[Congressional Record Volume 147, Number 116 (Monday, September 10, 2001)]
[Senate]
[Pages S9256-S9258]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CRAIG:
  S. 1414. A bill to provide incentives for States to establish and 
administer periodic testing and merit pay programs for elementary 
school and secondary school teachers, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. CRAIG. Mr. President, I rise today to introduce the Parent and 
Teacher Achievement Act of 2001. We spent much of the spring debating 
the Federal Government's role in education, and in the end we passed a 
bill which gives a lot of money to the education establishment. Now, 
however, it is time to work on a policy that addresses what we can do 
for parents and teachers, and how we can let them keep some of their 
money so they can start improving education from the ground up.
  This bill has many important provisions, but the most important is 
the tax credit for parents and relatives to use for education expenses. 
They can use this credit for any expenses they incur when they spend 
money on their children's education, such as school supplies, 
computers, private tutors, or other such expenses. This credit can also 
be used by parents who home school as well as to help offset tuition at 
private schools. This is not a voucher program nor is it a government 
subsidy for private schools. This tax credit is simply the Federal 
Government recognizing that parents know best how to educate their 
children. As education researcher Andrew Coulson has said, ``. . . 
parents have consistently made better education choices for their own 
children than state-appointed experts have made on their behalf.'' The 
Federal Government should not penalize them by taxing the money parents 
spend to further that education. It should be pointed out that this 
credit would also apply to relatives of students if they contribute 
money towards educational expenses. We all know that grandparents and 
aunts and uncles do a lot to contribute to children's education. It is 
only appropriate to recognize those efforts, too.
  The idea of the type of tax credit contained in this bill has been 
picking up steam recently, and many think tanks, such as the Cato 
Institute, the Mackinac Center, and the Buckeye Institute, have issued 
reports on tuition tax credits which clearly illustrate their benefits. 
A tax credit of this type has also begun to be enacted in the real 
world. Arizona has had an education tax credit for a few years, and it 
has proven to be remarkably successful. The Canadian province of 
Ontario also recently enacted a tax credit of this type.
  Of course, a tax credit is only available to people who pay taxes, 
but my bill also benefits low income individuals. To address the needs 
of these people, I have included a provision in this bill which would 
give individuals or corporations a tax credit when they donate money to 
organizations which give scholarships to lower income students. This 
would allow funds to go to private organizations so they award 
scholarships, while avoiding any church/state entanglements which 
concern so many who oppose vouchers. The state of Arizona has had 
success with this program, too.
  Another important tax component contained in this bill is one which 
allows teachers to take a credit for money spent on school supplies for 
their students. Nobody goes into teaching to get rich; they do it 
because they recognize their job is one of the most important in this 
Nation, preparing our youth for the future. And though teachers do not 
receive lavish salaries, many of them spend considerable sums for 
school supplies for their students. It is only fair that the Federal 
Government should not tax this money. The bill also contains a 
provision that would allow teachers and other school staff a tax 
deduction for expenses they incur while improving their education or 
job skills. Our teachers need to be the best trained teachers in the 
world, and we should encourage this all we can.
  The final section of this bill would empower teachers by allowing the 
Secretary of Education to give grants to States and school districts 
which set up merit pay systems in schools and implement teacher testing 
programs, as long as those states also have a continuing education 
requirement as part of their teacher certification process. It also has 
a provision which clarifies any Department of Education regulations and 
says that federal funds can be used for merit pay systems and for 
teacher testing programs. If States and school districts find the need 
to use their funds for these programs, the Federal Government should 
not tie them up in red tape and prevent them from meeting their needs 
as they see them. We all know that local educators have a much better 
view of the needs they encounter, and we in Washington

[[Page S9257]]

should give them as much freedom as possible to meet those needs.
  By enacting this bill, the U.S. Senate will be making a firm 
commitment to helping parents and teachers achieve education success. 
Parents in this country need to have as much freedom as possible to 
choose the ways in which their children will be educated, and this bill 
is a modest step in that direction. To complement the efforts of 
parents, though, we need to have teachers who are the most qualified 
and the most able to meet the needs of the children parents send to 
them every day. Encouraging states to implement merit pay and teacher 
testing, and allowing teachers to have a credit for their educational 
expenses, will go a long way towards making this a reality.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1414

       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 ``Parent and Teacher 
     Achievement Act of 2001''.

     SEC. 2. STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY.

       (a) Amendments.--Title II of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6601 et seq.) is amended--
       (1) by redesignating part E as part F;
       (2) by redesignating sections 2401 and 2402 as sections 
     2501 and 2502, respectively; and
       (3) by inserting after part D the following:

      ``PART E--STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY

     ``SEC. 2401. STATE INCENTIVES FOR TEACHER TESTING AND MERIT 
                   PAY.

