‘‘(2) BINDING COMMITMENT REQUIREMENT.—
Paragraph (1) shall apply to an issue only if, as of
the date of issuance, there is a reasonable expecta-
tion that—
‘‘(A) at least 10 percent of the proceeds of
the issue will be spent within the 6-month pe-
riod beginning on such date for the purpose for
which such issue was issued, and
‘‘(B) the remaining proceeds of the issue
will be spent with due diligence for such pur-
pose.
‘‘(3) EARNINGS ON PROCEEDS.—Any earnings
on proceeds during the temporary period shall be
treated as proceeds of the issue for purposes of ap-
plying subsection (a)(1) and paragraph (1) of this
subsection.
‘‘PART III—INCENTIVES FOR EDUCATION ZONES
‘‘Sec. 1400H. Qualified zone academy bonds.
‘‘Sec. 1400I. Corporate contributions to specialized training cen-
ters.
‘‘SEC. 1400H. 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 1400G(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) $1,000,000,000 for 2000,
‘‘(D) $1,400,000,000 for 2001, and
‘‘(E) except as provided in paragraph (3),
zero after 2001.
‘‘(2) ALLOCATION OF LIMITATION.—
‘‘(A) ALLOCATION AMONG STATES.—
‘‘(i) 1998 and 1999 LIMITATIONS.—
The national zone academy bond limita-
tions for calendar years 1998 and 1999
shall be allocated by the Secretary among
the States on the basis of their respective
populations of individuals below the pov-
erty line (as defined by the Office of Man-
agement and Budget).
‘‘(ii) LIMITATION
AFTER
1999.—The
national zone academy bond limitation for
any calendar year after 1999 shall be allo-
cated by the Secretary among the States in
the 
manner 
prescribed 
by 
section
1400G(d); except that in making the allo-
cation under this clause, the Secretary
shall take into account—
‘‘(I) Basic Grants attributable to
large local educational agencies (as
defined in section 1400G(e)).
‘‘(II) the national zone academy
bond limitation.
‘‘(B) 
ALLOCATION
TO
LOCAL
EDU-
CATIONAL
AGENCIES.—The limitation amount
allocated to a State under subparagraph (A)
shall be allocated by the State education agency
to qualified zone academies within such State.
‘‘(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.
‘‘SEC. 1400I. CORPORATE CONTRIBUTIONS TO SPECIALIZED
TRAINING CENTERS.
‘‘(a) GENERAL RULE.—For purposes of section 38,
in the case of a corporation, the specialized training center
credit determined under this section is an amount equal
to 50 percent of the amount of the designated qualified
contributions made by the taxpayer during the taxable
year to a specialized training center.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) SPECIALIZED
TRAINING
CENTER.—The
term ‘specialized training center’ means any quali-
fied 
zone 
academy 
(as 
defined 
in 
section
1400H(a)(3))—
‘‘(A) which is located in an empowerment
zone or enterprise community, or
‘‘(B) which is located in proximity to such
a zone or community and a significant number
of the students attending such academy have
their principal place of abode in such zone or
community.
‘‘(2) 
DESIGNATED
QUALIFIED
CONTRIBU-
TIONS.—The term ‘designated qualified contribution’
means any contribution—
‘‘(A) which is made pursuant to an agree-
ment under which the taxpayer participates in
the design of the academic program of the spe-
cialized training center, and
‘‘(B) which is designated under subsection
(c).
‘‘(c) DESIGNATION OF CONTRIBUTIONS.—
‘‘(1) LIMITATION ON AMOUNT DESIGNATED.—
The maximum amount of contributions made which
may be designated under this subsection with re-
spect to all specialized training centers located an
empowerment zone or enterprise community shall
not exceed—
‘‘(A) $8,000,000 in the case of an em-
powerment zone, and
‘‘(B) $2,000,000 in the case of an enter-
prise community.
‘‘(2) DESIGNATIONS.—Designations under this
subsection shall be made (in consultation with the
local educational agency) by the local government
agency responsible for implementing the strategic
plan described in section 1391(f)(2) for the em-
powerment zone or enterprise community.
‘‘(d) VALUE OF CONTRIBUTIONS.—The amount of
any designated qualified contribution which may be taken
into account under this section shall be—
‘‘(1) the amount of such contribution which
would be allowed as a deduction under section 170
without regard to section 280C(d), or
‘‘(2) in the case of a contribution of services
performed on the premises of a specialized training
center by an employee of the taxpayer, the amount
of wages (as defined in section 3306(b) but without
regard to any dollar limitation contained in such sec-
tion) paid by the taxpayer for such services.’’
(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
1400F(f) and such amounts shall be treated as
paid on the credit allowance date (as defined in
section 1400F(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 RELATED TO CRED-
IT
FOR CORPORATE CONTRIBUTIONS
TO SPECIALIZED
TRAINING CENTERS.—
(1) DENIAL
OF
DOUBLE
BENEFIT.—Section
280C of such Code is amended by adding at the end
the following new subsection: