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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 223 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                 S. 223

 To help communities modernize public school facilities, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            January 19, 1999

 Mr. Lautenberg (for himself, Mr. Robb, Mr. Kennedy, Mr. Daschle, Mr. 
   Conrad, Mr. Bingaman, Mr. Edwards, Mr. Torricelli, Mr. Kerry, Mr. 
    Breaux, Mr. Inouye, Mrs. Boxer, and Mr. Johnson) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL

 
 To help communities modernize public school facilities, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Public School Modernization Act of 
1999''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) According to the General Accounting Office, one-third 
        of all elementary and secondary schools in the United States, 
        serving 14,000,000 students, need extensive repair or 
        renovation.
            (2) School infrastructure problems exist across the 
        country, in urban, suburban, and rural school districts.
            (3) Many States and school districts will need to build new 
        schools in order to accommodate increasing student enrollments; 
        the Department of Education has predicted that the Nation will 
        need an additional 6,000 schools by 2006.
            (4) Many schools do not have the physical infrastructure to 
        take advantage of computers and other technology needed to meet 
        the challenges of the next century.
            (5) The Federal Government, by providing tax credits to 
        bondholders to substitute for interest paid by school 
        districts, can lower the costs of State and local school 
        infrastructure investment, creating an incentive for States and 
        localities to increase their own infrastructure improvement 
        efforts and help ensure that all students are able to attend 
        schools that are equipped for the 21st century.
    (b) Purpose.--The purpose of this Act is to provide Federal tax 
credits to bondholders, in lieu of interest owed by school districts, 
to help States and localities to modernize public school facilities and 
build the additional public schools needed to educate the increasing 
number of students who will enroll in the next decade.

SEC. 3. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

    (a) In General.--Part IV of subchapter U of chapter 1 of the 
Internal Revenue Code of 1986 (relating to incentives for education 
zones) is amended to read as follows:

 ``PART IV--INCENTIVES FOR QUALIFIED PUBLIC SCHOOL MODERNIZATION BONDS

                              ``Sec. 1397E. Credit to holders of 
                                        qualified public school 
                                        modernization bonds.
                              ``Sec. 1397F. Qualified zone academy 
                                        bonds.
                              ``Sec. 1397G. Qualified school 
                                        construction bonds.

``SEC. 1397E. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL 
              MODERNIZATION BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified public school modernization bond on the credit allowance date 
of such bond which occurs during the taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter for such 
taxable year the amount determined under subsection (b).
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any qualified public 
        school modernization bond is the amount equal to the product 
        of--
                    ``(A) the credit rate determined by the Secretary 
                under paragraph (2) for the month in which such bond 
                was issued, multiplied by
                    ``(B) the face amount of the bond held by the 
                taxpayer on the credit allowance date.
            ``(2) Determination.--During each calendar month, the 
        Secretary shall determine a credit rate which shall apply to 
        bonds issued during the following calendar month. The credit 
        rate for any month is the percentage which the Secretary 
        estimates will on average permit the issuance of qualified 
        public school modernization bonds without discount and without 
        interest cost to the issuer.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under part 
                IV of subchapter A (other than subpart C thereof, 
                relating to refundable credits).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Qualified Public School Modernization Bond; Credit Allowance 
Date.--For purposes of this section--
            ``(1) Qualified public school modernization bond.--The term 
        `qualified public school modernization bond' means--
                    ``(A) a qualified zone academy bond, and
                    ``(B) a qualified school construction bond.
            ``(2) Credit allowance date.--The term `credit allowance 
        date' means, with respect to any issue, the last day of the 1-
        year period beginning on the date of issuance of such issue and 
        the last day of each successive 1-year period thereafter.
    ``(e) Other Definitions.--For purposes of this part--
            ``(1) Local educational agency.--The term `local 
        educational agency' has the meaning given to such term by 
        section 14101 of the Elementary and Secondary Education Act of 
        1965. Such term includes the local educational agency that 
        serves the District of Columbia but does not include any other 
        State agency.
            ``(2) Bond.--The term `bond' includes any obligation.
            ``(3) State.--The term `State' includes the District of 
        Columbia and any possession of the United States.
            ``(4) Public school facility.--The term `public school 
        facility' shall not include any stadium or other facility 
        primarily used for athletic contests or exhibitions or other 
        events for which admission is charged to the general public.
    ``(f) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section and the 
amount so included shall be treated as interest income.
    ``(g) Bonds Held By Regulated Investment Companies.--If any 
qualified public school modernization bond is held by a regulated 
investment company, the credit determined under subsection (a) shall be 
allowed to shareholders of such company under procedures prescribed by 
the Secretary.

