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SECTION 1. PHYSICAL EDUCATION FOR PROGRESS.

    Title X of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8001 et seq.) is amended by adding at the end the following:

               ``PART L--PHYSICAL EDUCATION FOR PROGRESS

``SEC. 10999A. SHORT TITLE.

    ``This part may be cited as the `Physical Education for Progress 
Act'.

``SEC. 10999B. PURPOSE.

    ``The purpose of this part is to award grants and contracts to 
local educational agencies to enable the local educational agencies to 
initiate, expand, and improve physical education programs for all 
kindergarten through 12th grade students.

``SEC. 10999C. FINDINGS.

    ``Congress makes the following findings:
            ``(1) Physical education is essential to the development of 
        growing children.
            ``(2) Physical education helps improve the overall health 
        of children by improving their cardiovascular endurance, 
        muscular strength and power, and flexibility, and by enhancing 
        weight regulation, bone development, posture, skillful moving, 
        active lifestyle habits, and constructive use of leisure time.
            ``(3) Physical education helps improve the self esteem, 
        interpersonal relationships, responsible behavior, and 
        independence of children.
            ``(4) Children who participate in high quality daily 
        physical education programs tend to be more healthy and 
        physically fit.
            ``(5) The percentage of young people who are overweight has 
        more than doubled in the 30 years preceding 1999.
            ``(6) Low levels of activity contribute to the high 
        prevalence of obesity among children in the United States.
            ``(7) Obesity related diseases cost the United States 
        economy more than $100,000,000,000 every year.
            ``(8) Inactivity and poor diet cause at least 300,000 
        deaths a year in the United States.
            ``(9) Physically fit adults have significantly reduced risk 
        factors for heart attacks and stroke.
            ``(10) Children are not as active as they should be and 
        fewer than 1 in 4 children get 20 minutes of vigorous activity 
        every day of the week.
            ``(11) The Surgeon General's 1996 Report on Physical 
        Activity and Health, and the Centers for Disease Control and 
        Prevention, recommend daily physical education for all students 
        in kindergarten through grade 12.
            ``(12) Twelve years after Congress passed House Concurrent 
        Resolution 97, 100th Congress, agreed to December 11, 1987, 
        encouraging State and local governments and local educational 
        agencies to provide high quality daily physical education 
        programs for all children in kindergarten through grade 12, 
        little progress has been made.
            ``(13) Every student in our Nation's schools, from 
        kindergarten through grade 12, should have the opportunity to 
        participate in quality physical education. It is the unique 
        role of quality physical education programs to develop the 
        health-related fitness, physical competence, and cognitive 
        understanding about physical activity for all students so that 
        the students can adopt healthy and physically active 
        lifestyles.
            ``(14) Every student in our Nation's schools should have 
        the opportunity to achieve the goals established by Healthy 
        People 2000 and Healthy People 2010.

``SEC. 10999D. PROGRAM AUTHORIZED.

    ``The Secretary is authorized to award grants to, and enter into 
contracts with, local educational agencies to pay the Federal share of 
the costs of initiating, expanding, and improving physical education 
programs for kindergarten through grade 12 students by--
            ``(1) providing equipment and support to enable students to 
        actively participate in physical education activities;
            ``(2) developing or enhancing physical education curricula 
        to meet national goals for physical education developed by the 
        Secretary in consultation with the National Association for 
        Sport and Physical Education; and
            ``(3) providing funds for staff and teacher training and 
        education.

``SEC. 10999E. APPLICATIONS; PROGRAM REQUIREMENTS.

    ``(a) Applications.--Each local educational agency desiring a grant 
or contract under this part shall submit to the Secretary an 
application that contains a plan to initiate, expand, or improve 
physical education programs in the schools served by the agency in 
order to make progress toward meeting--
            ``(1) the goals described in subsection (b); or
            ``(2) State standards for physical education.
    ``(b) Goals.--The goals referred to in subsection (a) are as 
follows:
            ``(1) Physical education programs shall facilitate 
        achievement of the national goals for physical education 
        described in section 10999D(2), and the curriculum of the 
        programs may provide--
                    ``(A) fitness education and assessment to help 
                children understand, improve, or maintain their 
                physical well-being;
                    ``(B) instruction in a variety of motor skills and 
                physical activities designed to enhance the physical, 
                mental, and social or emotional development of every 
                child;
                    ``(C) development of cognitive concepts about motor 
                skill and physical fitness that support a lifelong 
                healthy lifestyle;
                    ``(D) opportunities to develop positive social and 
                cooperative skills through physical activity 
                participation; and
                    ``(E) instruction in healthy eating habits and good 
                nutrition.
            ``(2) Teachers of physical education shall be afforded the 
        opportunity for professional development to stay abreast of the 
        latest research, issues, and trends in the field of physical 
        education.
    ``(c) Special Rule.--For the purpose of this part, extracurricular 
activities such as team sports and Reserve Officers' Training Corps 
(ROTC) program activities shall not be considered as part of the 
curriculum of a physical education program assisted under this part.

