,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #aici  ,,in ,,the ,,house ,,of  
,,representatives  ,may #i1 #bjac ,mr4  
,kilmer 7for himself and ,mr4 ,polis7   
introduced the following bill2 which was
 referred to the ,committee on          
,education and the ,workforce1 and in   
addition to the ,committee on ,ways and 
,means1 for a period to be subsequently 
determined by the ,speaker1 in each case
 for consideration of such provisions as
 fall within the jurisdiction of the    
committee concerned  ,a ,,bill  ,to     
amend the ,workforce ,investment ,act of
 #aiih to establish lifelong learning   
accounts programs1 and for other        
purposes4  #a4 ,short title ,this ,act  
may be cited as the ,skills ,investment 
,act of #bjac4  #b4 ,findings and       
purpose  7a7 ,finding ,congress finds   
the following3  7#a7 ,it will not be    
possible for adult workers in the       
,united ,states to maintain a high      
standard of living in a competitive     
global economy without a dramatic       

increase in their skills4  7#b7 ,workers
 need up-to-date skills and skill       
credentials to keep pace with the       
changing and increasingly complex       
demands of the #bast century economy4   
7#c7 ,the fastest-growing occupations   
and best-paying jobs are those that     
require some postsecondary education4   
,maintaining a competitive edge requires
 knowledge and other skills4 ,increases 
in a country's overall level of         
educational attainment lead to increases
 in its overall rate of economic growth4
  7#d7 ,the high cost of education and  
skill development has limited the       
options of many workers4 ,current major 
benefits such as the use of a ,,hope tax
 credit or a ,coverdell education       
savings account are not available to    
students who attend school less than    
half-time4 ,other workers do not earn   
enough to qualify for available         
education and training tax credits and  
deductions4 ,most available financial   
aid is intended for full-time students  

studying for degrees rather than the    
many adults who cannot attend education 
or skill development programs full-time 
because of demanding family and work    
commitments4  7#e7 ,employers           
increasingly need workers with #bast    
century workplace and technical skills  
to stay competitive4  7b7 ,purpose ,the 
purpose of this ,act is to establish an 
innovative program to support lifelong  
learning1 that--  7#a7 motivates workers
 to participate in education and skill  
development activities in which the     
workers would not otherwise participate2
  7#b7 provides a financial incentive to
 workers to save for education and skill
 development activities for their       
careers1 and better manage their careers
 by upgrading1 at the time and place of 
their choosing1 their skills2  7#c7     
offers workers labor market and career  
information to make informed choices    
when enhancing skills to prosper in     
today's dynamic and highly competitive  
global economy2 and  7#d7 provides an   

incentive to small employers to invest  
in and offer learning opportunities to  
improve their employees' skills and     
productivity4  #c4 ,lifelong ,learning  
,accounts  7a7 ,in general ,subtitle ,b 
of title ,i of the ,workforce           
,investment ,act of #aiih 7#bi ,u4,s4,c4
 #bhaa et seq47 is amended--  7#a7 by   
redesignating chapter #f as chapter #g2 
and  7#b7 by inserting after chapter #e 
the following3  #f ,lifelong learning   
accounts  #ace4 ,definitions ,in this   
chapter3  7#a7 ,career pathway ,the term
 career pathway means a series of       
connected education and training        
strategies and support services that    
enable individuals to--  7,a7 secure    
industry relevant certification2  7,b7  
obtain employment within an occupational
 area and to advance to higher levels of
 future education and employment in that
 area2 and  7,c7 progress through one or
 more postsecondary education or        
training options4  7#b7 ,career plan    
,the term career plan means an          

individual employment plan described in 
section #acd7;d77#c77;,c77ii7 that--    
7,a7 describes a worker's career goal1  
and steps or alternative routes         
associated with acquiring the skills and
 skill credentials needed to achieve the
 goal2 and  7,b7 includes labor market  
and career information on local         
in-demand industries and high growth    
industries4  7#c7 ,education or skill   
development ,the term education or skill
 development means an activity          
provided--  7,a7 through a program or   
course of instruction by a postsecondary
 educational institution described in   
section #abb7;a77#b77;,a72  7,b7 through
 a registered apprenticeship program2 or
  7,c7 through a program or course of   
instruction that provides training      
services1 within the meaning of section 
#acd7;d77#d74  7#d7 ,eligible education 
or skill development expense ,the term  
eligible education or skill development 
expense means an amount paid for a      
program or course of instruction        

7including a registered apprenticeship  
program7 of career-related education or 
skill development1 provided by an       
eligible provider1 including--  7,a7    
tuition1 fees1 and similar payments2    
7,b7 payments for books1 supplies1      
equipment1 tools1 and information       
technology devices1 required for such   
program or course2 and  7,c7 any        
expenses related to an assessment of an 
eligible worker's prior learning or     
competency used to award credit for or  
placement in a program or course of     
instruction4  7#e7 ,eligible provider   
,the term eligible provider means--     
7,a7 a postsecondary educational        
institution described in section        
#abb7;a77#b77;,a7 or a provider         
described in section #abb7;a77#b77;,b72 
or  7,b7 a provider identified as an    
eligible provider of training services  
under section #abb7;e74  7#f7 ,eligible 
worker ,the term eligible worker means  
an individual--  7,a7 who is age #af or 
older2  7,b7 on whose behalf a lifelong 

learning account is established2 and    
7,c7 who1 on the date of application for
 the establishment of the account1 was  
employed1 was self-employed1 or had     
previously been employed and was looking
 for work4  7#g7 ,institution of higher 
education ,the term institution of      
higher education has the meaning given  
the term in section #aja7;a7 of the     
,higher ,education ,act of #aife 7#bj   
,u4,s4,c4 #ajja7;a774  7#h7 ,labor      
market and career information ,the term 
labor market and career information     
means information about--  7,a7 a       
regional labor market and promising     
industries and occupations for a worker 
in that market2  7,b7 skills and skill  
credentials needed by a worker to       
achieve the worker's career goal2 and   
7,c7 skill and work experience          
assessment results for the worker4  7#i7
 ,lifelong learning account  7,a7 ,in   
general ,the term lifelong learning     
account means an individual eligible    
worker's federally tax exempt portable  

education savings account1 established  
as a trust--  7i7 that contains         
contributions1 which may be made by the 
worker1 the worker's employer1 or a     
third party1 or which may be made by the
 worker and matched by the employer2    
7ii7 that is established for the purpose
 of paying for eligible education and   
skill development expenses1 to bolster  
the worker's existing career or a       
transition to a new career2 and  7iii7  
for which--  7,i7 no contribution may be
 accepted unless the contribution is in 
cash2  7,,ii7 except in the case of a   
rollover contribution1 the total amount 
of contributions to the account1 by the 
worker1 the employer1 or a third party1 
may not exceed #e1jjj for a single      
taxable year2  7,,iii7 no part of the   
trust assets may be invested in life    
insurance contracts2  7,,iv7 no part of 
the trust assets may be invested in any 
collectible 7as defined in section      
#djh7m7 of the ,internal ,revenue ,code 
of #aihf72  7,v7 the assets of the trust

 may not be commingled with other       
property except in a common trust fund  
or common investment fund2  7,,vi7 the  
interest of an individual in the balance
 in the individual's account shall be   
nonforfeitable2 and  7,,vii7 no         
distribution shall be made from the     
account except for eligible education or
 skill development expenses or after an 
event described in section              
#ace;,e7b77#d77;,i74  7,b7 ,adjustment  
for inflation ,the amount set forth in  
subparagraph 7,a77iii77,i7 shall be     
adjusted in accordance with increases in
 the ,consumer ,price ,index for all    
urban consumers of the ,bureau of ,labor
 ,statistics4  7#aj7 ,one-,stop center  
,the term one-stop center means a       
one-stop center referred to in section  
#acd7;c74  7#aa7 ,registered            
apprenticeship program ,the term        
registered apprenticeship program means 
a program--  7,a7 with an industry      
skills training approach that combines  
technical and theoretical training--    

