plying subsection (a)(1) and paragraph (1) of this 
subsection.
‘‘SEC. 1400P. QUALIFIED ZONE ACADEMY BONDS. 
‘‘(a) QUALIFIED ZONE ACADEMY BOND.—For pur-
poses of this subchapter—
‘‘(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 pur-
pose 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 as-
surances that the private business con-
tribution 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. 
Rules similar to the rules of section 1400O(g) shall 
apply for purposes of paragraph (1). 
‘‘(2) PRIVATE
BUSINESS
CONTRIBUTION
RE-
QUIREMENT.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the private business contribution re-
quirement of this paragraph is met with respect 
to any issue if the local educational agency that 
established the qualified zone academy has writ-
ten 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 ‘quali-
fied contribution’ means any contribution (of a 
type and quality acceptable to the local edu-
cational 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 tech-
nology in the classroom, 
‘‘(iii) services of employees as volun-
teer mentors, 
‘‘(iv) internships, field trips, or other 
educational opportunities outside the acad-
emy 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 pro-
gram (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 des-
ignated after the date of the 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 es-
tablished under the National School Lunch Act. 
‘‘(4) QUALIFIED PURPOSE.—The term ‘quali-
fied purpose’ means, with respect to any qualified 
zone academy—
‘‘(A) constructing, rehabilitating, or repair-
ing the public school facility in which the acad-
emy is established,
‘‘(B) acquiring the land on which such fa-
cility is to be constructed with part of the pro-
ceeds of such issue, 
‘‘(C) providing equipment for use at such 
academy, 
‘‘(D) developing course materials for edu-
cation to be provided at such academy, and 
‘‘(E) training teachers and other school 
personnel in such academy. 
‘‘(b) LIMITATIONS
ON AMOUNT
OF BONDS DES-
IGNATED.—
‘‘(1) IN GENERAL.—There is a national zone 
academy bond limitation for each calendar year. 
Such limitation is—
‘‘(A) $400,000,000 for 1998, 
‘‘(B) $400,000,000 for 1999, 
‘‘(C) $400,000,000 for 2000, 
‘‘(D) $400,000,000 for 2001, 
‘‘(E) $400,000,000 for 2002, 
‘‘(F) $400,000,000 for 2003, 
‘‘(G) $1,500,000,000 for 2004, 
‘‘(H) $1,500,000,000 for 2005, and 
‘‘(I) except as provided in paragraph (3), 
zero after 2005. 
‘‘(2) ALLOCATION OF LIMITATION.—
‘‘(C) DESIGNATION SUBJECT TO LIMITA-
TION 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 sub-
section for any State, exceeds 
‘‘(B) the amount of bonds issued during 
such year which are designated under sub-
section (a) (or the corresponding provisions of 
prior law) with respect to qualified zone acad-
emies within such State, 
the limitation amount under this subsection for such 
State for the following calendar year shall be in-
creased by the amount of such excess.’’
(b) REPORTING.—Subsection (d) of section 6049 of 
such Code (relating to returns regarding payments of in-
terest) is amended by adding at the end the following new 
paragraph:
‘‘(8) REPORTING
OF
CREDIT
ON
QUALIFIED 
PUBLIC SCHOOL MODERNIZATION BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts 
includible in gross income under section 
1400N(f) and such amounts shall be treated as 
paid on the credit allowance date (as defined in 
section 1400N(d)(2)). 
‘‘(B) 
REPORTING
TO
CORPORATIONS, 
ETC.—Except as otherwise provided in regula-
tions, 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 Sec-
retary may prescribe such regulations as are 
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations 
which require more frequent or more detailed 
reporting.’’
(c) CONFORMING AMENDMENTS.—
(1) Subchapter U of chapter 1 of such Code is 
amended by striking part IV, by redesignating part
V as part IV, and by redesignating section 1397F 
as section 1397E. 
(2) The table of subchapters for chapter 1 of 
such Code is amended by adding at the end the fol-
lowing new item:
‘‘Subchapter Z. Public school modernization provisions.’’
(3) The table of parts of subchapter U of chap-
ter 1 of such Code is amended by striking the last 
2 items and inserting the following item:
‘‘Part IV. Regulations.’’
(d) EFFECTIVE DATES.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to obligations issued after 
December 31, 2003. 
