,,ii #aafth ,,congress #ast ,session ,s4 #eci ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #be1 #bjai,mr4 ,warner 7for himself and ,mr4 ,coons7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to establish ,lifelong ,learning and ,training ,account programs4 #a4 ,short title ,this ,act may be cited as the ,lifelong ,learning and ,training ,account ,act of #bjai4 #b4 ,lifelong ,learning and ,training ,account programs 7a7 ,in general ,part ,,viii of subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #ecj the following new section3 #eca4 ,lifelong ,learning and ,training ,account programs 7a7 ,in general ,a ,lifelong ,learning and ,training ,account program shall be exempt from taxation under this subtitle4 ,notwithstanding the preceding sentence1 such program shall be subject to the taxes imposed by section #eaa4 7b7 ,lifelong ,learning and ,training ,account program ,for purposes of this section-- 7#a7 ,in general ,the term ,lifelong ,learning and ,training ,account program means a program established and maintained by a ,state or agency or instrumentality thereof-- 7,a7 under which the designated beneficiary of the account or their employer may make contributions to an account which is established for the purpose of meeting the qualified training expenditures of such beneficiary1 and 7,b7 which meets the other requirements of this section4 7#b7 ,qualified trust ,except to the extent provided in regulations1 a program shall not be treated as a ,lifelong ,learning and ,training ,account program unless such program provides that amounts are held in a qualified trust and such program has received a ruling or determination by the ,secretary that such program meets the applicable requirements for a ,lifelong ,learning and ,training ,account program4 ,for purposes of the preceding sentence1 the term qualified trust means a trust which is created or organized in the ,united ,states for the exclusive benefit of designated beneficiaries and with respect to which the requirements of paragraphs 7#b7 and 7#e7 of section #djh7;a7 are met4 7#c7 ,requirements 7,a7 ,in general ,a program shall not be treated as a ,lifelong ,learning and ,training ,account program unless it provides-- 7i7 that contributions may only be made in cash1 7ii7 separate accounting for each designated beneficiary1 7iii7 that no interest in the program or any portion thereof may be used as security for a loan1 7iv7 that no contributions may be made on behalf of a designated beneficiary-- 7,i7 in excess of #b1jjj during any calendar year1 7,,ii7 if the total amount in the account of such beneficiary is in excess of #ae1jjj1 or 7,,iii7 during any calendar year which begins after such beneficiary attains #eg years of age1 7v7 that any distribution shall be made in accordance with the requirements under subparagraphs 7,b7 and 7,c71 and 7vi7 that required distributions shall be made in accordance with paragraph 7#f74 7,b7 ,method of distribution 7i7 ,in general ,for purposes of any distribution from the account of a designated beneficiary under a ,lifelong ,learning and ,training ,account program-- 7,i7 the applicable amount of such distribution shall be drawn from amounts transferred to the account of the designated beneficiary pursuant to paragraph 7#d7 and any earnings thereon1 and 7,,ii7 after application of subclause 7,i71 the remainder of such distribution shall be drawn from amounts contributed by the designated beneficiary or their employer and any earnings thereon4 7ii7 ,applicable amount ,for purposes of clause 7i77,i71 the applicable amount shall be an amount equal to the lesser of-- 7,i7 #ej percent of the amount of the distribution1 or 7,,ii7 the total amount of any available funds in the account of the designated beneficiary which were transferred pursuant to paragraph 7#d7 and any earnings thereon4 7iii7 ,other methods ,the ,secretary may amend1 alter1 or supplement the distribution requirements under this subparagraph in such manner as the ,secretary deems appropriate4 7,c7 ,reporting ,for purposes of any distribution from the account of a designated beneficiary under a ,lifelong ,learning and ,training ,account program1 the administrator shall provide the beneficiary and the ,secretary with such information as the ,secretary deems appropriate1 including-- 7i7 the amount of such distribution1 including the applicable amount of such distribution 7as described in subparagraph 7,b77ii771 and 7ii7 whether such distribution was provided-- 7,i7 directly to the program described in clauses 7i7 through 7iii7 of subsection 7e77#e77;,a7 which provides training to the beneficiary1 or 7,,ii7 to reimburse the beneficiary for any qualified training expenditures incurred by such beneficiary4 7#d7 ,matching funds 7,a7 ,transfer to beneficiary account 7i7 ,in general ,out of any moneys in the ,treasury not otherwise appropriated1 the ,secretary shall transfer to the account of any designated beneficiary under a ,lifelong ,learning and ,training ,account program an amount equal to any amounts contributed to such account by such beneficiary or their employer which occur during any calendar year which begins after the date on which such beneficiary attains #bd years of age4 7ii7 ,limitation ,any amounts transferred by the ,secretary to the account of any designated beneficiary pursuant to clause 7i7 during any calendar year-- 7,i7 shall not exceed #a1jjj1 and 7,,ii7 shall not be subject to the limitation under paragraph 7#c77;,a77iv77,i74 7,b7 ,deposit of matching funds ,any amounts required to be transferred to the account of a designated beneficiary under subparagraph 7,a7 shall be transferred by the ,secretary as soon as is practicable following any contribution to such account by such beneficiary or their employer4 7,c7 ,reduction in matching funds 7i7 ,in general ,for each applicable taxable year1 the dollar amount in subparagraph 7,a77ii77,i7 shall be reduced 7but not below zero7 by an amount equal to the greater of-- 7,i7 an amount which bears the same ratio to such dollar amount as-- 7aa7 the amount 7not less than zero7 equal to the adjusted gross income of the taxpayer for the applicable taxable year minus #gb1jjj1 bears to 7bb7 #aj1jjj1 or 7,,ii7 an amount which bears the same ratio to such dollar amount as-- 7aa7 the amount 7not less than zero7 equal to the earned income 7as described in section #cb7;c77#b77 of the designated beneficiary for the applicable taxable year minus #gb1jjj1 bears to 7bb7 #aj1jjj4 7ii7 ,married individuals ,in the case of a designated beneficiary who is married 7within the meaning of section #ggjc7-- 7,i7 if such beneficiary has filed a joint return for the applicable taxable year1 each of the dollar amounts under clause 7i77,i7 shall be doubled for such year1 or 7,,ii7 if such beneficiary has not filed a joint return for the applicable taxable year1 the dollar amount in subparagraph 7,a77ii77,i7 shall be reduced to zero for such year4 7iii7 ,applicable taxable year ,for purposes of this subparagraph1 the term applicable taxable year means the taxable year in which the transfer described in subparagraph 7,a77i7 is made to the account of the designated beneficiary4 7iv7 ,excess transfers ,if the total amount of any transfers made to the account of a designated beneficiary pursuant to subparagraph 7,a77i7 during an applicable taxable year exceeds the dollar amount under subparagraph 7,a77ii77,i7 7after application of clauses 7i7 and 7ii77 for such taxable year1 the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess4 7,d7 ,distribution of matching funds 7i7 ,in general ,any distribution under a ,lifelong ,learning and ,training ,account program made from amounts transferred pursuant to this paragraph shall be made by the administrator-- 7,i7 directly to the program described in clauses 7i7 through 7iii7 of subsection 7e77#e77;,a7 which provides training to the designated beneficiary1 or 7,,ii7 to reimburse the designated beneficiary for any qualified training expenditures incurred by such beneficiary1 provided that the beneficiary has provided the administrator with such documentation as is deemed necessary to ensure compliance with clause 7ii74 7ii7 ,prohibition ,no amounts transferred pursuant to this paragraph to any account of a designated beneficiary under a ,lifelong ,learning and ,training ,account program may be distributed for any purpose other than for payment or reimbursement of qualified training expenditures4 7,e7 ,additional reduction for non-qualified distributions ,for purposes of any amount of a distribution under a ,lifelong ,learning and ,training ,account program which is includible in the gross income of the designated beneficiary1 any available funds in the account of such beneficiary which were transferred pursuant to this paragraph 7and any earnings thereon7 shall also be reduced by such amount4 7,f7 ,rescission of matching funds ,on ,january #a of the applicable calendar year1 any available funds in the account of such beneficiary which were transferred pursuant to this paragraph 7and any earnings thereon7 shall be reduced to zero4 7#e7 ,investment 7,a7 ,in general ,any contributions or transfers to a ,lifelong ,learning and ,training ,account program 7and any earnings thereon7 shall be invested by the administrator in ,united ,states ,treasury securities with a maturity date of not greater than #aj years4 7,b7 ,secretarial authority ,the ,secretary may prescribe such regulations1 rules1 or other guidance as may be necessary or appropriate for purposes of applying this paragraph4 7#f7 ,required distributions ,on ,january #a of the applicable calendar year1 the total amount of available funds in the account of the designated beneficiary which were contributed by the designated beneficiary or their employer 7and any earnings thereon7 shall be distributed to such beneficiary4 7c7 ,tax treatment 7#a7 ,in general ,except as otherwise provided in this subsection1 no amount shall be includible in gross income of-- 7,a7 a designated beneficiary under a ,lifelong ,learning and ,training ,account program1 or 7,b7 an employer of such beneficiary that contributes to such program on behalf of such beneficiary1 with respect to any distribution or earnings under such program4 7#b7 ,distributions 7,a7 ,in general ,any distribution under a ,lifelong ,learning and ,training ,account program shall be includible in the gross income of the distributee in the manner as provided under section #gb to the extent not excluded from gross income under any other provision of this