I

106TH CONGRESS

1ST SESSION H. R. 1767

To amend the Elementary and Secondary Education Act of 1965 to provide

for the allocation of any limitation imposed on school construction bonds

with respect to which the holders are allowed a credit under the Internal

Revenue Code of 1986, and to apply the wage requirements of the

Davis-Bacon Act to projects financed with such bonds.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 1999

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

Committee on Education and the Workforce

A BILL

To amend the Elementary and Secondary Education Act

of 1965 to provide for the allocation of any limitation

imposed on school construction bonds with respect to

which the holders are allowed a credit under the Internal

Revenue Code of 1986, and to apply the wage requirements of the Davis-Bacon Act to projects financed with

such bonds.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. ALLOCATION OF NATIONAL LIMITATION ON

2 QUALIFIED SCHOOL CONSTRUCTION BONDS;

3 APPLICATION OF DAVIS-BACON ACT TO

4 PROJECTS FINANCED WITH BONDS.

5 (a) IN GENERAL.—Title XII of the Elementary and

6 Secondary Education Act of 1965 (20 U.S.C. 8501 et

7 seq.) is amended—

8 (1) by redesignating sections 12004 through

9 12013 as sections 12101 through 12110, respec10 tively;

11 (2) by inserting before section 12101 (as so re12 designated) the following:

13 ‘‘PART A—GRANTS FOR IMPROVEMENT OF PUB14 LIC ELEMENTARY AND SECONDARY EDU15 CATION FACILITIES’’;

16 and

17 (3) by adding at the end the following:

18 ‘‘PART B—QUALIFIED SCHOOL CONSTRUCTION

19 BONDS

20 ‘‘SEC. 12201. ALLOCATION WITH RESPECT TO QUALIFIED

21 SCHOOL CONSTRUCTION BONDS.

22 ‘‘(a) QUALIFIED SCHOOL CONSTRUCTION BOND.—

23 ‘‘(1) IN GENERAL.—For purposes of this part,

24 the term ‘qualified school construction bond’ means

25 any bond issued as part of an issue if—
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1 ‘‘(A) a taxpayer who holds the bond is al2 lowed a credit under the Internal Revenue Code

3 of 1986;

4 ‘‘(B) 95 percent or more of the proceeds of

5 such issue are to be used for the construction,

6 rehabilitation, or repair of a public school facil7 ity;

8 ‘‘(C) the bond is issued by a State or local

9 government within the jurisdiction of which

10 such school is located; and

11 ‘‘(D) the issuer designates such bond for

12 purposes of this section and the Internal Rev13 enue Code of 1986.

14 ‘‘(2) TEMPORARY PERIOD EXCEPTION.—A bond

15 shall not be treated as failing to meet the require16 ment of paragraph (1)(B) solely by reason of the

17 fact that the proceeds of the issue of which such

18 bond is a part are invested for a reasonable tem19 porary period (but not more than 36 months) until

20 such proceeds are needed for the purpose for which

21 such issue was issued. Any earnings on such pro22 ceeds during such period shall be treated as proceeds

23 of the issue for purposes of applying paragraph

24 (1)(B).
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1 ‘‘(b) NATIONAL LIMITATION ON AMOUNT OF BONDS

2 DESIGNATED.—In any case in which there is imposed a

3 national limitation on the maximum aggregate face

4 amount of bonds issued during any calendar year which

5 may be designated as qualified school construction bonds,

6 such limitation shall be allocated in accordance with this

7 section.

8 ‘‘(c) ONE-THIRD OF LIMITATION ALLOCATED

9 AMONG STATES.—

10 ‘‘(1) IN GENERAL.—One-third of the limitation

11 applicable under subsection (b) for any calendar

12 year shall be allocated among the States under para13 graph (2) by the Secretary. The limitation amount

14 allocated to a State under the preceding sentence

15 shall be allocated by the State educational agency to

16 issuers within such State and such allocations may

17 be made only if there is an approved State applica18 tion.

19 ‘‘(2) ALLOCATION FORMULA.—The amount to

20 be allocated under paragraph (1) for any calendar

21 year shall be allocated among the States in propor22 tion to the respective amounts each such State re23 ceived for Basic Grants under subpart 2 of part A

24 of title I of this Act for the most recent fiscal year

25 ending before such calendar year. For purposes of
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1 the preceding sentence, Basic Grants attributable to

2 large local educational agencies (as defined in sub3 section (d)), and Basic Grants attributable to high4 growth local educational agencies (as defined in sub5 section (e)), shall be disregarded.

6 ‘‘(3) MINIMUM ALLOCATIONS TO STATES.—

7 ‘‘(A) IN GENERAL.—The Secretary shall

8 adjust the allocations under this subsection for

9 any calendar year for each State to the extent

10 necessary to ensure that the sum of—

11 ‘‘(i) the amount allocated to such

12 State under this subsection for such year;

13 and

14 ‘‘(ii) the aggregate amounts allocated

15 under subsections (d) and (e) to local edu16 cational agencies in such State for such

17 year;

18 is not less than an amount equal to such

19 State’s minimum percentage of one-third of the

20 national qualified school construction bond limi21 tation referred to in subsection (b) for the cal22 endar year.

