I
105TH CONGRESS
1ST SESSION
H. R. 1104
To establish a partnership to rebuild and modernize America’s school facilities.
IN THE HOUSE OF REPRESENTATIVES
MARCH 18, 1997
Mrs. LOWEY (for herself, Mr. KENNEDY of Massachusetts, Mr. CLAY, Mrs.
MALONEY of New York, Mr. SCHUMER, Ms. DELAURO, Mr. MILLER of
California, Mr. KILDEE, Mr. MARTINEZ, Mr. SAWYER, Mr. GREEN, Ms.
WATERS, Ms. NORTON, Mr. KUCINICH, Mr. DIXON, Mr. ANDREWS, Mr.
HASTINGS of Florida, Ms. PELOSI, Mr. HINOJOSA, Mr. LEWIS of Geor-
gia, Ms. SANCHEZ, Ms. CHRISTIAN-GREEN, Mrs. MCCARTHY of New
York, Mr. MCGOVERN, Mr. NEAL of Massachusetts, Ms. MCCARTHY of
Missouri, Mr. MATSUI, Mrs. MINK of Hawaii, Mr. STOKES, Mr. CON-
YERS, Mr. FROST, Mr. MCDERMOTT, Mr. BENTSEN, Mr. FORD, Mr.
ETHERIDGE, Mr. UNDERWOOD, Mr. BALDACCI, Mr. FATTAH, Ms.
MCKINNEY, Mr. GONZALEZ, Mr. MARKEY, and Mr. GUTIERREZ) intro-
duced the following bill; which was referred to the Committee on Edu-
cation and the Workforce
A BILL
To establish a partnership to rebuild and modernize
America’s school facilities.
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 ‘‘Partnership to Rebuild
America’s Schools Act of 1997’’.
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TITLE I—SCHOOL CONSTRUCTION ASSISTANCE
PROGRAM
TABLE OF CONTENTS
SEC. 101. The table of contents for this Act is as
follows:
TITLE I—SCHOOL CONSTRUCTION ASSISTANCE PROGRAM
Sec. 101. Table of contents.
PART 1—PROGRAM AUTHORIZED
Sec. 102. Findings and purpose.
Sec. 103. Definitions.
Sec. 104. Funds appropriated.
Sec. 105. Allocation of funds.
PART 2—GRANTS TO STATES
Sec. 111. Allocation of funds.
Sec. 112. Eligible State agency.
Sec. 113. Allowable uses of funds.
Sec. 114. Eligible construction projects; period for initiation.
Sec. 115. Selection of localities and projects.
Sec. 116. State applications.
Sec. 117. Amount of Federal subsidy.
Sec. 118. Separate funds or accounts; prudent investment.
Sec. 119. State reports.
PART 3—DIRECT GRANTS TO LOCAL EDUCATIONAL AGENCIES
Sec. 121. Eligible local educational agencies.
Sec. 122. Grantees.
Sec. 123. Allowable uses of funds.
Sec. 124. Eligible construction projects; redistribution.
Sec. 125. Local applications.
Sec. 126. Formula grants.
Sec. 127. Competitive grants.
Sec. 128. Amount of Federal subsidy.
Sec. 129. Separate funds or accounts; prudent investment.
Sec. 130. Local reports.
TITLE II—GENERAL PROVISIONS
Sec. 201. Technical employees.
Sec. 202. Wage rates.
Sec. 203. No liability of Federal Government.
Sec. 204. Consultation with Secretary of the Treasury.
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PART 1—PROGRAM AUTHORIZED
FINDINGS AND PURPOSE
SEC. 102. (a) FINDINGS.—The Congress finds as fol-
lows:
(1) According to the General Accounting Office,
one-third of all elementary and secondary schools in
the United States, serving 14,000,000 students,
need extensive repair or renovation.
(2) School infrastructure problems exist across
the country, but are most severe in central cities and
in schools with high proportions of poor and minor-
ity children.
