I
106TH CONGRESS
1ST SESSION
H. R. 1660
To amend the Internal Revenue Code of 1986 to expand the incentives
for the construction and renovation of public schools and to provide
tax incentives for corporations to participate in cooperative agreements
with public schools in distressed areas.
IN THE HOUSE OF REPRESENTATIVES
MAY 4, 1999
Mr. RANGEL (for himself, Mr. GEPHARDT, Mr. BONIOR, Mr. STARK, Mr.
MATSUI, Mr. COYNE, Mr. LEVIN, Mr. CARDIN, Mr. MCDERMOTT, Mr.
LEWIS of Georgia, Mr. NEAL of Massachusetts, Mr. MCNULTY, Mr. JEF-
FERSON, Mr. BECERRA, Mrs. THURMAN, Mr. ABERCROMBIE, Mr. ACKER-
MAN, Mr. ALLEN, Mr. BALDACCI, Mr. BARRETT of Wisconsin, Ms. BERK-
LEY, Mr. BLAGOJEVICH, Mr. BLUMENAUER, Mr. BORSKI, Ms. BROWN of
Florida, Mr. BROWN of California, Mr. CAPUANO, Ms. CARSON, Mrs.
CHRISTENSEN, Mrs. CLAYTON, Mr. CONYERS, Mr. CROWLEY, Mr. DAVIS
of Virginia, Ms. DEGETTE, Mr. DELAHUNT, Ms. DELAURO, Mr.
DEUTSCH, Mr. DINGELL, Mr. DIXON, Mr. ETHERIDGE, Mr. FARR of
California, Mr. FATTAH, Mr. FILNER, Mr. FRANK of Massachusetts, Mr.
FROST, Mr. GEJDENSON, Mr. GORDON, Mr. HINCHEY, Mr. HINOJOSA,
Ms. NORTON, Mr. INSLEE, Mr. KENNEDY of Rhode Island, Ms. KIL-
PATRICK, 
Mr. 
KUCINICH, 
Mr. 
LAFALCE, 
Mr. 
LAMPSON, 
Mr.
LATOURETTE, Mrs. LOWEY, Mrs. MALONEY of New York, Mr. MALONEY
of Connecticut, Mr. MARTINEZ, Mr. MASCARA, Mr. MCGOVERN, Ms.
MILLENDER-MCDONALD, Mr. MOAKLEY, Mr. OLVER, Mr. PAYNE, Ms.
PELOSI, Mr. POMEROY, Mr. QUINN, Ms. RIVERS, Mr. ROTHMAN, Mr.
RUSH, Ms. SANCHEZ, Mr. SANDERS, Mr. SANDLIN, Mr. SAWYER, Ms.
SCHAKOWSKY, Mr. SHOWS, Ms. SLAUGHTER, Mr. STRICKLAND, Mr.
TIERNEY, Mrs. JONES of Ohio, Mr. WAXMAN, Mr. WEINER, Mr.
WEXLER, Mr. WEYGAND, Ms. WOOLSEY, and Mr. WYNN) 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 subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To amend the Internal Revenue Code of 1986 to expand
the incentives for the construction and renovation of
public schools and to provide tax incentives for corpora-
tions to participate in cooperative agreements with public
schools in distressed 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 ‘‘Public School Mod-
ernization Act of 1999’’.
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
‘‘Part I. Credit to holders of qualified public school modernization
bonds.
‘‘Part II. Qualified school construction bonds.
‘‘Part III. Incentives for education zones.
‘‘PART I—CREDIT TO HOLDERS OF QUALIFIED
PUBLIC SCHOOL MODERNIZATION BONDS
‘‘Sec. 1400F. Credit to holders of qualified public school mod-
ernization 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
under subsection (b) with respect to credit allowance dates
during such year on which the taxpayer holds such bond.
‘‘(b) AMOUNT OF CREDIT.—
‘‘(1) IN GENERAL.—The amount of the credit
determined under this subsection with respect to any
credit allowance date for a qualified public school
modernization bond is 25 percent of the annual
credit determined with respect to such bond.
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any qualified public school
modernization bond is the product of—
‘‘(A) the applicable credit rate, multiplied
by
‘‘(B) the outstanding face amount of the
bond.
‘‘(3) APPLICABLE CREDIT RATE.—For purposes
of paragraph (1), the applicable credit rate with re-
spect to an issue is the rate equal to an average
market yield (as of the day before the date of
issuance of the issue) on outstanding long-term cor-
porate debt obligations (determined under regula-
tions prescribed by the Secretary).
‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued
during the 3-month period ending on a credit allow-
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—