In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

SECTION 1. CONGRESSIONAL FINDINGS.

    The Congress makes the following findings:
            (1) The People's Liberation Army is the principal 
        instrument of repression within the People's Republic of China, 
        responsible for occupying Tibet since 1950, massacring hundreds 
        of students and demonstrators for democracy in Tiananmen Square 
        on June 4, 1989, and running the Laogai (``reform through 
        labor'') slave labor camps.
            (2) The People's Liberation Army is engaged in a massive 
        military buildup, which has involved a doubling since 1992 of 
        announced official figures for military spending by the 
        People's Republic of China.
            (3) The People's Liberation Army is engaging in a major 
        ballistic missile modernization program which could undermine 
        peace and stability in East Asia, including 2 new 
        intercontinental missile programs, 1 submarine-launched missile 
        program, a new class of compact but long-range cruise missiles, 
        and an upgrading of medium- and short-range ballistic missiles.
            (4) The People's Liberation Army is working to coproduce 
        the SU-27 fighter with Russia, and is in the process of 
        purchasing several substantial weapons systems from Russia, 
        including the 633 model of the Kilo-class submarine and the SS-
        N-22 Sunburn missile system specifically designed to 
        incapacitate United States aircraft carriers and Aegis 
        cruisers.
            (5) The People's Liberation Army has carried out acts of 
        aggression in the South China Sea, including the February 1995 
        seizure of the Mischief Reef in the Spratley Islands, which is 
        claimed by the Philippines.
            (6) In July 1995 and in March 1996, the People's Liberation 
        Army conducted missile tests to intimidate Taiwan when Taiwan 
        held historic free elections, and those tests effectively 
        blockaded Taiwan's 2 principal ports of Keelung and Kaohsiung.
            (7) The People's Liberation Army has contributed to the 
        proliferation of technologies relevant to the refinement of 
        weapons-grade nuclear material, including transferring ring 
        magnets to Pakistan.
            (8) The People's Liberation Army and associated defense 
        companies have provided ballistic missile components, cruise 
        missiles, and chemical weapons ingredients to Iran, a country 
        that the executive branch has repeatedly reported to Congress 
        is the greatest sponsor of terrorism in the world.
            (9) In May 1996, United States authorities caught the 
        People's Liberation Army enterprise Poly Technologies and the 
        civilian defense industrial company Norinco attempting to 
        smuggle 2,000 AK-47s into Oakland, California, and offering to 
        sell urban gangs shoulder-held missile launchers capable of 
        ``taking out a 747'' (which the affidavit of the United States 
        Customs Service of May 21, 1996, indicated that the 
        representative of Poly Technologies and Norinco claimed), and 
        Communist Chinese authorities punished only 4 low-level arms 
        merchants by sentencing them on May 17, 1997, to brief prison 
        terms.
            (10) The People's Liberation Army contributes to the 
        People's Republic of China's failure to meet the standards of 
        the 1995 Memorandum of Understanding with the United States on 
        intellectual property rights by running factories which pirate 
        videos, compact discs, and computer software that are products 
        of the United States.
            (11) The People's Liberation Army contributes to the 
        People's Republic of China's failing to meet the standards of 
        the February 1997 Memorandum of Understanding with the United 
        States on textiles by operating enterprises engaged in the 
        transshipment of textile products to the United States through 
        third countries.
            (12) The estimated $2 billion to $3 billion in annual 
        earnings of People's Liberation Army enterprises subsidize the 
        expansion and activities of the People's Liberation Army 
        described in this subsection.
            (13) The commercial activities of the People's Liberation 
        Army are frequently conducted on noncommercial terms, or for 
        noncommercial purposes such as military or foreign policy 
        considerations.

SEC. 2. APPLICATION OF AUTHORITIES UNDER THE INTERNATIONAL EMERGENCY 
              ECONOMIC POWERS ACT TO CHINESE MILITARY COMPANIES.

