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(ii) a higher percentage of estimated
balances in such accounts that the Com-
mission determines to be justified for that
year by circumstances raising a significant
risk of substantial future losses to the
Trust Fund.
(2) NOTICE OF ASSESSMENTS.—The Commis-
sion shall notify each qualified financial institution
of that institution’s semiannual assessment.
(3) SPECIAL
RULE
UNTIL
THE
TRUST
FUND
ACHIEVES
THE
DESIGNATED
RESERVE
RATIO.—
Until the Trust Fund achieves the designated re-
serve ratio, the Commission may provide for uniform
percentage increases in assessments on qualified fi-
nancial institutions under the risk-based assessment
system authorized under subsection (a) to not more
than 10 basis points above the assessments on quali-
fied financial institutions under that system which
would be necessary, if the Trust Fund had achieved
the designated reserve ratio, to maintain the reserve
ratio of the Trust Fund at the designated reserve
ratio.
(c) SPECIAL RULE FOR RECAPITALIZING UNDER-
CAPITALIZED TRUST FUND.—
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(1) IN GENERAL.—If the reserve ratio of the
Trust Fund is less than the designated reserve ratio
under subsection (b)(1)(D), the Commission shall
set semiannual assessment rates for qualified finan-
cial institutions—
(A) that are sufficient to increase the re-
serve ratio for the Trust Fund to the des-
ignated reserve ratio not later than 1 year after
such rates are set; or
(B) in accordance with a schedule promul-
gated by the Commission under paragraph (2).
(2) RECAPITALIZATION SCHEDULE.—For pur-
poses of paragraph (1)(B), the Commission shall by
regulation promulgate a schedule that specifies, at
semiannual intervals, target reserve ratios for the
Trust Fund, culminating in a reserve ratio that is
equal to the designated reserve ratio not later than
15 years after the date on which the schedule is im-
plemented.
(d) SEMIANNUAL PERIOD DEFINED.—For purposes
of this section, the term ‘‘semiannual period’’ means a pe-
riod beginning on January 1 of any calendar year and end-
ing on June 30 of the same year, or a period beginning
on July 1 of any calendar year and ending on December
31 of the same year.
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(e) RECORDS TO BE MAINTAINED.—Each qualified
financial institution shall maintain all records that the
Commission may require for verifying the correctness of
the institution’s semiannual assessments. No qualified fi-
nancial institution shall be required to retain those records
for that purpose for a period of more than 5 years from
the date of the filing of any certified statement, except
that when there is a dispute between the qualified finan-
cial institution and the Commission over the amount of
any assessment, the institution shall retain the records
until final determination of the issue.
(f) EMERGENCY SPECIAL ASSESSMENTS.—In addi-
tion to the other assessments on qualified financial institu-
tions under this section, the Commission may impose one
or more special assessments on qualified financial institu-
tions in an amount determined by the Commission if the
amount of any such assessment is necessary—
(1) to provide sufficient assessment income to
repay amounts borrowed from the Secretary of the
Treasury under section 403(c) amounts due during
the period with respect to which such assessment is
imposed; or
(2) for any other purpose the Commission may
deem necessary.
(g) CERTIFIED STATEMENTS; PAYMENTS.—
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(1) CERTIFIED STATEMENTS REQUIRED.—
(A) IN GENERAL.—Each qualified financial
institution shall file with the Commission a cer-
tified statement containing such information as
the Commission may require for determining
the institution’s semiannual assessment.
(B) FORM OF CERTIFICATION.—The cer-
tified statement required under subparagraph
(A) shall—
(i) be in such form and set forth such
supporting information as the Commission
shall prescribe; and
(ii) be certified by the president of the
qualified financial institution or any other
officer designated by its board of directors
or trustees that to the best of his or her
knowledge and belief, the statement is
true, correct and complete, and in accord-
ance with this Act and regulations issued
hereunder.
(2) PAYMENTS REQUIRED.—
(A) IN GENERAL.—Each qualified financial
institution shall pay to the Commission the
semiannual assessment imposed under sub-
section (b).
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(B) FORM OF PAYMENT.—The payments
required under subparagraph (A) shall be made
in such manner and at such time or times as
the Commission shall prescribe by regulation.
(3) NEWLY INSURED INSTITUTIONS.—To facili-
tate the administration of this section, the Commis-
sion may waive the requirements of paragraphs (1)
and (2) for the semiannual period in which a finan-
cial institution becomes a qualified financial institu-
tion.