(3) Many States and school districts will need
to build new schools in order to accommodate in-
creasing student enrollments; the Department of
Education has predicted that the Nation will need
6,000 more schools by the year 2006.
(4) Many schools do not have the physical in-
frastructure to take advantage of computers and
other technology needed to meet the challenges of
the next century.
(5) While school construction and maintenance
are primarily a State and local concern, States and
communities have not, on their own, met the in-
creasing burden of providing acceptable school facili-
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ties for all students, and the poorest communities
have had the greatest difficulty meeting this need.
(6) The Federal Government, by providing in-
terest subsidies and similar types of support, can
lower the costs of State and local school infrastruc-
ture investment, creating an incentive for States and
localities to increase their own infrastructure im-
provement efforts and helping ensure that all stu-
dents are able to attend schools that are equipped
for the 21st century.
(b) PURPOSE.—The purpose of this Act is to provide
Federal interest subsidies, or similar assistance, to States
and localities to help them bring all public school facilities
up to an acceptable standard and build the additional pub-
lic schools needed to educate the additional numbers of
students who will enroll in the next decade.
DEFINITIONS
SEC. 103. Except as otherwise provided, as used in
this Act, the following terms have the following meanings:
(1) CHARTER
SCHOOL.—The term ‘‘charter
school’’ has the meaning given that term in section
10306(1) of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 8066(1)).
(2) COMMUNITY SCHOOL.—The term ‘‘commu-
nity school’’ means a school, or part of a school, that
serves as a center for after-school and summer pro-
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grams and delivery of education, tutoring, cultural,
and recreational services, and as a safe haven for all
members of the community by—
(A) collaborating with other public and pri-
vate nonprofit agencies (including libraries and
other educational, human-service, cultural, and
recreational entities) and private businesses in
the provision of services;
(B) providing services such as literacy and
reading programs; senior citizen programs; chil-
dren’s day-care services; nutrition services; serv-
ices for individuals with disabilities; employ-
ment counseling, training, and placement; and
other educational, health, cultural, and rec-
reational services; and
(C) providing those services outside the
normal school day and school year, such as
through safe and drug-free safe havens for
learning.
(3)(A) CONSTRUCTION.—The term ‘‘construc-
tion’’ means—
(i) the preparation of drawings and speci-
fications for school facilities;
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(ii) erecting, building, acquiring, remodel-
ing, renovating, improving, repairing or extend-
ing school facilities;
(iii) demolition, in preparation for rebuild-
ing school facilities; and
(iv) the inspection and supervision of the
construction of school facilities.
(B) The term ‘‘construction’’ does not include
the acquisition of any interest in real property.
(4) LOCAL EDUCATIONAL AGENCY.—The term
‘‘local educational agency’’ has the meaning given
that term in section 14101(18) (A) and (B) of the
Elementary and Secondary Education Act of 1965
(20 U.S.C. 8801(18) (A) and (B)).
(5) SCHOOL FACILITY.—(A) Term ‘‘school facil-
ity’’ means—
(i) a public structure suitable for use as a
classroom, laboratory, library, media center, or
related facility, whose primary purpose is the
instruction of public elementary or secondary
students; and
(ii) initial equipment, machinery, and utili-
ties necessary or appropriate for school pur-
poses.
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(B) The term ‘‘school facility’’ does not include
an athletic stadium, or any other structure or facil-
ity intended primarily for athletic exhibitions, con-
tests, games, or events for which admission is
charged to the general public.
(6) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Education.
(7) STATE.—The term ‘‘State’’ means each of
the 50 States and the Commonwealth of Puerto
Rico.
(8) STATE EDUCATIONAL AGENCY.—The term
‘‘State educational agency’’ has the meaning given
that term in section 14101(28) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C.
8801(28)).
FUNDS APPROPRIATED
SEC. 104. There are appropriated $5,000,000,000 for
the purpose of carrying out this Act, which shall be avail-
able for obligation by the Secretary of Education from Oc-
tober 1, 1997 until September 30, 2001.
