I 

108TH CONGRESS 

1ST SESSION H. R. 1844

To establish State revolving funds for school construction. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 29, 2003

Mr. ANDREWS introduced the following bill; which was referred to the 

Committee on Education and the Workforce 

A BILL

To establish State revolving funds for school construction.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘State Revolving Funds 

5 for Schools Act’’. 

6 SEC. 2. STATE REVOLVING FUND PILOT PROGRAM. 

7 (a) ESTABLISHMENT.—

8 (1) COOPERATIVE AGREEMENTS.—Subject to 

9 the provisions of this section, the Secretary of Edu10 cation may enter into cooperative agreements with 

11 States for the establishment of State revolving funds 

12 and multistate revolving funds for making loans to 
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1 local political subdivisions or local educational agen2 cies for building or repairing elementary or sec3 ondary schools which provide free public education. 

4 (2) INTERSTATE COMPACTS.—2 or more States 

5 may enter into a cooperative agreement under para6 graph (1) with the Secretary for the establishment 

7 of a multistate revolving fund, to enter into an inter8 state compact establishing such fund in accordance 

9 with this section. 

10 (b) FUNDING.—The Secretary shall make grants to 

11 State revolving funds and multistate revolving funds in a 

12 State in a cooperative agreement under subsection (a)(1) 

13 to provide initial capital for loans provided under this sec14 tion to local political subdivisions or local educational 

15 agencies. Each fund shall apply repayments of principal 

16 and interest on loans to the making of additional loans. 

17 The Secretary shall take final action on an application for 

18 a grant under this subsection within 90 days of the date 

19 of the submittal of such application. 

20 (c) REVOLVING FUND REQUIREMENTS.—In order to 

21 establish a revolving fund under this section, each State 

22 establishing the fund shall—

23 (1) meet the matching requirement described in 

24 subsection (d); 
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1 (2) identify an operating entity of the State as 

2 recipient of the grant if the entity has the capacity 

3 to manage loan funds; 

4 (3) allow such funds to be used as reserve for 

5 debt issued by the State so long as proceeds are de6 posited in the fund for loan purposes; 

7 (4) ensure that investment income generated by 

8 funds contributed to an account of the fund will 

9 be—

10 (A) credited to the account; 

11 (B) available for use in providing loans to 

12 projects eligible for assistance from the account; 

13 and 

14 (C) invested in United States Treasury se15 curities, bank deposits, or such other financing 

16 instruments as the Secretary may approve to 

17 earn interest to enhance the leveraging of 

18 projects assisted by the fund; 

19 (5) ensure that any loan from the fund will 

20 bear interest at or below the lowest interest rates 

21 being offered for bonds the income from which is ex22 empt from Federal taxation, as determined by the 

23 State; 
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1 (6) ensure that repayment of any loan from the 

2 fund will commence not later than 1 year after the 

3 project has been completed; 

4 (7) ensure that the term for repaying any loan 

5 will not exceed the projected useful life of the project 

6 that is the subject of the loan; and 

7 (8) require the fund to make an annual report 

8 to the Secretary on its status and make such other 

9 reports as the Secretary may require by guidelines. 

10 (d) MATCHING REQUIREMENT.—In order to meet the 

11 matching requirement, each State establishing a revolving 

12 fund shall—

13 (1) contribute, at a minimum, in each account 

14 of the fund from non-Federal sources an amount 

15 equal to 25 percent of the amount of each capitaliza16 tion grant made to the State and contributed to the 

17 fund under subsection (b); or 

18 (2) require for any project financed from the 

19 fund that the local political subdivision or edu20 cational agency contribute at least 20 percent of the 

21 cost of such project from non-Federal sources.

22 (e) FORMS OF ASSISTANCE FROM REVOLVING

23 FUNDS.—

24 (1) IN GENERAL.—A revolving fund established 

25 under this section may make loans to a local edu-
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1 cational agency in an amount equal to all or part of 

2 the cost of carrying out a project eligible for assist3 ance under this section. In the case of a project 

4 which meets the requirement of subsection (d)(2), a 

5 revolving fund established under this section may 

6 make loans to a local educational agency in an 

7 amount equal to up to 80 percent of the cost of car8 rying out a project eligible for assistance under this 

9 section. 

10 (2) APPLICATIONS FOR LOANS.—An application 

11 to a revolving fund by a local educational agency for 

12 a loan shall include—

13 (A) in the case of a renovation project, a 

14 description of each architectural, civil, struc15 tural, mechanical, or electrical deficiency to be 

16 corrected with funds under a loan and the pri17 orities to be applied; 

18 (B) a description of the criteria used by 

19 the applicant to determine the type of corrective 

20 action necessary for the renovation of a facility;

21 (C) a description of improvements to be 

22 made and a cost estimate for the improvements; 

23 and 

24 (D) such other information as the revolv25 ing fund may require. 
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1 A revolving fund shall take final action on a com2 pleted application submitted to it within 90 days 

3 after the date of its submittal. 

