[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 249 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 249
To amend the Internal Revenue Code of 1986 to permit private
educational institutions to maintain qualified tuition programs and to
provide that distributions from such programs which are used to pay
educational expenses shall not be includible in gross income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 30, 2001
Mr. Bachus introduced the following bill; which was referred to the
Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to permit private
educational institutions to maintain qualified tuition programs and to
provide that distributions from such programs which are used to pay
educational expenses shall not be includible in gross income.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``College Savings Protection Act''.
SEC. 2. MODIFICATIONS TO QUALIFIED TUITION PROGRAMS.
(a) Eligible Educational Institutions Permitted To Maintain
Qualified Tuition Programs.--
(1) In general.--Section 529(b)(1) of the Internal Revenue
Code of 1986 (defining qualified State tuition program) is
amended by inserting ``or by one or more eligible educational
institutions'' after ``maintained by a State or agency or
instrumentality thereof''.
(2) Private qualified tuition programs limited to benefit
plans.--Clause (ii) of section 529(b)(1)(A) of such Code is
amended by inserting ``in the case of a program established and
maintained by a State or agency or instrumentality thereof,''
before ``may make''.
(3) Conforming amendments.--
(A) Sections 72(e)(9), 135(c)(2)(C), 135(d)(1)(D),
529, 530(b)(2)(B), 4973(e), and 6693(a)(2)(C) of such
Code are each amended by striking ``qualified State
tuition'' each place it appears and inserting
``qualified tuition''.
(B) The headings for sections 72(e)(9) and
135(c)(2)(C) of such Code are each amended by striking
``qualified state tuition'' and inserting ``qualified
tuition''.
(C) The headings for sections 529(b) and
530(b)(2)(B) of such Code are each amended by striking
``Qualified state tuition'' and inserting ``Qualified
tuition''.
(D) The heading for section 529 of such Code is
amended by striking ``state''.
(E) The item relating to section 529 in the table
of sections for part VIII of subchapter F of chapter 1
of such Code is amended by striking ``State''.
(b) Exclusion From Gross Income of Education Distributions From
Qualified Tuition Programs.--
(1) In general.--Section 529(c)(3)(B) of such Code
(relating to distributions) is amended to read as follows:
``(B) Distributions for qualified higher education
expenses.--For purposes of this paragraph--
``(i) In-kind distributions.--No amount
shall be includible in gross income under
subparagraph (A) by reason of a distribution
which consists of providing a benefit to the
distributee which, if paid for by the
distributee, would constitute payment of a
qualified higher education expense.
``(ii) Cash distributions.--In the case of
distributions not described in clause (i), if--
``(I) such distributions do not
exceed the qualified higher education
expenses (reduced by expenses described
in clause (i)), no amount shall be
includible in gross income, and
``(II) in any other case, the
amount otherwise includible in gross
income shall be reduced by an amount
which bears the same ratio to such
amount as such expenses bear to such
distributions.
``(iii) Treatment as distributions.--Any
benefit furnished to a designated beneficiary
under a qualified tuition program shall be
treated as a distribution to the beneficiary
for purposes of this paragraph.
``(iv) Coordination with hope and lifetime
learning credits.--The total amount of
qualified higher education expenses with
respect to an individual for the taxable year
shall be reduced--
``(I) as provided in section
25A(g)(2), and
``(II) by the amount of such
expenses which were taken into account
in determining the credit allowed to
the taxpayer or any other person under
section 25A.
``(v) Coordination with education
individual retirement accounts.--If, with
respect to an individual for any taxable year--
``(I) the aggregate distributions
to which clauses (i) and (ii) and
section 530(d)(2)(A) apply, exceed
``(II) the total amount of
qualified higher education expenses
otherwise taken into account under
clauses (i) and (ii) (after the
application of clause (iv)) for such
year,
the taxpayer shall allocate such expenses among
such distributions for purposes of determining
the amount of the exclusion under clauses (i)
and (ii) and section 530(d)(2)(A).''.
(2) Conforming amendments.--
(A) Section 135(d)(2)(B) of such Code is amended by
striking ``the exclusion under section 530(d)(2)'' and
inserting ``the exclusions under sections
529(c)(3)(B)(i) and 530(d)(2)''.
(B) Section 221(e)(2)(A) of such Code is amended by
inserting ``529,'' after ``135,''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
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