II
114th CONGRESS
1st Session
S. 306
IN THE SENATE OF THE UNITED STATES
January 29, 2015
Mr. Lee (for himself, Mr. Cruz, and Mr. Crapo) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to encourage the use of 529 plans and Coverdell education savings accounts, and for other purposes.
Short title
This Act may be cited as the Enhancing Educational Opportunities for all Students Act
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Title I—Title I of the ESEA portability
Sec. 101. Title I portability.
Title II—Allowance of home school expenses as qualified education expenses
Sec. 201. Allowance of home school expenses as qualified education expenses for purposes of a Coverdell Education Savings Account.
Sec. 202. Elimination of Coverdell Education Savings Account contribution limitation.
Title III—529 programs for elementary and secondary education expenses
Sec. 301. 529 programs for elementary and secondary education expenses.
Title I of the ESEA portability
Title I portability
Part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) is amended by adding at the end the following:
Title I funds follow the low-income child State option
In general
Notwithstanding any other provision of law and to the extent permitted under State law, a State educational agency may allocate grant funds under this part among the local educational agencies in the State based on the number of eligible children enrolled in the public schools served by each local educational agency and the State-accredited private schools within each local educational agency’s geographic jurisdiction.
Eligible child
Definition
In this section, the term eligible child means a child aged 5 to 17, inclusive, from a family with an income below the poverty level on the basis of the most recent satisfactory data published by the Department of Commerce.
Criteria of poverty
In determining the families with incomes below the poverty level for the purposes of this section, a State educational agency shall use the criteria of poverty used by the Census Bureau in compiling the most recent decennial census, as the criteria have been updated by increases in the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics.
Student enrollment in public and private schools
Identification of eligible children
On an annual basis, on a date to be determined by the State educational agency, each local educational agency that receives grant funding in accordance with subsection (a) shall inform the State educational agency of the number of eligible children enrolled in public schools served by the local educational agency and the State-accredited private schools within the local educational agency’s geographic jurisdiction.
Allocation to local educational agencies
Based on the identification of eligible children in paragraph (1), the State educational agency shall provide to a local educational agency an amount equal to the sum of the amount available for each eligible child in the State multiplied by the number of eligible children identified by the local educational agency under paragraph (1).
Distribution to schools
Each local educational agency that receives funds under paragraph (2) shall distribute such funds to the public schools served by the local educational agency and State-accredited private schools within the local educational agency’s geographic jurisdiction—
based on the number of eligible children enrolled in such schools; and
in a manner that would, in the absence of such Federal funds, supplement the funds made available from non-Federal resources for the education of pupils participating in programs under this subpart, and not to supplant such funds.
.
Further Clarification of Coverdell Education Savings Accounts
Allowance of home school expenses as qualified education expenses for purposes of a Coverdell Education Savings Account
In General
Paragraph (3) of section 530(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
Private school
For purposes of this section, the term ‘private school’ includes any home school that meets the requirements of State law applicable to such home schools, whether or not such school is deemed a private school for purposes of State law.
.
Effective Date
The amendment made by this section shall apply to taxable years beginning after December 31, 2014.
Elimination of Coverdell Education Savings Account contribution limitation
In general
Subparagraph (A) of section 530(b)(1) of the Internal Revenue Code of 1986 is amended by inserting or
at the end of clause (i), by striking or
at the end of clause (ii) and inserting a period, and by striking clause (iii).
Prohibition on excess contributions
Subsection (b) of section 530 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
Prohibition on excess contributions
A program shall not be treated as a Coverdell education savings account unless it provides adequate safeguards to prevent contributions on behalf of a designated beneficiary in excess of those necessary to provide for the qualified education expenses of the beneficiary.
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
529 programs for elementary and secondary education expenses
529 programs for pre-kindergarten, elementary, and secondary education expenses
In general
Paragraph (3) of section 529(e) of the Internal Revenue Code of 1986 is amended—
by redesignating subparagraph (B) as subparagraph (C);
by striking Qualified higher education expenses
and all that follows through The term qualified higher education expenses means—
and inserting the following:
Qualified education expenses.—
In general
The term qualified education expenses means—
qualified higher education expenses, and
qualified pre-kindergarten, elementary, and secondary education expenses.
Qualified higher education expenses
The term qualified higher education expenses means
; and
by adding at the end the following new subparagraphs:
Qualified pre-kindergarten, elementary, and secondary education expenses
The term qualified pre-kindergarten, elementary, and secondary education expenses
means—
expenses for tuition, fees, academic tutoring, special needs services in the case of a special needs beneficiary, books, supplies, and other equipment which are incurred in connection with the enrollment or attendance of the designated beneficiary of the trust as a pre-kindergarten, elementary, or secondary school student at a public, private, or religious school,
expenses for room and board, uniforms, transportation, and supplementary items and services (including extended day programs) which are required or provided by a public, private, or religious school in connection with such enrollment or attendance, and
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 and the beneficiary’s family during any of the years the beneficiary is in school.
School
The term school means any school which provides pre-kindergarten, elementary, or secondary education (pre-kindergarten through grade 12), as determined under State law. Such a school shall be treated as an eligible educational institution for purposes of subsection (b).
.
Conforming amendments
Section 529 of such Code is amended by striking qualified higher education
each place it appears in subsections (b) and (c) and inserting qualified education
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
