in the account to the beneficiary, and close 
the account. 
‘‘(c) OVERSIGHT.—Consistent with its responsibilities 
to oversee the one-stop delivery system in the local area, 
the local board shall oversee the implementation of the 
lifelong learning account program in the local area, and 
shall monitor and assess the performance of the program. 
‘‘SEC. 135F. FEDERAL SHARE. 
‘‘(a) IN GENERAL.—The Federal share of the cost 
described in section 135A for administering the lifelong 
learning accounts program established by this chapter 
shall be 80 percent. 
‘‘(b) NON-FEDERAL SHARE.—The State may provide 
the non-Federal share of the cost in cash or in-kind, fairly 
evaluated, including plant, equipment, or services. The 
State may provide the non-Federal share from State, local, 
or private sources. 
‘‘SEC. 135G. TRUSTEE REPORTS. 
‘‘(a) PREPARATION.—Each State that carries out a 
lifelong learning account program under this chapter shall 
require each trustee in the State to annually prepare a 
report containing information on contributions to and 
withdrawals from such accounts in the State, an assess-
ment of the State lifelong learning account program, and 
information on such additional matters as the Secretary 
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of Labor, after consultation with the Secretary of the 
Treasury, may require. 
‘‘(b) SUBMISSION.—The trustee shall submit each 
such report to the Governor and the State legislature of 
the State. The Governor shall transmit each such report 
to the Secretary of Labor, the Secretary of the Treasury, 
and Congress, and shall make the report available to the 
general public. 
‘‘SEC. 135H. EVALUATIONS AND OTHER RESEARCH. 
‘‘(a) IN GENERAL.—The Secretary shall conduct 
evaluations and other research, directly or through grants 
or contracts, to determine the effectiveness of the lifelong 
learning account programs carried out under this chapter 
in meeting the objectives of this chapter. 
‘‘(b) METHODOLOGY
AND RESEARCH DESIGNS.— 
The Secretary shall use appropriate methodology and re-
search designs for the evaluations and research. 
‘‘(c) TOPICS.—In conducting the evaluations and re-
search, the Secretary may address topics including wheth-
er the programs increased the wages or salaries of work-
ers, resulted in promotions, new positions, or better posi-
tions for the workers, increased the number of workers 
who acquired industry-recognized skill credentials, en-
hanced the job performance of workers, or increased work-
er retention. 
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‘‘(d) REPORT.—The Secretary shall submit to Con-
gress a report containing the results of each evaluation 
or research project conducted under this section. 
‘‘SEC. 135I. STUDY ON CONTRIBUTIONS FROM FEDERAL 
PROGRAMS. 
‘‘(a) STUDY.—The Secretary, in conjunction with the 
Secretary of Health and Human Services, shall conduct 
a study concerning whether, and the degree to which, 
States should be permitted to use funds available under 
a covered program to make contributions to lifelong learn-
ing accounts of eligible workers in the State, and con-
cerning the impacts on the covered program. 
‘‘(b) REPORT.—Not later than 24 months after the 
date of enactment of the Skills Investments Act of 2013, 
the Secretary of Labor shall submit to Congress a report 
containing the results of the study and any recommenda-
tions for legislation the Secretary determines to be appro-
priate. 
‘‘(c) DEFINITION.—In this section, the term ‘covered 
program’ means the program of block grants to States for 
temporary assistance for needy families established under 
part A of title IV of the Social Security Act (42 U.S.C. 
601 et seq.), an employment and training program carried 
out under section 6(d)(4) of the Food Stamp Act of 1977 
(7 U.S.C. 2015(d)(4)), the portion of a program of em-
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ployment and training activities carried out under chapter 
5 that is funded through individual training accounts de-
scribed in section 134(d)(4)(G), the activities (including 
training, other employment services, and provision of al-
lowances) carried out under part II of subchapter B of 
chapter 2 of title II of the Trade Act of 1974 (29 U.S.C. 
2295 et seq.), and another Federal employment and train-
ing program identified by the Secretary. 
‘‘SEC. 135J. ELIGIBILITY FOR OTHER FEDERAL BENEFITS. 
‘‘No Federal agency may take into consideration the 
amount deposited to, or withdrawn from, an eligible work-
er’s lifelong learning account in determining the eligibility 
of the worker for any benefit or service under any provi-
sion of Federal law, including any education or skill devel-
opment benefit or service, other than this chapter.’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents in section 1(b) of the Workforce Investment Act of 
1998 is amended— 
(1) by redesignating the item relating to the 
chapter heading of chapter 6, as the item relating to 
the chapter heading of chapter 7, of subtitle B of 
title I; and 
(2) by inserting after the items relating to 
chapter 5 of that subtitle the following: 
‘‘CHAPTER 6—LIFELONG LEARNING ACCOUNTS 
‘‘Sec. 135. Definitions. 
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‘‘Sec. 135A. Lifelong learning account programs. 
‘‘Sec. 135B. State supplemental plans. 
‘‘Sec. 135C. State activities. 
‘‘Sec. 135D. Local supplemental plans. 
‘‘Sec. 135E. Local activities. 
‘‘Sec. 135F. Federal share. 
‘‘Sec. 135G. Trustee reports. 
‘‘Sec. 135H. Evaluations and other research. 
‘‘Sec. 135I. Study on contributions from Federal programs. 
‘‘Sec. 135J. Eligibility for other Federal benefits.’’. 
SEC. 4. AUTHORIZATION OF APPROPRIATIONS. 
Section 137 of the Workforce Investment Act of 1998 
(29 U.S.C. 2872) is amended by adding at the end the 
following: 
‘‘(d) LIFELONG LEARNING ACCOUNT PROGRAMS.— 
There is authorized to be appropriated to carry out chap-
ter 6 such sums as may be necessary for each of fiscal 
years 2015 through 2020.’’. 
SEC. 5. CREDIT FOR CONTRIBUTIONS TO LIFELONG LEARN-
ING ACCOUNTS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by insert-
ing after section 36B the following new section: 
‘‘SEC. 36C. CONTRIBUTIONS TO LIFELONG LEARNING AC-
COUNTS. 
‘‘(a) CREDIT ALLOWED.—In the case of an eligible 
individual, there shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an 
amount equal to the applicable percentage of the contribu-
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tions (other than rollover contributions described in sub-
section (e)(5)) paid in cash during such taxable year by 
or on behalf of such individual to a lifelong learning ac-
count of such individual. 
‘‘(b) LIMITATIONS AND DEFINITIONS RELATED TO 
ALLOWANCE OF CREDIT.— 
‘‘(1) DOLLAR
LIMITATION.—The amount of 
contributions taken into account under subsection 
(a) with respect to any eligible individual for any 
taxable year shall not exceed the lesser of— 
‘‘(A) $3,000, or 
‘‘(B) an amount equal to the compensation 
(as defined in section 219(f)(1)) includible in 
the individual’s gross income for such taxable 
year. 
‘‘(2) LIMITATIONS
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) PHASEOUT OF DOLLAR LIMITATION 
BASED ON ACCOUNT BENEFICIARY’S MODIFIED 
ADJUSTED
GROSS
INCOME.—The 
$3,000 
amount contained in paragraph (1)(A) shall be 
reduced (but not below zero) by the account 
beneficiary’s reduction amount. 
‘‘(B) 
PER
CONTRIBUTOR
LIMITATION 
BASED
ON
CONTRIBUTOR’S
MODIFIED
AD-
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JUSTED GROSS INCOME.—In the case of a con-
tributor who is an individual (other than an em-
ployer of the account beneficiary), the aggre-
gate amount of the contributions of such con-
tributor which may be taken into account under 
subsection (a) with respect to any eligible indi-
vidual for any taxable year shall not exceed the 
excess (if any) of $3,000 over such contribu-
tor’s reduction amount. 
‘‘(C) ACCOUNT BENEFICIARY’S REDUCTION 
AMOUNT.—For purposes of subparagraph (A), 
the account beneficiary’s reduction amount is 
the amount which bears the same ratio to 
$3,000 as— 
‘‘(i) the excess of— 
‘‘(I) the account beneficiary’s 
modified adjusted gross income for 
such taxable year, over 
‘‘(II) 
$100,000 
(twice 
such 
amount in the case of a joint return), 
bears to 
‘‘(ii) $20,000 (twice such amount in 
the case of a joint return). 
For purposes of the preceding sentence, the 
term ‘modified adjusted gross income’ means 
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SMARTINEZ on DSK6TPTVN1PROD with BILLS
adjusted gross income increased by any amount 
excluded from gross income under section 911, 
931, or 933. 
‘‘(D) 
CONTRIBUTOR’S
REDUCTION 
AMOUNT.—For purposes of subparagraph (B), 
the contributor’s reduction amount is the 
amount that would be determined under sub-
paragraph (C) if ‘contributor’ were substituted 
for ‘account beneficiary’ each place it appears 
therein. 
‘‘(E) SPECIAL RULE FOR MARRIED INDI-
VIDUALS FILING A SEPARATE RETURN.—In the 
case of a married individual filing a separate re-
turn, subparagraph (C)(I)(II) shall be applied 
by substituting ‘zero’ for the dollar amount 
therein. 
