,,ii #aahth ,,congress #ast ,session ,s4 #dda ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #ae1 #bjbc,mr4 ,booker 7for himself1 ,mr4 ,durbin1 ,mr4 ,markey1 ,mr4 ,merkley1 ,ms4 ,warren1 ,mr4 ,sanders1 ,mr4 ,brown1 ,mr4 ,blumenthal1 ,mr4 ,van ,hollen1 ,mr4 ,schatz1 ,mr4 ,whitehouse1 ,mr4 ,schumer1 ,ms4 ,baldwin1 ,ms4 ,klobuchar1 ,mrs4 ,gillibrand1 and ,mr4 ,heinrich7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to establish ,american opportunity accounts1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,american ,opportunity ,accounts ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,sec4 #b4 ,definitions4,sec4 #c4 ,american ,opportunity ,fund4,sec4 #d4 ,,ao accounts4,sec4 #e4 ,assignment1 alienation1 and treatment of deceased individuals4,sec4 #f4 ,rules governing ,,ao accounts relating to investment1 accounting1 and reporting4,sec4 #g4 ,american ,opportunity ,fund ,board4,sec4 #h4 ,fiduciary responsibilities4,sec4 #i4 ,accounts disregarded in determining eligibility for ,federal benefits4,sec4 #aj4 ,reports4,sec4 #aa4 ,programs for promoting financial capability4,sec4 #ab4 ,tax treatment4 #b4 ,definitions ,for purposes of this title-- 7#a7 ,american ,opportunity ,fund ,the term ,american ,opportunity ,fund means the fund established under section #c4 7#b7 ,,ao account ,the term ,,ao account means an ,american opportunity account established under section #d4 7#c7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury or the ,secretary's delegate4 7#d7 ,american ,opportunity ,fund ,board ,the term ,american ,opportunity ,fund ,board means the board established pursuant to section #g4 7#e7 ,executive ,director ,the term ,executive ,director means the executive director appointed pursuant to section #g4 #c4 ,american ,opportunity ,fund 7a7 ,establishment ,there is established in the ,treasury of the ,united ,states a fund to be known as the ,american ,opportunity ,fund4 7b7 ,amounts held by ,fund ,the ,american ,opportunity ,fund consists of the sum of all amounts paid into the ,fund under this title1 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 ,fund1 and reduced by the total amount of payments made from the ,fund 7including payments for administrative expenses74 7c7 ,use of ,fund 7#a7 ,in general ,the sums in the ,american ,opportunity ,fund are appropriated and shall remain available without fiscal year limitation-- 7,a7 to make contributions to ,,ao accounts2 7,b7 to invest under section #f2 7,c7 to make distributions in accordance with this title2 7,d7 to pay the administrative expenses of carrying out this title2 and 7,e7 to purchase insurance as provided in section #h7;c77#b74 7#b7 ,exclusive purposes ,the sums in the ,american ,opportunity ,fund shall not be appropriated for any purpose other than the purposes specified in this section and may not be used for any other purpose4 7d7 ,transfers to ,american ,opportunity ,fund ,the ,secretary shall make transfers from the general fund of the ,treasury to the ,american ,opportunity ,fund as follows3 7#a7 ,initial contribution for eligible individuals born after ,december #ca1 #bjbc ,upon receipt of a certification under section #d7;b77#b7 with respect to an individual born after ,december #ca1 #bjbc1 the ,secretary shall transfer #a1jjj to the ,,ao account of the individual4 7#b7 ,annual contributions 7,a7 ,in general ,each year which occurs after the year in which an ,,ao account is established for an eligible individual and before the year the eligible individual attains the age of #ah1 the ,secretary shall transfer the annual contribution amount to the ,,ao account of the individual4 7,b7 ,annual contribution amount ,the annual contribution amount shall be the amount such that the annual contribution amount for any taxpayer whose household income is within an income tier specified in the following table shall decrease1 on a sliding scale in a linear manner1 from the initial amount to the final amount specified in such table for such income tier3 ,in the case of household income 7expressed as a percent of the poverty line7 within the following income tier3,the initial amount is--,the final amount is--,up to #ajj percent#b1jjjb1jjjajj percent up to #abe percent#b1jjja1ejjabe percent up to #age percent#a1ejja1jjjage percent up to #bbe percent#a1jjjejjbbe percent up to #cbe percent#ejjbejcbe percent up to #ejj percent#bejjejj percent or more#jj4 7,c7 ,applicable household income2 poverty line ,for purposes of this paragraph-- 7i7 ,applicable household income ,the term applicable household income means household income 7as defined in section #cf;,b7d7 of the ,internal ,revenue ,code of #aihf71 except that-- 7,i7 with respect to any calendar year1 the ,secretary shall use the income of the second calendar year preceding the calendar year for which the contribution relates2 and 7,,ii7 in determining household income the ,secretary shall aggregate the income of married