[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1472 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1472

To amend the Internal Revenue Code of 1986 to provide a tax credit for 
  public elementary and secondary school construction, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 8, 1997

    Ms. Moseley-Braun (for herself and Mr. Kennedy) 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 a tax credit for 
  public elementary and secondary school construction, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``School Repair and Construction Act 
of 1997''.

SEC. 2. PURPOSE.

    It is the purpose of this Act to help school districts to improve 
their crumbling and overcrowded school facilities through the use of 
Federal tax credits.

SEC. 3. TAX CREDIT FOR PUBLIC ELEMENTARY AND SECONDARY SCHOOL 
              CONSTRUCTION.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to general business 
credits) is amended by adding at the end the following new section:

``SEC. 45D. CREDIT FOR PUBLIC ELEMENTARY AND SECONDARY SCHOOL 
              CONSTRUCTION.

    ``(a) In General.--For purposes of section 38, the amount of the 
school construction credit determined under this section for an 
eligible taxpayer for any taxable year with respect to an eligible 
school construction project shall be an amount equal to the lesser of--
            ``(1) the applicable percentage of the qualified school 
        construction costs, or
            ``(2) the excess (if any) of--
                    ``(A) the taxpayer's allocable school construction 
                amount with respect to such project under subsection 
                (d), over
                    ``(B) any portion of such allocable amount used 
                under this section for preceding taxable years.
    ``(b) Eligible Taxpayer; Eligible School Construction Project.--For 
purposes of this section--
            ``(1) Eligible taxpayer.--The term `eligible taxpayer' 
        means any person which--
                    ``(A) has entered into a contract with a local 
                educational agency for the performance of construction 
                or related activities in connection with an eligible 
                school construction project, and
                    ``(B) has received an allocable school construction 
                amount with respect to such contract under subsection 
                (d).
            ``(2) Eligible school construction project.--
                    ``(A) In general.--The term `eligible school 
                construction project' means any project related to a 
                public elementary school or secondary school that is 
                conducted for 1 or more of the following purposes:
                            ``(i) Construction of school facilities in 
                        order to ensure the health and safety of all 
                        students, which may include--
                                    ``(I) the removal of environmental 
                                hazards,
                                    ``(II) improvements in air quality, 
                                plumbing, lighting, heating and air 
                                conditioning, electrical systems, or 
                                basic school infrastructure, and
                                    ``(III) building improvements that 
                                increase school safety.
                            ``(ii) Construction activities needed to 
                        meet the requirements of section 504 of the 
                        Rehabilitation Act of 1973 (29 U.S.C. 794) or 
                        of the Americans with Disabilities Act of 1990 
                        (42 U.S.C. 12101 et seq.).
                            ``(iii) Construction activities that 
                        increase the energy efficiency of school 
                        facilities.
                            ``(iv) Construction that facilitates the 
                        use of modern educational technologies.
                            ``(v) Construction of new school facilities 
                        that are needed to accommodate growth in school 
                        enrollments.
                            ``(vi) Such other construction as the 
                        Secretary of Education determines appropriate.
                    ``(B) Special rules.--For purposes of this 
                paragraph--
                            ``(i) the term `construction' includes 
                        reconstruction, renovation, or other 
                        substantial rehabilitation, and
                            ``(ii) an eligible school construction 
                        project shall not include the costs of 
                        acquiring land (or any costs related to such 
                        acquisition).
    ``(c) Qualified School Construction Costs; Applicable Percentage.--
For purposes of this section--
            ``(1) In general.--The term `qualified school construction 
        costs' means the aggregate amounts paid to an eligible taxpayer 
        during the taxable year under the contract described in 
        subsection (b)(1).
            ``(2) Applicable percentage.--The term `applicable 
        percentage' means, in the case of an eligible school 
        construction project related to a local educational agency, the 
        higher of the following percentages:
                    ``(A) If the local educational agency has a 
                percentage or number of children described in clause 
                (i)(I) or (ii)(I) of section 1125(c)(2)(A) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6335(c)(2)(A)), the applicable percentage is 10 
                percent.
                    ``(B) If the local educational agency has a 
                percentage or number of children described in clause 
                (i)(II) or (ii)(II) of such section, the applicable 
                percentage is 15 percent.
                    ``(C) If the local educational agency has a 
                percentage or number of children described in clause 
                (i)(III) or (ii)(III) of such section, the applicable 
                percentage is 20 percent.
                    ``(D) If the local educational agency has a 
                percentage or number of children described in clause 
                (i)(IV) or (ii)(IV) of such section, the applicable 
                percentage is 25 percent.
                    ``(E) If the local educational agency has a 
                percentage or number of children described in clause 
                (i)(V) or (ii)(V) of such section, the applicable 
                percentage is 30 percent.
    ``(d) Allocable Amount.--For purposes of this section--
            ``(1) In general.--Subject to paragraph (3), a local 
        educational agency may allocate to any person a school 
        construction amount with respect to any eligible school 
        construction project.
            ``(2) Time for making allocation.--An allocation shall be 
        taken into account under paragraph (1) only if the allocation 
        is made at the time the contract described in subsection (b)(1) 
        is entered into (or such later time as the Secretary may by 
        regulation allow).
            ``(3) Coordination with state program.--A local educational 
        agency may not allocate school construction amounts for any 
        calendar year--
                    ``(A) which in the aggregate exceed the amount of 
                the State school construction ceiling allocated to such 
                agency for such calendar year under subsection (e), or
                    ``(B) if such allocation is inconsistent with any 
                specific allocation required by the State or this 
                section.
    ``(e) State Ceilings and Allocation.--
            ``(1) In general.--A State educational agency shall 
        allocate to local educational agencies within the State for any 
        calendar year a portion of the State school construction 
        ceiling for such year. Such allocations shall be consistent 
        with the State application which has been approved under 
        subsection (f) and with any requirement of this section.
            ``(2) State school construction ceiling.--
                    ``(A) In general.--The State school construction 
                ceiling for any State for any calendar year shall be an 
                amount equal to the State's allocable share of the 
                national school construction amount.
                    ``(B) State's allocable share.--The State's 
                allocable share of the national school construction 
                amount for a fiscal year shall bear the same relation 
                to the national school construction amount for the 
                fiscal year as the amount the State received under 
                section 1124 of the Elementary and Secondary Education 
                Act of 1965 (20 U.S.C. 6333) for the preceding fiscal 
