I
106TH CONGRESS
2D SESSION
H. R. 4094
To amend the Internal Revenue Code of 1986 to expand the incentives
for the construction and renovation of public schools.
IN THE HOUSE OF REPRESENTATIVES
MARCH 28, 2000
Mrs. JOHNSON of Connecticut (for herself, Mr. RANGEL, Mr. HOUGHTON, Mr.
STARK, Mr. MATSUI, Mr. COYNE, Mr. LEVIN, Mr. CARDIN, Mr.
MCDERMOTT, Mr. KLECZKA, Mr. LEWIS of Georgia, Mr. NEAL of Massa-
chusetts, Mr. MCNULTY, Mr. BECERRA, Mrs. THURMAN, Mrs. MORELLA,
Mr. GEPHARDT, Mr. GILCHREST, Mr. BONIOR, Mr. GILMAN, Mr. TRAFI-
CANT, Mr. QUINN, Mr. DOYLE, Mr. NEY, Mr. CAPUANO, Mr. HORN, Mr.
MEEKS of New York, Mr. LEACH, Mr. FORBES, Mr. BOEHLERT, Mr.
BALDACCI, Mr. EHLERS, Mr. FATTAH, Mrs. KELLY, Mr. ENGEL, Mr.
MCHUGH, Mrs. LOWEY, Mr. FRANKS of New Jersey, Mrs. CAPPS, Mr.
WALSH, Mrs. MALONEY of New York, Mr. SAXTON, Mr. BARCIA, Mr.
CROWLEY, Mr. CONYERS, Mrs. CLAYTON, Mr. FARR of California, Mrs.
TAUSCHER, Mr. BLAGOJEVICH, Mr. NADLER, Mr. MOAKLEY, Mr. HIN-
CHEY, Mr. PASTOR, Mrs. MCCARTHY of New York, Mr. ABERCROMBIE,
Mr. BROWN of Ohio, Ms. VELA´ZQUEZ, Mr. SKELTON, Mr. WEINER, Mr.
ETHERIDGE, Mrs. CHRISTENSEN, Mr. DIXON, Mr. MASCARA, Mr. OBER-
STAR, Mr. PALLONE, Mr. BISHOP, Mr. SANDLIN, Mr. FRANK of Massa-
chusetts, Ms. JACKSON-LEE
of Texas, Ms. ROYBAL-ALLARD, Ms.
LOFGREN, Ms. WOOLSEY, Mr. TIERNEY, Mr. FILNER, Mr. BORSKI, Mr.
FROST, Mr. PAYNE, Mrs. NAPOLITANO, Mr. BACA, Mr. BLUMENAUER,
Mr. WEYGAND, Ms. WATERS, Mr. OWENS, Mrs. JONES of Ohio, Mr.
KENNEDY of Rhode Island, Ms. NORTON, Mr. WAXMAN, Mr. DINGELL,
Mr. STRICKLAND, Ms. SANCHEZ, Mr. LANTOS, Mr. ALLEN, Mr. BAIRD,
Mr. BARRETT of Wisconsin, Mr. BERMAN, Ms. CARSON, Mr. DEUTSCH,
Mr. GREEN of Texas, Mr. HOYER, Mr. SNYDER, Mr. SHERMAN, Mr.
TOWNS, Mr. REYES, Mr. MALONEY of Connecticut, Mr. KILDEE, Ms.
SCHAKOWSKY, Mr. WU, Mr. CLAY, Mrs. MEEK of Florida, Mr. ACKER-
MAN, Mr. MCGOVERN, Mr. MENENDEZ, Mr. MCINTYRE, Mr. JEFFERSON,
Mr. POMEROY, and Ms. BERKLEY) introduced the following bill; which
was referred to the Committee on Ways and Means, and in addition to
the Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to expand
the incentives for the construction and renovation of
public schools.
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 ‘‘America’s Better
Classroom Act of 2000’’.
SEC. 2. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.
(a) IN GENERAL.—Chapter 1 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the
following new subchapter:
‘‘Subchapter X—Public School Modernization
Provisions
‘‘Sec. 1400F. Credit to holders of qualified public school mod-
ernization bonds.
‘‘Sec. 1400G. Qualified school construction bonds.
‘‘Sec. 1400H. Qualified zone academy bonds.
‘‘SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED PUBLIC
SCHOOL MODERNIZATION BONDS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax-
payer who holds a qualified public school modernization
bond on a 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 an amount equal to the sum of the credits determined
ance date, the amount of the credit determined
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-
month period during which the bond is outstanding.
A similar rule shall apply when the bond is re-
deemed.
‘‘(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 part IV of subchapter A (other than sub-
part 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 MODERNIZA-
TION BOND.—The term ‘qualified public school mod-
ernization 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—
‘‘(A) March 15,
‘‘(B) June 15,
‘‘(C) September 15, and
‘‘(D) December 15.
Such term includes the last day on which the bond
is outstanding.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
subchapter—
‘‘(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 in-
cludes 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 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—
‘‘(A) any stadium or other facility pri-
marily used for athletic contests or exhibitions
or other events for which admission is charged
to the general public, or
‘‘(B) any facility which is not owned by a
State or local government or any agency or in-
strumentality of a State or local government.
‘‘(f) CREDIT INCLUDED IN GROSS INCOME.—Gross
income includes the amount of the credit allowed to the
taxpayer under this section (determined without regard to
subsection (c)) and the amount so included shall be treat-
ed 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 share-
holders of such company under procedures prescribed by
the Secretary.
‘‘(h) CREDITS MAY BE STRIPPED.—Under regula-
tions prescribed by the Secretary—
‘‘(1) IN GENERAL.—There may be a separation
(including at issuance) of the ownership of a quali-
fied public school modernization bond and the enti-
tlement to the credit under this section with respect
to such bond. In case of any such separation, the
credit under this section shall be allowed to the per-
son who on the credit allowance date holds the in-
strument evidencing the entitlement to the credit
and not to the holder of the bond.
‘‘(2) CERTAIN RULES TO APPLY.—In the case
of a separation described in paragraph (1), the rules
of section 1286 shall apply to the qualified public
school modernization bond as if it were a stripped
bond and to the credit under this section as if it
were a stripped coupon.
‘‘(i) TREATMENT FOR ESTIMATED TAX PURPOSES.—
Solely for purposes of sections 6654 and 6655, the credit
allowed by this section to a taxpayer by reason of holding
a qualified public school modernization bonds on a credit
allowance date shall be treated as if it were a payment
of estimated tax made by the taxpayer on such date.
‘‘(j) CREDIT MAY BE TRANSFERRED.—Nothing in
any law or rule of law shall be construed to limit the trans-
ferability of the credit allowed by this section through sale
and repurchase agreements.
‘‘(k) REPORTING.—Issuers of qualified public school
modernization bonds shall submit reports similar to the
reports required under section 149(e).
‘‘(l) TERMINATION.—This section shall not apply to
any bond issued after September 30, 2005.
‘‘SEC. 1400G. QUALIFIED SCHOOL CONSTRUCTION BONDS.
‘‘(a) QUALIFIED SCHOOL CONSTRUCTION BOND.—
For purposes of this subchapter, 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, rehabilita-
tion, or repair of a public school facility or for the
acquisition of land on which such a facility is to be
constructed with part of the proceeds of such issue,
‘‘(2) the bond is issued by a State or local gov-
ernment within the jurisdiction of which such school
is located,
‘‘(3) the issuer designates such bond for pur-
poses of this section, and
‘‘(4) the term of each bond which is part of
such issue does not exceed 15 years.