individuals filing separate tax returns4 7ii7 ,special rule for individuals not filing returns 7,i7 ,in general ,in the case of any taxpayer who was not required to file a return of tax for the tax imposed by section #a for the taxable year described in clause 7i77,i7 or for whom the information described in clause 7i7 is not available for such year1 such taxpayer shall be treated as a taxpayer with a household income which is less than #ajj percent of the poverty line4 7,,ii7 ,use of other data ,subclause 7,i7 shall not apply if the ,secretary determines1 based on such other information from any agency of the ,united ,states as the ,secretary determines is reliable1 that the taxpayer's household income for such year is #ajj percent of the poverty line or greater4 7iii7 ,poverty line ,the term poverty line has the meaning given such term under section #cf;,b7d7 of the ,internal ,revenue ,code of #aihf4 7,d7 ,authority to provide tax information 7i7 ,in general ,section #fajc7l7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#bc7 ,disclosure of return information to carry out eligibility requirements for certain programs 7,a7 ,in general ,the ,secretary shall disclose to officers and employees of the ,department of the ,treasury or the ,american ,opportunity ,fund ,board return information of any taxpayer whose income is relevant in determining any annual contribution to an ,american ,opportunity ,account under section #c of the ,american ,opportunity ,accounts ,act4 ,such return information shall be limited to-- 7i7 taxpayer identity information with respect to such taxpayer1 7ii7 the filing status of such taxpayer1 7iii7 the number of individuals for whom a deduction is allowed under section #aea with respect to the taxpayer 7including the taxpayer and the taxpayer's spouse71 7iv7 the modified adjusted gross income 7as defined in section #cf;,b7 of such taxpayer1 of any spouse of such taxpayer who filed a separate return1 and of each of the other individuals included under clause 7iii7 who are required to file a return of tax imposed by chapter #a for the taxable year1 7v7 such other information as is prescribed by the ,secretary by regulation as might indicate whether the taxpayer is eligible for such an annual contribution 7and the amount thereof71 and 7vi7 the taxable year with respect to which the preceding information relates or1 if applicable1 the fact that such information is not available4 7,b7 ,restriction on use of disclosed information ,return information disclosed under subparagraph 7,a7 may be used by officers and employees of the ,department of the ,treasury or the ,american ,opportunity ,fund ,board for the purposes of1 and to the extent necessary in establishing eligibility for1 and verifying the appropriate amount of1 any annual contribution described in subparagraph 7,a74 4 7ii7 ,procedures and recordkeeping related to disclosures ,paragraph 7#d7 of section #fajc7p7 of such ,code is amended by striking or 7#bb7 each place it appears and inserting 7#bb71 or 7#bc74 7,e7 ,study on incorporation of other wealth factors ,not later than #b years after the date of the enactment of this ,act1 the ,comptroller ,general shall submit to ,congress and the ,secretary of the ,treasury a report on the feasibility and distributive impacts of a new measure for determining the amount of the annual contribution amount under this paragraph based on family wealth1 total assets1 and overall net worth4 ,such measure may-- 7i7 include financial assets1 the value of family home1 retirement accounts1 business and entrepreneurial ventures1 potential future inheritances1 and any other assets or debts2 and 7ii7 continue to factor in current or past income to the extent such information is useful in estimating overall household wealth4 7#c7 ,adjustment for inflation 7,a7 ,in general ,for each calendar year beginning after #bjbd1 each of the dollar amounts under paragraphs 7#a7 and 7#b77;,b77i7 shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section #a7;f77#c7 of the ,internal ,revenue ,code of #aihf determined by substituting calendar year #bjbc for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding ,if any amount adjusted under paragraph 7#a7 is not a multiple of #ej1 such amount shall be rounded to the next lowest multiple of #ej4 7e7 ,prohibition on ,use of ,payroll ,taxes ,to ,fund ,,ao accounts ,the ,american ,opportunity ,fund and ,,ao accounts are wholly separate and unique from the ,social ,security system4 ,no amount from any tax on employment may be contributed to the ,american ,opportunity ,fund or ,,ao accounts4 #d4 ,,ao accounts 7a7 ,in general 7#a7 ,establishment ,the ,executive ,director shall establish in the ,american ,opportunity ,fund an account 7to be known as an ,american ,opportunity account or an ,,ao account7 for each eligible individual certified under subsection 7b74 ,each such account shall be identified to its account holder