[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1133 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1133

     To amend the Internal Revenue Code of 1986 to allow tax-free 
    expenditures from education individual retirement accounts for 
 elementary and secondary school expenses and to increase the maximum 
            annual amount of contributions to such accounts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 31, 1997

Mr. Coverdell (for himself, Mr. Lott, Mr. Nickles, Mr. Mack, Mr. Craig, 
  Mr. McConnell, Mr. Roth, Mr. Gramm, Mr. Abraham, Mr. Ashcroft, Mr. 
Allard, Mr. Bennett, Mr. Bond, Mr. Brownback, Mr. Coats, Mr. Domenici, 
Mr. DeWine, Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Gregg, Mr. Hagel, 
 Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. Hutchison, Mr. Inhofe, Mr. 
 Lieberman, Mr. McCain, Mr. Murkowski, Mr. Roberts, Mr. Sessions, Mr. 
  Shelby, Mr. Smith of New Hampshire, Mr. Torricelli, and Mr. Warner) 
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 allow tax-free 
    expenditures from education individual retirement accounts for 
 elementary and secondary school expenses and to increase the maximum 
            annual amount of contributions to such accounts.

    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 ``Parent and Student Savings Account 
PLUS Act''.

SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT ACCOUNTS.

    (a) Tax-Free Expenditures for Elementary and Secondary School 
Expenses.--
            (1) In general.--Section 530(b)(2) of the Internal Revenue 
        Code of 1986 is amended to read as follows:
            ``(2) Qualified education expenses.--
                    ``(A) In general.--The term `qualified education 
                expenses' means--
                            ``(i) qualified higher education expenses 
                        (as defined in section 529(e)(3)), and
                            ``(ii) qualified elementary and secondary 
                        education expenses (as defined in paragraph 
                        (4)).
                Such expenses shall be reduced as provided in section 
                25A(g)(2).
                    ``(B) Qualified state tuition programs.--Such term 
                shall include amounts paid or incurred to purchase 
                tuition credits or certificates, or to make 
                contributions to an account, under a qualified State 
                tuition program (as defined in section 529(b)) for the 
                benefit of the beneficiary of the account.''
            (2) Qualified elementary and secondary education 
        expenses.--Section 530(b) of such Code is amended by adding at 
        the end the following new paragraph:
            ``(4) Qualified elementary and secondary education 
        expenses.--
                    ``(A) In general.--The term `qualified elementary 
                and secondary education expenses' means tuition, fees, 
                tutoring, special needs services, books, supplies, 
                equipment, transportation, and supplementary expenses 
                required for the enrollment or attendance of the 
                designated beneficiary of the trust at a public, 
                private, or sectarian school.
                    ``(B) Special rule for homeschooling.--Such term 
                shall include expenses described in subparagraph (A) 
                required for education provided for homeschooling if 
                the requirements of any applicable State or local law 
                are met with respect to such education.
                    ``(C) School.--The term `school' means any school 
                which provides elementary education or secondary 
                education (through grade 12), as determined under State 
                law.''
            (3) Conforming amendments.--Subsections (b)(1) and (d)(2) 
        of section 530 of such Code are each amended by striking 
        ``higher'' each place it appears in the text and heading 
        thereof.
    (b) Increase in Maximum Annual Contributions.--
            (1) In general.--Section 530(b)(1)(A)(iii) of the Internal 
        Revenue Code of 1986 is amended by striking ``$500'' and 
        inserting ``$2,000''.
            (2) Conforming amendments.--
                    (A) Section 530(d)(4)(C) of such Code is amended by 
                striking ``$500'' and inserting ``$2,000''.
                    (B) Section 4973(e)(1)(A) of such Code is amended 
                by striking ``$500'' and inserting ``$2,000''.
    (c) Effective Date; References.--
            (1) Effective date.--The amendments made by this section 
        shall take effect as if included in the amendments made by 
        section 213 of the Taxpayer Relief Act of 1997.
            (2) References.--Any reference in this section to any 
        section of the Internal Revenue Code of 1986 shall be a 
        reference to such section as added by the Taxpayer Relief Act 
        of 1997.
                                 <all>