I 
108TH CONGRESS 
1ST SESSION 
H. R. 213
To amend the Internal Revenue Code of 1986 to designate educational em-
powerment zones in certain low-income areas and to give a tax incentive 
to attract teachers to work in such areas. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 7, 2003
Mr. TOWNS 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 designate 
educational empowerment zones in certain low-income 
areas and to give a tax incentive to attract teachers 
to work in such areas.
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 ‘‘Educational Empower-
ment Act’’.
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SEC. 2. DESIGNATION OF EDUCATIONAL EMPOWERMENT 
ZONES. 
(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—Educational Empowerment 
Zones
‘‘Sec. 1400E. Designation of educational empowerment zones.
‘‘SEC. 1400E. DESIGNATION OF EDUCATIONAL EMPOWER-
MENT ZONES. 
‘‘(a) DESIGNATION.—
‘‘(1) EDUCATIONAL
EMPOWERMENT
ZONE.—
For purposes of this title, the term ‘educational em-
powerment zone’ means any area—
‘‘(A) which is nominated by one or more 
local governments and the State or States in 
which it is located for designation as an edu-
cational empowerment zone (hereinafter in this 
section referred to as a ‘nominated area’), and 
‘‘(B) which the Secretary of Health and 
Human Services and the Secretary of Edu-
cation (hereinafter in this section referred to as 
the ‘Secretaries concerned’) jointly designate as 
an educational empowerment zone.
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‘‘(2) NUMBER OF DESIGNATIONS.—The Secre-
taries concerned may designate not more than 30 
nominated areas as educational empowerment zones. 
‘‘(3) AREAS DESIGNATED BASED ON DEGREE 
OF POVERTY, ETC.—Except as otherwise provided in 
this section, the nominated areas designated as edu-
cational empowerment zones under this subsection 
shall be those nominated areas with the highest av-
erage ranking with respect to the criteria described 
in subsection (c)(3). For purposes of the preceding 
sentence, an area shall be ranked within each such 
criterion on the basis of the amount by which the 
area exceeds such criterion, with the area which ex-
ceeds such criterion by the greatest amount given 
the highest ranking. 
‘‘(4) LIMITATION ON DESIGNATIONS.—
‘‘(A) PUBLICATION
OF
REGULATIONS.—
The Secretaries concerned shall prescribe by 
regulation no later than 4 months after the 
date of the enactment of this section—
‘‘(i) the procedures for nominating an 
area under paragraph (1)(A). 
‘‘(ii) the parameters relating to the 
size and population characteristics of an 
educational empowerment zone, and
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‘‘(iii) the manner in which nominated 
areas will be evaluated based on the cri-
teria specified in subsection (c). 
‘‘(B) TIME LIMITATIONS.—The Secretaries 
concerned may designate nominated areas as 
educational empowerment zones only during the 
24-month period beginning on the first day of 
the first month following the month in which 
the regulations described in subparagraph (A) 
are prescribed. 
‘‘(C) PROCEDURAL
RULES.—The Secre-
taries concerned shall not make any designation 
of a nominated area as an educational em-
powerment zone under paragraph (2) unless—
‘‘(i) a nomination regarding such area 
is submitted in such a manner and in such 
form, and contains such information, as 
the Secretaries concerned shall by regula-
tion prescribe, and 
‘‘(ii) the Secretaries concerned deter-
mine that any information furnished is 
reasonably accurate. 
‘‘(5) NOMINATION PROCESS FOR INDIAN RES-
ERVATIONS.—For purposes of this subchapter, in 
the case of a nominated area on an Indian reserva-
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tion, the reservation governing body (as determined 
by the Secretary of the Interior) shall be treated as 
being both the State and local governments with re-
spect to such area. 
‘‘(b) PERIOD FOR WHICH DESIGNATION IS IN EF-
FECT.—Any designation of an area as an educational em-
powerment zone shall remain in effect during the period 
beginning on the date of the designation and ending on 
the earliest of—
‘‘(1) December 31, 2007, 
‘‘(2) the termination date designated by the 
State and local governments in their nomination, or 
‘‘(3) the date the Secretaries concerned revoke 
such designation. 
‘‘(c) AREA AND ELIGIBILITY REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The Secretary of Com-
merce may designate a nominated area as an edu-
cational empowerment zone under subsection (a) 
only if the area meets the requirements of para-
graphs (2) and (3) of this subsection. 
‘‘(2) AREA REQUIREMENTS.—For purposes of 
paragraph (1), a nominated area meets the require-
ments of this paragraph if—
‘‘(A) the area is within the jurisdiction of 
one or more local governments,
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‘‘(B) the boundary of the area is contin-
uous, and 
‘‘(C) the area does not include an em-
powerment zone (as defined in section 1393(b)) 
other than such a zone designated under section 
1391(g). 
‘‘(3) ELIGIBILITY
REQUIREMENTS.—For pur-
poses of paragraph (1), a nominated area meets the 
requirements of this paragraph if the State and the 
local governments in which it is located certify that 
the nominated area satisfies such conditions as the 
Secretary of Education deems appropriate.
‘‘(4) CONSIDERATION
OF
DROPOUT
RATE, 
ETC.—The Secretary of Education, in setting forth 
the conditions for eligibility pursuant to paragraph 
(3), shall take into account the extent to which an 
area has low-income families, a high dropout rate, a 
high rate of teen pregnancy, and large school class 
size. 
‘‘(d) COORDINATION WITH TREATMENT OF ENTER-
PRISE COMMUNITIES.—For purposes of this title, if there 
are in effect with respect to the same area both—
‘‘(1) a designation as an educational empower-
ment zone, and 
‘‘(2) a designation as an enterprise community,
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both of such designations shall be given full effect with 
respect to such area. 
‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this subchapter, rules similar to the rules of para-
graphs (2), (3), (5), and (7) of section 1393 shall apply.’’. 
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 1 is amended by adding at the end 
the following new item:
‘‘SUBCHAPTER X. Educational Empowerment Zones.’’. 
SEC. 3. CREDIT FOR DONATIONS TO SCHOOL DISTRICTS IN 
EDUCATIONAL EMPOWERMENT ZONES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 30A the fol-
lowing new section 
‘‘SEC. 30B. CONTRIBUTIONS TO SCHOOL DISTRICTS IN EDU-
CATIONAL EMPOWERMENT ZONES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the amount of 
qualified educational empowerment zone contributions 
made by the taxpayer during such year. 
‘‘(b) MAXIMUM CREDIT.—The amount of the credit 
allowed by subsection (a)—
‘‘(1) in the case of an individual, shall not ex-
ceed $2,000, and
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‘‘(2) in the case of any other taxpayer, shall not 
exceed $10,000. 
‘‘(c) DEFINITION OF QUALIFIED EDUCATIONAL EM-
POWERMENT ZONE CONTRIBUTIONS.—For purposes of 
this section, the term ‘qualified educational empowerment 
zone contributions’ means cash contributions made to any 
school district located in an educational empowerment 
zone (as designated under section 1400E) if such con-
tributions—
‘‘(1) but for subsection (d), would be allowable 
as a deduction under section 170, and 
‘‘(2) are used for any of the following purposes 
by the school district: 
‘‘(A) Hiring new teachers. 
‘‘(B) Increasing teacher salaries. 
‘‘(C) Training teachers. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under this chapter for any contribution 
taken into account in computing the credit under this sec-
tion. 
‘‘(e) ELECTION.—This section shall apply to any tax-
payer for any taxable year only if such taxpayer elects (at 
such time and in such manner as the Secretary may by 
regulations prescribe) to have this section apply for such 
taxable year.
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‘‘(f) APPLICATION WITH OTHER CREDITS; CARRY-
OVER OF EXCESS CREDIT.—The credit allowed by sub-
section (a) for any taxable year shall not exceed the excess 
(if any) of—
‘‘(1) the regular tax for the taxable year re-
duced by the sum of the credits allowable under sub-
part A and the preceding sections of this subpart, 
over 
‘‘(2) the tentative minimum tax for the taxable 
year. 
If the credit under subsection (a) exceeds the limitation 
of the preceding sentence, such excess shall be added to 
the credit allowable under subsection (a) for the suc-
ceeding taxable year.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 30A the following new item:
‘‘Sec. 30B. Contributions to school districts in educational empowerment 
zones.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
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SEC. 4. TEACHER LOAN FORGIVENESS PROGRAM. 
Part B of title IV of the Higher Education Act of 
1965 is amended by inserting after section 428K (20 
U.S.C. 1078–11) the following new section: 
‘‘SEC. 428L. LOAN FORGIVENESS FOR MATHEMATICS AND 
SCIENCE TEACHERS. 
‘‘(a) PURPOSE.—It is the purpose of this section to 
encourage more individuals to enter and stay in the field 
of teaching mathematics, science, and related fields. 
‘‘(b) PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary shall carry 
out a program of assuming the obligation to repay, 
pursuant to subsection (c), a loan made, insured, or 
guaranteed under this part or part D (excluding 
loans made under sections 428B and 428C or com-
parable loans made under Part D) for any new bor-
rower after October 12, 1998, who—
‘‘(A) has been employed as a full-time 
teacher for 3 consecutive complete school years 
in a school that is located in an educational em-
powerment zone, as such term is defined in sec-
tion 1400E of the Internal Revenue Code of 
1986; 
‘‘(B) is a fully qualified teacher; and 
‘‘C) is not in default on a loan for which 
the borrower seeks forgiveness.
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science, or related fields as a result of participa-
tion in the program; 
‘‘(C) identify the barriers to the effective-
ness of the program; 
‘‘(D) assess the cost-effectiveness of the 
program; and 
‘‘(E) identify the number of years each in-
dividual participates in the program. 
‘‘(4) INTERIM
AND
FINAL
EVALUATION
RE-
PORTS.—The Secretary shall prepare and submit to 
the President and the Congress such interim reports 
regarding the evaluation described in this subsection 
as the Secretary deems appropriate, and shall pre-
pare and so submit a final report regarding the eval-
uation by January 1, 2006’’.
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