,,ii #aafth ,,congress #b;d ,session ,s4 #cgfd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #ai1 #bjbj,mr4 ,casey 7for himself1 ,mr4 ,wyden1 and ,mr4 ,schumer7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to create ,federal child savings accounts1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,young ,american ,savers ,act of #bjbj4 #b4 ,establishment of child savings account program 7a7 ,establishment of program ,the ,secretary of the ,treasury shall1 not later than ,december #ca1 #bjba1 establish a permanent program1 to be known as the ,federal ,child ,savings ,account ,program1 which meets the requirements of this section to establish and maintain a savings account meeting the requirements of subsection 7c7 on behalf of eligible individuals4 7b7 ,program specifications 7#a7 ,in general 7,a7 ,savings accounts ,the ,federal ,child ,savings ,account ,program established under this section shall-- 7i7 permit the parent or guardian of an eligible individual to establish a savings account which meets the requirements of this subsection and subsection 7c7 on behalf of the individual2 7ii7 establish a savings account which meets the requirements of this subsection and subsection 7c7 on behalf of-- 7,i7 eligible individuals who are in foster care1 in coordination with the ,administration for ,children and ,families2 and 7,,ii7 other eligible individuals on whose behalf no account has been established by a parent or guardian under clause 7i7 as of the time the first deposit under paragraph 7#d77;,a7 is due to be made on behalf of such individuals1 and notify such individuals of the establishment of such accounts2 7iii7 require the assets of each savings account established under the program to be held by the designated custodian2 7iv7 within the limitations of paragraph 7#c71 permit contributions to be made periodically to such savings accounts by direct deposit through payroll deduction or by electronic means1 and by methods that provide access for the unbanked2 7v7 provide for the annual deposit under paragraph 7#d7 and the matching contributions under paragraph 7#e7 to be made to such savings accounts1 if applicable2 7vi7 as provided in subsection 7c71 permit distributions and rollovers from such savings accounts upon request of the parent or guardian of the individual on whose behalf the account is established before the individual has attained age #ah1 or upon request of such individual after such individual has attained age #ah2 7vii7 include procedures to consolidate multiple accounts established for the same individual and return excess contributions on an annual basis1 with notice provided to the parent or guardian of the individual 7or1 if appropriate1 to the individual7 and a procedure for resolution of disputes2 and 7viii7 ensure that such savings accounts are invested solely in ,united ,states ,treasury bonds4 7,b7 ,regulations1 etc ,the ,secretary of the ,treasury shall have authority to promulgate such regulations1 rules1 and other guidance as are necessary to implement the ,federal ,child ,savings ,account ,program1 and are consistent with this section and section #ebi;,b of the ,internal ,revenue ,code of #aihf1 including-- 7i7 rules regarding the provision of periodic notices to individuals and parents or guardians of individuals1 as appropriate1 on whose behalf accounts are established under the program1 including information on account balances and activity2 7ii7 rules regarding beneficiary designation in the case of the death of the individual on whose behalf an account was established2 and 7iii7 coordination rules permitting savings accounts to be established under the ,federal ,child ,savings ,account ,program in connection with ,state and local laws that provide contributions to savings accounts for residents4 7,c7 ,pilot program for deposits made with ,federal partners ,the ,secretary of the ,treasury may1 in fulfillment of subparagraph 7,a77iv71 establish a pilot program which would allow grocery stores1 pharmacies1 banks1 and other similar businesses to partner with the ,federal ,government to accept cash deposits from customers and to remit such deposits to the ,treasury for payment into savings accounts under the ,federal ,child ,savings ,account ,program4 7#b7 ,no fees ,no fees shall be assessed on participants in the ,federal ,child ,savings ,account ,program4 7#c7 ,limitations 7,a7 ,contribution minimum ,the ,secretary of the ,treasury may establish minimum amounts for initial and additional contributions to a savings account under the ,federal ,child ,savings ,account ,program1 not to exceed #e4 7,b7 ,contribution limitation ,contributions to a savings account under the ,federal ,child ,savings ,account ,program during any taxable year 7other than the contribution made under paragraph 7#d77 shall not be accepted to the extent such contributions exceed #b1ejj4 7,c7 ,limitation on participation ,within a reasonable amount of time before the date an eligible individual attains age #ag1 the designated custodian shall provide notice to the eligible individual and the parent or guardian of the eligible individual that-- 7i7 no deposits under paragraph 7#d7 or 7#e7 will be made for calendar years after the year in which the