Statement of Legislative Purpose

Teachers traditionally spend their own money on various supplies (e.g. bulletin board materials, books, pencils, crayons and markers). Although these expenses are deductible as unreimbursed business expenses on a teacher’s income tax return, election of the standard deduction meant that most teachers bore the entire cost of these generous expenditures. The United States Congress recognized the plight of teachers and effective tax year 2002 allowed a deduction of Two Hundred-Fifty Dollars ($250.00) from the adjusted gross income (see line 23, Internal Revenue Service (‘IRS’) Form 1040 for 2004) thereby allowing all teachers and other educators to deduct qualified expenses even if the educator did not itemize deductions. While the Two Hundred-Fifty Dollars ($250.00) tax deduction may be sufficient for teachers in some areas, it is woefully inadequate for many teachers teaching in the Guam public school system. Because of several years of chronic under-funding, public school educators have, for several years, responded to the needs of their students by spending their own money on what are denominated qualified expenses in this Act. Furthermore, educators in Guam’s private schools are faced with the same conditions, thereby finding it necessary to spend their own private funds to provide supplies and materials cited as qualified expenses in this Act. Given the state of Guam’s economy it is almost a certainty that COL 110609 CH. 43 EDUCATION APPRECIATION ACT educators will continue to attempt to meet the needs of their students by spending their own money. This Act allows educators to claim a tax rebate to recover up to Five Hundred Dollars ($500.00) of personal expenditures over and above the Two Hundred-Fifty Dollar ($250.00) deduction allowed by the Internal Revenue Code (‘IRC’). This Act adopts much of the operative language of §62 of the Internal Revenue Code (‘IRC’) thereby making the various instructions, pamphlets and other papers issued by the Internal Revenue Service (‘IRS’) available for the interpretation of this Act, e.g. expenses deductible at line 23 of Internal Revenue Service (‘IRS’) Form 1040 are subject to rebate under this Act to the extent they exceed the Two Hundred-Fifty Dollar ($250.00) deduction. GEDA Qualifying Certificates have been issued to businesses, allowing them tax rebates for nearly forty

(40)years and have fostered much economic development. This Act extends the functional equivalent of the Qualifying Certificate (the Educator’s Qualifying Certificate or ‘EQC’) and tax rebate, on a much smaller scale, to teachers. While this rebate is insufficient to make up for the economic hardship suffered by teachers, it is one way for this community to show its appreciation to its educators.