I

107TH CONGRESS

1ST SESSION H. R. 1851

To establish State infrastructure banks for education.

IN THE HOUSE OF REPRESENTATIVES

MAY 15, 2001

Mrs. TAUSCHER (for herself, Mr. ETHERIDGE, Mr. CONDIT, Ms. VELA ́ZQUEZ,

Mr. FROST, Mr. UNDERWOOD, Mr. MCGOVERN, Mr. FILNER, and Mrs.

THURMAN) 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 2001’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:

8 (1) According to a 1996 study conducted by the

9 American School & University, $10.42 billion was

10 spent to address the Nation’s education infrastruc-
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1 ture needs in 1995, with the average total cost of a

2 new high school at $15.4 million.

3 (2) According to the National Center for Edu4 cation Statistics, an estimated $127 billion in school

5 repair, modernization, expansion, and construction is

6 needed.

7 (3) Approximately 14 million American stu8 dents attend schools which report the need for exten9 sive repair or replacement of one or more buildings.

10 (4) Academic research has proven a direct cor11 relation between the condition of school facilities and

12 student achievement. At Georgetown University, re13 searchers found that students assigned to schools in

14 poor conditions can be expected to fall 10.9 percent15 age points behind those in buildings in excellent con16 dition. Similar studies have demonstrated up to a 20

17 percent improvement in test scores when students

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

19 (5) The Director of Education and Employment

20 Issues at the Government Accounting Office testified

21 that nearly 52 percent of schools, affecting 21.3 mil22 lion students, reported insufficient technology ele23 ments for 6 or more areas.
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1 (6) Large numbers of local educational agencies

2 have difficulties securing financing for school facility

3 improvement.

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

5 elementary and secondary schools and libraries re6 quire the concerted efforts of all levels of govern7 ment and all sectors of the community.

8 (8) The United States’ competitive position

9 within the world economy is vulnerable if America’s

10 future workforce continues to be educated in schools

11 and libraries not equipped for the 21st century.

12 (9) The deplorable state of collections in Amer13 ica’s public school libraries has increased the de14 mands on public libraries. In many instances, public

15 libraries substitute for school libraries creating a

16 higher demand for material and physical space to

17 house literature and educational computer equip18 ment.

19 (10) Research shows that 50 percent of a

20 child’s intellectual development takes place before

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

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

23 they provide a wealth of books and other resources

24 that can give every child a head start on life and

25 learning.
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1 SEC. 3. STATE INFRASTRUCTURE BANK PILOT PROGRAM.

2 (a) ESTABLISHMENT.—

3 (1) COOPERATIVE AGREEMENTS.—Subject to

4 the provisions of this section, the Secretary of the

5 Treasury, in consultation with the Secretary of Edu6 cation, may enter into cooperative agreements with

7 States for the establishment of State infrastructure

8 banks and multistate infrastructure banks for mak9 ing loans to local educational agencies for building

10 or repairing elementary or secondary schools which

11 provide free public education (as such terms are de12 fined in section 14101 of the Elementary and Sec13 ondary Education Act of 1965 (20 U.S.C. 8801))

14 and to public libraries for building or repairing li15 brary facilities.

16 (2) INTERSTATE COMPACTS.—Congress grants

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

18 cooperative agreement under paragraph (1) with the

19 Secretary of the Treasury for the establishment of a

20 multistate infrastructure bank, to enter into an

21 interstate compact establishing such bank in accord22 ance with this section.

23 (b) FUNDING.—The Secretary of the Treasury, in

24 consultation with the Secretary of Education, shall make

25 grants to State infrastructure banks and multistate infra26 structure banks in a State in a cooperative agreement
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1 under subsection (a)(1) to provide initial capital for loans

2 provided under this section to local educational agencies

3 and public libraries. Each bank shall apply repayments of

4 principal and interest on loans to the making of additional

5 loans. The Secretary shall take final action on an applica6 tion for a grant under this subsection within 90 days of

7 the date of the submittal of such application.

