[Congressional Record (Bound Edition), Volume 146 (2000), Part 2]
[Senate]
[Pages 1603-1610]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  THE AFFORDABLE EDUCATION ACT OF 1999

                                 ______
                                 

                  COVERDELL AMENDMENTS NOS. 2838-2840

  (Ordered to lie on the table.)
  Mr. COVERDELL submitted three amendments intended to be proposed by 
him to the bill, S. 1134, supra; as follows:

                           Amendment No. 2838

       At the appropriate place, insert the following:

               TITLE __--STUDENT SAFETY AND FAMILY CHOICE

     SEC. __. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.

       (a) In General.--Subpart 1 of part A of title I of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) is amended by inserting after section 1115A of 
     such Act (20 U.S.C. 6316) the following:

     ``SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.

       ``(a) In General.--Notwithstanding any other provision of 
     law, if a student is eligible to be served under section 
     1115(b), or attends a school eligible for a schoolwide 
     program under section 1114, and becomes a victim of a violent 
     criminal offense, including drug-related violence, while in 
     or on the grounds of a public elementary school or secondary 
     school that the student attends and that receives assistance 
     under this part, then the local educational agency may use 
     funds provided under this part or under any other Federal 
     education program to pay the supplementary costs for such 
     student to attend another school. The agency may use the 
     funds to pay for the supplementary costs of such student to 
     attend any other public or private elementary school or 
     secondary school, including a religious school, in the same 
     State as the school where the criminal offense occurred, that 
     is selected by the student's parent. The State educational 
     agency shall determine what actions constitute a violent 
     criminal offense for purposes of this section.
       ``(b) Supplementary Costs.--The supplementary costs 
     referred to in subsection (a) shall not exceed--
       ``(1) in the case of a student for whom funds under this 
     section are used to enable the student to attend a public 
     elementary school or secondary school served by a local 
     educational agency that also serves the school where the 
     violent criminal offense occurred, the costs of supplementary 
     educational services and activities described in section 
     1114(b) or 1115(c) that are provided to the student;
       ``(2) in the case of a student for whom funds under this 
     section are used to enable the student to attend a public 
     elementary school or secondary school served by a local 
     educational agency that does not serve the school where the 
     violent criminal offense occurred but is located in the same 
     State--
       ``(A) the costs of supplementary educational services and 
     activities described in section 1114(b) or 1115(c) that are 
     provided to the student; and
       ``(B) the reasonable costs of transportation for the 
     student to attend the school selected by the student's 
     parent; and
       ``(3) in the case of a student for whom funds under this 
     section are used to enable the student to attend a private 
     elementary school or secondary school, including a religious 
     school, the costs of tuition, required fees, and the 
     reasonable costs of such transportation.
       ``(c) Construction.--Nothing in this Act or any other 
     Federal law shall be construed to prevent a parent assisted 
     under this section from selecting the public or private, 
     including religious, elementary school or secondary school 
     that a child of the parent will attend within the State.
       ``(d) Consideration of Assistance.--Subject to subsection 
     (h), assistance made available under this section that is 
     used to pay the costs for a student to attend a private or 
     religious school shall not be considered to be Federal aid to 
     the school, and the Federal Government shall have no 
     authority to influence or regulate the operations of a 
     private or religious school as a result of assistance 
     received under this section.
       ``(e) Continuing Eligibility.--A student assisted under 
     this section shall remain eligible to continue receiving 
     assistance under this section for at least 3 academic years 
     without regard to whether the student is eligible for 
     assistance under section 1114 or 1115(b).
       ``(f) Tuition Charges.--Assistance under this section may 
     not be used to pay tuition or required fees at a private 
     elementary school or secondary school in an amount that is 
     greater than the tuition and required fees paid by students 
     not assisted under this section at such school.
       ``(g) Special Rule.--Any school receiving assistance 
     provided under this section shall comply with title VI of the 
     Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) and not 
     discriminate on the basis of race, color, or national origin.
       ``(h) Assistance; Taxes and Other Federal Programs.--
       ``(1) Assistance to families, not schools.--Assistance 
     provided under this section shall be considered to be aid to 
     families, not schools. Use of such assistance at a school 
     shall not be construed to be Federal financial aid or 
     assistance to that school.
       ``(2) Taxes and determinations of eligibility for other 
     federal programs.--Assistance provided under this section to 
     a student shall not be considered to be income of the student 
     or the parent of such student for Federal, State, or local 
     tax purposes or for determining eligibility for any other 
     Federal program.
       ``(i) Part B of the Individuals With Disabilities Education 
     Act.--Nothing in this section shall be construed to affect 
     the requirements of part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.).
       ``(j) Maximum Amount.--Notwithstanding any other provision 
     of this section, the amount of assistance provided under this 
     part for a student shall not exceed the per pupil expenditure 
     for elementary or secondary education, as appropriate, by the 
     local educational agency that serves the school where the 
     criminal offense occurred for the fiscal year preceding the 
     fiscal year for which the determination is made.''.

     SEC. __. TRANSFER OF REVENUES.

       (a) In General.--Notwithstanding any other provision of 
     Federal law, a State, a State educational agency, or a local 
     educational agency may transfer any non-Federal public funds 
     associated with the education of a student who is a victim of 
     a violent criminal offense while in or on the grounds of a 
     public elementary school or secondary school served by a 
     local educational agency to another local educational agency 
     or to a private elementary school or secondary school, 
     including a religious school.
       (b) Definitions.--For the purpose of subsection (a), the 
     terms ``elementary school'', ``secondary school'', ``local 
     educational agency'', and ``State educational agency'' have 
     the meanings given such terms in section 14101 of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801).
                                 ______
                                 

                           Amendment No. 2837

  At the appropriate place, add the following:

                 TITLE __--TEACHER LIABILITY PROTECTION

     SECTION __. SHORT TITLE.

