[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4334 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 4334

    To amend the Internal Revenue Code of 1986 to allow individual 
    retirement accounts to be used for expenses for post-secondary 
                     education and job retraining.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 30, 1996

  Mr. Smith of Texas (for himself, Mr. Rohrabacher, Mr. Bereuter, Mr. 
Blute, and Mr. Flake) introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to allow individual 
    retirement accounts to be used for expenses for post-secondary 
                     education and job retraining.

    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 ``Lifetime Education and Retraining 
Needs Act''.

SEC. 2. EXCLUSION FROM GROSS INCOME OF IRA DISTRIBUTIONS USED FOR POST-
              SECONDARY EDUCATION AND WORKER RETRAINING.

    (a) In General.--Subsection (d) of section 408 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(8) Distributions from an individual retirement account 
        used for qualified higher education or worker retraining 
        expenses.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any amount paid or distributed out of an individual 
                retirement account which but for this paragraph would 
                be included in gross income to the extent that such 
                amount does not exceed the sum of the amount of 
                qualified higher education expenses and the qualified 
                job retraining expenses paid during the taxable year.
                    ``(B) Definitions.--For the purposes of 
                subparagraph (A)--
                            ``(i) Qualified higher education 
                        expenses.--
                                    ``(I) In general.--The term 
                                `qualified higher education expenses' 
                                means tuition, fees, books, supplies, 
                                and equipment required for the 
                                enrollment or attendance of an eligible 
                                individual at an eligible educational 
                                institution (as defined in section 
                                135(c)(3)).
                                    ``(II) Coordination with savings 
                                bond provisions.--The amount of 
                                qualified higher education expenses for 
                                any taxable year shall be reduced by 
                                any amount excludable from gross income 
                                under section 135.
                            ``(ii) Job retraining expenses.--The term 
                        `job retraining expenses' means tuition, fees, 
                        books, supplies, and equipment required for the 
                        enrollment or attendance of an eligible 
                        individual in a State-accredited job retraining 
                        program.
                            ``(iii) Eligible individual.--The term 
                        `eligible individual' means--
                                    ``(I) the taxpayer,
                                    ``(II) the taxpayer's spouse, and
                                    ``(III) the taxpayer's child (as 
                                defined in section 151(c)(3)).''
    (b) Excess Distributions Tax Not To Apply.--Paragraph (2) of 
section 4980A(c) of such Code is amended by inserting after 
subparagraph (F) the following new subparagraph:
                    ``(G) Any retirement distribution to the extent not 
                included in gross income by reason of section 
                408(d)(8).''
    (c) Effective Date.--The amendments made by this section shall 
apply to payments and distributions made after December 31, 1996.
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