[Congressional Record (Bound Edition), Volume 146 (2000), Part 2]
[Senate]
[Pages 1856-1876]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    AFFORDABLE EDUCATION ACT OF 1999

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

       A bill (S. 1134) to amend the Internal Revenue Code of 1986 
     to allow tax-free expenditures from education individual 
     retirement accounts for elementary and secondary school 
     expenses, to increase the maximum annual amount of 
     contributions to such accounts, and for other purposes.

  Pending:

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


                           Amendment No. 2861

  The PRESIDING OFFICER. Under the previous order, there will now be 30 
minutes for debate equally divided on amendment No. 2861.
  The Senator from Virginia.
  Mr. ROBB. Mr. President, I ask unanimous consent that the Senator 
from Iowa be recognized to make a brief statement, and then I will 
continue.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN. Mr. President, I am proud to be a cosponsor of the 
pending amendment with my colleague from Virginia, Senator Robb. 
Senator Robb has been a great advocate for improving education for many 
years.
  The facts about the need for this amendment to help modernize and 
upgrade our nation's public school facilities are well known.
  The average school building is 42 years old. Nearly three-quarters of 
all public schools were built before 1970.
  Fourteen million American children attend classes in schools that are 
unsafe or inadequate and the General Accounting Office estimates it 
will cost $112 billion to upgrade existing public schools to overall 
good condition.
  Forty-six percent of schools lack adequate electrical wiring to 
support the full-scale use of technology.
  Enrollment in elementary and secondary schools is at an all time high 
and will continue to grow over the next 10 years, making it necessary 
for the United States to build an additional 6,000 schools.
  It is a national disgrace that the nicest places that our children 
see are shopping malls, sports arenas and movie theaters and the most 
run down place they see are their public schools. What signal are we 
sending them about the value we place on them, their education and 
future?
  How can we prepare our kids for the 21st century in schools that did 
not make the grade in the 20th century?
  Last year I visited Hiatt Middle School in Des Moines. This school 
opened its doors in 1925 and students spend all but a few hours a week 
in classrooms built during a time when Americans could not imagine the 
technological advances that would occur by the end of the century.
  In 1925, Americans were flocking to movie theaters to see--and hear--
the first talking motion picture--Al Jolson's ``The Jazz Singer.'' The 
students who walked through the doors of the brand new Hiatt school 
that year could not imagine IMAX theaters with surround sound where a 
movie goer actually becomes a part of the film.
  In 1925, consumers were lining up in department stores to buy 
novelties like electric phonographs, dial telephones, and self-winding 
watches. CD's, DVD players, cellular telephones, or palm pilots were 
unthinkable.
  And, the introduction of state-of-the-art technologies like rural 
electrification and crop dusting were revolutionizing the lives of 
families and farmers alike.
  There have been incredible technological and scientific advances in 
the past seven decades. Yet, our schools have not kept pace with the 
times. We continue to educate our children in schools built and 
equipped in bygone eras.
  We must make sure that every child and every school can facilitate 
the technology of the 21st century. However, Iowa State University 
reports that we need at least $4 billion over the next ten years to 
repair and upgrade school buildings in Iowa and make sure they can 
effectively utilize educational technology.
  The amendment we are offering is a comprehensive, two-prong response 
to this critical national problem.
  First, we would authorize $1.3 billion to make grants and loans for 
emergency repairs to public schools.

[[Page 1857]]

  Mr. President, the Iowa Fire Marshall reported a five-fold increase 
in the number of fires in schools over the past decade. During the 
1990's there were 100 fires in Iowa schools. During the previous decade 
there were 20.
  It is clear that public schools have an urgent need to make repairs 
now and these grants and no-interest loans will finance up to 8,300 
repair projects. We will fix the roofs, upgrade the electrical systems, 
and repair the fire code violations.
  The second part of our comprehensive strategy is to provide $25 
billion in tax credits to modernize our nation's schools. These tax 
credits will subsidize the interest on new construction projects that 
will enable school districts to build new schools to replace outdated 
buildings or add more class rooms so they can reduce class size.
  A few weeks ago I visited a school in Des Moines where students 
attend class in closets because there is no room. This is simply 
unacceptable.
  In closing, I would like to share a few words from Tunisia, 
Washington, D.C. fifth grader in Jonathan Kozol's book, ``Savage 
Inequalities.''

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

  Our amendment will make it possible to rebuild her schools. It will 
make it possible to fix the hole in the wall, put doors on the bathroom 
stalls and paint the classrooms. By modernizing and repairing Tunisia's 
schools we will make her feel a little less ashamed of herself and her 
school.
  This is a serious national problem. And it demands a comprehensive 
national response. Our amendment is that response and I urge my 
colleagues to support this important amendment.
  Mr. President, I am proud to be a cosponsor of the pending amendment 
with my colleague from Virginia, Senator Robb. Senator Robb has truly 
been one of the educational leaders over his tenure in the Senate. He 
has shown great leadership especially in this area that is so important 
as we are reducing class sizes around the country. I have visited 
schools in Iowa and other States recently where, because of the 
reduction of class sizes, they are out of room; they need more space. 
And we know the average school building in this country is 42 years 
old; 74 percent of our schools were built before 1970.
  The Robb amendment addresses this very critical need in our country. 
I am proud to be a cosponsor. I congratulate him for his very strong 
leadership in the whole area of education but especially in the area of 
modernizing and rebuilding our schools.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. I thank the Chair.
  I thank my distinguished colleague from Iowa for his statement this 
morning and for his continued leadership in education.
  Mr. President, we are now considering amendment No. 2861. It is an 
amendment I sent to the desk yesterday afternoon but agreed to debate 
this morning.
  I always welcome any opportunity to talk about education, about its 
importance to our society, about ways we can improve our system of 
education, and about how we at the Federal level can be better partners 
with our States, our localities, and our families.
  We met yesterday morning with the Governors of our 50 States. During 
my own term as Governor of Virginia in the early 1980s, we took a great 
deal of pride in being able to pump over $1 billion of new money--over 
and above the baseline projections--into public education. That was 
back when $1 billion was still serious money.
  Education is not the only engine of innovation fueling opportunity 
for economic prosperity; it is one of the most critical tools in 
maintaining a democracy. Thomas Jefferson said that ``an enlightened 
citizenry is indispensable to the proper functioning of a Republic.'' 
So when we have an opportunity to talk in this Chamber about education, 
we are really talking about our future as well as our past.
  To my dismay, the opportunity we have today to engage in really 
productive and constructive debate about education is really a mirage. 
We have traveled this road before. We have debated this same bill and 
others similar to it, and the President has exercised his veto power 
and has promised to veto this bill again if it arrives in its current 
condition.
  The Affordable Education Act, while it contains many admirable 
provisions that would primarily enhance the affordability of higher 
education, also contains a poison pill, one that many of us are simply 
unable to swallow. This bill, in essence, would allow the diversion of 
public moneys to private elementary and secondary schools. As stewards 
of public taxpayer dollars, any policy that diverts public money away 
from public schools, it seems to me, is both unwise and inequitable.
  We have heard many times the figures about education savings 
accounts. The average tax benefit to parents whose children attend 
private schools would be $37 a year while the benefit to families whose 
children attend public schools would be just $7 a year. Yet we know 
that 90 percent of our schoolchildren attend public schools. We also 
know our classrooms are overcrowded and many are dilapidated to the 
point of being unsafe. We know we face a very real and imminent teacher 
shortage over the next 10 years. We know we need to continue our 
efforts to help States finish the business we started with Goals 2000. 
We need to help States align their new standards and assessments with 
their curricula. We know we need to encourage more professional 
development for teachers and administrators. I believe we need to give 
even greater flexibility to States and localities in the use of Federal 
dollars in exchange for improved academic performance. We need to do 
all of these things and more.
  I wish to talk about one specific area that demands our immediate 
attention. As a member of the Finance Committee, I have frequently 
mentioned the need to build and modernize our Nation's schools. In 
fact, I introduced school modernization legislation last July. It has 
21 cosponsors and has been endorsed by over 50 organizations, from 
education groups to professional organizations to the National 
Conference of Mayors.
  Without good, safe, and modern facilities, the rest of the education 
debate becomes practically moot. When a roof collapses, teachers and 
administrators really care most about fixing the roof and reopening the 
school. When fuses blow because of poor electrical wiring, 
administrators know they can't buy more computers before first rewiring 
the schools. Trailers may be a cheaper temporary fix to the problem of 
overcrowded classrooms, but even the most modern trailers are not 
adequate to accommodate 21st century learning.
  One of the largest investments Congress ever made in our national 
infrastructure occurred under the leadership of a Republican President, 
Dwight Eisenhower. In the 1950s, we spent roughly $1 billion to build 
and renovate our Nation's schools. That was a time when $1 billion 
really meant something. My friends in Fairfax County tell me it now 
costs them over $25 million to build just one high school. My friends 
in Loudoun County need 22 more new schools in the next 5 to 6 years 
because of skyrocketing enrollments.
  There are a lot of problems we face in the education arena, but we 
simply can't ignore the massive infrastructure problem we have anymore. 
Everyone, from civil engineers to architects to construction firms to 
the education community, recognizes that we have to help and we have to 
help now. All of our talk about reducing class size and improving 
technology education and investing in school safety really puts the 
cart before the horse when there are no new classrooms for the newly 
hired teachers, no electrical upgrades to handle the new computers, no 
new roofs to ensure the safety of our children.
  Instead of talking about legislation which clearly is destined for 
defeat or

[[Page 1858]]

veto, we could be talking about reauthorizing the Elementary and 
Secondary Education Act. Instead of talking about giving greater tax 
benefits to 10 percent of American families, we could be talking about 
how to better serve the 90 percent of American families who want the 
best education system that all levels of government can provide. 
Instead of talking about pouring money into private schools, I would 
rather be talking about pouring foundations for public schools.
  So I offer an amendment with Senator Harkin, Senator Conrad, Senator 
Lautenberg, and Senator Bingaman that would authorize $25 billion in 
tax credit bonds for school modernization and renovation. The amendment 
would also authorize up to $1.3 billion a year for the next 5 years in 
grants and zero-interest loans to needy school districts so they could 
make urgent repairs such as those required to remedy fire code 
violations and other urgently needed safety repairs.
  This amendment still helps families save money for college. It still 
increases the annual limit for education savings accounts to $2,000. It 
also helps our States and localities meet a massive infrastructure 
need.
  In 1995, the GAO estimated we had $112 billion in repair needs and 
$73 billion in new construction needs. In a study just released by the 
National Education Association, the total unmet school infrastructure 
needs across the country now total $307 billion. These numbers were 
gathered from the individual State departments of education across the 
country. These are the dollars our States admit they can't come up with 
despite their surpluses. Even if every State used all of their 
available surpluses, that amount would still only meet 7.1 percent of 
the school construction needs that exist now nationwide.
  I don't think this Congress has taken seriously the enormity of this 
particular problem. We can't just sit by and do nothing. Without the 
pending amendment, the school construction assistance provided in this 
bill is negligible. Our amendment would help build 6,000 schools and 
help make urgent repairs to some 25,000 schools. The underlying bill we 
are considering today will only build or renovate 200 schools. That is 
a stark contrast.
  With over 12 million children attending schools with leaky roofs, our 
students deserve better. With over 3,000 trailers being used in my 
State of Virginia alone, our students deserve better. In Alabama, it is 
reported that the roof of an elementary school collapsed just after the 
children had left for the day. In Chicago, teachers place cheesecloth 
over air vents to keep lead-based paint flecks from getting into their 
classrooms. In Maine, some teachers are forced to turn out the lights 
when it rains because their wiring is exposed under leaking roofs. The 
list goes on and on.
  Helping States and localities build schools doesn't interfere with 
local school control. We know the overwhelming majority of school 
districts face this particular infrastructure crisis. I simply do not 
accept the argument that the Federal Government cannot and should not 
play a role in this crisis. The needs are simply too great. If we can 
help States and localities build roads, we can certainly help them 
build schools. Both are critical to our sustained economic success.
  We should expect great things from our Nation's schools and our 
Nation's students. They should expect real debate and results from 
Congress. But by choosing to rehash the same old debate about helping 
wealthy families pay for private school, we send a message to America 
that this Congress is more interested in sound bites than in solutions.
  The American people, and many Members here, are thirsty for solution-
oriented dialog. If this bill is passed without addressing some of the 
most urgent needs, we are not meeting our obligations and we are 
missing a very real opportunity to make a difference.
  I reserve the remainder of my time and yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I'd like to focus on the issue of school 
construction. All of us, Democrats and Republicans, recognize the need 
for well constructed and well-maintained school facilities. Nobody 
wants an inadequate learning environment for our children.
  Senator Robb has offered an amendment on school construction. His 
amendment, as I understand it, basically contains the administration's 
school construction package. I opposed this package last year, and I 
continue to do so today.
  Before I even talk about Senator Robb's amendment, I want to make a 
point that is often lost in this discussion. The Federal Government 
already provides a significant subsidy for school construction. Under 
current law, states and localities can issue debt that is exempt from 
federal taxation. This benefit allows them to finance school 
construction by issuing long-term bonds at a much lower cost than they 
otherwise could. The interest subsidy saves school districts money and 
allows them to stretch their resources to meet their needs.
  Now let me comment on the substance of Senator Robb's amendment. 
Among other things, it creates a new type of bond--called a ``qualified 
school modernization bond'' and authorizes the issuance of up to $23.6 
billion of these bonds. Unlike regular tax-exempt bonds, for which the 
holder receives tax-exempt interest payments, holders of these new 
qualified school modernization bonds would receive a federal tax 
credit, in an amount to be set by the Treasury Department.
  This program involves a dramatic increase in federal bureaucracy, 
while at the same time striking at the heart of local control of 
education--which is the hallmark of our nationwide educational system.
  In order to qualify for these bonds, a state or local school district 
would need to secure the approval of the Department of Education. In 
giving its OK, the Department of Education is supposed to consider 
whether a comprehensive survey of the district's renovation and 
construction needs had been completed, and how the state or locality 
would respond to the construction needs. In other words, federal 
officials in Washington would be micromanaging a local school 
district's renovation plans--in effect, second guessing the decision of 
state and local officials.
  It just does not make sense for the Department of Education to get 
involved at this level. President Clinton himself stated in 1994 that 
``the construction and renovation of school facilities has 
traditionally been the responsibility of state and local governments 
financed primarily by local taxpayers.'' In that respect at least, I 
agree with the President.
  While I am on the subject of local control, I want to point out that 
state and local governments have, in fact, responded to the need for 
school construction and renovation. On March 3, 1999, the Finance 
Committee had a hearing where we evaluated the appropriate federal role 
in school construction. At that time, Dr. Dennis Zimmerman of the 
Congressional Research Service explained that since the early 1990's, 
the approval rates for school bond issues and for total school 
construction dollars has increased substantially. From 1991 until 1998, 
the approval rate for new issues went from less than 50 percent to 
almost 67 percent. During those same years, the approval rates for new 
construction dollars went from about 48 percent to over 82 percent.
  Additionally, the inflation adjusted annual growth rate of school 
bond volume--measured in dollars--during the last 20 years is 7.7 
percent. This compares to an annual school age population growth rate 
of only 0.2 percent and an annual increase of 4.1 percent in state/
local receipts. With respect to bond volume, in the first 6 months of 
1996, voters approved $13.3 billion in school bonds, an increase of 
more than $4 billion over the first 6 months of 1995.
  The bottom line is that many states and localities are doing their 
homework, passing bonds, building and renovating schools, and enjoying 
favorable treatment under the existing Tax Code. They are stepping up 
and meeting the