       This Act may be cited as the ``Teacher Liability Protection 
     Act of 1999''.

     SEC. __. FINDINGS AND PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) The ability of teachers, principals and other school 
     professionals to teach, inspire and shape the intellect of 
     our Nation's elementary and secondary school students is 
     deterred and hindered by frivolous lawsuits and litigation.
       (2) Each year more and more teachers, principals and other 
     school professionals face lawsuits for actions undertaken as 
     part of their duties to provide millions of school children 
     quality educational opportunities.
       (3) Too many teachers, principals and other school 
     professionals face increasingly severe and random acts of 
     violence in the classroom and in schools.
       (4) Providing teachers, principals and other school 
     professionals a safe and secure environment is an important 
     part of the effort to improve and expand educational 
     opportunities.
       (5) Clarifying and limiting the liability of teachers, 
     principals and other school professionals who undertake 
     reasonable actions to maintain order, discipline and an 
     appropriate educational environment is an appropriate subject 
     of Federal legislation because--
       (A) the national scope of the problems created by the 
     legitimate fears of teachers, principals and other school 
     professionals about frivolous, arbitrary or capricious 
     lawsuits against teachers; and
       (B) millions of children and their families across the 
     Nation depend on teachers, principals and other school 
     professionals for the intellectual development of the 
     children.
       (b) Purpose.--The purpose of this Act is to provide 
     teachers, principals and other school professionals the tools 
     they need to undertake reasonable actions to maintain order, 
     discipline and an appropriate educational environment.

     SEC. __. PREEMPTION AND ELECTION OF STATE NONAPPLICABILITY.

       (a) Preemption.--This Act preempts the laws of any State to 
     the extent that such laws are inconsistent with this Act, 
     except that this Act shall not preempt any State law that 
     provides additional protection from liability relating to 
     teachers.
       (b) Election of State Regarding Nonapplicability.--This Act 
     shall not apply to any civil action in a State court against 
     a teacher in which all parties are citizens of the State if 
     such State enacts a statute in accordance with State 
     requirements for enacting legislation--

[[Page 1604]]

       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this Act 
     shall not apply, as of a date certain, to such civil action 
     in the State; and
       (3) containing no other provisions.

      SEC. __. LIMITATION ON LIABILITY FOR TEACHERS.

       (a) Liability Protection for Teachers.--Except as provided 
     in subsections (b) and (c), no teacher in a school shall be 
     liable for harm caused by an act or omission of the teacher 
     on behalf of the school if--
       (1) the teacher was acting within the scope of the 
     teacher's employment or responsibilities related to providing 
     educational services;
       (2) the actions of the teacher were carried out in 
     conformity with local, State, or Federal laws, rules or 
     regulations in furtherance of efforts to control, discipline, 
     expel, or suspend a student or maintain order or control in 
     the classroom or school;
       (3) if appropriate or required, the teacher was properly 
     licensed, certified, or authorized by the appropriate 
     authorities for the activities or practice in the State in 
     which the harm occurred, where the activities were or 
     practice was undertaken within the scope of the teacher's 
     responsibilities;
       (4) the harm was not caused by willful or criminal 
     misconduct, gross negligence, reckless misconduct, or a 
     conscious, flagrant indifference to the rights or safety of 
     the individual harmed by the teacher; and
       (5) the harm was not caused by the teacher operating a 
     motor vehicle, vessel, aircraft, or other vehicle for which 
     the State requires the operator or the owner of the vehicle, 
     craft, or vessel to--
       (A) possess an operator's license; or
       (B) maintain insurance.
       (b) Concerning Responsibility of Teachers to Schools and 
     Governmental Entities.--Nothing in this section shall be 
     construed to affect any civil action brought by any school or 
     any governmental entity against any teacher of such school.
       (c) Exceptions to Teacher Liability Protection.--If the 
     laws of a State limit teacher liability subject to one or 
     more of the following conditions, such conditions shall not 
     be construed as inconsistent with this section:
       (1) A State law that requires a school or governmental 
     entity to adhere to risk management procedures, including 
     mandatory training of teachers.
       (2) A State law that makes the school or governmental 
     entity liable for the acts or omissions of its teachers to 
     the same extent as an employer is liable for the acts or 
     omissions of its employees.
       (3) A State law that makes a limitation of liability 
     inapplicable if the civil action was brought by an officer of 
     a State or local government pursuant to State or local law.
       (d) Limitation on Punitive Damages Based on the Actions of 
     Teachers.--
       (1) General rule.--Punitive damages may not be awarded 
     against a teacher in an action brought for harm based on the 
     action of a teacher acting within the scope of the teacher's 
     responsibilities to a school or governmental entity unless 
     the claimant establishes by clear and convincing evidence 
     that the harm was proximately caused by an action of such 
     teacher which constitutes willful or criminal misconduct, or 
     a conscious, flagrant indifference to the rights or safety of 
     the individual harmed.
       (2) Construction.--Paragraph (1) does not create a cause of 
     action for punitive damages and does not preempt or supersede 
     any Federal or State law to the extent that such law would 
     further limit the award of punitive damages.
       (e) Exceptions to Limitations on Liability.--
       (1) In general.--The limitations on the liability of a 
     teacher under this Act shall not apply to any misconduct 
     that--
       (A) constitutes a crime of violence (as that term is 
     defined in section 16 of title 18, United States Code) or act 
     of international terrorism (as that term is defined in 
     section 2331 of title 18, United States Code) for which the 
     defendant has been convicted in any court;
       (B) involves a sexual offense, as defined by applicable 
     State law, for which the defendant has been convicted in any 
     court;
       (C) involves misconduct for which the defendant has been 
     found to have violated a Federal or State civil rights law; 
     or
       (D) where the defendant was under the influence (as 
     determined pursuant to applicable State law) of intoxicating 
     alcohol or any drug at the time of the misconduct.
       (2) Rule of construction.--Nothing in this subsection shall 
     be construed to affect subsection (a)(3) or (d).

