BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §1106(b), Title 30 of the Delaware Code by striking the period [.] at the end of paragraph (7), by inserting a semicolon [;] in its place, and by adding a new paragraph to read:
"(8) (A) Distributions received from qualified retirement plans as defined in § 4974 of the Internal Revenue Code ("IRC"), cash or deferred arrangements described in § 401(k) of the IRC, and governmental deferred compensation plans described in § 457 of the IRC, to the extent such distributions are applied within the tax year of the distributions for books, tuition, or fees at an institution of higher education attended by the person, or by any of the person's dependents who have not attained the age of twenty-six, so long as such amounts received have been included in the person's federal adjusted gross income.
(B) For the purposes of this paragraph, an institution of higher education is a school which:
(i) Admits as regular students only individuals having a certificate of graduation from a high school or the recognized equivalent of such a certificate;
(i) Is legally authorized in this or another State to provide a program of education beyond high school; and
(ii) Provides an educational program for which it awards a bachelor's or higher degree, or provides a program which is acceptable for full credit toward such a degree, a program of postgraduate or postdoctoral studies or a program of training to prepare students for gainful employment in a recognized occupation."
Section 2. This Act shall be effective for tax years commencing after December 31, 1995.