I 

109TH CONGRESS 

1ST SESSION H. R. 3304

To amend the Social Security Act and the Internal Revenue Code of 1986 

to stop the Congress from spending Social Security’s tax revenue surpluses on other Government programs by dedicating those surpluses 

to personal accounts. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 14, 2005

Mr. MCCRERY (for himself, Mr. SHAW, Mr. SAM JOHNSON of Texas, Mr. 

RYAN of Wisconsin, Mr. SHADEGG, Mr. HERGER, Mr. LEWIS of Kentucky, Mr. BRADY of Texas, Mr. CANTOR, Mr. CHOCOLA, Mr. AKIN, Mr. 

ALEXANDER, Mr. BACHUS, Mr. BAKER, Mr. BARRETT of South Carolina, 

Mr. BARTLETT of Maryland, Mr. BISHOP of Utah, Mr. CONAWAY, Mr. 

FEENEY, Ms. FOXX, Mr. FLAKE, Mr. GILCHREST, Mr. GINGREY, Mr. 

HENSARLING, Mr. ISSA, Mr. ISTOOK, Mr. JINDAL, Mr. KINGSTON, Mr. 

KUHL of New York, Mr. MCCAUL of Texas, Mr. MCHENRY, Mrs. 

MYRICK, Mrs. NORTHUP, Mr. PENCE, Mr. PITTS, Mr. PRICE of Georgia, 

Mr. SESSIONS, Mr. WELDON of Florida, and Mr. WICKER) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL

To amend the Social Security Act and the Internal Revenue 

Code of 1986 to stop the Congress from spending Social 

Security’s tax revenue surpluses on other Government 

programs by dedicating those surpluses to personal accounts.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Growing Real Ownership for Workers Act of 2005’’. 

4 (b) TABLE OF CONTENTS.—The table of contents is 

5 as follows:

Sec. 1. Short title; table of contents. 

TITLE I—GROW ACCOUNTS PROGRAM 

Sec. 101. Establishment of the GROW Accounts Program. 

‘‘PART B—GROW ACCOUNTS PROGRAM

‘‘Sec. 251. Definitions. 

‘‘Sec. 252. Establishment of Program. 

‘‘Sec. 253. Participation in Program. 

‘‘Sec. 254. Interim investment by Board. 

‘‘Sec. 255. GROW accounts. 

‘‘Sec. 256. Investment of accounts. 

‘‘Sec. 257. Distributions of account balance at retirement. 

‘‘Sec. 258. Treatment of part A benefit payments. 

‘‘Sec. 259. Additional rules relating to disposition of account assets. 

‘‘Sec. 260. Administration of the Program. 

Sec. 102. Annual account statements. 

Sec. 103. Report and Congressional consideration of proposals regarding alternative investment options and other matters. 

TITLE II—TAX TREATMENT 

Sec. 201. Tax treatment of GROW accounts. 

Sec. 202. Benefits taxable as Social Security benefits. 

Sec. 203. Estate tax not to apply to assets of GROW accounts.

6 TITLE I—GROW ACCOUNTS 

7 PROGRAM 

8 SEC. 101. ESTABLISHMENT OF THE GROW ACCOUNTS PRO9 GRAM. 

10 (a) IN GENERAL.—Title II of the Social Security Act 

11 is amended—

12 (1) by inserting before section 201 the fol13 lowing: 
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1 ‘‘PART A—INSURANCE BENEFITS’’; and 

2 (2) by adding at the end of such title the fol3 lowing new part: 

4 ‘‘PART B—GROW ACCOUNTS PROGRAM

5 ‘‘DEFINITIONS

6 ‘‘SEC. 251. For purposes of this part—

7 ‘‘(1) PARTICIPATING INDIVIDUAL.—The term 

8 ‘participating individual’ has the meaning provided 

9 in section 253(a). 

10 ‘‘(2) ACCOUNT ASSETS.—The term ‘account as11 sets’ means, with respect to a GROW account, the 

12 total amount transferred to such account, increased 

13 by earnings credited under this part and reduced by 

14 losses and administrative expenses under this part. 

15 ‘‘(3) CERTIFIED ACCOUNT MANAGER.—The 

16 term ‘certified account manager’ means a person 

17 who is certified under section 260(b). 

18 ‘‘(4) BOARD.—The term ‘Board’ means the 

19 GROW Accounts Board established under section 

20 260(a)(1). 

21 ‘‘(5) EXECUTIVE DIRECTOR.—The term ‘Execu22 tive Director’ means the Executive Director of the 

23 Board appointed under section 260(a)(2). 

24 ‘‘(6) COMMISSIONER.—The term ‘Commis25 sioner’ means the Commissioner of Social Security. 
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1 ‘‘(7) PROGRAM.—The term ‘Program’ means 

2 the GROW Accounts Program established under this 

3 part. 

4 ‘‘(8) RETIREMENT BENEFIT.—The term ‘retire5 ment benefit’ means, with respect to any month— 

6 ‘‘(A) an old-age insurance benefit under 

7 section 202(a) for such month, 

8 ‘‘(B) a wife’s insurance benefit or hus9 band’s insurance benefit under subsection (b) 

10 or (c) of section 202 for such month, if the wife 

11 or husband has attained age 62 as of the end 

12 of such month, 

13 ‘‘(C) a widow’s insurance benefit or wid14 ower’s insurance benefit under subsection (e) or 

15 (f) of section 202 for such month, if the widow 

16 or widower has attained age 60 as of the end 

17 of such month, and 

18 ‘‘(D) a parent’s insurance benefit under 

19 section 202(h). 

20 ‘‘(9) RETIREMENT DATE.—The term ‘retire21 ment date’ means, in connection with an individual, 

22 the earliest date on which such individual—

23 ‘‘(A) is entitled to a benefit described in 

24 subparagraph (A) or (D) of paragraph (8), or 
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1 ‘‘(B) is entitled to a benefit described in 

2 subparagraph (B) or (C) of paragraph (8) and 

3 has attained the age described in such subpara4 graph. 

5 ‘‘ESTABLISHMENT OF PROGRAM

6 ‘‘SEC. 252. There is hereby established a GROW Ac7 counts Program. Except as otherwise provided under this 

8 part, the Program shall be governed by regulations which 

9 shall be prescribed by the GROW Accounts Board. The 

10 Board, the Commissioner, and the Secretary of the Treas11 ury shall consult with each other in issuing regulations 

12 relating to their respective duties under this part. Such 

13 regulations shall provide for appropriate exchange of in14 formation to assist them in performing their respective du15 ties under this part. 

16 ‘‘PARTICIPATION IN PROGRAM

17 ‘‘SEC. 253. (a) PARTICIPATING INDIVIDUAL.—For 

18 purposes of this part, the term ‘participating individual’ 

19 means any individual—

20 ‘‘(1) who is a citizen or national of the United 

21 States or has been assigned a social security account 

22 number that was, at the time of assignment, or at 

23 any later time, consistent with the requirements of 

24 subclause (I) or (III) of section 205(c)(2)(B)(i), 

25 ‘‘(2) who is credited under part A with wages 

26 paid for services performed after December 31, 
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1 2005, or self-employment income derived in any tax2 able year ending after such date, 

3 ‘‘(3) who is born on or after January 1, 1950, 

4 and 

5 ‘‘(4) with respect to whom there is no election 

6 in effect which has been made in a timely fashion 

7 under subsection (b) to renounce such individual’s 

8 status as a participating individual or there is in ef9 fect an election under subsection (c) to renounce an 

10 election under subsection (b). 

11 The Commissioner shall notify the Board of the identity 

12 of each individual described in paragraphs (1), (2), and 

13 (3). 

14 ‘‘(b) RENUNCIATION OF PARTICIPATION.—

15 ‘‘(1) IN GENERAL.—An individual may elect, in 

16 such form and manner as shall be prescribed in reg17 ulations of the Board, to renounce such individual’s 

18 status as a ‘participating individual’ for purposes of 

19 this part. 

20 ‘‘(2) IF ELECTION IS TIMELY.—

21 ‘‘(A) IN GENERAL.—If an individual makes 

22 an election under this subsection in timely fash23 ion (as determined under regulations of the 

24 Board), such individual shall not be treated as 

25 a participating individual under this part, effec-
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1 tive as if such individual had never been a par2 ticipating individual. 

