II

107TH CONGRESS

1ST SESSION S. 1414

To provide incentives for States to establish and administer periodic testing

and merit pay programs for elementary school and secondary school

teachers, and for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 10, 2001

Mr. CRAIG introduced the following bill; which was read twice and referred

to the Committee on Health, Education, Labor, and Pensions

A BILL

To provide incentives for States to establish and administer

periodic testing and merit pay programs for elementary

school and secondary school teachers, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Parent and Teacher

5 Achievement Act of 2001’’.
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1 SEC. 2. STATE INCENTIVES FOR TEACHER TESTING AND

2 MERIT PAY.

3 (a) AMENDMENTS.—Title II of the Elementary and

4 Secondary Education Act of 1965 (20 U.S.C. 6601 et

5 seq.) is amended—

6 (1) by redesignating part E as part F;

7 (2) by redesignating sections 2401 and 2402 as

8 sections 2501 and 2502, respectively; and

9 (3) by inserting after part D the following:

10 ‘‘PART E—STATE INCENTIVES FOR TEACHER

11 TESTING AND MERIT PAY

12 ‘‘SEC. 2401. STATE INCENTIVES FOR TEACHER TESTING

13 AND MERIT PAY.

14 ‘‘(a) STATE AWARDS.—From funds made available

15 under subsection (b) for a fiscal year, the Secretary shall

16 make an award to each State that—

17 ‘‘(1) administers a test to each elementary

18 school and secondary school teacher in the State,

19 with respect to the subjects taught by the teacher,

20 every 3 to 5 years;

21 ‘‘(2) has an elementary school and secondary

22 school teacher compensation system that is based on

23 merit; and

24 ‘‘(3) requires elementary school and secondary

25 school teachers to earn continuing education credits

26 as part of a State recertification process.
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1 ‘‘(b) AVAILABLE FUNDING.—Notwithstanding any

2 other provision of law, the amount of funds that are avail3 able to carry out this section for a fiscal year is 50 percent

4 of the amount of funds appropriated to carry out this title

5 that are in excess of the amount so appropriated for fiscal

6 year 2001, except that no funds shall be available to carry

7 out this section for any fiscal year for which—

8 ‘‘(1) the amount appropriated to carry out this

9 title exceeds $600,000,000; or

10 ‘‘(2) each of the several States is eligible to re11 ceive an award under this section.

12 ‘‘(c) AWARD AMOUNT.—A State shall receive an

13 award under this section in an amount that bears the

14 same relation to the total amount available for awards

15 under this section for a fiscal year as the number of States

16 that are eligible to receive such an award for the fiscal

17 year bears to the total number of all States so eligible for

18 the fiscal year.

19 ‘‘(d) USE OF FUNDS.—Funds provided under this

20 section may be used by States to carry out the activities

21 described in section 2207.

22 ‘‘(e) DEFINITION OF STATE.—In this section, the

23 term ‘State’ means each of the 50 States and the District

24 of Columbia.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) shall take effect on October 1, 2001.

3 SEC. 3. TEACHER TESTING AND MERIT PAY.

4 (a) IN GENERAL.—Notwithstanding any other provi5 sion of law, a State may use Federal education funds—

6 (1) to carry out a test of each elementary

7 school or secondary school teacher in the State with

8 respect to the subjects taught by the teacher; or

9 (2) to establish a merit pay program for the

10 teachers.

11 (b) DEFINITIONS.—In this section, the terms ‘‘ele12 mentary school’’ and ‘‘secondary school’’ have the mean13 ings given the terms in section 14101 of the Elementary

14 and Secondary Education Act of 1965 (20 U.S.C. 8801).

15 SEC. 4. NONREFUNDABLE CREDIT FOR ELEMENTARY AND

16 SECONDARY SCHOOL EXPENSES.

17 (a) IN GENERAL.—Subpart A of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of

19 1986 (relating to nonrefundable personal credits) is

20 amended by inserting after section 25B the following new

21 section:

22 ‘‘SEC. 25C. CREDIT FOR ELEMENTARY AND SECONDARY

23 SCHOOL EXPENSES.

24 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in25 dividual, there shall be allowed as a credit against the tax
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1 imposed by this chapter for the taxable year an amount

2 equal to the qualified elementary and secondary education

3 expenses (within the meaning of section 530(b)(4)) with

4 respect to one or more qualifying students which are paid

5 or incurred by the individual during such taxable year.

6 ‘‘(b) LIMITATIONS.—

7 ‘‘(1) MAXIMUM CREDIT.—The credit allowed by

8 subsection (a) for any taxable year shall not exceed

9 $1000 per qualifying student.

