II

105TH CONGRESS

1ST SESSION S. 12

To improve education for the 21st Century.

IN THE SENATE OF THE UNITED STATES

JANUARY 21, 1997

Mr. DASCHLE (for himself; Mr. KENNEDY, Ms. MOSELEY-BRAUN, MS.

MIKULSKI; Mr. DODD, Mr. REID, Mr. DORGAN, Mrs. MURRAY, Mr.

FORD, Mr. ROCKEFELLER, Mr. INOUYE, Mr, KERRY, Mr. LEVIN, Mr.

CLELAND, Mr. JOHNSON, Mr. BREAUX, Mr. TORRICELLI, Mr. DURBIN,

Mr. GLENN, Mrs. BOXER, Mr. WELLSTONE, Mr. BRYAN and Mr. LAUTENBERG) introduced the following bill; which was read twice and referred to the Committees on Finance

A BILL

To improve education for the 21st Century.

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 ‘‘Education for the 21st

5 Century Act’’.

6 SEC. 2. FINDINGS.

7 Congress finds as follows:

8 (1) Quality public education is necessary not

9 only for the future of our children and our families,
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1 but for the future of America. A better educated

2 citizenry and workforce are essential to compete in

3 the global economy and to maintain a strong

4 democracy.

5 (2) The investment America makes today in the

6 education of its people will determine the future of

7 the Nation. In order to promote growth and prosper8 ity in our economy, and ensure individual oppor9 tunity, America must maintain education as a

10 national priority.

11 (3) Strong leadership in education is needed

12 more than ever. Schools are facing the challenge of

13 educating more highly skilled workers to meet the

14 demands of a modern economy. The Bureau of

15 Labor Statistics estimates that 60 percent of all jobs

16 created between 1992 and 2005 will require more

17 than a high school education.

18 (4) Mounting evidence suggests that far more

19 rigorous levels of academic achievement will be

20 required to equip American students for the 21st

21 century workplace. Employers will demand increas22 ingly sophisticated levels of literacy, communication,

23 mathematical, and technological skills. Sixty percent

24 of all jobs will require computer skills.
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1 (5) Literacy is a crucial element of academic

2 success. However, in 1994, 40 percent of 4th grade

3 students failed to attain the basic level of reading on

4 the National Assessment of Educational Progress.

5 Seventy percent did not attain the proficient level.

6 Students who are not reading at grade-level are very

7 unlikely to graduate from high school. One-on-one

8 tutoring is a key component of bringing students up

9 to reading grade-level.

10 (6) Students are learning in decrepit school

11 buildings. According to 2 recent Government Ac12 counting Office reports, 14,000,000 children in a

13 third of the Nation’s schools are learning in sub14 standard classrooms. Half of the schools have at

15 least 1 unsatisfactory environmental condition, such

16 as poor air quality.

17 (7) College costs are rising. College tuition has

18 risen in private colleges and universities and in State

19 institutions as State appropriations have eroded.

20 From 1985 to 1994, the average cost of attending

21 college rose by 30 percent after adjusting for infla22 tion. During the same period, the median income in23 creased by only 1 percent.
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1 (8) Meeting the challenge of the next century

2 will require the involvement of all Americans, includ3 ing public officials, educators, parents, business and

4 community leaders, and students. Encouraging ac5 tive participation by all segments of communities is

6 essential for the success of students in the 21st

7 century.

8 TITLE I—TAX INCENTIVES FOR

9 HIGHER EDUCATION

10 SEC. 101. REFUNDABLE CREDIT FOR HIGHER EDUCATION

11 EXPENSES.

12 (a) IN GENERAL.—Subpart C of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of

14 1986 (relating to refundable credits) is amended by redes15 ignating section 35 as section 36 and by inserting after

16 section 34 the following new section:

17 ‘‘SEC. 35. HIGHER EDUCATION TUITION AND FEES.

18 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in19 dividual, there shall be allowed as a credit against the tax

20 imposed by this subtitle for the taxable year the amount

21 of qualified higher education expenses paid by the tax22 payer during such taxable year.

23 ‘‘(b) CREDIT LIMITED TO $1,500 PER ACADEMIC

24 YEAR.—
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1 ‘‘(1) IN GENERAL.—The amount allowed as a

2 credit under subsection (a) for any taxable year with

3 respect to an eligible student shall not exceed the

4 sum of the credit amounts for qualified academic pe5 riods beginning during such taxable year or the first

6 3 months of the next taxable year. A qualified aca7 demic period may not be taken into account under

8 the preceding sentence more than once.

9 ‘‘(2) CREDIT ALLOWED ONLY FOR FIRST 2 ACA10 DEMIC YEARS OF POST-SECONDARY EDUCATION.—

11 For purposes of paragraph (1), the term ‘qualified

12 academic period’ means, with respect to any student,

13 any academic period for which such student is an el14 igible student if such period, when added to prior

15 periods that such student was an eligible student,

16 does not exceed 2 full-time academic years (or the

17 equivalent thereof).

18 ‘‘(3) CREDIT AMOUNT.—For purposes of para19 graph (1), except as otherwise provided in regula20 tions prescribed by the Secretary, the credit amount

21 for any academic period is the amount equal to—

22 ‘‘(A) $1,500, divided by

23 ‘‘(B) the number of such academic periods

24 during the academic year.
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1 In the case of an eligible student who is not a full2 time student for an academic period, the credit

3 amount for such period shall be one-half the amount

4 determined under the preceding sentence.

5 ‘‘(4) INFLATION ADJUSTMENT OF CREDIT LIMI6 TATION FOR ACADEMIC YEAR.—

7 ‘‘(A) IN GENERAL.—In the case of a tax8 able year beginning after 1998, the $1,500

9 amount in paragraph (3)(A) shall be increased

10 by an amount equal to—

11 ‘‘(i) such dollar amount, multiplied by

12 ‘‘(ii) the cost-of-living adjustment de13 termined under section 1(f)(3) for the cal14 endar year in which the taxable year be15 gins, determined by substituting ‘calendar

16 year 1999’ for ‘calendar year 1992’ in sub17 paragraph (B) thereof.

18 ‘‘(B) ROUNDING.—If any amount as ad19 justed under subparagraph (A) is not a multiple

20 of $5,000 such amount shall be rounded to the

21 next lowest multiple of $5,000.

22 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED

23 GROSS INCOME.—

24 ‘‘(1) IN GENERAL.—The amount which would

25 (but for this subsection) be taken into account under
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1 subsection (a) for the taxable year shall be reduced

2 (but not below zero) by the amount determined

3 under paragraph (2).

4 ‘‘(2) AMOUNT OF REDUCTION.—The amount

5 determined under this paragraph is the amount

6 which bears the same ratio to the amount which

7 would be so taken into account as—

8 ‘‘(A) the excess of—

9 ‘‘(i) the taxpayer’s modified adjusted

10 gross income for such taxable year, over

11 ‘‘(ii) $50,000 ($80,000 in the case of

12 a joint return), bears to

13 ‘‘(B) $20,000.

14 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—

15 The term ‘modified adjusted gross income’ means

16 the adjusted gross income of the taxpayer for the

17 taxable year—

18 ‘‘(A) determined without regard to section

19 221, and

20 ‘‘(B) increased by any amount excluded

21 from gross income under section 911, 931, or

22 933.

23 ‘‘(4) INFLATION ADJUSTMENT.—

24 ‘‘(A) IN GENERAL.—In the case of a tax25 able year beginning after 2000, the $50,000
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1 and $80,000 amounts in paragraph (2), section

2 221(b)(2)(B)(i)(II), and section

3 222(b)(2)(A)(ii) shall each be increased by an

4 amount equal to—

5 ‘‘(i) such dollar amounts, multiplied

6 by

7 ‘‘(ii) the cost-of-living adjustment de8 termined under section 1(f)(3) for the cal9 endar year in which the taxable year be10 gins, determined by substituting ‘calendar

11 year 1999’ for ‘calendar year 1992’ in sub12 paragraph (B) thereof.

13 ‘‘(B) ROUNDING.—If any amount as ad14 justed under subparagraph (A) is not a multiple

15 of $5,000, such amount shall be rounded to the

16 next lowest multiple of $5,000.

17 ‘‘(d) QUALIFIED HIGHER EDUCATION EXPENSES.—

18 For purposes of this section—

19 ‘‘(1) QUALIFIED HIGHER EDUCATION EX20 PENSES.—

21 ‘‘(A) IN GENERAL.—The term ‘qualified

22 higher education expenses’ means tuition and

23 fees required for the enrollment or attendance

24 of—

25 ‘‘(i) the taxpayer,
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1 ‘‘(ii) the taxpayer’s spouse, or

2 ‘‘(iii) any dependent of the taxpayer

3 with respect to whom the taxpayer is al4 lowed a deduction under section 151,

5 as an eligible student at an institution of higher

6 education.

7 ‘‘(B) EXCEPTION FOR EDUCATION INVOLV8 ING SPORTS, ETC.—Such term does not include

9 expenses with respect to any course or other

10 education involving sports, games, or hobbies,

11 unless such course or other education is part of

12 the student’s degree program.

13 ‘‘(C) EXCEPTION FOR NONACADEMIC

14 FEES.—Such term does not include student ac15 tivity fees, athletic fees, insurance expenses, or

16 other expenses unrelated to a student’s aca17 demic course of instruction.

18 ‘‘(D) ELIGIBLE STUDENT.—

19 ‘‘(i) IN GENERAL.—The term ‘eligible

20 student’ means, with respect to any aca21 demic period, a student who—

22 ‘‘(I) meets the requirements of

23 section 484(a)(1) of the Higher Edu24 cation Act of 1965 (20 U.S.C.
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1 1091(a)(1)), as in effect on the date

2 of the enactment of this section, and

‘‘(II) is carrying at least 1 3 ⁄2 the

4 normal full-time work load for the

5 course of study the student is pursu6 ing, as reasonably determined by the

7 institution of higher education.

8 ‘‘(ii) GRADE-POINT REQUIREMENT.—

9 A student shall not be treated as an eligi10 ble student if the student did not have a

11 grade-point average of at least 2.75 on a

12 4-point scale (or met a substantially simi13 lar measure of achievement) for the stu14 dents’ high school education (or equiva15 lent).

16 ‘‘(2) INSTITUTION OF HIGHER EDUCATION.—

17 The term ‘institution of higher education’ means an

18 institution—

19 ‘‘(A) which is described in section 481 of

20 the Higher Education Act of 1965 (20 U.S.C.