‘‘(3) TREATMENT
OF
EMPLOYER
CONTRIBU-
TIONS.— 
‘‘(A) EXCLUSION FROM GROSS INCOME.— 
Gross income shall not include any contribution 
to a lifelong learning account made by an em-
ployer of the account beneficiary to the extent 
that the aggregate amount of such contribu-
tions made during the taxable year does not ex-
ceed the limitation in effect under paragraph 
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SMARTINEZ on DSK6TPTVN1PROD with BILLS
(1) (determined without regard to subpara-
graph (B) of this paragraph) for such taxable 
year with respect to such beneficiary. 
‘‘(B) COORDINATION WITH CREDIT.—The 
limitation which would (but for this subpara-
graph) apply under paragraph (1) with respect 
to the eligible individual for any taxable year 
shall be reduced (but not below zero) by the ag-
gregate amount contributed to lifelong learning 
accounts of such individual which is excludable 
from the taxpayer’s gross income for such tax-
able year under subparagraph (A) (and such 
amount shall not be taken into account in de-
termining the credit under subsection (a)). 
‘‘(4) APPLICABLE PERCENTAGE.—For purposes 
of this section, the term ‘applicable percentage’ 
means— 
‘‘(A) 50 percent with respect to the first 
$500 of contributions taken into account under 
subsection (a) with respect to any eligible indi-
vidual for any taxable year, and 
‘‘(B) 25 percent with respect to so much of 
such contributions as exceeds $500. 
‘‘(5) ELIGIBLE INDIVIDUAL.—For purposes of 
this section, the term ‘eligible individual’ means any 
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individual for any taxable year if, as of the first day 
of such taxable year, such individual has attained 
age 16. 
‘‘(c) LIFELONG LEARNING ACCOUNTS.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘lifelong learning 
account’ means a trust created or organized in the 
United States as a lifelong learning account under 
a lifelong learning account program established by a 
State under chapter 6 of subtitle B of title I of the 
Workforce Investment Act of 1998 exclusively for 
the purpose of paying the eligible education or skill 
development expenses of the account beneficiary and 
maintained by a trustee consist with the require-
ments of section 135E(b) of such Act, but only if 
the written governing instrument creating the trust 
meets the following requirements: 
‘‘(A) No contribution will be accepted un-
less it is in cash. 
‘‘(B) Except in the case of a rollover con-
tribution described in subsection (e)(5), no con-
tribution will be accepted if such contribution, 
when added to all previous contributions to the 
trust for the calendar year, would exceed 
$5,000. 
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‘‘(C) The trust assets will be held by a 
trustee who will administer the trust consistent 
with the requirements of such lifelong learning 
account program and this section. 
‘‘(D) No part of the trust assets will be in-
vested in life insurance contracts. 
‘‘(E) No part of the trust assets will be in-
vested in any collectible (as defined in section 
408(m)). 
‘‘(F) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(G) The interest of an individual in the 
balance in his account is nonforfeitable. 
‘‘(H) No distribution shall be made from 
the account except— 
‘‘(i) for eligible education or skill de-
velopment expenses, or 
‘‘(ii) after an event described in sub-
section (e)(2)(B). 
‘‘(2) ELIGIBLE EDUCATION OR SKILL DEVELOP-
MENT
EXPENSE.—The term ‘eligible education or 
skill development expense’ means any eligible edu-
cation or skill development expense (as defined in 
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SMARTINEZ on DSK6TPTVN1PROD with BILLS
section 135 of the Workforce Investment Act of 
1998) which meets the requirements of subclauses 
(I) and (II) of section 135E(b)(4)(A)(ii) of such Act. 
‘‘(3) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the lifelong learning account was established. 
‘‘(4) TRUSTEE.—The term ‘trustee’ has the 
meaning given the term in section 135 of the Work-
force Investment Act of 1998. 
‘‘(5) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(B) Section 408(g) (relating to commu-
nity property laws). 
‘‘(C) Section 408(h) (relating to custodial 
accounts). 
‘‘(d) TAX TREATMENT OF ACCOUNTS.— 
‘‘(1) IN GENERAL.—A lifelong learning account 
is exempt from taxation under this subtitle unless 
such account has ceased to be a lifelong learning ac-
count. Notwithstanding the preceding sentence, any 
such account is subject to the taxes imposed by sec-
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SMARTINEZ on DSK6TPTVN1PROD with BILLS
tion 511 (relating to imposition of tax on unrelated 
business income of charitable, etc. organizations). 
‘‘(2) NONQUALIFIED
DISTRIBUTION
TREATED 
AS
ACCOUNT
TERMINATION.—If there is a non-
qualified distribution (as defined in subsection (e)) 
from a lifelong learning account for any taxable 
year— 
‘‘(A) such account shall cease to be treated 
as a lifelong learning account as of the close of 
such taxable year, and 
‘‘(B) any amounts in such account as of 
the close of such taxable year shall be treated 
as distributed to the account beneficiary on the 
last day of such taxable year and shall be treat-
ed as not used to pay eligible education or skill 
development expenses. 