``SEC. 1397F. QUALIFIED ZONE ACADEMY BONDS.

    ``(a) Qualified Zone Academy Bond.--For purposes of this part--
            ``(1) In general.--The term `qualified zone academy bond' 
        means any bond issued as part of an issue if--
                    ``(A) 95 percent or more of the proceeds of such 
                issue are to be used for a qualified purpose with 
                respect to a qualified zone academy established by a 
                local educational agency,
                    ``(B) the bond is issued by a State or local 
                government within the jurisdiction of which such 
                academy is located,
                    ``(C) the issuer--
                            ``(i) designates such bond for purposes of 
                        this section,
                            ``(ii) certifies that it has written 
                        assurances that the private business 
                        contribution requirement of paragraph (2) will 
                        be met with respect to such academy, and
                            ``(iii) certifies that it has the written 
                        approval of the local educational agency for 
                        such bond issuance, and
                    ``(D) the term of each bond which is part of such 
                issue does not exceed 15 years.
            ``(2) Private business contribution requirement.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the private business contribution requirement of this 
                paragraph is met with respect to any issue if the local 
                educational agency that established the qualified zone 
                academy has written commitments from private entities 
                to make qualified contributions having a present value 
                (as of the date of issuance of the issue) of not less 
                than 10 percent of the proceeds of the issue.
                    ``(B) Qualified contributions.--For purposes of 
                subparagraph (A), the term `qualified contribution' 
                means any contribution (of a type and quality 
                acceptable to the local educational agency) of--
                            ``(i) equipment for use in the qualified 
                        zone academy (including state-of-the-art 
                        technology and vocational equipment),
                            ``(ii) technical assistance in developing 
                        curriculum or in training teachers in order to 
                        promote appropriate market driven technology in 
                        the classroom,
                            ``(iii) services of employees as volunteer 
                        mentors,
                            ``(iv) internships, field trips, or other 
                        educational opportunities outside the academy 
                        for students, or
                            ``(v) any other property or service 
                        specified by the local educational agency.
            ``(3) Qualified zone academy.--The term `qualified zone 
        academy' means any public school (or academic program within a 
        public school) which is established by and operated under the 
        supervision of a local educational agency to provide education 
        or training below the postsecondary level if--
                    ``(A) such public school or program (as the case 
                may be) is designed in cooperation with business to 
                enhance the academic curriculum, increase graduation 
                and employment rates, and better prepare students for 
                the rigors of college and the increasingly complex 
                workforce,
                    ``(B) students in such public school or program (as 
                the case may be) will be subject to the same academic 
                standards and assessments as other students educated by 
                the local educational agency,
                    ``(C) the comprehensive education plan of such 
                public school or program is approved by the local 
                educational agency, and
                    ``(D)(i) such public school is located in an 
                empowerment zone or enterprise community (including any 
                such zone or community designated after the date of 
                enactment of this section), or
                    ``(ii) there is a reasonable expectation (as of the 
                date of issuance of the bonds) that at least 35 percent 
                of the students attending such school or participating 
                in such program (as the case may be) will be eligible 
                for free or reduced-cost lunches under the school lunch 
                program established under the National School Lunch 
                Act.
            ``(4) Qualified purpose.--The term `qualified purpose' 
        means, with respect to any qualified zone academy--
                    ``(A) constructing, rehabilitating, or repairing 
                the public school facility in which the academy is 
                established,
                    ``(B) providing equipment for use at such academy,
                    ``(C) developing course materials for education to 
                be provided at such academy, and
                    ``(D) training teachers and other school personnel 
                in such academy.
            ``(5) Temporary period exception.--A bond shall not be 
        treated as failing to meet the requirement of paragraph (1)(A) 
        solely by reason of the fact that the proceeds of the issue of 
        which such bond is a part are invested for a reasonable 
        temporary period (but not more than 36 months) until such 
        proceeds are needed for the purpose for which such issue was 
        issued. Any earnings on such proceeds during such period shall 
        be treated as proceeds of the issue for purposes of applying 
        paragraph (1)(A).
    ``(b) Limitations on Amount of Bonds Designated.--
            ``(1) In general.--There is a national zone academy bond 
        limitation for each calendar year. Such limitation is--
                    ``(A) $400,000,000 for 1999,
                    ``(B) $1,400,000,000 for 2000,
                    ``(C) $1,400,000,000 for 2001, and
                    ``(D) except as provided in paragraph (3), zero 
                after 2001.
            ``(2) Allocation of limitation.--
                    ``(A) Allocation among states.--
                            ``(i) 1999 limitation.--The national zone 
                        academy bond limitation for calendar year 1999 
                        shall be allocated by the Secretary among the 
                        States on the basis of their respective 
                        populations of individuals below the poverty 
                        line (as defined by the Office of Management 
                        and Budget).
                            ``(ii) Limitation after 1999.--The national 
                        zone academy bond limitation for any calendar 
                        year after 1999 shall be allocated by the 
                        Secretary among the States in the manner 
                        prescribed by section 1397G(d); except that, in 
                        making the allocation under this clause, the 
                        Secretary shall take into account Basic Grants 
                        attributable to large local educational 
                        agencies (as defined in section 1397G(e)).
                    ``(B) Allocation to local educational agencies.--
                The limitation amount allocated to a State under 
                subparagraph (A) shall be allocated by the State 
                education agency to qualified zone academies within 
                such State.
                    ``(C) Designation subject to limitation amount.--
                The maximum aggregate face amount of bonds issued 
                during any calendar year which may be designated under 
                subsection (a) with respect to any qualified zone 
                academy shall not exceed the limitation amount 
                allocated to such academy under subparagraph (B) for 
                such calendar year.
            ``(3) Carryover of unused limitation.--If for any calendar 
        year--
                    ``(A) the limitation amount under this subsection 
                for any State, exceeds
                    ``(B) the amount of bonds issued during such year 
                which are designated under subsection (a) with respect 
                to qualified zone academies within such State,
        the limitation amount under this subsection for such State for 
        the following calendar year shall be increased by the amount of 
        such excess. The preceding sentence shall not apply if such 
        following calendar year is after 2003.

