social ,security1 applying the same    
principles relating to timeliness of    
payment as are applicable under chapter 
#fb of the ,internal ,revenue ,code of  
#aihf with respect to taxes under       
chapter #b of such ,code4  7b7          
,designation of account ,the designation
 of a ,s4,a4,f4,e4 account for payment  
of prescribed self-employment           
contributions shall be made in such form
 and manner as may be prescribed in     
regulations of the ,commissioner of     

,social ,security4  7c7 ,periodic       
payment ,the ,commissioner of ,social   
,security shall provide by regulation   
for periodic installment payments during
 the calendar year of prescribed        
self-employment contributions for each  
eligible individual1 taking into        
account1 as appropriate for each period1
 prescribed employee contributions for  
such individual4  #aje4 ,elective       
participation  7a7 ,election ,any       
individual who has been assigned a      
social security account number under    
section #bje7;c77#b77;,b7 of the ,social
 ,security ,act and has been paid wages 
or has derived self-employment income   
may1 on or after the first day of the   
first calendar year beginning after the 
date of enactment of this ,act1 elect   
under this section to be an eligible    
individual for purposes of this ,act4   
,any such election shall be made by     
filing with the ,commissioner of ,social
 ,security1 the ,secretary of the       
,treasury1 and each person 7if any7 who 

is an employer of such individual on the
 date of the filing1 in such form and   
manner as shall be prescribed in        
regulations of the ,commissioner 7in    
consultation with the ,secretary of the 
,treasury71 a written and signed        
declaration of such individual's        
intention to be treated as an eligible  
individual for purposes of this ,act4   
,an election under this section shall be
 effective with respect to wages paid1  
and self-employment income derived1 on  
or after ,january #a following the date 
of the filing of the election4  7b7     
,election ineffective if entitled to    
social security benefits ,any election  
under this section shall not take effect
 if1 as of the effective date of the    
election1 the individual is entitled to 
an old-age insurance benefit under      
section #bjb7;a7 of the ,social         
,security ,act or to a disability       
insurance benefit under section #bbc of 
such ,act4  7c7 ,irrevocability subject 
to grace period  7#a7 ,in general       

,unless revoked in accordance with      
paragraph 7#b71 an election under this  
section shall be irrevocable4  7#b7     
,two-year grace period  7,a7 ,in general
 ,an individual may revoke an election  
under this section by filing with the   
,commissioner of ,social ,security1 the 
,secretary of the ,treasury1 and each   
person 7if any7 who is an employer of   
such individual on the date of the      
filing1 in such form and manner as shall
 be prescribed in regulations of the    
,commissioner 7in consultation with the 
,secretary of the ,treasury71 a written 
and signed revocation of the election at
 any time before the end of the two-year
 period beginning with the effective    
date of the election4 ,a revocation     
under this subsection shall take effect 
,january #a following the date of the   
filing of the revocation1 except that a 
revocation filed during the #ij-;day    
period beginning with the date of the   
filing of the election shall take effect
 as of the effective date of the        

election4 ,upon the effective date of a 
revocation under this subsection1       
entitlement to benefits under title ,,ii
 of the ,social ,security ,act shall be 
determined as if the revoked election   
had not occurred1 except that1 for      
purposes of any such entitlement1 wages 
paid1 and self-employment income        
derived1 during the period for which the
 election was in effect shall not be    
taken into account4 ,no subsequent      
election under this section may take    
effect with respect to an individual who
 has filed a revocation under this      
subsection 7except a revocation filed   
during the #ij-;day period beginning    
with the date of the filing of the      
election74  7,b7 ,reduction in benefits 
,the primary insurance amount1 as       
determined under section #bae of the    
,social ,security ,act1 of any          
individual who has filed a revocation   
under this subsection before the end of 
the two-year period described in        
subparagraph 7,a7 7and after the        

