I
106TH CONGRESS
1ST SESSION
H. R. 1043
To amend title II of the Social Security Act to strengthen the Social Security
system to meet the challenges of the next century.
IN THE HOUSE OF REPRESENTATIVES
MARCH 9, 1999
Mr. NADLER (for himself and Ms. PELOSI) 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 strengthen
the Social Security system to meet the challenges of
the next century.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Social Security Amend-
ments of 1999’’.
SEC. 2. ADDITIONAL APPROPRIATION TO FEDERAL OLD-
AGE AND SURVIVORS INSURANCE TRUST
FUND.
Section 201 of the Social Security Act (42 U.S.C.
401) is amended by adding at the end the following new
subsection:
‘‘(n)(1) There is hereby appropriated to the Federal
Old-Age and Survivors Insurance Trust Fund, in addition
to amounts appropriated under subsection (a), for each
fiscal year beginning on or after October 1, 1999, and end-
ing on or before September 30, 2014, amounts equal in
the aggregate to the applicable percentage of wages paid,
and self-employment income derived, in such fiscal year,
as specified in the following table:
‘‘Fiscal year:
Applicable percentage:
2000 .........................................................................................
2.20
2001 .........................................................................................
1.75
2002 .........................................................................................
2.20
2003 .........................................................................................
2.08
2004 .........................................................................................
2.41
2005 .........................................................................................
2.55
2006 .........................................................................................
3.07
2007 .........................................................................................
3.43
2008 .........................................................................................
3.79
2009 .........................................................................................
4.12
2010 .........................................................................................
4.32
2011 .........................................................................................
4.49
2012 .........................................................................................
4.58
2013 .........................................................................................
4.61
2014 .........................................................................................
4.51.
‘‘(2) The amounts appropriated by paragraph (1)
shall be transferred from time to time from the general
fund in the Treasury to the Federal Old-Age and Sur-
vivors Insurance Trust Fund, such amounts to be deter-
‘‘(1) SELECTION OF INDEX.—The Independent
Social Security Investment Oversight Board shall se-
lect, for purposes of investment of amounts held in
the Common Stock Investment Account of the Fed-
eral Old-Age and Survivors Insurance Trust Fund,
an index which is a commonly recognized index com-
prised of common stock the aggregate market value
of which is a reasonably complete representation of
the United States equity markets.
‘‘(2) PORTFOLIO DESIGN.—Amounts held in the
Common Stock Investment Account of the Federal
Old-Age and Survivors Insurance Trust Fund shall
be invested in a portfolio designed to replicate the
performance of the index selected under paragraph
(1). The portfolio shall be designed such that, to the
extent practicable, the percentage of the balance in
such Account 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.
‘‘(c) NO VOTING RIGHTS IN SECURITIES.—The Inde-
pendent Social Security Investment Oversight Board and
the Managing Trustee of the Federal Old-Age and Sur-
vivors Insurance Trust Fund may not exercise voting
rights associated with the ownership of securities by the
Trust Fund.
‘‘(d) ENGAGEMENT
OF
QUALIFIED
PUBLIC
AC-
COUNTANT.—
‘‘(1) IN GENERAL.—The Independent Social Se-
curity Investment Oversight Board shall annually
engage, on behalf of the Federal Old-Age and Sur-
vivors Insurance Trust Fund, an independent quali-
fied public accountant, who shall conduct an exam-
ination of all accounts and other books and records
maintained in the administration of this section as
the public accountant considers necessary to enable
the public accountant to make the determination re-
quired by paragraph (2). The examination shall be
conducted in accordance with generally accepted au-
diting standards and shall involve such tests of the
accounts, books, and records as the public account-
ant considers necessary.
‘‘(2) EXAMINATION AND REPORT.—The public
accountant conducting an examination under para-
graph (1) shall determine whether the accounts,
books, and records referred to in such paragraph
have been maintained in conformity with generally
accepted accounting principles applied on a basis
consistent with the manner in which such principles
were applied during the examination conducted
under such paragraph during the preceding year.
The public accountant shall transmit to the Board
and the Comptroller General of the United States a
report on his examination, including his determina-
tion under this paragraph.
‘‘(3) DEFINITION.—For the purposes of this
subsection, the term ‘qualified public accountant’
shall have the same meaning as is provided in sec-
tion 103(a)(3)(D) of the Employee Retirement In-
come 
Security 
Act 
of 
1974 
(29 
U.S.C.