``SEC. 1397G. QUALIFIED SCHOOL CONSTRUCTION BONDS.

    ``(a) Qualified School Construction Bond.--For purposes of this 
part, the term `qualified school construction bond' means any bond 
issued as part of an issue if--
            ``(1) 95 percent or more of the proceeds of such issue are 
        to be used for the construction, rehabilitation, or repair of a 
        public school facility,
            ``(2) the bond is issued by a State or local government 
        within the jurisdiction of which such school is located,
            ``(3) the issuer designates such bond for purposes of this 
        section, and
            ``(4) the term of each bond which is part of such issue 
        does not exceed 15 years.
Rules similar to the rules of section 1397F(a)(5) shall apply for 
purposes of paragraph (1).
    ``(b) Limitation on Amount of Bonds Designated.--The maximum 
aggregate face amount of bonds issued during any calendar year which 
may be designated under subsection (a) by any issuer shall not exceed 
the sum of--
            ``(1) the limitation amount allocated under subsection (d) 
        for such calendar year to such issuer, and
            ``(2) if such issuer is a large local educational agency 
        (as defined in subsection (e)) or is issuing on behalf of such 
        an agency, the limitation amount allocated under subsection (e) 
        for such calendar year to such agency.
    ``(c) National Limitation on Amount of Bonds Designated.--
            ``(1) In general.--There is a national qualified school 
        construction bond limitation for each calendar year equal to 
        the dollar amount specified in paragraph (2) for such year, 
        reduced, in the case of calendar years 2000 and 2001, by 1.5 
        percent of such amount.
            ``(2) Dollar amount specified.--The dollar amount specified 
        in this paragraph is--
                    ``(A) $9,700,000,000 for 2000,
                    ``(B) $9,700,000,000 for 2001, and
                    ``(C) except as provided in subsection (f), zero 
                after 2001.
    ``(d) 65-Percent of Limitation Allocated Among States.--
            ``(1) In general.--Sixty-five percent of the limitation 
        applicable under subsection (c) for any calendar year shall be 
        allocated among the States under paragraph (2) by the 
        Secretary. The limitation amount allocated to a State under the 
        preceding sentence shall be allocated by the State education 
        agency to issuers within such State and such allocations may be 
        made only if there is an approved State application.
            ``(2) Allocation formula.--The amount to be allocated under 
        paragraph (1) for any calendar year shall be allocated among 
        the States in proportion to the respective amounts each such 
        State received for Basic Grants under subpart 2 of part A of 
        title I of the Elementary and Secondary Education Act of 1965 
        (20 U.S.C. 6331 et seq.) for the most recent fiscal year ending 
        before such calendar year. For purposes of the preceding 
        sentence, Basic Grants attributable to large local educational 
        agencies (as defined in subsection (e)) shall be disregarded.
            ``(3) Minimum allocations to states.--
                    ``(A) In general.--The Secretary shall adjust the 
                allocations under this subsection for any calendar year 
                for each State to the extent necessary to ensure that 
                the sum of--
                            ``(i) the amount allocated to such State 
                        under this subsection for such year, and
                            ``(ii) the aggregate amounts allocated 
                        under subsection (e) to large local educational 
                        agencies in such State for such year,
                is not less than an amount equal to such State's 
                minimum percentage of 65 percent of the national 
                qualified school construction bond limitation under 
                subsection (c) for the calendar year.
                    ``(B) Minimum percentage.--A State's minimum 
                percentage for any calendar year is the minimum 
                percentage described in section 1124(d) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6334(d)) for such State for the most recent 
                fiscal year ending before such calendar year.
            ``(4) Allocations to certain possessions.--The amount to be 
        allocated under paragraph (1) to any possession of the United 
        States other than Puerto Rico shall be the amount which would 
        have been allocated if all allocations under paragraph (1) were 
        made on the basis of respective populations of individuals 
        below the poverty line (as defined by the Office of Management 
        and Budget). In making other allocations, the amount to be 
        allocated under paragraph (1) shall be reduced by the aggregate 
        amount allocated under this paragraph to possessions of the 
        United States.
            ``(5) Approved state application.--For purposes of 
        paragraph (1), the term `approved State application' means an 
        application which is approved by the Secretary of Education and 
        which includes--
                    ``(A) the results of a recent publicly-available 
                survey (undertaken by the State with the involvement of 
                local education officials, members of the public, and 
                experts in school construction and management) of such 
                State's needs for public school facilities, including 
                descriptions of--
                            ``(i) health and safety problems at such 
                        facilities,
                            ``(ii) the capacity of public schools in 
                        the State to house projected enrollments, and
                            ``(iii) the extent to which the public 
                        schools in the State offer the physical 
                        infrastructure needed to provide a high-quality 
                        education to all students, and
                    ``(B) a description of how the State will allocate 
                to local educational agencies, or otherwise use, its 
                allocation under this subsection to address the needs 
                identified under subparagraph (A), including a 
                description of how it will--
                            ``(i) give highest priority to localities 
                        with the greatest needs, as demonstrated by 
                        inadequate or overcrowded school facilities 
                        coupled with a low level of resources to meet 
                        those needs,
                            ``(ii) use its allocation under this 
                        subsection to assist localities that lack the 
                        fiscal capacity to issue bonds on their own, 
                        including the issuance of bonds by the State on 
                        behalf of such localities, and
                            ``(iii) ensure that its allocation under 
                        this subsection is used only to supplement, and 
                        not supplant, the amount of school 
                        construction, rehabilitation, and repair in the 
                        State that would have occurred in the absence 
                        of such allocation.
        Any allocation under paragraph (1) by a State education agency 
        shall be binding if such agency reasonably determined that the 
        allocation was in accordance with the plan approved under this 
        paragraph.
    ``(e) 35-Percent of Limitation Allocated Among Largest School 
Districts.--
            ``(1) In general.--Thirty-five percent of the limitation 
        applicable under subsection (c) for any calendar year shall be 
        allocated under paragraph (2) by the Secretary among local 
        educational agencies which are large local educational agencies 
        for such year. No qualified school construction bond may be 
        issued by reason of an allocation to a large local educational 
        agency under the preceding sentence unless such agency has an 
        approved local application.
            ``(2) Allocation formula.--The amount to be allocated under 
        paragraph (1) for any calendar year shall be allocated among 
        large local educational agencies in proportion to the 
        respective amounts each such agency received for Basic Grants 
        under subpart 2 of part A of title I of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for 
        the most recent fiscal year ending before such calendar year.
            ``(3) Large local educational agency.--For purposes of this 
        section, the term `large local educational agency' means, with 
        respect to a calendar year, any local educational agency if 
        such agency is--
                    ``(A) among the 100 local educational agencies with 
                the largest numbers of children aged 5 through 17 from 
                families living below the poverty level, as determined 
                by the Secretary using the most recent data available 
                from the Department of Commerce that are satisfactory 
                to the Secretary, or
                    ``(B) 1 of not more than 25 local educational 
                agencies (other than those described in clause (i)) 
                that the Secretary of Education determines (based on 
                the most recent data available satisfactory to the 
                Secretary) are in particular need of assistance, based 
                on a low level of resources for school construction, a 
                high level of enrollment growth, or such other factors 
                as the Secretary deems appropriate.
            ``(4) Approved local application.--For purposes of 
        paragraph (1), the term `approved local application' means an 
        application which is approved by the Secretary of Education and 
        which includes--
                    ``(A) the results of a recent publicly-available 
                survey (undertaken by the local educational agency with 
                the involvement of school officials, members of the 
                public, and experts in school construction and 
                management) of such agency's needs for public school 
