Congressional Record, Volume 146 Issue 21 (Wednesday, March 1, 2000)

[Congressional Record Volume 146, Number 21 (Wednesday, March 1, 2000)]
[Senate]
[Pages S983-S1003]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

AFFORDABLE EDUCATION ACT OF 1999

The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of S. 1134 which the clerk will report.
The bill clerk read as follows:

A bill (S. 1134) 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.

Pending:

Robb amendment No. 2861, to eliminate the use of education
individual retirement accounts for elementary and secondary
school expenses and to expand the incentives for the
construction and renovation of public schools.

Amendment No. 2861

The PRESIDING OFFICER. Under the previous order, there will now be 30
minutes for debate equally divided on amendment No. 2861.
The Senator from Virginia.
Mr. ROBB. Mr. President, I ask unanimous consent that the Senator
from Iowa be recognized to make a brief statement, and then I will
continue.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARKIN. Mr. President, I am proud to be a cosponsor of the
pending amendment with my colleague from Virginia, Senator Robb.
Senator Robb has been a great advocate for improving education for many
years.
The facts about the need for this amendment to help modernize and
upgrade our nation's public school facilities are well known.
The average school building is 42 years old. Nearly three-quarters of
all public schools were built before 1970.
Fourteen million American children attend classes in schools that are
unsafe or inadequate and the General Accounting Office estimates it
will cost $112 billion to upgrade existing public schools to overall
good condition.
Forty-six percent of schools lack adequate electrical wiring to
support the full-scale use of technology.
Enrollment in elementary and secondary schools is at an all time high
and will continue to grow over the next 10 years, making it necessary
for the United States to build an additional 6,000 schools.
It is a national disgrace that the nicest places that our children
see are shopping malls, sports arenas and movie theaters and the most
run down place they see are their public schools. What signal are we
sending them about the value we place on them, their education and
future?
How can we prepare our kids for the 21st century in schools that did
not make the grade in the 20th century?

[[Page S984]]

Last year I visited Hiatt Middle School in Des Moines. This school
opened its doors in 1925 and students spend all but a few hours a week
in classrooms built during a time when Americans could not imagine the
technological advances that would occur by the end of the century.
In 1925, Americans were flocking to movie theaters to see--and hear--
the first talking motion picture--Al Jolson's ``The Jazz Singer.'' The
students who walked through the doors of the brand new Hiatt school
that year could not imagine IMAX theaters with surround sound where a
movie goer actually becomes a part of the film.
In 1925, consumers were lining up in department stores to buy
novelties like electric phonographs, dial telephones, and self-winding
watches. CD's, DVD players, cellular telephones, or palm pilots were
unthinkable.
And, the introduction of state-of-the-art technologies like rural
electrification and crop dusting were revolutionizing the lives of
families and farmers alike.
There have been incredible technological and scientific advances in
the past seven decades. Yet, our schools have not kept pace with the
times. We continue to educate our children in schools built and
equipped in bygone eras.
We must make sure that every child and every school can facilitate
the technology of the 21st century. However, Iowa State University
reports that we need at least $4 billion over the next ten years to
repair and upgrade school buildings in Iowa and make sure they can
effectively utilize educational technology.
The amendment we are offering is a comprehensive, two-prong response
to this critical national problem.
First, we would authorize $1.3 billion to make grants and loans for
emergency repairs to public schools.
Mr. President, the Iowa Fire Marshall reported a five-fold increase
in the number of fires in schools over the past decade. During the
1990's there were 100 fires in Iowa schools. During the previous decade
there were 20.
It is clear that public schools have an urgent need to make repairs
now and these grants and no-interest loans will finance up to 8,300
repair projects. We will fix the roofs, upgrade the electrical systems,
and repair the fire code violations.
The second part of our comprehensive strategy is to provide $25
billion in tax credits to modernize our nation's schools. These tax
credits will subsidize the interest on new construction projects that
will enable school districts to build new schools to replace outdated
buildings or add more class rooms so they can reduce class size.
A few weeks ago I visited a school in Des Moines where students
attend class in closets because there is no room. This is simply
unacceptable.
In closing, I would like to share a few words from Tunisia,
Washington, D.C. fifth grader in Jonathan Kozol's book, ``Savage
Inequalities.''

It's like this. The school is dirty. There isn't any
playground. There's a hole in the wall behind the principal's
desk. What we need to do is first rebuild the school. Build a
playground. Plant a lot of flowers. Paint the classrooms. Fix
the hole in the principal's office. Buy doors for the toilet
stalls in the girl's bathroom. Make it a beautiful clean
building. Make it pretty. Way it is, I feel ashamed.

Our amendment will make it possible to rebuild her schools. It will
make it possible to fix the hole in the wall, put doors on the bathroom
stalls and paint the classrooms. By modernizing and repairing Tunisia's
schools we will make her feel a little less ashamed of herself and her
school.
This is a serious national problem. And it demands a comprehensive
national response. Our amendment is that response and I urge my
colleagues to support this important amendment.
Mr. President, I am proud to be a cosponsor of the pending amendment
with my colleague from Virginia, Senator Robb. Senator Robb has truly
been one of the educational leaders over his tenure in the Senate. He
has shown great leadership especially in this area that is so important
as we are reducing class sizes around the country. I have visited
schools in Iowa and other States recently where, because of the
reduction of class sizes, they are out of room; they need more space.
And we know the average school building in this country is 42 years
old; 74 percent of our schools were built before 1970.
The Robb amendment addresses this very critical need in our country.
I am proud to be a cosponsor. I congratulate him for his very strong
leadership in the whole area of education but especially in the area of
modernizing and rebuilding our schools.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. ROBB. I thank the Chair.
I thank my distinguished colleague from Iowa for his statement this
morning and for his continued leadership in education.
Mr. President, we are now considering amendment No. 2861. It is an
amendment I sent to the desk yesterday afternoon but agreed to debate
this morning.
I always welcome any opportunity to talk about education, about its
importance to our society, about ways we can improve our system of
education, and about how we at the Federal level can be better partners
with our States, our localities, and our families.
We met yesterday morning with the Governors of our 50 States. During
my own term as Governor of Virginia in the early 1980s, we took a great
deal of pride in being able to pump over $1 billion of new money--over
and above the baseline projections--into public education. That was
back when $1 billion was still serious money.
Education is not the only engine of innovation fueling opportunity
for economic prosperity; it is one of the most critical tools in
maintaining a democracy. Thomas Jefferson said that ``an enlightened
citizenry is indispensable to the proper functioning of a Republic.''
So when we have an opportunity to talk in this Chamber about education,
we are really talking about our future as well as our past.
To my dismay, the opportunity we have today to engage in really
productive and constructive debate about education is really a mirage.
We have traveled this road before. We have debated this same bill and
others similar to it, and the President has exercised his veto power
and has promised to veto this bill again if it arrives in its current
condition.

The Affordable Education Act, while it contains many admirable
provisions that would primarily enhance the affordability of higher
education, also contains a poison pill, one that many of us are simply
unable to swallow. This bill, in essence, would allow the diversion of
public moneys to private elementary and secondary schools. As stewards
of public taxpayer dollars, any policy that diverts public money away
from public schools, it seems to me, is both unwise and inequitable.
We have heard many times the figures about education savings
accounts. The average tax benefit to parents whose children attend
private schools would be $37 a year while the benefit to families whose
children attend public schools would be just $7 a year. Yet we know
that 90 percent of our schoolchildren attend public schools. We also
know our classrooms are overcrowded and many are dilapidated to the
point of being unsafe. We know we face a very real and imminent teacher
shortage over the next 10 years. We know we need to continue our
efforts to help States finish the business we started with Goals 2000.
We need to help States align their new standards and assessments with
their curricula. We know we need to encourage more professional
development for teachers and administrators. I believe we need to give
even greater flexibility to States and localities in the use of Federal
dollars in exchange for improved academic performance. We need to do
all of these things and more.
I wish to talk about one specific area that demands our immediate
attention. As a member of the Finance Committee, I have frequently
mentioned the need to build and modernize our Nation's schools. In
fact, I introduced school modernization legislation last July. It has
21 cosponsors and has been endorsed by over 50 organizations, from
education groups to professional organizations to the National
Conference of Mayors.
Without good, safe, and modern facilities, the rest of the education
debate becomes practically moot. When a roof collapses, teachers and
administrators really care most about fixing the roof and reopening the
school. When fuses blow because of poor electrical wiring,
administrators know

[[Page S985]]

they can't buy more computers before first rewiring the schools.
Trailers may be a cheaper temporary fix to the problem of overcrowded
classrooms, but even the most modern trailers are not adequate to
accommodate 21st century learning.
One of the largest investments Congress ever made in our national
infrastructure occurred under the leadership of a Republican President,
Dwight Eisenhower. In the 1950s, we spent roughly $1 billion to build
and renovate our Nation's schools. That was a time when $1 billion
really meant something. My friends in Fairfax County tell me it now
costs them over $25 million to build just one high school. My friends
in Loudoun County need 22 more new schools in the next 5 to 6 years
because of skyrocketing enrollments.
There are a lot of problems we face in the education arena, but we
simply can't ignore the massive infrastructure problem we have anymore.
Everyone, from civil engineers to architects to construction firms to
the education community, recognizes that we have to help and we have to
help now. All of our talk about reducing class size and improving
technology education and investing in school safety really puts the
cart before the horse when there are no new classrooms for the newly
hired teachers, no electrical upgrades to handle the new computers, no
new roofs to ensure the safety of our children.
Instead of talking about legislation which clearly is destined for
defeat or veto, we could be talking about reauthorizing the Elementary
and Secondary Education Act. Instead of talking about giving greater
tax benefits to 10 percent of American families, we could be talking
about how to better serve the 90 percent of American families who want
the best education system that all levels of government can provide.
Instead of talking about pouring money into private schools, I would
rather be talking about pouring foundations for public schools.
So I offer an amendment with Senator Harkin, Senator Conrad, Senator
Lautenberg, and Senator Bingaman that would authorize $25 billion in
tax credit bonds for school modernization and renovation. The amendment
would also authorize up to $1.3 billion a year for the next 5 years in
grants and zero-interest loans to needy school districts so they could
make urgent repairs such as those required to remedy fire code
violations and other urgently needed safety repairs.
This amendment still helps families save money for college. It still
increases the annual limit for education savings accounts to $2,000. It
also helps our States and localities meet a massive infrastructure
need.
In 1995, the GAO estimated we had $112 billion in repair needs and
$73 billion in new construction needs. In a study just released by the
National Education Association, the total unmet school infrastructure
needs across the country now total $307 billion. These numbers were
gathered from the individual State departments of education across the
country. These are the dollars our States admit they can't come up with
despite their surpluses. Even if every State used all of their
available surpluses, that amount would still only meet 7.1 percent of
the school construction needs that exist now nationwide.

I don't think this Congress has taken seriously the enormity of this
particular problem. We can't just sit by and do nothing. Without the
pending amendment, the school construction assistance provided in this
bill is negligible. Our amendment would help build 6,000 schools and
help make urgent repairs to some 25,000 schools. The underlying bill we
are considering today will only build or renovate 200 schools. That is
a stark contrast.
With over 12 million children attending schools with leaky roofs, our
students deserve better. With over 3,000 trailers being used in my
State of Virginia alone, our students deserve better. In Alabama, it is
reported that the roof of an elementary school collapsed just after the
children had left for the day. In Chicago, teachers place cheesecloth
over air vents to keep lead-based paint flecks from getting into their
classrooms. In Maine, some teachers are forced to turn out the lights
when it rains because their wiring is exposed under leaking roofs. The
list goes on and on.
Helping States and localities build schools doesn't interfere with
local school control. We know the overwhelming majority of school
districts face this particular infrastructure crisis. I simply do not
accept the argument that the Federal Government cannot and should not
play a role in this crisis. The needs are simply too great. If we can
help States and localities build roads, we can certainly help them
build schools. Both are critical to our sustained economic success.
We should expect great things from our Nation's schools and our
Nation's students. They should expect real debate and results from
Congress. But by choosing to rehash the same old debate about helping
wealthy families pay for private school, we send a message to America
that this Congress is more interested in sound bites than in solutions.
The American people, and many Members here, are thirsty for solution-
oriented dialog. If this bill is passed without addressing some of the
most urgent needs, we are not meeting our obligations and we are
missing a very real opportunity to make a difference.
I reserve the remainder of my time and yield the floor.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. Mr. President, I'd like to focus on the issue of school
construction. All of us, Democrats and Republicans, recognize the need
for well constructed and well-maintained school facilities. Nobody
wants an inadequate learning environment for our children.
Senator Robb has offered an amendment on school construction. His
amendment, as I understand it, basically contains the administration's
school construction package. I opposed this package last year, and I
continue to do so today.
Before I even talk about Senator Robb's amendment, I want to make a
point that is often lost in this discussion. The Federal Government
already provides a significant subsidy for school construction. Under
current law, states and localities can issue debt that is exempt from
federal taxation. This benefit allows them to finance school
construction by issuing long-term bonds at a much lower cost than they
otherwise could. The interest subsidy saves school districts money and
allows them to stretch their resources to meet their needs.
Now let me comment on the substance of Senator Robb's amendment.
Among other things, it creates a new type of bond--called a ``qualified
school modernization bond'' and authorizes the issuance of up to $23.6
billion of these bonds. Unlike regular tax-exempt bonds, for which the
holder receives tax-exempt interest payments, holders of these new
qualified school modernization bonds would receive a federal tax
credit, in an amount to be set by the Treasury Department.
This program involves a dramatic increase in federal bureaucracy,
while at the same time striking at the heart of local control of
education--which is the hallmark of our nationwide educational system.
In order to qualify for these bonds, a state or local school district
would need to secure the approval of the Department of Education. In
giving its OK, the Department of Education is supposed to consider
whether a comprehensive survey of the district's renovation and
construction needs had been completed, and how the state or locality
would respond to the construction needs. In other words, federal
officials in Washington would be micromanaging a local school
district's renovation plans--in effect, second guessing the decision of
state and local officials.
It just does not make sense for the Department of Education to get
involved at this level. President Clinton himself stated in 1994 that
``the construction and renovation of school facilities has
traditionally been the responsibility of state and local governments
financed primarily by local taxpayers.'' In that respect at least, I
agree with the President.
While I am on the subject of local control, I want to point out that
state and local governments have, in fact, responded to the need for
school construction and renovation. On March 3, 1999, the Finance
Committee had a

[[Page S986]]

hearing where we evaluated the appropriate federal role in school
construction. At that time, Dr. Dennis Zimmerman of the Congressional
Research Service explained that since the early 1990's, the approval
rates for school bond issues and for total school construction dollars
has increased substantially. From 1991 until 1998, the approval rate
for new issues went from less than 50 percent to almost 67 percent.
During those same years, the approval rates for new construction
dollars went from about 48 percent to over 82 percent.

Additionally, the inflation adjusted annual growth rate of school
bond volume--measured in dollars--during the last 20 years is 7.7
percent. This compares to an annual school age population growth rate
of only 0.2 percent and an annual increase of 4.1 percent in state/
local receipts. With respect to bond volume, in the first 6 months of
1996, voters approved $13.3 billion in school bonds, an increase of
more than $4 billion over the first 6 months of 1995.
The bottom line is that many states and localities are doing their
homework, passing bonds, building and renovating schools, and enjoying
favorable treatment under the existing Tax Code. They are stepping up
and meeting the challenge--and they are doing so without a massive
intrusion by the Federal Government. One of the witnesses at our
hearing, Bill Manning, the president of a large school district in my
little State of Delaware, told us that if we really wanted to improve
education at the local level, we should diminish the federal role,
rather than increase it.
The package of school construction measures in the Finance Committee
bill would retain state and local control, and would also work within
the existing tax-exempt bond framework. The latter point is important
because our purpose here is to provide state and local governments with
incentives that they can use, and not concepts that are untested and
uncertain.
For instance, 2 years ago, Congress enacted a tax credit bond program
for school construction. Called qualified zone academy bonds
(``QZABs''), the law provided for an authorization of $400 million in
1998 and $400 million in 1999. According to the Bond Market
Association, however, few QZAB transactions have taken place.
Mr. President, in the extenders tax legislation last fall, we did
extend the QZAB program through 2001. One of the reasons for this
extension was to evaluate how this pilot program is performing. My
point here is simply that setting up a big program with a high
authorization does not always translate into a successful policy
result. We need to look at how the program will play out in the real
world--whether the rhetoric will translate into results. We need to
look at how the program will play out in the real world.
The proposals in the Finance Committee bill provide local school
districts with the flexibility they need to address the needs of their
constituents. On this point, does anyone really believe Washington, DC,
bureaucrats really understand local school construction needs better
than the local school board?
How do we accomplish the objective of enhancing the financing of
school construction activities, while maintaining local control, in
this bill?

The answer is several important school construction measures.
The first proposal is directed at innovative financing for school
districts. It expands the tax exempt bond rules for public/private
partnerships set up for the construction, renovation, or restoration of
public school facilities in these districts. In general, it allows
states to issue tax-exempt bonds equal to $10 per state resident. Each
state would receive a minimum allocation of at least $5 million of
these tax-exempt bonds. In total, up to 600 million per year in new tax
exempt bonds would be issued for these innovative school construction
projects.
This proposal is important because it retains state and local
flexibility. It does not impose a new bureaucracy on the states and it
does not force the Federal Government to micromanage school
construction.
The proposal also is important because it promotes the use of public/
private partnerships. Many high-growth school districts may be too poor
or too overwhelmed to take on a school construction project themselves.
With these bonds, those districts can partner with a private entity--
and still enjoy the benefits of tax-exempt financing.
Mr. President, there is a second bond provision in this bill. That
provision is designated to simplify the issuance of bonds for school
construction. Under current law, arbitrage profits earned on investment
unrelated to the purpose of the borrowing must be rebated to the
Federal Government. However, there is an exception--generally referred
to as the small issuer exception--which allows governments to issue to
$5 million of bonds without being subject to the arbitrage rebate
requirement. We recently increased this limit to $10 million for
government that issue at least $5 million of public school bonds during
the year.
The provision in the Finance Committee bill increase the smaller
issuer exemption to $15 million, provided that at least $10 million of
the bonds are issued to finance public schools. This measure will
assist localities in meeting school construction needs by simplifying
their use of tax-exempt financing. At the same time, it will not create
incentives to issue such debt earlier or in larger amounts than is
necessary. It is a type of targeted provision that makes sense.
Mr. President, I also want to make sure that my colleagues realize
that the Robb Amendment strikes the language in the bill relating to K-
12 withdrawals from education savings accounts. This flexibility--the
ability to use a family's savings for any of the family's education
expenses--is a central component of this bill. Removing it sends the
wrong message to American families and does nothing to help them meet
the increasing need of education.

For these reasons, I oppose this amendment and urge my colleagues to
do so as well.
Mr. President, I ask unanimous consent that the statement of Dr.
Dennis Zimmerman of the Congressional Research Service and Mr. William
Manning of the Red Clay Consolidated School District Board of Education
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Prepared Statement of Dr. Dennis Zimmerman

State and local governments historically have assumed most
of the financial responsibility for public elementary and
secondary schools. They raised about 92 percent of total
school revenue for school year 1995-96; the federal
government contributed about eight percent of revenue.
Federal financial support can be divided into two major
components. Direct federal support provided by on-budget
spending programs in school year 1995-96 amounted to $19.1
billion (as measured by the states), 6.6 percent of total
school revenue. The federal policy objectives of this direct
federal spending are fairly clear: 55 percent of this
assistance in fiscal year 1995 targeted disadvantaged
children; another 22 percent targeted disabled children; 12
percent targeted school system support for such things as
professional development and drug abuse education; and six
percent targeted children whose parents live and/or work on
federal property.(1)
Indirect federal support for capital facilities is provided
through the tax system. The interest income individuals and
businesses earn on state and local debt is excluded from
their taxable income. This exclusion lowers the interest rate
on state-local debt, a reduction in effect paid for by the
federal tax revenue not collected on the excluded interest
earnings. The estimated revenue loss on school facilities
bonds amounted to $3.7 billion in 1996, about 1.2 percent of
total education revenue.(2) The federal government imposes no
limit on the amount of tax-exempt bonds state-local
governments may issue for governmentally owned school
facilities.
Unlike federal direct spending for public elementary and
secondary schools, this tax subsidy is not motivated by a
federal education policy objective. Its existence is a
byproduct of the income tax structure established in 1913
which incorporated the concept that the various levels of
government should refrain from taxing each other. As a
result, the tax subsidy is identical for all state-local
capital facilities--schools, roads, hospitals, parks, etc.--
and does not affect state-local taxpayer choices among
different types of facilities.
In summary, three facts stand out about federal financial
support for public elementary and secondary schools:
It is minor compared to state-local support.
On-budget spending is targeted to four major policy
objectives (the disadvantaged, the disabled, system support,
and the federally impacted).
The major tax subsidy was not adopted to pursue a federal
education policy objective,

[[Page S987]]

and has been structured not to influence state-local taxpayer
choice among capital facilities for different public
services.

The State-Local Sector and America's Public School Facilities

Attention recently has focused on the deficiencies of
public elementary and secondary school capital facilities.
Studies have suggested that as much as $112 billion of
investment may be necessary to restore school facilities to
good overall condition, and that the resources of many local
school districts are inadequate to rectify the situation.(3)
It is useful to evaluate this information in an economic
context. The gap between ``good overall condition'' of school
facilities and their current condition is a serious problem
not to be minimized that undoubtedly has an adverse impact on
human capital formation. But budget constraints are a fact of
life: our desire for both private and public spending
(consumption) exceeds our ability to pay for it. It is likely
that a similar study assessing the condition of state-local
capital facilities for any function--roads, sewage treatment
plants, prisons--would reach a similar conclusion.(4) A gap
exists between the ``good overall condition'' of the capital
stock we desire and the less-than-good overall condition we
choose to live with.
When making budget allocation decisions, state-local
decision makers decide where to spend additional tax revenue
based in part upon their assessment of which activity will
provide the highest return or value. It is a given that
positive returns will result from additional investment in
almost any activity funded by state-local budgets. But a
ten percent return in education facilities will not be
funded if decision makers judge a twelve percent return is
available in sewage treatment facilities. In other words,
one must consider the possibility that state-local
decision makers made their spending decisions with
complete information; that they chose the existing less-
than-good condition of education facilities because they
place a higher value on spending the available tax revenue
for private consumption or other state-local services.
For the Nation as a whole, state-local taxpayers have not
been neglecting education facilities. Table 1 presents
referendum data on public elementary and secondary school
bond issues for the years 1988 through 1998. The percentage
of bond issues approved and the percentage of dollars
approved appear in columns 2 and 3. Both series tell
approximately the same story. Approval rates declined
substantially in the early 1990s, reaching a low of 49.9
percent for Issues in 1991 and 48.4 percent for Dollars in
1993. Since those lows, the approval percentage for both
Issues and Dollars has risen substantially. The 1998 approval
rates of 66.8 percent for Issues and 82.4 percent for Dollars
are now higher than the levels that prevailed in 1988.

TABLE 1. SCHOOL BOND REFERENDA 1988-1998: APPROVAL RATES FOR ISSUES AND
DOLLARS
------------------------------------------------------------------------
Share of Share of
Year Issues Dollars
------------------------------------------------------------------------
1988.............................................. 0.657 0.776
1989.............................................. 0.580 0.736
1990.............................................. 0.573 0.707
1991.............................................. 0.499 0.490
1992.............................................. 0.532 0.604
1993.............................................. 0.568 0.484
1994.............................................. 0.592 0.516
1995.............................................. 0.553 0.544
1996.............................................. 0.586 0.691
1997.............................................. 0.619 0.619
1998.............................................. 0.668 0.824
------------------------------------------------------------------------
Source: Securities Data Company.

The increasing approval rates are consistent with the 7.7
percent real annual growth rate of school bond volume
(dollars of new issues) that occurred from 1979 through 1998.
This is not surprising. We are now in the longest
uninterrupted economic expansion in the Nation's history,
during which the state-local surplus rose from $80.1 billion
in 1990 to $148.7 billion in 1998. As real income rises,
state-local taxpayers can be expected to spend more on a wide
range of public services, including investment in schools.
But these bond data do not provide evidence about how much of
the growing bond volume was necessary to keep pace with
growing student enrollment and whether schools were faring
better or worse than other state-local services.
Table 2 compares the 7.7 percent real annual growth rate of
school bond volume over the last two decades to the rates for
school-age population (ages 5 to 19) and state-local receipts
net of federal grants.
The school-age population grew at a 0.2% annual rate, so
most of this 7.7 percent real annual increase in bond volume
was devoted to maintaining or improving the facilities of a
relatively stable school population. State-local receipts net
of federal grants grew at a 4.1 percent real annual rate.
These data suggest state-local taxpayers have been devoting
an increasing share of own-financed revenue to schools, and
school construction spending has fared better than all other
functions combined.

TABLE 2. SCHOOL NEW-ISSUE BOND VOLUME AND OTHER ECONOMIC INDICATORS,
1979-1998: REAL ANNUAL GROWTH RATES
------------------------------------------------------------------------
State-
Local
Population Receipts
School Bond Volume Ages 5-19 Net of
Federal
Grants
------------------------------------------------------------------------
7.7%............................................. 0.2% 4.1%
------------------------------------------------------------------------
Source: CRS calculations based upon data from Securities Data Company
and Economic Report of the President, 1999.

Of course, these aggregate data undoubtedly mask a
considerable amount of variation among states and school
districts. Several circumstances arise which may cause school
districts to provide grossly inadequate school facilities,
and alleviation of some of these circumstances may be
consistent with historical federal policy objectives for
financing public elementary and secondary education.
A district might suffer from inadequate fiscal capacity;
residents may be poor and the district may lack significant
commercial and industrial property tax base. If its state
does not have a vigorous fiscal equalization program for
education finance, resources may not be available to provide
minimal capital facilities.
Some school districts might experience a substantial influx
of retirees, or be at the height of a long-term aging of
their population. Retirees may feel they have done their duty
by supporting school finance in their child-raising years.
Seeing few direct benefits to themselves, they may be
reluctant to support additional spending to maintain minimal
services, particularly if they have relocated.
Some school districts have experienced rapid population
growth (often resulting from immigration to the United
States). A ``normal'' financing effort might prove to be
inadequate to maintain minimal services when student
enrollment expands rapidly.
Some states and local governments impose very tight
borrowing restrictions and/or super-majority approval
requirements for bond referenda that may frustrate the
majority's spending preferences.

in summary

The condition of America's school facilities may or may not
be worse than the capital facilities for other state-local
public services.
The proportion of school bond votes approved rose from a
low of 50 percent in 1991 to 67 percent in 1998. The
percentage of dollars approved in 1998 was 82 percent versus
49 percent in 1991.
State-local taxpayers have devoted an increasing share of
their own-source revenue to school bond finance; over the
last twenty years, the volume of new-issue school bonds has
grown at a 7.7 percent real annual rate, while state-local
own-source revenue has grown at a 4.1 percent real annual
rate. Since the school-age population has grown at a mere 0.2
percent rate, most of this spending has been devoted to
maintaining or improving facilities.
These data present a favorable picture for the Nation's
school facilities, but may hide a subset of communities that
find it difficult to maintain adequate school facilities due
to: a high concentration of the poor; a concentration of
retirees who are reluctant to support school spending; high
population growth rates, sometimes resulting from an influx
of immigrants; and very tight borrowing restrictions and/or
super-majority requirements for approval of bond referenda.

tax-exempt bond proposals

Several proposals have been introduced that would adjust
the current tax treatment of state-local debt to increase
federal financial support for school construction.(5) The
Administration has proposed Tax Credits for Holders of
Qualified School Modernization Bonds and Qualified Zone
Academy Bonds; Representative Archer has proposed a
lengthening of the period during which arbitrage can be
earned and not rebated to the Treasury; Senator Graham has
proposed allowing school facilities to be financed with
private-activity bonds; and it has been proposed that the
annual issuance ceiling to qualify for the small-issuer
arbitrage rebate exemption be raised. The last two proposals
were adopted by the Senate Finance Committee but not accepted
by the Conference.
Each of these proposals is described. Each proposal's
effect on the share of the debt service costs borne by state-
local taxpayers is estimated, and the targeting of the
proposal is compared to the targeting of federal on-budget
spending for elementary and secondary education.
School Modernization Bonds
Description. This Administration proposal would authorize
issuance of $11 billion of tax credit bonds in 2000 and $11
billion in 2001. School bond volume in 1998 was about $23
billion, so this proposal could be available to approximately
50 percent of the school bond market in 2000 and 2001.
Cost Reduction. Tax credit bonds pay 100 percent of state-
local interest cost on bonds, as opposed to 25 to 30 percent
of interest costs for traditional tax-exempt bonds. Thus,
unlike tax-exempt bonds, tax credit bonds lower the cost of
investing in school facilities relative to investing in
capital facilities for any other public purpose. This lower
relative cost would be a powerful incentive for state-
local taxpayers to adjust their public budgets and provide
more education services and less of all other services.
Targeting. Half of the annual borrowing authority would be
reserved for the Nation's communities with the highest
incidence of children living in poverty. The remaining half
would be allocated to the states and qualifying school
districts based upon the federal assistance they received
under the Basic Grant Formula for Title I of the Elementary
and Secondary Education Act of 1965 (based primarily upon
incidence of low-income children). But states would not be
constrained by the Title I formula and could use any
appropriate mechanism for distributing the funds. Thus, half
of the subsidy

