Education Trust Fund Act

[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2800 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2800

To amend the Internal Revenue Code of 1986 to impose a 5-percent tax on 
 all wagering and to use the revenues from such tax to enhance funding 
 for public elementary and secondary education, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

            December 18 (legislative day, December 15), 1995

   Mr. Fields of Louisiana introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
Committee on Economic and Educational Opportunities, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to impose a 5-percent tax on 
 all wagering and to use the revenues from such tax to enhance funding 
 for public elementary and secondary education, and for other purposes.

    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 ``Education Trust Fund Act''.

                      TITLE I--TAX AND TRUST FUND

SEC. 101. ADDITIONAL 5 PERCENT TAX ON NET PROCEEDS OF WAGERING.

    (a) In General.--Chapter 35 of the Internal Revenue Code of 1986 
(relating to taxes on wagering) is amended by redesignating subchapter 
C as subchapter D and by inserting after subchapter B the following new 
subchapter:

            ``Subchapter C--Tax on Net Proceeds From Wagers

                              ``Sec. 4415. Imposition of tax.
                              ``Sec. 4416. Definitions and special 
                                        rules.

``SEC. 4415. IMPOSITION OF TAX.

    ``(a) In General.--There is hereby imposed on the payment of 
wagering proceeds an excise tax equal to 5 percent of the net wagering 
proceeds paid during any calendar quarter.
    ``(b) Net Wagering Proceeds.--For purposes of subsection (a)--
            ``(1) In general.--The term `net wagering proceeds' means 
        the proceeds from a wager determined--
                    ``(A) by reducing the amount paid by the amount of 
                the wager, and
                    ``(B) without regard to any tax imposed by this 
                section.
            ``(2) Noncash proceeds.--Proceeds which are not money shall 
        be taken into account at their fair market value.
    ``(c) Liability for Tax.--The tax imposed by subsection (a) shall 
be paid by the person making payment of the wagering proceeds.
    ``(d) Credit for Dedicated State Taxes.--
            ``(1) In general.--The tax imposed by this section on the 
        net wagering proceeds paid during any calendar quarter shall be 
        reduced (but not below zero) by an amount equal to the 
        dedicated State tax imposed on such proceeds.
            ``(2) Dedicated state tax.--For purposes of paragraph (1), 
        the term `dedicated State tax' means any excise tax imposed by 
        a maintenance-of effort State on net wagering proceeds to the 
        extent that the revenues from such tax are set-aside solely for 
        purposes described in title II of the Education Trust Fund Act.
            ``(3) Maintenance-of-effort state.--For purposes of 
        paragraph (2), the term `maintenance-of-effort State' means, 
        with respect to any calendar year, any State if--
                    ``(A) the average per pupil expenditure in such 
                State (as determined for purposes of part A of title I 
                of the Elementary and Secondary Education Act of 1965) 
                for such calendar year is not less than such average 
                for the preceding calendar year, or
                    ``(B) in any case in which such average for the 
                calendar year is less than such average for the 
                preceding calendar year, there is a percentage 
                reduction in State expenditures for all purposes which 
                is at least as great as the percentage reduction in 
                such average.
        For purposes of the preceding sentence, State funding shall be 
        determined without regard to any dedicated State tax on net 
        wagering proceeds to the extent the amount of such tax on such 
        proceeds does not exceed 5 percent of such proceeds.

``SEC. 4416. DEFINITIONS AND SPECIAL RULES.

    ``(a) Wager.--For purposes of section 4415, the term `wager' 
means--
            ``(1) any wager placed with a person engaged in the 
        business of accepting wagers,
            ``(2) any wager placed in a wagering pool if such pool is 
        conducted for profit, and
            ``(3) any wager placed in a lottery conducted for profit.
Such term shall not include bingo.
    ``(b) Territorial Extent.--The tax imposed by this subchapter shall 
apply only to wagers--
            ``(1) accepted in the United States, or
            ``(2) placed by a person who is in the United States--
                    ``(A) with a person who is a citizen or resident of 
                the United States, or
                    ``(B) in a wagering pool or lottery conducted by a 
                person who is a citizen or resident of the United 
                States.''
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 4411 of such Code is amended 
        by inserting ``or 4415'' after ``4401''.
            (2) Paragraph (1) of section 4421 of such Code is amended 
        by striking ``The term'' and inserting ``Except as provided in 
        section 4416, the term''.
            (3) The table of subchapters for chapter 35 of such Code is 
        amended by striking the last item and inserting the following 
        new items:

