‘‘(1) DEFINITION.—In this section, the term 
‘eligible child’ means a child aged 5 to 17, inclusive, 
from a family with an income below the poverty level 
on the basis of the most recent satisfactory data 
published by the Department of Commerce. 
‘‘(2) CRITERIA OF POVERTY.—In determining 
the families with incomes below the poverty level for 
the purposes of this section, a State educational 
agency shall use the criteria of poverty used by the 
Census Bureau in compiling the most recent decen-
nial census, as the criteria have been updated by in-
creases in the Consumer Price Index for All Urban 
Consumers, published by the Bureau of Labor Sta-
tistics. 
‘‘(c) STUDENT ENROLLMENT IN PUBLIC AND PRI-
VATE SCHOOLS.— 
‘‘(1) IDENTIFICATION
OF
ELIGIBLE
CHIL-
DREN.—On an annual basis, on a date to be deter-
mined by the State educational agency, each local 
educational agency that receives grant funding in ac-
cordance with subsection (a) shall inform the State 
educational agency of the number of eligible children 
enrolled in public schools served by the local edu-
cational agency and the State-accredited private 
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schools within the local educational agency’s geo-
graphic jurisdiction. 
‘‘(2) ALLOCATION
TO
LOCAL
EDUCATIONAL 
AGENCIES.—Based on the identification of eligible 
children in paragraph (1), the State educational 
agency shall provide to a local educational agency an 
amount equal to the sum of the amount available for 
each eligible child in the State multiplied by the 
number of eligible children identified by the local 
educational agency under paragraph (1). 
‘‘(3) DISTRIBUTION TO SCHOOLS.—Each local 
educational agency that receives funds under para-
graph (2) shall distribute such funds to the public 
schools served by the local educational agency and 
State-accredited private schools within the local edu-
cational agency’s geographic jurisdiction— 
‘‘(A) based on the number of eligible chil-
dren enrolled in such schools; and 
‘‘(B) in a manner that would, in the ab-
sence of such Federal funds, supplement the 
funds made available from non-Federal re-
sources for the education of pupils participating 
in programs under this subpart, and not to sup-
plant such funds.’’. 
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SEC. 102. TABLE OF CONTENTS AMENDMENT. 
The table of contents in section 2 of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6301 
et seq.) is amended by inserting after the item relating 
to section 1127 the following: 
‘‘1128. Title I funds follow the low-income child State option.’’. 
TITLE II—FURTHER CLARIFICA-
TION OF COVERDELL EDU-
CATION SAVINGS ACCOUNTS 
SEC. 201. ALLOWANCE OF HOME SCHOOL EXPENSES AS 
QUALIFIED EDUCATION EXPENSES FOR PUR-
POSES OF A COVERDELL EDUCATION SAV-
INGS ACCOUNT. 
(a) IN GENERAL.—Section 530(b)(3) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(C) PRIVATE SCHOOL.—For purposes of 
this section, the term ‘private school’ includes 
any home school that meets the requirements of 
State law applicable to such home schools, 
whether or not such school is deemed a private 
school for purposes of State law.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
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SEC. 202. ELIMINATION OF COVERDELL EDUCATION SAV-
INGS ACCOUNT CONTRIBUTION LIMITATION. 
(a) IN GENERAL.—Section 530(b)(1)(A) of the Inter-
nal Revenue Code of 1986 is amended by inserting ‘‘or’’ 
at the end of clause (i), by striking ‘‘or’’ at the end of 
clause (ii) and inserting a period, and by striking clause 
(iii). 
(b) PROHIBITION
ON EXCESS CONTRIBUTIONS.— 
Section 530(b) of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(5) PROHIBITION
ON
EXCESS
CONTRIBU-
TIONS.—A program shall not be treated as a Cover-
dell education savings account unless it provides 
adequate safeguards to prevent contributions on be-
half of a designated beneficiary in excess of those 
necessary to provide for the qualified education ex-
penses of the beneficiary.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
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TITLE III—529 PROGRAMS FOR 
ELEMENTARY 
AND 
SEC-
ONDARY 
EDUCATION 
EX-
PENSES 
SEC. 301. 529 PROGRAMS FOR PRE-KINDERGARTEN, ELE-
MENTARY, AND SECONDARY EDUCATION EX-
PENSES. 
(a) IN GENERAL.—Section 529(e)(3) of the Internal 
Revenue Code of 1986 is amended— 
(1) by redesignating subparagraph (B) as sub-
paragraph (C); 
(2) by striking ‘‘QUALIFIED
HIGHER
EDU-
CATION
EXPENSES’’ and all that follows through 
‘‘The term ‘qualified higher education expenses’ 
means—’’ and inserting the following: ‘‘QUALIFIED 
EDUCATION EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
education expenses’ means— 
‘‘(i) qualified higher education ex-
penses, and 
‘‘(ii) qualified pre-kindergarten, ele-
mentary, and secondary education ex-
penses. 
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‘‘(B) QUALIFIED HIGHER EDUCATION EX-
PENSES.—The term ‘qualified higher education 
expenses’ means’’; and 
(3) by adding at the end the following new sub-
paragraphs: 
‘‘(D) QUALIFIED PRE-KINDERGARTEN, EL-
EMENTARY, AND SECONDARY EDUCATION EX-
PENSES.—The term ‘qualified pre-kindergarten, 
elementary, and secondary education expenses’ 
means— 
‘‘(i) expenses for tuition, fees, aca-
demic tutoring, special needs services in 
the case of a special needs beneficiary, 
books, supplies, and other equipment which 
are incurred in connection with the enroll-
ment or attendance of the designated bene-
ficiary of the trust as a pre-kindergarten, 
elementary, or secondary school student at 
a public, private, or religious school, 
‘‘(ii) expenses for room and board, 
uniforms, 
transportation, 
and 
supple-
mentary items and services (including ex-
tended day programs) which are required 
or provided by a public, private, or reli-
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gious school in connection with such enroll-
ment or attendance, and 
‘‘(iii) expenses for the purchase of any 
computer technology or equipment (as de-
fined in section 170(e)(6)(F)(i)) or Inter-
net access and related services, if such 
technology, equipment, or services are to 
be used by the beneficiary and the bene-
ficiary’s family during any of the years the 
beneficiary is in school. 
Clause (iii) shall not include expenses for com-
puter software designed for sports, games, or 
hobbies unless the software is predominantly 
educational in nature. 
‘‘(E) SCHOOL.—The term ‘school’ means 
any school which provides pre-kindergarten, ele-
mentary, or secondary education (pre-kinder-
garten through grade 12), as determined under 
State law. Such a school shall be treated as an 
eligible educational institution for purposes of 
subsection (b).’’. 
(b) CONFORMING AMENDMENTS.—Section 529 of 
such Code is amended by striking ‘‘qualified higher edu-
cation’’ each place it appears in subsections (b) and (c) 
and inserting ‘‘qualified education’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
Æ 
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