[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 441 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 441
To establish American opportunity accounts, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 15, 2023
Mr. Booker (for himself, Mr. Durbin, Mr. Markey, Mr. Merkley, Ms.
Warren, Mr. Sanders, Mr. Brown, Mr. Blumenthal, Mr. Van Hollen, Mr.
Schatz, Mr. Whitehouse, Mr. Schumer, Ms. Baldwin, Ms. Klobuchar, Mrs.
Gillibrand, and Mr. Heinrich) introduced the following bill; which was
read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To establish American opportunity accounts, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American
Opportunity Accounts Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. American Opportunity Fund.
Sec. 4. AO accounts.
Sec. 5. Assignment, alienation, and treatment of deceased individuals.
Sec. 6. Rules governing AO accounts relating to investment, accounting,
and reporting.
Sec. 7. American Opportunity Fund Board.
Sec. 8. Fiduciary responsibilities.
Sec. 9. Accounts disregarded in determining eligibility for Federal
benefits.
Sec. 10. Reports.
Sec. 11. Programs for promoting financial capability.
Sec. 12. Tax treatment.
SEC. 2. DEFINITIONS.
For purposes of this title--
(1) American opportunity fund.--The term ``American
Opportunity Fund'' means the fund established under section 3.
(2) AO account.--The term ``AO account'' means an American
opportunity account established under section 4.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(4) American opportunity fund board.--The term ``American
Opportunity Fund Board'' means the board established pursuant
to section 7.
(5) Executive director.--The term ``Executive Director''
means the executive director appointed pursuant to section 7.
SEC. 3. AMERICAN OPPORTUNITY FUND.
(a) Establishment.--There is established in the Treasury of the
United States a fund to be known as the ``American Opportunity Fund''.
(b) Amounts Held by Fund.--The American Opportunity Fund consists
of the sum of all amounts paid into the Fund under this title,
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 Fund, and reduced by the total amount of payments made from
the Fund (including payments for administrative expenses).
(c) Use of Fund.--
(1) In general.--The sums in the American Opportunity Fund
are appropriated and shall remain available without fiscal year
limitation--
(A) to make contributions to AO accounts;
(B) to invest under section 6;
(C) to make distributions in accordance with this
title;
(D) to pay the administrative expenses of carrying
out this title; and
(E) to purchase insurance as provided in section
8(c)(2).
(2) 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 purpose.
(d) Transfers to American Opportunity Fund.--The Secretary shall
make transfers from the general fund of the Treasury to the American
Opportunity Fund as follows:
(1) Initial contribution for eligible individuals born
after december 31, 2023.--Upon receipt of a certification under
section 4(b)(2) with respect to an individual born after
December 31, 2023, the Secretary shall transfer $1,000 to the
AO account of the individual.
(2) Annual contributions.--
(A) 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 18, the Secretary shall
transfer the annual contribution amount to the AO
account of the individual.
(B) 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 decrease, on a sliding scale
in a linear manner, from the initial amount to the
final amount specified in such table for such income
tier:
------------------------------------------------------------------------
In the case of household income (expressed as The initial
a percent of the poverty line) within the amount is-- The final
following income tier: amount is--
------------------------------------------------------------------------
Up to 100 percent............................. $2,000 $2,000
100 percent up to 125 percent................. 2,000 1,500
125 percent up to 175 percent................. 1,500 1,000
175 percent up to 225 percent................. 1,000 500
225 percent up to 325 percent................. 500 250
325 percent up to 500 percent................. 250 0
500 percent or more........................... 0 0.
------------------------------------------------------------------------
(C) Applicable household income; poverty line.--For
purposes of this paragraph--
(i) Applicable household income.--The term
``applicable household income'' means household
income (as defined in section 36B(d) of the
Internal Revenue Code of 1986), except that--
(I) with respect to any calendar
year, the Secretary shall use the
income of the second calendar year
preceding the calendar year for which
the contribution relates; and
(II) in determining household
income the Secretary shall aggregate
the income of married individuals
filing separate tax returns.
(ii) Special rule for individuals not
filing returns.--
(I) In general.--In the case of any
taxpayer who was not required to file a
return of tax for the tax imposed by
section 1 for the taxable year
described in clause (i)(I) or for whom
the information described in clause (i)
is not available for such year, such
taxpayer shall be treated as a taxpayer
with a household income which is less
than 100 percent of the poverty line.
