[Congressional Record Volume 144, Number 46 (Thursday, April 23, 1998)]
[Senate]
[Pages S3469-S3473]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EDUCATION SAVINGS ACT FOR PUBLIC AND PRIVATE SCHOOLS
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of H.R. 2646, which the clerk will report.
The legislative clerk read as follows:
A bill (H.R. 2646) to amend the Internal Revenue Code of
1986 to allow tax-free expenditures from education individual
retirement accounts for elementary and secondary school
expenses, to increase the maximum annual amount of
contributions to such accounts, and for other purposes.
The Senate resumed consideration of the bill.
Pending:
Coats amendment No. 2297, to provide an additional
incentive to donate to elementary and secondary schools or
other organizations which provide scholarships to
disadvantaged children.
Levin/Bingaman amendment No. 2299, to replace the expansion
of education individual retirement accounts to elementary and
secondary school expenses with an increase in the lifetime
learning education credit for expenses of teachers in
improving technology training.
Landrieu amendment No. 2301, to provide funding to carry
out a program that recognizes public and private elementary
and secondary schools that have established standards of
excellence.
Kempthorne modified amendment No. 2302 (to amendment No.
2301), to provide for student improvement incentive awards.
Levin amendment No. 2303 (to amendment No. 2299, as
amended), to replace the expansion of education individual
retirement accounts to elementary and secondary school
expenses with an increase in the lifetime learning education
credit for expenses of teachers in improving technology
training.
Amendment No. 2297
The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate prior to a vote on or in relation to the Coats
amendment No. 2297.
Mr. COATS addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the distinguished Senator
from Indiana.
Mr. COATS. Mr. President, this amendment Members will be voting on
shortly simply adds an incentive to the current deduction that is
allowed for individuals making contributions to tax-exempt
organizations that provide scholarships for low-income children.
Currently it is 100 percent deductible. We are adding an additional
10 percent incentive so that these organizations, of which currently
more than 30 exist around the country, can receive additional funds
through this incentive so that they can offer additional scholarships
to children trapped in an educational system which allows them no
escape. There are currently programs operating in virtually every major
city in the country. They are giving children a chance.
Those who say, ``If you can't give everybody a chance, you can't give
anybody a chance'', are like those standing on the Titanic saying, ``If
we don't have enough lifeboats for all on this sinking ship, nobody
gets to use the existing lifeboats.''
These kids are condemned to failure with no way out of the plight
they are in. Let us allow these organizations
[[Page S3470]]
that are reaching out through private contributions a chance to give
these kids a chance.
This is paid for. It is revenue neutral. Earlier the offset was an
elimination of the gambling loss deduction. That has been replaced.
There was controversy. We wanted the focus to be on this amendment.
That has been replaced by two provisions of the Internal Revenue Code,
changes that are approved by the Finance Committee. There should be no
controversy on that.
I urge my colleagues to give children, low-income children in
minority situations mostly in urban schools--let us give them a chance.
The PRESIDING OFFICER. Who yields time?
Mr. KENNEDY addressed the Chair.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, this week we were supposed to be debating
our Nation's policy on education. Where our Nation's children are going
to school is to the public school systems. We do not have anything
against the private school system, but we ought to be testing every
single recommendation against does it really help our public schools or
are we taking needed funds away from our public schools?
This does absolutely nothing for our public schools. It gives no help
and assistance to hard-working parents whose children are going to
public schools. What it does do is it says we are going to give a
preference in terms of charitable giving to these specific
organizations over charitable giving to cancer, over charitable giving
to heart disease, over charitable giving to Alzheimer's, over
charitable giving to a wide range of other very worthwhile factors.
What is possibly the justification for that? We ought to consider tax
policy in that respect, but this is not good education policy. It does
not advance our common interest of moving the public schools toward
greater academic achievement and accomplishment. That ought to be the
test. This fails on the education standard, and it fails on tax policy.
Mr. President, I hope that the amendment will not be accepted.
Mr. COVERDELL. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the amendment
No. 2297. The yeas and nays have been ordered. The clerk will call the
roll.
The assistant legislative clerk called the roll.