21 1088), as in effect on the date of the enactment

22 of this section, and

23 ‘‘(B) which is eligible to participate in pro24 grams under title IV of such Act.
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1 ‘‘(3) FULL-TIME STUDENT.—The term ‘full2 time student’ means any student who is carrying at

3 least the normal full-time work load for the course

4 of study the student is pursuing, as reasonably de5 termined by the institution of higher education.

6 ‘‘(e) SPECIAL RULES.—

7 ‘‘(1) DENIAL OF CREDIT IF STUDENT CON8 VICTED OF DRUG OFFENSE.—No credit shall be al9 lowed under subsection (a) for qualified higher edu10 cation expenses for the enrollment or attendance of

11 a student for any academic period if such student

12 has been convicted of a Federal or State offense con13 sisting of the possession or distribution of a con14 trolled substance before the end of the taxable year

15 with or within which such period ends.

16 ‘‘(2) NO DOUBLE BENEFIT.—

17 ‘‘(A) IN GENERAL.—No credit shall be al18 lowed under subsection (a) for qualified higher

19 education expenses for the enrollment or at20 tendance of a student for any academic period

21 if any such expense for the enrollment or at22 tendance of such student for such period is al23 lowed as a deduction to the taxpayer under any

24 other provision of this chapter.
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1 ‘‘(B) DEPENDENTS.—No credit shall be al2 lowed under subsection (a) to any individual

3 with respect to whom a deduction under section

4 151 is allowable to another taxpayer for a tax5 able year beginning in the calendar year in

6 which such individual’s taxable year begins.

7 ‘‘(3) IDENTIFICATION REQUIREMENT.—No

8 credit shall be allowed under subsection (a) to a tax9 payer with respect to an eligible student other than

10 the taxpayer unless the taxpayer includes the name

11 and taxpayer identification number of such eligible

12 student on the return of tax for the taxable year.

13 ‘‘(4) ADJUSTMENT FOR CERTAIN SCHOLAR14 SHIPS.—The amount of qualified higher education

15 expenses otherwise taken into account under sub16 section (a) with respect to the education of an indi17 vidual for an academic period shall be reduced (be18 fore the application of subsections (b) and (c)) by

19 the sum of—

20 ‘‘(A) the amounts received with respect to

21 such individual which are allocable to such pe22 riod as—

23 ‘‘(i) a qualified scholarship which

24 under section 117 is not includable in

25 gross income,
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1 ‘‘(ii) an educational assistance allow2 ance under chapter 30, 31, 32, 34, or 35

3 of title 38, United States Code, or

4 ‘‘(iii) a payment (other than a gift,

5 bequest, devise, or inheritance within the

6 meaning of section 102(a)) for educational

7 expenses, or attributable to enrollment at

8 an eligible educational institution, which is

9 exempt from income taxation by any law of

10 the United States, and

11 ‘‘(B) the amount excludable from gross in12 come under section 135 which is allocable to

13 such expenses with respect to such individual

14 for such period.

15 ‘‘(5) NO CREDIT FOR MARRIED INDIVIDUALS

16 FILING SEPARATE RETURNS.—If the taxpayer is a

17 married individual (within the meaning of section

18 7703), this section shall apply only if the taxpayer

19 and the taxpayer’s spouse file a joint return for the

20 taxable year.

21 ‘‘(6) NONRESIDENT ALIENS.—If the taxpayer is

22 a nonresident alien individual for any portion of the

23 taxable year, this section shall apply only if such in24 dividual is treated as a resident alien of the United
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1 States for purposes of this chapter by reason of an

2 election under subsection (g) or (h) of section 6013.

3 ‘‘(7) REGULATIONS.—The Secretary may, in

4 consultation with the Secretary of Education, pre5 scribe such regulations as may be necessary or ap6 propriate to carry out this section, including—

7 ‘‘(A) regulations requiring recordkeeping

8 and information reporting by the taxpayer and

9 any other person the Secretary determines ap10 propriate, and

11 ‘‘(B) regulations providing for a recapture

12 of credit allowed under this section in cases

13 where there is a refund in a subsequent taxable

14 year of any amount which was taken into ac15 count in determining the amount of such cred16 it.’’

17 (b) EXTENSION OF PROCEDURES APPLICABLE TO

18 MATHEMATICAL OR CLERICAL ERRORS.—Paragraph (2)

19 of section 6213(g) of such Code (relating to the definition

20 of mathematical or clerical errors) is amended by striking

21 ‘‘and’’ at the end of subparagraph (G), by striking the

22 period at the end of subparagraph (H) and inserting a

23 comma, and by inserting after subparagraph (H) the fol24 lowing new subparagraph:
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1 ‘‘(I) an omission of a correct TIN required

2 under section 35(e)(3) or under section

3 220(d)(3)(B) (relating to higher education tui4 tion and fees) to be included on a return.’’

5 (c) CONFORMING AMENDMENTS.—

6 (1) Paragraph (2) of section 1324(b) of title

7 31, United States Code, is amended by inserting be8 fore the period ‘‘or from section 35 of such Code’’.

9 (2) The table of sections for subpart C of part

10 IV of subchapter B of chapter 1 of such Code is

11 amended by striking the last item and inserting the

12 following new items:

‘‘Sec. 35. Higher education tuition and fees.

‘‘Sec. 36. Overpayments of tax.’’

13 (d) EFFECTIVE DATE.—

14 (1) IN GENERAL.—The amendments made by

15 this section shall apply to taxable years beginning

16 after December 31, 1997.

17 (2) PERIODS BEFORE 1998 TAKEN INTO AC18 COUNT.—For purposes of applying section

19 35(b)(2)(A) of the Internal Revenue Code of 1986

20 (as added by this section), periods before January 1,

21 1998, that the student was an eligible student shall

22 be taken into account.
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1 SEC. 102. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

2 (a) DEDUCTION ALLOWED.— Part VII of subchapter

3 B of chapter 1 of the Internal Revenue Code of 1986 (re4 lating to additional itemized deductions for individuals) is

5 amended by redesignating section 221 as section 222 and

6 by inserting after section 220 the following new section:

7 ‘‘SEC. 221. HIGHER EDUCATION TUITION AND FEES.

8 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an

9 individual, there shall be allowed as a deduction the

10 amount of qualified higher education expenses paid by the

11 taxpayer during the taxable year.

12 ‘‘(b) LIMITATIONS.—

13 ‘‘(1) DOLLAR LIMITATION.—

14 ‘‘(A) IN GENERAL.—The amount allowed

15 as a deduction under subsection (a) for any tax16 able year shall not exceed $10,000.

17 ‘‘(B) PHASE-IN.—In the case of taxable

18 years beginning in 1998 or 1999, subparagraph

19 (A) shall be applied by substituting ‘$5,000’ for

20 ‘$10,000’.

21 ‘‘(2) LIMITATION BASED ON MODIFIED AD22 JUSTED GROSS INCOME.—

23 ‘‘(A) IN GENERAL.—The amount allowed

24 as a deduction under subsection (a) (after ap25 plication of paragraph (1)) shall be reduced
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1 (but not below zero) by the amount determined

2 under subparagraph (B).

3 ‘‘(B) AMOUNT OF REDUCTION.—The

4 amount determined under this subparagraph

5 equals the amount which bears the same ratio

6 to the deduction (determined without regard to

7 this paragraph) as—

8 ‘‘(i) the excess of—

9 ‘‘(I) the taxpayer’s modified ad10 justed gross income for such taxable

11 year, over

12 ‘‘(II) $50,000 ($80,000 in the

13 case of a joint return), bears to

14 ‘‘(ii) $20,000.

15 ‘‘(C) MODIFIED ADJUSTED GROSS IN16 COME.—For purposes of subparagraph (B), the

17 term ‘modified adjusted gross income’ means

18 the adjusted gross income of the taxpayer for

19 the taxable year determined—

20 ‘‘(i) without regard to this section and

21 sections 911, 931, and 933, and

22 ‘‘(ii) after the application of sections

23 86, 135, 137, 219, and 469.

24 For purposes of sections 86, 135, 219, and

25 469, adjusted gross income shall be determined
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1 without regard to the deduction allowed under

2 this section.

3 ‘‘(D) CROSS REFERENCE.—

‘‘For inflation adjustment of $50,000 and $80,000

amounts, see section 35(c)(4).

4 ‘‘(c) DEFINITIONS.—For purposes of this section—

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), terms used in this section which are also

7 used in section 35 have the respective meanings

8 given such terms in section 35.

9 ‘‘(2) DEDUCTION AVAILABLE FOR EDUCATION

10 TO ACQUIRE OR IMPROVE JOB SKILLS.—For pur11 poses of applying this section, the requirement of

12 section 35(d)(1)(D)(ii) shall be treated as met if the

13 student is enrolled in a course which enables the stu14 dent to improve the student’s job skills or to acquire

15 new job skills.

16 ‘‘(d) SPECIAL RULES.—

17 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc18 tion shall be allowed under subsection (a) for quali19 fied higher education expenses with respect to which

20 a deduction is allowable to the taxpayer under any

21 other provision of this chapter unless the taxpayer

22 irrevocably waives his right to the deduction of such

23 expenses under such other provision.
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1 ‘‘(2) LIMITATION ON TAXABLE YEAR OF DE2 DUCTION.—

3 ‘‘(A) IN GENERAL.—A deduction shall be

4 allowed under subsection (a) for any taxable

5 year only to the extent the qualified higher edu6 cation expenses are in connection with enroll7 ment at an institution of higher education dur8 ing the taxable year.

9 ‘‘(B) CERTAIN PREPAYMENTS ALLOWED.—

10 Subparagraph (A) shall not apply to qualified

11 higher education expenses paid during a taxable

12 year if such expenses are in connection with an

13 academic term beginning during such taxable

14 year or during the 1st 3 months of the next

15 taxable year.

16 ‘‘(3) CERTAIN RULES TO APPLY.—Rules similar

17 to the following rules of section 35(e) shall apply for

18 purposes of this section:

19 ‘‘(A) Paragraph (2)(B) (relating to denial

20 of double benefit for dependents).

21 ‘‘(B) Paragraph (3) (relating to identifica22 tion requirement).

23 ‘‘(C) Paragraph (4) (relating to adjust24 ment for certain scholarships).
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1 ‘‘(D) Paragraph (5) (relating to no benefit

2 for married individuals filing separate returns).

3 ‘‘(E) Paragraph (6) (relating to non4 resident aliens).

5 ‘‘(4) REGULATIONS.—The Secretary may pre6 scribe such regulations as may be necessary or ap7 propriate to carry out this section, including regula8 tions requiring recordkeeping and information re9 porting.’’

