A bill to establish State infrastructure banks for education, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investing for Tomorrow's Schools Act 
of 2005''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) According to the National Center for Education 
        Statistics, an estimated $127,000,000,000 in repairs, 
        renovations, and modernizations is needed to put schools in the 
        United States into good overall condition.
            (2) Approximately 14,000,000 United States students attend 
        schools that report the need for extensive repair or 
        replacement of 1 or more buildings.
            (3) According to a 2005 study conducted by American School 
        & University magazine, $29,088,000,000 was spent to address the 
        Nation's education infrastructure needs in 2004, with the 
        average total cost of a new high school being $27,000,000.
            (4) Academic research has proven that there is a direct 
        correlation between the condition of school facilities and 
        student achievement. At Georgetown University, researchers 
        found that students assigned to schools in poor condition could 
        be expected to have test scores that are 10.9 percentage points 
        lower than students in schools in excellent condition. Similar 
        studies demonstrated improvement of up to 20 percent in test 
        scores when students were moved from a facility in poor 
        condition to a new facility.
            (5) The Director of the Education and Employment Issues 
        division of the Government Accounting Office (currently known 
        as the Education, Workforce, and Income Security division of 
        the Government Accountability Office) testified that nearly 52 
        percent of schools, affecting 21,300,000 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 the Nation's public elementary 
        schools and secondary schools and libraries require the 
        concerted efforts of all levels of government and all sectors 
        of communities.
            (8) The United States competitive position within the world 
        economy is vulnerable if the future workforce of the United 
        States continues to be educated in schools and libraries not 
        equipped for the 21st century.
            (9) The deplorable state of collections in public school 
        libraries in the United States 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. The Nation's 
        public and school libraries play a critical role in a child's 
        early development because the libraries 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.--The Secretary of Education 
        (referred to in this Act as the ``Secretary''), after 
        consultation with the Secretary of the Treasury, may enter into 
        cooperative agreements with States under which--
                    (A) the States establish State infrastructure banks 
                and multistate infrastructure banks for the purpose of 
                providing the loans described in subparagraph (B); and
                    (B) the Secretary awards grants to States to be 
                used as initial capital for the purpose of making loans 
                through the infrastructure banks--
                            (i) to local educational agencies to enable 
                        the agencies to construct, reconstruct, or 
                        renovate elementary schools or secondary 
                        schools that provide free public education; and
                            (ii) to public libraries to enable the 
                        libraries to construct, reconstruct, or 
                        renovate library facilities.
            (2) Interstate compacts.--
                    (A) Consent.--Congress grants consent to any 2 or 
                more States, entering into a cooperative agreement 
                under paragraph (1) with the Secretary for the 
                establishment of a multistate infrastructure bank, to 
                enter into an interstate compact establishing a 
                multistate infrastructure bank in accordance with this 
                section.
                    (B) Reservation of rights.--Congress expressly 
                reserves the right to alter, amend, or repeal this 
                section and any consent granted pursuant to this 
                section.
    (b) Repayments.--Each infrastructure bank established under 
subsection (a) shall apply repayments of principal and interest on 
loans funded by the grant received under subsection (a) to the making 
of additional loans.
    (c) Infrastructure Bank Requirements.--A State establishing an 
infrastructure bank under this section shall--
            (1) contribute to the bank, from non-Federal sources, an 
        amount equal to not less than 25 percent of the amount of each 
        grant made for the bank under subsection (a);
            (2) identify as recipient of the grant an operating entity 
        of the State that has the capacity to manage loan funds, and 
        issue debt instruments of the State for purposes of leveraging 
        the funds made available through the grant or State 
        contributions under paragraph (1) related to the grant;
            (3) allow such funds to be used as reserve for debt issued 
        by the State, so long as proceeds are deposited in the 
        appropriate accounts for loan purposes;
            (4) ensure that investment income generated by funds 
        described in paragraph (2) and made available to an account of 
        the bank will be--
                    (A) credited to the account;
                    (B) available for use in providing loans for a 
                project 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 funds for projects assisted by the 
                bank;
            (5) ensure that any loan from the bank will bear interest 
        at or below the lowest interest rate being offered for bonds;
            (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 such loan will 
        not exceed 30 years after the date of the first payment on the 
        loan under paragraph (6); 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 a loan 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 a loan under subsection 
        (e).
            (2) Applications for loans.--
                    (A) In general.--A local educational agency or 
                public library desiring a loan under this section shall 
                submit to such an infrastructure bank an application 
                that includes--
                            (i) in the case of an application for a 
                        renovation project for a facility--
                                    (I) a description of each 
                                architectural, civil, structural, 
                                mechanical, or electrical deficiency to 
                                be corrected with the loan funds and 
                                the priorities to be applied in 
                                determining which deficiency to address 
                                first; and
                                    (II) a description of the criteria 
                                used by the applicant to determine the 
                                type of corrective action necessary for 
                                the renovation of the facility;
                            (ii) a description of any improvements to 
                        be made and a cost estimate for the 
                        improvements to be made with the loan;
                            (iii) a description of how work undertaken 
                        with the loan will promote energy conservation; 
                        and
                            (iv) such other information as the 
                        infrastructure bank may require.
                    (B) Timing.--An infrastructure bank shall take 
                final action on a completed application submitted to it 
                in accordance with this subsection not later than 90 
                days after the date of the submission of the 
                application.
            (3) Criteria for loans.--In considering an application for 
        a loan under this section, an infrastructure bank shall 
        consider--
                    (A) the extent to which the local educational 
                agency or public library desiring the loan would 
                otherwise lack the fiscal capacity, including the 
                ability to raise funds through the full use of bonding 
                capacity of the agency or library, to undertake the 
                project proposed in the application;
                    (B) in the case of a local educational agency, the 
                threat that the condition of the physical plant in the 
                proposed project poses to the safety and well-being of 
                students;
                    (C) the demonstrated need for the construction, 
                reconstruction, or renovation described in the 
                application, based on the condition of the facility in 
                the proposed project; and
                    (D) the age of the facility proposed to be 
                replaced, reconstructed, or renovated.
    (e) Eligible Projects.--
            (1) In general.--A project shall be eligible for a loan 
        from an infrastructure bank under this section if the project 
        consists of--
                    (A) the construction of an elementary school or 
                secondary school to meet the needs imposed by 
                enrollment growth;
                    (B) the repair or upgrading of classrooms or 
                structures related to academic learning at an 
                educational facility, including the repair of leaking 
                roofs, crumbling walls, inadequate plumbing, poor 
                ventilation equipment, or inadequate heating or 
                lighting equipment;
                    (C) an activity to increase physical safety at an 
                educational facility;
                    (D) an activity to enhance an educational facility 
                to provide access for students, teachers, and other 
                individuals (such as staff and parents) who are 
                individuals with disabilities;
                    (E) an activity to address environmental hazards at 
                an educational facility, 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, at an educational 
                facility;
                    (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 treatment, storage, 
                        and disposal requirements mandated under the 
                        Solid Waste Disposal Act (42 U.S.C. 6901 et 
                        seq.) or similar State laws;
                    (H) work that will enable efficient use of 
                available energy resources at an educational facility;
                    (I) work to detect, remove, or otherwise contain 
                asbestos hazards in an educational facility; or
                    (J) work to construct public library facilities or 
                repair or upgrade public library facilities.
            (2) Davis-bacon.--The wage requirements of subchapter IV of 
        chapter 31 of title 40, United States Code 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 to carry out school or library construction, 
reconstruction, or renovation (including repair).
    (g) Limitation on Repayments.--Notwithstanding any other provision 
of law, if an infrastructure bank makes a loan under this section with 
funds made available through a grant awarded to a State under 
subsection (a), the funds used to repay the loan may not be credited 
toward the contribution required for the State under subsection (c)(1) 
for a subsequent grant awarded under subsection (c).
    (h) Secretarial Requirements.--In administering this section, the 
Secretary 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 
to 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) Income Attributable to Interest.--The income attributable to 
interest described in subsection (c)(5) shall be exempt from Federal 
taxation.
    (k) Management of Federal Funds.--Sections 3335 and 6503 of title 
31, United States Code, shall not apply to funds contributed under this 
section.
    (l) Program Administration.--A State may expend an amount not to 
exceed 2 percent of the grant funds contributed to an infrastructure 
bank established by a State or States under this section to pay the 
reasonable costs of administering the infrastructure bank.
    (m) Secretarial Review and Report.--The Secretary shall--
            (1) review the financial condition of each infrastructure 
        bank established under this section; and
            (2) transmit to Congress a report on the results of such 
        review not later than 90 days after the completion of the 
        review.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Elementary school, free public education, and secondary 
        school.--The terms ``elementary school'', ``free public 
        education'', and ``secondary school'' have the meanings given 
        the terms in section 9101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 7801).
            (2) Local educational agency.--The term ``local educational 
        agency'' has the meaning given the term in section 9101 of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801) 
        and includes a public charter school that operates as a local 
        educational agency of the State in which the school is located.
            (3) Outlying area.--The term ``outlying area'' means the 
        United States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, the Republic of 
        the Marshall Islands, the Federated States of Micronesia, and 
        the Republic of Palau.
            (4) Public library.--The term ``public library''--
                    (A) means a library that serves, free of charge, 
                all residents of a community, district, or region, and 
                receives its financial support in whole or in part from 
                public funds; and
                    (B) includes a research library, which, for 
                purposes of this subparagraph, means a library that--
                            (i) makes its services available to the 
                        public free of charge;
                            (ii) has extensive collections of books, 
                        manuscripts, and other materials suitable for 
                        scholarly research that are not available to 
                        the public through public libraries;
                            (iii) engages in the dissemination of 
                        humanistic knowledge through the provision of 
                        services to readers, fellowships, educational 
                        and cultural programs, publication of 
                        significant research, and other activities; and
                            (iv) is not an integral part of an 
                        institution of higher education (as defined in 
                        section 101(a) of the Higher Education Act of 
                        1965 (20 U.S.C. 1001(a)).
            (5) State.--The term ``State'' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, and 
        each of the outlying areas.

Summary: Investing for Tomorrow's Schools Act of 2005 - Authorizes the Secretary of Education to enter into cooperative agreements with states to establish state and multistate infrastructure banks for education. Provides, under such agreements, that the Secretary will award grants to states for initial capital to make loans through such banks to local educational agencies and public libraries for construction, reconstruction, or renovation of public elementary or secondary schools and public library facilities. Grants congressional consent to states to enter into an interstate compact to establish a multistate infrastructure bank through such an agreement with the Secretary. Includes among infrastructure bank requirements that states contribute from nonfederal sources at least 25 of the amount of the federal grant. Lists types of projects eligible to be funded by such bank loans. Applies Davis-Bacon Act wage requirements with respect to individuals employed on such projects.