I
106TH CONGRESS
1ST SESSION
H. R. 996
To amend the Internal Revenue Code of 1986 to provide a source of interest-
free capital, in addition to that recommended in the President’s budget
proposal, for the construction and renovation of public schools in States
experiencing large increases in public school enrollment.
IN THE HOUSE OF REPRESENTATIVES
MARCH 4, 1999
Mr. ETHERIDGE (for himself, Mr. PRICE of North Carolina, Mr. RANGEL, Mr.
MCINTYRE, Mr. FRANK of Massachusetts, Ms. CARSON, Mr. MCGOVERN,
Ms. PELOSI, Mr. MORAN of Virginia, Mr. TOWNS, Mr. WAXMAN, Mr.
FILNER, Mr. FROST, Mr. GREEN of Texas, Mr. FORBES, Mr. LEWIS of
Georgia, Mr. GORDON, Mr. PAYNE, Mr. HINCHEY, Mr. DELAHUNT, Mrs.
MALONEY of New York, Mr. SANDLIN, Mr. LAMPSON, Mr. ACKERMAN,
Mr. MARTINEZ, Mr. PASTOR, Mr. ORTIZ, Mr. NEAL of Massachusetts,
Mrs. CLAYTON, Mrs. MEEK of Florida, Mr. PALLONE, Mr. ROMERO-
BARCELO´, Mrs. TAUSCHER, Mr. CROWLEY, Mr. CLEMENT, Mr. SHOWS,
Mr. KENNEDY of Rhode Island, Mr. BONIOR, Ms. MILLENDER-MCDON-
ALD, Mr. CAPUANO, Mr. EVANS, Mr. MEEHAN, Ms. KILPATRICK, Mr.
OLVER, Mr. WEXLER, Mr. BROWN of California, Ms. NORTON, Mr.
BAIRD, Mr. WATT of North Carolina, Mr. DOOLEY of California, Mr.
INSLEE, Ms. BROWN of Florida, Mrs. CAPPS, Mr. DAVIS of Florida, Mr.
PHELPS, Mr. CONYERS, Mr. DINGELL, Mr. GONZALEZ, Ms. BERKLEY,
Mr. HILL of Indiana, Mr. WEINER, Ms. EDDIE BERNICE JOHNSON of
Texas, Mrs. JONES of Ohio, Mr. WU, and Ms. BALDWIN) introduced the
following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
a source of interest-free capital, in addition to that rec-
ommended in the President’s budget proposal, for the
construction and renovation of public schools in States
experiencing large increases in public school enrollment.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘School Construction
Act of 1999’’.
SEC. 2. INCENTIVES FOR PUBLIC SCHOOL CONSTRUCTION.
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
credits against tax) is amended by inserting after subpart
G the following new subpart:
‘‘Subpart H—Credit to Holders of Qualified Public
School Construction Bonds
‘‘Sec. 54. Credit to holders of qualified public school construction
bonds.
‘‘Sec. 54A. Qualified public school construction bonds.
‘‘SEC. 54. CREDIT TO HOLDERS OF QUALIFIED PUBLIC
SCHOOL CONSTRUCTION BONDS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax-
payer who holds a qualified public school construction
bond on the credit allowance date of such bond which oc-
curs 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 construction bond is the
amount equal to the product of—
‘‘(A) the credit rate determined by the Sec-
retary 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 follow-
ing 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 construction bonds without discount and with-
out 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 im-
posed by section 55, over
‘‘(B) the sum of the credits allowable
under this part (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) DEFINITIONS.—For purposes of this subpart—
‘‘(1) 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.
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation.
‘‘(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.
‘‘(e) 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.
‘‘(f) BONDS HELD
BY REGULATED INVESTMENT
COMPANIES.—If any qualified public school construction
bond is held by a regulated investment company, the credit
determined under subsection (a) shall be allowed to share-
holders of such company under procedures prescribed by
the Secretary.
‘‘SEC. 54A. QUALIFIED PUBLIC SCHOOL CONSTRUCTION
BONDS.
‘‘(a) QUALIFIED PUBLIC SCHOOL CONSTRUCTION
BOND.—For purposes of this subpart—
‘‘(1) IN GENERAL.—The term ‘qualified public
school construction 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 the construction,
rehabilitation, or repair of a public school facil-
ity,
‘‘(B) the bond is issued by a State or local
government within the jurisdiction of which
such school is located,