[Congressional Record Volume 156, Number 82 (Thursday, May 27, 2010)]
[Senate]
[Pages S4545-S4547]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH:
  S. 3445. A bill to amend the Internal Revenue Code of 1986 to allow 
an above-the-line deduction for certain professional development and 
other expenses of elementary and secondary school teachers and for 
certain certification expenses of individuals becoming science, 
technology, engineering, or math teachers; to the Committee on Finance.
  Mr. HATCH. Mr. President, I rise today to introduce legislation 
designed to increase tax fairness for America's primary and secondary 
school teachers.
  Our public school teachers are some of the unheralded heroes of our 
society. These women and men dedicate their careers to educating the 
young people of America. School teachers labor in often difficult and 
even dangerous circumstances. In most places, including in my home 
state of Utah, the salary of the average public school teacher is 
significantly below the national average.
  For a variety of economic and organizational reasons, schools across 
the nation are experiencing difficulties in recruiting teachers--
especially in the fields of math and science. There are at least two 
sources to this problem. First, schools are experiencing high levels of 
turnover related to retirement, relocation, and attrition. Second, 
there is an insufficient supply of new qualified math and science 
teachers coming in to the schools to compensate for the turnover.
  As a result of these factors, 31 percent of secondary schools across 
the nation report difficulties in filling math and science faculty 
positions. This teacher recruitment problem is especially troubling 
because it disproportionately affects small schools in urban and rural 
areas, especially those with limited access to funding.
  Unfortunately, the problems of retention and recruitment of public 
school teachers are exacerbated by the unfair tax treatment these 
professionals currently receive under our tax law. Specifically, 
teachers are greatly disadvantaged by the lack of deductibility of the 
total amount of out-of-pocket costs of classroom materials that 
practically all teachers find themselves supplying, as well as by the 
inability to deduct their professional development expenses. Let me 
explain.
  As with many other professionals, most elementary and secondary 
school teachers regularly incur expenses to keep themselves current in 
their fields of knowledge. These include subscriptions to journals and 
other periodicals as well as the cost of courses and seminars designed 
to improve their knowledge or teaching skills. For example, in order to 
be certified by the National Board for Professional Teaching Standards, 
NBPTS, a teacher must pay a fee of $2,500. Expenditures like these are 
necessary to keep our teachers up to date on the latest ideas, 
techniques, and trends so that they can provide our children with the 
best education possible.