    (a) Determination of Communist Chinese Military Companies.--
            (1) In general.--Subject to paragraphs (2) and (3), not 
        later than 90 days after the date of the enactment of this Act, 
        the Secretary of Defense, in consultation with the Attorney 
        General, the Director of Central Intelligence, and the Director 
        of the Federal Bureau of Investigation, shall compile a list of 
        persons who are Communist Chinese military companies and who 
        are operating directly or indirectly in the United States or 
        any of its territories and possessions, and shall publish the 
        list of such persons in the Federal Register. On an ongoing 
        basis, the Secretary of Defense, in consultation with the 
        Attorney General, the Director of Central Intelligence, and the 
        Director of the Federal Bureau of Investigation, shall make 
        additions or deletions to the list based on the latest 
        information available.
            (2) Communist chinese military company.--For purposes of 
        making the determination required by paragraph (1), the term 
        ``Communist Chinese military company''--
                    (A) means a person that is--
                            (i) engaged in providing commercial 
                        services, manufacturing, producing, or 
                        exporting, and
                            (ii) owned or controlled by the People's 
                        Liberation Army, and
                    (B) includes, but is not limited to, any person 
                identified in the United States Defense Intelligence 
                Agency publication numbered VP-1920-271-90, dated 
                September 1990, or PC-1921-57-95, dated October 1995, 
                and any update of such reports for the purposes of this 
                Act.
    (b) Presidential Authority.--
            (1) Authority.--The President may exercise the authorities 
        set forth in section 203(a) of the International Emergency 
        Economic Powers Act (50 U.S.C. 1702(a)) with respect to any 
        commercial activity in the United States by a Communist Chinese 
        military company (except with respect to authorities relating 
        to importation), without regard to section 202 of that Act.
            (2) Penalties.--The penalties set forth in section 206 of 
        the International Emergency Economic Powers Act (50 U.S.C. 
        1705) shall apply to violations of any license, order, or 
        regulation issued under paragraph (1).

SEC. 3. DEFINITION.

    For purposes of this Act, the term ``People's Liberation Army'' 
means the land, naval, and air military services, the police, and the 
intelligence services of the Communist Government of the People's 
Republic of China, and any member of any such service or of such 
police.

            Passed the House of Representatives November 7, 1997.

            Attest:

                                                ROBIN H. CARLE,

                                                                 Clerk.
Directs the Secretary of Defense to list, and publish in the Federal Register, persons who are Communist Chinese military companies operating directly or indirectly in the United States or any of its territories and possessions.  Authorizes the President to exercise authorities under the International Emergency Economic Powers Act (except those relating to importation) to regulate, prohibit, or penalize certain transactions involving foreign currency, transfers of credit, or property with respect to any activities of such companies in the United States.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Emergency Acute Care Hospital 
Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) According to the University of North Carolina's Center 
        for Health Services Research, 55 rural hospitals have closed in 
        the Unites States since January 2010.
            (2) In 2014, iVantage conducted a study for the National 
        Rural Health Association and found 283 hospitals at risk of 
        closure based upon performance indicators that matched those 
        facilities already forced to close in this decade.
            (3) Researchers at the University of North Carolina 
        identified inpatient volume as a substantial contributing 
        factor to the financial performance of rural hospitals, with 
        many of the at-risk hospitals having an average daily bed 
        census of less than 2.
            (4) Adverse impacts to the local economy and the loss of 
        timely access to emergency medical care are 2 major effects of 
        rural hospital closures.
            (5) According to the National Center for Rural Health 
        Works, the typical rural hospital creates over 140 jobs and 
        generates $6,800,000 in compensation while serving an average 
        population of 14,600.
            (6) The 2014 iVantage study estimates that the 283 at-risk 
        hospitals could result in the loss of 36,000 health care jobs, 
        50,000 community jobs, and $10,600,000,000 in gross domestic 
        product.
            (7) Time is the most critical factor for achieving 
        successful outcomes in emergency medicine, and emergency 
        medical clinicians refer to the time-sensitive period during 
        which successful outcomes may be best achieved as the ``golden 
        hour''.
            (8) The National Conference of State Legislatures states 
        that 60 percent of trauma deaths in the United States occur in 
        rural areas, where only 15 percent of the population is 
        represented.
            (9) The disproportionate percentage of trauma deaths in 
        rural areas is likely attributable in large part to a 
        combination of response time to the scene and distance to the 
        nearest emergency room to stabilize trauma victims.
            (10) The percentage of trauma deaths occurring in rural 
        areas could continue to increase as more rural hospitals close, 
        further limiting access to emergency services and requiring 
        patients to travel longer distances to receive emergency 
        medical care.
            (11) The creation of a rural emergency hospital designation 
        under the Medicare program will allow facilities in rural areas 
        to provide emergency medical services without having to 
        maintain inpatient beds.
            (12) In addition to providing emergency care, rural 
        emergency hospitals could convert the space previously used for 
        inpatient services to provide other medical services including, 
        but not limited to, observation care, skilled nursing facility 
        care, infusion services, hemodialysis, home health, hospice, 
        nursing home care, population health, and telemedicine 
        services.