chapter4 7,b7 ,distributions for qualified training expenditures 7i7 ,in general ,in the case of any distributions1 if such distributions do not exceed the qualified training expenditures of the designated beneficiary1 no amount shall be includible in gross income4 7ii7 ,coordination with other credits and deductions ,for purposes of determining the credit allowed under section #be;,a or the deduction allowed under section #bbb1 no distribution under a ,lifelong ,learning and ,training ,account program shall be included as qualified tuition and related expenses under such sections4 7,c7 ,change in beneficiaries or programs 7i7 ,rollovers ,subparagraph 7,a7 shall not apply to that portion of any distribution which1 within #fj days of such distribution1 is transferred-- 7,i7 to another ,lifelong ,learning and ,training ,account program for the benefit of the designated beneficiary1 or 7,,ii7 to the credit of another designated beneficiary under a ,lifelong ,learning and ,training ,account program who is a member of the family of the designated beneficiary with respect to which the distribution was made4 7ii7 ,change in designated beneficiaries ,any change in the designated beneficiary of an interest in a ,lifelong ,learning and ,training ,account program shall not be treated as a distribution for purposes of subparagraph 7,a7 if the new beneficiary is a member of the family of the old beneficiary4 7iii7 ,limitation on certain rollovers ,clause 7i77,i7 shall not apply to any transfer if such transfer occurs within #ab months from the date of a previous transfer to any ,lifelong ,learning and ,training ,account program for the benefit of the designated beneficiary4 7iv7 ,matching funds forfeited ,in the case of any transfer described in clause 7i77,,ii7 or any change in the designated beneficiary of an interest in a ,lifelong ,learning and ,training ,account program 7with the exception of any change due to the death of the old beneficiary71 any amounts transferred to the account of the designated beneficiary under subsection 7b77#d71 and any earnings thereon1 shall be reduced 7but not below zero7 by an amount equal to the total amount transferred to any account of any other beneficiary4 7,d7 ,special rule for contributions of refunded amounts ,in the case of a beneficiary who receives a refund of any qualified training expenditures from any program described in clauses 7i7 through 7iii7 of subsection 7e77#e77;,a71 subparagraph 7,a7 shall not apply to that portion of any distribution for the taxable year which is recontributed to a ,lifelong ,learning and ,training ,account program of which such individual is a beneficiary1 but only to the extent such recontribution is made not later than #fj days after the date of such refund and does not exceed the refunded amount4 7#c7 ,estate tax treatment 7,a7 ,in general ,no amount shall be includible in the gross estate of any individual for purposes of chapter #aa by reason of an interest in a ,lifelong ,learning and ,training ,account program4 7,b7 ,amounts includible in estate of designated beneficiary in certain cases ,subparagraph 7,a7 shall not apply to amounts distributed on account of the death of a beneficiary4 7#d7 ,other gift tax rules ,for purposes of chapters #ab and #ac-- 7,a7 ,treatment of distributions ,except as provided in subparagraph 7,b71 in no event shall a distribution from a ,lifelong ,learning and ,training ,account program be treated as a taxable gift4 7,b7 ,treatment of designation of new beneficiary ,the taxes imposed by chapters #ab and #ac shall apply to a transfer by reason of a change in the designated beneficiary under the program 7or a rollover to the account of a new beneficiary7 unless the new beneficiary is-- 7i7 assigned to the same generation as 7or a higher generation than7 the old beneficiary 7determined in accordance with section #bfea71 and 7ii7 a member of the family of the old beneficiary4 7#e7 ,additional tax ,the tax imposed by section #ecj7;d77#d7 shall apply to any payment or distribution from a ,lifelong ,learning and ,training ,account program in the same manner as such tax applies to a payment or distribution from a ,coverdell education savings account4 7d7 ,reports ,each officer or employee having control of the ,lifelong ,learning and ,training ,account program or their designee shall make such reports regarding such program to the ,secretary and to designated beneficiaries with respect to contributions1 transfers1 distributions1 and such other matters as the ,secretary may require4 ,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 the ,secretary4 7e7 ,other definitions and special rules ,for purposes of this section-- 7#a7 ,administrator ,the term administrator means the entity which established the ,lifelong ,learning and ,training ,account program and maintains such program1 as described in subsection 7b77#a74 7#b7 ,applicable calendar year ,the term applicable calendar year means the calendar year beginning after the date on which a designated beneficiary attained #fj years of age4 7#c7 ,designated beneficiary ,the term designated beneficiary means-- 7,a7 the individual designated at the commencement of participation in the ,lifelong ,learning and ,training ,account program as the beneficiary