#ij-;day period referred to in          
subparagraph 7,a77 shall be reduced     
7except for purposes of determining     
benefits under section #bbc of such     
,act1 and before any application of     
section #bae7;i7 of such ,act7 by #bj   
percent4  #ajf4 ,penalties  7a7 ,failure
 ,to establish ,s4,a4,f4,e4 account     
payroll deduction program ,any covered  
employer who fails to meet the          
requirements of section #ajb for any    
calendar year shall be subject to a     
civil penalty of not to exceed--  7#a7  
#bej1jjj1 in the case of an employer who
 is an individual1 or  7#b7 #ejj1jjj1 in
 any other case4  7b7 ,failure ,to make 
deductions required under program ,any  
covered employer who fails to timely    
deduct in full the amount from the wages
 of an employee who is an eligible      
individual as required under an         
applicable ,s4,a4,f4,e4 account payroll 
deduction program shall be subject to a 
civil penalty for each such failure of  
not to exceed--  7#a7 #bej1jjj1 in the  

case of an employer who is an           
individual1 or  7#b7 #ejj1jjj1 in any   
other case4  7c7 ,failure ,to pay       
deducted wages to ,s4,a4,f4,e4 account  
,if an amount deducted under a          
,s4,a4,f4,e4 account payroll deduction  
program from the wages of an employee   
who is an eligible individual is not    
timely paid in full to the designated   
,s4,a4,f4,e4 account in accordance with 
section #ajb1 the covered employer      
failing to make such payment--  7#a7    
shall be subject to a civil penalty for 
each such failure of not to exceed--    
7,a7 #bej1jjj1 in the case of an        
employer who is an individual1 or  7,b7 
#ejj1jjj1 in any other case1 and  7#b7  
shall be liable to the employee for     
interest on the unpaid amount at a rate 
equal to #aj percentage points in excess
 of the ,federal short-term rate under  
section #abgd7;d77#a7 of the ,internal  
,revenue ,code of #aihf1 calculated from
 the last day by which such amount was  
required to be so paid to the date on   

which such amount is paid into the      
designated ,s4,a4,f4,e4 account4  7d7   
,failure ,to pay prescribed             
self-,employment contributions to       
,s4,a4,f4,e4 account ,any eligible      
individual failing to timely pay in full
 a prescribed self-employment           
contribution to a designated            
,s4,a4,f4,e4 account as required under  
section #ajd shall be subject to a civil
 penalty for each such failure of not to
 exceed #bej1jjj1 plus interest on the  
unpaid amount at a rate equal to #aj    
percentage points in excess of the      
,federal short-term rate under section  
#abgd7;d77#a7 of the ,internal ,revenue 
,code of #aihf1 calculated from the last
 day by which such amount was required  
to be so paid to the date on which such 
amount is paid into the designated      
,s4,a4,f4,e4 account4  7e7 ,rules for   
application of section  7#a7 ,penalties 
assessed by ,commissioner of ,social    
,security ,any civil penalty assessed by
 this section shall be imposed by the   

,commissioner of ,social ,security and  
collected in a civil action4  7#b7      
,compromises ,the ,commissioner may     
compromise the amount of any civil      
penalty imposed by this section4  7#c7  
,authority to waive penalty in certain  
cases ,the ,commissioner may waive the  
application of this section with respect
 to any failure if the ,commissioner    
determines that such failure is due to  
reasonable cause and not to intentional 
disregard of rules and regulations4     
#ajg4 ,federal civilian and military    
personnel  7a7 ,in general ,not later   
than the last day of the calendar year  
during which the date of enactment of   
this ,act occurs1 the ,office of        
,personnel ,management1 after           
appropriate study1 shall submit to the  
,president and each ,house of ,congress 
a written report containing             
recommendations on how to provide for   
the application of this ,act with       
respect to ,federal civilian and        
military personnel4  7b7 ,requirements  

,the report-- 7#a7 shall be prepared in 
consultation with the ,social ,security 
,administration1 the ,securities and    
,exchange ,commission1 and other        
appropriate agencies2 and  7#b7 shall be
 accompanied by draft legislation which1
 if enacted1 would carry out the        
recommendations contained in such       
report4  7c7 ,provisions relating to the
 continued operation of existing        
retirement systems ,to the extent that  
the report and draft legislation relate 
to provisions of law in effect before   
the date of enactment of this ,act1 each
 shall address at least the following3  
7#a7 ,federal employees retirement      
system  7,a7 ,section #hdja7aa7 of title
 #e1 ,united ,states ,code 7relating to 
the definition of an employee71 which   
includes the requirement that the       
individual concerned be someone whose   
civilian service is employment for the  
purposes of title ,,ii of the ,social   
,security ,act and chapter #ba of the   
,internal ,revenue ,code of #aihf4  7,b7