                              ``Subchapter C. Tax on net proceeds from 
                                        wagers.
                              ``Subchapter D. Miscellaneous 
                                        provisions.''
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to calendar quarters beginning more than 90 days after 
        the date of the enactment of this Act.
            (2) Transitional rule.--Any person who, on the first day of 
        the first calendar quarter beginning more than 90 days after 
        the date of the enactment of this Act, is engaged in an 
        activity which makes such person liable for payment of the tax 
        imposed by section 4415 of the Internal Revenue Code of 1986 
        shall be treated as commencing such activity on such date for 
        purposes of such section and section 4901 of such Code. The 
        preceding sentence shall not apply to any person who before 
        such date paid the tax imposed by section 4411 of such Code for 
        the year which includes such date.

SEC. 102. NATIONAL EDUCATION TRUST FUND.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 (relating to trust fund code) is amended by adding at the 
end the following new section:

``SEC. 9512. NATIONAL EDUCATION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `National 
Education Trust Fund', consisting of such amounts as may be 
appropriated or credited to such Trust Fund as provided in this section 
or section 9602(b).
    ``(b) Transfers to Trust Fund.--
            ``(1) In general.--There are hereby appropriated to the 
        National Education Trust Fund amounts equivalent to the net 
        revenues received in the Treasury from the taxes imposed by 
        section 4401 (relating to tax on wagers) to the extent 
        attributable to the basic percentage under such section.
            ``(2) Net revenues.--For purposes of paragraph (1), the 
        term `net revenues' means the amount estimated by the Secretary 
        based on the excess of--
                    ``(A) the taxes referred to in paragraph (1) which 
                are received in the Treasury, over
                    ``(B) the decrease in the tax imposed by chapter 1 
                resulting from such taxes.
    ``(c) Expenditures From Trust Fund.--Amounts in the National 
Education Trust Fund shall be available, as provided in appropriation 
Acts, only for purposes of making expenditures to carry out title II of 
the Education Trust Fund Act.''
    (b) Clerical Amendment.--The table of sections for such subchapter 
A is amended by adding at the end the following new item:

                              ``Sec. 9512. National Education Trust 
                                        Fund.''

                   TITLE II--EDUCATIONAL ENHANCEMENT

SEC. 201. EDUCATION TRUST FUND PURPOSES.

    Funds from the National Education Trust Fund may be used by local 
educational agencies only for the purpose of educating students, 
including improving classroom instructional materials, renovating or 
building school facilities and buildings, and increasing teacher 
salaries.

SEC. 202. GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    (a) In General.--The Secretary of Education is authorized to 
provide grants from the National Education Trust Fund established under 
section 9512 of the Internal Revenue Code of 1986 to State educational 
agencies for use by local educational agencies to improve education in 
elementary and secondary schools as described in section 201.
    (b) Eligibility of Local Educational Agencies.--A local educational 
agency in a State is eligible to receive a grant under this section 
from the Education Trust Fund established pursuant to section 9512 of 
the Internal Revenue Code of 1986 for any fiscal year if the number of 
children in the local educational agency counted under subsection 
1124(c) of the Elementary and Secondary Education Act of 1965, before 
application of the weighting factor described in subsection (d) of this 
section, is at least 10, and if the number of children counted for 
grants under section 1124 of the Elementary and Secondary Education Act 
of 1965 is at least 18 percent of the total population aged 5 to 17 
years, inclusive, in the local educational agency. Funds made available 
as a result of applying this subsection shall be reallocated by the 
State educational agency to other eligible local educational agencies 
in the State in proportion to the distribution of other funds under 
this section.
    (c) Grants for Local Educational Agencies, the District of 
Columbia, and Puerto Rico.--
            (1) In general.--Of the funds made available for the 
        National Education Trust Fund as established under section 9512 
        of the Internal Revenue Code of 1986 in a fiscal year, seventy-
        four percent shall be made available to carry out this section. 
        The amount of the grant that a local educational agency in a 
        State or that the District of Columbia is eligible to receive 
        under this section for any fiscal year shall be the product 
        of--
                    (A) the weighted child count determined under 
                subsection (d); and
                    (B) the amount in the second sentence of 
                subparagraph 1124(a)(1) of the Elementary and Secondary 
                Education Act of 1965.
            (2) Puerto rico.--For each fiscal year, the amount of the 
        grant for which the Commonwealth of Puerto Rico is eligible 
        under this section shall be equal to the number of children 
        counted under subsection (d) for Puerto Rico, multiplied by the 
        amount determined in subparagraph 1124(a)(3) of the Elementary 
        and Secondary Education Act of 1965.
    (d) Weighted Child Count.--
            (1) In general.--The weighted child count used to determine 
        a local educational agency's allocation under this section is 
        the larger of the two amounts determined under clause (i) or 
        (ii), as follows:
                    (A) By percentage of children.--This amount is 
                determined by adding--
                            (i) the number of children determined under 
                        section 1124(c) of the Elementary and Secondary 
                        Education Act of 1965 for that local 
                        educational agency constituting up to 12.20 
                        percent, inclusive, of the local educational 
                        agency's total population aged 5 to 17, 
                        inclusive, multiplied by 1.0;
                            (ii) the number of such children 
                        constituting more than 12.20 percent, but not 
                        more than 17.70 percent, of such population, 
                        multiplied by 1.75;
                            (iii) the number of such children 
                        constituting more than 17.70 percent, but not 
                        more than 22.80 percent, of such population, 
                        multiplied by 2.5;
                            (iv) the number of such children 
                        constituting more than 22.80 percent, but not 
                        more than 29.70 percent, of such population, 
                        multiplied by 3.25; and
                            (v) the number of such children 
                        constituting more than 29.70 percent of such 
                        population, multiplied by 4.0.
                    (B) By number of children.--This amount is 
                determined by adding--
                            (i) the number of children determined under 
                        section 1124(c) of the Elementary and Secondary 
                        Education Act of 1965 constituting up to 1,917, 
                        inclusive, of the local educational agency's 
                        total population aged 5 to 17, inclusive, 
                        multiplied by 1.0;
                            (ii) the number of such children between 
                        1,918 and 5,938, inclusive, in such population, 
                        multiplied by 1.5;
                            (iii) the number of such children between 
                        5,939 and 20,199, inclusive, in such 
                        population, multiplied by 2.0;
                            (iv) the number of such children between 
                        20,200 and 77,999, inclusive, in such 
                        population, multiplied by 2.5; and
                            (v) the number of such children in excess 
                        of 77,999 in such population, multiplied by 
                        3.0.
            (2) Puerto rico.--Notwithstanding subparagraph (A), the 
        weighting factor for Puerto Rico under this paragraph shall not 
        be greater than the total number of children counted under 
        subsection 1124(c) of the Elementary and Secondary Education 
        Act of 1965 multiplied by 1.72.

SEC. 203. LOANS TO LOCAL EDUCATIONAL AGENCIES.

