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

To amend the Internal Revenue Code of 1986 to improve 529 plans. 1. Computer technology and equipment allowed as a qualified higher education expense for section 529 accounts (a) Made permanent Clause (iii) of section 529(e)(3)(A) in 2009 or 2010 (b) Only for use primarily by the beneficiary Clause (iii) of section 529(e)(3)(A) of such Code is amended by striking used by the beneficiary and the beneficiary’s family used primarily by the beneficiary (c) Effective date The amendments made by this section shall apply to expenses paid or incurred after December 31, 2010. 2. Investment direction under qualified tuition programs (a) In general Paragraph (4) of section 529(b) more frequently than 4 times per calendar year. (b) Clerical amendment The heading for paragraph (4) of section 529(b) of such Code is amended by striking No investment direction Limited investment direction (c) Effective date The amendments made by this section shall apply to years beginning after December 31, 2013. 3. Elimination of distribution aggregation requirements (a) In general Clause (ii) of section 529(c)(3)(D) , except for purposes of calculating the earnings portion of any distribution. (b) Effective date The amendment made by this section shall apply to distributions after December 31, 2013. 4. Contribution of amounts previously distributed in case of withdrawal from school (a) In general Paragraph (3) of section 529(c) (E) Special rule for contributions relating to withdrawal from school In the case of a beneficiary who receives a refund of any qualified higher education expenses from an eligible educational institution in connection with withdrawal from enrollment at such institution, subparagraph (A) shall not apply to that portion of any distribution for the taxable year which is recontributed to a qualified tuition program of which such individual is a beneficiary, but only to the extent such recontribution is made not later than 60 days after the date of such refund and does not exceed the refunded amount. . (b) Effective date The amendment made by this section shall apply with respect to distributions after December 31, 2013. 5. Special rollover to Roth IRA from long-term qualified tuition program (a) In general Paragraph (3) of section 529(c) (F) Special rollover to Roth IRA from long-term qualified tuition program For purposes of this section— (i) In general In the case of a distribution from a qualified tuition program which has been maintained by an account owner for the 10-year period ending on the date of such distribution— (I) subparagraph (A) shall not apply to any portion of such distribution which, not later than 60 days after such distribution, is paid into a Roth IRA maintained for the benefit of such account owner or the designated beneficiary under such qualified tuition program, and (II) such portion shall be treated as a rollover contribution for purposes of section 408A(e). (ii) Limitation Clause (i) shall only apply to so much of any distribution as does not exceed the lesser of— (I) $25,000, or (II) the aggregate amount contributed to the program (and earnings attributable thereto) before the 5-year period ending on the date of the distribution. . (b) Qualified rollover contribution Paragraph (1) of section 408A(e) of such Code is amended by striking the period at the end of subparagraph (B) and inserting , and (C) from a covered qualified tuition program (as defined in section 529(c)(3)(F)(ii)). . (c) Effective date The amendments made by this section shall apply with respect to distributions after December 31, 2013.

Summary: Amends the Internal Revenue Code, with respect to tax-exempt qualified tuition programs (529 plans), to: (1) make permanent the allowance for computer technology and equipment expenses and require that such technology and equipment be used primarily by the plan beneficiary (formerly, beneficiary and beneficiary's family); (2) allow contributors to a 529 plan or a plan beneficiary to direct plan investments, but not more frequently than four times per calendar year; (3) permit a recontribution to a 529 plan of amounts refunded to a student who withdraws from an educational institution if the recontribution is made not later than 60 days after the date of such refund and does not exceed the refunded amount; and (4) allow tax-free rollovers to a Roth individual retirement account (Roth IRA) of distributions from a qualified tuition program which has been maintained by the account holder for a 10-year period.