10 (b) DEDUCTION ALLOWED IN COMPUTING AD11 JUSTED GROSS INCOME.—Section 62(a) of such Code is

12 amended by inserting after paragraph (16) the following

13 new paragraph:

14 ‘‘(17) HIGHER EDUCATION TUITION AND

15 FEES.—The deduction allowed by section 221.’’

16 (c) CONFORMING AMENDMENT.—The table of sec17 tions for part VII of subchapter B of chapter 1 of such

18 Code is amended by striking the item relating to section

19 221 and inserting:

‘‘Sec. 221. Higher education tuition and fees.

‘‘Sec. 222. Cross reference.’’

20 (d) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to taxable years beginning after

22 December 31, 1997.
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1 SEC. 103. DEDUCTION FOR INTEREST ON EDUCATION

2 LOANS.

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to

5 additional itemized deductions for individuals), as amend6 ed by section 102, is amended by redesignating section

7 222 as section 223 and by inserting after section 221 the

8 following new section:

9 ‘‘SEC. 222. INTEREST ON EDUCATION LOANS.

10 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an

11 individual, there shall be allowed as a deduction for the

12 taxable year an amount equal to the interest paid by the

13 taxpayer during the taxable year on any qualified edu14 cation loan.

15 ‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED

16 GROSS INCOME.—

17 ‘‘(1) IN GENERAL.—The amount allowed as a

18 deduction under subsection (a) shall be reduced (but

19 not below zero) by the amount determined under

20 paragraph (2).

21 ‘‘(2) AMOUNT OF REDUCTION.—The amount

22 determined under this paragraph equals the amount

23 which bears the same ratio to the deduction (deter24 mined without regard to this subsection) as—

25 ‘‘(A) the excess of—
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1 ‘‘(i) the taxpayer’s modified adjusted

2 gross income for such taxable year, over

3 ‘‘(ii) $50,000 ($80,000 in the case of

4 a joint return), bears to

5 ‘‘(B) $20,000.

6 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—

7 For purposes of paragraph (2), the term ‘modified

8 adjusted gross income’ means the adjusted gross in9 come of the taxpayer for the taxable year deter10 mined—

11 ‘‘(A) without regard to this section and

12 sections 911, 931, and 933, and

13 ‘‘(B) after the application of sections 86,

14 135, 137, 219, 221, and 469.

15 For purposes of sections 86, 135, 219, 221, and

16 469, adjusted gross income shall be determined

17 without regard to the deduction allowed under this

18 section.

19 ‘‘(4) CROSS REFERENCE.—

‘‘For inflation adjustment of $50,000 and $80,000

amounts, see section 35(c)(4).

20 ‘‘(c) DEPENDENTS NOT ELIGIBLE FOR DEDUC21 TION.—No deduction shall be allowed by this section to
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1 an individual for the taxable year if a deduction under sec2 tion 151 with respect to such individual is allowed to an3 other taxpayer for the taxable year beginning in the cal4 endar year in which such individual’s taxable year begins.

5 ‘‘(d) DEFINITIONS.—For purposes of this section—

6 ‘‘(1) QUALIFIED EDUCATION LOAN.—The term

7 ‘qualified education loan’ means any indebtedness

8 incurred to pay qualified higher education ex9 penses—

10 ‘‘(A) which are incurred on behalf of the

11 taxpayer or the taxpayer’s spouse,

12 ‘‘(B) which are paid or incurred within a

13 reasonable period of time before or after the in14 debtedness is incurred, and

15 ‘‘(C) which are attributable to education

16 furnished during a period during which the re17 cipient was at least a half-time student.

18 Such term includes indebtedness used to refinance

19 indebtedness which qualifies as a qualified education

20 loan. The term ‘qualified education loan’ shall not

21 include any indebtedness owed to a person who is re22 lated (within the meaning of section 267(b) or

23 707(b)(1)) to the taxpayer.
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1 ‘‘(2) QUALIFIED HIGHER EDUCATION EX2 PENSES.—The term ‘qualified higher education ex3 penses’ has the meaning given such term by section

4 35(d) (without regard to paragraph (1)(D)(ii)), re5 duced by the sum of—

6 ‘‘(A) the amount excluded from gross in7 come under section 135 by reason of such ex8 penses, and

9 ‘‘(B) the amount of the reduction de10 scribed in section 135(d)(1).

11 For purposes of applying section 35(d) under the

12 preceding sentence, the term ‘eligible educational in13 stitution’ shall also include an institution conducting

14 an internship or residency program leading to a de15 gree or certificate awarded by an institution of high16 er education, a hospital, or a health care facility

17 which offers postgraduate training.

18 ‘‘(3) HALF-TIME STUDENT.—The term ‘half19 time student’ means any individual who would be a

20 student as defined in section 151(c)(4) if ‘half-time’

21 were substituted for ‘full-time’ each place it appears

22 in such section.

23 ‘‘(4) DEPENDENT.—The term ‘dependent’ has

24 the meaning given such term by section 152.

25 ‘‘(e) SPECIAL RULES.—
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1 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc2 tion shall be allowed under this section for any

3 amount for which a deduction is allowable under any

4 other provision of this chapter.

5 ‘‘(2) MARRIED COUPLES MUST FILE JOINT RE6 TURN.—If the taxpayer is married at the close of

7 the taxable year, the deduction shall be allowed

8 under subsection (a) only if the taxpayer and the

9 taxpayer’s spouse file a joint return for the taxable

10 year.

11 ‘‘(3) MARITAL STATUS.—Marital status shall be

12 determined in accordance with section 7703.’’

13 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX14 PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a)

15 of section 62 of such Code, as amended by section 102,

16 is amended by inserting after paragraph (17) the following

17 new paragraph:

18 ‘‘(18) INTEREST ON EDUCATION LOANS.—The

19 deduction allowed by section 222.’’

20 (c) REPORTING REQUIREMENT.—

21 (1) IN GENERAL.—Subpart B of part III of

22 subchapter A of chapter 61 of such Code (relating

23 to information concerning transactions with other

24 persons) is amended by inserting after section

25 6050R the following new section:
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1 ‘‘SEC. 6050S. RETURNS RELATING TO EDUCATION LOAN IN2 TEREST RECEIVED IN TRADE OR BUSINESS

3 FROM INDIVIDUALS.

4 ‘‘(a) EDUCATION LOAN INTEREST OF $600 OR

5 MORE.—Any person—

6 ‘‘(1) who is engaged in a trade or business, and

7 ‘‘(2) who, in the course of such trade or busi8 ness, receives from any individual interest aggregat9 ing $600 or more for any calendar year on 1 or

10 more qualified education loans,

11 shall make the return described in subsection (b) with re12 spect to each individual from whom such interest was re13 ceived at such time as the Secretary may by regulations

14 prescribe.

15 ‘‘(b) FORM AND MANNER OF RETURNS.—A return

16 is described in this subsection if such return—

17 ‘‘(1) is in such form as the Secretary may pre18 scribe,

19 ‘‘(2) contains—

20 ‘‘(A) the name, address, and TIN of the

21 individual from whom the interest described in

22 subsection (a)(2) was received,

23 ‘‘(B) the amount of such interest received

24 for the calendar year, and

25 ‘‘(C) such other information as the Sec26 retary may prescribe.
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1 ‘‘(c) APPLICATION TO GOVERNMENTAL UNITS.—For

2 purposes of subsection (a)—

3 ‘‘(1) TREATED AS PERSONS.—The term ‘per4 son’ includes any governmental unit (and any agency

5 or instrumentality thereof).

6 ‘‘(2) SPECIAL RULES.—In the case of a govern7 mental unit or any agency or instrumentality there8 of—

9 ‘‘(A) subsection (a) shall be applied with10 out regard to the trade or business requirement

11 contained therein, and

12 ‘‘(B) any return required under subsection

13 (a) shall be made by the officer or employee ap14 propriately designated for the purpose of mak15 ing such return.

16 ‘‘(d) STATEMENTS TO BE FURNISHED TO INDIVID17 UALS WITH RESPECT TO WHOM INFORMATION IS RE18 QUIRED.—Every person required to make a return under

19 subsection (a) shall furnish to each individual whose name

20 is required to be set forth in such return a written state21 ment showing—

22 ‘‘(1) the name and address of the person re23 quired to make such return, and

24 ‘‘(2) the aggregate amount of interest described

25 in subsection (a)(2) received by the person required
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1 to make such return from the individual to whom

2 the statement is required to be furnished.

3 The written statement required under the preceding sen4 tence shall be furnished on or before January 31 of the

5 year following the calendar year for which the return

6 under subsection (a) was required to be made.

7 ‘‘(e) QUALIFIED EDUCATION LOAN DEFINED.—For

8 purposes of this section, except as provided in regulations

9 prescribed by the Secretary, the term ‘qualified education

10 loan’ has the meaning given such term by section

11 222(d)(1).

12 ‘‘(f) RETURNS WHICH WOULD BE REQUIRED TO BE

13 MADE BY 2 OR MORE PERSONS.—Except to the extent

14 provided in regulations prescribed by the Secretary, in the

15 case of interest received by any person on behalf of an16 other person, only the person first receiving such interest

17 shall be required to make the return under subsection

18 (a).’’

19 (2) ASSESSABLE PENALTIES.—Section 6724(d)

20 (relating to definitions) is amended—

21 (A) by redesignating clauses (x) through

22 (xv) as clauses (xi) through (xvi), respectively,

23 in paragraph (1)(B) and by inserting after

24 clause (ix) of such paragraph the following new

25 clause:
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1 ‘‘(x) section 6050S (relating to re2 turns relating to education loan interest re3 ceived in trade or business from individ4 uals),’’, and

5 (B) by striking ‘‘or’’ at the end of the next

6 to last subparagraph, by striking the period at

7 the end of the last subparagraph and inserting

8 ‘‘, or’’, and by adding at the end the following

9 new subparagraph:

10 ‘‘(Z) section 6050R (relating to returns re11 lating to education loan interest received in

12 trade or business from individuals).’’

13 (d) CLERICAL AMENDMENT.—The table of sections

14 for part VII of subchapter B of chapter 1 is amended by

15 striking the last item and inserting the following new

16 items:

‘‘Sec. 222. Interest on education loans.

‘‘Sec. 223. Cross reference.’’

