Skills Investment Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 898 To amend the Internal Revenue Code of 1986 to provide for lifelong learning accounts, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 30, 2019 Mr. KILMER (for himself, Mr. THOMPSON of Pennsylvania, Mr. PETERS, Mr. FITZPATRICK, Mr. POSEY, Miss RICE of New York, Mrs. LURIA, and Ms. KUSTER of New Hampshire) introduced the following bill; which was re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide for lifelong learning accounts, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Skills Investment Act 4 of 2019’’. 5 SEC. 2. COVERDELL LIFELONG LEARNING ACCOUNTS. 6 (a) IN GENERAL.— 7 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 898 IH (1) RENAMING OF COVERDELL EDUCATION SAV- 1 INGS ACCOUNTS.—Section 530 of the Internal Rev- 2 enue Code of 1986 is amended— 3 (A) by striking ‘‘Coverdell education sav- 4 ings account’’ each place it appears and insert- 5 ing ‘‘Coverdell lifelong learning account’’; and 6 (B) by striking ‘‘COVERDELL EDU- 7 CATION SAVINGS ACCOUNTS’’ in the heading 8 and inserting ‘‘COVERDELL LIFELONG 9 LEARNING ACCOUNTS’’. 10 (2) CONFORMING AMENDMENTS.— 11 (A) Section 26(b)(2)(E) of the Internal 12 Revenue Code of 1986 is amended by striking 13 ‘‘Coverdell education savings accounts’’ and in- 14 serting ‘‘Coverdell lifelong learning accounts’’. 15 (B) Section 72(e)(9) of such Code is 16 amended— 17 (i) by striking ‘‘Coverdell education 18 savings account’’ and inserting ‘‘Coverdell 19 lifelong learning account’’; and 20 (ii) by striking ‘‘COVERDELL EDU- 21 CATION SAVINGS ACCOUNT’’ in the heading 22 and inserting ‘‘COVERDELL LIFELONG 23 LEARNING ACCOUNT’’. 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 898 IH (C) Section 135(c)(2)(C) of such Code is 1 amended— 2 (i) by striking ‘‘Coverdell education 3 savings account’’ and inserting ‘‘Coverdell 4 lifelong learning account’’; and 5 (ii) by striking ‘‘COVERDELL EDU- 6 CATION SAVINGS ACCOUNT’’ in the heading 7 and inserting ‘‘COVERDELL LIFELONG 8 LEARNING ACCOUNT’’. 9 (D) Section 408A(e)(2)(A)(ii) of such Code 10 is amended by striking ‘‘Coverdell education 11 savings account’’ and inserting ‘‘Coverdell life- 12 long learning account’’. 13 (E) Section 529(c) of such Code is amend- 14 ed— 15 (i) by striking ‘‘COVERDELL EDU- 16 CATION SAVINGS ACCOUNTS’’ in the head- 17 ing of paragraph (3)(B)(vi) and inserting 18 ‘‘COVERDELL LIFELONG LEARNING AC- 19 COUNT’’; and 20 (ii) by striking ‘‘an Coverdell edu- 21 cation savings account’’ in paragraph (6) 22 and inserting ‘‘a Coverdell lifelong learning 23 account’’. 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 898 IH (F) Section 877A(e)(2) of such Code is 1 amended by striking ‘‘Coverdell education sav- 2 ings account’’ and inserting ‘‘Coverdell lifelong 3 learning account’’. 4 (G) Section 4973 of such Code is amend- 5 ed— 6 (i) by striking ‘‘Coverdell education 7 savings account’’ each place it appears in 8 subsections (a)(4) and (e)(2)(A) and in- 9 serting ‘‘Coverdell lifelong learning ac- 10 count’’; 11 (ii) by striking ‘‘Coverdell education 12 savings accounts’’ in subsection (e)(1) and 13 inserting ‘‘Coverdell lifelong learning ac- 14 counts’’; and 15 (iii) by striking ‘‘COVERDELL EDU- 16 CATION SAVINGS ACCOUNTS’’ in the head- 17 ing of subsection (e) and inserting 18 ‘‘COVERDELL LIFELONG LEARNING AC- 19 COUNT’’. 