I

106TH CONGRESS

1ST SESSION H. R. 1648

To establish State infrastructure banks for education.

IN THE HOUSE OF REPRESENTATIVES

APRIL 29, 1999

Mrs. TAUSCHER (for herself, Mr. BOEHLERT, Mr. BROWN of California, Mrs.

CHRISTENSEN, Mr. CONDIT, Mr. CONYERS, Mr. CROWLEY, Mr.

CUMMINGS, Mr. DEFAZIO, Mr. DINGELL, Mr. DOOLEY of California, Mr.

ETHERIDGE, Mr. FILNER, Mr. FROST, Mr. GILCHREST, Mr. GREEN of

Texas, Mr. HOLDEN, Mr. KUCINICH, Mr. LAMPSON, Mr. LEWIS of Georgia, Ms. LOFGREN, Mr. MARTINEZ, Mr. MCGOVERN, Mr. MCINTYRE, Mr.

MORAN of Virginia, Mr. PAYNE, Ms. PELOSI, Mr. ROEMER, Mr. SHERMAN, Mr. SHOWS, Ms. STABENOW, Mr. STARK, Mr. TIERNEY, and Mr.

WEINER) introduced the following bill; which was referred to the Committee on Education and the Workforce

A BILL

To establish State infrastructure banks for education.

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 Infrastructure

5 Banks for Schools Act of 1999’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:
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1 (1) According to a 1996 study conducted by the

2 American School & University, $10.42 billion was

3 spent to address the Nation’s education infrastruc4 ture needs in 1995, with the average total cost of a

5 new high school at $15.4 million.

6 (2) According to a 1995 report to Congress by

7 the General Accounting Office, an estimated $112

8 billion in school repair, modernization, expansion,

9 and construction is needed.

10 (3) Approximately 14 million American stu11 dents attend schools which report the need for exten12 sive repair or replacement of one or more buildings.

13 (4) Academic research has proven a direct cor14 relation between the condition of school facilities and

15 student achievement. At Georgetown University, re16 searchers found that students assigned to schools in

17 poor conditions can be expected to fall 10.9 percent18 age points behind those in buildings in excellent con19 dition. Similar studies have demonstrated up to a 20

20 percent improvement in test scores when students

21 were moved from a poor facility to a new facility.

22 (5) The Director of Education and Employment

23 Issues at the Government Accounting Office testified

24 that nearly 52 percent of schools, affecting 21.3 mil-
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1 lion students, reported insufficient technology ele2 ments for 6 or more areas.

3 (6) Large numbers of local educational agencies

4 have difficulties securing financing for school facility

5 improvement.

6 (7) The challenges facing our Nation’s public

7 elementary and secondary schools and libraries re8 quire the concerted efforts of all levels of govern9 ment and all sectors of the community.

10 (8) The United States’s competitive position

11 within the world economy is vulnerable if America’s

12 future workforce continues to be educated in schools

13 and libraries not equipped for the 21st century.

14 (9) The deplorable state of collections in Amer15 ica’s public school libraries has increased the de16 mands on public libraries. In many instances, public

17 libraries substitute for school libraries creating a

18 higher demand for material and physical space to

19 house literature and educational computer equip20 ment.

21 (10) Research shows that 50 percent of a

22 child’s intellectual development takes place before

23 age 4. Our nation’s public and school libraries play

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

25 they provide a wealth of books and other resources
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1 that can give every child a head start on life and

2 learning.

3 SEC. 3. STATE INFRASTRUCTURE BANK PILOT PROGRAM.

4 (a) ESTABLISHMENT.—

5 (1) COOPERATIVE AGREEMENTS.—Subject to

6 the provisions of this section, the Secretary of the

7 Treasury, in consultation with the Secretary of Edu8 cation, may enter into cooperative agreements with

9 States for the establishment of State infrastructure

10 banks and multistate infrastructure banks for mak11 ing loans to local educational agencies for building

12 or repairing elementary or secondary schools which

13 provide free public education (as such terms are de14 fined in section 14101 of the Elementary and Sec15 ondary Education Act of 1965 (20 U.S.C. 8801))

16 and to public libraries for building or repairing li17 brary facilities.

