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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4682 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 4682

     To encourage savings, promote financial literacy, and expand 
    opportunities for young adults by establishing Lifetime Savings 
                               Accounts.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 24, 2010

  Mr. Kennedy (for himself, Mr. Petri, and Mr. Cooper) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
     To encourage savings, promote financial literacy, and expand 
    opportunities for young adults by establishing Lifetime 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``America Saving for 
Personal Investment, Retirement, and Education Act of 2010'' or the 
``ASPIRE Act of 2010''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. ASPIRE Fund.
Sec. 3. Lifetime Savings Accounts.
Sec. 4. Certifications related to Government contributions.
Sec. 5. Rules governing Lifetime Savings Accounts relating to 
                            investment, accounting, and reporting.
Sec. 6. Tax treatment of Lifetime Savings Accounts.
Sec. 7. Private management of Lifetime Savings Accounts.
Sec. 8. ASPIRE Fund Board.
Sec. 9. Fiduciary responsibilities.
Sec. 10. Assignment, alienation, and treatment of deceased individuals.
Sec. 11. Accounts disregarded in determining eligibility for Federal 
                            benefits.
Sec. 12. Reports.
Sec. 13. Programs for promoting financial literacy.

SEC. 2. ASPIRE FUND.

    (a) Establishment.--There is established in the Treasury of the 
United States an ASPIRE Fund.
    (b) Amounts Held by Fund.--The ASPIRE Fund consists of the sum of 
all amounts paid into the Fund under subsections (d) and (e), increased 
by the total net earnings from investments of sums held in the Fund or 
reduced by the total net losses from investments of sums held in the 
Fund, and reduced by the total amount of payments made from the Fund 
(including payments for administrative expenses).
    (c) Use of Fund.--
            (1) In general.--The sums in the ASPIRE Fund are 
        appropriated and shall remain available without fiscal year 
        limitation--
                    (A) to invest under section 5,
                    (B) to make distributions as provided pursuant to 
                section 6,
                    (C) to pay the administrative expenses of carrying 
                out this Act, and
                    (D) to purchase insurance as provided in section 
                9(c)(2).
            (2) Exclusive purposes.--The sums in the ASPIRE Fund shall 
        not be appropriated for any purpose other than the purposes 
        specified in this section and may not be used for any other 
        purpose.
    (d) Government Contributions.--
            (1) In general.--The Secretary of the Treasury shall make 
        transfers from the general fund of the Treasury to the ASPIRE 
        Fund as follows:
                    (A) Automatic contributions.--Upon receipt of each 
                certification under section 3(b), the Secretary of the 
                Treasury shall transfer $500.
                    (B) Supplemental contributions.--Upon receipt of 
                each certification under section 4(a), the Secretary of 
                the Treasury shall transfer the supplemental amount.
                    (C) Matching contributions.--Upon receipt of each 
                certification under section 4(b), the Secretary of the 
                Treasury shall transfer the matching amount.
            (2) Adjustment for inflation.--
                    (A) In general.--For each fifth calendar year 
                beginning after 2010, the $500 amount in paragraph 
                (1)(A) shall be increased by such dollar amount 
                multiplied by the cost-of-living adjustment determined 
                under section 1(f)(3) of the Internal Revenue Code of 
                1986 determined by substituting ``calendar year 2009'' 
                for ``calendar year 1992'' in subparagraph (B) thereof.
                    (B) Rounding.--If any amount adjusted under 
                subparagraph (A) is not a multiple of $50, such amount 
                shall be rounded to the next lowest multiple of $50.
    (e) Private Contributions.--The Executive Director shall pay into 
the ASPIRE Fund such amounts as are contributed under section 3(f).

SEC. 3. LIFETIME SAVINGS ACCOUNTS.

