S. 1909

A bill to amend title 31, United States Code, to provide for the issuance of Buy Back America Bonds.

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II

112th CONGRESS

1st Session

S. 1909

IN THE SENATE OF THE UNITED STATES

November 18, 2011

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

A BILL

To amend title 31, United States Code, to provide for the issuance of Buy Back America Bonds.

1.

Buy Back America Bonds

(a)

In general

Subchapter I of chapter 31 of subtitle III of title 31, United States Code, is amended by inserting after section 3105 the following new section:

3105a.

Buy Back America Bonds

(a)

The Secretary shall establish and administer a new series of United States savings bonds, to be known as Buy Back America Bonds. Proceeds from the bonds shall be used first solely to reduce the amount of foreign-held public debt, and then to reduce other public debt.

(b)

A Buy Back America Bond shall be subject to such terms and conditions of issue, conversion, redemption, and maturation as the Secretary may prescribe, except that a Buy Back America Bond shall not mature, and may not be redeemed by the holder, earlier than 10 years from the date of issue and shall mature not more than 20 years from the date of issue. Interest on a Buy Back America Bond whenever paid shall not be includible in gross income under the Internal Revenue Code of 1986.

(c)

Buy Back America Bonds shall be issued at face value and in denominations of not less than $25.

(d)

The redemption value of a Buy Back America Bond shall be determined as the Secretary shall provide—

(1)

at a fixed interest rate equal to the rate applicable to a Series I savings bond for the rate period during which the Buy Back America Bond is purchased, and

(2)

for purposes of calculating yearly interest, by increasing the purchase price of such Buy Back America Bond in each calendar year after the year of purchase by an amount equal to—

(A)

such purchase price, multiplied by

(B)

the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code of 1986 for such calendar year, determined by substituting the calendar year in which such bond was purchased for 1992 in subparagraph (B) thereof.

(e)

If during any fiscal year during which any Buy Back America Bond is outstanding—

(1)

the Federal budget deficit for such fiscal year is less than the amount equal to 3 percent of gross domestic product (as most recently computed and published by the Department of Commerce); and

(2)

the public debt is less than the amount equal to 10 percent of gross domestic product (as so computed and published);

then any such bond may be redeemed without regard to subsection (b).
(f)

A Buy Back America Bond may only be held by—

(1)

a citizen or resident of the United States;

(2)

a domestic partnership, or domestic corporation, not more than 1 percent of the ownership interest of which is held (directly or indirectly) by a person who is not a United States person (as defined in section 7701(a)(30) of the Internal Revenue Code of 1986); or

(3)

an estate or trust which is a United States person (as so defined), unless there is a beneficiary of the trust who is not a United States person (as so defined),

and may be purchased only by an individual who provides a valid social security account number (not including a taxpayer identification number provided by the Internal Revenue Service).
(g)

A Buy Back America Bond may be transferred as provided by the Secretary, but only to an individual who has a valid social security account number (not including a taxpayer identification number provided by the Internal Revenue Service).

.

(b)

Clerical amendment

The table of sections subchapter I of chapter 31 of subtitle III of title 31, United States Code, is amended by inserting after section 3105 the following new item:

3105. Buy Back America Bonds.

.

2.

Deficit reduction

(a)

Calculation

The Office of Management and Budget shall calculate the net deficit reduction resulting from the implementation of this Act and the sale of Buy Back America Bonds for the period beginning on the date of the sale of the first such Buy Back America Bond and ending on the date that is 1 year after such date.

(b)

Adjustment of the discretionary caps

Effective on the effective date of this Act, the limit for the appropriate discretionary budget category set forth in section 251(c) and 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 for the first fiscal year beginning after the date that is 1 year after the date of the sale of the first Buy Back America Bond shall be reduced by the amount of the net deficit reduction calculated pursuant to subsection (a).