(B) has the right to receive a specified per-
centage of the individual’s future income. 
(4) QUALIFIED ISA.—The term ‘‘Qualified ISA’’ 
means an income-share agreement that complies 
with the following: 
(A) AFFORDABILITY
FOR
LOW
AFTER- 
SCHOOL INCOME.—The income-share agreement 
provides that when an individual subject to the 
agreement has an income that is equal to or 
below the amount that is 150 percent of the 
poverty line for a single person (as defined in 
section 673 of the Community Services Block 
Grant Act (42 U.S.C. 9902)), the percentage of 
income obligation for the individual is zero. The 
preceding sentence may not be interpreted to 
preclude the charging of fees or nominal pay-
ments (as described under section 102(a)(5)) 
during this period. 
(B) LIMIT ON PERCENTAGE OF INCOME.— 
The maximum percentage of income an indi-
vidual would be required to pay under the 
agreement does not exceed 20 percent, and the 
product of such percentage and the number of 
years of the agreement does not exceed 2.25 
(which figure is the product of 7.5 percent and 
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the number of years in the longest allowable 
contract under section 102(a)(3)). 
(C) APPROPRIATE
RISK
SHARING.—The 
payments required under such agreement for an 
individual with income during the payment 
term equal to 175 percent of the poverty line 
for a single person (as defined in section 673 
of the Community Services Block Grant Act 
(42 U.S.C. 9902)) would not exceed the pay-
ments on a comparable loan that bears interest 
at a rate equal to the annual percentage rate of 
interest limitation under section 987(b) of title 
10, United States Code. 
(5) STATE.—The term ‘‘State’’ means the sev-
eral States of the Union, the Commonwealth of 
Puerto Rico, the District of Columbia, Guam, Amer-
ican Samoa, the Virgin Islands, the government of 
the Northern Mariana Islands, and the Trust Terri-
tory of the Pacific Islands. 
(6) STATE LAW.—The term ‘‘State law’’ means 
any law, decision, rule, regulation, or other action 
having the effect of a law of any State or any polit-
ical subdivision of a State, or any agency or instru-
mentality of a State or political subdivision of a 
State, except that a law of the United States appli-
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cable only to the District of Columbia shall be treat-
ed as a State law (rather than a law of the United 
States). 
TITLE I—TAX TREATMENT OF 
INCOME-SHARE AGREEMENTS 
SEC. 101. TAX TREATMENT OF PROCEEDS AND PAYMENTS 
OF FUTURE INCOME. 
For purposes of the Internal Revenue Code of 
1986— 
(1) FUNDING
EXCLUDED
FROM
GROSS
IN-
COME.—In the case of an individual, gross income 
shall not include the amount of any income-share 
funding which is paid to or on behalf of such indi-
vidual under an income-share agreement. 
(2) DIFFERENCE
IN
REPAYMENT
NOT
IN-
CLUDED AS GROSS INCOME.—In the case of an in-
come-share agreement under which the income-share 
funding exceeds the total income-share payments (in 
any period over the life of the contract), the individ-
ual’s gross income shall not include the amount of 
such excess. 
(3) TREATMENT OF PAYMENTS OF FUTURE IN-
COME.—The amount of any income-share payments 
under an income-share agreement shall be treated— 
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(A) first, with respect to so much of such 
amount as does not exceed the income-share 
funding under such agreement, as a recovery of 
investment (with a corresponding reduction in 
basis) in the contract; and 
(B) second, as income on the contract 
which is includible in gross income. 
SEC. 102. TERMS AND CONDITIONS OF INCOME-SHARE 
AGREEMENT CONTRACTS. 
(a) TERMS
AND
CONDITIONS.—An income-share 
agreement shall not be treated as meeting the require-
ments of this section unless: 
(1) SPECIFIED PERCENTAGE OF INCOME.—The 
agreement specifies the percentage of future income 
required to be paid. 