17 (e) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to any qualified education loan (as

19 defined in section 222(d)(1) of the Internal Revenue Code

20 of 1986, as added by this section) incurred on, before, or

21 after the date of the enactment of this Act, but only with

22 respect to any loan interest payment due after December

23 31, 1997.
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1 TITLE II—EDUCATIONAL

2 FACILITIES IMPROVEMENT

3 SEC. 201. SHORT TITLE.

4 This title may be cited as the ‘‘Educational Facilities

5 Improvement Act’’.

6 SEC. 202. PROVISION OF ASSISTANCE FOR CONSTRUCTION

7 AND RENOVATION OF EDUCATIONAL

8 FACILITIES.

9 Title XII of the Elementary and Secondary Edu10 cation Act of 1965 (20 U.S.C. 8501 et seq.) is amended—

11 (1) by repealing sections 12002 and 12003;

12 (2) by redesignating sections 12001 and 12004

13 through 12013, as sections 12101 and 12102

14 through 12111, respectively;

15 (3) by inserting after the title heading the

16 following:

17 ‘‘SEC. 12001. FINDINGS.

18 ‘‘The Congress finds the following:

19 ‘‘(1) The General Accounting Office performed

20 a comprehensive survey of the Nation’s public ele21 mentary and secondary school facilities, and found

22 severe levels of disrepair in all areas of the United

23 States.

24 ‘‘(2) The General Accounting Office concluded

25 more than 14,000,000 children attend schools in
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1 need of extensive repair or replacement. Seven mil2 lion children attend schools with life safety code vio3 lations. Twelve million children attend schools with

4 leaky roofs.

5 ‘‘(3) The General Accounting Office found the

6 problem of crumbling schools transcends demo7 graphic and geographic boundaries. At 38 percent of

8 urban schools, 30 percent of rural schools, and 29

9 percent of suburban schools, at least one building is

10 in need of extensive repair or should be completely

11 replaced.

12 ‘‘(4) The condition of school facilities has a di13 rect affect on the safety of students and teachers,

14 and on the ability of students to learn.

15 ‘‘(5) Academic research has proven a direct cor16 relation between the condition of school facilities and

17 student achievement. At Georgetown University, re18 searchers found students assigned to schools in poor

19 condition can be expected to fall 10.9 percentage

20 points below those in buildings in excellent condition.

21 Similar studies have demonstrated up to a 20 per22 cent improvement in test scores when students were

23 moved from a poor facility to a new facility.
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1 ‘‘(6) The General Accounting Office found most

2 schools are not prepared to incorporate modern tech3 nology into the classroom. Forty-six percent of

4 schools lack adequate electrical wiring to support the

5 full-scale use of technology. More than a third of

6 schools lack the requisite electrical power. Fifty-six

7 percent of schools have insufficient phone lines for

8 modems.

9 ‘‘(7) The Department of Education reported

10 that elementary and secondary school enrollment, al11 ready at a record high level, will continue to grow

12 during the period between 1996 and 2000, and that

13 in order to accommodate this growth, the United

14 States will need to build an additional 6,000 schools

15 over this time period.

16 ‘‘(8) The General Accounting Office found it

17 will cost $112,000,000,000 just to bring schools up

18 to good, overall condition, not including the cost of

19 modernizing schools so the schools can utilize 21st

20 century technology, nor including the cost of expan21 sion to meet record enrollment levels.

22 ‘‘(9) State and local financing mechanisms have

23 proven inadequate to meet the challenges facing to24 day’s aging school facilities. Large numbers of local
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1 educational agencies have difficulties securing fi2 nancing for school facility improvement.

3 ‘‘(10) The Federal Government can support ele4 mentary and secondary school facilities, and can le5 verage additional funds for the improvement of ele6 mentary and secondary school facilities.

7 ‘‘SEC. 12002. PURPOSE.

8 ‘‘The purpose of this title is to help State and local

9 authorities improve the quality of education at their public

10 schools through the provision of Federal funds to enable

11 the State and local authorities to meet the cost associated

12 with the improvement of school facilities within their

13 jurisdictions.

14 ‘‘PART A—GENERAL INFRASTRUCTURE

15 IMPROVEMENT GRANT PROGRAM’’;

16 and

17 (4) by adding at the end the following:

18 ‘‘PART B—CONSTRUCTION AND RENOVATION

19 BOND SUBSIDY PROGRAM

20 ‘‘SEC. 12201. DEFINITIONS.

21 ‘‘As used in this part:

22 ‘‘(1) EDUCATIONAL FACILITY.—The term ‘edu23 cational facility’ has the meaning given the term

24 ‘school’ in section 12110.
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1 ‘‘(2) LOCAL AREA.—The term ‘local area’

2 means the geographic area served by a local edu3 cational agency.

4 ‘‘(3) LOCAL BOND AUTHORITY.—The term

5 ‘local bond authority’ means—

6 ‘‘(A) a local educational agency with au7 thority to issue a bond for construction or ren8 ovation of educational facilities in a local area;

9 and

10 ‘‘(B) a political subdivision of a State with

11 authority to issue such a bond for an area in12 cluding a local area.

13 ‘‘(4) POVERTY LINE.—The term ‘poverty line’

14 means the official poverty line (as defined by the Of15 fice of Management and Budget, and revised annu16 ally in accordance with section 673(2) of the Omni17 bus Budget Reconciliation Act of 1981 (42 U.S.C.

18 9902(2))) applicable to a family of the size involved.

19 ‘‘(5) STATE.—The term ‘State’ means each of

20 the several States of the United States, the District

21 of Columbia, and the Commonwealth of Puerto Rico.

22 ‘‘SEC. 12202. AUTHORIZATION OF PROGRAM.

23 ‘‘(a) PROGRAM AUTHORITY.—Of the amount appro24 priated under section 12210 for a fiscal year and not re25 served under subsection (b), the Secretary shall use—
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1 ‘‘(1) 20 percent of such amount to award

2 grants to local bond authorities for not more than

3 125 eligible local areas as provided for under section

4 12203; and

5 ‘‘(2) 80 percent of such amount to award

6 grants to States as provided for under section

7 12204.

8 ‘‘(b) SPECIAL RULE.—The Secretary may reserve—

9 ‘‘(1) not more than 1 percent of the amount ap10 propriated under section 12210 to provide assistance

11 to Indian schools in accordance with the purpose of

12 this title;

13 ‘‘(2) not more than 0.5 percent of the amount

14 appropriated under section 12210 to provide assist15 ance to Guam, the United States Virgin Islands,

16 American Samoa, the Commonwealth of the North17 ern Mariana Islands, the Republic of the Marshall

18 Islands, the Federated States of Micronesia, and the

19 Republic of Palau to carry out the purpose of this

20 title; and

21 ‘‘(3) not more than 0.1 percent of the amount

22 appropriated under section 12210 to carry out sec23 tion 12209.
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1 ‘‘SEC. 12203. DIRECT GRANTS TO LOCAL BOND

2 AUTHORITIES.

3 ‘‘(a) IN GENERAL.—The Secretary shall award a

4 grant under section 12202(a)(1) to eligible local bond au5 thorities to provide assistance for construction or renova6 tion of educational facilities in a local area.

7 ‘‘(b) USE OF FUNDS.—The local bond authority shall

8 use amounts received through a grant made under section

9 12202(a)(1) to pay a portion of the interest costs applica10 ble to any local bond issued to finance an activity de11 scribed in section 12205 with respect to the local area.

12 ‘‘(c) ELIGIBILITY AND DETERMINATION.—

13 ‘‘(1) ELIGIBILITY.—To be eligible to receive a

14 grant under section 12202(a)(1) for a local area, a

15 local bond authority shall demonstrate the capacity

16 to issue a bond for an area that includes 1 of the

17 125 local areas for which the Secretary has made a

18 determination under paragraph (2).

19 ‘‘(2) DETERMINATION.—

20 ‘‘(A) MANDATORY.—The Secretary shall

21 make a determination of the 100 local areas

22 that have the highest numbers of children who

23 are—

24 ‘‘(i) aged 5 to 17, inclusive; and
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1 ‘‘(ii) members of families with in2 comes that do not exceed 100 percent of

3 the poverty line.

4 ‘‘(B) DISCRETIONARY.—The Secretary

5 may make a determination of 25 local areas, for

6 which the Secretary has not made a determina7 tion under subparagraph (A), that have extraor8 dinary needs for construction or renovation of

9 educational facilities that the local bond author10 ity serving the local area is unable to meet.

11 ‘‘(d) APPLICATION.—To be eligible to receive a grant

12 under section 12202(a)(1), a local bond authority shall

13 prepare and submit to the Secretary an application at

14 such time, in such manner, and containing such informa15 tion as the Secretary may require, including—

16 ‘‘(1) an assurance that the application was de17 veloped in consultation with parents and classroom

18 teachers;

19 ‘‘(2) information sufficient to enable the Sec20 retary to make a determination under subsection

21 (c)(2) with respect to such local authority;

22 ‘‘(3) a description of the architectural, civil,

23 structural, mechanical, or electrical construction or

24 renovation to be supported with the assistance pro25 vided under this part;
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1 ‘‘(4) a cost estimate of the proposed construc2 tion or renovation;

3 ‘‘(5) an identification of other resources, such

4 as unused bonding capacity, that are available to

5 carry out the activities for which assistance is re6 quested under this part;

7 ‘‘(6) a description of how activities supported

8 with funds provided under this part will promote en9 ergy conservation; and

10 ‘‘(7) such other information and assurances as

11 the Secretary may require.

12 ‘‘(e) AWARD OF GRANTS.—

13 ‘‘(1) IN GENERAL.—In awarding grants under

14 section 12202(a)(1), the Secretary shall give pref15 erence to a local bond authority based on—

16 ‘‘(A) the extent to which the local edu17 cational agency serving the local area involved

18 or the educational facility for which the author19 ity seeks a grant (as appropriate) meets the cri20 teria described in section 12103(a);

21 ‘‘(B) the extent to which the educational

22 facility is overcrowded; and

23 ‘‘(C) the extent to which assistance pro24 vided through the grant will be used to fund

25 construction or renovation that, but for receipt
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1 of the grant, would not otherwise be possible to

2 undertake.