3 ‘‘(B) PROCEDURE.—The Board, in con4 sultation with the Secretary of the Treasury 

5 and the Commissioner, shall prescribe by regu6 lation procedures governing the termination of 

7 an individual’s status as a ‘participating indi8 vidual’ pursuant to an election described in sub9 paragraph (A). Such procedures shall include—

10 ‘‘(i) prompt closing of the individual’s 

11 GROW account established under section 

12 255, and 

13 ‘‘(ii) proper crediting of the balance of 

14 the account to the Federal Old-Age and 

15 Survivors Insurance Trust Fund and the 

16 Federal Disability Insurance Trust Fund, 

17 allocated between the Trust Funds as de18 termined appropriate by the Commissioner. 

19 ‘‘(3) IF ELECTION IS NOT TIMELY.—If an indi20 vidual makes an election under this subsection other 

21 than in timely fashion (as determined under regula22 tions of the Board), GROW account deposits to such 

23 individual’s GROW account shall cease as soon as 

24 practicable after the date of the election, but such 

25 individual shall continue to be treated as a partici-
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1 pating individual with respect to the balance in such 

2 individual’s GROW account. 

3 ‘‘(4) NOTIFICATION REQUIREMENT.—The 

4 Board shall provide for immediate notification of 

5 any election under this subsection to the Commis6 sioner and the Secretary of the Treasury. 

7 ‘‘(c) REINSTATEMENT OF PARTICIPATION.—

8 ‘‘(1) IN GENERAL.—Any individual who has 

9 filed an election under subsection (b) to renounce 

10 such individual’s status as a ‘participating indi11 vidual’ under this part may elect, in such form and 

12 manner as shall be prescribed in regulations of the 

13 Board, to reinstate such status. Such regulations 

14 shall provide for regular, periodic opportunities for 

15 the filing of such an election. 

16 ‘‘(2) EFFECTIVENESS OF REINSTATEMENT.—

17 An election under this subsection shall be effective 

18 with respect to wages earned, and self-employment 

19 income derived, beginning on the earliest date on 

20 which the Board determines it is practicable to make 

21 such election effective following the date of the filing 

22 of the election. The individual filing the election 

23 shall be treated as becoming a participating indi24 vidual under this part on the effective date of the 

25 election as if such individual first met the require-
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1 ments of subsection (a) on such date. Nothing in 

2 this paragraph shall be construed to affect the rights 

3 or status of an individual with respect to whom 

4 GROW account deposits have ceased under sub5 section (b)(3) with respect to the balance in such in6 dividual’s GROW account at the time of such indi7 vidual’s election described in subsection (b)(3). 

8 ‘‘(3) IRREVOCABILITY.—An election under this 

9 subsection shall be irrevocable. 

10 ‘‘(4) NOTIFICATION REQUIREMENT.—The 

11 Board shall provide for immediate notification of 

12 any election under this subsection to the Commis13 sioner and the Secretary of the Treasury. 

14 ‘‘INTERIM INVESTMENT BY BOARD

15 ‘‘SEC. 254. (a) TRANSFERS TO THE BOARD.—

16 ‘‘(1) IN GENERAL.—During each calendar year, 

17 the Secretary of the Treasury shall transfer to the 

18 Board, for deposit into an interim fund maintained 

19 by the Board, from amounts held in the general 

20 fund of the Treasury, amounts equal, in the aggre21 gate, to 100 percent of the net OASDI Trust Fund 

22 surplus for such calendar year. 

23 ‘‘(2) NET OASDI TRUST FUND SURPLUS.—For 

24 purposes of paragraph (1), the term ‘net OASDI 

25 Trust Fund surplus’ for a calendar year means the 

26 excess, if any, of—
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1 ‘‘(A) the sum of—

2 ‘‘(i) the total amounts which are ap3 propriated to the Federal Old-Age and 

4 Survivors Insurance Trust Fund and the 

5 Federal Disability Insurance Trust Fund 

6 under subsections (a) and (b) of section 

7 201 and attributable to such calendar year, 

8 and 

9 ‘‘(ii) the total amounts which are ap10 propriated to such Trust Funds under sec11 tion 121 of the Social Security Amend12 ments of 1983 and attributable to such 

13 calendar year, over 

14 ‘‘(B) the amount estimated by the Com15 missioner to be the total amount to be paid 

16 from such Trust Funds during such calendar 

17 year for all purposes authorized by section 201 

18 (other than payments of interest on, and repay19 ments of, loans from the Federal Hospital In20 surance Trust Fund under section 201(l)(1), 

21 but excluding any transfer payments between 

22 such Trust Funds and reducing the amount of 

23 any transfer to the Railroad Retirement Ac24 count by the amount of any transfers into such 

25 Trust Funds from such Account). 
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1 ‘‘(3) TRANSFERS BASED ON ESTIMATES.—The 

2 amounts transferred to the Board pursuant to para3 graph (1) shall be transferred in at least monthly 

4 payments from the general fund of the Treasury to 

5 the Board. Such amounts shall be determined on the 

6 basis of estimates, by the Commissioner and cer7 tified to the Secretary of the Treasury, and proper 

8 adjustments shall be made in amounts subsequently 

9 transferred to the extent prior estimates were in ex10 cess of or were less than actual amounts. 

11 ‘‘(4) INVESTMENT.—Amounts held in the in12 terim fund maintained by the Board pursuant to 

13 paragraph (1) shall be invested by the Board in the 

14 same manner as is provided under section 256(c)(1). 

15 ‘‘(b) SEPARATE ACCOUNTING AND CREDITING.—The 

16 Board shall provide for prompt, separate crediting of the 

17 amounts received by the Board under subsection (a) to 

18 the GROW account deposit to be made for each calendar 

19 year under section 255(b) with respect to each partici20 pating individual. Such crediting shall be performed as 

21 soon as practicable. 

22 ‘‘GROW ACCOUNTS

23 ‘‘SEC. 255. (a) ESTABLISHMENT OF ACCOUNTS.—

24 Under regulations which shall be prescribed by the Board 

25 in consultation with the Secretary of the Treasury—
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1 ‘‘(1) the Board shall establish a GROW account 

2 for each individual who is a participating individual 

3 (for whom a GROW account has not otherwise been 

4 established under this part) upon receipt of notice 

5 from the Commissioner that the requirements of 

6 paragraphs (1), (2), and (3) of section 253(a) are 

7 met with respect to such individual, and 

8 ‘‘(2) as provided in paragraph (2) of section 

9 259(a) and paragraph (2) of section 259(b), the 

10 Board shall establish a GROW account for divorced 

11 spouses and surviving spouses referred to in such 

12 paragraphs. 

13 ‘‘(b) TRANSFERS TO GROW ACCOUNTS.—

14 ‘‘(1) IN GENERAL.—Under regulations which 

15 shall be prescribed by the Board, upon crediting of 

16 amounts equivalent to the GROW account deposit 

17 with respect to each participating individual for a 

18 calendar year pursuant to section 254(b), the Board 

19 shall transfer such amounts, from the interim fund 

20 maintained by the Board pursuant to section 

21 254(a)(1), to the participating individual’s GROW 

22 account. 

23 ‘‘(2) GROW ACCOUNT DEPOSIT.—

24 ‘‘(A) IN GENERAL.—For purposes of para25 graph (1), the GROW account deposit for a cal-
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1 endar year with respect to a participating indi2 vidual is the product derived by multiplying—

3 ‘‘(i) the sum of—

4 ‘‘(I) the total amount of wages 

5 paid to the participating individual 

6 during such calendar year on which 

7 there was imposed a tax under section 

8 3101(a) of the Internal Revenue Code 

9 of 1986, and 

10 ‘‘(II) the total amount of self-em11 ployment income derived by the par12 ticipating individual during the tax13 able year ending during such calendar 

14 year on which there was imposed a 

15 tax under section 1401(a) of the In16 ternal Revenue Code of 1986, by 

17 ‘‘(ii) the surplus percentage for such 

18 calendar year determined under subpara19 graph (B), 

20 increased at a monthly rate equivalent to the 

21 average monthly rate of the yield on amounts 

22 held in the interim fund maintained by the 

23 Board pursuant to section 254(a)(1) from July 

24 1 of such calendar year to the date of the de25 posit into the GROW account (minus the rat-
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1 able portion with respect to such participating 

2 individual of the total amount determined by 

3 the Board as administrative costs for such cal4 endar year of such interim fund, not to exceed 

5 30 basis points per year of the assets held in 

6 such interim fund). 