The result was announced--yeas 46, nays 54, as follows:
[Rollcall Vote No. 95 Leg.]
YEAS--46
Abraham
Allard
Ashcroft
Bennett
Bond
Brownback
Burns
Campbell
Coats
Cochran
Coverdell
Craig
D'Amato
DeWine
Domenici
Faircloth
Frist
Gorton
Gramm
Grams
Gregg
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Kempthorne
Kyl
Lieberman
Lott
Lugar
Mack
McCain
McConnell
Roberts
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Stevens
Thomas
Thompson
Thurmond
Warner
NAYS--54
Akaka
Baucus
Biden
Bingaman
Boxer
Breaux
Bryan
Bumpers
Byrd
Chafee
Cleland
Collins
Conrad
Daschle
Dodd
Dorgan
Durbin
Enzi
Feingold
Feinstein
Ford
Glenn
Graham
Grassley
Hagel
Harkin
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Mikulski
Moseley-Braun
Moynihan
Murkowski
Murray
Nickles
Reed
Reid
Robb
Rockefeller
Roth
Sarbanes
Specter
Torricelli
Wellstone
Wyden
The amendment (No. 2297) was rejected.
Mr. KENNEDY. Mr. President, I move to reconsider the vote by which
the amendment was rejected.
Mr. COVERDELL. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. COVERDELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Georgia is recognized.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the next
vote in this series be limited to 10 minutes in length.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2302, as modified
The PRESIDING OFFICER. Under the previous order there will now be 2
minutes of debate prior to the vote on or in relation to the Kempthorne
amendment 2302, as modified.
The text of the amendment (No. 2302), as modified, is as follows:
amendment no. 2302
(Purpose: To amend section 6201 of the Elementary and Secondary
Education Act of 1965 to provide for student improvement incentive
awards, and for other purposes)
Strike all after the first word, and insert the following:
101. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT
ACCOUNTS.
(a) Tax-Free Expenditures for Elementary and Secondary
School Expenses.--
(1) In general.--Section 530(b)(2) (defining qualified
higher education expenses) is amended to read as follows:
``(2) Qualified education expenses.--
``(A) In general.--The term `qualified education expenses'
means--
``(i) qualified higher education expenses (as defined in
section 529(e)(3)), and
``(ii) qualified elementary and secondary education
expenses (as defined in paragraph (4)).
Such expenses shall be reduced as provided in section
25A(g)(2).
``(B) Qualified state tuition programs.--Such term shall
include amounts paid or incurred to purchase tuition credits
or certificates, or to make contributions to an account,
under a qualified State tuition program (as defined in
section 529(b)) for the benefit of the beneficiary of the
account.''
(2) Qualified elementary and secondary education
expenses.--Section 530(b) (relating to definitions and
special rules) is amended by adding at the end the following
new paragraph:
``(4) Qualified elementary and secondary education
expenses.--
``(A) In general.--The term `qualified elementary and
secondary education expenses' means--
``(i) expenses for tuition, fees, academic tutoring,
special needs services, books, supplies, computer equipment
(including related software and services), and other
equipment which are incurred in connection with the
enrollment or attendance of the designated beneficiary of the
trust as an elementary or secondary school student at a
public, private, or religious school, or
``(ii) expenses for room and board, uniforms,
transportation, and supplementary items and services
(including extended day programs) which are required or
provided by a public, private, or religious school in
connection with such enrollment or attendance.
``(B) Special rule for homeschooling.--Such term shall
include expenses described in subparagraph (A)(i) in
connection with education provided by homeschooling if the
requirements of any applicable State or local law are met
with respect to such education.
``(C) School.--The term `school' means any school which
provides elementary education or secondary education
(kindergarten through grade 12), as determined under State
law.''
(3) Special rules for applying exclusion to elementary and
secondary expenses.--Section 530(d)(2) (relating to
distributions for qualified higher education expenses) is
amended by adding at the end the following new subparagraph:
``(D) Special rules for elementary and secondary
expenses.--
``(i) In general.--The aggregate amount of qualified
elementary and secondary education expenses taken into
account for purposes of this paragraph with respect to any
education individual retirement account for all taxable years
shall not exceed the sum of the aggregate contributions to
such account for taxable years beginning after December 31,
1998, and before January 1, 2003, and earnings on such
contributions.
