,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #ebi  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,janu>y #ac1 #bjag,ms4
 ,j5k9s ( ,kansas 7= h]self & ,mr4 ,k9d7
 introduc$ ! foll[+ bill2 :i* 0 ref]r$  
to ! ,committee on ,ways & ,means  ,a   
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to make improvem5ts 9 !   
rules relat$ to qualifi$ tuition        
programs & qualifi$ ,,able programs4    
#a4 ,%ort title ,?is ,act may be cit$ z 
! #ebi & ,,able ,acc\nt ,improvem5t ,act
 ( #bjag4  #b4 ,employ] contributions to
 qualifi$ tuition programs & qualifi$   
,,able programs  7a7 ,9 g5]al           
,subsection 7a7 ( section #acb ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ or at ! end ( p>agraph 7#g71 by
 /rik+ ! p]iod at ! end ( p>agraph 7#h7 
& ins]t+ 1 or1 & by add+ at ! end !     
foll[+ new p>agraph3  7#i7 qualifi$     
tuition program & qualifi$ ,,able       
program contributions4  4  7b7 ,qualifi$
 tuition program & qualifi$ ,,able      
program contributions def9$ ,section    

#acb ( su* ,code is am5d$ by r$esignat+ 
subsection 7o7 z subsection 7p7 & ins]t+
 aft] subsection 7n7 ! foll[+ new       
subsection3  7o7 ,qualifi$ tuition      
program & qualifi$ ,,able program       
contributions def9$  7#a7 ,9 g5]al ,=   
purposes ( ?is section1 ! t]m qualifi$  
tuition & qualifi$ ,,able program       
contributions means contributions       
7includ+ mat*+ contributions7 made by an
 employ] directly to a qualifi$ tuition 
program 7z describ$ 9 section #ebi7 or  
qualifi$ ,,able program 7z describ$ 9   
section #ebi;,a7 designat$ by an        
employee if-- 7,a7 su* contribution is  
made to an acc\nt "u su* program = :i* !
 designat$ b5efici>y is ! employee or a 
memb] ( ! family ( ! employee 7)9 !     
mean+ ( section #ebi7;e77#b771 &  7,b7  
su* contribution is made 9 connection ) 
a qualifi$ payroll d$uction contribution
 program e/abli%$ by ! employ]4  7#b7   
,qualifi$ payroll d$uction contribution 
program ,= purposes ( ?is subsection1 ! 
t]m qualifi$ payroll d$uction           

contribution program means a program    
e/abli%$ by an employ]--  7,a7 "u :i*   
employees may elect to make             
contributions to acc\nts describ$ 9     
p>agraph 7#a77;,a7 :i* r$uce ! am\nt (  
wages receiv$ directly by su* employee  
by ! am\nt ( su* contribution1 &  7,b7  
:i* is made available on sub/antially ! 
same t]ms to ea* memb] ( a gr\p (       
employees :i* is def9$ "u a reasonable  
classification set up by ! employ] :i*  
does n discrim9ate 9 favor ( highly     
comp5sat$ employees 7z def9$ 9 section  
#dad7q774  7#c7 ,limitation on exclusion
 ,! am\nt ( qualifi$ tuition & qualifi$ 
,,able program contributions :i* may be 
exclud$ f gross income "u subsection    
7a77#i7 ) respect to any employee %all n
 exce$ #ajj 9 any cal5d> ye>4  7#d7     
,nondiscrim9ation rule = employ]        
contributions ,subsection 7a77#i7 %all  
only apply to contributions provid$ )   
respect to a highly comp5sat$ employee  
if su* contributions meet ! requirem5ts 
( p>agraph 7#b77;,b74  7#e7 ,inflation  

adju/m5t  7,a7 ,9 g5]al ,9 ! case ( any 
taxable ye> beg9n+ 9 a cal5d> ye> aft]  
#bjag1 ! #ajj am\nt conta9$ 9 p>agraph  
7#c7 %all be increas$ by an am\nt equal 
to-- 7i7 su* doll> am\nt1 multipli$ by  
7ii7 ! co/-(-liv+ adju/m5t det]m9$ "u   
section #a7;f77#c7 = ! cal5d> ye> 9 :i* 
! taxable ye> beg9s1 det]m9$ by         
sub/itut+ cal5d> ye> #bjaf = cal5d> ye> 
#aiib 9 subp>agraph 7,b7 !re(4  7,b7    
,r\nd+ ,any increase det]m9$ "u         
subp>agraph 7,a7 %all be r\nd$ to !     
ne>e/ multiple ( #be4  4  7c7 ,effective
 date ,! am5dm5ts made by ?is section   
%all apply to contributions made aft]   
,decemb] #ca1 #bjaf4  #c4 ,tax cr$it =  
small employ] co/s ( e/abli%+ direct    
payroll d$uction into qualifi$ tuition  
programs & qualifi$ ,,able programs  7a7
 ,9 g5]al ,section #de;,e ( ! ,int]nal  
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new subsection3  7f7  
,application to programs = payroll      
d$uction contributions to qualifi$      
tuition programs & qualifi$ ,,able      

programs ,9 ! case ( a qualifi$ payroll 
d$uction contribution program 7z def9$ 9
 section #acb7o77#b77 e/abli%$ by an    
employ]-- 7#a7 su* program %all be      
treat$ z an eligible employ] plan =     
purposes ( ?is section1  7#b7 ?is       
section 7includ+ ! limitation (         
subsection 7b77 %all be appli$ sep>ately
 ) respect to su* programs & any o!r    
eligible employ] plans ( ! employ]1 &   
7#c7 subsection 7d77#a77;,a77ii7 %all be
 appli$ by sub/itut+ education =        
retirem5t-relat$ education4  4  7b7     
,cl]ical am5dm5ts  7#a7 ,! head+ =      
section #de;,e ( su* ,code is am5d$ by  
/rik+ p5sion4  7#b7 ,! table ( sections 
= subp>t ,d ( "p ,,iv ( sub*apt] ,a (   
*apt] #a ( su* ,code is am5d$ by /rik+ !
 item relat+ to section #de;,e & ins]t+ 
! foll[+ new item3  ,sec4 #de;,e4 ,small
 employ] plan />tup co/s4  4  7c7       
,effective date ,! am5dm5ts made by ?is 
section %all apply to co/s paid or      
incurr$ 9 taxable ye>s beg9n+ aft] !    
date ( ! enactm5t ( ?is ,act4  #d4      

,exemptions f additional tax = c]ta9    
di/ributions f qualifi$ tuition programs
  7a7 ,9 g5]al ,section #ebi7;c77#f7 ( !
 ,int]nal ,rev5ue ,code ( #aihf is am5d$
 by /rik+ ! la/ s5t5ce & ins]t+ !       
foll[+3  ,?is p>agraph %all n apply to !
 ext5t t-- 7,a7 a paym5t or di/ribution 
is us$ 7)9 #ij days ( ! paym5t or       
di/ribution7 to make a paym5t ( int]e/  
or pr9cipal on a qualifi$ education loan
 7z def9$ 9 section #bbb7;d77#a77 on    
behalf ( ! designat$ b5efici>y or a     
memb] ( ! family ( su* designat$        
b5efici>y )9 ! mean+ ( section          
#ebi7;e77#b771 or  7,b7 ! recipi5t ( a  
paym5t or di/ribution makes 7)9 #ij days
 ( ! receipt ( ! paym5t or di/ribution7 
a contribution to an organization       
describ$ 9 section #agj7;b77#a77;,a7    
7o!r ?an any organization describ$ 9    
section #eji7;a77#c7 or any fund or     
acc\nt describ$ 9 section               
#diff7;d77#b771 b only if-- 7i7 a       
d$uction = ! entire paym5t or           
di/ribution is all[able "u section #agj1