(II) Use of other data.--Subclause
(I) shall not apply if the Secretary
determines, based on such other
information from any agency of the
United States as the Secretary
determines is reliable, that the
taxpayer's household income for such
year is 100 percent of the poverty line
or greater.
(iii) Poverty line.--The term ``poverty
line'' has the meaning given such term under
section 36B(d) of the Internal Revenue Code of
1986.
(D) Authority to provide tax information.--
(i) In general.--Section 6103(l) of the
Internal Revenue Code of 1986 is amended by
adding at the end the following new paragraph:
``(23) Disclosure of return information to carry out
eligibility requirements for certain programs.--
``(A) 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 3 of the American
Opportunity Accounts Act. Such return information shall
be limited to--
``(i) taxpayer identity information with
respect to such taxpayer,
``(ii) the filing status of such taxpayer,
``(iii) the number of individuals for whom
a deduction is allowed under section 151 with
respect to the taxpayer (including the taxpayer
and the taxpayer's spouse),
``(iv) the modified adjusted gross income
(as defined in section 36B) of such taxpayer,
of any spouse of such taxpayer who filed a
separate return, and of each of the other
individuals included under clause (iii) who are
required to file a return of tax imposed by
chapter 1 for the taxable year,
``(v) such other information as is
prescribed by the Secretary by regulation as
might indicate whether the taxpayer is eligible
for such an annual contribution (and the amount
thereof), and
``(vi) the taxable year with respect to
which the preceding information relates or, if
applicable, the fact that such information is
not available.
``(B) Restriction on use of disclosed
information.--Return information disclosed under
subparagraph (A) may be used by officers and employees
of the Department of the Treasury or the American
Opportunity Fund Board for the purposes of, and to the
extent necessary in establishing eligibility for, and
verifying the appropriate amount of, any annual
contribution described in subparagraph (A).''.
(ii) Procedures and recordkeeping related
to disclosures.--Paragraph (4) of section
6103(p) of such Code is amended by striking
``or (22)'' each place it appears and inserting
``(22), or (23)''.
(E) Study on incorporation of other wealth
factors.--Not later than 2 years after the date of the
enactment of this Act, 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 wealth, total assets, and overall net worth.
Such measure may--
(i) include financial assets, the value of
family home, retirement accounts, business and
entrepreneurial ventures, potential future
inheritances, and any other assets or debts;
and
(ii) continue to factor in current or past
income to the extent such information is useful
in estimating overall household wealth.
(3) Adjustment for inflation.--
(A) In general.--For each calendar year beginning
after 2024, each of the dollar amounts under paragraphs
(1) and (2)(B)(i) shall be increased by such dollar
amount multiplied by the cost-of-living adjustment
determined under section 1(f)(3) of the Internal
Revenue Code of 1986 determined by substituting
``calendar year 2023'' for ``calendar year 2016'' in
subparagraph (A)(ii) thereof.
(B) Rounding.--If any amount adjusted under
paragraph (1) is not a multiple of $50, such amount
shall be rounded to the next lowest multiple of $50.
(e) 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 system. No amount from any tax on
employment may be contributed to the American Opportunity Fund or AO
accounts.
SEC. 4. AO ACCOUNTS.
(a) In General.--
(1) Establishment.--The Executive Director shall establish
in the American Opportunity Fund an account (to be known as an
``American Opportunity account'' or an ``AO account'') for each
eligible individual certified under subsection (b). 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
Fund.
(2) Account balance.--The balance in an account holder's AO
account at any time is the excess of--
(A) the sum of--
(i) all deposits made into the American
Opportunity Fund and credited to the account
under paragraph (3); and
(ii) the total amount of allocations made
to and reductions made in the account pursuant
to paragraph (4); over
(B) the amounts paid out of the account with
respect to such individual under subsection (c).
(3) Crediting of contributions.--Pursuant to regulations
which shall be prescribed by the Executive Director, the
Executive Director shall credit to each AO account the amounts
paid into the American Opportunity Fund under section 3(d)
which are attributable to the account holder of such account.
(4) 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 attributable, on a pro
rata basis, to sums credited to such account, reduced by an
appropriate share of the administrative expenses paid out of
the net earnings, as determined by the Executive Director.
(b) Eligible Individual.--For purposes of this title--
(1) In general.--The term ``eligible individual'' means any
individual who--
(A) was born after December 31, 2007;
(B) has not yet attained the age of 18 years; and
(C) has a valid, unique, Federal Government issued
identification number recognized by the Internal
Revenue Service.