``(ii) Special operating rules.--For purposes of clause
(i)--
``(I) the trustee of an education individual retirement
account shall keep separate accounts with respect to
contributions and earnings described in clause (i), and
``(II) if there are distributions in excess of qualified
elementary and secondary education expenses for any taxable
year, such excess distributions shall be allocated first to
contributions and earnings not described in clause (i).''
(4) Conforming amendments.--Subsections (b)(1) and (d)(2)
of section 530 are each amended by striking ``higher'' each
place it appears in the text and heading thereof.
(b) Maximum Annual Contributions.--
(1) In general.--Section 530(b)(1)(A)(iii) (defining
education individual retirement account) is amended by
striking ``$500'' and inserting ``the contribution limit for
such taxable year''.
(2) Contribution limit.--Section 530(b) (relating to
definitions and special rules), as amended by subsection
(a)(2), is amended by
[[Page S3471]]
adding at the end the following new paragraph:
``(5) Contribution limit.--The term `contribution limit'
means $500 ($2,000 in the case of any taxable year beginning
after December 31, 1998, and ending before January 1,
2003).''
(3) Conforming amendments.--
(A) Section 530(d)(4)(C) is amended by striking ``$500''
and inserting ``the contribution limit for such taxable
year''.
(B) Section 4973(e)(1)(A) is amended by striking ``$500''
and inserting ``the contribution limit (as defined in section
530(b)(5)) for such taxable year''.
(c) Waiver of Age Limitations for Children With Special
Needs.--Section 530(b)(1) (defining education individual
retirement account) is amended by adding at the end the
following flush sentence:
``The age limitations in the preceding sentence shall not
apply to any designated beneficiary with special needs (as
determined under regulations prescribed by the Secretary).''
(d) Corporations Permitted To Contribute to Accounts.--
Section 530(c)(1) (relating to reduction in permitted
contributions based on adjusted gross income) is amended by
striking ``The maximum amount which a contributor'' and
inserting ``In the case of a contributor who is an
individual, the maximum amount the contributor''.
(e) No Double Benefit.--Section 530(d)(2) (relating to
distributions for qualified education expenses), as amended
by subsection (a)(3), is amended by adding at the end the
following new subparagraph:
``(E) Disallowance of excluded amounts as credit or
deduction.--No deduction or credit shall be allowed to the
taxpayer under any other section of this chapter for any
qualified education expenses to the extent taken into account
in determining the amount of the exclusion under this
paragraph.''
(f) Technical Corrections.--
(1)(A) Section 530(b)(1)(E) (defining education individual
retirement account) is amended to read as follows:
``(E) Any balance to the credit of the designated
beneficiary on the date on which the beneficiary attains age
30 shall be distributed within 30 days after such date to the
beneficiary or, if the beneficiary dies before attaining age
30, shall be distributed within 30 days after the date of
death to the estate of such beneficiary.''
(B) Section 530(d) (relating to tax treatment of
distributions) is amended by adding at the end the following
new paragraph:
``(8) Deemed distribution on required distribution date.--
In any case in which a distribution is required under
subsection (b)(1)(E), any balance to the credit of a
designated beneficiary as of the close of the 30-day period
referred to in such subsection for making such distribution
shall be deemed distributed at the close of such period.''
(2)(A) Section 530(d)(1) is amended by striking ``section
72(b)'' and inserting ``section 72''.
(B) Section 72(e) (relating to amounts not received as
annuities) is amended by inserting after paragraph (8) the
following new paragraph:
``(9) Extension of paragraph (2)(b) to qualified state
tuition programs and educational individual retirement
accounts.--Notwithstanding any other provision of this
subsection, paragraph (2)(B) shall apply to amounts received
under a qualified State tuition program (as defined in
section 529(b)) or under an education individual retirement
account (as defined in section 530(b)). The rule of paragraph
(8)(B) shall apply for purposes of this paragraph.''
