I
106TH CONGRESS
1ST SESSION
H. R. 250
To amend the Internal Revenue Code of 1986 and the Social Security Act
to provide for personal investment plans funded by employee Social
Security payroll deductions, to extend the solvency of the old-age, sur-
vivors, and disability insurance program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1999
Mr. SANFORD introduced the following bill; which was referred to the Commit-
tee on Ways and Means, and in addition to the Committee on Education
and the Workforce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 and the Social
Security Act to provide for personal investment plans
funded by employee Social Security payroll deductions,
to extend the solvency of the old-age, survivors, and
disability insurance program, and for other purposes.
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 ‘‘Strengthening Social
Security Act of 1999.’’
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SEC. 2. PORTION OF SOCIAL SECURITY TAXES ON EMPLOY-
EES DEPOSITED INTO PERSONAL INVEST-
MENT PLANS.
(a) DEDICATION OF EMPLOYEE TAXES AND SELF-
EMPLOYMENT TAXES.—
(1) TAX ON EMPLOYEES.—Section 3101(a) of
the Internal Revenue Code of 1986 (relating to
OASDI tax on employees) is amended—
(A) by striking the period at the end of the
table and inserting a semicolon; and
(B) by adding after and below the table
the following: ‘‘except that, in the case of an eli-
gible employee (as defined in section 255(3) of
the Social Security Act), the rate of tax under
this subsection shall be 5.2 percent with respect
to wages paid on or after December 31, 1999,
for pay periods ending after such date.’’.
(2) SELF-EMPLOYMENT TAX.—Section 1401(a)
of such Code (relating to OASDI tax on self-employ-
ment income) is amended—
(A) by striking the period at the end of the
table and inserting a semicolon; and
(B) by adding after and below the table
the following: ‘‘except that, in the case of an eli-
gible self-employed individual (as defined in sec-
tion 255(4) of the Social Security Act), the rate
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of tax under this subsection shall be 11.4 per-
cent of the amount of the self-employment in-
come in the case of a taxable year beginning
after December 31, 1999.’’.
(3) EFFECTIVE DATE.—
(A) EMPLOYEE
TAX.—The amendments
made by paragraph (1) apply to remuneration
paid after December 31, 1999.
(B) 
SELF-EMPLOYMENT
TAX.—The
amendment made by paragraph (2) apply to
taxable years beginning after December 31,
1997.
(b) PERSONAL INVESTMENT PLANS.—
(1) IN GENERAL.—Title II of the Social Secu-
rity Act (42 U.S.C. 401 et seq.) is amended—
(A) by inserting before section 201 the fol-
lowing:
‘‘PART A—INSURANCE BENEFITS’’;
and
(B) by adding at the end the following:
‘‘PART B—PERSONAL INVESTMENT PLANS
‘‘PERSONAL INVESTMENT PAYROLL DEDUCTION PLANS
‘‘SEC. 251. (a) IN GENERAL.—Each person who is
a covered employer for a calendar year shall have in effect
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a personal investment payroll deduction plan for such cal-
endar year for such person’s eligible employees.
‘‘(b) PERSONAL INVESTMENT PAYROLL DEDUCTION
PLANS.—For purposes of this part, the term ‘personal in-
vestment payroll deduction plan’ means a written plan of
an employer—
‘‘(1) which applies only with respect to wages of
eligible employees,
‘‘(2) under which the personal investment plan
contributions will be deducted from the employee’s
wages and paid to the Social Security Administra-
tion with respect to a personal investment plan des-
ignated in accordance with section 252(a),
‘‘(3) under which the employer is required to
pay the amount so deducted with respect to the
specified personal investment plan within 10 busi-
ness days after the payment of the wages from
which the amount was deducted,
‘‘(4) under which the employer receives no com-
pensation for the cost of administering such plan,
and
‘‘(5) under which the employer does not make
any endorsement with respect to any personal invest-
ment plan.
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‘‘(c) AMOUNTS DEDUCTED MAY BE ACCUMULATED
BY EMPLOYER IN CERTAIN CASES.—If, under the terms
of a personal investment plan designated under section
252(a), contributions below a specified amount will not be
accepted, the requirements of subsection (b)(2) shall be
treated as met if amounts deducted from the wages of
such employee are accumulated by the employer and paid
to such plan not later than 10 business days after the first
day on which the accumulated amount exceeds such speci-
fied amount.
