I
106TH CONGRESS
1ST SESSION
H. R. 1648
To establish State infrastructure banks for education.
IN THE HOUSE OF REPRESENTATIVES
APRIL 29, 1999
Mrs. TAUSCHER (for herself, Mr. BOEHLERT, Mr. BROWN of California, Mrs.
CHRISTENSEN, Mr. CONDIT, Mr. CONYERS, Mr. CROWLEY, Mr.
CUMMINGS, Mr. DEFAZIO, Mr. DINGELL, Mr. DOOLEY of California, Mr.
ETHERIDGE, Mr. FILNER, Mr. FROST, Mr. GILCHREST, Mr. GREEN of
Texas, Mr. HOLDEN, Mr. KUCINICH, Mr. LAMPSON, Mr. LEWIS of Geor-
gia, Ms. LOFGREN, Mr. MARTINEZ, Mr. MCGOVERN, Mr. MCINTYRE, Mr.
MORAN of Virginia, Mr. PAYNE, Ms. PELOSI, Mr. ROEMER, Mr. SHER-
MAN, Mr. SHOWS, Ms. STABENOW, Mr. STARK, Mr. TIERNEY, and Mr.
WEINER) introduced the following bill; which was referred to the Com-
mittee 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 1999’’.
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 and libraries re-
quire the concerted efforts of all levels of govern-
ment and all sectors 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
and libraries not equipped for the 21st century.
(9) The deplorable state of collections in Amer-
ica’s public school libraries has increased the de-
mands on public libraries. In many instances, public
libraries substitute for school libraries creating a
higher demand for material and physical space to
house literature and educational computer equip-
ment.
(10) Research shows that 50 percent of a
child’s intellectual development takes place before
age 4. Our nation’s public and school libraries play
a critical role in a child’s early development because
they provide a wealth of books and other resources
that can give every child a head start on life and
learning.
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-
fined in section 14101 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 8801))
and to public libraries for building or repairing li-
brary facilities.
(2) INTERSTATE COMPACTS.—Congress grants
consent to 2 or more of the States, entering into a
cooperative agreement under paragraph (1) with the
Secretary of the Treasury for the establishment of a
multistate infrastructure bank, to enter into an
interstate compact establishing such bank in accord-
ance with this section.
(b) FUNDING.—The Secretary of the Treasury, in
consultation with the Secretary of Education, shall make
grants to State infrastructure banks and multistate infra-
structure banks in a State in a cooperative agreement
under subsection (a)(1) to provide initial capital for loans
provided under this section to local educational agencies
and public libraries. Each bank shall apply repayments of
principal and interest on loans to the making of additional
loans. The Secretary shall take final action on an applica-
tion for a grant under this subsection within 90 days of
the date of the submittal of such application.
(c) INFRASTRUCTURE BANK REQUIREMENTS.—In
order to establish an infrastructure bank under this sec-
tion, each State establishing the bank shall—
(1) contribute, at a minimum, in each account
of the bank from non-Federal sources an amount
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 or a public library in an
amount equal to all or part of the cost of carrying
out a project eligible for assistance under this sec-
tion.
(2) APPLICATIONS FOR LOANS.—An application
to an infrastructure bank by a local educational
agency or a public library 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 or public library involved lacks
the fiscal capacity, 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) in the case of a local educational agen-
cy, the threat that the condition of the physical
plant in the project poses to the safety and
well-being of students;