by means of a unique personal identifier currently recognized by the ,internal ,revenue ,service and shall remain in the ,american ,opportunity ,fund4 7#b7 ,account balance ,the balance in an account holder's ,,ao account at any time is the excess of-- 7,a7 the sum of-- 7i7 all deposits made into the ,american ,opportunity ,fund and credited to the account under paragraph 7#c72 and 7ii7 the total amount of allocations made to and reductions made in the account pursuant to paragraph 7#d72 over 7,b7 the amounts paid out of the account with respect to such individual under subsection 7c74 7#c7 ,crediting of contributions ,pursuant to regulations which shall be prescribed by the ,executive ,director1 the ,executive ,director shall credit to each ,,ao account the amounts paid into the ,american ,opportunity ,fund under section #c7;d7 which are attributable to the account holder of such account4 7#d7 ,allocation of earnings and losses ,the ,executive ,director shall allocate to each ,,ao account an amount equal to the net earnings and net losses from each investment of sums in the ,american ,opportunity ,fund which are attributable1 on a pro rata basis1 to sums credited to such account1 reduced by an appropriate share of the administrative expenses paid out of the net earnings1 as determined by the ,executive ,director4 7b7 ,eligible individual ,for purposes of this title-- 7#a7 ,in general ,the term eligible individual means any individual who-- 7,a7 was born after ,december #ca1 #bjjg2 7,b7 has not yet attained the age of #ah years2 and 7,c7 has a valid1 unique1 ,federal ,government issued identification number recognized by the ,internal ,revenue ,service4 7#b7 ,certification of account holders 7,a7 ,automatic certification for certain individuals born after ,december #ca1 #bjbc ,on any date after ,december #ca1 #bjbc1 on which an eligible individual is issued a social security account number under section #bjc7;c77#b7 of the ,social ,security ,act1 the ,commissioner of ,social ,security shall certify to the ,executive ,director and the ,secretary of the ,treasury the name of1 and social security number issued to1 such eligible individual4 7,b7 ,other individuals ,in the case of an eligible individual who is not certified under subparagraph 7,a71 such individual may request the establishment an ,,ao account under this subparagraph by application to the ,executive ,director1 and the ,executive ,director shall certify such individual under this subparagraph4 7c7 ,restrictions on distributions 7#a7 ,age-related restrictions 7,a7 ,in general ,except as otherwise provided in this paragraph1 no amount may be distributed from an ,,ao account before the date on which the account holder attains the age of #ah4 7,b7 ,higher education expenses ,subparagraph 7,a7 shall not apply to amounts paid for qualified tuition and related expenses 7as defined in section #be;,a7f77#a7 of the ,internal ,revenue ,code of #aihf7 of the account holder if the account holder is an eligible student 7as defined in section #be;,a7b77#c7 of such ,code7 with respect to such expenses4 7,c7 ,authority to provide higher age limit for certain distributions ,the ,secretary1 in consultation with the ,american ,opportunity ,fund ,advisory ,board1 may by regulations provide for a higher age limitation with respect to distributions relating to certain categories of qualified expenses if the ,secretary determines that such higher age limitation is appropriate4 7#b7 ,use-related restrictions 7,a7 ,in general ,no amount may be distributed from an ,,ao account unless the account holder establishes1 under rules established by the ,executive ,director in consultation with the ,american ,opportunity ,fund ,advisory ,board1 that such amount shall be used for a qualified expense4 7,b7 ,qualified expense ,for purposes of this subsection-- 7i7 ,in general ,the term qualified expense means expenses for any of the following3 7,i7 ,education of the account holder at-- 7aa7 an institution of higher education 7as defined in section #aja of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja772 or 7bb7 an area career and technical education school 7as defined in section #c of the ,carl ,d4 ,perkins ,career and ,technical ,education ,act of #bjjf 7#bj ,u4,s4,c4 #bcjb774 7,,ii7 ,ownership of a home by the account holder4 7,,iii7 ,any expenses paid or incurred on or after the date on which the account holder attains age #ei4 7,,iv7 ,any other investment in financial assets or personal capital that provides long-term gains to wages and wealth1 as established under regulations promulgated by the ,secretary1 in consultation with the ,executive ,director and the ,american ,opportunity ,fund ,advisory ,board4 7ii7 ,exception ,such term shall not include any expense described in clause 7i7 which is paid to a person who does not meet such standards as are prescribed by the ,secretary1 in consultation with the ,executive ,director and the ,american ,opportunity ,fund ,advisory ,board4 7#c7 ,american ,opportunity ,account ,advisory ,board ,for purposes of this subsection1 the term ,american ,opportunity ,fund ,advisory ,board means an advisory board established by the ,secretary consisting of individuals with expertise in savings and asset-building1 home financing1 education financing1 consumer financial protection1 and such other areas as the ,secretary may determine appropriate4 #e4 ,assignment1 alienation1 and treatment of deceased individuals 7a7 ,assignment and alienation ,under regulations which shall be prescribed by the ,executive ,director1 rules relating to assignment and alienation applicable under chapter #hd of title #e1 ,united ,states ,code1 with respect to amounts held in accounts in the ,thrift ,savings ,fund shall apply with respect to amounts held in ,,ao accounts in the ,american ,opportunity ,fund4 7b7 ,treatment of accounts of deceased individuals ,in the case of a deceased account holder of an ,,ao account which has an account balance greater than zero1 upon receipt of notification of such individual's death1 the ,executive ,director shall close the account and shall transfer the balance in such account to the ,,ao account of such account holder's surviving spouse or1 if there is no such account of a surviving spouse1 to the duly appointed legal representative of the estate of the deceased account holder1 or if there is no such representative1 to the person or persons determined to be entitled thereto under the laws of the domicile of the deceased account holder4 #f4 ,rules governing ,,ao accounts relating to investment1 accounting1 and reporting 7a7 ,investment program 7#a7 ,in general ,the ,american ,opportunity ,fund ,board shall invest amounts in the ,american ,opportunity ,fund in securities of the ,united ,states ,government issued as provided in paragraph 7#b74 7#b7 ,securities 7,a7 ,in general ,the ,secretary of the ,treasury is authorized to issue special interest-bearing obligations of the ,united ,states for purchase by the ,american ,opportunity ,fund4 7,b7 ,investment 7i7 ,obligations issued for the purpose of this paragraph shall have maturities fixed with due regard to the needs of the ,american ,opportunity ,fund as determined by the ,executive ,director1 and shall bear interest at a rate equal to the average market yield 7computed by the ,secretary of the ,treasury on the basis of market quotations as of the end of the calendar month next preceding the date of issue of such obligations7 on all marketable interest-bearing obligations of the ,united ,states then forming a part of the public debt which are not due or callable earlier than #aj years after the end of such calendar month4 7ii7 ,any average market yield computed under clause 7i7 which is not a multiple of one-eighth of #a percent1 shall be rounded to the nearest multiple of one-eighth of #a percent4 7b7 ,independent public accountant 7#a7 ,in general ,under regulations which shall be prescribed by the ,executive ,director1 and subject to the provisions of this title1 section #hdci7;b7 of title #e1 ,united ,states ,code 7relating to engagement of independent qualified public accountant71 shall apply with respect to the ,american ,opportunity ,fund and accounts maintained in such ,fund in the same manner and to the same extent as such section relates to the ,thrift ,savings ,fund and the accounts maintained in the ,thrift ,savings ,fund4 7#b7 ,application rules ,for purposes of paragraph 7#a71 references in such section #hdci7;b7 to an employee1 ,member1 former employee1 or former ,member shall be deemed references to an account holder of an ,,ao account in the ,american ,opportunity ,fund4 7c7 ,confidentiality and disclosure 7#a7 ,in general ,except as otherwise authorized by ,federal law1 the ,american ,opportunity ,fund ,board1 the ,executive ,director1 and any employee of the ,american ,opportunity ,fund ,board shall not disclose information with respect to the ,american ,opportunity ,fund or any account maintained in such ,fund4 7#b7 ,disclosure to designee of beneficiary ,the ,executive ,director may1 subject to such requirements and conditions as he may prescribe by regulations1 disclose such information with respect to the ,,ao account of the beneficiary to such person or persons as the beneficiary may designate in a request for or consent to such disclosure1 or to any other person at the beneficiary's request to the extent necessary to comply with a request for information or assistance made by the beneficiary to such other person4 #g4 ,american ,opportunity ,fund ,board 7a7 ,in general ,there is established in the executive branch of the ,government an ,american ,opportunity ,fund ,board4 7b7 ,composition1 duties1 and responsibilities ,subject to the provisions of this title1 the following provisions shall apply with respect to the ,american ,opportunity ,fund ,board