[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1515 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1515

   To amend the Internal Revenue Code of 1986 to improve and expand 
                      education savings accounts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 18, 2013

   Mr. Kirk 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 improve and expand 
                      education savings 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 ``401Kids Family Savings Act of 
2013''.

SEC. 2. CONVERSION OF COVERDELL EDUCATION SAVINGS ACCOUNTS TO 401KIDS 
              SAVINGS ACCOUNTS.

    (a) In General.--Section 530 of the Internal Revenue Code of 1986 
is amended by striking ``Coverdell education savings account'' each 
place it appears in subsection (a), subsection (b)(1), subsection 
(b)(4), subsection (d)(4)(A), subsection (d)(5), subsection (d)(6), 
subsection (d)(9), and subsection (h), and inserting ``401Kids savings 
account''.
    (b) Conforming Amendments.--
            (1) The heading of section 530 of the Internal Revenue Code 
        of 1986 is amended by striking ``coverdell education savings 
        accounts'' and inserting ``401kids savings accounts''.
            (2) The heading of paragraph (1) of section 530(b) of such 
        Code is amended by striking ``Coverdell education savings 
        account'' and inserting ``401Kids savings account''.
            (3) Section 26(b)(2)(E) of such Code is amended by striking 
        ``Coverdell education savings accounts'' and inserting 
        ``401Kids savings accounts''.
            (4) Section 72(e)(9) of such Code is amended by striking 
        ``Coverdell education savings account'' and inserting ``401Kids 
        savings account''.
            (5) The heading of paragraph (9) of section 72(e) of such 
        Code is amended by striking ``Coverdell education savings 
        accounts'' and inserting ``401Kids savings accounts''.
            (6) Section 135(c)(2)(C) of such Code is amended by 
        striking ``Coverdell education savings account'' and inserting 
        ``401Kids savings account''.
            (7) The heading of subparagraph (C) of section 135(c)(2) of 
        such Code is amended by striking ``Coverdell education savings 
        accounts'' and inserting ``401Kids savings accounts''.
            (8) Section 408A(e)(2)(A)(ii) of such Code is amended by 
        striking ``Coverdell education savings account'' and inserting 
        ``401Kids savings account''.
            (9) The heading of clause (vi) of section 529(c)(3)(B) of 
        such Code is amended by striking ``Coverdell education savings 
        accounts'' and inserting ``401Kids savings accounts''.
            (10) Section 529(c)(6) of such Code is amended by striking 
        ``Coverdell education savings account'' and inserting ``401Kids 
        savings account''.
            (11) Section 877A(e)(2) of such Code is amended by striking 
        ``Coverdell education savings account'' and inserting ``401Kids 
        savings account''.
            (12) Section 4973(a)(4) of such Code is amended by striking 
        ``Coverdell education savings account'' and inserting ``401Kids 
        savings account''.
            (13) Section 4973(e)(1) of such Code is amended by striking 
        ``Coverdell education savings accounts'' and inserting 
        ``401Kids savings accounts''.
            (14) Section 4973(e)(2)(A) of such Code is amended by 
        striking ``Coverdell education savings account'' and inserting 
        ``401Kids savings account''.
            (15) The heading of subsection (e) of section 4973 of such 
        Code is amended by striking ``Coverdell Education Savings 
        Accounts'' and inserting ``401Kids Savings Accounts''.
            (16) Section 4975(c)(5) of such Code is amended by striking 
        ``Coverdell education savings account'' and inserting ``401Kids 
        savings account''.
            (17) The heading of paragraph (5) of section 4975(c) of 
        such Code is amended by striking ``Coverdell education savings 
        accounts'' and inserting ``401Kids savings accounts''.
            (18) Section 4975(e)(1)(F) of such Code is amended by 
        striking ``Coverdell education savings account'' and inserting 
        ``401Kids savings account''.
            (19) Section 6693(a)(2)(E) of such Code is amended by 
        striking ``Coverdell education savings accounts'' and inserting 
        ``401Kids savings accounts''.
            (20) The heading of part VIII of subchapter F of chapter 1 
        of such Code is amended by striking ``higher education 
        savings'' and inserting ``education and children's savings''.
    (c) Clerical Amendments.--
            (1) The item relating to part VIII in the table of parts 
        for subchapter F of chapter 1 of the Internal Revenue Code of 
        1986 is amended to read as follows:

       ``Part VIII. Education and Children's Savings Entities''.

