I 
110TH CONGRESS 
1ST SESSION 
H. R. 590 
To amend the Internal Revenue Code of 1986 to increase the annual contribu-
tion limit to Coverdell education savings accounts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 19, 2007 
Mr. KNOLLENBERG 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 increase 
the annual contribution limit to Coverdell education sav-
ings accounts, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Financial 
Readiness Act of 2007’’. 
SEC. 2. COVERDELL EDUCATION SAVINGS ACCOUNT IM-
PROVEMENTS. 
(a) INCREASE IN ANNUAL CONTRIBUTION LIMIT TO 
COVERDELL EDUCATION SAVINGS ACCOUNTS.—Clause 
(iii) of section 530(b)(1)(A) of the Internal Revenue Code 
VerDate Aug 31 2005 
18:11 Jan 20, 2007
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H590.IH
H590
pwalker on PROD1PC71 with BILLS
of 1986 is amended by striking ‘‘$2,000’’ and inserting 
‘‘$5,000’’. 
(b) CONTRIBUTIONS NOT ALLOWED BY INDIVIDUALS 
WHOSE ADJUSTED GROSS INCOME EXCEEDS LIMITA-
TION.—So much of subsection (c) of section 530 of such 
Code as precedes paragraph (2) is amended to read as 
follows: 
‘‘(c) CONTRIBUTIONS NOT ALLOWED BY INDIVID-
UALS WHOSE ADJUSTED GROSS INCOME EXCEEDS LIMI-
TATION.— 
‘‘(1) IN
GENERAL.—No contribution may be 
made to any Coverdell education savings account by 
any individual during the taxable year if the modi-
fied adjusted gross income of such individual for 
such taxable year exceeds $150,000 (twice such 
amount in the case of a joint return).’’. 
(c) COST-OF-LIVING ADJUSTMENT.—Subsection (b) 
of section 530 of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(5) COST-OF-LIVING ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2007, the dollar amount contained in paragraph 
(1)(A)(iii) and subsection (c)(1) shall both be 
increased by an amount equal to— 
VerDate Aug 31 2005 
18:11 Jan 20, 2007
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H590.IH
H590
pwalker on PROD1PC71 with BILLS
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins determined by substituting ‘calendar 
year 2005’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
‘‘(B) ROUNDING.—If any increase under 
subparagraph (A) is not a multiple of $50, such 
increase shall be rounded to the nearest mul-
tiple of $50.’’. 
(d) CONFORMING AMENDMENT.—Subparagraph (A) 
of section 4973(e)(1) of such Code is amended by striking 
‘‘$2,000’’ and inserting ‘‘the dollar amount in effect under 
section 530(b)(1)(A)(iii) for the taxable year’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
Æ 
VerDate Aug 31 2005 
18:11 Jan 20, 2007
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6301
E:\BILLS\H590.IH
H590
pwalker on PROD1PC71 with BILLS