     SEC. __. LIABILITY FOR NONECONOMIC LOSS.

       (a) General Rule.--In any civil action against a teacher, 
     based on an action of a teacher acting within the scope of 
     the teacher's responsibilities to a school or governmental 
     entity, the liability of the teacher for noneconomic loss 
     shall be determined in accordance with subsection (b).
       (b) Amount of Liability.--
       (1) In general.--Each defendant who is a teacher, shall be 
     liable only for the amount of noneconomic loss allocated to 
     that defendant in direct proportion to the percentage of 
     responsibility of that defendant (determined in accordance 
     with paragraph (2)) for the harm to the claimant with respect 
     to which that defendant is liable. The court shall render a 
     separate judgment against each defendant in an amount 
     determined pursuant to the preceding sentence.
       (2) Percentage of responsibility.--For purposes of 
     determining the amount of noneconomic loss allocated to a 
     defendant who is a teacher under this section, the trier of 
     fact shall determine the percentage of responsibility of that 
     defendant for the claimant's harm.

     SEC. __. DEFINITIONS.

       For purposes of this Act:
       (1) Economic loss.--The term ``economic loss'' means any 
     pecuniary loss resulting from harm (including the loss of 
     earnings or other benefits related to employment, medical 
     expense loss, replacement services loss, loss due to death, 
     burial costs, and loss of business or employment 
     opportunities) to the extent recovery for such loss is 
     allowed under applicable State law.
       (2) Harm.--The term ``harm'' includes physical, 
     nonphysical, economic, and noneconomic losses.
       (3) Noneconomic losses.--The term ``noneconomic losses'' 
     means losses for physical and emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), hedonic damages, injury to reputation and 
     all other nonpecuniary losses of any kind or nature.
       (4) School.--The term ``school'' means a public or private 
     kindergarten, a public or private elementary school or 
     secondary school (as defined in section 14101 of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801)), or a home school.
       (5) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, any other territory or possession 
     of the United States, or any political subdivision of any 
     such State, territory, or possession.
       (6) Teacher.--The term ``teacher'' means a teacher, 
     instructor, principal, administrator, or other educational 
     professional, that works in a school.

     SEC. __. EFFECTIVE DATE.

       (a) In General.--This Act shall take effect 90 days after 
     the date of enactment of this Act.
       (b) Application.--This Act applies to any claim for harm 
     caused by an act or omission of a teacher where that claim is 
     filed on or after the effective date of this Act, without 
     regard to whether the harm that is the subject of the claim 
     or the conduct that caused the harm occurred before such 
     effective date.
                                 ______
                                 

                           Amendment No. 2840

       On page 3, strike lines 13 through 16, and insert:
       ``(4) Contribution limit.--The term `contribution limit' 
     means $2,000.''
                                 ______
                                 

                     KYL AMENDMENTS NOS. 2841-2842

  (Ordered to lie on the table.)
  Mr. KYL submitted two amendments intended to be proposed by him to 
the bill, S. 1134, supra; as follows:

                           Amendment No. 2841

       At the end of title II, insert:

     SEC. __. ELECTION OF CREDIT OR ABOVE-THE-LINE DEDUCTION TO 
                   ELEMENTARY AND SECONDARY SCHOOL TEACHERS WHO 
                   PROVIDE CLASSROOM MATERIALS.

       (a) Credit Allowed.--
       (1) In general.--Subpart B of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

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

       ``(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 such 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 $100.
       ``(c) Definitions.--
       ``(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 an elementary or secondary school on a full-time basis for 
     an academic year ending during a taxable 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 teacher in the 
     classroom.
       ``(3) Elementary or secondary school.--The term `elementary 
     or secondary school' means any school which provides 
     elementary

[[Page 1605]]

     education or secondary education (through grade 12), as 
     determined under State law.
       ``(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.''.
       (2) Clerical amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 is amended by 
     adding at the end the following new item:

``Sec. 30B. Credit to elementary and secondary school teachers who 
              provide classroom materials.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2000.
       (b) Above-the Line Deduction Allowed.--
       (1) In general.--Subsection (a)(2) of section 62 (defining 
     adjusted gross income) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Certain elementary and secondary education 
     expenses.--The deductions allowed by section 162 which 
     consist of qualified elementary and secondary education 
     expenses paid or incurred by an eligible teacher.''.
       (2) Definitions.--Section 62 is amended by adding at the 
     end the following new subsection:
       ``(d) Qualified Elementary and Secondary Education Expenses 
     of Eligible Teachers.--For purposes of subsection (a)(2)(D)--
       ``(1) In general.--The terms `eligible teacher' and 
     `qualified elementary and secondary education expenses' have 
     the meanings given such terms by section 30B(c).
       ``(2) Coordination with credit.--An individual shall not be 
     treated as an eligible teacher for any taxable year, unless 
     the taxpayer elects not to have section 30B apply for the 
     taxable year.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2000.
                                 ______
                                 

                           Amendment No. 2842

       At the end of title II, insert:

     SEC. __. 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 is amended by adding at the end the following new 
     section:

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

       ``(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 such taxable year an amount equal 
     to the sum of 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 $100.
       ``(c) Definitions.--
       ``(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 an elementary or secondary school on a full-time basis for 
     an academic year ending during a taxable year.
       ``(2) Qualified elementary and secondary education 
     expenses.--The term `qualified elementary and secondary 
     education expenses' means amounts paid 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.
       ``(3) Elementary or secondary school.--The term `elementary 
     or secondary school' means any school which provides 
     elementary education or secondary education (through grade 
     12), as determined under State law.
       ``(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 is amended by 
     adding at the end the following new item:

``Sec. 30B. 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, 
     2000.
                                 ______
                                 

                    GRAHAM AMENDMENTS NOS. 2843-2844

  (Ordered to lie on the table.)
  Mr. GRAHAM submitted two amendments intended to be proposed by him to 
the bill, S. 1134, supra; as follows:

                           Amendment No. 2843

       At the appropriate place, insert:

                  TITLE __--ADDITIONAL REVENUE OFFSETS

     SEC. __. EXTENSION OF HAZARDOUS SUBSTANCE SUPERFUND EXCISE 
                   TAXES.

       (a) In General.--Section 4611(e) is amended to read as 
     follows:
       ``(e) Application of Hazardous Substance Superfund 
     Financing Rate.--The Hazardous Substance Superfund Financing 
     rate under this section shall apply after December 31, 1986, 
     and before January 1, 1996, and after February 29, 2000.''
       (b) Effective Date.--The amendment made by this section 
     shall take effect on March 1, 2000.

     SEC. __. EXTENSION OF CORPORATE ENVIRONMENTAL INCOME TAX.

       (a) In General.--Section 59A(e) is amended to read as 
     follows:
       ``(e) Application of Tax.--The tax imposed by this section 
     shall apply to taxable years beginning after December 31, 
     1986, and before January 1, 1996, and to taxable years 
     beginning after December 31, 1999.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. __. REPEAL OF LOWER-OF-COST-OR-MARKET METHOD OF 
                   ACCOUNTING FOR INVENTORIES.

       (a) In General.--Section 471 (relating to general rule for 
     inventories) is amended by redesignating subsection (b) as 
     subsection (c) and by inserting after subsection (a) the 
     following new subsection:
       ``(b) Certain Write-Downs Not Permitted; Use of Mark-Downs 
     Required Under Retail Method.--
       ``(1) In general.--A taxpayer--
       ``(A) may not use the lower-of-cost-or-market method of 
     accounting for inventories, and
       ``(B) may not write-down items by reason of being unsalable 
     at normal prices or unusable in the normal way because of 
     damage, imperfections, shop wear, changes of style, odd or 
     broken lots, or other similar causes.
     Subparagraph (B) shall not apply to a taxpayer using a mark-
     to-market method of accounting for both gains and losses in 
     inventory values.
       ``(2) Mark-downs required to be taken into account under 
     retail method.--The retail method of accounting for 
     inventories shall be applied by taking into account mark-
     downs in determining the approximate cost of the inventories.
       ``(3) Exception for certain small businesses.--Paragraph 
     (1) shall not apply to any taxpayer for any taxable year if, 
     for all prior taxable years ending on or after the date of 
     the enactment of this subsection, the taxpayer (or any 
     predecessor) met the $5,000,000 gross receipts test of 
     section 448(c).
       ``(4) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out the purposes 
     of this subsection, including regulations relating to wash-
     sale-type transactions.''
       (b) Conforming Amendments.--
       (1) Clause (iii) of section 312(n)(4)(C) is amended to read 
     as follows:
       ``(iii) Inventory amount.--The inventory amount of assets 
     under the first-in, first-out method authorized by section 
     471 shall be determined using the method authorized to be 
     used by the taxpayer under such section.''
       (2) Subparagraph (C) of section 1363(d)(4) is amended to 
     read as follows:
       ``(C) Inventory amount.--The inventory amount of assets 
     under a method authorized by section 471 shall be determined 
     using the method authorized to be used by the corporation 
     under such section.''
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after the date of the 
     enactment of this subsection.
       (2) Change in method of accounting.--In the case of any 
     taxpayer required by this section to change its method of 
     accounting for its first taxable year beginning after the 
     date of the enactment of this subsection--
       (A) such change shall be treated as initiated by the 
     taxpayer,
       (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury, and
       (C) the net amount of the adjustments required to be taken 
     into account by the taxpayer under section 481 of the 
     Internal Revenue Code of 1986 shall be taken into account 
     ratably over the 4-taxable year period beginning with the 
     first taxable year beginning after such date.

[[Page 1606]]



     SEC. __. DISALLOWANCE OF NONECONOMIC TAX ATTRIBUTES.

       (a) In General.--Section 7701 is amended by redesignating 
     subsection (m) as subsection (n) and by inserting after 
     subsection (l) the following new subsection:
       ``(m) Disallowance of Noneconomic Tax Attributes.--
       ``(1) In general.--In determining liability for any tax 
     under subtitle A, noneconomic tax attributes shall not be 
     allowed.
       ``(2) Noneconomic tax attribute.--For purposes of this 
     subsection, a noneconomic tax attribute is any deduction, 
     loss, or credit claimed to result from any transaction 
     unless--
       ``(A) the transaction changes in a meaningful way (apart 
     from Federal income tax consequences) the taxpayer's economic 
     position, and
       ``(B)(i) the present value of the reasonably expected 
     potential income from the transaction (and the taxpayer's 
     risk of loss from the transaction) are substantial in 
     relationship to the present value of the tax benefits 
     claimed, or
       ``(ii) in the case of a transaction which is in substance 
     the borrowing of money or the acquisition of financial 
     capital, the deductions claimed with respect to the 
     transaction for any period are not significantly in excess of 
     the economic return for such period realized by the person 
     lending the money or providing the financial capital.
       ``(3) Presumption of noneconomic tax attributes.--For 
     purposes of paragraph (2), the following factors shall give 
     rise to a presumption that a transaction fails to meet the 
     requirements of paragraph (2):
       ``(A) The fact that the payments, liabilities, or assets 
     that purport to create a loss (or other benefit) for tax 
     purposes are not reflected to any meaningful extent on the 
     taxpayer's books and records for financial reporting 
     purposes.
       ``(B) The fact that the transaction results in an 
     allocation of income or gain to a tax-indifferent party which 
     is substantially in excess of such party's economic income or 
     gain from the transaction.
       ``(4) Treatment of built-in loss.--The determination of 
     whether a transaction results in the realization of a built-
     in loss shall be made under subtitle A as if this subsection 
     had not been enacted. For purposes of the preceding sentence, 
     the term `built-in loss' means any loss or deduction to the 
     extent that such loss or deduction had economically been 
     incurred before such transaction is entered into and to the 
     extent that the loss or deduction was economically borne by 
     the taxpayer.
       ``(5) Definition and special rules.--For purposes of this 
     subsection--
       ``(A) Tax-indifferent party.--The term `tax-indifferent 
     party' means any person or entity exempt from tax under 
     subtitle A. A person shall be treated as a tax-indifferent 
     party with respect to a transaction if, by reason of such 
     person's method of accounting, the items taken into account 
     with respect to the transaction have no substantial impact on 
     such person's liability under subtitle A.
       ``(B) Series of related transaction.--A transaction which 
     is part of a series of related transactions shall be treated 
     as meeting the requirements of paragraph (2) only if--
       ``(i) such transaction meets such requirements without 
     regard to the other transactions, and
       ``(ii) such transactions, if treated as 1 transaction, 
     would meet such requirements.