            (2) The table of sections for part VIII of subchapter F of 
        chapter 1 of such Code is amended by striking the item relating 
        to section 530 and inserting the following new item:

``Sec. 530. 401Kids savings accounts.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. QUALIFIED DISTRIBUTIONS FOR FIRST HOME PURCHASES.

    (a) In General.--Paragraph (1) of section 530(b) of the Internal 
Revenue Code of 1986 is amended by striking ``qualified education 
expenses'' and inserting ``qualified expenses''.
    (b) Qualified Expenses.--Subsection (b) of section 530 of the 
Internal Revenue Code of 1986 is amended by redesignating paragraphs 
(2), (3), and (4) as paragraphs (4), (5), and (6), respectively, and by 
inserting after paragraph (1) the following new paragraphs:
            ``(2) Qualified expenses.--The term `qualified expenses' 
        means--
                    ``(A) qualified first-time homebuyer expenses, and
                    ``(B) qualified education expenses.
            ``(3) Qualified first-time homebuyer expenses.--
                    ``(A) In general.--The term `qualified first-time 
                homebuyer expenses' means, in the case of a designated 
                beneficiary who is a first-time homebuyer, the 
                qualified acquisition costs with respect to a principal 
                residence of such beneficiary.
                    ``(B) Definitions.--The terms `first-time 
                homebuyer', `qualified acquisition costs', and 
                `principal residence' have the same meaning as when 
                used in section 72(t)(8).''.
    (c) Conforming Amendments.--
            (1) Paragraph (4)(A)(ii) (as redesignated by subsection 
        (b)) of section 530(b) of the Internal Revenue Code of 1986 is 
        amended by striking ``as defined in paragraph (3)'' and 
        inserting ``as defined in paragraph (5)''.
            (2) Subparagraphs (A), (B), and (D) of section 530(d)(1) of 
        such Code are each amended by striking ``qualified education 
        expenses'' each place it appears and inserting ``qualified 
        expenses''.
            (3) The heading of paragraph (2) of section 530(d) of such 
        Code is amended by striking ``education expenses'' and 
        inserting ``expenses''.
            (4) The heading of paragraph (4) of section 530(d) of such 
        Code is amended by striking ``educational expenses'' and 
        inserting ``expenses''.
            (5) Subclause (I) of section 529(c)(3)(B)(vi) of such Code 
        is amended by striking ``to which clauses (i) and (ii) and 
        section 530(d)(2)(A) apply'' and inserting ``for qualified 
        higher education expenses to which clauses (i) and (ii) apply 
        and for qualified education expenses to which section 
        530(d)(2)(A) applies''.
            (6) Clause (vi) of section 529(c)(3)(B) of such Code is 
        amended by striking ``and section 530(d)(2)(A).'' and inserting 
        ``and the amount of the exclusion with respect to qualified 
        education expenses under section 530(d)(2)(A).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to distributions made in taxable years beginning after the date 
of the enactment of this Act.

SEC. 4. QUALIFIED ROLLOVER CONTRIBUTIONS FROM 401KIDS SAVINGS ACCOUNTS 
              TO ROTH IRAS.

    (a) In General.--Paragraph (5) of section 530(d) of the Internal 
Revenue Code of 1986 is amended by inserting ``, or into a Roth IRA of 
the beneficiary'' after ``as of such date''.
    (b) Conforming Amendment; Technical Correction.--Paragraph (1) of 
section 408A(e) of the Internal Revenue Code of 1986 is amended to read 
as follows:
            ``(1) In general.--The term `qualified rollover 
        contribution' means a rollover contribution to a Roth IRA from 
        another such account, from an eligible retirement plan (as 
        defined in section 402(c)(8)(B)), or from a 401Kids savings 
        account (as defined in section 530(b)(1)), but only if--
                    ``(A) such rollover contribution meets the 
                requirements of section 408(d)(3),
                    ``(B) in the case of a rollover contribution from 
                an eligible retirement plan described in clause (iii), 
                (iv), (v), or (vi) of section 402(c)(8)(B), such 
                contribution meets the requirements of section 402(c), 
                403(b)(8), or 457(e)(16), whichever is applicable, and
                    ``(C) in the case of a rollover contribution from a 
                401Kids savings account, such contribution meets the 
                requirements of section 530(d)(5).
        For purposes of section 408(d)(3)(B), there shall be 
        disregarded any qualified rollover contribution from an 
        individual retirement plan (other than a Roth IRA) to a Roth 
        IRA.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to rollover contributions made in taxable years beginning after 
the date of the enactment of this Act.
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