3 ‘‘(2) AMOUNT OF ASSISTANCE.—

4 ‘‘(A) IN GENERAL.—In determining the

5 amount of assistance for which local bond au6 thorities are eligible under section 12202(a)(1),

7 the Secretary shall—

8 ‘‘(i) give preference to a local bond

9 authority based on the criteria specified in

10 paragraph (1); and

11 ‘‘(ii) consider—

12 ‘‘(I) the amount of the cost esti13 mate contained in the application of

14 the local bond authority under sub15 section (d)(4);

16 ‘‘(II) the relative size of the local

17 area several by the local bond author18 ity; and

19 ‘‘(III) any other factors deter20 mined to be appropriate by the

21 Secretary.

22 ‘‘(B) MAXIMUM AMOUNT OF ASSIST23 ANCE.—A local bond authority shall be eligible

24 for assistance under section 12202(a)(1) in an

25 amount that does not exceed the appropriate
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1 percentage under section 12204(f)(3) of the in2 terest costs applicable to any local bond issued

3 to finance an activity described in section

4 12205 with respect to the local area involved.

5 ‘‘SEC. 12204. GRANTS TO STATES.

6 ‘‘(a) IN GENERAL.—The Secretary shall award a

7 grant under section 12202(a)(2) to each eligible State to

8 provide assistance to the State, or local bond authorities

9 in the State, for construction and renovation of edu10 cational facilities in local areas.

11 ‘‘(b) USE OF FUNDS.—The State shall use amounts

12 received through a grant made under section

13 12202(a)(2)—

14 ‘‘(1) to pay a portion of the interest costs appli15 cable to any State bond issued to finance an activity

16 described in section 12205 with respect to the local

17 areas; or

18 ‘‘(2) to provide assistance to local bond authori19 ties in the State to pay a portion of the interest

20 costs applicable to any local bond issued to finance

21 an activity described in section 12205 with respect

22 to the local areas.

23 ‘‘(c) AMOUNT OF GRANT TO STATE.—

24 ‘‘(1) IN GENERAL.—From the amount available

25 for grants under section 12202(a)(2), the Secretary
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1 shall award a grant to each eligible State that is

2 equal to the total of—

3 ‘‘(A) a sum that bears the same relation4 ship to 50 percent of such amount as the total

5 amount of funds made available for all eligible

6 local educational agencies in the State under

7 part A of title I for such year bears to the total

8 amount of funds made available for all eligible

9 local educational agencies in all States under

10 such part for such year; and

11 ‘‘(B) a sum that bears the same relation12 ship to 50 percent of such amount as the total

13 amount of funds made available for all eligible

14 local educational agencies in the State under

15 title VI for such year bears to the total amount

16 of funds made available for all eligible local

17 educational agencies in all States under such

18 title for such year.

19 ‘‘(2) ELIGIBLE LOCAL EDUCATIONAL AGEN20 CIES.—For the purpose of paragraph (1) the term

21 ‘eligible local educational agency’ means a local edu22 cational agency that does not serve a local area for

23 which an eligible local bond authority received a

24 grant under section 12203.
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1 ‘‘(d) STATE APPLICATIONS REQUIRED.—To be eligi2 ble to receive a grant under section 12202(a)(2), a State

3 shall prepare and submit to the Secretary an application

4 at such time, in such manner, and containing such infor5 mation as the Secretary may require. Such application

6 shall contain—

7 ‘‘(1) a description of the process the State will

8 use to determine which local bond authorities will re9 ceive assistance under subsection (b)(2).

10 ‘‘(2) an assurance that grant funds under this

11 section will be used to increase the amount of school

12 construction or renovation in the State for a fiscal

13 year compared to such amount in the State for the

14 preceding fiscal years.

15 ‘‘(e) ADMINISTERING AGENCY.—

16 ‘‘(1) IN GENERAL.—The State agency with au17 thority to issue bonds for the construction or renova18 tion of educational facilities, or with the authority to

19 otherwise finance such construction or renovation,

20 shall administer the amount received through the

21 grant.

22 ‘‘(2) SPECIAL RULE.—If no agency described in

23 paragraph (1) exits, or if there is more than one

24 such agency, then the chief executive officer of the
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1 State and the chief State school officer shall des2 ignate a State entity or individual to administer the

3 amounts received through the grant.

4 ‘‘(f) ASSISTANCE TO LOCAL BOND AUTHORITIES.—

5 ‘‘(1) IN GENERAL.—To be eligible to receive as6 sistance from a State under this section, a local

7 bond authority shall prepare and submit to the State

8 agency designated under subsection (e) an applica9 tion at such time, in such manner, and containing

10 such information as the State agency may require,

11 including the information described in section

12 12203(d).

13 ‘‘(2) CRITERIA.—In awarding grants under this

14 section, the State agency shall give preference to a

15 local bond authority based on—

16 ‘‘(A) the extent to which the local edu17 cational agency serving the local area involved

18 or the educational facility for which the author19 ity seeks the grant (as appropriate) meets the

20 criteria described in section 12103(a);

21 ‘‘(B) the extent to which the educational

22 facility is overcrowded; and

23 ‘‘(C) the extent to which assistance pro24 vided through the grant will be used to fund

25 construction or renovation that, but for receipt
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1 of the grant, would not otherwise be possible to

2 undertake.

3 ‘‘(3) AMOUNT OF ASSISTANCE.—A local bond

4 authority seeking assistance for a local area served

5 by a local educational agency described in—

6 ‘‘(A) clause (i)(I) or clause (ii)(I) of sec7 tion 1125(c)(2)(A), shall be eligible for assist8 ance in an amount that does not exceed 10

9 percent;

10 ‘‘(B) clause (i)(II) or clause (ii)(II) of sec11 tion 1125(c)(2)(A), shall be eligible for assist12 ance in an amount that does not exceed 20

13 percent;

14 ‘‘(C) clause (i)(III) or clause (ii)(III) of

15 section 1125(c)(2)(A), shall be eligible for as16 sistance in an amount that does not exceed 30

17 percent;

18 ‘‘(D) clause (i)(IV) or clause (ii)(IV) of

19 section 1125(c)(2)(A), shall be eligible for as20 sistance in an amount that does not exceed 40

21 percent; and

22 ‘‘(E) clause (i)(V) or clause (ii)(V) of sec23 tion 1125(c)(2)(A), shall be eligible for assist24 ance in an amount that does not exceed 50

25 percent;
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1 of the interest costs applicable to any local bond is2 sued to finance an activity described in section

3 12205 with respect to the local area.

4 ‘‘(g) ASSISTANCE TO STATE.—

5 ‘‘(1) IN GENERAL.—If a State issues a bond to

6 finance an activity described in section 12205 with

7 respect to local areas, the State shall be eligible for

8 assistance in an amount that does not exceed the

9 percentage calculated under the formula described in

10 paragraph (2) of the interest costs applicable to the

11 State bond with respect to the local areas.

12 ‘‘(2) FORMULA.—The Secretary shall develop a

13 formula for determining the percentage referred to

14 in paragraph (1). The formula shall specify that the

15 percentage shall consist of a weighted average of the

16 percentages referred to in subparagraphs (A)

17 through (E) of subsection (f)(3) for the local areas

18 involved.

19 ‘‘SEC. 12205. AUTHORIZED ACTIVITIES.

20 ‘‘An activity described in this section is a project of

21 significant size and scope that consists of—

22 ‘‘(1) the repair or upgrading of classrooms or

23 structures related to academic learning, including
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1 the repair of leaking roofs, crumbling walls, inad2 equate plumbing, poor ventilation equipment, and in3 adequate heating or light equipment;

4 ‘‘(2) an activity to increase physical safety at

5 the educational facility involved;

6 ‘‘(3) an activity to enhance the educational fa7 cility involved to provide access for students, teach8 ers, and other individuals with disabilities;

9 ‘‘(4) an activity to improve the energy efficiency

10 of the educational facility involved;

11 ‘‘(5) an activity to address environmental haz12 ards at the educational facility involved, such as

13 poor ventilation, indoor air quality, or lighting;

14 ‘‘(6) the provision of basic infrastructure that

15 facilitates educational technology, such as commu16 nications outlets, electrical systems, power outlets, or

17 a communication closet;

18 ‘‘(7) the construction of new schools to meet

19 the needs imposed by enrollment growth; and

20 ‘‘(8) any other activity the Secretary determines

21 achieves the purpose of this title.

22 ‘‘SEC. 12206. STATE GRANT WAIVERS.

23 ‘‘(a) WAIVER FOR STATE ISSUANCE OF BOND.—

24 ‘‘(1) IN GENERAL.—A State that issues a bond

25 described in section 12204(b)(1) with respect to a
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1 local area may request that the Secretary waive the

2 limits described in section 12204(f)(3) for the local

3 area, in calculating the amount of assistance the

4 State may receive under section 12204(g). The State

5 may request the waiver only if no local entity is able,

6 for one of the reasons described in subparagraphs

7 (A) through (F) of paragraph (2), to issue bonds on

8 behalf of the local area. Under such a waiver, the

9 Secretary may permit the State to use amounts re10 ceived through a grant made under section

11 12202(a)(2) to pay for not more than 80 percent of

12 the interest costs applicable to the State bond with

13 respect to the local area.

14 ‘‘(2) DEMONSTRATION BY STATE.—To be eligi15 ble to receive a waiver under this subsection, a State

16 shall demonstrate to the satisfaction of the Secretary

17 that—

18 ‘‘(A) the local bond authority serving the

19 local area has reached a limit on its borrowing

20 authority as a result of a debt ceiling or prop21 erty tax cap;

22 ‘‘(B) the local area has a high percentage

23 of low-income residents, or an unusually high

24 property tax rate;
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1 ‘‘(C) the demographic composition of the

2 local area will not support additional school

3 spending;

4 ‘‘(D) the local bond authority has a history

5 of failed attempts to pass bond referenda;

6 ‘‘(E) the local area contains a significant

7 percentage of Federally-owned land that is not

8 subject to local taxation; or

9 ‘‘(F) for another reason, no local entity is

10 able to issue bonds on behalf of the local area.

11 ‘‘(b) WAIVER FOR OTHER FINANCING SOURCES.—

12 ‘‘(1) IN GENERAL.—A State may request that

13 the Secretary waive the use requirements of section

14 12204(b) for a local bond authority to permit the

15 State to provide assistance to the local bond author16 ity to finance construction or renovation by means

17 other than through the issuance of bonds.

18 ‘‘(2) USE OF FUNDS.—A State that receives a

19 waiver granted under this subsection may provide

20 assistance to a local bond authority in accordance

21 with the criteria described in section 12204(f)(2) to

22 enable the local bond authority to repay the costs in23 curred by the local bond authority in financing an

24 activity described in section 12205. The local bond

25 authority shall be eligible to receive the amount of
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1 such assistance that the Secretary estimates the

2 local bond authority would be eligible to receive

3 under section 12204(f)(3) if the construction or ren4 ovation were financed through the issuance of a

5 bond.