7i7 through structured on-the-job       
learning with related instruction 7in a 
classroom or through distance learning7 
while an individual is employed1 working
 under the direction of qualified       
personnel or a mentor1 and earning      
incremental wage increases aligned to   
enhanced job proficiency2 and  7ii7     
resulting in the acquisition of         
nationally recognized and portable      
certificate1 including a certificate of 
completion of apprenticeship2 and  7,b7 
carried out under a plan approved by the
 ,office of ,apprenticeship or a ,state 
agency recognized by the ,department of 
,labor1 and meeting the standards       
required under sections #bi and #cj of  
title #bi1 ,code of ,federal            
,regulations 7or any corresponding      
similar regulation or ruling71 including
 such matters as the requirement for a  
written apprenticeship agreement4  7#ab7
 ,state agency ,the term ,state agency  
means an agency appointed under section 
#ace;,b7b77#a74  7#ac7 ,trustee ,the    

term trustee means a                    
,governor-designated entity1 which may  
be a bank 7as defined in section #djh7n7
 of the ,internal ,revenue ,code of     
#aihf71 that demonstrates to the        
,governor that the entity will establish
 and manage a lifelong learning account 
in a manner consistent with the         
requirements of this chapter1 which     
demonstration may be accomplished by    
showing a record of success in          
establishing and managing similar       
retirement or education savings         
accounts4  7#ad7 ,worker ,the term      
worker means an individual--  7,a7 who  
is age #af or older2 and  7,b7 who is   
employed1 is self-employed1 or was      
previously employed and is looking for  
work2 or  #ace;,a4 ,lifelong learning   
account programs ,the ,secretary shall  
make grants to ,states to pay for the   
,federal share of establishing lifelong 
learning account programs1 to enhance   
and expand education and skill          
development activities for eligible     

workers4  #ace;,b4 ,state supplemental  
plans  7a7 ,in general ,for a ,state to 
be eligible to receive a grant under    
this chapter1 the ,governor of the      
,state shall submit a five-year plan to 
the ,secretary at such time1 in such    
manner1 and containing such information 
as the ,secretary may require4  7b7     
,contents ,the plan shall consist of a  
supplement to the ,state plan described 
in section #aab and shall include1 at a 
minimum--  7#a7 information identifying 
a fiscal and administrative agency that 
is a member of the ,state board         
appointed by the ,governor of the ,state
 to design1 establish1 and implement the
 lifelong learning account program      
proposed for the ,state2  7#b7 7,a7 an  
assurance that the ,governor of the     
,state will designate1 on the           
recommendation of the ,state ,board1 a  
trustee to establish and manage the     
lifelong learning accounts of eligible  
workers throughout the entire ,state2   
and  7,b7 a description of any criteria1

 developed in cooperation with ,state   
board1 other than criteria issued under 
this chapter1 that the ,governor will   
use to designate such a trustee2  7#c7  
information describing the formula the  
,state will use to allocate funding     
equitably to local areas within the     
,state to provide assistance to one-stop
 centers1 as described in section       
#ace;,c7a77#a77;,c72  7#d7 information  
describing how the ,state board will    
oversee the design1 establishment1 and  
implementation of the lifelong learning 
accounts program2  7#e7 a description of
 the ,state requirements for the        
program1 including requirements to      
ensure that the trustee manages the     
lifelong learning accounts in a manner  
consistent with the fiscal control and  
accounting procedures described in      
paragraph 7#aa72  7#f7 a schedule for   
implementation of the lifelong learning 
account program1 which 7notwithstanding 
any other provision of this chapter7 may
 specify implementation in phases if the

 schedule provides for full statewide   
implementation not later than #b years  
after the date of approval of the plan2 
7#g7 7,a7 7i7 a description of the      
career information1 guidance1           
counseling1 and related activities to be
 carried out through the one-stop       
centers in the ,state1 to enable workers
 seeking to establish or use a lifelong 
learning account to make informed       
decisions about meeting their education 
and skill development needs1 including  
labor market and career information1    
career planning1 and information on the 
high-skill1 high-demand industries      
identified under subparagraph 7,b7 and  
related career pathways2 and  7ii7 a    
description of information to be        
provided as described in paragraphs     
7#b71 7#c71 and 7#d7 of section         
#ace;,e7a72 and  7,b7 information1 as   
reported in the ,state plan1 identifying
 high-skill1 high-demand industries in  
each region of the ,state or in the     
,state1 and sets of courses aligned with

 the needs of those industries1 and     
services1 that constitute career        
pathways2  7#h7 a description of the    
methods the ,state agency will use to   
determine and carry out ,state-level    
activities described in section         
#ace;,c7b7 and any criteria established 
by the ,state for ,state contributions  
under section #ace;,c7a77#b72  7#i7 a   
description of how the ,state agency    
will monitor and assess the             
implementation 7including operation7 of 
the lifelong learning account program1  
including a description of the methods  
the ,state agency will use for          
collecting and reporting data on the    
program as required by the ,secretary   
and providing technical assistance to   
the one-stop centers in the ,state1 to  
implement and continuously improve the  
implementation of a fully operational   
lifelong learning account program2      
7#aj7 information describing how the    
,state will use the funds the ,state    
receives under this chapter to leverage 

other ,federal1 ,state1 local1 and      
private resources1 to maximize the      
effective use of those resources and    
maximize the effectiveness of the       
lifelong learning account program1 and  
to expand the participation of workers  
7especially lower-income workers7 and   
employers 7especially small and         
mid-sized employers7 in the program2    
7#aa7 an assurance that the ,state      
agency will provide for fiscal control  
and accounting procedures to ensure the 
proper disbursing of and accounting for 
funds made available to the ,state      
through the grant and for funds paid    
into lifelong learning accounts2  7#ab7 
a description of the process that the   
,state used to provide an opportunity   
for comment on1 and input on the        
development of1 the ,state supplemental 
plan by the ,state board and by the     
public1 representatives of business1 and
 representatives of labor organizations2
  7#ac7 7,a7 an assurance that the      
,state agency will1 at the request of a 

eligible worker who has moved to a      
second ,state1 direct the trustee       
managing the worker's lifelong learning 
account to transfer the account to a    
trustee in the second ,state and will   
otherwise comply with the portability   
plan described in subsection 7e72 and   
7,b7 a description of the means by which
 the ,state agency will direct the      
transfers1 and otherwise comply with the
 portability plan1 referred to in       
subparagraph 7,a72  7#ad7 if the ,state 
requires a minimum amount of            
contributions described in section      
#ace;,e7b77#b77;,b71 the minimum amount2
  7#ae7 an assurance that the ,state    
will participate in any evaluation or   
research conducted under section        
#ace;,h2 and  7#af7 an assurance that   
the ,state will use no more than #aj    
percent of the funds for administrative 
costs4  7c7 ,request for waiver ,at the 
election of a ,state1 the ,state may    
include in the plan a request for a     
waiver of section #ace;,e7b77#d77;,d71  

to permit a one-stop center staff or    
system operator of the statewide        
web-based system in the ,state to rely  
on an eligible worker's statement       
described in section                    
#ace;,e7b77#d77;,c77iv74 ,the ,secretary
 may approve the request as a portion of
 the plan1 or may deny the request4  7d7
 ,supplemental plan submission and      
approval ,a ,state supplemental plan    
submitted to the ,secretary under this  
section by a ,governor shall be         
considered to be approved by the        
,secretary at the end of the #ij-;day   
period beginning on the day the         
,secretary receives the plan1 unless the
 ,secretary makes a written             
determination1 during the #ij-;day      
period1 that the plan is inconsistent   
with the provisions of this chapter4    
7e7 ,portability plan ,the ,secretary   
shall develop1 in consultation with     
,state agencies and other entities and  
individuals1 a plan to ensure the       
portability of lifelong learning        

