Union Calendar No. 296
106TH CONGRESS
2D SESSION
H. R. 7
[Report No. 106–546]
A BILL
To amend the Internal Revenue Code of 1986 to
allow tax-free expenditures from education indi-
vidual retirement accounts for elementary and
secondary school expenses, to increase the max-
imum annual amount of contributions to such ac-
counts, and for other purposes.
MARCH 24, 2000
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed
IB
Union Calendar No. 296
106TH CONGRESS
2D SESSION
H. R. 7
[Report No. 106–546]
To amend the Internal Revenue Code of 1986 to allow tax-free expenditures
from education individual retirement accounts for elementary and sec-
ondary school expenses, to increase the maximum annual amount of
contributions to such accounts, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 1, 1999
Mr. HULSHOF (for himself and Mr. LIPINSKI) introduced the following bill;
which was referred to the Committee on Ways and Means
MARCH 24, 2000
Additional sponsors: Mrs. EMERSON, Mr. PAUL, Mr. KNOLLENBERG, Mr.
WATKINS, Mr. GREEN of Wisconsin, Mr. PITTS, Mr. TANCREDO, Mr.
SESSIONS, Mr. PETERSON of Pennsylvania, Mr. SAM JOHNSON of Texas,
Mr. DEAL of Georgia, Mr. MCKEON, Mr. POMBO, Mr. ADERHOLT, Mr.
SALMON, Mr. RYAN of Wisconsin, Mr. WELDON of Florida, Mr. CRANE,
Mr. FOLEY, Mr. HOSTETTLER, Mr. GARY MILLER of California, Mr.
SUNUNU, Mr. FORBES, Mr. BACHUS, Mr. CALVERT, Ms. GRANGER, Mr.
KOLBE, Mr. BAKER, Mr. BALLENGER, Ms. PRYCE of Ohio, Mr. CAMP,
Mr. NETHERCUTT, Mr. SCHAFFER, Mrs. BIGGERT, Mr. ROHRABACHER,
Mr. MILLER of Florida, Mr. HERGER, Mr. EHRLICH, Mr. METCALF, Mr.
SHIMKUS, Mr. THOMAS, Mr. ROGAN, Mr. TERRY, Mr. SMITH of New Jer-
sey, and Mr. DEMINT
MARCH 24, 2000
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on March 1, 1999]
A BILL
To amend the Internal Revenue Code of 1986 to allow tax-
free expenditures from education individual retirement
accounts for elementary and secondary school expenses,
to increase the maximum annual amount of contributions
to such accounts, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Education Savings and School Excellence Act of 2000’’.
(b) AMENDMENT OF 1986 CODE.—Except as otherwise
expressly provided, whenever in this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986.
SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RE-
TIREMENT ACCOUNTS.
(a) MAXIMUM ANNUAL CONTRIBUTIONS.—
(1) IN GENERAL.—Section 530(b)(1)(A)(iii) (de-
fining education individual retirement account) is
amended by striking ‘‘$500’’ and inserting ‘‘$2,000’’.
(2) 
CONFORMING
AMENDMENT.—Section
4973(e)(1)(A) is amended by striking ‘‘$500’’ and in-
serting ‘‘$2,000’’.
(b) TAX-FREE EXPENDITURES FOR ELEMENTARY AND
SECONDARY SCHOOL EXPENSES.—
(1) IN
GENERAL.—Section 530(b)(2) (defining
qualified higher education expenses) is amended to
read as follows:
‘‘(2) QUALIFIED EDUCATION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
education expenses’ means—
‘‘(i) qualified higher education ex-
penses (as defined in section 529(e)(3)), and
‘‘(ii) qualified elementary and sec-
ondary education expenses (as defined in
paragraph (4)).
‘‘(B) QUALIFIED
STATE
TUITION
PRO-
GRAMS.—Such term shall include any contribu-
tion to a qualified State tuition program (as de-
fined in section 529(b)) on behalf of the des-
ignated beneficiary (as defined in section
529(e)(1)); but there shall be no increase in the
investment in the contract for purposes of apply-
ing section 72 by reason of any portion of such
connection with such enrollment or attend-
ance.
‘‘(B) 
SPECIAL
RULE
FOR
HOMESCHOOLING.—Such term shall include ex-
penses described in subparagraph (A)(i) in con-
nection 
with 
education 
provided 
by
homeschooling if the requirements of any appli-
cable State or local law are met with respect to
such education.
‘‘(C) SCHOOL.—The term ‘school’ means
any school which provides elementary education
or secondary education (kindergarten through
grade 12), as determined under State law.’’.
(3) CONFORMING AMENDMENTS.—Section 530 is
amended—
(A) by striking ‘‘higher’’ each place it ap-
pears in subsections (b)(1) and (d)(2), and
(B) by striking ‘‘HIGHER’’ in the heading
for subsection (d)(2).
(c) WAIVER
OF AGE LIMITATIONS
FOR CHILDREN
WITH SPECIAL NEEDS.—Section 530(b)(1) (defining edu-
cation individual retirement account) is amended by add-
ing at the end the following flush sentence:
‘‘The age limitations in subparagraphs (A)(ii) and
(E) and paragraphs (5) and (6) of subsection (d)
shall not apply to any designated beneficiary with
special needs (as determined under regulations pre-
scribed by the Secretary).’’.
(d) ENTITIES PERMITTED TO CONTRIBUTE TO AC-
COUNTS.—Section 530(c)(1) (relating to reduction in per-
mitted contributions based on adjusted gross income) is
amended by striking ‘‘The maximum amount which a
contributor’’ and inserting ‘‘In the case of a contributor
who is an individual, the maximum amount the
contributor’’.
(e) TIME WHEN CONTRIBUTIONS DEEMED MADE.—
(1) IN
GENERAL.—Section 530(b) (relating to
definitions and special rules), as amended by sub-
section (b)(2), is amended by adding at the end the
following new paragraph:
‘‘(5) TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—An individual shall be deemed to have made
a contribution to an education individual retirement
account on the last day of the preceding taxable year
if the contribution is made on account of such taxable
year and is made not later than the time prescribed
by law for filing the return for such taxable year (not
including extensions thereof).’’.
(2) EXTENSION
OF
TIME
TO
RETURN
EXCESS
CONTRIBUTIONS.—Subparagraph 
(C) 
of 
section
530(d)(4) (relating to additional tax for distributions
not used for educational expenses) is amended—
(A) by striking clause (i) and inserting the
following new clause:
‘‘(i) such distribution is made before
the first day of the sixth month of the tax-
able year following the taxable year, and’’,
and
(B) by striking ‘‘DUE DATE OF RETURN’’ in
the heading and inserting ‘‘CERTAIN DATE’’.
(f ) COORDINATION
WITH
HOPE
AND
LIFETIME
LEARNING
CREDITS
AND
QUALIFIED
TUITION
PRO-
GRAMS.—
(1) 
IN
GENERAL.—Section 
530(d)(2)(C) 
is
amended to read as follows:
‘‘(C) COORDINATION WITH HOPE AND LIFE-
TIME LEARNING CREDITS AND QUALIFIED TUI-
TION PROGRAMS.—For purposes of subparagraph
(A)—
‘‘(i) 
CREDIT
COORDINATION.—The
total amount of qualified higher education
expenses with respect to an individual for
the taxable year shall be reduced—
‘‘(I) 
as 
provided 
in 
section
25A(g)(2), and
‘‘(II) by the amount of such ex-
penses which were taken into account
in determining the credit allowed to
the taxpayer or any other person under
section 25A.
‘‘(ii) COORDINATION WITH QUALIFIED
TUITION PROGRAMS.—If, with respect to an
individual for any taxable year—
‘‘(I) the aggregate distributions
during such year to which subpara-
graph (A) and section 529(c)(3)(B)
apply, exceed
‘‘(II) the total amount of qualified
education expenses (after the applica-
tion of clause (i)) for such year,
the taxpayer shall allocate such expenses
among such distributions for purposes of de-
termining the amount of the exclusion
under 
subparagraph 
(A) 
and 
section
529(c)(3)(B).’’.
(2) CONFORMING AMENDMENTS.—
(A) Subsection (e) of section 25A is amend-
ed to read as follows:
‘‘(e) ELECTION NOT TO HAVE SECTION APPLY.—A
taxpayer may elect not to have this section apply with re-
spect to the qualified tuition and related expenses of an in-
dividual for any taxable year.’’.
(B) Section 135(d)(2)(A) is amended by
striking ‘‘allowable’’ and inserting ‘‘allowed’’.
