I 111th CONGRESS 2d Session H. R. 4857 IN THE HOUSE OF REPRESENTATIVES March 16, 2010 Mr. Hodes introduced the following bill; which was referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend title 5, United States Code, to allow amounts to be transferred from a qualified tuition program to the Thrift Savings Plan for the benefit of any individual who is eligible to participate in such Plan by virtue of being a member of the uniformed services or of the Ready Reserve, and for other purposes.

1.

Transfers from qualified tuition programs to the Thrift Savings Plan

(a)

In general

Section 8440e of title 5, United States Code, is amended by adding at the end the following: (f) (1)Any person may transfer to the Thrift Savings Fund, to the account of any qualified member, any contributions previously made by such person under a qualified tuition program and with respect to which such member is the designated beneficiary. (2)For purposes of this subsection— (A)the term qualified member means any member who— (i)is eligible to participate in the Thrift Savings Plan by virtue of section 211(b) of title 37; and (ii)in connection with the proposed transfer under paragraph (1), provides (in accordance with such requirements as may by regulation apply)— (I)any information necessary— (aa)to identify such member’s account in the Thrift Savings Fund; or (bb)if none, to establish such an account; and (II)any other information which may be necessary to effect such transfer; (B)the terms qualified tuition program and designated beneficiary have the respective meanings given them by section 529 of the Internal Revenue Code of 1986; and (C)the term contributions— (i)when referring to amounts contributed under an arrangement described in clause (i) of section 529(b)(1)(A) of such Code, means the cash value of the credits or certificates referred to in such clause (as determined under regulations); and (ii)when referring to amounts contributed under an arrangement described in clause (ii) of section 529(b)(1)(A) of such Code, includes any earnings thereon. (3)A transfer under this subsection for the benefit of a qualified member may be made irrespective of whether or not such member has otherwise elected to participate in the Thrift Savings Plan. . (b)

Establishment and maintenance of account in Thrift Savings Fund

Section 8439(a)(1) of title 5, United States Code, is amended by striking under section 8432 of this title or who makes contributions to the Thrift Savings Fund. and inserting under section 8432, for whose benefit any transfers are made under section 8440e(f), or who otherwise makes contributions or for whom contributions are otherwise made to the Thrift Savings Fund.. (c)

Regulations

Any regulations necessary to carry out the amendments made by this section shall, to the extent that they relate to the operation of the Thrift Savings Fund, be prescribed by the Executive Director of the Federal Retirement Thrift Investment Board (described in section 8474 of title 5, United States Code) after consultation with the Secretary of the Treasury.

2.

Distributions from qualified tuition plans provided tax-free rollover treatment

(a)

In general

Paragraph (3) of section 529(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (E)

Distributions for Thrift Savings Fund of member of uniformed services

(i)

In general

Subparagraph (A) shall not apply to that portion of any distribution from a qualified tuition program which, within 60 days of such distribution, is transferred under section 8440e(f) of title 5, United States Code, to the Thrift Savings Fund (as defined in section 7701(j)(4)) of a qualified member who is the designated beneficiary under the qualified tuition program. For purposes of the preceding sentence, the term qualified member has the meaning given such term by such section 8440e(f). (ii)

Limitation

Clause (i) shall not apply to any transfer from a qualified tuition program is clause (i) applied to a prior transfer from such program.. (b)

Effective date

The amendment made by this section shall apply to distributions after the date of the enactment of this Act.