II
119THCONGRESS
1
STSESSION S. 311
To amend the Internal Revenue Code of 1986 to provide incentives for
education.
IN THE SENATE OF THE UNITED STATES
JANUARY29, 2025
Mr. L
EE(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.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Achieving Choice in 4
Education Act’’ or the ‘‘ACE Act’’. 5
SEC. 2. 529 ACCOUNT FUNDING FOR HOMESCHOOL AND AD-6
DITIONAL ELEMENTARY AND SECONDARY EX-7
PENSES. 8
(a) I
NGENERAL.—Section 529(c)(7) of the Internal 9
Revenue Code of 1986 is amended to read as follows: 10
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‘‘(7) TREATMENT OF ELEMENTARY AND SEC -1
ONDARY TUITION.—Any reference in this section to 2
the term ‘qualified higher education expense’ shall 3
include a reference to the following expenses in con-4
nection with enrollment or attendance at, or for stu-5
dents enrolled at or attending, an elementary or sec-6
ondary public, private, or religious school: 7
‘‘(A) Tuition. 8
‘‘(B) Curriculum and curricular materials. 9
‘‘(C) Books or other instructional mate-10
rials. 11
‘‘(D) Online educational materials. 12
‘‘(E) Tuition for tutoring or educational 13
classes outside of the home, including at a tu-14
toring facility, but only if the tutor or instruc-15
tor is not related to the student and— 16
‘‘(i) is licensed as a teacher in any 17
State, 18
‘‘(ii) has taught at an eligible edu-19
cational institution, or 20
‘‘(iii) is a subject matter expert in the 21
relevant subject. 22
‘‘(F) Fees for a nationally standardized 23
norm-referenced achievement test, an advanced 24
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placement examination, or any examinations re-1
lated to college or university admission. 2
‘‘(G) Fees for dual enrollment in an insti-3
tution of higher education. 4
‘‘(H) Educational therapies for students 5
with disabilities provided by a licensed or ac-6
credited practitioner or provider, including oc-7
cupational, behavioral, physical, and speech-lan-8
guage therapies. 9
Such term shall include expenses for the purposes 10
described in subparagraphs (A) through (H) in con-11
nection with a homeschool (whether treated as a 12
homeschool or a private school for purposes of appli-13
cable State law).’’. 14
(b) E
FFECTIVEDATE.—The amendment made by 15
this section shall apply to distributions made after the 16
date of the enactment of this Act. 17
SEC. 3. INCREASE IN LIMITATION ON DISTRIBUTIONS 18
FROM 529 PLANS FOR ELEMENTARY AND SEC-19
ONDARY SCHOOL EXPENSES. 20
(a) I
NGENERAL.—Section 529(e)(3)(A) of the Inter-21
nal Revenue Code of 1986 is amended by striking 22
‘‘$10,000’’ in the flush matter at the end and inserting 23
‘‘$20,000’’. 24
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(b) EFFECTIVEDATE.—The amendment made by 1
this section shall apply to taxable years beginning after 2
December 31, 2026. 3
SEC. 4. GIFT TAX EXCLUSIONS. 4
(a) G
IFTTAXEXCLUSION FORCONTRIBUTIONS TO 5
529 P
LANS.—Section 2503(b) of the Internal Revenue 6
Code of 1986 is amended by adding at the end the fol-7
lowing new paragraph: 8
‘‘(3) E
XCLUSION FOR CONTRIBUTIONS TO 529 9
PLANS.—The dollar amount in effect under para-10
graph (1) with respect to gifts (to which such para-11
graph applies) made to any person during any cal-12
endar year shall be increased (not in excess of 13
$20,000) by the amount of such gifts made during 14
such calendar year to qualified tuition programs (as 15
defined in section 529) with respect to which such 16
person is the designated beneficiary.’’. 17
(b) E
FFECTIVEDATE.—The amendments made by 18
this section shall apply to gifts made after December 31, 19
2026. 20
SEC. 5. TAX-EXEMPT BONDS RESTRICTED TO STATES THAT 21
IMPLEMENT SCHOOL CHOICE LAWS. 22
(a) I
NGENERAL.—Section 103 of the Internal Rev-23
enue Code of 1986 is amended by adding at the end the 24
following new subsection: 25
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‘‘(d) RESTRICTION TO STATESTHATIMPLEMENT 1
S
CHOOLCHOICELAWS.— 2
‘‘(1) I
N GENERAL.—Subsection (a) shall not 3
apply to any State or local bond unless such bond 4
is issued by a minimum school choice State or a po-5
litical subdivision of such a State. 6
‘‘(2) P
ARTIAL EXCLUSION WITH RESPECT TO 7
CERTAIN STATES.— 8
‘‘(A) I
N GENERAL.—In the case of any 9
State or local bond issued by a minimum school 10
choice State which does not meet the require-11
ments of subparagraph (B) (or issued by any 12
political subdivision of such a State), subsection 13
(a) shall be applied by substituting ‘50 percent 14
of the interest’ for ‘interest’. 15
‘‘(B) R
EQUIREMENTS.—A minimum school 16
choice State meets the requirements of this sub-17
paragraph if the Secretary determines that— 18
‘‘(i) at least 65 percent of the speci-19
fied school age children are eligible for one 20
or more of such State’s school choice pro-21
grams, and 22
‘‘(ii) the average amount spent by 23
such State on the education of each speci-24
fied school age child eligible for one or 25
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more of such State’s school choice pro-1
grams is at least 75 percent of the average 2
amount spent by such State on the edu-3
cation of each specified school age child 4
not eligible for one or more of such pro-5
grams. 6
‘‘(3) M
INIMUM SCHOOL CHOICE STATE .—For 7
purposes of this subsection, the term ‘minimum 8
school choice State’ means any State if the Sec-9
retary determines that— 10
‘‘(A) such State has enacted one or more 11
school choice programs, 12
‘‘(B) at least 40 percent of the specified 13
school age children are eligible for one or more 14
of such State’s school choice programs, and 15
‘‘(C) the average amount spent by such 16
State on the education of each specified school 17
age child eligible for one or more of such 18
State’s school choice programs is at least 60 19
percent of the average amount spent by such 20
State on the education of each specified school 21
age child not eligible for one or more of such 22
programs. 23
‘‘(4) S
CHOOL CHOICE PROGRAMS .—For pur-24
poses of this subsection, the term ‘school choice pro-25
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gram’ means, with respect to any State, each of the 1
following with respect to elementary and secondary 2
education in such State: 3
‘‘(A) Tax credit scholarship programs. 4
‘‘(B) Voucher programs. 5
‘‘(C) Education savings account program. 6
‘‘(D) Refundable tax credit for private edu-7
cation expenses. 8
‘‘(5) S
PECIFIED SCHOOL AGE CHILD .—For pur-9
poses of this subsection, the term ‘specified school 10
age child’ means, with respect to any State, any in-11
dividual residing in such State who has not attained 12
age 18.’’. 13
(b) E
FFECTIVEDATE.—The amendment made by 14
this section shall apply to bonds issued after the date of 15
the enactment of this Act. 16
Æ
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