[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3520 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 3520
To amend the Internal Revenue Code of 1986 to provide incentives for
education.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 14, 2023
Mr. Lee (for himself and Mr. Scott of South Carolina) 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 provide incentives for
education.
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 ``Achieving Choice in Education Act''
or the ``ACE Act''.
SEC. 2. 529 ACCOUNT FUNDING FOR HOMESCHOOL AND ADDITIONAL ELEMENTARY
AND SECONDARY EXPENSES.
(a) In General.--Section 529(c)(7) of the Internal Revenue Code of
1986 is amended to read as follows:
``(7) Treatment of elementary and secondary tuition.--Any
reference in this section to the term `qualified higher
education expense' shall include a reference to the following
expenses in connection with enrollment or attendance at, or for
students enrolled at or attending, an elementary or secondary
public, private, or religious school:
``(A) Tuition.
``(B) Curriculum and curricular materials.
``(C) Books or other instructional materials.
``(D) Online educational materials.
``(E) Tuition for tutoring or educational classes
outside of the home, including at a tutoring facility,
but only if the tutor or instructor is not related to
the student and--
``(i) is licensed as a teacher in any
State,
``(ii) has taught at an eligible
educational institution, or
``(iii) is a subject matter expert in the
relevant subject.
``(F) Fees for a nationally standardized norm-
referenced achievement test, an advanced placement
examination, or any examinations related to college or
university admission.
``(G) Fees for dual enrollment in an institution of
higher education.
``(H) Educational therapies for students with
disabilities provided by a licensed or accredited
practitioner or provider, including occupational,
behavioral, physical, and speech-language therapies.
Such term shall include expenses for the purposes described in
subparagraphs (A) through (H) in connection with a homeschool
(whether treated as a homeschool or a private school for
purposes of applicable State law).''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions made after the date of the enactment of this Act.
SEC. 3. INCREASE IN LIMITATION ON DISTRIBUTIONS FROM 529 PLANS FOR
ELEMENTARY AND SECONDARY SCHOOL EXPENSES.
(a) In General.--Section 529(e)(3)(A) of the Internal Revenue Code
of 1986 is amended by striking ``$10,000'' in the flush matter at the
end and inserting ``$20,000''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2023.
SEC. 4. GIFT TAX EXCLUSIONS.
(a) Gift Tax Exclusion for Contributions to 529 Plans.--Section
2503(b) of the Internal Revenue Code of 1986 is amended by adding at
the end the following new paragraph:
``(3) Exclusion for contributions to 529 plans.--The dollar
amount in effect under paragraph (1) with respect to gifts (to
which such paragraph applies) made to any person during any
calendar year shall be increased (not in excess of $20,000) by
the amount of such gifts made during such calendar year to
qualified tuition programs (as defined in section 529) with
respect to which such person is the designated beneficiary.''.
(b) Effective Date.--The amendments made by this section shall
apply to gifts made after December 31, 2023.
SEC. 5. TAX-EXEMPT BONDS RESTRICTED TO STATES THAT IMPLEMENT SCHOOL
CHOICE LAWS.
(a) In General.--Section 103 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(d) Restriction to States That Implement School Choice Laws.--
``(1) In general.--Subsection (a) shall not apply to any
State or local bond unless such bond is issued by a minimum
school choice State or a political subdivision of such a State.
``(2) Partial exclusion with respect to certain states.--
``(A) In general.--In the case of any State or
local bond issued by a minimum school choice State
which does not meet the requirements of subparagraph
(B) (or issued by any political subdivision of such a
State), subsection (a) shall be applied by substituting
`50 percent of the interest' for `interest'.
``(B) Requirements.--A minimum school choice State
meets the requirements of this subparagraph if the
Secretary determines that--
``(i) at least 65 percent of the specified
school age children are eligible for one or
more of such State's school choice programs,
and
``(ii) the average amount spent by such
State on the education of each specified school
age child eligible for one or more of such
State's school choice programs is at least 75
percent of the average amount spent by such
State on the education of each specified school
age child not eligible for one or more of such
programs.
``(3) Minimum school choice state.--For purposes of this
subsection, the term `minimum school choice State' means any
State if the Secretary determines that--
``(A) such State has enacted one or more school
choice programs,
``(B) at least 40 percent of the specified school
age children are eligible for one or more of such
State's school choice programs, and
``(C) the average amount spent by such State on the
education of each specified school age child eligible
for one or more of such State's school choice programs
is at least 60 percent of the average amount spent by
such State on the education of each specified school
age child not eligible for one or more of such
programs.
``(4) School choice programs.--For purposes of this
subsection, the term `school choice program' means, with
respect to any State, each of the following with respect to
elementary and secondary education in such State:
``(A) Tax credit scholarship programs.
``(B) Voucher programs.
``(C) Education savings account program.
``(D) Refundable tax credit for private education
expenses.
``(5) Specified school age child.--For purposes of this
subsection, the term `specified school age child' means, with
respect to any State, any individual residing in such State who
has not attained age 18.''.
(b) Effective Date.--The amendment made by this section shall apply
to bonds issued after the date of the enactment of this Act.
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