(4) PENALTY
FOR
FAILURE
TO
MAKE
ACCU-
RATE CERTIFIED STATEMENT.—
(A) FIRST TIER.—Any qualified financial
institution which—
(i) maintains procedures reasonably
adapted to avoid any inadvertent error
and, unintentionally and as a result of
such an error, fails to submit the certified
statement under paragraph (1) within the
period of time required under paragraph
(1) or submits a false or misleading cer-
tified statement; or
(ii) submits the statement at a time
which is minimally after the time required
in such paragraph, shall be subject to a
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penalty of not more than $2,000 for each
day during which such failure continues or
such false and misleading information is
not corrected. The institution shall have
the burden of proving that an error was in-
advertent or that a statement was inad-
vertently submitted late.
(B) SECOND TIER.—Any qualified finan-
cial institution which fails to submit the cer-
tified statement under paragraph (1) within the
period of time required under paragraph (1) or
submits a false or misleading certified state-
ment in a manner not described in subpara-
graph (A) shall be subject to a penalty of not
more than $20,000 for each day during which
such failure continues or such false and mis-
leading information is not corrected.
(C) THIRD
TIER.—Notwithstanding sub-
paragraphs (A) and (B), if any qualified finan-
cial institution knowingly or with reckless dis-
regard for the accuracy of any certified state-
ment described in paragraph (1) submits a false
or misleading certified statement under para-
graph (1), the Commission may assess a pen-
alty of not more than $1,000,000 or not more
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than 1 percent of the total assets of the institu-
tion, whichever is less, per day for each day
during which the failure continues or the false
or misleading information in such statement is
not corrected.
(h) PENALTIES FOR LATE PAYMENT.—If any assess-
ment or penalty under this section is not paid when it is
due the Commission is authorized to assess a late payment
charge of not more than 100 percent of the payment which
was not timely paid. The preceding sentence shall not
apply to any payment made within 60 days after the date
on which a payment is due, if before such date, the person
required to make such payment obtains a waiver from the
Commission based upon a showing of substantial hardship
arising from the timely payment. The Commission is au-
thorized to grant a waiver under this subsection upon ap-
plication made by such person, but the Commission may
not grant a waiver if it appears that such person will be
unable to make the payment within 60 days after the date
on which it is due. If any payment is not made by the
last date prescribed for a payment, interest on the amount
of such payment at the rate imposed under section
6601(a) of the Internal Revenue Code of 1986 (relating
to interest on underpayment, nonpayment, or extensions
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of time for payment of tax) shall be paid for the period
from such last date to the date paid.
(i) CIVIL ACTION.—If any person required to make
such payment fails to make the payment when due, the
Commission is authorized to bring a civil action in any
district court of the United States within the jurisdiction
of which the assets of the personal retirement account are
located, the account is administered, or in which a defend-
ant resides or is found for the recovery of the amount of
the unpaid amount (including penalties and interest), and
process may be served in any other district. The district
courts of the United States shall have jurisdiction over ac-
tions brought under this subsection by the Commission
without regard to the amount in controversy.
(j) GUARANTEE PRESERVED.—The Commission shall
not cease its guarantee on account of the failure of any
person to pay any amount when due under this section.
SEC. 403. ESTABLISHMENT OF SOCIAL SECURITY SAVINGS
INSURANCE TRUST FUND.
(a) ESTABLISHMENT.—There is established on the
books of the Treasury of the United States a Social Secu-
rity Savings Insurance Trust Fund to be used by the Se-
curities and Exchange Commission in carrying out its du-
ties under this title. Whenever in this title reference is
made to the term ‘‘Trust Fund’’ the reference shall be
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considered to refer to the Trust Fund established under
this subsection.
(b) FLOW OF FUNDS.—
(1) CREDITS
TO
TRUST
FUND.—The Trust
Fund shall be credited with the appropriate portion
of—
(A) funds borrowed under subsection (c),
(B) assessments, penalties, and interest
collected under this title,
(C) earnings on investments of the Trust
Fund or on assets credited to the Trust Fund
under this subsection,
(D) attorney’s fees awarded to the Com-
mission, and
(E) receipts from any other operations
under this title.
(2) DEBITS
FROM
TRUST
FUND.—Subject to
the provisions of subsection (a), the Trust Fund
shall be available—
(A) for making such payments as the Com-
mission determines are necessary to pay
amounts guaranteed under section 301,
(B) to purchase assets from a qualified fi-
nancial institution ceasing to be a qualified fi-
nancial institution when the Commission deter-
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mines such purchase will best protect the inter-
ests of the Commission,
(C) to repay to the Secretary of the Treas-
ury such sums as may be borrowed (together
with interest thereon) under subsection (c),
(D) to pay the operational and administra-
tive expenses of the Commission under this
title, including reimbursement of the expenses
incurred by the Department of the Treasury in
maintaining the funds, and the Comptroller
General in auditing the Commission, and
(E) to pay to account holders the amounts
which are guaranteed by the Commission under
this title with respect to any personal retire-
ment account maintained by a financial institu-
tion which is unable to pay such amounts when
due.