SEC. 3. RURAL EMERGENCY HOSPITAL PROGRAM.

    (a) In General.--
            (1) Rural emergency hospital and services defined.--Section 
        1861 of the Social Security Act (42 U.S.C. 1395x) is amended--
                    (A) in subsection (e), in the last sentence of the 
                matter following paragraph (9), by inserting ``or a 
                rural emergency hospital (as defined in section 
                1861(iii)(1))'' before the period at the end; and
                    (B) by adding at the end the following subsection:

    ``Rural Emergency Hospital; Rural Emergency Hospital Outpatient 
                                Services

    ``(iii)(1) The term `rural emergency hospital' means a facility 
that--
            ``(A)(i) as of December 31, 2014--
                            ``(I) was a critical access hospital; or
                            ``(II) was a hospital with not more than 50 
                        beds located in a county (or equivalent unit of 
                        local government) in a rural area (as defined 
                        in section 1886(d)(2)(D)), or was a hospital 
                        with not more than 50 beds that was treated as 
                        being located in a rural area pursuant to 
                        section 1886(d)(8)(E); or
                    ``(ii) was a critical access hospital described in 
                clause (i)(I) or a hospital described in clause (i)(II) 
                that ceased operations during the period beginning on 
                the date that is 5 years prior to the date of the 
                enactment of this subsection and ending on December 30, 
                2014;
            ``(B) provides 24-hour emergency medical care and 
        observation care that does not exceed an annual per patient 
        average of 24 hours or more than 1 midnight;
            ``(C) does not provide any acute care inpatient beds and 
        has protocols in place for the timely transfer of patients who 
        require acute care inpatient services or other inpatient 
        services;
            ``(D) has elected to be designated as a rural emergency 
        hospital;
            ``(E) has received approval to operate as a rural emergency 
        hospital from the State under section 1834(r)(3)(A); and
            ``(F) is certified by the Secretary under section 
        1834(r)(3)(B).
    ``(2) The term `rural emergency hospital outpatient services' means 
medical and other health services furnished by a rural emergency 
hospital on an outpatient basis.
    ``(3) Nothing in this subsection or section 1834(r)(3) shall be 
construed to prohibit a rural emergency hospital from providing 
extended care services.''.
            (2) Payment for rural emergency hospital services.--
                    (A) In general.--Section 1833(a) of the Social 
                Security Act (42 U.S.C. 1395l(a)) is amended--
                            (i) in paragraph (8), by striking ``and'' 
                        at the end;
                            (ii) in paragraph (9), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by inserting after paragraph (9) the 
                        following new paragraph:
            ``(10) in the case of rural emergency hospital emergency 
        services and services provided by a rural emergency hospital or 
        other provider of ambulance services to transport patients who 
        require acute care inpatient services or other inpatient 
        services from such rural emergency hospital to a hospital or 
        critical access hospital, the amounts described in section 
        1834(r).''.
                    (B) Payment amount.--Section 1834 of the Social 
                Security Act (42 U.S.C. 1395m) is amended by adding at 
                the end the following subsection:
    ``(r) Payment Rules Relating to Rural Emergency Hospitals.--
            ``(1) Payment for rural emergency hospital outpatient 
        services.--
                    ``(A) In general.--The amount of payment for rural 
                emergency hospital outpatient services of a rural 
                emergency hospital is equal to 110 percent of the 
                reasonable costs of providing such services.
                    ``(B) Telehealth services.--For purposes of this 
                paragraph, in determining the reasonable costs of 
                providing rural emergency hospital outpatient services, 
                costs associated with having a backup physician 
                available via a telecommunications system shall be 
                considered reasonable costs.
            ``(2) Payment for transportation services.--The amount of 
        payment for services provided by a rural emergency hospital or 
        other provider of ambulance services to transport patients who 
        require acute care inpatient services or other inpatient 
        services from such rural emergency hospital to a hospital or 
        critical access hospital is equal to 110 percent of the 
        reasonable costs of providing such services.
            ``(3) Requirements for rural emergency hospitals.--
                    ``(A) State approval to operate as a rural 
                emergency hospital.--No payment shall be made under 
                this subsection to a facility, or to a provider of 
                ambulance services providing transportation services 
                from such facility, unless the State in which the 
                facility is located has approved the facility's 
                designation as a rural emergency hospital.
                    ``(B) Certification of rural emergency hospital.--
                            ``(i) In general.--No payment shall be made 
                        under this subsection to a facility, or to a 
