Calendar No. 227
105TH CONGRESS
1ST SESSION
H. R. 2646
AN ACT
To amend the Internal Revenue Code of 1986 to
allow tax-free expenditures from education indi-
vidual retirement accounts for elementary and
secondary school expenses, to increase the maxi-
mum annual amount of contributions to such ac-
counts, and for other purposes.
OCTOBER 27, 1997
Read the second time and placed on the calendar
II
Calendar No. 227
105TH CONGRESS
1ST SESSION
H. R. 2646
IN THE SENATE OF THE UNITED STATES
OCTOBER 24, 1997
Received and read the first time
OCTOBER 27, 1997
Read the second time and placed on the calendar
AN ACT
To amend the Internal Revenue Code of 1986 to allow tax-
free expenditures from education individual retirement
accounts for elementary and secondary school expenses,
to increase the maximum annual amount of contributions
to such accounts, and for other purposes.
HR 2646 PCS
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 ‘‘Education Savings Act
for Public and Private Schools’’.
SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RE-
TIREMENT ACCOUNTS.
(a) TAX-FREE EXPENDITURES
FOR ELEMENTARY
AND SECONDARY SCHOOL EXPENSES.—
(1) IN GENERAL.—Section 530(b)(2) of the In-
ternal Revenue Code of 1986 is amended to read as
follows:
‘‘(2) QUALIFIED EDUCATION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
education expenses’ means—
‘‘(i) qualified higher education ex-
penses (as defined in section 529(e)(3)),
and
‘‘(ii) qualified elementary and second-
ary education expenses (as defined in para-
graph (4)) but only with respect to
amounts in the account which are attrib-
utable to contributions for any taxable year
ending before January 1, 2003, and earn-
ings on such contributions.
HR 2646 PCS
Such expenses shall be reduced as provided in
section 25A(g)(2).
‘‘(B) QUALIFIED
STATE
TUITION
PRO-
GRAMS.—Such term shall include amounts paid
or incurred to purchase tuition credits or cer-
tificates, or to make contributions to an ac-
count, under a qualified State tuition program
(as defined in section 529(b)) for the benefit of
the beneficiary of the account.’’.
(2) QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION
EXPENSES.—Section 530(b) of such
Code is amended by adding at the end the following
new paragraph:
‘‘(4) QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION EXPENSES.—
‘‘(A) IN GENERAL.—The term ‘qualified el-
ementary and secondary education expenses’
means tuition, fees, tutoring, special needs serv-
ices, books, supplies, computer equipment (in-
cluding related software and services) and other
equipment, transportation, and supplementary
expenses required for the enrollment or attend-
ance of the designated beneficiary of the trust
at a public, private, or religious school.
HR 2646 PCS
‘‘(B) 
SPECIAL
RULE
FOR
HOME-
SCHOOLING.—Such term shall include expenses
described in subparagraph (A) required for edu-
cation provided for homeschooling if the re-
quirements of any applicable State or local law
are met with respect to such education.
‘‘(C) SCHOOL.—The term ‘school’ means
any school which provides elementary education
or secondary education (through grade 12), as
determined under State law.’’.
(3) CONFORMING
AMENDMENTS.—Subsections
(b)(1) and (d)(2) of section 530 of such Code are
each amended by striking ‘‘higher’’ each place it ap-
pears in the text and heading thereof.
(b) TEMPORARY INCREASE IN MAXIMUM ANNUAL
CONTRIBUTIONS.—
(1) IN GENERAL.—Section 530(b)(1)(A)(iii) of
the Internal Revenue Code of 1986 is amended by
striking ‘‘$500’’ and inserting ‘‘the contribution
limit for such taxable year’’.
(2) CONTRIBUTION LIMIT.—Section 530(b) of
such Code is amended by adding at the end the fol-
lowing new paragraph:
HR 2646 PCS
(A) such change shall be treated as initi-
ated by the taxpayer,
(B) such change shall be treated as made
with the consent of the Secretary of the Treas-
ury, and
(C) the net amount of the adjustments re-
quired to be taken into account by the taxpayer
under section 481 of the Internal Revenue Code
of 1986 shall be taken into account in such first
taxable year.
Passed the House of Representatives October 23,
1997.
Attest:
ROBIN H. CARLE,
Clerk.