    (a) Establishment.--The Executive Director shall establish in the 
ASPIRE Fund a Lifetime Savings Account for each eligible individual 
certified under subsection (b). Each such account shall be identified 
to its account holder by means of the account holder's social security 
account number.
    (b) Certification of Account Holders.--On the date on which an 
eligible individual is issued a social security account number under 
section 203(c)(2) of the Social Security Act, the Commissioner of 
Social Security shall certify to the Executive Director and the 
Secretary of the Treasury the name of, and social security number 
issued to, such eligible individual.
    (c) Account Balance.--The balance in an account holder's Lifetime 
Savings Account at any time is the excess of--
            (1) the sum of--
                    (A) all deposits made into the ASPIRE Fund and 
                credited to the account under subsection (d), and
                    (B) the total amount of allocations made to and 
                reductions made in the account pursuant to subsection 
                (e), over
            (2) the amounts paid out of the account with respect to 
        such individual under section 6.
    (d) Crediting of Contributions.--Pursuant to regulations which 
shall be prescribed by the Executive Director, the Executive Director 
shall credit to each Lifetime Savings Account the amounts paid into the 
ASPIRE Fund under subsections (d) and (e) of section 2 which are 
attributable to the account holder of such account.
    (e) Allocation of Earnings and Losses.--The Executive Director 
shall allocate to each Lifetime Savings Account an amount equal to the 
net earnings and net losses from each investment of sums in the ASPIRE 
Fund which are attributable, on a pro rata basis, to sums credited to 
such account, reduced by an appropriate share of the administrative 
expenses paid out of the net earnings, as determined by the Executive 
Director.
    (f) Private Contributions.--
            (1) In general.--The Executive Director shall accept cash 
        contributions for payment into the ASPIRE Fund if such 
        contribution is identified (in such manner as the Executive 
        Director may require) with the account holder of a Lifetime 
        Savings Account to whom it is to be credited at the time the 
        contribution is made.
            (2) Alternative methods of contribution.--
                    (A) Payroll deduction.--Under regulations 
                prescribed by the Executive Director and at the 
                election of the employer, contributions under paragraph 
                (1) may be made through payroll deductions.
                    (B) Tax refunds.--Under regulations prescribed by 
                the Secretary of the Treasury, contributions under 
                paragraph (1) may be made by an election to contribute 
                all or a portion of the tax refund of the contributor.
            (3) Annual limitation.--
                    (A) Account holders under age 18.--In the case of 
                an account holder who has not attained age 18 at the 
                end of a calendar year--
                            (i) the limitation under section 219(b)(1) 
                        of the Internal Revenue Code of 1986 shall not 
                        apply, and
                            (ii) the Executive Director shall not 
                        accept any contribution identified with such 
                        account holder if such contribution, when added 
                        to all other contributions made under this 
                        subsection during such calendar year with 
                        respect to such account holder, exceeds $2,000.
                    (B) Account holders age 18 or older.--In the case 
                of an account holder who is age 18 or older at the end 
                of a calendar year, any contribution identified with 
                such account holder shall be taken into account under 
                section 219(b)(1) of the Internal Revenue Code of 1986 
                for such year.
                    (C) Adjustment for inflation.--
                            (i) In general.--For each fifth calendar 
                        year beginning after 2010, the $2,000 amount 
                        under subparagraph (A)(ii) shall be increased 
                        by such dollar amount multiplied by the cost-
                        of-living adjustment determined under section 
                        1(f)(3) of the Internal Revenue Code of 1986 
                        determined by substituting ``calendar year 
                        2009'' for ``calendar year 1992'' in 
                        subparagraph (B) thereof.
                            (ii) Rounding.--If any amount adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the next lowest 
                        multiple of $50.
    (g) Eligible Individual.--For purposes of this Act, the term 
``eligible individual'' means any individual who is--
            (1) a United States citizen or a person described in 
        paragraph (1) of section 431(b) of the Personal Responsibility 
        and Work Opportunity Reconciliation Act of 1996,
            (2) born after December 31, 2009, and
            (3) less than 18 years of age.
    (h) Rights of Legal Guardian.--Until the account holder of a 
Lifetime Savings Account attains age 18, any rights or duties of the 
account holder under this Act with respect to such account shall be 
exercised or performed by the legal guardian of such account holder.

SEC. 4. CERTIFICATIONS RELATED TO GOVERNMENT CONTRIBUTIONS.