in the same manner and to the same extent as such provisions relate to the ,federal ,retirement ,thrift ,investment ,board3 7#a7 ,section #hdgb of title #e1 ,united ,states ,code 7relating to composition of ,federal ,retirement ,thrift ,investment ,board74 7#b7 ,section #hdgd of such title 7relating to ,executive ,director74 7#c7 ,section #hdgf of such title 7relating to administrative provisions74 #h4 ,fiduciary responsibilities 7a7 ,in general ,under regulations of the ,secretary of ,labor1 the provisions of sections #hdgg and #hdgh of title #e1 ,united ,states ,code1 shall apply in connection with the ,american ,opportunity ,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 ,fund4 7b7 ,investigative authority ,any authority available to the ,secretary of ,labor under section #ejd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aacd7 is hereby made available to the ,secretary of ,labor1 and any officer designated by the ,secretary of ,labor1 to determine whether any person has violated1 or is about to violate1 any provision applicable under subsection 7a74 7c7 ,exculpatory provisions2 insurance 7#a7 ,in general ,any provision in an agreement or instrument which purports to relieve a fiduciary from responsibility or liability for any responsibility1 obligation1 or duty under this title shall be void4 7#b7 ,insurance ,amounts in the ,american ,opportunity ,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 therein1 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 obligation4 #i4 ,accounts disregarded in determining eligibility for ,federal benefits ,amounts in any ,,ao account shall not be taken into account in determining any individual's or household's financial eligibility for1 or amount of1 any benefit or service1 paid for in whole or in part with ,federal funds1 including student financial aid4 #aj4 ,reports 7a7 ,reports to ,congress ,the ,executive ,director1 in consultation with the ,secretary1 shall annually transmit a written report to the ,congress4 ,such report shall include-- 7#a7 a detailed description of the status and operation of the ,american ,opportunity ,fund and the management of the ,,ao accounts2 and 7#b7 a detailed accounting of the administrative expenses in carrying out this title1 including the ratio of such administrative expenses to the balance of the ,american ,opportunity ,fund and the methodology adopted by the ,executive ,director for allocating such expenses among the ,,ao accounts4 7b7 ,reports to account holders ,the ,american ,opportunity ,fund ,board shall prescribe regulations under which each individual for whom an ,,ao account is maintained shall be furnished with an annual statement relating to the individual's account1 which shall include-- 7#a7 a statement of the balance of individual's ,,ao account2 7#b7 a projection of the account's growth by the time the individual attains the age of #ah2 and 7#c7 such other information as the ,secretary deems relevant4 #aa4 ,programs for promoting financial capability ,the ,secretary of the ,treasury1 in coordination with the ,financial ,literacy and ,education ,commission1 shall develop programs to promote the financial capability of account holders of ,,ao accounts4 #ab4 ,tax treatment 7a7 ,contributions and distributions ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #aci;,i the following new section3 #aci;,j4 ,contributions to and distributions from ,,ao accounts ,gross income shall not include-- 7#a7 any contribution credited to the ,,ao account of the taxpayer under section #d7;a77#c7 of the ,american ,opportunity ,accounts ,act1 and 7#b7 any distribution from such an ,,ao account4 4 7b7 ,tax treatment of earnings and distributions ,subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new part3 ,,ix ,american ,opportunity ,fund and ,,ao accounts ,sec4 #ecj;,a4 ,american ,opportunity ,fund and ,,ao accounts4 #ecj;,a4 ,american ,opportunity ,fund and ,,ao accounts 7a7 ,general rule ,the ,american ,opportunity ,fund and ,,ao accounts shall be exempt from taxation under this subtitle4 ,notwithstanding the preceding sentence1 a ,,ao account shall be subject to the taxes imposed by section #eaa 7relating to imposition of tax on unrelated business income of charitable organizations74 7b7 ,definitions ,for purposes of this section1 the terms ,american ,opportunity ,fund and ,,ao account have the meanings given such terms under the ,american ,opportunity ,accounts ,act4 4 7c7 ,conforming amendments 7#a7 ,the table of sections for part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item related to section #aci;,i the following new item3 ,sec4 #aci;,j4 ,contributions to and distributions from ,,ao accounts4 4 7#b7 ,the table of parts for subchapter ,f of chapter #a of such ,code is amended by adding at the end the following new item3 ,part ,,ix--,american ,opportunity ,fund and ,,ao accounts 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbc4