I 
115TH CONGRESS 
2D SESSION 
H. R. 7235 
To amend the Internal Revenue Code of 1986 to establish Lifelong Learning 
and Training Account programs. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 10, 2018 
Ms. DELBENE (for herself and Ms. SEWELL of Alabama) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
Lifelong Learning and Training Account programs. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Lifelong Learning and 
Training Account Act of 2018’’. 
SEC. 2. LIFELONG LEARNING AND TRAINING ACCOUNT 
PROGRAMS. 
(a) IN GENERAL.—Part VIII of subchapter E of 
chapter 1 of the Internal Revenue Code of 1986 is amend-
ed by inserting after section 530 the following new section: 
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‘‘SEC. 531. LIFELONG LEARNING AND TRAINING ACCOUNT 
PROGRAMS. 
‘‘(a) IN GENERAL.—A Lifelong Learning and Train-
ing Account program shall be exempt from taxation under 
this subtitle. Notwithstanding the preceding sentence, 
such program shall be subject to the taxes imposed by sec-
tion 511. 
‘‘(b) LIFELONG LEARNING AND TRAINING ACCOUNT 
PROGRAM.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘Lifelong Learn-
ing and Training Account program’ means a pro-
gram established and maintained by a State or 
agency or instrumentality thereof— 
‘‘(A) under which the designated bene-
ficiary of the account or their employer may 
make contributions to an account which is es-
tablished for the purpose of meeting the quali-
fied training expenditures of such beneficiary, 
and 
‘‘(B) which meets the other requirements 
of this section. 
‘‘(2) QUALIFIED TRUST.—Except to the extent 
provided in regulations, a program shall not be 
treated as a Lifelong Learning and Training Ac-
count program unless such program provides that 
amounts are held in a qualified trust and such pro-
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gram has received a ruling or determination by the 
Secretary that such program meets the applicable 
requirements for a Lifelong Learning and Training 
Account program. For purposes of the preceding 
sentence, 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 para-
graphs (2) and (5) of section 408(a) are met. 
‘‘(3) REQUIREMENTS.— 
‘‘(A) IN GENERAL.—A program shall not 
be treated as a Lifelong Learning and Training 
Account program unless it provides— 
‘‘(i) that contributions may only be 
made in cash, 
‘‘(ii) separate accounting for each des-
ignated beneficiary, 
‘‘(iii) that no interest in the program 
or any portion thereof may be used as se-
curity for a loan, 
‘‘(iv) that no contributions may be 
made on behalf of a designated bene-
ficiary— 
‘‘(I) in excess of $2,000 during 
any calendar year, 
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‘‘(II) if the total amount in the 
account of such beneficiary is in ex-
cess of $15,000, or 
‘‘(III) during any calendar year 
which begins after such beneficiary at-
tains 57 years of age, 
‘‘(v) that any distribution shall be 
made in accordance with the requirements 
under subparagraphs (B) and (C), and 
‘‘(vi) that required distributions shall 
be made in accordance with paragraph (6). 
‘‘(B) METHOD OF DISTRIBUTION.— 
‘‘(i) IN
GENERAL.—For purposes of 
any distribution from the account of a des-
ignated 
beneficiary 
under 
a 
Lifelong 
Learning and Training Account program— 
‘‘(I) the applicable amount of 
such distribution shall be drawn from 
amounts transferred to the account of 
the designated beneficiary pursuant to 
paragraph (4) and any earnings there-
on, and 
‘‘(II) after application of sub-
clause (I), the remainder of such dis-
tribution 
shall 
be 
drawn 
from 
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amounts contributed by the des-
ignated beneficiary or their employer 
and any earnings thereon. 
‘‘(ii) APPLICABLE AMOUNT.—For pur-
poses of clause (i)(I), the applicable 
amount shall be an amount equal to the 
lesser of— 
‘‘(I) 50 percent of the amount of 
the distribution, or 
‘‘(II) the total amount of any 
available funds in the account of the 
designated beneficiary which were 
transferred pursuant to paragraph (4) 
and any earnings thereon. 
