[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1718 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 1718
To amend the Internal Revenue Code of 1986 to create invest America
accounts.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 12, 2025
Mr. Cruz introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to create invest America
accounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Invest America Act''.
SEC. 2. INVEST AMERICA ACCOUNTS.
(a) In General.--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--INVEST AMERICA ACCOUNTS
``SEC. 530A. INVEST AMERICA ACCOUNTS.
``(a) General Rule.--An invest America account shall be exempt from
taxation under this subtitle. Notwithstanding the preceding sentence,
such account shall be subject to the taxes imposed by section 511
(relating to imposition of tax on unrelated business income of
charitable organizations).
``(b) Invest America Account.--For purposes of this section--
``(1) 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 (in
such manner as the Secretary shall prescribe) at the time of
the establishment of the trust as an invest America account,
but only if the written governing instrument creating the trust
meets the following requirements:
``(A) Except in the case of a qualified rollover
contribution described in subsection (e), no
contribution will be accepted--
``(i) unless it is in cash, and
``(ii) if such contribution would result in
aggregate contributions for the taxable year
exceeding the contribution limit specified in
subsection (c)(1).
``(B) No distribution (other than a qualified
rollover distribution) will be allowed before the date
on which the beneficiary attains the age of 18.
``(C) The trustee is a bank (as defined in section
408(n)) 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 plan.
``(D) The interest of an individual in the balance
of his account is nonforfeitable.
``(E) The assets of the trust shall not be
commingled with other property except in a common trust
fund or common investment fund.
``(F) No part of the trust funds will be invested
in any asset other than eligible investments.
``(2) Eligible investments.--The term `eligible
investments' means any mutual fund or exchange traded fund
which--
``(A) tracks the returns of the Standard and Poor's
500 stock market index, and
``(B) meets such other requirements as provided by
the Secretary.
``(c) Treatment of Contributions.--
``(1) Contribution limit.--The contribution limit for any
taxable year is $5,000.
``(2) Cost-of-living adjustment.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 2026, the $5,000
amount under paragraph (1) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year, determined by substituting
`calendar year 2025' for `calendar year 2016'
in subparagraph (A)(ii) thereof.
``(B) Rounding.--If any increase under subparagraph
(A) is not a multiple of $100, such amount shall be
rounded to the next lower multiple of $100.
``(d) Distributions.--
``(1) 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 72, except that the character
of such income shall be determined after the application of
section 1(h)(12).
``(2) Exceptions.--Paragraph (1) shall not apply to any
qualified rollover contribution.
``(e) Qualified Rollover Contribution.--For purposes of this
section, the term `qualified rollover contribution' means--
``(1) a contribution made pursuant to section 3(a) of the
Invest America Act, or
``(2) an amount which is paid in a direct trustee-to-
trustee transfer to an invest America account maintained for
the benefit of such designated beneficiary.
``(f) Treatment After Death of Account Beneficiary.--Rules similar
to the rules of section 223(f)(8) shall apply for purposes of this
section.
``(g) Custodial Accounts.--For purposes of this section, 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--
``(1) the custodial account or annuity contract would,
except for the fact that it is not a trust, constitute a trust
which meets the requirements of subsection (b)(1), and
``(2) in the case of a custodial account, the assets of
such account are held by a bank (as defined in section 408(n))
or another person who demonstrates, to the satisfaction of the
Secretary, that the manner in which he will administer the
account will be consistent with the requirements of this
section.
For purposes of this title, in the case of a custodial account or
annuity contract treated as a trust by reason of the preceding
sentence, the person holding the assets of such account or holding such
annuity contract shall be treated as the trustee thereof.
``(h) 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 contributions,
distributions, and such other matters as the Secretary may require. 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 required.''.
(b) Distribution Taxed at Same Rate as Net Capital Gains.--Section
1(h) of the Internal Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
``(12) Distributions from invest america accounts taxed as
net capital gain.--For purposes of this subsection, the term
`net capital gain' meant the net capital gain (determined
without regard to this paragraph) increased by the amount of
distributions made during the taxable year from an invest
America account (as defined in section 530A) which are
includible in income under section 530A(d).''.
(c) Tax on Excess Contributions.--
(1) In general.--Subsection (a) of section 4973 of the
Internal Revenue Code of 1986 is amended by striking ``or'' at
the end of paragraph (5), by inserting ``or'' at the end of
paragraph (6), and by inserting after paragraph (6) the
following new paragraph:
``(7) an invest America account (as defined in section
530A),''.
(2) Excess contribution.--Section 4973 of such Code is
amended by adding at the end the following new subsection:
``(i) Excess Contributions to Invest America Accounts.--For
purposes of this section, in the case of invest America accounts
(within the meaning of section 530A), the term `excess contributions'
means the sum of--
``(1) the amount by which the amount contributed for the
calendar year to such account (other than qualified rollover
contributions (as defined in section 530A(e))) exceeds the
contribution limit under section 530A(c)(1), and
``(2) the amount determined under this subsection for the
preceding calendar year, reduced by the excess (if any) of the
maximum amount allowable as a contribution under section
530A(c)(1) for the calendar year over the amount contributed to
the account for the calendar year (other than qualified
rollover contributions (as so defined)).''.
(d) Failure To Provide Reports on Invest America Accounts.--
Paragraph (2) of section 6693(a) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of subparagraph (E), by
striking the period at the end of subparagraph (F) and inserting ``,
and'', and by adding at the end the following new subparagraph:
``(G) section 530A(h) (relating to invest America
accounts).''.
(e) Conforming Amendment.--The table of parts for subchapter F of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Part IX. Invest America Accounts''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 3. FEDERAL CONTRIBUTIONS TO INVEST AMERICA ACCOUNTS.
(a) In General.--As soon as practical after an individual is
certified as an eligible individual under subsection (c), the Secretary
of the Treasury shall pay to the invest America account of such
eligible individual an amount equal to $1,000.
(b) Eligible Individual.--For purposes of this section, the term
``eligible individual'' means any individual who--
(1) is born after July 4, 2026,
(2) is a United States citizen, and
'(3) has at least one parent who, at the time of the
individual's birth, is a United States citizen.
(c) Certification of Eligible Individuals.--
(1) In general.--The Secretary of the Treasury, in
consultation with the Commissioner of Social Security, shall
establish procedures for the certification of individuals as
eligible individuals.
(2) Timing.--No certification may be made under this
section more than 6 months after the date of the individual's
birth.
(d) Automatic Establishment of Invest America Accounts in Certain
Cases.--
(1) In general.--If an eligible individual does not have an
invest America account, the Secretary shall establish such an
account on behalf of such individual.
(2) Selection of account provider.--The Secretary of the
Treasury shall develop rules for the selection of persons
described in section 530A(b)(1)(C) for the establishment of
invest America accounts of individuals to whom paragraph (1)
applies. Such rules shall provide for selection based on low
fees, historical investment performance, administrative
capabilities, and such other criteria as the Secretary
determines appropriate.
(e) Tax Treatment.--
(1) In general.--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. FEDERAL CONTRIBUTIONS TO INVEST AMERICA ACCOUNTS.
``Gross income shall not include any contribution made by the
Secretary to an invest America account under section 3(a) of the Invest
America Act.''.
(2) Clerical amendment.--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 relating to section
139I the following new item:
``Sec. 139J. Federal contributions to invest America accounts.''.
(3) Effective date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2024.
(f) Appropriation.--There are hereby appropriated such sums as may
be necessary to make payments under subsection (a).
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