     A similar rule shall apply to a multiple step transaction 
     with each step being treated as a separate related 
     transaction.
       ``(C) Normal business transactions.--In the case of a 
     transaction which is an integral part of a taxpayer's trade 
     or business and which is entered into in the normal course of 
     such trade or business, the determination of the potential 
     income from such transaction shall be made by taking into 
     account its relationship to the overall trade or business of 
     the taxpayer.
       ``(D) Treatment of fees.--In determining whether there is 
     risk of loss from a transaction (and the amount thereof), 
     potential loss of fees and other transaction expenses shall 
     be disregarded.
       ``(E) Treatment of economic return enhancements.--The 
     following shall be treated as economic returns and not tax 
     benefits:
       ``(i) The credit under section 29 (relating to credit for 
     producing fuel from a nonconventional source).
       ``(ii) The credit under section 42 (relating to low-income 
     housing credit).
       ``(iii) The credit under section 45 (relating to 
     electricity produced from certain renewable resources).
       ``(iv) The credit under section 1397E (relating to credit 
     to holders of qualified zone academy bonds) or any similar 
     program hereafter enacted.
       ``(v) Any other tax benefit specified in regulations.
       ``(F) Exceptions for nonbusiness transactions.--
       ``(i) Individuals.--In the case of an individual, this 
     subsection shall only apply to transactions entered into in 
     connection with a trade or business or activity engaged in 
     for profit.
       ``(ii) Charitable transfers.--This subsection shall not 
     apply in determining the amount allowable as a deduction 
     under section 170, 545(b)(2), 556(b)(2), or 642(c).
       ``(6) Economic substance doctrine, etc., not affected.--The 
     provisions of this subsection shall not be construed as 
     altering or supplanting any rule of law referred to in 
     section 6662(i)(2)(B) and the requirements of this subsection 
     shall be construed as being in addition to any such rule of 
     law.''
       (b) Increase in Substantial Underpayment Penalty With 
     Respect to Disallowed Noneconomic Tax Attributes.--Section 
     6662 (relating to imposition of accuracy-related penalty) is 
     amended by adding at the end the following new subsection:
       ``(i) Increase in Penalty in Case of Disallowed Noneconomic 
     Tax Attributes.--
       ``(1) In general.--In the case of the portion of the 
     underpayment to which this subsection applies--
       ``(A) subsection (a) shall be applied with respect to such 
     portion by substituting `40 percent' for `20 percent', and
       ``(B) subsection (d)(2)(B) and section 6664(c) shall not 
     apply.
       ``(2) Underpayments to which subsection applies.--This 
     subsection shall apply to an underpayment to which this 
     section applies by reason of paragraph (1) or (2) of 
     subsection (b) to the extent that such underpayment is 
     attributable to--
       ``(A) the disallowance of any noneconomic tax attribute 
     (determined under section 7701(m)), or
       ``(B) the disallowance of any other benefit--
       ``(i) because of a lack of economic substance or business 
     purpose for the transaction giving rise to the claimed 
     benefit,
       ``(ii) because the form of the transaction did not reflect 
     its substance, or
       ``(iii) because of any other similar rule of law.
       ``(3) Increase in penalty not to apply if compliance with 
     disclosure requirements.--Paragraph (1)(A) shall not apply if 
     the taxpayer--
       ``(A) discloses to the Secretary within 30 days after the 
     closing of the transaction appropriate documents describing 
     the transaction, and
       ``(B) files with the taxpayer's return of tax imposed by 
     subtitle A--
       ``(i) a statement verifying that such disclosure has been 
     made,
       ``(ii) a detailed description of the facts, assumptions of 
     facts, and factual conclusions with respect to the business 
     or economic purposes or objectives of the transaction that 
     are relied upon to support the manner in which it is reported 
     on the return,
       ``(iii) a description of the due diligence performed to 
     ascertain the accuracy of such facts, assumptions, and 
     factual conclusions,
       ``(iv)(I) a statement (signed by the senior financial 
     officer of the corporation under penalty of perjury) that the 
     facts, assumptions, or factual conclusions relied upon in 
     reporting the transaction are true and correct as of the date 
     the return is filed, to the best of such officer's knowledge 
     and belief, and
       ``(II) if the actual facts varied materially from the 
     facts, assumptions, or factual conclusions relied upon, a 
     statement describing such variances,
       ``(v) copies of any written material provided in connection 
     with the offer of the transaction to the taxpayer by a third 
     party,
       ``(vi) a full description of any express or implied 
     agreement or arrangement with any advisor, or with any 
     offeror, that the fee payable to such person would be 
     contingent or subject to possible reimbursement, and
       ``(vii) a full description of any express or implied 
     warranty from any person with respect to the anticipated tax 
     results from the transaction.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions after the date of the enactment 
     of this Act.
                                 ______
                                 

