[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Senate]
[Pages S10411-S10414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 1512. A bill to provide educational opportunities for 
disadvantaged children, and for other purposes; to the Committee on 
Health, Education, Labor, and Pensions.


          INTRODUCTION OF LEGISLATION REGARDING SCHOOL CHOICE

  Mr. McCAIN. Mr. President, today, I am introducing legislation to 
authorize a three-year nationwide school choice demonstration program 
targeted at children from economically disadvantaged families. The 
program would expand educational opportunities for low-income children 
by providing parents and students the freedom to choose the best school 
for their unique academic needs, while encouraging schools to be 
creative and responsive to the needs of all students.
  This legislation is identical to the school choice amendment which I 
offered on July 30, 1999 to S.1429, the Taxpayer Refund Act of 1999. I 
am gravely disappointed that the Senate failed to pass this amendment 
as a part of the Taxpayer Refund Act. However, I am committed to seeing 
it implemented before Congress adjourns this year and will be working 
with my colleagues on both sides of the aisle and on the Health, 
Education, Labor and Pensions Committee (HELP) to ensure that this 
measure is implemented before Congress adjourns, perhaps as a part of 
the legislation reauthorizing the Elementary and Secondary Education 
Act (ESEA).
  This bill authorizes $1.8 billion annually for fiscal years 2001 
through 2003 to be used to provide school choice vouchers to 
economically disadvantaged children through the nation. The funds would 
be divided among the states based upon the number of children they have 
enrolled in public schools. Then, each state would conduct a lottery 
among low-income children who attend the public schools with the lowest 
academic performance in their state. Each child selected in the lottery 
would receive $2,000 per year for three years to be used to pay tuition 
at any school of their choice in the state, including private or 
religious schools. The money could also be used to pay for 
transportation to the school or supplementary educational services to 
meet the unique needs of the individual student.
  In total, this bill authorizes $5.4 billion for the three-year school 
choice demonstration program, as well as a GAO evaluation of the 
program upon its completion. The cost of this important test of school 
vouchers is fully offset by eliminating more than $5.4 billion in 
unnecessary and inequitable corporate tax loopholes which benefits the 
ethanol, sugar, gas and oil industries.
  First, the legislation eliminates tax credits for ethanol producers, 
eliminating a $1.5 billion subsidy. Ethanol is an inefficient, 
expensive fuel that has not lived up to claims that it would reduce 
reliance on foreign oil or reduce impact on the environment. It takes 
more energy to produce a gallon of ethanol than the amount of energy 
that a gallon of ethanol contains. Ethanol tax credits are simply a 
subsidy for corn producers, and the amendment ends the taxpayers' 
support for this outdated program.
  Second, the bill eliminates three subsidies enjoyed by the oil and 
gas industry, totaling $3.9 billion. It phases out oil and gas 
industry's special right to fully deduct capital costs for drilling, 
exploration and development; eliminates the 15 percent tax credit for 
recovering oil using particular methods; and ends special right of oil 
and gas property owners to claim unlimited passive losses under income 
and alternative minimum tax provisions. Subsidizing the cost of 
domestic production has not been shown to have reduced reliance on 
foreign oil or directly contributed to more efficient resource use or 
domestic productivity. This bill would end these special tax 
treatments.
  Finally, this measure eliminates the special loan program for sugar 
producers and processors, worth $390 million. The federal government is 
burdened with an unnecessary and unprofitable loan program for bug 
sugar producers and enforcing mandated import

[[Page S10412]]