7 ‘‘(B) SURPLUS PERCENTAGE.—For pur8 poses of subparagraph (A)(ii), the term ‘surplus 

9 percentage’ means, for a calendar year, the 

10 ratio, expressed as a percentage, which—

11 ‘‘(i) the net OASDI Trust Fund sur12 plus for such calendar year (determined 

13 under section 254(a)(2)), bears to 

14 ‘‘(ii) the sum of—

15 ‘‘(I) the total amount of wages 

16 paid to participating individuals dur17 ing such calendar year on which there 

18 was imposed a tax under section 

19 3101(a) of the Internal Revenue Code 

20 of 1986, and 

21 ‘‘(II) the total amount of self-em22 ployment income derived by partici23 pating individuals during taxable 

24 years ending during such calendar 

25 year on which there was imposed a 
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1 tax under section 1401(a) of such 

2 Code. 

3 ‘‘(3) CESSATION OF GROW ACCOUNT DEPOS4 ITS.—No wages paid to a participating individual, 

5 and no self-employment income derived by a partici6 pating individual, after the date on which such indi7 vidual first becomes entitled to a retirement benefit 

8 shall be taken into account in determining wages 

9 and self-employment income for purposes of para10 graph (2)(A)(i). 

11 ‘‘(4) TRANSITION RULE.—Notwithstanding 

12 paragraph (1), amounts payable to GROW accounts 

13 under paragraph (1) with respect to the first cal14 endar year described in paragraph (1) ending after 

15 the date of the enactment of the Growing Real Own16 ership for Workers Act of 2005 shall be paid by the 

17 Board as soon as practicable after the Board deter18 mines that the administrative mechanisms necessary 

19 to provide for accurate and efficient payment of such 

20 amounts have been established, but no later than 2 

21 years after such date. 

22 ‘‘(c) REQUIREMENTS FOR ACCOUNTS.—The following 

23 requirements shall be met with respect to each GROW ac24 count: 
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1 ‘‘(1) The account assets consist solely of 

2 amounts deposited or transferred pursuant to this 

3 part, including investment earnings thereon under 

4 section 256. 

5 ‘‘(2) In accordance with section 256, the ac6 count assets are held for purposes of investment 

7 under the Program by a certified account manager 

8 designated by (or on behalf of) the participating in9 dividual for whom such account is established under 

10 the Program. 

11 ‘‘(3) Disposition of the account assets is made 

12 solely in accordance with sections 257 and 259. 

13 ‘‘(d) ACCOUNTING OF RECEIPTS AND DISBURSE14 MENTS UNDER THE PROGRAM.—The Board shall provide 

15 by regulation for an accounting system for purposes of 

16 this part—

17 ‘‘(1) which shall be maintained by or under the 

18 Executive Director, 

19 ‘‘(2) which shall provide for crediting of earn20 ings to, and debiting of losses and administrative ex21 penses from, amounts held in GROW accounts, and 

22 ‘‘(3) under which receipts and disbursements 

23 under the Program which are attributable to each 

24 account are separately accounted for with respect to 

25 such account. 
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1 ‘‘(e) CORRECTION OF ERRONEOUS TRANSFERS.—

2 The Board, in consultation with the Commissioner, shall 

3 provide by regulation rules similar to paragraphs (4) 

4 through (7) and (9) of section 205(c) with respect to the 

5 correction of errors or omissions in determinations of 

6 amounts to be transferred to GROW accounts, and rules 

7 providing for the transfer, between such accounts and the 

8 interim fund maintained by the Board, of amounts nec9 essary to compensate for such errors and omissions. In 

10 connection with the implementation of such rules, section 

11 205(g) shall apply by substituting, for any reference there12 in to the Commissioner, a reference to the Board. 

13 ‘‘INVESTMENT OF ACCOUNTS

14 ‘‘SEC. 256. (a) DESIGNATION OF CERTIFIED AC15 COUNT MANAGERS.—Under the Program, a certified ac16 count manager shall be designated by or on behalf of each 

17 participating individual to hold for investment under this 

18 section the account assets of such individual’s GROW ac19 count. 

20 ‘‘(b) PROCEDURE FOR DESIGNATION.—Any designa21 tion made under subsection (a) shall be made at such 

22 times and in such form and manner as shall be prescribed 

23 in regulations prescribed by the Board. Such regulations 

24 shall provide for annual selection periods during which 

25 participating individuals may make designations pursuant 

26 to subsection (a). Designations made pursuant to sub-
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1 section (a) during any such period shall be irrevocable for 

2 the one-year period following such period, except that such 

3 regulations shall provide for such interim designations as 

4 may be necessitated by the decertification of a certified 

5 account manager. Such regulations shall provide for such 

6 designations made by the Board on behalf of a partici7 pating individual in any case in which a timely designation 

8 is not made by the participating individual. 

9 ‘‘(c) INVESTMENT.—The account assets of a partici10 pating individual’s GROW account which are not nec11 essary for immediate withdrawal (including administrative 

12 costs charged in accordance with section 259(e)(1)) shall 

13 be invested on behalf of such participating individual by 

14 the certified account manager as follows: 

15 ‘‘(1) INVESTMENT IN MARKETABLE GOVERN16 MENT SECURITIES.—In a representative mix of fixed 

17 marketable interest-bearing obligations of the United 

18 States then forming a part of the public debt which 

19 are not due or callable earlier than 4 years after the 

20 date of investment. 

21 ‘‘(2) ADDITIONAL AND ALTERNATIVE INVEST22 MENTS.—Beginning at such time as the Board im23 plements an investment options plan to provide addi24 tional and alternative investment options in accord25 ance with section 103 of the Growing Real Owner-
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1 ship for Workers Act of 2005, in such funds as a 

2 participating individual may elect that are offered 

3 under such plan. 

4 ‘‘DISTRIBUTIONS OF ACCOUNT BALANCE AT RETIREMENT

5 ‘‘SEC. 257. (a) AVAILABILITY FOR DISTRIBUTION.—

6 The GROW account of any participating individual shall 

7 be available for distribution under this section only—

8 ‘‘(1) on or after the participating individual’s 

9 retirement date, and 

10 ‘‘(2) in such form and manner as is provided in 

11 this section. 

12 ‘‘(b) REQUIREMENTS FOR ANNUITY DISTRIBU13 TIONS.—

14 ‘‘(1) IN GENERAL.—In any case in which dis15 tribution of all or a portion of the balance of a par16 ticipating individual’s GROW account is to be made 

17 in the form of an annuity, in accordance with regu18 lations which shall be prescribed by the Board, the 

19 Executive Director shall provide for such distribu20 tion in the form of an annuity—

21 ‘‘(A) which shall be purchased from the 

22 Board, as soon as practicable after the partici23 pating individual’s retirement date, from annu24 ities offered by the Board, including such annu25 ities as may be made available under proce-
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1 dures established by the Board pursuant to 

2 subsection (f), and 

3 ‘‘(B) which meets the requirements of this 

4 subsection. 

5 ‘‘(2) ANNUITY STARTING DATE.—The annuity 

6 starting date (as defined in section 72(c)(4) of the 

7 Internal Revenue Code of 1986) of any annuity re8 ferred to in paragraph (1) shall be the first day of 

9 the month beginning after the date of the purchase 

10 of the annuity. 

11 ‘‘(3) LEVEL PAYMENTS.—Subject to paragraph 

12 (4) and subsection (d), the terms of any annuity re13 ferred to in paragraph (1) shall provide for a series 

14 of substantially equal annual payments, payable 

15 monthly to the participating individual during the 

16 life of the participating individual. 

17 ‘‘(4) COST OF LIVING ADJUSTMENT.—The 

18 terms of any annuity referred to in paragraph (1) 

19 shall include provision for increases in the monthly 

20 annuity payments thereunder determined in the 

21 same manner and at the same rate as primary in22 surance amounts are increased under section 215(i). 