[[Page S988]]

would conform to the federal government's existing criteria
for federal spending programs in education, and half could
potentially be spent on other school districts.
Relaxation of Arbitrage Restrictions
Description. State-local arbitrage bonds are tax-exempt
bonds issued where all or a major portion of the proceeds are
used to acquire securities with a higher yield. Because
state-local governments pay no federal income tax on their
interest earnings, Congress has restricted their ability to
earn arbitrage profits. Bonds for construction are allowed to
earn arbitrage profits if they conform to a schedule for
spending the bond proceeds: 10% within six months of
issuance; 45% within 12 months of issuance; 75% within 18
months of issuance; 95% within 24 months of issuance; and the
permissible 5% retainage (amounts by which the earlier
targets are missed) within 36 months. Failure to comply
triggers a requirement to rebate the arbitrage earnings to
the U.S. Treasury.
This proposal would slow and lengthen the spend-down
schedule that must be met for bonds issued to finance public
school education facilities in order to qualify for exemption
from arbitrage rebate. No rebate would be required if: 10
percent of bond proceeds is spent within 1 year of issuance;
30 percent is spent within 2 years; 50 percent is spent
within 3 years; and 95 percent is spent within 4 years. The 5
percent retainage would have to be spent within 5 years. The
proposal applies to all school bonds.
Cost reduction. Issuers must be cautious when attempting to
earn arbitrage profits. Suppose the interest rate on the tax-
exempt bond issue is 6 percent and the interest rate on a
comparable long-term taxable bond is 8 percent. In theory,
the issuer could earn 2 percent arbitrage profit by investing
the tax-exempt bond proceeds in 8 percent long-term taxable
securities. This is a risky investment strategy. The issuer's
investment horizon is short because the spend-down rules
require sale of all the securities within 36 months (60
months if this proposal is passed). Should interest rates
have risen when the issuer must sell the taxable bond to pay
for construction costs, the bond must be sold at a discount
and the issuer will suffer a capital loss that could easily
exceed the arbitrage earnings. Thus, the calculations in this
testimony assume the issuer earns arbitrage profits of 0.75
percent, not the 2 percent yield differential. The important
point here is not so much the share of the principal that
could be paid off by the arbitrage profits, but the
differential between current law and the proposed changes.
Assuming the issuer takes maximum advantage of arbitrage
opportunities with a 0.75 percent profit, current law could
provide arbitrage profits for tax-exempt bonds sufficient to
pay for 1.05 percent of the amount borrowed. For tax credit
bonds, this percentage would rise to 9.5.(6) Allowing a five-
year spend-down period for tax-exempt bonds would increase
the percentage borrowed that could be financed with arbitrage
profits from 1.05 to 2.4 percent. If combined with tax credit
bonds, the percentage would rise from 9.5 to 21.2 percent.
Targeting. The arbitrage proposal would apply to all school
bonds. No attempt is made to target its availability to
school districts that meet the federal government's targeting
criteria for its on-budget spending programs.
Public School Construction Partnership Act
Description. This proposal introduced by Senator Graham in
the 105th Congress would include public elementary and
secondary education facilities in the list of exempt
facilities eligible for the use of tax-exempt private-
activity bonds. A state could issue bonds equal to the
greater of $10 per resident or $5 million on behalf of
corporations that would use the bond proceeds to build school
facilities and lease the buildings to school districts. A
corporation must charge a lease payment such that the
building could be transferred to the school district at the
end of the contract without further compensation to the
corporation. The bonds would not be subject to the private-
activity bond volume cap, so they would not compete with
other private-activity bonds for scarce borrowing authority.
Cost reduction. This proposal might reduce the federal
subsidy. Private-activity education facility bonds would be
issued as revenue bonds whose debt service is secured by the
corporation building and operating the facility rather than
as general obligation bonds whose debt service is secured by
the full faith and credit of the issuing school district. As
a result, the interest rate on the private-activity school
bonds is likely to be higher and the spread between the
taxable interest rate and the interest rate on the school
bonds is likely to be lower. The federal government would pay
a smaller share of interest costs than it would pay on
governmental tax-exempt school bonds.
A school district that chose this option could conceivably
receive compensation sufficient to offset its higher interest
cost in two ways. First, it might face very restrictive bond
referenda requirements that preclude getting approval from
the voters. Although private-activity bonds require the
issuing jurisdiction to hold a public meeting, they do not
require a vote. Second, the corporation might be a more
efficient builder and operator of the facility, or it may be
able to avoid compliance with a host of regulatory rules
pertaining to government construction projects (such as the
Davis-Bacon Act). These savings might enable the corporation
to provide lease terms whose present discounted value is
lower than would be the case for principal and interest
payments on the debt.(7)
Targeting. All but $5 million must be allocated to high-
growth school districts, defined as having: (1) a 5,000 or
greater student enrollment in the second academic year
preceding the date of the bond issuance; and (2) an increase
in student enrollment of at least 20 percent in the 5-year
period ending with that second academic year. It is not clear
how many of the eligible districts would have characteristics
that are targeted by federal on-budget education spending.
Small Issuer Arbitrage Exemption
Description. When the requirement for rebate of arbitrage
earnings was enacted in 1986, governmental units that issued
no more than $5 million of bonds per year were exempt. In
1997, the exemption limit was increased to $10 million,
provided at least $5 million is used to finance public school
construction. This proposal would increase the exemption
limit to $15 million, provided at least $10 million is used
to finance public school construction.
Cost reduction. The value of the small-issuer exemption is
that the spend-down rules do not apply; the issuer can earn
arbitrage profits on the amount borrowed for the entire
three-year spend-down period. When considering a $5 million
marginal investment on a variety of public functions, state-
local taxpayers will likely notice that (under current law)
school bonds could earn arbitrage profits sufficient to pay
2.3 percent of the amount borrowed, while bonds for other
functions could earn arbitrage profits sufficient to pay only
1.05 percent of the amount borrowed. If tax credit bonds
could be combined with the small-issuer exception (while
retaining the three-year spend-down requirement), arbitrage
profits would be sufficient to pay 20.3 percent of the amount
borrowed.
Targeting. This provision would apply only to relatively
small governmental units. It is not clear how many of these
units would have the characteristics that are targeted by
federal on-budget education spending.

endnotes

(1) U.S. Library of Congress, Congressional Research
Service, Public School Expenditure Disparities: Size,
Sources, and Debates over Their Significance, No. 96-51 EPW
by Wayne Riddle and Liane White, December 19, 1995, 31p.
(2) Indirect financial support is also provided by the
deductibility of state-local income and property taxes from
federal taxable income. This provision is not discussed here.
The tax-exempt bond revenue estimate is based on a 1996
federal revenue loss from all outstanding bonds of $25
billion (Budget of the U.S. Government, Analytical
Perspectives, Fiscal Year 1998), and assumes the school share
of the outstanding stock of all state-local bonds is equal to
the school share (14.7 percent) of new-issue state-local
bonds issued in 1996. A small amount of tax credit bonds are
also available for school districts with high concentrations
of students receiving free lunch.
(3) U.S. General Accounting Office, School Facilities:
America's Schools Not Designed or Equipped for 21st Century,
GAO/HEHS-95-95, April 4, 1995; and GAO, School Facilities:
Condition of America's Schools, GAO/HEHS-95-61, February 1,
1995.
(4) For an example, see Commission to Promote Investment in
America's Infrastructure, Financing the Future: Report of the
Commission to Promote Investment in America's Infrastructure,
February 1993.
(5) The question of whether these proposed increased
federal subsidies represent an improvement in economic
efficiency is complex. The answer depends in part upon the
extent to which returns from elementary and secondary
education accrue to society rather than the individual and
how widely these ``external'' benefits spill beyond state
borders.
(6) Since the federal government pays 100 percent of the
interest cost on tax credit bonds, arbitrage earnings would
be 6.75 percent, not the 0.75 percent for tax-exempt bonds.
(7) Some have suggested the efficiencies in such public/
private partnerships may be sufficiently great that school
districts could reduce costs even if they used taxable debt.
Ronald D. Utt, How Public-Private Partnerships Can Facilitate
Public School Construction, Heritage Foundation Backgrounder
No. 1257, February 25, 1999.
____

Prepared Statement of William E. Manning

Bill Manning has been President of the Red Clay
Consolidated School District Board of Education (Delaware's
second largest school district) for nine years. An attorney
by trade, Mr. Manning has been among Delaware's leaders in
proposing and implementing a variety of educational reforms:
public school choice, charter school legislation and rigorous
academic standards statewide. Red Clay is currently the only
district in Delaware to have reached an agreement with its
teachers association pursuant to which Red Clay teachers will
be evaluated based on student performance. Among other
recognitions, Mr. Manning was honored, in October, 1998, as
one of the nation's ``unsung heroes'' in education reform by
the Center for Education Reform in Washington, DC.
Demographically, Red Clay is a composite of all cross
sections of Delaware and America. It has both affluent areas
and poverty

[[Page S989]]

stricken areas; suburban and city. Red Clay students speak a
variety of native languages, including a large component of
Spanish-speaking children.
Red Clay's capital assets are probably typical of those
found throughout America. No new schools have been built for
more than 30 years and existing schools require repair and
renovation. After one unsuccessful attempt, Red Clay received
referendum approval both to make the most needed repairs to
its buildings and invest in technology. That capital program,
however, is much smaller than Red Clay would prefer, and new
schools and renovations remain critical.

Statement Regarding the Federal Role in School Construction

I don't want to begin my testimony by assuming that the
federal government should have any role at all in public
education. Indeed, many of those in the education reform
community believe that the federal government should
diminish, rather than increase, its role in public education.
Let me give you one good reason why that is so. With all of
the talk regarding education reform these days, one
particular notion is being identified as having preeminent
importance: ``accountability.'' Indeed, it is acquiring
buzzword status. Presidents, members of Congress, governors
and school board members all over the country are talking
about the importance of accountability and they are all
correct. However, to the extent that you shift the locus of
decision making from the school to the district to the state
to the federal level, the more you have diminished the
chances that those responsible for delivering educational
services can be held accountable for their successes or
failures. Put another way, if I am a school administrator and
I can point to burdensome and inappropriate federal
regulations as the reason for my failure to provide adequate
facilities, I will.
All of that leads me to bring two messages today: (1) Don't
do anything at all and, if you have loose change rattling
around in the federal coffers, send it back to those who gave
it to you in the first place. (2) If you must do something,
make good on all the promises of local autonomy and
flexibility that inevitably accompany all such programs.
Don't let the public educational establishment claim that:
``But for this federal regulation or that federal guideline,
we could have done the job.''
If you detect a note of cynicism about federal promises for
local autonomy and flexibility, you are correct. That
cynicism, however, is justified as we out in the states hear
more and more about some of the proposals before you. For
example, I understand that the President's proposal wants to
encourage capital spending by school districts that would not
have been possible without such financial assistance.
Therefore, as a criterion for eligibility, one would not be
surprised to see the Department of Education require an
applicant to make some sort of showing that its proposed
capital expenditure would not otherwise happen.
One imagines several responses to such a rule. First, the
``green eyeshade guys'' that exist within each school
district will now slow down some projects, testing the
political waters each day to see whether increased federal
funding is soon to be available. After all, to move forward
with capital projects at this time may be to render them
ineligible at a later time. Thus, the games begin. Second,
what is so wrong with providing assistance to a district that
has already decided to ``bite the bullet'' and ignore other
priorities in order to make capital repairs? It seems to me
that this particular element of the President's proposal
removes, rather than creates, incentive for local
responsibility.
To take another example, one who is reading about the
President's current proposal comes away with the sense that
there will be significant means-testing within the
eligibility criteria. I certainly hope, on behalf of my
school district, that I will be able to use whatever capital
assistance the federal government decides to give me anywhere
in my district--whether it be in downtown Wilmington or out
in the suburbs.
Please understand that any federal rules and regulations
accompanying any new federal financial assistance will apply
on top of a host of other regulations already imposed at the
state level. Indeed, as I indicated, this hotchpot of
regulations imposed upon local school districts at the state
level already gives the establishment enough places to hide
from true accountability as it is. It is almost inconceivable
that a new regime of federal requirements would not be, in
some ways, inconsistent with a body of regulations that, in
my view, is already too large. Thus, the prospect of time
wasted and projects left undone because of conflicts between
federal and state regulation grows with every new federal
program. Please make any program that results from the
proposals before you serve as a testament that the federal
government can, if it wants to, render meaningful assistance
without creating matching unnecessary burdens.
Let me close with a few specific suggestions. First, I
believe, as do many of you, that charter schools are already
improving the educational landscape by offering variety,
quality and single-school focus to those who previously had
to pay to get those things. That's the good news. The bad
news is that charter schools are still regarded by the
educational establishment in some quarters as the enemy.
Thus, the organization that owns our school buildings is
sometimes stingy with them when it comes to housing charter
schools. Nor do the funding formulae in many state charter
school bills provide adequate capital--as opposed to
operating--assistance to charter schools. In that
environment, it would be particularly fitting if the federal
government took special care to ensure that our new charter
schools were well housed. Please don't overlook them.
As you review the variety of proposals before you, I
suggest that you carefully review those that would render
assistance to local school districts needing capital
assistance and simultaneously reduce federal ``red tape.'' In
Delaware, for example, we have several lending institutions
that are members of the Federal Home Loan Bank--one of the
Nation's few triple A rated institutions. If these lenders
could offer the Federal Home Loan Bank's credit to support
bond-financed school construction projects, then the cost of
debt--even tax exempt debt--would go down. However, for
reasons that appear only to have historical significance,
Federal Home Loan Banks are not permitted, under Section 149
of the Internal Revenue Code, to provide such credit
enhancement. Nor does it appear that those federal (and
former federal) instrumentalities that are so authorized by
Section 149 (Federal Housing Administration, Veteran's
Administration, Fannie Mae, Freddie Mac, Ginnie Mae and
Sallie Mae) are actually in the business of assisting school
financing. Thus, Section 149 of the Internal Revenue Code
should be amended to permit Federal Home Loan Banks to sell
credit enhancement products--at least in the area of school
construction finance if not all projects eligible for tax
exempt financing.
I appreciate the opportunity to share my thoughts with the
Committee. I realize that my plea to send those tax revenues
that might otherwise have been spent by the federal
government back to the taxpayers requires that Congress
ignore the political head of steam building over this issue.
So, if the federal government decides it wants or needs to
play a role in building schools, please do it in a way that
leaves school board members like me, as well as the
administrators and teachers who we employ, exposed to the
consequences of our failure, if that be the case, to do our
job and deliver a quality education to each of our students.
Mr. ROTH. Mr. President, I yield the remainder of my time.
Mr. CONRAD. Mr. President, I rise in strong support of the amendment
offered by Senator Robb. During consideration of S. 1134, the
Affordable Education Act last year in the Finance committee, I joined
my colleague in offering a similar amendment during the markup.
Regrettably, that amendment was not adopted.
Under the Robb amendment, an allocation of $24.8 billion in bonds
would be authorized to permit states and local school districts, over
the next 5 years, to issue bonds to modernize and renovate
approximately 6,000 schools. Sixty-five percent of the bond authority
would be allocated to states based on their title I allocation, and 35
percent to the 100 school districts with the largest number of low-
income students. Additionally, $1.3 billion would be authorized for a
new grant and zero-interest loan program to fund the most urgent school
repair needs in local schools. There is also $400 million set aside for
Bureau of Indian Affairs schools.
Today we are considering our first major education measure of the
21st century. It is critical that we weigh carefully the direction of
that education policy. What should our priorities be as we enter the
21st century? How should we allocate our limited Federal resources in
education? How do we respond to growing concerns about the digital
divide, and what is the role of education in that debate?
Under S. 1134, the major provision of the bill would expand tax-free
expenditures from the current higher education individual retirement
account to permit student expenses for elementary and secondary
education including private, parochial, or public education. S. 1134
would increase the limit on the annual contribution for an education
IRA for a four-year period (2000-2003) to $2,000.
Expenses authorized for IRA expenditures would include traditional
expenses including tuition, books, supplies, computer equipment,
tutoring services, as well as student expenses for room, board,
transportation and supplementary items. Additionally, S. 1134 makes a
number of important changes, which I support, in prepaid tuition plans,
employer-provided educational assistance, and student loan interest
deduction.
There is no question, of the merits of encouraging families to save
to meet the educational needs of their children. Education IRA's are
one way to encourage this savings, and we know it

[[Page S990]]

has been very helpful to families planning for higher education
expenses. As we debate this legislation, however, it is critical that
we define our national education priorities, and allocate our limited
Federal resources to meet those objectives. Does an expansion of
education IRA's respond to our national education priorities? Does the
allocation of limited Federal resources for education IRA's respond to
the education needs of our children into the 21st century?
In the past 5 years, a number of very respected organizations have
alerted us to the critical elementary and secondary school
infrastructure needs. In 1995, the GAO reported that $112 billion was
needed to bring the nation's schools into good overall condition. The
report cited that one-third of schools--about 25,000--were in need of
extensive repairs. More recently, the National Center for Education
Statistics released a report stating that the average public school in
America is 42 years old. Many of these schools are also lagging in
technology infrastructure and their effort to connect to the Internet.

I know the need for repairs in our schools is great from my visits to
North Dakota schools and conversations with educators, and state
officials. North Dakota State Superintendent of Schools, Wayne
Sanstead, informed me last year during consideration of the markup of
S. 1134, that costs associated with school modernization in the North
Dakota would exceed $420 million. 88 percent of schools reported need
to upgrade or repair facilities, and 62 percent reported unsatisfactory
environmental conditions.
I ask unanimous consent Mr. President, that a letter from the N.D.
Department of Public Instruction which outlines the critical school
infrastructure needs in North Dakota be printed in the Record at the
conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. CONRAD. It is critical that we ask whether an expansion of
education IRA's for elementary and secondary education expenses is the
best use of our limited Federal education dollars and responds to our
national education priorities. We need to examine who will benefit from
this IRA expansion as opposed to who will benefit from meeting school
infrastructure needs.
According to the Department of Treasury, 70 percent of the proposed
education IRA benefit would go to 20 percent of all taxpayers. Higher
income families would derive the most benefit. Many families with
incomes less than $55,000 would receive little benefit. Additionally,
according to the Joint Committee on Taxation, the average annual
benefit for children attending private and parochial schools would be
limited to approximately $37.
On the other hand, 90 percent of our children attend public schools,
and public school enrollments are increasing. According to the National
Council on Education Statistics, a record 52.7 million children are
enrolled in public schools, and that number is expected to increase to
54.3 million by 2008. It is estimated that at least 2,400 new school
facilities will be needed to meet this student enrollment increase.
Studies also show that building conditions and overcrowding in school
facilities are linked to student achievement.
There is no question where our education resources should be
directed. Although it is important to encourage families to save for
their children's education, we have a more urgent need to ensure that a
majority of our children have the best educational environment for
learning. Regrettably, that is not the case in too many of our local
school districts. Local school districts face many challenges in school
modernization efforts. Interest payments on bonds are already a major
expense for local taxpayers. Additionally, taxpayers are burdened with
many unfunded Federal mandates and it becomes difficult to finance new
construction or repairs through an expansion of bond authority. Also,
many of our rural communities across the nation, including North
Dakota, are experiencing declining enrollments in local school
districts leaving many of these smaller, rural schools with more
limited education resources, and very limited ability to undertake bond
initiatives.
It is clear where Federal support for education should be directed.
The importance of school modernization is underscored by the emphasis
on technology in our economy in the 21st century. Information
technology will play a key role in our continued economic growth. The
condition of our public school facilities, including technology
infrastructure and the ability to connect to the Internet, is critical
in sustaining our current economic growth. It is also important in
ensuring that our children are equipped to enter the job markets in the
21st century, and able to benefit from the extraordinary growth that we
have experienced in recent years.
School modernization is critical for our children's success, and
should be one of our key national education priorities as we enter the
21st century. Local communities cannot face the task of funding the
necessary school building and technology infrastructure improvements on
their own. They urgently need our help. I strongly urge my colleagues
to vote in support of the amendment offered by Senator Robb.

Exhibit 1

Department of Public Instruction,

Bismarck, ND, March 2, 1999.
Hon. Kent Conrad,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Conrad: I am writing this as a follow-up to
our recent conversation concerning the Senate Finance
Committee's plans to conduct hearings regarding funding for
school modernization.
I am attaching the executive summary of a school facilities
inventory completed by the Department of Public Instruction
with assistance from the Barton Malow Company. The study was
done in the fall of 1994 and the report was issued in January
of 1995.
While some school construction has taken place since that
time there is no reason to believe that the basic assumptions
outlined in the executive summary about North Dakota's needs
for school building renovation and upgrading have changed
significantly. As the executive summary indicates the total
projected costs to bring North Dakota's 453 public school
facilities up to state-of-the-art facilities would be
approximately $420 million or nearly one million dollars per
building.
Our small rural North Dakota school districts in particular
have extensive and potentially expensive school renovation
needs which have been consistently deferred because of budget
constraints due to fluctuations of our agricultural economy
and the impacts of significant declining enrollment which
further erodes school districts funding base.
Even in those few circumstances where some of these rural
districts consider consolidation school renovation would
still be needed. In fact, consolidation that appears to be
required in some rural areas to sustain school programs will
in turn require construction of updated larger facilities to
accommodate consolidation enrollments. Clearly, North Dakota,
and in this case, especially rural North Dakota would benefit
from federal financial assistance for school renovation and
construction.
In addition, North Dakota's Native American reservation
schools are in some cases in desperate need of renovation and
upgrading. While they have access to some funding through
other federal programs, our experience is that the money
available through those programs is not adequate and not
available in a timely fashion. These districts would also
benefit from a general federal infusion in the area of school
construction and renovation.
In sum, I am encouraged and strongly support your efforts
to pursue this source of funding to help our hard-pressed
agricultural areas. If I can provide further information or
be of advocacy assistance in this congressional effort please
do not hesitate to contact me at any time.
I look forward to visiting with you and your staff when I
once again preside over Council of Chief State School
Officers Legislative Committee deliberations on March 15 and
16.
With best wishes,
Dr. Wayne G. Sanstead,
State Superintendent.

The PRESIDING OFFICER. The Senator from Virginia.
Mr. ROBB. Mr. President, I wish to address a couple of the issues
raised by my distinguished colleague from Delaware. One of the issues
the Senator from Delaware suggested was that this creates a whole new
bureaucracy. But with all due respect, it does not create a whole new
bureaucracy. States only have to keep a tally on how much bonding
authority they have used. That is it. That is not a whole new
bureaucracy.
Talking about the concern about assessments and making additional
assessments, the truth is that most of the States have already made
those assessments. So we are not talking about any additional burden.

[[Page S991]]

When we talk about the QZAB as not having been used, 94 school
districts in 15 States have utilized the QZAB, and that, indeed, is the
model upon which these school modernization bonds are featured. We are
not talking about an untested bill.
With respect to the number of students that we are trying to help
under the circumstances, currently we have 52.7 million students in
America's schools. In 8 years, that total will climb to 54.3 million
students in our schools. We are talking about a significant increase in
the number of students at the same time we are trying to decrease the
number of students in individual classes. We know the schools are
getting older and older, with the average age of the schools in this
country today being 42 years old. We have a pressing, urgent problem.
With all due respect to my distinguished colleague from Delaware, I
would recommend a visit to a number of the schools because the schools
in many cases are in desperate need of infrastructure repair. And this
is designed to provide Federal assistance in ways that do not get
involved in local school control. I recognize and respect that
particular feature.
This is simply designed to assess the financing of those greatly
needed improvements, which I believe the Senator from Delaware and any
other Senator in this Chamber will find if they visit the schools in
their districts. They are old and getting older, and we can't meet the
reduction in class size. The school population is increasing. Most of
the children we are talking about for the years 2007 and 2008 are
already born. We know the numbers. We have to be able to respond to the
need. This is a way to do it without interfering with local control.
The basic difference between the two of us is whether or not we ought
to put public moneys into private education or whether as stewards of
the public purse we have a responsibility to make sure we fund public
education first.
I respectfully request that my colleagues support this particular
measure and stand up for the students and the future of education in
America.
I yield the floor.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. Mr. President, let me remind my colleagues that we have
already considered and rejected the President's school construction
proposal in the past. In 1998, in connection with an education tax
bill, Senator Moseley-Braun offered the President's package, and it was
defeated by a vote of 56-42. Last year, my distinguished colleague,
Senator Robb, offered this school construction plan, and it was
defeated 55-45.
We all agree on the need for well-built and well-maintained schools.
There is no one in this body who wants our children to learn in a
substandard learning environment. But the evidence shows the States are
stepping up and meeting the challenge of providing schools for their
students. We should not create a new Federal program that injects the
Federal bureaucracy into additional State and local controls. For these
reasons, I oppose the amendment, and I move to table it.
Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER (Mr. L. Chafee). Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. KENNEDY. Mr. President, I urge the Senate to support of Senator
Robb's amendment to provide funding for rebuilding and modernizing the
nation's schools. The Coverdell bill does nothing for crumbling
schools.
Schools, communities, and governments at every level have to do more
to improve student achievement. Schools need smaller classes,
particularly in the early grades. They need stronger parent
involvement. They need well-trained teachers in the classroom who keep
up with current developments in their field and the best teaching
practices. They need after-school instruction for students who need
extra help, and after-school programs to engage students in
constructive activities. They need safe, modern facilities with up-to-
date technology.
But, all of these reforms will be undermined if facilities are
inadequate. Sending children to dilapidated, overcrowded facilities
sends a message to these children. It tells them they don't matter. No
CEO would tolerate a leaky ceiling in the board room, and no teacher
should have to tolerate it in the classroom. We need to do all we can
to ensure that children are learning in safe, modern buildings.
Nearly one third of all public schools are more than 50 years old. 14
million children in a third of the nation's schools are learning in
substandard buildings. Half of all schools have at least one
unsatisfactory environmental condition. The problems with ailing school
buildings aren't the problems of the inner city alone. They exist in
almost every community, urban, rural, or suburban.
In addition to modernizing and renovating dilapidated schools, large
numbers of communities across the country need to build new schools, in
order to keep pace with rising enrollments and to reduce class sizes.
Elementary and secondary school enrollments have reached an all-time
high again this year of 53.2 million students, and will continue to
rise over the next ten years. The number will increase by 324,000 in
2000, by another 282,000 in 2001, by still another 250,000 in 2002, and
continue on an upward trend in the following years.
Last year, the Senate heard testimony from a student in Clifton,
Virginia whose high school is so overcrowded that fights often break
out in the overflowing halls. The problem is called ``Hall Rage,'' and
it's analogous to ``Road Rage'' on crowded highways. The violence in
the hallways is bad enough. But it's even worse, because it's difficult
for teachers to teach when students are distracted by the chaos in the
hallways and outside the classrooms.
The Department of Education estimates that 2,400 new public schools
will be needed by 2003 to accommodate rising enrollments. The General
Accounting Office estimates that it will cost communities $112 billion
to repair and modernize the nation's schools. Congress should lend a
helping hand and do all we can to help schools and communities across
the country meet this challenge.
In Massachusetts, 41 percent of schools report that at least one
building needs extensive repairs or should be replaced. 80 percent of
schools report at lest one unsatisfactory environmental factor. 48
percent have inadequate heating, ventilation, or air conditioning. And
36 percent report inadequate plumbing systems.
In Detroit, over half--150 of the 263--school buildings were built
before 1930. Their average age is 61 years old, and some date to the
1800's. Detroit estimates that the city has $5 billion in unmet repair
and new construction needs. Detroit voters recently approved a $1.5
billion, 15-year school construction program, but it's not enough.
In an elementary school in Montgomery, Alabama, a ceiling which had
been damaged by leaking water collapsed only 40 minutes after the
children had left for the day.
At Cresthaven Elementary School in Silver Spring, Maryland, a second-
grade reading class has to squeeze through a narrow corridor with a
sink on one side into a space about 14 ft. wide by 15 ft. long. The
area used to be a janitor's office, and the teacher has no place to
sit.
Schools across the country are struggling to meet needs such as
these, but they can't do it alone. The federal government should join
with state and local governments and community organizations to
guarantee that all children have the opportunity for a good education
in safe and up-to-date school buildings. The Robb amendment is an
excellent start on this high priorities, and I urge the Senate to
approve it.
Mr. BYRD. Mr. President, I oppose this amendment offered by Senator
Robb today to the Affordable Education Act which would remove the
provision of the bill to expand the use of educational individual
retirement accounts for elementary and secondary education expenses,
and instead expand incentives for the construction and renovation of
our nation's public schools.
While I understand the overwhelming need for additional resources to
help repair and rebuild crumbling schools across the United States,
this amendment would strip the legislation of its very admirable intent
to assist parents in saving scarce resources for a child's elementary
and secondary schooling

[[Page S992]]

years. Parents should have the ability to make decisions about their
own child's education, particularly in the early, formative years, as
they do with higher education. I believe that the education savings
accounts for elementary and secondary education are a step in the right
direction in helping families to make these often difficult decisions
about the education of their child.
This vote on the Robb amendment is a particularly difficult one for
me to cast because I, too, am extremely concerned about the dilapidated
state of our nation's schools. My home state of West Virginia has a
school renovation and construction need in excess of $1.2 billion, and
the nation a need totaling more than $250 billion. Mr. President, this
is alarming! Our nation's schools are in disrepair and provide a less-
than-appealing workplace for our students and faculties. They lack the
basic infrastructure to allow our students to become ``ready'' for the
age of technology, and many ill-equipped schools deny students the
opportunity to engage in meaningful laboratory experiences in the
sciences. Some schools are overcrowded, and many have become small
communities of portable classrooms.
Mr. President, it is my hope that the Senate will revisit this
important issue of funding for school construction in a context that
would not pit one good initiative against another.
The PRESIDING OFFICER. All time has expired. The question is on
agreeing to the motion to table amendment No. 2861. The clerk will call
the roll.
The assistant legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is
necessarily absent.
The result was announced--yeas 57, nays 42, as follows:

[Rollcall Vote No. 17 Leg.]

YEAS--57

Abraham
Allard
Ashcroft
Bennett
Bond
Brownback
Bunning
Burns
Byrd
Campbell
Chafee, L.
Cochran
Collins
Coverdell
Craig
Crapo
DeWine
Domenici
Enzi
Feingold
Fitzgerald
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchinson
Hutchison
Inhofe
Jeffords
Kyl
Lieberman
Lott
Lugar
Mack
McConnell
Murkowski
Nickles
Roberts
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner

NAYS--42

Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Breaux
Bryan
Cleland
Conrad
Daschle
Dodd
Dorgan
Durbin
Edwards
Feinstein
Graham
Harkin
Hollings
Inouye
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lincoln
Mikulski
Moynihan
Murray
Reed
Reid
Robb
Rockefeller
Sarbanes
Schumer
Specter
Wellstone
Wyden

NOT VOTING--1

McCain

The motion was agreed to.
Mr. COVERDELL. Mr. President, I move to reconsider the vote.
Mr. CRAIG. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. COVERDELL. Mr. President, under a previous order, it is my
understanding we will now go to the amendment of Senator Abraham of
Michigan; am I correct?
The PRESIDING OFFICER. That is correct.
Mr. COVERDELL. I thank the Chair.
The PRESIDING OFFICER. The Senator from Michigan.

Amendment No. 2825

(Purpose: To amend the Internal Revenue Code of 1986 to expand the
deduction for computer donations to schools and to allow a tax credit
for donated computers, and for other purposes)

Mr. ABRAHAM. Mr. President, I ask unanimous consent that amendment
No. 2825 be called up.
The PRESIDING OFFICER. Without objectiohn, it is so ordered. The
clerk will report.
The legislative clerk read as follows:

The Senator from Michigan [Mr. Abraham], for himself, Mr.
Wyden, Mr. Daschle, Mr. Reid, Mr. Schumer, Mr. Inouye, Mr.
Durbin, Mr. Kerry, Mr. Dorgan, Mrs. Boxer, and Mr.
Torricelli, proposes an amendment numbered 2825.

Mr. ABRAHAM. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

At the appropriate place, insert:

SEC. ____. EXPANSION OF DEDUCTION FOR COMPUTER DONATIONS TO
SCHOOLS.

(a) Extension of Age of Eligible Computers.--Section
170(e)(6)(B)(ii) (defining qualified elementary or secondary
educational contribution) is amended by striking ``2 years''
and inserting ``3 years''.
(b) Reacquired Computers Eligible for Donation.--Section
170(e)(6)(B)(iii) (defining qualified elementary or secondary
educational contribution) is amended by inserting ``, the
person from whom the donor reacquires the property,'' after
``the donor''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made in taxable years ending
after the date of the enactment of this Act.

SEC. ____. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS AND
SENIOR CENTERS.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits) is amended
by adding at the end the following:

``SEC. 45D. CREDIT FOR COMPUTER DONATIONS TO SCHOOLS AND
SENIOR CENTERS.

``(a) General Rule.--For purposes of section 38, the
computer donation credit determined under this section is an
amount equal to 30 percent of the qualified computer
contributions made by the taxpayer during the taxable year as
determined after the application of section 170(e)(6)(A).
``(b) Qualified Computer Contribution.--For purposes of
this section, the term `qualified computer contribution' has
the meaning given the term `qualified elementary or secondary
educational contribution' by section 170(e)(6)(B), except
that--
``(1) such term shall include the contribution of a
computer (as defined in section 168(i)(2)(B)(ii)) only if
computer software (as defined in section 197(e)(3)(B)) that
serves as a computer operating system has been lawfully
installed in such computer, and
``(2) notwithstanding clauses (i) and (iv) of section
170(e)(6)(B), such term shall include the contribution of
computer technology or equipment to multipurpose senior
centers (as defined in section 102(35) of the Older Americans
Act of 1965 (42 U.S.C. 3002(35)) described in section
501(c)(3) and exempt from tax under section 501(a) to be used
by individuals who have attained 60 years of age to improve
job skills in computers.
``(c) Increased Percentage for Contributions to Entities in
Empowerment Zones, Enterprise Communities, and Indian
Reservations.--In the case of a qualified computer
contribution to an entity located in an empowerment zone or
enterprise community designated under section 1391 or an
Indian reservation (as defined in section 168(j)(6)),
subsection (a) shall be applied by substituting `50 percent'
for `30 percent'.
``(d) Certain Rules Made Applicable.--For purposes of this
section, rules similar to the rules of paragraphs (1) and (2)
of section 41(f) shall apply.
``(e) Termination.--This section shall not apply to taxable
years beginning on or after the date which is 3 years after
the date of the enactment of the [New Millennium Classrooms
Act].''
(b) Current Year Business Credit Calculation.--Section
38(b) (relating to current year business credit) 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:
``(13) the computer donation credit determined under
section 45D(a).''
(c) Disallowance of Deduction by Amount of Credit.--Section
280C (relating to certain expenses for which credits are
allowable) is amended by adding at the end the following:
``(d) Credit for Computer Donations.--No deduction shall be
allowed for that portion of the qualified computer
contributions (as defined in section 45D(b)) made during the
taxable year that is equal to the amount of credit determined
for the taxable year under section 45D(a). In the case of a
corporation which is a member of a controlled group of
corporations (within the meaning of section 52(a)) or a trade
or business which is treated as being under common control
with other trades or businesses (within the meaning of
section 52(b)), this subsection shall be applied under rules
prescribed by the Secretary similar to the rules applicable
under subsections (a) and (b) of section 52.''
(d) Limitation on Carryback.--Subsection (d) of section 39
(relating to carryback and carryforward of unused credits) is
amended by adding at the end the following:
``(9) No carryback of computer donation credit before
effective date.--No amount of unused business credit
available under section 45D may be carried back to a taxable
year beginning on or before the date of the enactment of this
paragraph.''
(e) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 is amended by
inserting after the item relating to section 45C the
following:

``Sec. 45D. Credit for computer donations to schools and senior
centers.''

[[Page S993]]

(f) Effective Date.--The amendments made by this section
shall apply to contributions made in taxable years beginning
after the date of the enactment of this Act.

Mr. REID. Mr. President, before the Senator from Michigan begins the
debate, I ask unanimous consent to add Senators Daschle, Reid, Schumer,
Inouye, Wyden, Durbin, John Kerry, Dorgan, Boxer, and Torricelli. We
appreciate the work of the Senator from Michigan but also the work
product of the Democrats who have been involved in this.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ABRAHAM. Mr. President, I comment to my colleague from Nevada, I
appreciate the interest and support and efforts of all the Members he
mentioned and those who previously were supporters of this legislation
when it was introduced as a freestanding bill. I hope very much to
ultimately succeed in bringing this legislation to final successful
completion.
First, prior to a discussion on the amendment, I express my strong
support for the Affordable Education Act and compliment Senator
Coverdell for his hard work on this effort. At a time when the new
high-tech economy demands greater skills from our workers, our
educational system is failing in its duty to provide enough of these
skills.
At a time when the Department of Labor figures project our economy
will produce more than 1.3 million information technology jobs over the
next 10 years, our universities will produce, at least at the current
pace, less than one-quarter of that number of graduates in related
fields.
At a time when we enjoy a critical competitive edge in high tech, we
are not giving our own children the skills they need to succeed in the
high-tech economy, at least not, in my judgment, at an adequate level.
We need to address that, and this amendment, in a small way, attempts
to do so.
One crucial problem concerns the skyrocketing cost of education.
According to the College Board, the average annual cost for tuition,
room, and board at a public university is now $7,472. At a private
college, it is a whopping $19,213 per year.
If costs continue rising as they have been, a 4-year college
education will cost $75,000 at a public university and $250,000 at a
private college by the time the average newborn begins attending in the
year 2016.
The Affordable Education Act addresses this problem through
practical, pragmatic reforms. I will not detail all of those at this
time. Obviously, the proponents of the legislation have been doing an
excellent job of outlining what this bill accomplishes.
I firmly believe the continuing growth and prosperity in America
depends on continuing affordability of higher education. It is my firm
belief we must do more, particularly in the area of closing what is
regularly referenced as the digital divide between the digital haves
and the digital have-nots.
The amendment I have offered is the full text of my New Millennium
Classrooms Act, legislation I have been pursuing for some time in this
body. In addition to the cosponsors who were just added, our bill, S.
542, includes the support of Senators Wyden, Coverdell, Daschle, Hatch,
Harkin, McConnell, Hollings, Burns, Boxer, Helms, Bingaman, Kerrey,
Bennett, Lieberman, and Ashcroft, just to name a few of its Senate
sponsors. I ask unanimous consent the entire list of cosponsors be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows

Cosponsors (30)

Senators: Allard, Ashcroft, Bennett, Bingaman, Bond, Boxer,
Burns, Campbell, Cochran, Collins, Coverdell, Crapo, Daschle,
Gorton, Grams, Hagel, Harkin, Hatch, Helms, Hollings,
Hutchison, Jeffords, Johnson, Kerrey, Lieberman, McConnell,
Santorum, Smith of Oregon, Warner, Wyden.

Mr. ABRAHAM. Mr. President, on July 29 of last year, the Senate
unanimously adopted this amendment to the tax reduction bill. I urge
the Senate to do so again today.
This amendment aims to address our shortage of skilled high-tech
workers by addressing the shortage of computers and computer training
in our schools.
Advanced technology has fueled unprecedented economic growth and
transformed the way Americans do business and communicate with each
other.
Despite these gains, however, this same technology is just beginning
to have an impact on our classrooms and how we educate our children.
Thirty-two percent of our public schools have only one classroom with
access to the Internet.
It is imperative that we act now to provide our Nation's students
with the training they need to succeed in tomorrow's high-tech
workplace.
The Department of Education recommends there be at least one computer
for every five students. According to the Education Testing Service, in
1997 there was only one computer for every 24 students on average. Not
only are our classrooms sadly underequipped, but the equipment they
have is often obsolete, often incapable, for example, of accessing the
Internet.
One of the more common computers in our schools today is the Apple
IIc, a computer so archaic that it is now on display at the
Smithsonian.
While this technological deficiency affects all of our schools, the
students who are in the most need are receiving the least amount of
computer instruction and exposure. According to the Secretary of
Education, 75.9 percent of households with an annual income over
$75,000 have computers, compared to only 11 percent of households with
incomes under $10,000.
This disparity exists when comparing households with the Internet
access as well. While 42 percent of families with annual incomes over
$75,000 have online capability, only 10 percent of families with
incomes of $25,000 or less have the same capability.
Rural areas and inner cities fall below the national average for
households that have computers. Nationwide, 40.8 percent of white
households have computers, while only 19 percent of African American
and Hispanic households do. This disparity, unfortunately, is
increasing, not decreasing. This unfortunate trend is not confined
simply to individual households; it is present in our schools as well.
The Educational Testing Service statistics show schools with 81
percent or more economically disadvantaged students have only one
multimedia computer for every 32 students, while a school with 20
percent or fewer economically disadvantaged students will have a
multimedia computer for every 22 students.
That is a difference of 10 students per computer. Furthermore,
schools with 90 percent or more minority students have only one
multimedia computer for every 30 students. This is simply unacceptable.
It points up the importance of securing additional computers for use
in our schools. Our schools should be great educational equalizers,
providing resources and training to everyone, regardless of their race,
class, or rural or urban location so all of our kids can succeed.
To achieve this end, our amendment expands the parameters of the
existing tax deduction for computer deductions. It will also add a tax
credit.
Specifically, it will do the following: First, it will allow a tax
credit equal to 30 percent of the fair market value of the donated
computer equipment. An increased tax credit provides a greater
incentive for companies to donate computer technology and equipment to
schools. This includes computers, peripheral equipment, software, and
fiber optic cable related to computer use.
Second, it will expand the current age limit on donated computers to
include equipment 3 years old or less. Many companies do not update
their equipment within the existing 2-year period that currently is
required for qualification for the existing tax deductions.
Yet 3-year-old computers equipped with Pentium-based or equivalent
chips have the processing power, memory, and graphics capabilities to
provide sufficient Internet and multimedia access and run any necessary
software.
Third, the current limitation on original use will be expanded to
include original equipment manufacturers or any corporation that
reacquires the equipment. By expanding the number of donors eligible
for the tax credit, the number of computers available will increase as
well.

[[Page S994]]

Lastly, it would implement enhanced tax credits equal to 50 percent
of the fair market value of equipment donated to schools located within
designated empowerment zones, enterprise communities, and Indian
reservations.
Doubling the amount of the tax credits for donations made to schools
in economically distressed areas will increase the availability of
computers to the children who need it most.
Bringing our classrooms into the 21st century will require a major
national investment.
According to a Rand Institute study, it will cost $15 billion, or
$300 per student, to provide American schools with the technology
needed to educate our young people; the primary cost being the purchase
and installation of computer equipment.
At a time when the Government is planning to spend $2.25 billion to
wire schools and libraries to the Internet, the demand for this
sophisticated hardware will be even greater.
Meanwhile, the Detwiler Foundation estimates that if just 10 percent
of the computers that are taken out of service each year were donated
to schools, the national ratio of students-to-computers would be
brought to 5 to 1 or less. This would meet, or even exceed, the ratio
recommended by the Department of Education.
This amendment will provide powerful tax incentives for American
businesses to donate top quality high-tech equipment to our Nation's
classrooms. And it will do so without unduly increasing Federal
Government expenditures or creating yet another Federal program or
department.
Encouraging private investment and involvement, this act will keep
control where it belongs--with the teachers, the parents, and the
students.
At the same time, all our children will have an equal chance at
succeeding in the new technological millennium.
In my mind, these are laudable goals, goals we must attain if we are
going to provide the kind of future our children deserve.
In closing, I am hopeful our colleagues will uniformly join in
support of this legislation. It seems to me, as I travel around my
State and go into classrooms, there are a lot of places in Michigan--
and I suspect in all the other States--where just a little bit more
equipment would allow for more students to get the kind of high-tech
training they need.
How do we match up a situation where, literally across this country,
we have schools that do not have enough computer equipment, and we have
countless businesses and enterprises that have used equipment they
don't know what to do with? Can't we find a way? In my judgment, this
legislation is the way.
If we pass this legislation, I think we will provide a major
incentive to merge the used surplus computers that exist in the private
sector with the needs of our schools. In doing so, we will provide more
students with access to the technology they need to have in order to be
able to pursue the jobs of the new century.
I offer this amendment for my colleagues' consideration. I appreciate
the attention of the Chamber.
I yield the floor.
Mr. WYDEN. I am pleased to join today with my colleague from
Michigan, Senator Abraham, to offer the New Millennium Classrooms Act
as an amendment to the Education Savings Account legislation. This is
an issue on which he and I have worked for several years now.
The New Millennium Classrooms Act is about digital recycling. It
gives companies an incentive to recycle technology. It says the
computer Bill Gates may see as a dinosaur, is really a dynamic new
opportunity for a student who has none.
The E-Rate program, authored by Senators Rockefeller and Snowe, has
been an enormous success, helping to wire almost all of the nation's
schools and a good portion of the nation's classrooms. What schools
need now is good equipment. That's the purpose of this amendment.
We know that very early in this new Century 60% of all jobs will
require high-tech computer skills. To prepare our children for the jobs
of the future, they not only must have access to technology, but they
must be trained to use it as well.
The purpose of our amendment is to build more bridges between the
technology ``haves'' and the ``have nots;'' to build more on-ramps to
the information superhighway. You can't get 21st Century classrooms,
using Flintstones technology.
Technology is not cheap and school budgets are limited, making it
tough for schools to upgrade their systems by themselves. The point of
our amendment is to enhance existing incentives to businesses to donate
computer equipment to schools.
There is a federal program in place, the 21st Century Classroom Act
of 1997, but its use has been limited. It allows businesses to take a
tax deduction for certain computer equipment donations to K-12 schools.
But most businesses take longer to upgrade their computers than allowed
for under the law.
The New Millennium Classrooms Act would make this law work the way it
was intended. First, our legislation would increase the age limit from
two to three years for donated equipment eligible for a tax credit.
This more realistically tracks the time line businesses follow for
their computer upgrades. It will cover hardware that possesses the
necessary memory capacity and graphics capability to support Internet
and multimedia applications.
Second, our bill expands the current limitation of ``original use''
to include both original equipment manufacturers and any corporation
that reacquires their equipment. We believe that by expanding the
number of donors eligible for the credit, we will expand the number of
computers donated to schools.
Third, our bill provides for a 30% tax credit of the fair market
value for school computer donations, and a 50% credit for donations to
schools located in empowerment zones, enterprise communities and Indian
reservations. The Department of Commerce report highlights the need to
encourage computer donation in these notoriously under-served
communities and we want to target donations toward these communities.
Finally, our bill requires an operating system to be included on a
donated computer's hard drive in order to qualify for the tax credit.
This will ensure students don't get empty computer shells, but the
brains that drive the computers.
Our legislation is supported by a wide range of business and
education groups. Leaders of technology associations, like the
Information Technology Industry Council and TechNet, and the National
Association of Manufacturers have joined education associations, such
as the National Association of Secondary School Principals and the
National Association of State University and Land Grant Colleges, in
support of the amendment.
The Digital Millennium Classrooms Act promotes digital recycling. It
will encourage companies to put their used computers into classrooms
instead of into landfills. It will help build a safety net under
students trying to cross the digital divide. I urge my colleagues to
support this amendment, and again wish to commend Senator Abraham for
his leadership on this legislation.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ABRAHAM. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ABRAHAM. I ask unanimous consent to add Senator Hagel as a
cosponsor to my amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ABRAHAM. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COVERDELL. Mr. President, I commend the Senator from Michigan for
his amendment and his work on the New Millennium Classrooms Act. I
joined him several months ago at a press conference where he announced
his intentions. I think it is among the