8 (c) INFRASTRUCTURE BANK REQUIREMENTS.—In

9 order to establish an infrastructure bank under this sec10 tion, each State establishing the bank shall—

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

12 of the bank from non-Federal sources an amount

13 equal to 25 percent of the amount of each capitaliza14 tion grant made to the State and contributed to the

15 bank under subsection (b);

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

17 recipient of the grant if the entity has the capacity

18 to manage loan funds and issue debt instruments of

19 the State for purposes of leveraging the funds;

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

21 debt issued by the State so long as proceeds are de22 posited in the fund for loan purposes;

23 (4) ensure that investment income generated by

24 funds contributed to an account of the bank will

25 be—
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1 (A) credited to the account;

2 (B) available for use in providing loans to

3 projects eligible for assistance from the account;

4 and

5 (C) invested in United States Treasury se6 curities, bank deposits, or such other financing

7 instruments as the Secretary may approve to

8 earn interest to enhance the leveraging of

9 projects assisted by the bank;

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

11 bear interest at or below the lowest interest rates

12 being offered for bonds the income from which is ex13 empt from Federal taxation, as determined by the

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

15 loan feasible;

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

17 bank will commence not later than 1 year after the

18 project has been completed;

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

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

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

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

23 to the Secretary on its status and make such other

24 reports as the Secretary may require by guidelines.
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1 (d) FORMS OF ASSISTANCE FROM INFRASTRUCTURE

2 BANKS.—

3 (1) IN GENERAL.—An infrastructure bank es4 tablished under this section may make loans to a

5 local educational agency or a public library in an

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

7 out a project eligible for assistance under this sec8 tion.

9 (2) APPLICATIONS FOR LOANS.—An application

10 to an infrastructure bank by a local educational

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

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

13 description of each architectural, civil, struc14 tural, mechanical, or electrical deficiency to be

15 corrected with funds under a loan and the pri16 orities to be applied;

17 (B) a description of the criteria used by

18 the applicant to determine the type of corrective

19 action necessary for the renovation of a facility;

20 (C) a description of improvements to be

21 made and a cost estimate for the improvements;

22 (D) a description of how work undertaken

23 with the loan will promote energy conservation;

24 and
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1 (E) such other information as the infra2 structure bank may require.

3 An infrastructure bank shall take final action on a

4 completed application submitted to it within 90 days

5 after the date of its submittal.

6 (3) CRITERIA FOR LOANS.—In considering ap7 plications for a loan an infrastructure bank shall

8 consider—

9 (A) the extent to which the local edu10 cational agency or public library involved lacks

11 the fiscal capacity, including the ability to raise

12 funds through the full use of such agency’s

13 bonding capacity and otherwise, to undertake

14 the project for which the loan would be used

15 without the loan;

16 (B) in the case of a local educational agen17 cy, the threat that the condition of the physical

18 plant in the project poses to the safety and

19 well-being of students;

20 (C) the demonstrated need for the con21 struction, reconstruction, or renovation based

22 on the condition of the facility in the project;

23 and

24 (D) the age of such facility.

25 (e) QUALIFYING PROJECTS.—
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1 (1) IN GENERAL.—A project is eligible for a

2 loan from an infrastructure bank if it is a project

3 that consists of—

4 (A) the construction of new elementary or

5 secondary schools to meet the needs imposed by

6 enrollment growth;

7 (B) the repair or upgrading of classrooms

8 or structures related to academic learning, in9 cluding the repair of leaking roofs, crumbling

10 walls, inadequate plumbing, poor ventilation

11 equipment, and inadequate heating or light

12 equipment;

13 (C) an activity to increase physical safety

14 at the educational facility involved;

15 (D) an activity to enhance the educational

16 facility involved to provide access for students,

17 teachers, and other individuals with disabilities;

18 (E) an activity to address environmental

19 hazards at the educational facility involved,

20 such as poor ventilation, indoor air quality, or

21 lighting;

22 (F) the provision of basic infrastructure

23 that facilitates educational technology, such as

24 communications outlets, electrical systems,

25 power outlets, or a communication closet;
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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 disposal, treat10 ment, and storage requirements mandated

11 by the Resource Conservation and Recov12 ery Act of 1976 or similar State laws;

13 (H) work that will enable efficient use of

14 available energy resources, especially coal, solar

15 power, and other renewable energy resources;

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

17 contain asbestos hazards in educational facili18 ties; or

19 (J) work to construct new public library

20 facilities or repair or upgrade existing public li21 brary facilities.

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

23 the Act of March 3, 1931 (referred to as the ‘‘Davis24 Bacon Act’’, 40 U.S.C. 276a et seq.) shall apply
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1 with respect to individuals employed on the projects

2 described in paragraph (1).