18 (2) INTERSTATE COMPACTS.—Congress grants

19 consent to 2 or more of the States, entering into a

20 cooperative agreement under paragraph (1) with the

21 Secretary of the Treasury for the establishment of a

22 multistate infrastructure bank, to enter into an

23 interstate compact establishing such bank in accord24 ance with this section.
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1 (b) FUNDING.—The Secretary of the Treasury, in

2 consultation with the Secretary of Education, shall make

3 grants to State infrastructure banks and multistate infra4 structure banks in a State in a cooperative agreement

5 under subsection (a)(1) to provide initial capital for loans

6 provided under this section to local educational agencies

7 and public libraries. Each bank shall apply repayments of

8 principal and interest on loans to the making of additional

9 loans. The Secretary shall take final action on an applica10 tion for a grant under this subsection within 90 days of

11 the date of the submittal of such application.

12 (c) INFRASTRUCTURE BANK REQUIREMENTS.—In

13 order to establish an infrastructure bank under this sec14 tion, each State establishing the bank shall—

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

16 of the bank from non-Federal sources an amount

17 equal to 25 percent of the amount of each capitaliza18 tion grant made to the State and contributed to the

19 bank under subsection (b);

20 (2) identify an operating entity of the State as

21 recipient of the grant if the entity has the capacity

22 to manage loan funds and issue debt instruments of

23 the State for purposes of leveraging the funds;
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1 (3) allow such funds to be used as reserve for

2 debt issued by the State so long as proceeds are de3 posited in the fund for loan purposes;

4 (4) ensure that investment income generated by

5 funds contributed to an account of the bank will

6 be—

7 (A) credited to the account;

8 (B) available for use in providing loans to

9 projects eligible for assistance from the account;

10 and

11 (C) invested in United States Treasury se12 curities, bank deposits, or such other financing

13 instruments as the Secretary may approve to

14 earn interest to enhance the leveraging of

15 projects assisted by the bank;

16 (5) ensure that any loan from the bank will

17 bear interest at or below the lowest interest rates

18 being offered for bonds the income from which is ex19 empt from Federal taxation, as determined by the

20 State, to make the project that is the subject of the

21 loan feasible;

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

23 bank will commence not later than 1 year after the

24 project has been completed.
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1 (7) ensure that the term for repaying any loan

2 will not exceed 30 years after the date of the first

3 payment on the loan under paragraph (5); and

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

5 to the Secretary on its status and make such other

6 reports as the Secretary may require by guidelines.

7 (d) FORMS OF ASSISTANCE FROM INFRASTRUCTURE

8 BANKS.—

9 (1) IN GENERAL.—An infrastructure bank es10 tablished under this section may make loans to a

11 local educational agency or a public library in an

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

13 out a project eligible for assistance under this sec14 tion.

15 (2) APPLICATIONS FOR LOANS.—An application

16 to an infrastructure bank by a local educational

17 agency or a public library for a loan shall include—

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

19 description of each architectural, civil, struc20 tural, mechanical, or electrical deficiency to be

21 corrected with funds under a loan and the pri22 orities to be applied;

23 (B) a description of the criteria used by

24 the applicant to determine the type of corrective

25 action necessary for the renovation of a facility;
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1 (C) a description of improvements to be

2 made and a cost estimate for the improvements;

3 (D) a description of how work undertaken

4 with the loan will promote energy conservation;

5 and

6 (E) such other information as the infra7 structure bank may require.

8 An infrastructure bank shall take final action on a

9 completed application submitted to it within 90 days

10 after the date of its submittal.

11 (3) CRITERIA FOR LOANS.—In considering ap12 plications for a loan an infrastructure bank shall

13 consider—

14 (A) the extent to which the local edu15 cational agency or public library involved lacks

16 the fiscal capacity, including the ability to raise

17 funds through the full use of such agency’s

18 bonding capacity and otherwise, to undertake

19 the project for which the loan would be used

20 without the loan;

21 (B) in the case of a local educational agen22 cy, the threat that the condition of the physical

23 plant in the project poses to the safety and

24 well-being of students;
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1 (C) the demonstrated need for the con2 struction, reconstruction, or renovation based

3 on the condition of the facility in the project;

4 and

5 (D) the age of such facility.

