I
105TH CONGRESS
1ST SESSION
H. R. 1639
To establish an education development block grant program to allow local
educational agencies to use such funds and to borrow five times the
amount of such funds to repair school infrastructure.
IN THE HOUSE OF REPRESENTATIVES
MAY 15, 1997
Ms. WATERS (for herself, Mr. CUMMINGS, Mr. HILLIARD, Mr. JACKSON of Il-
linois, Ms. JACKSON-LEE of Texas, Ms. MCKINNEY, Mrs. MEEK of Flor-
ida, Mr. THOMPSON, Ms. BROWN of Florida, Mr. RUSH, Mr. TOWNS, Mr.
DIXON, Mr. STOKES, Mr. CONYERS, Mr. DELLUMS, Mr. RANGEL, Mrs.
CLAYTON, Ms. KILPATRICK, Mr. CLYBURN, Mr. FORD, Mr. DAVIS of Illi-
nois, Mr. OWENS, Mr. WATT of North Carolina, Mr. WYNN, Mr. SCOTT,
Mr. HASTINGS of Florida, Ms. CHRISTIAN-GREEN, Ms. CARSON, Ms.
NORTON, Mr. PAYNE, Mr. CLAY, Mr. JEFFERSON, Ms. EDDIE BERNICE
JOHNSON of Texas, Mr. FATTAH, Mr. LEWIS of Georgia, and Ms.
MILLENDER-MCDONALD) introduced the following bill; which was re-
ferred to the Committee on Education and the Workforce
A BILL
To establish an education development block grant program
to allow local educational agencies to use such funds
and to borrow five times the amount of such funds
to repair school infrastructure.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Education Develop-
ment Block Grant Act of 1997’’.
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
TITLE I—BLOCK GRANTS AND GRANT REQUIREMENTS
Sec. 101. Block grants.
Sec. 102. Education plans.
Sec. 103. Review of plans.
Sec. 104. Regulations.
Sec. 105. Authorization of appropriations.
TITLE II—ALLOCATION OF GRANT AMOUNTS
Sec. 201. Annual allocation.
TITLE III—FEDERAL GUARANTEES FOR FINANCING
Sec. 301. Authority and requirements.
Sec. 302. Security and repayment.
Sec. 303. Payment of interest.
Sec. 304. Training and information.
Sec. 305. Limitations on amount of guarantees.
SEC. 3. DEFINITIONS.
(a) LOCAL BOND AUTHORITY.—The term ‘‘local
bond authority’’ means—
(1) a local educational agency with authority to
issue a bond for construction or renovation of edu-
cational facilities in a local area; and
(2) a political subdivision of a State with au-
thority to issue such a bond for an area including
a local area.
(b) SECRETARY.—The term ‘‘Secretary’’ means the
Secretary of Education.
(c) STATE.—The term ‘‘State’’ means each of the
several States of the United States, the District of Colum-
bia, and the Commonwealth of Puerto Rico.
TITLE I—BLOCK GRANTS AND
GRANT REQUIREMENTS
SEC. 101. BLOCK GRANTS.
(a) AUTHORITY.—For each of fiscal years 1998
through 2001, the Secretary shall (to the extent amounts
are made available to carry out this Act) make grants
under this section to a local bond authority to allow such
authority to repair its school infrastructure.
(b) PLAN REQUIREMENT.—
(1) IN GENERAL.—The Secretary may make a
grant under this Act to a local bond authority for
a fiscal year only if—
(A) the local bond authority has submitted
to the Secretary an education plan for such fis-
cal year under section 102; and
(B) the plan has been determined under
section 103 to comply with the requirements of
section 102.
(2) WAIVER.—The Secretary may waive the ap-
plicability of the requirements under paragraph (1),
in whole or in part, if the Secretary finds that a
local bond authority has not complied or cannot
comply with such requirements due to circumstances
beyond the control of the authority.
(c) ADMINISTRATIVE
EXPENSES.—The Secretary
shall, by regulation, authorize each recipient to use not
more that 5 percent of any grant amounts received under
this Act for any reasonable administrative costs.
SEC. 102. EDUCATION PLANS.
(a) PLAN SUBMISSION.—The Secretary shall provide
for each local bond authority to submit an education plan
as described in subsections (b) and (c).
(b) 4-YEAR PLAN.—Each education plan under this
section shall be in a form prescribed by the Secretary and
shall contain, with respect to the 4-year period beginning
with the fiscal year for which the plan is submitted, the
following information:
(c) 1-YEAR PLAN.—An education plan under this
section for a local bond authority shall be in a form pre-
scribed by the Secretary and contain the following infor-
mation relating to the upcoming fiscal year for which the
assistance under this Act is to be made available:
SEC. 103. REVIEW OF PLANS.
(a) REVIEW AND NOTICE.—
(1) REVIEW.—The Secretary shall conduct a
limited review of each education plan submitted to
the Secretary to ensure that the plan complies with
the requirements of section 102. The Secretary shall
have the discretion to review a plan only to the ex-
tent that the Secretary considers review is necessary.
(2) NOTICE.—The Secretary shall notify each
local bond authority for which a plan is submitted
whether the plan complies with such requirements
not later than 60 days after receiving the plan. If
the Secretary does not notify the local bond author-
ity, as required under this subsection and subsection
(b), the plan shall be considered, for purposes of this
Act, to have been determined to comply with the re-
quirements under section 102 and the local bond au-
thority shall be considered to have been notified of
compliance upon the expiration of such 60-day
period.
(b) NOTICE OF REASONS FOR DETERMINATION OF
NONCOMPLIANCE.—If the Secretary determines that a
plan, as submitted, does not comply with the requirements
under section 102, the Secretary shall specify in the notice
under subsection (a) the reasons for the noncompliance
and any modifications necessary for the plan to meet the
requirements under section 102.
(c) REVIEW.—After submission of the education plan
or any amendment or modification to the plan to the Sec-
retary, to the extent that the Secretary considers such ac-
tion to be necessary to make determinations under this
subsection, the Secretary shall review the plan (including
any amendments or modifications thereto) to determine
whether the contents of the plan—
(1) set forth the information required by section
102 to be contained in an education plan;
(2) are consistent with information and data
available to the Secretary; and
(3) are prohibited by or inconsistent with any
provision of this Act or other applicable law.
If the Secretary determines that any of the appropriate
certifications required under section 102 are not included
in the plan, the plan shall be deemed to be incomplete.
(d) UPDATES TO PLAN.—After a plan under section
102 has been submitted for a local bond authority for any
fiscal year, the local bond authority may comply with the
provisions of such section for any succeeding fiscal year
(with respect to information included for the 4-year period
under section 102(b) or the 1-year period under section
102(c)) by submitting only such information regarding
such changes as may be necessary to update the plan pre-
viously submitted.
(e) EFFECTIVE DATE.—This section and section 102
shall take effect on the date provided by the Secretary.
SEC. 104. REGULATIONS.
Not later than 90 days after the date of the enact-
ment of this Act, the Secretary shall, by notice issued in
the Federal Register, establish any requirements nec-
essary to implement this Act.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for grants
under this title $2,000,000,000 for each of fiscal years
1998, 1999, 2000, and 2001.
TITLE II—ALLOCATION OF
GRANT AMOUNTS
SEC. 201. ANNUAL ALLOCATION.
For each fiscal year, the Secretary shall allocate any
amounts made available for assistance under this Act for
the fiscal year, in accordance with the provisions of part
A of title I of the Elementary and Secondary Education
Act of 1965.
TITLE III—FEDERAL
GUARANTEES FOR FINANCING
SEC. 301. AUTHORITY AND REQUIREMENTS.
(a) AUTHORITY.—To such extent or in such amounts
as provided in appropriations Acts, the Secretary may,
subject to the limitations of this title and upon such terms
and conditions as the Secretary may prescribe, guarantee
and make commitments to guarantee, the notes or other
obligations issued by local bond authorities, for the pur-
poses of financing repairs to school infrastructure.
(b) LACK OF FINANCING ELSEWHERE.—A guarantee
under this title may be used to assist a local bond author-
ity in obtaining financing only if the local bond authority
has made efforts to obtain such financing without the use
of such guarantee and cannot complete such financing
consistent with the timely execution of the program plans
without such guarantee.
