A bill to establish State infrastructure banks for education.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investing for Tomorrow's Schools Act 
of 2002''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) According to a 1996 study conducted by the American 
        School & University, $10,420,000,000 was spent to address the 
        Nation's education infrastructure needs in 1995, with the 
        average total cost of a new high school at $15,400,000.
            (2) According to the National Center for Education 
        Statistics, an estimated $127,000,000,000 in repairs, 
        renovations, and modernizations is needed to put schools in the 
        United States into good overall condition.
            (3) Approximately 14,000,000 American students attend 
        schools that report the need for extensive repair or 
        replacement of 1 or more buildings.
            (4) Academic research has proven that there is a direct 
        correlation between the condition of school facilities and 
        student achievement. At Georgetown University, researchers 
        found that students assigned to schools in poor conditions can 
        be expected to fall 10.9 percentage points behind those in 
        buildings in excellent condition. Similar studies have 
        demonstrated improvement of up to 20 percent 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 21,300,000 students, reported 
        insufficient technology elements 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 
        schools and secondary schools and libraries require the 
        concerted efforts of all levels of government and all sectors 
        of the community.
            (8) The United States 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 America's public 
        school libraries has increased the demands 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 equipment.
            (10) Research shows that 50 percent of a child's 
        intellectual development takes place before age 4. The Nation's 
        public and school libraries play a critical role in a child's 
        early development because the libraries 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.--The Secretary of Education 
        (hereafter in this Act referred to as the ``Secretary''), in 
        consultation with the Secretary of the Treasury, may enter into 
        cooperative agreements with States under which--
                    (A) States establish State infrastructure banks and 
                multistate infrastructure banks for the purpose of 
                providing the loans described in subparagraph (B); and
                    (B) the Secretary awards grants to such States to 
                be used as initial capital for the purpose of making 
                loans--
                            (i) to local educational agencies to enable 
                        the agencies to build or repair elementary 
                        schools or secondary schools that provide free 
                        public education; and
                            (ii) to public libraries to enable the 
                        libraries to build or repair library 
                        facilities.
            (2) Interstate compacts.--
                    (A) Consent.--Congress grants consent to any 2 or 
                more States, entering into a cooperative agreement 
                under paragraph (1) with the Secretary for the 
                establishment of a multistate infrastructure bank, to 
                enter into an interstate  compact establishing a 
multistate infrastructure bank in accordance with this section.
                    (B) Reservation of rights.--Congress expressly 
                reserves the right to alter, amend, or repeal this 
                section and any interstate compact entered into 
                pursuant to this section.
    (b) Repayments.--Each infrastructure bank established under 
subsection (a) shall apply repayments of principal and interest on 
loans funded by the grant received under subsection (a) to the making 
of additional loans.
    (c) Infrastructure Bank Requirements.--A State establishing an 
infrastructure bank under this section shall--
            (1) contribute in each account of the bank from non-Federal 
        sources an amount equal to not less than 25 percent of the 
        amount of each capitalization grant made to the bank under 
        subsection (a);
            (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 deposited 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 securities, 
                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 exempt 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 (6); 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 established under 
        this section may make a loan 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 subsection 
        (e).
            (2) Applications for loans.--
                    (A) In general.--A local educational agency or 
                public library desiring a loan under this Act shall 
                submit to an infrastructure bank an application that 
                includes--
                            (i) in the case of a renovation project--
                                    (I) a description of each 
                                architectural, civil, structural, 
                                mechanical, or electrical deficiency to 
                                be corrected with loan funds and the 
                                priorities to be applied; and
                                    (II) a description of the criteria 
                                used by the applicant to determine the 
                                type of corrective action necessary for 
                                the renovation of a facility;
                            (ii) a description of any improvements to 
                        be made and a cost estimate for the 
                        improvements;
                            (iii) a description of how work undertaken 
                        with the loan will promote energy conservation; 
                        and
                            (iv) such other information as the 
                        infrastructure bank may require.
                    (B) Timing.--An infrastructure bank shall take 
                final action on a completed application submitted to it 
                in accordance with this subsection not later than 90 
                days after the date of the submission of the 
                application.
            (3) Criteria for loans.--In considering an application for 
        a loan, an infrastructure bank shall consider--
                    (A) the extent to which the local educational 
                agency or public library desiring a loan would 
                otherwise lack the fiscal capacity, including the 
                ability to raise funds through the full use of such 
                bonding capacity of the agency or library, to undertake 
                the project proposed in the application;
                    (B) in the case of a local educational agency, the 
                threat that the condition of the physical plant in the 
                proposed project poses to the safety and well-being of 
                students;
                    (C) the demonstrated need for the construction, 
                reconstruction, or renovation based on the condition of 
                the facility in the proposed project; and
                    (D) the age of the facility proposed to be 
                reconstructed, renovated, or replaced.