(2) Certification of account holders.--
(A) Automatic certification for certain individuals
born after december 31, 2023.--On any date after
December 31, 2023, on which an eligible individual is
issued a social security account number under section
203(c)(2) of the Social Security Act, the Commissioner
of Social Security shall certify to the Executive
Director and the Secretary of the Treasury the name of,
and social security number issued to, such eligible
individual.
(B) Other individuals.--In the case of an eligible
individual who is not certified under subparagraph (A),
such individual may request the establishment an AO
account under this subparagraph by application to the
Executive Director, and the Executive Director shall
certify such individual under this subparagraph.
(c) Restrictions on Distributions.--
(1) Age-related restrictions.--
(A) In general.--Except as otherwise provided in
this paragraph, no amount may be distributed from an AO
account before the date on which the account holder
attains the age of 18.
(B) Higher education expenses.--Subparagraph (A)
shall not apply to amounts paid for qualified tuition
and related expenses (as defined in section 25A(f)(1)
of the Internal Revenue Code of 1986) of the account
holder if the account holder is an eligible student (as
defined in section 25A(b)(3) of such Code) with respect
to such expenses.
(C) Authority to provide higher age limit for
certain distributions.--The Secretary, in consultation
with the American Opportunity Fund Advisory Board, 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 appropriate.
(2) Use-related restrictions.--
(A) In general.--No amount may be distributed from
an AO account unless the account holder establishes,
under rules established by the Executive Director in
consultation with the American Opportunity Fund
Advisory Board, that such amount shall be used for a
qualified expense.
(B) Qualified expense.--For purposes of this
subsection--
(i) In general.--The term ``qualified
expense'' means expenses for any of the
following:
(I) Education of the account holder
at--
(aa) an institution of
higher education (as defined in
section 101 of the Higher
Education Act of 1965 (20
U.S.C. 1001)); or
(bb) an area career and
technical education school (as
defined in section 3 of the
Carl D. Perkins Career and
Technical Education Act of 2006
(20 U.S.C. 2302)).
(II) Ownership of a home by the
account holder.
(III) Any expenses paid or incurred
on or after the date on which the
account holder attains age 59\1/2\.
(IV) Any other investment in
financial assets or personal capital
that provides long-term gains to wages
and wealth, as established under
regulations promulgated by the
Secretary, in consultation with the
Executive Director and the American
Opportunity Fund Advisory Board.
(ii) Exception.--Such term shall not
include any expense described in clause (i)
which is paid to a person who does not meet
such standards as are prescribed by the
Secretary, in consultation with the Executive
Director and the American Opportunity Fund
Advisory Board.
(3) American opportunity account advisory board.--For
purposes of this subsection, the term ``American Opportunity
Fund Advisory Board'' means an advisory board established by
the Secretary consisting of individuals with expertise in
savings and asset-building, home financing, education
financing, consumer financial protection, and such other areas
as the Secretary may determine appropriate.
SEC. 5. ASSIGNMENT, ALIENATION, AND TREATMENT OF DECEASED INDIVIDUALS.
(a) Assignment and Alienation.--Under regulations which shall be
prescribed by the Executive Director, rules relating to assignment and
alienation applicable under chapter 84 of title 5, United States Code,
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 Fund.
(b) 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 zero, upon receipt of notification of such individual's
death, 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 or, if there is no such account of a
surviving spouse, to the duly appointed legal representative of the
estate of the deceased account holder, or if there is no such
representative, to the person or persons determined to be entitled
thereto under the laws of the domicile of the deceased account holder.
SEC. 6. RULES GOVERNING AO ACCOUNTS RELATING TO INVESTMENT, ACCOUNTING,
AND REPORTING.
(a) Investment Program.--
(1) 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
(2).
(2) Securities.--
(A) 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 Fund.
(B) Investment.--
(i) 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
Director, and shall bear interest at a rate
equal to the average market yield (computed 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
obligations) 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 10 years after the end of
such calendar month.
(ii) Any average market yield computed
under clause (i) which is not a multiple of
one-eighth of 1 percent, shall be rounded to
the nearest multiple of one-eighth of 1
percent.
(b) Independent Public Accountant.--
(1) In general.--Under regulations which shall be
prescribed by the Executive Director, and subject to the
provisions of this title, section 8439(b) of title 5, United
States Code (relating to engagement of independent qualified
public accountant), 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 Fund.
