119-s1718

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1718 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1718

 To amend the Internal Revenue Code of 1986 to create invest America 
 accounts.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 May 12, 2025

 Mr. Cruz introduced the following bill; which was read twice and 
 referred to the Committee on Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to create invest America 
 accounts.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Invest America Act''.

SEC. 2. INVEST AMERICA ACCOUNTS.

    (a) In General.--Subchapter F of Chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

 ``PART IX--INVEST AMERICA ACCOUNTS

``

SEC. 530A. INVEST AMERICA ACCOUNTS.

 ``

    (a) General Rule.--An invest America account shall be exempt from 
taxation under this subtitle. Notwithstanding the preceding sentence, 
such account shall be subject to the taxes imposed by 

section 511 
(relating to imposition of tax on unrelated business income of 
charitable organizations).
 ``

    (b) Invest America Account.--For purposes of this section--
 ``

    (1) In general.--The term `invest America account' means 
 a trust created or organized in the United States for the 
 exclusive benefit of an individual and which is designated (in 
 such manner as the Secretary shall prescribe) at the time of 
 the establishment of the trust as an invest America account, 
 but only if the written governing instrument creating the trust 
 meets the following requirements:
 ``
        (A) Except in the case of a qualified rollover 
 contribution described in subsection

    (e) , no 
 contribution will be accepted--
 ``
            (i) unless it is in cash, and
 ``
            (ii) if such contribution would result in 
 aggregate contributions for the taxable year 
 exceeding the contribution limit specified in 
 subsection
            (c) (1) .
 ``
        (B) No distribution (other than a qualified 
 rollover distribution) will be allowed before the date 
 on which the beneficiary attains the age of 18.
 ``
            (C) The trustee is a bank (as defined in 

section 408

    (n) ) or another person who demonstrates to the 
 satisfaction of the Secretary that the manner in which 
 that person will administer the trust will be 
 consistent with the requirements of this section or who 
 has so demonstrated with respect to any individual 
 retirement plan.
 ``
            (D) The interest of an individual in the balance 
 of his account is nonforfeitable.
 ``
        (E) The assets of the trust shall not be 
 commingled with other property except in a common trust 
 fund or common investment fund.
 ``
        (F) No part of the trust funds will be invested 
 in any asset other than eligible investments.
 ``

    (2) Eligible investments.--The term `eligible 
 investments' means any mutual fund or exchange traded fund 
 which--
 ``
        (A) tracks the returns of the Standard and Poor's 
 500 stock market index, and
 ``
        (B) meets such other requirements as provided by 
 the Secretary.
 ``
            (c) Treatment of Contributions.--
 ``

    (1) Contribution limit.--The contribution limit for any 
 taxable year is $5,000.
 ``

    (2) Cost-of-living adjustment.--
 ``
        (A) In general.--In the case of any taxable year 
 beginning in a calendar year after 2026, the $5,000 
 amount under paragraph

    (1) shall be increased by an 
 amount equal to--
 ``
            (i) such dollar amount, multiplied by
 ``
            (ii) the cost-of-living adjustment 
 determined under 

section 1

    (f)

    (3) for the 
 calendar year, determined by substituting 
 `calendar year 2025' for `calendar year 2016' 
 in subparagraph
        (A)
            (ii) thereof.
 ``
        (B) Rounding.--If any increase under subparagraph
        (A) is not a multiple of $100, such amount shall be 
 rounded to the next lower multiple of $100.
 ``
            (d) Distributions.--
 ``

    (1) In general.--Any distribution from an invest America 
 account shall be included in gross income of the distributee in 
 the manner as provided in 

section 72, except that the character 
 of such income shall be determined after the application of 
 

section 1

    (h)

    (12) .
 ``

    (2) Exceptions.--Paragraph

    (1) shall not apply to any 
 qualified rollover contribution.
 ``

    (e) Qualified Rollover Contribution.--For purposes of this 
section, the term `qualified rollover contribution' means--
 ``

    (1) a contribution made pursuant to 

section 3

    (a) of the 
 Invest America Act, or
 ``

    (2) an amount which is paid in a direct trustee-to-
 trustee transfer to an invest America account maintained for 
 the benefit of such designated beneficiary.
 ``

    (f) Treatment After Death of Account Beneficiary.--Rules similar 
to the rules of 

section 223

    (f)

    (8) shall apply for purposes of this 
section.
 ``

    (g) Custodial Accounts.--For purposes of this section, a 
custodial account or an annuity contract issued by an insurance company 
qualified to do business in a State shall be treated as a trust under 
this section if--
 ``

    (1) the custodial account or annuity contract would, 
 except for the fact that it is not a trust, constitute a trust 
 which meets the requirements of subsection

    (b)

    (1) , and
 ``

    (2) in the case of a custodial account, the assets of 
 such account are held by a bank (as defined in 

section 408

    (n) ) 
 or another person who demonstrates, to the satisfaction of the 
 Secretary, that the manner in which he will administer the 
 account will be consistent with the requirements of this 
 section.
For purposes of this title, in the case of a custodial account or 
annuity contract treated as a trust by reason of the preceding 
sentence, the person holding the assets of such account or holding such 
annuity contract shall be treated as the trustee thereof.
 ``

    (h) Reports.--The trustee of an invest America account shall make 
such reports regarding such account to the Secretary and to the 
beneficiary of the account with respect to contributions, 
distributions, and such other matters as the Secretary may require. The 
reports required by this subsection shall be filed at such time and in 
such manner and furnished to such individuals at such time and in such 
manner as may be required.''.