23 ‘‘(B) MINIMUM PERCENTAGE.—A State’s

24 minimum percentage for any calendar year is

25 the minimum percentage described in section
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1 1124(d) for such State for the most recent fis2 cal year ending before such calendar year.

3 ‘‘(4) ALLOCATIONS TO CERTAIN POSSES4 SIONS.—The amount to be allocated under para5 graph (1) to any possession of the United States (as

6 such term is used in the Internal Revenue Code of

7 1986) other than Puerto Rico shall be the amount

8 which would have been allocated if all allocations

9 under paragraph (1) were made on the basis of re10 spective populations of individuals below the poverty

11 line (as defined by the Office of Management and

12 Budget). In making other allocations, the amount to

13 be allocated under paragraph (1) shall be reduced by

14 the aggregate amount allocated under this para15 graph to possessions of the United States.

16 ‘‘(5) APPROVED STATE APPLICATION.—For

17 purposes of paragraph (1), the term ‘approved State

18 application’ means an application which is approved

19 by the Secretary and which includes—

20 ‘‘(A) the results of a recent publicly avail21 able survey (undertaken by the State with the

22 involvement of local education officials, mem23 bers of the public, and experts in school con24 struction and management) of such State’s
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1 needs for public school facilities, including de2 scriptions of—

3 ‘‘(i) health and safety problems at

4 such facilities;

5 ‘‘(ii) the capacity of public schools in

6 the State to house projected enrollments;

7 and

8 ‘‘(iii) the extent to which the public

9 schools in the State offer the physical in10 frastructure needed to provide a high-qual11 ity education to all students; and

12 ‘‘(B) a description of how the State will al13 locate to local educational agencies, or other14 wise use, its allocation under this subsection to

15 address the needs identified under subpara16 graph (A), including a description of how it

17 will—

18 ‘‘(i) give highest priority to localities

19 with the greatest needs, as demonstrated

20 by inadequate school facilities coupled with

21 a low level of resources to meet those

22 needs;

23 ‘‘(ii) use its allocation under this sub24 section to assist localities that lack the fis-
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1 cal capacity to issue bonds on their own;

2 and

3 ‘‘(iii) ensure that its allocation under

4 this subsection is used only to supplement,

5 and not supplant, the amount of school

6 construction, rehabilitation, and repair in

7 the State that would have occurred in the

8 absence of such allocation.

9 Any allocation under paragraph (1) by a State edu10 cation agency shall be binding if such agency reason11 ably determined that the allocation was in accord12 ance with the plan approved under this paragraph.

13 ‘‘(d) ONE-THIRD OF LIMITATION ALLOCATED

14 AMONG LARGEST SCHOOL DISTRICTS.—

15 ‘‘(1) IN GENERAL.—One-third of the limitation

16 applicable under subsection (b) for any calendar

17 year shall be allocated under paragraph (2) by the

18 Secretary among local educational agencies which

19 are large local educational agencies for such year.

20 No qualified school construction bond may be issued

21 by reason of an allocation to a large local edu22 cational agency under the preceding sentence unless

23 such agency has an approved local application.

24 ‘‘(2) ALLOCATION FORMULA.—The amount to

25 be allocated under paragraph (1) for any calendar
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1 year shall be allocated among large local educational

2 agencies in proportion to the respective amounts

3 each such agency received for Basic Grants under

4 subpart 2 of part A of title I of this Act for the

5 most recent fiscal year ending before such calendar

6 year.

7 ‘‘(3) LARGE LOCAL EDUCATIONAL AGENCY.—

8 For purposes of this section, the term ‘large local

9 educational agency’ means, with respect to a cal10 endar year, any local educational agency (other than

11 a high-growth local educational agency, as defined in

12 subsection (e)) if such agency is—

13 ‘‘(A) among the 100 local educational

14 agencies with the largest numbers of children

15 aged 5 through 17 from families living below

16 the poverty level, as determined by the Sec17 retary using the most recent data available

18 from the Department of Commerce that are

19 satisfactory to the Secretary; or

20 ‘‘(B) 1 of not more than 25 local edu21 cational agencies (other than those described in

22 clause (i)) that the Secretary determines (based

23 on the most recent data available satisfactory to

24 the Secretary) are in particular need of assist25 ance, based on a low level of resources for
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1 school construction, a high level of enrollment

2 growth, or such other factors as the Secretary

3 deems appropriate.