[[Page 1859]]

challenge--and they are doing so without a massive intrusion by the 
Federal Government. One of the witnesses at our hearing, Bill Manning, 
the president of a large school district in my little State of 
Delaware, told us that if we really wanted to improve education at the 
local level, we should diminish the federal role, rather than increase 
it.
  The package of school construction measures in the Finance Committee 
bill would retain state and local control, and would also work within 
the existing tax-exempt bond framework. The latter point is important 
because our purpose here is to provide state and local governments with 
incentives that they can use, and not concepts that are untested and 
uncertain.
  For instance, 2 years ago, Congress enacted a tax credit bond program 
for school construction. Called qualified zone academy bonds 
(``QZABs''), the law provided for an authorization of $400 million in 
1998 and $400 million in 1999. According to the Bond Market 
Association, however, few QZAB transactions have taken place.
  Mr. President, in the extenders tax legislation last fall, we did 
extend the QZAB program through 2001. One of the reasons for this 
extension was to evaluate how this pilot program is performing. My 
point here is simply that setting up a big program with a high 
authorization does not always translate into a successful policy 
result. We need to look at how the program will play out in the real 
world--whether the rhetoric will translate into results. We need to 
look at how the program will play out in the real world.
  The proposals in the Finance Committee bill provide local school 
districts with the flexibility they need to address the needs of their 
constituents. On this point, does anyone really believe Washington, DC, 
bureaucrats really understand local school construction needs better 
than the local school board?
  How do we accomplish the objective of enhancing the financing of 
school construction activities, while maintaining local control, in 
this bill?
  The answer is several important school construction measures.
  The first proposal is directed at innovative financing for school 
districts. It expands the tax exempt bond rules for public/private 
partnerships set up for the construction, renovation, or restoration of 
public school facilities in these districts. In general, it allows 
states to issue tax-exempt bonds equal to $10 per state resident. Each 
state would receive a minimum allocation of at least $5 million of 
these tax-exempt bonds. In total, up to 600 million per year in new tax 
exempt bonds would be issued for these innovative school construction 
projects.
  This proposal is important because it retains state and local 
flexibility. It does not impose a new bureaucracy on the states and it 
does not force the Federal Government to micromanage school 
construction.
  The proposal also is important because it promotes the use of public/
private partnerships. Many high-growth school districts may be too poor 
or too overwhelmed to take on a school construction project themselves. 
With these bonds, those districts can partner with a private entity--
and still enjoy the benefits of tax-exempt financing.
  Mr. President, there is a second bond provision in this bill. That 
provision is designated to simplify the issuance of bonds for school 
construction. Under current law, arbitrage profits earned on investment 
unrelated to the purpose of the borrowing must be rebated to the 
Federal Government. However, there is an exception--generally referred 
to as the small issuer exception--which allows governments to issue to 
$5 million of bonds without being subject to the arbitrage rebate 
requirement. We recently increased this limit to $10 million for 
government that issue at least $5 million of public school bonds during 
the year.
  The provision in the Finance Committee bill increase the smaller 
issuer exemption to $15 million, provided that at least $10 million of 
the bonds are issued to finance public schools. This measure will 
assist localities in meeting school construction needs by simplifying 
their use of tax-exempt financing. At the same time, it will not create 
incentives to issue such debt earlier or in larger amounts than is 
necessary. It is a type of targeted provision that makes sense.
  Mr. President, I also want to make sure that my colleagues realize 
that the Robb Amendment strikes the language in the bill relating to K-
12 withdrawals from education savings accounts. This flexibility--the 
ability to use a family's savings for any of the family's education 
expenses--is a central component of this bill. Removing it sends the 
wrong message to American families and does nothing to help them meet 
the increasing need of education.
  For these reasons, I oppose this amendment and urge my colleagues to 
do so as well.
  Mr. President, I ask unanimous consent that the statement of Dr. 
Dennis Zimmerman of the Congressional Research Service and Mr. William 
Manning of the Red Clay Consolidated School District Board of Education 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               Prepared Statement of Dr. Dennis Zimmerman

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


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

       Attention recently has focused on the deficiencies of 
     public elementary and secondary school capital facilities. 
     Studies have suggested that as much as $112 billion of 
     investment may be necessary to restore school facilities to 
     good overall condition, and that the resources of many local 
     school districts are inadequate to rectify the situation.(3)
       It is useful to evaluate this information in an economic 
     context. The gap between ``good overall condition'' of school 
     facilities and their current condition is a serious problem 
     not to be minimized that undoubtedly has an adverse impact on 
     human capital formation. But budget constraints are a fact of 
     life: our desire for both private and public spending 
     (consumption) exceeds our ability to pay for it. It is likely 
     that a similar study assessing the condition of state-local 
     capital facilities for any function--roads, sewage treatment

[[Page 1860]]

     plants, prisons--would reach a similar conclusion.(4) A gap 
     exists between the ``good overall condition'' of the capital 
     stock we desire and the less-than-good overall condition we 
     choose to live with.
       When making budget allocation decisions, state-local 
     decision makers decide where to spend additional tax revenue 
     based in part upon their assessment of which activity will 
     provide the highest return or value. It is a given that 
     positive returns will result from additional investment in 
     almost any activity funded by state-local budgets. But a ten 
     percent return in education facilities will not be funded if 
     decision makers judge a twelve percent return is available in 
     sewage treatment facilities. In other words, one must 
     consider the possibility that state-local decision makers 
     made their spending decisions with complete information; that 
     they chose the existing less-than-good condition of education 
     facilities because they place a higher value on spending the 
     available tax revenue for private consumption or other state-
     local services.
       For the Nation as a whole, state-local taxpayers have not 
     been neglecting education facilities. Table 1 presents 
     referendum data on public elementary and secondary school 
     bond issues for the years 1988 through 1998. The percentage 
     of bond issues approved and the percentage of dollars 
     approved appear in columns 2 and 3. Both series tell 
     approximately the same story. Approval rates declined 
     substantially in the early 1990s, reaching a low of 49.9 
     percent for Issues in 1991 and 48.4 percent for Dollars in 
     1993. Since those lows, the approval percentage for both 
     Issues and Dollars has risen substantially. The 1998 approval 
     rates of 66.8 percent for Issues and 82.4 percent for Dollars 
     are now higher than the levels that prevailed in 1988.

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

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

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

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


                               in summary

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


                       tax-exempt bond proposals

       Several proposals have been introduced that would adjust 
     the current tax treatment of state-local debt to increase 
     federal financial support for school construction.(5) The 
     Administration has proposed Tax Credits for Holders of 
     Qualified School Modernization Bonds and Qualified Zone 
     Academy Bonds; Representative Archer has proposed a 
     lengthening of the period during which arbitrage can be 
     earned and not rebated to the Treasury; Senator Graham has 
     proposed allowing school facilities to be financed with 
     private-activity bonds; and it has been proposed that the 
     annual issuance ceiling to qualify for the small-issuer 
     arbitrage rebate exemption be raised. The last two proposals 
     were adopted by the Senate Finance Committee but not accepted 
     by the Conference.
       Each of these proposals is described. Each proposal's 
     effect on the share of the debt service costs borne by state-
     local taxpayers is estimated, and the targeting of the 
     proposal is compared to the targeting of federal on-budget 
     spending for elementary and secondary education.
     School Modernization Bonds
       Description. This Administration proposal would authorize 
     issuance of $11 billion of tax credit bonds in 2000 and $11 
     billion in 2001. School bond volume in 1998 was about $23 
     billion, so this proposal could be available to approximately 
     50 percent of the school bond market in 2000 and 2001.
       Cost Reduction. Tax credit bonds pay 100 percent of state-
     local interest cost on bonds, as opposed to 25 to 30 percent 
     of interest costs for traditional tax-exempt bonds. Thus, 
     unlike tax-exempt bonds, tax credit bonds lower the cost of 
     investing in school facilities relative to investing in 
     capital facilities for any other public purpose. This lower 
     relative cost would be a powerful incentive for state-local 
     taxpayers to adjust their public budgets and provide more 
     education services and less of all other services.
       Targeting. Half of the annual borrowing authority would be 
     reserved for the Nation's communities with the highest 
     incidence of children living in poverty. The remaining half 
     would be allocated to the states and qualifying school 
     districts based upon the federal assistance they received 
     under the Basic Grant Formula for Title I of the Elementary 
     and Secondary Education Act of 1965 (based primarily upon 
     incidence of low-income children). But states would not be 
     constrained by the Title I formula and could use any 
     appropriate mechanism for distributing the funds. Thus, half 
     of the subsidy would conform to the federal government's 
     existing criteria for federal spending programs in education, 
     and half could potentially be spent on other school 
     districts.
     Relaxation of Arbitrage Restrictions
       Description. State-local arbitrage bonds are tax-exempt 
     bonds issued where all or a major portion of the proceeds are 
     used to acquire securities with a higher yield. Because 
     state-local governments pay no federal income tax on their 
     interest earnings, Congress has restricted their ability to 
     earn arbitrage profits. Bonds for construction are allowed to 
     earn arbitrage profits if they conform to a

[[Page 1861]]

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


                                endnotes

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


                Prepared Statement of William E. Manning

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

[[Page 1862]]

       Red Clay's capital assets are probably typical of those 
     found throughout America. No new schools have been built for 
     more than 30 years and existing schools require repair and 
     renovation. After one unsuccessful attempt, Red Clay received 
     referendum approval both to make the most needed repairs to 
     its buildings and invest in technology. That capital program, 
     however, is much smaller than Red Clay would prefer, and new 
     schools and renovations remain critical.