    (a) Supplemental Government Contributions.--
            (1) In general.--Upon such showing as the Executive 
        Director may require to establish the basis for certification, 
        the Executive Director shall, with respect to each eligible 
        account holder, certify to the Secretary of the Treasury the 
        supplemental amount with respect to such account holder.
            (2) Eligible account holder.--For purposes of this 
        subsection, the term ``eligible account holder'' means an 
        account holder of a Lifetime Savings Account who, for the last 
        taxable year ending before such account holder's certification 
        under section 3(b), has a modified adjusted gross income which 
        is below the applicable national median adjusted gross income 
        amount.
            (3) Supplemental amount.--
                    (A) In general.--For purposes of this Act, the term 
                ``supplemental amount'' means $500.
                    (B) Income phase-out.--With respect to any account 
                holder who has a modified adjusted gross income for the 
                last taxable year ending before such account holder's 
                certification under section 3(b) which is in excess of 
                75 percent of the applicable national median adjusted 
                gross income amount, the $500 amount in subparagraph 
                (A) shall be reduced (but not below zero) by an amount 
                which bears the same ratio to $500 as such excess bears 
                to 25 percent of the applicable national median 
                adjusted gross income amount.
                    (C) Adjustment for inflation.--
                            (i) In general.--For each fifth calendar 
                        year beginning after 2010, each of the $500 
                        amounts under subparagraphs (A) and (B) shall 
                        be increased by such dollar amount multiplied 
                        by the cost-of-living adjustment determined 
                        under section 1(f)(3) of the Internal Revenue 
                        Code of 1986 determined by substituting 
                        ``calendar year 2009'' for ``calendar year 
                        1992'' in subparagraph (B) thereof.
                            (ii) Rounding.--If any amount adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the next lowest 
                        multiple of $50.
    (b) Government Matching Contribution.--
            (1) In general.--Upon such showing as the Executive 
        Director may require to establish the basis for certification, 
        the Executive Director shall, with respect to each private 
        contribution to the account of an account holder which is made 
        before such account holder attains age 18, certify to the 
        Secretary of the Treasury the matching amount with respect to 
        such contribution.
            (2) Matching amount.--
                    (A) In general.--For purposes of this subsection, 
                the term ``matching amount'' means, with respect to the 
                first $500 of private contributions to an account 
                during any calendar year, an amount equal to 100 
                percent of such contribution.
                    (B) Income phase-out.--With respect to any account 
                holder who has a modified adjusted gross income for the 
                last taxable year ending before such contribution which 
                is in excess of 75 percent of the applicable national 
                median adjusted gross income amount, the $500 amount in 
                subparagraph (A) shall be reduced (but not below zero) 
                by an amount which bears the same ratio to $500 as--
                            (i) such excess, bears to
                            (ii) 25 percent of the applicable national 
                        median adjusted gross income amount.
                    (C) Adjustment for inflation.--
                            (i) In general.--For each fifth calendar 
                        year beginning after 2010, each of the $500 
                        amounts under subparagraphs (A) and (B) shall 
                        be increased by such dollar amount multiplied 
                        by the cost-of-living adjustment determined 
                        under section 1(f)(3) of the Internal Revenue 
                        Code of 1986 determined by substituting 
                        ``calendar year 2009'' for ``calendar year 
                        1992'' in subparagraph (B) thereof.
                            (ii) Rounding.--If any amount adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the next lowest 
                        multiple of $50.
            (3) Private contribution.--For purposes of this subsection, 
        the term ``private contribution'' means a contribution accepted 
        under section 3(f).
    (c) Definitions and Rules Relating to Modified Adjusted Gross 
Income.--For purposes of this section--
            (1) Special rule for account holders who can be claimed as 
        dependents.--In the case of an account holder of a Lifetime 
        Savings Account for whom a deduction is allowable under section 
        151 of the Internal Revenue Code of 1986 to another taxpayer, 
        any reference in this section to the modified adjusted gross 
        income of the account holder for any taxable year shall be 
        treated as a reference to the modified adjusted gross income of 
        such other taxpayer.
            (2) Modified adjusted gross income.--The term ``modified 
        adjusted gross income'' has the meaning given such term in 
        section 221(b) of the Internal Revenue Code of 1986.
            (3) Applicable national median adjusted gross income.--
                    (A) In general.--The term ``applicable national 
                median adjusted gross income'' means, with respect to 
                any calendar year, the median amount of adjusted gross 
                income (as defined in section 62 of the Internal 
                Revenue Code of 1986) for individual taxpayers for 
                taxable years ending in the prior calendar year as 
                determined by the Secretary of the Treasury.
                    (B) Joint returns.--The applicable national median 
                adjusted gross income shall be calculated and applied 
                separately with respect to joint returns and all other 
                returns.

SEC. 5. RULES GOVERNING LIFETIME SAVINGS ACCOUNTS RELATING TO 
              INVESTMENT, ACCOUNTING, AND REPORTING.