(3) INVESTMENT OF TRUST FUND ASSETS.—
Whenever the Commission determines that the mon-
eys of the Trust fund are in excess of current needs,
it may request the investment of such amounts as it
determines advisable by the Secretary of the Treas-
ury in obligations issued or guaranteed by the
United States but, until all borrowings under sub-
section (c) have been repaid, the obligations in which
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such excess moneys are invested may not yield a rate
of return in excess of the rate of interest payable on
such borrowings.
(c) ISSUANCE OF OBLIGATIONS.—The Commission is
authorized to issue to the Secretary of the Treasury notes
or other obligations in an aggregate amount of not to ex-
ceed $100,000,000, in such forms and denominations,
bearing such maturities, and subject to such terms and
conditions as may be prescribed by the Secretary of the
Treasury. Such notes or other obligations shall bear inter-
est at a rate determined by the Secretary of the Treasury,
taking into consideration the current average market yield
on outstanding marketable obligations of the United
States of comparable maturities during the month preced-
ing the issuance of such notes or other obligations of the
Commission. The Secretary of the Treasury is authorized
and directed to purchase any notes or other obligations
issued by the Commission under this subsection, and for
that purpose he is authorized to use as a public debt trans-
action the proceeds from the sale of any securities issued
under chapter 31 of title 31, United States Code, and the
purposes for which securities may be issued under that
chapter are extended to include any purchase of such
notes and obligations. The Secretary of the Treasury may
at any time sell any of the notes or other obligations ac-
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quired by him under this subsection. All redemptions, pur-
chases, and sales by the Secretary of the Treasury of such
notes or other obligations shall be treated as public debt
transactions of the United States.
(d) DEDICATED AMOUNTS.—Amounts in the Trust
Fund may be used only for the purposes for which the
Trust Fund was established and may not be used to make
loans to (or on behalf of) any other fund or to finance
any other activity of the Commission. None of the funds
borrowed under subsection (c) may be used to make loans
to (or on behalf of) any other fund.
(e) VOTING OF STOCK.—Any stock in a person liable
to the Commission under this title which is paid to the
Commission by such person or a member of such person’s
controlled group in satisfaction of such person’s liability
under this title may be voted only by the custodial trustees
or outside money managers of the Commission.
SEC. 404. INSTITUTION OF TERMINATION PROCEEDINGS BY
THE COMMISSION.
(a) IN GENERAL.—The Securities and Exchange
Commission may institute proceedings under this section
to terminate a personal retirement account whenever it de-
termines that the possible long-run loss of the Commission
with respect to the account may reasonably be expected
to increase unreasonably if the account is not terminated.
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The Commission shall as soon as practicable institute pro-
ceedings under this section to terminate a personal retire-
ment account whenever the Commission determines that
an insurable event under paragraph (1) or (2) of section
401(d) has occurred. The Commission may prescribe a
simplified procedure to follow in terminating personal re-
tirement accounts as long as that procedure includes sub-
stantial safeguards for the rights of the account holder.
Notwithstanding any other provision of this title, the Com-
mission is authorized to pool assets of terminated personal
retirement accounts for purposes of administration, invest-
ment, payment of liabilities of all such accounts, and such
other purposes as it determines to be appropriate in the
administration of this title.
(b) INITIAL APPOINTMENT OF ALTERNATIVE TRUST-
EE.—
(1) IN GENERAL.—Whenever the Commission
makes a determination under subsection (a) with re-
spect to a personal retirement account, it may, upon
notice to the financial institution serving as trustee
of the account, apply to the appropriate United
States district court for the appointment of an alter-
native trustee to administer the account pending the
issuance of a decree under subsection (c) ordering
the termination of the account. If within 3 business
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alternative trustee without proceeding in accordance
with the requirements of paragraphs (1) and (2).
(c) TERMINATION PROCEEDINGS.—
(1) IN
GENERAL.—If the Commission is re-
quired under subsection (a) to commence proceed-
ings under this section with respect to a personal re-
tirement account or, after issuing a notice under this
section to the qualified financial institution serving
as trustee of the account, has determined that the
account should be terminated, the Commission may,
upon notice to the institution, apply to the appro-
priate United States district court for a decree adju-
dicating that the account must be terminated in
order to protect the interests of the account holder
with respect to the account or to avoid any unrea-
sonable deterioration of the financial condition of the
account or any unreasonable increase in the liability
of the Trust Fund. If the alternative trustee ap-
pointed under subsection (b) disagrees with the de-
termination of the Commission under the preceding
sentence, he may intervene in the proceeding relat-
ing to the application for the decree, or make appli-
cation for such decree himself. Upon granting a de-
cree for which the Commission or alternative trustee
has applied under this subsection, the court shall au-
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thorize the alternative trustee (or appoint an alter-
native trustee if one has not been appointed under
such subsection and authorize him) to assume trust-
eeship of the personal retirement account, and pro-
vide for its liquidation, in accordance with the provi-
sions of this section, and a transfer of its assets to
a successor personal retirement account, in accord-
ance with paragraph (2).