 ,section #hdba of such title 7relating 
to annuity supplement71 which includes  
provisions incorporating the notion of  
the period of time for which the        
individual is or would be entitled to   
old-age insurance benefits under title  
,,ii of the ,social ,security ,act1 and 
provisions for computing the amount of  
such supplement based on the amount of  
certain benefits to which the individual
 would be entitled under such ,act4     
7,c7 ,section #hddb of such title       
7relating to rights of a widow or       
widower71 which includes provisions     
under which a supplementary annuity for 
a widow or widower is not payable to    
anyone who would not be entitled to     
certain benefits under the ,social      
,security ,act1 and provisions for the  
computation of any such annuity based on
 the amount of certain benefits which   
would be payable to that individual     
under the ,social ,security ,act4  7,d7 
,section #hddc of such title 7relating  
to rights of a child71 which includes   

provisions under which1 as part of the  
formula for computing the amount of a   
survivor annuity for a child1 there is  
incorporated the notion of the amount of
 child's insurance benefits which are or
 would be payable under title ,,ii of   
the ,social ,security ,act4  7#b7 ,civil
 service retirement system  7,a7        
,section #hccd7k7 of such title         
7relating to special rules for          
determining deductions and contributions
 for individuals subject to offset-#hc  
treatment71 which incorporates the      
notion of the ,,oasdi contribution made 
from ,federal wages of the individual   
concerned4  7,b7 ,section #hcdi of such 
title 7relating to offset based on      
certain benefits under the ,social      
,security ,act71 which incorporates     
notions relating to actual or           
constructive eligibility for benefits   
under the ,social ,security ,act1 and   
the amount of those benefits4  7#c7     
,coordination provisions ,provisions of 
law involving a reduction or other      

adjustment in retirement benefits 7or   
eligibility therefor71 based on any     
individual's eligibility for benefits   
under title ,,ii of the ,social         
,security ,act4  7#d7 ,other retirement 
systems ,similar provisions of law under
 other retirement systems covering      
,federal civilian or military personnel4
  7d7 ,provisions relating to the new   
system ,to the extent that the report   
and draft legislation relate to the     
implementation of any other title of    
this ,act1 each shall address at least  
the following3  7#a7 ,what the          
specifications for the ,s4,a4,f4,e4     
account payroll deduction program or    
programs covering ,federal civilian and 
military personnel shall be or1         
alternatively1 how those specifications 
shall be developed4  7#b7 ,which        
agencies or instrumentalities of the    
,federal ,government shall be           
responsible for operating or maintaining
 which aspects of the program or        
programs referred to in paragraph 7#a74 

7#c7 ,which penalty provisions are      
appropriate or inappropriate with       
respect to the ,federal ,government in  
its capacity as a covered employer1     
subject to what modifications 7if any74 
,,ii ,tax-exempt ,s4,a4,f4,e4 accounts  
#bja4 ,s4,a4,f4,e4 accounts  7a7 ,in    
general ,part ,,vii of subchapter ,b of 
chapter #a of the ,internal ,revenue    
,code of #aihf 7relating to additional  
itemized deductions for individuals7 is 
amended by redesignating section #bbd as
 section #bbe and by inserting after    
section #bbc the following new section3 
#bbd4 ,s4,a4,f4,e4 accounts  7a7        
,deduction allowed ,in the case of an   
individual1 there shall be allowed as a 
deduction the aggregate amount paid in  
cash during the taxable year by or on   
behalf of such individual to a          
,s4,a4,f4,e4 account of such individual4
  7b7 ,limitation ,the amount allowable 
as a deduction under subsection 7a7 for 
any taxable year shall not exceed #f4b  
percent of the lesser of--  7#a7 the    

contribution and benefit base 7as       
determined under section #bcj of the    
,social ,security ,act7 for the calendar
 year which ends with or within such    
taxable year1 or  7#b7 the sum of--     
7,a7 the amount of wages 7as defined in 
section #caba7;a77 received during such 
calendar year1 and  7,b7 the amount of  
the self-employment income 7as defined  
in section #adjb7 of such individual for
 the taxable year4  ,effective with the 
commencement of the #afth calendar year 
for which the individual's election     
under section #aje of the ,savings      
,account for ,every ,american ,act of   
#bjah is effective1 the limitation under
 the preceding sentence shall be        
increased by any prescribed employer    
contribution paid to a personal         
retirement account of such individual   
pursuant to section #ajb7;b77#b77;,b7 of
 such ,act and the portion of any       
prescribed self-employment contribution 
paid to such an account which is        
attributable to the increase in such    