(C) Section 530(d)(2)(D) is amended—
(i) by striking ‘‘or credit’’, and
(ii) by striking ‘‘CREDIT OR’’ in the
heading.
(D) Section 4973(e)(1) is amended by add-
ing ‘‘and’’ at the end of subparagraph (A), by
striking subparagraph (B), and by redesignating
subparagraph (C) as subparagraph (B).
(g) RENAMING EDUCATION INDIVIDUAL RETIREMENT
ACCOUNTS AS EDUCATION SAVINGS ACCOUNTS.—
(1) IN GENERAL.—
(A) Section 530 (as amended by the pre-
ceding provisions of this section) is amended by
striking ‘‘education individual retirement ac-
count’’ each place it appears and inserting ‘‘edu-
cation savings account’’.
(B) The heading for paragraph (1) of sec-
tion 530(b) is amended by striking ‘‘EDUCATION
INDIVIDUAL RETIREMENT ACCOUNT’’ and insert-
ing ‘‘EDUCATION SAVINGS ACCOUNT’’.
(C) The heading for section 530 is amended
to read as follows:
‘‘SEC. 530. EDUCATION SAVINGS ACCOUNTS.’’.
(D) The item in the table of contents for
part VII of subchapter F of chapter 1 relating to
section 530 is amended to read as follows:
‘‘Sec. 530. Education savings accounts.’’.
(2) CONFORMING AMENDMENTS.—
(A) The following provisions are each
amended by striking ‘‘education individual re-
tirement’’ each place it appears and inserting
‘‘education savings’’:
(i) Section 25A(e)(2).
(ii) Section 26(b)(2)(E).
(iii) Section 72(e)(9).
(iv) Section 135(c)(2)(C).
(v) Subsections (a) and (e) of section
4973.
(vi) Subsections (c) and (e) of section
4975.
(vii) Section 6693(a)(2)(D).
(B) The headings for each of the following
provisions are amended by striking ‘‘EDUCATION
INDIVIDUAL RETIREMENT ACCOUNTS’’ each place
it appears and inserting ‘‘EDUCATION SAVINGS
ACCOUNTS’’.
(i) Section 72(e)(9).
(ii) Section 135(c)(2)(C).
(iii) Section 4973(e).
(iv) Section 4975(c)(5).
(h) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to taxable years beginning after December 31,
2000.
(2) SUBSECTION (g).—The amendments made by
subsection (g) shall take effect on the date of the en-
actment of this Act.
SEC. 3. MODIFICATIONS TO QUALIFIED TUITION PRO-
GRAMS.
(a) SHORT TITLE.—This section may be cited as the
‘‘Collegiate Learning and Student Savings (CLASS) Act’’.
(b) ELIGIBLE
EDUCATIONAL
INSTITUTIONS
PER-
MITTED TO MAINTAIN QUALIFIED TUITION PROGRAMS.—
(1) IN
GENERAL.—Section 529(b)(1) (defining
qualified State tuition program) is amended by in-
serting ‘‘or by one or more eligible educational insti-
tutions’’ after ‘‘maintained by a State or agency or
instrumentality thereof ’’.
(2) PRIVATE QUALIFIED TUITION PROGRAMS LIM-
ITED
TO
BENEFIT
PLANS.—Clause (ii) of section
529(b)(1)(A) is amended by inserting ‘‘in the case of
a program established and maintained by a State or
agency or instrumentality thereof,’’ before ‘‘may
make’’.
(3) CONFORMING AMENDMENTS.—
(A) 
Sections 
72(e)(9), 
135(c)(2)(C),
135(d)(1)(D), 529, 530(b)(2)(B), 4973(e), and
6693(a)(2)(C) are each amended by striking
‘‘qualified State tuition’’ each place it appears
and inserting ‘‘qualified tuition’’.
(B) The headings for sections 72(e)(9) and
135(c)(2)(C) are each amended by striking
‘‘QUALIFIED
STATE
TUITION’’ and inserting
‘‘QUALIFIED TUITION’’.
(C) The headings for sections 529(b) and
530(b)(2)(B) are each amended by striking
‘‘QUALIFIED
STATE
TUITION’’ and inserting
‘‘QUALIFIED TUITION’’.
(D) The heading for section 529 is amended
by striking ‘‘STATE’’.
