[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5450 Introduced in House (IH)]
<DOC>
114th CONGRESS
2d Session
H. R. 5450
To establish an American Savings Account Fund and create a retirement
savings plan available to all employees, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 10, 2016
Mr. Huffman (for himself and Ms. Bonamici) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To establish an American Savings Account Fund and create a retirement
savings plan available to all employees, 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.
This Act may be cited as the ``American Savings Account Act of
2016''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--ADMINISTRATION
Sec. 101. American Savings Account Board of Directors.
Sec. 102. Responsibilities of American Savings Account Board of
Directors.
Sec. 103. Fiduciary responsibilities; liability and penalties.
Sec. 104. American Savings Account Fund Advisory Council.
TITLE II--AMERICAN SAVINGS ACCOUNT FUND
Sec. 201. American Savings Account Fund.
Sec. 202. Tax treatment of the American Savings Account Fund.
TITLE III--AMERICAN SAVINGS ACCOUNTS
Sec. 301. American Savings Accounts.
Sec. 302. Employer requirements.
Sec. 303. State retirement savings plans.
Sec. 304. Definitions.
TITLE IV--CONFORMING AMENDMENTS
Sec. 401. American Savings Accounts.
Sec. 402. Penalty for employer noncompliance.
Sec. 403. Outreach.
Sec. 404. Independent contractors.
TITLE I--ADMINISTRATION
SEC. 101. AMERICAN SAVINGS ACCOUNT BOARD OF DIRECTORS.
(a) In General.--There is established an American Savings Account
Board of Directors (hereafter referred to in this title as the
``Board'') as a federally chartered organization. Except as otherwise
provided, such Board has perpetual existence.
(b) Purpose.--The purpose of the Board is--
(1) to establish policies for the investment and management
of the American Savings Account Fund; and
(2) to carry out the responsibilities of the Board under
section 102.
(c) Membership.--The Board shall be composed of 9 members appointed
by the President in consultation with the Secretary of Labor and with
the advice and consent of the Senate, to include--
(1) the Secretary of Labor or a delegate of the Secretary;
(2) 1 representative of employers;
(3) 1 representative of the private retirement savings
investment industry;
(4) 1 representative of employees;
(5) 1 representative of retirees; and
(6) the Executive Director and 3 additional members of the
Federal Retirement Thrift Investment Board established under
section 8472(a) of title 5, United States Code.
Of such 9 members, 1 shall be elected by the members of the Board as
the Chair.
(d) Terms and Vacancies.--
(1) Term.--A member of the Board shall be appointed for a
term of 4 years and, after the expiration of such term, may be
reappointed immediately to a subsequent term.
(2) Vacancy.--A vacancy on the Board shall be filled in the
manner in which the original appointment was made and shall be
subject to any conditions which applied with respect to the
original appointment. An individual chosen to fill a vacancy
shall be appointed for the unexpired term of the member
replaced.
(3) Expiration.--The term of any member shall not expire
before the date on which the member's successor takes office.
(e) Responsibility.--The members of the Board shall discharge their
responsibilities solely in the interest of participants and
beneficiaries under this title.
(f) Compensation.--
(1) In general.--Each member of the Board who is not an
officer or employee of the Federal Government shall be
compensated at the daily rate of basic pay for grade GS-18 of
the General Schedule under subchapter III of chapter 53 of
title 5, United States Code, for each day during which such
member is engaged in performing a function of the Board.
(2) Per diem, etc.--A member of the Board shall be paid
travel, per diem, and other necessary expenses while traveling
away from such member's home or regular place of business in
the performance of the duties of the Board.
(3) Payments.--Payments authorized under this subsection
shall be paid from the American Savings Account Fund.
SEC. 102. RESPONSIBILITIES OF AMERICAN SAVINGS ACCOUNT BOARD OF
DIRECTORS.
(a) Establishment of Investment Funds and Options.--The Board shall
select or establish a list of investment funds and options similar to
those described in subsection (b) of section 8438 of title 5, United
States Code, among which an individual participating in an American
Savings Account established under section 103(a) may elect under
subsection (b)(2).
(b) Investment of Sums.--
(1) In general.--The Chair of the Board shall invest the
sums available in the American Savings Account Fund for
investment as provided in elections made under paragraph (2).
If an election has not been made with respect to any sums in
the American Savings Account Fund available for investment, the
Chair shall invest such sums in a portfolio similar to the age-
appropriate target date asset allocation portfolio established
by the Federal Retirement Thrift Investment Board under section
8438(b) of title 5, United States Code, in the same manner as
sums in the Thrift Savings Fund established under section 8437
of title 5, United States Code, are invested under such
section.
(2) Election.--
(A) In general.--At least twice each year, an
individual participating in an American Savings Account
established under subsection (c)(1) may elect any of
the investment funds and options referred to in
subsection (a) into which the sums in the American
Savings Account Fund credited to such individual's
American Savings Account are to be invested or
reinvested in the same manner as sums in the Thrift
Savings Fund are invested under section 8438 of title
5, United States Code.
(B) Form and manner of election.--An election may
be made under subparagraph (A) only in such manner and
within such period as shall be provided by the Chair of
the Board.
(c) Accounting and Information.--
(1) In general.--The Chair of the Board shall establish and
maintain--
(A) an American Savings Account described in
paragraph (1) of section 301(a); or
(B) at the election of the individual pursuant to
section 301(b)(2), an American Savings Account
described in paragraph (2) of section 301(a);
for each individual who makes contributions under section
301(b)(3), or for whom contributions are made under section
302, to the American Savings Account Fund.
