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ficiary with respect to which the distribu-
tion was made.
‘‘(ii) CHANGE IN DESIGNATED BENE-
FICIARIES.—Any change in the designated
beneficiary of an interest in a qualified
State tuition program shall not be treated
as a distribution for purposes of subpara-
graph (A) if the new beneficiary is a mem-
ber of the same family as the old bene-
ficiary.
‘‘(D) OPERATING RULES.—For purposes of
applying section 72—
‘‘(i) all qualified State tuition pro-
grams of which an individual is a des-
ignated beneficiary shall be treated as one
program,
‘‘(ii) all distributions during a taxable
year shall be treated as one distribution,
and
‘‘(iii) the value of the contract, income
on the contract, and investment in the con-
tract shall be computed as of the close of the
calendar year in which the taxable year be-
gins.
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‘‘(3) GIFT TAX TREATMENT.—Any contribution
on behalf of a designated beneficiary to a qualified
State tuition program shall be treated as a qualified
transfer for purposes of section 2503(e).
‘‘(d) REPORTING REQUIREMENTS.—
‘‘(1) IN GENERAL.—If—
‘‘(A) a designated beneficiary is furnished
education under a qualified State tuition pro-
gram during any calendar year, or
‘‘(B) there is a distribution to any individ-
ual with respect to an interest in such program
during any calendar year,
each officer or employee having control of the quali-
fied State tuition program or their designee shall
make such reports as the Secretary may require re-
garding such education or distribution to the Sec-
retary and to the designated beneficiary or the indi-
vidual to whom the distribution was made. Any such
report shall include such information as the Secretary
may prescribe.
‘‘(2) TIMING OF REPORTS.—Any report required
by this subsection—
‘‘(A) shall be filed at such time and in such
matter as the Secretary prescribes, and
574
‘‘(B) shall be furnished to individuals not
later than January 31 of the calendar year fol-
lowing the calendar year to which such report re-
lates.
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—For
purposes of this section—
‘‘(1) DESIGNATED BENEFICIARY.—The term ‘des-
ignated beneficiary’ means—
‘‘(A) the individual designated at the com-
mencement of participation in the qualified
State tuition program as the beneficiary of
amounts paid (or to be paid) to the program,
‘‘(B) in the case of a change in beneficiaries
described in subsection (c)(2)(C)(ii), the individ-
ual who is the new beneficiary, and
‘‘(C) in the case of an interest in a qualified
State tuition program purchased by a State or
local government or an organization described in
section 501(c)(3) and exempt from taxation
under section 501(a) as part of a scholarship
program operated by such government or organi-
zation, the individual receiving such interest as
a scholarship.
575
‘‘(2) MEMBER OF FAMILY.—The term ‘member of
family’ has the same meaning given such term as sec-
tion 2032A(e)(2).
‘‘(3) 
QUALIFIED
HIGHER
EDUCATION
EX-
PENSES.—The term ‘qualified higher education ex-
penses’ means tuition, fees, books, supplies, and
equipment required for the enrollment or attendance
of a designated beneficiary at an eligible education
institution (as defined in section 135(c)(3)).
‘‘(4) APPLICATION OF SECTION 514.—An interest
in a qualified State tuition program shall not be
treated as debt for purposes of section 514.’’
(b) EFFECTIVE DATES.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to taxable years ending after
the date of the enactment of this Act.
(2) TRANSITION RULE.—If—
(A) a State or agency or instrumentality
thereof maintains, on the date of the enactment
of this Act, a program under which persons may
purchase tuition credits or certificates on behalf
of, or make contributions for education expenses
of, a designated beneficiary, and
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(B) such program meets the requirements of
a qualified State tuition program before the later
of—
(i) the date which is 1 year after such
date of enactment, or
(ii) the first day of the first calendar
quarter after the close of the first regular
session of the State legislature that begins
after such date of enactment,
the amendments made by this section shall apply
to contributions (and earnings allocable thereto)
made before the later of such dates without re-
gard to whether any requirements of such
amendments are met with respect to such con-
tributions and earnings. For purposes of sub-
paragraph (B)(ii), if a State has a 2-year legis-
lative session, each year of such session shall be
deemed to be a separate regular session of the
State legislature.
TITLE II—PAYMENT OF WAGES
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Employee Commuting
Flexibility Act of 1996’’.
577
SEC. 2. PROPER COMPENSATION FOR USE OF EMPLOYER
VEHICLES.
Section 4(a) of the Portal-to-Portal Act of 1947 (29
U.S.C. 254(a)) is amended by adding at the end the fol-
lowing: ‘‘For purposes of this subsection, the use of an
employer’s vehicle for travel by an employee and activities
performed by an employee which are incidental to the use
of such vehicle for commuting shall not be considered part
of the employee’s principal activities if the use of such ve-
hicle for travel is within the normal commuting area for
the employer’s business or establishment and the use of
the employer’s vehicle is subject to an agreement on the
part of the employer and the employee or representative
of such employee.’’.
SEC. 3. EFFECTIVE DATE.
The amendment made by section 1 shall take effect
on the date of the enactment of this Act and shall apply
in determining the application of section 4 of the Portal-
to-Portal Act of 1947 to an employee in any civil action
brought before such date of enactment but pending on
such date.
SEC. 4. MINIMUM WAGE INCREASE.
(a) SHORT TITLE.—This section may be cited as the
‘‘Minimum Wage Increase Act of 1996’’.