[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 285 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 285

To amend the Internal Revenue Code of 1986 to exclude from gross income 
     any distribution from a qualified State tuition program used 
exclusively to pay qualified higher education expenses incurred by the 
            designated beneficiary, and for other purposes.


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                   IN THE SENATE OF THE UNITED STATES

                            February 6, 1997

Mr. Shelby (for himself, Mr. Sessions, Mr. DeWine, Mr. Hutchinson, Mr. 
Cochran, and Mr. Smith of New Hampshire) 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 exclude from gross income 
     any distribution from a qualified State tuition program used 
exclusively to pay qualified higher education expenses incurred by the 
            designated beneficiary, and for other purposes.

    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 ``Tuition Tax Elimination Act''.

SEC. 2. TAX-FREE DISTRIBUTIONS FROM QUALIFIED STATE TUITION PROGRAMS.

    (a) In General.--Section 529(c)(3)(A) of the Internal Revenue Code 
of 1986 (relating to distributions) is amended by striking ``not 
excluded from gross income under any other provision of this chapter'' 
and inserting ``not used exclusively to pay qualified higher education 
expenses of the designated beneficiary''.
    (b) Effective Date.--The amendment made by this section takes 
effect as if included in the amendments made by section 1806 of the 
Small Business Job Protection Act of 1996.

SEC. 3. SUSPENSION OF INFLATION ADJUSTMENTS FOR INDIVIDUALS WITH NO 
              QUALIFYING CHILDREN.

    (a) In General.--Section 32(j) of the Internal Revenue Code of 1986 
(relating to inflation adjustments) is amended by adding at the end the 
following:
            ``(3) No adjustment for individuals with no qualifying 
        children.--This subsection shall not apply to each dollar 
        amount contained in subsection (b)(2) with respect to 
        individuals with no qualifying children.''.
    (b) Effective Date.--The amendment made by this section applies to 
taxable years beginning after December 31, 1996.
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