ALLOCATION OF FUNDS
SEC. 105. (a) RESERVATION FOR THE SECRETARY
OF THE INTERIOR AND THE OUTLYING AREAS.—
(1) The Secretary shall reserve up to 2 percent
of the funds appropriated by section 104 to—
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(A) provide assistance to the Secretary of
the Interior, which the Secretary of the Interior
shall use for the school construction priorities
described in section 1125(c) of the Education
Amendments of 1978 (25 U.S.C. 2005(c)); and
(B) make grants to American Samoa,
Guam, the Virgin Islands, and the Common-
wealth of the Northern Mariana Islands, in ac-
cordance with their respective needs, as deter-
mined by the Secretary.
(2) Grants provided under paragraph (1)(B)
shall be used for activities that the Secretary deter-
mines best meet the school infrastructure needs of
the areas identified in that paragraph, subject to the
terms and conditions, consistent with the purpose of
this Act, that the Secretary may establish.
(b) ALLOCATION OF REMAINING FUNDS.—Of the re-
maining funds appropriated by section 104—
(1) 50 percent shall be used for formula grants
to States under section 111;
(2) 35 percent shall be used for direct formula
grants to local educational agencies under section
126; and
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and Secondary Education Act of 1965 (20 U.S.C.
6334(d)) for the previous fiscal year.
(c) REALLOCATIONS.—If a State does not apply for
its allocation, applies for less than its full allocation, or
fails to submit an approvable application, the Secretary
may reallocate all or a portion of the State’s allocation,
as the case may be, to the remaining States in the same
proportions as the original allocations were made to those
States under subsections (a) and (b).
ELIGIBLE STATE AGENCY
SEC. 112. The Secretary shall award each State’s
grant to the State agency, such as a State educational
agency, a State school construction agency, or a State
bond bank, that the Governor, with the agreement of the
chief State school officer, designates as best able to admin-
ister the grant.
ALLOWABLE USES OF FUNDS
SEC. 113. Each State shall use its grant under this
part only for one or more of the following activities to sub-
sidize the cost of eligible school construction projects de-
scribed in section 114:
(1) Providing a portion of the interest cost (or
of another financing cost approved by the Secretary)
on bonds, certificates of participation, purchase or
lease arrangements, or other forms of indebtedness
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issued or entered into by a State or its instrumental-
ity for the purpose of financing eligible projects.
(2) State-level expenditures approved by the
Secretary for credit enhancement for the debt or fi-
nancing instruments described in paragraph (1).
(3) Making subgrants, or making loans through
a State revolving fund, to local educational agencies
or (with the agreement of the affected local edu-
cational agency) to other qualified public agencies to
subsidize—
(A) the interest cost (or another financing
cost approved by the Secretary) of bonds, cer-
tificates of participation, purchase or lease ar-
rangements, or other forms of indebtedness is-
sued or entered into by a local educational
agency or other agency or unit of local govern-
ment for the purpose of financing eligible
projects; or
(B) local expenditures approved by the
Secretary for credit enhancement for the debt
or financing instruments described in subpara-
graph (A).
(4) Other State and local expenditures approved
by the Secretary that leverage funds for additional
school construction.
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ELIGIBLE CONSTRUCTION PROJECTS; PERIOD FOR
INITIATION
SEC. 114. (a) ELIGIBLE PROJECTS.—States and
their subgrantees may use funds under this part, in ac-
cordance with section 113, to subsidize the cost of—
(1) construction of elementary and secondary
school facilities in order to ensure the health and
safety of all students, which may include the removal
of environmental hazards; improvements in air qual-
ity, plumbing, lighting, heating and air conditioning,
electrical systems, or basic school infrastructure; and
building improvements that increase school safety;
(2) construction activities needed to meet the
requirements of section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794) or of the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.);
(3) construction activities that increase the en-
ergy efficiency of school facilities;
(4) construction that facilitates the use of mod-
ern educational technologies;
(5) construction of new school facilities that are
needed to accommodate growth in school enroll-
ments; or
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(6) construction projects needed to facilitate the
establishment of charter schools and community
schools.