(2) Balance; allocation of earnings and losses, etc.--Rules
similar to the rules of paragraphs (2) and (3) of section
8439(a) of title 5, United States Code, shall apply for
purposes of an individual's American Savings Account
established under paragraph (1).
(3) Examination by qualified public accountant; reporting,
etc.--Rules similar to the requirements of subsections (b),
(c), and (d) of section 8439 of title 5, United States Code,
shall apply with respect to individuals for whom an American
Savings Account is maintained under this subsection (in the
case of such subsection (d), applied as if each such individual
were an employee described in such subsection).
(d) Reporting Requirements.--
(1) Annual report.--The Board shall, not later than June 30
of each year, submit to Congress an annual report on the
operations of the American Savings Account Fund. Such report
shall include, for the prior calendar year, information on the
number of participants as of the last day of such prior
calendar year, the median balance in participants' accounts as
of such last day, demographic information on participants, the
percentage allocation of amounts among investment funds or
options, the status of the development and implementation of
the mutual fund window, the diversity demographics of any
company, investment adviser, or other entity retained to invest
and manage the assets of the American Savings Account Fund, and
such other information as the Board considers appropriate. A
copy of each annual report under this subsection shall be made
available to the public through an Internet website.
(2) Reporting of fees and other information.--
(A) In general.--The Board shall provide to each
individual for whom an account is maintained--
(i) a periodic statement relating to the
individual's account;
(ii) a summary description of the
investment funds and options under subsection
(a) covering, and an evaluation of, each such
option during the 5-year period preceding the
date as of which such evaluation is made;
(iii) a statement of the amount of the
investment management fees, administrative
expenses, and any other fees or expenses paid
with respect to each such investment fund and
option; and
(iv) a statement notifying participants as
to how they may access the annual report
described in paragraph (1), as well as any
other information concerning American Savings
Accounts that might be useful.
If the fees and expenses described in clause (iii)
exceed the fees charged to a similarly situated
individual who contributes to the Thrift Savings Fund
established under section 8437 of title 5, United
States Code, the information required under the
preceding sentence shall include a statement
identifying the reason for such excess.
(B) Time when sent.--Information under subparagraph
(A) with respect to each participant shall be provided
immediately upon payment of the participant's first
contribution to the American Savings Account Fund and
on a regular basis thereafter, in a manner designed to
facilitate informed decisionmaking with respect to
elections under subsection (b)(2). Nothing in this
subparagraph shall be considered to limit the
dissemination of information only to the times required
under the preceding sentence.
(C) Use of estimates.--For purposes of providing
the information required under this paragraph, the
Board may provide a reasonable and representative
estimate of any fees or expenses described in
subparagraph (A) and shall indicate any such estimate
as being such an estimate. Any such estimate shall be
based on the previous year's experience.
SEC. 103. FIDUCIARY RESPONSIBILITIES; LIABILITY AND PENALTIES.
(a) Definitions.--For purposes of this section--
(1) the term ``adequate consideration'' means--
(A) in the case of a security for which there is a
generally recognized market--
(i) the price of the security prevailing on
a national securities exchange which is
registered under section 6 of the Securities
Exchange Act of 1934; or
(ii) if the security is not traded on such
a national securities exchange, a price not
less favorable to the American Savings Account
Fund than the offering price for the security
as established by the current bid and asked
prices quoted by persons independent of the
issuer and of any party in interest; and
(B) in the case of an asset other than a security
for which there is a generally recognized market, the
fair market value of the asset as determined in good
faith by a fiduciary or fiduciaries in accordance with
regulations prescribed by the Secretary of Labor;
(2) the term ``fiduciary'' means--
(A) a member of the Board, including the Chair;
(B) any person who has or exercises discretionary
authority or discretionary control over the management
or disposition of the assets of the American Savings
Account Fund; and
(C) any person who, with respect to the American
Savings Account Fund, is described in section 3(21)(A)
of the Employee Retirement Income Security Act of 1974;
and
(3) the term ``party in interest'' includes--
(A) any fiduciary;
(B) any counsel to a person who is a fiduciary,
with respect to the actions of such person as a
fiduciary;
(C) any participant;
(D) any person providing services to the Board and,
with respect to the actions of the Chair as a
fiduciary, any person providing services to the Chair;
(E) a labor organization, the members of which are
participants;
(F) a spouse, sibling, ancestor, lineal descendant,
or spouse of a lineal descendant of a person described
in subparagraph (A), (B), or (D);
(G) a corporation, partnership, or trust or estate
of which, or in which, at least 50 percent of--
(i) the combined voting power of all
classes of stock entitled to vote or the total
value of shares of all classes of stock of such
corporation;
(ii) the capital interest or profits
interest of such partnership; or
(iii) the beneficial interest of such trust
or estate,
is owned, directly or indirectly, or held by a person
described in subparagraph (A), (B), (D), or (E);
(H) an official (including a director) of, or an
individual employed by, a person described in
subparagraph (A), (B), (D), (E), or (G), or an
individual having powers or responsibilities similar to
those of such an official;
(I) a holder (directly or indirectly) of at least
10 percent of the shares in a person described in any
subparagraph referred to in subparagraph (H); and
(J) a person who, directly or indirectly, is at
least a 10 percent partner or joint venturer (measured
in capital or profits) in a person described in any
subparagraph referred to in subparagraph (H).