    (e) Qualifying Projects.--
            (1) In general.--A project is eligible for a loan from an 
        infrastructure bank if it is a project that consists of--
                    (A) the construction of a new elementary school or 
                secondary school to meet the needs imposed by 
                enrollment growth;
                    (B) the repair or upgrading of classrooms or 
                structures related to academic learning, including the 
                repair of leaking roofs, crumbling walls, inadequate 
                plumbing, poor ventilation equipment, and inadequate 
                heating or lighting equipment;
                    (C) an activity to increase physical safety at the 
                educational facility involved;
                    (D) an activity to enhance the educational facility 
                involved to provide access for students, teachers, and 
                other individuals with disabilities;
                    (E) an activity to address environmental hazards at 
                the educational facility involved, such as poor 
                ventilation, indoor air quality, or lighting;
                    (F) the provision of basic infrastructure that 
                facilitates educational technology, such as 
                communications outlets, electrical systems, power 
                outlets, or a communication closet;
                    (G) work that will bring an educational facility 
                into conformity with the requirements of--
                            (i) 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
                            (ii) hazardous waste disposal, treatment, 
                        and storage requirements mandated by the Solid 
                        Waste Disposal Act (42 U.S.C. 6901 et seq.) or 
                        similar State laws;
                    (H) work that will enable efficient use of 
                available energy resources;
                    (I) work to detect, remove, or otherwise contain 
                asbestos hazards in educational facilities; or
                    (J) work to construct new public library facilities 
                or repair or upgrade existing public library 
                facilities.
            (2) Davis-bacon.--The wage requirements of the Act of March 
        3, 1931 (referred to as the ``Davis-Bacon Act'' (40 U.S.C. 276a 
        et seq.)) shall apply with respect to individuals employed on 
        the projects described in paragraph (1).
    (f) Supplementation.--Any loan made by an infrastructure bank shall 
be used to supplement and not supplant other Federal, State, and local 
funds available to carry out school or library construction, 
renovation, or repair.
    (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 credited toward the non-Federal share of the cost of 
any project.
    (h) Secretarial Requirements.--In administering this section, the 
Secretary shall specify procedures and guidelines for establishing, 
operating, and providing assistance from an infrastructure bank.
    (i) United States Not Obligated.--The contribution of Federal funds 
into an infrastructure bank established 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 solely by virtue of the 
contribution. Any security or debt financing 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.--A State may expend an amount not to 
exceed 2 percent of the grant funds contributed to an infrastructure 
bank established by a State or States under this section to pay the 
reasonable costs of administering the infrastructure bank.
    (l) Secretarial Review and Report.--The Secretary shall--
            (1) review the financial condition of each infrastructure 
        bank established under this section; and
            (2) transmit to Congress a report on the results of such 
        review not later than 90 days after the completion of the 
        review.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Elementary school, free public education, local 
        educational agency, and secondary school.--The terms 
        ``elementary school'', ``free public education'', ``local 
        educational agency'', and ``secondary school'' have the same 
        meanings as in section 14101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801);
            (2) Outlying area.--The term ``outlying area'' means the 
        Virgin Islands, Guam, American Samoa, the Commonwealth of the 
        Northern Mariana Islands, the Republic of the Marshall Islands, 
        the Federated States of Micronesia, and the Republic of Palau;
            (3) Public library.--The term ``public library''--
                    (A) means a library that serves free of charge all 
                residents of a community, district, or region, and 
                receives its financial support in whole or in part from 
                public funds; and
                    (B) includes a research library, which, for 
                purposes of this subparagraph, means a library that--
                            (i) makes its services available to the 
                        public free of charge;
                            (ii) has extensive collections of books, 
                        manuscripts, and other materials suitable for 
                        scholarly research which are not available to 
                        the public through public libraries;
                            (iii) engages in the dissemination of 
                        humanistic knowledge through services to 
                        readers, fellowships, educational and cultural 
                        programs, publication of significant research, 
                        and other activities; and
                            (iv) is not an integral part of an 
                        institution of higher education; and
            (4) State.--The term ``State'' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, and 
        each of the outlying areas.

Summary: Investing for Tomorrow's Schools Act of 2002 - Authorizes the Secretary of Education to enter into cooperative agreements with States to establish State infrastructure banks and multistate infrastructure banks to make loans to: (1) local educational agencies for building or repairing elementary or secondary public schools; and (2) public libraries for building or repairing library facilities.Grants consent of Congress to States to enter into a cooperative agreement with the Secretary, as well as an interstate compact, to establish a multistate infrastructure bank. Prescribes infrastructure bank requirements. Requires infrastructure bank loans to be used to supplement, not supplant, other Federal, State, and local funds. Prohibits construing Federal contributions to such infrastructure banks as a Federal commitment, guarantee, or obligation to any third party. Directs the Secretary to review the financial condition of each infrastructure bank.