accounts among ,states4 ,the plan shall 
address the extent of portability of    
lifelong learning accounts established  
for eligible workers4 ,the ,secretary   
shall ensure that ,states comply with   
the plan1 in determining whether to     
approve ,state supplemental plans under 
this section4  7f7 ,modifications to    
plan ,a ,state may submit modifications 
to a ,state supplemental plan in        
accordance with the requirements of this
 section and section #ace;,c7c7 as      
necessary during the period covered by  
the plan4  7g7 ,compliance with plan    
requirements ,a ,state shall comply with
 the requirements of the ,state         
supplemental plan to be eligible to     
receive funds under this chapter4       
,nothing in this chapter shall be       
construed to affect the eligibility of a
 ,state for an allotment under section  
#abg or #acb1 or financial assistance   
under the ,wagner-,peyser ,act 7#bi     
,u4,s4,c4 #di et seq471 on the basis of 
the ,state's compliance with the        

requirements of the ,state supplemental 
plan4  #ace;,c4 ,state activities  7a7  
,in general ,a ,state that receives a   
grant under this chapter--  7#a7 shall  
use the funds made available through the
 grant--  7,a7 for the design1          
establishment1 and implementation       
7including monitoring and assessment7 of
 lifelong learning accounts programs1 as
 described in subsection 7b72  7,b7 to  
provide funds to one or more trustees in
 the ,state for the establishment and   
management of lifelong learning accounts
 as described in section #ace;,e7b72 and
  7,c7 to provide assistance to the     
one-stop centers in the ,state1 to      
enable the one-stop center staff to     
carry out the responsibilities described
 in section #ace;,e7a72 and  7#b7 may1  
after carrying out paragraph 7#a71 use a
 portion of the grant funds to make     
contributions to lifelong learning      
accounts in the ,state that meet        
criteria established by the ,state1 such
 as accounts to which small- and        

mid-sized employers have made           
contributions or accounts of            
lower-income eligible workers4  7b7     
,state-,level activities ,the ,state    
agency shall design1 establish1 and     
implement 7including monitoring and     
assessing7 the lifelong learning        
accounts program1 including--  7#a7     
establishing and maintaining a          
worker-accessible statewide web-based   
system to provide the assistance        
described in paragraphs 7#a7 through    
7#d7 of section #ace;,e7a7 and meet the 
applicable requirements of section      
#ace;,e7b72  7#b7 developing outreach   
and marketing activities to be carried  
out in the ,state2  7#c7 reviewing the  
,state list of training services        
providers compiled under section        
#abb7;e77#d7 to determine the currency  
and accuracy of the list1 updating the  
list1 improving the format of the list1 
and increasing access to the list2  7#d7
 providing capacity building and        
technical assistance to local boards1   

one-stop center staff1 7and employees of
 such centers who provide career        
information1 guidance1 counseling1 and  
related activities71 and eligible       
providers1 with respect to the          
authorities and responsibilities of such
 entities under this chapter2  7#e7     
developing1 disseminating1 and          
presenting information on the lifelong  
learning account program of the ,state  
to workers1 employers1 and general      
public1 and carrying out creative       
efforts to engage private sector        
organizations 7such as labor            
organizations1 industry organizations1  
and nonprofit organizations7 and public 
sector organizations as partners in the 
program2 and  7#f7 preparing reports for
 the ,state board for the ,state1       
containing assessments of the program4  
7c7 ,state board responsibilities ,the  
,state board for the ,state shall--     
7#a7 make recommendations to the        
,governor about the designation of a    
trustee2  7#b7 provide advice to the    

,governor and the ,state agency on a    
general vision for a lifelong learning  
account program that suggests ways to   
create opportunities for all workers1   
but especially for workers earning less 
than #bjj percent of the poverty line or
 workers without a degree from a #b-year
 or #d-year nationally recognized       
postsecondary 7or not participating in  
an apprenticeship program71 to          
successfully participate in the program1
 with the goal of improving their skills
 and the likelihood of long-term        
prosperity for themselves and their     
families2  7#c7 provide independent     
advice to the ,state agency about the   
operation and performance of the        
lifelong learning account program1 and1 
as appropriate1 enter into contracts for
 studies or assessments of the program  
in order to provide that advice2  7#d7  
review and provide advice to the        
,governor on proposals for ,state       
supplemental plans2 and  7#e7 receive   
and comment on reports from the trustee 

and the ,state agency1 containing       
assessments of the lifelong learning    
account program1 and from1 as           
appropriate1 the ,secretary and other   
entities evaluating or researching the  
program4  #ace;,d4 ,local supplemental  
plans  7a7 ,in general ,each local board
 shall develop and submit to the        
,governor a local supplemental plan1 in 
partnership with the appropriate chief  
elected official4 ,the plan shall be    
consistent with the ,state supplemental 
plan4  7b7 ,contents ,the plan shall    
consist of a supplement to the local    
plan described in section #aah and shall
 include1 at a minimum--  7#a7 the      
description referred to in section      
#ace;,b7b77#g77;,a71 with respect to    
information and activities to be        
provided through the one-stop centers in
 the local area involved2  7#b7 an      
assurance that the local one-stop       
delivery system will1 through the       
one-stop centers in the local area1     
provide the assistance described in     

paragraphs 7#a7 through 7#e7 of section 
#ace;,e7a72  7#c7 an assurance that the 
one-stop center staff for the one-stop  
centers in the local area will          
coordinate activities carried out       
through the centers with ,state-level   
activities1 including the operation of  
the statewide web-based system1 to      
provide the assistance described in     
paragraphs 7#a7 through 7#d7 of section 
#ace;,e7a72  7#d7 information describing
 how the local board will use the funds 
the local area receives under this      
chapter to leverage other ,federal1     
,state1 local1 and private resources1 to
 maximize the effective use of those    
resources and maximize the effectiveness
 of the lifelong learning account       
program in the ,state1 and to expand the
 participation of workers 7especially   
lower-income workers7 and employers     
7especially small- and mid-sized        
employers7 in the program2 and  7#e7    
other assurances as required by the     
,governor4  7c7 ,supplemental plan      

submission and approval ,a local        
supplemental plan submitted to a        
,governor under this section by a local 
board and chief elected official shall  
be considered to be approved by the     
,governor at the end of the #ij-;day    
period beginning on the day the         
,governor receives the plan1 unless the 
,governor makes a written determination1
 during the #ij-;day period1 that--     
7#a7 deficiencies in activities carried 
out under this chapter have been        
identified1 and the local area has not  
made acceptable progress in implementing
 corrective measures to address the     
deficiencies2 or  7#b7 the plan is      
inconsistent with the provisions of this
 chapter4  #ace;,e4 ,local activities   
7a7 ,one-,stop center staff ,the        
one-stop center staff that receives     
assistance under section                
#ace;,c7a77#a77;,c7 shall use the       
assistance to--  7#a7 provide career    
information1 guidance1 counseling1 and  
related activities for workers seeking  

to establish or use a lifelong learning 
account1 including labor market and     
career information1 career planning1 and
 information on the high-skill1         
high-demand industries1 in the region   
involved1 that are identified under     
section #ace;,b7b77#g77;,b7 and related 
career pathways2  7#b7 provide          
information on lifelong learning        
accounts1 and assistance in establishing
 and using lifelong learning accounts1  
including applying to establish such an 
account2  7#c7 provide information on   
eligible providers1 their education and 
skill development programs or courses1  
and the eligible education or skill     
development expenses associated with the
 programs or courses2  7#d7 provide     
information about other public or       
private education or skill development  
activities 7other than activities       
eligible for funding through a lifelong 
learning account7 that workers may be   
eligible to participate in to meet their
 education and skill development needs2 

