[Congressional Record Volume 147, Number 13 (Wednesday, January 31, 2001)]
[Senate]
[Pages S917-S919]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WARNER:
  S. 225. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives to public elementary and secondary school teachers by 
providing a tax credit for teaching expenses, professional development 
expenses, and student education loans; to the Committee on Finance.
  Mr. WARNER. Mr. President, I rise today to introduce, ``The Teacher 
Tax Credit Act.''
  All of us know that individuals do not pursue a career in the 
teaching profession for the money. People go into the teaching 
profession for grander reasons--to educate our youth, to make a lasting 
influence.
  Simply put, to teach is to touch a life forever.
  How true that is. I venture to say that every one of us can remember 
at least one teacher and the special influence he or she had on our 
lives.
  Despite the fact that teachers play such an important role, 
elementary and secondary education teachers are underpaid, overworked, 
and, unfortunately, all too often, under-appreciated.
  I was astounded to learn that teachers expend significant money out 
of their own pocket to better the education of our children. Most 
typically, our teachers are spending money out of their own pocket on 
three types of expenses:

       (1) education expenses brought into the classroom--such as 
     books, supplies, pens, paper, and computer equipment;
       (2) professional development expenses--such as tuition, 
     fees, books, and supplies associated with courses that help 
     our teachers become even better instructors; and
       (3) interest paid by the teacher for previously incurred 
     higher education loans.

  This is the essence of volunteerism in the United States--teachers 
spending their own money to better our childrens' education. Why do 
they do this? Simply because school budgets are not adequate to meet 
the costs of education.
  These out-of-pocket costs placed on the backs of our teachers are but 
one reason our teachers are leaving the profession.
  Numerous reports exist detailing the teacher shortage. According to 
the National Education Association, ``America will need two million new 
teachers in the next decade, and experts predict that half the teachers 
who will be in the public school classrooms 10 years from now have not 
yet been hired.''
  In addition, it is estimated that twenty percent of all new hires 
leave the teaching profession within three years.
  Certainly, a pay raise for teachers is needed and would be a strong 
showing of recognition and appreciation towards the profession. 
However, whether or not to provide teachers a pay raise is a local 
issue and not one that the federal government ought to be involved in.
  Nevertheless, there is something we can do. On a federal level, we 
can encourage individuals to enter the teaching profession and remain 
in the teaching profession by reimbursing them for the costs that 
teachers voluntarily incur as part of the profession. Second, we can 
help our local school districts with the costs associated with 
education. And, finally, third, we can specifically help financially 
strapped urban and rural school systems recruit new teachers and keep 
those teachers that are currently in the system.
  With these premises in mind, I introduce, ``The Teacher Tax Credit.'' 
This legislation creates a $1,000 tax credit for eligible teachers for 
qualified education expenses, qualified professional development 
expenses and interest paid by the teacher during the taxable year on 
any qualified education loan.
  Every one of these expenses benefit the student in the classroom 
either through better classroom materials or through increased 
knowledge on the part of the teacher. Even so, the current tax code 
provides little, if any, recognition of the importance of these 
expenses.
  Under the current tax structure, each of these expenses are 
deductible. However, in order to deduct these classroom expenses under 
the current tax code, our teachers must meet 4 requirements:

       (1) Teachers must itemize their deductions to receive any 
     tax benefit for the unreimbursed money they spend on 
     education expenses or professional development expenses. Most 
     taxpayers in this country do not itemize;
       (2) In the event teachers do itemize, in order to receive a 
     deduction under the current tax code for education expenses 
     or professional development costs, teachers' deductions would 
     have to exceed two percent of their adjusted gross income;

[[Page S918]]

       (3) With respect to qualified education loans, under the 
     current tax law, the interest on these loans is deductible, 
     but that deduction is limited to the first sixty months after 
     graduation. A teacher with the standard ten year repayment 
     loans who has been teaching for more than five years receives 
     no benefit; and
       (4) Under the current tax code, the student loan interest 
     deduction is phased out based on income level. Thus, some 
     teachers, although not rich by any means, could be phased out 
     of the deduction.

