II 

109TH CONGRESS 

1ST SESSION S. 2057 

To establish State infrastructure banks for education, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 18, 2005 

Mrs. CLINTON (for herself, Mr. HARKIN, Mr. DURBIN, Mr. KENNEDY, Mr. 

KERRY, Ms. LANDRIEU, Mr. LAUTENBERG, and Mr. INOUYE) introduced 

the following bill; which was read twice and referred to the Committee 

on Health, Education, Labor, and Pensions 

A BILL 

To establish State infrastructure banks for education, and 

for other purposes. 

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 ‘‘Investing for Tomor5 row’s Schools Act of 2005’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) According to the National Center for Edu9 cation Statistics, an estimated $127,000,000,000 in 

10 repairs, renovations, and modernizations is needed 
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1 to put schools in the United States into good overall 

2 condition. 

3 (2) Approximately 14,000,000 United States 

4 students attend schools that report the need for ex5 tensive repair or replacement of 1 or more buildings. 

6 (3) According to a 2005 study conducted by 

7 American School & University magazine, 

8 $29,088,000,000 was spent to address the Nation’s 

9 education infrastructure needs in 2004, with the av10 erage total cost of a new high school being 

11 $27,000,000. 

12 (4) Academic research has proven that there is 

13 a direct correlation between the condition of school 

14 facilities and student achievement. At Georgetown 

15 University, researchers found that students assigned 

16 to schools in poor condition could be expected to 

17 have test scores that are 10.9 percentage points 

18 lower than students in schools in excellent condition. 

19 Similar studies demonstrated improvement of up to 

20 20 percent in test scores when students were moved 

21 from a facility in poor condition to a new facility. 

22 (5) The Director of the Education and Employ23 ment Issues division of the Government Accounting 

24 Office (currently known as the Education, Work25 force, and Income Security division of the Govern-
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1 ment Accountability Office) testified that nearly 52 

2 percent of schools, affecting 21,300,000 students, 

3 reported insufficient technology elements for 6 or 

4 more areas. 

5 (6) Large numbers of local educational agencies 

6 have difficulties securing financing for school facility 

7 improvement. 

8 (7) The challenges facing the Nation’s public el9 ementary schools and secondary schools and libraries 

10 require the concerted efforts of all levels of govern11 ment and all sectors of communities. 

12 (8) The United States competitive position 

13 within the world economy is vulnerable if the future 

14 workforce of the United States continues to be edu15 cated in schools and libraries not equipped for the 

16 21st century. 

17 (9) The deplorable state of collections in public 

18 school libraries in the United States has increased 

19 the demands on public libraries. In many instances, 

20 public libraries substitute for school libraries, cre21 ating a higher demand for material and physical 

22 space to house literature and educational computer 

23 equipment. 

24 (10) Research shows that 50 percent of a 

25 child’s intellectual development takes place before 
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1 age 4. The Nation’s public and school libraries play 

2 a critical role in a child’s early development because 

3 the libraries provide a wealth of books and other re4 sources that can give every child a head start on life 

5 and learning. 

6 SEC. 3. STATE INFRASTRUCTURE BANK PILOT PROGRAM. 

7 (a) ESTABLISHMENT.— 

8 (1) COOPERATIVE AGREEMENTS.—The Sec9 retary of Education (referred to in this Act as the 

10 ‘‘Secretary’’), after consultation with the Secretary 

11 of the Treasury, may enter into cooperative agree12 ments with States under which— 

13 (A) the States establish State infrastruc14 ture banks and multistate infrastructure banks 

15 for the purpose of providing the loans described 

16 in subparagraph (B); and 

17 (B) the Secretary awards grants to States 

18 to be used as initial capital for the purpose of 

19 making loans through the infrastructure 

20 banks— 

21 (i) to local educational agencies to en22 able the agencies to construct, reconstruct, 

23 or renovate elementary schools or sec24 ondary schools that provide free public 

25 education; and 
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1 (ii) to public libraries to enable the li2 braries to construct, reconstruct, or ren3 ovate library facilities. 

4 (2) INTERSTATE COMPACTS.— 

5 (A) CONSENT.—Congress grants consent 

6 to any 2 or more States, entering into a cooper7 ative agreement under paragraph (1) with the 

8 Secretary for the establishment of a multistate 

9 infrastructure bank, to enter into an interstate 

10 compact establishing a multistate infrastructure 

11 bank in accordance with this section. 

12 (B) RESERVATION OF RIGHTS.—Congress 

13 expressly reserves the right to alter, amend, or 

14 repeal this section and any consent granted 

15 pursuant to this section. 

16 (b) REPAYMENTS.—Each infrastructure bank estab17 lished under subsection (a) shall apply repayments of prin18 cipal and interest on loans funded by the grant received 

19 under subsection (a) to the making of additional loans. 