3 (f) SUPPLEMENTATION.—Any loan made by an infra4 structure bank shall be used to supplement and not sup5 plant other Federal, State, and local funds available.

6 (g) LIMITATION ON REPAYMENTS.—Notwithstanding

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

8 an infrastructure bank under this section may not be cred9 ited towards the non-Federal share of the cost of any

10 project.

11 (h) SECRETARIAL REQUIREMENTS.—In admin12 istering this section, the Secretary of the Treasury shall

13 specify procedures and guidelines for establishing, oper14 ating, and providing assistance from an infrastructure

15 bank.

16 (i) UNITED STATES NOT OBLIGATED.—The con17 tribution of Federal funds into an infrastructure bank es18 tablished under this section shall not be construed as a

19 commitment, guarantee, or obligation on the part of the

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

21 have any right against the United States for payment sole22 ly by virtue of the contribution. Any security or debt fi23 nancing instrument issued by the infrastructure bank

24 shall expressly state that the security or instrument does
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1 not constitute a commitment, guarantee, or obligation of

2 the United States.

3 (j) MANAGEMENT OF FEDERAL FUNDS.—Sections

4 3335 and 6503 of title 31, United States Code, shall not

5 apply to funds contributed under this section.

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

7 years 2002 through 2006, a State may expend not to ex8 ceed 2 percent of the Federal funds contributed to an in9 frastructure bank established by the State under this sec10 tion to pay the reasonable costs of administering the bank.

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

12 Treasury shall review the financial condition of each infra13 structure bank established under this section and transmit

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

15 than 90 days after the completion of the review.

16 (m) AUTHORIZATION OF APPROPRIATIONS.—For

17 grants to States for the initial capitalization of infrastruc18 ture banks there are authorized to be appropriated

19 $500,000,000 for fiscal year 2002 and for each of the next

20 4 fiscal years.

21 SEC. 4. DEFINITIONS.

22 For purposes of this Act:

23 (1) LOCAL EDUCATIONAL AGENCY.—(A) The

24 term ‘‘local educational agency’’ means a public

25 board of education or other public authority legally
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1 constituted within a State for either administrative

2 control or direction of, or to perform a service func3 tion for, public elementary or secondary schools in a

4 city, county, township, school district, or other polit5 ical subdivision of a State, or for such combination

6 of school districts or counties as are recognized in a

7 State as an administrative agency for its public ele8 mentary or secondary schools.

9 (B) The term includes any other public institu10 tion or agency having administrative control and di11 rection of a public elementary or secondary school.

12 (C) The term includes an elementary or sec13 ondary school funded by the Bureau of Indian Af14 fairs but only to the extent that such inclusion

15 makes such school eligible for programs for which

16 specific eligibility is not provided to such school in

17 another provision of law and such school does not

18 have a student population that is smaller than the

19 student population of the local educational agency

20 receiving assistance under this Act with the smallest

21 student population, except that such school shall not

22 be subject to the jurisdiction of any State edu23 cational agency other than the Bureau of Indian Af24 fairs.
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1 (2) OUTLYING AREA.—The term ‘‘outlying

2 area’’ means the Virgin Islands, Guam, American

3 Samoa, the Commonwealth of the Northern Mariana

4 Islands, the Republic of the Marshall Islands, the

5 Federated States of Micronesia, and the Republic of

6 Palau.

7 (3) PUBLIC LIBRARY.—The term ‘‘public li8 brary’’ means a library that serves free of charge all

9 residents of a community, district, or region, and re10 ceives its financial support in whole or in part from

11 public funds. Such term also includes a research li12 brary, which, for the purposes of this sentence,

13 means a library that—

14 (A) makes its services available to the pub15 lic free of charge;

16 (B) has extensive collections of books,

17 manuscripts, and other materials suitable for

18 scholarly research which are not available to the

19 public through public libraries;

20 (C) engages in the dissemination of hu21 manistic knowledge through services to readers,

22 fellowships, educational and cultural programs,

23 publication of significant research, and other

24 activities; and
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1 (D) is not an integral part of an institu2 tion of higher education.

3 (4) STATE.—The term ‘‘State’’ means each of

4 the 50 States, the District of Columbia, the Com5 monwealth of Puerto Rico, and each of the outlying

6 areas.

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