(b) In General.--
(1) Discharge of responsibilities.--To the extent not
inconsistent with the provisions of this title and the policies
prescribed by the Board, a fiduciary shall discharge the
fiduciary's responsibilities with respect to the American
Savings Account Fund or applicable portion thereof solely in
the interest of the participants and beneficiaries and--
(A) for the exclusive purpose of--
(i) providing benefits to participants and
their beneficiaries; and
(ii) defraying reasonable expenses of
administering the American Savings Account Fund
or applicable portions thereof;
(B) with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent
individual acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise
of a like character and with like objectives; and
(C) to the extent permitted by this title, by
diversifying the investments of the American Savings
Account Fund or applicable portions thereof so as to
minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
(2) Ownership.--No fiduciary may maintain the indicia of
ownership of any assets of the American Savings Account Fund
outside the jurisdiction of the district courts of the United
States.
(c) Prohibited Transactions.--
(1) In general.--A fiduciary shall not permit the American
Savings Account Fund to engage in any of the following
transactions, except in exchange for adequate consideration:
(A) A transfer of any assets of the American
Savings Account Fund to any person the fiduciary knows
or should know to be a party in interest or the use of
such assets by any such person.
(B) An acquisition of any property from or sale of
any property to the American Savings Account Fund by
any person the fiduciary knows or should know to be a
party in interest.
(C) A transfer or exchange of services between the
American Savings Account Fund and any person the
fiduciary knows or should know to be a party in
interest.
(2) Special rules.--Notwithstanding paragraph (1), a
fiduciary with respect to the American Savings Account Fund
shall not--
(A) deal with any assets of the American Savings
Account Fund in the fiduciary's own interest or for the
fiduciary's own account;
(B) act, in an individual capacity or any other
capacity, in any transaction involving the American
Savings Account Fund on behalf of a party, or
representing a party, whose interests are adverse to
the interests of the American Savings Account Fund or
the interests of its participants or beneficiaries; or
(C) receive any consideration for the fiduciary's
own personal account from any party dealing with sums
credited to the American Savings Account Fund in
connection with a transaction involving assets of the
American Savings Account Fund.
(3) Granting of exemptions.--
(A) The Secretary may, in accordance with
procedures which the Secretary shall by regulation
prescribe, grant a conditional or unconditional
exemption of any fiduciary or transaction, or class of
fiduciaries or transactions, from all or part of the
restrictions imposed by paragraph (2).
(B) An exemption granted under this paragraph shall
not relieve a fiduciary from any other applicable
provision of this title.
(C) The Secretary may not grant an exemption under
this paragraph unless the Secretary finds that such
exemption is--
(i) administratively feasible;
(ii) in the interests of the American
Savings Account Fund and of its participants
and beneficiaries; and
(iii) protective of the rights of
participants and beneficiaries of such Fund.
(D) An exemption under this paragraph may not be
granted unless--
(i) notice of the proposed exemption is
published in the Federal Register;
(ii) interested persons are given an
opportunity to present views; and
(iii) the Secretary affords an opportunity
for a hearing and makes a determination on the
record with respect to the respective
requirements of clauses (i), (ii), and (iii) of
subparagraph (C).
(E) Notwithstanding subparagraph (D), the Secretary
may determine that an exemption granted for any class
of fiduciaries or transactions under section 408(a) of
the Employee Retirement Income Security Act of 1974
shall, upon publication of notice in the Federal
Register under this subparagraph, constitute an
exemption for purposes of the provisions of paragraph
(2).
(d) Allowances.--This section does not prohibit any fiduciary
from--
(1) receiving any benefit which the fiduciary is entitled
to receive under this title as a participant or beneficiary;
(2) receiving any reasonable compensation authorized by
this title for services rendered, or for reimbursement of
expenses properly and actually incurred, in the performance of
the fiduciary's duties under this title; or
(3) serving as a fiduciary in addition to being an officer,
employee, agent, or other representative of a party in
interest.
(e) Liability.--
(1) In general.--
(A) Any fiduciary that breaches the
responsibilities, duties, and obligations set out in
subsection (b) or violates subsection (c) shall be
personally liable to the American Savings Account Fund
for any losses to such Fund resulting from each such
breach or violation and to restore to such Fund any
profits made by the fiduciary through use of assets of
such Fund by the fiduciary, and shall be subject to
such other equitable or remedial relief as a court
considers appropriate, except as provided in paragraphs
(3) and (4). A fiduciary may be removed for a breach
referred to in the preceding sentence.
(B) The Secretary may assess a civil penalty
against a party in interest with respect to each
transaction which is engaged in by the party in
interest and is prohibited by subsection (c). The
amount of such penalty shall be equal to 5 percent of
the amount involved in each such transaction (as
defined in section 4975(f)(4) of the Internal Revenue
Code of 1986) for each year or part thereof during
which the prohibited transaction continues, except
that, if the transaction is not corrected (in such
manner as the Secretary shall prescribe by regulation
consistent with section 4975(f)(5) of such Code) within
90 days after the date the Secretary transmits notice
to the party in interest (or such longer period as the
Secretary may permit), such penalty may be in an amount
not more than 100 percent of the amount involved.
(C)(i) A fiduciary shall not be liable under
subparagraph (A) with respect to a breach of fiduciary
duty under subsection (b) committed before becoming a
fiduciary or after ceasing to be a fiduciary.
(ii) A fiduciary shall not be liable under
subparagraph (A), and no civil action may be brought
against a fiduciary--
(I) for providing for the automatic
enrollment of a participant in accordance with
this title; or
(II) for enrolling a participant or
beneficiary in a default investment fund or
option in accordance with this title.
