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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3098 Introduced in House (IH)]

  2d Session
                                H. R. 3098

     To amend title II of the Social Security Act to diversify the 
    investments of the Social Security trust funds by providing for 
investment of 40 percent of each year's surplus in such trust funds in 
     certain private obligations, securities, or other instruments.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 14, 1996

 Ms. Lofgren introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
     To amend title II of the Social Security Act to diversify the 
    investments of the Social Security trust funds by providing for 
investment of 40 percent of each year's surplus in such trust funds in 
     certain private obligations, securities, or other instruments.

    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 ``Social Security Trust Funds 
Investment Act of 1996''.

SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST 
              FUND AND THE FEDERAL DISABILITY INSURANCE TRUST FUND.

    (a) In General.--Section 201(d) of the Social Security Act (42 
U.S.C. 401(d)) is amended--
            (1) by inserting ``(1)'' after ``(d)'';
            (2) in the second sentence, by striking ``Such investments 
        may be made only'' and inserting the following: ``Except as 
        provided in paragraph (2), such investments may be made only'', 
        and by striking ``(1)'' and ``(2)'' and inserting ``(A)'' and 
        ``(B)'', respectively; and
            (3) by adding at the end the following new paragraph:
    ``(2)(A) The Managing Trustee shall determine the annual surplus 
(as defined in subparagraph (B)) for each of the Trust Funds as of the 
end of each fiscal year. The Managing Trustee shall ensure that an 
amount held by each of the Trust Funds equal to at least 40 percent of 
such annual surplus is invested, throughout the next following fiscal 
year, in the manner described in clause (i) or (ii) or in a manner 
consisting of any combination thereof.
            ``(i) Investments under this subparagraph may be in the 
        form of--
                    ``(I) insurance contracts,
                    ``(II) certificates of deposit, or
                    ``(III) other instruments or obligations selected 
                by qualified professional asset managers,
        which return the amount invested and pay interest, at a 
        specified rate or rates, on that amount during a specified 
        period of time.
            ``(ii) Investments under this subparagraph may be in the 
        form of a portfolio of common stock designed to replicate the 
        performance of an index which shall be selected by the Managing 
        Trustee, in consultation with the Board of Trustees. Such index 
        must be a commonly recognized index comprised of common stock 
        the aggregate market value of which is a reasonably complete 
        representation of the United States equity markets. The 
        portfolio shall be designed such that, to the extent 
        practicable, the percentage of the total amount invested in the 
        manner described in this clause that is invested in each stock 
        is the same as the percentage determined by dividing the 
        aggregate market value of all shares of that stock by the 
        aggregate market value of all shares of all stocks included in 
        such index.
    ``(B) For purposes of this paragraph, the `annual surplus' for 
either of the Trust Funds as of the end of a fiscal year is the excess 
(if any) of--
            ``(i) the sum of--
                    ``(I) in the case of the Federal Old-Age and 
                Survivors Insurance Trust Fund, the amounts 
                appropriated to such Trust Fund under paragraphs (3) 
                and (4) of subsection (a) for the fiscal year,
                    ``(II) in the case of the Federal Disability 
                Insurance Trust Fund, the amounts appropriated to such 
                Trust Fund under paragraphs (1) and (2) of subsection 
                (b) for the fiscal year, and
                    ``(III) in either case, the amount appropriated to 
                such Trust Fund under section 121(e) of the Social 
                Security Amendments of 1983 for the fiscal year, and 
                any amounts otherwise credited to or deposited in such 
                Trust Fund under this title for the fiscal year, over
            ``(ii) the amounts paid or transferred from such Trust Fund 
        during the fiscal year.''.
    (b) Conforming Amendments.--Section 201 of such Act is amended 
further--
            (1) in subsection (e) (42 U.S.C. 401(e)), by striking ``Any 
        obligations'' and inserting ``Any obligations, securities, or 
        other instruments''; and
            (2) in subsection (f) (42 U.S.C. 401(f)), by striking ``any 
        obligations'' and inserting ``any obligations, securities, or 
        other instruments''.

SEC. 3. EFFECTIVE DATE.

    The amendments made by this Act shall apply with respect to annual 
surpluses as of the end of fiscal years beginning on or after October 
1, 1996.
                                 <all>
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