(b) PERIOD FOR INITIATION OF PROJECT.—(1) Each
State shall use its grant under this part only to subsidize
construction projects described in subsection (a) that the
State or its localities have chosen to initiate, through the
vote of a school board, passage of a bond issue, or similar
public decision, made between July 11, 1996 and Septem-
ber 30, 2001.
(2) If a State determines, after September 30, 2001,
that an eligible project for which it has obligated funds
under this part will not be carried out, the State may use
those funds (or any available portion of those funds) for
other eligible projects selected in accordance with this
part.
(c) REALLOCATION.—If the Secretary determines, by
a date before September 30, 2001 selected by the Sec-
retary, that a State is not making satisfactory progress
in carrying out its plan for the use of the funds allocated
to it under this part, the Secretary may reallocate all or
part of those funds, including any interest earned by the
State on those funds, to one or more other States that
are making satisfactory progress.
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SELECTION OF LOCALITIES AND PROJECTS
SEC. 115. (a) PRIORITIES.—In determining which lo-
calities and activities to support with grant funds, each
State shall give the highest priority to—
(1) localities with the greatest needs, as dem-
onstrated by inadequate educational facilities, cou-
pled with a low level of resources available to meet
school construction needs; and
(2) localities that will achieve the greatest
leveraging effect on school construction from assist-
ance under this part.
(b) ADDITIONAL CRITERIA.—In addition to the prior-
ities required by subsection (a), each State shall consider
each of the following in determining the use of its grant
funds under this part:
(1) The condition of the school facilities in dif-
ferent communities in the State.
(2) The energy efficiency and the effect on the
environment of projects proposed by communities,
and the extent to which these projects use cost-effi-
cient architectural design.
(3) The commitment of communities to finance
school construction and renovation projects with as-
sistance from the State’s grant, as demonstrated by
their incurring indebtedness or by similar public or
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private commitments for the purposes described in
section 114(a).
(4) The ability of communities to repay bonds
or other forms of indebtedness supported with grant
funds.
(5) The particular needs, if any, of rural com-
munities in the State for assistance under this Act.
(6) The receipt by local educational agencies in
the State of grants under part 3, except that a local
educational agency is not ineligible for a subgrant
under this part solely because it receives such a
grant.
STATE APPLICATIONS
SEC. 116. (a) APPLICATION REQUIRED.—A State
that wishes to receive a grant under this part shall submit
an application to the Secretary, in the manner the Sec-
retary may require, not later than two years after the date
of enactment of this Act.
(b) DEVELOPMENT OF APPLICATION.—(1) The State
agency designated under section 112 shall develop the
State’s application under this part only after broadly con-
sulting with the State board of education, and representa-
tives of local school boards, school administrators, the
business community, parents, and teachers in the State
about the best means of carrying out this part.
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(1) an identification of the State agency des-
ignated by the Governor under section 112 to receive
the State’s grant under this part;
(2) a summary of the results of the State’s sur-
vey of its school facility needs, as described in sub-
section (c);
(3) a description of how the State will imple-
ment its program under this part;
(4) a description of how the State will allocate
its grant funds, including a description of how the
State will implement the priorities and criteria de-
scribed in section 115;
(5)(A) a description of the mechanisms that will
be used to finance construction projects supported
by grant funds; and
(B) a statement of how the State will determine
the amount of the Federal subsidy to be applied, in
accordance with section 117(a), to each local project
that the State will support;
(6) a description of how the State will ensure
that the requirements of this part are met by sub-
grantees under this part;
(7) a description of the steps the State will take
to ensure that local educational agencies will ade-
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quately maintain the facilities that are constructed
or improved with funds under this part;
(8) an assurance that the State will use its
grant only to supplement the funds that the State,
and the localities receiving subgrants, would spend
on school construction and renovation in the absence
of a grant under this part, and not to supplant those
funds;
(9) an assurance that, during the four-year pe-
riod beginning with the year the State receives its
grant, the combined expenditures for school con-
struction by the State and the localities that benefit
from the State’s program under this part (which, at
the State’s option, may include private contribu-
tions) will be at least 125 percent of those combined
expenditures for that purpose for the four preceding
years; and
(10) other information and assurances that the
Secretary may require.