(D) A fiduciary shall be jointly and severally
liable under subparagraph (A) for a breach of fiduciary
duty under subsection (b) by another fiduciary only
if--
(i) the fiduciary participates knowingly
in, or knowingly undertakes to conceal, an act
or omission of such other fiduciary, knowing
such act or omission is such a breach;
(ii) by the fiduciary's failure to comply
with subsection (b) in the administration of
the fiduciary's specific responsibilities which
give rise to the fiduciary status, the
fiduciary has enabled such other fiduciary to
commit such a breach; or
(iii) the fiduciary has knowledge of a
breach by such other fiduciary, unless the
fiduciary makes reasonable efforts under the
circumstances to remedy the breach.
(E) The Secretary shall prescribe, in regulations,
procedures for allocating fiduciary responsibilities
among fiduciaries, including investment managers. Any
fiduciary who, pursuant to such procedures, allocates
to a person or persons any fiduciary responsibility
shall not be liable for an act or omission of such
person or persons unless--
(i) such fiduciary violated subsection (b)
with respect to the allocation, with respect to
the implementation of the procedures prescribed
by the Secretary, or in continuing such
allocation; or
(ii) such fiduciary would otherwise be
liable in accordance with subparagraph (D).
(2) Civil action only as provided.--No civil action may be
maintained against any fiduciary with respect to the
responsibilities, liabilities, and penalties authorized or
provided for in this section except in accordance with
paragraphs (3) and (4).
(3) Rules regarding civil actions.--A civil action may be
brought in the district courts of the United States--
(A) by the Secretary against any fiduciary other
than a Member of the Board or the Chair of the Board--
(i) to determine and enforce a liability
under paragraph (1)(A);
(ii) to collect any civil penalty under
paragraph (1)(B);
(iii) to enjoin any act or practice which
violates any provision of subsection (b) or
(c);
(iv) to obtain any other appropriate
equitable relief to redress a violation of any
such provision; or
(v) to enjoin any act or practice which
violates section 101(e);
(B) by any participant, beneficiary, or fiduciary
against any fiduciary--
(i) to enjoin any act or practice which
violates any provision of subsection (b) or
(c);
(ii) to obtain any other appropriate
equitable relief to redress a violation of any
such provision; or
(iii) to enjoin any act or practice which
violates section 101(e); or
(C) by any participant or beneficiary--
(i) to recover benefits of such participant
or beneficiary under the provisions of this
title, to enforce any right of such participant
or beneficiary under such provisions, or to
clarify any such right to future benefits under
such provisions; or
(ii) to enforce any claim otherwise
cognizable under sections 1346(b) and 2671
through 2680 of title 28, United States Code,
provided that the remedy against the United
States provided by sections 1346(b) and 2672 of
title 28, United States Code, for damages for
injury or loss of property caused by the
negligent or wrongful act or omission of any
fiduciary while acting within the scope of the
fiduciary's duties or employment shall be
exclusive of any other civil action or
proceeding by the participant or beneficiary
for recovery of money by reason of the same
subject matter against the fiduciary (or the
estate of such fiduciary) whose act or omission
gave rise to such action or proceeding, whether
or not such action or proceeding is based on an
alleged violation of subsection (b) or (c).
(4) Other rules.--
(A) In all civil actions under paragraph (3)(A),
attorneys appointed by the Secretary may represent the
Secretary (except as provided in section 518(a) of
title 28, United States Code), however all such
litigation shall be subject to the direction and
control of the Attorney General.
(B) The Attorney General shall defend any civil
action or proceeding brought in any court against any
fiduciary referred to in paragraph (3)(C)(ii) (or the
estate of such fiduciary) for any such injury. Any
fiduciary against whom such a civil action or
proceeding is brought shall deliver, within such time
after date of service or knowledge of service as
determined by the Attorney General, all process served
upon such fiduciary (or an attested copy thereof) to
the Chair of the Board, who shall promptly furnish
copies of the pleading and process to the Attorney
General and the United States Attorney for the district
wherein the action or proceeding is brought.
(C) Upon certification by the Attorney General that
a fiduciary described in paragraph (3)(C)(ii) was
acting in the scope of such fiduciary's duties or
employment as a fiduciary at the time of the occurrence
or omission out of which the action arose, any such
civil action or proceeding commenced in a State court
shall be--
(i) removed without bond at any time before
trial by the Attorney General to the district
court of the United States for the district and
division in which it is pending; and
(ii) deemed a tort action brought against
the United States under the provisions of title
28, United States Code, and all references
thereto.
(D) The Attorney General may compromise or settle
any claim asserted in such civil action or proceeding
in the manner provided in section 2677 of title 28,
United States Code, and with the same effect. To the
extent section 2672 of title 28, United States Code,
provides that persons other than the Attorney General
or the Attorney General's designee may compromise and
settle claims, and that payment of such claims may be
made from agency appropriations, such provisions shall
not apply to claims based upon an alleged violation of
subsection (b) or (c).
(E) For the purposes of paragraph (3)(C)(ii) the
provisions of sections 2680(h) of title 28, United
States Code, shall not apply to any claim based upon an
alleged violation of subsection (b) or (c).
(F) Notwithstanding sections 1346(b) and 2671
through 2680 of title 28, United States Code, whenever
an award, compromise, or settlement is made under such
sections upon any claim based upon an alleged violation
of subsection (b) or (c), payment of such award,
compromise, or settlement shall be made to the
appropriate account within the American Savings Account
Fund, or where there is no such appropriate account, to
the participant or beneficiary bringing the claim.
(G) For purposes of paragraph (3)(C)(ii), the term
``fiduciary'' includes only the Members of the Board
and the Board's Chair.
(5) Prohibition of monetary relief.--Any relief awarded
against a Member of the Board or the Chair of the Board in a
civil action authorized by paragraph (3) may not include any
monetary damages or any other recovery of money.