(c) TERMS OF LOANS.—Notes or other obligations
guaranteed pursuant to this title shall be in such form
and denominations, have such maturities, and be subject
to such conditions as may be prescribed by regulations is-
sued by the Secretary. The Secretary may not deny a
guarantee under this title on the basis of the proposed
repayment period for the note or other obligation, unless
the period is more than 20 years or the Secretary deter-
mines that the period causes the guarantee to constitute
an unacceptable financial risk.
(d) LIMITATION ON OUTSTANDING GUARANTEES.—
No guarantee or commitment to guarantee shall be made
with respect to any note or other obligation if the total
outstanding notes or obligations of the issuer guaranteed
under this title (excluding any amount defeased under the
contract entered into under section 302(a)(1)) would
thereby exceed an amount equal to 5 times the amount
of the grant approval for the issuer pursuant to title III.
SEC. 302. SECURITY AND REPAYMENT.
(a) REQUIREMENTS ON ISSUER.—To assure the re-
payment of notes or other obligations and charges in-
curred under this title and as a condition for receiving
such guarantees, the Secretary shall require the local bond
authority issuing such notes or obligations to—
(1) enter into a contract, in a form acceptable
to the Secretary, for repayment of notes or other ob-
ligations guaranteed under this title;
(2) pledge any grant for which the issuer may
become eligible under this Act;
(3) demonstrate that the extent of such issu-
ance and guarantee under this title is within the fi-
nancial capacity of the local bond authority and is
not likely to impair the ability to use grant amounts
under title I; and
(4) furnish, at the discretion of the Secretary,
such other security as may be deemed appropriate
by the Secretary in making such guarantees.
(b) REPAYMENT FROM GRANT AMOUNTS.—Notwith-
standing any other provision of this Act—
(1) the Secretary may apply grants pledged
pursuant to subsection (a)(2) to any repayments due
the United States as a result of such guarantees;
and
(2) grants allocated under this Act for a local
bond authority may be used to pay principal and in-
terest due (including such servicing, underwriting,
and other costs as may be specified in regulations is-
sued by the Secretary) on notes or other obligations
guaranteed pursuant to this title.
(c) FULL FAITH AND CREDIT.—The full faith and
credit of the United States is pledged to the payment of
all guarantees made under this title. Any such guarantee
made by the Secretary shall be conclusive evidence of the
eligibility of the obligations for such guarantee with re-
spect to principal and interest, and the validity of any such
guarantee so made shall be incontestable in the hands of
a holder of the guaranteed obligations.
SEC. 303. PAYMENT OF INTEREST.
The Secretary may make, and contract to make,
grants, in such amounts as may be approved in appropria-
tions Acts, to or on behalf of a local bond authority issuing
notes or other obligations guaranteed under this title, to
cover not to exceed 30 percent of the net interest cost (in-
cluding such servicing, underwriting, or other costs as may
be specified in regulations of the Secretary) to the borrow-
ing entity or agency of such obligations. The Secretary
may also, to the extent approved in appropriations Acts,
assist the issuer of a note or other obligation guaranteed
under this title in the payment of all or a portion of the
principal and interest amount due under the note or other
obligation, if the Secretary determines that the issuer is
unable to pay the amount because of circumstances of ex-
treme hardship beyond the control of the issuer.
SEC. 304. TRAINING AND INFORMATION.
The Secretary, in cooperation with eligible public en-
tities, shall carry out training and information activities
with respect to the guarantee program under this title.
SEC. 305. LIMITATIONS ON AMOUNT OF GUARANTEES.
(a) AGGREGATE FISCAL YEAR LIMITATION.—Not-
withstanding any other provision of law and subject only
to the absence of qualified applicants or proposed activities
and to the authority provided in this title, to the extent
approved or provided in appropriations Acts, the Secretary
may enter into commitments to guarantee notes and obli-
gations under this title.
(b) AUTHORIZATION OF APPROPRIATIONS FOR CRED-
IT SUBSIDY.—There are authorized to be appropriated to
cover the costs (as such term is defined in section 502
of the Congressional Budget Act of 1974) of guarantees
under this title such sums as may be necessary for each
of fiscal years 1998, 1999, 2000, and 2001.
(c) FISCAL YEAR LIMITATIONS.—The Secretary shall
monitor the use of guarantees under this title by local
bond authorities. If necessary, the Secretary may impose
limitations on the amount of guarantees any one local
bond authority may receive in any fiscal year.
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