SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Universal Savings Account Act''.

SEC. 2. UNIVERSAL SAVINGS 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--UNIVERSAL SAVINGS ACCOUNTS

``SEC. 530A. UNIVERSAL SAVINGS ACCOUNTS.

    ``(a) General Rule.--A Universal Savings 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) Universal Savings Account.--For purposes of this section, the 
term `Universal Savings Account' means a trust created or organized in 
the United States by an eligible individual for the exclusive benefit 
of such eligible individual or his beneficiaries and which is 
designated (in such manner as the Secretary shall prescribe) at the 
time of the establishment of the trust as a Universal Savings Account, 
but only if the written governing instrument creating the trust meets 
the following requirements:
            ``(1) Except in the case of a qualified rollover 
        contribution described in subsection (e)--
                    ``(A) no contribution will be accepted unless it is 
                in cash, and
                    ``(B) contributions will not be accepted for the 
                calendar year in excess of the contribution limit 
                specified in subsection (d)(1).
            ``(2) 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.
            ``(3) No part of the trust assets will be invested in life 
        insurance contracts.
            ``(4) The interest of an individual in the balance of his 
        account is nonforfeitable.
            ``(5) The assets of the trust shall not be commingled with 
        other property except in a common trust fund or common 
        investment fund.
    ``(c) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual who is--
            ``(1) not less than 18 years of age, and
            ``(2) a citizen or legal permanent resident of the United 
        States.
    ``(d) Treatment of Contributions and Distributions.--
            ``(1) Contribution limit.--
                    ``(A) In general.--The aggregate amount of 
                contributions (other than qualified rollover 
                contributions described in subsection (e)) for any 
                calendar year to all Universal Savings Accounts 
                maintained for the benefit of an eligible individual 
                shall not exceed $5,500.
                    ``(B) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of any 
                        calendar year after 2016, the $5,500 amount 
                        under subparagraph (A) 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 2015' for `calendar year 1992' in 
                                subparagraph (B) thereof.
                            ``(ii) Rounding rules.--If any amount after 
                        adjustment under clause (i) is not a multiple 
                        of $500, such amount shall be rounded to the 
                        next lower multiple of $500.
            ``(2) Distributions.--Any distribution from a Universal 
        Savings Account shall not be includible in gross income.
    ``(e) Qualified Rollover Contribution.--For purposes of this 
section, the term `qualified rollover contribution' means a 
contribution to a Universal Savings Account from another such account 
of the same beneficiary, but only if such amount is contributed not 
later than the 60th day after the distribution from such other account.
    ``(f) Treatment of Account Upon Death.--Upon death of any 
individual for whose benefit a Universal Savings Account has been 
established--
            ``(1) all amounts in such account shall be treated as 
        distributed on the date of such individual's death, and
            ``(2) such account shall cease to be treated as a Universal 
        Savings Account.
    ``(g) Loss of Taxation Exemption of Account Where Beneficiary 
Engages in Prohibited Transaction; Effect of Pledging Account as 
Security.--Rules similar to the rules of paragraph (2) and (4) of 
section 408(e) shall apply to any Universal Savings Account.
    ``(h) Limitation to 1 Account Per Individual.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        trust created for the benefit of an eligible individual shall 
        be treated as a Universal Savings Account under subsection (b) 
        if such eligible individual has in existence another Universal 
        Savings Account at the time such trust was established.
            ``(2) Exception.--Under regulations established by the 
        Secretary, paragraph (1) shall not apply with respect to any 
        trust created for the purposes of receiving a qualified 
        rollover contribution consisting of all amounts in the 
        previously established Universal Savings Account.
    ``(i) Reports.--The trustee of a Universal Savings 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) 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 (4), by inserting ``or'' at the end of 
        paragraph (5), and by inserting after paragraph (5) the 
        following new paragraph:
            ``(6) a Universal Savings 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 Universal Savings Accounts.--For 
purposes of this section--
            ``(1) In general.--In the case of Universal Savings 
        Accounts (within the meaning of section 530A), the term `excess 
        contributions' means the sum of--
                    ``(A) the amount by which the amount contributed 
                for the calendar year to such accounts (other than 
                qualified rollover contributions (as defined in section 
                530A(e)) exceeds the contribution limit under section 
                530A(d)(1) for such calendar year, and
                    ``(B) 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(d)(1) for the calendar 
                year over the amount contributed to the accounts for 
                the calendar year.
            ``(2) Special rule.--A contribution shall not be taken into 
        account under paragraph (1) if such contribution (together with 
        the amount of net income attributable to such contribution) is 
        returned to the beneficiary before July 1 of the year following 
        the year in which the contribution is made.''.
    (c) Failure To Provide Reports on Universal Savings 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 inserting after subparagraph (F) the following new 
subparagraph:
                    ``(G) section 530A(i) (relating to Universal 
                Savings Accounts).''.
    (d) 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. Universal Savings Accounts.''.

    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.
Universal Savings Account Act This bill amends the Internal Revenue Code to allow for the establishment of Universal Savings Accounts. These Accounts shall be tax-exempt and may be opened by any individual who is at least 18 years of age and a U.S. citizen or legal permanent resident. Contributions to these Accounts must be in cash and may not exceed $5,500 (adjusted annually for inflation) in any calendar year. Distributions from a Universal Savings Account are excluded from the gross income of the account holder for income tax purposes. 
Universal Savings Account Act