To amend the Internal Revenue Code of 1986 to encourage stronger math and science programs at elementary and secondary schools.

Summary: National Science Education Incentive Act of 2005 - Amends the Internal Revenue Code to allow: (1) certain science, engineering, math, or technology teachers who teach in elementary or secondary schools a refundable tax credit for ten percent of their undergraduate tuition costs, up to $1,000 ($1,500 for teachers in high-needs school districts); and (2) a general business tax credit for certain contributions of property or services to elementary and secondary schools and for teacher training to promote instruction in science, technology, engineering, or mathematics (STEM contributions).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Science Education Incentive 
Act of 2005''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) As concluded in the report of the Committee on Science 
        of the House of Representatives, ``Unlocking Our Future: Toward 
        a New National Science Policy,'' which was adopted by the House 
        of Representatives, the United States must maintain and improve 
        its preeminent position in science and technology in order to 
        advance human understanding of the universe and all it 
        contains, and to improve the lives, health, and freedoms of all 
        people.
            (2) It is estimated that more than half of the economic 
        growth of the United States today results directly from 
        research and development in science and technology. The most 
        fundamental research is responsible for investigating our 
        perceived universe, to extend our observations to the outer 
        limits of what our minds and methods can achieve, and to seek 
        answers to questions that have never been asked before. Applied 
        research continues the process by applying the answers from 
        basic science to the problems faced by individuals, 
        organizations, and governments in the everyday activities, so 
        that our lives may become more meaningful and livable.
            (3) The effectiveness of the United States in promoting 
        economic growth will be largely determined by the intellectual 
        capital and innovativeness of the United States. Education is 
        critical to developing this resource.
            (4) The education programs of the United States need to 
        provide for 3 different kinds of intellectual capital. First, 
        the country needs scientists and engineers to continue the 
        research and development that is central to the economic growth 
        of the United States. Second, it needs technologically 
        proficient workers who are comfortable and capable dealing with 
        the demands of a science-based, high-technology workplace. 
        Last, it needs scientifically literate voters and consumers to 
        make intelligent decisions about public policy.
            (5) Student performance on the recent Trends in 
        International Math and Science Study and the Program for 
        International Student Assessment highlights the shortcomings of 
        current K-12 science and mathematics education in the United 
        States, particularly when compared to other countries. We must 
        expect more from our Nation's educators and students if we are 
        to build on the accomplishments of previous generations. New 
        methods of teaching mathematics and science are required, as 
        well as better curricula and improved training of teachers, 
        coupled with strong parental involvement and support.
            (6) Science is more than a collection of facts, theories, 
        and results. It is a process of inquiry built upon observations 
        and data that leads to a way of knowing and explaining the 
        perceived universe in logically derived concepts and theories.
            (7) Students should learn science primarily by doing 
        science. Science education ought to reflect the scientific 
        process and be object-oriented, experiment-centered, and 
        concept-based.
            (8) Children are naturally curious and inquisitive. To 
        successfully tap into these innate qualities, education in 
        science must begin at an early age and continue throughout the 
        entire school experience.
            (9) Teachers provide the essential connection between 
        students and the content they are learning. High-quality, well-
        trained prospective teachers need to be identified and 
        recruited by presenting to them a career that is respected by 
        their peers, is financially and intellectually rewarding, and 
        contains sufficient opportunities for advancement.
            (10) Teachers must have incentives to remain in the 
        classroom and improve their practice, and training of teachers 
        is essential if the results are to be superior. Teachers need 
        to be knowledgeable of their content area, of their curriculum, 
        of up-to-date research in teaching and learning, and of 
        techniques that can be used to connect that information to 
        their students in their classroom.

SEC. 3. REFUNDABLE CREDIT FOR PORTION OF TUITION PAID FOR UNDERGRADUATE 
              EDUCATION OF CERTAIN TEACHERS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. TUITION FOR UNDERGRADUATE EDUCATION OF CERTAIN TEACHERS.