(E) The item relating to section 529 in the
table of sections for part VIII of subchapter F of
chapter 1 is amended by striking ‘‘State’’.
(c) EXCLUSION FROM GROSS INCOME OF EDUCATION
DISTRIBUTIONS FROM QUALIFIED TUITION PROGRAMS.—
(1) IN GENERAL.—Section 529(c)(3)(B) (relating
to distributions) is amended to read as follows:
‘‘(B) DISTRIBUTIONS FOR QUALIFIED HIGH-
ER EDUCATION EXPENSES.—For purposes of this
paragraph—
‘‘(i) 
IN-KIND
DISTRIBUTIONS.—No
amount shall be includible in gross income
under subparagraph (A) by reason of a dis-
tribution which consists of providing a ben-
efit to the distributee which, if paid for by
the distributee, would constitute payment of
a qualified higher education expense.
‘‘(ii) CASH
DISTRIBUTIONS.—In the
case of distributions not described in clause
(i), if—
‘‘(I) such distributions do not ex-
ceed the qualified higher education ex-
penses (reduced by expenses described
in clause (i)), no amount shall be in-
cludible in gross income, and
‘‘(II) in any other case, the
amount otherwise includible in gross
income shall be reduced by an amount
which bears the same ratio to such
amount as such expenses bear to such
distributions.
‘‘(iii) 
TREATMENT
AS
DISTRIBU-
TIONS.—Any benefit furnished to a des-
ignated beneficiary under a qualified tui-
tion program shall be treated as a distribu-
tion to the beneficiary for purposes of this
paragraph.
‘‘(iv) COORDINATION WITH HOPE AND
LIFETIME
LEARNING
CREDITS.—The total
amount of qualified higher education ex-
penses with respect to an individual for the
taxable year shall be reduced—
‘‘(I) 
as 
provided 
in 
section
25A(g)(2), and
‘‘(II) by the amount of such ex-
penses which were taken into account
in determining the credit allowed to
the taxpayer or any other person under
section 25A.
‘‘(v) COORDINATION WITH EDUCATION
INDIVIDUAL
RETIREMENT
ACCOUNTS.—If,
with respect to an individual for any tax-
able year—
‘‘(I) the aggregate distributions to
which clauses (i) and (ii) and section
530(d)(2)(A) apply, exceed
‘‘(II) the total amount of qualified
higher education expenses otherwise
taken into account under clauses (i)
and (ii) (after the application of clause
(iv)) for such year,
the taxpayer shall allocate such expenses
among such distributions for purposes of de-
termining the amount of the exclusion
under clauses (i) and (ii) and section
530(d)(2)(A).’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 135(d)(2)(B) is amended by
striking ‘‘the exclusion under section 530(d)(2)’’
and inserting ‘‘the exclusions under sections
529(c)(3)(B)(i) and 530(d)(2)’’.
(B) Section 221(e)(2)(A) is amended by in-
serting ‘‘529,’’ after ‘‘135,’’.
(d) ROLLOVER TO DIFFERENT PROGRAM FOR BENEFIT
OF
SAME
DESIGNATED
BENEFICIARY.—Section
529(c)(3)(C) (relating to change in beneficiaries) is
amended—
(1) by striking ‘‘transferred to the credit’’ in
clause (i) and inserting ‘‘transferred—
‘‘(I) to another qualified tuition
program for the benefit of the des-
ignated beneficiary, or
‘‘(II) to the credit’’,
(2) by adding at the end the following new
clause:
‘‘(iii) LIMITATION ON CERTAIN ROLL-
OVERS.—Clause (i)(I) shall not apply to
any amount transferred with respect to a
designated beneficiary if, at any time dur-
ing the 1-year period ending on the day of
such transfer, any other amount was trans-
ferred with respect to such beneficiary
which was not includible in gross income by
reason of clause (i)(I).’’, and
(3) by inserting ‘‘OR PROGRAMS’’ after ‘‘BENE-
FICIARIES’’ in the heading.
(e) MEMBER OF FAMILY INCLUDES FIRST COUSIN.—
Section 529(e)(2) (defining member of family) is amended
by striking ‘‘and’’ at the end of subparagraph (B), by strik-
ing the period at the end of subparagraph (C) and by in-
serting ‘‘; and’’, and by adding at the end the following
new subparagraph:
‘‘(D) any first cousin of such beneficiary.’’.
