[Congressional Record Volume 164, Number 139 (Tuesday, August 21, 2018)]
[Senate]
[Pages S5769-S5771]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 3816. Ms. KLOBUCHAR (for herself and Mr. Sasse) submitted an
amendment intended to be proposed by her to the bill H.R. 6157, making
appropriations for the Department of Defense for the fiscal year ending
September 30, 2019, and for other purposes; which was ordered to lie on
the table; as follows:
At the appropriate place, insert the following:
SEC. ___. COVERDELL LIFELONG LEARNING ACCOUNTS.
(a) In General.--
(1) Renaming of coverdell education savings accounts.--
Section 530 of the Internal Revenue Code of 1986 is amended--
(A) by striking ``Coverdell education savings account''
each place it appears and inserting ``Coverdell lifelong
learning account''; and
(B) by striking ``coverdell education savings accounts'' in
the heading and inserting ``coverdell lifelong learning
accounts''.
(2) Conforming amendments.--
(A) Section 26(b)(2)(E) of the Internal Revenue Code of
1986 is amended by striking ``Coverdell education savings
accounts'' and inserting ``Coverdell lifelong learning
accounts''.
(B) Section 72(e)(9) of such Code is amended--
(i) by striking ``Coverdell education savings account'' and
inserting ``Coverdell lifelong learning account''; and
(ii) by striking ``Coverdell education savings account'' in
the heading and inserting ``Coverdell lifelong learning
account''.
(C) Section 135(c)(2)(C) of such Code is amended--
(i) by striking ``Coverdell education savings account'' and
inserting ``Coverdell lifelong learning account''; and
(ii) by striking ``Coverdell education savings account'' in
the heading and inserting ``Coverdell lifelong learning
account''.
(D) Section 408A(e)(2)(A)(ii) of such Code is amended by
striking ``Coverdell education savings account'' and
inserting ``Coverdell lifelong learning account''.
(E) Section 529(c) of such Code is amended--
(i) by striking ``Coverdell education savings accounts'' in
the heading of paragraph (3)(B)(vi) and inserting ``Coverdell
lifelong learning account''; and
(ii) by striking ``an Coverdell education savings account''
in paragraph (6) and inserting ``a Coverdell lifelong
learning account''.
(F) Section 877A(e)(2) of such Code is amended by striking
``Coverdell education
[[Page S5770]]
savings account'' and inserting ``Coverdell lifelong learning
account''.
(G) Section 4973 of such Code is amended--
(i) by striking ``Coverdell education savings account''
each place it appears in subsections (a)(4) and (e)(2)(A) and
inserting ``Coverdell lifelong learning account'';
(ii) by striking ``Coverdell education savings accounts''
in subsection (e)(1) and inserting ``Coverdell lifelong
learning accounts''; and
(iii) by striking ``Coverdell Education Savings Accounts''
in the heading of subsection (e) and inserting ``Coverdell
Lifelong Learning Account''.
(H) Section 4975 of such Code is amended--
(i) by striking ``Coverdell education savings account''
each place it appears in subsections (c)(5) and (e)(1)(F) and
inserting ``Coverdell lifelong learning account''; and
(ii) by striking ``Coverdell education savings accounts''
in the heading of subsection (c)(5) and inserting ``Coverdell
lifelong learning accounts''.
(I) Section 6693(a)(2)(F) of such Code is amended by
striking ``Coverdell education savings accounts'' and
inserting ``Coverdell lifelong learning accounts''.
(J) The table of sections for part VIII of subchapter F of
chapter 1 of such Code is amended by striking ``Coverdell
education savings accounts'' and inserting ``Coverdell
lifelong learning accounts''.
(3) Treatment of existing accounts.--For purposes of
section 530(b)(1) of the Internal Revenue Code of 1986, any
account established before January 1, 2018, and designated as
a Coverdell education savings account shall be deemed to have
been designated as a Coverdell lifelong learning account.
(b) Expanded Use of Accounts.--
(1) Eligible expenses.--
(A) In general.--Section 530(b)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking ``and'' at the
end of clause (i), by striking the period at the end of
clause (ii) and inserting ``, and'', and by adding at the end
the following new clause:
``(iii) qualified educational or skill development expenses
(as defined in paragraph (5)).''.
(B) Qualified educational or skill development expenses.--
Section 530(b) of such Code is amended by adding at the end
the following new paragraph:
``(5) Qualified educational or skill development
expenses.--The term `qualified educational or skill
development expenses' means--
``(A) expenses paid or incurred--
``(i) after the beneficiary attains age 16, and
``(ii) for participation or enrollment of the beneficiary
in services or activities that are--
``(I) training services described in section 134(c)(3)(D)
of the Workforce Innovation and Opportunity Act (29 U.S.C.
3174(c)(3)(D)) that are offered by a provider included on the
list of eligible providers of training services described in
section 122 of such Act (29 U.S.C. 3152),
``(II) career and technical education activities defined in
section 3 of the Carl D. Perkins Career and Technical
Education Act of 2006 (20 U.S.C. 2302) that are offered
through an eligible institution (as defined in such section),
``(III) career services described in clauses (iii), (iv),
and (xi) of section 134(c)(2)(A) of the Workforce Innovation
and Opportunity Act (29 U.S.C. 3174(c)(2)(A)) that are
provided by providers eligible under section 134(c)(2)(C) of
such Act,
``(IV) youth activities described in section 129(c)(2) of
the Workforce Innovation and Opportunity Act (29 U.S.C.
3164(c)(2)) that are provided by eligible providers of youth
workforce investment activities under section 123 of such
Act, or
``(V) adult education and literacy activities, as defined
in section 203 of the Adult Education and Family Literacy Act
(29 U.S.C. 3272), that are provided by eligible providers of
adult education and literacy activities under section 231 of
such Act (29 U.S.C. 3321),
``(B) expenses for transportation required for or provided
by any of the services or activities described in
subparagraph (A),
``(C) expenses for testing necessary for enrollment in, or
certification in connection with, services or activities
described in subparagraph (A), or
``(D) expenses for the purchase of any computer technology
or equipment (as defined in section 170(e)(6)(F)(i)) or
Internet access and related services, if such technology,
equipment, or services are to be used by the beneficiary for
services or activities described in subparagraph (A) during
any of the years the beneficiary is participating in or
enrolled in any of the services or activities described in
subparagraph (A).''.
(c) Modification of Rules Relating to Age Restrictions and
Contributions.--
(1) $10,000 account limit after age 30.--
(A) In general.--Subparagraph (E) of section 530(b)(1) of
the Internal Revenue Code of 1986 is amended by inserting
``in excess of $10,000'' after ``any balance to the credit of
the designated beneficiary''.
(B) Contribution limit.--Paragraph (1) of section 530(b)(1)
of such Code is amended by striking ``or'' at the end of
clause (ii), by striking the period at the end of clause
(iii) and inserting ``, or'', and by adding at the end the
following new clause:
``(iv) in the case of a beneficiary who is over the age of
30, if such contribution would result in the balance of the
account exceeding $10,000.''.
(2) Increased age limit for contributions.--Clause (ii) of
section 530(b)(1)(A) of the Internal Revenue Code of 1986 is
amended by striking ``age 18'' and inserting ``age 70''.
(3) Increased contribution limitation for individuals over
age 30.--
(A) In general.--Section 530(b)(1)(A)(iii) of the Internal
Revenue Code of 1986 is amended by inserting ``($4,000 in the
case of an account the designated beneficiary of which has
attained age of 30 before the end of the taxable year)''
after ``$2,000''.
(B) Conforming amendment.--Section 4973(e)(1)(A) of such
Code is amended by striking ``$2,000'' and inserting ``the
limitation applicable under section 530(b)(1)(A)(iii)''.
(4) No change in beneficiary after age 30.--Paragraph (6)
of section 530(d) of the Internal Revenue Code of 1986 is
amended by striking ``shall not be treated as a distribution
for purposes of paragraph (1) if the new beneficiary'' and
inserting ``shall not be treated as a distribution for
purposes of paragraph (1) if--
``(A) the old beneficiary has not attained age 30 before
the date of the change in beneficiary, and
``(B) the new beneficiary''.
(d) Credit for Employer Contributions.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 45T. EMPLOYEE EDUCATIONAL SKILLS AND DEVELOPMENT
EXPENSES.
``(a) General Rule.--For purposes of section 38, the
employee educational skills and development contribution
credit determined under this section for any taxable year is
25 percent of the nonelective contributions made by the
taxpayer during the taxable year to a Coverdell lifelong
learning account (as defined in section 530(b)) the
designated beneficiary of which is an employee of the
taxpayer.
``(b) Special Rules and Definitions.--For purposes of this
section--
``(1) Employee.--
``(A) Certain employees excluded.--The term `employee'
shall not include--
``(i) an employee within the meaning of section 401(c)(1),
``(ii) any 2-percent shareholder (as defined in section
1372(b)) of an S corporation,
``(iii) any 5-percent owner (as defined in section
416(i)(1)(B)(i)) of taxpayer, or
``(iv) any individual who bears any of the relationships
described in subparagraphs (A) through (G) of section
152(d)(2) to, or is a dependent described in section
152(d)(2)(H) of, an individual described in clause (i), (ii),
or (iii).
``(B) Leased employees.--The term `employee' shall include
a leased employee within the meaning of section 414(n).
``(2) Nonelective contribution.--The term `nonelective
contribution' means an employer contribution other than an
employer contribution pursuant to a salary reduction
arrangement.
``(3) Aggregation and other rules made applicable.--
``(A) Aggregation rules.--All employers treated as a single
employer under subsection (b), (c), (m), or (o) of section
414 shall be treated as a single employer for purposes of
this section.
``(B) Other rules.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.''.
(2) Credit treated as part of general business credit.--
Section 38(b) of such Code is amended by striking ``plus'' at
the end of paragraph (31), by striking the period at the end
of paragraph (32) and inserting ``, plus'', and by adding at
the end the following new paragraph:
``(33) the employee educational skills and development
contribution credit determined under section 45T(a).''.
(3) Clerical amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following new item:
``Sec. 45T. Employee educational skills and development expenses.''.
(e) Allowance of Deduction for Beneficiary.--
(1) In general.--Part VIII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 is amended by redesignating
section 224 as section 225 and by inserting after section 223
the following new section:
``SEC. 224. COVERDELL LIFELONG LEARNING ACCOUNT
CONTRIBUTIONS.
``(a) In General.--In the case of an individual who--
``(1) is the designated beneficiary of a Coverdell lifelong
learning account (as defined in section 530(b)(1)), and
``(2) has attained the age of 18 before the close of the
taxable year,
there shall be allowed as a deduction an amount equal to the
contributions for the taxable year by or on behalf of such
individual to the account described in paragraph (1).
``(b) Recontributed Amounts.--No deduction shall be allowed
under this section with respect to a rollover contribution
described in section 530(d)(5).''.
(2) Increase in additional tax.--
(A) Increase.--
(i) In general.--Section 530(d)(4)(A) of the Internal
Revenue Code of 1986 is amended by striking ``10 percent''
and inserting ``20 percent''.
(ii) Conforming amendment.--Section 529(c)(6) of such Code
is amended by inserting
[[Page S5771]]
``, except that `10 percent' shall be substituted for `20
percent' in subparagraph (A) thereof'' before the period at
the end of the first sentence.
(B) Modification of tax treatment of deductible
contributions.--Paragraph (1) of section 530(d) is amended to
read as follows:
``(1) Inclusion in gross income.--
``(A) In general.--Any distribution shall be includible in
the gross income of the distributee as follows:
``(i) So much of the distribution as is equal to or less
than the deductible amount shall be fully included in gross
income.
``(ii) So much of the distribution which exceeds the
deductible amount shall be included in gross income in the
manner as provided in section 72 (determined by applying such
section without regard to any amounts to which clause (i)
applies).
``(B) Deductible amount.--For purposes of this paragraph,
the term `deductible amount' means the excess of--
``(i) the sum of contributions to the account for which a
deduction was allowed under section 224 in such year and any
preceding taxable year, over
``(ii) the amount of distributions to which subparagraph
(A)(i) applied to in any preceding taxable year.''.
(3) Clerical amendment.--The table of sections for part
VIII of subchapter B of chapter 1 of such Code is amended by
redesignating the item relating to section 224 as relating to
section 225 and by inserting after the item relating to
section 223 the following new item:
``Sec. 224. Coverdell lifelong learning account contributions.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2018.
(2) Eligible expenses.--The amendments made by subsection
(b) shall apply to distributions made after December 31,
2018.
(3) Contributions.--The amendments made by paragraphs
(1)(B) and (2) of subsection (c) shall apply to contributions
made after December 31, 2018.
(4) Employer contribution credit and beneficiary
deductions.--The amendments made by subsections (d) and (e)
shall apply to taxable years beginning after December 31,
2018.
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