4 ‘‘(4) APPROVED LOCAL APPLICATION.—For

5 purposes of paragraph (1), the term ‘approved local

6 application’ means an application which is approved

7 by the Secretary and which includes—

8 ‘‘(A) the results of a recent publicly-avail9 able survey (undertaken by the local educational

10 agency with the involvement of school officials,

11 members of the public, and experts in school

12 construction and management) of such agency’s

13 needs for public school facilities, including de14 scriptions of—

15 ‘‘(i) the overall condition of the local

16 educational agency’s school facilities, in17 cluding health and safety problems;

18 ‘‘(ii) the capacity of the agency’s

19 schools to house projected enrollments; and

20 ‘‘(iii) the extent to which the agency’s

21 schools offer the physical infrastructure

22 needed to provide a high-quality education

23 to all students;

24 ‘‘(B) a description of how the local edu25 cational agency will use its allocation under this
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1 subsection to address the needs identified under

2 subparagraph (A); and

3 ‘‘(C) a description of how the local edu4 cational agency will ensure that its allocation

5 under this subsection is used only to supple6 ment, and not supplant, the amount of school

7 construction, rehabilitation, or repair in the lo8 cality that would have occurred in the absence

9 of such allocation.

10 A rule similar to the rule of the last sentence of sub11 section (c)(5) shall apply for purposes of this sub12 section.

13 ‘‘(e) ONE-THIRD OF LIMITATION ALLOCATED

14 AMONG HIGH-GROWTH SCHOOL DISTRICTS.—

15 ‘‘(1) IN GENERAL.—One-third of the limitation

16 applicable under subsection (b) for any calendar

17 year shall be allocated under paragraph (2) by the

18 Secretary among local educational agencies which

19 are high-growth local educational agencies for such

20 year. No qualified school construction bond may be

21 issued by reason of an allocation to a high-growth

22 local educational agency under the preceding sen23 tence unless such agency has an approved local ap24 plication (as defined in subsection (d)(4)). A rule
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1 similar to the rule of the last sentence of subsection

2 (c)(5) shall apply for purposes of this subsection.

3 ‘‘(2) ALLOCATION FORMULA.—The amount to

4 be allocated under paragraph (1) for any calendar

5 year shall be allocated among high-growth local edu6 cational agencies in proportion to the respective

7 amounts each such agency received for Basic Grants

8 under subpart 2 of part A of title I of this Act for

9 the most recent fiscal year ending before such cal10 endar year.

11 ‘‘(3) HIGH-GROWTH LOCAL EDUCATIONAL

12 AGENCY.—For purposes of this section, the term

13 ‘high-growth local educational agency’ means, with

14 respect to a calendar year, any local educational

15 agency if—

16 ‘‘(A) there has been at least a 7.5 percent

17 increase in such agency’s enrollment during the

18 5-year period ending with the preceding cal19 endar year; and

20 ‘‘(B) such enrollment increase exceeds 150

21 students.

22 ‘‘(f) CARRYOVER OF UNUSED LIMITATION.—If for

23 any calendar year—

24 ‘‘(1) the amount allocated under subsection (c)

25 to any State; exceeds
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1 ‘‘(2) the amount of bonds issued during such

2 year which are designated as qualified school con3 struction bonds pursuant to such allocation;

4 the limitation amount under such subsection for such

5 State for the following calendar year shall be increased

6 by the amount of such excess. A similar rule shall apply

7 to the amounts allocated under subsections (d) and (e).

8 ‘‘(g) OTHER DEFINITIONS.—For purposes of this

9 section:

10 ‘‘(1) LOCAL EDUCATIONAL AGENCY.—The term

11 ‘local educational agency’ has the meaning given to

12 such term by section 14101. Such term includes the

13 local educational agency that serves the District of

14 Columbia but does not include any other State agen15 cy.

16 ‘‘(2) BOND.—The term ‘bond’ includes any ob17 ligation.

18 ‘‘(3) PUBLIC SCHOOL FACILITY.—The term

19 ‘public school facility’ shall not include any stadium

20 or other facility primarily used for athletic contests

21 or exhibitions or other events for which admission is

22 charged to the general public.
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1 ‘‘SEC. 12202. APPLICATION OF DAVIS-BACON ACT TO

2 PROJECTS FINANCED WITH QUALIFIED

3 SCHOOL CONSTRUCTION BONDS.

4 ‘‘The wage requirements of the Act of March 3, 1931

5 (40 U.S.C. 276a et seq.) (commonly referred to as the

6 ‘Davis-Bacon Act’) shall apply with respect to individuals

7 employed on school construction, rehabilitation, or repair

8 projects financed with the proceeds from an issuance of

9 qualified school construction bonds.’’.

10 (b) CONFORMING AMENDMENTS.—Title XII of such

11 Act is amended—

12 (1) in sections 12101 through 12110 (as so re13 designated), by striking ‘‘this title’’ each place it ap14 pears and inserting ‘‘this part’’;

15 (2) in section 12101(a)(1) (as so redesig16 nated)—

17 (A) by striking ‘‘section 12013’’ and in18 serting ‘‘section 12110’’;

19 (B) by striking ‘‘section 12005’’ and in20 serting ‘‘section 12102’’; and

21 (C) by striking ‘‘section 12007’’ and in22 serting ‘‘section 12104’’;

23 (3) in section 12101(a)(2) (as so redesignated),

24 by striking ‘‘section 12013’’ and inserting ‘‘section

25 12110’’; and
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1 (4) in section 12109(3)(C) (as so redesignated),

2 by striking ‘‘section 12006’’ and inserting ‘‘section

3 12103’’.

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