HR 1767 IH

To amend the Elementary and Secondary Education Act of 1965 to provide for the allocation of any limitation imposed on school construction bonds with respect to which the holders are allowed a credit under the Internal Revenue Code of 1986, and to apply the wage requirements of the Davis-Bacon Act to projects financed with such bonds.

May 12, 1999

Mr. ANDREWS introduced the following bill; which was referred to the Committee on Education and the Workforce

To amend the Elementary and Secondary Education Act of 1965 to provide for the allocation of any limitation imposed on school construction bonds with respect to which the holders are allowed a credit under the Internal Revenue Code of 1986, and to apply the wage requirements of the Davis-Bacon Act to projects financed with such bonds.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. ALLOCATION OF NATIONAL LIMITATION ON QUALIFIED SCHOOL CONSTRUCTION BONDS; APPLICATION OF DAVIS-BACON ACT TO PROJECTS FINANCED WITH BONDS.

(a) IN GENERAL- Title XII of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8501 et seq.) is amended--

(1) by redesignating sections 12004 through 12013 as sections 12101 through 12110, respectively;

(2) by inserting before section 12101 (as so redesignated) the following:

`PART A--GRANTS FOR IMPROVEMENT OF PUBLIC ELEMENTARY AND SECONDARY EDUCATION FACILITIES';

and

(3) by adding at the end the following:

`PART B--QUALIFIED SCHOOL CONSTRUCTION BONDS

`SEC. 12201. ALLOCATION WITH RESPECT TO QUALIFIED SCHOOL CONSTRUCTION BONDS.

`(a) QUALIFIED SCHOOL CONSTRUCTION BOND-

`(1) IN GENERAL- For purposes of this part, the term `qualified school construction bond' means any bond issued as part of an issue if--

`(A) a taxpayer who holds the bond is allowed a credit under the Internal Revenue Code of 1986;

`(B) 95 percent or more of the proceeds of such issue are to be used for the construction, rehabilitation, or repair of a public school facility;

`(C) the bond is issued by a State or local government within the jurisdiction of which such school is located; and

`(D) the issuer designates such bond for purposes of this section and the Internal Revenue Code of 1986.

`(2) TEMPORARY PERIOD EXCEPTION- A bond shall not be treated as failing to meet the requirement of paragraph (1)(B) solely by reason of the fact that the proceeds of the issue of which such bond is a part are invested for a reasonable temporary period (but not more than 36 months) until such proceeds are needed for the purpose for which such issue was issued. Any earnings on such proceeds during such period shall be treated as proceeds of the issue for purposes of applying paragraph (1)(B).

`(b) NATIONAL LIMITATION ON AMOUNT OF BONDS DESIGNATED- In any case in which there is imposed a national limitation on the maximum aggregate face amount of bonds issued during any calendar year which may be designated as qualified school construction bonds, such limitation shall be allocated in accordance with this section.

`(c) ONE-THIRD OF LIMITATION ALLOCATED AMONG STATES-

`(1) IN GENERAL- One-third of the limitation applicable under subsection (b) for any calendar year shall be allocated among the States under paragraph (2) by the Secretary. The limitation amount allocated to a State under the preceding sentence shall be allocated by the State educational agency to issuers within such State and such allocations may be made only if there is an approved State application.

`(2) ALLOCATION FORMULA- The amount to be allocated under paragraph (1) for any calendar year shall be allocated among the States in proportion to the respective amounts each such State received for Basic Grants under subpart 2 of part A of title I of this Act for the most recent fiscal year ending before such calendar year. For purposes of the preceding sentence, Basic Grants attributable to large local educational agencies (as defined in subsection (d)), and Basic Grants attributable to high-growth local educational agencies (as defined in subsection (e)), shall be disregarded.

`(3) MINIMUM ALLOCATIONS TO STATES-

`(A) IN GENERAL- The Secretary shall adjust the allocations under this subsection for any calendar year for each State to the extent necessary to ensure that the sum of--

`(i) the amount allocated to such State under this subsection for such year; and

`(ii) the aggregate amounts allocated under subsections (d) and (e) to local educational agencies in such State for such year;

is not less than an amount equal to such State's minimum percentage of one-third of the national qualified school construction bond limitation referred to in subsection (b) for the calendar year.

`(B) MINIMUM PERCENTAGE- A State's minimum percentage for any calendar year is the minimum percentage described in section 1124(d) for such State for the most recent fiscal year ending before such calendar year.

`(4) ALLOCATIONS TO CERTAIN POSSESSIONS- The amount to be allocated under paragraph (1) to any possession of the United States (as such term is used in the Internal Revenue Code of 1986) other than Puerto Rico shall be the amount which would have been allocated if all allocations under paragraph (1) were made on the basis of respective populations of individuals below the poverty line (as defined by the Office of Management and Budget). In making other allocations, the amount to be allocated under paragraph (1) shall be reduced by the aggregate amount allocated under this paragraph to possessions of the United States.

`(5) APPROVED STATE APPLICATION- For purposes of paragraph (1), the term `approved State application' means an application which is approved by the Secretary and which includes--

`(A) the results of a recent publicly available survey (undertaken by the State with the involvement of local education officials, members of the public, and experts in school construction and management) of such State's needs for public school facilities, including descriptions of--

`(i) health and safety problems at such facilities;

`(ii) the capacity of public schools in the State to house projected enrollments; and

`(iii) the extent to which the public schools in the State offer the physical infrastructure needed to provide a high-quality education to all students; and

`(B) a description of how the State will allocate to local educational agencies, or otherwise use, its allocation under this subsection to address the needs identified under subparagraph (A), including a description of how it will--

`(i) give highest priority to localities with the greatest needs, as demonstrated by inadequate school facilities coupled with a low level of resources to meet those needs;

`(ii) use its allocation under this subsection to assist localities that lack the fiscal capacity to issue bonds on their own; and

`(iii) ensure that its allocation under this subsection is used only to supplement, and not supplant, the amount of school construction, rehabilitation, and repair in the State that would have occurred in the absence of such allocation.

Any allocation under paragraph (1) by a State education agency shall be binding if such agency reasonably determined that the allocation was in accordance with the plan approved under this paragraph.

`(d) ONE-THIRD OF LIMITATION ALLOCATED AMONG LARGEST SCHOOL DISTRICTS-

`(1) IN GENERAL- One-third of the limitation applicable under subsection (b) for any calendar year shall be allocated under paragraph (2) by the Secretary among local educational agencies which are large local educational agencies for such year. No qualified school construction bond may be issued by reason of an allocation to a large local educational agency under the preceding sentence unless such agency has an approved local application.

`(2) ALLOCATION FORMULA- The amount to be allocated under paragraph (1) for any calendar

year shall be allocated among large local educational agencies in proportion to the respective amounts each such agency received for Basic Grants under subpart 2 of part A of title I of this Act for the most recent fiscal year ending before such calendar year.

`(3) LARGE LOCAL EDUCATIONAL AGENCY- For purposes of this section, the term `large local educational agency' means, with respect to a calendar year, any local educational agency (other than a high-growth local educational agency, as defined in subsection (e)) if such agency is--

`(A) among the 100 local educational agencies with the largest numbers of children aged 5 through 17 from families living below the poverty level, as determined by the Secretary using the most recent data available from the Department of Commerce that are satisfactory to the Secretary; or

`(B) 1 of not more than 25 local educational agencies (other than those described in clause (i)) that the Secretary determines (based on the most recent data available satisfactory to the Secretary) are in particular need of assistance, based on a low level of resources for school construction, a high level of enrollment growth, or such other factors as the Secretary deems appropriate.

`(4) APPROVED LOCAL APPLICATION- For purposes of paragraph (1), the term `approved local application' means an application which is approved by the Secretary and which includes--

`(A) the results of a recent publicly-available survey (undertaken by the local educational agency with the involvement of school officials, members of the public, and experts in school construction and management) of such agency's needs for public school facilities, including descriptions of--

`(i) the overall condition of the local educational agency's school facilities, including health and safety problems;

`(ii) the capacity of the agency's schools to house projected enrollments; and

`(iii) the extent to which the agency's schools offer the physical infrastructure needed to provide a high-quality education to all students;

`(B) a description of how the local educational agency will use its allocation under this subsection to address the needs identified under subparagraph (A); and

`(C) a description of how the local educational agency will ensure that its allocation under this subsection is used only to supplement, and not supplant, the amount of school construction, rehabilitation, or repair in the locality that would have occurred in the absence of such allocation.

A rule similar to the rule of the last sentence of subsection (c)(5) shall apply for purposes of this subsection.

`(e) ONE-THIRD OF LIMITATION ALLOCATED AMONG HIGH-GROWTH SCHOOL DISTRICTS-

`(1) IN GENERAL- One-third of the limitation applicable under subsection (b) for any calendar year shall be allocated under paragraph (2) by the Secretary among local educational agencies which are high-growth local educational agencies for such year. No qualified school construction bond may be issued by reason of an allocation to a high-growth local educational agency under the preceding sentence unless such agency has an approved local application (as defined in subsection (d)(4)). A rule similar to the rule of the last sentence of subsection (c)(5) shall apply for purposes of this subsection.

`(2) ALLOCATION FORMULA- The amount to be allocated under paragraph (1) for any calendar year shall be allocated among high-growth local educational agencies in proportion to the respective amounts each such agency received for Basic Grants under subpart 2 of part A of title I of this Act for the most recent fiscal year ending before such calendar year.

`(3) HIGH-GROWTH LOCAL EDUCATIONAL AGENCY- For purposes of this section, the term `high-growth local educational agency' means, with respect to a calendar year, any local educational agency if--

`(A) there has been at least a 7.5 percent increase in such agency's enrollment during the 5-year period ending with the preceding calendar year; and

`(B) such enrollment increase exceeds 150 students.

`(f) CARRYOVER OF UNUSED LIMITATION- If for any calendar year--

`(1) the amount allocated under subsection (c) to any State; exceeds

`(2) the amount of bonds issued during such year which are designated as qualified school construction bonds pursuant to such allocation;

the limitation amount under such subsection for such State for the following calendar year shall be increased by the amount of such excess. A similar rule shall apply to the amounts allocated under subsections (d) and (e).

`(g) OTHER DEFINITIONS- For purposes of this section:

`(1) LOCAL EDUCATIONAL AGENCY- The term `local educational agency' has the meaning given to such term by section 14101. Such term includes the local educational agency that serves the District of Columbia but does not include any other State agency.

`(2) BOND- The term `bond' includes any obligation.

`(3) PUBLIC SCHOOL FACILITY- The term `public school facility' shall not include any stadium or other facility primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public.

`SEC. 12202. APPLICATION OF DAVIS-BACON ACT TO PROJECTS FINANCED WITH QUALIFIED SCHOOL CONSTRUCTION BONDS.

`The wage requirements of the Act of March 3, 1931 (40 U.S.C. 276a et seq.) (commonly referred to as the `Davis-Bacon Act') shall apply with respect to individuals employed on school construction, rehabilitation, or repair projects financed with the proceeds from an issuance of qualified school construction bonds.'.

(b) CONFORMING AMENDMENTS- Title XII of such Act is amended--

(1) in sections 12101 through 12110 (as so redesignated), by striking `this title' each place it appears and inserting `this part';

(2) in section 12101(a)(1) (as so redesignated)--

(A) by striking `section 12013' and inserting `section 12110';

(B) by striking `section 12005' and inserting `section 12102'; and

(C) by striking `section 12007' and inserting `section 12104';

(3) in section 12101(a)(2) (as so redesignated), by striking `section 12013' and inserting `section 12110'; and

(4) in section 12109(3)(C) (as so redesignated), by striking `section 12006' and inserting `section 12103'.

END