7#e7 carry out outreach and marketing   
activities2 and  7#f7 meet the          
applicable requirements of subsection   
7b74  7b7 ,trustees ,a trustee shall    
establish and manage lifelong learning  
accounts in accordance with the         
following requirements3  7#a7           
,establishment  7,a7 ,request ,a worker 
who resides in a ,state and who meets   
the requirements of section #ace7f7 but 
does not have a lifelong learning       
account may1 at the election of the     
worker1 request a lifelong learning     
account4 ,the worker may submit the     
request through a one-stop center 7to   
the one-stop center staff7 or through   
the statewide web-based system 7to the  
system operator74 ,the request shall    
include an assurance that the employer  
of the worker has not required1 coerced1
 or influenced the worker to establish  
the account4  7,b7 ,information ,on     
receipt of a request described in       
subparagraph 7,a7 for such a worker1 the
 one-stop center staff involved or the  

operator of the web-based system shall  
supply information to the worker on the 
manner in which the account will be     
managed1 the requirements for           
withdrawing and using funds from the    
account1 and information on the         
prohibition and procedure described in  
paragraph 7#d77;,h71 and will ask the   
worker to acknowledge receipt of the    
information4  7,c7 ,establishment ,on   
receiving the acknowledgment from the   
worker1 the one-stop center staff or    
system operator shall forward the       
application to the appropriate trustee1 
who shall establish the account4  7#b7  
,contributions  7,a7 ,in general ,a     
contribution may be made to an eligible 
worker's lifelong learning account by-- 
7i7 the worker2  7ii7 the employer of   
the worker1 who may provide             
contributions without regard to the     
worker's contributions1 or as matching  
funds2 or  7iii7 a third party1 such as 
the ,state1 a political subdivision of  
the ,state1 the ,federal government     

through any ,federal program2 an        
individual1 or a foundation4  7,b7      
,minimum contribution for employer      
contributions ,the ,state may require a 
worker to provide a minimum amount of   
contributions to the worker's lifelong  
learning account before permitting the  
worker's employer to provide employer   
contributions under this paragraph4     
7#c7 ,transfers ,if the eligible worker 
moves to a second ,state1 at the request
 of the eligible worker1 the ,state     
described in paragraph 7#a7 shall direct
 the trustee to transfer the worker's   
lifelong learning account to the second 
,state1 in compliance with the          
portability plan described in subsection
 7d74 ,the program requirements of the  
lifelong learning account program in the
 second ,state shall apply to the       
account4  7#d7 ,withdrawal of amounts   
7,a7 ,application to one-stop center    
staff  7i7 ,in general ,an eligible     
worker who desires to withdraw funds    
from the worker's lifelong learning     

account shall submit an application to  
withdraw the funds--  7,i7 at a one-stop
 center1 to the one-stop center staff2  
or  7,,ii7 through the statewide        
web-based system1 to the system         
operator4  7ii7 ,assurance ,the         
application shall include assurances    
that--  7,i7 the worker is not          
requesting funds for routine health and 
safety training or training that relates
 to use of new equipment that is        
otherwise covered by the employer2      
7,,ii7 the worker is not requesting     
funds for an education or skill         
development activity that was previously
 provided by the worker's employer or   
that is an activity for which the       
employer previously provided financial  
assistance 7such as tuition assistance7 
to workers1 if the employer initiates   
discontinuance of the activity or       
financial assistance1 respectively1 less
 than #f months before the date of the  
request2 and  7,,iii7 the employer of   
the worker has not required1 coerced1 or

 influenced the worker to establish the 
account or to use1 or refrain from      
using1 funds from the account for any   
type of education or skill development  
activity for which the worker may use   
the funds under this chapter1 or for an 
activity described in subclause 7,i7 or 
7,,ii74  7,b7 ,services ,the one-stop   
center staff or system operator shall   
offer career information1 guidance1     
counseling1 and related activities      
described in subsection 7a77#a7 to the  
eligible worker4  7,c7 ,application to  
trustee ,on receiving or declining the  
services described in subparagraph 7,b7 
the eligible worker shall submit an     
application to the one-stop center staff
 or system operator1 for the trustee1   
containing--  7i7 a career goal 7and1 if
 developed1 a career plan72  7ii7 a     
description of the career-related       
education or skill development activity 
to be funded through the withdrawal2    
7iii7 the eligible provider who will    
provide the education or skill          

development activity2 and  7iv7 a       
statement of the eligible education or  
skill development expense associated    
with the activity4  7,d7 ,verification  
,except in a ,state covered by a waiver 
approved under section #ace;,b7c71 on   
receiving the application1 the one-stop 
center staff or system operator shall   
endeavor to verify the amount of the    
expense specified on the statement      
described in subparagraph 7,c77iv74 ,if 
the one-stop center staff or system     
operator is able to verify the amount   
7or is in a ,state covered by such a    
waiver71 and the application contains   
the items described in clauses 7i7      
through 7iv7 of subparagraph 7,c71 the  
one-stop center staff or system operator
 shall forward the application to the   
trustee4  7,e7 ,approval ,the trustee   
shall approve the application not later 
than #aj days after receipt1 unless--   
7i7 the application fails to contain an 
item described in clause 7i7 through    
7iv7 of subparagraph 7,c72 or  7ii7 the 

amount in the eligible worker's account 
is less than the amount of the expense  
specified on the statement described in 
subparagraph 7,c77iv74  7,f7            
,disbursement ,on approving the         
application1 the trustee shall disburse 
the amount of the expense specified on  
the statement to the eligible provider4 
,in the event that the amount of the    
expense includes an amount for an item  
described in section #ace7d77;,b71 and  
that amount is not payable to the       
provider1 the provider may reimburse the
 worker for the amount of that item4    
7,g7 ,failure to disburse ,if1 not      
earlier than #aj days after the date on 
which the trustee has received the      
application1 the trustee has failed to  
approve or disapprove the application1  
or has approved the application but     
failed to make a disbursement as        
provided in subparagraph 7,f71 the      
eligible worker may bring an action in a
 court of appropriate jurisdiction to   
compel disbursement of the amount4  7,h7

 ,prohibition on employer requirements1 
coercion1 or influence  7i7 ,in general 
,no employer of the eligible worker1 or 
contributor to the worker's lifelong    
learning account1 may require1 coerce1  
or influence a worker to establish the  
account1 or to use1 or refrain from     
using1 funds from the account for any   
type of education or skill development  
activity for which the worker may use   
the funds under this chapter1 or any    
activity described in subclause 7,i7 or 
7,,ii7 of subparagraph 7,a77ii74  7ii7  
,grievance or complaint ,an eligible    
worker alleging a violation of this     
subparagraph may file a grievance or    
complaint in accordance with section    
#aha7;c74  7,i7 ,special disbursements  
,for purposes of this paragraph1 any    
disbursement 7or request for            
disbursement7 made after the account    
beneficiary dies1 becomes disabled      
7within the meaning of section          
#gb7m77#g7 of the ,internal ,revenue    
,code of #aihf71 or has attained age    