                facilities, including descriptions of--
                            ``(i) the overall condition of the local 
                        educational agency's school facilities, 
                        including health and safety problems,
                            ``(ii) the capacity of the agency's schools 
                        to house projected enrollments, and
                            ``(iii) the extent to which the agency's 
                        schools offer the physical infrastructure 
                        needed to provide a high-quality education to 
                        all students,
                    ``(B) a description of how the local educational 
                agency will use its allocation under this subsection to 
                address the needs identified under subparagraph (A), 
                and
                    ``(C) a description of how the local educational 
                agency will ensure that its allocation under this 
                subsection is used only to supplement, and not 
                supplant, the amount of school construction, 
                rehabilitation, or repair in the locality that would 
                have occurred in the absence of such allocation.
        A rule similar to the rule of the last sentence of subsection 
        (d)(5) shall apply for purposes of this paragraph.
    ``(f) Carryover of Unused Limitation.--If for any calendar year--
            ``(1) the amount allocated under subsection (d) to any 
        State, exceeds
            ``(2) the amount of bonds issued during such year which are 
        designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State for the 
following calendar year shall be increased by the amount of such 
excess. A similar rule shall apply to the amounts allocated under 
subsection (e). The subsection shall not apply if such following 
calendar year is after 2003.
    ``(g) Set-Aside Allocated Among Indian Tribes.--
            ``(1) In general.--The 1.5 percent set-aside applicable 
        under subsection (c)(1) for any calendar year shall be 
        allocated under paragraph (2) among Indian tribes for the 
        construction, rehabilitation, or repair of tribal schools. No 
        allocation may be made under the preceding sentence unless the 
        Indian tribe has an approved application.
            ``(2) Allocation formula.--The amount to be allocated under 
        paragraph (1) for any calendar year shall be allocated among 
        Indian tribes on a competitive basis by the Secretary of 
        Interior, in consultation with the Secretary of the Education--
                    ``(A) through a negotiated rulemaking procedure 
                with the tribes in the same manner as the procedure 
                described in section 106(b)(2) of the Native American 
                Housing Assistance and Self-Determination Act of 1996 
                (25 U.S.C. 4116(b)(2)), and
                    ``(B) based on criteria described in paragraphs 
                (1), (3), (4), (5), and (6) of section 12005(a) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 8505(a)).
            ``(3) Approved application.--For purposes of paragraph (1), 
        the term `approved application' means an application submitted 
        by an Indian tribe which is approved by the Secretary of 
        Education and which includes--
                    ``(A) the basis upon which the applicable tribal 
                school meets the criteria described in paragraph 
                (2)(B), and
                    ``(B) an assurance by the Indian tribe that such 
                tribal school will not receive funds pursuant to 
                allocations described in subsection (d) or (e).
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Indian tribe.--The term `Indian tribe' has 
                the meaning given such term by section 45A(c)(6).
                    ``(B) Tribal school.--The term `tribal school' 
                means a school that is operated by an Indian tribe for 
the education of Indian children with financial assistance under grant 
under the Tribally Controlled Schools Act of 1988 (25 U.S.C. 2501 et 
seq.) or a contract with the Bureau of Indian Affairs under the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 450f et 
seq.).''
    (b) Reporting.--Subsection (d) of section 6049 of the Internal 
Revenue Code of 1986 (relating to returns regarding payments of 
interest) is amended by adding at the end the following:
            ``(8) Reporting of credit on qualified public school 
        modernization bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 1397E(f) and such amounts 
                shall be treated as paid on the credit allowance date 
                (as defined in section 1397E(d)(2)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A) of this 
                paragraph, subsection (b)(4) of this section shall be 
                applied without regard to subparagraphs (A), (H), (I), 
                (J), (K), and (L)(i).
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''
    (c) Clerical Amendments.--
            (1) The table of parts for subchapter U of chapter 1 of the 
        Internal Revenue Code of 1986 is amended by striking the item 
        relating to part IV and inserting the following:

                              ``Part IV. Incentives for qualified 
                                        public school modernization 
                                        bonds.''
            (2) Part V of subchapter U of chapter 1 of such Code is 
        amended by redesignating both section 1397F and the item 
        relating thereto in the table of sections for such part as 
        section 1397H.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to obligations 
        issued after December 31, 1998.
            (2) Repeal of restriction on zone academy bond holders.--
        The repeal of the limitation of section 1397E of the Internal 
        Revenue Code of 1986 (as in effect on the day before the date 
        of enactment of this Act) to eligible taxpayers (as defined in 
        subsection (d)(6) of such section) shall apply to obligations 
        issued after December 31, 1997.

SEC. 4. SENSE OF THE SENATE REGARDING FUNDING FOR BIA SCHOOL 
              FACILITIES.

    (a) Findings.--The Senate finds that--
            (1) the Bureau of Indian Affairs operates 1 of only 2 
        federally-run school systems; and
            (2) there is a clear Federal responsibility to ensure that 
        the more than 50,000 students attending these schools have 
        decent, safe schools.
    (b) Sense of the Senate.--It is the sense of the Senate that--
            (1) sufficient funds should be provided in fiscal year 2000 
        to begin construction of 3 new Bureau of Indian Affairs school 
        facilities and to increase funds available for the improvement 
        and repair of existing facilities; and
            (2) in addition, Congress should consider enacting 
        legislation to establish other funding mechanisms that would 
        leverage Federal investments on behalf of Bureau of Indian 
        Affairs schools in order to address the serious construction 
        backlog which exists at tribal schools.
                                 <all>
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