II 

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. 

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. 

TITLE I—TITLE I OF THE ESEA PORTABILITY 

Sec. 101. Title I portability. 


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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. 

1 TITLE I—TITLE I OF THE ESEA 

2 PORTABILITY 

3 SEC. 101. TITLE I PORTABILITY. 

4 (a) IN GENERAL.—Part A of title I of the Elemen5 tary and Secondary Education Act of 1965 (20 U.S.C. 

6 6311 et seq.) is amended by adding at the end the fol7 lowing: 

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

9 CHILD STATE OPTION. 

10 ‘‘(a) IN GENERAL.—Notwithstanding any other pro11 vision of law and to the extent permitted under State law, 

12 a State educational agency may allocate grant funds under 

13 this part among the local educational agencies in the State 

14 based on the number of eligible children enrolled in the 

15 public schools served by each local educational agency and 

16 the State-accredited private schools within each local edu17 cational agency’s geographic jurisdiction. 

18 ‘‘(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 (b) AMENDMENT TO TABLE OF CONTENTS.—The 

2 table of contents in section 2 of the Elementary and Sec3 ondary Education Act of 1965 is amended by inserting 

4 after the item relating to section 1127 the following: 

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

5 TITLE II—FURTHER CLARIFICA6 TION OF COVERDELL EDU7 CATION SAVINGS ACCOUNTS 

8 SEC. 201. ALLOWANCE OF HOME SCHOOL EXPENSES AS 

9 QUALIFIED EDUCATION EXPENSES FOR PUR10 POSES OF A COVERDELL EDUCATION SAV11 INGS ACCOUNT. 

12 (a) IN GENERAL.—Paragraph (3) of section 530(b) 

13 of the Internal Revenue Code of 1986 is amended by add14 ing at the end the following new subparagraph: 

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

16 this section, the term ‘private school’ includes 

17 any home school that meets the requirements of 

18 State law applicable to such home schools, 

19 whether or not such school is deemed a private 

20 school for purposes of State law.’’. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2017. 


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

3 (a) IN GENERAL.—Subparagraph (A) of section 

4 530(b)(1) of the Internal Revenue Code of 1986 is amend5 ed by inserting ‘‘or’’ at the end of clause (i), by striking 

6 ‘‘, or’’ at the end of clause (ii) and inserting a period, 

7 and by striking clause (iii). 

8 (b) PROHIBITION ON EXCESS CONTRIBUTIONS.— 

9 Subsection (b) of section 530 of the Internal Revenue 

10 Code of 1986 is amended by adding at the end the fol11 lowing new paragraph: 

12 ‘‘(5) PROHIBITION ON EXCESS CONTRIBU13 TIONS.—A program shall not be treated as a Cover14 dell education savings account unless it provides 

15 adequate safeguards to prevent contributions on be16 half of a designated beneficiary in excess of those 

17 necessary to provide for the qualified education ex18 penses of the beneficiary.’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2017. 


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1 TITLE III—529 PROGRAMS FOR 

2 ELEMENTARY AND SEC3 ONDARY EDUCATION EX4 PENSES 

5 SEC. 301. PROGRAMS FOR PRE-KINDERGARTEN, ELEMEN6 TARY, AND SECONDARY EDUCATION EX7 PENSES. 

8 (a) IN GENERAL.—Paragraph (7) of section 529(c) 

9 of the Internal Revenue Code of 1986, as added by section 

10 11032 of Public Law 115–97, is amended to read as fol11 lows: 

12 ‘‘(7) TREATMENT OF CERTAIN PRE-HIGHER

13 EDUCATION EXPENSES.— 

14 ‘‘(A) IN GENERAL.—Any reference in this 

15 section to the term ‘qualified higher education 

16 expense’ shall include a reference to— 

17 ‘‘(i) expenses for tuition, fees, aca18 demic tutoring, special needs services (in 

19 the case of a special needs beneficiary), 

20 and books, supplies, and other equipment 

21 which are incurred in connection with the 

22 enrollment or attendance of the designated 

23 beneficiary as a pre-kindergarten, elemen24 tary, or secondary school student at a pub25 lic, private, or religious school, 


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

2 uniforms, transportation, and supple3 mentary items and services (including ex4 tended day programs) which are required 

5 or provided by a public, private, or reli6 gious school in connection with such enroll7 ment or attendance, and 

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

9 computer technology or equipment (as de10 fined in section 170(e)(6)(F)(i)) or Inter11 net access and related services, if such 

12 technology, equipment, or services are to 

13 be used by the beneficiary and the bene14 ficiary’s family during any of the years the 

15 beneficiary is in school. 

16 Clause (iii) shall not include expenses for com17 puter software designed for sports, games, or 

18 hobbies unless the software is predominantly 

19 educational in nature. 

20 ‘‘(B) SCHOOL.—For purposes of this para21 graph, the term ‘school’ means any school (in22 cluding a home school) which provides pre-kin23 dergarten, elementary, or secondary education 

24 (pre-kindergarten through grade 12), as deter25 mined under State law. Such a school shall be 


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1 treated as an eligible educational institution for 

2 purposes of subsection (b).’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to distributions made after Decem5 ber 31, 2017. 

Æ 


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