       ``(a) State Awards.--From funds made available under 
     subsection (b) for a fiscal year, the Secretary shall make an 
     award to each State that--
       ``(1) administers a test to each elementary school and 
     secondary school teacher in the State, with respect to the 
     subjects taught by the teacher, every 3 to 5 years;
       ``(2) has an elementary school and secondary school teacher 
     compensation system that is based on merit; and
       ``(3) requires elementary school and secondary school 
     teachers to earn continuing education credits as part of a 
     State recertification process.
       ``(b) Available Funding.--Notwithstanding any other 
     provision of law, the amount of funds that are available to 
     carry out this section for a fiscal year is 50 percent of the 
     amount of funds appropriated to carry out this title that are 
     in excess of the amount so appropriated for fiscal year 2001, 
     except that no funds shall be available to carry out this 
     section for any fiscal year for which--
       ``(1) the amount appropriated to carry out this title 
     exceeds $600,000,000; or
       ``(2) each of the several States is eligible to receive an 
     award under this section.
       ``(c) Award Amount.--A State shall receive an award under 
     this section in an amount that bears the same relation to the 
     total amount available for awards under this section for a 
     fiscal year as the number of States that are eligible to 
     receive such an award for the fiscal year bears to the total 
     number of all States so eligible for the fiscal year.
       ``(d) Use of Funds.--Funds provided under this section may 
     be used by States to carry out the activities described in 
     section 2207.
       ``(e) Definition of State.--In this section, the term 
     `State' means each of the 50 States and the District of 
     Columbia.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2001.

     SEC. 3. TEACHER TESTING AND MERIT PAY.

       (a) In General.--Notwithstanding any other provision of 
     law, a State may use Federal education funds--
       (1) to carry out a test of each elementary school or 
     secondary school teacher in the State with respect to the 
     subjects taught by the teacher; or
       (2) to establish a merit pay program for the teachers.
       (b) Definitions.--In this section, the terms ``elementary 
     school'' and ``secondary school'' have the meanings given the 
     terms in section 14101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8801).

     SEC. 4. NONREFUNDABLE CREDIT FOR ELEMENTARY AND SECONDARY 
                   SCHOOL EXPENSES.

       (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 25B the following new section:

     ``SEC. 25C. CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL 
                   EXPENSES.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the 
     qualified elementary and secondary education expenses (within 
     the meaning of section 530(b)(4)) with respect to one or more 
     qualifying students which are paid or incurred by the 
     individual during such taxable year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed by subsection (a) 
     for any taxable year shall not exceed $1000 per qualifying 
     student.
       ``(2) Maximum tuition expenses.--The tuition expenses which 
     may be taken into account in determining qualified elementary 
     and secondary education expenses for any taxable year shall 
     not exceed $500 per qualifying student.
       ``(c) Qualifying Student.--For purposes of this section, 
     the term ``qualifying student'' means a dependent (within the 
     meaning of section 152) or a relative of the taxpayer who is 
     enrolled in school (as defined in section 530(b)(4)(B)) on a 
     full-time basis. For purposes of the preceding sentence, the 
     term `relative' means an individual bearing a relationship to 
     the taxpayer which is described in any of paragraphs (1) 
     through (8) of section 152(a).
       ``(d) Denial of Double Benefit.--No deduction or exclusion 
     shall be allowed under this chapter for any expense for which 
     credit is allowed under this section.
       ``(g) Election To Have Credit Not Apply.--A taxpayer may 
     elect to have this section not apply for any taxable year.''.
       (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 25B the following new item:

``Sec. 25C. Credit for elementary and secondary school expenses.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 5. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT OF 
                   ELEMENTARY AND SECONDARY SCHOOLS.

