article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Parent and Teacher Achievement Act of 2001''. SEC. 2. STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY. (a) Amendments.--Title II of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6601 et seq.) is amended-- (1) by redesignating part E as part F; (2) by redesignating sections 2401 and 2402 as sections 2501 and 2502, respectively; and (3) by inserting after part D the following: ``PART E--STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY ``SEC. 2401. STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY. ``(a) State Awards.--From funds made available under subsection (b) for a fiscal year, the Secretary shall make an award to each State that-- ``(1) administers a test to each elementary school and secondary school teacher in the State, with respect to the subjects taught by the teacher, every 3 to 5 years; ``(2) has an elementary school and secondary school teacher compensation system that is based on merit; and ``(3) requires elementary school and secondary school teachers to earn continuing education credits as part of a State recertification process. ``(b) Available Funding.--Notwithstanding any other provision of law, the amount of funds that are available to carry out this section for a fiscal year is 50 percent of the amount of funds appropriated to carry out this title that are in excess of the amount so appropriated for fiscal year 2001, except that no funds shall be available to carry out this section for any fiscal year for which-- ``(1) the amount appropriated to carry out this title exceeds $600,000,000; or ``(2) each of the several States is eligible to receive an award under this section. ``(c) Award Amount.--A State shall receive an award under this section in an amount that bears the same relation to the total amount available for awards under this section for a fiscal year as the number of States that are eligible to receive such an award for the fiscal year bears to the total number of all States so eligible for the fiscal year. ``(d) Use of Funds.--Funds provided under this section may be used by States to carry out the activities described in section 2207. ``(e) Definition of State.--In this section, the term `State' means each of the 50 States and the District of Columbia.''. (b) Effective Date.--The amendments made by subsection (a) shall take effect on October 1, 2001. SEC. 3. TEACHER TESTING AND MERIT PAY. (a) In General.--Notwithstanding any other provision of law, a State may use Federal education funds-- (1) to carry out a test of each elementary school or secondary school teacher in the State with respect to the subjects taught by the teacher; or (2) to establish a merit pay program for the teachers. (b) Definitions.--In this section, the terms ``elementary school'' and ``secondary school'' have the meanings given the terms in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801). SEC. 4. NONREFUNDABLE CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL EXPENSES. (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 25B the following new section: ``SEC. 25C. CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL EXPENSES. ``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified elementary and secondary education expenses (within the meaning of section 530(b)(4)) with respect to one or more qualifying students which are paid or incurred by the individual during such taxable year. ``(b) Limitations.-- ``(1) Maximum credit.--The credit allowed by subsection (a) for any taxable year shall not exceed $1000 per qualifying student. ``(2) Maximum tuition expenses.--The tuition expenses which may be taken into account in determining qualified elementary and secondary education expenses for any taxable year shall not exceed $500 per qualifying student. ``(c) Qualifying Student.--For purposes of this section, the term `qualifying student' means a dependent (within the meaning of section 152) or a relative of the taxpayer who is enrolled in school (as defined in section 530(b)(4)(B)) on a full-time basis. For purposes of the preceding sentence, the term `relative' means an individual bearing a relationship to the taxpayer which is described in any of paragraphs (1) through (8) of section 152(a). ``(d) Denial of Double Benefit.--No deduction or exclusion shall be allowed under this chapter for any expense for which credit is allowed under this section. ``(e) Election To Have Credit Not Apply.--A taxpayer may elect to have this section not apply for any taxable year.''. (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 25B the following new item: ``Sec. 25C. Credit for elementary and secondary school expenses.''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 5. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT OF ELEMENTARY AND SECONDARY SCHOOLS. (a) In General.--Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits) is amended by adding at the end the following new section: ``SEC. 30B. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT OF ELEMENTARY AND SECONDARY SCHOOLS. ``(a) Allowance of Credit.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 75 percent of the qualified charitable contributions of the taxpayer for the taxable year. ``(b) Maximum Credit.-- ``(1) Individuals.--In the case of a taxpayer other than a corporation, the credit allowed by subsection (a) for any taxable year shall not exceed $500 ($1,000 in the case of a joint return). ``(2) Corporations.--In the case of a corporation, the credit allowed by subsection (a) shall not exceed $100,000. ``(c) Qualified Charitable Contribution.--For purposes of this section-- ``(1) In general.--The term `qualified charitable contribution' means, with respect to any taxable year, the aggregate amount allowable as a deduction under section 170 (determined without regard to subsection (d)(1)) for cash contributions to a school tuition organization. ``(2) School tuition organization.-- ``(A) In general.