20 (H) Section 4975 of such Code is amend- 21 ed— 22 (i) by striking ‘‘Coverdell education 23 savings account’’ each place it appears in 24 subsections (c)(5) and (e)(1)(F) and in- 25 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 898 IH serting ‘‘Coverdell lifelong learning ac- 1 count’’; and 2 (ii) by striking ‘‘COVERDELL EDU- 3 CATION SAVINGS ACCOUNTS’’ in the head- 4 ing of subsection (c)(5) and inserting 5 ‘‘COVERDELL LIFELONG LEARNING AC- 6 COUNTS’’. 7 (I) Section 6693(a)(2)(F) of such Code is 8 amended by striking ‘‘Coverdell education sav- 9 ings accounts’’ and inserting ‘‘Coverdell lifelong 10 learning accounts’’. 11 (J) The table of sections for part VIII of 12 subchapter F of chapter 1 of such Code is 13 amended by striking ‘‘Coverdell education sav- 14 ings accounts’’ and inserting ‘‘Coverdell lifelong 15 learning accounts’’. 16 (3) TREATMENT OF EXISTING ACCOUNTS.—For 17 purposes of section 530(b)(1) of the Internal Rev- 18 enue Code of 1986, any account established before 19 January 1, 2019, and designated as a Coverdell edu- 20 cation savings account shall be deemed to have been 21 designated as a Coverdell lifelong learning account. 22 (b) EXPANDED USE OF ACCOUNTS.— 23 (1) ELIGIBLE EXPENSES.— 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 898 IH (A) IN GENERAL.—Section 530(b)(2)(A) of 1 the Internal Revenue Code of 1986 is amended 2 by striking ‘‘and’’ at the end of clause (i), by 3 striking the period at the end of clause (ii) and 4 inserting ‘‘, and’’, and by adding at the end the 5 following new clause: 6 ‘‘(iii) qualified educational or skill de- 7 velopment expenses (as defined in para- 8 graph (5)).’’. 9 (B) QUALIFIED EDUCATIONAL OR SKILL 10 DEVELOPMENT EXPENSES.—Section 530(b) of 11 such Code is amended by adding at the end the 12 following new paragraph: 13 ‘‘(5) QUALIFIED EDUCATIONAL OR SKILL DE- 14 VELOPMENT EXPENSES.—The term ‘qualified edu- 15 cational or skill development expenses’ means— 16 ‘‘(A) expenses paid or incurred— 17 ‘‘(i) after the beneficiary attains age 18 16, and 19 ‘‘(ii) for participation or enrollment of 20 the beneficiary in services or activities that 21 are— 22 ‘‘(I) training services described in 23 section 134(c)(3)(D) of the Workforce 24 Innovation and Opportunity Act (29 25 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 898 IH U.S.C. 3174(c)(3)(D)) that are of- 1 fered by a provider included on the 2 list of eligible providers of training 3 services described in section 122 of 4 such Act (29 U.S.C. 3152), 5 ‘‘(II) career and technical edu- 6 cation activities defined in section 3 of 7 the Carl D. Perkins Career and Tech- 8 nical Education Act of 2006 (20 9 U.S.C. 2302) that are offered through 10 an eligible institution (as defined in 11 such section), 12 ‘‘(III) career services described in 13 clauses (iii), (iv), and (xi) of section 14 134(c)(2)(A) of the Workforce Inno- 15 vation and Opportunity Act (29 16 U.S.C. 3174(c)(2)(A)) that are pro- 17 vided by providers eligible under sec- 18 tion 134(c)(2)(C) of such Act, 19 ‘‘(IV) youth activities described 20 in section 129(c)(2) of the Workforce 21 Innovation and Opportunity Act (29 22 U.S.C. 3164(c)(2)) that are provided 23 by eligible providers of youth work- 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 898 IH force investment activities under