quotas on foreign sugar. Sugar price supports also force consumers to 
pay $1.4 billion every year in artificially inflated sugar prices. This 
bill simply eliminates the taxpayer-funded loan program in 2003 and 
immediately requires repayment of existing loans in case, rather than 
sugar.
  These tax benefits and subsidies were originally intended to serve a 
limited purpose during times of economic recession and hardship in the 
1970's. Our economy has long since recovered and I believe that these 
subsidies have outlived its purpose. The sunset of these programs will 
end these corporate welfare programs and return any remaining benefit 
back to our Nation's children.
  Mr. President, we all know that one of the most important issues 
facing our nation is the education of our children. Providing a solid, 
quality education for each and every child in our nation is a critical 
component in their quest for personal success and fulfillment. A solid 
education for our children also plays a pivotal role in the success of 
our nation; economically, intellectually, civically and morally.
  We must strive to develop and implement initiatives which strengthen 
and improve our education system thereby ensuring that our children are 
provided with the essential academic tools for succeeding 
professionally, economically and personally. I am sure we all agree 
that increasing the academic performance and skills of all our nation's 
students must be the paramount goal of any education reform we 
implement.
  School vouchers are a viable method of allowing all American children 
access to high quality schools, including private and religious 
schools. Every parent should be able to obtain the highest quality 
education for their children, not just the wealthy. Tuition vouchers 
would finally provide low-income children trapped in mediocre, or 
worse, schools the same educational choices as children of economic 
privilege.
  Some of my colleagues may argue that vouchers would divert money away 
from our nation's public schools and instead of instilling competition 
into our school systems we should be pouring more and more money into 
poor performing public schools. I respectfully disagree. While I 
support strengthening financial support for education in our nation, 
the solution to what ails our system is not simply pouring more and 
more money into it.
  Currently our Nation spends significantly more money than most 
countries and yet our students scored lower than their peers from 
almost all of the forty countries which participated in the last Third 
International Mathematics and Science Study (TIMMS) test. Students in 
countries which are struggling economically, socially and politically, 
such as Russia, outscored U.S. children in math and scored far above 
them in advanced math and physics. Clearly, we must make significant 
changes beyond simply pouring more money into the current structure in 
order to improve our children's academic performance in order to remain 
a viable force in the world economy.

  It is shameful that we are failing to provide many of our children 
with adequate training and quality academic preparation for the real 
world. The number of college freshman who require remedial courses in 
reading, writing and mathematics when they begin their higher education 
is unacceptably high. In fact, presently, more than 30 percent of 
entering freshman need to enroll in one or more remedial course when 
they start college. It does not bode well for our future economy if the 
majority of workers are not prepared with the basic skills to engage in 
a competitive global marketplace.
  I concede that school vouchers are not the magic bullet for 
eradicating all that is wrong with our current educational system, but 
they are an important opportunity for providing improved academic 
opportunities for all children, not just the wealthy. Examination of 
the limited voucher programs scattered around our country reveal high 
levels of parent and student satisfaction, an increase in parental 
involvement, and a definite improvement in attendance and discipline at 
the participating schools. Vouchers encourage public and private 
schools, communities and parents to all work together to raise the 
level of education for all students. Through this bill, we have the 
opportunity to replicate these important attributes throughout all our 
nation's communities.
  Thomas Jefferson said, ``The purpose of education is to create young 
citizens with knowing heads and loving hearts.'' If we fail to give our 
children the education they need to nurture their heads and hearts, 
then we threaten their futures and the future of our nation. Each of us 
is responsible for ensuring that our children have both the love in 
their hearts and the knowledge in their heads to not only dream, but to 
make their dreams a reality.
  The time has come for us to finally conduct a national demonstration 
of school choice to determine the benefits or perhaps disadvantages of 
providing educational choices to all students, not just those who are 
fortunate enough to be born into a wealthy family. I urge my colleagues 
to support this bill and put the needs of America's school children 
ahead of the financial gluttony of big business.
  Mr. President, I ask unanimous consent that a copy of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1512

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
                   TITLE I--EDUCATIONAL OPPORTUNITIES

     SEC. 101. PURPOSES.

       The purposes of this title are--
       (1) to assist States to--
       (A) give children from low-income families the same choices 
     among all elementary and secondary schools and other academic 
     programs as children from wealthier families already have;
       (B) improve schools and other academic programs by giving 
     parents in low-income families increased consumer power to 
     choose the schools and programs that the parents determine 
     best fit the needs of their children; and
       (C) more fully engage parents in their children's 
     schooling; and
       (2) to demonstrate, through a 3-year national grant 
     program, the effects of a voucher program that gives parents 
     in low-income families--
       (A) choice among public, private, and religious schools for 
     their children; and
       (B) access to the same academic options as parents in 
     wealthy families have for their children.

     SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this title (other than section 110) $1,800,000,000 
     for each of fiscal years 2001 through 2003.
       (b) Evaluation.--There is authorized to be appropriated to 
     carry out section 110 $17,000,000 for fiscal years 2001 
     through 2004.

     SEC. 103. PROGRAM AUTHORITY.

       (a) In General.--The Secretary shall make grants to States, 
     from allotments made under section 104 to enable the States 
     to carry out educational choice programs that provide 
     scholarships, in accordance with this title.
       (b) Limit on Federal Administrative Expenditures.--The 
     Secretary may reserve not more than $1,000,000 of the amounts 
     appropriated under section 102(a) for a fiscal year to pay 
     for the costs of administering this title.