10 ‘‘(2) MAXIMUM TUITION EXPENSES.—The tui11 tion expenses which may be taken into account in

12 determining qualified elementary and secondary edu13 cation expenses for any taxable year shall not exceed

14 $500 per qualifying student.

15 ‘‘(c) QUALIFYING STUDENT.—For purposes of this

16 section, the term ‘qualifying student’ means a dependent

17 (within the meaning of section 152) or a relative of the

18 taxpayer who is enrolled in school (as defined in section

19 530(b)(4)(B)) on a full-time basis. For purposes of the

20 preceding sentence, the term ‘relative’ means an individual

21 bearing a relationship to the taxpayer which is described

22 in any of paragraphs (1) through (8) of section 152(a).

23 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction

24 or exclusion shall be allowed under this chapter for any

25 expense for which credit is allowed under this section.
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1 ‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—A

2 taxpayer may elect to have this section not apply for any

3 taxable year.’’.

4 (b) CONFORMING AMENDMENT.—The table of sec5 tions for subpart A of part IV of subchapter A of chapter

6 1 of the Internal Revenue Code of 1986 is amended by

7 inserting after the item relating to section 25B the fol8 lowing new item:

‘‘Sec. 25C. Credit for elementary and secondary school expenses.’’.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to taxable years beginning after

11 December 31, 2001.

12 SEC. 5. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT OF

13 ELEMENTARY AND SECONDARY SCHOOLS.

14 (a) IN GENERAL.—Subpart B of part IV of sub15 chapter A of chapter 1 of the Internal Revenue Code of

16 1986 (relating to other credits) is amended by adding at

17 the end the following new section:

18 ‘‘SEC. 30B. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT

19 OF ELEMENTARY AND SECONDARY SCHOOLS.

20 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al21 lowed as a credit against the tax imposed by this chapter

22 for the taxable year an amount equal to 75 percent of the

23 qualified charitable contributions of the taxpayer for the

24 taxable year.
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1 ‘‘(b) MAXIMUM CREDIT.—

2 ‘‘(1) INDIVIDUALS.—In the case of a taxpayer

3 other than a corporation, the credit allowed by sub4 section (a) for any taxable year shall not exceed

5 $500 ($1,000 in the case of a joint return).

6 ‘‘(2) CORPORATIONS.—In the case of a corpora7 tion, the credit allowed by subsection (a) shall not

8 exceed $100,000.

9 ‘‘(c) QUALIFIED CHARITABLE CONTRIBUTION.—For

10 purposes of this section—

11 ‘‘(1) IN GENERAL.—The term ‘qualified chari12 table contribution’ means, with respect to any tax13 able year, the aggregate amount allowable as a de14 duction under section 170 (determined without re15 gard to subsection (d)(1)) for cash contributions to

16 a school tuition organization.

17 ‘‘(2) SCHOOL TUITION ORGANIZATION.—

18 ‘‘(A) IN GENERAL.—The term ‘school tui19 tion organization’ means any organization

20 which—

21 ‘‘(i) is described in section 170(c)(2),

22 ‘‘(ii) allocates at least 90 percent of

23 its gross income and contributions and

24 gifts to elementary and secondary school

25 scholarships, and
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1 ‘‘(iii) awards scholarships to any stu2 dent who is eligible for free or reduced cost

3 lunch under the school program established

4 under the Richard B. Russell National

5 School Lunch Act.

6 ‘‘(B) ELEMENTARY AND SECONDARY

7 SCHOOL SCHOLARSHIP.—The term ‘elementary

8 and secondary school scholarship’ means any

9 scholarship excludable from gross income under

10 section 117 for expenses related to education at

11 or below the 12th grade.

12 ‘‘(d) SPECIAL RULES.—

13 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc14 tion shall be allowed under this chapter for any con15 tribution for which credit is allowed under this sec16 tion.

17 ‘‘(2) APPLICATION WITH OTHER CREDITS.—

18 The credit allowable under subsection (a) for any

19 taxable year shall not exceed the excess (if any) of—

20 ‘‘(A) the regular tax for the taxable year,

21 reduced by the sum of the credits allowable

22 under subpart A and the preceding sections of

23 this subpart, over

24 ‘‘(B) the tentative minimum tax for the

25 taxable year.
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1 ‘‘(3) CONTROLLED GROUPS.—All persons who

2 are treated as one employer under subsection (a) or

3 (b) of section 52 shall be treated as 1 taxpayer for

4 purposes of this section.

5 ‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—A

6 taxpayer may elect to have this section not apply for any

7 taxable year.’’.

8 (b) CONFORMING AMENDMENT.—The table of sec9 tions for subpart B of part IV of subchapter A of chapter

10 1 of the Internal Revenue Code of 1986 is amended by

11 adding at the end the following new item:

‘‘Sec. 30B. Credit for contributions for the benefit of elementary

and secondary schools.’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to taxable years beginning after

14 December 31, 2001.

15 SEC. 6. CREDIT TO ELEMENTARY AND SECONDARY SCHOOL

16 TEACHERS WHO PROVIDE CLASSROOM MATE17 RIALS.

18 (a) IN GENERAL.—Subpart B of part IV of sub19 chapter A of chapter 1 of the Internal Revenue Code of

20 1986 (relating to other credits), as amended by section

21 4(a), is amended by adding at the end the following new

22 section:
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1 ‘‘SEC. 30C. CREDIT TO ELEMENTARY AND SECONDARY

2 SCHOOL TEACHERS WHO PROVIDE CLASS3 ROOM MATERIALS.

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli5 gible educator, there shall be allowed as a credit against

6 the tax imposed by this chapter for the taxable year an

7 amount equal to the qualified elementary and secondary

8 education expenses which are paid or incurred by the tax9 payer during such taxable year.

10 ‘‘(b) MAXIMUM CREDIT.—The credit allowed by sub11 section (a) for any taxable year shall not exceed $1,000.

12 ‘‘(c) DEFINITIONS.—

13 ‘‘(1) ELIGIBLE EDUCATOR.—The term ‘eligible

14 educator’ means an individual who is a teacher, in15 structor, counselor, principal, or aide in a school (as

16 defined in section 530(b)(4)(B)) for at least 900

17 hours during a school year.

18 ‘‘(2) QUALIFIED ELEMENTARY AND SECONDARY

19 EDUCATION EXPENSES.—The term ‘qualified ele20 mentary and secondary education expenses’ means

21 expenses for books, supplies (other than nonathletic

22 supplies for courses of instruction in health or phys23 ical education), computer equipment (including re24 lated software and services) and other equipment,

25 and supplementary materials used by an eligible ed26 ucator in the classroom.
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1 ‘‘(d) SPECIAL RULES.—

2 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc3 tion shall be allowed under this chapter for any ex4 pense for which credit is allowed under this section.

5 ‘‘(2) APPLICATION WITH OTHER CREDITS.—

6 The credit allowable under subsection (a) for any

7 taxable year shall not exceed the excess (if any) of—

8 ‘‘(A) the regular tax for the taxable year,

9 reduced by the sum of the credits allowable

10 under subpart A and the preceding sections of

11 this subpart, over

12 ‘‘(B) the tentative minimum tax for the

13 taxable year.

14 ‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—A

15 taxpayer may elect to have this section not apply for any

16 taxable year.’’.

17 (b) CLERICAL AMENDMENT.—The table of sections

18 for subpart B of part IV of subchapter A of chapter 1

19 of the Internal Revenue Code of 1986, as amended by sec20 tion 4(b), is amended by adding at the end the following

21 new item:

‘‘Sec. 30C. Credit to elementary and secondary school teachers

who provide classroom materials.’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to taxable years beginning after

24 December 31, 2001.
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1 SEC. 7. ADJUSTED GROSS INCOME DETERMINED BY TAK2 ING INTO ACCOUNT PROFESSIONAL DEVEL3 OPMENT EXPENSES OF ELEMENTARY AND

4 SECONDARY SCHOOL TEACHERS.

5 (a) IN GENERAL.—Section 62(a)(2) of the Internal

6 Revenue Code of 1986 (relating to certain trade and busi7 ness deductions of employees) is amended by adding at

8 the end the following:

9 ‘‘(D) PROFESSIONAL DEVELOPMENT EX10 PENSES OF ELEMENTARY AND SECONDARY

11 SCHOOL TEACHERS.—The deductions allowed

12 by section 162 which consist of expenses, not in

13 excess of $1,500, paid or incurred by an eligible

14 educator (as defined section 30C(c)(1)) by rea15 son of the participation of the educator in pro16 fessional development courses which are related

17 to the curriculum and academic subjects in

18 which the educator provides instruction or to

19 the students for which the educator provides in20 struction and which are part of a program of

21 professional development which is approved and

22 certified by the appropriate local educational

23 agency (as defined by section 14101 of the Ele24 mentary and Secondary Education Act of 1965,

25 as in effect on the date of the enactment of this

26 subparagraph).’’.
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1 (b) SPECIAL RULES.—Section 62 of the Internal

2 Revenue Code of 1986 is amended by adding at the end

3 the following:

4 ‘‘(d) SPECIAL RULES.—A deduction shall be allowed

5 under subsection (a)(2)(D) for expenses only to the extent

6 the amount of such expenses exceeds the amount exclud7 able under section 135, 529(c)(1), or 530(d)(2) for the

8 taxable year.’’.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to taxable years beginning after

11 December 31, 2001.

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