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 require-
ments of the Davis-Bacon Act to projects financed with
such bonds.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. ALLOCATION OF NATIONAL LIMITATION ON
QUALIFIED SCHOOL CONSTRUCTION BONDS;
APPLICATION 
OF 
DAVIS-BACON 
ACT 
TO
PROJECTS FINANCED WITH BONDS.
(a) IN GENERAL.—Title XII of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 8501 et
seq.) is amended—
(1) by redesignating sections 12004 through
12013 as sections 12101 through 12110, respec-
tively;
(2) by inserting before section 12101 (as so re-
designated) the following:
‘‘PART A—GRANTS FOR IMPROVEMENT OF PUB-
LIC ELEMENTARY AND SECONDARY EDU-
CATION FACILITIES’’;
and
(3) by adding at the end the following:
‘‘PART B—QUALIFIED SCHOOL CONSTRUCTION
BONDS
‘‘SEC. 12201. ALLOCATION WITH RESPECT TO QUALIFIED
SCHOOL CONSTRUCTION BONDS.
‘‘(a) QUALIFIED SCHOOL CONSTRUCTION BOND.—
‘‘(1) IN GENERAL.—For purposes of this part,
the term ‘qualified school construction bond’ means
any bond issued as part of an issue if—
‘‘(A) a taxpayer who holds the bond is al-
lowed a credit under the Internal Revenue Code
of 1986;
‘‘(B) 95 percent or more of the proceeds of
such issue are to be used for the construction,
rehabilitation, or repair of a public school facil-
ity;
‘‘(C) the bond is issued by a State or local
government within the jurisdiction of which
such school is located; and
‘‘(D) the issuer designates such bond for
purposes of this section and the Internal Rev-
enue Code of 1986.
‘‘(2) TEMPORARY PERIOD EXCEPTION.—A bond
shall not be treated as failing to meet the require-
ment of paragraph (1)(B) solely by reason of the
fact that the proceeds of the issue of which such
bond is a part are invested for a reasonable tem-
porary period (but not more than 36 months) until
such proceeds are needed for the purpose for which
such issue was issued. Any earnings on such pro-
ceeds during such period shall be treated as proceeds
of the issue for purposes of applying paragraph
(1)(B).
‘‘(b) NATIONAL LIMITATION ON AMOUNT OF BONDS
DESIGNATED.—In any case in which there is imposed a
national limitation on the maximum aggregate face
amount of bonds issued during any calendar year which
may be designated as qualified school construction bonds,
such limitation shall be allocated in accordance with this
section.
‘‘(c) 
ONE-THIRD
OF
LIMITATION
ALLOCATED
AMONG STATES.—
‘‘(1) IN GENERAL.—One-third of the limitation
applicable under subsection (b) for any calendar
year shall be allocated among the States under para-
graph (2) by the Secretary. The limitation amount
allocated to a State under the preceding sentence
shall be allocated by the State educational agency to
issuers within such State and such allocations may
be made only if there is an approved State applica-
tion.
‘‘(2) ALLOCATION FORMULA.—The amount to
be allocated under paragraph (1) for any calendar
year shall be allocated among the States in propor-
tion to the respective amounts each such State re-
ceived for Basic Grants under subpart 2 of part A
of title I of this Act for the most recent fiscal year
ending before such calendar year. For purposes of
the preceding sentence, Basic Grants attributable to
large local educational agencies (as defined in sub-
section (d)), and Basic Grants attributable to high-
growth local educational agencies (as defined in sub-
section (e)), shall be disregarded.
‘‘(3) MINIMUM ALLOCATIONS TO STATES.—
‘‘(A) IN
GENERAL.—The Secretary shall
adjust the allocations under this subsection for
any calendar year for each State to the extent
necessary to ensure that the sum of—
‘‘(i) the amount allocated to such
State under this subsection for such year;
and
‘‘(ii) the aggregate amounts allocated
under subsections (d) and (e) to local edu-
cational agencies in such State for such
year;
is not less than an amount equal to such
State’s minimum percentage of one-third of the
national qualified school construction bond limi-
tation referred to in subsection (b) for the cal-
endar year.
‘‘(B) MINIMUM
PERCENTAGE.—A State’s
minimum percentage for any calendar year is
the minimum percentage described in section
1124(d) for such State for the most recent fis-
cal year ending before such calendar year.
‘‘(4) 
ALLOCATIONS
TO
CERTAIN
POSSES-
SIONS.—The amount to be allocated under para-
graph (1) to any possession of the United States (as
such term is used in the Internal Revenue Code of
1986) other than Puerto Rico shall be the amount
which would have been allocated if all allocations
under paragraph (1) were made on the basis of re-
spective populations of individuals below the poverty
line (as defined by the Office of Management and
Budget). In making other allocations, the amount to
be allocated under paragraph (1) shall be reduced by
the aggregate amount allocated under this para-
graph to possessions of the United States.