contribution required by the last       
sentence of section #aja7g7 of such     
,act4  7c7 ,s4,a4,f4,e4 account ,for    
purposes of this section1 the term      
,s4,a4,f4,e4 account means a trust      
created or organized in the ,united     
,states exclusively for the benefit of  
an individual or his beneficiaries1 but 
only if the written governing instrument
 creating the trust meets the following 
requirements3  7#a7 ,except in the case 
of rollover contributions from another  
,s4,a4,f4,e4 account of such            
individual-- 7,a7 no contribution will  
be accepted unless it is in cash1  7,b7 
contributions will not be accepted for  
the taxable year in excess of #f4b      
percent of the contribution and benefit 
base 7as determined under section #bcj  
of the ,social ,security ,act7 for the  
calendar year which ends with or within 
such taxable year1 and  7,c7 any        
contributions with respect to an account
 holder which are not accepted pursuant 
to this paragraph are promptly refunded 

directly to the account holder4  ,in the
 case of any such individual1 effective 
for taxable years beginning with or     
after the #afth calendar year for which 
the individual's election under section 
#aje of the ,savings ,account for ,every
 ,american ,act of #bjah is effective1  
#ab4d percent shall be substituted for  
#f4b percent in subparagraph 7,b74  7#b7
 ,the trustee is a bank 7as defined in  
section #djh7n77 or such other person   
who demonstrates to the satisfaction of 
the ,secretary that the manner in which 
such other person will administer the   
trust will be consistent with the       
requirements of this section4  7#c7 ,no 
part of the trust funds will be invested
 in life insurance contracts4  7#d7 ,the
 interest of an individual in the       
balance in his account is               
nonforfeitable4  7#e7 ,the assets of the
 trust will not be commingled with other
 property except in a common trust fund 
or common investment fund4  7d7 ,tax    
treatment of distributions  7#a7 ,in    

general ,except as otherwise provided in
 this subsection1 any amount distributed
 out of a ,s4,a4,f4,e4 account shall be 
included in gross income of the         
distributee for the taxable year in     
which the distribution is received4     
,notwithstanding any other provision of 
this title 7including chapters #aa and  
#ab71 the basis of any person in such an
 account is zero4  7#b7 ,exceptions for 
distributions after age #eia_/b or death
 ,paragraph 7#a7 shall not apply to any 
distribution out of a ,s4,a4,f4,e4      
account-- 7,a7 made on or after the date
 on which the account beneficiary       
attains age #eia_/b1 or  7,b7 made to   
the account beneficiary 7or to the      
estate of the beneficiary7 on or after  
the death of the account beneficiary4   
7#c7 ,exceptions for distributions to   
purchase certain insurance ,paragraph   
7#a7 shall not apply to any distribution
 out of a ,s4,a4,f4,e4 account to the   
account beneficiary to the extent such  
distributions do not exceed the sum of  

the expenses paid or incurred during the
 taxable year for--  7,a7 any qualified 
long-term care insurance contract 7but  
only to the extent of eligible long-term
 care premiums 7as defined in section   
#bac7;d77#aj771  7,b7 disability        
insurance1 or  7,c7 term life insurance4
  7#d7 ,exceptions for certain other    
distributions ,rules similar to the     
rules of paragraphs 7#c71 7#d71 7#e71   
and 7#f7 of section #djh7;d7 shall apply
 for purposes of this section4  7e7 ,tax
 treatment of accounts  7#a7 ,exemption 
from tax ,a ,s4,a4,f4,e4 account is     
exempt from taxation under this subtitle
 unless such account has ceased to be a 
,s4,a4,f4,e4 account by reason of       
paragraph 7#b74 ,notwithstanding the    
preceding sentence1 any such account is 
subject to the taxes imposed by section 
#eaa 7relating to imposition of tax on  
unrelated business income of charitable1
 etc4 organizations74  7#b7 ,account    
terminations ,rules similar to the rules
 of paragraphs 7#b7 and 7#d7 of section 

