IB 

Union Calendar No. 17 

114TH CONGRESS 

1ST SESSION H. R. 529 

[Report No. 114–25] 

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

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 26, 2015 

Ms. JENKINS of Kansas (for herself and Mr. KIND) introduced the following 

bill; which was referred to the Committee on Ways and Means 

FEBRUARY 20, 2015 

Additional sponsors: Mr. PAULSEN, Mr. GIBSON, Mr. KELLY of Pennsylvania, 

Mr. STUTZMAN, Mr. COOK, Mr. FITZPATRICK, Mr. MARCHANT, Mr. 

POLIQUIN, Mr. HUIZENGA of Michigan, Mr. BYRNE, Mr. AMODEI, Mr. 

BENISHEK, Mr. KLINE, Mr. YOUNG of Indiana, Mr. GOODLATTE, Mr. 

MEEHAN, Mr. WESTERMAN, Mr. PETERS, Mr. HILL, Ms. GRAHAM, Ms. 

KUSTER, Mr. FORBES, Mr. HECK of Nevada, Mr. BERA, Mr. POE of 

Texas, Mr. NUNES, Mr. BLUM, Mr. CONNOLLY, Mr. FINCHER, Mr. ROSKAM, Mr. SAM JOHNSON of Texas, Mr. GROTHMAN, Mr. LATTA, Mr. 

THOMPSON of California, Mr. SESSIONS, Mr. HIMES, and Mr. SMITH of 

Missouri 

FEBRUARY 20, 2015 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on January 26, 2015] 


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•HR 529 RH

A BILL 

To amend the Internal Revenue Code of 1986 to improve 

529 plans. 


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

3 SECTION 1. FINDINGS AND PURPOSE. 

4 (a) FINDINGS.—Congress finds the following: 

5 (1) When the Economic Growth and Tax Relief 

6 Reconciliation Act of 2001 became law, the tax treat7 ment of section 529 college savings plans was changed 

8 so that qualified distributions were no longer taxed as 

9 income. The favorable tax treatment of college savings 

10 plans was made permanent with the passage of the 

11 Pension Protection Act of 2006. 

12 (2) Section 529 college savings plans empower 

13 middle-class families to accumulate savings to offset 

14 the rising costs of attending college. 

15 (3) The latest data from the College Savings 

16 Plan Network shows that there are 11.83 million 529 

17 accounts open throughout all 50 states, which rep18 resent $244.5 billion in total assets. The average 529 

19 account size is $20,671. 

20 (4) States that sponsor 529 college savings plans 

21 have taken steps to ensure these plans are a tool that 

22 all families can use to save for college, including set23 ting minimum contributions as low as $25 per month 

24 to encourage participation by families of all income 

25 levels. 


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1 (5) The President’s fiscal year 2016 Budget pro2 poses raising taxes by taxing certain future distribu3 tions made from 529 college savings plans. 

4 (6) The tax proposed by the President would dis5 courage the use of 529 college savings plans, requiring 

6 families and students to take on more debt. 

7 (7) Purchase of a computer represents a signifi8 cant higher education expense and therefore should be 

9 eligible for qualified distributions under 529 college 

10 savings plans. 

11 (b) PURPOSE.—It is the purpose of this Act to— 

12 (1) enact policies that strengthen 529 college sav13 ings plans, and 

14 (2) make 529 plans more modern, consumer15 friendly, and responsive to the realities faced by stu16 dents today. 

17 SEC. 2. COMPUTER TECHNOLOGY AND EQUIPMENT PERMA18 NENTLY ALLOWED AS A QUALIFIED HIGHER 

19 EDUCATION EXPENSE FOR SECTION 529 AC20 COUNTS. 

21 (a) IN GENERAL.—Section 529(e)(3)(A)(iii) of the In22 ternal Revenue Code of 1986 is amended to read as follows: 

23 ‘‘(iii) expenses for the purchase of com24 puter or peripheral equipment (as defined 

25 in section 168(i)(2)(B)), computer software 


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1 (as defined in section 197(e)(3)(B)), or 

2 Internet access and related services, if such 

3 equipment, software, or services are to be 

4 used primarily by the beneficiary during 

5 any of the years the beneficiary is enrolled 

6 at an eligible educational institution.’’. 

7 (b) EFFECTIVE DATE.—The amendment made by this 

8 section shall apply to taxable years beginning after Decem9 ber 31, 2014. 

10 SEC. 3. ELIMINATION OF DISTRIBUTION AGGREGATION RE11 QUIREMENTS. 

12 (a) IN GENERAL.—Section 529(c)(3) of the Internal 

13 Revenue Code of 1986 is amended by striking subparagraph 

14 (D). 

15 (b) EFFECTIVE DATE.—The amendment made by this 

16 section shall apply to distributions after December 31, 2014. 

17 SEC. 4. RECONTRIBUTION OF REFUNDED AMOUNTS. 

18 (a) IN GENERAL.—Section 529(c)(3) of the Internal 

19 Revenue Code of 1986, as amended by section 3, is amended 

20 by adding at the end the following new subparagraph: 

21 ‘‘(D) SPECIAL RULE FOR CONTRIBUTIONS

22 OF REFUNDED AMOUNTS.—In the case of a bene23 ficiary who receives a refund of any qualified 

24 higher education expenses from an eligible edu25 cational institution, subparagraph (A) shall not 


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•HR 529 RH

1 apply to that portion of any distribution for the 

2 taxable year which is recontributed to a qualified 

3 tuition program of which such individual is a 

4 beneficiary, but only to the extent such recon5 tribution is made not later than 60 days after 

6 the date of such refund and does not exceed the 

7 refunded amount.’’. 

8 (b) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—The amendment made by this 

10 section shall apply with respect to refunds of qualified 

11 higher education expenses after December 31, 2014. 

12 (2) TRANSITION RULE.—In the case of a refund 

13 of qualified higher education expenses received after 

14 December 31, 2014, and before the date of the enact15 ment of this Act, section 529(c)(3)(D) of the Internal 

16 Revenue Code of 1986 (as added by this section) shall 

17 be applied by substituting ‘‘not later than 60 days 

18 after the date of the enactment of this subparagraph’’ 

19 for ‘‘not later than 60 days after the date of such re20 fund’’. 


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Union Calendar No. 17 

114TH CONGRESS 

1ST SESSION H. R. 529 

[Report No. 114–25] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

F

improve 529 plans. 

EBRUARY 20, 2015 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


tkelley on DSK3SPTVN1PROD with BILLS