23 ‘‘(5) ASSUMPTIONS.—Determinations under 

24 this subsection shall be made in accordance with 

25 regulations which shall be prescribed by the Board, 
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1 providing for the use of generally accepted actuarial 

2 assumptions, except that no differentiation shall be 

3 made in such assumptions on the basis of sex, race, 

4 health status, or other characteristics other than 

5 age. Such assumptions shall include the life expect6 ancy of persons born in the same year as the partici7 pating individual, projected investment earnings 

8 based on investment of the account assets, expected 

9 price inflation, and reasonable administrative costs. 

10 ‘‘(c) MINIMUM ANNUITY REQUIREMENT.—

11 ‘‘(1) IN GENERAL.—Except as provided in para12 graph (3), in any case in which the total amount of 

13 retirement benefits payable under section 258(a) to 

14 a participating individual for the month in which oc15 curs the participating individual’s retirement date is 

16 less than the monthly poverty line for such month, 

17 under regulations which shall be prescribed by the 

18 Board, all or a portion of the participating individ19 ual’s GROW account balance shall be distributed in 

20 the form of an annuity offered by the Board which 

21 meets the requirements of subsection (b) and is in 

22 the form of a minimum annuity. 

23 ‘‘(2) MINIMUM ANNUITY DEFINED.—

24 ‘‘(A) IN GENERAL.—For purposes of this 

25 subsection, the term ‘minimum annuity’ means 
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1 an annuity under which the monthly payments 

2 are equal to at least the minimum annuity 

3 amount (subject to subsections (b) and (d)(1)). 

4 ‘‘(B) MINIMUM ANNUITY AMOUNT.—For 

5 purposes of subparagraph (A), the term ‘min6 imum annuity amount’ means an amount equal 

7 to the excess (but not less than zero) of—

8 ‘‘(i) the monthly poverty line for the 

9 month in which occurs the participating in10 dividual’s retirement date, over 

11 ‘‘(ii) the total amount of retirement 

12 benefits payable under section 258(a) to 

13 the participating individual for such 

14 month. 

15 ‘‘(C) MONTHLY POVERTY LINE.—For pur16 poses of this subparagraph (B)(i), the term 

17 ‘monthly poverty line’ for any month means the 

18 monthly equivalent of the poverty line for an in19 dividual (determined under the poverty guide20 lines of the Department of Health and Human 

21 Services issued under section 673(2) of the Om22 nibus Budget Reconciliation Act of 1981), as 

23 most recently published prior to the date of the 

24 annuity purchase in the Federal Register by the 

25 Department of Health and Human Services. 
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1 ‘‘(3) EXCEPTION FOR MINIMAL ACCOUNT BAL2 ANCES.—Paragraph (1) shall not apply in any case 

3 in which the assets of the GROW account are insuf4 ficient to purchase a minimum annuity. 

5 ‘‘(d) REQUIREMENT OF JOINT AND SURVIVOR ANNU6 ITY.—

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), if the participating individual is married 

9 as of the participating individual’s retirement date, 

10 the entire GROW account balance available for dis11 tribution shall be distributed in the form of an annu12 ity—

13 ‘‘(A) which meets the requirements of sub14 section (b), and 

15 ‘‘(B) is in the form of a joint and survivor 

16 annuity under which payments are made during 

17 the joint lives of the participating individual 

18 and the participating individual’s spouse, with a 

19 survivor annuity for the life of the one of them 

20 who survives the other for the life of the survivor which is not less than 662 21 ⁄3 percent of 

22 (and not greater than 100 percent of) the 

23 amount which would have continued to be pay24 able to the participating individual but for the 

25 death of either spouse. 
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1 ‘‘(2) ELECTION.—Paragraph (1) shall not apply 

2 in any case in which the participating individual and 

3 his or her spouse elect (in such form and manner as 

4 shall be prescribed by the Board) not to take the 

5 distribution of the participating individual’s GROW 

6 account in the form described in paragraph (1). 

7 ‘‘(e) AUTHORITY TO CONTRACT FOR ANNUITIES.—

8 The Board may, under regulations prescribed by the 

9 Board, contract with insurance companies in the private 

10 sector through competitive bidding to provide for annuities 

11 to be offered by the Board under this section in cases in 

12 which the Board determines that annuities obtained in 

13 such manner would be in the best interest of participating 

14 individuals and administrative costs for such annuities 

15 would be reasonable. 

16 ‘‘(f) OTHER DISTRIBUTIONS.—The Board shall pro17 vide by regulation for distribution, on or after the partici18 pating individual’s retirement date, of any balance in the 

19 GROW account of a participating individual which re20 mains available for distribution after the preceding re21 quirements of this section, and the requirements for dis22 tribution under any payout options plan which has been 

23 implemented by the Board pursuant to section 103 of the 

24 Growing Real Ownership for Workers Act of 2005, have 

25 been met. Any such distribution shall be in the form of 
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1 a lump sum or in any other form provided for by the 

2 Board and elected by the participating individual. 

3 ‘‘TREATMENT OF PART A BENEFIT PAYMENTS

4 ‘‘SEC. 258. (a) APPLICATION OF GROW ACCOUNT

5 CREDITS AND EXCESS GROW ACCOUNT CREDITS.—The 

6 total amount payable to an individual under part A as re7 tirement benefits for any month shall be equal to the ex8 cess (but not less than zero) of—

9 ‘‘(1) the total amount payable (after all applica10 ble deductions and reductions) as determined with11 out regard to this section and section 202(z), over 

12 ‘‘(2) the sum of—

13 ‘‘(A) the amount of the individual’s GROW 

14 account credit for such month (if any), plus 

15 ‘‘(B) the sum of the excess GROW account 

16 credits for such month (if any) determined in 

17 the case of such individual for such month 

18 under subsection (c). 

19 ‘‘(b) GROW ACCOUNT CREDIT.—

20 ‘‘(1) IN GENERAL.—In accordance with regula21 tions of the Board, the Board shall determine, for 

22 purposes of this section, the GROW account credit 

23 of each participating individual for each month for 

24 which such individual is entitled to any retirement 

25 benefit. 
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1 ‘‘(2) DETERMINATION OF GROW ACCOUNT

2 CREDIT.—

3 ‘‘(A) IN GENERAL.—The GROW account 

4 credit of a participating individual for any 

5 month shall be equal to the amount which 

6 would be the monthly payment for such month 

7 under an annuity—

8 ‘‘(i) purchased with the participating 

9 individual’s benchmark account balance, 

10 and 

11 ‘‘(ii) meeting the requirements of sec12 tion 257(b) and of section 257(d) (with no 

13 election under section 257(d)(2) and a reduction for the survivor annuity to 662 14 ⁄3

15 percent). 

16 ‘‘(B) REDUCTION IN GROW ACCOUNT

17 CREDIT IN THE CASE OF SURVIVORS.—In any 

18 case in which the participating individual is 

19 married as of the participating individual’s re20 tirement date, the GROW account credit deter21 mined for any month in connection with the 

22 participating individual shall reflect, for months 

23 after the death of the participating individual or 

24 the death of the participating individual’s 

25 spouse, a reduction in the amount of the sur-
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1 vivor annuity described in section 257(d)(1) to 

662 2 ⁄3 percent. 

3 ‘‘(C) BENCHMARK ACCOUNT BALANCE.—

4 For purposes of subparagraph (A), the bench5 mark account balance is an amount equal to—

6 ‘‘(i) the total amount deposited into 

7 the participating individual’s GROW ac8 count under section 255(b) as of imme9 diately before the participating individual’s 

10 retirement date, 

11 ‘‘(ii) increased by any net deposits to 

12 the account, and decreased by any net 

13 withdrawals from the account, under sec14 tion 259(a), occurring prior to such date, 

15 ‘‘(iii) increased by any deposits to the 

16 account under section 259(b) in the case of 

17 a spouse who dies prior to such spouse’s 

18 retirement date, and 

19 ‘‘(iv) adjusted, under regulations of 

20 the Board, to reflect any net increase or 

21 any net decrease in the balance, as it ac22 crued under clauses (i), (ii), and (iii), 

23 which would be attributable to investment 

24 of the balance in the manner described in 

25 section 256(c)(1), assuming payment of 
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1 administrative costs at the rate experi2 enced in connection with investments of 

3 the account assets of the participating in4 dividual’s GROW account under section 

5 256 (not to exceed 30 basis points per 

6 year). 