     SEC. 104. ALLOTMENTS TO STATES.

       (a) Allotments.--The Secretary shall make the allotments to 
     States in accordance with a formula specified in regulations 
     issued in accordance with subsection (b). The formula shall 
     provide that the Secretary shall allot to each State an 
     amount that bears the same relationship to the amounts 
     appropriated under section 102(a) for a fiscal year (other 
     than funds reserved under section 103(b)) as the number of 
     covered children in the State bears to the number of covered 
     children in all such States.
       (b) Formula.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall issue regulations 
     specifying the formula referred to in subsection (a).
       (c) Limit on State Administrative Expenditures.--The State 
     may reserve not more than 1 percent of the funds made 
     available through the State allotment to pay for the costs of 
     administering this title.
       (d) Definition.--In this section, the term ``covered 
     child'' means a child who is enrolled in a public school 
     (including a charter school) that is an elementary school or 
     secondary school.

     SEC. 105. ELIGIBLE SCHOOLS.

       (a) Eligibility.--
       (1) In general.--Schools identified by a State under 
     paragraph (2) shall be considered to be eligible schools 
     under this title.
       (2) Determination.--Not later than 180 days after the date 
     the Secretary issues regulations under section 104(b), each 
     State shall identify the public elementary schools and 
     secondary schools in the State that are at or below the 25th 
     percentile for academic performance of schools in the State.
       (b) Performance.--The State shall determine the academic 
     performance of a school under this section based on such 
     criteria as the State may consider to be appropriate.

[[Page S10413]]

     SEC. 106. SCHOLARSHIPS.

       (a) In General.--
       (1) Scholarship awards.--With funds awarded under this 
     title, each State awarded a grant under this title shall 
     provide scholarships to the parents of eligible children, in 
     accordance with subsections (b) and (c). The State shall 
     ensure that the scholarships may be redeemed for elementary 
     or secondary education for the children at any of a broad 
     variety of public and private schools, including religious 
     schools, in the State.
       (2) Scholarship amount.--The amount of each scholarship 
     shall be $2000 per year.
       (3) Tax exemption.--Scholarships awarded under this title 
     shall not be considered income of the parents for Federal 
     income tax purposes or for determining eligibility for any 
     other Federal program.
       (b) Eligible Children.--To be eligible to receive a 
     scholarship under this title, a child shall be--
       (1) a child who is enrolled in a public elementary school 
     or secondary school that is an eligible school; and
       (2) a member of a family with a family income that is not 
     more than 200 percent of the poverty line.
       (c) Award Rules.--
       (1) Priority.--In providing scholarships under this title, 
     the State shall provide scholarships for eligible children 
     through a lottery system administered for all eligible 
     schools in the State by the State educational agency.
       (2) Continuing eligibility.--Each State receiving a grant 
     under this title to carry out an educational choice program 
     shall provide a scholarship in each year of the program to 
     each child who received a scholarship during the previous 
     year of the program, unless--
       (A) the child no longer resides in the area served by an 
     eligible school;
       (B) the child no longer attends school;
       (C) the child's family income exceeds, by 20 percent or 
     more, 200 percent of the poverty line; or
       (D) the child is expelled or convicted of a felony, 
     including felonious drug possession, possession of a weapon 
     on school grounds, or a violent act against an other student 
     or a member of the school's faculty.

     SEC. 107. USES OF FUNDS.

       Any scholarship awarded under this title for a year shall 
     be used--
       (1) first, for--
       (A) the payment of tuition and fees at the school selected 
     by the parents of the child for whom the scholarship was 
     provided; and
       (B) the reasonable costs of the child's transportation to 
     the school, if the school is not the school to which the 
     child would be assigned in the absence of a program under 
     this title;
       (2) second, if the parents so choose, to obtain 
     supplementary academic services for the child, at a cost of 
     not more than $500, from any provider chosen by the parents, 
     that the State determines is capable of providing such 
     services and has an appropriate refund policy; and
       (3) finally, for educational programs that help the 
     eligible child achieve high levels of academic excellence in 
     the school attended by the eligible child, if the eligible 
     child chooses to attend a public school.

     SEC. 108. STATE REQUIREMENT.

       A State that receives a grant under this title shall allow 
     lawfully operating public and private elementary schools and 
     secondary schools, including religious schools, if any, 
     serving the area involved to participate in the program.

     SEC. 109. EFFECT OF PROGRAMS.

