S 225 IS

To amend the Internal Revenue Code of 1986 to provide incentives to public elementary and secondary school teachers by providing a tax credit for teaching expenses, professional development expenses, and student education loans.

January 31, 2001

Mr. WARNER introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to provide incentives to public elementary and secondary school teachers by providing a tax credit for teaching expenses, professional development expenses, and student education loans.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as `The TEACHER-Tax Credit Act'.

SEC. 2. CREDIT FOR TEACHING EXPENSES, PROFESSIONAL DEVELOPMENT EXPENSES, AND INTEREST ON HIGHER EDUCATION LOANS OF PUBLIC ELEMENTARY AND SECONDARY SCHOOL TEACHERS.

(a) IN GENERAL- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25A the following new section:

`SEC. 25B. TEACHING EXPENSES, PROFESSIONAL DEVELOPMENT EXPENSES, AND INTEREST ON HIGHER EDUCATION LOANS OF PUBLIC ELEMENTARY AND SECONDARY SCHOOL TEACHERS.

`(a) ALLOWANCE OF CREDIT- In the case of an eligible teacher, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--

`(1) the qualified education expenses paid or incurred by the taxpayer during the taxable year,

`(2) the qualified professional development expenses paid or incurred by the taxpayer during the taxable year, and

`(3) interest paid by the taxpayer during the taxable year on any qualified education loan.

`(b) MAXIMUM CREDIT- The credit allowed by subsection (a) for the taxable year shall not exceed $1,000.

`(c) DEFINITIONS- For purposes of this section--

`(1) ELIGIBLE TEACHER- The term `eligible teacher' means an individual who is a kindergarten through grade 12 classroom teacher, instructor, counselor, aide, or principal in a public elementary or secondary school on a full-time basis for an academic year ending during a taxable year.

`(2) ELEMENTARY AND SECONDARY SCHOOLS- The terms `elementary school' and `secondary school' have the respective meanings given such terms by section 14101 of the Elementary and Secondary Education Act of 1965, as in effect of the date of enactment of this section.

`(3) QUALIFIED EDUCATION EXPENSES- The term `qualified education expenses' means expenses for books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment, and supplementary materials used by an eligible teacher in the classroom.

`(4) QUALIFIED PROFESSIONAL DEVELOPMENT EXPENSES-

`(A) IN GENERAL- The term `qualified professional development expenses' means expenses--

`(i) for tuition, fees, books, supplies, and equipment required for the enrollment or attendance of an individual in a qualified course of instruction, and

`(ii) with respect to which a deduction is allowable under section 162 (determined without regard to this section).

`(B) QUALIFIED COURSE OF INSTRUCTION- The term `qualified course of instruction' means a course of instruction which--

`(i) directly relates to the curriculum and academic subjects in which an eligible teacher provides instruction,

`(ii) is designed to enhance the ability of an eligible teacher to understand and use State standards for the academic subjects in which such teacher provides instruction,

`(iii) provides instruction in how to teach children with different learning styles, particularly children with disabilities and children with special learning needs (including children who are gifted and talented),

`(iv) provides instruction in how best to discipline children in the classroom and identify early and appropriate interventions to help children described clause (iii) learn, or

`(v) is tied to strategies and programs that demonstrate effectiveness in increasing student academic achievement and student performance, or substantially increasing the knowledge and teaching skills of the eligible teacher.

`(5) QUALIFIED EDUCATION LOAN- The term `qualified education loan' has the meaning given such term by section 221(e)(1), but only with respect to qualified higher education expenses of the taxpayer.

`(d) DENIAL OF DOUBLE BENEFIT-

`(1) IN GENERAL- No deduction or other credit shall be allowed under this chapter for any amount taken into account for which credit is allowed under this section.

`(2) COORDINATION WITH EXCLUSIONS- A credit shall be allowed under subsection (a) for qualified professional development expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135, 529(c)(1), or 530(d)(2) for the taxable year.

`(e) ELECTION TO HAVE CREDIT NOT APPLY- A taxpayer may elect to have this section not apply for any taxable year.

`(f) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section.'.

(b) CONFORMING AMENDMENT- The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25A the following new item:

`Sec. 25B. Teaching expenses, professional development expenses, and interest on higher education loans of public elementary and secondary school teachers.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2001.

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