                        provider of ambulance services providing 
                        transportation services from such facility, 
                        unless the facility has been certified by the 
                        Secretary as a rural emergency hospital.
                            ``(ii) Certification requirements.--The 
                        Secretary shall certify a facility as a rural 
                        emergency hospital if the facility--
                                    ``(I) meets the criteria for rural 
                                emergency hospitals described in 
                                subparagraphs (A) through (E) of 
                                section 1861(iii)(1);
                                    ``(II) either--
                                            ``(aa) is verified by the 
                                        American College of Surgeons as 
                                        having the resources required 
                                        of a level IV trauma center or 
                                        higher; or
                                            ``(bb) employs healthcare 
                                        professionals that successfully 
                                        completed the Advanced Trauma 
                                        Life Support Course offered by 
                                        the American College of 
                                        Surgeons within the preceding 4 
                                        years;
                                    ``(III) has in effect a transfer 
                                agreement with a level I or level II 
                                trauma center; and
                                    ``(IV) meets such staff training 
                                and certification requirements as the 
                                Secretary may require.
            ``(4) Coinsurance.--
                    ``(A) In general.--The amount of payment for rural 
                emergency hospital services or transportation services 
                made to a rural emergency hospital or other provider of 
                ambulance services under this subsection shall be 
                reduced by the coinsurance amount described in 
                subparagraph (B).
                    ``(B) Coinsurance amount.--The coinsurance amount 
                described in this subparagraph, with respect to an item 
                or service provided by a rural emergency hospital or 
                provider of ambulance services, shall be calculated in 
                the same manner as the coinsurance amount for an 
                outpatient critical access hospital service is 
                calculated under section 1866(a)(2).''.
    (b) Waiver of Distance Requirement for Replacement CAHs; Subsequent 
Redesignation of Rural Emergency Hospitals as CAHs.--Section 1820(c)(2) 
of the Social Security Act (42 U.S.C. 1395i-4(c)(2)) is amended--
            (1) in subparagraph (B)(i)(I), by inserting ``subject to 
        subparagraph (F),'' before ``is located''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(F) Option to waive distance requirement.--
                Beginning on the date of the enactment of this 
                subparagraph, for every critical access hospital 
                located in a State that is certified as a rural 
                emergency hospital under section 1834(r)(3)(B), the 
                State shall have the option of waiving the distance 
                requirement described in subparagraph (B)(i)(I) with 
                respect to another facility located in the State that 
                is seeking designation as a critical access hospital 
                under this paragraph.
                    ``(G) Redesignation of a rural emergency hospital 
                as a critical access hospital.--A rural emergency 
                hospital that was previously designated as a critical 
                access hospital under this paragraph may elect to be 
                redesignated as a critical access hospital (in the same 
                manner that the hospital was originally designated as a 
                critical access hospital) at any time, subject to such 
                conditions as the Secretary may establish.''.
    (c) Studies and Reports.--
            (1) Studies.--The Secretary of Health & Human Services 
        shall conduct 3 studies to evaluate the impact of rural 
        emergency hospitals on the availability of health care and 
        health outcomes in rural areas (as defined in section 
        1886(d)(2)(D) of the Social Security Act (42 U.S.C. 1395ww)). 
        The Secretary shall conduct a study--
                    (A) 2 years after the date of the enactment of this 
                Act;
                    (B) 5 years after the date of the enactment of this 
                Act; and
                    (C) 10 years after the date of the enactment of 
                this Act.
            (2) Reports.--Not later than 6 months after each date that 
        the Secretary of Health & Human Services is required to conduct 
        a study under paragraph (1), the Secretary shall submit a 
        report to Congress containing the results of each such study.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after the date that is 1 
year after the date of the enactment of this Act.

SEC. 4. INCLUSION OF EMERGENCY MEDICINE AS HEALTH SERVICES UNDER THE 
              NATIONAL HEALTH SERVICE CORPS.

    Section 331(a)(3)(D) of the Public Health Service Act (42 U.S.C. 
254d(a)(3)(D)) is amended by inserting ``, and includes emergency 
medicine provided by physicians in a rural emergency hospital (as 
defined in section 1861(iii) of the Social Security Act)'' before the 
period.

