I
118th CONGRESS
2d Session
H. R. 9881
IN THE HOUSE OF REPRESENTATIVES
September 27, 2024
Mr. Phillips (for himself, Mr. Vargas, and Mr. Thanedar) introduced the following bill; which was referred to the Committee 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 direct the Commissioner of Social Security to establish American Dream Accounts for every child born in the United States, and for other purposes.
Short title
This Act may be cited as the American Dream Accounts Act of 2024
.
Establishment of American Dream Accounts
American Dream Account
In general
The Commissioner shall establish and manage an American Dream Account (in this Act, referred to as an Account
) for each covered individual.
Initial amount
Upon the establishment of an Account, the Commissioner shall transfer $5,000 into such Account, to be invested in accordance with section 3.
Vesting
A contribution to an Account vests when a contribution is made, and the balance of an Account is nonforfeitable except as described in section 4(b)(5).
Distributions
The Commissioner may only distribute the balance of an Account upon receiving a request in accordance with section 4.
Peace Corps and AmeriCorps bonus
If a covered individual serves, for at least 12 months, as a Peace Corps volunteer or volunteer leader (as referred to in the Peace Corps Act (22 U.S.C. 2501 et seq.)) or in an approved national service position (as defined in section 101 of the National and Community Service Act of 1990 (42 U.S.C. 12511)), prior to the date that such individual turns 26 years of age and prior to requesting a disbursement under section 4, then the Commissioner shall transfer $10,000 to the Account of such covered individual.
Exempt from benefit and entitlement determinations
Notwithstanding any other provision of law, the balance of an Account shall not be taken into account in determining the need or eligibility of a covered individual or the family of the covered individual under any Federal, State, or local program financed in whole or in part with Federal funds.
Investment guidelines
The Commissioner shall invest the funds of each Account established under this Act, and any interest or proceeds earned on such funds, in a commonly recognized index comprised of common stock, the aggregate market value of which is a reasonably complete representation of the United States equity markets.
Disbursement
In general
The Commissioner shall, upon receiving a request pursuant to subsection (b)(1)(A), make a disbursement in accordance with the election made under subsection (b)(1)(B) to a covered individual or an eligible beneficiary in the form of—
a one-time disbursement;
monthly checks over a 12-month period;
a rollover contribution directly to a Roth IRA (as defined in section 408A of the Internal Revenue Code of 1986); or
any combination of the disbursements described in paragraphs (1) through (3) as the Secretary may prescribe by regulation.
Disbursement and request requirements
In general
Request information
To receive a disbursement from the Account of a covered individual, such individual, or an eligible beneficiary, shall submit a request at such time, in such manner, and containing such information as the Commissioner may require.
Disbursement form
As part of the request made under subparagraph (A), a covered individual or eligible beneficiary shall elect the form in which the disbursement should be made.
Covered individual request eligibility
To be eligible to receive a disbursement under this Act, a covered individual shall be older than 17 years of age and younger than 26 years of age, and—
earn a regular high school diploma (as defined in section 8101(43)(A) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801(43)(A));
earn a recognized equivalent of a diploma, such as a general equivalency diploma or a home school diploma; or
obtain a waiver of disability from the Social Security Administration.
Requirements for certain disbursements
A covered individual, or an eligible beneficiary, shall—
in order to receive a one-time disbursement, establish a bank account prior to submitting a request for a disbursement; or
in order to have the Commissioner transfer any amount in a rollover contribution directly to a Roth IRA (as defined in section 408A of the Internal Revenue Code of 1986), establish a Roth IRA (as so defined) prior to submitting a request for a disbursement.
Disbursement after death of a covered individual
In the case of a covered individual who dies prior to submitting a request for a disbursement, an eligible beneficiary who is the appropriate individual in accordance with the laws of the domicile of the covered individual at the date of death of the individual shall submit a request under paragraph (1) not later than 1 year after the date of the death of such individual.
Failure to submit a request
If a request for disbursement is not submitted to the Commissioner to receive a disbursement prior to the date that the individual turns 26 years of age, or within the necessary time period described in paragraph (4), then the Commissioner shall transfer the balance of such Account to the general fund of the Treasury.
Exempt from benefit and entitlement determinations
Notwithstanding any other provision of law, an amount received as a disbursement from an Account under this Act shall not be taken into account, for the year in which the disbursement is received, in determining the need or eligibility of an individual under any Federal, State, or local program financed in whole or in part with Federal funds.