(2) TRANSFER
TO
SUCCESSOR
ACCOUNT.—In
any case in which a personal retirement account is
terminated under this section, the Commission shall
provide by regulation for procedures under which se-
lection for the account holder of an appropriate suc-
cessor personal retirement account is facilitated and
a trustee-to-trustee transfer of the balance in the
terminated account to the successor account is
made. Whenever an alternative trustee appointed
under this section is exercising trusteeship authority
over a personal retirement account with discretion as
to the date upon which transfer of the assets from
the account to a successor account is to be per-
formed, the alternative trustee shall notify the Com-
mission at least 10 days before the date on which he
proposes to perform such transfer.
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(d) TRUSTEESHIP WITHOUT TERMINATION.—If the
Commission and the financial institution agree that trust-
eeship over the personal retirement account should be as-
sumed by an alternative trustee appointed under this sec-
tion and agree to the appointment of an alternative trustee
without proceeding in accordance with the requirements
of subsection (c), the alternative trustee shall have the
power described in subsection (e)(1) of this section and,
in addition to any other duties imposed on the alternative
trustee under law or by agreement between the Commis-
sion and the financial institution, the alternative trustee
is subject to the duties described in subsection (e)(3).
(e) POWERS AND DUTIES OF ALTERNATIVE TRUST-
EE.—
(1) IN GENERAL.—An alternative trustee ap-
pointed under subsection (b) shall have the power—
(A) to do any act authorized by documents
governing the personal retirement account or
this title to be done by the financial institution
as trustee of the account;
(B) to require the transfer of all (or any
part) of the assets and records of the account
to himself as trustee;
(C) to invest any assets of the account
which he holds in accordance with the docu-
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ments governing the account, regulations of the
Commission and the Securities and Exchange
Commission, and applicable rules of law;
(D) to limit payment of assets in the ac-
count to assets guaranteed under this title as
appropriate or to continue payment of some or
all of the assets in the account which were
being paid prior to his appointment;
(E) to do such other acts as he deems nec-
essary to continue operation of the account
without increasing the potential liability of the
Commission, if such acts may be done under
the documents governing the account; and
(F) to require the financial institution to
furnish any information with respect to the ac-
count which the alternative trustee may reason-
ably need in order to administer the account.
(2) TIME LIMITATION ON ALTERNATIVE TRUST-
EESHIP WHERE TERMINATION DOES NOT ENSUE.—
If the court to which application is made under sub-
section (c) dismisses the application with prejudice,
or if the Commission fails to apply for a decree
under subsection (c) within 30 days after the date
on which the alternative trustee is appointed under
subsection (b), the alternative trustee shall transfer
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all assets and records of the account held by him to
the financial institution which had been serving as
trustee of the account within 3 business days after
such dismissal or the expiration of such 30-day pe-
riod, and shall not be liable to the financial institu-
tion or any other person for his acts as alternative
trustee except for willful misconduct, or for conduct
in violation of any other provision of this Act. The
30-day period referred to in this paragraph may be
extended as provided by agreement between the fi-
nancial institution and the Commission or by court
order obtained by the Commission.
(3) 
ADDITIONAL
POWERS
UPON
TERMI-
NATION.—If the court to which an application is
made under subsection (c) issues the decree re-
quested in such application, in addition to the pow-
ers described in paragraph (1), the alternative trust-
ee shall have the power—
(A) to collect for the account any amounts
due the account, including but not limited to
the power to collect from the persons obligated
to meet the contribution requirements of title I
or the terms of the documents governing the ac-
count;
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(B) to receive any payment made by the
Commission to the account under this title;
(C) to commence, prosecute, or defend on
behalf of the financial institution or the account
any suit or proceeding involving the account;
(D) to issue, publish, or file such notices,
statements, and reports as may be required by
the Commission or any order of the court;
(E) to liquidate the assets of the account
and perform the transfer of such assets to a
successor personal retirement account as pro-
vided in subsection (c)(2);
(F) to recover payments inappropriately
made from the account; and
(G) to do such other acts as may be nec-
essary to comply with this Act or any order of
the court and to protect the interests of the ac-
count holder of the terminated account.
(4) NOTICE
OF
PROCEEDINGS.—As soon as
practicable after his appointment, the alternative
trustee shall give notice to interested parties of the
institution of proceedings under this section to de-
termine whether the account should be terminated or
to terminate the account, whichever is applicable.
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For purposes of this paragraph, the term ‘‘interested
party’’ means—
(A) the financial institution,
(B) the account holder with respect to the
account was maintained, including the bene-
ficiary of the account holder who is deceased,
(C) each person who may be subject to li-
ability under section 406, and
(D) each person who may be liable for pay-
ments to the account.