#gj1 shall be treated as a disbursement 
7or request for disbursement7 for       
eligible education or skill development 
expenses4  7#e7 ,treatment of account   
7,a7 ,separation or divorce ,if a       
separation or divorce agreement awards  
the lifelong learning account1 or the   
benefits of the account1 of an eligible 
worker to the worker's spouse or former 
spouse1 the trustee shall transfer the  
account to the spouse or former spouse4 
7,b7 ,death ,on the death of an eligible
 worker--  7i7 if the designated        
beneficiary for the lifelong learning   
account elects the application of this  
clause1 such designated beneficiary     
shall be treated as the account         
beneficiary for purposes of such        
account2 or  7ii7 in any case not       
described in clause 7i71 the trustee    
shall pay the funds in the account to   
the beneficiary1 and close the account4 
7c7 ,oversight ,consistent with its     
responsibilities to oversee the one-stop
 delivery system in the local area1 the 

local board shall oversee the           
implementation of the lifelong learning 
account program in the local area1 and  
shall monitor and assess the performance
 of the program4  #ace;,f4 ,federal     
share  7a7 ,in general ,the ,federal    
share of the cost described in section  
#ace;,a for administering the lifelong  
learning accounts program established by
 this chapter shall be #hj percent4  7b7
 ,non-,federal share ,the ,state may    
provide the non-,federal share of the   
cost in cash or in-kind1 fairly         
evaluated1 including plant1 equipment1  
or services4 ,the ,state may provide the
 non-,federal share from ,state1 local1 
or private sources4  #ace;,g4 ,trustee  
reports  7a7 ,preparation ,each ,state  
that carries out a lifelong learning    
account program under this chapter shall
 require each trustee in the ,state to  
annually prepare a report containing    
information on contributions to and     
withdrawals from such accounts in the   
,state1 an assessment of the ,state     

lifelong learning account program1 and  
information on such additional matters  
as the ,secretary of ,labor1 after      
consultation with the ,secretary of the 
,treasury1 may require4  7b7 ,submission
 ,the trustee shall submit each such    
report to the ,governor and the ,state  
legislature of the ,state4 ,the         
,governor shall transmit each such      
report to the ,secretary of ,labor1 the 
,secretary of the ,treasury1 and        
,congress1 and shall make the report    
available to the general public4        
#ace;,h4 ,evaluations and other research
  7a7 ,in general ,the ,secretary shall 
conduct evaluations and other research1 
directly or through grants or contracts1
 to determine the effectiveness of the  
lifelong learning account programs      
carried out under this chapter in       
meeting the objectives of this chapter4 
7b7 ,methodology and research designs   
,the ,secretary shall use appropriate   
methodology and research designs for the
 evaluations and research4  7c7 ,topics 

,in conducting the evaluations and      
research1 the ,secretary may address    
topics including whether the programs   
increased the wages or salaries of      
workers1 resulted in promotions1 new    
positions1 or better positions for the  
workers1 increased the number of workers
 who acquired industry-recognized skill 
credentials1 enhanced the job           
performance of workers1 or increased    
worker retention4  7d7 ,report ,the     
,secretary shall submit to ,congress a  
report containing the results of each   
evaluation or research project conducted
 under this section4  #ace;,i4 ,study on
 contributions from ,federal programs   
7a7 ,study ,the ,secretary1 in          
conjunction with the ,secretary of      
,health and ,human ,services1 shall     
conduct a study concerning whether1 and 
the degree to which1 ,states should be  
permitted to use funds available under a
 covered program to make contributions  
to lifelong learning accounts of        
eligible workers in the ,state1 and     

concerning the impacts on the covered   
program4  7b7 ,report ,not later than   
#bd months after the date of enactment  
of the ,skills ,investments ,act of     
#bjac1 the ,secretary of ,labor shall   
submit to ,congress a report containing 
the results of the study and any        
recommendations for legislation the     
,secretary determines to be appropriate4
  7c7 ,definition ,in this section1 the 
term covered program means the program  
of block grants to ,states for temporary
 assistance for needy families          
established under part ,a of title ,,iv 
of the ,social ,security ,act 7#db      
,u4,s4,c4 #fja et seq471 an employment  
and training program carried out under  
section #f7;d77#d7 of the ,food ,stamp  
,act of #aigg 7#g ,u4,s4,c4             
#bjae7;d77#d771 the portion of a program
 of employment and training activities  
carried out under chapter #e that is    
funded through individual training      
accounts described in section           
#acd7;d77#d77;,g71 the activities       

7including training1 other employment   
services1 and provision of allowances7  
carried out under part ,,ii of          
subchapter ,b of chapter #b of title    
,,ii of the ,trade ,act of #aigd 7#bi   
,u4,s4,c4 #bbie et seq471 and another   
,federal employment and training program
 identified by the ,secretary4  #ace;,j4
 ,eligibility for other ,federal        
benefits ,no ,federal agency may take   
into consideration the amount deposited 
to1 or withdrawn from1 an eligible      
worker's lifelong learning account in   
determining the eligibility of the      
worker for any benefit or service under 
any provision of ,federal law1 including
 any education or skill development     
benefit or service1 other than this     
chapter4  4  7b7 ,conforming amendment  
,the table of contents in section #a7;b7
 of the ,workforce ,investment ,act of  
#aiih is amended--  7#a7 by             
redesignating the item relating to the  
chapter heading of chapter #f1 as the   
item relating to the chapter heading of 

chapter #g1 of subtitle ,b of title ,i2 
and  7#b7 by inserting after the items  
relating to chapter #e of that subtitle 
the following3  ,chapter #f--,lifelong  
learning accounts ,sec4 #ace4           
,definitions4 ,sec4 #ace;,a4 ,lifelong  
learning account programs4 ,sec4        
#ace;,b4 ,state supplemental plans4     
,sec4 #ace;,c4 ,state activities4 ,sec4 
#ace;,d4 ,local supplemental plans4     
,sec4 #ace;,e4 ,local activities4 ,sec4 
#ace;,f4 ,federal share4 ,sec4 #ace;,g4 
,trustee reports4 ,sec4 #ace;,h4        
,evaluations and other research4 ,sec4  
#ace;,i4 ,study on contributions from   
,federal programs4 ,sec4 #ace;,j4       
,eligibility for other ,federal         
benefits4  4  #d4 ,authorization of     
appropriations ,section #acg of the     
,workforce ,investment ,act of #aiih    
7#bi ,u4,s4,c4 #bhgb7 is amended by     
adding at the end the following3  7d7   
,lifelong learning account programs     
,there is authorized to be appropriated 
to carry out chapter #f such sums as may

 be necessary for each of fiscal years  
#bjae through #bjbj4  4  #e4 ,credit for
 contributions to lifelong learning     
accounts  7a7 ,in general ,subpart ,c of
 part ,,iv of subchapter ,a of chapter  
#a of the ,internal ,revenue ,code of   
#aihf 7relating to refundable credits7  
is amended by inserting after section   
#cf;,b the following new section3       
#cf;,c4 ,contributions to lifelong      
learning accounts  7a7 ,credit allowed  
,in the case of an eligible individual1 
there shall be allowed as a credit      
against the tax imposed by this chapter 
for the taxable year an amount equal to 
the applicable percentage of the        
contributions 7other than rollover      
contributions described in subsection   
7e77#e77 paid in cash during such       
taxable year by or on behalf of such    
individual to a lifelong learning       
account of such individual4  7b7        
,limitations and definitions related to 
allowance of credit  7#a7 ,dollar       
limitation ,the amount of contributions 

taken into account under subsection 7a7 
with respect to any eligible individual 
for any taxable year shall not exceed   
the lesser of--  7,a7 #c1jjj1 or  7,b7  
an amount equal to the compensation 7as 
defined in section #bai7;f77#a77        
includible in the individual's gross    
income for such taxable year4  7#b7     
,limitations based on modified adjusted 
gross income  7,a7 ,phaseout of dollar  
limitation based on account             
beneficiary's modified adjusted gross   
income ,the #c1jjj amount contained in  
paragraph 7#a77;,a7 shall be reduced    
7but not below zero7 by the account     
beneficiary's reduction amount4  7,b7   
,per contributor limitation based on    
contributor's modified adjusted gross   
income ,in the case of a contributor who
 is an individual 7other than an        
employer of the account beneficiary71   
the aggregate amount of the             
contributions of such contributor which 
may be taken into account under         
subsection 7a7 with respect to any      