SEC. 5. PERMITTING HOSPITALS WITH APPROVED RESIDENCY PROGRAMS IN 
              EMERGENCY MEDICINE TO INCLUDE TIME SPENT BY INTERNS AND 
              RESIDENTS IN THE EMERGENCY DEPARTMENT OF A RURAL HOSPITAL 
              IN FULL-TIME EQUIVALENT COUNT.

    (a) Indirect Medical Education.--Section 1886(d)(5)(B)(iv) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended by 
adding at the end the following new subclause:
            ``(III) Effective for discharges occurring on or after 
        October 1, 2015, all of the time spent in patient care 
        activities in the emergency department of a rural hospital by 
        interns and residents in emergency medicine from a hospital 
        with an approved medical residency training program (as defined 
        in subsection (h)(5)(A)) in such specialty shall be included in 
        determining the number of full-time equivalent interns and 
        residents in such program if the hospital with such program 
        incurs the costs of the stipends and fringe benefits of the 
        interns or residents during the time the interns or residents 
        spend in that rural hospital in accordance with subclause (II). 
        In this subclause, the term `rural hospital' means a hospital 
        that is located in a rural area (as defined for purposes of 
        paragraph (2)(D)).''.
    (b) Direct Medical Education.--Section 1886(h)(4)(E) of the Social 
Security Act (42 U.S.C. 1395(h)(4)) is amended--
            (1) in clause (ii), by striking the period at the end and 
        inserting ``; and'';
            (2) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) effective for cost reporting 
                        periods beginning on or after July 1, 2015, all 
                        of the time so spent in the emergency 
                        department of a rural hospital by residents in 
                        emergency medicine from a hospital with an 
                        approved medical residency training program in 
                        such specialty shall be counted towards the 
                        determination of full-time equivalency in such 
                        program if the hospital with such program bears 
                        all, or substantially all, of the costs of 
                        training such residents in the rural hospital. 
                        In this subparagraph, the term `rural hospital' 
                        means a hospital that is located in a rural 
                        area (as defined for purposes of subsection 
                        (d)(2)(D)).''; and
            (3) by adding at the end the following new sentence: ``For 
        purposes of this subparagraph, the emergency department of a 
        rural hospital described in clause (iii) is a nonprovider 
        setting.''.
Rural Emergency Acute Care Hospital Act  This bill amends title XVIII (Medicare) of the Social Security Act to designate as a rural emergency hospital any facility that as of December 31, 2014, was:   a critical access hospital (CAH) or a hospital with at most 50 beds located in a county in a rural area or treated as located in a rural area, or one of such hospitals that ceased operations during the period beginning five years before enactment of this Act and ending on December 30, 2014.  A rural emergency hospital:  must provide 24-hour emergency medical care and observation care not exceeding an annual per patient average of 24 hours or more than 1 midnight, does not provide any acute care inpatient beds and has protocols in place for the timely transfer of patients who require acute care inpatient services or other inpatient services, has elected to be designated as a rural emergency hospital, has received approval to operate as one from the state, and is certified by the Department of Health and Human Services (HHS).  Medicare part B (Supplementary Medical Insurance Benefits) shall cover rural emergency hospital emergency services as well as ambulance services provided by a rural emergency hospital or other provider to transport patients who require acute care inpatient services or other inpatient services from the rural emergency hospital to a hospital or a CAH. Payment for rural emergency hospital outpatient services of a rural emergency hospital, including telehealth and ambulance services, shall be 110% percent of their reasonable costs. Rural emergency hospitals must be approved by the state and certified by HHS. States shall have the option of waiving a specified distance requirement between a CAH certified as a rural emergency hospital and another facility located in the state that is seeking designation as a CAH. Primary health services which the National Health Service Corps may provide under the Public Health Service Act shall include emergency medicine provided by physicians in a rural emergency hospital. Hospitals with approved residency programs in emergency medicine shall include time spent by interns and residents in the emergency department of a rural hospital in the full-time equivalent count with respect to reimbursement for the indirect (stipend, fringe benefit) and direct (all or substantially all training) costs of medical education in subsection (d) hospitals. (Generally, a subsection [d] hospital is an acute care hospital, particularly one that receives payments under Medicare's inpatient prospective payment system [IPPS] when providing covered inpatient services to eligible beneficiaries.)