(3) Section 530(d)(4)(B) (relating to exceptions) is
amended by striking ``or'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, or'', and by adding at the end the following new clause:
``(iv) an amount which is includible in gross income solely
because the taxpayer elected under paragraph (2)(C) to waive
the application of paragraph (2) for the taxable year.''
(g) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 1998.
(2) Technical corrections.--The amendments made by
subsection (f) shall take effect as if included in the
amendments made by section 213 of the Taxpayer Relief Act of
1997.
SEC. 102. STUDENT IMPROVEMENT INCENTIVE AWARDS.
Section 6201 of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 7331) is amended--
(1) in subsection (a)--
(A) in paragraph (1)(C), by striking ``and'' after the
semicolon;
(B) in paragraph (2), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(3) student improvement incentive awards described in
subsection (c).''; and
(2) by adding at the end the following:
``(c) Student Improvement Incentive Awards.--
``(1) Awards.--A State educational agency may use funds
made available for State use under this title to make awards
to public schools in the State that are determined to be
outstanding schools pursuant to a statewide assessment
described in paragraph (2).
``(2) Statewide assessment.--The statewide assessment
referred to in paragraph (1)--
``(A) shall--
``(i) determine the educational progress of students
attending public schools within the State; and
``(ii) allow for an objective analysis of the assessment on
a school-by-school basis; and
``(B) may involve exit exams.''.
Mr. KEMPTHORNE addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from Idaho.
Mr. KEMPTHORNE. Mr. President, thank you very much.
Mr. President, this is a very straightforward amendment. This is a
voluntary, incentive-based approach to help improve the academic
excellence in our public schools. It allows each State, if they wish,
to utilize Federal funds that they receive so they can reward
excellence and encourage their schools. There is no new requirement of
new Federal money. It uses existing Federal money. There is no new
Federal bureaucracy put in place. It would be taken care of, again,
voluntarily by the States. It is simply a concept that all of us
believe in; that is, incentive and reward. We now give a new tool to
our public schools to utilize these funds for that purpose, if the
States so choose.
Thank you, Mr. President.
The PRESIDING OFFICER (Mr. Frist). Who yields time?
Ms. LANDRIEU addressed the Chair.
The PRESIDING OFFICER. The Senator from Louisiana.
Ms. LANDRIEU. Mr. President, let me ask my colleagues to join me in
voting against the second-degree amendment to my underlying amendment
on blue ribbon schools. This is a do-nothing amendment. The States
actually can already do this with the money they receive. There is no
reason for this amendment. The only thing that this amendment does, if
by any chance it passes, is it limits our----
Mr. WELLSTONE. Mr. President, could we have order?
The PRESIDING OFFICER. The Senate will be in order.
Ms. LANDRIEU. Mr. President, this amendment is a do-nothing
amendment. In some ways it could be harmful to the current blue ribbon
program that is so excellent now in our country, because if this
amendment would pass, you would not be able to reward private and
parochial schools who are doing an excellent job. A wonderful thing
about our blue ribbon school program is that it recognizes excellence
across the board and helps us. It will give them more than a blue
ribbon and a plaque; it will give them some financial incentive to
continue to do good work.
I ask my colleagues to vote ``no'' on the Kempthorne amendment and
then to support our blue ribbon amendment, which is the underlying
amendment.
Thank you very much, Mr. President.
Mr. KEMPTHORNE. Mr. President, I greatly respect the Senator from
Louisiana, but I totally disagree with the characterization of the
Senator from Louisiana. This allows the States to finally utilize these
funds so they can make financial rewards to our schools as they should
do.
Thank you.
The PRESIDING OFFICER. The time has expired.
The yeas and nays have not yet been ordered.
Mr. COVERDELL. Mr. President, I ask for the yeas and nays on the
amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the amendment
of the Senator from Idaho. On this question, the yeas and nays have
been ordered, and the clerk will call the roll.
The legislative clerk called the roll.
The result was announced--yeas 58, nays 42, as follows:
[Rollcall Vote No. 96 Leg.]