(5) ADDITIONAL DUTIES.—Exept to the extent
inconsistent with the provisions of this Act, or as
may be otherwise ordered by the court, an alter-
native trustee appointed under this section shall be
subject to the same duties as those of a trustee
under section 704 of title 11, United States Code,
and shall be, with respect to the account, a fiduciary
within the meaning of paragraph (21) of section 3
of the Employee Retirement Income Security Act of
1974 and under section 4975(e) of the Internal Rev-
enue Code of 1986 (except to the extent that the
provisions of this title are inconsistent with the re-
quirements applicable under part 4 of subtitle B of
title I of such Act and of such section 4975).
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(f) COORDINATION WITH BANKRUPTCY OR OTHER
INSOLVENCY PROCEEDINGS.—An application by the Com-
mission under this section may be filed notwithstanding
the pendency in the same or any other court of any bank-
ruptcy, mortgage foreclosure, or equity receivership pro-
ceeding, or any proceeding to reorganize, conserve, or liq-
uidate the personal retirement account or the financial in-
stitution, or its assets, or any proceeding to enforce a lien
against assets of the account or the institution.
(g) COURT JURISDICTION.—Upon the filing of an ap-
plication for the appointment of an alternative trustee or
the issuance of a decree under this section, the court to
which an application is made shall have exclusive jurisdic-
tion of the account involved and its assets wherever lo-
cated with the powers, to the extent consistent with the
purposes of this section, of a court of the United States
having jurisdiction over cases under chapter 11 of title 11
of the United States Code. Pending an adjudication under
subsection (c), such court shall stay, and upon appoint-
ment by it of an alternative trustee, as provided in this
section, such court shall continue the stay of, any pending
mortgage foreclosure, equity receivership, or other pro-
ceeding to reorganize, conserve, or liquidate the account
or its assets and any other suit against any receiver, con-
servator, or trustee of the account or the financial institu-
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tion, or its assets. Pending such adjudication and upon
the appointment by it of such alternative trustee, the court
may stay any proceeding to enforce a lien against property
of the account or the financial institution or any other suit
against the account or the financial institution.
(h) VENUE AND PROCESS.—An action under this
subsection may be brought in the judicial district where
the financial institution serving as trustee of the personal
retirement account is located or does business or where
any asset of the account or the institution is situated. A
district court in which such action is brought may issue
process with respect to such action in any other judicial
district.
(i) COMPENSATION AND PERSONNEL FOR ALTER-
NATIVE TRUSTEES.—
(1) COMPENSATION.—The amount of com-
pensation paid to each alternative trustee appointed
under the provisions of this section shall require the
prior approval of the Commission, and, in the case
of an alternative trustee appointed by a court, the
consent of that court.
(2) APPOINTMENT
AND
RETENTION
OF
PER-
SONNEL.—Alternative trustees appointed under this
section shall appoint, retain, and compensate ac-
countants, actuaries, and other professional service
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personnel in accordance with regulations prescribed
by the Commission.
SEC. 405. LIABILITY UPON TERMINATION OF ACCOUNTS.
(a) IN GENERAL.—In any case in which a personal
retirement account is terminated in a proceeding insti-
tuted by the Securities and Exchange Commission under
section 405, each person who is the financial institution
serving as trustee of the account on the termination date
or a member of the financial institution’s controlled group
shall incur liability to the Commission under this section.
The liability under this section of all such persons shall
be joint and several.
(b) AMOUNT
OF LIABILITY.—The liability to the
Commission of a person described in subsection (a) shall
be the total amount of the assets of the account which
are guaranteed by the Commission and which are not
available for payment from the account, calculated from
the termination date in accordance with regulations pre-
scribed by the Commission.
(c) PAYMENT OF LIABILITY.—
(1) IN GENERAL.—Except as provided in para-
graph (2); the liability to the Commission under this
section shall be due and payable to the Commission
as of the termination date, in cash or securities ac-
ceptable to the Commission.
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(2) SPECIAL RULE.—Payment of so much of
the liability as exceeds 30 percent of the collective
net worth of all persons described in subsection (a)
(including interest) shall be made under commer-
cially reasonable terms prescribed by the Commis-
sion. The parties involved shall make a reasonable
effort to reach agreement on such commercially rea-
sonable terms. Any such terms prescribed by the
Commission shall provide for deferral of 50 percent
of any amount of liability otherwise payable for any
year under this paragraph if a person subject to
such liability demonstrates to the satisfaction of the
Commission that no person subject to such liability
has any individual pre-tax profits for such person’s
fiscal year ending during such year.
(3) ALTERNATIVE ARRANGEMENTS.—The Com-
mission and any person liable under this section may
agree to alternative arrangements for the satisfac-
tion of liability to the Commission under this sub-
section.