(2) Application rules.--For purposes of paragraph (1),
references in such section 8439(b) to an employee, Member,
former employee, or former Member shall be deemed references to
an account holder of an AO account in the American Opportunity
Fund.
(c) Confidentiality and Disclosure.--
(1) In general.--Except as otherwise authorized by Federal
law, the American Opportunity Fund Board, the Executive
Director, 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
Fund.
(2) Disclosure to designee of beneficiary.--The Executive
Director may, subject to such requirements and conditions as he
may prescribe by regulations, 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 disclosure, 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 person.
SEC. 7. AMERICAN OPPORTUNITY FUND BOARD.
(a) In General.--There is established in the executive branch of
the Government an American Opportunity Fund Board.
(b) Composition, Duties, and Responsibilities.--Subject to the
provisions of this title, 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 Board:
(1) Section 8472 of title 5, United States Code (relating
to composition of Federal Retirement Thrift Investment Board).
(2) Section 8474 of such title (relating to Executive
Director).
(3) Section 8476 of such title (relating to administrative
provisions).
SEC. 8. FIDUCIARY RESPONSIBILITIES.
(a) In General.--Under regulations of the Secretary of Labor, the
provisions of sections 8477 and 8478 of title 5, United States Code,
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 Fund.
(b) Investigative Authority.--Any authority available to the
Secretary of Labor under section 504 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1134) is hereby made available to the
Secretary of Labor, and any officer designated by the Secretary of
Labor, to determine whether any person has violated, or is about to
violate, any provision applicable under subsection (a).
(c) Exculpatory Provisions; Insurance.--
(1) In general.--Any provision in an agreement or
instrument which purports to relieve a fiduciary from
responsibility or liability for any responsibility, obligation,
or duty under this title shall be void.
(2) 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 therein, 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 obligation.
SEC. 9. 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 for,
or amount of, any benefit or service, paid for in whole or in part with
Federal funds, including student financial aid.
SEC. 10. REPORTS.
(a) Reports to Congress.--The Executive Director, in consultation
with the Secretary, shall annually transmit a written report to the
Congress. Such report shall include--
(1) a detailed description of the status and operation of
the American Opportunity Fund and the management of the AO
accounts; and
(2) a detailed accounting of the administrative expenses in
carrying out this title, 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 accounts.
(b) 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 account, which shall include--
(1) a statement of the balance of individual's AO account;
(2) a projection of the account's growth by the time the
individual attains the age of 18; and
(3) such other information as the Secretary deems relevant.
SEC. 11. PROGRAMS FOR PROMOTING FINANCIAL CAPABILITY.
The Secretary of the Treasury, in coordination with the Financial
Literacy and Education Commission, shall develop programs to promote
the financial capability of account holders of AO accounts.
SEC. 12. TAX TREATMENT.
(a) Contributions and Distributions.--Part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 is amended by inserting
after section 139I the following new section:
``SEC. 139J. CONTRIBUTIONS TO AND DISTRIBUTIONS FROM AO ACCOUNTS.
``Gross income shall not include--
``(1) any contribution credited to the AO account of the
taxpayer under section 4(a)(3) of the American Opportunity
Accounts Act, and
``(2) any distribution from such an AO account.''.
(b) Tax Treatment of Earnings and Distributions.--Subchapter F of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new part:
``PART IX--AMERICAN OPPORTUNITY FUND AND AO ACCOUNTS
``Sec. 530A. American Opportunity Fund and AO accounts.
``SEC. 530A. AMERICAN OPPORTUNITY FUND AND AO ACCOUNTS.
``(a) General Rule.--The American Opportunity Fund and AO accounts
shall be exempt from taxation under this subtitle. Notwithstanding the
preceding sentence, a AO account shall be subject to the taxes imposed
by section 511 (relating to imposition of tax on unrelated business
income of charitable organizations).
``(b) Definitions.--For purposes of this section, the terms
`American Opportunity Fund' and `AO account' have the meanings given
such terms under the American Opportunity Accounts Act.''.
(c) Conforming Amendments.--
(1) The table of sections for part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after the item related to section 139I the following
new item:
``Sec. 139J. Contributions to and distributions from AO accounts.''.
(2) The table of parts for subchapter F of chapter 1 of
such Code is amended by adding at the end the following new
item:
``Part IX--American Opportunity Fund and AO Accounts''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2023.
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