[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 335 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                 S. 335

    To amend the Internal Revenue Code of 1986 to improve 529 plans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 2, 2015

    Mr. Grassley (for himself, Mr. Casey, Mr. Burr, Mr. Warner, Mr. 
Roberts, and Mr. Cardin) 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 529 plans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. COMPUTER TECHNOLOGY AND EQUIPMENT ALLOWED AS A QUALIFIED 
              HIGHER EDUCATION EXPENSE FOR SECTION 529 ACCOUNTS.

    (a) Made Permanent.--Clause (iii) of section 529(e)(3)(A) of the 
Internal Revenue Code of 1986 is amended by striking ``in 2009 or 
2010''.
    (b) Only for Use Primarily by the Beneficiary.--Clause (iii) of 
section 529(e)(3)(A) of such Code is amended by striking ``used by the 
beneficiary and the beneficiary's family'' and inserting ``used 
primarily by the beneficiary''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after December 31, 2014.

SEC. 2. ELIMINATION OF DISTRIBUTION AGGREGATION REQUIREMENTS.

    (a) In General.--Clause (ii) of section 529(c)(3)(D) of the 
Internal Revenue Code of 1986 is amended by inserting before the comma 
at the end the following: ``, except for purposes of calculating the 
earnings portion of any distribution.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after December 31, 2014.

SEC. 3. CONTRIBUTION OF AMOUNTS PREVIOUSLY DISTRIBUTED IN CASE OF 
              WITHDRAWAL FROM SCHOOL.

    (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) Special rule for contributions relating to 
                withdrawal from school.--In the case of a beneficiary 
                who receives a refund of any qualified higher education 
                expenses from an eligible educational institution in 
                connection with withdrawal from enrollment at such 
                institution, subparagraph (A) shall not apply to that 
                portion of any distribution for the taxable year which 
                is recontributed to a qualified tuition program of 
                which such individual is a beneficiary, but only to the 
                extent such recontribution is made not later than 60 
                days after the date of such refund and does not exceed 
                the refunded amount.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to distributions after December 31, 2014.
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