HR 1648 IH

To establish State infrastructure banks for education.

April 29, 1999

Mrs. TAUSCHER (for herself, Mr. BOEHLERT, Mr. BROWN of California, Mrs. CHRISTENSEN, Mr. CONDIT, Mr. CONYERS, Mr. CROWLEY, Mr. CUMMINGS, Mr. DEFAZIO, Mr. DINGELL, Mr. DOOLEY of California, Mr. ETHERIDGE, Mr. FILNER, Mr. FROST, Mr. GILCHREST, Mr. GREEN of Texas, Mr. HOLDEN, Mr. KUCINICH, Mr. LAMPSON, Mr. LEWIS of Georgia, Ms. LOFGREN, Mr. MARTINEZ, Mr. MCGOVERN, Mr. MCINTYRE, Mr. MORAN of Virginia, Mr. PAYNE, Ms. PELOSI, Mr. ROEMER, Mr. SHERMAN, Mr. SHOWS, Ms. STABENOW, Mr. STARK, Mr. TIERNEY, and Mr. WEINER) introduced the following bill; which was referred to the Committee on Education and the Workforce

To establish State infrastructure banks for education.

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 `State Infrastructure Banks for Schools Act of 1999'.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) According to a 1996 study conducted by the American School & University, $10.42 billion was spent to address the Nation's education infrastructure needs in 1995, with the average total cost of a new high school at $15.4 million.

(2) According to a 1995 report to Congress by the General Accounting Office, an estimated $112 billion in school repair, modernization, expansion, and construction is needed.

(3) Approximately 14 million American students attend schools which report the need for extensive repair or replacement of one or more buildings.

(4) Academic research has proven a direct correlation between the condition of school facilities and student achievement. At Georgetown University, researchers found that students assigned to schools in poor conditions can be expected to fall 10.9 percentage points behind those in buildings in excellent condition. Similar studies have demonstrated up to a 20 percent improvement in test scores when students were moved from a poor facility to a new facility.

(5) The Director of Education and Employment Issues at the Government Accounting Office testified that nearly 52 percent of schools, affecting 21.3 million students, reported insufficient technology elements for 6 or more areas.

(6) Large numbers of local educational agencies have difficulties securing financing for school facility improvement.

(7) The challenges facing our Nation's public elementary and secondary schools and libraries require the concerted efforts of all levels of government and all sectors of the community.

(8) The United States's competitive position within the world economy is vulnerable if America's future workforce continues to be educated in schools and libraries not equipped for the 21st century.

(9) The deplorable state of collections in America's public school libraries has increased the demands on public libraries. In many instances, public libraries substitute for school libraries creating a higher demand for material and physical space to house literature and educational computer equipment.

(10) Research shows that 50 percent of a child's intellectual development takes place before age 4. Our nation's public and school libraries play a critical role in a child's early development because they provide a wealth of books and other resources that can give every child a head start on life and learning.

SEC. 3. STATE INFRASTRUCTURE BANK PILOT PROGRAM.

(a) ESTABLISHMENT-

(1) COOPERATIVE AGREEMENTS- Subject to the provisions of this section, the Secretary of the Treasury, in consultation with the Secretary of Education, may enter into cooperative agreements with States for the establishment of State infrastructure banks and multistate infrastructure banks for making loans to local educational agencies for building or repairing elementary or secondary schools which provide free public education (as such terms are defined in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)) and to public libraries for building or repairing library facilities.

(2) INTERSTATE COMPACTS- Congress grants consent to 2 or more of the States, entering into a cooperative agreement under paragraph (1) with the Secretary of the Treasury for the establishment of a multistate infrastructure bank, to enter into an interstate compact establishing such bank in accordance with this section.

(b) FUNDING- The Secretary of the Treasury, in consultation with the Secretary of Education, shall make grants to State infrastructure banks and multistate infrastructure banks in a State in a cooperative agreement under subsection (a)(1) to provide initial capital for loans provided under this section to local educational agencies and public libraries. Each bank shall apply repayments of principal and interest on loans to the making of additional loans. The Secretary shall take final action on an application for a grant under this subsection within 90 days of the date of the submittal of such application.

(c) INFRASTRUCTURE BANK REQUIREMENTS- In order to establish an infrastructure bank under this section, each State establishing the bank shall--

(1) contribute, at a minimum, in each account of the bank from non-Federal sources an amount equal to 25 percent of the amount of each capitalization grant made to the State and contributed to the bank under subsection (b);

(2) identify an operating entity of the State as recipient of the grant if the entity has the capacity to manage loan funds and issue debt instruments of the State for purposes of leveraging the funds;

(3) allow such funds to be used as reserve for debt issued by the State so long as proceeds are deposited in the fund for loan purposes;

(4) ensure that investment income generated by funds contributed to an account of the bank will be--

(A) credited to the account;

(B) available for use in providing loans to projects eligible for assistance from the account; and

(C) invested in United States Treasury securities, bank deposits, or such other financing instruments as the Secretary may approve to earn interest to enhance the leveraging of projects assisted by the bank;

(5) ensure that any loan from the bank will bear interest at or below the lowest interest rates being offered for bonds the income from which is exempt from Federal taxation, as determined by the State, to make the project that is the subject of the loan feasible;

(6) ensure that repayment of any loan from the bank will commence not later than 1 year after the project has been completed.