of amounts paid 7or to be paid7 to the program1 or 7,b7 in the case of a change in beneficiaries described in subsection 7c77#b77;,c71 the individual who is the new beneficiary4 7#d7 ,member of family ,the term member of the family means an individual-- 7,a7 who has attained #be years of age1 and 7,b7 who is1 with respect to any designated beneficiary-- 7i7 the spouse of such beneficiary1 7ii7 an individual who bears a relationship to such beneficiary which is described in subparagraphs 7,a7 through 7,g7 of section #aeb7;d77#b71 7iii7 the spouse of any individual described in clause 7ii71 or 7iv7 any first cousin of such beneficiary4 7#e7 ,qualified training expenditures 7,a7 ,in general ,the term qualified training expenditures means any expenditures for training which results in the attainment of a recognized postsecondary credential and which is provided through-- 7i7 a program of training services which is listed under section #abb7;d7 of the ,workforce ,innovation and ,opportunity ,act 7#bi ,u4,s4,c4 #caeb7;d771 7ii7 a program which is conducted by an area career and technical education school1 a community college1 or a labor organization1 or 7iii7 a program which is sponsored and administered by an industry trade association1 industry or sector partnership1 or labor organization4 7,b7 ,related definitions ,for purposes of subparagraph 7,a7-- 7i7 ,area career and technical education school ,the term area career and technical education school means such a school1 as defined in section #c of the ,carl ,d4 ,perkins ,career and ,technical ,education ,act of #bjjf 7#bj ,u4,s4,c4 #bcjb71 which participates in a program under that ,act 7#bj ,u4,s4,c4 #bcja et seq474 7ii7 ,community college ,the term community college means an institution which-- 7,i7 is a junior or community college as defined in section #cab7;f7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajeh7;f771 except that the institution need not meet the requirements of paragraph 7#a7 of that section2 and 7,,ii7 participates in a program under title ,,iv of that ,act 7#bj ,u4,s4,c4 #ajgj et seq474 7iii7 ,industry or sector partnership ,the term industry or sector partnership has the meaning given such term under section #c of the ,workforce ,innovation and ,opportunity ,act 7#bi ,u4,s4,c4 #cajb74 7iv7 ,industry trade association ,the term industry trade association means an organization which-- 7,i7 is described in paragraph 7#c7 or 7#f7 of section #eja7;c7 and exempt from taxation under section #eja7;a72 and 7,,ii7 is representing an industry4 7v7 ,labor organization ,the term labor organization means a labor organization1 within the meaning of the term in section #eja7;c77#e74 7vi7 ,recognized postsecondary credential ,the term recognized postsecondary credential means a credential consisting of an industry-recognized certificate or certification1 a license recognized by the ,state involved or ,federal ,government1 or an associate or baccalaureate degree4 7,c7 ,exclusion ,the term qualified training expenditures shall not include any amounts paid for meals1 lodging1 transportation1 or other services incidental to any training described in subparagraph 7,a74 7#f7 ,application of ,section #ead ,an interest in a ,lifelong ,learning and ,training ,account program shall not be treated as debt for purposes of section #ead4 7f7 ,public awareness 7#a7 ,in general ,the ,secretary shall conduct a public information campaign1 utilizing paid advertising1 to inform the public of the availability of ,lifelong ,learning and ,training ,account programs4 7#b7 ,authorization of appropriations 7,a7 ,in general ,there is authorized to be appropriated such sums as are necessary to carry out this subsection4 7,b7 ,availability ,any sums appropriated under the authorization contained in this subsection shall remain available1 without fiscal year limitation1 until expended4 7g7 ,regulations ,notwithstanding any other provision of this section1 the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section and to prevent abuse of such purposes1 including regulations under chapters #aa1 #ab1 and #ac of this title4 4 7b7 ,conforming amendments 7#a7 ,section #ace7;d77#b77;,b7 of the ,internal ,revenue ,code of #aihf is amended by striking sections #ebi7;c77#c77;,b7 and #ecj7;d77#b7 and inserting sections #ebi7;c77#c77;,b71 #ecj7;d77#b71 and #eca7;c77#b77;,b74 7#b7 ,the table of sections for part ,,viii of subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #ecj the following new item3 ,sec4 #eca4 ,lifelong ,learning and ,training ,account programs4 4 7c7 ,administration assistance 7#a7 ,in general ,the ,secretary of the ,treasury1 or the ,secretary's delegate 7referred to in this paragraph as the ,secretary71 shall make a grant1 in such amount as the ,secretary determines appropriate1 to each ,state or agency or instrumentality thereof that has established and maintains a ,lifelong ,learning and ,training ,account program under section #eca of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a771 for purposes of administering such program4 7#b7 ,authorization of appropriations ,there are authorized to be appropriated such sums as may be necessary to carry out the purposes of this subsection4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4