Archived Information

+-----------------------------------------------------------------------+
| ####                                                                  |
|                                                                       |
| #### THE ADMINISTRATION'S PLAN TO MODERNIZE AMERICA'S SCHOOLS         |
|                                                                       |
| ### July 26, 2000                                                     |
+-----------------------------------------------------------------------+

Students can't be expected to reach high standards in substandard school
buildings. After years of deferred maintenance and growing enrollments,
a significant new investment is needed to prepare our school facilities
for the 21^st^ century. Half of our public schools need repairs totaling
\$127 billion, according to a recent U.S. Department of Education
report. To help communities nationwide modernize their schools,
President Clinton has called on Congress to pass his school construction
proposals: \$25 Billion in School Modernization Bonds and \$6.5 Billion
in Urgent School Renovation Loans and Grants.

# \$25 BILLION IN SCHOOL MODERNIZATION BONDS. In the U.S. House of Representatives, Reps. Charles Rangel (D-NY) and Nancy Johnson (R-CT) introduced bipartisan legislation (H.R. 4094) based on the President's proposal. In the Senate, Sen. Charles Robb has introduced a similar bill. The Johnson-Rangel America's Better Classrooms Act now has 224 co-sponsors --- more than half the members of the U.S. House of Representatives. The proposal would create \$24.8 billion in school construction bonds that would be interest-free for school districts and would help modernize 6,000 schools nationwide.

-   **How School Modernization Bonds Work.** Bondholders would receive
    federal tax credits rather than interest payments from school
    districts, allowing districts to borrow interest-free for school
    construction. A similar mechanism has been used successfully for
    Qualified Zone Academy Bonds (QZABs). Districts could use these
    15-year bonds to modernize existing schools as well as build new
    ones. The proposal would cost \$2.4 billion over five years. The
    bill's innovative financing mechanism is a cost-effective approach
    to leveraging local construction that avoids a new bureaucracy. All
    decisions regarding which schools to build or repair would be left
    to states and local school districts.

-   **How Bonds Would Be Allocated.** Of the \$24.8 billion in school
    construction bonding authority: \$2.4 billion would be allocated to
    expand the existing Qualified Zone Academy Bonds program, \$400
    million to Bureau of Indian Affairs schools, \$13.2 billion to
    states based on enrollment, and \$8.8 billion to the 125 school
    districts with the largest number of low-income children.

**LOANS AND GRANTS FOR URGENT REPAIRS.** President Clinton proposed a
\$1.3 billion initiative to make \$6.7 billion in grants and
interest-free loans for emergency repairs at 5,000 schools a year. Sen.
Harkin and Rep. Clay have introduced urgent school repair legislation.

-   **A Five-Year Effort to Help 25,000 Schools.** Over five years, the
    initiative would help 25,000 schools --- more than one-fourth of all
    schools --- repair roofs, heating and cooling systems, and
    electrical wiring. These repairs can help make schools safer and
    more energy efficient, as well as improve access to technology.

```{=html}
<!-- -->
```
-   **Complements School Modernization Bonds.** Urgent School Renovation
    loans and grants would complement School Modernization Bonds
    proposal, including the bipartisan bill introduced by Reps. Johnson
    and Rangel that now has 224 co-sponsors. School Modernization bonds
    would fund major renovation projects and new buildings, while loans
    and grants would be available faster and with a financing structure
    that is better suited to repair projects.

```{=html}
<!-- -->
```
-   **Targets Funds to Meet Need.** Of the \$1.3 billion in renovation
    funds:

```{=html}
<!-- -->
```
-   \$125 million in grants would be provided to other high-need school
    districts with little or no capacity to borrow money for emergency
    repairs. The smaller grant program would provide direct funding to
    the neediest school districts unable to finance the capital
    expenditures associated with school renovation;

-   \$50 million in grants would fund repairs and construction at school
    districts where half or more of students live on Indian lands;

-   The remaining \$1,125 million would fund \$6.5 billion in
    interest-free, seven-year loans.