``SEC. 10999F. PROPORTIONALITY.

    ``The Secretary shall ensure that grants awarded and contracts 
entered into under this part shall be equitably distributed between 
local educational agencies serving urban and rural areas, and between 
local educational agencies serving large and small numbers of students.

``SEC. 10999G. PRIVATE SCHOOL STUDENTS AND HOME-SCHOOLED STUDENTS.

    ``An application for funds under this part, consistent with the 
number of home-schooled children or children enrolled in private 
elementary schools, middle schools, and secondary schools located in 
the school district of a local educational agency, may provide for the 
participation of such children and their teachers in the activities 
assisted under this part.

``SEC. 10999H. REPORT REQUIRED FOR CONTINUED FUNDING.

    ``As a condition to continue to receive grant or contract funding 
after the first year of a multiyear grant or contract under this part, 
the administrator of the grant or contract for the local educational 
agency shall submit to the Secretary an annual report that describes 
the activities conducted during the preceding year and demonstrates 
that progress has been made toward achieving goals described in section 
10999E(b) or meeting State standards for physical education.

``SEC. 10999I. REPORT TO CONGRESS.

    ``The Secretary shall submit a report to Congress not later than 
June 1, 2003, that describes the programs assisted under this part, 
documents the success of such programs in improving physical fitness, 
and makes such recommendations as the Secretary determines appropriate 
for the continuation and improvement of the programs assisted under 
this part.

``SEC. 10999J. ADMINISTRATIVE COSTS.

    ``Not more than 5 percent of the grant or contract funds made 
available to a local educational agency under this part for any fiscal 
year may be used for administrative costs.

``SEC. 10999K. FEDERAL SHARE; SUPPLEMENT NOT SUPPLANT.

    ``(a) Federal Share.--The Federal share under this part may not 
exceed--
            ``(1) 90 percent of the total cost of a project for the 
        first year for which the project receives assistance under this 
        part; and
            ``(2) 75 percent of such cost for the second and each 
        subsequent such year.
    ``(b) Supplement not Supplant.--Funds made available under this 
part shall be used to supplement and not supplant other Federal, State, 
and local funds available for physical education activities.

``SEC. 10999L. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated $30,000,000 for fiscal 
year 2000, $70,000,000 for fiscal year 2001, and $100,000,000 for each 
of the fiscal years 2002 through 2004, to carry out this part. Such 
funds shall remain available until expended.''.
Requires such grants and contracts to be used for: (1) providing equipment and support to enable students to actively participate in physical education activities; (2) developing or enhancing physical education curricula to meet national goals developed by the Secretary; and (3) providing funds for staff and teacher training and education.
Requires LEA assistance applications for such assistance to contain plans for helping school physical education programs make progress toward meeting State standards for physical education or specified goals. Prohibits extracurricular activities such as team sports and Reserve Officers' Training Corps (ROTC) program activities from consideration as part of the curriculum of a physical education program assisted under this Act.
Authorizes appropriations.

SECTION 1. MODIFICATIONS AND INCREASED VOLUME CAP WITH RESPECT TO 
              QUALIFIED MORTGAGE BONDS.