--The term `school tuition organization' means any organization which-- ``(i) is described in section 170(c)(2), ``(ii) allocates at least 90 percent of its gross income and contributions and gifts to elementary and secondary school scholarships, and ``(iii) awards scholarships to any student who is eligible for free or reduced cost lunch under the school program established under the Richard B. Russell National School Lunch Act. ``(B) Elementary and secondary school scholarship.--The term `elementary and secondary school scholarship' means any scholarship excludable from gross income under section 117 for expenses related to education at or below the 12th grade. ``(d) Special Rules.-- ``(1) Denial of double benefit.--No deduction shall be allowed under this chapter for any contribution for which credit is allowed under this section. ``(2) Application with other credits.--The credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of-- ``(A) the regular tax for the taxable year, reduced by the sum of the credits allowable under subpart A and the preceding sections of this subpart, over ``(B) the tentative minimum tax for the taxable year. ``(3) Controlled groups.--All persons who are treated as one employer under subsection (a) or (b) of section 52 shall be treated as 1 taxpayer for purposes of this section. ``(e) Election To Have Credit Not Apply.--A taxpayer may elect to have this section not apply for any taxable year.''. (b) Conforming Amendment.--The table of sections for subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: ``Sec. 30B. Credit for contributions for the benefit of elementary and secondary schools.''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 6. CREDIT TO ELEMENTARY AND SECONDARY SCHOOL TEACHERS WHO PROVIDE CLASSROOM MATERIALS. (a) In General.--Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits), as amended by section 4(a), is amended by adding at the end the following new section: ``SEC. 30C. CREDIT TO ELEMENTARY AND SECONDARY SCHOOL TEACHERS WHO PROVIDE CLASSROOM MATERIALS. ``(a) Allowance of Credit.--In the case of an eligible educator, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified elementary and secondary education expenses which are paid or incurred by the taxpayer during such taxable year. ``(b) Maximum Credit.--The credit allowed by subsection (a) for any taxable year shall not exceed $1,000. ``(c) Definitions.-- ``(1) Eligible educator.--The term `eligible educator' means an individual who is a teacher, instructor, counselor, principal, or aide in a school (as defined in section 530(b)(4)(B)) for at least 900 hours during a school year. ``(2) Qualified elementary and secondary education expenses.--The term `qualified elementary and secondary 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 educator in the classroom. ``(d) Special Rules.-- ``(1) Denial of double benefit.--No deduction shall be allowed under this chapter for any expense for which credit is allowed under this section. ``(2) Application with other credits.--The credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of-- ``(A) the regular tax for the taxable year, reduced by the sum of the credits allowable under subpart A and the preceding sections of this subpart, over ``(B) the tentative minimum tax 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.''. (b) Clerical Amendment.--The table of sections for subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by section 4(b), is amended by adding at the end the following new item: ``Sec. 30C. Credit to elementary and secondary school teachers who provide classroom materials.''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 7. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO ACCOUNT PROFESSIONAL DEVELOPMENT EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS. (a) In General.--Section 62(a)(2) of the Internal Revenue Code of 1986 (relating to certain trade and business deductions of employees) is amended by adding at the end the following: ``(D) Professional development expenses of elementary and secondary school teachers.--The deductions allowed by section 162 which consist of expenses, not in excess of $1,500, paid or incurred by an eligible educator (as defined section 30C(c)(1)) by reason of the participation of the educator in professional development courses which are related to the curriculum and academic subjects in which the educator provides instruction or to the students for which the educator provides instruction and which are part of a program of professional development which is approved and certified by the appropriate local educational agency (as defined by section 14101 of the Elementary and Secondary Education Act of 1965, as in effect on the date of the enactment of this subparagraph).''. (b) Special Rules.--Section 62 of the Internal Revenue Code of 1986 is amended by adding at the end the following: ``(d) Special Rules.--A deduction shall be allowed under subsection (a)(2)(D) for 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.''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
summary: Parent and Teacher Achievement Act of 2001 - Amends the Elementary and Secondary Education Act of 1965 to establish a program for State incentives for teacher testing and merit pay. Directs the Secretary of Education to make an award of such program funds to each State that: (1) administers a test to each elementary and secondary school teacher in the State, with respect to the subjects taught by the teacher, every three to five years; (2) has school teacher compensation system that is based on merit; and (3) requires school teachers to earn continuing education credits as part of a State recertification process.Allows States, regardless of any other Federal law, to use Federal education funds to: (1) test elementary or secondary school teachers in the subjects they teach; or (2) establish a merit pay program for such teachers.Amends the Internal Revenue Act to provide certain tax credits for: (1) elementary and secondary school expenses; (2) contributions for the benefit of elementary and secondary schools; and (3) elementary and secondary school teachers who provide classroom materials. Allows elementary and secondary school teachers to take a tax deduction for certain professional development expenses.