(7) ensure that the term for repaying any loan will not exceed 30 years after the date of the first payment on the loan under paragraph (5); and

(8) require the bank to make an annual report to the Secretary on its status and make such other reports as the Secretary may require by guidelines.

(d) FORMS OF ASSISTANCE FROM INFRASTRUCTURE BANKS-

(1) IN GENERAL- An infrastructure bank established under this section may make loans to a local educational agency or a public library in an amount equal to all or part of the cost of carrying out a project eligible for assistance under this section.

(2) APPLICATIONS FOR LOANS- An application to an infrastructure bank by a local educational agency or a public library for a loan shall include--

(A) in the case of a renovation project, a description of each architectural, civil, structural, mechanical, or electrical deficiency to be corrected with funds under a loan and the priorities to be applied;

(B) a description of the criteria used by the applicant to determine the type of corrective action necessary for the renovation of a facility;

(C) a description of improvements to be made and a cost estimate for the improvements;

(D) a description of how work undertaken with the loan will promote energy conservation; and

(E) such other information as the infrastructure bank may require.

An infrastructure bank shall take final action on a completed application submitted to it within 90 days after the date of its submittal.

(3) CRITERIA FOR LOANS- In considering applications for a loan an infrastructure bank shall consider--

(A) the extent to which the local educational agency or public library involved lacks the fiscal capacity, including the ability to raise funds through the full use of such agency's bonding capacity and otherwise, to undertake the project for which the loan would be used without the loan;

(B) in the case of a local educational agency, the threat that the condition of the physical plant in the project poses to the safety and well-being of students;

(C) the demonstrated need for the construction, reconstruction, or renovation based on the condition of the facility in the project; and

(D) the age of such facility.

(e) QUALIFYING PROJECTS-

(1) IN GENERAL- A project is eligible for a loan from an infrastructure bank if it is a project that consists of--

(A) the construction of new elementary or secondary schools to meet the needs imposed by enrollment growth;

(B) the repair or upgrading of classrooms or structures related to academic learning, including the repair of leaking roofs, crumbling walls, inadequate plumbing, poor ventilation equipment, and inadequate heating or light equipment;

(C) an activity to increase physical safety at the educational facility involved;

(D) an activity to enhance the educational facility involved to provide access for students, teachers, and other individuals with disabilities;

(E) an activity to address environmental hazards at the educational facility involved, such as poor ventilation, indoor air quality, or lighting;

(F) the provision of basic infrastructure that facilitates educational technology, such as communications outlets, electrical systems, power outlets, or a communication closet;

(G) work that will bring an educational facility into conformity with the requirements of--

(i) environmental protection or health and safety programs mandated by Federal, State, or local law if such requirements were not in effect when the facility was initially constructed; and

(ii) hazardous waste disposal, treatment, and storage requirements mandated by the Resource Conservation and Recovery Act of 1976 or similar State laws;

(H) work that will enable efficient use of available energy resources, especially coal, solar power, and other renewable energy resources;

(I) work to detect, remove, or otherwise contain asbestos hazards in educational facilities; or

(J) work to construct new public library facilities or repair or upgrade existing public library facilities.

(2) DAVIS-BACON- The wage requirements of the Act of March 3, 1931 (referred to as the `Davis-Bacon Act', 40 U.S.C. 276a et seq.) shall apply with respect to individuals employed on the projects described in paragraph (1).

(f) SUPPLEMENTATION- Any loan made by an infrastructure bank shall be used to supplement and not supplant other Federal, State, and local funds available.

(g) LIMITATION ON REPAYMENTS- Notwithstanding any other provision of law, the repayment of a loan from an infrastructure bank under this section may not be credited towards the non-Federal share of the cost of any project.

(h) SECRETARIAL REQUIREMENTS- In administering this section, the Secretary of the Treasury shall specify procedures and guidelines for establishing, operating, and providing assistance from an infrastructure bank.

(i) UNITED STATES NOT OBLIGATED- The contribution of Federal funds into an infrastructure bank established under this section shall not be construed as a commitment, guarantee, or obligation on the part of the United States to any third party, nor shall any third party have any right against the United States for payment solely by virtue of the contribution. Any security or debt financing instrument issued by the infrastructure bank shall expressly state that the security or instrument does not constitute a commitment, guarantee, or obligation of the United States.

(j) MANAGEMENT OF FEDERAL FUNDS- Sections 3335 and 6503 of title 31, United States Code, shall not apply to funds contributed under this section.

(k) PROGRAM ADMINISTRATION- For each of fiscal years 2000 through 2004, a State may expend not to exceed 2 percent of the Federal funds contributed to an infrastructure bank established by the State under this section to pay the reasonable costs of administering the bank.

(l) SECRETARIAL REVIEW- The Secretary of the Treasury shall review the financial condition of each infrastructure bank established under this section and transmit to Congress a report on the results of such review not later than 90 days after the completion of the review.

(m) AUTHORIZATION OF APPROPRIATIONS- For grants to States for the initial capitalization of infrastructure banks there are authorized to be appropriated $250,000,000 for fiscal year 2000 and for each of the next 4 fiscal years.

END