                           Amendment No. 2844

       Beginning on page 15, line 16, strike all through page 16, 
     line 17, and insert:
       ``(iv) Coordination with hope and lifetime learning 
     credits.--The total amount of qualified higher education 
     expenses otherwise taken into account under clause (i) with 
     respect to an individual for any taxable year shall be 
     reduced (after the application of the reduction provided in 
     section 25A(g)(2)) by the amount of such expenses which were 
     taken into account in determining the credit allowed to the 
     taxpayer or any other person under section 25A with respect 
     to such expenses.
                                 ______
                                 

                  FEINSTEIN AMENDMENTS NOS. 2845-2846

  (Ordered to lie on the table.)
  Mrs. FEINSTEIN submitted two amendments intended to be proposed by 
her to the bill, S. 1134, supra; as follows:

                           Amendment No. 2845

       At the appropriate place, insert the following:

     SEC. __. ACHIEVEMENT STANDARDS AND ASSESSMENT OF STUDENT 
                   PERFORMANCE.

       In order to receive Federal funds under the Elementary and 
     Secondary Education Act of

[[Page 1607]]

     1965 each local educational agency and State educational 
     agency shall--
       (1) require that students served by the agency be subject 
     to State achievement standards in the core curriculum at key 
     transition points, to be determined by the State, for all 
     kindergarten through grade 12 students; and
       (2) assess student performance in meeting the State 
     achievement standards.
                                 ______
                                 

                           Amendment No. 2846

       At the appropriate place, insert the following:

     SEC. __. POLICY PROHIBITING SOCIAL PROMOTION.

       (a) Policy.--No education funds appropriated under the 
     Elementary and Secondary Education Act of 1965 shall be made 
     available to a local educational agency in a State unless the 
     State demonstrates to the Secretary of Education that the 
     State has adopted a policy prohibiting the practice of social 
     promotion.
       (b) Definition.--In this section, the term ``practice of 
     social promotion'' means a formal or informal practice of 
     promoting a student from the grade for which the 
     determination is made to the next grade when the student 
     fails to achieve a minimum level of achievement and 
     proficiency in the core curriculum for the grade for which 
     the determination is made.
       (c) Waiver Prohibited.--Notwithstanding any other provision 
     of law, the Secretary of Education may not waive the 
     provisions of this section.
                                 ______
                                 

                    GRAHAM AMENDMENT NOS. 2847-2848

  (Ordered to lie on the table.)
  Mr. GRAHAM submitted two amendments intended to be proposed by him to 
the bill, S. 1134, supra; as follows:

                           Amendment No. 2847

       At the appropriate place, insert the following:

     SECTION 1. SHORT TITLE.

       This Act 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 Act 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--
       (1) continuing and enhancing the Troops to Teachers model 
     for recruiting and supporting the placement of such teachers; 
     and
       (2) 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.--Subject to subsection (b), the Secretary is 
     authorized to use funds appropriated under subsection (c) 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 Act.
       (b) Troops to Teachers.--
       (1) In general.--Before making awards under subsection (a) 
     for any fiscal year, the Secretary shall first--
       (A) consult with the Secretary of Defense and the Secretary 
     of Transportation regarding the appropriate amount of funding 
     needed to continue and enhance the Troops to Teachers 
     program; and
       (B) upon agreement, transfer that amount to the Defense 
     Activity for Non-Traditional Education Support (DANTES) to 
     carry out the Troops to Teachers program.
       (2) Continuation of program.--The Secretary may enter into 
     a written agreement with the Departments of Defense and 
     Transportation, or take such other steps as the Secretary 
     determines are appropriate to ensure effective continuation 
     of the Troops to Teachers program.
       (c) Authorization of Appropriations.--For the purpose of 
     carrying out this Act, there are authorized to be 
     appropriated $18,000,000 for each of fiscal years 2000 
     through 2005.

     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 Act, 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 Act;
       (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 Act, 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 Act.

     SEC. 6. USES OF FUNDS AND PERIOD OF SERVICE.

       (a) Authorized Activities.--Funds under this Act 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 Act 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 Act that support programs in different geographic 
     regions of the Nation.

     SEC. 8. DEFINITIONS.

       In this Act:
       (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

[[Page 1608]]

       (C) have knowledge and experience that are relevant to 
     teaching a high-need subject area in a high-need local 
     educational agency.
                                 ______
                                 

                           Amendment No. 2848

       At the end of title III, add:

     SEC. __. SPENDING REQUIREMENT FOR PUBLIC SCHOOL CONSTRUCTION 
                   ISSUE.

       (a) In General.--Paragraph (4)(C) of section 148(f) 
     (relating to required rebate to the United States) is amended 
     by adding at the end the following new clause:
       ``(xviii) 4-year spending requirement for public school 
     construction issue.--

       ``(I) In general.--In the case of a public school 
     construction issue, the spending requirements of clause (ii) 
     shall be treated as met if at least 10 percent of the 
     available construction proceeds of the construction issue are 
     spent for the governmental purposes of the issue within the 
     1-year period beginning on the date the bonds are issued, 30 
     percent of such proceeds are spent for such purposes within 
     the 2-year period beginning on such date, 50 percent of such 
     proceeds are spent for such purposes within the 3-year period 
     beginning on such date, and 100 percent of such proceeds are 
     spent for such purposes within the 4-year period beginning on 
     such date.
       ``(II) Public school construction issue.--For purposes of 
     this clause, the term `public school construction issue' 
     means any construction issue if no bond which is part of such 
     issue is a private activity bond and all of the available 
     construction proceeds of such issue are to be used for the 
     construction (as defined in clause (iv)) of public school 
     facilities to provide education or training below the 
     postsecondary level or for the acquisition of land that is 
     functionally related and subordinate to such facilities.
       ``(III) Other rules to apply.--Rules similar to the rules 
     of the preceding provisions of this subparagraph which apply 
     to clause (ii) shall apply to this clause.''