1023(a)(3)(D)).
‘‘(e) FIDUCIARY RESPONSIBILITIES.—
‘‘(1) 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 amounts maintained in the
Common Stock Investment Account of the Federal
Old-Age and Survivors Insurance Trust Fund in the
same manner and to the same extent as such provi-
sions apply in connection with the Thrift Savings
Fund.
‘‘(2) INVESTIGATIVE AUTHORITY.—Any author-
ity available to the Secretary of Labor under section
504 of the Employee Retirement Income Security
Act of 1974 is hereby made available to the Sec-
retary 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 ap-
plicable under paragraph (1).
‘‘(3) EXCULPATORY PROVISIONS; INSURANCE.—
‘‘(A) IN GENERAL.—Any provision in an
agreement or instrument which purports to re-
lieve a fiduciary from responsibility or liability
for any responsibility, obligation, or duty under
this section shall be void.
‘‘(B) INSURANCE.—Amounts held in the
Federal Old-Age and Survivors Insurance Trust
Fund available for administrative expenses shall
be available and may be used at the discretion
of the Independent Social Security Investment
Oversight Board to purchase insurance to cover
potential liability of persons who serve in a fi-
duciary capacity with respect to amounts main-
tained in the Common Stock Investment Ac-
count of such Trust Fund, 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. 4. ESTABLISHMENT OF THE INDEPENDENT SOCIAL SE-
CURITY INVESTMENT OVERSIGHT BOARD.
Title VII of the Social Security Act is amended by
inserting after section 705 (42 U.S.C. 906) the following
new section:
‘‘INDEPENDENT SOCIAL SECURITY INVESTMENT
OVERSIGHT BOARD
‘‘SEC. 706. (a) There is established in the Social Se-
curity Administration an Independent Social Security In-
vestment Oversight Board.
‘‘(b) The Board shall be composed of a Chairman and
four additional members. The Chairman and each addi-
tional member shall be appointed by the President, by and
with the advice and consent to the Senate.
‘‘(c) Members of the Board shall have substantial ex-
perience, training, and expertise in the management of fi-
nancial investments and service in a fiduciary capacity.
‘‘(d)(1) A member of the Board shall be appointed
for a term of 10 years, except that of the members first
appointed—
‘‘(A) the member appointed as Chairman shall
be appointed for a term of 10 years;
‘‘(B) one member shall be appointed for a term
of 8 years;
‘‘(C) one member shall be appointed for a term
of 6 years;
‘‘(D) one member shall be appointed for a term
of 4 years; and
‘‘(E) one member shall be appointed for a term
of 2 years,
as designated by the President at the time of appointment.
‘‘(2)(A) A vacancy on the Board shall be filled in the
manner in which the original appointment was made and
shall be subject to any conditions which applied with re-
spect to the original appointment.
‘‘(B) An individual chosen to fill a vacancy shall be
appointed for the unexpired term of the member replaced.
‘‘(C) The term of any member shall not expire before
the date on which the member’s successor takes office.
‘‘(3) An individual appointed as a member of the
Board may be removed from office only pursuant to a
finding by the President of neglect of duty or malfeasance
in office.
‘‘(e) The member of the Board designated by the
President as Chairman shall serve as Chairman for a term
of 4 years (or until the expiration of his term as member
of the Board, if earlier). A member serving as Chairman
may be reappointed as Chairman.
‘‘(f) The Board shall—
‘‘(1) establish policies for investments in com-
mon stock of amounts in the Common Stock Invest-
ment Account of the Federal Old-Age and Survivors
Insurance Trust Fund under section 201(d)(2),
including—
‘‘(A) the risk and return parameters for
such investments; and
‘‘(B) the number and structure of the port-
folios in which such investments are main-
tained;
‘‘(2) review bids from, and select managers for,
such investments;
‘‘(3) annually review the performance of each
investment manager selected pursuant to paragraph
(2) and provide for reallocation of funds among
them by the Managing Trustee as appropriate;
‘‘(4) report annually to each House of the Con-
gress and to the President regarding the earnings on
such investments and publish such reports annually
in the Federal Register; and
‘‘(5) review and approve the budget of the
Board.
‘‘(g)(1) The Board may—
‘‘(A) adopt, alter, and use a seal;
‘‘(B) establish policies with which the Managing
Trustee of the Federal Old-Age and Survivors Insur-
ance Trust Fund is required to comply under section
201(d)(2); and
‘‘(C) take such other actions as may be nec-
essary to carry out the functions of the Board.