eligible individual for any taxable year
 shall not exceed the excess 7if any7 of
 #c1jjj over such contributor's         
reduction amount4  7,c7 ,account        
beneficiary's reduction amount ,for     
purposes of subparagraph 7,a71 the      
account beneficiary's reduction amount  
is the amount which bears the same ratio
 to #c1jjj as--  7i7 the excess of--    
7,i7 the account beneficiary's modified 
adjusted gross income for such taxable  
year1 over  7,,ii7 #ajj1jjj 7twice such 
amount in the case of a joint return71  
bears to  7ii7 #bj1jjj 7twice such      
amount in the case of a joint return74  
,for purposes of the preceding sentence1
 the term modified adjusted gross income
 means adjusted gross income increased  
by any amount excluded from gross income
 under section #iaa1 #ica1 or #icc4     
7,d7 ,contributor's reduction amount    
,for purposes of subparagraph 7,b71 the 
contributor's reduction amount is the   
amount that would be determined under   
subparagraph 7,c7 if contributor were   

substituted for account beneficiary each
 place it appears therein4  7,e7        
,special rule for married individuals   
filing a separate return ,in the case of
 a married individual filing a separate 
return1 subparagraph 7,c77,i77,,ii7     
shall be applied by substituting zero   
for the dollar amount therein4  7#c7    
,treatment of employer contributions    
7,a7 ,exclusion from gross income ,gross
 income shall not include any           
contribution to a lifelong learning     
account made by an employer of the      
account beneficiary to the extent that  
the aggregate amount of such            
contributions made during the taxable   
year does not exceed the limitation in  
effect under paragraph 7#a7 7determined 
without regard to subparagraph 7,b7 of  
this paragraph7 for such taxable year   
with respect to such beneficiary4  7,b7 
,coordination with credit ,the          
limitation which would 7but for this    
subparagraph7 apply under paragraph 7#a7
 with respect to the eligible individual

 for any taxable year shall be reduced  
7but not below zero7 by the aggregate   
amount contributed to lifelong learning 
accounts of such individual which is    
excludable from the taxpayer's gross    
income for such taxable year under      
subparagraph 7,a7 7and such amount shall
 not be taken into account in           
determining the credit under subsection 
7a774  7#d7 ,applicable percentage ,for 
purposes of this section1 the term      
applicable percentage means--  7,a7 #ej 
percent with respect to the first #ejj  
of contributions taken into account     
under subsection 7a7 with respect to any
 eligible individual for any taxable    
year1 and  7,b7 #be percent with respect
 to so much of such contributions as    
exceeds #ejj4  7#e7 ,eligible individual
 ,for purposes of this section1 the term
 eligible individual means any          
individual for any taxable year if1 as  
of the first day of such taxable year1  
such individual has attained age #af4   
7c7 ,lifelong learning accounts ,for    

purposes of this section--  7#a7 ,in    
general ,the term lifelong learning     
account means a trust created or        
organized in the ,united ,states as a   
lifelong learning account under a       
lifelong learning account program       
established by a ,state under chapter #f
 of subtitle ,b of title ,i of the      
,workforce ,investment ,act of #aiih    
exclusively for the purpose of paying   
the eligible education or skill         
development expenses of the account     
beneficiary and maintained by a trustee 
consist with the requirements of section
 #ace;,e7b7 of such ,act1 but only if   
the written governing instrument        
creating the trust meets the following  
requirements3  7,a7 ,no contribution    
will be accepted unless it is in cash4  
7,b7 ,except in the case of a rollover  
contribution described in subsection    
7e77#e71 no contribution will be        
accepted if such contribution1 when     
added to all previous contributions to  
the trust for the calendar year1 would  

exceed #e1jjj4  7,c7 ,the trust assets  
will be held by a trustee who will      
administer the trust consistent with the
 requirements of such lifelong learning 
account program and this section4  7,d7 
,no part of the trust assets will be    
invested in life insurance contracts4   
7,e7 ,no part of the trust assets will  
be invested in any collectible 7as      
defined in section #djh7m774  7,f7 ,the 
assets of the trust will not be         
commingled with other property except in
 a common trust fund or common          
investment fund4  7,g7 ,the interest of 
an individual in the balance in his     
account is nonforfeitable4  7,h7 ,no    
distribution shall be made from the     
account except--  7i7 for eligible      
education or skill development expenses1
 or  7ii7 after an event described in   
subsection 7e77#b77;,b74  7#b7 ,eligible
 education or skill development expense 
,the term eligible education or skill   
development expense means any eligible  
education or skill development expense  

7as defined in section #ace of the      
,workforce ,investment ,act of #aiih7   
which meets the requirements of         
subclauses 7,i7 and 7,,ii7 of section   
#ace;,e7b77#d77;,a77ii7 of such ,act4   
7#c7 ,account beneficiary ,the term     
account beneficiary means the individual
 on whose behalf the lifelong learning  
account was established4  7#d7 ,trustee 
,the term trustee has the meaning given 
the term in section #ace of the         
,workforce ,investment ,act of #aiih4   
7#e7 ,certain rules to apply ,rules     
similar to the following rules shall    
apply for purposes of this section3     
7,a7 ,section #bai7;f77#c7 7relating to 
time when contributions deemed made74   
7,b7 ,section #djh7;g7 7relating to     
community property laws74  7,c7 ,section
 #djh7;h7 7relating to custodial        
accounts74  7d7 ,tax treatment of       
accounts  7#a7 ,in general ,a lifelong  
learning account is exempt from taxation
 under this subtitle unless such account
 has ceased to be a lifelong learning   

account4 ,notwithstanding the preceding 
sentence1 any such account is subject to
 the taxes imposed by section #eaa      
7relating to imposition of tax on       
unrelated business income of charitable1
 etc4 organizations74  7#b7             
,nonqualified distribution treated as   
account termination ,if there is a      
nonqualified distribution 7as defined in
 subsection 7e77 from a lifelong        
learning account for any taxable year-- 
7,a7 such account shall cease to be     
treated as a lifelong learning account  
as of the close of such taxable year1   
and  7,b7 any amounts in such account as
 of the close of such taxable year shall
 be treated as distributed to the       
account beneficiary on the last day of  
such taxable year and shall be treated  
as not used to pay eligible education or
 skill development expenses4  7#c7      
,application of other rules treating    
certain events as account terminations  
,rules similar to the rules of          
paragraphs 7#b7 and 7#d7 of section     

#djh7;e7 shall apply to lifelong        
learning accounts1 and any amount       
treated as distributed under such rules 
shall be treated as not used to pay     
eligible education or skill development 
expenses4  7e7 ,inclusion of            
distributions in gross income  7#a7     
,inclusion in gross income ,any amount  
distributed out of a lifelong learning  
account shall be included in gross      
income by the account beneficiary4  7#b7
 ,additional tax  7,a7 ,in general      
,except as otherwise provided in this   
subsection1 the tax imposed by this     
chapter on the account beneficiary for  
any taxable year in which there is a    
nonqualified distribution from a        
lifelong learning account shall be      
increased by #aj percent of the amount  
of such distribution4  7,b7 ,exceptions 
,subparagraph 7,a7 and subsection       
7d77#b7 shall not apply if the          
distribution is made after the account  
beneficiary dies1 becomes disabled      
7within the meaning of section          

#gb7m77#g771 or has attained age #gj4   
7#c7 ,nonqualified distribution ,for    
purposes of this section1 the term      
nonqualified distribution means the     
excess 7if any7 of--  7,a7 the aggregate
 distributions from the account during  
the taxable year1 over  7,b7 the        
eligible education or skill development 
expenses of the account beneficiary for 
the taxable year4  7#d7 ,excess         
contributions returned before due date  
of return  7,a7 ,in general ,if any     
excess contribution is contributed for a
 taxable year to any lifelong learning  
account of an individual1 paragraphs    
7#a7 and 7#b7 and subsection 7d77#b7    
shall not apply to distributions from   
the lifelong learning accounts of such  
individual 7to the extent such          
distributions do not exceed the         
aggregate excess contributions to all   
such accounts of such individual for    
such year7 if--  7i7 such distribution  
is received by the individual on or     
before the last day prescribed by law   