      Statement Regarding the Federal Role in School Construction

       I don't want to begin my testimony by assuming that the 
     federal government should have any role at all in public 
     education. Indeed, many of those in the education reform 
     community believe that the federal government should 
     diminish, rather than increase, its role in public education. 
     Let me give you one good reason why that is so. With all of 
     the talk regarding education reform these days, one 
     particular notion is being identified as having preeminent 
     importance: ``accountability.'' Indeed, it is acquiring 
     buzzword status. Presidents, members of Congress, governors 
     and school board members all over the country are talking 
     about the importance of accountability and they are all 
     correct. However, to the extent that you shift the locus of 
     decision making from the school to the district to the state 
     to the federal level, the more you have diminished the 
     chances that those responsible for delivering educational 
     services can be held accountable for their successes or 
     failures. Put another way, if I am a school administrator and 
     I can point to burdensome and inappropriate federal 
     regulations as the reason for my failure to provide adequate 
     facilities, I will.
       All of that leads me to bring two messages today: (1) Don't 
     do anything at all and, if you have loose change rattling 
     around in the federal coffers, send it back to those who gave 
     it to you in the first place. (2) If you must do something, 
     make good on all the promises of local autonomy and 
     flexibility that inevitably accompany all such programs. 
     Don't let the public educational establishment claim that: 
     ``But for this federal regulation or that federal guideline, 
     we could have done the job.''
       If you detect a note of cynicism about federal promises for 
     local autonomy and flexibility, you are correct. That 
     cynicism, however, is justified as we out in the states hear 
     more and more about some of the proposals before you. For 
     example, I understand that the President's proposal wants to 
     encourage capital spending by school districts that would not 
     have been possible without such financial assistance. 
     Therefore, as a criterion for eligibility, one would not be 
     surprised to see the Department of Education require an 
     applicant to make some sort of showing that its proposed 
     capital expenditure would not otherwise happen.
       One imagines several responses to such a rule. First, the 
     ``green eyeshade guys'' that exist within each school 
     district will now slow down some projects, testing the 
     political waters each day to see whether increased federal 
     funding is soon to be available. After all, to move forward 
     with capital projects at this time may be to render them 
     ineligible at a later time. Thus, the games begin. Second, 
     what is so wrong with providing assistance to a district that 
     has already decided to ``bite the bullet'' and ignore other 
     priorities in order to make capital repairs? It seems to me 
     that this particular element of the President's proposal 
     removes, rather than creates, incentive for local 
     responsibility.
       To take another example, one who is reading about the 
     President's current proposal comes away with the sense that 
     there will be significant means-testing within the 
     eligibility criteria. I certainly hope, on behalf of my 
     school district, that I will be able to use whatever capital 
     assistance the federal government decides to give me anywhere 
     in my district--whether it be in downtown Wilmington or out 
     in the suburbs.
       Please understand that any federal rules and regulations 
     accompanying any new federal financial assistance will apply 
     on top of a host of other regulations already imposed at the 
     state level. Indeed, as I indicated, this hotchpot of 
     regulations imposed upon local school districts at the state 
     level already gives the establishment enough places to hide 
     from true accountability as it is. It is almost inconceivable 
     that a new regime of federal requirements would not be, in 
     some ways, inconsistent with a body of regulations that, in 
     my view, is already too large. Thus, the prospect of time 
     wasted and projects left undone because of conflicts between 
     federal and state regulation grows with every new federal 
     program. Please make any program that results from the 
     proposals before you serve as a testament that the federal 
     government can, if it wants to, render meaningful assistance 
     without creating matching unnecessary burdens.
       Let me close with a few specific suggestions. First, I 
     believe, as do many of you, that charter schools are already 
     improving the educational landscape by offering variety, 
     quality and single-school focus to those who previously had 
     to pay to get those things. That's the good news. The bad 
     news is that charter schools are still regarded by the 
     educational establishment in some quarters as the enemy. 
     Thus, the organization that owns our school buildings is 
     sometimes stingy with them when it comes to housing charter 
     schools. Nor do the funding formulae in many state charter 
     school bills provide adequate capital--as opposed to 
     operating--assistance to charter schools. In that 
     environment, it would be particularly fitting if the federal 
     government took special care to ensure that our new charter 
     schools were well housed. Please don't overlook them.
       As you review the variety of proposals before you, I 
     suggest that you carefully review those that would render 
     assistance to local school districts needing capital 
     assistance and simultaneously reduce federal ``red tape.'' In 
     Delaware, for example, we have several lending institutions 
     that are members of the Federal Home Loan Bank--one of the 
     Nation's few triple A rated institutions. If these lenders 
     could offer the Federal Home Loan Bank's credit to support 
     bond-financed school construction projects, then the cost of 
     debt--even tax exempt debt--would go down. However, for 
     reasons that appear only to have historical significance, 
     Federal Home Loan Banks are not permitted, under Section 149 
     of the Internal Revenue Code, to provide such credit 
     enhancement. Nor does it appear that those federal (and 
     former federal) instrumentalities that are so authorized by 
     Section 149 (Federal Housing Administration, Veteran's 
     Administration, Fannie Mae, Freddie Mac, Ginnie Mae and 
     Sallie Mae) are actually in the business of assisting school 
     financing. Thus, Section 149 of the Internal Revenue Code 
     should be amended to permit Federal Home Loan Banks to sell 
     credit enhancement products--at least in the area of school 
     construction finance if not all projects eligible for tax 
     exempt financing.
       I appreciate the opportunity to share my thoughts with the 
     Committee. I realize that my plea to send those tax revenues 
     that might otherwise have been spent by the federal 
     government back to the taxpayers requires that Congress 
     ignore the political head of steam building over this issue. 
     So, if the federal government decides it wants or needs to 
     play a role in building schools, please do it in a way that 
     leaves school board members like me, as well as the 
     administrators and teachers who we employ, exposed to the 
     consequences of our failure, if that be the case, to do our 
     job and deliver a quality education to each of our students.

  Mr. ROTH. Mr. President, I yield the remainder of my time.
  Mr. CONRAD. Mr. President, I rise in strong support of the amendment 
offered by Senator Robb. During consideration of S. 1134, the 
Affordable Education Act last year in the Finance committee, I joined 
my colleague in offering a similar amendment during the markup. 
Regrettably, that amendment was not adopted.
  Under the Robb amendment, an allocation of $24.8 billion in bonds 
would be authorized to permit states and local school districts, over 
the next 5 years, to issue bonds to modernize and renovate 
approximately 6,000 schools. Sixty-five percent of the bond authority 
would be allocated to states based on their title I allocation, and 35 
percent to the 100 school districts with the largest number of low-
income students. Additionally, $1.3 billion would be authorized for a 
new grant and zero-interest loan program to fund the most urgent school 
repair needs in local schools. There is also $400 million set aside for 
Bureau of Indian Affairs schools.
  Today we are considering our first major education measure of the 
21st century. It is critical that we weigh carefully the direction of 
that education policy. What should our priorities be as we enter the 
21st century? How should we allocate our limited Federal resources in 
education? How do we respond to growing concerns about the digital 
divide, and what is the role of education in that debate?
  Under S. 1134, the major provision of the bill would expand tax-free 
expenditures from the current higher education individual retirement 
account to permit student expenses for elementary and secondary 
education including private, parochial, or public education. S. 1134 
would increase the limit on the annual contribution for an education 
IRA for a four-year period (2000-2003) to $2,000.
  Expenses authorized for IRA expenditures would include traditional 
expenses including tuition, books, supplies, computer equipment, 
tutoring services, as well as student expenses for room, board, 
transportation and supplementary items. Additionally, S. 1134 makes a 
number of important changes, which I support, in prepaid tuition plans, 
employer-provided educational assistance, and student loan interest 
deduction.

[[Page 1863]]

  There is no question, of the merits of encouraging families to save 
to meet the educational needs of their children. Education IRA's are 
one way to encourage this savings, and we know it has been very helpful 
to families planning for higher education expenses. As we debate this 
legislation, however, it is critical that we define our national 
education priorities, and allocate our limited Federal resources to 
meet those objectives. Does an expansion of education IRA's respond to 
our national education priorities? Does the allocation of limited 
Federal resources for education IRA's respond to the education needs of 
our children into the 21st century?
  In the past 5 years, a number of very respected organizations have 
alerted us to the critical elementary and secondary school 
infrastructure needs. In 1995, the GAO reported that $112 billion was 
needed to bring the nation's schools into good overall condition. The 
report cited that one-third of schools--about 25,000--were in need of 
extensive repairs. More recently, the National Center for Education 
Statistics released a report stating that the average public school in 
America is 42 years old. Many of these schools are also lagging in 
technology infrastructure and their effort to connect to the Internet.
  I know the need for repairs in our schools is great from my visits to 
North Dakota schools and conversations with educators, and state 
officials. North Dakota State Superintendent of Schools, Wayne 
Sanstead, informed me last year during consideration of the markup of 
S. 1134, that costs associated with school modernization in the North 
Dakota would exceed $420 million. 88 percent of schools reported need 
to upgrade or repair facilities, and 62 percent reported unsatisfactory 
environmental conditions.
  I ask unanimous consent Mr. President, that a letter from the N.D. 
Department of Public Instruction which outlines the critical school 
infrastructure needs in North Dakota be printed in the Record at the 
conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. CONRAD. It is critical that we ask whether an expansion of 
education IRA's for elementary and secondary education expenses is the 
best use of our limited Federal education dollars and responds to our 
national education priorities. We need to examine who will benefit from 
this IRA expansion as opposed to who will benefit from meeting school 
infrastructure needs.
  According to the Department of Treasury, 70 percent of the proposed 
education IRA benefit would go to 20 percent of all taxpayers. Higher 
income families would derive the most benefit. Many families with 
incomes less than $55,000 would receive little benefit. Additionally, 
according to the Joint Committee on Taxation, the average annual 
benefit for children attending private and parochial schools would be 
limited to approximately $37.
  On the other hand, 90 percent of our children attend public schools, 
and public school enrollments are increasing. According to the National 
Council on Education Statistics, a record 52.7 million children are 
enrolled in public schools, and that number is expected to increase to 
54.3 million by 2008. It is estimated that at least 2,400 new school 
facilities will be needed to meet this student enrollment increase. 
Studies also show that building conditions and overcrowding in school 
facilities are linked to student achievement.
  There is no question where our education resources should be 
directed. Although it is important to encourage families to save for 
their children's education, we have a more urgent need to ensure that a 
majority of our children have the best educational environment for 
learning. Regrettably, that is not the case in too many of our local 
school districts. Local school districts face many challenges in school 
modernization efforts. Interest payments on bonds are already a major 
expense for local taxpayers. Additionally, taxpayers are burdened with 
many unfunded Federal mandates and it becomes difficult to finance new 
construction or repairs through an expansion of bond authority. Also, 
many of our rural communities across the nation, including North 
Dakota, are experiencing declining enrollments in local school 
districts leaving many of these smaller, rural schools with more 
limited education resources, and very limited ability to undertake bond 
initiatives.
  It is clear where Federal support for education should be directed. 
The importance of school modernization is underscored by the emphasis 
on technology in our economy in the 21st century. Information 
technology will play a key role in our continued economic growth. The 
condition of our public school facilities, including technology 
infrastructure and the ability to connect to the Internet, is critical 
in sustaining our current economic growth. It is also important in 
ensuring that our children are equipped to enter the job markets in the 
21st century, and able to benefit from the extraordinary growth that we 
have experienced in recent years.
  School modernization is critical for our children's success, and 
should be one of our key national education priorities as we enter the 
21st century. Local communities cannot face the task of funding the 
necessary school building and technology infrastructure improvements on 
their own. They urgently need our help. I strongly urge my colleagues 
to vote in support of the amendment offered by Senator Robb.

                               Exhibit 1


                             Department of Public Instruction,

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

  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. Mr. President, I wish to address a couple of the issues 
raised by my distinguished colleague from Delaware. One of the issues 
the Senator

