text: 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.
target: 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.
feat_title: A bill to provide incentives for States to establish and administer periodic testing and merit pay programs for elementary school and secondary school teachers, and for other purposes.