                year bears to the total amount received by all States 
                under such section for such preceding fiscal year.
                    ``(C) National school construction amount.--The 
                national school construction amount for any calendar 
                year is the lesser of--
                            ``(i) $1,000,000,000, or
                            ``(ii) the amount made available for such 
                        year under the School Infrastructure 
                        Improvement Trust Fund established under 
                        section 9512,
                reduced by any amount described in paragraph (3).
            ``(3) Special allocations for indian tribes and 
        territories.--
                    ``(A) Allocation to indian tribes.--The national 
                school construction amount under paragraph (2)(C) shall 
                be reduced by 1.5 percent for each calendar year and 
                the Secretary of Interior shall allocate such amount 
                among Indian tribes according to their respective need 
                for assistance under this section.
                    ``(B) Allocation to territories.--The national 
                school construction amount under paragraph (2)(C) shall 
                be reduced by 0.5 percent for each calendar year and 
                the Secretary of Education shall allocate such amount 
                among the territories according to their respective 
                need for assistance under this section.
            ``(4) Reallocation.--If the Secretary of Education 
        determines that a State is not making satisfactory progress in 
        carrying out the State's plan for the use of funds allocated to 
        the State under this section, the Secretary may reallocate all 
        or part of the State school construction ceiling to 1 or more 
        other States that are making satisfactory progress.
    ``(e) State Application.--
            ``(1) In general.--A State educational agency shall not be 
        eligible to allocate any amount to a local educational agency 
        for any calendar year unless the agency submits to the 
        Secretary of Education (and the Secretary approves) an 
        application containing such information as the Secretary may 
        require, including--
                    ``(A) an estimate of the overall condition of 
                school facilities in the State, including the projected 
                cost of upgrading schools to adequate condition;
                    ``(B) an estimate of the capacity of the schools in 
                the State to house projected student enrollments, 
                including the projected cost of expanding school 
                capacity to meet rising student enrollment;
                    ``(C) the extent to which the schools in the State 
                have the basic infrastructure elements necessary to 
                incorporate modern technology into their classrooms, 
                including the projected cost of upgrading school 
                infrastructure to enable the use of modern technology 
                in classrooms;
                    ``(D) the extent to which the schools in the State 
                offer the physical infrastructure needed to provide a 
                high-quality education to all students; and
                    ``(E) an identification of the State agency that 
                will allocate credit amounts to local educational 
                agencies within the State.
            ``(2) Specific items in allocation.--The State shall 
        include in the State's application the process by which the 
        State will allocate the credits to local educational agencies 
        within the State. The State shall consider in its allocation 
        process the extent to which--
                    ``(A) the school district served by the local 
                educational agency has--
                            ``(i) a high number or percentage of the 
                        total number of children aged 5 to 17, 
                        inclusive, in the State who are counted under 
                        section 1124(c) of the Elementary and Secondary 
                        Education Act of 1965 (20 U.S.C. 6333(c)); or
                            ``(ii) a high percentage of the total 
                        number of low-income residents in the State;
                    ``(B) the local educational agency lacks the fiscal 
                capacity, including the ability to raise funds through 
                the full use of such agency's bonding capacity and 
                otherwise, to undertake the eligible school 
                construction project without assistance;
                    ``(C) the local area makes an unusually high local 
                tax effort, or has a history of failed attempts to pass 
                bond referenda;
                    ``(D) the local area contains a significant 
                percentage of federally owned land that is not subject 
                to local taxation;
                    ``(E) the threat the condition of the physical 
                facility poses to the safety and well-being of 
                students;
                    ``(F) there is a demonstrated need for the 
                construction, reconstruction, renovation, or 
                rehabilitation based on the condition of the facility;
                    ``(G) the extent to which the facility is 
                overcrowded; and
                    ``(H) the extent to which assistance provided will 
                be used to support eligible school construction 
                projects that would not otherwise be possible to 
                undertake.
            ``(3) Identification of areas.--The State shall include in 
        the State's application the process by which the State will 
        identify the areas of greatest needs (whether those areas are 
        in large urban centers, pockets of rural poverty, fast-growing 
        suburbs, or elsewhere) and how the State intends to meet the 
        needs of those areas.
            ``(4) Allocations on basis of application.--The Secretary 
        of Education shall evaluate applications submitted under this 
        subsection and shall approve any such application which meets 
        the requirements of this section.
    ``(g) Required Allocations.--Notwithstanding any process for 
allocation under a State application under subsection (f), in the case 
of a State which contains 1 or more of the 100 school districts within 
the United States which contains the largest number of poor children 
(as determined by the Secretary of Education), the State shall allocate 
each calendar year to the local educational agency serving such 
districts that portion of the State school construction ceiling which 
bears the same ratio to such ceiling as the number of children in such 
district for the preceding calendar year who are counted for purposes 
of section 1124(c) of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6333(c)) bears to the total number of children in such 
State who are so counted.
    ``(h) Definitions.--For purposes of this section--
            ``(1) Elementary school; local educational agency; 
        secondary school; state educational agency.--The terms 
        `elementary school', `local educational agency', `secondary 
        school', and `State educational agency' have the meanings given 
        the terms in section 14101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801).
            ``(2) Territories.--The term `territories' means the United 
        States Virgin Islands, Guam, American Samoa, the Commonwealth 
        of the Northern Mariana Islands, the Republic of the Marshall 
        Islands, the Federated States of Micronesia, and the Republic 
        of Palau.
            ``(3) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.''
    (b) Inclusion in General Business Credit.--
            (1) In general.--Section 38(b) of the Internal Revenue Code 
        of 1986 is amended by striking ``plus'' at the end of paragraph 
        (11), by striking the period at the end of paragraph (12) and 
        inserting ``, plus'', and by adding at the end the following 
        new paragraph:
            ``(13) the school construction credit determined under 
        section 45D(a).''
            (2) Transition rule.--Section 39(d) of such Code is amended 
        by adding at the end the following new paragraph:
            ``(8) No carryback of section 45d credit before 
        enactment.--No portion of the unused business credit for any 
        taxable year which is attributable to the school construction 
        credit determined under section 45D may be carried back to a 
        taxable year ending before the date of the enactment of section 
        45D.''
    (c) Establishment of School Infrastructure Improvement Trust 
Fund.--
            (1) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new section:

``SEC. 9512. SCHOOL INFRASTRUCTURE IMPROVEMENT TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `School 
Infrastructure Improvement Trust Fund', consisting of such amounts as 
may be credited or paid to such Trust Fund as provided in this section 
or section 9602(b).
    ``(b) Transfers to Trust Fund.--
            ``(1) In general.--There are hereby appropriated to the 
        Trust Fund for any calendar year an amount equal to the lesser 
        of--
                    ``(A) the revenue surplus determined under 
                paragraph (2) for the preceding calendar year, or
                    ``(B) $1,000,000,000.
            ``(2) Revenue surplus.--The revenue surplus determined 
        under this paragraph for any calendar year is an amount equal 
        to the excess (if any) of--
                    ``(A) the Secretary's estimate of revenues received 
                in the Treasury of the United States for the calendar 
                year, over
                    ``(B) the amount the Director of the Congressional 
                Budget Office estimated would be so received in the 
                report provided to the Committees on the Budget of the 
                House and the Senate pursuant to section 202(f)(1) of 
                the Congressional Budget Act of 1974.
    ``(c) Expenditures From Trust Fund.--Amounts in the Trust Fund 
shall be transferred to the general fund of the Treasury at such times 
as the Secretary determines appropriate to offset any decrease in 
Federal revenues by reason of credits allowed under section 38 which 
are attributable to the school construction credit determined under 
section 45D.''
            (2) Conforming amendment.--The table of section for 
        subchapter A of chapter 98 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 9512. School Infrastructure 
                                        Improvement Trust Fund.
    (d) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

                              ``Sec. 45D. Credit for public elementary 
                                        and secondary school 
                                        construction.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.
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