[[Page 1864]]

from Delaware suggested was that this creates a whole new bureaucracy. 
But with all due respect, it does not create a whole new bureaucracy. 
States only have to keep a tally on how much bonding authority they 
have used. That is it. That is not a whole new bureaucracy.
  Talking about the concern about assessments and making additional 
assessments, the truth is that most of the States have already made 
those assessments. So we are not talking about any additional burden.
  When we talk about the QZAB as not having been used, 94 school 
districts in 15 States have utilized the QZAB, and that, indeed, is the 
model upon which these school modernization bonds are featured. We are 
not talking about an untested bill.
  With respect to the number of students that we are trying to help 
under the circumstances, currently we have 52.7 million students in 
America's schools. In 8 years, that total will climb to 54.3 million 
students in our schools. We are talking about a significant increase in 
the number of students at the same time we are trying to decrease the 
number of students in individual classes. We know the schools are 
getting older and older, with the average age of the schools in this 
country today being 42 years old. We have a pressing, urgent problem.
  With all due respect to my distinguished colleague from Delaware, I 
would recommend a visit to a number of the schools because the schools 
in many cases are in desperate need of infrastructure repair. And this 
is designed to provide Federal assistance in ways that do not get 
involved in local school control. I recognize and respect that 
particular feature.
  This is simply designed to assess the financing of those greatly 
needed improvements, which I believe the Senator from Delaware and any 
other Senator in this Chamber will find if they visit the schools in 
their districts. They are old and getting older, and we can't meet the 
reduction in class size. The school population is increasing. Most of 
the children we are talking about for the years 2007 and 2008 are 
already born. We know the numbers. We have to be able to respond to the 
need. This is a way to do it without interfering with local control.
  The basic difference between the two of us is whether or not we ought 
to put public moneys into private education or whether as stewards of 
the public purse we have a responsibility to make sure we fund public 
education first.
  I respectfully request that my colleagues support this particular 
measure and stand up for the students and the future of education in 
America.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, let me remind my colleagues that we have 
already considered and rejected the President's school construction 
proposal in the past. In 1998, in connection with an education tax 
bill, Senator Moseley-Braun offered the President's package, and it was 
defeated by a vote of 56-42. Last year, my distinguished colleague, 
Senator Robb, offered this school construction plan, and it was 
defeated 55-45.
  We all agree on the need for well-built and well-maintained schools. 
There is no one in this body who wants our children to learn in a 
substandard learning environment. But the evidence shows the States are 
stepping up and meeting the challenge of providing schools for their 
students. We should not create a new Federal program that injects the 
Federal bureaucracy into additional State and local controls. For these 
reasons, I oppose the amendment, and I move to table it.
  Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER (Mr. L. Chafee). Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. KENNEDY. Mr. President, I urge the Senate to support Senator 
Robb's amendment to provide funding for rebuilding and modernizing the 
nation's schools. The Coverdell bill does nothing for crumbling 
schools.
  Schools, communities, and governments at every level have to do more 
to improve student achievement. Schools need smaller classes, 
particularly in the early grades. They need stronger parent 
involvement. They need well-trained teachers in the classroom who keep 
up with current developments in their field and the best teaching 
practices. They need after-school instruction for students who need 
extra help, and after-school programs to engage students in 
constructive activities. They need safe, modern facilities with up-to-
date technology.
  But, all of these reforms will be undermined if facilities are 
inadequate. Sending children to dilapidated, overcrowded facilities 
sends a message to these children. It tells them they don't matter. No 
CEO would tolerate a leaky ceiling in the board room, and no teacher 
should have to tolerate it in the classroom. We need to do all we can 
to ensure that children are learning in safe, modern buildings.
  Nearly one-third of all public schools are more than 50 years old. 
Fourteen million children in a third of the nation's schools are 
learning in substandard buildings. Half of all schools have at least 
one unsatisfactory environmental condition. The problems with ailing 
school buildings aren't the problems of the inner city alone. They 
exist in almost every community, urban, rural, or suburban.
  In addition to modernizing and renovating dilapidated schools, large 
numbers of communities across the country need to build new schools, in 
order to keep pace with rising enrollments and to reduce class sizes. 
Elementary and secondary school enrollments have reached an all-time 
high again this year of 53.2 million students, and will continue to 
rise over the next 10 years. The number will increase by 324,000 in 
2000, by another 282,000 in 2001, by still another 250,000 in 2002, and 
continue on an upward trend in the following years.
  Last year, the Senate heard testimony from a student in Clifton, 
Virginia, whose high school is so overcrowded that fights often break 
out in the overflowing halls. The problem is called ``Hall Rage,'' and 
it's analogous to ``Road Rage'' on crowded highways. The violence in 
the hallways is bad enough. But it's even worse, because it's difficult 
for teachers to teach when students are distracted by the chaos in the 
hallways and outside the classrooms.
  The Department of Education estimates that 2,400 new public schools 
will be needed by 2003 to accommodate rising enrollments. The General 
Accounting Office estimates that it will cost communities $112 billion 
to repair and modernize the nation's schools. Congress should lend a 
helping hand and do all we can to help schools and communities across 
the country meet this challenge.
  In Massachusetts, 41 percent of schools report that at least one 
building needs extensive repairs or should be replaced. 80 percent of 
schools report at least one unsatisfactory environmental factor. 48 
percent have inadequate heating, ventilation, or air conditioning. And 
36 percent report inadequate plumbing systems.
  In Detroit, over half--150 of the 263--school buildings were built 
before 1930. Their average age is 61 years old, and some date to the 
1800's. Detroit estimates that the city has $5 billion in unmet repair 
and new construction needs. Detroit voters recently approved a $1.5 
billion, 15-year school construction program, but it's not enough.
  In an elementary school in Montgomery, Alabama, a ceiling which had 
been damaged by leaking water collapsed only 40 minutes after the 
children had left for the day.
  At Cresthaven Elementary School in Silver Spring, Maryland, a second-
grade reading class has to squeeze through a narrow corridor with a 
sink on one side into a space about 14 ft. wide by 15 ft. long. The 
area used to be a janitor's office, and the teacher has no place to 
sit.
  Schools across the country are struggling to meet needs such as 
these, but they can't do it alone. The federal government should join 
with state and local governments and community organizations to 
guarantee that all children have the opportunity for a good education 
in safe and up-to-date school buildings. The Robb amendment is an

[[Page 1865]]

excellent start on these high priorities, and I urge the Senate to 
approve it.
  Mr. BYRD. Mr. President, I oppose this amendment offered by Senator 
Robb today to the Affordable Education Act which would remove the 
provision of the bill to expand the use of educational individual 
retirement accounts for elementary and secondary education expenses, 
and instead expand incentives for the construction and renovation of 
our nation's public schools.
  While I understand the overwhelming need for additional resources to 
help repair and rebuild crumbling schools across the United States, 
this amendment would strip the legislation of its very admirable intent 
to assist parents in saving scarce resources for a child's elementary 
and secondary schooling years. Parents should have the ability to make 
decisions about their own child's education, particularly in the early, 
formative years, as they do with higher education. I believe that the 
education savings accounts for elementary and secondary education are a 
step in the right direction in helping families to make these often 
difficult decisions about the education of their child.
  This vote on the Robb amendment is a particularly difficult one for 
me to cast because I, too, am extremely concerned about the dilapidated 
state of our nation's schools. My home state of West Virginia has a 
school renovation and construction need in excess of $1.2 billion, and 
the nation a need totaling more than $250 billion. Mr. President, this 
is alarming! Our nation's schools are in disrepair and provide a less-
than-appealing workplace for our students and faculties. They lack the 
basic infrastructure to allow our students to become ``ready'' for the 
age of technology, and many ill-equipped schools deny students the 
opportunity to engage in meaningful laboratory experiences in the 
sciences. Some schools are overcrowded, and many have become small 
communities of portable classrooms.
  Mr. President, it is my hope that the Senate will revisit this 
important issue of funding for school construction in a context that 
would not pit one good initiative against another.
  The PRESIDING OFFICER. All time has expired. The question is on 
agreeing to the motion to table amendment No. 2861. The clerk will call 
the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) is 
necessarily absent.
  The result was announced--yeas 57, nays 42, as follows:

                      [Rollcall Vote No. 17 Leg.]

                                YEAS--57

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

                                NAYS--42

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

                             NOT VOTING--1

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


                           Amendment No. 2825

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

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

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

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

       At the appropriate place, insert:

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

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

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

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

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

       ``(a) General Rule.--For purposes of section 38, the 
     computer donation credit determined under this section is an 
     amount equal to 30 percent of the qualified computer 
     contributions made by the taxpayer during the taxable year as 
     determined after the application of section 170(e)(6)(A).
       ``(b) Qualified Computer Contribution.--For purposes of 
     this section, the term `qualified computer contribution' has 
     the meaning given the term `qualified elementary or secondary 
     educational contribution' by section 170(e)(6)(B), except 
     that--
       ``(1) such term shall include the contribution of a 
     computer (as defined in section 168(i)(2)(B)(ii)) only if 
     computer software (as defined in section 197(e)(3)(B)) that 
     serves as a computer operating system has been lawfully 
     installed in such computer, and
       ``(2) notwithstanding clauses (i) and (iv) of section 
     170(e)(6)(B), such term shall include the contribution of 
     computer technology or equipment to multipurpose senior 
     centers (as defined in section 102(35) of the Older Americans 
     Act of 1965 (42 U.S.C. 3002(35)) described in section 
     501(c)(3) and exempt from tax under section 501(a) to be used 
     by individuals who have attained 60 years of age to improve 
     job skills in computers.
       ``(c) Increased Percentage for Contributions to Entities in 
     Empowerment Zones, Enterprise Communities, and Indian 
     Reservations.--In the case of a qualified computer 
     contribution to an entity located in an empowerment zone or 
     enterprise community designated under section 1391 or an 
     Indian reservation (as defined in section 168(j)(6)), 
     subsection (a) shall be applied by substituting `50 percent' 
     for `30 percent'.
       ``(d) Certain Rules Made Applicable.--For purposes of this 
     section, rules similar to the rules of paragraphs (1) and (2) 
     of section 41(f) shall apply.
       ``(e) Termination.--This section shall not apply to taxable 
     years beginning on or after the date which is 3 years after 
     the date of the enactment of the [New Millennium Classrooms 
     Act].''
       (b) Current Year Business Credit Calculation.--Section 
     38(b) (relating to current year business credit) is amended 
     by striking ``plus'' at the end of paragraph (11), by 
     striking the period at the end of paragraph (12) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(13) the computer donation credit determined under 
     section 45D(a).''
       (c) Disallowance of Deduction by Amount of Credit.--Section 
     280C (relating to certain expenses for which credits are 
     allowable) is amended by adding at the end the following:
       ``(d) Credit for Computer Donations.--No deduction shall be 
     allowed for that portion of

[[Page 1866]]

     the qualified computer contributions (as defined in section 
     45D(b)) made during the taxable year that is equal to the 
     amount of credit determined for the taxable year under 
     section 45D(a). In the case of a corporation which is a 
     member of a controlled group of corporations (within the 
     meaning of section 52(a)) or a trade or business which is 
     treated as being under common control with other trades or 
     businesses (within the meaning of section 52(b)), this 
     subsection shall be applied under rules prescribed by the 
     Secretary similar to the rules applicable under subsections 
     (a) and (b) of section 52.''
       (d) Limitation on Carryback.--Subsection (d) of section 39 
     (relating to carryback and carryforward of unused credits) is 
     amended by adding at the end the following:
       ``(9) No carryback of computer donation credit before 
     effective date.--No amount of unused business credit 
     available under section 45D may be carried back to a taxable 
     year beginning on or before the date of the enactment of this 
     paragraph.''
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     inserting after the item relating to section 45C the 
     following:

``Sec. 45D. Credit for computer donations to schools and senior 
              centers.''
       (f) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after the date of the enactment of this Act.

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

                            Cosponsors (30)

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

  Mr. ABRAHAM. Mr. President, on July 29 of last year, the Senate 
unanimously adopted this amendment to the tax reduction bill. I urge 
the Senate to do so again today.
  This amendment aims to address our shortage of skilled high-tech 
workers by addressing the shortage of computers and computer training 
in our schools.
  Advanced technology has fueled unprecedented economic growth and 
transformed the way Americans do business and communicate with each 
other.
  Despite these gains, however, this same technology is just beginning 
to have an impact on our classrooms and how we educate our children. 
Thirty-two percent of our public schools have only one classroom with 
access to the Internet.
  It is imperative that we act now to provide our Nation's students 
with the training they need to succeed in tomorrow's high-tech 
workplace.
  The Department of Education recommends there be at least one computer 
for every five students. According to the Education Testing Service, in 
1997 there was only one computer for every 24 students on average. Not 
only are our classrooms sadly underequipped, but the equipment they 
have is often obsolete, often incapable, for example, of accessing the 
Internet.
  One of the more common computers in our schools today is the Apple 
IIc, a computer so archaic that it is now on display at the 
Smithsonian.
  While this technological deficiency affects all of our schools, the 
students who are in the most need are receiving the least amount of 
computer instruction and exposure. According to the Secretary of 
Education, 75.9 percent of households with an annual income over 
$75,000 have computers, compared to only 11 percent of households with 
incomes under $10,000.
  This disparity exists when comparing households with the Internet 
access as well. While 42 percent of families with annual incomes over 
$75,000 have online capability, only 10 percent of families with 
incomes of $25,000 or less have the same capability.
  Rural areas and inner cities fall below the national average for 
households that have computers. Nationwide, 40.8 percent of white 
households have computers, while only 19 percent of African American 
and Hispanic households do. This disparity, unfortunately, is 
increasing, not decreasing. This unfortunate trend is not confined 
simply to individual households; it is present in our schools as well.
  The Educational Testing Service statistics show schools with 81 
percent or more economically disadvantaged students have only one 
multimedia computer for every 32 students, while a school with 20 
percent or fewer economically disadvantaged students will have a 
multimedia computer for every 22 students.
  That is a difference of 10 students per computer. Furthermore, 
schools with 90 percent or more minority students have only one 
multimedia computer for every 30 students. This is simply unacceptable.
  It points up the importance of securing additional computers for use 
in our schools. Our schools should be great educational equalizers, 
providing resources and training to everyone, regardless of their race, 
class, or rural or urban location so all of our kids can succeed.
  To achieve this end, our amendment expands the parameters of the 
existing