20 (c) INFRASTRUCTURE BANK REQUIREMENTS.—A 

21 State establishing an infrastructure bank under this sec22 tion shall— 

23 (1) contribute to the bank, from non-Federal 

24 sources, an amount equal to not less than 25 per-
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1 cent of the amount of each grant made for the bank 

2 under subsection (a); 

3 (2) identify as recipient of the grant an oper4 ating entity of the State that has the capacity to 

5 manage loan funds, and issue debt instruments of 

6 the State for purposes of leveraging the funds made 

7 available through the grant or State contributions 

8 under paragraph (1) related to the grant; 

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

10 debt issued by the State, so long as proceeds are de11 posited in the appropriate accounts for loan pur12 poses; 

13 (4) ensure that investment income generated by 

14 funds described in paragraph (2) and made available 

15 to an account of the bank will be— 

16 (A) credited to the account; 

17 (B) available for use in providing loans for 

18 a project eligible for assistance from the ac19 count; and 

20 (C) invested in United States Treasury se21 curities, bank deposits, or such other financing 

22 instruments as the Secretary may approve to 

23 earn interest to enhance the leveraging of funds 

24 for projects assisted by the bank; 
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1 (5) ensure that any loan from the bank will 

2 bear interest at or below the lowest interest rate 

3 being offered for bonds; 

4 (6) ensure that repayment of any loan from the 

5 bank will commence not later than 1 year after the 

6 project has been completed; 

7 (7) ensure that the term for repaying any such 

8 loan will not exceed 30 years after the date of the 

9 first payment on the loan under paragraph (6); and 

10 (8) require the bank to make an annual report 

11 to the Secretary on its status, and make such other 

12 reports as the Secretary may require by guidelines. 

13 (d) FORMS OF ASSISTANCE FROM INFRASTRUCTURE

14 BANKS.— 

15 (1) IN GENERAL.—An infrastructure bank es16 tablished under this section may make a loan to a 

17 local educational agency or a public library in an 

18 amount equal to all or part of the cost of carrying 

19 out a project eligible for a loan under subsection (e). 

20 (2) APPLICATIONS FOR LOANS.— 

21 (A) IN GENERAL.—A local educational 

22 agency or public library desiring a loan under 

23 this section shall submit to such an infrastruc24 ture bank an application that includes— 
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1 (i) in the case of an application for a 

2 renovation project for a facility— 

3 (I) a description of each architec4 tural, civil, structural, mechanical, or 

5 electrical deficiency to be corrected 

6 with the loan funds and the priorities 

7 to be applied in determining which de8 ficiency to address first; and 

9 (II) a description of the criteria 

10 used by the applicant to determine the 

11 type of corrective action necessary for 

12 the renovation of the facility; 

13 (ii) a description of any improvements 

14 to be made and a cost estimate for the im15 provements to be made with the loan; 

16 (iii) a description of how work under17 taken with the loan will promote energy 

18 conservation; and 

19 (iv) such other information as the in20 frastructure bank may require. 

21 (B) TIMING.—An infrastructure bank shall 

22 take final action on a completed application 

23 submitted to it in accordance with this sub24 section not later than 90 days after the date of 

25 the submission of the application. 
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1 (3) CRITERIA FOR LOANS.—In considering an 

2 application for a loan under this section, an infra3 structure bank shall consider— 

4 (A) the extent to which the local edu5 cational agency or public library desiring the 

6 loan would otherwise lack the fiscal capacity, 

7 including the ability to raise funds through the 

8 full use of bonding capacity of the agency or li9 brary, to undertake the project proposed in the 

10 application; 

11 (B) in the case of a local educational agen12 cy, the threat that the condition of the physical 

13 plant in the proposed project poses to the safety 

14 and well-being of students; 

15 (C) the demonstrated need for the con16 struction, reconstruction, or renovation de17 scribed in the application, based on the condi18 tion of the facility in the proposed project; and 

19 (D) the age of the facility proposed to be 

20 replaced, reconstructed, or renovated. 

21 (e) ELIGIBLE PROJECTS.— 

22 (1) IN GENERAL.—A project shall be eligible for 

23 a loan from an infrastructure bank under this sec24 tion if the project consists of— 
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1 (A) the construction of an elementary 

2 school or secondary school to meet the needs 

3 imposed by enrollment growth; 

4 (B) the repair or upgrading of classrooms 

5 or structures related to academic learning at an 

6 educational facility, including the repair of leak7 ing roofs, crumbling walls, inadequate plumb8 ing, poor ventilation equipment, or inadequate 

9 heating or lighting equipment; 

10 (C) an activity to increase physical safety 

11 at an educational facility; 

12 (D) an activity to enhance an educational 

13 facility to provide access for students, teachers, 

14 and other individuals (such as staff and par15 ents) who are individuals with disabilities; 

16 (E) an activity to address environmental 

17 hazards at an educational facility, such as poor 

18 ventilation, indoor air quality, or lighting; 

19 (F) the provision of basic infrastructure 

20 that facilitates educational technology, such as 

21 communications outlets, electrical systems, 

22 power outlets, or a communication closet, at an 

23 educational facility; 
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1 (G) work that will bring an educational fa2 cility into conformity with the requirements 

3 of— 

4 (i) environmental protection or health 

5 and safety programs mandated by Federal, 

6 State, or local law, if such requirements 

7 were not in effect when the facility was ini8 tially constructed; and 

9 (ii) hazardous waste treatment, stor10 age, and disposal requirements mandated 

11 under the Solid Waste Disposal Act (42 

12 U.S.C. 6901 et seq.) or similar State laws; 

13 (H) work that will enable efficient use of 

14 available energy resources at an educational fa15 cility; 

16 (I) work to detect, remove, or otherwise 

17 contain asbestos hazards in an educational fa18 cility; or 

19 (J) work to construct public library facili20 ties or repair or upgrade public library facili21 ties. 