(e) WAIVER OF REQUIREMENT TO INCREASE EX-
PENDITURES.—The Secretary may waive or modify the re-
quirement of subsection (d)(9) for a particular State if
the State demonstrates to the Secretary’s satisfaction that
that requirement is unduly burdensome because the State
or its localities have incurred a particularly high level of
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school construction expenditures during the previous four
years.
AMOUNT OF FEDERAL SUBSIDY
SEC. 117. (a) PROJECTS FUNDED WITH SUB-
GRANTS.—For each construction project assisted by a
State through a subgrant to a locality, the State shall de-
termine the amount of the Federal subsidy under this
part, taking into account the number or percentage of chil-
dren from low-income families residing in the locality, sub-
ject to the following limits:
(1) If the locality will use the subgrant to help
meet the costs of repaying bonds issued for a school
construction project, the Federal subsidy shall be
not more than one-half of the total interest cost of
those bonds, determined in accordance with para-
graph (4).
(2) If the bonds to be subsidized are general ob-
ligation bonds issued to finance more than one type
of activity (including school construction), the Fed-
eral subsidy shall be not more than one-half of the
interest cost for that portion of the bonds that will
be used for school construction purposes, determined
in accordance with paragraph (4).
(3) If the locality elects to use its subgrant for
an allowable activity not described in paragraph (1)
or (2), such as for certificates of participation, pur-
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chase or lease arrangements, reduction of the
amount of principal to be borrowed, or credit en-
hancements for individual construction projects, the
Federal subsidy shall be not more than one-half of
the interest cost, as determined by the State in ac-
cordance with paragraph (4), that would have been
incurred if bonds had been used to finance the
project.
(4) The interest cost referred to in paragraphs
(1), (2), and (3) shall be—
(A) calculated on the basis of net present
value; and
(B) determined in accordance with an am-
ortization schedule and any other criteria and
conditions the Secretary considers necessary, in-
cluding provisions to ensure comparable treat-
ment of different financing mechanisms.
(b) STATE-FUNDED PROJECTS.—For a construction
project under this part funded directly by the State
through the use of State-issued bonds or other financial
instruments, the Secretary shall determine the Federal
subsidy in accordance with subsection (a).
(c) NON-FEDERAL SHARE.—A State, and localities
in the State receiving subgrants under this part, may use
any non-Federal funds, including State, local, and private-
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sector funds, for the financing costs that are not covered
by the Federal subsidy under subsection (a).
SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT
SEC. 118. (a) SEPARATE FUNDS OR ACCOUNTS RE-
QUIRED.—Each State that receives a grant, and each re-
cipient of a subgrant under this part, shall deposit the
grant or subgrant proceeds in a separate fund or account,
from which it shall make bond repayments and pay other
expenses allowable under this part.
(b) PRUDENT INVESTMENT REQUIRED.—Each State
that receives a grant, and each recipient of a subgrant
under this part, shall—
(1) invest the grant or subgrant in a fiscally pru-
dent manner, in order to generate amounts needed
to make repayments on bonds and other forms of in-
debtedness described in section 113; and
(2) notwithstanding section 6503 of title 31,
United States Code or any other law, use the pro-
ceeds of that investment to carry out this part.
STATE REPORTS
SEC. 119. (a) REPORTS REQUIRED.—
(1) Each State receiving a grant under this
part shall report to the Secretary on its activities
under this part, in the form and manner the Sec-
retary may prescribe.