    ``(a) In General.--In the case of an individual who is an eligible 
teacher for the taxable year, there shall be allowed as a credit 
against the tax imposed by this subtitle an amount equal to 10 percent 
of qualified undergraduate tuition paid by such individual.
    ``(b) Limitations.--
            ``(1) Dollar amount.--The credit allowed by this section 
        for any taxable year shall not exceed $1,000.
            ``(2) Teachers in high-needs schools districts.--In the 
        case of one of the first 5 taxable years in which a teacher is 
        an eligible teacher who teaches in an elementary school or a 
        secondary school (as those terms are defined in section 9101 of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        7801)) receiving funds under part A of title I of such Act (20 
        U.S.C. 6311 et seq.), subparagraph (A) shall be applied by 
        substituting `$1,500' for `$1,000'.
            ``(3) Credit allowed only for 10 years.--No credit shall be 
        allowed under this section for any taxable year after the 10th 
        taxable year for which credit is allowed under this section.
    ``(c) Eligible Teacher.--For purposes of this section--
            ``(1) In general.--The term `eligible teacher' means, with 
        respect to a taxable year, any individual--
                    ``(A) who is a full-time teacher, including a full-
                time substitute teacher, in any of grades kindergarten 
                through 12th grade for the academic year ending in such 
                taxable year,
                    ``(B)(i) who teaches primarily math, science, 
                engineering, or technology courses in 1 or more of 
                grades 9 through 12 during such academic year, or
                    ``(ii) who teaches math, science, engineering, or 
                technology courses in 1 or more of grades kindergarten 
                through 8 during such academic year,
                    ``(C) who, in the case that such individual is a 
                middle or secondary school teacher, received a 
                baccalaureate or similar degree with a major in 
                mathematics, science, engineering, or technology from 
                an institution of higher education, and
                    ``(D) who is highly qualified (as defined in 
                section 9101(23) of the Elementary and Secondary 
                Education Act of 1965).
            ``(2) Special rule for administrative personnel.--School 
        administrative functions shall be treated as teaching courses 
        referred to in paragraph (1)(B) if such functions primarily 
        relate to such courses or are for a school which focuses 
        primarily on such courses.
    ``(d) Qualified Undergraduate Tuition.--For purposes of this 
section, the term `qualified undergraduate tuition' means qualified 
higher education expenses (as defined in section 529(e)(3)) for 
enrollment or attendance at an institution of higher education, reduced 
as provided in section 25A(g)(2) and by any credit allowed by section 
25A with respect to such expenses.
    ``(e) Institution of Higher Education.--The term `institution of 
higher education' means an institution of higher education as defined 
in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002).
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 36'' after ``section 
        35''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following new items:

``Sec. 36. Tuition for undergraduate education of certain teachers.
``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act; except that only periods of being an eligible teacher (as 
defined in section 36(c) of the Internal Revenue Code of 1986, as added 
by this section) after such date shall be taken into account under 
section 36(b)(3) of such Code, as so added.

SEC. 4. CREDITS FOR CERTAIN CONTRIBUTIONS BENEFITING SCIENCE, 
              TECHNOLOGY, ENGINEERING, AND MATHEMATICS EDUCATION AT THE 
              ELEMENTARY AND SECONDARY SCHOOL LEVEL.

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

``SEC. 45J. CONTRIBUTIONS BENEFITING SCIENCE, TECHNOLOGY, ENGINEERING, 
              AND MATHEMATICS EDUCATION AT THE ELEMENTARY AND SECONDARY 
              SCHOOL LEVEL.

