,i #aaith ,,congress #b;d ,session ,h4 ,r4 #iefh ,,in ,,the ,,house ,,of ,,representatives ,june #cj1 #bjbf,mr4 ,steube 7for himself and ,mr4 ,boyle of ,pennsylvania7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to establish name1 image1 and likeness investment accounts for student-athletes1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,helping ,undergraduate ,students ,thrive with ,long-,term ,earnings ,act or the ,,hustle ,act4 #b4 ,,nil investment accounts 7a7 ,in general ,subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by section #gjbjd of ,public ,law #aai-ba1 is amended by adding at the end the following new part3 ,x ,,nil ,investment ,accounts #ecj;,b4 ,,nil investment accounts 7a7 ,general rule ,an ,,nil investment account shall be exempt from taxation under this subtitle4 ,notwithstanding the preceding sentence1 the ,,nil investment account shall be subject to the taxes imposed by section #eaa 7relating to imposition of tax on unrelated business income of charitable organizations74 7b7 ,definitions and special rules ,for purposes of this section3 7#a7 ,designated beneficiary ,the term designated beneficiary means the eligible athlete who established the ,,nil investment account and is the owner of such account4 7#b7 ,eligible athlete 7,a7 ,in general ,the term eligible athlete means an individual who-- 7i7 is enrolled as a student at a participating institution of higher education1 and 7ii7 participates in an amateur or collegiate athletic program4 7,b7 ,secretarial authority ,the ,secretary1 in consultation with the ,secretary of ,education1 shall have the authority to-- 7i7 further define the criteria for participation in an amateur or collegiate athletic program for purposes of subparagraph 7,a77ii71 7ii7 establish procedures for verifying an individual's status as an eligible athlete1 and 7iii7 issue guidance regarding the application of the requirements described in subparagraph 7,a7 in cases where an individual's enrollment or athletic participation status changes during a taxable year4 7#c7 ,participating institution of higher education 7,a7 ,in general ,for purposes of this section1 the term participating institution of higher education means an institution of higher education which elects 7pursuant to subparagraph 7,b77 to participate under this section and to comply with any requirements applicable to such institution of higher education under this section4 7,b7 ,election and revocation 7i7 ,election ,any election made by an institution of higher education to participate under this section shall be effective for the academic year with respect to which it is made and for all subsequent academic years and1 once made1 may be revoked only pursuant to clause 7ii74 7ii7 ,revocation ,a revocation of an election described in clause 7i7 may be made by an institution of higher education only if-- 7,i7 such institution of higher education provides notice of such revocation to all eligible athletes enrolled at such institution of higher education1 and 7,,ii7 such revocation takes effect no earlier than the first academic year beginning after the date which is #ab months after the date on which the notice described in subclause 7,i7 has been provided4 7,c7 ,institution of higher education ,for purposes of this section1 the term institution of higher education has the same meaning given such term in section #ajb of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb74 7#d7 ,,nil investment account ,the term ,,nil investment account means a trust created or organized in the ,united ,states exclusively for the purpose of receiving contributions of qualified ,,nil income and providing distributions to the individual who is the designated beneficiary of the trust 7and designated as an ,,nil investment account at the time created or organized71 but only if the written governing instrument creating the trust meets the following requirements3 7,a7 ,no contribution will be accepted-- 7i7 unless it is in cash and is made by an eligible athlete from qualified ,,nil income1 or 7ii7 except in the case of rollover contributions1 if such contribution would not be permitted under paragraph 7#f74 7,b7 ,the trustee is a bank 7as defined in section #djh7n77 or another person who demonstrates to the satisfaction of the ,secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section4 7,c7 ,no part of the trust assets will be invested in life insurance contracts4 7,d7 ,the assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund4 7#e7 ,qualified ,,nil income ,the term qualified ,,nil income means any income received by an eligible athlete that is derived from the use of such athlete's name1 image1 or likeness1 including endorsements1 appearances1 social media content creation1 and licensing arrangements4 7#f7 ,contribution limitations ,no contribution will be accepted to an ,,nil investment account for any eligible athlete-- 7,a7 which1 for any taxable year1 is in excess of the dollar amount determined under section #bejc7;b7 for the calendar year in which such taxable year began1 and 7,b7 after the end of the fifth taxable year in which such athlete-- 7i7 has received qualified ,,nil income1 and 7ii7 was enrolled at a participating institution of higher education4 7#g7 ,treatment of contributions ,with respect to any qualified ,,nil income received by an eligible athlete which is contributed to an ,,nil investment account1 at the election of such eligible athlete1 gross income shall not include such qualified ,,nil income4 7#h7 ,treatment of self-employment taxes 7,a7 ,in general ,for purposes of chapter #b 7relating to tax on self-employment income71 any qualified ,,nil income contributed to an ,,nil investment account for which an election has been made pursuant to paragraph 7#g7 shall not be taken into account as net earnings from self-employment 7within the meaning of section #adjb7;a77 for the taxable year of contribution4 