4 (3) CRITERIA FOR LOANS.—In considering ap5 plications for a loan, a revolving fund shall con6 sider—

7 (A) the extent to which the local edu8 cational agency involved lacks the fiscal capac9 ity, including the ability to raise funds through 

10 the full use of such agency’s bonding capacity 

11 and otherwise, to undertake the project for 

12 which the loan would be used without the loan; 

13 (B) the threat that the condition of the 

14 physical plant in the project poses to the safety 

15 and well-being of students; 

16 (C) the demonstrated need for the con17 struction, reconstruction, or renovation based 

18 on the condition of the facility in the project; 

19 and 

20 (D) the age of such facility. 

21 (f) QUALIFYING PROJECTS.—A project is eligible for 

22 a loan from a revolving fund if it is a project that consists 

23 of—
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1 (1) the construction of new elementary or sec2 ondary schools to meet the needs imposed by enroll3 ment growth; 

4 (2) the repair or upgrading of classrooms or 

5 structures related to academic learning, including 

6 the repair of leaking roofs, crumbling walls, inad7 equate plumbing, poor ventilation equipment, and in8 adequate heating or light equipment; 

9 (3) an activity to increase physical safety at the 

10 educational facility involved; 

11 (4) an activity to enhance the educational facil12 ity involved to provide access for students, teachers, 

13 and other individuals with disabilities; 

14 (5) an activity to address environmental haz15 ards at the educational facility involved, such as 

16 poor ventilation, indoor air quality, or lighting; 

17 (6) the provision of basic infrastructure that fa18 cilitates educational technology, such as communica19 tions outlets, electrical systems, power outlets, or a 

20 communication closet; 

21 (7) work that will bring an educational facility 

22 into conformity with the requirements of—

23 (A) environmental protection or health and 

24 safety programs mandated by Federal, State, or 
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1 local law if such requirements were not in effect 

2 when the facility was initially constructed; and 

3 (B) hazardous waste disposal, treatment, 

4 and storage requirements mandated by the Re5 source Conservation and Recovery Act of 1976 

6 or similar State laws; and 

7 (8) work to detect, remove, or otherwise contain 

8 asbestos hazards in educational facilities. 

9 (g) LOAN FORGIVENESS.—A State may forgive all or 

10 part of any loan described in this section if the total pro11 jected principal and interest repayments for all loans 

12 granted by the State and not forgiven under this sub13 section equal or exceed the combined total of all Federal 

14 capitalization grants provided to the State and any match15 ing funds described in subsection (d)(1) provided by the 

16 State. 

17 (h) SUPPLEMENTATION.—Any loan made by a revolv18 ing fund shall be used to supplement and not supplant 

19 other Federal, State, and local funds available. 

20 (i) LIMITATION ON REPAYMENTS.—Notwithstanding 

21 any other provision of law, the repayment of a loan from 

22 a revolving fund under this section may not be credited 

23 toward the non-Federal share of the cost of any project. 

24 (j) SECRETARIAL REQUIREMENTS.—In administering 

25 this section, the Secretary shall specify procedures and 
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1 guidelines for establishing, operating, and providing as2 sistance from a revolving fund. 

3 (k) UNITED STATES NOT OBLIGATED.—The con4 tribution of Federal funds into a revolving fund estab5 lished under this section shall not be construed as a com6 mitment, guarantee, or obligation on the part of the 

7 United States to any third party, nor shall any third party 

8 have any right against the United States for payment sole9 ly by virtue of the contribution. Any security or debt fi10 nancing instrument issued by the revolving fund shall ex11 pressly state that the security or instrument does not con12 stitute a commitment, guarantee, or obligation of the 

13 United States. 

14 (l) MANAGEMENT OF FEDERAL FUNDS.—Sections 

15 3335 and 6503 of title 31, United States Code, shall not 

16 apply to funds contributed under this section. 

17 (m) PROGRAM ADMINISTRATION.—For each of fiscal 

18 years 2004 through 2008, a State may expend an amount 

19 not to exceed 2 percent of the Federal funds contributed 

20 to a revolving fund established by the State under this 

21 section to pay the reasonable costs of administering the 

22 fund. 

23 (n) SECRETARIAL REVIEW.—The Secretary shall re24 view the financial condition of each revolving fund estab25 lished under this section biennially and transmit to Con-
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1 gress a report on the results of such review not later than 

2 90 days after the completion of the review. 

3 (o) AUTHORIZATION OF APPROPRIATIONS.—For 

4 grants to States for the initial capitalization of revolving 

5 funds there are authorized to be appropriated 

6 $1,000,000,000 for fiscal year 2004 and for each of the 

7 4 succeeding fiscal years. 

8 SEC. 3. DEFINITIONS. 

9 The terms used in this Act shall have the meaning 

10 given such terms in section 9101 of the Elementary and 

11 Secondary Education Act of 1965 (20 U.S.C. 7801).

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