individual attains age #ag2 7ii7 no further contributions made by any person will be accepted after the date the individual attains age #bf2 and 7iii7 the individual 7or1 as provided1 the individual's parent or guardian7 may elect to have the account balance rolled over or distributed as provided1 and at the time specified1 in subsection 7c74 7#d7 ,annual deposit 7,a7 ,in general ,within a reasonable amount of time 7not to exceed #fj days7 after the filing of the return of tax for each taxable year by a taxpayer claiming an eligible individual as a dependent1 the ,secretary of the ,treasury shall deposit #ejj into the savings account established for such individual under the ,federal ,child ,savings ,account ,program4 7,b7 ,phaseout ,the #ejj amount under subparagraph 7,a7 shall be reduced 7but not below zero7 by #be for each #a1jjj 7or fraction thereof7 by which the taxpayer's adjusted gross income 7as defined in section #fb of the ,internal ,revenue ,code of #aihf7 exceeds #ajj1jjj4 7,c7 ,deposit on behalf of children in foster care ,at an appropriate time each year as determined by the ,secretary of the ,treasury in coordination with the ,administration for ,children and ,families1 such ,secretary shall deposit #ejj into the savings account established under such ,program for any eligible individual in foster care in any ,state with respect to whom no deposit was made for such year under subparagraph 7,a74 7#e7 ,matching contributions ,if a credit is allowed under section #cb of the ,internal ,revenue ,code of #aihf to the parent or guardian or an eligible individual for a taxable year1 with respect to contributions made by such parent or guardian to the savings account of such eligible individual under the ,federal ,child ,savings ,account ,program during the succeeding taxable year1 the ,secretary of the ,treasury shall deposit into such savings account an amount equal to so much of such contributions as does not exceed #bej4 ,such deposit shall be made in addition to the deposit under paragraph 7#d74 7#f7 ,designated custodian ,for purposes of this section1 the designated custodian is the person designated by the ,secretary of the ,treasury to act as custodian of the savings accounts established on behalf of participants in the ,federal ,child ,savings ,account ,program4 7#g7 ,state ,for purposes of this section1 the term ,state includes the ,district of ,columbia1 any possession of the ,united ,states1 and any ,indian tribe 7as defined in section #de;,a7c77#f7 of the ,internal ,revenue ,code of #aihf74 7#h7 ,deposit of matching contributions into ,roth ,,ira ,if a parent or guardian of an eligible individual is eligible to receive any matching contribution under paragraph 7#e71 such parent or guardian may elect either to have such matching contribution paid to the savings account of such eligible individual under the ,federal ,child ,savings ,account ,program or to a ,roth ,,ira of such parent or guardian4 ,the ,secretary of the ,treasury shall establish a permanent program that creates and maintains a ,roth ,,ira 7within the meaning of section #djh;,a of the ,internal ,revenue ,code7 on behalf of a parent or guardian who elects for the matching contribution to be made to his or her ,roth ,,ira and who either affirmatively chooses to participate in the program or does not identify a ,roth ,,ira for receipt of the matching contribution4 ,the permanent program shall provide for investment of account balances solely within ,united ,states ,treasury bonds and shall not charge any fees to account owners4 7#i7 ,inflation adjustments 7,a7 ,in general ,in the case of any calendar year after #bjba1 the #b1ejj amount in paragraph 7#c77;,b71 the #ejj amount in paragraphs 7#d77;,a71 7#d77;,b71 and 7#d77;,c71 and the #bej amount in paragraph 7#e7 shall each be increased by an amount equal to-- 7i7 such dollar amount2 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 of the ,internal ,revenue ,code of #aihf for the calendar year1 determined by substituting calendar year #bjbj for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding ,if any dollar amount increased under subparagraph 7,a7 is not a multiple of #e1 such dollar amount shall be rounded to the nearest multiple of #e4 7#aj7 ,accounts may not be assigned ,an account established on behalf of an individual under the ,federal ,child ,savings ,account ,program may not be pledged or assigned to any other person4 7c7 ,distributions from savings account 7#a7 ,in general ,after the earlier of-- 7,a7 the date the individual on whose behalf the savings account under the ,federal ,child ,savings ,account ,program was established attains age #bf2 or 7,b7 the date such individual receives a bachelor's degree or associate's degree1 or enlists in active duty military service of the ,united ,states1 amounts in such account may be contributed in a direct transfer to a ,roth ,,ira 7as defined in section #djh;,a7b7 of the ,internal ,revenue ,code of #aihf7 or a designated ,roth account 7within the meaning of section #djb;,a of such ,code7 according to the rules of the ,internal ,revenue ,code of #aihf1 or distributed to the individual in cash4 7#b7 ,distributions for higher education expenses ,without regard to the date