    (a) Eligibility of Local Educational Agencies.--A local educational 
agency in a State is eligible to receive a low interest loan, payable 
over a period not to exceed 30 years, under this section from the 
Education Trust Fund established pursuant to section 9512 of the 
Internal Revenue Code of 1986 for any fiscal year if the number of 
children in the local educational agency counted under subsection 
1124(c) of the Elementary and Secondary Education Act of 1965, before 
application of the weighting factor described in section 201(c), is at 
least 10, and if the number of children counted for grants under 
section 1124 of the Elementary and Secondary Education Act of 1965 is 
less than 18 percent of the total population aged 5 to 17 years, 
inclusive, in the local educational agency.
    (b) Loans for Local Educational Agencies, the District of Columbia, 
and Puerto Rico.--
            (1) In general.--Of the funds made available for the 
        National Education Trust Fund as established under the section 
        9512 of the Internal Revenue Code of 1986 in a fiscal year, 
        twenty-four percent shall be made available to carry out this 
        section. The amount of the loan that a local educational agency 
        in a State or that the District of Columbia is eligible to 
        receive under this section for any fiscal year shall be the 
        product of--
                    (A) the weighted child count determined under 
                section 202(c); and
                    (B) the amount in the second sentence of 
                subparagraph 1124(a)(1) of the Elementary and Secondary 
                Education Act of 1965.
            (2) Puerto rico.--For each fiscal year, the amount of the 
        grant for which the Commonwealth of Puerto Rico is eligible 
        under this section shall be equal to the number of children 
        counted under section 202(c) for Puerto Rico, multiplied by the 
        amount determined in subparagraph 1124(a)(3) of the Elementary 
        and Secondary Education Act of 1965.
    (c) Loan Repayment.--Interest for a loan received under subsection 
(a) shall be based upon administrative costs, but shall not exceed 2 
percent of the loan amount.
    (d) Distribution.--Funds made available as a result of applying 
subsection (a) shall be reallocated by the State educational agency to 
other eligible local educational agencies in the State in proportion to 
the distribution of other funds under section 201.

SEC. 204. EDUCATION COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the ``National Commission on Educational Enhancement''.
    (b) Purpose.--The purpose of the Commission is to make 
recommendations to the Secretary of Education to enhance educational 
programs for elementary and secondary school students, including 
purchasing of necessary textbooks and providing a safe physical 
environment by improving the structural soundness of school facilities.
    (c) Members.--
            (1) Appointment.--The Commission shall be composed of 9 
        members, appointed by the President with not less than two 
        individuals to represent the following groups or organizations:
                    (A) Local educational agencies.
                    (B) Teachers or principals.
                    (C) Parents.
            (2) Chairperson. The Chairperson shall be elected by the 
        members of the Commission each year.
            (3) Terms.--The term of office of a member appointed to the 
        Commission shall be for four years.
            (4) Vacancy.--A member appointed to fill a vacancy shall be 
        appointed only for the remainder of such term. A member may 
        serve after the expiration of that member's term until a 
        successor has taken office.
            (5) Appointment date.--Members of the Commission shall be 
        appointed no later than 90 days after the enactment of this 
        Act.
    (d) Basic Pay.--
            (1) Rates of pay.--Except as provided in paragraph (2), 
        each member shall be entitled to receive the daily equivalent 
        of the minimum annual rate of basic pay payable for grade GS-15 
        of the General Schedule for each day (including travel time) 
        during which they are engaged in the actual performance of 
        duties vested in the Commission.
            (2) Prohibition of compensation of federal employees.--
        Members of the Commission who are full-time officers or 
        employees of the United States or Members of Congress may not 
        receive additional pay, allowances, or benefits by reason of 
        their service on the Commission.
    (3) Travel Expenses.--Each member shall receive travel expenses, 
including per diem in lieu of subsistence, in accordance with sections 
5702 and 5703 of title 5, United States Code.
    (e) Applicability of Certain Civil Service Laws.--The Director of 
the Commission may be appointed without regard to the provisions of 
title 5, United States Code, governing appointments in the competitive 
service, and may be paid without regard to the provisions of chapter 51 
and subchapter III of chapter 53 of that title relating to 
classification and General Schedule pay rates, except that an 
individual so appointed may not receive pay in excess of the annual 
rate of basic pay payable for GS-15 of the General Schedule.
    (f) Experts and Consultants.--The Commission may procure temporary 
and intermittent services under section 3109(b) of title 5, United 
States Code, but at rates for individuals not to exceed the daily 
equivalent of the minimum annual rate of basic pay payable for GS-15 of 
the General Schedule.
    (g) Annual Report.--The Commission shall transmit an annual report 
to the Secretary of Education, President, and the Congress not later 
than one year after the date of the appointment of a majority of 
members and every succeeding year thereafter. The report shall contain 
a detailed statement of the findings and conclusions of the Commission 
and a review of how funds from the Education Trust Fund were spent.
    (h) Funds for Commission.--Of the funds made available for the 
National Education Trust Fund as established under section 9512 of the 
Internal Revenue Code of 1986, two percent may be used by the 
Commission to comply with the requirements of this section.
                                 <all>
HR 2800 IH----2