‘‘(3) APPLICATION OF OTHER RULES TREATING 
CERTAIN
EVENTS
AS
ACCOUNT
TERMINATIONS.— 
Rules similar to the rules of paragraphs (2) and (4) 
of section 408(e) shall apply to lifelong learning ac-
counts, and any amount treated as distributed under 
such rules shall be treated as not used to pay eligible 
education or skill development expenses. 
‘‘(e) INCLUSION OF DISTRIBUTIONS IN GROSS IN-
COME.— 
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‘‘(1) INCLUSION
IN
GROSS
INCOME.—Any 
amount distributed out of a lifelong learning account 
shall be included in gross income by the account 
beneficiary. 
‘‘(2) ADDITIONAL TAX.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this subsection, the tax imposed by 
this chapter on the account beneficiary for any 
taxable year in which there is a nonqualified 
distribution from a lifelong learning account 
shall be increased by 10 percent of the amount 
of such distribution. 
‘‘(B) 
EXCEPTIONS.—Subparagraph 
(A) 
and subsection (d)(2) shall not apply if the dis-
tribution is made after the account beneficiary 
dies, becomes disabled (within the meaning of 
section 72(m)(7)), or has attained age 70. 
‘‘(3) NONQUALIFIED DISTRIBUTION.—For pur-
poses of this section, the term ‘nonqualified distribu-
tion’ means the excess (if any) of— 
‘‘(A) the aggregate distributions from the 
account during the taxable year, over 
‘‘(B) the eligible education or skill develop-
ment expenses of the account beneficiary for 
the taxable year. 
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‘‘(4) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.— 
‘‘(A) IN
GENERAL.—If any excess con-
tribution is contributed for a taxable year to 
any lifelong learning account of an individual, 
paragraphs (1) and (2) and subsection (d)(2) 
shall not apply to distributions from the lifelong 
learning accounts of such individual (to the ex-
tent such distributions do not exceed the aggre-
gate excess contributions to all such accounts of 
such individual for such year) if— 
‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
time) for filing such individual’s return for 
such taxable year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
Any net income described in clause (ii) shall be 
included in the gross income of the individual 
for the taxable year in which it is received. 
‘‘(B) EXCESS
CONTRIBUTION.—For pur-
poses of subparagraph (A), the term ‘excess 
contribution’ means any contribution (other 
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than a rollover contribution described in para-
graph (6)) which is not taken into account for 
purposes of determining the credit allowed 
under subsection (a) or the amount excludable 
from the taxpayer’s gross income under sub-
section (b)(3). 
‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 
described in this paragraph as a rollover contribu-
tion if it meets the requirements of subparagraphs 
(A) and (B). 
‘‘(A) IN GENERAL.—Paragraphs (1) and 
(2) and subsection (d)(2) shall not apply to any 
amount paid or distributed from a lifelong 
learning account to the account beneficiary to 
the extent the amount received is paid into a 
lifelong learning account for the benefit of such 
beneficiary not later than the 60th day after 
the day on which the beneficiary receives the 
payment or distribution. 
‘‘(B) LIMITATION.—This paragraph shall 
not apply to any amount described in subpara-
graph (A) received by an individual from a life-
long learning account if, at any time during the 
1-year period ending on the day of such receipt, 
such individual received any other amount de-
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scribed in subparagraph (A) from a lifelong 
learning account to which paragraphs (1) and 
(2) did not apply by reason of the application 
of this paragraph. 
‘‘(6) TRANSFER OF ACCOUNT INCIDENT TO DI-
VORCE.—The transfer of an individual’s interest in 
a lifelong learning account to an individual’s spouse 
or former spouse under a divorce or separation in-
strument described in subparagraph (A) of section 
71(b)(2) shall not be considered a taxable transfer 
made by such individual notwithstanding any other 
provision of this subtitle, and such interest shall, 
after such transfer, be treated as a lifelong learning 
account with respect to which such spouse is the ac-
count beneficiary. 
‘‘(7) TREATMENT AFTER DEATH OF ACCOUNT 
BENEFICIARY.— 
‘‘(A) TREATMENT IF DESIGNATED BENE-
FICIARY IS SPOUSE OR ELECTS TO CONTINUE 
ACCOUNT.—If any individual acquires the ac-
count beneficiary’s interest in a lifelong learn-
ing account by reason of being the designated 
beneficiary of such account at the death of the 
account beneficiary and such individual elects 
the application of this subparagraph, such life-
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