7,b7 ,distributions ,any distribution from an ,,nil investment account that is includible in gross income under subsection 7c77#a7 shall be treated as net earnings from self-employment 7within the meaning of section #adjb7;a77 for purposes of chapter #b in the taxable year of distribution4 7#i7 ,limitations ,rules similar to the rules of paragraphs 7#d7 and 7#e7 of section #ebi7;b7 shall apply for purposes of this section4 7c7 ,tax treatment of distributions 7#a7 ,in general ,any distribution from an ,,nil investment account 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 ,tax treatment of distributions 7,a7 ,in general ,for purposes of applying paragraph 7#a71 a distribution shall be treated as-- 7i7 includible in gross income and taxed as ordinary income if made before the date on which the designated beneficiary-- 7,i7 graduates from a participating institution of higher education 7as provided in subparagraph 7,d771 or 7,,ii7 transfers from a participating institution of higher education to a non-participating institution of higher education 7as provided in subparagraph 7,e771 and 7ii7 includible in gross income and taxed at the rate applicable to long-term capital gains under section #a7;h7 if made on or after the date on which the designated beneficiary-- 7,i7 graduates from a participating institution of higher education 7as provided in subparagraph 7,d771 or 7,,ii7 transfers from a participating institution of higher education to a non-participating institution of higher education 7as provided in subparagraph 7,e771 but1 for purposes of clause 7ii71 only to the extent that such distribution does not exceed the limitation described in subparagraph 7,b7 for the taxable year4 7,b7 ,limitation on preferential tax treatment 7i7 ,in general ,the amount of distributions from an ,,nil investment account that may be taxed at the rate applicable to long-term capital gain under subparagraph 7,a77ii7 during any taxable year shall not exceed the amount described under section #a7;h77#a77;,b77i7 for an individual described in section #a7;c74 7ii7 ,excess amounts ,any distribution exceeding the limitation under clause 7i7 shall be includible in gross income1 taxed as ordinary income1 and 7except in the case of a qualified distribution described in paragraph 7#c77;,b77 subject to the additional tax under paragraph 7#c77;,a74 7,c7 ,student transfers between institutions 7i7 ,in general ,in the case of a designated beneficiary who transfers from one participating institution of higher education to another participating institution of higher education 7referred to in this subparagraph as the subsequent institution71 the graduation date for purposes of this section shall be the date on which the designated beneficiary graduates from the subsequent institution4 7ii7 ,notification requirement ,a designated beneficiary who transfers to a subsequent institution shall notify the trustee of the ,,nil investment account of such transfer within #fj days of enrollment at the subsequent institution4 ,the subsequent institution shall1 upon the request of the designated beneficiary1 confirm such enrollment to the trustee of the ,,nil investment account4 7iii7 ,multiple transfers ,the rules of this paragraph shall apply to designated beneficiaries who transfer between multiple participating institutions of higher education1 with each subsequent institution being treated as the relevant institution for purposes of determining the graduation date4 7,d7 ,certification of graduation ,the participating institution of higher education from which the designated beneficiary graduates shall transmit documentation of the designated beneficiary's graduation directly to the trustee of the ,,nil investment account4 ,the ,secretary shall prescribe the form and manner of such certification4 7,e7 ,transfer to non-participating institution of higher education ,in the case of a designated beneficiary who transfers from a participating institution of higher education to a non-participating institution of higher education1 the participating institution of higher education shall notify the trustee of the ,,nil investment account of such transfer4 7#c7 ,additional tax for distributions not used for qualified expenses 7,a7 ,in general ,the tax imposed by this chapter for any taxable year on any taxpayer who receives a distribution from an ,,nil investment account-- 7i7 before the date on which the designated beneficiary graduates from an institution of higher education 7as provided in paragraph 7#b77;,d771 or 7ii7 in the case of a distribution described in paragraph 7#b77;,a77ii71 which is in excess of the limitation under paragraph 7#b77;,b77i71 shall be increased by #aj percent of the amount which is includible in gross income1 unless such distribution is a qualified distribution4 7,b7 ,qualified distributions ,for purposes of subparagraph 7,a71 a distribution shall be treated as a qualified distribution if-- 7i7 the distribution is made to a beneficiary 7or to the estate of the designated beneficiary7 on or after the death of the designated beneficiary1 7ii7 the distribution is attributable to the designated beneficiary's being disabled 7within the meaning of section #gb7m77#g771 7iii7 the distribution is used for qualified expenses of the designated beneficiary1 or 7iv7 the distribution is part of a rollover contribution described in paragraph 7#d74 7,c7 ,qualified expenses ,for purposes of subparagraph 7,b77iii71 the term qualified expenses means expenses incurred by the designated beneficiary for any of the following3 7i7 ,career transition costs1 including-- 7,i7 professional training1 certification1 or education costs1 7,,ii7 moving expenses 7as defined in section #bag7;b77 related to post-athletic career opportunities1 or 7,,iii7 professional services related to career planning and development4 7ii7 ,qualified higher education expenses 7as defined in section #ebi7;e77#c77 