[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2873 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2873

   To amend the Internal Revenue Code of 1986 to allow individuals a 
    deduction for contributions to education individual retirement 
   accounts, to increase the amount which may be contributed to such 
  accounts, to permit such accounts to be used to pay elementary and 
      secondary education expenses and training expenses of older 
                  individuals, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 15, 1999

 Mr. English 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 individuals a 
    deduction for contributions to education individual retirement 
   accounts, to increase the amount which may be contributed to such 
  accounts, to permit such accounts to be used to pay elementary and 
      secondary education expenses and training expenses of older 
                  individuals, 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 ``Education for Life Act of 1999''.

SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT ACCOUNTS.

    (a) Withdrawals for Elementary and Secondary School Expenses and 
for Job Training Expenses by Older Individuals.--
            (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 elementary and secondary 
                        education expenses (as defined in paragraph 
                        (4)),
                            ``(ii) qualified higher education expenses 
                        (as defined in section 529(e)(3)), and
                            ``(iii) qualified job training expenses (as 
                        defined in paragraph (5)).
                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; 
        qualified job training expenses.--Section 530(b) of such Code 
        is amended by adding at the end the following new paragraphs:
            ``(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, 
                computer equipment (including related software and 
                services) and other equipment, transportation, and 
                supplementary expenses required for the enrollment or 
                attendance of the designated beneficiary of the trust 
                at a public, private, or religious 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.
            ``(5) Qualified job training expenses.--
                    ``(A) In general.--The term `qualified job training 
                expenses' means--
                            ``(i) tuition and fees required for the 
                        enrollment or attendance of a worker in an 
                        applicable training program,
                            ``(ii) fees, books, supplies, and equipment 
                        required for an applicable training program, 
                        and
                            ``(iii) a reasonable allowance for meals 
                        and lodging while attending an applicable 
                        training program.
                    ``(B) Applicable training program.--For purposes of 
                subparagraph (A), the term `applicable training 
                program' means--
                            ``(i) any applicable program (as defined in 
                        section 314(g) of the Job Training Partnership 
                        Act), and
                            ``(ii) any training program approved under 
                        section 236 of the Trade Act of 1974.''.
            (3) Contributions to account permitted until beneficiary 
        attains age 55.--Clause (ii) of section 530(b)(1)(A) of such 
        Code is amended by striking ``age 18'' and inserting ``age 
        55''.
            (4) 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 Contributions to Education Individual 
Retirement Accounts.--Sections 530(b)(1)(A)(iii) and 4973(e)(1)(A) of 
such Code are each amended by striking ``$500'' and inserting 
``$2,500''.
    (c) Deduction for Contributions to Education Individual Retirement 
Accounts.--
            (1) In general.--Part VII of subchapter B of chapter 1 of 
        such Code (relating to additional itemized deductions for 
        individuals) is amended by redesignating section 222 as section 
        223 and by inserting after section 221 the following new 
        section:

``SEC. 222. CONTRIBUTIONS TO EDUCATION INDIVIDUAL RETIREMENT ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of an individual, there shall 
be allowed as a deduction the amount paid in cash for the taxable year 
by or on behalf of such individual to any education individual 
retirement account for the benefit of any individual.
    ``(b) Maximum Deduction.--The amount allowable as a deduction under 
subsection (a) shall not exceed $2,500 with respect to each individual 
for whose benefit the payments referred to in subsection (a) are made.
    ``(c) Other Limitations and Restrictions.--
            ``(1) Beneficiary must be under age 55.--No deduction shall 
        be allowed under this section for any payment for the benefit 
        of an individual if such individual has attained age 55 before 
        the date that the payment is made.
            ``(2) Recontributed amounts.--No deduction shall be allowed 
        under this section with respect to a rollover contribution.
            ``(3) Time when contributions deemed made.--For purposes of 
        this section, a taxpayer shall be deemed to have made a 
        contribution to an education individual retirement account on 
        the last day of the preceding taxable year if the contribution 
        is made on account of such taxable year and is made not later 
        than the time prescribed by law for filing the return for such 
        taxable year (not including extensions thereof).
            ``(4) Employer payments.--For purposes of this title, any 
        amount paid by an employer to an education individual 
        retirement account shall be treated as payment of compensation 
        to the employee (other than a self-employed individual who is 
        an employee within the meaning of section 401(c)(1)) includible 
        in his gross income in the taxable year for which the amount 
        was contributed, whether or not a deduction for such payment is 
        allowable under this section to the employee.''.
            (2) Deduction allowed whether or not taxpayer itemizes 
        other deductions.--Subsection (a) of section 62 of such Code is 
        amended by inserting after paragraph (17) the following new 
        paragraph:
            ``(18) Contributions to education individual retirement 
        accounts.--The deduction allowed by section 222.''.
            (3) Clerical amendment.--The table of sections for part VII 
        of subchapter B of chapter 1 of such Code is amended by 
        striking the last item and inserting the following new items:

                              ``Sec. 222. Contributions to education 
                                        individual retirement accounts.
                              ``Sec. 223. Cross reference.''.
    (d) No Penalty for Distributions Not Used for Education Expenses 
After Date Beneficiary Attains Age 59\1/2\.--Subparagraph (B) of 
section 530(d)(4) of such Code (relating to additional tax for 
distributions not used for educational expenses) is amended by striking 
``or'' at the end of clause (iii), by striking the period at the end of 
clause (iv) and inserting ``, or'', and by adding at the end the 
following new clause:
                            ``(v) made to the designated beneficiary on 
                        or after the date on which the designated 
                        beneficiary attains age 59\1/2\.''.
    (e) Waiver of Age Limitations for Children With Special Needs.--
Paragraph (1) of section 530(b) of such Code is amended by adding at 
the end the following flush sentence:
        ``The age limitations in this paragraph shall not apply to any 
        designated beneficiary with special needs (as determined under 
        regulations prescribed by the Secretary).''.
    (f) Corporations Permitted To Contribute to Accounts.--Paragraph 
(1) of section 530(c) of such Code is amended by striking ``The maximum 
amount which a contributor'' and inserting ``In the case of a 
contributor who is an individual, the maximum amount the contributor''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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