    ``(a) In General.--For purposes of section 38, the elementary and 
secondary science, technology, engineering, and mathematics (STEM) 
contributions credit determined under this section for the taxable year 
is an amount equal to 100 percent of the qualified STEM contributions 
of the taxpayer for such taxable year.
    ``(b) Qualified STEM Contributions.--For purposes of this section, 
the term `qualified STEM contributions' means--
            ``(1) STEM school contributions,
            ``(2) STEM teacher externship expenses, and
            ``(3) STEM teacher training expenses.
    ``(c) STEM School Contributions.--For purposes of this section--
            ``(1) In general.--The term `STEM school contributions' 
        means--
                    ``(A) STEM property contributions, and
                    ``(B) STEM service contributions.
            ``(2) STEM property contributions.--The term `STEM property 
        contributions' means the amount which would (but for subsection 
        (f)) be allowed as a deduction under section 170 for a 
        charitable contribution of STEM inventory property if--
                    ``(A) the donee is an elementary or secondary 
                school described in section 170(b)(1)(A)(ii),
                    ``(B) substantially all of the use of the property 
                by the donee is within the United States or within the 
                defense dependents' education system for educational 
                purposes in any of the grades K-12 that are related to 
                the purpose or function of the donee,
                    ``(C) the original use of the property begins with 
                the donee,
                    ``(D) the property will fit productively into the 
                donee's education plan,
                    ``(E) the property is not transferred by the donee 
                in exchange for money, other property, or services, 
                except for shipping, installation and transfer costs, 
                and
                    ``(F) the donee's use and disposition of the 
                property will be in accordance with the provisions of 
                subparagraphs (B) and (E).
        The determination of the amount of deduction under section 170 
        for purposes of this paragraph shall be made as if the 
        limitation under section 170(e)(3)(B) applied to all STEM 
        inventory property.
            ``(3) STEM service contributions.--The term `STEM service 
        contributions' means the amount paid or incurred during the 
        taxable year for STEM services provided in the United States or 
        in the defense dependents' education system for the exclusive 
        benefit of students at an elementary or secondary school 
        described in section 170(b)(1)(A)(ii) but only if--
                    ``(A) the taxpayer is engaged in the trade or 
                business of providing such services on a commercial 
                basis, and
                    ``(B) no charge is imposed for providing such 
                services.
            ``(4) STEM inventory property.--The term `STEM inventory 
        property' means, with respect to any contribution to a school, 
        any property--
                    ``(A) which is described in paragraph (1) or (2) of 
                section 1221(a) with respect to the donor, and
                    ``(B) which is determined by the school to be 
                needed by the school in providing education in grades 
                K-12 in the areas of science, technology, engineering, 
                or mathematics.
            ``(5) STEM services.--The term `STEM services' means, with 
        respect to any contribution to a school, any service determined 
        by the school to be needed by the school in providing education 
        in grades K-12 in the areas of science, technology, 
        engineering, or mathematics, including teaching courses of 
        instruction at such school in any such area.
            ``(6) Defense dependents' education system.--For purposes 
        of this subsection, the term `defense dependents' education 
        system' means the program established and operated under the 
        Defense Dependents' Education Act of 1978 (20 U.S.C. 921 et 
        seq.).
    ``(d) STEM Teacher Externship Expenses.--For purposes of this 
section--
            ``(1) In general.--The term `STEM teacher externship 
        expenses' means any amount paid or incurred to carry out a STEM 
        externship program of the taxpayer but only to the extent that 
        such amount is attributable to the participation in such 
        program of any eligible STEM teacher, including amounts paid to 
        such a teacher as a stipend while participating in such 
        program.
            ``(2) STEM externship program.--The term `STEM externship 
        program' means any program--
                    ``(A) established by a taxpayer engaged in a trade 
                or business within an area of science, technology, 
                engineering, or mathematics, and
                    ``(B) under which eligible STEM teachers receive 
                training to enhance their teaching skills in the areas 
                of science, technology, engineering, or mathematics or 
                otherwise improve their knowledge in such areas.
            ``(3) Eligible stem teacher.--The term `eligible STEM 
        teacher' means any individual--
                    ``(A) who is a teacher in grades K-12 at an 
                educational organization described in section 
                170(b)(1)(A)(ii) which is located in the United States 
                or which is located on a United States military base 
                outside the United States, and
                    ``(B) whose teaching responsibilities at such 
                school include, or are likely to include, any course in 
                the areas of science, technology, engineering, or 
                mathematics.
    ``(e) STEM Teacher Training Expenses.--The term `STEM teacher 
training expenses' means any amount paid or incurred by a taxpayer 
engaged in a trade or business within an area of science, technology, 
engineering, or mathematics which is attributable to the participation 
of any eligible STEM teacher in a regular training program provided to 
employees of the taxpayer which is determined by such teacher's school 
as enhancing such teacher's teaching skills in the areas of science, 
technology, engineering, or mathematics.
    ``(f) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any amount allowed as a credit under this 
section.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of such Code is amended by striking 
        ``plus'' at the end of paragraph (18), by striking the period 
        at the end of paragraph (19), and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(20) the elementary and secondary science, technology, 
        engineering, and mathematics (STEM) contributions credit 
        determined under section 45J.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 45J. Contributions benefiting science, technology, engineering, 
                            and mathematics education at the elementary 
                            and secondary school level.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 5. ASSURANCE OF CONTINUED LOCAL CONTROL.

    Nothing in this Act may be construed to authorize any department, 
agency, officer, or employee of the United States to exercise any 
direction, supervision, or control over the curriculum, program of 
instruction, administration, or personnel of any educational 
institution or school system.