sec- 1 tion 123 of such Act, or 2 ‘‘(V) adult education and literacy 3 activities, as defined in section 203 of 4 the Adult Education and Family Lit- 5 eracy Act (29 U.S.C. 3272), that are 6 provided by eligible providers of adult 7 education and literacy activities under 8 section 231 of such Act (29 U.S.C. 9 3321), 10 ‘‘(B) expenses for transportation required 11 for or provided by any of the services or activi- 12 ties described in subparagraph (A), 13 ‘‘(C) expenses for testing necessary for en- 14 rollment in, or certification in connection with, 15 services or activities described in subparagraph 16 (A), or 17 ‘‘(D) expenses for the purchase of any 18 computer technology or equipment (as defined 19 in section 170(e)(6)(F)(i)) or internet access 20 and related services, if such technology, equip- 21 ment, or services are to be used by the bene- 22 ficiary for services or activities described in sub- 23 paragraph (A) during any of the years the ben- 24 eficiary is participating in or enrolled in any of 25 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 898 IH the services or activities described in subpara- 1 graph (A).’’. 2 (c) MODIFICATION OF RULES RELATING TO AGE RE- 3 STRICTIONS AND CONTRIBUTIONS.— 4 (1) $10,000 ACCOUNT LIMIT AFTER AGE 30.— 5 (A) IN GENERAL.—Subparagraph (E) of 6 section 530(b)(1) of the Internal Revenue Code 7 of 1986 is amended by inserting ‘‘in excess of 8 $10,000’’ after ‘‘any balance to the credit of 9 the designated beneficiary’’. 10 (B) CONTRIBUTION LIMIT.—Paragraph (1) 11 of section 530(b)(1) of such Code is amended 12 by striking ‘‘or’’ at the end of clause (ii), by 13 striking the period at the end of clause (iii) and 14 inserting ‘‘, or’’, and by adding at the end the 15 following new clause: 16 ‘‘(iv) in the case of a beneficiary who 17 is over the age of 30, if such contribution 18 would result in the balance of the account 19 exceeding $10,000.’’. 20 (2) INCREASED AGE LIMIT FOR CONTRIBU- 21 TIONS.—Clause (ii) of section 530(b)(1)(A) of the 22 Internal Revenue Code of 1986 is amended by strik- 23 ing ‘‘age 18’’ and inserting ‘‘age 70’’. 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 898 IH (3) INCREASED CONTRIBUTION LIMITATION 1 FOR INDIVIDUALS OVER AGE 30.— 2 (A) IN GENERAL.—Section 3 530(b)(1)(A)(iii) of the Internal Revenue Code 4 of 1986 is amended by inserting ‘‘($4,000 in 5 the case of an account the designated bene- 6 ficiary of which has attained age of 30 before 7 the end of the taxable year)’’ after ‘‘$2,000’’. 8 (B) CONFORMING AMENDMENT.—Section 9 4973(e)(1)(A) of such Code is amended by 10 striking ‘‘$2,000’’ and inserting ‘‘the limitation 11 applicable under section 530(b)(1)(A)(iii)’’. 12 (4) NO CHANGE IN BENEFICIARY AFTER AGE 13 30.—Paragraph (6) of section 530(d) of the Internal 14 Revenue Code of 1986 is amended by striking ‘‘shall 15 not be treated as a distribution for purposes of para- 16 graph (1) if the new beneficiary’’ and inserting 17 ‘‘shall not be treated as a distribution for purposes 18 of paragraph (1) if— 19 ‘‘(A) the old beneficiary has not attained 20 age 30 before the date of the change in bene- 21 ficiary, and 22 ‘‘(B) the new beneficiary’’. 23 (d) CREDIT FOR EMPLOYER CONTRIBUTIONS.— 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 898 IH (1) IN GENERAL.