,,ii #aaeth ,,congress #ast ,session ,s4 #cbc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #g 7legislative day1 ,february #f71 #bjag,mr4 ,flake introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to create ,universal ,savings ,accounts4 #a4 ,short title ,this ,act may be cited as the ,universal ,savings ,account ,act4 #b4 ,universal savings accounts 7a7 ,in general ,subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new part3 ,,ix ,universal savings accounts #ecj;,a4 ,universal savings accounts 7a7 ,general rule ,a ,universal ,savings ,account shall be exempt from taxation under this subtitle4 ,notwithstanding the preceding sentence1 such account shall be subject to the taxes imposed by section #eaa 7relating to imposition of tax on unrelated business income of charitable organizations74 7b7 ,universal savings account ,for purposes of this section1 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 7in such manner as the ,secretary shall prescribe7 at the time of the establishment of the trust as a ,universal ,savings ,account1 but only if the written governing instrument creating the trust meets the following requirements3 7#a7 ,except in the case of a qualified rollover contribution described in subsection 7e7-- 7,a7 no contribution will be accepted unless it is in cash1 and 7,b7 contributions will not be accepted for the calendar year in excess of the contribution limit specified in subsection 7d77#a74 7#b7 ,the trustee is a bank 7as defined in section #djh7n77 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 plan4 7#c7 ,no part of the trust assets will be invested in life insurance contracts4 7#d7 ,the interest of an individual in the balance of his account is nonforfeitable4 7#e7 ,the assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund4 7c7 ,eligible individual ,for purposes of this section1 the term eligible individual means any individual who is-- 7#a7 not less than #ah years of age1 and 7#b7 a citizen or legal permanent resident of the ,united ,states4 7d7 ,treatment of contributions and distributions 7#a7 ,contribution limit 7,a7 ,in general ,the aggregate amount of contributions 7other than qualified rollover contributions described in subsection 7e77 for any calendar year to all ,universal ,savings ,accounts maintained for the benefit of an eligible individual shall not exceed #e1ejj4 7,b7 ,cost-of-living adjustment 7i7 ,in general ,in the case of any calendar year after #bjah1 the #e1ejj amount under subparagraph 7,a7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year1 determined by substituting calendar year #bjag for calendar year #aiib in subparagraph 7,b7 thereof4 7ii7 ,rounding rules ,if any amount after adjustment under clause 7i7 is not a multiple of #ejj1 such amount shall be rounded to the next lower multiple of #ejj4 7#b7 ,distributions ,any distribution from a ,universal ,savings ,account shall not be includible in gross income4 7e7 ,qualified rollover contribution ,for purposes of this section1 the term qualified rollover contribution means a contribution to a ,universal ,savings ,account from another such account of the same beneficiary1 but only if such amount is contributed not later than the #fjth day after the distribution from such other account4 7f7 ,treatment of account upon death ,upon death of any individual for whose benefit a ,universal ,savings ,account has been established-- 7#a7 all amounts in such account shall be treated as distributed on the date of such individual's death1 and 7#b7 such account shall cease to be treated as a ,universal ,savings ,account4 7g7 ,loss of taxation exemption of account where beneficiary engages in prohibited transaction2 effect of pledging account as security ,rules similar to the rules of paragraph 7#b7 and 7#d7 of section #djh7;e7 shall apply to any ,universal ,savings ,account4 7h7 ,limitation to one account per individual 7#a7 ,in general ,except as provided in paragraph 7#b71 no trust created for the benefit of an eligible individual shall be treated as a ,universal ,savings ,account under subsection 7b7 if such eligible individual has in existence another ,universal ,savings ,account at the time such trust was established4 7#b7 ,exception ,under regulations established by the ,secretary1 paragraph 7#a7 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 ,account4 7i7 ,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 contributions1 distributions1 and such other matters as the ,secretary may require4 ,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 required4 4 7b7 ,tax on excess contributions 7#a7 ,in general ,subsection 7a7 of section #digc of the ,internal ,revenue ,code of #aihf 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 ,universal ,savings ,account 7as defined in section #ecj;,a71 4 7#b7 ,excess contribution ,section #digc of such ,code is amended by adding at the end the following new subsection3 7i7 ,excess contributions to universal savings accounts ,for purposes of this section-- 7#a7 ,in general ,in the case of ,universal ,savings ,accounts 7within the meaning of section #ecj;,a71 the term excess contributions means the sum of-- 7,a7 the amount by which the amount contributed for the calendar year to such accounts 7other than qualified rollover contributions 7as defined in section #ecj;,a7e77 exceeds the contribution limit under section #ecj;,a7d77#a7 for such calendar year1 and 7,b7 the amount determined under this subsection for the preceding calendar year1 reduced by the excess 7if any7 of the maximum amount allowable as a contribution under section #ecj;,a7d77#a7 for the calendar year over the amount contributed to the accounts for the calendar year4 7#b7 ,special rule ,a contribution shall not be taken into account under paragraph 7#a7 if such contribution 7together with the amount of net income attributable to such contribution7 is returned to the beneficiary before ,july #a of the year following the year in which the contribution is made4 4 7c7 ,failure ,to provide reports on universal savings accounts ,paragraph 7#b7 of section #ffic7;a7 of the ,internal ,revenue ,code of #aihf 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 inserting after subparagraph 7,f7 the following new subparagraph3 7,g7 section #ecj;,a7i7 7relating to ,universal ,savings ,accounts74 4 7d7 ,conforming amendment ,the table of parts for subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,part ,,ix4 ,universal savings accounts 4 7e7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4