,,ii #aaith ,,congress #ast ,session ,s4 #agah ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #ab1 #bjbe ,mr4 ,cruz 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 invest ,america accounts4 #a4 ,short title ,this ,act may be cited as the ,invest ,america ,act4 #b4 ,invest ,america 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 ,invest ,america accounts #ecj;,a4 ,invest ,america accounts 7a7 ,general rule ,an invest ,america 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 ,invest ,america account ,for purposes of this section-- 7#a7 ,in general ,the term invest ,america account means a trust created or organized in the ,united ,states for the exclusive benefit of an individual and which is designated 7in such manner as the ,secretary shall prescribe7 at the time of the establishment of the trust as an invest ,america 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 7e71 no contribution will be accepted-- 7i7 unless it is in cash1 and 7ii7 if such contribution would result in aggregate contributions for the taxable year exceeding the contribution limit specified in subsection 7c77#a74 7,b7 ,no distribution 7other than a qualified rollover distribution7 will be allowed before the date on which the beneficiary attains the age of #ah4 7,c7 ,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,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 7,f7 ,no part of the trust funds will be invested in any asset other than eligible investments4 7#b7 ,eligible investments ,the term eligible investments means any mutual fund or exchange traded fund which-- 7,a7 tracks the returns of the ,standard and ,poor's #ejj stock market index1 and 7,b7 meets such other requirements as provided by the ,secretary4 7c7 ,treatment of contributions 7#a7 ,contribution limit ,the contribution limit for any taxable year is #e1jjj4 7#b7 ,cost-of-living adjustment 7,a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjbf1 the #e1jjj amount under paragraph 7#a7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year1 determined by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding ,if any increase under subparagraph 7,a7 is not a multiple of #ajj1 such amount shall be rounded to the next lower multiple of #ajj4 7d7 ,distributions 7#a7 ,in general ,any distribution from an invest ,america account shall be included in gross income of the distributee in the manner as provided in section #gb1 except that the character of such income shall be determined after the application of section #a7;h77#ab74 7#b7 ,exceptions ,paragraph 7#a7 shall not apply to any qualified rollover contribution4 7e7 ,qualified rollover contribution ,for purposes of this section1 the term qualified rollover contribution means-- 7#a7 a contribution made pursuant to section #c7;a7 of the ,invest ,america ,act1 or 7#b7 an amount which is paid in a direct trustee-to-trustee transfer to an invest ,america account maintained for the benefit of such designated beneficiary4 7f7 ,treatment after death of account beneficiary ,rules similar to the rules of section #bbc7;f77#h7 shall apply for purposes of this section4 7g7 ,custodial accounts ,for purposes of this section1 a custodial account or an annuity contract issued by an insurance company qualified to do business in a ,state shall be treated as a trust under this section if-- 7#a7 the custodial account or annuity contract would1 except for the fact that it is not a trust1 constitute a trust which meets the requirements of subsection 7b77#a71 and 7#b7 in the case of a custodial account1 the assets of such account are held by a bank 7as defined in section #djh7n77 or another person who demonstrates1 to the satisfaction of the ,secretary1 that the manner in which he will administer the account will be consistent with the requirements of this section4 ,for purposes of this title1 in the case of a custodial account or annuity contract treated as a trust by reason of the preceding sentence1 the person holding the assets of such account or holding such annuity contract shall be treated as the trustee thereof4 7h7 ,reports ,the trustee of an invest ,america 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 ,distribution taxed at same rate as net capital gains ,section #a7;h7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ab7 ,distributions from invest ,america accounts taxed as net capital gain ,for purposes of this subsection1 the term net capital gain meant the net capital gain 7determined without regard to this paragraph7 increased by the amount of distributions made during the taxable year from an invest ,america account 7as defined in section #ecj;,a7 which are includible in income under section #ecj;,a7d74 4 7c7 ,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 an invest ,america 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 invest ,america accounts ,for purposes of this section1 in the case of invest ,america 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 account 7other than qualified rollover contributions 7as defined in section #ecj;,a7e777 exceeds the contribution limit under section #ecj;,a7c77#a71 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;,a7c77#a7 for the calendar year over the amount contributed to the account for the calendar year 7other than qualified rollover contributions 7as so defined774 4 7d7 ,failure ,to provide reports on invest ,america 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 adding at the end the following new subparagraph3 7,g7 section #ecj;,a7h7 7relating to invest ,america accounts74 4 7e7 ,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 ,invest ,america accounts 4 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 #c4 ,federal contributions to invest ,america accounts 7a7 ,in general ,as soon as practical after an individual is certified as an eligible individual under subsection 7c71 the ,secretary of the ,treasury shall pay to the invest ,america account of such eligible individual an amount equal to #a1jjj4 7b7 ,eligible individual ,for purposes of this section1 the term eligible individual means any individual who-- 7#a7 is born after ,july #d1 #bjbf1 7#b7 is a ,united ,states citizen1 and '7#c7 has at least one parent who1 at the time of the individual's birth1 is a ,united ,states citizen4 7c7 ,certification of eligible individuals 7#a7 ,in general ,the ,secretary of the ,treasury1 in consultation with the ,commissioner of ,social ,security1 shall establish procedures for the certification of individuals as eligible individuals4 7#b7 ,timing ,no certification may be made under this section more than #f months after the date of the individual's birth4 7d7 ,automatic establishment of invest ,america accounts in certain cases 7#a7 ,in general ,if an eligible individual does not have an invest ,america account1 the ,secretary shall establish such an account on behalf of such individual4 7#b7 ,selection of account provider ,the ,secretary of the ,treasury shall develop rules for the selection of persons described in section #ecj;,a7b77#a77;,c7 for the establishment of invest ,america accounts of individuals to whom paragraph 7#a7 applies4 ,such rules shall provide for selection based on low fees1 historical investment performance1 administrative capabilities1 and such other criteria as the ,secretary determines appropriate4 7e7 ,tax treatment 7#a7 ,in general ,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 ,federal contributions to invest ,america accounts ,gross income shall not include any contribution made by the ,secretary to an invest ,america account under section #c7;a7 of the ,invest ,america ,act4 4 7#b7 ,clerical amendment ,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 relating to section #aci;,i the following new item3 ,sec4 #aci;,j4 ,federal contributions to invest ,america accounts4 4 7#c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 7f7 ,appropriation ,there are hereby appropriated such sums as may be necessary to make payments under subsection 7a74