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more well-intended, helpful measures to deal with the reform and change
we are all seeking in education across America.
There is a real need to bring more computers into our classrooms
which is, of course, what the amendment is designed to do.
Sixty percent of all jobs will require high-tech computer skills. Yet
32 percent of our public schools have only one classroom with access to
the Internet. It is almost an incongruity, when you read every day
about what is happening on the Internet and where we have gotten in
terms of access. It really does point to the digital divide we all
speak of these days.
The change is occurring so quickly, and the large public educational
system is not accustomed to it. In fact, many of us are not accustomed
to it. But legislation such as that offered by the Senator from
Michigan accelerates the ability of public education to stay up with
high tech.
The Department of Education recommends that there be at least one
computer for every five students. Yet according to the Educational
Testing Service, on average, there is only one multimedia computer for
every 24 students.
Since the passage of the 21st Century Classrooms Act of 1997, there
has not been a significant increase in computer donations due to
restrictions on the age of the donated equipment and the limitations on
donor qualifications.
According to the Detwiler Foundation, a California-based nonprofit
organization dedicated to providing schools nationwide with quality
computers donated by individuals and industry, there are very few
Pentium computers donated to schools through their organization. This
number has not increased since the passage of the 21st Century
Classrooms Act of 1997. Of those computers donated, even fewer
qualified for the deduction because of the restrictions.
According to the Detwiler Foundation, if even just 10 percent of
retired computers each year were donated to schools, we would easily
achieve the Department of Education's recommendation of only five
students for every one computer. The current deduction is not enough to
offset the costs of the donation.
Without the addition of the tax credit, the high costs associated
with the transport and installation of the computer equipment cancel
out the current tax benefit.
The new millennium classrooms amendment addresses these restrictions
without unduly increasing Federal Government expenditures or creating
yet another Federal program or department. It encourages private
investment and involvement and keeps control with the teachers, the
parents, and the students. At a time when the Government is planning to
spend $1.2 billion to wire schools and libraries to the Internet, the
demand for this sophisticated equipment and technology will be greater
than ever.
This amendment increases the age limit for eligible computers from 2
to 3 years; will allow computer manufacturers to donate equipment
returned to them through trade-in and leasing programs; allows a 30-
percent tax credit for qualified computer donations; allows a 50-
percent tax credit for qualified computer donations to schools located
within empowerment zones, enterprise communities and Indian
reservations; requires that the donated computer must include an
operating system.
Increasing the amount of the tax credits for donations made to
schools in economically distressed areas will increase the availability
of computers to the children who need it most. Educational Testing
Service statistics show that schools with 81 percent or more
economically disadvantaged students have only one multimedia computer
for every 32 students, while a school with 20 percent or fewer
economically disadvantaged students will have a multimedia computer for
every 22 students. Again, the divide is a most dangerous thing for us
to contemplate in education in America.
Public schools with a high minority enrollment had a smaller
percentage of instructional rooms with Internet access than public
schools with a low minority enrollment.
This bill is not another targeted tax break. Broad-based tax relief
and reform efforts should work to lower tax rates across the board
while continuing to retain and improve upon the core tax incentives for
education, home ownership, and charitable contributions. The new
millennium classrooms amendment expands the parameters and, thus, the
effectiveness of an already existing education and charity tax
incentive, one which will effectively bring top-of-the-line technology
into all of our schools.
The 21st Century Classrooms Act tax deduction expires this year. It
is imperative we act now to ensure that all our children have access to
quality computer technology.
Again, I commend the Senator from Michigan and his cosponsors. This
is, indeed, a most appropriate piece of legislation that will do great
good in our education system.
I yield the floor and suggest the absence of a quorum.
Mr. REID. Mr. President, if the Senator will withhold that for a
second, we have two Senators who are on their way to speak. The
minority leader is on his way to speak on this issue, and Senator
Wyden, who is a cosponsor of the amendment, is in the House and is also
on his way back. They should both be here momentarily.
Mr. COVERDELL. Mr. President, my estimate is that maybe in the next
15 minutes or so----
Mr. REID. I think it would probably be closer to 11:30 because both
have prepared remarks.
Mr. COVERDELL. I know Senators are trying to plan their day. It is
useful to clarify, even though we are not absolutely certain. The
Senator thinks their statements are such that the next vote might occur
at or about 11:30?
Mr. REID. I think that is probably when it will be.
Mr. COVERDELL. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DASCHLE. Mr. President, I ask unanimous consent that the order
for the quorum call be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DASCHLE. Mr. President, I rise in support of this amendment and
applaud the authors. I am very hopeful that we can get good bipartisan
support for this legislation, in large measure because it is exactly
what we need to be doing right now, if, indeed, we are serious when we
say we want more technology in schools.
I can't think of a better way to encourage more technology in schools
than to ensure that companies are able to use the incentives that are
there to maximize the opportunities for schools to acquire the kinds of
hardware and software they need to fully equip every school across the
country.
As I travel throughout South Dakota, it is with great pride that
superintendents and principals will show me their computer room. They
will show me how computer literate their students are. They show me how
integrated technology is now becoming in schools. But the one
consistent lament they have is that they just don't have the resources
to ensure that they can acquire the equipment or, in a timely way,
replace that equipment, knowing it is going to be outdated in 3 years,
knowing they are going to be faced with the same budgetary decisions
once again in a very short period of time. There is a longer life for
acquiring sports equipment, books, desks, or almost anything else
related to schools. The timeframe within which the technology becomes
outdated, as we all know, is extremely short.
So this amendment is simply designed to acknowledge that fact--to
acknowledge the fact that schools desperately need this technology and
all of the equipment associated with it. They need to have the
assurance that once they have acquired this technology, they are going
to continue to get it in the future. This relatively minor tax
incentive, from the perspective of a budgetary impact, will have
profound consequences with respect to its effect on companies and the
incentive it will create, and with its effect on what can happen in
schools if we pass it.
Mr. President, I applaud Senators Wyden, Baucus, Abraham, and others
for their effort to make this issue the prominent one it is with this
debate on

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how we might improve our educational opportunities. As I say, I think
that as we look at the next 10 or 20 years, one of the biggest
challenges schools are going to face--whether they are rural or urban,
private or public--will be the insurmountable task of technology
acquisition. I do hope they can overcome the fiscal challenges they all
face. Whether or not they do, in part, will be dependent upon whether
or not something as simple as this can be passed, creating an incentive
that will ultimately provide companies with more reasons to support
schools in their effort to acquire technology.
That is what this amendment is all about. It deserves our support. I
am sure it will have our support, and I am sure it may not be the last
word on what it is we need to do with regard to technology acquisition.
But it is a good beginning. I applaud my colleagues--especially
Senators Wyden and Baucus--for all their efforts in bringing it to this
point. I urge its passage.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the vote
in relation to the Abraham amendment and with respect to the Bingaman
accountability amendment be postponed to occur at 1 p.m. today. I
further ask that no second-degree amendments be in order to either
amendment prior to the votes and the time between now and 1 p.m. be
equally divided for debate of both amendments.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COVERDELL. Many Senators thought we would be voting at about 11,
so they need to pay particular attention to this change.
I thank the Chair.
Mr. BINGAMAN. Mr. President, what is the business before the Senate?
The PRESIDING OFFICER (Mr. Hutchinson). There is an order for the
Senator's amendment and the amendment of the Senator from Michigan to
be debated concurrently, with a vote to occur at 1 o'clock.

Amendment No. 2863

(Purpose: To ensure accountability in programs for disadvantaged
children and provide funds to turn around failing schools)

Mr. BINGAMAN. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from New Mexico [Mr. Bingaman] proposes an
amendment numbered 2863.

Mr. BINGAMAN. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

Strike section 101 and insert the following:

``SEC. 101 FUNDS FOR ACCOUNTABILITY AND SCHOOL IMPROVEMENT.

``(a) Authorization of Appropriations.--For the purpose of
carrying out this section, there are authorized to be
appropriated $275,000,000 for fiscal year 2001 and such sums
as may be necessary for each of the succeeding fiscal years.
``(b) National Activities.--From the amount appropriated
for any fiscal year under subsection (a), the Secretary of
Education (`the Secretary') may reserve not more than 3
percent to conduct evaluations and studies, collect data, and
carry out other activities relevant to sections 1116 and 1117
of the Elementary and Secondary Education Act of 1965
(hereafter in this section referred to as ``the ESEA'').
``(c) Allocations to States.--The Secretary shall allocate
the amount appropriated for any fiscal year under subsection
(a) and not reserved under subsection (b) among the States in
the same proportion in which funds are allocated among the
States under part A of title I of the ESEA.
``(d) State Use of Funds.--(1) In General.--Each State
educational agency shall use funds received under subsection
(c) to--
``(A) make allotments under paragraph (2); and
``(B) carry out its responsibilities under sections 1116
and 1117 of the ESEA, including establishing and supporting
the State educational agency's statewide system of technical
assistance and support for local educational agencies.
``(2) Allotments to Local Educational Agencies.--
``(A) In general.--Each State educational agency shall
allot at least 70 percent of the amount received under this
section to local educational agencies in the State.
``(B) Priorities.--In making allotments under this
paragraph, the State educational agency shall--
``(i) give first priority to schools and local educational
agencies with schools identified for corrective action under
section 1116(c)(5) of the ESEA; and
``(ii) give second priority to schools and local
educational agencies with other schools identified for school
improvement under section 1116(c)(1) of the ESEA.
``(e) Local Use of Funds.--.
``(1) Corrective action.--Each local educational agency
receiving an allotment under subsection (d)(2)(B)(i) shall
use the allotment to carry out effective corrective action in
the schools identified for corrective action.
``(2) School improvement.--Each local educational agency
receiving an allotment under subsection (d)(2)(B)(ii) shall
use the allotment to achieve substantial improvement in the
performance of the schools identified for school
improvement.''

Mr. BINGAMAN. Mr. President, I am introducing this amendment to
strike the part of the bill that provides the tax savings because I
think there is a better use for that amount of funding. I am proposing
an alternative use for that funding that I urge my colleagues to
seriously consider.
My amendment strikes the part of the bill that provides the average
family with a very small tax savings, and there are various estimates
as to what that savings would be. Essentially, as I understand it, the
Joint Tax Committee says the average benefit per child in public school
would be something like $3 in 2001 and $4.50 in 2002.
I think it is clear, regardless of the precise number, that these are
not tax savings that are going to help any child in this country get a
better education. So my thought is that rather than do that with the
funds we are expending through this bill--or proposing to expend--we
use the money to provide crucial funds to turn around the failing
public schools.
Public schools are where over 90 percent of our children are
educated. I grew up in Silver City, NM where, if you want to go to
school, you go to public school. That is the way it has always been, to
my knowledge. It is going to be that way for some time. We need to be
sure the schools that are not adequately training young people and
educating young people get the assistance, the resources, the
oversight, and the accountability they need in order to move ahead and
solve that problem.
Let me talk a little bit more about the bill that is presently
pending and then talk about my own amendment. The Joint Tax Committee
did this analysis of the Coverdell proposal and indicated that it
would, in their view, disproportionately help families with children
already in private schools. Eighty-three percent of families with
children in private schools would use this account, but only 28 percent
of families in public schools would make use of it.
Essentially, the proposal is a way of diverting funds that are
otherwise public funds into the private schools, at a time when we all
recognize that the public schools have inadequate funds to do the job
we are calling upon them to do.
Also, the pending Coverdell bill we are trying to amend has no
mechanisms in it to ensure accountability of the use of the funds we
are talking about. The bill does nothing to improve teacher quality. It
does nothing to provide safe and modern environments for learning. It
does nothing to raise academic standards or to impose upon the public
schools or bring them to more accountability in the expenditure of the
funds.
I believe we need to use Federal funds on initiatives that make a
difference in our public schools. That is what my amendment intended to
do.
The relevant section of the Coverdell bill costs the public an
average of $275 million a year for the next 5 years. That is the cost
to the taxpayers. I believe we can use that $275 million each year to
ensure that higher standards and accountability are implemented
throughout our public schools. We have made some progress in
implementing higher standards.
Most States have adopted or are in the process of adopting statewide
standards. This is due in part to the fact that Federal law applicable
to the program for disadvantaged students --that is title I--requires
that standards be adopted. Although States have

[[Page S997]]

adopted standards, many States and districts have not had sufficient
funds to ensure the accountability for meeting those standards they
have set or to provide adequate resources to the schools that are
failing to meet the standards. I think dedicating specific funds to
this purpose is necessary in order to create the rewards and the
penalties that will allow schools to be held accountable for the
improvement in student performance.
The Federal Government directs over $8 billion in Federal funds to
provide support programs through title I. But the accountability
provisions in title I have not been adequately implemented because they
haven't had the resources to do it at the State level, primarily.
Title I authorizes State school support teams to provide support for
schoolwide programs to provide assistance to schools that are in need
of improvement through activities such as professional developments for
the teachers in those schools, and identifying resources for changing
the way the instruction is provided.

In 1998, only eight States requiring these school support teams have
been able to serve the majority of the schools that they have been
identified as needing improvement. Less than half the schools
identified as being in the need of improvement in the school year of
1997-1998 reported that having been designated as a school needing
improvement actually got some professional development to accomplish
that improvement.
Schools and school districts need additional support and resources in
order to address the weaknesses that we identify. They need that
support and those resources quickly after those weaknesses are
identified. They need to be able to promote an intensive range of
interventions, continuously assess the results of those interventions,
and to implement some incentives for improvement.
The National Governors' Association asked us to provide funds for the
purpose this amendment tries to address.
I have a letter that came to me last October when this same issue
came before us in the Senate. I offered an amendment at that time which
was not successful but which I believe had merit then, and I believe it
has merit now.
Let me make it very clear so there is no misunderstanding. At that
time, I was not proposing to strike the tax proposal that Senator
Coverdell brought forward and substitute this in its stead. The
Governors were not responding to that specific striking aspect of my
amendment of today, but they were talking about the need to have
additional funds to ensure accountability and to ensure the
implementation of these higher standards by the schools that are
failing.
The amendment I am offering would provide $275 million to help
improve failing schools. The money would be used to ensure the States
and school districts have the necessary resources to implement the
corrective action provisions of title I by providing immediate,
intensive interventions to turn around low-performing schools.
Let me read part of this letter so that folks know what the Governors
are saying. It is a letter to me by Mr. Raymond Scheppach, who is the
executive director of the National Governors' Association.
It says:

On behalf of the Nation's Governors, I write to express our
strong support for your amendment to provide States with
additional funds to help turn around schools that are failing
to provide quality education for title I students.

That is what we are trying to do today.
He says further:

As you know, under current law, States are permitted to
reserve one-half of one percent of their title I monies to
administer the title I program and provide schools with
additional assistance. However, this small set aside--this is
one-half of one percent--does not provide the States with
sufficient funds to improve the quality of title I schools. A
recent study by the U.S. Department of Education noted the
``capacity of State school support teams to assist schools in
need of improvement of title I is a major concern.'' The
programs authorized to fund such improvement efforts have not
been funded. As a result, States have been unable to provide
such services.

Then he goes on to various other points but essentially says:

Your amendment would provide such funding. Therefore, NGA
supports your amendment and will urge other Senators to
support the adoption of it.

Let me make it very clear to people again. This was a letter related
to an amendment to direct funds at accountability in the expenditure of
public funds and help these failing schools. It does not include the
proposal I am making today as well to strike the Coverdell amendment
and substitute this instead as a better use of that money.
But the types of interventions the States and school districts could
provide under these funds are things which I think we would all
recognize are needed.
First, purchasing necessary materials, up-to-date textbooks,
curriculum, technology.
I think we all encounter circumstances where teachers, school
administrators, and students tell us about how they have outdated
textbooks and inadequate lab materials or whatever in order to really
pursue their studies as they would like to.
These funds could be used for that. They could be used for providing
intensive, ongoing teacher training.
That clearly is a need, and I think it is a recognized need in the
teaching profession.
The people who talk to me about the importance of more teacher
training are the teachers. So this is not an attack on our public
school teachers. This is a recognition that we need to do more to help
them constantly stay abreast of the new developments in teaching and do
a better job.
Third, this would provide access to distance learning.
We have the amendment that was talked about just prior to the
amendment I am discussing about technology in our schools. All of us
recognize there is a great opportunity, particularly in rural
communities, to make better use of teacher learning.
This past weekend, I was in some communities in my State where there
are very small high schools. I was in Eunice, NM; I was in Jal, NM.
Those are communities with very small high schools. Frankly, they are
not able to offer all of the courses they would like to offer for their
students. They have the opportunity through distance learning, through
the Internet, through interactive television, and through a variety of
technologies to provide courses to some of their students even though
they may not have a teacher in that school who is qualified to teach
that course. We need to be sure the funds are there to do that. This
amendment would help provide those funds.
These funds must be used to extend learning time for students--
afterschool programs, Saturday programs, and summer school--to help
them catch up and perform at least at grade level and, hopefully,
better than grade level.
These funds could be used to provide rewards to low-performing
schools that show significant progress, including cash awards or other
incentives such as, in particular, release time for teachers to prepare
for the next school year or whatever.
Also, these funds could be used for intensive technical assistance
from teams of experts outside the schools to help develop and implement
school improvement plans in failing schools.
These teams would determine the causes of low performance--for
example, low expectations, outdated curriculum, poorly trained
teachers, and unsafe conditions. They would assist in implementing
research-based models for improvement.
I am persuaded there are today research-based whole school reform
programs that have been developed that can dramatically improve the
performance of our elementary schools. I have become most familiar with
one which is called Success for All. There are others that are also
showing very good results.
This Success for All program was developed at Johns Hopkins
University. Bob Slavin was the key researcher who worked on it. This is
a proven early grade reading program. It also covers other subjects.
The core subject which most schools have adopted and are focused on is
the reading. This is a program which, if implemented properly, can
ensure substantial results. We have 50 elementary schools in New Mexico
that are presently using this Success for All program and the results
are impressive. At the end of the first grade, Success for All schools
have averaged

[[Page S998]]

reading scores almost 3 months ahead of those in other control schools
where that program has not been implemented.
This amendment will not address all the issues of our schools. I
believe sincerely that it is a positive step forward. It will be a more
meaningful step forward in improving the educational quality in America
than this alternative of providing a $5 a year, or whatever the right
number is, tax benefit to the average American.
Clearly, we all want to see our schools improved.
Senator Reed is on the floor and wishes to speak for a moment on this
and then I understand Senator Roth has an amendment he wishes to offer.
I ask for the yeas and nays on this amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The Senator from Rhode Island, Mr. Reed.
Mr. REED. Mr. President, first, I will speak with respect to Senator
Bingaman's amendment. Let me commend the Senator for his efforts not
only today but throughout his career in the Senate to ensure that
accountability is a central part of Federal educational legislation.
Senator Bingaman, in 1994, was one of the leaders in this body with
respect to the issue of accountability. At that time, I was serving in
the other body. Together we worked at the conference on accountability
provisions in the 1994 reauthorization of the Elementary and Secondary
Education Act. As a result of the efforts of Senator Bingaman and
others, we were able, for the first time, to begin to focus significant
attention on the issue of accountability. In fact, the 1994
reauthorization, together with Goals 2000 legislation, accelerated and
encouraged a movement throughout the States to develop standards.
Practically every State in the country today has standards.
We now have the opportunity to begin measuring how well schools are
doing. That is at the heart, I believe, of Senator Bingaman's approach
today. We need not only to measure how well they are doing but then
hold States and localities accountable for those results.
What has happened in the last several years is that the States have
not had the resources to fully exploit the opportunities to measure
schools against standards and then improve those schools. Half of the
schools in the country that are problematic, according to State
standards, have not been able to have access to teams of improvement;
they have not had access to the support they need to make themselves
better. In addition, they have not had access to the
professional development which they need to enhance the capabilities of
their teachers. All of these efforts together suggest the American
people's money would be best spent by devoting time and attention to
accountability.