  Furthermore, almost all teachers find themselves spending not 
insignificant amounts of money to provide basic classroom materials for 
their students. Because of tight education budgets, most schools do not 
provide 100 percent of the material teachers need to adequately present 
their lessons. New teachers in their first and second years are 
especially susceptible to a large financial burden as they must start 
from scratch in establishing a curriculum and classroom for their 
students.
  I realize that employees in many fields incur expenses for 
professional development and out-of-pocket expenses. In many cases, 
however, these costs are reimbursed by the employer. This is seldom the 
case with school teachers. Other professionals who are self-employed 
are generally able to fully deduct these types of expenses.
  Under the current tax law, unreimbursed expenses for all employees 
are deductible generally, but only as miscellaneous itemized 
deductions. However, there are two practical hurdles that effectively 
make these expenses non-deductible for most teachers. The first hurdle 
is that the total amount of a taxpayer's deductible miscellaneous 
deductions must exceed 2 percent of gross income before they begin to 
be deductible.
  The second hurdle is that the amount in excess of the 2 percent 
floor, if any, combined with all other deductions of the taxpayer, must 
exceed the standard deduction before the teacher can itemize. Only 
about one-third of taxpayers have enough deductions to itemize. The 
unfortunate effect of these two limitations is that, as a practical 
matter, only a small proportion of teachers are able to deduct their 
professional development and out-of-pocket supplies expenses.
  Let me illustrate this unfair situation with an example. Let us 
consider the case of a first-year teacher in Utah, whom we will refer 
to as Michelle. Michelle is newly married. She and her husband together 
expect to earn $48,000 this year. As a brand-new teacher, Michelle has 
none of the classroom decorations, materials, or curriculum aides that 
veteran teachers have accumulated. In an effort to quickly collect some 
necessary items for her classroom, a new teacher like Michelle will 
probably spend close to $1,500 of her own money. She will not be 
reimbursed for any of these expenses by the school district.
  Under current law, Michelle's expenditures are deductible, subject to 
the two limitations I mentioned. The first limitation is that her 
expenses must exceed 2 percent of her and her husband's joint income 
before they begin to be deductible. Two percent of $48,000 is $960. 
Thus, only $540 of her $1,500 total expense is potentially deductible--
that portion that exceeds $960.
  As a married taxpayer, Michelle's standard deduction this year is 
$11,400. Her total itemized deductions, including the $540 in qualified 
miscellaneous deductions for her professional expenses and out-of-
pocket classroom supplies, will fall far short of the standard 
deduction threshold. Therefore, not even the $540 of the original 
$1,500 in out-of-pocket costs is deductible for Michelle. What the 
first limitation did not block, the second one did, and Michelle gets 
no deduction at all for these expenses under the current law.
  The entry-level employees in the teaching field are the first- and 
second-year teachers like Michelle, who receive the lowest relative 
salary and yet often incur the greatest school-related expenses. These 
expenses place a heavy burden on our teachers and can act as a 
significant barrier to entry to the teaching profession. Many of these 
new teachers are renting and fresh out of college, and are thus very 
unlikely to be able to itemize their deductions. Therefore, without the 
ability to itemize, the teachers with the greatest need of tax relief 
are the ones least likely to receive it.
  This problem is not isolated to first-year teachers. Veteran 
educators, like Kristen Adamson, also an elementary school teacher in 
Utah, have also expressed their concerns about this tax inequity. 
Kristen is preparing for a class of 35 fifth-graders next year--the 
most she's ever had. She, like most teachers, feels that it is her duty 
to provide all of her students with the materials they will need to 
successfully complete their school work. There are few careers that I 
know of in which employees take similar initiative.
  This year, due to limited state funding, Kristen will be forced to 
choose between a class set of colored pencils or a class set of 
crayons. Whatever the district does not provide, Kristen will be forced 
to purchase herself. Further, the school district provides only one

[[Page S4546]]