7 ‘‘(c) EXCESS GROW ACCOUNT CREDIT.—

8 ‘‘(1) IN GENERAL.—In accordance with regula9 tions of the Board meeting the requirements of this 

10 section, for purposes of determining under sub11 section (a) the total amount payable to any indi12 vidual under part A as retirement benefits for any 

13 month, the Board shall determine, in the case of any 

14 such individual who was married to his or her 

15 spouse on such spouse’s retirement date, the excess 

16 GROW account credit of such spouse for such 

17 month. 

18 ‘‘(2) DETERMINATION OF EXCESS GROW AC19 COUNT CREDIT.—The excess GROW account credit 

20 of the spouse referred to in paragraph (1) for a 

21 month is the excess (not less than zero) of—

22 ‘‘(A) such spouse’s GROW account credit 

23 for such month, over 
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1 ‘‘(B) the total of the retirement benefits (if 

2 any) to which such spouse is entitled for such 

3 month. 

4 ‘‘ADDITIONAL RULES RELATING TO DISPOSITION OF

5 ACCOUNT ASSETS

6 ‘‘SEC. 259. (a) SPLITTING OF ACCOUNT ASSETS

7 UPON DIVORCE AFTER 1 YEAR OF MARRIAGE.—Subject 

8 to subsection (c)—

9 ‘‘(1) IN GENERAL.—In the case of a divorce of 

10 a participating individual for whom a GROW ac11 count has been established under this part, if the di12 vorce occurs—

13 ‘‘(A) prior to the participating individual’s 

14 retirement date, and 

15 ‘‘(B) the participating individual and his 

16 or her divorced spouse were married to each 

17 other for at least 1 year prior to the date of the 

18 divorce, 

19 the Board shall, upon the date of the divorce, direct 

20 the appropriate certified account manager to trans21 fer, from the GROW account of the participating in22 dividual to the GROW account of the divorced 

23 spouse, an amount equal to one-half of the total 

24 amount of GROW account deposits made to the 

25 GROW account of the participating individual under 

26 section 255(b) during the period of the marriage 
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1 (taking into account earnings and losses attributable 

2 to such deposits during such period), disregarding, 

3 for purposes of determining such total amount, any 

4 amounts similarly transferred, pursuant to this 

5 paragraph, to such participating individual’s account 

6 from the account (if any) of such divorced spouse. 

7 ‘‘(2) TREATMENT OF DIVORCED SPOUSE WHO

8 IS NOT A PARTICIPATING INDIVIDUAL.—In the case 

9 of a divorced spouse referred to in paragraph (1) 

10 who, as of the time of the transfer required under 

11 paragraph (1), is not a participating individual— 

12 ‘‘(A) the divorced spouse shall be deemed 

13 a participating individual for purposes of this 

14 part (subject to renunciation under section 

15 253(b)), and 

16 ‘‘(B) the Board shall establish a GROW 

17 account for the divorced spouse and shall direct 

18 the appropriate certified account manager to 

19 perform the transfer. 

20 ‘‘(3) PREEMPTION.—The provisions of this sub21 section, and subsection (c) (to the extent it relates 

22 to this subsection), shall supersede any provision of 

23 law of any State or political subdivision thereof 

24 which is inconsistent with the requirements of this 

25 subsection. 
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1 ‘‘(b) CLOSING OF ACCOUNT UPON THE DEATH OF

2 THE PARTICIPATING INDIVIDUAL.—Subject to subsection 

3 (c)—

4 ‘‘(1) IN GENERAL.—Upon the death of a par5 ticipating individual, the Executive Director shall 

6 close out any remaining balance in the participating 

7 individual’s GROW account. In closing out the ac8 count, the Executive Director shall certify to the cer9 tified account manager the amount of the account 

10 assets, and, upon receipt of such certification, the 

11 certified account manager shall transfer from such 

12 account an amount equal to such certified amount to 

13 the Secretary of the Treasury for subsequent trans14 fer to—

15 ‘‘(A) the GROW account of the surviving 

16 spouse of such participating individual, 

17 ‘‘(B) if there is no person described in sub18 paragraph (A), to such other person as may be 

19 designated by the participating individual in ac20 cordance with regulations which shall be pre21 scribed by the Board, 

22 ‘‘(C) if there is no person described in sub23 paragraph (A) or (B), to such successors in in24 terest to such balance as may be specified 

25 under applicable law and claim such interest 
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1 (within such reasonable time and in such form 

2 and manner as shall be prescribed in regula3 tions of the Board), or 

4 ‘‘(D) if there is no person described in sub5 paragraph (A), (B), or (C), to the Federal Old6 Age and Survivors Insurance Trust Fund and 

7 the Federal Disability Insurance Trust Fund, 

8 allocated between such Trust Funds as deter9 mined appropriate by the Commissioner. 

10 ‘‘(2) TREATMENT OF SURVIVING SPOUSE WHO

11 IS NOT A PARTICIPATING INDIVIDUAL.—In the case 

12 of a surviving spouse referred to in paragraph (1) 

13 who, as of the time of the death of the participating 

14 individual, is not a participating individual—

15 ‘‘(A) the surviving spouse shall be deemed 

16 a participating individual for purposes of this 

17 part (subject to renunciation under section 

18 253(b)), and 

19 ‘‘(B) the Board shall establish a GROW 

20 account for the surviving spouse and shall di21 rect the appropriate certified account manager 

22 to perform the such transfer. 

23 ‘‘(3) DEATH DETERMINATIONS AND ABAN24 DONED ACCOUNTS.—The Board shall prescribe rules 

25 similar to the rules applicable under part A for pur-
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1 poses of determining whether an individual has died 

2 and such individual’s date of death, including rules 

3 for treatment under this subsection of abandoned 

4 accounts. 

5 ‘‘(c) CLOSING OF ACCOUNT OF PARTICIPATING INDI6 VIDUALS WHO ARE INELIGIBLE FOR BENEFITS UPON AP7 PLICABLE CLOSE-OUT DATE.—

8 ‘‘(1) IN GENERAL.—In any case in which a par9 ticipating individual is not eligible for a retirement 

10 benefit as of the applicable close-out date, the Com11 missioner shall so certify to the Executive Director 

12 and, upon receipt of such certification, the Executive 

13 Director shall close out the participating individual’s 

14 GROW account. In closing out the account, the Ex15 ecutive Director shall certify to the certified account 

16 manager the amount of the account assets, and 

17 upon receipt of such certification from the Executive 

18 Director, the account manager shall transfer from 

19 such account an amount equal to such certified 

20 amount to the Secretary of the Treasury for subse21 quent transfer to the participating individual. 

22 ‘‘(2) APPLICABLE CLOSE-OUT DATE.—For pur23 poses of paragraph (1), the term ‘applicable close24 out date’, in connection with a participating indi25 vidual, means the later of—
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1 ‘‘(A) the date on which the participating 

2 individual attains retirement age (as defined in 

3 section 216(l)), or 

4 ‘‘(B) in the case of a participating indi5 vidual who is married on the date on which the 

6 participating individual attains retirement age 

7 (as so defined), the date on which the partici8 pating individual’s spouse attains retirement 

9 age (as so defined), or dies before attaining 

10 such age. 

11 ‘‘(d) ADMINISTRATIVE EXPENSES.—

12 ‘‘(1) IN GENERAL.—Under regulations which 

13 shall be prescribed by the Board, account assets are 

14 available for payment of the reasonable administra15 tive costs of the Program (including reasonable ad16 ministration fees charged by certified account man17 agers under the Program), but in no event to exceed 

18 30 basis points per year of the assets under manage19 ment. 