       (b) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after December 31, 1999.

     SEC. __. TREATMENT OF PUBLIC SCHOOL CONSTRUCTION BONDS AS 
                   QUALIFIED TAX-EXEMPT OBLIGATIONS.

       (a) In General.--Clause (i) of subsection (b)(3)(B) of 
     section 265 (relating to expenses and interest relating to 
     tax-exempt income) is amended to read as follows:
       ``(i) In general.--For purposes of subparagraph (A), the 
     term `qualified tax-exempt obligation' means a tax-exempt 
     obligation--

       ``(I) which is issued after August 7, 1986, by a qualified 
     small issuer, is not a private activity bond (as defined in 
     section 141), and is designated by the issuer for purposes of 
     this paragraph, or
       ``(II) which is a public school construction bond (within 
     the meaning of section 148(f)(4)(C)(xviii)) issued by a 
     qualified small education bond issuer (as defined in 
     subparagraph (F)).''

       (b) Definition of Qualified Small Education Bond Issuer.--
     Subsection (b)(3) of section 265 is amended by adding at the 
     end the following new subparagraph:
       ``(F) Qualified small education bond issuer.--For purposes 
     of subparagraph (B)(i)(II), the term `qualified small 
     education bond issuer' means, with respect to bonds issued 
     during any calendar year, any issuer if the reasonably 
     anticipated amount of public school construction bonds which 
     will be issued by such issuer during such calendar year does 
     not exceed $25,000,000.''
       (c) Conforming Amendment.--Section 265(b)(3)(B)(ii) is 
     amended by striking ``(i)(II)'' in the matter preceding 
     subclause (I) and inserting ``(i)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 1999.
                                 ______
                                 

                       KENNEDY AMENDMENT NO. 2849

  (Ordered to lie on the table.)
  Mr. KENNEDY submitted an amendment intended to be proposed by him to 
the bill, S. 1134, supra; as follows:

       Beginning on page 5, line 14, strike all through page 6, 
     line 12, and insert:
       ``(i) expenses for tuition, fees, academic tutoring, 
     special needs services, books, supplies, computer equipment 
     (including related software and services), and other 
     equipment which are incurred in connection with the 
     enrollment or attendance of the designated beneficiary of the 
     trust as an elementary or secondary school student at a 
     public school, and
       ``(ii) expenses for room and board, uniforms, 
     transportation, and supplementary items and services 
     (including extended day programs) which are required or 
     provided by a public school in connection with such 
     enrollment or attendance.
                                 ______
                                 

                        DODD AMENDMENT NO. 2850

  (Ordered to lie on the table.)
  Mr. DODD submitted an amendment intended to be proposed by him to the 
bill, S. 1134, supra; as follows:

       On page 5, line 14, strike ``tuition, fees,''.
                                 ______
                                 

                       KENNEDY AMENDMENT NO. 2851

  (Ordered to lie on the table.)
  Mr. KENNEDY submitted an amendment intended to be proposed by him to 
the bill, S. 134, supra; as follows:

       Beginning on page 4, line 3, strike all through page 8, 
     line 4.
                                 ______
                                 

                        BIDEN AMENDMENT NO. 2852

  (Ordered to lie on the table.)
  Mr. BIDEN submitted an amendment intended to be proposed by him to 
the bill, S. 1134, supra. as follows:

       At the end of title II, add the following:

     SEC. __. MODIFICATION OF LIFETIME LEARNING CREDIT AND 
                   OPTIONAL DEDUCTION FOR TUITION EXPENSES.

       (a) Modification of Lifetime Learning Credit.--
       (1) Increase in percentage.--Section 25A(c)(1) (relating to 
     per taxpayer credit) is amended by striking ``20 percent'' 
     and inserting ``28 percent''.
       (2) Limitation based on modified adjusted gross income.--
       (A) In general.--Section 25A(d)(2) (relating to amount of 
     reduction) is amended to read as follows:
       ``(2) Amount of reduction.--
       ``(A) Hope scholarship.--In the case of the Hope 
     Scholarship credit, the amount determined under this 
     paragraph is the amount which bears the same ratio to the 
     amount which would be so taken into account as--
       ``(i) the excess of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $40,000 ($80,000 in the case of a joint return), 
     bears to

       ``(ii) $10,000 ($20,000 in the case of a joint return).
       ``(B) Lifetime learning.--In the case of the Lifetime 
     Learning credit, the amount determined under subparagraph (A) 
     shall be determined by substituting `$50,000 ($100,000 in the 
     case of a joint return)' for `$40,000 ($80,000 in the case of 
     a joint return)' in clause (i)(II) of such subparagraph.''.
       (B) Conforming amendment.--Section 25A(h)(2)(A) is amended 
     by striking ``the $40,000 and $80,000 amounts'' and inserting 
     ``each dollar amount''.
       (b) Deduction for Qualified Tuition and Related Expenses in 
     Lieu of Lifetime Learning Credit.--
       (1) In general.--Part VII of subchapter B of chapter 1 is 
     amended by redesignating section 222 as section 223 and 
     inserting after section 221 the following new section:

     ``SEC. 222. QUALIFIED TUITION EXPENSES.