22 (2) DAVIS-BACON.—The wage requirements of 

23 subchapter IV of chapter 31 of title 40, United 

24 States Code shall apply with respect to individuals 

25 employed on the projects described in paragraph (1). 
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1 (f) SUPPLEMENTATION.—Any loan made by an infra2 structure bank shall be used to supplement and not sup3 plant other Federal, State, and local funds available to 

4 carry out school or library construction, reconstruction, or 

5 renovation (including repair). 

6 (g) LIMITATION ON REPAYMENTS.—Notwithstanding 

7 any other provision of law, if an infrastructure bank 

8 makes a loan under this section with funds made available 

9 through a grant awarded to a State under subsection (a), 

10 the funds used to repay the loan may not be credited to11 ward the contribution required for the State under sub12 section (c)(1) for a subsequent grant awarded under sub13 section (c). 

14 (h) SECRETARIAL REQUIREMENTS.—In admin15 istering this section, the Secretary shall specify procedures 

16 and guidelines for establishing, operating, and providing 

17 assistance from an infrastructure bank. 

18 (i) UNITED STATES NOT OBLIGATED.—The con19 tribution of Federal funds to an infrastructure bank estab20 lished under this section shall not be construed as a com21 mitment, guarantee, or obligation on the part of the 

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

23 have any right against the United States for payment sole24 ly by virtue of the contribution. Any security or debt fi25 nancing instrument issued by the infrastructure bank 
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1 shall expressly state that the security or instrument does 

2 not constitute a commitment, guarantee, or obligation of 

3 the United States. 

4 (j) INCOME ATTRIBUTABLE TO INTEREST.—The in5 come attributable to interest described in subsection (c)(5) 

6 shall be exempt from Federal taxation. 

7 (k) MANAGEMENT OF FEDERAL FUNDS.—Sections 

8 3335 and 6503 of title 31, United States Code, shall not 

9 apply to funds contributed under this section. 

10 (l) PROGRAM ADMINISTRATION.—A State may ex11 pend an amount not to exceed 2 percent of the grant funds 

12 contributed to an infrastructure bank established by a 

13 State or States under this section to pay the reasonable 

14 costs of administering the infrastructure bank. 

15 (m) SECRETARIAL REVIEW AND REPORT.—The Sec16 retary shall— 

17 (1) review the financial condition of each infra18 structure bank established under this section; and 

19 (2) transmit to Congress a report on the results 

20 of such review not later than 90 days after the com21 pletion of the review. 

22 SEC. 4. DEFINITIONS. 

23 In this Act: 

24 (1) ELEMENTARY SCHOOL, FREE PUBLIC EDU25 CATION, AND SECONDARY SCHOOL.—The terms ‘‘ele-
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1 mentary school’’, ‘‘free public education’’, and ‘‘sec2 ondary school’’ have the meanings given the terms 

3 in section 9101 of the Elementary and Secondary 

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

5 (2) LOCAL EDUCATIONAL AGENCY.—The term 

6 ‘‘local educational agency’’ has the meaning given 

7 the term in section 9101 of the Elementary and Sec8 ondary Education Act of 1965 (20 U.S.C. 7801) 

9 and includes a public charter school that operates as 

10 a local educational agency of the State in which the 

11 school is located. 

12 (3) OUTLYING AREA.—The term ‘‘outlying 

13 area’’ means the United States Virgin Islands, 

14 Guam, American Samoa, the Commonwealth of the 

15 Northern Mariana Islands, the Republic of the Mar16 shall Islands, the Federated States of Micronesia, 

17 and the Republic of Palau. 

18 (4) PUBLIC LIBRARY.—The term ‘‘public li19 brary’’— 

20 (A) means a library that serves, free of 

21 charge, all residents of a community, district, or 

22 region, and receives its financial support in 

23 whole or in part from public funds; and 
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1 (B) includes a research library, which, for 

2 purposes of this subparagraph, means a library 

3 that— 

4 (i) makes its services available to the 

5 public free of charge; 

6 (ii) has extensive collections of books, 

7 manuscripts, and other materials suitable 

8 for scholarly research that are not avail9 able to the public through public libraries; 

10 (iii) engages in the dissemination of 

11 humanistic knowledge through the provi12 sion of services to readers, fellowships, 

13 educational and cultural programs, publi14 cation of significant research, and other 

15 activities; and 

16 (iv) is not an integral part of an insti17 tution of higher education (as defined in 

18 section 101(a) of the Higher Education 

19 Act of 1965 (20 U.S.C. 1001(a)). 

20 (5) STATE.—The term ‘‘State’’ means each of 

21 the 50 States, the District of Columbia, the Com22 monwealth of Puerto Rico, and each of the outlying 

23 areas. 

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