(6) Limitation.--An action may not be commenced under
paragraph (3)(A) or (B) with respect to a fiduciary's breach of
any responsibility, duty, or obligation under subsection (b) or
a violation of subsection (c) after the earlier of--
(A) 6 years after--
(i) the date of the last action which
constituted a part of the breach or violation;
or
(ii) in the case of an omission, the latest
date on which the fiduciary could have cured
the breach or violation; or
(B) 3 years after the earliest date on which the
plaintiff had actual knowledge of the breach or
violation, except that, in the case of fraud or
concealment, such action may be commenced not later
than 6 years after the date of discovery of such breach
or violation.
(7) Jurisdiction.--
(A) The district courts of the United States shall
have exclusive jurisdiction of civil actions under this
subsection.
(B) An action under this subsection may be brought
in the District Court of the United States for the
District of Columbia or a district court of the United
States in the district where the breach alleged in the
complaint or petition filed in the action took place or
in the district where a defendant resides or may be
found. Process may be served in any other district
where a defendant resides or may be found.
(8) Service.--
(A) A copy of the complaint or petition filed in
any action brought under this subsection (other than by
the Secretary) shall be served on the Chair, the
Secretary, and the Secretary of the Treasury by
certified mail.
(B) Any officer referred to in subparagraph (A)
shall have the right in the officer's discretion to
intervene in any action. If the Secretary brings an
action under paragraph (2) on behalf of a participant
or beneficiary, the Secretary shall notify the Chair
and the Secretary of the Treasury.
(f) Regulations.--The Secretary may prescribe regulations to carry
out this section.
(g) Audits by Secretary.--
(1) In general.--The Secretary of Labor shall establish a
program to carry out audits to determine the level of
compliance with the requirements of this section relating to
fiduciary responsibilities and prohibited activities of
fiduciaries.
(2) Contracts, etc.--An audit under this subsection may be
conducted by the Secretary, by contract with a qualified
nongovernmental organization, or in cooperation with the
Comptroller General of the United States, as the Secretary
considers appropriate.
SEC. 104. AMERICAN SAVINGS ACCOUNT FUND ADVISORY COUNCIL.
(a) In General.--The Board shall establish an American Savings
Account Fund Advisory Council, to be composed of 14 members appointed
by the Chair of the Board. The Chair of the Board shall designate 1
member of the Council to serve as head of the Council.
(b) Terms and Vacancies.--
(1) Term.--A member of the Council shall be appointed for a
term of 4 years.
(2) Vacancies.--
(A) A vacancy in the Council shall be filled in the
manner in which the original appointment was made and
shall be subject to any conditions which applied with
respect to the original appointment.
(B) An individual chosen to fill a vacancy shall be
appointed for the unexpired term of the member
replaced.
(C) The term of any member shall not expire before
the date on which the member's successor takes office.
(c) Action by Majority Resolution.--The Council shall act by
resolution of a majority of the members.
(d) Responsibilities.--The Council shall--
(1) advise the Board and the Chair of the Board on matters
relating to--
(A) investment policies for the American Savings
Account Fund; and
(B) the administration of this title; and
(2) perform such other duties as the Board may direct with
respect to investment funds established in accordance with this
title.
TITLE II--AMERICAN SAVINGS ACCOUNT FUND
SEC. 201. AMERICAN SAVINGS ACCOUNT FUND.
(a) In General.--There is established in the Treasury of the United
States an American Savings Account Fund.
(b) Amounts in Fund.--The American Savings Account Fund consists of
the sum of all amounts contributed under section 302, increased by the
total net earnings from investments of sums in the American Savings
Account Fund or reduced by the total net losses from investments of the
American Savings Account Fund, and reduced by the total amount of
payments made from the American Savings Account Fund (including
payments for administrative expenses).
(c) Appropriations From Fund.--The sums in the American Savings
Account Fund are appropriated and shall remain available without fiscal
year limitation--
(1) to invest as provided in section 102(b)(1);
(2) to pay benefits or purchase annuity contracts under
section 301(b);
(3) to pay the administrative expenses of the Board
relating to the responsibilities under section 102; and
(4) at the discretion of the Chair of the Board, to
purchase insurance to cover potential liability of persons who
serve in a fiduciary capacity with respect to the American
Savings Account Fund, in a manner consistent with rules similar
to the provisions of section 8479 of title 5, United States
Code.
(d) Benefits Inalienable and Nonforfeitable.--
(1) In general.--Subject to paragraphs (3) and (4) of
subsection (c) and paragraphs (3) and (4) of this subsection,
sums in the American Savings Account Fund credited to the
American Savings Account of a participant may not be used for,
or diverted to, purposes other than for the exclusive benefit
of the participant or the participant's beneficiaries.
(2) Protection from alienation.--Except as provided in
paragraphs (3) and (4), sums in the American Savings Account
Fund may not be assigned or alienated and are not subject to
execution, levy, attachment, garnishment, or other legal
process.
(3) Certain exceptions.--Moneys due or payable from the
American Savings Account Fund to any individual shall be
subject to legal process for the enforcement of the
individual's legal obligations to provide child support or make
alimony payments as provided in section 459 of the Social
Security Act, the enforcement of an order for restitution under
section 3663A of title 18, United States Code, or an obligation
of the Chair of the Board to make a payment to another person
under paragraph (4), and shall be subject to a Federal tax levy
under section 6331 of the Internal Revenue Code of 1986.
(4) Court orders.--Rules similar to the rules of section
8467 of title 5, United States Code, shall apply with respect
to payments which would otherwise be made to a participant
under section 301(b).
(e) Limitation on Further Appropriation.--The sums in the American
Savings Account 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.