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(2) If the State educational agency is not the
State agency designated under section 112, the
State’s report shall include the approval of the State
educational agency or its comments on the report.
(b) CONTENTS.—Each report shall—
(1) describe the State’s implementation of this
part, including how the State has met the require-
ments of this part;
(2) identify the specific school facilities con-
structed, renovated, or modernized with support
from the grant, and the mechanisms used to finance
those activities;
(3) identify the level of Federal subsidy pro-
vided to each construction project carried out with
support from the State’s grant; and
(4) include any other information the Secretary
may require.
(c) FREQUENCY.—(1) Each State shall submit its
first report under this section not later than 24 months
after it receives its grant under this part.
(2) Each State shall submit an annual report for each
of the three years after submitting its first report, and
subsequently shall submit periodic reports as long as the
State or localities in the State are using grant funds.
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decision, made between July 11, 1996 and September 30,
2001.
(b) REDISTRIBUTION.—If the Secretary determines,
by a date before September 30, 2001 selected by the Sec-
retary, that a local educational agency is not making satis-
factory progress in carrying out its plan for the use of
funds awarded to it under this part, the Secretary may
redistribute all or part of those funds, and any interest
earned by that agency on those funds, to one or more
other local educational agencies that are making satisfac-
tory progress.
LOCAL APPLICATIONS
SEC. 125. (a) APPLICATION REQUIRED.—A local
educational agency, or an alternative agency described in
section 122 (both referred to in this part as the ‘‘local
agency’’), that wishes to receive a grant under this part
shall submit an application to the Secretary, in the man-
ner the Secretary may require, not later than two years
after the date of enactment of this Act.
(b) DEVELOPMENT OF APPLICATION.—(1) The local
agency shall develop the local application under this part
only after broadly consulting with parents, administrators,
teachers, the business community, and other members of
the local community about the best means of carrying out
this part.
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(2) If the local educational agency is not the appli-
cant, the applicant shall consult with the local educational
agency, and shall obtain its approval before submitting its
application to the Secretary.
(c) LOCAL SURVEY.—(1) Before submitting its appli-
cation, the local agency, with the involvement of local
school officials and experts in building construction and
management, shall survey the local need for construction
and renovation of school facilities, including, at a mini-
mum—
(A) the overall condition of school facilities in
the local educational agency, including health and
safety problems;
(B) the capacity of the local educational agen-
cy’s schools to house projected enrollments; and
(C) the extent to which the local educational
agency’s schools offer the physical infrastructure
needed to provide a high-quality education to all stu-
dents.
(2) A local educational agency need not conduct a
new survey under paragraph (1) if it has previously com-
pleted a survey that meets the requirements of that para-
graph and that the Secretary finds is sufficiently recent
for the purpose of carrying out this part.
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(d) APPLICATION CONTENTS.—Each local applica-
tion under this part shall include—
(1) an identification of the local agency to re-
ceive the grant under this part;
(2) a summary of the results of the survey of
school facility needs, as described in subsection (c);
(3) a description of how the local agency will
implement its program under this part;
(4) a description of the criteria the local agency
has used to determine which construction projects to
support with grant funds;
(5) a description of the construction projects
that will be supported with grant funds;
(6) a description of the mechanisms that will be
used to finance construction projects supported by
grant funds;
(7) a requested level of Federal subsidy, with a
justification for that level, for each construction
project to be supported by the grant, in accordance
with section 128(a), including the financial and de-
mographic information the Secretary may require;
(8) a description of the steps the agency will
take to ensure that facilities constructed or improved
with funds under this part will be adequately main-
tained;
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(9) an assurance that the agency will use its
grant only to supplement the funds that the locality
would spend on school construction and renovation
in the absence of a grant under this part, and not
to supplant those funds;
(10) an assurance that, during the four-year
period beginning with the year the local educational
agency receives its grant, its expenditures for school
construction (which, at that agency’s option, may in-
clude private contributions) will be at least 125 per-
cent of its expenditures for that purpose for the four
preceding years; and
(11) other information and assurances that the
Secretary may require.
