I 

114TH CONGRESS 

1ST SESSION H. R. 4094 

To amend the Internal Revenue Code of 1986 to create Universal Savings 

Accounts. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 19, 2015 

Mr. BRAT introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to create 

Universal Savings Accounts. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Universal Savings Ac5 count Act’’. 

6 SEC. 2. UNIVERSAL SAVINGS ACCOUNTS. 

7 (a) IN GENERAL.—Subchapter F of chapter 1 of the 

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following new part: 

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1 ‘‘PART IX—UNIVERSAL SAVINGS ACCOUNTS 

2 ‘‘SEC. 530A. UNIVERSAL SAVINGS ACCOUNTS. 

3 ‘‘(a) GENERAL RULE.—A Universal Savings Account 

4 shall be exempt from taxation under this subtitle. Not5 withstanding the preceding sentence, such account shall 

6 be subject to the taxes imposed by section 511 (relating 

7 to imposition of tax on unrelated business income of chari8 table organizations). 

9 ‘‘(b) UNIVERSAL SAVINGS ACCOUNT.—For purposes 

10 of this section, the term ‘Universal Savings Account’ 

11 means a trust created or organized in the United States 

12 by an eligible individual for the exclusive benefit of such 

13 eligible individual or his beneficiaries and which is des14 ignated (in such manner as the Secretary shall prescribe) 

15 at the time of the establishment of the trust as a Universal 

16 Savings Account, but only if the written governing instru17 ment creating the trust meets the following requirements: 

18 ‘‘(1) Except in the case of a qualified rollover 

19 contribution described in subsection (e)— 

20 ‘‘(A) no contribution will be accepted un21 less it is in cash, and 

22 ‘‘(B) contributions will not be accepted for 

23 the calendar year in excess of the contribution 

24 limit specified in subsection (d)(1). 

25 ‘‘(2) The trustee is a bank (as defined in sec26 tion 408(n)) or another person who demonstrates to 

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1 the satisfaction of the Secretary that the manner in 

2 which that person will administer the trust will be 

3 consistent with the requirements of this section or 

4 who has so demonstrated with respect to any indi5 vidual retirement plan. 

6 ‘‘(3) No part of the trust assets will be invested 

7 in life insurance contracts. 

8 ‘‘(4) The interest of an individual in the bal9 ance of his account is nonforfeitable. 

10 ‘‘(5) The assets of the trust shall not be com11 mingled with other property except in a common 

12 trust fund or common investment fund. 

13 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

14 section, the term ‘eligible individual’ means any individual 

15 who is— 

16 ‘‘(1) not less than 18 years of age, and 

17 ‘‘(2) a citizen or legal permanent resident of the 

18 United States. 

19 ‘‘(d) TREATMENT OF CONTRIBUTIONS AND DIS20 TRIBUTIONS.— 

21 ‘‘(1) CONTRIBUTION LIMIT.— 

22 ‘‘(A) IN GENERAL.—The aggregate 

23 amount of contributions (other than qualified 

24 rollover contributions described in subsection 

25 (e)) for any calendar year to all Universal Savmstockstill on DSK4VPTVN1PROD with BILLS

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1 ings Accounts maintained for the benefit of an 

2 eligible individual shall not exceed $5,500. 

3 ‘‘(B) COST-OF-LIVING ADJUSTMENT.— 

4 ‘‘(i) IN GENERAL.—In the case of any 

5 calendar year after 2016, the $5,500 

6 amount under subparagraph (A) shall be 

7 increased by an amount equal to— 

8 ‘‘(I) such dollar amount, multi9 plied by 

10 ‘‘(II) the cost-of-living adjust11 ment determined under section 1(f)(3) 

12 for the calendar year, determined by 

13 substituting ‘calendar year 2015’ for 

14 ‘calendar year 1992’ in subparagraph 

15 (B) thereof. 

16 ‘‘(ii) ROUNDING RULES.—If any 

17 amount after adjustment under clause (i) 

18 is not a multiple of $500, such amount 

19 shall be rounded to the next lower multiple 

20 of $500. 

21 ‘‘(2) DISTRIBUTIONS.—Any distribution from a 

22 Universal Savings Account shall not be includible in 

23 gross income. 

24 ‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For 

25 purposes of this section, the term ‘qualified rollover conmstockstill on DSK4VPTVN1PROD with BILLS

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1 tribution’ means a contribution to a Universal Savings Ac2 count from another such account of the same beneficiary, 

3 but only if such amount is contributed not later than the 

4 60th day after the distribution from such other account. 