  As a result of these four prerequisites, most teachers today receive 
little, if any, tax benefit for their out of pocket expenses to improve 
our childrens' education.
  Our teachers deserve better.
  When our teachers spend their own money on education expenses that go 
into the classroom to help students learn, they ought to receive a real 
tax benefit.
  When our teachers spend their own money on professional development 
courses to enhance their knowledge in a subject in which they are 
instructing, our teachers deserve a real tax benefit.
  When our recent college graduates make the honorable and tough choice 
of training today's youth and tomorrow's leaders, with little 
expectation of financial riches, such a choice should be encouraged and 
our teachers' choices should be recognized.
  In my view, the most important factor in ensuring a quality education 
is having a quality teacher in the classroom.
  The $1,000 Teacher Tax Credit recognizes the hard work our teachers 
have committed themselves to and helps improve education.
  Under my legislation, teachers could receive up to a $1,000 tax 
credit for qualified education expenses, qualified professional 
development courses, and interest on student loans. Qualifying teachers 
would not have to itemize their deductions to receive the credit, and 
they would not have to exceed the two percent floor. Teachers would not 
be phased out of the student loan interest benefit based on income 
level, and there would be no 60 month limitation.
  Mr. President, we all agree that our education system must ensure 
that no child is left behind. As we move towards education reforms to 
achieve this goal, we must keep in mind the other component in our 
education system--the teachers.
  We must ensure that qualified teachers are not forgotten.
  Quality, caring teachers, along with quality caring parents, play the 
predominant roles in ensuring that no child is left behind. Passage of 
The Teacher Tax Credit will help our school systems retain the good 
teachers they now have and recruit the good teachers they need for the 
future.
  Mr. President, some of my colleagues in the Senate have recognized 
that we can and must do more for our teachers in this country. Senators 
Collins and Kyl have worked on similar legislation, and I commend them 
for their efforts. I look forward working with them and my other 
colleagues on this important matter. I urge my colleagues to support 
this legislation.
  I ask unanimous consent that letters from the National Education 
Association and the Virginia Education Association indicating their 
support for this legislation and the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 225

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as ``The TEACHER Tax Credit Act''.

     SEC. 2. CREDIT FOR TEACHING EXPENSES, PROFESSIONAL 
                   DEVELOPMENT EXPENSES, AND INTEREST ON HIGHER 
                   EDUCATION LOANS OF PUBLIC ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25A the following new section:

     ``SEC. 25B. TEACHING EXPENSES, PROFESSIONAL DEVELOPMENT 
                   EXPENSES, AND INTEREST ON HIGHER EDUCATION 
                   LOANS OF PUBLIC ELEMENTARY AND SECONDARY SCHOOL 
                   TEACHERS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     teacher, there shall be allowed as a credit against the tax 
     imposed by this chapter for the taxable year an amount equal 
     to the sum of--
       ``(1) the qualified education expenses paid or incurred by 
     the taxpayer during the taxable year,
       ``(2) the qualified professional development expenses paid 
     or incurred by the taxpayer during the taxable year, and
       ``(3) interest paid by the taxpayer during the taxable year 
     on any qualified education loan.
       ``(b) Maximum Credit.--The credit allowed by subsection (a) 
     for the taxable year shall not exceed $1,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Eligible teacher.--The term `eligible teacher' means 
     an individual who is a kindergarten through grade 12 
     classroom teacher, instructor, counselor, aide, or principal 
     in a public elementary or secondary school on a full-time 
     basis for an academic year ending during a taxable year.
       ``(2) Elementary and secondary schools.--The terms 
     `elementary school' and `secondary school' have the 
     respective meanings given such terms by section 14101 of the 
     Elementary and Secondary Education Act of 1965, as in effect 
     of the date of enactment of this section.
       ``(3) Qualified education expenses.--The term `qualified 
     education expenses' means expenses for books, supplies (other 
     than nonathletic supplies for courses of instruction in 
     health or physical education), computer equipment (including 
     related software and services) and other equipment, and 
     supplementary materials used by an eligible teacher in the 
     classroom.
       ``(4) Qualified professional development expenses.--
       ``(A) In general.--The term `qualified professional 
     development expenses' means expenses--
       ``(i) for tuition, fees, books, supplies, and equipment 
     required for the enrollment or attendance of an individual in 
     a qualified course of instruction, and
       ``(ii) with respect to which a deduction is allowable under 
     section 162 (determined without regard to this section).
       ``(B) Qualified course of instruction.--The term `qualified 
     course of instruction' means a course of instruction which--
       ``(i) directly relates to the curriculum and academic 
     subjects in which an eligible teacher provides instruction,
       ``(ii) is designed to enhance the ability of an eligible 
     teacher to understand and use State standards for the 
     academic subjects in which such teacher provides instruction,
       ``(iii) provides instruction in how to teach children with 
     different learning styles, particularly children with 
     disabilities and children with special learning needs 
     (including children who are gifted and talented),
       ``(iv) provides instruction in how best to discipline 
     children in the classroom and identify early and appropriate 
     interventions to help children described clause (iii) learn, 
     or
       ``(v) is tied to strategies and programs that demonstrate 
     effectiveness in increasing student academic achievement and 
     student performance, or substantially increasing the 
     knowledge and teaching skills of the eligible teacher.
       ``(5) Qualified education loan.--The term `qualified 
     education loan' has the meaning given such term by section 
     221(e)(1), but only with respect to qualified higher 
     education expenses of the taxpayer.
       ``(d) Denial of Double Benefit.--
       ``(1) In general.--No deduction or other credit shall be 
     allowed under this chapter for any amount taken into account 
     for which credit is allowed under this section.
       ``(2) Coordination with exclusions.--A credit shall be 
     allowed under subsection (a) for qualified professional 
     development expenses only to the extent the amount of such 
     expenses exceeds the amount excludable under section 135, 
     529(c)(1), or 530(d)(2) for the taxable year.
       ``(e) Election To Have Credit Not Apply.--A taxpayer may 
     elect to have this section not apply for any taxable year.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the provisions 
     of this section.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 25A the following new item:

``Sec. 25B. Teaching expenses, professional development expenses, and 
              interest on higher education loans of public elementary 
              and secondary school teachers.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                  ____



                               National Education Association,

                                 Washington, DC, January 25, 2001.
     Senator John Warner,
     U.S. Senate,
     Washington, DC.
       Dear Senator Warner: On behalf of the National Education 
     Association's (NEA) 2.6 million members, we would like to 
     express our support for the Educator and Classroom Help 
     Education Resources (TEACHER) Tax Credit Act.
       As you know, teacher quality is the single most critical 
     factor in maximizing student achievement. Ongoing 
     professional development is essential to ensure that teachers 
     stay up-to-date on the skills and knowledge necessary to 
     prepare students for the challenges of the 21st century. The 
     TEACHER

[[Page S919]]

     Act tax credit for professional development expenses will 
     make a critical difference in helping teachers access quality 
     training.
       In addition, the TEACHER Act will help encourage talented 
     students to pursue a career in teaching by providing a tax 
     credit for interest paid on higher education loans. Such a 
     tax credit is particularly critical given the projected need 
     to recruit two million qualified teachers nationwide over the 
     next decade.
       Finally, we are pleased that your legislation would provide 
     a tax credit for teachers who reach into their own pockets to 
     pay for necessary classroom materials, including books, 
     pencils, paper, and art supplies. A 1996 NEA study found that 
     the average K-12 teacher spent over $400 a year out of 
     personal funds for classroom supplies. For teachers earning 
     modest salaries, the purchase of classroom supplies 
     represents a considerable expense for which they often must 
     sacrifice other personal needs.
       We than you for your leadership in introducing this 
     important legislation and look forward to working with you to 
     support our nation's teachers.
           Sincerely,
                                           Mary Elizabeth Teasley,
     Director of Government Relations.
                                  ____



                               Virginia Education Association,

                                   Richmond, VA, January 24, 2001.
     Hon. John W. Warner,
     U.S. Senate,
     Washington, DC.
       Dear Senator Warner: On behalf of all 56,000 members of VEA 
     we congratulate you on your appointment to the Education 
     Committee, and we look forward to working with you.
       Christopher Yianilos reviewed ``The Educator and Classroom 
     Help Education Resources (TEACHER) Tax Credit Act'' with Rob 
     Jones and me on January 19th. We appreciated this opportunity 
     to evaluate the bill and to receive a thorough briefing from 
     Mr. Yianilos.
       We both appreciate and support your efforts to provide a 
     tax credit for teaching expenses, professional development 
     expenses, and student education loans. Please call on VEA if 
     we can be of assistance in gaining passage of this worthy 
     bill.
       In addition, please call on us if we can ever be of 
     assistance to you in your new position as a member of the 
     Education Committee.
           Sincerely,
                                                   Jean H. Bankos,
                                                        President.
                                 ______