(e) WAIVER OF REQUIREMENT TO INCREASE EX-
PENDITURES.—The Secretary may waive or modify the re-
quirement of subsection (d)(10) for a local educational
agency that demonstrates to the Secretary’s satisfaction
that that requirement is unduly burdensome because that
agency has incurred a particularly high level of school con-
struction expenditures during the previous four years.
FORMULA GRANTS
SEC. 126. (a) ALLOCATIONS.—The Secretary shall
allocate the funds available under section 105(b)(2) to the
local educational agencies identified under section 121(a)
on the basis of their relative allocations under section
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1124 of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 6333) in the most recent year for which
that information is available to the Secretary.
(b) REALLOCATIONS.—If a local educational agency
does not apply for its allocation, applies for less than its
full allocation, or fails to submit an approvable applica-
tion, the Secretary may reallocate all or a portion of its
allocation, as the case may be, to the remaining local edu-
cational agencies in the same proportions as the original
allocations were made to those agencies under subsection
(a).
COMPETITIVE GRANTS
SEC. 127. (a) GRANTS AUTHORIZED.—The Secretary
shall use funds available under section 105(b)(3) to make
additional grants, on a competitive basis, to recipients of
formula grants under section 126.
(b) ADDITIONAL APPLICATION MATERIALS.—Any el-
igible applicant under section 126 that wishes to receive
additional funds under this section shall include in its ap-
plication under section 125 the following additional infor-
mation:
(1) The amount of funds requested under this
section, in accordance with ranges or limits that the
Secretary may establish based on factors such as rel-
ative size of the eligible applicants.
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(2) A description of the additional construction
activities that the applicant would carry out with
those funds.
(3) Information on the current financial effort
the applicant is making for elementary and second-
ary education, including support from private
sources, relative to its resources.
(4) Information on the extent to which the ap-
plicant will increase its own (or other public or pri-
vate) spending for school construction in the year in
which it receives a grant under this section, above
the average annual amount for construction activity
during the preceding four years.
(5) A description of the energy efficiency and
the effect on the environment of the projects that
the applicant will undertake, both with its grant
under this section and its grant under section 126,
and of the extent to which those projects will use
cost-efficient architectural design.
(6) Other information that the Secretary may
require.
(c) SELECTION OF GRANTEES.—The Secretary shall
select grantees under this section on the basis of criteria,
consistent with the purpose of this Act, that the Secretary
may establish, which shall include—
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(1) the relative need of applicants, as dem-
onstrated by inadequate educational facilities and a
low level of resources to meet their school construc-
tion needs;
(2) the commitment of applicants to meet their
school construction needs and the leveraging effect
that assistance under this part would have, as dem-
onstrated by the additional resources that they will
provide, from non-Federal sources, to meet those
needs, in accordance with subsection (b)(4).
AMOUNT OF FEDERAL SUBSIDY
SEC. 128. (a) AMOUNT OF FEDERAL SUBSIDY.—For
each construction project assisted under this part, the Sec-
retary shall determine the amount of the Federal subsidy
in accordance with section 117(a).
(b) NON-FEDERAL SHARE.—A grantee under this
part may use any non-Federal funds, including State,
local, and private-sector funds, for the financing costs that
are not covered by the Federal subsidy under subsection
(a).
SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT
SEC. 129. (a) SEPARATE FUNDS OR ACCOUNTS RE-
QUIRED.—Each grantee under this part shall deposit the
grant proceeds in a separate fund or account, from which
it shall make bond repayments and pay other expenses al-
lowable under this part.