#djh7;e7 shall apply to ,s4,a4,f4,e4    
accounts1 and any amount treated as     
distributed under such rules shall be   
treated as not used to pay expenses     
described in subsection 7d77#c74  7f7   
,additional tax on amounts included in  
gross income ,if any distribution from a
 ,s4,a4,f4,e4 account is includible in  
gross income of the account beneficiary1
 the tax liability of such beneficiary  
under this chapter for the taxable year 
in which the distribution is received   
shall be increased by an amount equal to
 #bj percent of the amount of the       
distribution4  7g7 ,other definition and
 special rules  7#a7 ,account           
beneficiary ,for purposes of this       
section1 the term account beneficiary   
means the individual for whose benefit  
the ,s4,a4,f4,e4 account was            
established4  7#b7 ,certain rules to    
apply ,rules similar to the following   
rules shall apply for purposes of this  
section3  7,a7 ,section #bai7;d77#b7    
7relating to no deduction for           

rollovers74  7,b7 ,section #bai7;f77#c7 
7relating to time when contributions    
deemed made74  7,c7 ,section            
#bai7;f77#e7 7relating to employer      
payments74  7,d7 ,section #djh7;g7      
7relating to community property laws74  
7,e7 ,section #djh7;h7 7relating to     
custodial accounts74  7h7 ,reports ,the 
trustee of a ,s4,a4,f4,e4 account shall 
make such reports regarding such account
 to the ,secretary and to the individual
 for whose benefit the account is       
maintained with respect to              
contributions1 distributions1 and such  
other matters as the ,secretary may by  
regulation prescribe4 ,the reports      
required by this subsection shall be    
filed at such time and in such manner1  
and furnished to such individuals at    
such time and in such manner1 as may be 
required by such regulations4  4  7b7   
,deduction allowed in arriving at       
adjusted gross income ,subsection 7a7 of
 section #fb of such ,code is amended by
 inserting at the end the following new 

paragraph3  7#bb7 ,s4,a4,f4,e4 account  
contributions ,the deduction allowed by 
section #bbd4  4  7c7 ,tax on excess    
contributions  7#a7 ,subsection 7a7 of  
section #digc of such ,code 7relating to
 tax on excess contributions to         
individual retirement accounts1 etc47 is
 amended by striking or at the end of   
paragraph 7#e71 by inserting or at the  
end of paragraph 7#f71 and by inserting 
after paragraph 7#f7 the following new  
paragraph3  7#g7 a ,s4,a4,f4,e4 account 
7within the meaning of section          
#bbd7;c771  4  7#b7 ,section #digc of   
such ,code is amended by adding at the  
end the following new subsection3  7i7  
,excess contributions to ,s4,a4,f4,e4   
accounts ,for purposes of this section1 
in the case of ,s4,a4,f4,e4 accounts    
7within the meaning of section          
#bbd7;c771 the term excess contributions
 means the sum of--  7#a7 the excess 7if
 any7 of-- 7,a7 the aggregate amount    
contributed for the taxable year to the 
accounts 7other than rollover           

contributions71 over  7,b7 the amount   
allowable as a deduction under section  
#bbd for such contributions1 and  7#b7  
the amount determined under this        
subsection for the preceding taxable    
year1 reduced by the sum of--  7,a7 the 
distributions out of the accounts which 
were included in gross income under     
rules similar to the rules of section   
#djh7;d77#e7 which apply to such        
accounts by reason of section           
#bbd7;d77#d71 and  7,b7 the excess 7if  
any7 of-- 7i7 the maximum amount        
allowable as a deduction under section  
#bbd7;b7 for the taxable year1 over     
7ii7 the amount contributed to the      
accounts for the taxable year4  ,for    
purposes of this subsection1 any        
contribution which is distributed out of
 the ,s4,a4,f4,e4 account in a          
distribution to which the rules similar 
to the rules of section #djh7;d77#d7    
which apply to such accounts by reason  
of section #bbd7;d77#d7 shall be treated
 as an amount not contributed4  4  7d7  

