The proposed amendments will not take effect until after December 31, 2026, allowing for a gradual implementation of the changes. By broadening the scope of expenses covered under 529 plans, this bill aims to alleviate the financial burdens faced by families involved in private or homeschooling scenarios. The changes may enable more families to allocate funds towards quality educational resources, thus enhancing the overall educational landscape in the state.
Summary
SB311, officially titled the Achieving Choice in Education Act, seeks to amend the Internal Revenue Code to enhance educational opportunities through various financial incentives. One of the key proposals within the bill is the expansion of the definition of qualified expenses for 529 savings accounts to include costs associated with elementary and secondary education, such as tuition, curricular materials, books, and tutoring fees. This expansion is intended to promote educational choice, particularly for families opting for homeschooling or private schooling.
Contention
One notable point of contention surrounding SB311 is its linkage to school choice legislation. The bill stipulates that states must implement certain school choice programs to qualify for specific tax exemptions or benefits related to tax-exempt bonds. Critics may argue that this creates an uneven playing field where states with robust school choice initiatives could disadvantage those without such programs. This reliance on state policies regarding educational choice could spark debate among legislators on educational equity and access.
Children Have Opportunities in Classrooms Everywhere Act This bill allows tax-exempt distributions from qualified tuition programs (known as 529 plans) to be used for additional educational expenses in connection with elementary or secondary school. The bill also allows certain federal funds for elementary and secondary education to follow a student from a low-income household to the public school that the student attends or for tax-exempt educational expenses. Under current law, tax-exempt distributions in connection with elementary or secondary school are limited to tuition for a public, private, or religious school. The bill allows these distributions to be used additionally for curriculum and curricular materials, books or other instructional materials, online educational materials, tutoring or educational classes outside the home, testing fees, fees for dual enrollment in an institution of higher education, and educational therapies for students with disabilities. Distributions may also be used for tuition and the purposes above in connection with a home school (whether treated as a home school or a private school under state law). In addition, the bill directs state educational agencies to allocate grant funds to ensure the funding follows students to their public school or for other tax-exempt educational expenses outlined by the bill. Each state that carries out these allocations must establish a plan that allows the parent of an eligible child to apply for grant funds.