[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 656 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 656

      To amend the Internal Revenue Code of 1986 to provide that 
 distributions from qualified State tuition programs which are used to 
pay educational expenses shall not be includible in gross income and to 
          include as such expenses the cost of room and board.


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                    IN THE HOUSE OF REPRESENTATIVES

                           February 10, 1997

 Mr. Bachus (for himself, Mr. Young of Alaska, Mr. Cramer, Mr. Riley, 
 Mr. Aderholt, Mr. Mica, Mr. Oxley, Mr. McCollum, and Mr. LaTourette) 
 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 provide that 
 distributions from qualified State tuition programs which are used to 
pay educational expenses shall not be includible in gross income and to 
          include as such expenses the cost of room and board.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATIONS OF TAX TREATMENT OF QUALIFIED STATE TUITION 
              PROGRAMS.

    (a) Exclusion of Distributions Used for Educational Purposes.--
Subparagraph (B) of section 529(c)(3) of the Internal Revenue Code of 
1986 is amended to read as follows:
                    ``(B) Distributions for qualified higher education 
                expenses.--Subparagraph (A) shall not apply to any 
                distribution to the extent--
                            ``(i) the distribution is used exclusively 
                        to pay qualified higher education expenses of 
                        the distributee, or
                            ``(ii) the distribution consists of 
                        providing a benefit to the distributee which, 
                        if paid for by the distributee, would 
                        constitute payment of a qualified higher 
                        education expense.''
    (b) Qualified Higher Education Expenses To Include Room and 
Board.--Section 529(e)(3) of such Code is amended to read as follows:
            ``(3) Qualified higher education expenses.--The term 
        `qualified higher education expenses' means the cost of 
        attendance (within the meaning of section 472 of the Higher 
        Education Act of 1965 (20 U.S.C. 1087ll), as in effect on the 
        date of the enactment of this paragraph) of a designated 
        beneficiary at an eligible educational institution (as defined 
        in section 135(c)(3)).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.
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