‘‘(i) DISCHARGE OF RESPONSIBILITIES.—The mem-
bers of the Board shall discharge their responsibilities 
solely in the interest of the participants and their bene-
ficiaries under this part. 
‘‘(j) ANNUAL INDEPENDENT AUDIT.—The Board 
shall annually engage an independent qualified public ac-
countant to audit the activities of the Board. 
‘‘(k) SUBMISSION OF BUDGET TO CONGRESS.—The 
Board shall prepare and submit to the President, 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 Congress 
under section 1105 of title 31, United States Code. 
‘‘(l) SUBMISSION
OF LEGISLATIVE RECOMMENDA-
TIONS.—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 part or any other provision 
of law. 
‘‘SEC. 262. EXECUTIVE DIRECTOR OF THE INDIVIDUAL IN-
VESTMENT BOARD. 
‘‘(a) APPOINTMENT OF EXECUTIVE DIRECTOR.—The 
Board shall appoint, without regard to the provisions of 
law governing appointments in the competitive service, an
Executive Director by action agreed to by a majority of 
the members of the Board. 
‘‘(b) DUTIES.—The Executive Director shall, as de-
termined appropriate by the Board—
‘‘(1) carry out the policies established by the 
Board; 
‘‘(2) invest and manage the Tier I Investment 
Fund and the Tier II Investment Fund in accord-
ance with the investment policies and other policies 
established by the Board; 
‘‘(3) administer the provisions of this part re-
lating to the Tier I Investment Fund and the Tier 
II Investment Fund; and 
‘‘(4) prescribe such regulations (other than reg-
ulations relating to fiduciary responsibilities) as may 
be necessary for the administration of this part re-
lating to the Tier I Investment Fund and the Tier 
II Investment Fund. 
‘‘(c) ADMINISTRATIVE AUTHORITY.—The Executive 
Director may, within the scope of the duties of the Execu-
tive Director as determined by the Board—
‘‘(1) appoint such personnel as may be nec-
essary to carry out the provisions of this part relat-
ing to the Tier I Investment Fund and the Tier II 
Investment Fund;
‘‘(2) subject to approval by the Board, procure 
the services of experts and consultants under section 
3109 of title 5, United States Code; 
‘‘(3) secure directly from an Executive agency, 
the United States Postal Service, or the Postal Rate 
Commission any information necessary to carry out 
the provisions of this part and the policies of the 
Board relating to the Tier I Investment Fund and 
the Tier II Investment Fund; 
‘‘(4) make such payments out of sums in the 
Tier I Investment Fund and the Tier II Investment 
Fund as the Executive Director determines, in ac-
cordance with regulations of the Board, are nec-
essary to carry out the provisions of this part and 
the policies of the Board; 
‘‘(5) pay the compensation, per diem, and travel 
expenses of individuals appointed under paragraphs 
(1), (2), and (6) from the Tier I Investment Fund 
or the Tier II Investment Fund, in accordance with 
regulations of the Board; 
‘‘(6) accept and use the services of individuals 
employed intermittently in the Government service 
and reimburse such individuals for travel expenses, 
authorized by section 5703 of title 5, United States
Code, including per diem as authorized by section 
5702 of such title; 
‘‘(7) except as otherwise expressly prohibited by 
law or the policies of the Board, delegate any of the 
Executive Director’s functions to such employees 
under the Board as the Executive Director may des-
ignate and authorize such successive redelegations of 
such functions to such employees under the Board 
as the Executive Director may consider to be nec-
essary or appropriate; and 
‘‘(8) take such other actions as are appropriate 
to carry out the functions of the Executive Direc-
tor.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to wages paid after 
December 31, 2004, for pay periods ending after such 
date and self-employment income for taxable years begin-
ning after such date. 
SEC. 3. TAX TREATMENT OF INDIVIDUAL SOCIAL SECURITY 
INVESTMENT PROGRAM. 
(a) TAXATION WITH RESPECT TO ELEMENTS OF 
THE PROGRAM.—
(1) IN GENERAL.—Subchapter F of chapter 1 
of the Internal Revenue Code of 1986 (relating to
exempt organizations) is amended by adding at the 
end the following new part: 
‘‘PART IX—INDIVIDUAL SOCIAL SECURITY 
INVESTMENT PROGRAM
‘‘Sec. 530A. Individual Social Security Investment Program.
‘‘SEC. 530A. INDIVIDUAL SOCIAL SECURITY INVESTMENT 
PROGRAM. 
‘‘(a) GENERAL RULE.—Any fund created, account 
established, or annuity under part B of title II of the So-
cial Security Act is exempt from taxation under this sub-
title. Notwithstanding the preceding sentence, any such 
fund or account is subject to the taxes imposed by section 
511 (relating to imposition of tax on unrelated business 
income of charitable, etc. organizations). 
‘‘(b) RECOGNITION BONDS.—Gross income shall not 
include—
‘‘(1) the value of a recognition bond issued to 
a participant under section 257(b) of the Social Se-
curity Act which is deposited in the Tier II Invest-
ment Fund and held for such participant under such 
section, 
‘‘(2) proceeds from the sale of a recognition 
bond of a participant under section 257(e) of the 
Social Security Act which are deposited in the Tier