(3) DEFINITIONS.—
(1) COLLECTIVE NET WORTH OF PERSONS SUB-
JECT TO LIABILITY.—
(A) IN
GENERAL.—The collective net
worth of persons subject to liability in connec-
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tion with the termination of a personal retire-
ment account consists of the sum of the individ-
ual net worths of all persons who—
(i) have individual net worths which
are greater than zero, and
(ii) are (as of the termination date)
the financial institution or members of the
financial institution’s controlled group.
(B) DETERMINATION
OF
NET
WORTH.—
For purposes of this paragraph, the net worth
of a person is—
(i) determined on whatever basis best
reflects, in the determination of the Com-
mission, the current status of the person’s
operations and prospects at the time cho-
sen for determining the net worth of the
person, and
(ii) increased by the amount of any
transfers of assets made by the person
which are determined by the Commission
to be improper under the circumstances,
including any such transfers which would
be inappropriate under title 11, United
States Code, if the person were a debtor in
a case under chapter 7 of such title.
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(C) TIMING
OF
DETERMINATION.—For
purposes of this paragraph, determinations of
net worth shall be made as of a day chosen by
the Commission (during the 120-day period
ending with the termination date) and shall be
computed without regard to any liability under
this section.
(2) PRE-TAX
PROFITS.—The term ‘‘pre-tax
profits’’ means, for any fiscal year of any person,
such person’s consolidated net income (excluding any
extraordinary charges to income and including any
extraordinary credits to income) for such fiscal year,
as shown on audited financial statements prepared
in accordance with generally accepted accounting
principles, before provision for or deduction of Fed-
eral or other income tax and any amounts required
to be paid for such fiscal year under this section.
The Commission may by regulation require such in-
formation to be filed on such forms as may be nec-
essary to determine the existence and amount of
such pre-tax profits.
(3) CONTROLLED GROUP.—
(A) IN GENERAL.—The term ‘‘controlled
group’’ means, in connection with any person,
a group consisting of such person and all other
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persons under common control with such per-
son.
(B) COMMON CONTROL.—The determina-
tion of whether two or more persons are under
‘‘common control’’ shall be made under regula-
tions of the Commission which are consistent
and coextensive with regulations prescribed for
similar purposes by the Secretary of the Treas-
ury under subsections (b) and (c) of section
414 of the Internal Revenue Code of 1986.
(4) TERMINATION
DATE.—The term ‘‘termi-
nation date’’ means.—
(A) the date established by the Commis-
sion (or the alternative trustee appointed under
section 405(b)(2), if any) and agreed to by the
financial institution serving as trustee of the
terminated personal retirement account imme-
diately before the termination, or
(B) if no agreement is reached, the date
established by the court.
SEC. 406 INSURANCE LOGO.
(a) IN GENERAL.—Each qualified financial institu-
tion, while serving as trustee for a personal retirement ac-
count subject to the guarantee of the Securities and Ex-
change Commission under this title, shall display at each
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place of business maintained by such institution a sign
containing only the following items:
(1) A statement that insured contributions to
personal retirement accounts maintained by the in-
stitution are backed by the full faith and credit of
the United States Government.
(2) A statement that amounts contributed to such ac-
counts are federally insured to the amount necessary to
purchase a minimum annuity.
(3) A patriotic symbol defined by the Commis-
sion by regulation.
The sign shall not contain any reference to a Government
agency and shall accord each item substantially equal
prominence. No person may display such a sign unless
such person is a qualified financial institution.
(b) REGULATIONS.—The Commission shall prescribe
regulations to carry out the purposes of this section, in-
cluding regulations governing the manner of display or use
of such signs. Initial regulations under this section shall
be prescribed not later than December 31, 1999.
(c) PENALTIES.—For each day a qualified financial
institution continues to violate any provision of this sec-
tion or any lawful provisions of regulations prescribed
under this section, it shall be subject to a penalty of not
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more than $100, which the Commission shall recover for
its use.
SEC. 407. REPORT BY THE COMMISSION.
As soon as practicable after the close of each fiscal
year the Securities and Exchange Commission shall trans-
mit to the President and the Congress a report relative
to the conduct of its business under this title for that fiscal
year. The report shall include financial statements setting
forth the result of its operations under this title (including
the source and application of its funds) for the fiscal year
and shall include an actuarial evaluation of the expected
operations and status of the Trust Fund for the next five
years (including a detailed statement of the actuarial as-
sumptions and methods used in making such evaluation).
TITLE V—ENFORCEMENT
AUTHORITY
SEC. 501. CAUSE OF ACTION.
