To amend the Internal Revenue Code of 1986 to expand the uses for funds under qualified tuition programs, and for other purposes.
Bill: H.R.8128 | Sponsor: Rep. Smucker, Lloyd (R-PA)
Policy area: Taxation

Summary:
This bill expands the uses of qualified tuition program (529 plans) funds to include payment of costs related to industry recognized apprenticeship programs. It also provides for payment of expenses related to a career and technical education program or a career pathway.
The bill increases from 1.4% to 1.6% the rate of the excise tax on the investment income of certain private colleges and universities.

To amend the Internal Revenue Code of 1986 to expand the uses for funds 
       under qualified tuition programs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. 529 ACCOUNT FUNDING FOR JOB TRAINING.

    (a) In General.--Section 529(c)(8) of the Internal Revenue Code of 
1986 is amended--
            (1) in the heading, by inserting ``and industry recognized 
        apprenticeship programs'' after ``programs'', and
            (2) by striking the period at the end and inserting ``or an 
        industry recognized apprenticeship program registered and 
        certified by an eligible Standards Recognition Entity under 
        part 29 of title 29, Code of Federal Regulations.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to funding contributed in taxable years beginning after the date 
of the enactment of this Act.

SEC. 2. ACCOUNT FUNDING FOR SHORT TERM PROGRAMS.

    (a) In General.--Section 529(e)(3)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``and'' at the end of clause (ii), by 
striking the period at the end of clause (iii) and inserting ``, and'', 
and by inserting after clause (iii) the following new clause:
                            ``(iv) expenses related to a career and 
                        technical education program (as such term is 
                        defined for purposes of section 3(6)(A) of the 
                        Carl D. Perkins Career and Technical Education 
                        Act of 2006 (20 U.S.C. 2302(6)(A)) or a career 
                        pathway (as such term is defined in section 3 
                        of the Workforce Innovation and Opportunity Act 
                        (29 U.S.C. 3102)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to funding in taxable years beginning after the date of the 
enactment of this Act.

SEC. 3. MODIFICATIONS TO EXCISE TAX BASED ON INVESTMENT INCOME OF 
              CERTAIN PRIVATE COLLEGES AND UNIVERSITIES.

    (a) In General.--Section 4968(a) of the Internal Revenue Code of 
1986 is amended by striking ``1.4'' and inserting ``1.6''.
    (b) Exemption for Educational Institutions That Do Not Accept 
Federal Aid.--Section 4968(b)(1) of such Code is amended by striking 
``and'' at the end of subparagraph (C), by striking the period at the 
end of subparagraph (D) and inserting ``, and'', and by adding at the 
end the following new subparagraph:
                    ``(E) which does not accept Federal aid, including 
                Federal student financial assistance, under title IV of 
                the Higher Education Act of 1965 (20 U.S.C. 1070 et 
                seq.).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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