‘‘(2) The policies of the Board may not require the
Managing Trustee to invest or to cause to be invested any
sums in the Federal Old-Age and Survivors Insurance
Trust Fund in a specific asset or to dispose of or cause
to be disposed of any specific asset of such Trust Fund.
‘‘(h)(1) The Board shall meet—
‘‘(A) not less than once during each month; and
‘‘(B) at additional times at the call of the
Chairman.
‘‘(2)(A) The Board shall perform the functions and
exercise the powers of the Board on a majority vote of
a quorum of the Board.
‘‘(B) A vacancy on the Board shall not impair the
authority of a quorum of the Board to perform the func-
tions and exercise the powers of the Board.
‘‘(3) Three members of the Board shall constitute a
quorum for the transaction of business.
‘‘(4)(A) Each member of the Board who is not an
officer or employee of the Federal Government shall be
compensated at the daily rate of basic pay payable for level
IV of the Executive Schedule for each day during which
such member is engaged in performing a function of the
Board.
‘‘(B) A member of the Board shall be paid travel,
per diem, and other necessary expenses under subchapter
I of chapter 57 of title 5, United States Code, while travel-
ing away from such member’s home or regular place of
business in the performance of the duties of the Board.
‘‘(C) Payments authorized under this paragraph shall
be paid from the Federal Old-Age and Survivors Insurance
Trust Fund.
‘‘(5) The accrued annual leave of any officer or em-
ployee of the Federal Government who is a member of the
Board shall not be charged for any time used in perform-
ing services for the Board.
‘‘(i) The members of the Board shall discharge their
responsibilities solely in the interest of the Federal Old-
Age and Survivors Insurance Trust Fund in connection
with investments of amounts in the Common Stock Invest-
ment Account of such Trust Fund under section
201(d)(2).
‘‘(j) The Board shall prepare and submit to the Presi-
dent, and, at the same time, to the appropriate committees
of Congress, an annual budget of the expenses and other
items relating to the Board which shall be included as a
separate item in the budget required to be transmitted to
the Congress under section 1105 of title 31, United States
Code.
‘‘(k) The Board may submit to the President, and,
at the same time, shall submit to each House of Congress,
any legislative recommendations of the Board relating to
any of its functions under this section.’’.
SEC. 5. ADJUSTMENTS TO CONTRIBUTION AND BENEFIT
BASE.
(a) IN GENERAL.—So much of section 230 of the So-
cial Security Act (42 U.S.C. 430) as precedes subsection
(d) is amended to read as follows:
‘‘CONTRIBUTION AND BENEFIT BASE
‘‘SEC. 230. (a) The amount of the contribution and
benefit base with respect to remuneration paid (and tax-
able years beginning) in calendar year 2000 shall be
$99,600.
‘‘(b) The Commissioner of Social Security shall deter-
mine and publish in the Federal Register on or before No-
vember 1 of each calendar year (after 1999) the contribu-
tion and benefit base determined under subparagraph (c)
which shall be effective with respect to remuneration paid
after such calendar year and taxable years beginning after
such year.
‘‘(c)(1) Subject to paragraph (2), the amount of the
contribution and benefit base referred to in subsection (b)
shall be the amount of the contribution and benefit base
in effect in the year in which the determination is made
or, if larger, the amount determined under paragraph (2).
‘‘(2)(A) In advance of determining and publishing, in
each calendar year consisting of calendar year 2001 or any
calendar year thereafter, the contribution and benefit base
which shall be effective with respect to remuneration paid
after such calendar year and taxable years beginning after
such year, the Commissioner shall estimate as accurately
as practicable the minimum contribution and benefit base
which would be necessary to have in effect with respect
to remuneration paid in the next calendar year and taxable
years beginning in such next calendar year to ensure that
90 percent of the total of all remuneration paid in such
next calendar year and all net earnings from self-employ-
ment derived during such taxable years would consist of
wages and self-employment income.
‘‘(B) In any case in which a minimum contribution
and benefit base estimated under subparagraph (A) is
greater than the corresponding contribution and benefit
base which would otherwise be in effect under subsection
(b), such estimated contribution and benefit base shall be
deemed the contribution and benefit base so in effect, in
lieu of such corresponding contribution and benefit base.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to remuneration
paid, and taxable years beginning, after 1999.
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