I 

113TH CONGRESS 

2D SESSION H. R. 5477 

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 

SEPTEMBER 16, 2014 

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. 

TITLE II—ALLOWANCE OF HOME SCHOOL EXPENSES AS 

QUALIFIED EDUCATION EXPENSES 

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 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 TITLE II—FURTHER CLARIFICA2 TION OF COVERDELL EDU3 CATION SAVINGS ACCOUNTS 

4 SEC. 201. ALLOWANCE OF HOME SCHOOL EXPENSES AS 

5 QUALIFIED EDUCATION EXPENSES FOR PUR6 POSES OF A COVERDELL EDUCATION SAV7 INGS ACCOUNT. 

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

9 of the Internal Revenue Code of 1986 is amended by add10 ing at the end the following new subparagraph: 

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

12 this section, the term ‘private school’ includes 

13 any home school that meets the requirements of 

14 State law applicable to such home schools, 

15 whether or not such school is deemed a private 

16 school for purposes of State law.’’. 

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

18 this section shall apply to taxable years beginning after 

19 December 31, 2013. 

20 SEC. 202. ELIMINATION OF COVERDELL EDUCATION SAV21 INGS ACCOUNT CONTRIBUTION LIMITATION. 

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

23 530(b)(1) of the Internal Revenue Code of 1986 is amend24 ed by inserting ‘‘or’’ at the end of clause (i), by striking 


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

2 by striking clause (iii). 

3 (b) PROHIBITION ON EXCESS CONTRIBUTIONS.— 

4 Subsection (b) of section 530 of such Code is amended 

5 by adding at the end the following new paragraph: 

6 ‘‘(5) PROHIBITION ON EXCESS CONTRIBU7 TIONS.—A program shall not be treated as a Cover8 dell education savings account unless it provides 

9 adequate safeguards to prevent contributions on be10 half of a designated beneficiary in excess of those 

11 necessary to provide for the qualified education ex12 penses of the beneficiary.’’. 

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

14 this section shall apply to taxable years beginning after 

15 December 31, 2013. 

16 TITLE III—529 PROGRAMS FOR 

17 ELEMENTARY AND SECOND18 ARY EDUCATION EXPENSES 

19 SEC. 301. 529 PROGRAMS FOR PRE-KINDERGARTEN, ELE20 MENTARY, AND SECONDARY EDUCATION EX21 PENSES. 

22 (a) IN GENERAL.—Paragraph (3) of section 529(e) 

23 of the Internal Revenue Code of 1986 is amended— 

24 (1) by redesignating subparagraph (B) as sub25 paragraph (C); 


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1 (2) by striking ‘‘QUALIFIED HIGHER EDU2 CATION EXPENSES’’ and all that follows through 

3 ‘‘The term ‘qualified higher education expenses’ 

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

5 EDUCATION EXPENSES.— 

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

7 education expenses’ means— 

8 ‘‘(i) qualified higher education ex9 penses, and 

10 ‘‘(ii) qualified pre-kindergarten, ele11 mentary, and secondary education ex12 penses. 

13 ‘‘(B) QUALIFIED HIGHER EDUCATION EX14 PENSES.—The term ‘qualified higher education 

15 expenses’ means’’; and 

16 (3) by adding at the end the following new sub17 paragraphs: 

18 ‘‘(D) QUALIFIED PRE-KINDERGARTEN, EL19 EMENTARY, AND SECONDARY EDUCATION EX20 PENSES.—The term ‘qualified pre-kindergarten, 

21 elementary, and secondary education expenses’ 

22 means— 

23 ‘‘(i) expenses for tuition, fees, aca24 demic tutoring, special needs services in 

25 the case of a special needs beneficiary, 


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1 books, supplies, and other equipment which 

2 are incurred in connection with the enroll3 ment or attendance of the designated bene4 ficiary of the trust as a pre-kindergarten, 

5 elementary, or secondary school student at 

6 a public, private, or religious school, 

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

8 uniforms, transportation, and supple9 mentary items and services (including ex10 tended day programs) which are required 

11 or provided by a public, private, or reli12 gious school in connection with such enroll13 ment or attendance, and 

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

15 computer technology or equipment (as de16 fined in section 170(e)(6)(F)(i)) or Inter17 net access and related services, if such 

18 technology, equipment, or services are to 

19 be used by the beneficiary and the bene20 ficiary’s family during any of the years the 

21 beneficiary is in school. 

22 Clause (iii) shall not include expenses for com23 puter software designed for sports, games, or 

24 hobbies unless the software is predominantly 

25 educational in nature. 


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

2 any school which provides pre-kindergarten, ele3 mentary, or secondary education (pre-kinder4 garten through grade 12), as determined under 

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

6 eligible educational institution for purposes of 

7 subsection (b).’’. 

8 (b) CONFORMING AMENDMENTS.—Section 529 of 

9 such Code is amended by striking ‘‘qualified higher edu10 cation’’ each place it appears in subsections (b) and (c) 

11 and inserting ‘‘qualified education’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2014. 

Æ 


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