20 ‘‘(2) TEMPORARY AUTHORIZATION OF APPRO21 PRIATIONS FOR STARTUP ADMINISTRATIVE COSTS.—

22 For any such administrative costs that remain after 

23 applying paragraph (1) for each of the first 5 fiscal 

24 years that end after the date on which GROW ac25 counts are first established under section 255(a), 
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•HR 3304 IH 

1 there are authorized to be appropriated such sums 

2 as may be necessary for each of such fiscal years. 

3 ‘‘ADMINISTRATION OF THE PROGRAM

4 ‘‘SEC. 260. (a) GENERAL PROVISIONS.—

5 ‘‘(1) ESTABLISHMENT AND DUTIES OF THE

6 GROW ACCOUNTS BOARD.—

7 ‘‘(A) ESTABLISHMENT.—There is estab8 lished in the Executive branch of the Govern9 ment a GROW Accounts Board. 

10 ‘‘(B) NUMBER AND APPOINTMENT.—The 

11 Board shall be composed of 7 members as fol12 lows: 

13 ‘‘(i) 3 members appointed by the 

14 President, of whom 1 shall be designated 

15 by the President as Chairman; and 

16 ‘‘(ii) 4 members appointed by the 

17 President, of whom—

18 ‘‘(I) 2 shall be appointed by the 

19 President after taking into consider20 ation the recommendations made by 

21 the Speaker of the House of Rep22 resentatives in consultation with the 

23 minority leader of the House of Rep24 resentatives; and 

25 ‘‘(II) 2 shall be appointed by the 

26 President after taking into consider-
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1 ation the recommendations made by 

2 the majority leader of the Senate in 

3 consultation with the minority leader 

4 of the Senate. 

5 ‘‘(C) MEMBERSHIP REQUIREMENTS.—

6 Members of the Board shall have substantial 

7 experience, training, and expertise in the man8 agement of financial investments and pension 

9 benefit plans. No more than 4 of the members 

10 of the Board may be of the same political party. 

11 ‘‘(D) TERMS.—Each member of the Board 

12 shall be appointed for a term of 4 years, except 

13 that of the members first appointed— 

14 ‘‘(i) the Chairman shall be appointed 

15 for a term of 4 years; 

16 ‘‘(ii) the remaining members ap17 pointed under subsection (B)(i) shall be 

18 appointed for terms of 3 years; 

19 ‘‘(iii) one of the members appointed 

20 under subsection (B)(ii)(I) shall be ap21 pointed for a term of 4 years and the other 

22 for a term of two years; and 

23 ‘‘(iv) one of the members appointed 

24 under subsection (B)(ii)(II) shall be ap-
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1 pointed for a term of 4 years and the other 

2 for a term of 2 years. 

3 ‘‘(E) VACANCIES.—A vacancy on the 

4 Board shall be filled in the manner in which the 

5 original appointment was made and shall be 

6 subject to any conditions which applied with re7 spect to the original appointment. An individual 

8 chosen to fill a vacancy shall be appointed for 

9 the unexpired term of the member replaced. 

10 The term of any member shall not expire before 

11 the date on which the member’s successor takes 

12 office. 

13 ‘‘(F) POWERS AND DUTIES OF THE

14 BOARD.—

15 ‘‘(i) IN GENERAL.—The Board shall 

16 have powers and duties solely as provided 

17 in this part. The Board shall prescribe by 

18 regulation—

19 ‘‘(I) the terms of the GROW Ac20 counts Program established under this 

21 part, including policies for investment 

22 under the Program of account assets, 

23 and policies for the certification and 

24 decertification of account managers 

25 under the Program, which shall in-
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1 clude consideration of the appropriate2 ness of the marketing materials and 

3 plans of such managers, and 

4 ‘‘(II) the policies for the pur5 chase of annuities for purposes of dis6 tribution of GROW accounts under 

7 section 257. 

8 ‘‘(ii) BUDGETARY REQUIREMENTS.—

9 The Board shall prepare and submit to the 

10 President and to the appropriate commit11 tees of Congress an annual budget of the 

12 expenses and other items relating to the 

13 Board which shall be included as a sepa14 rate item in the budget required to be 

15 transmitted to the Congress under section 

16 1105 of title 31, United States Code. The 

17 Board shall provide for low administrative 

18 costs such that, to the extent practicable, 

19 overall administrative costs of the Program 

20 do not exceed 30 basis points per year in 

21 relation to assets under management under 

22 the Program. 

23 ‘‘(iii) ADDITIONAL AUTHORITIES OF

24 THE BOARD.—The Board may—

25 ‘‘(I) adopt, alter, and use a seal; 
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1 ‘‘(II) establish policies with which 

2 the Commissioner shall comply under 

3 this part; and 

4 ‘‘(III) appoint and remove the 

5 Executive Director, as provided in 

6 paragraph (2). 

7 ‘‘(iv) INDEPENDENCE OF CERTIFIED

8 ACCOUNT MANAGERS.—The policies of the 

9 Board may not require a certified account 

10 manager to invest or to cause to be in11 vested any account assets in a specific 

12 asset or to dispose of or cause to be dis13 posed of any specific asset so held. 

14 ‘‘(v) MEETINGS OF THE BOARD.—The 

15 Board shall meet at the call of the Chair16 man or upon the request of a quorum of 

17 the Board. The Board shall perform the 

18 functions and exercise the powers of the 

19 Board on a majority vote of a quorum of 

20 the Board. Four members of the Board 

21 shall constitute a quorum for the trans22 action of business. 

23 ‘‘(vi) COMPENSATION OF BOARD MEM24 BERS.—
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1 ‘‘(I) IN GENERAL.—Each mem2 ber of the Board who is not an officer 

3 or employee of the Federal Govern4 ment shall be compensated at the 

5 daily rate of basic pay for level IV of 

6 the Executive Schedule for each day 

7 during which such member is engaged 

8 in performing a function of the 

9 Board. Any member who is such an 

10 officer or employee shall not suffer 

11 any loss of pay or deduction from an12 nual leave on the basis of any time 

13 used by such member in performing 

14 such a function. 

15 ‘‘(II) TRAVEL, PER DIEM, AND

16 EXPENSES.—A member of the Board 

17 shall be paid travel, per diem, and 

18 other necessary expenses under sub19 chapter I of chapter 57 of title 5, 

20 United States Code, while traveling 

21 away from such member’s home or 

22 regular place of business in the per23 formance of the duties of the Board. 

24 ‘‘(vii) STANDARD FOR BOARD’S DIS25 CHARGE OF RESPONSIBILITIES.—The 
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1 members of the Board shall discharge their 

2 responsibilities solely in the interest of par3 ticipating individuals and the Program. 

4 ‘‘(viii) ANNUAL REPORT.—The Board 

5 shall submit an annual report to the Presi6 dent, to each House of the Congress, and 

7 to the Board of Trustees of the Federal 

8 Old-Age and Survivors Insurance Trust 

9 Fund and the Federal Disability Insurance 

10 Trust Fund regarding the financial and 

11 operating condition of the Program. 

12 ‘‘(ix) PUBLIC ACCOUNTANT.—

13 ‘‘(I) DEFINITION.—For purposes 

14 of this subparagraph, the term ‘quali15 fied public accountant’ shall have the 

16 same meaning as provided in section 

17 103(a)(3)(D) of the Employee Retire18 ment Income Security Act of 1974 

19 (29 U.S.C. 1023(a)(3)(D)). 

20 ‘‘(II) ENGAGEMENT.—The Exec21 utive Director, in consultation with 

22 the Board, shall annually engage, on 

23 behalf of all individuals for whom a 

24 GROW account is established under 

25 this part, an independent qualified 
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1 public accountant, who shall conduct 

2 an examination of all records main3 tained in the administration of this 

4 part that the public accountant con5 siders necessary. 

6 ‘‘(III) DUTIES.—The public ac7 countant conducting an examination 

8 under subclause (II) shall determine 

9 whether the records referred to in 

10 such subclause have been maintained 

11 in conformity with generally accepted 

12 accounting principles. The public ac13 countant shall transmit to the Board 

14 a report on his examination. 

15 ‘‘(IV) RELIANCE ON CERTIFIED

16 ACTUARIAL MATTERS.—In making a 

17 determination under subclause (III), a 

18 public accountant may rely on the cor19 rectness of any actuarial matter cer20 tified by an enrolled actuary if the 

21 public accountant states his reliance 

22 in the report transmitted to the Board 

23 under such subclause. 