‘‘(5) APPROVED
STATE
APPLICATION.—For
purposes of paragraph (1), the term ‘approved State
application’ means an application which is approved
by the Secretary and which includes—
‘‘(A) the results of a recent publicly avail-
able survey (undertaken by the State with the
involvement of local education officials, mem-
bers of the public, and experts in school con-
struction and management) of such State’s
needs for public school facilities, including de-
scriptions of—
‘‘(i) health and safety problems at
such facilities;
‘‘(ii) the capacity of public schools in
the State to house projected enrollments;
and
‘‘(iii) the extent to which the public
schools in the State offer the physical in-
frastructure needed to provide a high-qual-
ity education to all students; and
‘‘(B) a description of how the State will al-
locate to local educational agencies, or other-
wise use, its allocation under this subsection to
address the needs identified under subpara-
graph (A), including a description of how it
will—
‘‘(i) give highest priority to localities
with the greatest needs, as demonstrated
by inadequate school facilities coupled with
a low level of resources to meet those
needs;
‘‘(ii) use its allocation under this sub-
section to assist localities that lack the fis-
cal capacity to issue bonds on their own;
and
‘‘(iii) ensure that its allocation under
this subsection is used only to supplement,
and not supplant, the amount of school
construction, rehabilitation, and repair in
the State that would have occurred in the
absence of such allocation.
Any allocation under paragraph (1) by a State edu-
cation agency shall be binding if such agency reason-
ably determined that the allocation was in accord-
ance with the plan approved under this paragraph.
‘‘(d) 
ONE-THIRD
OF
LIMITATION
ALLOCATED
AMONG LARGEST SCHOOL DISTRICTS.—
‘‘(1) IN GENERAL.—One-third of the limitation
applicable under subsection (b) for any calendar
year shall be allocated under paragraph (2) by the
Secretary among local educational agencies which
are large local educational agencies for such year.
No qualified school construction bond may be issued
by reason of an allocation to a large local edu-
cational agency under the preceding sentence unless
such agency has an approved local application.
‘‘(2) ALLOCATION FORMULA.—The amount to
be allocated under paragraph (1) for any calendar
year shall be allocated among large local educational
agencies in proportion to the respective amounts
each such agency received for Basic Grants under
subpart 2 of part A of title I of this Act for the
most recent fiscal year ending before such calendar
year.
‘‘(3) LARGE LOCAL EDUCATIONAL AGENCY.—
For purposes of this section, the term ‘large local
educational agency’ means, with respect to a cal-
endar year, any local educational agency (other than
a high-growth local educational agency, as defined in
subsection (e)) if such agency is—
‘‘(A) among the 100 local educational
agencies with the largest numbers of children
aged 5 through 17 from families living below
the poverty level, as determined by the Sec-
retary using the most recent data available
from the Department of Commerce that are
satisfactory to the Secretary; or
‘‘(B) 1 of not more than 25 local edu-
cational agencies (other than those described in
clause (i)) that the Secretary determines (based
on the most recent data available satisfactory to
the Secretary) are in particular need of assist-
ance, based on a low level of resources for
school construction, a high level of enrollment
growth, or such other factors as the Secretary
deems appropriate.
‘‘(4) APPROVED
LOCAL
APPLICATION.—For
purposes of paragraph (1), the term ‘approved local
application’ means an application which is approved
by the Secretary and which includes—
‘‘(A) the results of a recent publicly-avail-
able survey (undertaken by the local educational
agency with the involvement of school officials,
members of the public, and experts in school
construction and management) of such agency’s
needs for public school facilities, including de-
scriptions of—
‘‘(i) the overall condition of the local
educational agency’s school facilities, in-
cluding health and safety problems;
‘‘(ii) the capacity of the agency’s
schools to house projected enrollments; and
‘‘(iii) the extent to which the agency’s
schools offer the physical infrastructure
needed to provide a high-quality education
to all students;
‘‘(B) a description of how the local edu-
cational agency will use its allocation under this
‘‘SEC. 
12202. 
APPLICATION 
OF 
DAVIS-BACON 
ACT 
TO
PROJECTS 
FINANCED 
WITH 
QUALIFIED
SCHOOL CONSTRUCTION BONDS.
‘‘The wage requirements of the Act of March 3, 1931
(40 U.S.C. 276a et seq.) (commonly referred to as the
‘Davis-Bacon Act’) shall apply with respect to individuals
employed on school construction, rehabilitation, or repair
projects financed with the proceeds from an issuance of
qualified school construction bonds.’’.
(b) CONFORMING AMENDMENTS.—Title XII of such
Act is amended—
(1) in sections 12101 through 12110 (as so re-
designated), by striking ‘‘this title’’ each place it ap-
pears and inserting ‘‘this part’’;
(2) in section 12101(a)(1) (as so redesig-
nated)—
(A) by striking ‘‘section 12013’’ and in-
serting ‘‘section 12110’’;
(B) by striking ‘‘section 12005’’ and in-
serting ‘‘section 12102’’; and
(C) by striking ‘‘section 12007’’ and in-
serting ‘‘section 12104’’;
(3) in section 12101(a)(2) (as so redesignated),
by striking ‘‘section 12013’’ and inserting ‘‘section
12110’’; and
(4) in section 12109(3)(C) (as so redesignated),
by striking ‘‘section 12006’’ and inserting ‘‘section
12103’’.
Æ