YEAS--58
Abraham
Allard
Ashcroft
Bennett
Bond
Brownback
Burns
Campbell
Chafee
Cleland
Coats
Cochran
Collins
Coverdell
Craig
D'Amato
DeWine
Domenici
Enzi
Faircloth
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Jeffords
Kempthorne
Kyl
Lieberman
[[Page S3472]]
Lott
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Reid
Roberts
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Warner
NAYS--42
Akaka
Baucus
Biden
Bingaman
Boxer
Breaux
Bryan
Bumpers
Byrd
Conrad
Daschle
Dodd
Dorgan
Durbin
Feingold
Feinstein
Ford
Glenn
Graham
Harkin
Hollings
Inouye
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Mikulski
Moseley-Braun
Moynihan
Murray
Reed
Robb
Rockefeller
Sarbanes
Torricelli
Wellstone
Wyden
The amendment (No. 2302), as modified, was agreed to.
Mr. KEMPTHORNE. Mr. President, I move to reconsider the vote and I
move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. Under the previous order, the amendment is
modified to be a first-degree amendment.
The amendment (No. 2302), as modified further, reads as follows:
Strike section 101 and insert the following:
101. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT
ACCOUNTS.
(a) Tax-Free Expenditures for Elementary and Secondary
School Expenses.--
(1) In general.--Section 530(b)(2) (defining qualified
higher education expenses) is amended to read as follows:
``(2) Qualified education expenses.--
``(A) In general.--The term `qualified education expenses'
means--
``(i) qualified higher education expenses (as defined in
section 529(e)(3)), and
``(ii) qualified elementary and secondary education
expenses (as defined in paragraph (4)).
Such expenses shall be reduced as provided in section
25A(g)(2).
``(B) Qualified state tuition programs.--Such term shall
include amounts paid or incurred to purchase tuition credits
or certificates, or to make contributions to an account,
under a qualified State tuition program (as defined in
section 529(b)) for the benefit of the beneficiary of the
account.''
(2) Qualified elementary and secondary education
expenses.--Section 530(b) (relating to definitions and
special rules) is amended by adding at the end the following
new paragraph:
``(4) Qualified elementary and secondary education
expenses.--
``(A) In general.--The term `qualified elementary and
secondary education expenses' means--
``(i) expenses for tuition, fees, academic tutoring,
special needs services, books, supplies, computer equipment
(including related software and services), and other
equipment which are incurred in connection with the
enrollment or attendance of the designated beneficiary of the
trust as an elementary or secondary school student at a
public, private, or religious school, or
``(ii) expenses for room and board, uniforms,
transportation, and supplementary items and services
(including extended day programs) which are required or
provided by a public, private, or religious school in
connection with such enrollment or attendance.
``(B) Special rule for homeschooling.--Such term shall
include expenses described in subparagraph (A)(i) in
connection with education provided by homeschooling if the
requirements of any applicable State or local law are met
with respect to such education.
``(C) School.--The term `school' means any school which
provides elementary education or secondary education
(kindergarten through grade 12), as determined under State
law.''
(3) Special rules for applying exclusion to elementary and
secondary expenses.--Section 530(d)(2) (relating to
distributions for qualified higher education expenses) is
amended by adding at the end the following new subparagraph:
``(D) Special rules for elementary and secondary
expenses.--
``(i) In general.--The aggregate amount of qualified
elementary and secondary education expenses taken into
account for purposes of this paragraph with respect to any
education individual retirement account for all taxable years
shall not exceed the sum of the aggregate contributions to
such account for taxable years beginning after December 31,
1998, and before January 1, 2003, and earnings on such
contributions.
``(ii) Special operating rules.--For purposes of clause
(i)--
``(I) the trustee of an education individual retirement
account shall keep separate accounts with respect to
contributions and earnings described in clause (i), and
``(II) if there are distributions in excess of qualified
elementary and secondary education expenses for any taxable
year, such excess distributions shall be allocated first to
contributions and earnings not described in clause (i).''
(4) Conforming amendments.--Subsections (b)(1) and (d)(2)
of section 530 are each amended by striking ``higher'' each
place it appears in the text and heading thereof.
(b) Maximum Annual Contributions.--
(1) In general.--Section 530(b)(1)(A)(iii) (defining
education individual retirement account) is amended by
striking ``$500'' and inserting ``the contribution limit for
such taxable year''.
(2) Contribution limit.--Section 530(b) (relating to
definitions and special rules), as amended by subsection
(a)(2), is amended by adding at the end the following new
paragraph:
``(5) Contribution limit.--The term `contribution limit'
means $500 ($2,000 in the case of any taxable year beginning
after December 31, 1998, and ending before January 1,
2003).''
(3) Conforming amendments.--
(A) Section 530(d)(4)(C) is amended by striking ``$500''
and inserting ``the contribution limit for such taxable
year''.
(B) Section 4973(e)(1)(A) is amended by striking ``$500''
and inserting ``the contribution limit (as defined in section
530(b)(5)) for such taxable year''.
(c) Waiver of Age Limitations for Children With Special
Needs.--Section 530(b)(1) (defining education individual
retirement account) is amended by adding at the end the
following flush sentence:
``The age limitations in the preceding sentence shall not
apply to any designated beneficiary with special needs (as
determined under regulations prescribed by the Secretary).''
(d) Corporations Permitted To Contribute to Accounts.--
Section 530(c)(1) (relating to reduction in permitted
contributions based on adjusted gross income) is amended by
striking ``The maximum amount which a contributor'' and
inserting ``In the case of a contributor who is an
individual, the maximum amount the contributor''.
(e) No Double Benefit.--Section 530(d)(2) (relating to
distributions for qualified education expenses), as amended
by subsection (a)(3), is amended by adding at the end the
following new subparagraph:
``(E) Disallowance of excluded amounts as credit or
deduction.--No deduction or credit shall be allowed to the
taxpayer under any other section of this chapter for any
qualified education expenses to the extent taken into account
in determining the amount of the exclusion under this
paragraph.''
(f) Technical Corrections.--
(1)(A) Section 530(b)(1)(E) (defining education individual
retirement account) is amended to read as follows:
``(E) Any balance to the credit of the designated
beneficiary on the date on which the beneficiary attains age
30 shall be distributed within 30 days after such date to the
beneficiary or, if the beneficiary dies before attaining age
30, shall be distributed within 30 days after the date of
death to the estate of such beneficiary.''
(B) Section 530(d) (relating to tax treatment of
distributions) is amended by adding at the end the following
new paragraph:
``(8) Deemed distribution on required distribution date.--
In any case in which a distribution is required under
subsection (b)(1)(E), any balance to the credit of a
designated beneficiary as of the close of the 30-day period
referred to in such subsection for making such distribution
shall be deemed distributed at the close of such period.''
(2)(A) Section 530(d)(1) is amended by striking ``section
72(b)'' and inserting ``section 72''.
(B) Section 72(e) (relating to amounts not received as
annuities) is amended by inserting after paragraph (8) the
following new paragraph:
``(9) Extension of paragraph (2)(b) to qualified state
tuition programs and educational individual retirement
accounts.--Notwithstanding any other provision of this
subsection, paragraph (2)(B) shall apply to amounts received
under a qualified State tuition program (as defined in
section 529(b)) or under an education individual retirement
account (as defined in section 530(b)). The rule of paragraph
(8)(B) shall apply for purposes of this paragraph.''
(3) Section 530(d)(4)(B) (relating to exceptions) is
amended by striking ``or'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, or'', and by adding at the end the following new clause:
``(iv) an amount which is includible in gross income solely
because the taxpayer elected under paragraph (2)(C) to waive
the application of paragraph (2) for the taxable year.''
(g) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 1998.
(2) Technical corrections.--The amendments made by
subsection (f) shall take effect as if included in the
amendments made by section 213 of the Taxpayer Relief Act of
1997.
SEC. 102. STUDENT IMPROVEMENT INCENTIVE AWARDS.
Section 6201 of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 7331) is amended--
(1) in subsection (a)--
(A) in paragraph (1)(C), by striking ``and'' after the
semicolon;
(B) in paragraph (2), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(3) student improvement incentive awards described in
subsection (c).''; and
(2) by adding at the end the following:
[[Page S3473]]
``(c) Student Improvement Incentive Awards.--
``(1) Awards.--A State educational agency may use funds
made available for State use under this title to make awards
to public schools in the State that are determined to be
outstanding schools pursuant to a statewide assessment
described in paragraph (2).