24 ‘‘(2) EXECUTIVE DIRECTOR.—
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1 ‘‘(A) APPOINTMENT AND REMOVAL.—The 

2 Board shall appoint, without regard to the pro3 visions of law governing appointments in the 

4 competitive service, an Executive Director by 

5 action agreed to by a majority of the members 

6 of the Board. The Executive Director shall have 

7 substantial experience, training, and expertise 

8 in the management of financial investments and 

9 pension benefit plans. The Board may, with the 

10 concurrence of 4 members of the Board, remove 

11 the Executive Director from office for good 

12 cause shown. 

13 ‘‘(B) POWERS AND DUTIES OF EXECUTIVE

14 DIRECTOR.—The Executive Director shall—

15 ‘‘(i) carry out the policies established 

16 by the Board, 

17 ‘‘(ii) administer the provisions of this 

18 part in accordance with the policies of the 

19 Board, and 

20 ‘‘(iii) meet from time to time with the 

21 Board upon request of the Board. 

22 ‘‘(C) ADMINISTRATIVE AUTHORITIES OF

23 EXECUTIVE DIRECTOR.—The Executive Direc24 tor may—
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1 ‘‘(i) appoint such personnel as may be 

2 necessary to carry out the provisions of 

3 this part, 

4 ‘‘(ii) subject to approval by the Board, 

5 procure the services of experts and consult6 ants under section 3109 of title 5, United 

7 States Code, 

8 ‘‘(iii) secure directly from any agency 

9 or instrumentality of the Federal Govern10 ment on a reimbursable basis any informa11 tion which, in the judgment of the Execu12 tive Director, is necessary to carry out the 

13 provisions of this part and the policies of 

14 the Board, and which shall be provided by 

15 such agency or instrumentality upon the 

16 request of the Executive Director, 

17 ‘‘(iv) pay the compensation, per diem, 

18 and travel expenses of individuals ap19 pointed under clauses (i), (ii), and (v) of 

20 this subparagraph, subject to such limits 

21 as may be established by the Board, 

22 ‘‘(v) accept and use the services of in23 dividuals employed intermittently in the 

24 Government service and reimburse such in25 dividuals for travel expenses, as authorized 
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1 by section 5703 of title 5, United States 

2 Code, including per diem as authorized by 

3 section 5702 of such title, and 

4 ‘‘(vi) except as otherwise expressly 

5 prohibited by law or the policies of the 

6 Board, delegate any of the Executive Di7 rector’s functions to such employees under 

8 the Board as the Executive Director may 

9 designate and authorize such successive re10 delegations of such functions to such em11 ployees under the Board as the Executive 

12 Director may consider to be necessary or 

13 appropriate. 

14 ‘‘(3) ROLE OF THE COMMISSIONER.—The Com15 missioner shall—

16 ‘‘(A) prescribe such regulations (supple17 mentary to and consistent with the regulations 

18 prescribed by the Board) as may be necessary 

19 for carrying out the duties of the Commissioner 

20 under this part, 

21 ‘‘(B) meet from time to time with, and 

22 provide information to, the Board upon request 

23 of the Board regarding matters relating to the 

24 Program, and 
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1 ‘‘(C) in consultation with the Board and 

2 utilizing available Federal agencies and re3 sources, develop a campaign to educate workers 

4 about the Program. 

5 ‘‘(b) CERTIFICATION AND OVERSIGHT OF ACCOUNT

6 MANAGERS.—

7 ‘‘(1) CERTIFICATION BY THE BOARD.—

8 ‘‘(A) IN GENERAL.—Any person that is a 

9 qualified professional asset manager (as defined 

10 in section 8438(a)(8) of title 5, United States 

11 Code) may apply to the Board (in such form 

12 and manner as shall be provided by the Board 

13 by regulation) for certification under this sub14 section as a certified account manager. In mak15 ing certification decisions, the Board shall con16 sider the applicant’s general character and fit17 ness, financial history and future earnings pros18 pects, and ability to serve participating individ19 uals under the Program, and such other criteria 

20 as the Board deems necessary to carry out this 

21 part. Certification of any person under this sub22 section shall be contingent upon entry into a 

23 contractual arrangement between the Board 

24 and such person. 
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1 ‘‘(B) NONDELEGATION REQUIREMENT.—

2 The authority of the Board to make any deter3 mination to deny any application under this 

4 subsection may not be delegated by the Board. 

5 ‘‘(2) OVERSIGHT OF CERTIFIED ACCOUNT MAN6 AGERS.—

7 ‘‘(A) ROLE OF REGULATORY AGENCIES.—

8 The Board may enter into cooperative arrange9 ments with Federal and State regulatory agen10 cies identified by the Board as having jurisdic11 tion over persons eligible for certification under 

12 this subsection so as to ensure that the provi13 sions of this part are enforced with respect to 

14 certified account managers in a manner con15 sistent with and supportive of the requirements 

16 of other provisions of Federal law applicable to 

17 them. Such Federal regulatory agencies shall 

18 cooperate with the Board to the extent that the 

19 Board determines that such cooperation is nec20 essary and appropriate to ensure that the provi21 sions of this part are effectively implemented. 

22 ‘‘(B) ACCESS TO RECORDS.—The Board 

23 may from time to time require any certified ac24 count manager to file such reports as the Board 

25 may specify by regulation as necessary for the 
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1 administration of this part. In prescribing such 

2 regulations, the Board shall minimize the regu3 latory burden imposed upon certified account 

4 managers while taking into account the benefit 

5 of the information to the Board in carrying out 

6 its functions under this part. 

7 ‘‘(3) REVOCATION OF CERTIFICATION.—The 

8 Board shall provide, in the contractual arrangements 

9 entered into under this subsection with each certified 

10 account manager, for revocation of such person’s 

11 status as a certified account manager upon deter12 mination by the Board of such person’s failure to 

13 comply with the requirements of such contractual ar14 rangements. Such arrangements shall include provi15 sion for notice and opportunity for review of any 

16 such revocation. 

17 ‘‘(c) FIDUCIARY RESPONSIBILITIES.—

18 ‘‘(1) IN GENERAL.—Rules similar to the provi19 sions of section 8477 of title 5, United States Code 

20 (relating to fiduciary responsibilities; liability and 

21 penalties) shall apply in connection with account as22 sets, in accordance with regulations which shall be 

23 issued by the Board. The Board shall issue regula24 tions with respect to the investigative authority of 
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1 appropriate Federal agencies in cases involving ac2 count assets. 

3 ‘‘(2) EXCULPATORY PROVISIONS VOIDED.—Any 

4 provision in an agreement or instrument which pur5 ports to relieve a fiduciary from responsibility or li6 ability for any responsibility, obligation, or duty 

7 under this part shall be void. 

8 ‘‘(d) CIVIL ACTIONS BY BOARD.—If any person fails 

9 to meet any requirement of this part or of any contract 

10 entered into under this part, the Board may bring a civil 

11 action in any district court of the United States within 

12 the jurisdiction of which such person’s assets are located 

13 or in which such person resides or is found, without regard 

14 to the amount in controversy, for appropriate relief to re15 dress the violation or enforce the provisions of this part, 

16 and process in such an action may be served in any dis17 trict. 

18 ‘‘(e) REPRESENTATIVES.—The Board shall provide 

19 by regulation for elections and designations otherwise to 

20 be made by an individual under this part to be made in21 stead on behalf of the individual by a designated rep22 resentative of the individual. 

23 ‘‘(f) PREEMPTION OF INCONSISTENT STATE LAW.—

24 A provision of this part shall not be construed to preempt 

25 any provision of the law of any State or political subdivi-
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1 sion thereof, or prevent a State or political subdivision 

2 thereof from enacting any provision of law with respect 

3 to the subject matter of this part, except to the extent 

4 that such provision of State law is inconsistent with this 

5 part, and then only to the extent of the inconsistency. 

6 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated to the Board, the Com8 missioner, and the Secretary of the Treasury, for fiscal 

9 years beginning on or after October 1, 2005, such sums 

10 as are necessary to carry out their respective duties under 

11 this part.’’. 