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(b) 
PRUDENT
INVESTMENT
REQUIRED.—Each
grantee under this part shall—
(1) invest the grant funds in a fiscally prudent
manner, in order to generate amounts needed to
make repayments on bonds and other forms of in-
debtedness; and
(2) Notwithstanding section 6503 of title 31,
United States Code or any other law, use the pro-
ceeds of that investment to carry out this part.
LOCAL REPORTS
SEC. 130. (a) REPORTS REQUIRED.—(1) Each grant-
ee under this part shall report to the Secretary on its ac-
tivities under this part, in the form and manner the Sec-
retary may prescribe.
(2) If the local educational agency is not the grantee
under this part, the grantee’s report shall include the ap-
proval of the local educational agency or its comments on
the report.
(b) CONTENTS.—Each report shall—
(1) describe the grantee’s implementation of
this part, including how it has met the requirements
of this part;
(2) identify the specific school facilities con-
structed, renovated, or modernized with support
from the grant, and the mechanisms used to finance
those activities; and
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(3) other information the Secretary may re-
quire.
(c) FREQUENCY.—(1) Each grantee shall submit its
first report under this section not later than 24 months
after it receives its grant under this part.
(2) Each grantee shall submit an annual report for
each of the three years after submitting its first report,
and subsequently shall submit periodic reports as long as
it is using grant funds.
TITLE II—GENERAL PROVISIONS
TECHNICAL EMPLOYEES
SEC. 201. For the purpose of carrying out this Act,
the Secretary, without regard to the provisions of title 5,
United States Code, governing appointments in the com-
petitive service, may appoint not more than 10 technical
employees who may be paid without regard to the provi-
sions of chapter 51 and subchapter IV of chapter 5 of
that title relating to classification and General Schedule
pay rates.
WAGE RATES
SEC. 202. (a) PREVAILING WAGE.—The Secretary
shall ensure that all laborers and mechanics employed by
contractors and subcontractors on any project assisted
under this Act are paid wages at rates not less than those
prevailing as determined by the Secretary of Labor in ac-
cordance with the Act of March 3, 1931, as amended (40
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U.S.C. 276a et seq.). The Secretary of Labor has, with
respect to this section, the authority and functions estab-
lished in Reorganization Plan Numbered 14 of 1950 (ef-
fective May 24, 1950, 64 Stat. 1267) and section 2 of
the Act of June 13, 1934 (40 U.S.C. 276c).
(b) WAIVER FOR VOLUNTEERS.—Section 7305 of the
Federal Acquisition Streamlining Act of 1994 (40 U.S.C.
276d–3) is amended—
(1) in paragraph (5), by striking out the ‘‘and’’
at the end thereof;
(2) in paragraph (6), by striking out the period
at the end thereof and inserting a semi-colon and
‘‘and’’; and
(3) by adding at the end thereof the following
new paragraph:
‘‘(7) the Partnership to Rehabilitate America’s
Schools Act of 1997.’’.
NO LIABILITY OF FEDERAL GOVERNMENT
SEC. 203. (a) NO FEDERAL LIABILITY.—Any finan-
cial instruments, including but not limited to contracts,
bonds, bills, notes, certificates of participation, or pur-
chase or lease arrangements, issued by States, localities
or instrumentalities thereof in connection with any assist-
ance provided by the Secretary under this Act are obliga-
tions of such States, localities or instrumentalities and not
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obligations of the United States and are not guaranteed
by the full faith and credit of the United States.
(b) NOTICE REQUIREMENT.—Documents relating to
any financial instruments, including but not limited to
contracts, bonds, bills, notes, offering statements, certifi-
cates of participation, or purchase or lease arrangements,
issued by States, localities or instrumentalities thereof in
connection with any assistance provided under this Act,
shall include a prominent statement providing notice that
the financial instruments are not obligations of the United
States and are not guaranteed by the full faith and credit
of the United States.
CONSULTATION WITH SECRETARY OF THE TREASURY
SEC. 204. The Secretary shall consult with the Sec-
retary of the Treasury in carrying out this Act.
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