[[Page 1867]]

tax deduction for computer deductions. It will also add a tax credit.
  Specifically, it will do the following: First, it will allow a tax 
credit equal to 30 percent of the fair market value of the donated 
computer equipment. An increased tax credit provides a greater 
incentive for companies to donate computer technology and equipment to 
schools. This includes computers, peripheral equipment, software, and 
fiber optic cable related to computer use.
  Second, it will expand the current age limit on donated computers to 
include equipment 3 years old or less. Many companies do not update 
their equipment within the existing 2-year period that currently is 
required for qualification for the existing tax deductions.
  Yet 3-year-old computers equipped with Pentium-based or equivalent 
chips have the processing power, memory, and graphics capabilities to 
provide sufficient Internet and multimedia access and run any necessary 
software.
  Third, the current limitation on original use will be expanded to 
include original equipment manufacturers or any corporation that 
reacquires the equipment. By expanding the number of donors eligible 
for the tax credit, the number of computers available will increase as 
well.
  Lastly, it would implement enhanced tax credits equal to 50 percent 
of the fair market value of equipment donated to schools located within 
designated empowerment zones, enterprise communities, and Indian 
reservations.
  Doubling the amount of the tax credits for donations made to schools 
in economically distressed areas will increase the availability of 
computers to the children who need it most.
  Bringing our classrooms into the 21st century will require a major 
national investment.
  According to a Rand Institute study, it will cost $15 billion, or 
$300 per student, to provide American schools with the technology 
needed to educate our young people; the primary cost being the purchase 
and installation of computer equipment.
  At a time when the Government is planning to spend $2.25 billion to 
wire schools and libraries to the Internet, the demand for this 
sophisticated hardware will be even greater.
  Meanwhile, the Detwiler Foundation estimates that if just 10 percent 
of the computers that are taken out of service each year were donated 
to schools, the national ratio of students-to-computers would be 
brought to 5 to 1 or less. This would meet, or even exceed, the ratio 
recommended by the Department of Education.
  This amendment will provide powerful tax incentives for American 
businesses to donate top quality high-tech equipment to our Nation's 
classrooms. And it will do so without unduly increasing Federal 
Government expenditures or creating yet another Federal program or 
department.
  Encouraging private investment and involvement, this act will keep 
control where it belongs--with the teachers, the parents, and the 
students.
  At the same time, all our children will have an equal chance at 
succeeding in the new technological millennium.
  In my mind, these are laudable goals, goals we must attain if we are 
going to provide the kind of future our children deserve.
  In closing, I am hopeful our colleagues will uniformly join in 
support of this legislation. It seems to me, as I travel around my 
State and go into classrooms, there are a lot of places in Michigan--
and I suspect in all the other States--where just a little bit more 
equipment would allow for more students to get the kind of high-tech 
training they need.
  How do we match up a situation where, literally across this country, 
we have schools that do not have enough computer equipment, and we have 
countless businesses and enterprises that have used equipment they 
don't know what to do with? Can't we find a way? In my judgment, this 
legislation is the way.
  If we pass this legislation, I think we will provide a major 
incentive to merge the used surplus computers that exist in the private 
sector with the needs of our schools. In doing so, we will provide more 
students with access to the technology they need to have in order to be 
able to pursue the jobs of the new century.
  I offer this amendment for my colleagues' consideration. I appreciate 
the attention of the Chamber.
  I yield the floor.
  Mr. WYDEN. I am pleased to join today with my colleague from 
Michigan, Senator Abraham, to offer the New Millennium Classrooms Act 
as an amendment to the Education Savings Account legislation. This is 
an issue on which he and I have worked for several years now.
  The New Millennium Classrooms Act is about digital recycling. It 
gives companies an incentive to recycle technology. It says the 
computer Bill Gates may see as a dinosaur, is really a dynamic new 
opportunity for a student who has none.
  The E-Rate program, authored by Senators Rockefeller and Snowe, has 
been an enormous success, helping to wire almost all of the nation's 
schools and a good portion of the nation's classrooms. What schools 
need now is good equipment. That's the purpose of this amendment.
  We know that very early in this new Century 60% of all jobs will 
require high-tech computer skills. To prepare our children for the jobs 
of the future, they not only must have access to technology, but they 
must be trained to use it as well.
  The purpose of our amendment is to build more bridges between the 
technology ``haves'' and the ``have nots;'' to build more on-ramps to 
the information superhighway. You can't get 21st Century classrooms, 
using Flintstones technology.
  Technology is not cheap and school budgets are limited, making it 
tough for schools to upgrade their systems by themselves. The point of 
our amendment is to enhance existing incentives to businesses to donate 
computer equipment to schools.
  There is a federal program in place, the 21st Century Classroom Act 
of 1997, but its use has been limited. It allows businesses to take a 
tax deduction for certain computer equipment donations to K-12 schools. 
But most businesses take longer to upgrade their computers than allowed 
for under the law.
  The New Millennium Classrooms Act would make this law work the way it 
was intended. First, our legislation would increase the age limit from 
two to three years for donated equipment eligible for a tax credit. 
This more realistically tracks the time line businesses follow for 
their computer upgrades. It will cover hardware that possesses the 
necessary memory capacity and graphics capability to support Internet 
and multimedia applications.
  Second, our bill expands the current limitation of ``original use'' 
to include both original equipment manufacturers and any corporation 
that reacquires their equipment. We believe that by expanding the 
number of donors eligible for the credit, we will expand the number of 
computers donated to schools.
  Third, our bill provides for a 30% tax credit of the fair market 
value for school computer donations, and a 50% credit for donations to 
schools located in empowerment zones, enterprise communities and Indian 
reservations. The Department of Commerce report highlights the need to 
encourage computer donation in these notoriously under-served 
communities and we want to target donations toward these communities.
  Finally, our bill requires an operating system to be included on a 
donated computer's hard drive in order to qualify for the tax credit. 
This will ensure students don't get empty computer shells, but the 
brains that drive the computers.
  Our legislation is supported by a wide range of business and 
education groups. Leaders of technology associations, like the 
Information Technology Industry Council and TechNet, and the National 
Association of Manufacturers have joined education associations, such 
as the National Association of Secondary School Principals and the 
National Association of State University and Land Grant Colleges, in 
support of the amendment.

[[Page 1868]]

  The Digital Millennium Classrooms Act promotes digital recycling. It 
will encourage companies to put their used computers into classrooms 
instead of into landfills. It will help build a safety net under 
students trying to cross the digital divide. I urge my colleagues to 
support this amendment, and again wish to commend Senator Abraham for 
his leadership on this legislation.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ABRAHAM. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. I ask unanimous consent to add Senator Hagel as a 
cosponsor to my amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I commend the Senator from Michigan for 
his amendment and his work on the New Millennium Classrooms Act. I 
joined him several months ago at a press conference where he announced 
his intentions. I think it is among the more well-intended, helpful 
measures to deal with the reform and change we are all seeking in 
education across America.
  There is a real need to bring more computers into our classrooms 
which is, of course, what the amendment is designed to do.
  Sixty percent of all jobs will require high-tech computer skills. Yet 
32 percent of our public schools have only one classroom with access to 
the Internet. It is almost an incongruity, when you read every day 
about what is happening on the Internet and where we have gotten in 
terms of access. It really does point to the digital divide we all 
speak of these days.
  The change is occurring so quickly, and the large public educational 
system is not accustomed to it. In fact, many of us are not accustomed 
to it. But legislation such as that offered by the Senator from 
Michigan accelerates the ability of public education to stay up with 
high tech.
  The Department of Education recommends that there be at least one 
computer for every five students. Yet according to the Educational 
Testing Service, on average, there is only one multimedia computer for 
every 24 students.
  Since the passage of the 21st Century Classrooms Act of 1997, there 
has not been a significant increase in computer donations due to 
restrictions on the age of the donated equipment and the limitations on 
donor qualifications.
  According to the Detwiler Foundation, a California-based nonprofit 
organization dedicated to providing schools nationwide with quality 
computers donated by individuals and industry, there are very few 
Pentium computers donated to schools through their organization. This 
number has not increased since the passage of the 21st Century 
Classrooms Act of 1997. Of those computers donated, even fewer 
qualified for the deduction because of the restrictions.
  According to the Detwiler Foundation, if even just 10 percent of 
retired computers each year were donated to schools, we would easily 
achieve the Department of Education's recommendation of only five 
students for every one computer. The current deduction is not enough to 
offset the costs of the donation.
  Without the addition of the tax credit, the high costs associated 
with the transport and installation of the computer equipment cancel 
out the current tax benefit.
  The new millennium classrooms amendment addresses these restrictions 
without unduly increasing Federal Government expenditures or creating 
yet another Federal program or department. It encourages private 
investment and involvement and keeps control with the teachers, the 
parents, and the students. At a time when the Government is planning to 
spend $1.2 billion to wire schools and libraries to the Internet, the 
demand for this sophisticated equipment and technology will be greater 
than ever.
  This amendment increases the age limit for eligible computers from 2 
to 3 years; will allow computer manufacturers to donate equipment 
returned to them through trade-in and leasing programs; allows a 30-
percent tax credit for qualified computer donations; allows a 50-
percent tax credit for qualified computer donations to schools located 
within empowerment zones, enterprise communities and Indian 
reservations; requires that the donated computer must include an 
operating system.
  Increasing the amount of the tax credits for donations made to 
schools in economically distressed areas will increase the availability 
of computers to the children who need it most. Educational Testing 
Service statistics show that schools with 81 percent or more 
economically disadvantaged students have only one multimedia computer 
for every 32 students, while a school with 20 percent or fewer 
economically disadvantaged students will have a multimedia computer for 
every 22 students. Again, the divide is a most dangerous thing for us 
to contemplate in education in America.
  Public schools with a high minority enrollment had a smaller 
percentage of instructional rooms with Internet access than public 
schools with a low minority enrollment.
  This bill is not another targeted tax break. Broad-based tax relief 
and reform efforts should work to lower tax rates across the board 
while continuing to retain and improve upon the core tax incentives for 
education, home ownership, and charitable contributions. The new 
millennium classrooms amendment expands the parameters and, thus, the 
effectiveness of an already existing education and charity tax 
incentive, one which will effectively bring top-of-the-line technology 
into all of our schools.
  The 21st Century Classrooms Act tax deduction expires this year. It 
is imperative we act now to ensure that all our children have access to 
quality computer technology.
  Again, I commend the Senator from Michigan and his cosponsors. This 
is, indeed, a most appropriate piece of legislation that will do great 
good in our education system.
  I yield the floor and suggest the absence of a quorum.
  Mr. REID. Mr. President, if the Senator will withhold that for a 
second, we have two Senators who are on their way to speak. The 
minority leader is on his way to speak on this issue, and Senator 
Wyden, who is a cosponsor of the amendment, is in the House and is also 
on his way back. They should both be here momentarily.
  Mr. COVERDELL. Mr. President, my estimate is that maybe in the next 
15 minutes or so----
  Mr. REID. I think it would probably be closer to 11:30 because both 
have prepared remarks.
  Mr. COVERDELL. I know Senators are trying to plan their day. It is 
useful to clarify, even though we are not absolutely certain. The 
Senator thinks their statements are such that the next vote might occur 
at or about 11:30?
  Mr. REID. I think that is probably when it will be.
  Mr. COVERDELL. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Mr. President, I rise in support of this amendment and 
applaud the authors. I am very hopeful that we can get good bipartisan 
support for this legislation, in large measure because it is exactly 
what we need

[[Page 1869]]

to be doing right now, if, indeed, we are serious when we say we want 
more technology in schools.
  I can't think of a better way to encourage more technology in schools 
than to ensure that companies are able to use the incentives that are 
there to maximize the opportunities for schools to acquire the kinds of 
hardware and software they need to fully equip every school across the 
country.
  As I travel throughout South Dakota, it is with great pride that 
superintendents and principals will show me their computer room. They 
will show me how computer literate their students are. They show me how 
integrated technology is now becoming in schools. But the one 
consistent lament they have is that they just don't have the resources 
to ensure that they can acquire the equipment or, in a timely way, 
replace that equipment, knowing it is going to be outdated in 3 years, 
knowing they are going to be faced with the same budgetary decisions 
once again in a very short period of time. There is a longer life for 
acquiring sports equipment, books, desks, or almost anything else 
related to schools. The timeframe within which the technology becomes 
outdated, as we all know, is extremely short.
  So this amendment is simply designed to acknowledge that fact--to 
acknowledge the fact that schools desperately need this technology and 
all of the equipment associated with it. They need to have the 
assurance that once they have acquired this technology, they are going 
to continue to get it in the future. This relatively minor tax 
incentive, from the perspective of a budgetary impact, will have 
profound consequences with respect to its effect on companies and the 
incentive it will create, and with its effect on what can happen in 
schools if we pass it.
  Mr. President, I applaud Senators Wyden, Baucus, Abraham, and others 
for their effort to make this issue the prominent one it is with this 
debate on how we might improve our educational opportunities. As I say, 
I think that as we look at the next 10 or 20 years, one of the biggest 
challenges schools are going to face--whether they are rural or urban, 
private or public--will be the insurmountable task of technology 
acquisition. I do hope they can overcome the fiscal challenges they all 
face. Whether or not they do, in part, will be dependent upon whether 
or not something as simple as this can be passed, creating an incentive 
that will ultimately provide companies with more reasons to support 
schools in their effort to acquire technology.
  That is what this amendment is all about. It deserves our support. I 
am sure it will have our support, and I am sure it may not be the last 
word on what it is we need to do with regard to technology acquisition. 
But it is a good beginning. I applaud my colleagues--especially 
Senators Wyden and Baucus--for all their efforts in bringing it to this 
point. I urge its passage.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the vote 
in relation to the Abraham amendment and with respect to the Bingaman 
accountability amendment be postponed to occur at 1 p.m. today. I 
further ask that no second-degree amendments be in order to either 
amendment prior to the votes and the time between now and 1 p.m. be 
equally divided for debate of both amendments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Many Senators thought we would be voting at about 11, 
so they need to pay particular attention to this change.
  I thank the Chair.
  Mr. BINGAMAN. Mr. President, what is the business before the Senate?
  The PRESIDING OFFICER (Mr. Hutchinson). There is an order for the 
Senator's amendment and the amendment of the Senator from Michigan to 
be debated concurrently, with a vote to occur at 1 o'clock.