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security KidSave Accounts 
Act''.

SEC. 2. SOCIAL SECURITY KIDSAVE ACCOUNTS.

    (a) In General.--Title II of the Social Security Act (42 U.S.C. 401 
et seq.) is amended--
            (1) by inserting before section 201 the following:

                    ``Part A--Insurance Benefits'';

        and
            (2) by adding at the end the following:

                       ``Part B--KidSave Accounts

                  ``establishment of kidsave accounts

    ``Sec. 251. (a) In General.--The Commissioner of Social Security, 
through the Federal Retirement Thrift Investment Board, shall establish 
in the name of each individual born on or after January 1, 2001, a 
KidSave Account in the Thrift Savings Fund under subchapter III of 
chapter 84 of title 5, United States Code, upon the later of--
            ``(1) the date of enactment of this part; or
            ``(2) the date of the issuance of a Social Security account 
        number under section 205(c)(2) to such individual.
    ``(b) Identification of Account.--The KidSave Account shall be 
identified to the account holder by means of the account holder's 
Social Security account number.

                    ``treatment of kidsave accounts

    ``Sec. 252. (a) In General.--For purposes of this part, except as 
provided in subsection (b), a KidSave Account described in subsection 
(a) shall be treated in the same manner as an account in the Thrift 
Savings Fund under subchapter III of chapter 84 of title 5, United 
States Code.
    ``(b) Exceptions.--
            ``(1) Contribution rules.--
                    ``(A) Loan contributions.--
                            ``(i) In general.--In addition to any 
                        contributions to a KidSave Account by or on 
                        behalf of an individual described in 
                        subparagraph (B), the Secretary of the Treasury 
                        shall transfer $2,000 to such Account from the 
                        Federal Old-Age and Survivors Insurance Trust 
                        Fund on the date of the establishment of such 
                        Account under subsection (a).
                            ``(ii) Adjustment for inflation.--For any 
                        calendar year after 2008, the dollar amount 
                        under clause (i) shall be increased by the 
                        cost-of-living adjustment determined under 
                        section 215(i) for the calendar year.
                    ``(B) Other contributions.--
                            ``(i) Contribution limit.--The aggregate 
                        amount of contributions by or on behalf of an 
                        individual (including rollover contributions) 
                        for any taxable year to the KidSave Account of 
                        such individual shall not exceed $500 for such 
                        year (determined without regard to the amount 
                        of the contribution made pursuant to 
                        subparagraph (A)).
                            ``(ii) Rollover contributions.--No rollover 
                        contribution may be made to a KidSave Account 
                        of an individual unless it is from an eligible 
                        retirement plan described in clause (i), (ii), 
                        or (iii) of section 402(c)(8)(B) of the 
                        Internal Revenue Code of 1986 of such 
                        individual or of a parent or grandparent of 
                        such individual.
                            ``(iii) No contributions past the age of 
                        18.--No contribution (including rollover 
                        contribution) may be made to a KidSave Account 
                        of an individual in any year after the year in 
                        which such individual attains the age of 19.
                            ``(iv) Direct deposits.--The Secretary of 
                        the Treasury shall, under regulations, provide 
                        for the direct deposit of any overpayment of 
                        Federal tax of an individual or of a parent or 
                        grandparent of such individual as a 
                        contribution to the KidSave Account of such 
                        individual.
            ``(2) Designations regarding kidsave account investments.--
                    ``(A) Initial designations of investment fund.--A 
                person described in subsection (c) shall, on behalf of 
                the individual described in section 251(a), designate 1 
                or more investment funds (established under section 
                8438 of title 5, United States Code) for the KidSave 
                Account to which contributions by or on behalf of such 
                individual are to be deposited. Such designation shall 
                be made on the application for such individual's Social 
                Security account number.
                    ``(B) Default designation.--In the absence of any 
                designation under subparagraph (A), the contributions 
                by or on behalf of an individual described in section 
                251(a) shall be deposited--
                            ``(i) 60 percent in the Common Stock Index 
                        Investment Fund established under section 
                        8438(b)(1)(C) of title 5, United States Code;
                            ``(ii) 20 percent in the Fixed Income 
                        Investment Fund established under section 
                        8438(b)(1)(B) of such title; and
                            ``(iii) 20 percent in the Government 
                        Securities Investment Fund established under 
                        section 8438(b)(1)(A) of such title.
                    ``(C) Changes in designations.--An individual who 
                has attained age 18 or a person described in subsection 
                (c) on behalf of such individual may change 1 or more 
                investment designations for a KidSave Account of such 
                individual at the same time and in the same manner as 
                provided under subchapter III of chapter 84 of such 
                title.
            ``(3) Distributions.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), distributions may only be made from a 
                KidSave Account of an individual on or after the 
                earlier of--
                            ``(i) the date on which the individual 
                        begins receiving benefits under this title; or
                            ``(ii) the date of the individual's death.
                    ``(B) Repayment of contribution loan.--
                            ``(i) In general.--On the date on which an 
                        individual described in section 251(a) attains 
                        age 30 and on such date in each succeeding 
                        calendar year (as necessary), the Federal 
                        Retirement Thrift Investment Board shall 
                        transfer from the KidSave Account of such 
                        individual to the Federal Old-Age and Survivors 
                        Insurance Trust Fund an amount equal to the 
                        least of the following amounts:
                                    ``(I) 20 percent of the applicable 
                                amount.
                                    ``(II) 20 percent of the balance in 
                                such KidSave Account.
                                    ``(III) An amount equal to the 
                                excess of the applicable amount over 
                                the aggregate amount deducted under 
                                this clause in all preceding calendar 
                                years with respect to such individual.
                            ``(ii) Applicable amount.--With respect to 
                        any individual described in clause (i), the 
                        applicable amount is equal to the amount of the 
                        loan contribution under paragraph (1)(A) 
                        determined for the first calendar year 
                        described in such clause for KidSave Accounts 
                        established in such year.
    ``(c) Treatment of Minors and Incompetent Individuals.--
            ``(1) Designations.--Any designation under subsection 
        (b)(2) to be made by a minor, or an individual mentally 
        incompetent or under other legal disability, may be made by the 
        person who is constituted guardian or other fiduciary by the 
        law of the State of residence of the individual or is otherwise 
        legally vested with the care of the individual or his estate.
            ``(2) Distributions.--Payment under this part due a minor, 
        or an individual mentally incompetent or under other legal 
        disability, may be made to the person who is constituted 
        guardian or other fiduciary by the law of the State of 
        residence of the claimant or is otherwise legally vested with 
        the care of the claimant or his estate.
            ``(3) Other persons designated.--In any case in which a 
        guardian or other fiduciary of the individual under legal 
        disability has not been appointed under the law of the State of 
        residence of the individual, if any other person, in the 
        judgment of the Commissioner, is responsible for the care of 
        such individual, any designation under subsection (b)(2) which 
        may otherwise be made by such individual may be made by such 
        person, any payment under this part which is otherwise payable 
        to such individual may be made to such person, and the payment 
        of an annuity payment under this part to such person bars 
        recovery by any other person.