(f) Amounts Held in Trust.--All sums contributed to the American
Savings Account Fund by a participant or by an employer for the benefit
of such participant and all net earnings in such Fund attributable to
investment of such sums are held in such Fund in trust for such
participant.
SEC. 202. TAX TREATMENT OF THE AMERICAN SAVINGS ACCOUNT FUND.
(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) the American Savings Account Fund shall be treated as a
trust described in section 401(a) of such Code which is exempt
from taxation under section 501(a) of such Code;
(2) any contribution to, or distribution from, the American
Savings Account Fund shall be treated in the same manner as
contributions to or distributions from such a trust;
(3) contributions to the American Savings Account Fund
shall not be treated as distributed or made available to a
participant nor as a contribution made to the Fund by an
individual merely because the individual has, under section
302(b)(1)(C), made an election whether the contribution will be
made to the American Savings Account Fund or received by the
individual in cash; and
(4) the rules of section 414(w) of such Code shall apply
with respect to American Savings Accounts, except that
paragraph (2)(B) thereof shall be applied by substituting ``the
due date for the return of tax for the taxable year in which
the first elective contribution is made with respect to the
employee under the arrangement'' for ``the date which is 90
days after the date of the first elective contribution with
respect to the employee under the arrangement''.
(b) Coordination With Social Security Act.--Subsection (a) shall
not be construed to provide that any amount of the employee's
compensation which is contributed to the American Savings Account Fund
shall not be included in the term ``wages'' for the purposes of section
209 of the Social Security Act or section 3121(a) of the Internal
Revenue Code of 1986.
TITLE III--AMERICAN SAVINGS ACCOUNTS
SEC. 301. AMERICAN SAVINGS ACCOUNTS.
(a) In General.--For purposes of this title, the term ``American
Savings Account'' means--
(1) an individual retirement account (as defined in section
408(a) of the Internal Revenue Code of 1986); and
(2) in the case of an individual making the election under
subsection (b)(2), a Roth IRA (as defined in section 408A(b) of
such Code);
established and maintained by the Board, as trustee of such account.
(b) Special Rules.--
(1) Eligibility.--
(A) In general.--All qualified employees shall be
eligible to participate in an American Savings Account.
(B) Qualified employee.--For purposes of this
subtitle--
(i) In general.--The term ``qualified
employee'' means an employee (other than an
employee described in section 410(b)(3)(C) of
the Internal Revenue Code of 1986) of an
American employer if the employer does not
provide the opportunity for the employee to
participate in a defined contribution plan
(within the meaning of section 414(i) of the
Internal Revenue Code of 1986) maintained by
the employer that satisfies the requirements of
section 401(a) or 403(b) of the Internal
Revenue Code of 1986.
(ii) Exception for employees covered by
collective bargaining agreements.--Such term
shall not include any employee who is included
in a group of employees covered by a collective
bargaining agreement described in section
410(b)(3)(A) of such Code.
(iii) American employer.--The term
``American employer'' has the meaning given
such term by section 3121(h) of such Code.
(2) Election to convert to roth ira.--Subject to the rules
of section 408A(d)(3) of the Internal Revenue Code of 1986, an
individual may elect at any time to convert all or a portion of
the individual retirement account established for the
individual under section 102(c)(1)(A) to a Roth IRA (as defined
in section 408A(b) of such Code).
(3) Contributions.--
(A) In general.--Subject to section 302(b)(1), an
individual may contribute to the American Savings
Account Fund in any year, pursuant to an election under
section 102(b)(2), an amount not to exceed the
limitation described in subparagraph (C). Contributions
pursuant to such an election shall, with respect to
each pay period for which such election remains in
effect, be made in accordance with a program of regular
contributions as prescribed by the Chair.
(B) Eligible rollover distributions.--An individual
may contribute to the American Savings Account Fund an
eligible rollover that an individual retirement account
or Roth IRA could accept under section 408 or 408A of
the Internal Revenue Code of 1986, whichever is
applicable (after the application of subparagraph (C)).
In the case of an eligible rollover distribution (as
defined in section 402(c)(4) of such Code), the maximum
amount transferred to the American Savings Account Fund
shall not exceed the amount which would otherwise have
been included in the individual's gross income for
Federal income tax purposes.
(C) Modification of contribution limitation.--In
lieu of the contribution limitations for individual
retirement accounts or Roth IRAs, whichever is
applicable, under part I of subchapter D of chapter 1
of the Internal Revenue Code of 1986, the annual
contribution limitation applicable to an American
Savings Account shall be equal to the limitation
applicable under section 415(c) of the Internal Revenue
Code of 1986 to contributions to a defined contribution
plan.
(4) Annuities, etc.--
(A) In general.--The Board shall prescribe methods
of payment of annuities similar to the methods
available under section 8434(a)(2) of title 5, United
States Code.
(B) Rules applicable.--Rules similar to the rules
of subsections (b), (c), (d), and (e) of section 8434
of title 5, United States Code, shall apply for
purposes of this paragraph.
(5) Protections for spouses and former spouses.--
(A) In general.--Except as provided in subparagraph
(A), rules similar to the rules of sections 8433(e) and
8435 of title 5, United States Code, shall apply for
purposes of this subsection.
(B) Additional protection for surviving spouses.--A
surviving spouse shall be the first party entitled to
receive benefits (before any designated beneficiary
other than the surviving spouse) unless the surviving
spouse consents in writing to the application of the
order of precedence in effect but for this
subparagraph.
SEC. 302. EMPLOYER REQUIREMENTS.
(a) In General.--Except as provided in subsections (a) and (b) of
section 303, each United States employer shall make contributions
meeting the requirements of subsection (b) on behalf of such qualified
employee to the American Savings Account Fund, beginning with the later
of--
(1) the first pay period for which the employee receives
compensation from the employer; or
(2) the first pay period beginning on or after the
contribution beginning date.
(b) Contributions.--The requirements of this subsection are met for
a taxable year with respect to contributions to the American Savings
Account Fund on behalf of a qualified employee if--
(1) Contribution amount.--With respect to any pay period
beginning in such taxable year--
(A) In general.--Except as provided in
subparagraphs (B) and (C), such contributions are equal
to 3 percent of the compensation of the employee for
such period.
(B) Coordination with limitations.--The total
contributions to the Fund on behalf of the employee for
pay periods in any taxable year do not exceed the
contribution limitation described in section
301(b)(3)(C).
(C) Election.--After the first pay period with
respect to which a contribution is made with respect to
a qualified employee under subsection (a), the
qualified employee may elect--
(i) to change the percentage of
compensation which is contributed to the Fund
on behalf of such employee, except that such
percentage may not be less than 2 percent or
greater than the highest percentage that would
not cause total contributions during the
taxable year to exceed the limitation under
subparagraph (B); or
(ii) to discontinue contributions to the
Fund and withdraw all contributions previously
made through a salary reduction arrangement in
the same calendar year other than nonelective
contributions made by the employer on behalf of
the employee.
In the event a qualified employee elects to withdraw
all contributions previously made to the Fund under the
preceding sentence, the amount of any nonelective
contributions made by the employer on behalf of the
employee shall be withdrawn and paid to the employer.
(D) Contributions may be made through salary
reduction arrangement.--Contributions by an employer
shall not fail to meet the requirements of this
subsection solely because the employee may elect to
have the employer make payments--
(i) to the American Savings Account of the
employee; or
(ii) to the employee directly in cash.
The preceding sentence shall apply only if the
contributions on behalf of all qualified employees of
the employer for a pay period are in a uniform dollar
amount or a uniform percentage of compensation.
(E) Mandatory percentage increase offer.--
(i) In general.--If a qualified employee
elects under subparagraph (C) a contribution
percentage that is less than 5 percent, then 12
months after such election is made and every 12
months thereafter the Board shall notify the
employee in writing that such contribution
percentage will be increased by 0.5 percent
unless the employee objects within 30 days of
receipt of such notice. If the employee does
not so object, upon notification by the Board,
the employer shall increase the percentage of
the employee's compensation which is
contributed to the Fund on behalf of the
employee by 0.5 percent.
(ii) Applicability.--
(I) In general.--Clause (i) shall
cease to apply once the percentage of
compensation contributed to the Fund on
behalf of the employee is greater than
or equal to 5 percent.
(II) Coordination with
limitations.--Clause (i) shall not
apply during a taxable year if, as so
increased, the percentage of
compensation contributed to the Fund on
behalf of the employee would exceed the
percentage described in subparagraph
(C)(i).
(2) Frequency and timing of contributions.--Contributions
under subsection (a) are made not less frequently than monthly
during such year, and each such contribution is made not later
than 30 days after the close of the pay period to which it
relates.
(c) Exceptions.--Subsection (a) shall not apply to an employer that
is a church or convention or association of churches which is exempt
from tax under section 501(a) of the Internal Revenue Code of 1986. If
such an employer elects to make contributions to the American Savings
Account Fund on behalf of qualified employees of the employer, such
contributions must meet the requirements of paragraph (1).
(d) Self-Employed Individuals.--An individual--
(1) who has net earnings from self-employment (as defined
in section 1402(a) of the Internal Revenue Code of 1986);
(2) who is not a qualified employee with respect to any
employer; and
(3) who is not eligible to participate in a defined
contribution plan (within the meaning of section 414(i) of the
Internal Revenue Code of 1986) maintained by any employer;
may elect to make contributions on the individual's own behalf to the
American Savings Account Fund. Such contributions shall be made under
rules similar to the rules of section 301(b)(3).
(e) Contribution Beginning Date.--For purposes of this section, the
term ``contribution beginning date'' means January 1 of the 3rd
calendar year beginning after the date of the enactment of the American
Savings Account Act of 2016.
SEC. 303. STATE RETIREMENT SAVINGS PLANS.
(a) In General.--If a State--
(1) maintains a public retirement savings plan that allows
all covered employers in the State to enroll all employees of
the employer automatically in such plan; or
(2) allows all covered employers in the State to make
contributions to an individual retirement plan (as defined in
section 7701(a)(37) of the Internal Revenue Code of 1986) on
behalf of the employees of the employer;
such State may prohibit employers in the State from making
contributions to the American Savings Account Fund on behalf of their
employees, and section 302 shall not apply to covered employers to
which such prohibition applies.
(b) Exemption.--For purposes of this Act, the term ``employee
pension benefit plan'' shall not include a payroll deduction program
established by a State for the purpose of making contributions to one
or more individual retirement plans (as defined in section 7701(a)(37)
of the Internal Revenue Code of 1986), including such a program which
provides for automatic enrollment.
(c) Waiver of Penalty.--The penalty under section 6672(f) of the
Internal Revenue Code of 1986 shall not apply to a failure to make a
contribution on behalf of a qualified employee if the employer makes
contributions to a State plan described in subsection (a) or (b) on
behalf of such employee that satisfy the applicable requirements of
such State plan. The employer shall certify to the Secretary of the
Treasury, in such manner as shall be determined by such Secretary, that
such contributions have been made.