    (a) Default Investment Program.--The ASPIRE Fund Board shall 
establish a default investment program under which, in a manner similar 
to a lifecycle investment program, sums in each Lifetime Savings 
Account are allocated to investment funds in the ASPIRE Fund based on 
the amount of time before the account holder attains the age of 18. 
Each account holder of a Lifetime Savings Account shall be enrolled in 
such program unless such account holder, in such form and manner as 
prescribed by the Executive Director, elects otherwise.
    (b) Other Rules.--Under regulations which shall be prescribed by 
the Executive Director, and subject to the provisions of this Act, the 
provisions of--
            (1) section 8438 of title 5, United States Code (relating 
        to investment of the Thrift Savings Fund),
            (2) section 8439(b) of such title (relating to engagement 
        of independent qualified public accountant),
            (3) section 8439(c) of such title (relating to periodic 
        statements and summary descriptions of investment options), and
            (4) section 8439(d) of such title (relating to assumption 
        of risk),
shall apply with respect to the ASPIRE Fund and accounts maintained in 
such Fund in the same manner and to the same extent as such provisions 
relate to the Thrift Savings Fund and the accounts maintained in the 
Thrift Savings Fund. For purposes of this subsection, references in 
such sections 8438 and 8439 to an employee, Member, former employee, or 
former Member shall be deemed references to an account holder of a 
Lifetime Savings Account in the ASPIRE Fund.

SEC. 6. TAX TREATMENT OF LIFETIME SAVINGS ACCOUNTS.

    (a) In General.--Except as otherwise provided in this Act, for 
purposes of the Internal Revenue Code of 1986--
            (1) each Lifetime Savings Account shall be treated in the 
        same manner as a Roth IRA (within the meaning of section 408A 
        of such Code), except that section 408A of such Code shall be 
        applied separately to Lifetime Savings Accounts, and
            (2) any distribution from such account shall be treated in 
        the same manner as a distribution from a Roth IRA.
    (b) Separate Application of Taxation Rules.--For purposes of this 
Act, section 408A, other than subsection (c) thereof (relating to 
treatment of contributions), of the Internal Revenue Code of 1986 shall 
be applied separately to Lifetime Savings Accounts.
    (c) Minimum Balance.--No amount shall be distributed pursuant to 
subsection (a)(2) to the extent such distribution would cause the 
balance of such account to be less than the amount transferred to such 
account under section 2(d)(1)(A) before the account holder--
            (1) attains age 59\1/2\,
            (2) dies, or
            (3) becomes disabled (within the meaning of section 
        72(m)(7).
    (d) Distributions for Higher Education.--In the case of higher 
education expenses of an account holder incurred during the period 
beginning on the date the account holder attains 18 and ending before 
the account holder attains 25, no amount shall be treated as a 
qualified distribution pursuant to subsection (a)(2) unless such amount 
is paid directly to the institution of higher education (as defined in 
section 101 of the Higher Education Act of 1065 (20 U.S.C. 1001) 
through which the higher education is provided.
    (e) Age Limitation.--Except as otherwise provided by this Act, no 
distribution shall be made under subsection (a) with respect to any 
account holder of a Lifetime Savings Account before such account holder 
attains age 18.
    (f) Qualified Rollovers Contributions.--
            (1) In general.--Under regulations prescribed by the 
        Secretary of the Treasury in consultation with the Executive 
        Director, any account holder of a Lifetime Savings Account may 
        elect to make a rollover contribution from such account 
        holder's account to a privately managed Lifetime Savings 
        Account (as defined in section 408B of the Internal Revenue 
        Code of 1986).
            (2) Limitation.--No rollover contribution may be made under 
        this paragraph to the extent that such rollover contribution 
        would cause the balance of such account holder's account to be 
        less than the minimum balance specified in subsection (c).
    (g) 100 Percent Tax on Government Contributions.--
            (1) Lifetime savings accounts.--
                    (A) In general.--In the case of any amount 
                distributed from a Lifetime Savings Account which is 
                attributable to contributions made under section 2(d) 
                and which would be includible in gross income (but for 
                this paragraph)--
                            (i) such amount shall not be includible in 
                        gross income, and
                            (ii) the tax imposed under chapter 1 of the 
                        Internal Revenue Code of 1986 on the 
                        distributee for the taxable year in which such 
                        amount is distributed shall be increased by 100 
                        percent of such amount.
                    (B) Ordering rules.--For purposes of this 
                paragraph, distributions from Lifetime Savings Accounts 
                shall be treated as made from amounts attributable to 
                contributions made under section 3(f) and from earnings 
                before made from amounts attributable to contributions 
                made under section 2(d).