—Subpart D of part IV of 1 subchapter A of chapter 1 of the Internal Revenue 2 Code of 1986 is amended by adding at the end the 3 following new section: 4 ‘‘SEC. 45T. EMPLOYEE EDUCATIONAL SKILLS AND DEVEL- 5 OPMENT EXPENSES. 6 ‘‘(a) GENERAL RULE.—For purposes of section 38, 7 the employee educational skills and development contribu- 8 tion credit determined under this section for any taxable 9 year is 25 percent of the nonelective contributions made 10 by the taxpayer during the taxable year to a Coverdell life- 11 long learning account (as defined in section 530(b)) the 12 designated beneficiary of which is an employee of the tax- 13 payer. 14 ‘‘(b) SPECIAL RULES AND DEFINITIONS.—For pur- 15 poses of this section— 16 ‘‘(1) EMPLOYEE.— 17 ‘‘(A) CERTAIN EMPLOYEES EXCLUDED.— 18 The term ‘employee’ shall not include— 19 ‘‘(i) an employee within the meaning 20 of section 401(c)(1), 21 ‘‘(ii) any 2-percent shareholder (as de- 22 fined in section 1372(b)) of an S corpora- 23 tion, 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 898 IH ‘‘(iii) any 5-percent owner (as defined 1 in section 416(i)(1)(B)(i)) of taxpayer, or 2 ‘‘(iv) any individual who bears any of 3 the relationships described in subpara- 4 graphs (A) through (G) of section 5 152(d)(2) to, or is a dependent described 6 in section 152(d)(2)(H) of, an individual 7 described in clause (i), (ii), or (iii). 8 ‘‘(B) LEASED EMPLOYEES.—The term 9 ‘employee’ shall include a leased employee with- 10 in the meaning of section 414(n). 11 ‘‘(2) NONELECTIVE CONTRIBUTION.—The term 12 ‘nonelective contribution’ means an employer con- 13 tribution other than an employer contribution pursu- 14 ant to a salary reduction arrangement. 15 ‘‘(3) AGGREGATION AND OTHER RULES MADE 16 APPLICABLE.— 17 ‘‘(A) AGGREGATION RULES.—All employ- 18 ers treated as a single employer under sub- 19 section (b), (c), (m), or (o) of section 414 shall 20 be treated as a single employer for purposes of 21 this section. 22 ‘‘(B) OTHER RULES.—Rules similar to the 23 rules of subsections (c), (d), and (e) of section 24 52 shall apply.’’. 25 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H898.IH H898 pamtmann on DSKBFK8HB2PROD with BILLS 13 •HR 898 IH (2) CREDIT TREATED AS PART OF GENERAL 1 BUSINESS CREDIT.—Section 38(b) of such Code is 2 amended by striking ‘‘plus’’ at the end of paragraph 3 (31), by striking the period at the end of paragraph 4 (32) and inserting ‘‘, plus’’, and by adding at the 5 end the following new paragraph: 6 ‘‘(33) the employee educational skills and devel- 7 opment contribution credit determined under section 8 45T(a).’’. 9 (3) CLERICAL AMENDMENT.—The table of sec- 10 tions for subpart D of part IV of subchapter A of 11 chapter 1 of such Code is amended by adding at the 12 end the following new item: 13 ‘‘Sec. 45T. Employee educational skills and development expenses.’’. (e) ALLOWANCE OF DEDUCTION FOR BENE- 14 FICIARY.— 15 (1) IN GENERAL.—Part VIII of subchapter B 16 of chapter 1 of the Internal Revenue Code of 1986 17 is amended by redesignating section 224 as section 18 225 and by inserting after section 223 the following 19 new section: 20 ‘‘SEC. 224. COVERDELL LIFELONG LEARNING ACCOUNT 21 CONTRIBUTIONS. 22 ‘‘(a) IN GENERAL.—In the case of an individual 23 who— 24 VerDate Sep 11 2014 21:01 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E [Text truncated for display. Full text available on Congress.gov.]