                           Amendment No. 2863

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

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

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

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

       Strike section 101 and insert the following:

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

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

  Mr. BINGAMAN. Mr. President, I am introducing this amendment to 
strike the part of the bill that provides the tax savings because I 
think there is a better use for that amount of funding. I am proposing 
an alternative use for that funding that I urge my colleagues to 
seriously consider.
  My amendment strikes the part of the bill that provides the average 
family with a very small tax savings, and there are various estimates 
as to what that savings would be. Essentially, as I understand it, the 
Joint Tax Committee says the average benefit per child in public school 
would be something like $3 in 2001 and $4.50 in 2002.
  I think it is clear, regardless of the precise number, that these are 
not tax savings that are going to help any child in this country get a 
better education. So my thought is that rather than do that with the 
funds we are expending through this bill--or proposing to expend--we 
use the money to provide crucial funds to turn around the failing 
public schools.
  Public schools are where over 90 percent of our children are 
educated. I grew up in Silver City, NM where, if

[[Page 1870]]

you want to go to school, you go to public school. That is the way it 
has always been, to my knowledge. It is going to be that way for some 
time. We need to be sure the schools that are not adequately training 
young people and educating young people get the assistance, the 
resources, the oversight, and the accountability they need in order to 
move ahead and solve that problem.
  Let me talk a little bit more about the bill that is presently 
pending and then talk about my own amendment. The Joint Tax Committee 
did this analysis of the Coverdell proposal and indicated that it 
would, in their view, disproportionately help families with children 
already in private schools. Eighty-three percent of families with 
children in private schools would use this account, but only 28 percent 
of families in public schools would make use of it.
  Essentially, the proposal is a way of diverting funds that are 
otherwise public funds into the private schools, at a time when we all 
recognize that the public schools have inadequate funds to do the job 
we are calling upon them to do.
  Also, the pending Coverdell bill we are trying to amend has no 
mechanisms in it to ensure accountability of the use of the funds we 
are talking about. The bill does nothing to improve teacher quality. It 
does nothing to provide safe and modern environments for learning. It 
does nothing to raise academic standards or to impose upon the public 
schools or bring them to more accountability in the expenditure of the 
funds.
  I believe we need to use Federal funds on initiatives that make a 
difference in our public schools. That is what my amendment intended to 
do.
  The relevant section of the Coverdell bill costs the public an 
average of $275 million a year for the next 5 years. That is the cost 
to the taxpayers. I believe we can use that $275 million each year to 
ensure that higher standards and accountability are implemented 
throughout our public schools. We have made some progress in 
implementing higher standards.
  Most States have adopted or are in the process of adopting statewide 
standards. This is due in part to the fact that Federal law applicable 
to the program for disadvantaged students --that is title I--requires 
that standards be adopted. Although States have adopted standards, many 
States and districts have not had sufficient funds to ensure the 
accountability for meeting those standards they have set or to provide 
adequate resources to the schools that are failing to meet the 
standards. I think dedicating specific funds to this purpose is 
necessary in order to create the rewards and the penalties that will 
allow schools to be held accountable for the improvement in student 
performance.
  The Federal Government directs over $8 billion in Federal funds to 
provide support programs through title I. But the accountability 
provisions in title I have not been adequately implemented because they 
haven't had the resources to do it at the State level, primarily.
  Title I authorizes State school support teams to provide support for 
schoolwide programs to provide assistance to schools that are in need 
of improvement through activities such as professional developments for 
the teachers in those schools, and identifying resources for changing 
the way the instruction is provided.
  In 1998, only eight States requiring these school support teams have 
been able to serve the majority of the schools that they have been 
identified as needing improvement. Less than half the schools 
identified as being in the need of improvement in the school year of 
1997-1998 reported that having been designated as a school needing 
improvement actually got some professional development to accomplish 
that improvement.
  Schools and school districts need additional support and resources in 
order to address the weaknesses that we identify. They need that 
support and those resources quickly after those weaknesses are 
identified. They need to be able to promote an intensive range of 
interventions, continuously assess the results of those interventions, 
and to implement some incentives for improvement.
  The National Governors' Association asked us to provide funds for the 
purpose this amendment tries to address.
  I have a letter that came to me last October when this same issue 
came before us in the Senate. I offered an amendment at that time which 
was not successful but which I believe had merit then, and I believe it 
has merit now.
  Let me make it very clear so there is no misunderstanding. At that 
time, I was not proposing to strike the tax proposal that Senator 
Coverdell brought forward and substitute this in its stead. The 
Governors were not responding to that specific striking aspect of my 
amendment of today, but they were talking about the need to have 
additional funds to ensure accountability and to ensure the 
implementation of these higher standards by the schools that are 
failing.
  The amendment I am offering would provide $275 million to help 
improve failing schools. The money would be used to ensure the States 
and school districts have the necessary resources to implement the 
corrective action provisions of title I by providing immediate, 
intensive interventions to turn around low-performing schools.
  Let me read part of this letter so that folks know what the Governors 
are saying. It is a letter to me by Mr. Raymond Scheppach, who is the 
executive director of the National Governors' Association.
  It says:

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

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

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

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

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

  Let me make it very clear to people again. This was a letter related 
to an amendment to direct funds at accountability in the expenditure of 
public funds and help these failing schools. It does not include the 
proposal I am making today as well to strike the Coverdell amendment 
and substitute this instead as a better use of that money.
  But the types of interventions the States and school districts could 
provide under these funds are things which I think we would all 
recognize are needed.
  First, purchasing necessary materials, up-to-date textbooks, 
curriculum, technology.
  I think we all encounter circumstances where teachers, school 
administrators, and students tell us about how they have outdated 
textbooks and inadequate lab materials or whatever in order to really 
pursue their studies as they would like to.
  These funds could be used for that. They could be used for providing 
intensive, ongoing teacher training.
  That clearly is a need, and I think it is a recognized need in the 
teaching profession.
  The people who talk to me about the importance of more teacher 
training are the teachers. So this is not an attack on our public 
school teachers. This is a recognition that we need to do more to help 
them constantly stay abreast of the new developments in teaching and do 
a better job.
  Third, this would provide access to distance learning.
  We have the amendment that was talked about just prior to the 
amendment I am discussing about technology

[[Page 1871]]

in our schools. All of us recognize there is a great opportunity, 
particularly in rural communities, to make better use of teacher 
learning.
  This past weekend, I was in some communities in my State where there 
are very small high schools. I was in Eunice, NM; I was in Jal, NM. 
Those are communities with very small high schools. Frankly, they are 
not able to offer all of the courses they would like to offer for their 
students. They have the opportunity through distance learning, through 
the Internet, through interactive television, and through a variety of 
technologies to provide courses to some of their students even though 
they may not have a teacher in that school who is qualified to teach 
that course. We need to be sure the funds are there to do that. This 
amendment would help provide those funds.
  These funds must be used to extend learning time for students--
afterschool programs, Saturday programs, and summer school--to help 
them catch up and perform at least at grade level and, hopefully, 
better than grade level.
  These funds could be used to provide rewards to low-performing 
schools that show significant progress, including cash awards or other 
incentives such as, in particular, release time for teachers to prepare 
for the next school year or whatever.
  Also, these funds could be used for intensive technical assistance 
from teams of experts outside the schools to help develop and implement 
school improvement plans in failing schools.
  These teams would determine the causes of low performance--for 
example, low expectations, outdated curriculum, poorly trained 
teachers, and unsafe conditions. They would assist in implementing 
research-based models for improvement.
  I am persuaded there are today research-based whole school reform 
programs that have been developed that can dramatically improve the 
performance of our elementary schools. I have become most familiar with 
one which is called Success for All. There are others that are also 
showing very good results.
  This Success for All program was developed at Johns Hopkins 
University. Bob Slavin was the key researcher who worked on it. This is 
a proven early grade reading program. It also covers other subjects. 
The core subject which most schools have adopted and are focused on is 
the reading. This is a program which, if implemented properly, can 
ensure substantial results. We have 50 elementary schools in New Mexico 
that are presently using this Success for All program and the results 
are impressive. At the end of the first grade, Success for All schools 
have averaged reading scores almost 3 months ahead of those in other 
control schools where that program has not been implemented.
  This amendment will not address all the issues of our schools. I 
believe sincerely that it is a positive step forward. It will be a more 
meaningful step forward in improving the educational quality in America 
than this alternative of providing a $5 a year, or whatever the right 
number is, tax benefit to the average American.
  Clearly, we all want to see our schools improved.
  Senator Reed is on the floor and wishes to speak for a moment on this 
and then I understand Senator Roth has an amendment he wishes to offer.
  I ask for the yeas and nays on this amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from Rhode Island, Mr. Reed.
  Mr. REED. Mr. President, first, I will speak with respect to Senator 
Bingaman's amendment. Let me commend the Senator for his efforts not 
only today but throughout his career in the Senate to ensure that 
accountability is a central part of Federal educational legislation.
  Senator Bingaman, in 1994, was one of the leaders in this body with 
respect to the issue of accountability. At that time, I was serving in 
the other body. Together we worked at the conference on accountability 
provisions in the 1994 reauthorization of the Elementary and Secondary 
Education Act. As a result of the efforts of Senator Bingaman and 
others, we were able, for the first time, to begin to focus significant 
attention on the issue of accountability. In fact, the 1994 
reauthorization, together with Goals 2000 legislation, accelerated and 
encouraged a movement throughout the States to develop standards. 
Practically every State in the country today has standards.
  We now have the opportunity to begin measuring how well schools are 
doing. That is at the heart, I believe, of Senator Bingaman's approach 
today. We need not only to measure how well they are doing but then 
hold States and localities accountable for those results.
  What has happened in the last several years is that the States have 
not had the resources to fully exploit the opportunities to measure 
schools against standards and then improve those schools. Half of the 
schools in the country that are problematic, according to State 
standards, have not been able to have access to teams of improvement; 
they have not had access to the support they need to make themselves 
better. In addition, they have not had access to the professional 
development which they need to enhance the capabilities of their 
teachers. All of these efforts together suggest the American people's 
money would be best spent by devoting time and attention to 
accountability.
  Again, I think the approach that the Senator from New Mexico is 
taking is exactly on target. As we spend $8 billion a year on title I, 
we should insist that the States live up to their responsibility to use 
these funds wisely as measured by the performance of their students. 
The best way we can do that is to give them the resources and, again, 
the impetus to take stock of their schools and then to apply corrective 
measures, remedial measures.
  They have not been able to do that. I don't believe it is because 
they don't want to do it; I believe it is because they have not been 
able to find the resources to carry out this mission. Senator 
Bingaman's amendment would give them access to these resources. It will 
give them access not in a restrictive way but in a very open-ended way 
so they can pick and choose the best device to use in their particular 
school to ensure that school performance improves. That, again, is why 
I believe we are all here.
  We have a special obligation at the national level to assist, 
particularly, low-income schools. Regrettably and unfortunately, many 
of the low-performing schools are low-income schools. Therefore, this 
effort to help support States to identify low-performing schools and to 
bring them up to the standards of the State is entirely consistent with 
the purpose of Federal legislation, which is to assist low-income 
students to have access to the opportunities that more affluent 
students and their families take for granted.
  I believe what the Senator is proposing is entirely consistent with 
what we should be about, but also it will go to the heart of leveraging 
all of our programs and all the State programs to ensure we accomplish 
the ultimate goal that lies before the Senate of ensuring that every 
child in this country has access to excellent public education.
  Coincidentally, both Senator Bingaman and I and others today are 
beginning the markup in committee of the reauthorization of the 
Elementary and Secondary Education Act. We will be pursuing these 
issues within the context of that legislation. Today, when we have a 
bill in this Chamber that purports to be a way to assist education, 
elementary and secondary education, in the United States, we have to 
seize this opportunity to point out that the heart of our efforts has 
to be the reinforcement of what we have already begun years ago, which 
is to develop within the States the capacity to evaluate their schools 
based upon their standards and then to intervene successfully to fix 
these schools.
  Before we go on to more attenuated means to help education in the 
United States--such as tax credits and other proposals--we have a 
primary responsibility and, today, an opportunity to do