The account holder with respect to a personal retire-
ment account who is adversely affected by an act or prac-
tice of any party (other than the Securities and Exchange
Commission or any officer or employee thereof) in viola-
tion of any provision of this Act, may bring an action—
(1) to enjoin such act or practice, or
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(2) to obtain other appropriate equitable relief
(A) to redress such violation or (B) to enforce such
provision.
SEC. 502. JURISDICTION AND VENUE.
The district courts of the United States shall have
exclusive jurisdiction of civil actions under this title. Such
actions may be brought in the district where the personal
retirement account is administered, where the violation
took place, or where a defendant resides or may be found,
and process may be served in any other district where a
defendant resides or may be found. The district courts of
the United States shall have jurisdiction, without regard
to the amount in controversy or the citizenship of the par-
ties, to grant the relief provided for in section 501 in any
action.
SEC. 503. RIGHT OF SECURITIES AND EXCHANGE COMMIS-
SION TO INTERVENE.
A copy of the complaint or notice of appeal in any
action under this title shall be served upon the Securities
and Exchange Commission by certified mail. The relevant
Federal agency, the Commission, and the Commission
shall have the right in its discretion to intervene in any
action.
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SEC. 504. AWARDS OF COSTS AND EXPENSES.
In any action brought under this title, the court in
its discretion may award all or a portion of the costs and
expenses incurred in connection with such action, includ-
ing reasonable attorney’s fees, to any party who prevails
or substantially prevails in such action.
SEC. 505. LIMITATION ON ACTIONS.
(a) IN GENERAL.—Except as provided in subsection
(c), an action under this title may not be brought after
the later of—
(1) 6 years after the date on which the cause
of action arose, or
(2) 3 years after the applicable date specified in
subsection (b).
(b) APPLICABLE DATE.—The applicable date speci-
fied in this subsection is the earliest date on which the
plaintiff acquired or should have acquired actual knowl-
edge of the existence of such cause of action.
(c) CASES OF FRAUD OR CONCEALMENT.—In the
case of fraud or concealment, the period described in sub-
section (a)(2) shall be extended to 6 years after the appli-
cable date specified in subsection (b).
SEC. 506. PENALTY FOR FAILURE TO TIMELY PROVIDE RE-
QUIRED INFORMATION.
The Securities and Exchange Commission may assess
a penalty, payable to it, against any person who fails to
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provide any notice or other material information required
under this Act or any regulations prescribed under this
Act within the applicable time limit specified therein. Such
penalty shall not exceed $1,000 for each day for which
such failure continues.
SEC. 507. ACTIONS BY SECURITIES AND EXCHANGE COM-
MISSION.
If any person is assessed under this Act and fails to
pay the assessment when due, or any person otherwise
fails to meet any requirement of this Act, the Securities
and Exchange Commission may bring a civil action in any
district court of the United States within the jurisdiction
of which such person’s assets are located or in which such
person resides or is found for the recovery of the amount
of the assessment or for appropriate equitable relief to re-
dress the violation or enforce the provisions of this Act,
and process may be served in any other district. The dis-
trict courts of the United States shall have jurisdiction
over actions brought under this subsection by the Commis-
sion without regard to the amount in controversy.
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TITLE 
VI—TRANSITION 
FROM
COVERAGE 
FOR 
OLD-AGE
AND SURVIVORS INSURANCE
BENEFITS UNDER TITLE II OF
THE SOCIAL SECURITY ACT
SEC. 601. PRIMARY INSURANCE AMOUNTS FOR TRANSI-
TIONAL ELIGIBLE INDIVIDUALS.
(a) IN GENERAL.—Section 215(a) of the Social Secu-
rity Act (42 U.S.C. 415(a)) is amended by adding at the
end the following new paragraph:
‘‘(8) Notwithstanding the preceding provisions
of this subsection, the primary insurance amount of
an eligible individual (as defined in section 2(4) of
the Personal Retirement Accounts Act of 1997) shall
be determined, effective for January 2000, as other-
wise provided under this section—
‘‘(A) if such individual has not attained
age 62 as of January 1, 2000, as though such
individual had attained such age on such date,
and
‘‘(B) as though such individual had filed
application for old-age insurance benefits in
January 2000.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to monthly insur-
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ance benefits under part A of title II of the Social Security
Act (as redesignated by this Act) for which applications
are filed after December 31, 1999.
SEC. 602. CERTIFICATION OF COVERED STATUS UNDER
THE OLD-AGE, SURVIVORS, AND DISABILITY
INSURANCE PROGRAM.
Not later than July 1, 2000, the Commissioner of So-
cial Security shall provide a written certification to each
individual who has a social security account number, who
has been credited with wages or net earnings from self-
employment. Such certification shall indicate to each re-
cipient whether such recipient is or is not an eligible indi-
vidual and a description of the benefits available to such
individual under part A of title II of the Social Security
Act based on such individual’s status as an eligible individ-
ual or otherwise.