notebook per student, but her pupils require a minimum of four each to 
organize their work. With 35 students, these costs can add up very 
quickly. Kristen typically does not have enough deductions to itemize 
and therefore, like most teachers, will receive little or no tax 
relief.
  As you can see, public school educators are at a marked disadvantage 
under the current tax law, and they deserve better treatment. Not only 
is the situation morally unacceptable, it is aggravating to our teacher 
retention and recruitment problems.
  I have been fighting to pass legislation that will help alleviate 
this long-standing problem for almost a decade. In 2001, I first 
introduced the Tax Equity for School Teachers Act. This legislation 
would have provided an unlimited tax deduction for the out-of-pocket 
expenses school teachers incur to acquire necessary training and 
materials.
  Rather than being available only to those who are able to itemize 
their deductions, this bill would have made these expenses ``above-the-
line'' deductions, meaning they would be deductible whether or not the 
teacher itemized on their tax return.
  Unfortunately, only a part of this bill was enacted. The 2001 tax act 
included an above the-line deduction for $250 for the costs of 
classroom expenses. While this was a step in the right direction, it 
was essentially a symbolic gesture as teachers typically spend far more 
than $250 on school-related expenses. This deduction has expired and 
has been renewed several times, but it expired again at the end of last 
year. It is not clear when Congress is going to extend it.
  The bill I am introducing today would do three things. First, it 
would reinstate the above-the-line deduction for teachers' out-of-
pocket expenses for classroom supplies, make it permanent, and remove 
the $250 cap. Second, it would provide an unlimited deduction for the 
professional development expenses for school teachers. Finally, to 
assist in the recruitment of teachers in the most-needed fields, it 
would provide an unlimited deduction for the cost of professionals in 
the fields of math, science, and technology to certify to become public 
school teachers.
  Under my bill, first-year teacher Michelle would be allowed to deduct 
all $1,500 of her professional development and classroom supplies 
expenses, whether she itemized or not. Similarly, Kristen would be able 
to deduct all of the expenses she incurred to provide materials for her 
students. This would help provide tax equity and a measure of much-
needed tax relief for scores of underpaid professionals. It would also 
help retain current public school teachers and attract new ones to the 
field.
  Some might argue that such a generous deduction would be giving 
teachers preferential treatment. I disagree. Most organizations provide 
training and supplies for their employees that are fully deductible to 
the organization and non-taxable to the employee. Yet, public teachers 
pay for training out of their own pocket, as is the case with NBPTS 
certification.
  Others may question the wisdom of my bill granting an unlimited tax 
deduction. Why not place a limit or cap on the amount that may be 
deducted, some might ask. Again, I respectfully disagree with such 
critics. It is important to keep in mind the difference between a tax 
deduction and a tax credit. My bill calls for tax deductions, which 
essentially act as a cost-sharing arrangement between the teacher and 
the government. Deductions reduce the amount of income that is subject 
to tax. A credit, on the other hand, is a dollar-for-dollar reduction 
in the amount of tax that is due.
  With a tax deduction, a public school teacher is not receiving a cash 
subsidy or reimbursement for his or her expenses. Rather, he or she is 
merely obtaining a reduction in the amount of income that is taxed. 
Thus, the most benefit a teacher would receive under my bill would be a 
35 percent reduction in the cost of professional development, supplies, 
or certification expenses. For the vast majority of teachers, the 
amount would be far less than 35 percent, because they are in lower tax 
brackets. This means that the teacher is still responsible for paying 
for the biggest portion of these costs. In other words, this bill does 
not provide an incentive for teachers to spend unnecessary funds; it 
simply provides a discount for teachers who use their common sense and 
spend their money appropriately. If anything, this deduction is not 
generous enough, but it would go a long way toward providing help for 
these dedicated professionals.
  Support for mathematics and science education at all levels is 
necessary to improve the global competitiveness of the United States in 
science and energy technology. I endorse the efforts of some of my 
colleagues to encourage more of our best and brightest students who 
choose these fields of study. Sup ort for qualified STEM teachers, 
Science, Technology, Engineering, and Mathematics, is equally 
important. If we are successful in increasing the supply of STEM 
students, we will need to take drastic measures to increase the already 
strained supply of STEM teachers. This bill would provide incentives 
for these professionals to enter the teaching profession by allowing 
expenses in connection with teacher licensing and certification to be 
fully deductible, above the line, the same as professional development 
and supplies expenses of teaching professionals.
  This bill would provide modest tax relief for teachers who, for too 
long, have been treated unfairly under our tax laws. It would alleviate 
significant barriers to entry to the teaching profession and would help 
solve some of our teacher recruitment and retention problems. Our 
teachers deserve whatever help we can provide. It is time that Congress 
recognized this unfairness and corrected it. I thank the Senate for the 
opportunity to address this issue today, and I urge my colleagues to 
support this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3445

       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 ``Tax Equity for School 
     Teachers Act of 2010''.

     SEC. 2. DEDUCTION FOR CERTAIN PROFESSIONAL DEVELOPMENT 
                   EXPENSES AND CLASSROOM SUPPLIES OF ELEMENTARY 
                   AND SECONDARY SCHOOL TEACHERS AND FOR CERTAIN 
                   CERTIFICATION EXPENSES OF SCIENCE, TECHNOLOGY, 
                   ENGINEERING, OR MATH TEACHERS.

