PUBLIC LAW 107-147—MAR. 9, 2002 116 STAT. 43 liability under this subsection may exceed the rate of interest otherwise permitted under subclause (I); except that such rate of interest shall not exceed 120 percent of the weighted average referred to in subsection (b)(5)(B)(ii).". (2) QUARTERLY CONTRIBUTIONS.— Subsection (e) of section 302 of such Act (29 U.S.C. 1082) is amended by adding at the end the following new paragraph: "(7) SPECIAL RULES FOR 2002 AND 2004.— In any case in which the interest rate used to determine current liability is determined under subsection (d)(7)(C)(i)(III)— " (A) 2002. —For purposes of applying paragraphs (1) and (4)(B)(ii) for plan years beginning in 2002, the current liability for the preceding plan year shall be redetermined using 120 percent as the specified percentage determined under subsection (d)(7)(C)(i)(II). "(B) 2004. —For purposes of applying paragraphs (1) and (4)(B)(ii) for plan years beginning in 2004, the current liability for the preceding plan year shall be redetermined using 105 percent as the specified percentage determined under subsection (d)(7)(C)(i)(II). ". (c) PBGC—Clause (iii) of section 4006(a)(3)(E) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)(E)) is amended by adding at the end the following new subclause: "(IV) In the case of plan years beginning after December 31, Applicability. 2001, and before January 1, 2004, subclause (II) shall be applied by substituting '100 percent' for '85 percent'. Subclause (III) shall be applied for such years without regard to the preceding sentence. Any reference to this clause by any other sections or subsections shall be treated as a reference to this clause without regard to this subclause.". SEC. 406. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO ACCOUNT CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS. (a) IN GENERAL.—Section 62(a)(2) (relating to certain trade 26 USC 62. and business deductions of employees) is amended by adding at the end the following: "(D) CERTAIN EXPENSES OF ELEMENTARY AND SEC- ONDARY SCHOOL TEACHERS. —In the case of taxable years beginning during 2002 or 2003, the deductions allowed by section 162 which consist of expenses, not in excess of $250, paid or incurred by an eligible educator in connection with 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 the eligible educator in the classroom.". (b) ELIGIBLE EDUCATOR.— Section 62 is amended by adding at the end the following: "(d) DEFINITION; SPECIAL RULES. — " (1) ELIGIBLE EDUCATOR. — " (A) IN GENERAL.— For purposes of subsection (a)(2)(D), the term 'eligible educator' means, with respect to any taxable year, an individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.
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