of the designated beneficiary4 7iii7 ,qualified medical expenses 7as defined in section #bac7;d77 of the designated beneficiary to the extent such expenses exceed #g4e percent of the designated beneficiary's adjusted gross income for the taxable year in which such expenses are incurred4 7iv7 ,such other purposes as are determined appropriate by the ,secretary4 7,d7 ,contributions returned before certain date ,subparagraph 7,a7 shall not apply to the distribution of any contribution made during a taxable year if-- 7i7 such distribution is received on or before the day prescribed by law 7including extensions of time7 for filing such designated beneficiary's return for such taxable year1 and 7ii7 such distribution is accompanied by the amount of net income attributable to such excess contribution4 ,in the case of such a distribution1 for purposes of section #fa1 any net income described in clause 7ii7 shall be included in gross income for the taxable year in which such excess contribution was made4 7#d7 ,change in beneficiaries or programs 7,a7 ,rollovers ,paragraph 7#a7 shall not apply to that portion of any distribution from an ,,nil investment account which1 within #fj days of such distribution1 is transferred into another ,,nil investment account for the benefit of-- 7i7 the designated beneficiary1 or 7ii7 an eligible athlete who is a member of the family of such beneficiary4 7,b7 ,change in designated beneficiaries ,any change in the designated beneficiary of an ,,nil investment account shall not be treated as a distribution for purposes of paragraph 7#a7 if the new beneficiary is-- 7i7 an eligible athlete for such taxable year1 and 7ii7 a member of the family of the former beneficiary4 7,c7 ,limitation on certain rollovers ,subparagraph 7,a7 shall not apply to any transfer if such transfer occurs within #ab months from the date of a previous transfer to any ,,nil investment account for the benefit of the designated beneficiary4 7#e7 ,special rules for applying estate and gift taxes with respect to account ,rules similar to the rules of paragraphs 7#b71 7#d71 and 7#e7 of section #ebi7;c7 shall apply for purposes of this section4 7#f7 ,member of the family ,for purposes of this subsection1 the term member of the family means1 with respect to any designated beneficiary1 an individual who bears a relationship to such beneficiary which is described in section #ebi7;e77#b74 7#g7 ,loss of ,,nil investment account treatment ,if an ,,nil investment account is established for a designated beneficiary1 no account subsequently established for such beneficiary shall be treated as an ,,nil investment account4 ,the preceding sentence shall not apply in the case of an account established for purposes of a transfer described in paragraph 7#d77;,a7 if the transferor account is closed as of the end of the #fj-;day period referred to in such paragraph4 7#h7 ,transition to retirement accounts 7,a7 ,in general ,subject to subparagraph 7,c71 an individual who has ceased to be an eligible athlete for at least #a year may elect to convert their ,,nil investment account1 in whole or in part1 to-- 7i7 an individual retirement account 7as defined in section #djh7;a771 7ii7 a ,roth ,,ira 7as defined in section #djh;,a7b771 or 7iii7 such other retirement arrangements as the ,secretary may specify in regulations4 7,b7 ,tax treatment ,a conversion under subparagraph 7,a7 shall be treated as a rollover contribution for purposes of this title4 7,c7 ,lifetime limitation ,with respect to any individual described in subparagraph 7,a71 the amount of any conversion of any ,,nil investment account to any other account or arrangement described in clause 7i71 7ii71 or 7iii7 of such subparagraph during any taxable year shall not exceed the excess 7if any7 of #ce1jjj over the aggregate amount of any prior conversions under this paragraph with respect to such individual for all prior taxable years4 7d7 ,tax treatment of accounts ,rules similar to the rules of paragraphs 7#b7 and 7#d7 of section #djh7;e7 shall apply to any ,,nil investment account4 7e7 ,education requirements 7#a7 ,in general ,the trustee of an ,,nil investment account shall make available to the designated beneficiary educational materials regarding-- 7,a7 the benefits and rules of the ,,nil investment account1 7,b7 basic principles of investing and financial planning1 7,c7 the importance of long-term financial security1 and 7,d7 such other topics as the ,secretary may specify in regulations4 7#b7 ,delivery of materials ,the educational materials required under paragraph 7#a7 shall be provided to a designated beneficiary-- 7,a7 upon the establishment of an ,,nil investment account1 and 7,b7 on an annual basis thereafter4 7f7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section1 including regulations-- 7#a7 to enforce the limitation described in subsection 7c77#g71 7#b7 providing for the information required to be presented to establish an ,,nil investment account1 7#c7 to identify additional qualified expenses pursuant to subsection 7c77#c77;,c77iv71 7#d7 to prevent fraud and abuse with respect to amounts claimed as qualified expenses1 7#e7 to ensure proper reporting and verification of ,,nil income sources1 7#f7 to establish procedures for tracking the number of taxable years in which an eligible athlete makes contributions to an ,,nil investment account1 7#g7 to establish procedures for determining the annual limit on preferential capital gains treatment under subsection 7c77#b77;,b71 7#h7 to establish procedures for the transition of ,,nil investment accounts to retirement accounts under subsection 7c77#h71 and 7#i7 to allow for transfers described in subsection 7c77#d74 4 7b7 ,clerical amendment ,the table of parts for subchapter ,f of chapter #a of such ,code is amended by adding at the end the following new item3 ,part ,x--,,nil ,investment ,accounts 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4