    (a) Use of Qualified Mortgage Bonds Proceeds for Subprime 
Refinancing Loans.--Section 143(k) of the Internal Revenue Code of 1986 
(relating to other definitions and special rules) is amended by adding 
at the end the following new paragraph:
            ``(12) Special rules for subprime refinancings.--
                    ``(A) In general.--In the case of a residence which 
                was originally financed by the mortgagor through a 
                qualified subprime loan, this section shall be applied 
                with the following modifications:
                            ``(i) Subsection (i)(1) (relating to 
                        mortgages must be new mortgages) shall not 
                        apply.
                            ``(ii) Subsection (a)(2)(D)(i) shall be 
                        applied by substituting `12-month period' for 
                        `42-month period' each place it appears.
                            ``(iii) Subsection (d) (relating to 3-year 
                        requirement) shall not apply.
                            ``(iv) Subsection (e) (relating to purchase 
                        price requirement) shall be applied by using 
                        the market value of the residence at the time 
                        of refinancing in lieu of the acquisition cost.
                    ``(B) Qualified subprime loan.--
                            ``(i) In general.--The term `qualified 
                        subprime loan' means an adjustable rate single-
                        family residential mortgage loan originated 
                        after December 31, 2001, and before January 1, 
                        2008, that the bond issuer determines has 
                        characteristics that suggest both a reasonably 
                        foreseeable risk of default and a reasonable 
                        potential to avoid default with the benefit of 
                        a lower cost refinancing.
                            ``(ii) Considerations.--In making the 
                        determination under clause (i), the bond issuer 
                        may consider the following characteristics:
                                    ``(I) Loan payments which are 
                                scheduled to increase by more than 10 
                                percent after December 31, 2007, and 
                                before January 1, 2011.
                                    ``(II) A loan-to-value ratio of 97 
                                percent or greater at the time of the 
                                original mortgage loan or at the time 
                                of the refinancing of such loan after 
                                adjustment for any decline in the fair 
                                market value of the residence.
                                    ``(III) A borrower whose 
                                creditworthiness is relatively low in 
                                comparison to a prime borrower, based 
                                on a lower credit score, such as a Fair 
                                Isaac Credit Organization credit score 
                                at the time of the original subprime 
                                loan of less than 660 and the absence 
                                of an increase in such score by more 
                                than 10 percent since the time of the 
                                original loan.
                                    ``(IV) Whether loan payments on the 
                                original mortgage loan generally have 
                                been made in a current, timely manner, 
                                subject only to isolated late payments.
                    ``(C) Termination.--This paragraph shall not apply 
                to any bonds issued after December 31, 2010.''.
    (b) Increased Volume Cap for Qualified Mortgage Bonds.--
            (1) In general.--Subsection (d) of section 146 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new paragraph:
            ``(5) Increase and set aside for qualified mortgage bonds 
        for 2008.--
                    ``(A) In general.--The State ceiling for calendar 
                year 2008 shall be increased by $15,000,000,000.
                    ``(B) Set aside.--
                            ``(i) In general.--Not less than an amount 
                        equal to each State's allocable share of the 
                        increase in the State ceiling under 
                        subparagraph (A) shall be allocated solely for 
                        the purpose of a qualified mortgage issue which 
                        meets the requirement clause (ii).
                            ``(ii) Requirement.--A qualified mortgage 
                        issue meets the requirement of this clause if 
                        such issue meets the requirement of section 
                        143(a)(2)(D)(i) (determined by substituting 
                        `12-month period' for `42-month period' each 
                        place it appears).''.
            (2) Carryforward of unused limitations.--Subsection (f) of 
        section 146 of such Code is amended by adding at the end the 
        following new paragraph:
            ``(6) Special rules for increased volume cap under 
        subsection (d)(5).--No amount which is attributable to the 
        increase under subsection (d)(5) may be used--
                    ``(A) for a carryforward purpose other than issuing 
                qualified mortgage bonds, and
                    ``(B) to issue any bond after calendar year 
                2010.''.
    (c) Alternative Minimum Tax.--
            (1) In general.--Clause (ii) of section 57(a)(5)(C) of the 
        Internal Revenue Code of 1986 is amended by striking ``shall 
        not include'' and all that follows and inserting ``shall not 
        include--
                                    ``(I) any qualified 501(c)(3) bond 
                                (as defined in section 145), or
                                    ``(II) any qualified mortgage bond 
                                (as defined in section 143(a)) or 
                                qualified veterans' mortgage bond (as 
                                defined in section 143(b)) issued after 
                                December 31, 2007, and before January 
                                1, 2011.''.
            (2) Conforming amendment.--The heading for section 
        57(a)(5)(C)(ii) is amended by striking ``qualified 501(c)(3) 
        bonds'' and inserting ``certain bonds''.
    (d) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 2007.
Amends the Internal Revenue Code to: (1) allow proceeds of qualified mortgage bonds to be used to refinance certain residential subprime loans issued between 2002 and 2008; (2) increase in 2008 limitations on issuance amounts for qualified mortgage bonds; and (3) exempt tax-exempt interest on qualified mortgage or veterans' mortgage bonds issued before 2011 from the alternative minimum tax.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Made in America Deduction 
Enhancement (MADE) Act''.