(2) DEFINITION
OF
INCOME.—The income- 
share agreement specifies the definition of income to 
be used for purposes of calculating an individual’s 
obligation to pay under the agreement, which shall 
not in any case include the income of the individ-
ual’s children. 
(3) SPECIFIED DURATION; EXTENSION OF PE-
RIOD.— 
(A) DURATION.—The agreement specifies 
the maximum period of time during which the 
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individual will be obligated to pay a percentage 
of the individual’s future income (excluding pe-
riods when just a nominal payment (as de-
scribed under paragraph (5)) is required), 
which may not (except as provided in subpara-
graph (B)) exceed 360 months. 
(B) EXTENSION OF PERIOD.—The agree-
ment may provide for the extension of such pe-
riod by a number of months during which the 
individual’s percentage of income obligation (ex-
cluding nominal payments and fees) was zero, 
either because of further enrollment in edu-
cation or training or the individual’s income 
was below the level at which payments are re-
quired in the agreement. 
(4) EARLY
TERMINATION.—The agreement 
specifies the terms and conditions under which the 
individual subject to the agreement may terminate 
the agreement. 
(5) 
NOMINAL
PAYMENTS.—The 
agreement 
specifies any nominal monthly payment that is re-
quired during periods when the individual subject to 
the agreement has no percentage of income obliga-
tion, except that such nominal monthly payment 
shall not exceed twenty-five dollars per month (ad-
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justed each year to reflect changes in the Consumer 
Price Index for All Urban Consumers published by 
the Bureau of Labor Statistics of the Department of 
Labor for the most recent 12-month period for 
which the data are available). 
(b) REQUIRED
DISCLOSURES.—An income-share 
agreement does not comply with the requirements of this 
section unless the individual who is committing under the 
agreement to pay future income is provided, before enter-
ing into such agreement, a written document that clearly 
and simply discloses— 
(1) that the agreement is not a debt instru-
ment, and that the amount the individual will be re-
quired to pay under the agreement— 
(A) may be more or less than the amount 
provided to the individual pursuant to the 
agreement; and 
(B) will vary in proportion to the individ-
ual’s future income; 
(2) that the obligations of the individual under 
the agreement are not dischargeable under bank-
ruptcy law, except in a case that would impose an 
undue hardship on the debtor and the debtor’s de-
pendents; 
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accordance with guidance issued by the Direc-
tor of the Bureau of Consumer Financial Pro-
tection; to 
(B) the amounts required to be paid under 
one or more comparable loans, including a loan 
at an interest rate determined by the Director 
of the Bureau of Consumer Financial Protec-
tion to be an approximation of the interest rate 
available to student loan borrowers in the pri-
vate marketplace and, where applicable, a Fed-
eral Stafford loan; 
(8) income verification documentation, includ-
ing personal tax records submitted to the Internal 
Revenue Service, that the individual may be required 
to provide under the agreement; 
(9) intent to conduct annual reconciliation re-
lating to obligations owed by the individual under 
the agreement; and 
(10) any nominal payments required under the 
agreement. 
(c) NON-INTERFERENCE.—An income-share agree-
ment represents an obligation by the individual pay the 
specific percentage of future income, but shall not be con-
strued to give the contract holder any rights over an indi-
vidual’s actions. 
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(d) EFFECT OF FAILURE TO PROVIDE DOCUMENTA-
TION.— 
(1) IN GENERAL.—Absent income documenta-
tion from an individual under an income-share 
agreement, the ISA funder of such agreement (or 
the funder’s successor in interest) may assume a 
certain income level for the individual, up to the 
level that would create an obligation equal to the 
maximum payment amount under the agreement. 
(2) TREATMENT UNDER STATE LAW.—Any obli-
gation resulting from an assumed income level under 
paragraph (1) shall not be considered to be imposing 
an unlawful fee under a State law unless such State 
law was issued after the date of the enactment of 
this Act and such State law expressly states that it 
is intended to apply to income-share agreements. 