,tax on prohibited transactions  7#a7   
,in general ,paragraph 7#a7 of section  
#dige7;e7 of such ,code 7relating to    
prohibited transactions7 is amended by  
striking or at the end of subparagraph  
7,f71 by redesignating subparagraph 7,g7
 as subparagraph 7,h71 and by inserting 
after subparagraph 7,f7 the following   
new subparagraph3  7,g7 a ,s4,a4,f4,e4  
account described in section #bbd7;c71  
or  4  7#b7 ,special rule ,subsection   
7c7 of section #dige of such ,code is   
amended by adding at the end the        
following new paragraph3  7#g7 ,special 
rule for ,s4,a4,f4,e4 accounts ,an      
individual for whose benefit a          
,s4,a4,f4,e4 account is established     
shall be exempt from the tax imposed by 
this section with respect to any        
transaction concerning such account     
7which would otherwise be taxable under 
this section7 if section #bbd7;e77#b7   
applies with respect to such            
transaction4  4  7e7 ,failure ,to       
provide reports on ,s4,a4,f4,e4 accounts

 ,paragraph 7#b7 of section #ffic7;a7 of
 such ,code 7relating to failure to     
provide reports on individual retirement
 accounts or annuities7 is amended by   
striking and at the end of subparagraph 
7,e71 by striking the period at the end 
of subparagraph 7,f7 and inserting 1    
and1 and by adding at the end the       
following new subparagraph3  7,g7       
,section #bbd7;h7 7relating to          
,s4,a4,f4,e4 accounts74  4  7f7         
,clerical amendments  7#a7 ,the table of
 sections for part ,,vii of subchapter  
,b of chapter #a of such ,code is       
amended by striking the item relating to
 section #bbd and inserting the         
following new items3  ,sec4 #bbd4       
,s4,a4,f4,e4 accounts4 ,sec4 #bbe4      
,cross references4  4  7#b7 ,the table  
of sections for chapter #dc of such     
,code is amended by striking the item   
relating to section #digc and inserting 
the following new item3  ,sec4 #digc4   
,tax on excess contributions to certain 
tax-favored accounts and annuities1 etc4

  4  #bjb4 ,effective date ,the         
amendments made by this title shall     
apply to contributions made for taxable 
years beginning on or after the first   
day of the first calendar year beginning
 after the date of enactment of this    
,act4  ,,iii ,conforming amendments to  
the ,social ,security ,act and the      
,internal ,revenue ,code of #aihf  #cja4
 ,reductions in and exemptions from     
,,fica taxes and ,,seca taxes with      
respect to eligible individuals  7a7    
,,fica tax on employees ,section #caja  
of the ,internal ,revenue ,code of #aihf
 7relating to ,,oasdi tax on employees7 
is amended-- 7#a7 in subsection 7a71 by 
striking ,in addition and inserting     
,subject to subsection 7c71 in addition2
  7#b7 by redesignating subsection 7c7  
as subsection 7d72 and  7#c7 by         
inserting after subsection 7b7 the      
following new subsection3  7c7          
,exemption from ,,oasdi tax for eligible
 individuals ,subsection 7a7 shall not  
apply with respect to wages received by 

an eligible individual 7as defined in   
section #aja7d7 of the ,savings ,account
 for ,every ,american ,act of #bjah74  4
  7b7 ,,fica tax on employers ,section  
#caaa of such ,code 7relating to ,,oasdi
 tax on employees7 is amended-- 7#a7 in 
subsection 7a71 by striking ,in addition
 and inserting ,subject to subsection   
7c71 in addition2  7#b7 by redesignating
 subsection 7c7 as subsection 7d72 and  
7#c7 by inserting after subsection 7b7  
the following new subsection3  7c7      
,exemption from ,,oasdi tax with respect
 to eligible individuals ,in the case of
 an eligible individual 7as defined in  
section #aja7d7 of the ,savings ,account
 for ,every ,american ,act of #bjah71   
effective with the #afth calendar year  
for which such individual's election    
under section #aje of such ,act is      
effective1 subsection 7a7 shall not     
apply with respect to wages received by 
such individual4  4  7c7 ,reduction ,in 
and exemption from self-,employment tax 
,subsection 7a7 of section #adja of such