(f ) DEFINITION OF QUALIFIED HIGHER EDUCATION
EXPENSES.—
(1) IN GENERAL.—Subparagraph (A) of section
529(e)(3) (relating to definition of qualified higher
education expenses) is amended to read as follows:
‘‘(A) IN
GENERAL.—The term ‘qualified
higher education expenses’ means—
‘‘(i) tuition and fees required for the
enrollment or attendance of a designated
beneficiary at an eligible educational insti-
tution for courses of instruction of such ben-
eficiary at such institution, and
‘‘(ii) expenses for books, supplies, and
equipment which are incurred in connection
with such enrollment or attendance, but not
to exceed the allowance for books and sup-
plies included in the cost of attendance (as
defined in section 472 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087ll), as in
effect on the date of the enactment of the
Education Savings and School Excellence
Act of 2000 as determined by the eligible
educational institution.’’.
(2) EXCEPTION
FOR
EDUCATION
INVOLVING
SPORTS, ETC.—Paragraph (3) of section 529(e) (relat-
ing to qualified higher education expenses) is amend-
ed by adding at the end the following new subpara-
graph:
‘‘(C) EXCEPTION FOR EDUCATION INVOLV-
ING SPORTS, ETC.—The term ‘qualified higher
education expenses’ shall not include expenses
with respect to any course or other education in-
volving sports, games, or hobbies unless such
course or other education is part of the bene-
ficiary’s degree program or is taken to acquire or
improve job skills of the beneficiary.’’.
(g) EFFECTIVE DATES.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to taxable years beginning
after December 31, 2000.
(2) 
QUALIFIED
HIGHER
EDUCATION
EX-
PENSES.—The amendments made by subsection (f )
shall apply to amounts paid for courses beginning
after December 31, 2000.
SEC. 4. EXCLUSION OF CERTAIN AMOUNTS RECEIVED
UNDER THE NATIONAL HEALTH SERVICE
CORPS SCHOLARSHIP PROGRAM, THE F. ED-
WARD HEBERT ARMED FORCES HEALTH PRO-
FESSIONS SCHOLARSHIP AND FINANCIAL AS-
SISTANCE PROGRAM, AND CERTAIN OTHER
PROGRAMS.
(a) IN GENERAL.—Section 117(c) (relating to the ex-
clusion from gross income amounts received as a qualified
scholarship) is amended—
(1) by striking ‘‘Subsections (a)’’ and inserting
the following:
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), subsections (a)’’, and
(2) by adding at the end the following new para-
graph:
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
apply to any amount received by an individual
under—
‘‘(A) the National Health Service Corps
Scholarship 
program 
under 
section
338A(g)(1)(A) of the Public Health Service Act,
‘‘(B) the Armed Forces Health Professions
Scholarship and Financial Assistance program
under subchapter I of chapter 105 of title 10,
United States Code,
‘‘(C) the National Institutes of Health Un-
dergraduate Scholarship program under section
487D of the Public Health Service Act, or
‘‘(D) any State program determined by the
Secretary to have substantially similar objectives
as such programs.’’.
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by subsection (a)
shall apply to amounts received in taxable years be-
ginning after December 31, 1993.
(2) STATE PROGRAMS.—Section 117(c)(2)(D) of
the Internal Revenue Code of 1986 (as added by the
amendments made by subsection (a)) shall apply to
amounts received in taxable years beginning after De-
cember 31, 1999.
SEC. 5. ADDITIONAL INCREASE IN ARBITRAGE REBATE EX-
CEPTION FOR GOVERNMENTAL BONDS USED
TO FINANCE EDUCATIONAL FACILITIES.
(a) IN GENERAL.—Section 148(f )(4)(D)(vii) (relating
to increase in exception for bonds financing public school
capital expenditures) is amended by striking ‘‘$5,000,000’’
the second place it appears and inserting ‘‘$10,000,000’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to obligations issued after December 31,
2000.
SEC. 7. ELIMINATION OF 60-MONTH LIMIT AND INCREASE
IN INCOME LIMITATION ON STUDENT LOAN
INTEREST DEDUCTION.
(a) ELIMINATION OF 60-MONTH LIMIT.—
(1) IN GENERAL.—Section 221 (relating to inter-
est on education loans) is amended by striking sub-
section (d) and by redesignating subsections (e), (f ),
and (g) as subsections (d), (e), and (f ), respectively.