(2) REPEAL OF RESTRICTION ON ZONE ACAD-
EMY
BOND
HOLDERS.—In the case of bonds to 
which section 1397E of the Internal Revenue Code 
of 1986 (as in effect before the date of the enact-
ment of this Act) applies, the limitation of such sec-
tion to eligible taxpayers (as defined in subsection 
(d)(6) of such section) shall not apply after the date 
of the enactment of this Act.
SEC. 3. APPLICATION OF CERTAIN LABOR STANDARDS ON 
CONSTRUCTION 
PROJECTS 
FINANCED 
UNDER PUBLIC SCHOOL MODERNIZATION 
PROGRAM. 
Section 439 of the General Education Provisions Act 
(relating to labor standards) is amended—
(1) by inserting ‘‘(a)’’ before ‘‘All laborers and 
mechanics’’, and 
(2) by adding at the end the following: 
‘‘(b)(1) For purposes of this section, the term ‘appli-
cable program’ also includes the qualified zone academy 
bond provisions enacted by section 226 of the Taxpayer 
Relief Act of 1997 and the program established by section 
2 of the America’s Better Classroom Act of 2003. 
‘‘(2) A State or local government participating in a 
program described in paragraph (1) shall—
‘‘(A) in the awarding of contracts, give priority 
to contractors with substantial numbers of employ-
ees residing in the local education area to be served 
by the school being constructed; and 
‘‘(B) include in the construction contract for 
such school a requirement that the contractor give 
priority in hiring new workers to individuals residing 
in such local education area. 
‘‘(3) In the case of a program described in paragraph 
(1), nothing in this subsection or subsection (a) shall be
construed to deny any tax credit allowed under such pro-
gram. If amounts are required to be withheld from con-
tractors to pay wages to which workers are entitled, such 
amounts shall be treated as expended for construction pur-
poses in determining whether the requirements of such 
program are met.’’. 
SEC. 4. EMPLOYMENT AND TRAINING ACTIVITIES RELAT-
ING TO CONSTRUCTION OR RECONSTRUC-
TION OF PUBLIC SCHOOL FACILITIES. 
(a) IN GENERAL.—Section 134 of the Workforce In-
vestment Act of 1998 (29 U.S.C. 2864) is amended by 
adding at the end the following: 
‘‘(f) LOCAL EMPLOYMENT AND TRAINING ACTIVI-
TIES RELATING TO CONSTRUCTION OR RECONSTRUCTION 
OF PUBLIC SCHOOL FACILITIES.—
‘‘(1) IN GENERAL.—In order to provide training 
services related to construction or reconstruction of 
public school facilities receiving funding assistance 
under an applicable program, each State shall estab-
lish a specialized program of training meeting the 
following requirements: 
‘‘(A) The specialized program provides 
training for jobs in the construction industry. 
‘‘(B) The program provides trained work-
ers for projects for the construction or recon-
struction of public school facilities receiving 
funding assistance under an applicable pro-
gram. 
‘‘(C) The program ensures that skilled 
workers (residing in the area to be served by 
the school facilities) will be available for the 
construction or reconstruction work. 
‘‘(2) COORDINATION.—The specialized program 
established under paragraph (1) shall be integrated 
with other activities under this Act, with the activi-
ties carried out under the National Apprenticeship 
Act of 1937 by the State Apprenticeship Council or 
through the Bureau of Apprenticeship and Training 
in the Department of Labor, as appropriate, and 
with activities carried out under the Carl D. Perkins 
Vocational and Technical Education Act of 1998. 
Nothing in this subsection shall be construed to re-
quire services duplicative of those referred to in the 
preceding sentence. 
‘‘(3) APPLICABLE
PROGRAM.—In this sub-
section, the term ‘applicable program’ has the mean-
ing given the term in section 439(b) of the General 
Education Provisions Act (relating to labor stand-
ards).’’.
(b) STATE PLAN.—Section 112(b)(17)(A) of the 
Workforce 
Investment 
Act 
of 
1998 
(29 
U.S.C. 
2822(b)(17)(A)) is amended—
(1) in clause (iii), by striking ‘‘and’’ at the end; 
(2) by redesignating clause (iv) as clause (v); 
and 
(3) by inserting after clause (iii) the following: 
‘‘(iv) how the State will establish and 
carry out a specialized program of training 
under section 134(f); and’’.
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