                   ``treatment of thrift savings fund

    ``Sec. 253. For purposes of subchapter VIII of chapter 84 of title 
5, United States Code, the KidSave Accounts established in the Thrift 
Savings Fund under section 251 shall be separately maintained and 
accounted for by the Federal Retirement Thrift Investment Board from 
the accounts established under such subchapter in such Fund.''.
    (b) Conforming Amendments Regarding Rollovers.--
            (1) Section 402(c)(5) of the Internal Revenue Code of 1986 
        is amended by striking ``(i) or (ii)'' and inserting ``(i), 
        (ii), or (v)''.
            (2) Section 402(c)(8)(B) of such Code is amended by 
        striking ``and'' at the end of clause (iii), by striking the 
        period at the end of clause (iv) and inserting ``, and'', and 
        by adding at the end the following new clause:
                            ``(v) a KidSave Account established under 
                        section 251(a) of the Social Security Act.''.
            (3) Section 408(d)(3)(A)(i) of such Code is amended by 
        inserting ``or a KidSave Account established under section 
        251(a) of the Social Security Act'' after ``contract)''.

Requires the Secretary of the Treasury to transfer from the Federal Old- Age and Survivors Insurance Trust Fund to each account holder's KidSave Account: (1) $2,000, on the date such individual's KidSave Account is established; plus (2) other, including rollover, contributions, by or on behalf of the individual, the aggregate amount of which in the case of any individual below age 19 is capped at $500 for any taxable year. Provides for the treatment of distributions.
Amends the Internal Revenue Code to exclude from gross income any rollovers into a KidSave Account.