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

     ``SEC. 30B. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT OF 
                   ELEMENTARY AND SECONDARY SCHOOLS.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to 75 percent of the qualified 
     charitable contributions of the taxpayer for the taxable 
     year.
       ``(b) Maximum Credit.--
       ``(1) Individuals.--In the case of a taxpayer other than a 
     corporation, the credit allowed by subsection (a) for any 
     taxable year shall not exceed $500 ($1,000 in the case of a 
     joint return).
       ``(2) Corporations.--In the case of a corporation, the 
     credit allowed by subsection (a) shall not exceed $100,000.
       ``(c) Qualified Charitable Contribution.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified charitable 
     contribution' means, with respect to any taxable year, the 
     aggregate amount allowable as a deduction under section 170 
     (determined without regard to subsection (d)(1)) for cash 
     contributions to a school tuition organization.
       ``(2) School tuition organization.--
       ``(A) In general.--The term `school tuition organization' 
     means any organization which--
       ``(i) is described in section 170(c)(2),
       ``(ii) allocates at least 90 percent of its gross income 
     and contributions and gifts to elementary and secondary 
     school scholarships, and
       ``(iii) awards scholarships to any student who is eligible 
     for free or reduced cost lunch under the school program 
     established under the Richard B. Russell National School 
     Lunch Act.
       ``(B) Elementary and secondary school scholarship.--The 
     term `elementary and secondary school scholarship' means any 
     scholarship excludable from gross income under section 117 
     for expenses related to education at or below the 12th grade.
       ``(d) Special Rules.--
       ``(1) Denial of double benefit.--No deduction shall be 
     allowed under this chapter for any contribution for which 
     credit is allowed under this section.
       ``(2) Application with other credits.--The credit allowable 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(A) the regular tax for the taxable year, reduced by the 
     sum of the credits allowable under subpart A and the 
     preceding sections of this subpart, over
       ``(B) the tentative minimum tax for the taxable year.
       ``(3) Controlled groups.--All persons who are treated as 
     one employer under subsection (a) or (b) of section 52 shall 
     be treated as 1 taxpayer for purposes of this section.
       ``(e) Election To Have Credit Not Apply.--A taxpayer may 
     elect to have this section not apply for any taxable year.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart B of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new item:

``Sec. 30B. Credit for contributions for the benefit of elementary and 
              secondary schools.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 6. CREDIT TO ELEMENTARY AND SECONDARY SCHOOL TEACHERS 
                   WHO PROVIDE CLASSROOM MATERIALS.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal

[[Page S9258]]

     Revenue Code of 1986 (relating to other credits), as amended 
     by section 4(a), is amended by adding at the end the 
     following new section:

     ``SEC. 30C. CREDIT TO ELEMENTARY AND SECONDARY SCHOOL 
                   TEACHERS WHO PROVIDE CLASSROOM MATERIALS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     educator, there shall be allowed as a credit against the tax 
     imposed by this chapter for the taxable year an amount equal 
     to the qualified elementary and secondary education expenses 
     which are paid or incurred by the taxpayer during such 
     taxable year.
       ``(b) Maximum Credit.--The credit allowed by subsection (a) 
     for any taxable year shall not exceed $1,000.
       ``(c) Definitions.--
       ``(1) Eligible educator.--The term `eligible educator' 
     means an individual who is a teacher, instructor, counselor, 
     principal, or aide in a school (as defined in section 
     530(b)(4)(B)) for at least 900 hours during a school year.
       ``(2) Qualified elementary and secondary education 
     expenses.--The term `qualified elementary and secondary 
     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 educator in the 
     classroom.
       ``(d) Special Rules.--
       ``(1) Denial of double benefit.--No deduction shall be 
     allowed under this chapter for any expense for which credit 
     is allowed under this section.
       ``(2) Application with other credits.--The credit allowable 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(A) the regular tax for the taxable year, reduced by the 
     sum of the credits allowable under subpart A and the 
     preceding sections of this subpart, over
       ``(B) the tentative minimum tax 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.''.
       (b) Clerical Amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986, as amended by section 4(b), is amended 
     by adding at the end the following new item:

``Sec. 30C. Credit to elementary and secondary school teachers who 
              provide classroom materials.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 7. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO 
                   ACCOUNT PROFESSIONAL DEVELOPMENT EXPENSES OF 
                   ELEMENTARY AND SECONDARY SCHOOL TEACHERS.

       (a) In General.--Section 62(a)(2) of the Internal Revenue 
     Code of 1986 (relating to certain trade and business 
     deductions of employees) is amended by adding at the end the 
     following:
       ``(D) Professional development expenses of elementary and 
     secondary school teachers.--The deductions allowed by section 
     162 which consist of expenses, not in excess of $1,500, paid 
     or incurred by an eligible educator (as defined section 
     30C(c)(1)) by reason of the participation of the educator in 
     professional development courses which are related to the 
     curriculum and academic subjects in which the educator 
     provides instruction or to the students for which the 
     educator provides instruction and which are part of a program 
     of professional development which is approved and certified 
     by the appropriate local educational agency (as defined by 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965, as in effect on the date of the enactment of this 
     subparagraph).''.
       (b) Special Rules.--Section 62 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following:
       ``(d) Special Rules.--A deduction shall be allowed under 
     subsection (a)(2)(D) for 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.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                 ______