‘‘(iii) OTHER
METHODS.—The Sec-
retary may amend, alter, or supplement 
the distribution requirements under this 
subparagraph in such manner as the Sec-
retary deems appropriate. 
‘‘(C) REPORTING.—For purposes of any 
distribution from the account of a designated 
beneficiary under a Lifelong Learning and 
Training Account program, the administrator 
shall provide the beneficiary and the Secretary 
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with such information as the Secretary deems 
appropriate, including— 
‘‘(i) the amount of such distribution, 
including the applicable amount of such 
distribution (as described in subparagraph 
(B)(ii)), and 
‘‘(ii) whether such distribution was 
provided— 
‘‘(I) directly to the program de-
scribed in clauses (i) through (iii) of 
subsection (e)(5)(A) which provides 
training to the beneficiary, or 
‘‘(II) to reimburse the beneficiary 
for any qualified training expenditures 
incurred by such beneficiary. 
‘‘(4) MATCHING FUNDS.— 
‘‘(A) TRANSFER
TO
BENEFICIARY
AC-
COUNT.— 
‘‘(i) IN GENERAL.—Out of any mon-
eys in the Treasury not otherwise appro-
priated, 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 
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such beneficiary or their employer which 
occur during any calendar year which be-
gins after the date on which such bene-
ficiary attains 24 years of age. 
‘‘(ii) 
LIMITATION.—Any 
amounts 
transferred by the Secretary to the account 
of any designated beneficiary pursuant to 
clause (i) during any calendar year— 
‘‘(I) shall not exceed $1,000, and 
‘‘(II) shall not be subject to the 
limitation 
under 
paragraph 
(3)(A)(iv)(I). 
‘‘(B) DEPOSIT
OF
MATCHING
FUNDS.— 
Any amounts required to be transferred to the 
account of a designated beneficiary under sub-
paragraph (A) shall be transferred by the Sec-
retary as soon as is practicable following any 
contribution to such account by such bene-
ficiary or their employer. 
‘‘(C) REDUCTION IN MATCHING FUNDS.— 
‘‘(i) IN GENERAL.—For each applica-
ble taxable year, the dollar amount in sub-
paragraph (A)(ii)(I) shall be reduced (but 
not below zero) by an amount equal to the 
greater of— 
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‘‘(I) an amount which bears the 
same ratio to such dollar amount as— 
‘‘(aa) the amount (not less 
than zero) equal to the adjusted 
gross income of the taxpayer for 
the applicable taxable year minus 
$72,000, bears to 
‘‘(bb) $10,000, or 
‘‘(II) an amount which bears the 
same ratio to such dollar amount as— 
‘‘(aa) the amount (not less 
than zero) equal to the earned in-
come (as described in section 
32(c)(2)) of the designated bene-
ficiary for the applicable taxable 
year minus $72,000, bears to 
‘‘(bb) $10,000. 
‘‘(ii) MARRIED INDIVIDUALS.—In the 
case of a designated beneficiary who is 
married (within the meaning of section 
7703)— 
‘‘(I) if such beneficiary has filed 
a joint return for the applicable tax-
able year, each of the dollar amounts 
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under clause (i)(I) shall be doubled 
for such year, or 
‘‘(II) if such beneficiary has not 
filed a joint return for the applicable 
taxable year, the dollar amount in 
subparagraph (A)(ii)(I) shall be re-
duced to zero for such year. 
‘‘(iii) APPLICABLE TAXABLE YEAR.— 
For purposes of this subparagraph, the 
term ‘applicable taxable year’ means the 
taxable year in which the transfer de-
scribed in subparagraph (A)(i) is made to 
the account of the designated beneficiary. 
‘‘(iv) EXCESS
TRANSFERS.—If the 
total amount of any transfers made to the 
account of a designated beneficiary pursu-
ant to subparagraph (A)(i) during an ap-
plicable taxable year exceeds the dollar 
amount under subparagraph (A)(ii)(I) 
(after application of clauses (i) and (ii)) 
for such taxable year, the tax imposed by 
this chapter for such taxable year shall be 
increased by the amount of such excess. 
