CONGRESSWOMAN ELISE STEFANIK
The House is expected to consider H.R. 4178, on the House floor on Tuesday, April 20, 2010, under a motion to suspend the rules, requiring a two-thirds majority vote for passage. This legislation was introduced by Rep. Emanuel Cleaver (D-MO) on December 2, 2009.
H.R. 4178 would amend the Federal Deposit Insurance Act to prescribe requirements for deposit restricted qualified tuition programs (e.g., 529 plans) which are exempt from federal income tax.
The bill would define such a program as one in which: (1) the cash provided to it by a contributor may be invested only in deposits insured by the Federal Deposit Insurance Corporation (FDIC); (2) the contributor may become a participant in the program by depositing funds through the program into an account at a depository institution participating in the program; and (3) the program may include multiple depository institutions.
The bill would deem a deposit restricted qualified tuition program to be an identified banking product for purposes of the Securities Exchange Act of 1934. It would deny treatment as a security under the Securities Act of 1933, the Securities Exchange Act of 1934, or the Investment Company Act of 1940 of: (1) the investment of cash in deposits at an insured depository institution through a deposit restricted qualified tuition program; (2) any certificate of deposit or other instrument evidencing any such deposit; or (3) any participation by a contributor to a deposit restricted qualified tuition program.
Lastly, the bill would affirm that a deposit restricted qualified tuition program, the state entity designated by statute to oversee such program, or the administrator appointed to operate it on behalf of the state or a participating depository institution, be deemed to be an issuer of a security or an investment company.
A CBO cost estimate of H.R. 4178 is not yet available.