       (a) Title I.--Notwithstanding any other provision of law, 
     if a local educational agency in the State would, in the 
     absence of an educational choice program that is funded under 
     this title, provide services to a participating eligible 
     child under part A of title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311 et seq.), the State 
     shall ensure the provision of such services to such child.
       (b) Individuals With Disabilities.--Nothing in this title 
     shall be construed to affect the requirements of part B of 
     the Individuals with Disabilities Education Act (20 U.S.C. 
     1411 et seq.).
       (c) Aid.--
       (1) In general.--Scholarships under this title shall be 
     considered to aid families, not institutions. For purposes of 
     determining Federal assistance under Federal law, a parent's 
     expenditure of scholarship funds under this title at a school 
     or for supplementary academic services shall not constitute 
     Federal financial aid or assistance to that school or to the 
     provider of supplementary academic services.
       (2) Supplementary academic services.--
       (A) In general.--Notwithstanding paragraph (1), a school or 
     provider of supplementary academic services that receives 
     scholarship funds under this title shall, as a condition of 
     participation under this title, comply with the provisions of 
     title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
     seq.) and section 504 of the Rehabilitation Act of 1973 (29 
     U.S.C. 794).
       (B) Regulations.--The Secretary shall promulgate 
     regulations to implement the provisions of subparagraph (A), 
     taking into account the purposes of this title and the 
     nature, variety, and missions of schools and providers that 
     may participate in providing services to children under this 
     title.
       (d) Other Federal Funds.--No Federal, State, or local 
     agency may, in any year, take into account Federal funds 
     provided to a State or to the parents of any child under this 
     title in determining whether to provide any other funds from 
     Federal, State, or local resources, or in determining the 
     amount of such assistance, to such State or to a school 
     attended by such child.
       (e) No Discretion.--Nothing in this title shall be 
     construed to authorize the Secretary to exercise any 
     direction, supervision, or control over the curriculum, 
     program of instruction, administration, or personnel of any 
     educational institution or school participating in a program 
     under this title.

     SEC. 110. EVALUATION.

       The Comptroller General of the United States shall conduct 
     an evaluation of the program authorized by this title. Such 
     evaluation shall, at a minimum--
       (1) assess the implementation of educational choice 
     programs assisted under this title and their effect on 
     participants, schools, and communities in the school 
     districts served, including parental involvement in, and 
     satisfaction with, the program and their children's 
     education;
       (2) compare the educational achievement of participating 
     eligible children with the educational achievement of similar 
     non-participating children before, during, and after the 
     program; and
       (3) compare--
       (A) the educational achievement of eligible children who 
     use scholarships to attend schools other than the schools the 
     children would attend in the absence of the program; with
       (B) the educational achievement of children who attend the 
     schools the children would attend in the absence of the 
     program.

     SEC. 111. ENFORCEMENT.

       (a) Regulations.--The Secretary shall promulgate 
     regulations to enforce the provisions of this title.
       (b) Private Cause.--No provision or requirement of this 
     title shall be enforced through a private cause of action.

     SEC. 112. DEFINITIONS.

       In this title:
       (1) Charter school.--The term ``charter school'' has the 
     meaning given the term in section 10310 of the Elementary and 
     Secondary Education Act of 1965 (as redesignated in section 
     3(g) of Public Law 105-278; 112 Stat. 2687).
       (2) Elementary school; local educational agency; parent; 
     secondary school; state educational agency.--The terms 
     ``elementary school'', ``local educational agency'', 
     ``parent'', ``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).
       (3) Poverty line.--The term ``poverty line'' means the 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2))) applicable to a family of the size involved.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (5) State.--The term ``State'' means each of the 50 States.
                      TITLE II--REVENUE PROVISIONS

     SEC. 201. PHASEOUT OF OIL AND GAS EXPENSING OF DRILLING AND 
                   DEVELOPMENT COSTS.

       Section 263(c) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new sentence: 
     ``This subsection shall not apply to the applicable 
     percentage of costs incurred in taxable years beginning after 
     December 31, 1999. For purposes of the preceding sentence, 
     the applicable percentage for any taxable year shall be 
     determined in accordance with the following table:

The applicable percentage is--ear beginning in--
  2000..........................................................20 ....

  2001..........................................................40 ....

  2002..........................................................60 ....

  2003..........................................................80 ....

  After 2003.................................................100.''....

     SEC. 202. SUNSET OF ALCOHOL FUELS INCENTIVES.