‘‘(D) 
DISTRIBUTION
OF
MATCHING 
FUNDS.— 
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‘‘(i) 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— 
‘‘(I) directly to the program de-
scribed in clauses (i) through (iii) of 
subsection (e)(5)(A) which provides 
training to the designated beneficiary, 
or 
‘‘(II) to reimburse the designated 
beneficiary for any qualified training 
expenditures incurred by such bene-
ficiary, 
provided that the beneficiary has provided 
the administrator with such documentation 
as is deemed necessary to ensure compli-
ance with clause (ii). 
‘‘(ii) 
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 re-
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imbursement of qualified training expendi-
tures. 
‘‘(E) 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 des-
ignated beneficiary, any available funds in the 
account of such beneficiary which were trans-
ferred pursuant to this paragraph (and any 
earnings thereon) shall also be reduced by such 
amount. 
‘‘(F) RESCISSION OF MATCHING FUNDS.— 
On January 1 of the applicable calendar year, 
any available funds in the account of such bene-
ficiary which were transferred pursuant to this 
paragraph (and any earnings thereon) shall be 
reduced to zero. 
‘‘(5) INVESTMENT.— 
‘‘(A) IN GENERAL.—Any contributions or 
transfers to a Lifelong Learning and Training 
Account program (and any earnings thereon) 
shall be invested by the administrator in United 
States Treasury securities with a maturity date 
of not greater than 10 years. 
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‘‘(B) SECRETARIAL AUTHORITY.—The Sec-
retary may prescribe such regulations, rules, or 
other guidance as may be necessary or appro-
priate for purposes of applying this paragraph. 
‘‘(6) REQUIRED DISTRIBUTIONS.—On January 
1 of the applicable calendar year, the total amount 
of available funds in the account of the designated 
beneficiary which were contributed by the designated 
beneficiary or their employer (and any earnings 
thereon) shall be distributed to such beneficiary. 
‘‘(c) TAX TREATMENT.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, no amount shall be includ-
ible in gross income of— 
‘‘(A) a designated beneficiary under a Life-
long Learning and Training Account program, 
or 
‘‘(B) an employer of such beneficiary that 
contributes to such program on behalf of such 
beneficiary, 
with respect to any distribution or earnings under 
such program. 
‘‘(2) DISTRIBUTIONS.— 
‘‘(A) 
IN
GENERAL.—Any 
distribution 
under a Lifelong Learning and Training Ac-
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count program shall be includible in the gross 
income of the distributee in the manner as pro-
vided under section 72 to the extent not ex-
cluded from gross income under any other pro-
vision of this chapter. 
‘‘(B) 
DISTRIBUTIONS
FOR
QUALIFIED 
TRAINING EXPENDITURES.— 
‘‘(i) IN GENERAL.—In the case of any 
distributions, if such distributions do not 
exceed the qualified training expenditures 
of the designated beneficiary, no amount 
shall be includible in gross income. 
‘‘(ii) COORDINATION
WITH
OTHER 
CREDITS AND DEDUCTIONS.—For purposes 
of determining the credit allowed under 
section 25A or the deduction allowed under 
section 222, no distribution under a Life-
long Learning and Training Account pro-
gram shall be included as qualified tuition 
and related expenses under such sections. 
‘‘(C) CHANGE IN BENEFICIARIES OR PRO-
GRAMS.— 
‘‘(i) ROLLOVERS.—Subparagraph (A) 
shall not apply to that portion of any dis-
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tribution which, within 60 days of such 
distribution, is transferred— 
‘‘(I) to another Lifelong Learn-
ing and Training Account program 
for the benefit of the designated bene-
ficiary, or 
‘‘(II) to the credit of another des-
ignated beneficiary under a Lifelong 
Learning and Training Account pro-
gram who is a member of the family 
of the designated beneficiary with re-
spect to which the distribution was 
made. 
‘‘(ii) CHANGE IN DESIGNATED BENE-
FICIARIES.—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 (A) if the new 
beneficiary is a member of the family of 
the old beneficiary. 
‘‘(iii) LIMITATION ON CERTAIN ROLL-
OVERS.—Clause (i)(I) shall not apply to 
any transfer if such transfer occurs within 
12 months from the date of a previous 
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