5 ‘‘(f) TREATMENT OF ACCOUNT UPON DEATH.— 

6 Upon death of any individual for whose benefit a Universal 

7 Savings Account has been established— 

8 ‘‘(1) all amounts in such account shall be treat9 ed as distributed on the date of such individual’s 

10 death, and 

11 ‘‘(2) such account shall cease to be treated as 

12 a Universal Savings Account. 

13 ‘‘(g) LOSS OF TAXATION EXEMPTION OF ACCOUNT

14 WHERE BENEFICIARY ENGAGES IN PROHIBITED TRANS15 ACTION; EFFECT OF PLEDGING ACCOUNT AS SECU16 RITY.—Rules similar to the rules of paragraphs (2) and 

17 (4) of section 408(e) shall apply to any Universal Savings 

18 Account. 

19 ‘‘(h) LIMITATION TO 1 ACCOUNT PER INDIVIDUAL.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), no trust created for the benefit of an eli22 gible individual shall be treated as a Universal Sav23 ings Account under subsection (b) if such eligible in24 dividual has in existence another Universal Savings 

25 Account at the time such trust was established. 

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1 ‘‘(2) EXCEPTION.—Under regulations estab2 lished by the Secretary, paragraph (1) shall not 

3 apply with respect to any trust created for the pur4 poses of receiving a qualified rollover contribution 

5 consisting of all amounts in the previously estab6 lished Universal Savings Account. 

7 ‘‘(i) REPORTS.—The trustee of a Universal Savings 

8 Account shall make such reports regarding such account 

9 to the Secretary and to the beneficiary of the account with 

10 respect to contributions, distributions, and such other 

11 matters as the Secretary may require. The reports re12 quired by this subsection shall be filed at such time and 

13 in such manner and furnished to such individuals at such 

14 time and in such manner as may be required.’’. 

15 (b) TAX ON EXCESS CONTRIBUTIONS.— 

16 (1) IN GENERAL.—Subsection (a) of section 

17 4973 of the Internal Revenue Code of 1986 is 

18 amended by striking ‘‘or’’ at the end of paragraph 

19 (5), by inserting ‘‘or’’ at the end of paragraph (6), 

20 and by inserting after paragraph (6) the following 

21 new paragraph: 

22 ‘‘(6) a Universal Savings Account (as defined in 

23 section 530A),’’. 

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1 (2) EXCESS CONTRIBUTION.—Section 4973 of 

2 such Code is amended by adding at the end the fol3 lowing new subsection: 

4 ‘‘(i) EXCESS CONTRIBUTIONS TO UNIVERSAL SAV5 INGS ACCOUNTS.—For purposes of this section— 

6 ‘‘(1) IN GENERAL.—In the case of Universal 

7 Savings Accounts (within the meaning of section 

8 530A), the term ‘excess contributions’ means the 

9 sum of— 

10 ‘‘(A) the amount by which the amount con11 tributed for the calendar year to such accounts 

12 (other than qualified rollover contributions (as 

13 defined in section 530A(e))) exceeds the con14 tribution limit under section 530A(d)(1) for 

15 such calendar year, and 

16 ‘‘(B) the amount determined under this 

17 subsection for the preceding calendar year, re18 duced by the excess (if any) of the maximum 

19 amount allowable as a contribution under sec20 tion 530A(d)(1) for the calendar year over the 

21 amount contributed to the accounts for the cal22 endar year. 

23 ‘‘(2) SPECIAL RULE.—A contribution shall not 

24 be taken into account under paragraph (1) if such 

25 contribution (together with the amount of net inmstockstill on DSK4VPTVN1PROD with BILLS

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1 come attributable to such contribution) is returned 

2 to the beneficiary before July 1 of the year following 

3 the year in which the contribution is made.’’. 

4 (c) FAILURE TO PROVIDE REPORTS ON UNIVERSAL

5 SAVINGS ACCOUNTS.—Paragraph (2) of section 6693(a) 

6 of the Internal Revenue Code of 1986 is amended by strik7 ing ‘‘and’’ at the end of subparagraph (E), by striking 

8 the period at the end of subparagraph (F) and inserting 

9 ‘‘, and’’, and by inserting after subparagraph (F) the fol10 lowing new subparagraph: 

11 ‘‘(G) section 530A(i) (relating to Universal 

12 Savings Accounts).’’. 

13 (d) CONFORMING AMENDMENT.—The table of parts 

14 for subchapter F of chapter 1 of the Internal Revenue 

15 Code of 1986 is amended by adding at the end the fol16 lowing new item: 

‘‘Part IX. Universal Savings Accounts.’’. 

17 (e) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2015. 

Æ 

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