S. 311

119 S311 IS: Achieving Choice in Education Act
 U.S. Senate
 2025-01-29
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 II  119th CONGRESS  1st Session  S. 311  IN THE SENATE OF THE UNITED STATES   January 29, 2025   Mr. Lee  (for himself and  Mr. Budd ) introduced the following bill; which was read twice and referred to the  Committee on Finance    A BILL
To amend the Internal Revenue Code of 1986 to provide incentives for education.
1.
Short title
This Act may be cited as the   Achieving Choice in Education Act    or the   ACE Act  .
2.
529 account funding for homeschool and additional elementary and secondary expenses
(a)
In general
 Section 529(c)(7)  of the Internal Revenue Code of 1986 is amended to read as follows:
(7)
Treatment of elementary and secondary tuition
Any reference in this section to the term  qualified higher education expense  shall include a reference to the following expenses in connection with enrollment or attendance at, or for students enrolled at or attending, an elementary or secondary public, private, or religious school:
(A)
Tuition.
(B)
Curriculum and curricular materials.
(C)
Books or other instructional materials.
(D)
Online educational materials.
(E)
Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i)
is licensed as a teacher in any State,
(ii)
has taught at an eligible educational institution, or
(iii)
is a subject matter expert in the relevant subject.
(F)
Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission.
(G)
Fees for dual enrollment in an institution of higher education.
(H)
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies.
 Such term shall include expenses for the purposes described in subparagraphs (A) through (H) in connection with a homeschool (whether treated as a homeschool or a private school for purposes of applicable State law).
 .
(b)
Effective date
The amendment made by this section shall apply to distributions made after the date of the enactment of this Act.
3.
Increase in limitation on distributions from 529 plans for elementary and secondary school expenses
(a)
In general
 Section 529(e)(3)(A)  of the Internal Revenue Code of 1986 is amended by striking  $10,000  in the flush matter at the end and inserting  $20,000 .
(b)
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2026.
4.
Gift tax exclusions
(a)
Gift tax exclusion for contributions to 529 plans
 Section 2503(b)  of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
(3)
Exclusion for contributions to 529 plans
The dollar amount in effect under paragraph (1) with respect to gifts (to which such paragraph applies) made to any person during any calendar year shall be increased (not in excess of $20,000) by the amount of such gifts made during such calendar year to qualified tuition programs (as defined in section 529) with respect to which such person is the designated beneficiary.
 .
(b)
Effective date
The amendments made by this section shall apply to gifts made after December 31, 2026.
5.
Tax-exempt bonds restricted to States that implement school choice laws
(a)
In general
 Section 103  of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
(d)
Restriction to States that implement school choice laws
(1)
In general
Subsection (a) shall not apply to any State or local bond unless such bond is issued by a minimum school choice State or a political subdivision of such a State.
(2)
Partial exclusion with respect to certain States
(A)
In general
In the case of any State or local bond issued by a minimum school choice State which does not meet the requirements of subparagraph (B) (or issued by any political subdivision of such a State), subsection (a) shall be applied by substituting  50 percent of the interest  for  interest .
(B)
Requirements
A minimum school choice State meets the requirements of this subparagraph if the Secretary determines that—
(i)
at least 65 percent of the specified school age children are eligible for one or more of such State’s school choice programs, and
(ii)
the average amount spent by such State on the education of each specified school age child eligible for one or more of such State’s school choice programs is at least 75 percent of the average amount spent by such State on the education of each specified school age child not eligible for one or more of such programs.
(3)
Minimum school choice State
For purposes of this subsection, the term  minimum school choice State  means any State if the Secretary determines that—
(A)
such State has enacted one or more school choice programs,
(B)
at least 40 percent of the specified school age children are eligible for one or more of such State’s school choice programs, and
(C)
the average amount spent by such State on the education of each specified school age child eligible for one or more of such State’s school choice programs is at least 60 percent of the average amount spent by such State on the education of each specified school age child not eligible for one or more of such programs.
(4)
School choice programs
For purposes of this subsection, the term  school choice program  means, with respect to any State, each of the following with respect to elementary and secondary education in such State:
(A)
Tax credit scholarship programs.
(B)
Voucher programs.
(C)
Education savings account program.
(D)
Refundable tax credit for private education expenses.
(5)
Specified school age child
For purposes of this subsection, the term  specified school age child  means, with respect to any State, any individual residing in such State who has not attained age 18.
 .
(b)
Effective date
The amendment made by this section shall apply to bonds issued after the date of the enactment of this Act.