[[Page 1872]]

what we started to do in 1994 to give the States the resources, further 
incentives to evaluate their schools, identify the schools that are 
failing, to step in with their choice of intervention strategies, and 
to fix the schools in America.
  There are over 8,000 schools in this country that are not meeting 
State standards. Those figures come from our Department of Education. 
What is preventing the States and the localities from stepping in right 
now? There might be a host of issues, but one thing we can do to 
accelerate that intervention is to support the Bingaman amendment, to 
give them resources and give them the clarion call to step in and fix 
the schools so we can declare--as I hope we can at the end of this 
debate and certainly I hope at the end of the debate on the Elementary 
and Secondary Education Act--that we are not only committed but we are 
on a path to ensure that every school in this country is providing 
every American child with the opportunity to succeed. Every public 
school in this country is doing that.
  I commend the Senator and I thank him for yielding time to me. I 
yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I yield myself such time as I may consume 
off of the Abraham amendment debate time.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. ROTH. Mr. President, I intend to offer a substitute amendment to 
S. 1134 later today. The underlying bill was reported out of the 
Finance Committee almost 1 year ago, in May 1999. My substitute 
amendment makes some important and necessary policy changes that were 
not done before--because of budget constraints 1 year ago. My amendment 
also updates the bill to account for the passage of time.
  When the committee originally considered this education bill, we were 
operating under last year's budget scenario. Since that time, the 
surplus numbers have increased dramatically. In today's economic 
environment, I believe that it is appropriate to use the surplus to 
provide education tax incentives for American families. Through their 
hard work, the American people created these favorable economic 
conditions and the resulting budget surplus. They should be entitled to 
take some of that surplus back.
  We should not have to raise taxes to offset these much needed 
education tax incentives. My amendment makes this legislation a true 
tax cut relief bill for education. With a growing Federal surplus 
created by their tax dollars, Americans should not be taxed again to 
pay for a national priority.
  Accordingly, my substitute amendment strikes all of the revenue 
raisers in S. 1134. The cost of my amendment is but a small percentage 
of the projected budget surplus over the next 10 years.
  Now let me explain some of the substantive changes that I make in the 
substitute amendment. First, the underlying bill increases the maximum 
contribution amount for an Education IRA from $500 per year to $2,000 
per year. The underlying bill also allows contributions to an Education 
IRA to be used for kindergarten through high school education expenses. 
These are both important and needed changes. But the underlying bill 
sunsets both of those benefits after the year 2003. That is not good 
policy. Accordingly, my bill removes the sunset--it makes permanent 
both the increase in the contribution limit and the flexibility in the 
use of the accounts.
  Planning and saving for college should take place as early as 
possible. To help families make those important decisions, they need to 
know how much money they can put away and for what it can be used. 
Having provisions that sunset--and thus need to be renewed by 
Congress--takes away from that certainty. We need to make saving for 
college easier and more certain--not complex and uncertain.
  I can easily see why a family would not want to take their hard 
earned savings and put them in a program where the terms could change 
in a few years. My amendment helps to solve that problem. We should not 
sunset our future--the education of our children.
  Education IRAs are extremely important for a few reasons. First, they 
help families afford the escalating costs of higher education. The 
increase to $2,000 will make these accounts more attractive to families 
who want to use them and to institutions who want to offer them. 
Second, the existence of an education IRA gives an additional push to a 
student to attend college. Last month, the Senate Governmental Affairs 
Committee held a hearing on the rising cost of college tuition. One of 
the witnesses was Dr. Caroline M. Hoxby, an associate professor of 
economics at Harvard University.
  Commenting on the behavioral incentives of an Education IRA, Dr. 
Hoxby noted that for an eighth grader, there is something different 
about knowing that there is money being put away for your college 
education and that you will lose it and the opportunity to go to 
college if you do not continue to do well. It makes sense that a child 
who is aware that there is a fund being built up for his or her future 
education would think longer and harder about going to college.
  My amendment also fixes a trap for the unwary. Under current law, a 
student who takes a distribution from an Education IRA is not able to 
use the HOPE or Lifetime Learning Credit--even if different education 
expenses are allocated for the different tax benefits. Again, this is 
not right. We are providing these education tax incentives to families 
because they need them. We should not hold them out there--making 
people believe that they are available--and then take them away. 
Because of revenue constraints, the original Finance Committee bill 
fixed this coordination only for a few years. My amendment makes the 
coordination permanent, and makes sure that families continue to 
receive the full benefits from all these tax benefits.
  My amendment also makes the tax-free treatment of employer-provided 
educational assistance permanent. In last year's Extenders bill, 
Congress extended the current tax-free treatment for a few years. That 
was the right move, but it did not go far enough. First, something as 
important and necessary as continuing education should not be wrapped 
up in the uncertainty of extenders legislation. Workers and companies 
need to plan ahead, and they need to know how these educational 
expenses will be treated under the Tax Code. Second, we should 
reinstitute the exclusion for graduate education expenses. Especially 
in today's dynamic economy--which is marked by high technology and 
innovation--it is important that workers have access to graduate 
education. My amendment recognizes that fact, and so it makes permanent 
tax-free treatment of employer-provided educational assistance for both 
undergraduate and graduate level courses.
  Finally, my amendment updates the Finance Committee bill by changing 
the effective dates of the provisions. They would all be effective 
beginning in the year 2001. I should also note that my amendment takes 
into account the Senate's adoption of the Collins amendment yesterday--
and so will include that amendment as well as any others that have been 
adopted.
  Why are the permanent provisions in my amendment so important? Some 
Senators have tried to rationalize their opposition to this bill by 
claiming that it would not do enough to advance education. My amendment 
guarantees that this is simply not true.
  My amendment would allow parents to contribute up to $2,000 annually 
toward their child's education--from the day of birth to the first day 
of college.
  That is just $5.48 a day or $38.46 a week. That may not seem like a 
lot but, like a train, it may start slowly but it is very powerful. It 
will gain speed. It is a savings express to college.
  By putting their child on the savings express, after 18 years when 
that child is ready to go to college, the parents will have $65,200, 
and that just assumes a 6 percent rate of interest--the rate on a 
Government security. Of course, other investments could yield even 
more, but a U.S. Government security is the safest in the world.
  So parents would have at least $65,200 toward their child's 
education. $29,000

[[Page 1873]]

of that would be solely due to the power of compounding interest. And 
every cent of that $29,000 would be tax-free--it would go straight into 
education.
  Maybe that still does not seem like a lot to some folks, but it sure 
seems like a lot to parents who are struggling today to insure college 
for their children tomorrow.
  The average annual cost of college--tuition, room, and fees--in 1997-
1998, was $9,536. At the University of Delaware, it is $9,984 for this 
school year. So the national average total cost is roughly $10,000 per 
year or $40,000 for the cost of a college education.
  My amendment before us today will cover this. It will give parents 
and students peace of mind.
  My amendment is a powerful incentive to save. It is an engine. It is 
the engine that can pull a long train of savings--and dreams.
  Like the Little Engine that Could, my amendment makes this 
legislation the Education Savings Plan that Will. Parents and children 
getting on this savings train, will get off at college to a better 
future.
  I am amazed that some people are trying to overlook the train and 
just see the caboose. I promise you the American people are not. 
America has waited for this college savings plan for 3 years. This 
legislation brings it home today. It is time the President got on 
board.
  The measures in this bill are an important step forward. My amendment 
will not only take us another step forward but keep us on a permanent 
track to prosperity.
  I urge my colleagues to join in a bipartisan effort to make education 
affordable for American families.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Grams). Who yields time? The Senator from 
Georgia.
  Mr. COVERDELL. Mr. President, how much time remains on each side?
  The PRESIDING OFFICER. The majority has 46 minutes; the minority has 
33 minutes remaining.
  Mr. COVERDELL. Mr. President, I want to speak briefly to the Bingaman 
amendment.
  First, I associate myself with the remarks of the Senator from 
Delaware. The Senator talked about the train that could and the train 
that will, but it will not if we adopt the Bingaman amendment because 
the Bingaman amendment neuters, makes moot, the education IRA, the 
education savings account. He takes the funding that is in the bill 
that is before us and shifts it to the Department of Education. It may 
be a rational goal or not; that can be debated. The bottom line is that 
everything Senator Roth of Delaware has just spoken to would be moot. 
All the advantages, the accumulation of funds that will allow families 
to more effectively deal with college costs or educational costs in 
general will disappear, end, be over, no train.
  This is about the third attempt from the other side to bring ``an 
apple pie goal'' and use it as a tactic to defund educational savings 
accounts.
  With regard to the Bingaman amendment and its issues of 
accountability, of course those are rightfully being discussed in the 
Elementary and Secondary Education Act which is in committee. It is 
being jump-started in a very confrontational way in that the very 
essence of everything we have been talking about for the better part of 
2 weeks would be moot if we allowed the funding that allows the 
creation of family education savings accounts to be shifted over to the 
Department of Education and all that bureaucratic morass in the name of 
a good goal.
  Certainly, accountability is something for which we all strive. I do 
think we ought to remember that accountability in schools is primarily 
the responsibility of the State governments. Currently, of all the 
education funds available in America, some 13 percent are now provided 
by the Federal Government.
  What is interesting is about 50 to 60 percent of the administrative 
overhead and regulations and those things that bog down principals and 
superintendents and teachers is a Federal mandate. We send off a check 
for 13 percent, but we demand about a 50-percent overhead on what all 
those local schools have to do.
  We will be voting a little bit later on the Robb amendment which, of 
course, does the same thing. It creates a national school construction 
program, and if my colleagues read through the amendment, they will see 
it is going to take a building of lawyers to understand all the 
requirements and mandates.
  I wanted to make the point that on the Bingaman amendment and, for 
that matter, the Robb amendment, both have the effect of defunding and 
making impossible the creation of the education savings account.
  I will take a few more minutes to remind everybody that by Government 
predictions and estimates, the education savings account we are 
proposing will affect 14 million American families who are educating 20 
million children. Because they are setting up this education savings 
account, they will invest--these are the American families--$12 billion 
over the next 10 years to be used to help their children for 
educational purposes.
  So every time we confront one of these amendments that removes the 
funding to establish the education savings account, we are not only 
throwing the idea away, but we are throwing away $12 billion of 
volunteered money that would come from these 14 million families for 
their children. It will be one of the largest infusions of resources we 
have seen in public-private education in many years, and the Federal 
Government is not having to raise taxes to do it. They are not having 
to appropriate money to do it. We are simply saying we will allow the 
interest that will build up in these education savings accounts not to 
be taxed.
  Over a 10-year period, it is a reasonably small number of tax revenue 
that is forfeited, and it makes the American public do massive things. 
Imagine saving $12 billion for the aid of kids who are trying to get 
through school and college.
  I wanted to make it clear that these amendments, under these ``apple 
pie'' titles have the effect of closing down the idea that we will be 
opening an education savings account.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the period 
of time that is consumed in the quorum call be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the 
pending consent agreement be amended to include a vote in relation to 
the Graham amendment and, therefore, those three votes be postponed to 
occur at 2 p.m. today. I further ask unanimous consent that no second-
degree amendments be in order to either of the three amendments prior 
to the votes and the time between now and 2 p.m. be equally divided for 
debate of all three amendments.
  The PRESIDING OFFICER (Mr. Burns). Is there objection?
  Mr. REID. Mr. President, reserving the right to object, it is my 
understanding the next 2 hours, then, are evenly divided between the 
minority and majority.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. COVERDELL. Therefore, Mr. President, the next votes will occur at

[[Page 1874]]

2. The Senate was advised that it would be at 1 and there would be two 
votes. So the change is that we are able to work another amendment in, 
and we will have 3 votes at 2.
  The PRESIDING OFFICER. The Senator from Florida.