(3) VERIFICATION
OF
INCOME.—If an indi-
vidual supplies an ISA funder (or its successor in in-
terest) with their income verification information 
within 180 days of the ISA funder (or its successor 
in interest) assuming an income level for such indi-
vidual under paragraph (1), the individual shall be 
entitled to have any payments that were made in ex-
cess of their actual obligation under the contract ei-
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ther refunded to them or credited to future obliga-
tions under the contract. 
SEC. 103. RULEMAKING; MODEL DISCLOSURE FORMS. 
(a) NO BUREAU GENERAL RULEMAKING AUTHOR-
ITY.—Except as provided under subsection (b) and section 
102(b)(7), the Director of the Bureau of Consumer Finan-
cial Protection may not issue regulations under this title. 
(b) MODEL DISCLOSURE FORMS.— 
(1) IN
GENERAL.—Not later than 180 days 
after the date of the enactment of this Act, the Di-
rector of the Bureau of Consumer Financial Protec-
tion, after engaging in appropriate consumer testing 
of such forms, shall promulgate a model disclosure 
form for the disclosures required under section 
102(b). 
(2) SAFE HARBOR.—Any person who uses the 
model disclosure form promulgated pursuant to 
paragraph (1) and includes accurate information re-
quired under section 102(b) shall be deemed to be 
in compliance with the disclosure requirements 
under section 102(b). 
SEC. 104. TRUTH IN LENDING ACT. 
Any income-share agreement that complies with the 
disclosure requirements of section 102(b) shall be deemed 
to be in compliance with the Truth in Lending Act. 
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SEC. 105. CONSENT TO CONTINUING RELEASE OF TAX-
PAYER INFORMATION UNDER INCOME SHARE 
AGREEMENT. 
The Secretary of the Treasury shall modify Treasury 
Regulations and guidance to provide for continuing con-
sent to disclosure of an individual’s return information to 
an ISA funder (or the funder’s successor in interest) 
under an income-share agreement, but only for periods rel-
evant to, and only to the extent the Secretary determines 
is necessary and appropriate in carrying out the terms of, 
such agreement. 
TITLE II—TREATMENT OF IN-
COME-SHARE 
AGREEMENTS 
UNDER STATE LAW 
SEC. 201. LAWFULNESS OF CONTRACTS; PREEMPTION OF 
STATE LAW. 
Any income-share agreement that complies with the 
requirements of section 102 shall be a valid, binding, and 
enforceable contract notwithstanding any State law lim-
iting or otherwise regulating assignments of future wages 
or other income. 
SEC. 202. PREEMPTION OF STATE LAW WITH RESPECT TO 
USURY. 
A Qualified ISA shall not be subject to State law with 
respect to usury, unless such State law was issued after 
the date of the enactment of this Act and such State law 
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expressly states that it is intended to apply to income- 
share agreements. 
SEC. 203. PREEMPTION PRE-EXISTING STATE LAWS WITH 
RESPECT TO ABILITY-TO-REPAY AND LICENS-
ING LAWS. 
A Qualified ISA shall not be subject to a State law 
with respect to ‘‘ability-to-repay’’ requirements, and an 
ISA funder issuing a Qualified ISA shall not be subject 
to any State law with respect to licensing or registration, 
unless such State law was issued after the date of the en-
actment of this Act and such State law expressly states 
that it is intended to apply to income-share agreements. 
TITLE III—QUALIFIED 
EDUCATION LOAN 
SEC. 301. QUALIFIED EDUCATION LOAN. 
(a) IN GENERAL.—Paragraph (1) of section 221(d) 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following: ‘‘Such term includes any in-
come-share agreement (as such term is defined in section 
2 of the Investing in Students Act of 2017) that complies 
with the requirements of section 102 of such Act, except 
that payments made by the taxpayer during the taxable 
year to meet an income-share agreement obligation shall 
not be taken into account under subsection (a).’’. 
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