[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 474 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 474

 To amend the Internal Revenue Code of 1986 to provide a deduction for 
  contributions to education individual retirement accounts, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 25, 1999

  Mr. Schumer 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 provide a deduction for 
  contributions to education individual retirement accounts, 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 ``Save for College Act of 1999''.

SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO EDUCATION INDIVIDUAL RETIREMENT 
              ACCOUNTS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (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. EDUCATION INDIVIDUAL RETIREMENT ACCOUNTS.

    ``In the case of an individual, there shall be allowed as a 
deduction the amount paid in cash during the taxable year by such 
individual to an education individual retirement account under section 
530.''
    (b) Deduction Allowed in Arriving at Adjusted Gross Income.--
Paragraph (7) of section 62(a) of such Code (relating to retirement 
savings) is amended--
            (1) by inserting ``or education'' after ``Retirement'' in 
        the heading of such paragraph, and
            (2) by inserting before the period at the end the 
        following: ``and the deduction allowed by section 222 (relating 
        to education individual retirement accounts)''.
    (c) Modifications to Education Individual Retirement Accounts.--
            (1) Increase in contribution limit.--Section 
        530(b)(1)(A)(iii) of such Code (defining education individual 
        retirement account) is amended by striking ``$500'' and 
        inserting ``$2,000''.
            (2) Increase in agi limits.--Section 530(c)(1) of such Code 
        (relating to reduction in permitted contributions based on 
        adjusted gross income) is amended--
                    (A) by striking ``$95,000 ($150,000'' in 
                subparagraph (A)(ii) and inserting ``$100,000 
                ($140,000'', and
                    (B) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) $20,000.''
            (3) Inflation adjustments.--Section 530 of such Code is 
        amended by adding at the end the following new subsection:
    ``(i) Inflation Adjustments.--
            ``(1) Dollar limitation on amount of contribution.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 1999, the $2,000 amount under 
                subsection (b)(1)(A)(iii) shall be increased by an 
                amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 1998' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $100, such amount 
                shall be rounded to the next lowest multiple of $100.
            ``(2) Income limits.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 1999, the $100,000 and $140,000 amounts 
                under subsection (c)(1)(A)(ii) shall each be increased 
                by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 1998' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $5,000, such 
                amount shall be rounded to the next lowest multiple of 
                $5,000.''
    (d) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the item 
relating to section 222 and inserting the following new items:

                              ``Sec. 222. Education individual 
                                        retirement accounts.
                              ``Sec. 223. Cross references.''
    (e) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after December 
31, 1998.
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