``(2) Statewide assessment.--The statewide assessment
referred to in paragraph (1)--
``(A) shall--
``(i) determine the educational progress of students
attending public schools within the State; and
``(ii) allow for an objective analysis of the assessment on
a school-by-school basis; and
``(B) may involve exit exams.''.
Amendment No. 2301
The PRESIDING OFFICER. Under the previous order, there will now be 2
minutes of debate prior to a vote on or in relation to the Landrieu
amendment No. 2301. Who yields time?
Ms. LANDRIEU. Mr. President, could I have some order, please?
Mr. KENNEDY. Mr. President, may we have order? The Senator is
entitled to be heard.
The PRESIDING OFFICER. The Senate will be in order. The Senator from
Louisiana.
Ms. LANDRIEU. Mr. President, as this body knows, many on both sides
of this aisle support blue ribbon schools because we believe that we
should begin rewarding excellence, funding results, and we should stop
funding failures. Blue ribbon schools are chosen by their States every
year. Some of them are public--many of them. Some of them are private.
Some of them are parochial. When they achieve against the odds and when
their students succeed, we call them to Washington and they come, 250
of them every year. We give them a beautiful, shiny plaque and a big
blue ribbon and we send them home with nothing else but the plaque and
the blue ribbon. They are happy to get it, but what they really want
and need are some resources to continue doing their good work.
So I think this is a better way to spend the $1.5 billion. Instead of
helping just a few people in America, we can help all of our schools
and begin rewarding results. That is what this amendment does, the blue
ribbon school amendment. I ask my colleagues to support it.
The PRESIDING OFFICER. The time of the Senator has expired. Who
yields time? The Senator from Georgia.
Mr. COVERDELL. Mr. President, there is certainly nothing wrong with
an amendment that tries to improve blue ribbon schools. But the
amendment by the Senator from Louisiana guts the underlying premise of
the bill. What is substituted here is pretty simple. You have 250
schools that would receive a grant of $100,000, or you have 20 million
children and 14 million families that will benefit all across the
Nation. In balance, there is just no comparison at all. So I would
simply say again her amendment guts the underlying premise we have been
debating for 6 months and exchanges assistance to 200-some-odd schools
for 14 million families.
I urge the defeat of the amendment.
The PRESIDING OFFICER. The yeas and nays have not yet been ordered.
Mr. COVERDELL. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The yeas and nays have been ordered.
The clerk will call the roll.
The assistant legislative clerk called the roll.
The result was announced--yeas 34, nays 66, as follows:
[Rollcall Vote No. 97 Leg.]
YEAS--34
Akaka
Bingaman
Boxer
Bumpers
Conrad
Daschle
Dodd
Dorgan
Durbin
Feingold
Ford
Glenn
Harkin
Hollings
Inouye
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Mikulski
Moseley-Braun
Moynihan
Murray
Reed
Robb
Rockefeller
Sarbanes
Wellstone
Wyden
NAYS--66
Abraham
Allard
Ashcroft
Baucus
Bennett
Biden
Bond
Breaux
Brownback
Bryan
Burns
Byrd
Campbell
Chafee
Cleland
Coats
Cochran
Collins
Coverdell
Craig
D'Amato
DeWine
Domenici
Enzi
Faircloth
Feinstein
Frist
Gorton
Graham
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Jeffords
Kempthorne
Kyl
Lieberman
Lott
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Reid
Roberts
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Torricelli
Warner
The amendment (No. 2301) was rejected.
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of Levin amendment No. 2303 on which there shall
be 30 minutes of debate equally divided.
Mr. LEVIN addressed the Chair.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. Mr. President, I yield 1 minute to my good friend from
Louisiana on an unrelated matter.
The PRESIDING OFFICER. The Senator from Louisiana.
Ms. LANDRIEU. Thank you, Mr. President. I thank my colleague from
Michigan.
____________________