the preceding sentence, a personal social security savings 
account is subject to the taxes imposed by section 511 (re-
lating to imposition of tax on unrelated business income 
of charitable, etc. organizations). 
‘‘(b) DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—Any qualified distribution 
from amounts credited to a personal social security 
savings account from the Social Security Personal 
Savings Fund or held in a Tier III Investment Op-
tion shall not be included in the gross income of the 
distributee. 
‘‘(2) QUALIFIED DISTRIBUTION.—For purposes 
of paragraph (1), the term ‘qualified distribution’ 
means a distribution which meets the requirements 
of section 259 of the Social Security Act and which 
is not a guaranty payment (as defined by section 
260 of such Act). 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) PERSONAL SOCIAL SECURITY SAVINGS AC-
COUNT.—For purposes of this section, the term ‘per-
sonal social security savings account’ means an ac-
count established under section 254(a) of the Social 
Security Act. 
‘‘(2) SOCIAL
SECURITY
PERSONAL
SAVINGS 
FUND.—The term ‘Social Security Personal Savings
Fund’ means the Savings Fund established under 
section 252 of the Social Security Act. 
‘‘(3) TIER III INVESTMENT OPTION.—The term 
‘Tier III Investment Option’ has the meaning given 
such term by section 251(9) of the Social Security 
Act. 
‘‘(d) ESTATE TAX TREATMENT.—No amount shall be 
includible in the gross estate of any individual for pur-
poses of chapter 11 by reason of a distribution in the case 
of death under section 259(e) of the Social Security Act.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
86(d)(1)(A) of such Code is amended by inserting 
‘‘part A of’’ after ‘‘under’’. 
(3) CLERICAL
AMENDMENT.—The table of 
parts for subchapter F of chapter 1 of such Code is 
amended by adding after the item relating to part 
VIII the following new item:
‘‘PART IX. PERSONAL SOCIAL SECURITY SAVINGS PROGRAM’’.
(b) GUARANTY PAYMENTS.—Paragraph (1) of sec-
tion 86(d) of the Internal Revenue Act of 1986, as amend-
ed by subsection (b), is amended by striking ‘‘or’’ at the 
end of subparagraph (A), by striking the period and in-
serting ‘‘, or’’ at the end of subparagraph (B), and by 
adding at the end the following new subparagraph: 
‘‘(C) a guaranty payment under section 
260(a), and a payment of an additional amount
under section 260(c), of the Social Security 
Act.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
SEC. 6. SELF-LIQUIDATING SOCIAL SECURITY TRANSITION 
FUND. 
(a) ESTABLISHMENT.—There is hereby created on 
the books of the Treasury of the United States a trust 
fund to be known as the Self-Liquidating Social Security 
Transition Fund (in this section referred to as the ‘‘Tran-
sition Fund’’). 
(b) DEPOSIT OF OASDI TRUST FUND SURPLUS.—
(1) IN GENERAL.—There are appropriated to 
the Transition Fund for the fiscal year beginning in 
2030, and for each fiscal year thereafter, out of any 
moneys in the Federal Old-Age and Survivors Insur-
ance Trust Fund, amounts equivalent to the OASDI 
trust fund surplus (as defined in paragraph (2)) for 
the preceding fiscal year. 
(2) OASDI TRUST FUND SURPLUS DEFINED.—
In this section, the term ‘‘OASDI trust fund sur-
plus’’ for a fiscal year means the dollar amount by 
which the Federal Old-Age and Survivors Insurance 
Trust Fund could be reduced as of the end of such
fiscal year so as to result in an OASDI trust fund 
ratio (as defined in section 5(b)(3)) for such fiscal 
year equal to 125 percent. 
(3) RULE
OF
CONSTRUCTION.—This section 
shall not be construed to require redemption of obli-
gations of the Trust Fund for the purpose of mak-
ing transfers to the Transition Fund under this sec-
tion or for any other purpose other than to provide 
for payment of benefits under part A of title II of 
the Social Security Act. 
(c) 
TRANSFERS
BASED
ON
ESTIMATES.—The 
amounts appropriated by subsection (c)(1) shall be trans-
ferred from time to time from the Federal Old-Age and 
Survivors Insurance Trust Fund to the Transition Fund, 
such amounts to be determined on the basis of estimates 
by the Commissioner of Social Security. Proper adjust-
ments shall be made in amounts subsequently transferred 
to the extent prior estimates were in excess of or were 
less than such surplus. 
(d) BOARD OF TRUSTEES.—
(1) ESTABLISHMENT.—With respect to the 
Transition Fund, there is hereby created a body to 
be known as the Board of Trustees of the Transition 
Fund (in this section referred to as the ‘‘Board of 
Trustees’’) composed of the Commissioner of Social