(1) Private schools supplement the public school 
system and are a vital component of our nation’s 
school network. 
(2) The public school system was created to 
serve students, not the other way around. Children 
should have the opportunity to attend the school sys-
tem that is most conducive to developing their abili-
ties, and parents have the right to choose the public 
or private school that best meets their child’s indi-
vidual needs. 
(3) In 1999, 4,599,000 students were enrolled 
in private school in grades kindergarten through 8th 
grade, while 1,399,000 students were enrolled in pri-
vate school in grades 9 through 12, for a combined 
total of 5,939,000 children enrolled in private school. 
(4) In 1999, 33,437,000 students were enrolled 
in public school in grades kindergarten through 8th 
grade, while 13,375,000 students were enrolled in 
public school in grades 9 through 12, for a combined 
total of 52,750,000 children enrolled in public 
school. 
(5) When polled by the Department of Edu-
cation in 1999, 78 percent of parents with children 
enrolled in private schools, but just 48 percent of 
parents with children enrolled in public schools, were
very satisfied with the school’s discipline provisions, 
academic standards, and quality and performance of 
teachers. 
(6) In the 1993–94 school year, the average 
class size in public schools was at least twice the av-
erage class size in private schools. Larger classes 
can result in more disruption by misbehaving stu-
dents. Thus, class size has a direct effect on the 
quality of the educational experience of students, 
teachers, and other staff, as well as parents’ satis-
faction with their child’s school. 
SEC. 3. CREDIT FOR ELEMENTARY AND SECONDARY EDU-
CATION EXPENSES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by redes-
ignating section 36 as section 37 and by inserting after 
section 34 the following new section: 
‘‘SEC. 36. ELEMENTARY AND SECONDARY EDUCATION EX-
PENSES. 
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, there shall be allowed as a credit against the 
tax imposed by this subtitle for the taxable year the 
amount of the qualified education expenses paid by
the taxpayer during the taxable year for each quali-
fying child of the taxpayer. 
‘‘(2) AMOUNT
PER
CHILD.—The amount of 
credit allowable under paragraph (1) for any taxable 
year with respect to the qualified education expenses 
of each qualifying child of the taxpayer shall not ex-
ceed—
‘‘(A) $2,500 for a child enrolled in an ele-
mentary school for any portion of the taxable 
year, and 
‘‘(B) $3,500 for a child enrolled in a sec-
ondary school for any portion of the taxable 
year. 
In any taxable year in which a child meets the re-
quirements of both subparagraphs (A) and (B), the 
amount of credit allowable shall not exceed the sum 
of the amounts in such subparagraphs. 
‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.—
‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) (after the application 
of subsection (a)(2)) shall be reduced (but not below 
zero) by $50 for each $1,000 (or fraction thereof) by
which the taxpayer’s modified adjusted gross income 
exceeds the threshold amount.
‘‘(2) DEFINITIONS AND SPECIAL RULES.—For 
purposes of this paragraph (1)—
‘‘(A) THRESHOLD
AMOUNT.—The term 
‘threshold amount’ means—
‘‘(i) $150,000 in the case of a joint 
return, and 
‘‘(ii) $75,000 in any other case. 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—The term ‘modified adjusted gross in-
come’ means adjusted gross income increased 
by any amount excluded from gross income 
under section 911, 931, or 933. 
‘‘(C) MARITAL
STATUS.—Marital status 
shall be determined under section 7703. 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFYING CHILD.—The term ‘qualifying 
child’ has the meaning provided by section 24(c). 
‘‘(2) QUALIFIED EDUCATION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified 
education expenses’ means amounts paid for—
‘‘(i) tuition and fees required for the 
enrollment or attendance of a student at a 
qualified educational institution, 
‘‘(ii) computers, educational software, 
computer support services, and books re-
quired for courses of instruction at a quali-
fied educational institution, 
‘‘(iii) academic tutoring (by a person 
other than the taxpayer), 
‘‘(iv) special needs services for quali-
fying children with disabilities (within the 
meaning of the Americans With Disabil-
ities Act of 1990), 
‘‘(v) fees for transportation services to 
and from a private school, if the transpor-
tation is provided by the school and the 
school charges a fee for the transportation, 
and 
‘‘(vi) academic testing services. 
‘‘(B) AMOUNTS
EXCLUDED.—The term 
does not include special school fees for nonaca-
demic purposes, including fees for student ac-
tivities, athletics, insurance, school uniforms, 
and nonacademic after-school activities. 
‘‘(3) QUALIFIED EDUCATIONAL INSTITUTION.—
The term ‘qualified educational institution’ means—
‘‘(A) an elementary or secondary school (as 
defined in section 14101 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 
8801)), or