SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Infrastructure Banks for 
Schools Act of 1997''.

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 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 not equipped for the 21st 
        century.

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)).
            (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. 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 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 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 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) 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.--A project is eligible for a loan from an 
infrastructure bank if it is a project that consists of--
            (1) the construction of new elementary or secondary schools 
        to meet the needs imposed by enrollment growth;
            (2) 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;
            (3) an activity to increase physical safety at the 
        educational facility involved;
            (4) an activity to enhance the educational facility 
        involved to provide access for students, teachers, and other 
        individuals with disabilities;
            (5) an activity to address environmental hazards at the 
        educational facility involved, such as poor ventilation, indoor 
        air quality, or lighting;
            (6) the provision of basic infrastructure that facilitates 
        educational technology, such as communications outlets, 
        electrical systems, power outlets, or a communication closet;
            (7) work that will bring an educational facility into 
        conformity with the requirements of--
                    (A) 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
                    (B) hazardous waste disposal, treatment, and 
                storage requirements mandated by the Resource 
                Conservation and Recovery Act of 1976 or similar State 
                laws;
            (8) work that will enable efficient use of available energy 
        resources, especially coal, solar power, and other renewable 
        energy resources; or
            (9) work to detect, remove, or otherwise contain asbestos 
        hazards in educational facilities.
    (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 1998 through 
2002, 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 1998 and for each of the 
next 4 fiscal years.
State Infrastructure Banks for Schools Act of 1997 - Authorizes the Secretary of the Treasury to:  (1) enter into cooperative agreements with States for the establishment of State infrastructure banks and multistate infrastructure banks for making loans to local educational agencies (LEAs) for building or repairing elementary or secondary public schools; and (2) make initial capitalization grants to State and multistate infrastructure banks. 
Sets forth:  (1) conditions, including State contribution requirements, for States to meet in order to establish such infrastructure banks; (2) authorized forms of assistance to LEAs from such banks; (3) criteria for loans; and (4) qualifying projects. Declares that the contribution of Federal funds to an infrastructure bank shall not be construed as an obligation of the United States to any third party. 
Directs the Secretary of the Treasury to review the financial condition of each infrastructure bank and report to the Congress. 
Authorizes appropriations.
State Infrastructure Banks for Schools Act of 1997