12 (b) CONFORMING AMENDMENT TO PART A.—Section 

13 202 of such Act (42 U.S.C. 402) is amended by adding 

14 at the end the following new subsection: 

15 ‘‘Adjustments Under Part B 

16 ‘‘(z) The amount of benefits under subsections (a), 

17 (b), (c), (e), (f), and (h) which are otherwise payable under 

18 this part and which are retirement benefits (as defined 

19 in section 251(8)) shall be subject to adjustment as pro20 vided under section 258.’’. 

21 (c) ADDITIONAL CONFORMING AMENDMENTS.—(1) 

22 Section 701(b) of the Social Security Act (42 U.S.C. 

23 901(b)) is amended by striking ‘‘title II’’ and inserting 

24 ‘‘part A of title II, the GROW Accounts Program under 

25 part B of title II,’’. 
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1 (2) Section 702(a)(4) of such Act (42 U.S.C. 

2 902(a)(4)) is amended by inserting ‘‘other than those of 

3 the GROW Accounts Board’’ after ‘‘Administration’’, and 

4 by striking ‘‘thereof’’ and inserting ‘‘of the Administration 

5 in connection with the exercise of such powers and the 

6 discharge of such duties’’. 

7 SEC. 102. ANNUAL ACCOUNT STATEMENTS. 

8 Section 1143 of the Social Security Act (42 U.S.C. 

9 1320b–13) is amended by adding at the end the following 

10 new subsection: 

11 ‘‘Performance of GROW Accounts 

12 ‘‘(e) Beginning not later than 1 year after the date 

13 on which the first deposit is made to a participating indi14 vidual’s GROW account, each statement provided to such 

15 participating individual under this section shall include in16 formation determined by the GROW Accounts Board as 

17 sufficient to fully inform such participating individual an18 nually of the balance, investment performance, and admin19 istrative expenses of such account.’’. 

20 SEC. 103. REPORT AND CONGRESSIONAL CONSIDERATION 

21 OF PROPOSALS REGARDING ALTERNATIVE 

22 INVESTMENT OPTIONS AND OTHER MAT23 TERS. 

24 (a) REPORT.—During the period of 30 calendar days 

25 beginning on the first day of the 111th Congress, the 
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1 GROW Accounts Board shall submit to the President and 

2 each House of the Congress a report containing a consoli3 dated implementation plan for the GROW Accounts Pro4 gram, consisting of the following 3 components: 

5 (1) INVESTMENT OPTIONS PLAN.—An invest6 ment options plan, which shall provide for additional 

7 and alternative investment options, for GROW ac8 count balances, in broad-based index funds—

9 (A) which are similar to the index fund in10 vestment options available within the Thrift 

11 Savings Fund established under section 8437 of 

12 title 5, United States Code, including a lifecycle 

13 fund in which investments are adjusted based 

14 on the number of years remaining prior to the 

15 participating individual’s attainment of age 62, 

16 (B) which the Board determines would be 

17 prudent sources of retirement income that could 

18 yield greater amounts of income than the in19 vestment described in section 256(c)(1) of the 

20 Social Security Act (added by this title), and 

21 (C) which a participating individual may 

22 elect. 

23 (2) PAYOUT OPTIONS PLAN.—A payout options 

24 plan, which shall provide for additional and alter25 native options for the payout of GROW account bal-
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1 ances to participating individuals upon their retire2 ment date (as defined in section 251(9) of the Social 

3 Security Act) which the Board determines would be 

4 appropriate. 

5 (3) PUBLIC EDUCATION PLAN.—A public edu6 cation plan, which shall provide for enhancement of 

7 information dissemination under, and public edu8 cation regarding, the GROW Accounts Program. 

9 (b) IMPLEMENTATION.—

10 (1) IN GENERAL.—Subject to paragraph (2)—

11 (A) INVESTMENT OPTIONS PLAN.—The in12 vestment options plan submitted pursuant to 

13 subsection (a)(1) shall take effect on the date 

14 immediately following the 90-day period begin15 ning on the date on which such plan is so sub16 mitted. 

17 (B) PAYOUT OPTIONS PLAN AND PUBLIC

18 EDUCATION PLAN.—The payout options plan 

19 submitted pursuant to subsection (a)(2) and the 

20 public education plan submitted pursuant to 

21 subsection (a)(3) shall be implemented in ac22 cordance with timetables which shall be in23 cluded with such plans. 

24 (2) CONGRESSIONAL REVIEW.—The consoli25 dated implementation plan submitted pursuant to 
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1 subsection (a) shall not become effective if, during 

2 the 90-day period beginning on the date on which 

3 such plan is so submitted, there is enacted by the 

4 Congress a joint resolution of disapproval of such 

5 plan. 

6 (3) TIME PERIODS.—For purposes of this sub7 section, the days on which either House of Congress 

8 is not in session because of an adjournment of more 

9 than 3 days to a day certain shall be excluded in the 

10 computation of the 90-day period referred to in 

11 paragraphs (1)(A) and (2). 

12 (c) DEFINITIONS.—For purposes of this section—

13 (1) the term ‘‘Grow Accounts Board’’ or 

14 ‘‘Board’’ means the GROW Accounts Board estab15 lished under section 260(a) of the Social Security 

16 Act; 

17 (2) the term ‘‘GROW Accounts Program’’ 

18 means the GROW Accounts Program established 

19 under part B of title II of such Act; 

20 (3) the term ‘‘GROW account’’ means a GROW 

21 account established under section 255 of such Act; 

22 and 

23 (4) the term ‘‘participating individual’’ has the 

24 meaning provided in section 253(a) of such Act. 
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1 TITLE II—TAX TREATMENT 

2 SEC. 201. TAX TREATMENT OF GROW ACCOUNTS. 

3 Section 7701 of the Internal Revenue Code of 1986 

4 (relating to definitions) is amended by redesignating sub5 section (o) as subsection (p) and by inserting after sub6 section (n) the following new subsection: 

7 ‘‘(o) TAX TREATMENT OF GROW ACCOUNTS.—

8 ‘‘(1) IN GENERAL.—All GROW accounts estab9 lished under part B of title II of the Social Security 

10 Act shall be exempt from taxation under this title. 

11 ‘‘(2) CERTAIN DISPOSITIONS OF ACCOUNT AS12 SETS.—No amount shall be includible in gross in13 come by reason of a disposition under subsection (a) 

14 or (b) of section 259 of the Social Security Act.’’. 

15 SEC. 202. BENEFITS TAXABLE AS SOCIAL SECURITY BENE16 FITS. 

17 (a) IN GENERAL.—Section 86(d)(1) of the Internal 

18 Revenue Code of 1986 is amended—

19 (1) in subparagraph (A) by inserting ‘‘part A 

20 of’’ after ‘‘benefit under’’, and 

21 (2) by striking ‘‘or’’ at the end of subparagraph 

22 (A), by redesignating subparagraph (B) as subpara23 graph (C), and by inserting after subparagraph (A) 

24 the following new subparagraph: 
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1 ‘‘(B) any distribution under section 257 of 

2 the Social Security Act, or ’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this subsection shall apply to taxable years beginning after 

5 the end of the calendar year in which this Act is enacted. 

6 SEC. 203. ESTATE TAX NOT TO APPLY TO ASSETS OF GROW 

7 ACCOUNTS. 

8 (a) IN GENERAL.—Part IV of subchapter A of chap9 ter 11 of the Internal Revenue Code of 1986 (relating to 

10 taxable estate) is amended by adding at the end the fol11 lowing new section: 

12 ‘‘SEC. 2059. GROW ACCOUNTS. 

13 ‘‘For purposes of the tax imposed by section 2001, 

14 the value of the taxable estate shall be determined by de15 ducting from the value of the gross estate an amount 

16 equal to the value of the assets of a GROW account trans17 ferred from such account by the Secretary under section 

18 258 of the Social Security Act.’’. 

19 (b) CLERICAL AMENDMENT.—The table of sections 

20 for part IV of subchapter A of chapter 11 of such Code 

21 is amended by adding at the end the following new item:

‘‘Sec. 2059. GROW accounts.’’.

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to decedents dying in or after the 

24 calendar year in which this Act is enacted.

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