(2) 
CONFORMING
AMENDMENT.—Section
6050S(e) is amended by striking ‘‘section 221(e)(1)’’
and inserting ‘‘section 221(d)(1)’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply with respect to any
loan interest paid after December 31, 2000, in taxable
years ending after such date.
(b) INCREASE IN INCOME LIMITATION.—
(1) IN GENERAL.—Section 221(b)(2)(B) (relating
to amount of reduction) is amended by striking
clauses (i) and (ii) and inserting the following:
‘‘(i) the excess of—
‘‘(I) the taxpayer’s modified ad-
justed gross income for such taxable
year, over
‘‘(II) $45,000 ($90,000 in the case
of a joint return), bears to
‘‘(ii) $15,000.’’.
(2) 
CONFORMING
AMENDMENT.—Section
221(g)(1) is amended by striking ‘‘$40,000 and
$60,000 amounts’’ and inserting ‘‘$45,000 and
$90,000 amounts’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to taxable years ending
after December 31, 2000.
SEC. 8. 2-PERCENT FLOOR ON MISCELLANEOUS ITEMIZED
DEDUCTIONS NOT TO APPLY TO QUALIFIED
PROFESSIONAL DEVELOPMENT EXPENSES OF
ELEMENTARY 
AND 
SECONDARY 
SCHOOL
TEACHERS.
(a) IN GENERAL.—Section 67(b) (defining miscella-
neous itemized deductions) is amended by striking ‘‘and’’
at the end of paragraph (11), by striking the period at the
end of paragraph (12) and inserting ‘‘, and’’, and by add-
ing at the end the following new paragraph:
‘‘(13) any deduction allowable for the qualified
professional development expenses of an eligible teach-
er.’’.
(b) DEFINITIONS.—Section 67 (relating to 2-percent
floor on miscellaneous itemized deductions) is amended by
adding at the end the following new subsection:
‘‘(g) QUALIFIED PROFESSIONAL DEVELOPMENT EX-
PENSES OF ELIGIBLE TEACHERS.—For purposes of sub-
section (b)(13)—
‘‘(1) QUALIFIED
PROFESSIONAL
DEVELOPMENT
EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
professional development expenses’ means ex-
penses in an amount not to exceed $1,000 for
any taxable year—
‘‘(i) for tuition, fees, books, supplies,
equipment, and transportation required for
the enrollment or attendance of an indi-
vidual in a qualified course of instruction,
and
‘‘(ii) with respect to which a deduction
is allowable under section 162 (determined
without regard to this section).
‘‘(B) QUALIFIED
COURSE
OF
INSTRUC-
TION.—The term ‘qualified course of instruction’
means a course of instruction which—
‘‘(i) is—
‘‘(I) at an institution of higher
education (as defined in section 481 of
the Higher Education Act of 1965 (20
U.S.C. 1088), as in effect on the date
of the enactment of this subsection), or
‘‘(II) a professional conference,
and
‘‘(ii) is part of a program of profes-
sional development which is approved and
certified by the appropriate local edu-
cational agency as furthering the individ-
ual’s teaching skills.
‘‘(C) LOCAL EDUCATIONAL AGENCY.—The term
‘local educational agency’ has the meaning given such
term by section 14101 of the Elementary and Sec-
ondary Education Act of 1965, as so in effect.
‘‘(2) ELIGIBLE TEACHER.—
‘‘(A) IN
GENERAL.—The term ‘eligible
teacher’ means an individual who is a kinder-
garten through grade 12 classroom teacher, in-
structor, counselor, aide, or principal in an ele-
mentary or secondary school.
‘‘(B) 
ELEMENTARY
OR
SECONDARY
SCHOOL.—The terms ‘elementary school’ and
‘secondary school’ have the meanings given such
terms by section 14101 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C.
8801), as so in effect.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2000.
SEC. 9. EXTENSION OF SPECIAL RULE FOR CHARITABLE
CONTRIBUTIONS 
OF 
COMPUTER 
TECH-
NOLOGY AND EQUIPMENT FOR ELEMENTARY
AND SECONDARY SCHOOL PURPOSES.
Subparagraph (F) of section 170(e)(6) (relating to ter-
mination) is amended by striking ‘‘2000’’ and inserting
‘‘2001’’.