6 ‘‘(3) MATCHING REQUIREMENT.—The State

7 shall make available to the local bond authority (di8 rectly or through donations from public or private

9 entities) non-Federal contributions in an amount

10 equal to not less than $1 for every $1 of Federal

11 funds provided to the local bond authority through

12 the grant.

13 ‘‘(c) WAIVER FOR OTHER USES.—

14 ‘‘(1) IN GENERAL.—A State may request that

15 the Secretary waive the use requirements of section

16 12204(b) for a State to permit the State to carry

17 out activities that achieve the purpose of this title.

18 ‘‘(2) DEMONSTRATION BY STATE.—To be eligi19 ble to receive a waiver under this subsection, a State

20 shall demonstrate to the satisfaction of the Secretary

21 that the use of assistance provided under the

22 waiver—
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1 ‘‘(A) will result in an equal or greater

2 amount of construction or renovation of edu3 cational facilities than the provision of assist4 ance to defray the interest costs applicable to a

5 bond for such construction or renovation; and

6 ‘‘(B) will be used to fund activities that

7 are effective in carrying out the activities de8 scribed in section 12205, such as—

9 ‘‘(i) the capitalization of a revolving

10 loan fund for such construction or

11 renovation;

12 ‘‘(ii) the use of funds for reinsurance

13 or guarantees with respect to the financing

14 of such construction or renovation;

15 ‘‘(iii) the creation of a mechanism to

16 leverage private sector resources for such

17 construction or renovation;

18 ‘‘(iv) the capitalization of authorities

19 similar to State Infrastructure Banks to

20 leverage additional funds for such con21 struction or renovation; or

22 ‘‘(v) any other activity the Secretary

23 determines achieves the purpose of this

24 title.

25 ‘‘(d) LOCAL BOND AUTHORITY WAIVER.—
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1 ‘‘(1) IN GENERAL.—A local bond authority may

2 request the Secretary waive the use requirements of

3 section 12203(b) for a local head authority to permit

4 the authority to finance construction or renovation

5 of educational facilities by means other than through

6 use of bonds.

7 ‘‘(2) DEMONSTRATION.—To be eligible to re8 ceive a waiver under this subsection, a local bond

9 authority shall demonstrate that the amounts made

10 available through a grant under the waiver will re11 sult in an equal or greater amount of construction

12 or renovation of educational facilities than the provi13 sion of assistance to defray the interest costs appli14 cable to a bond for such construction or renovation.

15 ‘‘(e) REQUEST FOR WAIVER.—A State or local bond

16 authority that desires a waiver under this section shall

17 submit a waiver request to the Secretary that—

18 ‘‘(1) identifies the type of waiver requested;

19 ‘‘(2) with respect to a waiver described in sub20 section (a), (c), or (d), makes the demonstration de21 scribed in subsection (a)(2), (c)(2), or (d)(2),

22 respectively;

23 ‘‘(3) describes the manner in which the waiver

24 will further the purpose of this title; and
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1 ‘‘(4) describes the use of assistance provided

2 under such waiver.

3 ‘‘(f) ACTION BY SECRETARY.—The Secretary shall

4 make a determination with respect to a request submitted

5 under subsection (d) not later than 90 days after the date

6 on which such request was submitted.

7 ‘‘(g) GENERAL REQUIREMENTS.—

8 ‘‘(1) STATES.—In the case of a waiver request

9 submitted by a State under this section, the State

10 shall—

11 ‘‘(A) provide all interested local edu12 cational agencies in the State with notice and a

13 reasonable opportunity to comment on the re14 quest;

15 ‘‘(B) submit the comments to the Sec16 retary; and

17 ‘‘(C) provide notice and information to the

18 public regarding the waiver request in the man19 ner that the applying State customarily pro20 vides similar notices and information to the

21 public.

22 ‘‘(2) LOCAL BOND AUTHORITIES.—In the case

23 of a waiver request submitted by a local bond au24 thority under this section, the local bond authority

25 shall—
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1 ‘‘(A) provide the affected local educational

2 agency with notice and a reasonable oppor3 tunity to comment on the request;

4 ‘‘(B) submit the comments to the Sec5 retary; and

6 ‘‘(C) provide notice and information to the

7 public regarding the waiver request in the man8 ner that the applying local bond authority cus9 tomarily provides similar notices and informa10 tion to the public.

11 ‘‘SEC. 12207. GENERAL PROVISIONS.

12 ‘‘(a) FAILURE TO ISSUE BONDS.—

13 ‘‘(1) STATES.—If a State that receives assist14 ance under this part fails to issue a bond for which

15 the assistance is provided, the amount of such as16 sistance shall be made available to the State as pro17 vided for under section 12204, during the first fiscal

18 year following the date of repayment.

19 ‘‘(2) LOCAL BOND AUTHORITIES AND LOCAL

20 AREAS.—If a local bond authority that receives as21 sistance under this part fails to issue a bond, or a

22 local area that receives such assistance fails to be23 come the beneficiary of a bond, for which the assist24 ance is provided, the amount of such assistance—
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1 ‘‘(A) in the case of assistance received

2 under section 12202(a)(1), shall be repaid to

3 the Secretary and made available as provided

4 for under section 12203; and

5 ‘‘(B) in the case of assistance received

6 under section 12202(a)(2), shall be repaid to

7 the State and made available as provided for

8 under section 12204.

9 ‘‘(b) LIABILITY OF THE FEDERAL GOVERNMENT.—

10 The Secretary shall not be liable for any debt incurred

11 by a State or local bond authority for which assistance

12 is provided under this part. If such assistance is used by

13 a local educational agency to subsidize a debt other than

14 the issuance of a bond, the Secretary shall have no obliga15 tion to repay the lending institution to whom the debt is

16 owed if the local educational agency defaults.

17 ‘‘SEC. 12208. FAIR WAGES.

18 ‘‘The provisions of section 12107 shall apply with re19 spect to all laborers and mechanics employed by contrac20 tors or subcontractors in the performance of any contract

21 and subcontract for the repair, renovation, alteration, or

22 construction, including painting and decorating, of any

23 building or work that is financed in whole or in part using

24 assistance provided under this part.
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1 ‘‘SEC. 12209. REPORT.

2 ‘‘From amounts reserved under section 12202(b)(3)

3 for each fiscal year the Secretary shall—

4 ‘‘(1) collect such data as the Secretary deter5 mines necessary at the school, local, and State levels;

6 ‘‘(2) conduct studies and evaluations, including

7 national studies and evaluations, in order to—

8 ‘‘(A) monitor the progress of activities sup9 ported with funds provided under this part; and

10 ‘‘(B) evaluate the state of United States

11 educational facilities; and

12 ‘‘(3) report to the appropriate committees of

13 Congress regarding the findings of the studies and

14 evaluations described in paragraph (2).

15 ‘‘SEC. 12210. FUNDING.

16 ‘‘(a) IN GENERAL.—There are appropriated

17 $5,000,000,000 for fiscal year 1998 to carry out this part.

18 ‘‘(b) ENTITLEMENT.—Subject to subsection (a), each

19 State or local bond authority awarded a grant under this

20 part shall be entitled to payments under the grant.

21 ‘‘(c) AVAILABILITY.—Any amounts appropriated pur22 suant to the authority of subsection (a) shall remain avail23 able until expended.’’.
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1 SEC. 203. FUNDING.

2 Section 12111 of the Educated Infrastructure Act of

3 1994 (as redesignated by section 202(2)) (20 U.S.C.

4 8513) is amended to read as follows:

5 ‘‘SEC. 12111. FUNDING.

6 ‘‘(a) AUTHORIZATION.—There are authorized to be

7 appropriated to carry out this part $200,000,000 for fiscal

8 year 1995 and such sums as may be necessary for each

9 of the four succeeding fiscal years.

10 ‘‘(b) APPROPRIATION.—There are appropriated to

11 carry out this part $150,000,000 for each of the fiscal

12 years 1998 through 2002.

13 ‘‘(c) ENTITLEMENT.—Subject to subsection (b), each

14 State or local bond authority awarded a grant under this

15 part shall be entitled to payments under the grant.’’.

16 SEC. 204. CONFORMING AMENDMENTS.

17 (a) CROSS REFERENCES.—Part A of title XII of the

18 Elementary and Secondary Education Act of 1965 (as re19 designated by section 202(3)) is amended—

20 (1) in section 12102(a) (as redesignated by sec21 tion 202(2))—

22 (A) in paragraph (1)—

23 (i) by striking ‘‘12013’’ and inserting

24 ‘‘12111’’;

25 (ii) by striking ‘‘12005’’ and inserting

26 ‘‘12103’’; and
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1 (iii) by striking ‘‘12007’’ and insert2 ing ‘‘12105’’; and

3 (B) in paragraph (2), by striking ‘‘12013’’

4 and inserting ‘‘12111’’; and

5 (2) in section 12110(3)(C) (as redesignated by

6 section 202(2)), by striking ‘‘12006’’ and inserting

7 ‘‘12104’’.

8 (b) CONFORMING AMENDMENTS.—Part A of title XII

9 of the Elementary and Secondary Education Act of 1965

10 (as redesignated by section 202(3)) (20 U.S.C. 8501 et

11 seq.) is further amended—

12 (1) in section 12101 (as redesignated by

13 section 202(2)), by striking ‘‘This title’’ and in14 serting ‘‘This part’’; and

15 (2) in sections 12102(a)(2), 12102(b)(1),

16 12103(a), 12103(b), 12103(b)(2), 12103(c),

17 12103(d), 12104(a), 12104(b)(2), 12104(b)(3),

18 12104(b)(4), 12104(b)(6), 12104(b)(7),

19 12105(a), 12105(b), 12106(a), 12106(b),

20 12106(c), 12106(c)(1), 12106(c)(7), 12106(e),

21 12107, 12108(a)(1), 12108(a)(2), 12108(b)(1),

22 12108(b)(2), 12108(b)(3), 12108(b)(4),

23 12109(2)(A), and 12110 (as redesignated by

24 section 202(2)), by striking ‘‘this title’’ each

25 place it appears and inserting ‘‘this part’’.
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1 TITLE III—AMERICA READS

2 CHALLENGE

3 SEC. 301. FINDINGS.

4 Congress finds as follows:

5 (1) With the proper support and teaching, all

6 children can learn to read at grade-level by the end

7 of the 3d grade.

8 (2) Students who are not reading at grade-level

9 are very unlikely to graduate from high school.