Again, I think the approach that the Senator from New Mexico is
taking is exactly on target. As we spend $8 billion a year on title I,
we should insist that the States live up to their responsibility to use
these funds wisely as measured by the performance of their students.
The best way we can do that is to give them the resources and, again,
the impetus to take stock of their schools and then to apply corrective
measures, remedial measures.
They have not been able to do that. I don't believe it is because
they don't want to do it; I believe it is because they have not been
able to find the resources to carry out this mission. Senator
Bingaman's amendment would give them access to these resources. It will
give them access not in a restrictive way but in a very open-ended way
so they can pick and choose the best device to use in their particular
school to ensure that school performance improves. That, again, is why
I believe we are all here.
We have a special obligation at the national level to assist,
particularly, low-income schools. Regrettably and unfortunately, many
of the low-performing schools are low-income schools. Therefore, this
effort to help support States to identify low-performing schools and to
bring them up to the standards of the State is entirely consistent with
the purpose of Federal legislation, which is to assist low-income
students to have access to the opportunities that more affluent
students and their families take for granted.
I believe what the Senator is proposing is entirely consistent with
what we should be about, but also it will go to the heart of leveraging
all of our programs and all the State programs to ensure we accomplish
the ultimate goal that lies before the Senate of ensuring that every
child in this country has access to excellent public education.
Coincidentally, both Senator Bingaman and I and others today are
beginning the markup in committee of the reauthorization of the
Elementary and Secondary Education Act. We will be pursuing these
issues within the context of that legislation. Today, when we have a
bill in this Chamber that purports to be a way to assist education,
elementary and secondary education, in the United States, we have to
seize this opportunity to point out that the heart of our efforts has
to be the reinforcement of what we have already begun years ago, which
is to develop within the States the capacity to evaluate their schools
based upon their standards and then to intervene successfully to fix
these schools.
Before we go on to more attenuated means to help education in the
United States--such as tax credits and other proposals--we have a
primary responsibility and, today, an opportunity to do what we started
to do in 1994 to give the States the resources, further incentives to
evaluate their schools, identify the schools that are failing, to step
in with their choice of intervention strategies, and to fix the schools
in America.
There are over 8,000 schools in this country that are not meeting
State standards. Those figures come from our Department of Education.
What is preventing the States and the localities from stepping in right
now? There might be a host of issues, but one thing we can do to
accelerate that intervention is to support the Bingaman amendment, to
give them resources and give them the clarion call to step in and fix
the schools so we can declare--as I hope we can at the end of this
debate and certainly I hope at the end of the debate on the Elementary
and Secondary Education Act--that we are not only committed but we are
on a path to ensure that every school in this country is providing
every American child with the opportunity to succeed. Every public
school in this country is doing that.
I commend the Senator and I thank him for yielding time to me. I
yield the floor.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. Mr. President, I yield myself such time as I may consume
off of the Abraham amendment debate time.
The PRESIDING OFFICER. The Senator is recognized.
Mr. ROTH. Mr. President, I intend to offer a substitute amendment to
S. 1134 later today. The underlying bill was reported out of the
Finance Committee almost 1 year ago, in May 1999. My substitute
amendment makes some important and necessary policy changes that were
not done before--because of budget constraints 1 year ago. My amendment
also updates the bill to account for the passage of time.
When the committee originally considered this education bill, we were
operating under last year's budget scenario. Since that time, the
surplus numbers have increased dramatically. In today's economic
environment, I believe that it is appropriate to use the surplus to
provide education tax incentives for American families. Through their
hard work, the American people created these favorable economic
conditions and the resulting budget surplus. They should be entitled to
take some of that surplus back.
We should not have to raise taxes to offset these much needed
education tax incentives. My amendment makes this legislation a true
tax cut relief bill for education. With a growing Federal surplus
created by their tax dollars, Americans should not be taxed again to
pay for a national priority.
Accordingly, my substitute amendment strikes all of the revenue
raisers in S. 1134. The cost of my amendment is but a small percentage
of the projected budget surplus over the next 10 years.
Now let me explain some of the substantive changes that I make in the

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substitute amendment. First, the underlying bill increases the maximum
contribution amount for an Education IRA from $500 per year to $2,000
per year. The underlying bill also allows contributions to an Education
IRA to be used for kindergarten through high school education expenses.
These are both important and needed changes. But the underlying bill
sunsets both of those benefits after the year 2003. That is not good
policy. Accordingly, my bill removes the sunset--it makes permanent
both the increase in the contribution limit and the flexibility in the
use of the accounts.
Planning and saving for college should take place as early as
possible. To help families make those important decisions, they need to
know how much money they can put away and for what it can be used.
Having provisions that sunset--and thus need to be renewed by
Congress--takes away from that certainty. We need to make saving for
college easier and more certain--not complex and uncertain.
I can easily see why a family would not want to take their hard
earned savings and put them in a program where the terms could change
in a few years. My amendment helps to solve that problem. We should not
sunset our future--the education of our children.
Education IRAs are extremely important for a few reasons. First, they
help families afford the escalating costs of higher education. The
increase to $2,000 will make these accounts more attractive to families
who want to use them and to institutions who want to offer them.
Second, the existence of an education IRA gives an additional push to a
student to attend college. Last month, the Senate Governmental Affairs
Committee held a hearing on the rising cost of college tuition. One of
the witnesses was Dr. Caroline M. Hoxby, an associate professor of
economics at Harvard University.
Commenting on the behavioral incentives of an Education IRA, Dr.
Hoxby noted that for an eighth grader, there is something different
about knowing that there is money being put away for your college
education and that you will lose it and the opportunity to go to
college if you do not continue to do well. It makes sense that a child
who is aware that there is a fund being built up for his or her future
education would think longer and harder about going to college.

My amendment also fixes a trap for the unwary. Under current law, a
student who takes a distribution from an Education IRA is not able to
use the HOPE or Lifetime Learning Credit--even if different education
expenses are allocated for the different tax benefits. Again, this is
not right. We are providing these education tax incentives to families
because they need them. We should not hold them out there--making
people believe that they are available--and then take them away.
Because of revenue constraints, the original Finance Committee bill
fixed this coordination only for a few years. My amendment makes the
coordination permanent, and makes sure that families continue to
receive the full benefits from all these tax benefits.
My amendment also makes the tax-free treatment of employer-provided
educational assistance permanent. In last year's Extenders bill,
Congress extended the current tax-free treatment for a few years. That
was the right move, but it did not go far enough. First, something as
important and necessary as continuing education should not be wrapped
up in the uncertainty of extenders legislation. Workers and companies
need to plan ahead, and they need to know how these educational
expenses will be treated under the Tax Code. Second, we should
reinstitute the exclusion for graduate education expenses. Especially
in today's dynamic economy--which is marked by high technology and
innovation--it is important that workers have access to graduate
education. My amendment recognizes that fact, and so it makes permanent
tax-free treatment of employer-provided educational assistance for both
undergraduate and graduate level courses.
Finally, my amendment updates the Finance Committee bill by changing
the effective dates of the provisions. They would all be effective
beginning in the year 2001. I should also note that my amendment takes
into account the Senate's adoption of the Collins amendment yesterday--
and so will include that amendment as well as any others that have been
adopted.
Why are the permanent provisions in my amendment so important? Some
Senators have tried to rationalize their opposition to this bill by
claiming that it would not do enough to advance education. My amendment
guarantees that this is simply not true.
My amendment would allow parents to contribute up to $2,000 annually
toward their child's education--from the day of birth to the first day
of college.
That is just $5.48 a day or $38.46 a week. That may not seem like a
lot but, like a train, it may start slowly but it is very powerful. It
will gain speed. It is a savings express to college.
By putting their child on the savings express, after 18 years when
that child is ready to go to college, the parents will have $65,200,
and that just assumes a 6 percent rate of interest--the rate on a
Government security. Of course, other investments could yield even
more, but a U.S. Government security is the safest in the world.
So parents would have at least $65,200 toward their child's
education. $29,000 of that would be solely due to the power of
compounding interest. And every cent of that $29,000 would be tax-
free--it would go straight into education.
Maybe that still does not seem like a lot to some folks, but it sure
seems like a lot to parents who are struggling today to insure college
for their children tomorrow.
The average annual cost of college--tuition, room, and fees--in 1997-
1998, was $9,536. At the University of Delaware, it is $9,984 for this
school year. So the national average total cost is roughly $10,000 per
year or $40,000 for the cost of a college education.
My amendment before us today will cover this. It will give parents
and students peace of mind.
My amendment is a powerful incentive to save. It is an engine. It is
the engine that can pull a long train of savings--and dreams.
Like the Little Engine that Could, my amendment makes this
legislation the Education Savings Plan that Will. Parents and children
getting on this savings train, will get off at college to a better
future.
I am amazed that some people are trying to overlook the train and
just see the caboose. I promise you the American people are not.
America has waited for this college savings plan for 3 years. This
legislation brings it home today. It is time the President got on
board.

The measures in this bill are an important step forward. My amendment
will not only take us another step forward but keep us on a permanent
track to prosperity.
I urge my colleagues to join in a bipartisan effort to make education
affordable for American families.
I yield the floor.
The PRESIDING OFFICER (Mr. Grams). Who yields time? The Senator from
Georgia.
Mr. COVERDELL. Mr. President, how much time remains on each side?
The PRESIDING OFFICER. The majority has 46 minutes; the minority has
33 minutes remaining.
Mr. COVERDELL. Mr. President, I want to speak briefly to the Bingaman
amendment.
First, I associate myself with the remarks of the Senator from
Delaware. The Senator talked about the train that could and the train
that will, but it will not if we adopt the Bingaman amendment because
the Bingaman amendment neuters, makes moot, the education IRA, the
education savings account. He takes the funding that is in the bill
that is before us and shifts it to the Department of Education. It may
be a rational goal or not; that can be debated. The bottom line is that
everything Senator Roth of Delaware has just spoken to would be moot.
All the advantages, the accumulation of funds that will allow families
to more effectively deal with college costs or educational costs in
general will disappear, end, be over, no train.
This is about the third attempt from the other side to bring ``an
apple pie goal'' and use it as a tactic to defund educational savings
accounts.
With regard to the Bingaman amendment and its issues of
accountability, of course those are rightfully being discussed in the
Elementary and Secondary Education Act which is in committee. It is
being jump-started in a

[[Page S1000]]

very confrontational way in that the very essence of everything we have
been talking about for the better part of 2 weeks would be moot if we
allowed the funding that allows the creation of family education
savings accounts to be shifted over to the Department of Education and
all that bureaucratic morass in the name of a good goal.
Certainly, accountability is something for which we all strive. I do
think we ought to remember that accountability in schools is primarily
the responsibility of the State governments. Currently, of all the
education funds available in America, some 13 percent are now provided
by the Federal Government.

What is interesting is about 50 to 60 percent of the administrative
overhead and regulations and those things that bog down principals and
superintendents and teachers is a Federal mandate. We send off a check
for 13 percent, but we demand about a 50-percent overhead on what all
those local schools have to do.
We will be voting a little bit later on the Robb amendment which, of
course, does the same thing. It creates a national school construction
program, and if my colleagues read through the amendment, they will see
it is going to take a building of lawyers to understand all the
requirements and mandates.
I wanted to make the point that on the Bingaman amendment and, for
that matter, the Robb amendment, both have the effect of defunding and
making impossible the creation of the education savings account.
I will take a few more minutes to remind everybody that by Government
predictions and estimates, the education savings account we are
proposing will affect 14 million American families who are educating 20
million children. Because they are setting up this education savings
account, they will invest--these are the American families--$12 billion
over the next 10 years to be used to help their children for
educational purposes.
So every time we confront one of these amendments that removes the
funding to establish the education savings account, we are not only
throwing the idea away, but we are throwing away $12 billion of
volunteered money that would come from these 14 million families for
their children. It will be one of the largest infusions of resources we
have seen in public-private education in many years, and the Federal
Government is not having to raise taxes to do it. They are not having
to appropriate money to do it. We are simply saying we will allow the
interest that will build up in these education savings accounts not to
be taxed.
Over a 10-year period, it is a reasonably small number of tax revenue
that is forfeited, and it makes the American public do massive things.
Imagine saving $12 billion for the aid of kids who are trying to get
through school and college.
I wanted to make it clear that these amendments, under these ``apple
pie'' titles have the effect of closing down the idea that we will be
opening an education savings account.
Mr. President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the period
of time that is consumed in the quorum call be equally divided.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COVERDELL. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the order
for the quorum call be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COVERDELL. Mr. President, I ask unanimous consent that the
pending consent agreement be amended to include a vote in relation to
the Graham amendment and, therefore, those three votes be postponed to
occur at 2 p.m. today. I further ask unanimous consent that no second-
degree amendments be in order to either of the three amendments prior
to the votes and the time between now and 2 p.m. be equally divided for
debate of all three amendments.
The PRESIDING OFFICER (Mr. Burns). Is there objection?
Mr. REID. Mr. President, reserving the right to object, it is my
understanding the next 2 hours, then, are evenly divided between the
minority and majority.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. COVERDELL. Therefore, Mr. President, the next votes will occur at
2. The Senate was advised that it would be at 1 and there would be two
votes. So the change is that we are able to work another amendment in,
and we will have 3 votes at 2.
The PRESIDING OFFICER. The Senator from Florida.

