I 

113TH CONGRESS 

2D SESSION H. R. 4333 

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

IN THE HOUSE OF REPRESENTATIVES 

MARCH 27, 2014 

Ms. JENKINS (for herself, Mr. KIND, and Mr. YOUNG of Indiana) introduced 

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

A BILL 

To amend the Internal Revenue Code of 1986 to improve 

529 plans. 

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

3 SECTION 1. COMPUTER TECHNOLOGY AND EQUIPMENT AL4 LOWED AS A QUALIFIED HIGHER EDUCATION 

5 EXPENSE FOR SECTION 529 ACCOUNTS. 

6 (a) MADE PERMANENT.—Clause (iii) of section 

7 529(e)(3)(A) of the Internal Revenue Code of 1986 is 

8 amended by striking ‘‘in 2009 or 2010’’. 

9 (b) ONLY FOR USE PRIMARILY BY THE BENE10 FICIARY.—Clause (iii) of section 529(e)(3)(A) of such 

11 Code is amended by striking ‘‘used by the beneficiary and 


tkelley on DSK3SPTVN1PROD with BILLS
2 

•HR 4333 IH

1 the beneficiary’s family’’ and inserting ‘‘used primarily by 

2 the beneficiary’’. 

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

4 this section shall apply to expenses paid or incurred after 

5 December 31, 2010. 

6 SEC. 2. INVESTMENT DIRECTION UNDER QUALIFIED TUI7 TION PROGRAMS. 

8 (a) IN GENERAL.—Paragraph (4) of section 529(b) 

9 of the Internal Revenue Code of 1986 is amended by strik10 ing the period at the end and inserting ‘‘more frequently 

11 than 4 times per calendar year.’’. 

12 (b) CLERICAL AMENDMENT.—The heading for para13 graph (4) of section 529(b) of such Code is amended by 

14 striking ‘‘NO INVESTMENT DIRECTION’’ and inserting 

15 ‘‘LIMITED INVESTMENT DIRECTION’’. 

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

17 this section shall apply to years beginning after December 

18 31, 2013. 

19 SEC. 3. ELIMINATION OF DISTRIBUTION AGGREGATION RE20 QUIREMENTS. 

21 (a) IN GENERAL.—Clause (ii) of section 

22 529(c)(3)(D) of the Internal Revenue Code of 1986 is 

23 amended by inserting before the comma at the end the 

24 following: ‘‘, except for purposes of calculating the earn25 ings portion of any distribution.’’. 


tkelley on DSK3SPTVN1PROD with BILLS
3 

•HR 4333 IH

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

2 this section shall apply to distributions after December 31, 

3 2013. 

4 SEC. 4. CONTRIBUTION OF AMOUNTS PREVIOUSLY DIS5 TRIBUTED IN CASE OF WITHDRAWAL FROM 

6 SCHOOL. 

7 (a) IN GENERAL.—Paragraph (3) of section 529(c) 

8 of the Internal Revenue Code of 1986 is amended by add9 ing at the end the following new subparagraph: 

10 ‘‘(E) SPECIAL RULE FOR CONTRIBUTIONS

11 RELATING TO WITHDRAWAL FROM SCHOOL.—In 

12 the case of a beneficiary who receives a refund 

13 of any qualified higher education expenses from 

14 an eligible educational institution in connection 

15 with withdrawal from enrollment at such insti16 tution, subparagraph (A) shall not apply to that 

17 portion of any distribution for the taxable year 

18 which is recontributed to a qualified tuition pro19 gram of which such individual is a beneficiary, 

20 but only to the extent such recontribution is 

21 made not later than 60 days after the date of 

22 such refund and does not exceed the refunded 

23 amount.’’. 


tkelley on DSK3SPTVN1PROD with BILLS
4 

•HR 4333 IH

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

2 this section shall apply with respect to distributions after 

3 December 31, 2013. 

4 SEC. 5. SPECIAL ROLLOVER TO ROTH IRA FROM LONG5 TERM QUALIFIED TUITION PROGRAM. 

6 (a) IN GENERAL.—Paragraph (3) of section 529(c) 

7 of the Internal Revenue Code of 1986, as amended by this 

8 Act, is amended by adding at the end the following new 

9 subparagraph: 

10 ‘‘(F) SPECIAL ROLLOVER TO ROTH IRA

11 FROM LONG-TERM QUALIFIED TUITION PRO12 GRAM.—For purposes of this section— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 distribution from a qualified tuition pro15 gram which has been maintained by an ac16 count owner for the 10-year period ending 

17 on the date of such distribution— 

18 ‘‘(I) subparagraph (A) shall not 

19 apply to any portion of such distribu20 tion which, not later than 60 days 

21 after such distribution, is paid into a 

22 Roth IRA maintained for the benefit 

23 of such account owner or the des24 ignated beneficiary under such quali25 fied tuition program, and 


tkelley on DSK3SPTVN1PROD with BILLS
5 

•HR 4333 IH

1 ‘‘(II) such portion shall be treat2 ed as a rollover contribution for pur3 poses of section 408A(e). 

4 ‘‘(ii) LIMITATION.—Clause (i) shall 

5 only apply to so much of any distribution 

6 as does not exceed the lesser of— 

7 ‘‘(I) $25,000, or 

8 ‘‘(II) the aggregate amount con9 tributed to the program (and earnings 

10 attributable thereto) before the 5-year 

11 period ending on the date of the dis12 tribution.’’. 

13 (b) QUALIFIED ROLLOVER CONTRIBUTION.—Para14 graph (1) of section 408A(e) of such Code is amended by 

15 striking the period at the end of subparagraph (B) and 

16 inserting ‘‘, and’’ and by inserting after subparagraph (B) 

17 the following new subparagraph: 

18 ‘‘(C) from a covered qualified tuition pro19 gram (as defined in section 529(c)(3)(F)(ii)).’’. 

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

21 this section shall apply with respect to distributions after 

22 December 31, 2013. 

Æ 


tkelley on DSK3SPTVN1PROD with BILLS