requirements of paragraph 7#a71 a portion of the amount in a savings account established under the ,federal ,child ,savings ,account ,program may be distributed in cash to the individual or to the parent or guardian of the individual for the payment of qualified higher education expenses of the individual at an eligible educational institution4 ,the aggregate amount so distributed shall not exceed #ej percent of the amount in such account as of the due date for the first payment of tuition for the enrollment of the individual on whose behalf the account is established as an eligible student at such eligible educational institution4 7#c7 ,contribution to ,,able account ,without regard to the date requirements of paragraph 7#a71 all or a portion of the amount in a savings account established under the ,federal ,child ,savings ,account ,program may be contributed in a direct transfer to an ,,able account established for the benefit of the individual under section #ebi;,a of the ,internal ,revenue ,code of #aihf 7if the individual is eligible for purposes of section #ebi;,a7e77#a7 of such ,code74 7#d7 ,definitions ,any term used in this subsection which is also used in section #ebi of the ,internal ,revenue ,code of #aihf has the same meaning as when used in such section4 7d7 ,eligible individual ,for purposes of this section1 the term eligible individual means a child who has not attained age #ah and is a resident of the ,united ,states4 7e7 ,treatment of accounts under certain ,federal programs 7#a7 ,account funds disregarded for purposes of certain other means-tested ,federal programs ,notwithstanding any other provision of ,federal law that requires consideration of one or more financial circumstances of an individual1 for the purpose of determining eligibility to receive1 or the amount of1 any assistance or benefit authorized by such provision to be provided to or for the benefit of such individual1 any amount 7including earnings thereon7 in an individual's account established under the ,federal ,child ,savings ,account ,program1 any contributions to such account1 and any distribution 7or portion thereof7 which is exempt from the tax under section #ebi;,b7d77#c7 of the ,internal ,revenue ,code of #aihf shall be disregarded for such purpose with respect to any period during which such individual maintains1 makes contributions to1 or receives distributions from such account1 except that-- 7,a7 a distribution for qualified acquisition costs 7within the meaning of section #ebi;,b7d77#c77;,c77ii7 of such ,code7 shall not be so disregarded2 and 7,b7 any amount 7including such earnings7 in such account shall be considered a resource of the individual to the extent that such amount exceeds #ajj1jjj4 7#b7 ,suspension of ,,ssi benefits during periods of excessive account funds 7,a7 ,in general ,the benefits of an individual under the supplemental security income program under title ,,xvi of the ,social ,security ,act shall not be terminated1 but shall be suspended1 by reason of excess resources of the individual attributable to an amount in the account of the individual established under the ,federal ,child ,savings ,account ,program not disregarded under paragraph 7#a74 7,b7 ,no impact on ,medicaid eligibility ,an individual who would be receiving payment of such supplemental security income benefits but for the application of subparagraph 7,a7 shall be treated for purposes of title ,,xix of the ,social ,security ,act as if the individual continued to be receiving payment of such benefits4 7f7 ,disclosure of taxpayer information 7#a7 ,in general ,subsection 7l7 of section #fajc of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#bc7 ,disclosure of return information for purposes of administration of the ,federal ,child ,savings ,account ,program ,the ,secretary shall disclose to any officer or employee of the ,department of the ,treasury1 as necessary for the administration of the ,federal ,child ,savings ,account ,program established under section #b7;a7 of the ,young ,american ,savers ,act of #bjbj1 return information relating to taxpayer identity1 dependents1 adjusted gross income1 and whether the taxpayer has claimed the earned income credit under section #cb for the taxable year4 4 7#b7 ,prohibition of redisclosure ,paragraph 7#c7 of section #fajc7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking or 7#ba7 and inserting 7#ba71 or 7#bc74 7g7 ,child ,savings ,account ,program ,part ,,viii of subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #ebi;,a the following new section3 #ebi;,b4 ,child ,savings ,account ,program 7a7 ,general rule ,the ,federal ,child ,savings ,account ,program shall be exempt from taxation under this subtitle4 7b7 ,federal ,child ,savings ,account ,program ,for purposes of this title1 the term ,federal ,child ,savings ,account ,program means the program established under section #b7;a7 of the ,young ,american ,savers ,act of #bjbj4 7c7 ,treatment of contributions and earnings 7#a7 ,in general ,no amount shall be includible in gross income of an individual on whose behalf an account is established under the ,federal ,child ,savings ,account ,program1 or of any taxpayer claiming such individual as a dependent1 with respect to any