 ,code 7relating to ,,oasdi tax on      
self-employment income7 is amended--    
7#a7 in subsection 7a71 by striking ,in 
addition and inserting ,subject to      
subsection 7c71 in addition2  7#b7 by   
redesignating subsection 7c7 as         
subsection 7d72 and  7#c7 by inserting  
after subsection 7b7 the following new  
subsection3  7c7 ,adjustment to ,,oasdi 
tax  7#a7 ,reduction ,in the case of an 
eligible individual 7as defined in      
section #aja7d7 of the ,savings ,account
 for ,every ,american ,act of #bjah71   
for taxable years beginning with or     
during the #ast #ae calendar years for  
which such individual's election is in  
effect under section #aje of such ,act1 
the rate of tax under subsection 7a7    
shall be #f4bj percent4  7#b7 ,exemption
 ,in the case of such an eligible       
individual1 effective for taxable years 
beginning with or during the #afth      
calendar year for which such            
individual's election under such section
 #aje is effective1 subsection 7a7 shall

 not apply4  4  7d7 ,effective date ,the
 amendments made by this section shall  
apply with respect to wages received on 
or after the first day of the first     
calendar year beginning after the date  
of enactment of this ,act1 and with     
respect to self-employment income for   
taxable years beginning after such first
 day4  #cjb4 ,exclusion of eligible     
individuals from old-age1 survivors1 and
 disability insurance coverage  7a7     
,monthly insurance benefits under       
,section #bjb ,section #bjb of the      
,social ,security ,act 7#db ,u4,s4,c4   
#djb7 is amended by adding at the end   
the following new subsection3  7aa7     
,limitation on payment to eligible      
individuals under ,savings ,account for 
,every ,american ,act of #bjah  7#a7    
,notwithstanding any other provision of 
this title1 no monthly benefits shall be
 paid under this section based on the   
wages and self-employment income of an  
eligible individual 7as defined in      
section #aja7d7 of the ,savings ,account

 for ,every ,american ,act of #bjah74   
7#b7 ,determinations of entitlement to  
hospital insurance benefits under       
section #bbf or #bbf;,a shall be made   
without regard to paragraph 7#a74  4    
7b7 ,disability insurance benefits under
 ,section #bbc ,section #bbc of such    
,act 7#db ,u4,s4,c4 #dbc7 is amended by 
adding at the end the following new     
subsection3  7k7 ,limitation on payment 
to eligible individuals under ,savings  
,account for every ,american ,act of    
#bjjg  7#a7 ,notwithstanding any other  
provision of this title1 no monthly     
benefits shall be paid under this       
section based on the wages and          
self-employment income of an eligible   
individual 7as defined in section       
#aja7d7 of the ,savings ,account for    
,every ,american ,act of #bjah74  7#b7  
,determinations of entitlement to       
hospital insurance benefits under       
section #bbf or #bbf;,a shall be made   
without regard to paragraph 7#a74  4    
#cjc4 ,information provided in social   

security account statements  7a7 ,in    
general ,section #aadc of the ,social   
,security ,act 7#db ,u4,s4,c4           
#acbj;b-#ac7 is amended to read as      
follows3  #aadc4 ,social ,security      
,account ,statement  7a7 ,provision of  
annual statements ,the ,commissioner of 
,social ,security shall provide an      
annual social security account statement
 7hereinafter in this section referred  
to as the statement7 to each eligible   
individual who is not receiving benefits
 under title ,,ii and for whom a mailing
 address can be determined through such 
methods as the ,commissioner determines 
to be appropriate4  7b7 ,contents of    
statement ,each statement shall         
contain-- 7#a7 the amount of wages paid 
to and self-employment income derived by
 the eligible individual as shown by the
 records of the ,commissioner2  7#b7 an 
estimate of the aggregate of the        
employer1 employee1 and self-employment 
contributions of the eligible individual
 for old-age1 survivors1 and disability 

insurance as shown by the records of the
 ,commissioner2  7#c7 a separate        
estimate of the aggregate of the        
employer1 employee1 and self-employment 
contributions of the eligible individual
 for hospital insurance as shown by the 
records of the ,commissioner2 and  7#d7 
an estimate of the potential monthly    
retirement1 disability1 survivor1 and   
auxiliary benefits payable on the       
eligible individual's account together  
with a description of the benefits      
payable under the ,medicare program of  
title ,,xviii4  7c7 ,eligible individual
 ,for purposes of this section1 the term
 eligible individual means an individual
 who-- 7#a7 has a social security       
account number1 and  7#b7 has wages or  
net earnings from self-employment4  4   
7b7 ,effective date ,the amendment made 
by subsection 7a7 shall apply with      
respect to statements provided on or    
after the first day of the first        
calendar year beginning after the date  
of enactment of this ,act4