I 

115TH CONGRESS 

1ST SESSION H. R. 716 

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 HOUSE OF REPRESENTATIVES 

JANUARY 27, 2017 

Mr. MESSER introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, 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 the Internal Revenue Code of 1986 to encourage 

the use of 529 plans and Coverdell education savings 

accounts, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Enhancing Edu5 cational Opportunities for all Students Act’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

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TITLE I—TITLE I OF THE ESEA PORTABILITY 

Sec. 101. Title I portability. 

Sec. 102. Table of contents amendment. 

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. 529 programs for pre-kindergarten, elementary, and secondary education expenses. 

1 TITLE I—TITLE I OF THE ESEA 

2 PORTABILITY 

3 SEC. 101. TITLE I PORTABILITY. 

4 Part A of title I of the Elementary and Secondary 

5 Education Act of 1965 (20 U.S.C. 6311 et seq.) is amend6 ed by adding at the end the following: 

7 ‘‘SEC. 1128. TITLE I FUNDS FOLLOW THE LOW-INCOME 

8 CHILD STATE OPTION. 

9 ‘‘(a) IN GENERAL.—Notwithstanding any other pro10 vision of law and to the extent permitted under State law, 

11 a State educational agency may allocate grant funds under 

12 this part among the local educational agencies in the State 

13 based on the number of eligible children enrolled in the 

14 public schools served by each local educational agency and 

15 the State-accredited private schools within each local edu16 cational agency’s geographic jurisdiction. 

17 ‘‘(b) ELIGIBLE CHILD.— 

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1 ‘‘(1) DEFINITION.—In this section, the term 

2 ‘eligible child’ means a child aged 5 to 17, inclusive, 

3 from a family with an income below the poverty level 

4 on the basis of the most recent satisfactory data 

5 published by the Department of Commerce. 

6 ‘‘(2) CRITERIA OF POVERTY.—In determining 

7 the families with incomes below the poverty level for 

8 the purposes of this section, a State educational 

9 agency shall use the criteria of poverty used by the 

10 Census Bureau in compiling the most recent decen11 nial census, as the criteria have been updated by in12 creases in the Consumer Price Index for All Urban 

13 Consumers, published by the Bureau of Labor Sta14 tistics. 

15 ‘‘(c) STUDENT ENROLLMENT IN PUBLIC AND PRI16 VATE SCHOOLS.— 

17 ‘‘(1) IDENTIFICATION OF ELIGIBLE CHIL18 DREN.—On an annual basis, on a date to be deter19 mined by the State educational agency, each local 

20 educational agency that receives grant funding in ac21 cordance with subsection (a) shall inform the State 

22 educational agency of the number of eligible children 

23 enrolled in public schools served by the local edu24 cational agency and the State-accredited private 

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1 schools within the local educational agency’s geo2 graphic jurisdiction. 

3 ‘‘(2) ALLOCATION TO LOCAL EDUCATIONAL

4 AGENCIES.—Based on the identification of eligible 

5 children in paragraph (1), the State educational 

6 agency shall provide to a local educational agency an 

7 amount equal to the sum of the amount available for 

8 each eligible child in the State multiplied by the 

9 number of eligible children identified by the local 

10 educational agency under paragraph (1). 

11 ‘‘(3) DISTRIBUTION TO SCHOOLS.—Each local 

12 educational agency that receives funds under para13 graph (2) shall distribute such funds to the public 

14 schools served by the local educational agency and 

15 State-accredited private schools within the local edu16 cational agency’s geographic jurisdiction— 

17 ‘‘(A) based on the number of eligible chil18 dren enrolled in such schools; and 

19 ‘‘(B) in a manner that would, in the ab20 sence of such Federal funds, supplement the 

21 funds made available from non-Federal re22 sources for the education of pupils participating 

23 in programs under this subpart, and not to sup24 plant such funds.’’. 

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1 SEC. 102. TABLE OF CONTENTS AMENDMENT. 

2 The table of contents in section 2 of the Elementary 

3 and Secondary Education Act of 1965 (20 U.S.C. 6301 

4 et seq.) is amended by inserting after the item relating 

5 to section 1127 the following: 

‘‘1128. Title I funds follow the low-income child State option.’’. 

6 TITLE II—FURTHER CLARIFICA7 TION OF COVERDELL EDU8 CATION SAVINGS ACCOUNTS 

9 SEC. 201. ALLOWANCE OF HOME SCHOOL EXPENSES AS 

10 QUALIFIED EDUCATION EXPENSES FOR PUR11 POSES OF A COVERDELL EDUCATION SAV12 INGS ACCOUNT. 

13 (a) IN GENERAL.—Section 530(b)(3) of the Internal 

14 Revenue Code of 1986 is amended by adding at the end 

15 the following new subparagraph: 

16 ‘‘(C) PRIVATE SCHOOL.—For purposes of 

17 this section, the term ‘private school’ includes 

18 any home school that meets the requirements of 

19 State law applicable to such home schools, 

20 whether or not such school is deemed a private 

21 school for purposes of State law.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to taxable years beginning after 

24 December 31, 2014. 

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1 SEC. 202. ELIMINATION OF COVERDELL EDUCATION SAV2 INGS ACCOUNT CONTRIBUTION LIMITATION. 

3 (a) IN GENERAL.—Section 530(b)(1)(A) of the Inter4 nal Revenue Code of 1986 is amended by inserting ‘‘or’’ 

5 at the end of clause (i), by striking ‘‘or’’ at the end of 

6 clause (ii) and inserting a period, and by striking clause 

7 (iii). 

8 (b) PROHIBITION ON EXCESS CONTRIBUTIONS.— 

9 Section 530(b) of such Code is amended by adding at the 

10 end the following new paragraph: 

11 ‘‘(5) PROHIBITION ON EXCESS CONTRIBU12 TIONS.—A program shall not be treated as a Cover13 dell education savings account unless it provides 

14 adequate safeguards to prevent contributions on be15 half of a designated beneficiary in excess of those 

16 necessary to provide for the qualified education ex17 penses of the beneficiary.’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years beginning after 

20 December 31, 2014. 

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1 TITLE III—529 PROGRAMS FOR 

2 ELEMENTARY AND SEC3 ONDARY EDUCATION EX4 PENSES 

5 SEC. 301. 529 PROGRAMS FOR PRE-KINDERGARTEN, ELE6 MENTARY, AND SECONDARY EDUCATION EX7 PENSES. 

8 (a) IN GENERAL.—Section 529(e)(3) of the Internal 

9 Revenue Code of 1986 is amended— 

10 (1) by redesignating subparagraph (B) as sub11 paragraph (C); 

12 (2) by striking ‘‘QUALIFIED HIGHER EDU13 CATION EXPENSES’’ and all that follows through 

14 ‘‘The term ‘qualified higher education expenses’ 

15 means—’’ and inserting the following: ‘‘QUALIFIED

16 EDUCATION EXPENSES.— 

17 ‘‘(A) IN GENERAL.—The term ‘qualified 

18 education expenses’ means— 

19 ‘‘(i) qualified higher education ex20 penses, and 

21 ‘‘(ii) qualified pre-kindergarten, ele22 mentary, and secondary education ex23 penses. 

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1 ‘‘(B) QUALIFIED HIGHER EDUCATION EX2 PENSES.—The term ‘qualified higher education 

3 expenses’ means’’; and 

4 (3) by adding at the end the following new sub5 paragraphs: 

6 ‘‘(D) QUALIFIED PRE-KINDERGARTEN, EL7 EMENTARY, AND SECONDARY EDUCATION EX8 PENSES.—The term ‘qualified pre-kindergarten, 

9 elementary, and secondary education expenses’ 

10 means— 

11 ‘‘(i) expenses for tuition, fees, aca12 demic tutoring, special needs services in 

13 the case of a special needs beneficiary, 

14 books, supplies, and other equipment which 

15 are incurred in connection with the enroll16 ment or attendance of the designated bene17 ficiary of the trust as a pre-kindergarten, 

18 elementary, or secondary school student at 

19 a public, private, or religious school, 

20 ‘‘(ii) expenses for room and board, 

21 uniforms, transportation, and supple22 mentary items and services (including ex23 tended day programs) which are required 

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1 gious school in connection with such enroll2 ment or attendance, and 

3 ‘‘(iii) expenses for the purchase of any 

4 computer technology or equipment (as de5 fined in section 170(e)(6)(F)(i)) or Inter6 net access and related services, if such 

7 technology, equipment, or services are to 

8 be used by the beneficiary and the bene9 ficiary’s family during any of the years the 

10 beneficiary is in school. 

11 Clause (iii) shall not include expenses for com12 puter software designed for sports, games, or 

13 hobbies unless the software is predominantly 

14 educational in nature. 

15 ‘‘(E) SCHOOL.—The term ‘school’ means 

16 any school which provides pre-kindergarten, ele17 mentary, or secondary education (pre-kinder18 garten through grade 12), as determined under 

19 State law. Such a school shall be treated as an 

20 eligible educational institution for purposes of 

21 subsection (b).’’. 

22 (b) CONFORMING AMENDMENTS.—Section 529 of 

23 such Code is amended by striking ‘‘qualified higher edu24 cation’’ each place it appears in subsections (b) and (c) 

25 and inserting ‘‘qualified education’’. 

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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2014. 

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