       (a) In General.--The following provisions of the Internal 
     Revenue Code of 1986 are each repealed:
       (1) Section 40 (relating to alcohol used as fuel).
       (2) Section 4041(b)(2) (relating to qualified methanol and 
     ethanol).
       (3) Section 4041(k) (relating to fuels containing alcohol).
       (4) Section 4081(c) (relating to taxable fuels mixed with 
     alcohol).
       (5) Section 4091(c) (relating to reduced rate of tax for 
     aviation fuel in alcohol mixture, etc.).
       (6) Section 6427(f) (relating to gasoline, diesel fuel, 
     kerosene, and aviation fuel used to produce certain alcohol 
     fuels).
       (7) The headings 9901.00.50 and 9901.00.52 of the 
     Harmonized Tariff Schedule of the United States (19 U.S.C. 
     3007).
       (b) Effective Date.--The repeals made by subsection (a) 
     shall take effect on October 1, 1999.

     SEC. 203. REPEAL OF ENHANCED OIL RECOVERY CREDIT.

       Section 43 of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following:
       ``(f) Termination.--In the case of taxable years beginning 
     after December 31, 1999, the enhanced oil recovery credit is 
     zero.''.

     SEC. 204. REPEAL OF UNLIMITED PASSIVE LOSS DEDUCTIONS FOR OIL 
                   AND GAS PROPERTIES.

       Section 469(c)(3) of the Internal Revenue Code of 1986 
     (relating to working interests in

[[Page S10414]]

     oil and gas property) is amended by adding at the end the 
     following:
       ``(C) Termination.--This paragraph shall not apply with 
     respect to any taxable year beginning after December 31, 
     1999.''

     SEC. 205. SUGAR PROGRAM.

       (a) Elimination of Authority To Use Sugar as Collateral for 
     Loans.--Section 156 of the Agricultural Market Transition Act 
     (7 U.S.C. 7272) is amended--
       (1) in subsection (d)--
       (A) by striking ``(d)'' and all that follows through ``A 
     loan under'' and inserting ``(d) Term of Loans.--A loan 
     under'';
       (B) by striking paragraph (2); and
       (C) by redesignating subparagraphs (A) and (B) as 
     paragraphs (1) and (2), respectively, and indenting 
     appropriately;
       (2) by striking subsection (g); and
       (3) by redesignating subsections (h) and (i) as subsections 
     (g) and (h), respectively.
       (b) Elimination of Sugar Price Support and Production 
     Adjustment Programs.--
       (1) In general.--Notwithstanding any other provision of 
     law--
       (A) a processor of any of the 2003 or subsequent crops of 
     sugarcane or sugar beets shall not be eligible for a loan 
     under any provision of law with respect to the crop; and
       (B) the Secretary of Agriculture may not make price support 
     available, whether in the form of a loan, payment, purchase, 
     or other operation, for any of the 2003 and subsequent crops 
     of sugar beets and sugarcane by using the funds of the 
     Commodity Credit Corporation or other funds available to the 
     Secretary.
       (2) Termination of marketing quotas and allotments.--
       (A) In general.--Part VII of subtitle B of title III of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa et seq.) 
     is repealed.
       (B) Conforming amendment.--Section 344(f)(2) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1344(f)(2)) is 
     amended by striking ``sugar cane for sugar, sugar beets for 
     sugar,''.
       (3) General powers.--
       (A) Designated nonbasic agricultural commodities.--Section 
     201(a) of the Agricultural Act of 1949 (7 U.S.C. 1446(a)) is 
     amended by striking ``milk, sugar beets, and sugarcane'' and 
     inserting ``and milk''.
       (B) Powers of commodity credit corporation.--Section 5(a) 
     of the Commodity Credit Corporation Charter Act (15 U.S.C. 
     714c(a)) is amended by inserting after ``agricultural 
     commodities'' the following: ``(other than sugar)''.
       (C) Section 32 activities.--Section 32 of the Act of August 
     24, 1935 (49 Stat. 774, chapter 641; 7 U.S.C. 612c), is 
     amended in the second sentence of the first paragraph--
       (i) in paragraph (1), by inserting ``(other than sugar)'' 
     after ``commodities''; and
       (ii) in paragraph (3), by inserting ``(other than sugar)'' 
     after ``commodity''.
       (4) Transition provisions.--This subsection and the 
     amendments made by this subsection shall not affect the 
     liability of any person under any provision of law as in 
     effect before the application of this subsection and the 
     amendments made by this subsection.
       (5) Crops.--This subsection and the amendments made by this 
     subsection shall apply beginning with the 2003 crop of sugar 
     beets and sugarcane.
                                 ______