       (a) Deduction Allowed Whether or Not Taxpayer Itemizes 
     Other Deductions.--Subparagraph (D) of section 62(a)(2) of 
     the Internal Revenue Code of 1986 (relating to certain 
     expenses of elementary and secondary school teachers) is 
     amended to read as follows:
       ``(D) Certain professional development expenses, classroom 
     supplies, and other expenses for elementary and secondary 
     teachers.--The sum of the deductions allowed by section 162 
     with respect to the following expenses:
       ``(i) Expenses paid or incurred by an eligible educator in 
     connection with 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 the eligible educator in the classroom.
       ``(ii) Expenses paid or incurred by an eligible educator 
     which constitute qualified professional development expenses.
       ``(iii) Expenses which are related to the initial 
     certification of an individual (in the individual's State 
     licensing system) as a qualified science, technology, 
     engineering or math teacher.''.
       (b) Definitions and Special Rules.--Section 62(d) of the 
     Internal Revenue Code of 1986 (relating to definitions and 
     special rules is amended by redesignating paragraph (2) as 
     paragraph (5) and by adding after paragraph (1) the following 
     new paragraphs:
       ``(2) Qualified professional development expenses.--For 
     purposes of subsection (a)(2)(D)--
       ``(A) In general.--The term `qualified professional 
     development expenses' means expenses for tuition, fees, 
     books, supplies, equipment, and transportation required for 
     the enrollment or attendance of an individual in a qualified 
     course of instruction.
       ``(B) Qualified course of instruction.--The term `qualified 
     course of instruction' means a course of instruction which--
       ``(i) is--

       ``(I) directly related to the curriculum and academic 
     subjects in which an eligible educator provides instruction,
       ``(II) designed to enhance the ability of an eligible 
     educator to understand and use State standards for the 
     academic subjects in which such teacher provides instruction, 
     or
       ``(III) designed to enable an eligible educator to meet the 
     highly qualified teacher requirements under the No Child Left 
     Behind Act of 2001,

       ``(ii) may provide instruction to an eligible educator--

[[Page S4547]]

       ``(I) 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), or
       ``(II) in how best to discipline children in the classroom 
     and identify early and appropriate interventions to help 
     children described in subclause (I) to learn,

       ``(iii) is tied to the ability of an eligible educator to 
     enable students to meet challenging State or local content 
     standards and student performance standards,
       ``(iv) is tied to strategies and programs that demonstrate 
     effectiveness in assisting an eligible educator in increasing 
     student academic achievement and student performance, or 
     substantially increasing the knowledge and teaching skills of 
     an eligible educator, and
       ``(v) is part of a program of professional development for 
     eligible educators which is approved and certified by the 
     appropriate local educational agency as furthering the goals 
     of the preceding clauses.
       ``(C) Local educational agency.--The term `local 
     educational agency' has the meaning given such term by 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965, as in effect on the date of the enactment of this 
     subsection.
       ``(3) Qualified science, technology, engineering, or math 
     teacher.--For purposes of subsection (a)(2)(D), the term 
     `qualified science, technology, engineering, or math teacher' 
     means, with respect to a taxable year, an individual who--
       ``(A) has a bachelor's degree or other advanced degree in a 
     field related to science, technology, engineering, or math,
       ``(B) was employed as a nonteaching professional in a field 
     related to science, technology, engineering, or math for not 
     less than 3 taxable years during the 10-taxable-year period 
     ending with the taxable year,
       ``(C) is certified as a teacher of science, technology, 
     engineering, or math in the individual's State licensing 
     system for the first time during such taxable year, and
       ``(D) is employed at least part-time as a teacher of 
     science, technology, engineering, or math in an elementary or 
     secondary school during such taxable year.
       ``(4) Exemption from minimum education or new trade or 
     business exception.--For purposes of applying subsection 
     (a)(2)(D) and this subsection, the determination as to 
     whether qualified professional development expenses, or 
     expenses for the initial certification described in 
     subsection (a)(2)(D)(iii), are deductible under section 162 
     shall be made without regard to any disallowance of such a 
     deduction under such section for such expenses because such 
     expenses are necessary to meet the minimum educational 
     requirements for qualification for employment or qualify the 
     individual for a new trade or business.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.
                                 ______