       ``(a) Allowance of Deduction.--In the case of an 
     individual, there shall be allowed as a deduction for the 
     taxable year an amount equal to the lesser of--
       ``(1) the qualified tuition and related expenses (within 
     the meaning of section 25A(c)) paid by the taxpayer for the 
     taxable year, or
       ``(2) $10,000 ($5,000 in the case of taxable years 
     beginning in 2001 or 2002).
       ``(b) Special Rules.--
       ``(1) In general.--Rules similar to the rules of section 
     25A(g) shall apply for purposes of this section.
       ``(2) Rules for determining expenses.--Rules similar to the 
     rules of section 25A(c)(2) shall apply for purposes of 
     determining the qualified tuition and related expenses to be 
     taken into account under subsection (a).
       ``(c) Limitation Based on Modified Adjusted Gross Income.--
     The amount which would (but for this subsection) be taken 
     into account under subsection (a) for the taxable year shall 
     be reduced (but not below zero) by the amount determined 
     under section 25A(d)(2)(B) by applying the modified adjusted 
     gross income as defined in section 25A(d)(3) and determined 
     without regard to the deduction under this section.
       ``(d) Coordination With Certain Credits.--No deduction 
     shall be allowed under this section with respect to the 
     qualified tuition and related expenses of any individual 
     unless a taxpayer elects not to have section 25A apply for 
     the taxable year with respect to--
       ``(1) such individual, in the case of the Hope Scholarship 
     credit, and
       ``(2) the taxpayer, in the case of the Lifetime Learning 
     credit.
       ``(e) Coordination with exclusions.--No deduction shall be 
     allowed under this section with respect to an individual for 
     any taxable year if any portion of any distribution during 
     such taxable year from an education individual retirement 
     account is excluded from gross income under section 
     530(d)(2).''.
       (2) Deduction allowed whether or not taxpayer itemizes 
     other deductions.--Section 62(a) (defining adjusted gross 
     income) is amended by inserting after paragraph (17) the 
     following new paragraph:
       ``(18) Qualified tuition and related expenses.--The 
     deduction allowed by section 222.''.
       (3) Conforming amendment.--The table of sections for part 
     VII of subchapter B of chapter 1 is amended by striking the 
     last item and inserting the following new items:

``Sec. 222. Qualified tuition and related expenses.
``Sec. 223. Cross reference.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to expenses paid in taxable years beginning after 
     December 31, 2000.

[[Page 1609]]


                                 ______
                                 

                       GRAHAM AMENDMENT NO. 2853

  (Ordered to lie on the table.)
  Mr. GRAHAM submitted an amendment intended to be proposed by him to 
the bill, S. 1134, supra; 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 $18,000,000 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:
       (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.
                                 ______
                                 

                COLLINS (AND OTHERS) AMENDMENT NO. 2854

  Ms. COLLINS (for herself, Mr. Kyl, and Mr. Coverdell) proposed an 
amendment to the bill, S. 1134, supra; as follows:

       At the end of title II, insert:

     SEC. __. 2-PERCENT FLOOR ON MISCELLANEOUS ITEMIZED DEDUCTIONS 
                   NOT TO APPLY TO QUALIFIED PROFESSIONAL 
                   DEVELOPMENT EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Section 67(b) (defining miscellaneous 
     itemized deductions) is amended by striking ``and'' at the 
     end of paragraph (11), by striking the period at the end of 
     paragraph (12) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(13) any deduction allowable for the qualified 
     professional development expenses paid or incurred by an 
     eligible teacher.''.
       (b) Definitions.--Section 67 (relating to 2-percent floor 
     on miscellaneous itemized deductions) is amended by adding at 
     the end the following new subsection:
       ``(g) Qualified Professional Development Expenses of 
     Eligible Teachers.--For purposes of subsection (b)(13)--
       ``(1) Qualified professional development expenses.--
       ``(A) In general.--The term `qualified professional 
     development expenses' means expenses--
       ``(i) for tuition, fees, books, supplies, equipment, and 
     transportation 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) is--

       ``(I) directly related to the curriculum and academic 
     subjects in which an eligible teacher provides instruction, 
     or
       ``(II) 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,

       ``(ii) may--

       ``(I) provide 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), or

[[Page 1610]]

       ``(II) provide instruction 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 challenging State or local content 
     standards and student performance standards,
       ``(iv) 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 an eligible teacher,
       ``(v) is of sufficient intensity and duration to have a 
     positive and lasting impact on the performance of an eligible 
     teacher in the classroom (which shall not include 1-day or 
     short-term workshops and conferences), except that this 
     clause shall not apply to an activity if such activity is 1 
     component described in a long-term comprehensive professional 
     development plan established by an eligible teacher and the 
     teacher's supervisor based upon an assessment of the needs of 
     the teacher, the students of the teacher, and the local 
     educational agency involved, and
       ``(vi) is part of a program of professional development 
     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.
       ``(2) Eligible teacher.--
       ``(A) In general.--The term `eligible teacher' means an 
     individual who is a kindergarten through grade 12 classroom 
     teacher in an elementary or secondary school.
       ``(B) Elementary or secondary school.--The terms 
     `elementary school' and `secondary school' have the meanings 
     given such terms by section 14101 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 8801), as so in 
     effect.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. __. 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 is amended by adding at the end the following new 
     section:

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

       ``(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 such 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 $100.
       ``(c) Definitions.--
       ``(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 an elementary or secondary school on a full-time basis for 
     an academic year ending during a taxable 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 teacher in the 
     classroom.
       ``(3) Elementary or secondary school.--The term `elementary 
     or secondary school' means any school which provides 
     elementary education or secondary education (through grade 
     12), as determined under State law.
       ``(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 is amended by 
     adding at the end the following new item:

``Sec. 30B. 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, 
     2000.

                          ____________________