6 (e) QUALIFYING PROJECTS.—

7 (1) IN GENERAL.—A project is eligible for a

8 loan from an infrastructure bank if it is a project

9 that consists of—

10 (A) the construction of new elementary or

11 secondary schools to meet the needs imposed by

12 enrollment growth;

13 (B) the repair or upgrading of classrooms

14 or structures related to academic learning, in15 cluding the repair of leaking roofs, crumbling

16 walls, inadequate plumbing, poor ventilation

17 equipment, and inadequate heating or light

18 equipment;

19 (C) an activity to increase physical safety

20 at the educational facility involved;

21 (D) an activity to enhance the educational

22 facility involved to provide access for students,

23 teachers, and other individuals with disabilities;

24 (E) an activity to address environmental

25 hazards at the educational facility involved,
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1 such as poor ventilation, indoor air quality, or

2 lighting;

3 (F) the provision of basic infrastructure

4 that facilitates educational technology, such as

5 communications outlets, electrical systems,

6 power outlets, or a communication closet;

7 (G) work that will bring an educational fa8 cility into conformity with the requirements

9 of—

10 (i) environmental protection or health

11 and safety programs mandated by Federal,

12 State, or local law if such requirements

13 were not in effect when the facility was ini14 tially constructed; and

15 (ii) hazardous waste disposal, treat16 ment, and storage requirements mandated

17 by the Resource Conservation and Recov18 ery Act of 1976 or similar State laws;

19 (H) work that will enable efficient use of

20 available energy resources, especially coal, solar

21 power, and other renewable energy resources;

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

23 contain asbestos hazards in educational facili24 ties; or
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1 (J) work to construct new public library

2 facilities or repair or upgrade existing public li3 brary facilities.

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

5 the Act of March 3, 1931 (referred to as the ‘‘Davis6 Bacon Act’’, 40 U.S.C. 276a et seq.) shall apply

7 with respect to individuals employed on the projects

8 described in paragraph (1).

9 (f) SUPPLEMENTATION.—Any loan made by an infra10 structure bank shall be used to supplement and not sup11 plant other Federal, State, and local funds available.

12 (g) LIMITATION ON REPAYMENTS.—Notwithstanding

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

14 an infrastructure bank under this section may not be cred15 ited towards the non-Federal share of the cost of any

16 project.

17 (h) SECRETARIAL REQUIREMENTS.—In admin18 istering this section, the Secretary of the Treasury shall

19 specify procedures and guidelines for establishing, oper20 ating, and providing assistance from an infrastructure

21 bank.

22 (i) UNITED STATES NOT OBLIGATED.—The con23 tribution of Federal funds into an infrastructure bank es24 tablished under this section shall not be construed as a

25 commitment, guarantee, or obligation on the part of the
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1 United States to any third party, nor shall any third party

2 have any right against the United States for payment sole3 ly by virtue of the contribution. Any security or debt fi4 nancing instrument issued by the infrastructure bank

5 shall expressly state that the security or instrument does

6 not constitute a commitment, guarantee, or obligation of

7 the United States.

8 (j) MANAGEMENT OF FEDERAL FUNDS.—Sections

9 3335 and 6503 of title 31, United States Code, shall not

10 apply to funds contributed under this section.

11 (k) PROGRAM ADMINISTRATION.—For each of fiscal

12 years 2000 through 2004, a State may expend not to ex13 ceed 2 percent of the Federal funds contributed to an in14 frastructure bank established by the State under this sec15 tion to pay the reasonable costs of administering the bank.

16 (l) SECRETARIAL REVIEW.—The Secretary of the

17 Treasury shall review the financial condition of each infra18 structure bank established under this section and transmit

19 to Congress a report on the results of such review not later

20 than 90 days after the completion of the review.

21 (m) AUTHORIZATION OF APPROPRIATIONS.—For

22 grants to States for the initial capitalization of infrastruc23 ture banks there are authorized to be appropriated
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1 $250,000,000 for fiscal year 2000 and for each of the next

2 4 fiscal years.

Æ