I
105TH CONGRESS
1ST SESSION
H. R. 1822
To establish State infrastructure banks for education.
IN THE HOUSE OF REPRESENTATIVES
JUNE 5, 1997
Mrs. TAUSCHER (for herself, Mr. MCINTYRE, Ms. LOFGREN, Mr. FROST, Mr.
FARR of California, Mr. ENGLISH of Pennsylvania, Mr. MORAN of Vir-
ginia, Mr. DOOLEY of California, Mr. ROEMER, Mr. MILLER of Califor-
nia, Mr. JEFFERSON, Mr. LEWIS of Georgia, Mr. LAMPSON, Mr. MCGOV-
ERN, Mr. BROWN of California, Mr. BOYD, Ms. STABENOW, Ms. HOOLEY
of Oregon, Mr. PAYNE, Mr. FORD, Mr. MATSUI, Mr. SNYDER, Ms.
CHRISTIAN-GREEN, Ms. ESHOO, Ms. SANCHEZ, Mr. FILNER, Mr. PETER-
SON of Minnesota, Mr. MINGE, Mr. CONDIT, Mr. HOLDEN, Mr. FAZIO
of California, and Mr. TIERNEY) introduced the following bill; which was
referred to the Committee on Education and the Workforce
A BILL
To establish State infrastructure banks for education.
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 ‘‘State Infrastructure
Banks for Schools Act of 1997’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) According to a 1996 study conducted by the
American School & University, $10.42 billion was
spent to address the Nation’s education infrastruc-
ture needs in 1995, with the average total cost of a
new high school at $15.4 million.
(2) According to a 1995 report to Congress by
the General Accounting Office, an estimated $112
billion in school repair, modernization, expansion,
and construction is needed.
(3) Approximately 14 million American stu-
dents attend schools which report the need for exten-
sive repair or replacement of one or more buildings.
(4) Academic research has proven a direct cor-
relation between the condition of school facilities and
student achievement. At Georgetown University, re-
searchers found that students assigned to schools in
poor conditions can be expected to fall 10.9 percent-
age points behind those in buildings in excellent con-
dition. Similar studies have demonstrated up to a 20
percent improvement in test scores when students
were moved from a poor facility to a new facility.
(5) The Director of Education and Employment
Issues at the Government Accounting Office testified
that nearly 52 percent of schools, affecting 21.3 mil-
lion students, reported insufficient technology ele-
ments for 6 or more areas.
(6) Large numbers of local educational agencies
have difficulties securing financing for school facility
improvement.
(7) The challenges facing our Nation’s public
elementary and secondary schools require the con-
certed efforts of all levels of government and all sec-
tors of the community.
(8) The United States’s competitive position
within the world economy is vulnerable if America’s
future workforce continues to be educated in schools
not equipped for the 21st century.
SEC. 3. STATE INFRASTRUCTURE BANK PILOT PROGRAM.
(a) ESTABLISHMENT.—
(1) COOPERATIVE
AGREEMENTS.—Subject to
the provisions of this section, the Secretary of the
Treasury, in consultation with the Secretary of Edu-
cation, may enter into cooperative agreements with
States for the establishment of State infrastructure
banks and multistate infrastructure banks for mak-
ing loans to local educational agencies for building
or repairing elementary or secondary schools which
provide free public education (as such terms are de-
equal to 25 percent of the amount of each capitaliza-
tion grant made to the State and contributed to the
bank under subsection (b);
(2) identify an operating entity of the State as
recipient of the grant if the entity has the capacity
to manage loan funds and issue debt instruments of
the State for purposes of leveraging the funds;
(3) allow such funds to be used as reserve for
debt issued by the State so long as proceeds are de-
posited in the fund for loan purposes;
(4) ensure that investment income generated by
funds contributed to an account of the bank will
be—
(A) credited to the account;
(B) available for use in providing loans to
projects eligible for assistance from the account;
and
(C) invested in United States Treasury se-
curities, bank deposits, or such other financing
instruments as the Secretary may approve to
earn interest to enhance the leveraging of
projects assisted by the bank;
(5) ensure that any loan from the bank will
bear interest at or below the lowest interest rates
being offered for bonds the income from which is ex-
empt from Federal taxation, as determined by the
State, to make the project that is the subject of the
loan feasible;
(6) ensure that repayment of any loan from the
bank will commence not later than 1 year after the
project has been completed.
(7) ensure that the term for repaying any loan
will not exceed 30 years after the date of the first
payment on the loan under paragraph (5); and
(8) require the bank to make an annual report
to the Secretary on its status and make such other
reports as the Secretary may require by guidelines.
(d) FORMS OF ASSISTANCE FROM INFRASTRUCTURE
BANKS.—
(1) IN GENERAL.—An infrastructure bank es-
tablished under this section may make loans to a
local educational agency in an amount equal to all
or part of the cost of carrying out a project eligible
for assistance under this section.