earnings under the program4 7#b7 ,governmental and matching contributions ,gross income of an individual on whose behalf an account is established under the ,federal ,child ,savings ,account ,program1 or of any taxpayer claiming such individual as a dependent1 shall not include the amount of any deposit made to the individual's account under the program pursuant to section #b7;b77#d77;,a71 #b7;b77#d77;,c71 or #b7;b77#e7 of the ,young ,american ,savers ,act of #bjbj4 7d7 ,treatment of distributions 7#a7 ,in general ,gross income shall not include any cash distribution from an account under the ,federal ,child ,savings ,account ,program permitted under section #b7;c7 of the ,young ,american ,savers ,act of #bjbj4 7#b7 ,treatment of rollovers 7,a7 ,roth ,i,r,as ,any contribution from the ,federal ,child ,savings ,account ,program to a ,roth ,,ira permitted under section #b7;c77#a7 of the ,young ,american ,savers ,act of #bjbj shall be treated-- 7i7 as a contribution from another ,roth ,,ira as described in section #djh;,a7e77#a77;,a71 and 7ii7 as having been contributed to such ,roth ,,ira in a direct trustee-to-trustee transfer within #fj days of the distribution for purposes of section #djh7;d77#c74 7,b7 ,designated ,roth accounts ,any contribution from the ,federal ,child ,savings ,account ,program to a designated ,roth account permitted under section #b7;c77#a7 of the ,young ,american ,savers ,act of #bjbj shall be treated-- 7i7 as a contribution from another designated ,roth account for purposes of section #djb;,a7c77#c71 and 7ii7 as having been contributed to such designated ,roth account in a direct trustee-to-trustee transfer within #fj days of the distribution for purposes of section #djb7;c74 7,c7 ,,able accounts ,any contribution from the ,federal ,child ,savings ,account ,program to an ,,able account permitted under section #b7;c77#c7 of the ,young ,american ,savers ,act of #bjbj shall be treated-- 7i7 as a contribution from another ,,able account as described in section #ebi;,a7c77#a77;,c77i71 and 7ii7 as having been contributed to such ,,able account within #fj days of the distribution for purposes of such section4 7#c7 ,tax on nonqualified use 7,a7 ,in general ,the tax imposed by this title for the taxable year shall be increased by an amount equal to #bj percent of the amount of any distribution other than a rollover described in paragraph 7#b7 from an account under the ,federal ,child ,savings ,account ,program during the taxable year1 unless the qualified expenses of the individual on whose behalf the account was established paid or incurred during the taxable year of the distribution are equal to or exceed the amount of such distribution4 7,b7 ,distributions from ,roth ,,ira ,if any amount is contributed to a ,roth ,,ira in a rollover distribution from an account under the ,federal ,child ,savings ,program as provided in section #b7;c77#a7 of the ,young ,american ,savers ,act of #bjbj1 the tax imposed by this title for any taxable year shall be increased by an amount equal to #bj percent of the amount of any distribution from such ,roth ,,ira within the #e-year period beginning on the date of the rollover1 to the extent that such distribution from the ,roth ,,ira1 when aggregated with all other distributions from such ,roth ,,ira during such #e-year period1 does not exceed the amount contributed in such rollover distribution4 ,the preceding sentence shall not apply to the extent the qualified expenses of the individual on whose behalf the account under the ,federal ,child ,savings ,account ,program was established which are paid or incurred during the taxable year of the distribution from the ,roth ,,ira are equal to or exceed the amount of such distribution4 7,c7 ,qualified expenses ,for purposes of subparagraphs 7,a7 and 7,b71 the term qualified expenses means amounts paid or incurred by an individual-- 7i7 as collateral required for a loan provided by the ,small ,business ,administration1 7ii7 as qualified acquisition costs 7as defined in section #gb7t77#h77;,c77 with respect to a residence intended to be the primary residence of the individual1 or 7iii7 for qualified higher education expenses of the individual at an eligible educational institution4 7#d7 ,definitions ,any term used in this subsection which is also used in section #ebi of the ,internal ,revenue ,code of #aihf has the same meaning as when used in such section4 4 7h7 ,clerical amendment ,the table of sections for part ,,viii of subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #ebi;,a the following new item3 ,sec4 #ebi;,b4 ,child ,savings ,account ,program4 4 7i7 ,appropriation ,there is hereby appropriated to the ,secretary of the ,treasury1 to remain available until spent without fiscal year limitation-- 7#a7 #ajj1jjj1jjj for technology and technology systems necessary for the implementation and administration of the ,federal ,child ,savings ,account ,program2 7#b7 #be1jjj1jjj for each fiscal year beginning with fiscal year #bjba for the administration of the ,federal ,child ,savings ,account ,program2 and 7#c7 such sums as are necessary to make contributions to ,federal ,child ,savings ,accounts as required under paragraphs 7#d77;,a71 7#d77;,c71 and 7#e7 of subsection 7c74