Amendment No. 2864

(Purpose: To provide funds to assist high-poverty school districts in
meeting their teaching needs)

Mr. GRAHAM. Mr. President, I will be offering an amendment which is
entitled Transition to Teaching. This amendment came to my attention as
a result of a series of personal experiences.
One set of those experiences related to the military and specifically
the U.S. Navy in Pensacola. Several years ago, facing the downsizing of
the military and aware that there were going to be a lot of people with
talents, particularly in areas such as science and mathematics, who
would be looking for a second career, the U.S. Navy in Pensacola, the
State university in Pensacola, and the University of West Florida
formed a partnership. That partnership was to provide training for
naval personnel who were within a few months or years of their
retirement date so that when they did reach retirement, they would be
prepared to go into the classrooms of America with full certification
and commence a second career educating the next generation of young
Americans.
This has been a very successful program. It has assisted scores of
schools in my State and many more across the country. This program has
been generally referred to as the Troops to Teachers Program.
Last August, I did one of my monthly workdays at North Marion High
School north of Ocala, FL. There I met a man by the name of Bill
Aradine. Bill teaches automobile mechanics at North Marion. North
Marion, as do many schools in America, every year faces a major
challenge in how to recruit enough young new teachers to fill the
ranks.
We are facing, in the next decade, something on the order of 2
million American teachers who are going to retire. These are teachers
who largely came to the classroom in the 1950s and 1960s, are now
reaching their retirement period, and are going to create tremendous
demands for new teachers to fill those ranks. Bill Aradine filled one
of those positions at North Marion High School.
What is peculiar about Bill is not just the fact that he is
considered to be an outstanding teacher who motivates his students and
has prepared students for very good paying jobs upon their graduation
from his automobile mechanics program, but what is most peculiar about
Bill is the fact that he is a man who already had a career. The career
was that, at first, he was an automobile mechanic and then the lead
mechanic of one of the large automobile dealerships in Marion County,
FL. So when he came to the classroom, he was a fully mature adult with
a lot of experience in the area he was going to teach, credibility with
the students, and the ability to be beyond a teacher, a mentor, a
counselor, and the bridge from the classroom to employment for his
students.

Now, Bill made that transition to the classroom out of his own grit,
his interest in being able to share with young Floridians what he had
learned in a lifetime of automobile mechanics. But Bill, unfortunately,
is a rarer commodity than he should be. We ought to be encouraging more
people at midcareer to consider the classroom as their second career.
We ought to be facilitating their ability, as the Navy and the
University of West Florida did, to get certified so they can move

[[Page S1001]]

seemlessly into the classroom. We ought to recognize the fact that a
student at 40 is different than a student at 18, in terms of their
class schedule and their other responsibilities, both family and
economic; and we ought to try to make it easier for those Americans to
be able to pursue their desire at a second career in the classroom.
That is what the transition to teaching legislation intends to do. It
focuses on two of the principal inhibitors to persons pursuing a second
career in education. The first of those occurs at the universities. The
universities are very well prepared to train people who are right out
of high school, who don't have many family or economic
responsibilities, and who, at the age of 22 or 23, will go into the
classroom. They are not so well prepared to deal with the student who
is in their forties, who has all these responsibilities and has to have
a greater degree of flexibility in their schedule. As the University of
West Florida found, they had to redo their curriculum in order to be
able to respond to the needs of the Navy personnel. I suggest the same
thing is going to be required if we are going to move the Bill Aradines
from a rare exception to a significant stream of persons coming into
the classroom as a second career. So the first part of our transition
to teaching is focused on the universities to provide them some
stimulation and resources to commence the process of restructuring
their curriculum so they can be responsive to the needs of the middle-
age second career student. Second is to provide stipends to these
students while they are undergoing this process of change, recognizing
that they have other responsibilities, typically, in terms of
supporting their families and the other obligations that an adult would
typically have.
So those are the two targets of this legislation in order to
facilitate more Americans being able to consider a second career in
education and to be able to contribute to that 2 million new teachers
that America is going to need in the next 10 years in order to meet the
tremendous demands that will be caused by the impending retirements of
many hundreds of thousands of current teachers.
I will offer, for purposes of consideration as an amendment to the
legislation that is pending before us, an amendment on which I have
been joined by Senators Bingaman and Robb, entitled ``Transition to
Teaching.'' I will urge its consideration and vote at the scheduled
time of 2 o'clock.
Mr. GRAHAM. Mr. President, I now send my amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Florida [Mr. Graham], for himself, Mr.
Robb and Mr. Bingaman, proposes an amendment numbered 2864.

Mr. GRAHAM. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

At the appropriate place, add the following:

TITLE ____--TRANSITION TO TEACHING

SEC. ____1. SHORT TITLE.

This title may be cited as the ``Transition to Teaching
Act''.

SEC. ____2. FINDINGS.

The Congress finds as follows:
(1) School districts will need to hire more than 2,000,000
teachers in the next decade. The need for teachers in the
areas of mathematics, science, foreign languages, special
education, and bilingual education, and for those able to
teach in high-poverty school districts will be particularly
high. To meet this need, talented Americans of all ages
should be recruited to become successful, qualified teachers.
(2) Nearly 28 percent of teachers of academic subjects have
neither an undergraduate major nor minor in their main
assignment fields. This problem is more acute in high-poverty
schools, where the out-of-field percentage is 39 percent.
(3) The Third International Math and Science Study (TIMSS)
ranked United States high school seniors last among 16
countries in physics and next to last in mathematics. It is
also evident, mainly from the TIMSS data, that based on
academic scores, a stronger emphasis needs to be placed on
the academic preparation of our children in mathematics and
science.
(4) One-fourth of high-poverty schools find it very
difficult to fill bilingual teaching positions, and nearly
half of public school teachers have students in their
classrooms for whom English is a second language.
(5) Many career-changing professionals with strong content-
area skills are interested in a teaching career, but need
assistance in getting the appropriate pedagogical training
and classroom experience.
(6) The Troops to Teachers model has been highly successful
in linking high-quality teachers to teach in high-poverty
districts.

SEC. ____3. PURPOSE.

The purpose of this title is to address the need of high-
poverty school districts for highly qualified teachers in
particular subject areas, such as mathematics, science,
foreign languages, bilingual education, and special
education, needed by those school districts, by recruiting,
preparing, placing, and supporting career-changing
professionals who have knowledge and experience that will
help them become such teachers.

SEC. ____4. PROGRAM AUTHORIZED.

(a) Authority.--The Secretary is authorized to use funds
appropriated under subsection (b) for each fiscal year to
award grants, contracts, or cooperative agreements to
institutions of higher education and public and private
nonprofit agencies or organizations to carry out programs
authorized by this title.
(b) Authorization of Appropriations.--For the purpose of
carrying out this title, there are authorized to be
appropriated $25,000,000 for each of fiscal years 2001
through 2006.

SEC. ____5. APPLICATION.

Each applicant that desires an award under section ____4(a)
shall submit an application to the Secretary containing such
information as the Secretary requires, including--
(1) a description of the target group of career-changing
professionals upon which the applicant will focus in carrying
out its program under this title, including a description of
the characteristics of that target group that shows how the
knowledge and experience of its members are relevant to
meeting the purpose of this title;
(2) a description of how the applicant will identify and
recruit program participants;
(3) a description of the training that program participants
will receive and how that training will relate to their
certification as teachers;
(4) a description of how the applicant will ensure that
program participants are placed and teach in high-poverty
local educational agencies;
(5) a description of the teacher induction services (which
may be provided through existing induction programs) the
program participants will receive throughout at least their
first year of teaching;
(6) a description of how the applicant will collaborate, as
needed, with other institutions, agencies, or organizations
to recruit, train, place, and support program participants
under this title, including evidence of the commitment of
those institutions, agencies, or organizations to the
applicant's program;
(7) a description of how the applicant will evaluate the
progress and effectiveness of its program, including--
(A) the program's goals and objectives;
(B) the performance indicators the applicant will use to
measure the program's progress; and
(C) the outcome measures that will be used to determine the
program's effectiveness; and
(8) an assurance that the applicant will provide to the
Secretary such information as the Secretary determines
necessary to determine the overall effectiveness of programs
under this title.

SEC. ____6. USES OF FUNDS AND PERIOD OF SERVICE.

(a) Authorized Activities.--Funds under this title may be
used for--
(1) recruiting program participants, including informing
them of opportunities under the program and putting them in
contact with other institutions, agencies, or organizations
that would train, place, and support them;
(2) training stipends and other financial incentives for
program participants, not to exceed $5,000 per participant;
(3) assisting institutions of higher education or other
providers of teacher training to tailor their training to
meet the particular needs of professionals who are changing
their careers to teaching;
(4) placement activities, including identifying high-
poverty local educational agencies with a need for the
particular skills and characteristics of the newly trained
program participants and assisting those participants to
obtain employment in those local educational agencies; and
(5) post-placement induction or support activities for
program participants.
(b) Period of Service.--A program participant in a program
under this title who completes his or her training shall
serve in a high-poverty local educational agency for at least
3 years.
(c) Repayment.--The Secretary shall establish such
requirements as the Secretary determines appropriate to
ensure that program participants who receive a training
stipend or other financial incentive under subsection (a)(2),
but fail to complete their service obligation under
subsection (b), repay all or a portion of such stipend or
other incentive.

SEC. ____7. EQUITABLE DISTRIBUTION.

To the extent practicable, the Secretary shall make awards
under this title that support programs in different
geographic regions of the Nation.

SEC. ____8. DEFINITIONS.

In this title:

[[Page S1002]]

(1) High-poverty local educational agency.--The term
``high-poverty local educational agency'' means a local
educational agency in which the percentage of children, ages
5 through 17, from families below the poverty level is 20
percent or greater, or the number of such children exceeds
10,000.
(2) Program participants.--The term ``program
participants'' means career-changing professionals who--
(A) hold at least a baccalaureate degree;
(B) demonstrate interest in, and commitment to, becoming a
teacher; and
(C) have knowledge and experience that are relevant to
teaching a high-need subject area in a high-need local
educational agency.

Mr. GRAHAM. Mr. President, when I introduced Transition to Teaching
in October last year, I talked about my workday with Bill Aradine.
He teaches 150 students, from 9th to 12th grade at North Marion High
School near Ocala, FL.
He teaches auto mechanics, and has sparked an interest in students
that may lead to rewarding, lucrative, and challenging careers for
them.
But Mr. Aradine brings something else to his first year in North
Marion High School--eleven years of on-the-job experience.
He has years of experience in a local Chevrolet car dealership, and
he is starting a second career in teaching.
The students look at him with a different perspective: When he says
that ``you will need to know this to succeed'' they know that he knows.
Having just come from the automotive industry, he teaches at the
cutting edge.
The information that he brings to his students is what he was
actually doing in the workplace not that long ago.
Mr. Aradine is also a bridge between North Marion High students and
the world of employment.
He offers them advice, counsel, and real-life connections to future
jobs.
As Bill Aradine made the mid-career transition into the teaching
profession, students gained a valuable instructor and mentor, and North
Marion High School was able to fill a vacancy and ease its teacher
shortage.
Every August and September--another school year begins for thousands
of young Americans.
Almost every year at this time, I hear from school districts in
Florida about teacher shortages:
Miami-Dade hired 1,700 new teachers for the 1999 school year, and
still had 300 vacancies to fill on the first day of classes.
Hillsborough County hired 1,493 teachers for the start of the school
year and were still 238 teachers short when the first class bell rang.
Orange County needed 1,300 teachers for the new year, and still had
50 vacancies several months after school started.
These concerns will only get worse: 40 percent of current
schoolteachers are over age 50, on the verge of retirement.
Who will be the future role models to the next generation of
Americans?
The importance of having high-quality teachers, and in sufficient
numbers is crucial when we look at the challenges facing education in
the future.
The American family structure will change in two key ways: Half of
all children will spend some of their childhood in single-parent homes,
and are more likely to live in poverty. And, of the children who grow
up in a nuclear family, very often both parents will work, thus are
less able to be involved in a child's school and schoolwork.
Second, societal expectations for students upon graduation will be
greater.
In the middle of this century, 20 percent of the jobs needed skilled
workers.
At the end of this century, 80 percent of jobs will need skilled
workers.
Thus, the American student will need to graduate from school better
prepared for the hi-tech world than ever before, but single parent
families and dual-income families, in general, will face more
challenges in being actively involved in their child's education.
These challenges, and others, will face the American educational
system.
I rise today to take one step forward in easing the nationwide
teacher shortage, and offering challenging new opportunities for
America's professionals by introducing the Transition to Teaching Act
of 1999.
Representatives Jim Davis of Florida and Tim Roemer of Indiana have
taken the lead in the House of Representatives on this issue.
We have a very successful model on which to build the Transition to
Teaching program.
Since 1994, the ``Troops to Teachers'' program has brought more than
3,000 retired military personnel to our classrooms as math, science,
and technology teachers.
Florida schools have the benefit of more than 270 individuals who
have successfully completed the Troops to Teachers program, and are
bringing their life-experience to the classroom today.
Troops to Teachers, and now Transition to Teaching, overcome two of
the main obstacles that mid-career professionals face when becoming a
teacher.
It streamlines the teaching certification process.
It provides money to mid-career professionals to become certified.
It's not impossible to do this now, as Mr. Aradine has shown, but
this legislation will assist with and simplify the process.
The first issue that is addressed involves teaching colleges within
universities.
They are often set up for traditional students, in their early-20's,
just starting out in their professional lives.
These programs are generally taken over a multi-year period as a
full-time college student.
This legislation encourages teaching colleges to develop curriculum
suitable for an individual who has many years of work experience.
These programs are more streamlined, more flexible in school hours,
and recognize that the professional brings more life and work
experience than a traditional college student.
By developing such programs, colleges can maintain high standards,
but allow a mid-career professional, making the change into teaching to
become certified in a more efficient, streamlined manner.
Teaching colleges are also asked to develop programs to maintain
contact with and support for these new teachers during at least their
first year in the classroom.
Second, Transition to Teaching will assist teachers who come to the
profession in mid-career in a very tangible way.
Grants will be awarded, up to $5,000 per participant, to offset the
costs of becoming a certified teacher.
In return, the teacher agrees to teach in low-income schools for
three years, as determined by the percentage of Title One students in
the school population.
Thus, two of the biggest obstacles to becoming a teacher in mid-
career are alleviated by this legislation:
First, the certification process is streamlined, and second, stipends
are provided to offset the cost of this additional education.
By expanding the ``Troops to Teachers'' program into ``Transition to
Teaching,'' law enforcement, attorneys, business leaders, scientists,
entrepreneurs, and others in the private sector, should be encouraged
to share their wisdom with students.
This amendment is timely. We are on the cusp of the retirement of
millions of baby boomers.
By encouraging recent retirees, or mid-career professionals, to
become certified through Transition to Teaching and spend a few years
in the classroom, we will bring the life skills of experienced
professionals to our youngest citizens.
I encourage my colleagues to support this amendment.
Our nation's children deserve our best efforts to provide them with a
world class education.
Let me just add an economic component to this amendment. This
amendment would be in the nature of an authorization. The President has
in his budget an item of $25 million, which would be the basis of
supporting this program, as well as the current Troops to Teachers
Program.
It is estimated that approximately half of the persons who would be
trained with that $25 million appropriation that has been recommended
by the President would be military personnel and the other half would
be civilian. As we begin to stabilize the reduction of the military,
the proportion of those persons who would be trained for a second
career in the classroom would probably begin to shift with a larger
number being from the civilian sector. It is estimated that the cost
per student for this program will be approximately $3,500 to $4,000 a
year for their training, with the average person

[[Page S1003]]

taking between 1 and 2 years to be trained to the point they are
certified to go into the classroom.
I believe this is a very reasonable and prudent investment for
America to make in Americans who have demonstrated their
accomplishments in a first career and are now ready to share their
experiences with American youth in a second career in the classroom.
This will help to facilitate that transition to teaching for the 21st
century.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LAUTENBERG. Mr. President, I ask whether the floor is in any kind
of a parliamentary situation at this time.
The PRESIDING OFFICER. The time is controlled and evenly divided
until 2 o'clock on the pending amendment.
Mr. LAUTENBERG. Mr. President, I ask unanimous consent to speak as if
in morning business for a maximum of 15 minutes.
The PRESIDING OFFICER. Is there objection?
Mr. COVERDELL. Mr. President, reserving the right to object, I
mention to the Senator that in the context of these amendments that his
side has invited Senator Wellstone to come to begin his amendment. If
that were to come about, we would need to try to accommodate it. If the
Senator would help us with that, I see no problem.
Mr. LAUTENBERG. I would be pleased to do that.
Mr. COVERDELL. I have no objection.
The PRESIDING OFFICER. The Senator from New Jersey.

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