    (b) Distribution Taxed at Same Rate as Net Capital Gains.--

Section 1

    (h) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph:
 ``

    (12) Distributions from invest america accounts taxed as 
 net capital gain.--For purposes of this subsection, the term 
 `net capital gain' meant the net capital gain (determined 
 without regard to this paragraph) increased by the amount of 
 distributions made during the taxable year from an invest 
 America account (as defined in 

section 530A) which are 
 includible in income under 

section 530A
            (d) .''.
            (c) Tax on Excess Contributions.--

    (1) In general.--Subsection

    (a) of 

section 4973 of the 
 Internal Revenue Code of 1986 is amended by striking ``or'' at 
 the end of paragraph

    (5) , by inserting ``or'' at the end of 
 paragraph

    (6) , and by inserting after paragraph

    (6) the 
 following new paragraph:
 ``

    (7) an invest America account (as defined in 

section 530A),''.

    (2) Excess contribution.--

Section 4973 of such Code is 
 amended by adding at the end the following new subsection:
 ``
            (i) Excess Contributions to Invest America Accounts.--For 
purposes of this section, in the case of invest America accounts 
(within the meaning of 

section 530A), the term `excess contributions' 
means the sum of--
 ``

    (1) the amount by which the amount contributed for the 
 calendar year to such account (other than qualified rollover 
 contributions (as defined in 

section 530A

    (e) )) exceeds the 
 contribution limit under 

section 530A
            (c) (1) , and
 ``

    (2) the amount determined under this subsection for the 
 preceding calendar year, reduced by the excess (if any) of the 
 maximum amount allowable as a contribution under 

section 530A
            (c) (1) for the calendar year over the amount contributed to 
 the account for the calendar year (other than qualified 
 rollover contributions (as so defined)).''.
            (d) Failure To Provide Reports on Invest America Accounts.--
Paragraph

    (2) of 

section 6693

    (a) of the Internal Revenue Code of 1986 
is amended by striking ``and'' at the end of subparagraph
        (E) , by 
striking the period at the end of subparagraph
        (F) and inserting ``, 
and'', and by adding at the end the following new subparagraph:
 ``
        (G) section 530A

    (h) (relating to invest America 
 accounts).''.

    (e) Conforming Amendment.--The table of parts for subchapter F of 
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

 ``Part IX. Invest America Accounts''.

    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

SEC. 3. FEDERAL CONTRIBUTIONS TO INVEST AMERICA ACCOUNTS.

    (a) In General.--As soon as practical after an individual is 
certified as an eligible individual under subsection
            (c) , the Secretary 
of the Treasury shall pay to the invest America account of such 
eligible individual an amount equal to $1,000.

    (b) Eligible Individual.--For purposes of this section, the term 
``eligible individual'' means any individual who--

    (1) is born after July 4, 2026,

    (2) is a United States citizen, and
 '

    (3) has at least one parent who, at the time of the 
 individual's birth, is a United States citizen.
            (c) Certification of Eligible Individuals.--

    (1) In general.--The Secretary of the Treasury, in 
 consultation with the Commissioner of Social Security, shall 
 establish procedures for the certification of individuals as 
 eligible individuals.

    (2) Timing.--No certification may be made under this 
 section more than 6 months after the date of the individual's 
 birth.
            (d) Automatic Establishment of Invest America Accounts in Certain 
Cases.--

    (1) In general.--If an eligible individual does not have an 
 invest America account, the Secretary shall establish such an 
 account on behalf of such individual.

    (2) Selection of account provider.--The Secretary of the 
 Treasury shall develop rules for the selection of persons 
 described in 

section 530A

    (b)

    (1)
            (C) for the establishment of 
 invest America accounts of individuals to whom paragraph

    (1) applies. Such rules shall provide for selection based on low 
 fees, historical investment performance, administrative 
 capabilities, and such other criteria as the Secretary 
 determines appropriate.

    (e) Tax Treatment.--

    (1) In general.--Part III of subchapter B of chapter 1 of 
 the Internal Revenue Code of 1986 is amended by inserting after 
 

section 139I the following new section:

``

SEC. 139J. FEDERAL CONTRIBUTIONS TO INVEST AMERICA ACCOUNTS.

 ``Gross income shall not include any contribution made by the 
Secretary to an invest America account under 

section 3

    (a) of the Invest 
America Act.''.

    (2) Clerical amendment.--The table of sections for part III 
 of subchapter B of chapter 1 of the Internal Revenue Code of 
 1986 is amended by inserting after the item relating to 

section 139I the following new item:

``

Sec. 139J. Federal contributions to invest America accounts.''.

    (3) Effective date.--The amendments made by this section 
 shall apply to taxable years beginning after December 31, 2024.

    (f) Appropriation.--There are hereby appropriated such sums as may 
be necessary to make payments under subsection

    (a) .
 <all>