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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9010 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 9010

   To amend the Internal Revenue Code of 1986 to establish universal 
                           savings accounts.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 11, 2024

 Mrs. Harshbarger (for herself, Mr. Grothman, Mr. Ogles, Mr. Pfluger, 
and Mr. Van Orden) 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 establish universal 
                           savings accounts.

    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 ``Universal Savings Account Act of 
2024''.

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. 530U. Universal savings accounts.

``SEC. 530U. 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 individual for the exclusive benefit of such 
individual and which is designated (in such manner as the Secretary may 
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 (d)--
                    ``(A) no contribution will be accepted unless it is 
                in cash, and
                    ``(B) contributions will not be accepted for the 
                taxable year in excess of the contribution limit 
                specified in subsection (c)(2).
            ``(2) No distribution will be made unless it is--
                    ``(A) cash, or
                    ``(B) property that--
                            ``(i) has a readily ascertainable fair 
                        market value, and
                            ``(ii) is identified by the Secretary in 
                        regulations or other guidance as property to 
                        which this subparagraph applies.
            ``(3) 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.
            ``(4) No part of the trust assets will be invested in life 
        insurance contracts or collectibles (as defined in section 
        408(m)).
            ``(5) The interest of an individual in the balance of his 
        account is nonforfeitable.
            ``(6) The assets of the trust shall not be commingled with 
        other property except in a common trust fund or common 
        investment fund.
    ``(c) Treatment of Distributions and Contributions.--
            ``(1) Distributions.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any distribution from a universal 
                savings account shall not be includible in gross 
                income.
                    ``(B) Net income attributable to excess 
                contributions.--Any distribution of net income 
                described in section 4973(i)(2) shall be includible in 
                the gross income of the account holder in the taxable 
                year in which the contribution to which such net income 
                relates was made.
            ``(2) Contribution limit.--
                    ``(A) In general.--The aggregate amount of 
                contributions (other than qualified rollover 
                contributions described in subsection (d)) for any 
                taxable year to all universal savings accounts 
                maintained for the benefit of an individual shall not 
                exceed the lesser of--
                            ``(i) $10,000, or
                            ``(ii) an amount equal to the compensation 
                        (within the meaning of section 219) includible 
                        in such individual's gross income for such 
                        taxable year.
                    ``(B) Phaseout.--
                            ``(i) In general.--The amount allowable as 
                        a contribution under subparagraph (A)(i) 
                        (determined without regard to this 
                        subparagraph) shall be reduced by $50 for each 
                        $1,000 (or fraction thereof) by which the 
                        taxpayer's modified adjusted gross income 
                        exceeds the applicable threshold amount.
                            ``(ii) Applicable threshold amount.--For 
                        purposes of this subparagraph, the term 
                        `applicable threshold amount means'--
                                    ``(I) $400,000, in the case of a 
                                joint return or surviving spouse,
                                    ``(II) $300,000 in the case of a 
                                head of household, or
                                    ``(III) $200,000 in the case of any 
                                other return.
                            ``(iii) Modified adjusted gross income.--
                        For purposes of this subparagraph, the term 
                        `modified adjusted gross income' means adjusted 
                        gross income increased by any amount excluded 
                        from gross income under section 911, 931, or 
                        933.
                    ``(C) No contributions for dependents.--In the case 
                of an individual who is a dependent of another taxpayer 
                for a taxable year beginning in the calendar year in 
                which such individual's taxable year begins, the dollar 
                amount under subparagraph (A) for such individual's 
                taxable year shall be zero.
                    ``(D) Cost-of-living adjustment.--In the case of 
                any taxable year beginning in a calendar year after 
                2025, the dollar amounts in subparagraphs (A)(i) and 
                (B)(ii) 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 2024' for `calendar year 2016' 
                        in subparagraph (A)(ii) thereof.
                If any amount after adjustment under the preceding 
                sentence is not a multiple of $100, such amount shall 
                be rounded to the next lower multiple of $100.
    ``(d) 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 individual, but only if such amount is contributed not 
later than the 60th day after the distribution from such other account.
    ``(e) Treatment of Account Upon Death.--Upon death of any account 
holder of a universal savings account--
            ``(1) Spouse or child.--In the case of the account holder's 
        surviving spouse or child acquiring such account holder's 
        interest in such account by reason of the death of the account 
        holder, such account shall be treated as if the acquiring 
        spouse or child were the account holder.
            ``(2) Other cases.--In any other case--
                    ``(A) all amounts in such account shall be treated 
                as distributed on the date of such individual's death, 
                and
                    ``(B) such account shall cease to be treated as a 
                universal savings account.
    ``(f) Other Special Rules.--
            ``(1) Community property laws.--This section shall be 
        applied without regard to any community property laws.
            ``(2) Loss of taxation exemption of account where 
        individual engages in prohibited transaction; effect of 
        pledging account as security.--Rules similar to the rules of 
        paragraphs (2) and (4) of section 408(e) shall apply to any 
        universal savings account.
    ``(g) Reports.--The trustee of a universal savings account shall 
make such reports regarding such account to the Secretary and to the 
account holder with respect to contributions, distributions, and such 
other matters as the Secretary may require. Such reports shall be--
            ``(1) filed at such time and in such manner as the 
        Secretary provides, and
            ``(2) furnished to account holders--
                    ``(A) not later than January 31 of the calendar 
                year following the calendar year to which such reports 
                relate, and
                    ``(B) in such manner as the Secretary provides.''.
    (b) Tax on Excess Contributions.--
            (1) In general.--Section 4973(a) of such Code is amended by 
        striking ``or'' at the end of paragraph (5), by inserting 
        ``or'' at the end of paragraph (6), and by inserting after 
        paragraph (6) the following new paragraph:
            ``(7) a universal savings account (as defined in section 
        530U),''.
            (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 530U), the term `excess 
        contributions' means the sum of--
                    ``(A) the amount (if any) by which the amount 
                contributed for the taxable year to such accounts 
                (other than qualified rollover contributions (as 
                defined in section 530U(d))) exceeds the contribution 
                limit under section 530U(c)(2) for such taxable year, 
                and
                    ``(B) the amount determined under this subsection 
                for the preceding taxable year, reduced by the sum of--
                            ``(i) the distributions out of the account 
                        for the taxable year, and
                            ``(ii) the amount (if any) by which the 
                        maximum amount allowable as a contribution 
                        under section 530U(c)(2) for the taxable year 
                        exceeds the amount contributed to the accounts 
                        for the taxable 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 
        distributed to the account holder on or before the due date of 
        the account holder's return of tax for such taxable year.''.
    (c) Tax on Prohibited Transactions.--Section 4975(e)(1) of such 
Code is amended by striking ``or'' at the end of subparagraph (F), by 
striking the period at the end of subparagraph (G) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
                    ``(H) a universal savings account (as defined in 
                section 530U).''.
    (d) Failure To Provide Reports on Universal Savings Accounts.--
Section 6693(a)(2) of such Code 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 530U(g) (relating to universal 
                savings accounts).''.
    (e) Conforming Amendment.--The table of parts for subchapter F of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

                ``Part IX. Universal Savings Accounts''.

    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
                                 <all>
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