‘‘(IV) ensure that the needs of
both rural and urban areas are recog-
nized.
Any allocation under subparagraph (A) by a
State education agency shall be binding if such
agency reasonably determined that the alloca-
tion was in accordance with the plan approved
under this subparagraph.
‘‘(5) CARRYOVER OF UNUSED LIMITATION.—If
for any calendar year—
‘‘(A) the amount allocated under para-
graph (4) to any State, exceeds
‘‘(B) the amount of bonds issued during
such year which are designated under para-
graph (1) pursuant to such allocation,
the limitation amount under paragraph (4) for such
State for the following calendar year shall be in-
creased by the amount of such excess.
‘‘(d) 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.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) 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.
‘‘(2) 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.
‘‘(3) BOND.—The term ‘bond’ includes any ob-
ligation.
‘‘(4) STATE.—The term ‘State’ includes the
District of Columbia and any possession of the
United States.
‘‘(5) 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 (d)) and the amount so included shall be treat-
ed as interest income.
‘‘(g) BONDS HELD
BY REGULATED INVESTMENT
COMPANIES.—If any qualified school construction bond is
held by a regulated investment company, the credit deter-
mined 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 school construction bond and the entitlement 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 person who
on the credit allowance date holds the instrument ev-
idencing 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 school
construction 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 school construction bond 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 school con-
struction 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 December 31, 2004.’’
(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
SCHOOL CONSTRUCTION BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts
includible in gross income under section 30B(f)
and such amounts shall be treated as paid on
the credit allowance date (as defined in section
30B(e)(1)).
‘‘(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
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to obligations issued after Decem-
ber 31, 1999.
SEC. 502. APPLICATION OF CERTAIN LABOR STANDARDS
ON 
CONSTRUCTION 
PROJECTS 
FINANCED
UNDER 
PUBLIC 
SCHOOL 
CONSTRUCTION
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
501 of the Youth Development Act of 1999.
‘‘(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. 503. 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 is designed to provide
trained workers for projects for the construction
or reconstruction of public school facilities re-
ceiving funding assistance under an applicable
program.
‘‘(C) The program is designed to ensure
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’’.
TITLE VI—ACCESS TO POST
SECONDARY EDUCATION
SECTION. 601. INCREASE IN MAXIMUM PELL GRANTS.
Section 401(b)(2)(A) of the Higher Education Act of
1965 (20 U.S.C. 1070a(b)(2)(A)) is amended
(1) by inserting ‘‘and’’ after the semicolon at
the end of clause (i); and
(2) by striking clauses (ii) through (v) and in-
serting the following:
‘‘(ii) $6,500 for each of the academic
years 2000–2001, 2001–2002, 2002–2003,
and 2003–2004,’’.
Æ