                           Amendment No. 2864

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

  Mr. GRAHAM. Mr. President, I will be offering an amendment which is 
entitled Transition to Teaching. This amendment came to my attention as 
a result of a series of personal experiences.
  One set of those experiences related to the military and specifically 
the U.S. Navy in Pensacola. Several years ago, facing the downsizing of 
the military and aware that there were going to be a lot of people with 
talents, particularly in areas such as science and mathematics, who 
would be looking for a second career, the U.S. Navy in Pensacola, the 
State university in Pensacola, and the University of West Florida 
formed a partnership. That partnership was to provide training for 
naval personnel who were within a few months or years of their 
retirement date so that when they did reach retirement, they would be 
prepared to go into the classrooms of America with full certification 
and commence a second career educating the next generation of young 
Americans.
  This has been a very successful program. It has assisted scores of 
schools in my State and many more across the country. This program has 
been generally referred to as the Troops to Teachers Program.
  Last August, I did one of my monthly workdays at North Marion High 
School north of Ocala, FL. There I met a man by the name of Bill 
Aradine. Bill teaches automobile mechanics at North Marion. North 
Marion, as do many schools in America, every year faces a major 
challenge in how to recruit enough young new teachers to fill the 
ranks.
  We are facing, in the next decade, something on the order of 2 
million American teachers who are going to retire. These are teachers 
who largely came to the classroom in the 1950s and 1960s, are now 
reaching their retirement period, and are going to create tremendous 
demands for new teachers to fill those ranks. Bill Aradine filled one 
of those positions at North Marion High School.
  What is peculiar about Bill is not just the fact that he is 
considered to be an outstanding teacher who motivates his students and 
has prepared students for very good paying jobs upon their graduation 
from his automobile mechanics program, but what is most peculiar about 
Bill is the fact that he is a man who already had a career. The career 
was that, at first, he was an automobile mechanic and then the lead 
mechanic of one of the large automobile dealerships in Marion County, 
FL. So when he came to the classroom, he was a fully mature adult with 
a lot of experience in the area he was going to teach, credibility with 
the students, and the ability to be beyond a teacher, a mentor, a 
counselor, and the bridge from the classroom to employment for his 
students.
  Now, Bill made that transition to the classroom out of his own grit, 
his interest in being able to share with young Floridians what he had 
learned in a lifetime of automobile mechanics. But Bill, unfortunately, 
is a rarer commodity than he should be. We ought to be encouraging more 
people at midcareer to consider the classroom as their second career. 
We ought to be facilitating their ability, as the Navy and the 
University of West Florida did, to get certified so they can move 
seemlessly into the classroom. We ought to recognize the fact that a 
student at 40 is different than a student at 18, in terms of their 
class schedule and their other responsibilities, both family and 
economic; and we ought to try to make it easier for those Americans to 
be able to pursue their desire at a second career in the classroom.
  That is what the transition to teaching legislation intends to do. It 
focuses on two of the principal inhibitors to persons pursuing a second 
career in education. The first of those occurs at the universities. The 
universities are very well prepared to train people who are right out 
of high school, who don't have many family or economic 
responsibilities, and who, at the age of 22 or 23, will go into the 
classroom. They are not so well prepared to deal with the student who 
is in their forties, who has all these responsibilities and has to have 
a greater degree of flexibility in their schedule. As the University of 
West Florida found, they had to redo their curriculum in order to be 
able to respond to the needs of the Navy personnel. I suggest the same 
thing is going to be required if we are going to move the Bill Aradines 
from a rare exception to a significant stream of persons coming into 
the classroom as a second career. So the first part of our transition 
to teaching is focused on the universities to provide them some 
stimulation and resources to commence the process of restructuring 
their curriculum so they can be responsive to the needs of the middle-
age second career student. Second is to provide stipends to these 
students while they are undergoing this process of change, recognizing 
that they have other responsibilities, typically, in terms of 
supporting their families and the other obligations that an adult would 
typically have.
  So those are the two targets of this legislation in order to 
facilitate more Americans being able to consider a second career in 
education and to be able to contribute to that 2 million new teachers 
that America is going to need in the next 10 years in order to meet the 
tremendous demands that will be caused by the impending retirements of 
many hundreds of thousands of current teachers.
  I will offer, for purposes of consideration as an amendment to the 
legislation that is pending before us, an amendment on which I have 
been joined by Senators Bingaman and Robb, entitled ``Transition to 
Teaching.'' I will urge its consideration and vote at the scheduled 
time of 2 o'clock.
  Mr. GRAHAM. Mr. President, I now send my amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

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

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

       At the appropriate place, add the following:

                    TITLE __--TRANSITION TO TEACHING

     SEC. __1. SHORT TITLE.

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

     SEC. __2. FINDINGS.

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

     SEC. __3. PURPOSE.

       The purpose of this title is to address the need of high-
     poverty school districts for

[[Page 1875]]

     highly qualified teachers in particular subject areas, such 
     as mathematics, science, foreign languages, bilingual 
     education, and special education, needed by those school 
     districts, by recruiting, preparing, placing, and supporting 
     career-changing professionals who have knowledge and 
     experience that will help them become such teachers.

     SEC. __4. PROGRAM AUTHORIZED.

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

     SEC. __5. APPLICATION.

       Each applicant that desires an award under section __4(a) 
     shall submit an application to the Secretary containing such 
     information as the Secretary requires, including--
       (1) a description of the target group of career-changing 
     professionals upon which the applicant will focus in carrying 
     out its program under this title, including a description of 
     the characteristics of that target group that shows how the 
     knowledge and experience of its members are relevant to 
     meeting the purpose of this title;
       (2) a description of how the applicant will identify and 
     recruit program participants;
       (3) a description of the training that program participants 
     will receive and how that training will relate to their 
     certification as teachers;
       (4) a description of how the applicant will ensure that 
     program participants are placed and teach in high-poverty 
     local educational agencies;
       (5) a description of the teacher induction services (which 
     may be provided through existing induction programs) the 
     program participants will receive throughout at least their 
     first year of teaching;
       (6) a description of how the applicant will collaborate, as 
     needed, with other institutions, agencies, or organizations 
     to recruit, train, place, and support program participants 
     under this title, including evidence of the commitment of 
     those institutions, agencies, or organizations to the 
     applicant's program;
       (7) a description of how the applicant will evaluate the 
     progress and effectiveness of its program, including--
       (A) the program's goals and objectives;
       (B) the performance indicators the applicant will use to 
     measure the program's progress; and
       (C) the outcome measures that will be used to determine the 
     program's effectiveness; and
       (8) an assurance that the applicant will provide to the 
     Secretary such information as the Secretary determines 
     necessary to determine the overall effectiveness of programs 
     under this title.

     SEC. __6. USES OF FUNDS AND PERIOD OF SERVICE.

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

     SEC. __7. EQUITABLE DISTRIBUTION.

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

     SEC. __8. DEFINITIONS.

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

  Mr. GRAHAM. Mr. President, when I introduced Transition to Teaching 
in October last year, I talked about my workday with Bill Aradine.
  He teaches 150 students, from 9th to 12th grade at North Marion High 
School near Ocala, FL.
  He teaches auto mechanics, and has sparked an interest in students 
that may lead to rewarding, lucrative, and challenging careers for 
them.
  But Mr. Aradine brings something else to his first year in North 
Marion High School--eleven years of on-the-job experience.
  He has years of experience in a local Chevrolet car dealership, and 
he is starting a second career in teaching.
  The students look at him with a different perspective: When he says 
that ``you will need to know this to succeed'' they know that he knows.
  Having just come from the automotive industry, he teaches at the 
cutting edge.
  The information that he brings to his students is what he was 
actually doing in the workplace not that long ago.
  Mr. Aradine is also a bridge between North Marion High students and 
the world of employment.
  He offers them advice, counsel, and real-life connections to future 
jobs.
  As Bill Aradine made the mid-career transition into the teaching 
profession, students gained a valuable instructor and mentor, and North 
Marion High School was able to fill a vacancy and ease its teacher 
shortage.
  Every August and September--another school year begins for thousands 
of young Americans.
  Almost every year at this time, I hear from school districts in 
Florida about teacher shortages:
  Miami-Dade hired 1,700 new teachers for the 1999 school year, and 
still had 300 vacancies to fill on the first day of classes.
  Hillsborough County hired 1,493 teachers for the start of the school 
year and were still 238 teachers short when the first class bell rang.
  Orange County needed 1,300 teachers for the new year, and still had 
50 vacancies several months after school started.
  These concerns will only get worse: 40 percent of current 
schoolteachers are over age 50, on the verge of retirement.
  Who will be the future role models to the next generation of 
Americans?
  The importance of having high-quality teachers, and in sufficient 
numbers is crucial when we look at the challenges facing education in 
the future.
  The American family structure will change in two key ways: Half of 
all children will spend some of their childhood in single-parent homes, 
and are more likely to live in poverty. And, of the children who grow 
up in a nuclear family, very often both parents will work, thus are 
less able to be involved in a child's school and schoolwork.
  Second, societal expectations for students upon graduation will be 
greater.
  In the middle of this century, 20 percent of the jobs needed skilled 
workers.
  At the end of this century, 80 percent of jobs will need skilled 
workers.
  Thus, the American student will need to graduate from school better 
prepared for the hi-tech world than ever before, but single parent 
families and dual-income families, in general, will face more 
challenges in being actively involved in their child's education.
  These challenges, and others, will face the American educational 
system.
  I rise today to take one step forward in easing the nationwide 
teacher shortage, and offering challenging new opportunities for 
America's professionals by introducing the Transition to Teaching Act 
of 1999.
  Representatives Jim Davis of Florida and Tim Roemer of Indiana have 
taken the lead in the House of Representatives on this issue.
  We have a very successful model on which to build the Transition to 
Teaching program.

[[Page 1876]]

  Since 1994, the ``Troops to Teachers'' program has brought more than 
3,000 retired military personnel to our classrooms as math, science, 
and technology teachers.
  Florida schools have the benefit of more than 270 individuals who 
have successfully completed the Troops to Teachers program, and are 
bringing their life-experience to the classroom today.
  Troops to Teachers, and now Transition to Teaching, overcome two of 
the main obstacles that mid-career professionals face when becoming a 
teacher.
  It streamlines the teaching certification process.
  It provides money to mid-career professionals to become certified.
  It's not impossible to do this now, as Mr. Aradine has shown, but 
this legislation will assist with and simplify the process.
  The first issue that is addressed involves teaching colleges within 
universities.
  They are often set up for traditional students, in their early-20's, 
just starting out in their professional lives.
  These programs are generally taken over a multi-year period as a 
full-time college student.
  This legislation encourages teaching colleges to develop curriculum 
suitable for an individual who has many years of work experience.
  These programs are more streamlined, more flexible in school hours, 
and recognize that the professional brings more life and work 
experience than a traditional college student.
  By developing such programs, colleges can maintain high standards, 
but allow a mid-career professional, making the change into teaching to 
become certified in a more efficient, streamlined manner.
  Teaching colleges are also asked to develop programs to maintain 
contact with and support for these new teachers during at least their 
first year in the classroom.
  Second, Transition to Teaching will assist teachers who come to the 
profession in mid-career in a very tangible way.
  Grants will be awarded, up to $5,000 per participant, to offset the 
costs of becoming a certified teacher.
  In return, the teacher agrees to teach in low-income schools for 
three years, as determined by the percentage of Title One students in 
the school population.
  Thus, two of the biggest obstacles to becoming a teacher in mid-
career are alleviated by this legislation:
  First, the certification process is streamlined, and second, stipends 
are provided to offset the cost of this additional education.
  By expanding the ``Troops to Teachers'' program into ``Transition to 
Teaching,'' law enforcement, attorneys, business leaders, scientists, 
entrepreneurs, and others in the private sector, should be encouraged 
to share their wisdom with students.
  This amendment is timely. We are on the cusp of the retirement of 
millions of baby boomers.
  By encouraging recent retirees, or mid-career professionals, to 
become certified through Transition to Teaching and spend a few years 
in the classroom, we will bring the life skills of experienced 
professionals to our youngest citizens.
  I encourage my colleagues to support this amendment.
  Our nation's children deserve our best efforts to provide them with a 
world class education.
  Let me just add an economic component to this amendment. This 
amendment would be in the nature of an authorization. The President has 
in his budget an item of $25 million, which would be the basis of 
supporting this program, as well as the current Troops to Teachers 
Program.
  It is estimated that approximately half of the persons who would be 
trained with that $25 million appropriation that has been recommended 
by the President would be military personnel and the other half would 
be civilian. As we begin to stabilize the reduction of the military, 
the proportion of those persons who would be trained for a second 
career in the classroom would probably begin to shift with a larger 
number being from the civilian sector. It is estimated that the cost 
per student for this program will be approximately $3,500 to $4,000 a 
year for their training, with the average person taking between 1 and 2 
years to be trained to the point they are certified to go into the 
classroom.
  I believe this is a very reasonable and prudent investment for 
America to make in Americans who have demonstrated their 
accomplishments in a first career and are now ready to share their 
experiences with American youth in a second career in the classroom. 
This will help to facilitate that transition to teaching for the 21st 
century.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LAUTENBERG. Mr. President, I ask whether the floor is in any kind 
of a parliamentary situation at this time.
  The PRESIDING OFFICER. The time is controlled and evenly divided 
until 2 o'clock on the pending amendment.
  Mr. LAUTENBERG. Mr. President, I ask unanimous consent to speak as if 
in morning business for a maximum of 15 minutes.
  The PRESIDING OFFICER. Is there objection?
  Mr. COVERDELL. Mr. President, reserving the right to object, I 
mention to the Senator that in the context of these amendments that his 
side has invited Senator Wellstone to come to begin his amendment. If 
that were to come about, we would need to try to accommodate it. If the 
Senator would help us with that, I see no problem.
  Mr. LAUTENBERG. I would be pleased to do that.
  Mr. COVERDELL. I have no objection.
  The PRESIDING OFFICER. The Senator from New Jersey.

                          ____________________