SEC. 2. ENHANCED DEDUCTION FOR CERTAIN DOMESTIC PRODUCTION.

    (a) In General.--Section 199 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Enhanced Manufacturing Deduction.--
            ``(1) In general.--If an eligible taxpayer has qualified 
        core manufacturing income for any taxable year, the amount 
        otherwise allowable as a deduction under subsection (a) shall 
        be increased by the applicable percentage of the least of--
                    ``(A) the qualified core manufacturing income of 
                the taxpayer for the taxable year,
                    ``(B) the qualified production activities income of 
                the taxpayer for the taxable year, or
                    ``(C) taxable income (determined without regard to 
                this section).
            ``(2) Eligible taxpayer.--For purposes of this subsection, 
        the term `eligible taxpayer' means, with respect to any taxable 
        year, any taxpayer if the domestic input percentage for such 
        taxable year is more than 75 percent.
            ``(3) Domestic input percentage.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `domestic input 
                percentage' means the ratio (expressed as a percentage) 
                of--
                            ``(i) domestically produced input costs, to
                            ``(ii) the total costs of direct material 
                        inputs included in the cost of goods sold which 
                        are allocable to gross receipts derived from 
                        qualified property.
                    ``(B) Domestically produced input costs.--For 
                purposes of subparagraph (A)--
                            ``(i) In general.--The term `domestically 
                        produced input costs' means the costs described 
                        in subparagraph (A)(ii) for materials--
                                    ``(I) which become an integral part 
                                of property produced by the eligible 
                                taxpayer, or
                                    ``(II) which can be identified or 
                                associated with particular units or 
                                groups of units of property produced by 
                                the eligible taxpayer,
                        if all or virtually all of such material is 
                        produced in the United States.
                            ``(ii) Determination.--For purposes of this 
                        subparagraph--
                                    ``(I) the determination of whether 
                                all or virtually all of a material is 
                                produced in the United States shall be 
                                made based on rules similar to the 
                                guidelines of the Federal Trade 
                                Commission with respect to goods 
                                advertised as Made in USA, and
                                    ``(II) all or virtually all of a 
                                material shall not be treated as 
                                produced in the United States unless 
                                the taxpayer has a reasonable basis to 
                                support such claim.
                            ``(iii) United states.--For purposes of 
                        this subparagraph, the United States includes 
                        any possession of the United States.
            ``(4) Qualified core manufacturing income; qualified 
        property.--For purposes of this subsection--
                    ``(A) In general.--The term `qualified core 
                manufacturing income' means for any taxable year the 
                qualified production activities income which is 
                attributable to the manufacture of qualified property 
                during such taxable year.
                    ``(B) Qualified property.--The term `qualified 
                property' means tangible personal property other than--
                            ``(i) a film,
                            ``(ii) computer software,
                            ``(iii) property described in section 
                        168(f)(4),
                            ``(iv) a natural resource extracted by the 
                        taxpayer, or
                            ``(v) property produced in a farming 
                        business (within the meaning of section 
                        263A(e)(4)).
            ``(5) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is the percentage which bears 
        the same ratio to 9 percent as--
                    ``(A) so much the domestic input percentage as 
                exceeds 75 percent, bears to
                    ``(B) 25 percent.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

Made in America Deduction Enhancement (MADE) Act  This bill amends the Internal Revenue Code, with respect to the deduction for income attributable to domestic production activities, to allow an increased deduction for manufacturers that use materials produced in the United States during their production process.  The bill allows the increased deduction for taxpayers with a domestic input percentage that exceeds 75%.  A &quot;domestic input percentage&quot; is the ratio of: (1) domestically produced input costs, to (2) the total costs of direct material inputs included in the cost of goods sold which are allocable to gross receipts derived from qualified property (tangible personal property other than a film, computer software, sound recordings, a natural resource extracted by the taxpayer, or property produced in a farming business).  &quot;Domestically produced input costs&quot; are costs for materials which: (1) become an integral part of property produced by the eligible taxpayer; or (2) can be identified or associated with particular units or groups of units of property produced by the eligible taxpayer, if all or virtually all of the material is produced in the United States.