SEC. 7. PRIVATE MANAGEMENT OF LIFETIME SAVINGS ACCOUNTS.

    (a) In General.--Part I of subchapter D of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
408A the following new section:

``SEC. 408B. PRIVATELY MANAGED LIFETIME SAVINGS ACCOUNTS.

    ``(a) In General.--Except as provided in this section, a privately 
managed Lifetime Savings Account shall be treated in the same manner as 
a Roth IRA, except that:
            ``(1) Qualified special purpose distributions.--Qualified 
        special distributions (as defined in section 408A(d)(5)) shall 
        include--
                    ``(A) distributions to the extent that such 
                distributions do not exceed qualified higher education 
                expenses (as defined in section 529(e)(3)) of the 
                beneficiary of a privately managed Lifetime Savings 
                Account, reduced by the sum of--
                            ``(i) the amount excluded from gross income 
                        under section 127, 135, 529, or 530 by reason 
                        of such expenses,
                            ``(ii) the amount excluded from gross 
                        income under section 221 by reason of such 
                        expenses (determined without regard to the last 
                        sentence of subsection (d)(2) thereof),
                            ``(iii) the amount of any scholarship, 
                        allowance, or payment described in section 
                        25A(g)(2), and
                            ``(iv) the amount of such expenses which 
                        were taken into account in determining the 
                        credit allowed to the taxpayer or any other 
                        person under section 25A, and
                    ``(B) amounts which within 60 days of distribution 
                are transferred to a qualified tuition program under 
                section 529 for the benefit of the account holder of a 
                privately managed Lifetime Savings Account or a member 
                of the family (within the meaning of section 529(e)(2)) 
                of such account holder.
            ``(2) Nonexclusion period does not apply.--Section 
        408A(d)(2)(B) shall not apply.
            ``(3) Qualified rollover.--In lieu of the definition given 
        the term `qualified rollover contribution' under section 
        408A(e), such term shall mean a rollover contribution to a 
        privately managed Lifetime Savings Account from another such 
        account or from a Lifetime Savings Account under section 
        7(b)(2)(A) of the America Saving for Personal Investment, 
        Retirement, and Education Act of 2010, but only if such 
        rollover contribution meets the requirements of section 
        408(d)(3).
            ``(4) Age limitation on distributions.--Except as otherwise 
        provided in this section, no distribution may be made with 
        respect to any account holder of a privately managed Lifetime 
        Savings Account before such account holder attains age 18.
            ``(5) Taxation of government contributions.--In the case of 
        any distribution which is attributable to contributions made 
        under section 2(d) of the America Saving for Personal 
        Investment, Retirement, and Education Act of 2010 and which 
        would be includible in gross income (but for this paragraph)--
                    ``(A) such amount shall not be includible in gross 
                income, and
                    ``(B) the tax imposed under chapter 1 on the 
                distributee for the taxable year in which such amount 
                is distributed shall be increased by 100 percent of 
                such amount.
        For purposes of this paragraph, distributions shall be treated 
        as made from amounts attributable to other contributions and 
        from earnings before made from amounts attributable to 
        contributions made under section 2(d) of the America Saving for 
        Personal Investment, Retirement, and Education Act of 2010.
            ``(6) Assignment, alienation, and treatment of deceased 
        individuals.--Section 10 of the America Saving for Personal 
        Investment, Retirement, and Education Act of 2010 shall apply 
        in lieu of treatment under this subsection as a Roth IRA.
    ``(b) Privately Managed Lifetime Savings Account.--For purposes of 
this title, the term `privately managed Lifetime Savings Account' means 
an individual retirement plan (as defined in section 7701(a)(37)) which 
is designated (in such manner as the Secretary may prescribe) as a 
privately managed Lifetime Savings Account and which meets the 
requirements of the America Saving for Personal Investment, Retirement, 
and Education Act of 2010.''.
    (b) Conforming Amendment.--The table of sections for part I of 
subchapter D of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item related to section 408A the 
following new item:

``Sec. 408B. Privately managed Lifetime Savings Accounts.''.

SEC. 8. ASPIRE FUND BOARD.

    (a) In General.--There is established in the executive branch of 
the Government a ASPIRE Fund Board.
    (b) Composition, Duties, and Responsibilities.--Subject to the 
provisions of this Act, the provisions of--
            (1) section 8472 of title 5, United States Code (relating 
        to composition of Federal Retirement Thrift Investment Board),
            (2) section 8474 of such title (relating to Executive 
        Director),
            (3) section 8475 of such title (relating to investment 
        policies), and
            (4) section 8476 of such title (relating to administrative 
        provisions),
shall apply with respect to the ASPIRE Fund Board in the same manner 
and to the same extent as such provisions relate to the Federal 
Retirement Thrift Investment Board.

SEC. 9. FIDUCIARY RESPONSIBILITIES.

    (a) In General.--Under regulations of the Secretary of Labor, the 
provisions of sections 8477 and 8478 of title 5, United States Code, 
shall apply in connection with the ASPIRE Fund and the accounts 
maintained in such Fund in the same manner and to the same extent as 
such provisions apply in connection with the Thrift Savings Fund and 
the accounts maintained in the Thrift Savings Fund.
    (b) Investigative Authority.--Any authority available to the 
Secretary of Labor under section 504 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1134) is hereby made available to the 
Secretary of Labor, and any officer designated by the Secretary of 
Labor, to determine whether any person has violated, or is about to 
violate, any provision applicable under subsection (a).
    (c) Exculpatory Provisions; Insurance.--
            (1) In general.--Any provision in an agreement or 
        instrument which purports to relieve a fiduciary from 
        responsibility or liability for any responsibility, obligation, 
        or duty under this Act shall be void.
            (2) Insurance.--Amounts in the ASPIRE Fund available for 
        administrative expenses shall be available and may be used at 
        the discretion of the Executive Director to purchase insurance 
        to cover potential liability of persons who serve in a 
        fiduciary capacity with respect to the Fund and accounts 
        maintained therein, without regard to whether a policy of 
        insurance permits recourse by the insurer against the fiduciary 
        in the case of a breach of a fiduciary obligation.

SEC. 10. ASSIGNMENT, ALIENATION, AND TREATMENT OF DECEASED INDIVIDUALS.

    (a) Assignment and Alienation.--Under regulations which shall be 
prescribed by the Executive Director, rules relating to assignment and 
alienation applicable under chapter 84 of title 5, United States Code, 
with respect to amounts held in accounts in the Thrift Savings Fund 
shall apply with respect to amounts held in Lifetime Savings Accounts 
in the ASPIRE Fund.
    (b) Treatment of Accounts of Deceased Individuals.--In the case of 
a deceased account holder of a Lifetime Savings Account which has an 
account balance greater than zero, upon receipt of notification of such 
individual's death, the Executive Director shall close the account and 
shall transfer the balance in such account to the Lifetime Savings 
Account of such account holder's surviving spouse or, if there is no 
such account of a surviving spouse, to the duly appointed legal 
representative of the estate of the deceased account holder, or if 
there is no such representative, to the person or persons determined to 
be entitled thereto under the laws of the domicile of the deceased 
account holder.

SEC. 11. ACCOUNTS DISREGARDED IN DETERMINING ELIGIBILITY FOR FEDERAL 
              BENEFITS.

    Amounts in any Lifetime Savings Account shall not be taken into 
account in determining any individual's or household's financial 
eligibility for, or amount of, any benefit or service, paid for in 
whole or in part with Federal funds, including student financial aid.

SEC. 12. REPORTS.

    The Executive Director, in consultation with the Secretary of the 
Treasury, shall annually transmit a written report to the Congress. 
Such report shall include--
            (1) a detailed description of the status and operation of 
        the ASPIRE Fund and the management of the Lifetime Savings 
        Accounts, and
            (2) a detailed accounting of the administrative expenses in 
        carrying out this Act, including the ratio of such 
        administrative expenses to the balance of the ASPIRE Fund and 
        the methodology adopted by the Executive Director for 
        allocating such expenses among the Lifetime Savings Accounts.

SEC. 13. PROGRAMS FOR PROMOTING FINANCIAL LITERACY.

    The Secretary of the Treasury, in coordination with the Financial 
Literacy and Education Commission, shall develop programs to promote 
the financial literacy of account holders of Lifetime Savings Accounts 
and the legal guardians of such account holders who have the rights 
with respect to such accounts under section 3(h).
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