7including extensions of time7 for      
filing such individual's return for such
 taxable year1 and  7ii7 such           
distribution is accompanied by the      
amount of net income attributable to    
such excess contribution4  ,any net     
income described in clause 7ii7 shall be
 included in the gross income of the    
individual for the taxable year in which
 it is received4  7,b7 ,excess          
contribution ,for purposes of           
subparagraph 7,a71 the term excess      
contribution means any contribution     
7other than a rollover contribution     
described in paragraph 7#f77 which is   
not taken into account for purposes of  
determining the credit allowed under    
subsection 7a7 or the amount excludable 
from the taxpayer's gross income under  
subsection 7b77#c74  7#e7 ,rollover     
contribution ,an amount is described in 
this paragraph as a rollover            
contribution if it meets the            
requirements of subparagraphs 7,a7 and  
7,b74  7,a7 ,in general ,paragraphs 7#a7

 and 7#b7 and subsection 7d77#b7 shall  
not apply to any amount paid or         
distributed from a lifelong learning    
account to the account beneficiary to   
the extent the amount received is paid  
into a lifelong learning account for the
 benefit of such beneficiary not later  
than the #fjth day after the day on     
which the beneficiary receives the      
payment or distribution4  7,b7          
,limitation ,this paragraph shall not   
apply to any amount described in        
subparagraph 7,a7 received by an        
individual from a lifelong learning     
account if1 at any time during the      
#a-year period ending on the day of such
 receipt1 such individual received any  
other amount described in subparagraph  
7,a7 from a lifelong learning account to
 which paragraphs 7#a7 and 7#b7 did not 
apply by reason of the application of   
this paragraph4  7#f7 ,transfer of      
account incident to divorce ,the        
transfer of an individual's interest in 
a lifelong learning account to an       

individual's spouse or former spouse    
under a divorce or separation instrument
 described in subparagraph 7,a7 of      
section #ga7;b77#b7 shall not be        
considered a taxable transfer made by   
such individual notwithstanding any     
other provision of this subtitle1 and   
such interest shall1 after such         
transfer1 be treated as a lifelong      
learning account with respect to which  
such spouse is the account beneficiary4 
7#g7 ,treatment after death of account  
beneficiary  7,a7 ,treatment if         
designated beneficiary is spouse or     
elects to continue account ,if any      
individual acquires the account         
beneficiary's interest in a lifelong    
learning account by reason of being the 
designated beneficiary of such account  
at the death of the account beneficiary 
and such individual elects the          
application of this subparagraph1 such  
lifelong learning account shall be      
treated as if such designated           
beneficiary were the account            

beneficiary4  7,b7 ,other cases  7i7 ,in
 general ,if1 by reason of the death of 
the account beneficiary1 any person     
acquires the account beneficiary's      
interest in a lifelong learning account 
in a case to which subparagraph 7,a7    
does not apply--  7,i7 such account     
shall cease to be a lifelong learning   
account as of the date of death1 and    
7,,ii7 an amount equal to the fair      
market value of the assets in such      
account on such date shall be includible
 if such person is not the estate of    
such beneficiary1 in such person's gross
 income for the taxable year which      
includes such date1 or if such person is
 the estate of such beneficiary1 in such
 beneficiary's gross income for the last
 taxable year of such beneficiary4  7ii7
 ,deduction for estate taxes ,an        
appropriate deduction shall be allowed  
under section #fia7;c7 to any person    
7other than the decedent or the         
decedent's spouse7 with respect to      
amounts included in gross income under  

clause 7,i7 by such person4  7f7        
,reports ,the trustee of a lifelong     
learning account shall make such reports
 regarding such account to the          
,secretary and to the account           
beneficiary with respect to             
contributions1 distributions1 and such  
other matters as the ,secretary may     
require under regulations4 ,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 by those regulations4  4  7b7  
,tax on excess contributions ,section   
#digc of the ,internal ,revenue ,code of
 #aihf is amended--  7#a7 by striking or
 at the end of subsection 7a77#d71 by   
inserting or at the end of subsection   
7a77#e71 and by inserting after         
subsection 7a77#e7 the following new    
paragraph3  7#f7 a lifelong learning    
account 7within the meaning of section  
#cf;,c7c771  1 and  7#b7 by adding at   
the end the following new subsection3   

7h7 ,excess contributions to lifelong   
learning accounts ,for purposes of this 
section1 in the case of lifelong        
learning accounts 7within the meaning of
 section #cf;,c7c771 the term excess    
contributions means the sum of--  7#a7  
the aggregate amount contributed for the
 taxable year to the accounts 7other    
than rollover contributions described in
 section #cf;,c7e77#e77 which is not    
taken into account for purposes of      
determining the credit allowed under    
section #cf;,c7a7 or the amount         
excludable from the taxpayer's gross    
income under section #cf;,c7b77#c71 and 
7#b7 the amount determined under this   
subsection for the preceding taxable    
year1 reduced by the sum of--  7,a7 the 
distributions out of the accounts with  
respect to which additional tax was     
imposed under section #cf;,c7e77#b77;,a7
 for the taxable year1 and  7,b7 the    
excess 7if any7 of--  7i7 the maximum   
amount of contributions which may be    
taken into account under section        

#cf;,c7a7 for the taxable year1 over    
7ii7 the amount contributed to the      
accounts for the taxable year4  ,for    
purposes of this subsection1 any        
contribution which is distributed out of
 the lifelong learning account in a     
distribution to which section           
#cf;,c7e77#e7 applies shall be treated  
as an amount not contributed4  4  7c7   
,tax on prohibited transactions  7#a7   
,paragraph 7#a7 of section #dige7;e7 of 
the ,internal ,revenue ,code of #aihf   
7relating to prohibited transactions7 is
 amended by redesignating subparagraph  
7,g7 as subparagraph 7,h71 by striking  
or at the end of subparagraph 7,f71 and 
by inserting after subparagraph 7,f7 the
 following new subparagraph3  7,g7 a    
lifelong learning account described in  
section #cf;,c7c71 or  4  7#b7          
,subsection 7c7 of section #dige of such
 ,code is amended by adding at the end  
the following new paragraph3  7#g7      
,special rule for lifelong learning     
accounts ,an individual for whose       

benefit a lifelong learning account is  
established shall be exempt from the tax
 imposed by this section with respect to
 any transaction concerning such account
 7which would otherwise be taxable under
 this section7 if1 with respect to such 
transaction1 the account ceases to be a 
lifelong learning account by reason of  
the application of paragraph 7#b7 or    
7#c7 of section #cf;,c7d7 to such       
account4  4  7d7 ,failure ,to provide   
reports on lifelong learning accounts   
,paragraph 7#b7 of section #ffic7;a7 of 
the ,internal ,revenue ,code of #aihf is
 amended by striking and at the end of  
subparagraph 7,d71 by redesignating     
subparagraph 7,e7 as subparagraph 7,f71 
and by inserting after subparagraph 7,d7
 the following new subparagraph3  7,e7  
section #cf;,c7f7 7relating to lifelong 
learning accounts71 and  4  7e7         
,exclusion from employment taxes  7#a7  
,federal ,insurance ,contributions ,act 
,subsection 7a7 of section #caba of the 
,internal ,revenue ,code of #aihf is    

amended by striking or at the end of    
paragraph 7#bb71 by striking the period 
at the end of paragraph 7#bc7 and       
inserting 2 or1 and by inserting after  
paragraph 7#bc7 the following new       
paragraph3  7#bd7 any payment made to or
 for the benefit of an employee if at   
the time of such payment it is          
reasonable to believe that the employee 
will be able to exclude such payment    
from income under section #cf;,c7b77#c74
  4  7#b7 ,railroad retirement tax      
,subsection 7e7 of section #cbca of such
 ,code is amended by adding at the end  
the following new paragraph3  7#ac7     
,learning account contributions ,the    
term compensation shall not include any 
payment made to or for the benefit of an
 employee if at the time of such payment
 it is reasonable to believe that the   
employee will be able to exclude such   
payment from income under section       
#cf;,c7b77#c74  4  7#c7 ,unemployment   
tax ,subsection 7b7 of section #ccjf of 
such ,code is amended by striking or at 

