[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2306 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 2306

To amend the Internal Revenue Code of 1986 to encourage the use of 529 
plans and Coverdell education savings accounts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 16, 2018

Mr. Lee (for himself and Mr. Cruz) 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 encourage the use of 529 
plans and Coverdell education savings 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 ``Enhancing Educational Opportunities 
for all Students Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                TITLE I--TITLE I OF THE ESEA PORTABILITY

Sec. 101. Title I portability.
TITLE II--FURTHER CLARIFICATION OF COVERDELL EDUCATION SAVINGS ACCOUNTS

Sec. 201. Allowance of home school expenses as qualified education 
                            expenses for purposes of a Coverdell 
                            Education Savings Account.
Sec. 202. Elimination of Coverdell Education Savings Account 
                            contribution limitation.
TITLE III--529 PROGRAMS FOR ELEMENTARY AND SECONDARY EDUCATION EXPENSES

Sec. 301. Programs for pre-kindergarten, elementary, and secondary 
                            education expenses.

                TITLE I--TITLE I OF THE ESEA PORTABILITY

SEC. 101. TITLE I PORTABILITY.

    (a) In General.--Part A of title I of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6311 et seq.) is amended by adding at 
the end the following:

``SEC. 1128. TITLE I FUNDS FOLLOW THE LOW-INCOME CHILD STATE OPTION.

    ``(a) In General.--Notwithstanding any other provision of law and 
to the extent permitted under State law, a State educational agency may 
allocate grant funds under this part among the local educational 
agencies in the State based on the number of eligible children enrolled 
in the public schools served by each local educational agency and the 
State-accredited private schools within each local educational agency's 
geographic jurisdiction.
    ``(b) Eligible Child.--
            ``(1) Definition.--In this section, the term `eligible 
        child' means a child aged 5 to 17, inclusive, from a family 
        with an income below the poverty level on the basis of the most 
        recent satisfactory data published by the Department of 
        Commerce.
            ``(2) Criteria of poverty.--In determining the families 
        with incomes below the poverty level for the purposes of this 
        section, a State educational agency shall use the criteria of 
        poverty used by the Census Bureau in compiling the most recent 
        decennial census, as the criteria have been updated by 
        increases in the Consumer Price Index for All Urban Consumers, 
        published by the Bureau of Labor Statistics.
    ``(c) Student Enrollment in Public and Private Schools.--
            ``(1) Identification of eligible children.--On an annual 
        basis, on a date to be determined by the State educational 
        agency, each local educational agency that receives grant 
        funding in accordance with subsection (a) shall inform the 
        State educational agency of the number of eligible children 
        enrolled in public schools served by the local educational 
        agency and the State-accredited private schools within the 
        local educational agency's geographic jurisdiction.
            ``(2) Allocation to local educational agencies.--Based on 
        the identification of eligible children in paragraph (1), the 
        State educational agency shall provide to a local educational 
        agency an amount equal to the sum of the amount available for 
        each eligible child in the State multiplied by the number of 
        eligible children identified by the local educational agency 
        under paragraph (1).
            ``(3) Distribution to schools.--Each local educational 
        agency that receives funds under paragraph (2) shall distribute 
        such funds to the public schools served by the local 
        educational agency and State-accredited private schools within 
        the local educational agency's geographic jurisdiction--
                    ``(A) based on the number of eligible children 
                enrolled in such schools; and
                    ``(B) in a manner that would, in the absence of 
                such Federal funds, supplement the funds made available 
                from non-Federal resources for the education of pupils 
                participating in programs under this subpart, and not 
                to supplant such funds.''.
    (b) Amendment to Table of Contents.--The table of contents in 
section 2 of the Elementary and Secondary Education Act of 1965 is 
amended by inserting after the item relating to section 1127 the 
following:

``Sec. 1128. Title I funds follow the low-income child State option.''.

TITLE II--FURTHER CLARIFICATION OF COVERDELL EDUCATION SAVINGS ACCOUNTS

SEC. 201. ALLOWANCE OF HOME SCHOOL EXPENSES AS QUALIFIED EDUCATION 
              EXPENSES FOR PURPOSES OF A COVERDELL EDUCATION SAVINGS 
              ACCOUNT.

    (a) In General.--Paragraph (3) of section 530(b) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(C) Private school.--For purposes of this 
                section, the term `private school' includes any home 
                school that meets the requirements of State law 
                applicable to such home schools, whether or not such 
                school is deemed a private school for purposes of State 
                law.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.

SEC. 202. ELIMINATION OF COVERDELL EDUCATION SAVINGS ACCOUNT 
              CONTRIBUTION LIMITATION.

    (a) In General.--Subparagraph (A) of section 530(b)(1) of the 
Internal Revenue Code of 1986 is amended by inserting ``or'' at the end 
of clause (i), by striking ``, or'' at the end of clause (ii) and 
inserting a period, and by striking clause (iii).
    (b) Prohibition on Excess Contributions.--Subsection (b) of section 
530 of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph:
            ``(5) Prohibition on excess contributions.--A program shall 
        not be treated as a Coverdell education savings account unless 
        it provides adequate safeguards to prevent contributions on 
        behalf of a designated beneficiary in excess of those necessary 
        to provide for the qualified education expenses of the 
        beneficiary.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

TITLE III--529 PROGRAMS FOR ELEMENTARY AND SECONDARY EDUCATION EXPENSES

SEC. 301. PROGRAMS FOR PRE-KINDERGARTEN, ELEMENTARY, AND SECONDARY 
              EDUCATION EXPENSES.

    (a) In General.--Paragraph (7) of section 529(c) of the Internal 
Revenue Code of 1986, as added by section 11032 of Public Law 115-97, 
is amended to read as follows:
            ``(7) Treatment of certain pre-higher education expenses.--
                    ``(A) In general.--Any reference in this section to 
                the term `qualified higher education expense' shall 
                include a reference to--
                            ``(i) expenses for tuition, fees, academic 
                        tutoring, special needs services (in the case 
                        of a special needs beneficiary), and books, 
                        supplies, and other equipment which are 
                        incurred in connection with the enrollment or 
                        attendance of the designated beneficiary as a 
                        pre-kindergarten, elementary, or secondary 
                        school student at a public, private, or 
                        religious school,
                            ``(ii) expenses for room and board, 
                        uniforms, transportation, and supplementary 
                        items and services (including extended day 
                        programs) which are required or provided by a 
                        public, private, or religious school in 
                        connection with such enrollment or attendance, 
                        and
                            ``(iii) expenses for the purchase of any 
                        computer technology or equipment (as defined in 
                        section 170(e)(6)(F)(i)) or Internet access and 
                        related services, if such technology, 
                        equipment, or services are to be used by the 
                        beneficiary and the beneficiary's family during 
                        any of the years the beneficiary is in school.
                Clause (iii) shall not include expenses for computer 
                software designed for sports, games, or hobbies unless 
                the software is predominantly educational in nature.
                    ``(B) School.--For purposes of this paragraph, the 
                term `school' means any school (including a home 
                school) which provides pre-kindergarten, elementary, or 
                secondary education (pre-kindergarten through grade 
                12), as determined under State law. Such a school shall 
                be treated as an eligible educational institution for 
                purposes of subsection (b).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2017.
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