‘‘DESIGNATION OF PERSONAL INVESTMENT PLANS
UNDER PAYROLL DEDUCTION PLAN
‘‘SEC. 252. (a) IN GENERAL.—Except as provided in
subsection (b), the personal investment plan to which the
personal investment plan contributions with respect to any
employee are required to be paid under section 251 shall
be a personal investment plan designated by the employee
to the employer not later than 10 business days after the
date on which the employee becomes an employee of such
employer. Any such designation shall be made in such
form and manner as may be prescribed in regulations of
the Commissioner of Social Security.
‘‘(b) DESIGNATION IN ABSENCE OF TIMELY DES-
IGNATION BY EMPLOYEE.—In any case in which no timely
designation of the personal investment plan is made, the
employer shall make the designation of the personal in-
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vestment plan in accordance with regulations of the Com-
missioner of Social Security.
‘‘PARTICIPATION BY SELF-EMPLOYED INDIVIDUALS
‘‘SEC. 253. (a) IN GENERAL.—Each eligible self-em-
ployed individual who receives self-employment income in
any taxable year, shall, in such form and manner as shall
be prescribed in regulations of the Commissioner of Social
Security, deposit with the Social Security Administration
with respect to a personal investment plan maintained by
such individual the personal investment plan contribution
for such taxable year. Such deposit shall be made within
10 business days after the receipt by such individual of
such self-employment income.
‘‘(b) AMOUNTS PAYABLE MAY BE ACCUMULATED IN
CERTAIN CASES.—If, under the terms of a personal in-
vestment plan maintained under subsection (a), contribu-
tions below a specified amount will not be accepted, the
requirements of subsection (a) shall be treated as met if
amounts otherwise payable under subsection (a) are accu-
mulated by the individual and paid to such plan not later
than 10 business days after the first day on which the
accumulated amount exceeds such specified amount.
‘‘DESIGNATION OF PLANS OF SURVIVING SPOUSES AND
SURVIVING DIVORCED SPOUSES
‘‘SEC. 254. (a) IN GENERAL.—Except as otherwise
provided in this section, in the case of a deceased individ-
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ual with respect to whom a personal investment plan was
established and maintained pursuant to section 252 or
253, the trustee of such plan shall transfer the balance
in such plan to a personal investment plan maintained by
an eligible survivor if such plan is designated by the eligi-
ble survivor to the trustee not later than 20 business days
after the date of such individual’s death. Any such des-
ignation shall be made in such form and manner as may
be prescribed in regulations of the Commissioner of Social
Security.
‘‘(b) EXCEPTION IN CASE OF WRITTEN CONSENT TO
TRANSFER TO ANOTHER BENEFICIARY.—In any case in
which the eligible survivor of a deceased individual has
consented in writing to a transfer by such individual of
the balance in such individual’s personal investment plan
to another beneficiary, the trustee of such plan shall trans-
fer the balance in such plan to such beneficiary within the
period of 20 business days following the date of such indi-
vidual’s death.
‘‘(c) DESIGNATION IN ABSENCE OF TIMELY DES-
IGNATION OR CONSENT BY ELIGIBLE SURVIVOR.—In any
case in which, upon the expiration of the 20-day period
described in subsection (a), there is an eligible survivor
but no timely designation is made by the eligible survivor
under subsection (a) and no consent has been made pursu-
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ant to subsection (b), the trustee shall make the designa-
tion of the personal investment plan under subsection (a)
on behalf of such eligible survivor, in accordance with reg-
ulations of the Commissioner of Social Security.
‘‘(d) DISPOSITION OF PLAN BALANCE IF NO ELIGI-
BLE SURVIVOR EXISTS.—In any case in which, upon the
expiration of the 20-day period described in subsection (a),
no timely designation under subsection (c) has been made
and there is no eligible survivor, the trustee of the de-
ceased individual’s plan shall transfer the balance in such
plan to the estate of the deceased individual.
‘‘(e) PERIOD FOR TRANSFER BY TRUSTEE.—In the
case of a transfer by a trustee under subsection (a), (c),
or (d), the trustee shall transfer the balance in the per-
sonal investment plan of the deceased individual within the
period of 20 business days following the expiration of the
20-day period described in such subsection.
‘‘DEFINITIONS
‘‘SEC. 255. For purposes of this part—
‘‘(1) PERSONAL INVESTMENT PLAN.—The term
‘personal investment plan’ means—
‘‘(A) any personal investment retirement
plan in the Personal Investment Fund (estab-
lished under section 257) which is administered
by the Personal Investment Board, or