10 (3) Reading is a fundamental skill for learning,

11 but in 1994, 40 percent of 4th grade students failed

12 to attain the basic level of reading on the National

13 Assessment of Education Progress. Seventy percent

14 of 4th graders did not attain the proficient level of

15 reading.

16 (4) Parents are the best first teachers. Parents

17 can help to increase their children’s reading levels,

18 for example, by reading with their child 30 minutes

19 a day. Evidence shows that greater parental support

20 of children’s literacy success makes a significant

21 difference.

22 (5) One-on-one tutoring is a key component of

23 bringing students up to reading at grade-level.
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1 (6) Pre-school preparation and family involve2 ment is widely recognized to improve student per3 formance. Preparing children to learn, both through

4 parent involvement and through pre-school prepara5 tion, plays a crucial role in preventing students from

6 falling behind.

7 Subtitle A—Parents As First

8 Teachers Challenge Grants

9 SEC. 311. SHORT TITLE.

10 This subtitle may be cited as the ‘‘Parents as First

11 Teachers Challenge Grant Act of 1997’’.

12 SEC. 312. FINDING AND PURPOSE.

13 (a) FINDING.—Congress finds that parents are the

14 best first teachers.

15 (b) PURPOSE.—The purpose of this subtitle is to sup16 port effective, proven efforts that provide assistance to

17 parents who want to help their children become successful

18 readers by the end of the 3d grade.

19 SEC. 313. DEFINITIONS.

20 In this subtitle:

21 (1) ELIGIBLE CHILD.—The term ‘‘eligible

22 child’’ means an individual eligible to attend pre23 school, kindergarten, or 1st, 2d, or 3d grade.

24 (2) SECRETARY.—The term ‘‘Secretary’’ means

25 the Secretary of Education.
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1 SEC. 314. GRANTS AUTHORIZED.

2 (a) GRANTS FOR NATIONAL OR REGIONAL NET3 WORKS.—The Secretary is authorized to award at least

4 2 grants to public or private agencies or institutions to

5 enable the agencies or institutions to support national or

6 regional networks that share information on helping eligi7 ble children read.

8 (b) GRANTS FOR SUCCESSFUL PROGRAMS OR ACTIVI9 TIES.—The Secretary is authorized to award at least 2

10 grants to State or local government agencies, nonprofit

11 community groups or organizations, or consortia thereof,

12 to enable such agencies, groups, organizations, or consor13 tia to expand or replicate successful programs or activities

14 that helps a parent—

15 (1) be a good teacher to the parent’s eligible

16 child; and

17 (2) assist the parent’s eligible child in attaining

18 reading skills while assisting the eligible child to

19 learn to read.

20 SEC. 315. RECIPIENT CRITERIA.

21 (a) GRANTS FOR NATIONAL OR REGIONAL NET22 WORKS.—In order to receive a grant under section 312(a),

23 a public or private agency or institution shall have a prov24 en record of working with parents of eligible children.

25 (b) GRANTS FOR SUCCESSFUL PROGRAMS OR ACTIVI26 TIES.—In order to receive a grant under section 314(b),
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1 an agency, group, organization, or consortium shall have

2 a proven record of working with parents to improve their

3 eligible children’s reading.

4 SEC. 316. APPLICATIONS.

5 (a) IN GENERAL.—Each entity desiring a grant

6 under this subtitle shall submit an application to the Sec7 retary at such time, in such manner, and accompanied by

8 such information as the Secretary may require.

9 (b) APPLICATIONS FOR GRANTS FOR NATIONAL OR

10 REGIONAL NETWORKS.—Each application submitted

11 under subsection (a) for a grant under section 314(a)

12 shall—

13 (1) demonstrate the likelihood that the pro14 posed program or activity will have a substantial re15 gional or national impact;

16 (2) demonstrate the cost-effectiveness of the

17 proposed program or activity; and

18 (3) describe how the proposed program or activ19 ity will be coordinated with private sector programs

20 and activities, and State and local programs and ac21 tivities that provide support for parents of eligible

22 children.

23 (c) APPLICATIONS FOR GRANTS FOR SUCCESSFUL

24 PROGRAMS OR ACTIVITIES.—Each application submitted
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1 under subsection (a) for a grant under section 04(b)

2 shall—

3 (1) describe a program or activity that is capa4 ble of successful expansion or replication;

5 (2) contain evidence of community support for

6 the proposed program or activity from the private

7 sector, a school, and another entity;

8 (3) contain information demonstrating the cost9 effectiveness of the proposed program or activity;

10 and

11 (4) provide an assurance that the applicant will

12 coordinate the proposed program or activity with

13 State and local programs and activities that provide

14 support for parents of eligible children.

15 SEC. 317. AUTHORIZATION OF APPROPRIATIONS.

16 (a) APPROPRIATIONS.—There are appropriated to

17 carry out this subtitle $45,000,000 for fiscal year 1998,

18 $50,000,000 for fiscal year 1999, $60,000,000 for fiscal

19 year 2000, $70,000,000 for fiscal year 2001, and

20 $75,000,000 for fiscal year 2002.

21 (b) ENTITLEMENT.—Subject to subsection (a), each

22 entity receiving a grant under this title for a fiscal year

23 shall be entitled to payments for such year under the

24 grant.
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1 Subtitle B—Challenging America’s

2 Young Readers

3 SEC. 321. SHORT TITLE.

4 This subtitle may be cited as the ‘‘Challenging Ameri5 ca’s Young Readers Act of 1997’’.

6 SEC. 322. PURPOSE.

7 The purpose of this subtitle is to raise reading levels

8 by providing tutoring assistance outside regular school

9 hours to children eligible to attend preschool, kinder10 garten, or 1st, 2d, or 3d grade.

11 SEC. 323. DEFINITIONS.

12 In this subtitle:

13 (1) ADMINISTRATORS.—The term ‘‘Administra14 tors’’ means the Secretary of Education and the

15 Chief Executive Officer of the Corporation for Na16 tional and Community Service acting pursuant to

17 the agreement entered into under section 324(c).

18 (2) ELIGIBLE CHILD.—The term ‘‘eligible

19 child’’ means an individual eligible to attend pre20 school, kindergarten, or 1st, 2d, or 3d grade.

21 (3) STATE.—The term ‘‘State’’ means each of

22 the several States of the United States, the District

23 of Columbia, and the Commonwealth of Puerto Rico.

24 (4) STATE EDUCATIONAL AGENCY.—The term

25 ‘‘State educational agency’’ has the meaning given
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1 the term by section 14101 of the Elementary and

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

3 SEC. 324. PROGRAM AUTHORIZED.

4 (a) ALLOTMENT AND RESERVATIONS.—

5 (1) ALLOTMENT.—From the sum made avail6 able under section 330(b) and not reserved under

7 paragraph (5) for a fiscal year, the Administrators

8 shall make an allotment to each State educational

9 agency for the fiscal year in an amount that bears

10 the same relation to the sum as the amount such

11 State received under part A of title I of the Elemen12 tary and Secondary Education Act of 1965 (20

13 U.S.C. 6311 et seq.) for the previous fiscal year

14 bears to the amount all States received under such

15 part for the previous fiscal year.

16 (2) RESERVATIONS.—

17 (A) IN GENERAL.—From the sum made

18 available under section 330(b) for a fiscal year,

19 the Administrators—

20 (i) shall reserve 10 percent of such

21 sum to carry out local reading programs

22 under section 326;

23 (ii) shall reserve not more than 1.5

24 percent of such sum to carry out national
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1 leadership and evaluation activities under

2 section 327;

3 (iii) shall reserve the percentage de4 scribed in subparagraph (B) of such sum

5 to make a payment to the Secretary of the

6 Interior to enable the Secretary of the In7 terior to carry out the purpose of this sub8 title for Indian children; and

9 (iv) shall reserve 0.25 percent of such

10 sum to make payments to the United

11 States Virgin Islands, Guam, American

12 Samoa, the Commonwealth of the North13 ern Mariana Islands, the Republic of the

14 Marshall Islands, the Federated States of

15 Micronesia, and the Republic of Palau on

16 the basis of their respective need for assist17 ance according to such criteria as the Sec18 retary determines will best carry out the

19 purpose of this subtitle.

20 (B) PERCENTAGE.—The percentage re21 ferred to in subparagraph (A)(iii) for a fiscal

22 year is the percentage of funds reserved under

23 section 1121(a)(2) of the Elementary and Sec24 ondary Education Act of 1965 (20 U.S.C.
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1 6331(a)(2)) for the Secretary of the Interior for

2 such previous year.

3 (b) GRANTS.—

4 (1) IN GENERAL.—Each State educational

5 agency receiving an allotment under subsection

6 (a)(1) shall use such allotment to award grants, on

7 a competitive basis, to organizations in the State to

8 enable the organizations—

9 (A) to employ reading specialists to super10 vise tutoring programs that teach eligible chil11 dren to read;

12 (B) to recruit and train tutors for tutoring

13 programs that teach eligible children to read;

14 and

15 (C) to carry out tutoring programs that

16 teach eligible children to read.

17 (2) SPECIAL RULE.—Each tutoring program

18 assisted through a grant awarded under paragraph

19 (1) shall be conducted before or after regular school

20 hours, or during the weekend or the summer.

21 (c) COMMUNITY AND NATIONAL SERVICE FUNDS.—

22 The Administrators shall use amounts reserved under sec23 tion 330(a) for a fiscal year to carry out the activities de24 scribed in subparagraphs (A) through (C) of subsection

25 (b)(1) during the periods described in subsection (b)(2)
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1 in accordance with the National and Community Service

2 Act of 1990 (42 U.S.C. 12501).

3 (d) JOINT ADMINISTRATION.—

4 (1) IN GENERAL.—The Secretary of Education

5 and the Chief Executive Officer of the Corporation

6 for National and Community Service shall admin7 ister this subtitle jointly pursuant to an agreement

8 between the Secretary and the Chief Executive Offi9 cer.

10 (2) AGREEMENT.—The agreement described in

11 paragraph (1) shall establish the responsibilities of

12 the Secretary of Education and the Chief Executive

13 Officer of the Corporation for National and Commu14 nity Service for administering this subtitle. Such

15 agreement shall—

16 (A) not require more than one application

17 from any one State educational agency or local

18 applicant;

19 (B) encourage, but not require, the use of

20 volunteers assisted through funding made avail21 able under section 330(a) to serve as volunteer

22 recruiters and coordinators; and

23 (C) include only one application review

24 process.
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1 SEC. 325. APPLICATIONS.