SEC. 603. REDUCTION IN FICA AND SECA TAXES WITH RE-
SPECT TO ELIGIBLE INDIVIDUALS.
(a) TAX ON EMPLOYEES.—Section 3101 of the Inter-
nal Revenue Code of 1986 (relating to OASDI tax on em-
ployees) is amended—
(1) in subsection (a), by striking ‘‘In addition’’
and inserting ‘‘Subject to subsection (c), in addi-
tion’’;
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(2) by redesignating subsection (c) as sub-
section (d); and
(3) by inserting after subsection (b) the follow-
ing new subsection:
‘‘(c) REDUCTION IN OASDI TAX.—In the case of an
eligible individual (as defined in section 104(3) of the Per-
sonal Retirement Accounts Act of 1997), the rate of tax
under subsection (a) shall be 2.90 percent.’’
(b) TAX
ON EMPLOYERS.—Section 3111 of such
Code (relating to OASDI tax on employers) is amended—
(1) in subsection (a), by striking ‘‘In addition’’
and inserting ‘‘Subject to subsection (c), in addi-
tion’’;
(2) by redesignating subsection (c) as sub-
section (d); and
(3) by inserting after subsection (b) the follow-
ing new subsection:
‘‘(d) REDUCTION IN OASDI TAX.—The rate of tax
under subsection (a) with respect to having in the employ-
er’s employ an eligible individual (as defined in section
104(3) of the Personal Retirement Accounts Act of 1997)
shall be 2.90 percent.’’
‘‘(c) SELF-EMPLOYMENT TAX.—Subsection (a) of
section 1401 of such Code (relating to OASDI tax on self-
employment income) is amended—
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(1) in subsection (a), by striking ‘‘In addition’’
and inserting ‘‘Subject to subsection (c), in addi-
tion’’;
(2) by redesignating subsection (c) as sub-
section (d); and
(3) by inserting after subsection (b) the follow-
ing new subsection:
‘‘(c) REDUCTION IN OASDI TAX.—In the case of an
eligible individual (as defined in section 104(3) of the Per-
sonal Retirement Accounts Act of 1997), the rate of tax
under subsection (a) with respect to self-employment in-
come for taxable years ending December 31, 1999, shall
be 5.80 percent.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to wages received
after December 31, 1999, and with respect to self-employ-
ment income for taxable years ending after such date.
SEC. 604. SUPPLEMENTAL RETIREMENT BENEFITS.
(a) IN GENERAL.—Section 202 of the Social Security
Act (42 U.S.C. 402) is amended by adding at the end the
following new subsection:
‘‘Supplemental Retirement Benefits
‘‘(y)(1) Every individual—
‘‘(A) who is a fully insured individual
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‘‘(B) who has attained retirement age (as de-
fined in section 216(l)),
‘‘(C) who is an eligible individual (as defined in
section 104(3) of the Personal Retirement Accounts
Act of 1999),
‘‘(D) to whom no distribution has been made
from any personal retirement account established
under title I of the Personal Retirement Accounts
Act of 1999, and
‘‘(E) whose personal retirement account holds,
as of the date on which the individual attains retire-
ment age, total assets equal, in the aggregate, to
less than the minimum annuity amount (as defined
in section 2(b) of the Personal Retirement Accounts
Act of 1999), shall be entitled to a supplemental old-
age benefit for each month, beginning with the
month in which such individual attains retirement
age and ending with the month preceding the month
in which he dies.
‘‘(2) Such individual’s supplemental retirement bene-
fit for any month shall be equal to the excess of—
‘‘(A) the minimum annuity amount (as defined
in section 2(6)(A) of the Personal Retirement Ac-
counts Act of 1999) for the month, over
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‘‘(B) the amount which would be payable as a
monthly periodic payment of an immediate annuity
(as defined in section 202(b)(5) of the Personal Re-
tirement Accounts Act of 1999) purchased with the
total balance, in the aggregate, of all personal retire-
ment accounts maintained for such individual under
title I of such Act, determined as of the date on
which such individual attains retirement age.
‘‘(3) There are authorized to be appropriated sums
sufficient to carry out this section.’’.
(b) CONFORMING AMENDMENT.—Section 201(h) of
such Act (42 U.S.C. 401(h)) is amended by striking ‘‘sec-
tion 226’’ and inserting ‘‘sections 202(y) and 226’’.
(c) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to months beginning
on or after January 1, 2000.
SEC. 605. PHASED IN INCREASE IN SOCIAL SECURITY RE-
TIREMENT AGE.
Section 216(l) of the Social Security Act (42 U.S.C.
416(l) is amended—
(1) by striking subparagraphs (B), (C), (D),
and (E) of paragraph (1) and inserting the following
new subparagraphs:
‘‘(B) with respect to an individual who attains
early retirement age (as determined under para-