Attachment
The right of any person to any payment from an Account under this Act shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable, or rights existing under this Act, shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
Office of the American Dream
Establishment
In general
Not later than 180 days after the date of enactment of this Act, the Commissioner shall establish an office, to be known as the Office of the American Dream
(referred to in this section as the Office
),
Director
The Commissioner shall appoint a director of the Office who has substantial experience, training, and expertise in the management of financial investments and pension benefit plans.
Duties
The Office shall—
develop expertise in the management of financial investments and pension benefit plans;
establish policies to guide the Commissioner’s investment and management of the Accounts, pursuant to the guidelines described in section 3;
conduct periodic reviews of the Accounts, in collaboration with the Office of Analytics, Review, and Oversight, including the performance of investments made for the Accounts;
regularly provide information to covered individuals about the status of the Accounts of such individuals; and
carry out the duties of the Office solely in the interest of covered individuals.
Tax treatment
In general
An Account is exempt from taxation under subtitle A of the Internal Revenue Code of 1986 and contributions to, and distributions from, an Account shall not be includible in the gross income of the beneficiary of such Account.
Rollovers to Roth IRAs
Section 408A(e)(1) of the Internal Revenue Code of 1986 is amended—
by striking and
at the end of subparagraph (B)(ii), by striking the period at the end of subparagraph (C) and inserting , and
, and by inserting after subparagraph (C) the following new subparagraph:
from an American Dream Account to the extent provided in section 4 of the American Dream Accounts Act of 2024.
; and
in the last sentence—
by inserting or American Dream Account
after qualified tuition program
, and
by inserting or (D), respectively,
after subparagraph (C)
.
Establishment of website and mobile application
Not later than 1 year after the date of enactment of this Act, the Commissioner, in consultation with the Secretary of Education, shall develop a publicly accessible website and mobile application for covered individuals to access information about the Accounts of such individuals.
Financial management and personal finance best practices and grants
In general
Not later than 1 year after the date of enactment of this Act, the Secretary of Education shall disseminate best practices for teaching financial management described in subsection (b) to public elementary schools and public secondary schools.
Best practices
The best practices described in this paragraph—
shall include information relating to the tracking, management, and usage of the Accounts; and
may include—
methods to create a budget, track expenses, and save for short-term and long-term financial objectives;
effective ways to save and invest money, including by introducing students to different financial securities;
information on the fundamentals of credit, including a description and effects of credit scores, and the importance of responsible credit card usage;
critical thinking skills to evaluate financial products, make informed decisions, and avoid financial scams;
methods to ensure that each student has a clear understanding of postsecondary education financing options, including student loan borrowing, in preparation for enrollment at an institution of higher education; and
entrepreneurship training and the fundamentals of starting a small business.
Grants
Grant authorized
Not later than 1 year after the date of enactment of this Act, the Secretary shall establish a grant program to award grants, on a competitive basis, to State educational agencies to promote new and existing strategies to expand, develop, implement, evaluate, and disseminate professional development programs in financial literacy for the voluntary use of innovative approaches to teaching financial literacy to elementary and secondary school students.
Application
To be eligible to receive a grant under this section, a State educational agency shall submit to the Secretary of Education an application at such time, in such manner, and containing such information as the Secretary may require.
Subgrants
A State educational agency receiving a grant under this Act shall use any remaining funds to provide grants to local educational agencies in the State for such local education agencies to provide professional development to teachers.
Additional uses of funds
Each State educational agency may use not more than 10 percent of a grant received under this Act—
for the development of financial literacy and personal finance curricula; or
to conduct an evaluation of the impact of financial literacy or personal finance education on students’ understanding of financial literacy concepts.
ESEA definitions
In this section, the terms elementary school, local educational agency, secondary school, and State educational agency have the meanings given the terms in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).
Definitions
In this Act:
Commissioner
The term Commissioner means the Commissioner of Social Security.
Covered individual
The term covered individual means an individual who, after the date of enactment of this Act—
has been issued a social security account number; and
is born a citizen of the United States; or
becomes a naturalized citizen of the United States prior to turning 18 years of age.
Eligible beneficiary
The term eligible beneficiary means a person who is—
entitled to receive funds on behalf of a covered individual under the laws of the domicile of the covered individual; and
not the individual for whom the Account was established.
Appropriations
Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as are necessary to carry out this Act.