2 (a) STATE.—Each State educational agency desiring

3 an allotment under this subtitle shall submit an applica4 tion to the Administrators at such time, in such manner,

5 and containing such information as the Administrators

6 may require. Each such application shall—

7 (1) describe how the State educational agency

8 will award grants under this subtitle; and

9 (2) describe how the State educational agency

10 will encourage use of activities assisted under the

11 National and Community Service Act of 1990 (42

12 U.S.C. 12501 et seq.) and the Domestic Volunteer

13 Service Act of 1973 (42 U.S.C. 4950 et seq.).

14 (b) LOCAL.—Each organization desiring a grant

15 under section 324(b) shall submit an application to the

16 State educational agency at such time, in such manner,

17 and accompanied by such information as the State edu18 cational agency may reasonably require. Each such appli19 cation shall—

20 (1) describe how the proposed program or activ21 ity will be linked with the curriculum of the appro22 priate local educational agency, school, or classroom,

23 and other reading enhancement activities of the

24 school and the eligible children;
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1 (2) contain a description of how the applicant

2 will use the grant funds to provide assistance to eco3 nomically disadvantaged communities, and schools,

4 in which eligible children have the greatest need for

5 reading assistance;

6 (3) contain an assurance that the proposed pro7 gram or activity will focus on providing individual8 ized tutoring in reading that involves trained and su9 pervised volunteers who have been approved by the

10 applicant; and

11 (4) describe the strategies that will be under12 taken through the program or activity to ensure that

13 eligible children will make progress in reading;

14 (5) describe how the applicant will evaluate the

15 program or activity, including measuring progress

16 toward improving the reading performance of eligible

17 children, and improve the program or activity if eli18 gible children do not make progress in improving

19 reading performance; and

20 (6) demonstrate how the program or activity—

21 (A) will be coordinated with activities of

22 local school personnel, and activities assisted

23 under the Head Start Act (42 U.S.C. 9831 et

24 seq.), Even Start, other provisions of title I of

25 the Elementary and Secondary Education Act
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1 of 1965 (20 U.S.C. 6301 et seq.), and the Indi2 viduals with Disabilities Education Act (20

3 U.S.C. 1400 et seq.), particularly with respect

4 to referral of eligible children; and

5 (B) will be developed and carried out with

6 strong parent, community, and private sector

7 involvement.

8 SEC. 326. LOCAL READING PROGRAMS.

9 (a) GRANTS AUTHORIZED.—

10 (1) IN GENERAL.—From amounts reserved

11 under section 324(a)(2)(A)(i) for a fiscal year, the

12 Administrators shall award grants to local entities

13 for the planning, implementation, or expansion of

14 local reading programs that serve economically dis15 advantaged communities.

16 (2) SPECIAL RULE.—In awarding grants under

17 paragraph (1) for a fiscal year, the Administrators

18 shall ensure that at least 1 such grant is awarded

19 to serve an urban economically disadvantaged com20 munity and at least 1 such grant is awarded to serve

21 a rural economically disadvantaged community.
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1 (b) APPLICATION.—Each local entity desiring a grant

2 under subsection (a) shall submit an application to the Ad3 ministrators at such time, in such manner, and accom4 panied by such information as the Administrators may re5 quire. Each such application shall include the information

6 and assurances described in section 325(b) with respect

7 to such local entity.

8 SEC. 327. NATIONAL LEADERSHIP AND EVALUATION.

9 (a) NATIONAL LEADERSHIP.—From a portion of

10 amounts reserved under section 324(a)(2)(A)(ii) for a fis11 cal year, the Administrators may carry out national lead12 ership activities, including dissemination of information on

13 effective practices, providing technical assistance mate14 rials, and other activities, to increase the performance of

15 eligible children in the States.

16 (b) EVALUATION.—

17 (1) IN GENERAL.—From a portion of the

18 amounts reserved under section 324(a)(2)(A)(ii) for

19 a fiscal year, the Administrators, through a grant,

20 contract, or cooperative agreement, shall evaluate,

21 and submit reports to Congress regarding, the effec22 tiveness of programs and activities assisted under

23 this subtitle.
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1 (2) REPORT DATES.—The reports described in

2 paragraph (1) shall be submitted to Congress on

3 September 1, 2000, and every 2 years thereafter.

4 SEC. 328. ADJUSTMENT OR TERMINATION OF FUNDING.

5 Notwithstanding any other provision of this subtitle,

6 the Administrators may decrease or terminate any funding

7 provided under this subtitle if the Administrators deter8 mine that a recipient of such funding does not—

9 (1) improve reading performance with respect

10 to eligible children; or

11 (2) implement the recipient’s strategies to im12 prove reading performance with respect to eligible

13 children.

14 SEC. 329. NONDUPLICATION AND NONDISPLACEMENT.

15 (a) NONDUPLICATION.—Assistance provided under

16 this subtitle shall be used only for a program or activity

17 that does not duplicate, and is in addition to, an activity

18 otherwise available in the locality of such program or

19 activity.

20 (b) NONDISPLACEMENT.—An employer shall not dis21 place an employee or position, including partial displace22 ment such as reduction in hours, wages, or employment

23 benefits, as a result of the use by such employer of a par24 ticipant in a program or activity receiving assistance

25 under this subtitle.
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1 SEC. 330. FUNDING.

2 (a) RESERVATION.—From amounts made available to

3 carry out the National and Community Service Act of

4 1990 (42 U.S.C. 12501 et seq.) for each of the fiscal years

5 1998 through 2002, the Chief Executive Officer of the

6 Corporation for National and Community Service shall

7 make available $200,000,000 to carry out this subtitle.

8 (b) APPROPRIATION.—There are appropriated to the

9 Secretary of Education to carry out this subtitle

10 $200,000,000 for fiscal year 1998, $250,000,000 for fis11 cal year 1999, $300,000,000 for fiscal year 2000,

12 $350,000,000 for fiscal year 2001, and $350,000,000 for

13 fiscal year 2002.

14 (c) ENTITLEMENT.—Subject to subsections (a) and

15 (b), each entity receiving an allotment, awarded a grant,

16 or entering into a contract or cooperative agreement,

17 under this subtitle for a fiscal year shall be entitled to

18 payments for such year under the allotment, grant, con19 tract, or cooperative agreement.

20 TITLE IV—INVESTING IN TECH21 NOLOGY FOR THE CLASS22 ROOMS

23 Subtitle A—Sense of the Senate

24 SEC. 401. FINDINGS.

25 Congress finds as follows:
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1 (1) Technology in the schools is a central com2 ponent of preparing students for the 21st century.

3 (2) Equipping schools with technology is no

4 longer a luxury. It is a necessity. By the year 2000,

5 60 percent of all jobs in the Nation will require

6 skills in computer and network use.

7 (3) Technology in the classroom improves stu8 dents’ mastery of basic skills, test scores, writing,

9 and engagement in school. With these gains come

10 decreases in dropout rates and decreases in attend11 ance and discipline problems.

12 (4) Not enough students have access to comput13 ers, distance learning, and telecommunications tech14 nologies. A 1995 Government Accounting Report re15 port estimates that 10,000,000 students, and 1

16 school in every 4 schools, do not have sufficient com17 puters to meet their needs.

18 (5) Of the 5,800,000 computers in United

19 States schools, many are older models that do not

20 have the power to perform advanced functions such

21 as those involving video and the Internet.

22 (6) Only 9 percent of all instructional rooms in23 cluding classrooms, laboratories, and library media,

24 have connections to the Internet.
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1 (7) The Federal Government began a new com2 mitment to funding education technology by invest3 ing an additional $200,000,000 in subpart 2 of part

4 A of title III of the Elementary and Secondary Edu5 cation Act of 1965 (20 U.S.C. 6841 et seq.) in fiscal

6 year 1997. Although such investment is an impor7 tant investment, it is not sufficient to meet the tech8 nology needs of schools and school children in the

9 21st century.

10 SEC. 402. SENSE OF THE SENATE.

11 It is the Sense of the Senate that it is in the Nation’s

12 best interest for the Federal Government to invest at least

13 $1,800,000,000 in additional funding for education tech14 nology programs between fiscal years 1998 and 2002.

15 Subtitle B—Educational

16 Technology Clearinghouses

17 SEC. 421. PURPOSE.

18 It is the purpose of this subtitle to authorize a pro19 gram to support regional educational technology clearing20 houses that facilitate the donation of surplus equipment

21 and technology to schools and libraries from Federal or

22 State governmental agencies, businesses, and other private

23 entities.
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1 SEC. 422. AUTHORITY.

2 (a) IN GENERAL.—The Secretary of Education shall

3 make grants to or enter into contracts with regional public

4 or private nonprofit entities for the purpose of supporting

5 a system of regional educational technology clearing6 houses. In awarding the grants or contracts, the Secretary

7 shall ensure that each geographic region of the United

8 States is served by such an entity.

9 (b) DURATION.—The Secretary shall award grants

10 and contracts under this subtitle for a period of 5 years.

11 SEC. 423. REQUIREMENTS.

12 Each entity receiving a grant or contract under this

13 subtitle shall—

14 (1) in cooperation with State educational agen15 cies and local educational agencies, develop a re16 gional program to support a clearinghouse that fa17 cilitates the transfer of surplus equipment and tech18 nology to schools and libraries from Federal or State

19 governmental agencies, businesses, and other private

20 entities;

21 (2) disseminate information to State edu22 cational agencies and local educational agencies

23 about the availability and procurement of the equip24 ment and technology through the clearinghouse;
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1 (3) disseminate information to the public about

2 activities assisted under this subtitle, including in3 formation about the donations being accepted by the

4 clearinghouse;

5 (4) have in place a process for ensuring that

6 surplus equipment and technology is distributed in a

7 fair and equitable manner, with school districts with

8 the greatest need for such equipment and technology

9 receiving priority for donations under this subtitle;

10 (5) provide technical assistance to a school or

11 library to ensure that the equipment and technology

12 being donated is consistent with the short- and long13 term educational technology plans of the school or li14 brary, respectively;

15 (6) use funds under this subtitle to upgrade

16 equipment or technology only if the entity deter17 mines such upgrading meets the short- and long18 term educational plan of the school or library receiv19 ing the equipment or technology; and

20 (7) ensure that the transfer of equipment and

21 technology does not violate copyright, patent, or

22 trademark laws.

23 SEC. 424. AUTHORIZATION OF APPROPRIATIONS.

24 There are authorized to be appropriated to carry out

25 this subtitle $5,000,000 for fiscal year 1998 and such
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1 sums as may be necessary for each of the 4 succeeding

2 fiscal years.

Æ