(d) Covered Employer.--For purposes of this section, the term
``covered employer'' means an employer--
(1) that does not provide the opportunity for employees to
participate in a defined contribution plan (within the meaning
of section 414(i) of the Internal Revenue Code of 1986)
maintained by the employer; and
(2) whose employees are not covered by a collective
bargaining agreement described in section 410(b)(3)(A) of the
Internal Revenue Code of 1986.
SEC. 304. DEFINITIONS.
Any term used in this title which is also used in section 408(k) of
the Internal Revenue Code of 1986 has the same meaning as when used in
such section.
TITLE IV--CONFORMING AMENDMENTS
SEC. 401. AMERICAN SAVINGS ACCOUNTS.
(a) Conforming Amendment.--Section 7701 of the Internal Revenue
Code of 1986 is amended by redesignating subsection (p) as subsection
(q) and by inserting after subsection (o) the following new subsection:
``(p) Tax Treatment of American Savings Account Fund.--
``(1) In general.--For purposes of this title--
``(A) the American Savings Account Fund shall be
treated as a trust described in section 401(a) which is
exempt from taxation under section 501(a);
``(B) any contribution to, or distribution from,
the American Savings Account Fund shall be treated in
the same manner as contributions to or distributions
from such a trust;
``(C) contributions to the American Savings Account
Fund shall not be treated as distributed or made
available to a participant nor as a contribution made
to the Fund by an individual merely because the
individual has, under section 302(b)(1)(C) of the
American Savings Account Act of 2016, made an election
whether the contribution will be made to the American
Savings Account Fund or received by the individual in
cash; and
``(D) the rules of section 414(w) shall apply with
respect to American Savings Accounts, except that
paragraph (2)(B) thereof shall be applied by
substituting `the due date for the return of tax for
the taxable year in which the first elective
contribution is made with respect to the employee under
the arrangement' for `the date which is 90 days after
the date of the first elective contribution with
respect to the employee under the arrangement'.
``(2) Coordination with social security act.--Paragraph (1)
shall not be construed to provide that any amount of the
employee's compensation which is contributed to the American
Savings Account Fund shall not be included in the term `wages'
for the purposes of section 209 of the Social Security Act or
section 3121(a) of this title.
``(3) Definitions.--For purposes of this subsection, the
terms `employee' and `American Savings Account Fund' shall have
the same respective meanings as when used in the American
Savings Account Act of 2016.
``(4) Coordination with other provisions of law.--No
provision of law not contained in this title shall apply for
purposes of determining the treatment under this title of the
American Savings Account Fund or any contribution to, or
distribution from, such Fund.''.
(b) Treatment of Contributions to American Savings Account Fund.--
(1) In general.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 is amended by inserting after
section 139E the following new section:
``SEC. 139F. AMOUNTS CONTRIBUTED TO AMERICAN SAVINGS ACCOUNTS.
``(a) In General.--Gross income does not include so much of the
contributions made to the American Savings Account Fund on behalf of an
individual for pay periods in the taxable year as does not exceed the
limitation applicable under section 415(c) of the Internal Revenue Code
of 1986 to contributions to a defined contribution plan.
``(b) American Savings Account Fund.--For purposes of this section,
the term `American Savings Account Fund' means the Fund established
under section 201 of the American Savings Account Act of 2016.''.
(2) Denial of deduction.--Subsection (b) of section 219 of
such Code is amended by adding at the end the following new
paragraph:
``(6) Special rule for american savings accounts.--This
section shall not apply with respect to any amount contributed
to an individual retirement account (as defined in section
408(a)) or a Roth IRA (as defined in section 408A(b)) which is
an American Savings Account (as defined in section 301 of the
American Savings Account Act of 2016).''.
(3) Clerical amendment.--The table of sections for part III
of subchapter B of chapter 1 of such Code is amended by
inserting after the item relating to section 139E the following
new item:
``Sec. 139F. Amounts contributed to American Savings Accounts.''.
(c) Treatment of Distributions as Separate From Other IRAs and Roth
IRAs.--Subparagraph (A) of section 408(d)(2) of the Internal Revenue
Code of 1986 is amended by striking ``plans'' and inserting ``plans
(other than American Savings Accounts, within the meaning of section
301 of the American Savings Account Act of 2016)''.
(d) Effective Date.--
(1) Program.--The Chair of the American Savings Account
Board of Directors shall establish the American Savings Account
program such that the American Savings Account Fund is prepared
to begin receiving contributions on January 1 of the 3rd
calendar year beginning after the date of the enactment of this
Act.
(2) Treatment of contributions.--Except as provided in
paragraph (1), the amendments made by this section shall apply
to contributions made to the American Savings Account Fund, as
established by the amendments made by subsection (a), after
December 31 of the 2nd calendar year beginning after the date
of the enactment of this Act.
SEC. 402. PENALTY FOR EMPLOYER NONCOMPLIANCE.
Section 6672 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subsection:
``(f) Employer Noncompliance With Requirements of American Savings
Account Act.--Except as provided in section 303(c) of the American
Savings Account Act of 2016, any employer that fails to make any
contribution required by section 302 of such Act shall be treated for
purposes of subsection (a) as if the employer had willfully failed to
collect a tax in the amount of such required contribution.''.
SEC. 403. OUTREACH.
The Commissioner of Internal Revenue shall provide to any person
filing Form 1099 information on contributing to the American Savings
Account Fund.
SEC. 404. INDEPENDENT CONTRACTORS.
The Secretary of Labor shall promulgate rules allowing employers
to--
(1) request explicit authorization from independent
contractors with such employers to contribute on behalf of such
independent contractors to the American Savings Account Fund;
and
(2) automatically withhold and transmit a set amount or
percentage of compensation paid to such independent contractors
to such Fund.
<all>