 &  7ii7 ! total paym5ts & di/ributions 
tak5 into acc\nt "u ?is subp>agraph )   
respect to su* recipi5t = any taxable   
ye> does n exce$ #a1jjj4  4  7b7        
,effective date ,! am5dm5ts made by ?is 
section %all apply to di/ributions aft] 
! date ( ! enactm5t ( ?is ,act4  #e4    
,cl>ification reg>d+ inve/m5t direction 
9 qualifi$ tuition programs & qualifi$  
,,able programs  7a7 ,inve/m5t direction
 9 qualifi$ tuition programs ,p>agraph  
7#d7 ( section #ebi7;b7 ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+3 ,= purposes ( ?is    
p>agraph1 rebalanc+ inve/m5ts among     
broad-bas$ inve/m5t /rategies e/abli%$  
"u ! program %all n be treat$ z inve/m5t
 direction by a contributor or designat$
 b5efici>y unless ! specific inve/m5ts  
)9 ^? broad-bas$ /rategies are direct$  
by ! contributor or designat$           
b5efici>y44  7b7 ,inve/m5t direction 9  
qualifi$ ,,able programs ,p>agraph 7#d7 
( section #ebi;,a7b7 ( su* ,code is     
am5d$ by add+ at ! end ! foll[+3 ,=     

purposes ( ?is p>agraph1 rebalanc+      
inve/m5ts among broad-bas$ inve/m5t     
/rategies e/abli%$ "u ! program %all n  
be treat$ z inve/m5t direction by a     
designat$ b5efici>y unless ! specific   
inve/m5ts )9 ^? broad-bas$ /rategies are
 direct$ by ! designat$ b5efici>y44  7c7
 ,effective date ,! am5dm5ts made by ?is
 section %all apply ) respect to cal5d> 
ye>s beg9n+ aft] ! date ( ! enactm5t (  
?is ,act4  #f4 ,rollov]s betwe5 qualifi$
 tuition programs & qualifi$ ,,able     
programs  7a7 ,rollov]s f qualifi$      
tuition programs to qualifi$ ,,able     
programs ,clause 7i7 ( section          
#ebi7;c77#c77;,c7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by /rik+ or at ! 
end ( subclause 7,i71 by /rik+ ! p]iod  
at ! end ( subclause 7,,ii7 & ins]t+ 1  
or1 & by add+ at ! end ! foll[+ new     
subclause3  7,,iii7 to an ,,able acc\nt 
7z def9$ 9 section #ebi;,a7e77#f77 ( !  
designat$ b5efici>y or a memb] ( !      
family ( ! designat$ b5efici>y4         
,subclause 7,,iii7 %all n apply to s mu*

 ( a di/ribution :i*1 :5 add$ to all o!r
 contributions made to ! ,,able acc\nt =
 ! taxable ye>1 exce$s ! limitation "u  
section #ebi;,a7b77#b77;,b74 4  7b7     
,rollov]s f qualifi$ ,,able programs to 
qualifi$ tuition programs ,clause 7i7 ( 
section #ebi;,a7c77#a77;,c7 ( su* ,code 
is am5d$--  7#a7 by /rik+ su* paym5t or 
di/ribution1 into ano!r & ins]t+ su*    
paym5t or di/ribution--  7,i7 into ano!r
  2  7#b7 by /rik+ ! p]iod at ! end &   
ins]t+ 1 or1 &  7#c7 by add+ at ! end ! 
foll[+ new subclause3  7,,ii7 to a      
qualifi$ tuition program 7z describ$ 9  
section #ebi7 = ! b5efit ( ! same       
designat$ b5efici>y or a memb] ( !      
family ( su* designat$ b5efici>y4  4    
7c7 ,effective date ,! am5dm5ts made by 
?is section %all apply to di/ributions  
aft] ! date ( ! enactm5t ( ?is ,act4