the end of paragraph 7#ai71 by striking 
the period at the end of paragraph 7#bj7
 and inserting 2 or1 and by inserting   
after paragraph 7#bj7 the following new 
paragraph3  7#ba7 any payment made to or
 for the benefit of an employee if at   
the time of such payment it is          
reasonable to believe that the employee 
will be able to exclude such payment    
from income under section #cf;,c7b77#c74
  4  7#d7 ,withholding tax ,subsection  
7a7 of section #cdja of such ,code is   
amended by striking or at the end of    
paragraph 7#bb71 by striking the period 
at the end of paragraph 7#bc7 and       
inserting 2 or1 and by inserting after  
paragraph 7#bc7 the following new       
paragraph3  7#bd7 any payment made to or
 for the benefit of an employee if at   
the time of such payment it is          
reasonable to believe that the employee 
will be able to exclude such payment    
from income under section #cf;,c7b77#c74
  4  7#e7 ,social security trust funds  
held harmless ,there is hereby          

appropriated 7out of any money in the   
,treasury not otherwise appropriated7   
for each fiscal year to each fund under 
the ,social ,security ,act an amount    
equal to the reduction in the transfers 
to such fund for such fiscal year by    
reason of the amendment made by         
paragraph 7#a74  7f7 ,exemption from    
,,erisa requirements ,subsection 7b7 of 
section #d of the ,employee ,retirement 
,income ,security ,act of #aigd is      
amended by striking or at the end of    
paragraph 7#d71 by striking the period  
at the end of paragraph 7#e7 and        
inserting 2 or1 and by inserting after  
paragraph 7#e7 the following new        
paragraph3  7#f7 such plan is maintained
 solely for the purposes of             
establishing1 and making contributions  
to1 lifelong learning accounts 7within  
the meaning of section #cf;,c7c7 of the 
,internal ,revenue ,code of #aihf7 on   
behalf of employees4  4  7g7 ,conforming
 amendments  7#a7 ,the table of sections
 for subpart ,c of part ,,iv of         

subchapter ,a of chapter #a of the      
,internal ,revenue ,code of #aihf is    
amended by inserting after the item     
relating to section #cf;,b the following
 new item3  ,sec4 #cf;,c4 ,contributions
 to lifelong learning accounts4  4  7#b7
 ,section #fbaa7;b77#d77;,a7 of such    
,code is amended by inserting #cf;,c1   
after #cf;,b14  7#c7 ,section           
#acbd7;b77#b7 of title #ca1 ,united     
,states ,code1 is amended by inserting  
#cf;,c1 after #cf;,b14  7h7 ,effective  
date ,the amendments made by this       
section shall apply to taxable years    
beginning after ,december #ca1 #bjac4   
#f4 ,credit for small businesses with   
respect to lifelong learning account    
programs  7a7 ,in general ,subpart ,d of
 part ,,iv of subchapter ,a of chapter  
#a of the ,internal ,revenue ,code of   
#aihf 7relating to business related     
credits7 is amended by adding at the end
 the following new section3  #de,s4     
,lifelong learning accounts credit  7a7 
,in general ,for purposes of section    

#ch1 in the case of an eligible         
employer1 the lifelong learning accounts
 credit is the sum of--  7#a7 the       
lifelong learning account contributions 
credit1 and  7#b7 the lifelong learning 
account administrative costs credit4    
7b7 ,lifelong learning account          
contributions credit  7#a7 ,in general  
,for purposes of this section1 the term 
lifelong learning account contributions 
credit means the amount equal to #be    
percent of the aggregate amount paid or 
incurred by the taxpayer during the     
taxable year as contributions to        
lifelong learning accounts 7within the  
meaning of section #cf;,c7c77 of        
employees of the taxpayer4  7#b7 ,dollar
 limitation ,the amount of the          
contributions taken into account under  
paragraph 7#a7 with respect to any      
employee for any taxable year shall not 
exceed #c1jjj4  7c7 ,lifelong learning  
account administrative costs credit     
7#a7 ,in general ,for purposes of this  
section1 the term lifelong learning     

account administrative costs credit     
means the amount equal to #ej percent of
 the aggregate amount paid or incurred  
by the taxpayer during the taxable year 
as administrative expenses in carrying  
out a program to make payments to the   
lifelong learning accounts 7within the  
meaning of section #cf;,c7c77 of        
employees of the taxpayer4  7#b7 ,dollar
 limitation ,the amount of the credit   
determined under this subsection for any
 taxable year shall not exceed--  7,a7  
#ejj per eligible employer for the first
 credit year and each of the #b taxable 
years immediately following the first   
credit year1 and  7,b7 zero for any     
other taxable year4  7#c7 ,first credit 
year ,for purposes of this subsection1  
the term first credit year means the    
first taxable year for which the        
taxpayer claims a credit under this     
section4  7#d7 ,special rules ,for      
purposes of this subsection1 rules      
similar to the rules of paragraphs 7#a71
 7#b71 and 7#c7 of section #de;,e7e7    

shall apply4  7d7 ,eligible employer    
,for purposes of this section1 the term 
eligible employer has the meaning given 
such term by section                    
#djh7p77#b77;,c77,i7 applied--  7#a7 by 
substituting #bej employees for #ajj    
employees in subclause 7,i7 thereof1    
7#b7 for purposes of determining        
eligibility for the lifelong learning   
account contributions credit for any    
taxable year1 without regard to         
subclause 7,,ii7 thereof1 and  7#c7 for 
purposes of determining eligibility for 
the lifelong learning account           
administrative costs credit for any     
taxable year1 by treating the plan      
described in subsection 7c77#a7 as the  
plan referred to in such subclause      
7,,ii74  7e7 ,recapture in case of      
employee coercion1 etc ,if the          
,secretary1 after consultation with the 
,secretary of ,labor1 determines that   
the taxpayer has required1 coerced1 or  
influenced an employee to establish a   
life long learning account or to use1 or

 refrain from using1 funds from the     
account for any eligible education or   
skill development expense 7as defined in
 section #cf;,c7--  7#a7 the tax imposed
 on the taxpayer under this subtitle for
 the taxable year which includes the    
date of such determination shall be     
increased by the amount of the credits  
allowed under this section to the       
taxpayer for all taxable years which    
include any portion of the period during
 which such requirement1 coercion1 or   
influence occurred1 and  7#b7 no credit 
shall be allowed to the taxpayer under  
this section for the taxable year which 
includes the date of such determination 
and the succeeding taxable year4  4  7b7
 ,credit part of general business credit
 ,section #ch7;b7 of the ,internal      
,revenue ,code of #aihf is amended by   
striking plus at the end of paragraph   
7#ce71 by striking the period at the end
 of paragraph 7#cf7 and inserting 1     
plus1 and by adding at the end the      
following new paragraph3  7#cg7 the     

lifelong learning accounts credit       
determined under section #de,s4  4  7c7 
,deduction for unused credit ,section   
#aif7;c7 of the ,internal ,revenue ,code
 of #aihf is amended by striking and at 
the end of paragraph 7#ac71 by striking 
the period at the end of paragraph 7#ad7
 and inserting 1 and1 and by adding at  
the end the following new paragraph3    
7#ae7 the lifelong learning accounts    
credit determined under section #de,s4  
4  7d7 ,clerical amendment ,the table of
 sections for subpart ,d of part ,,iv of
 subchapter ,a of chapter #a of the     
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new item3  ,sec4 #de,s4       
,lifelong learning accounts credit4  4  
7e7 ,effective date ,the amendments made
 by this section shall apply to taxable 
years beginning after ,december #ca1    
#bjac4