(2) APPLICATIONS FOR LOANS.—An application
to an infrastructure bank by a local educational
agency for a loan shall include—
(A) in the case of a renovation project, a
description of each architectural, civil, struc-
tural, mechanical, or electrical deficiency to be
corrected with funds under a loan and the pri-
orities to be applied;
(B) a description of the criteria used by
the applicant to determine the type of corrective
action necessary for the renovation of a facility;
(C) a description of improvements to be
made and a cost estimate for the improvements;
(D) a description of how work undertaken
with the loan will promote energy conservation;
and
(E) such other information as the infra-
structure bank may require.
An infrastructure bank shall take final action on a
completed application submitted to it within 90 days
after the date of its submittal.
(3) CRITERIA FOR LOANS.—In considering ap-
plications for a loan an infrastructure bank shall
consider—
(A) the extent to which the local edu-
cational agency involved lacks the fiscal capac-
ity, including the ability to raise funds through
the full use of such agency’s bonding capacity
and otherwise, to undertake the project for
which the loan would be used without the loan;
(B) the threat that the condition of the
physical plant in the project poses to the safety
and well-being of students;
(C) the demonstrated need for the con-
struction, reconstruction, or renovation based
on the condition of the facility in the project;
and
(D) the age of such facility.
(e) QUALIFYING PROJECTS.—A project is eligible for
a loan from an infrastructure bank if it is a project that
consists of—
(1) the construction of new elementary or sec-
ondary schools to meet the needs imposed by enroll-
ment growth;
(2) the repair or upgrading of classrooms or
structures related to academic learning, including
the repair of leaking roofs, crumbling walls, inad-
equate plumbing, poor ventilation equipment, and in-
adequate heating or light equipment;
(3) an activity to increase physical safety at the
educational facility involved;
(4) an activity to enhance the educational facil-
ity involved to provide access for students, teachers,
and other individuals with disabilities;
(5) an activity to address environmental haz-
ards at the educational facility involved, such as
poor ventilation, indoor air quality, or lighting;
(6) the provision of basic infrastructure that fa-
cilitates educational technology, such as communica-
tions outlets, electrical systems, power outlets, or a
communication closet;
(7) work that will bring an educational facility
into conformity with the requirements of—
(A) environmental protection or health and
safety programs mandated by Federal, State, or
local law if such requirements were not in effect
when the facility was initially constructed; and
(B) hazardous waste disposal, treatment,
and storage requirements mandated by the Re-
source Conservation and Recovery Act of 1976
or similar State laws;
(8) work that will enable efficient use of avail-
able energy resources, especially coal, solar power,
and other renewable energy resources; or
(9) work to detect, remove, or otherwise contain
asbestos hazards in educational facilities.
(f) SUPPLEMENTATION.—Any loan made by an infra-
structure bank shall be used to supplement and not sup-
plant other Federal, State, and local funds available.
(g) LIMITATION ON REPAYMENTS.—Notwithstanding
any other provision of law, the repayment of a loan from
an infrastructure bank under this section may not be cred-
ited towards the non-Federal share of the cost of any
project.
(h) SECRETARIAL REQUIREMENTS.—In administer-
ing this section, the Secretary of the Treasury shall specify
procedures and guidelines for establishing, operating, and
providing assistance from an infrastructure bank.
(i) UNITED STATES NOT OBLIGATED.—The con-
tribution of Federal funds into an infrastructure bank es-
tablished under this section shall not be construed as a
commitment, guarantee, or obligation on the part of the
United States to any third party, nor shall any third party
have any right against the United States for payment sole-
ly by virtue of the contribution. Any security or debt fi-
nancing instrument issued by the infrastructure bank
shall expressly state that the security or instrument does
not constitute a commitment, guarantee, or obligation of
the United States.
(j) MANAGEMENT OF FEDERAL FUNDS.—Sections
3335 and 6503 of title 31, United States Code, shall not
apply to funds contributed under this section.
(k) PROGRAM ADMINISTRATION.—For each of fiscal
years 1998 through 2002, a State may expend not to ex-
ceed 2 percent of the Federal funds contributed to an in-
frastructure bank established by the State under this sec-
tion to pay the reasonable costs of administering the bank.
(l) SECRETARIAL REVIEW.—The Secretary of the
Treasury shall review the financial condition of each infra-
structure bank established under this section and transmit
to Congress a report on the results of such review not later
than 90 days after the completion of the review.
(m) AUTHORIZATION
OF
APPROPRIATIONS.—For
grants to States for the initial capitalization of infrastruc-
ture banks there are authorized to be appropriated
$250,000,000 for fiscal year 1998 and for each of the next
4 fiscal years.
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