[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1104 Introduced in House (IH)]







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 Georgia, 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. Conyers, 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) 
 introduced the following bill; which was referred to the Committee on 
                      Education 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 Representatives 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''.

            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.

                       Part 1--Program Authorized

                          findings and purpose

    Sec. 102. (a) Findings.--The Congress finds as follows:
            (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 minority children.
            (3) Many States and school districts will need to build new 
        schools in order to accommodate increasing 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 infrastructure 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 increasing burden of providing acceptable 
school facilities for all students, and the poorest communities have 
had the greatest difficulty meeting this need.
            (6) The Federal Government, by providing interest subsidies 
        and similar types of support, can lower the costs of State and 
        local school infrastructure investment, creating an incentive 
        for States and localities to increase their own infrastructure 
        improvement efforts and helping ensure that all students 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 public 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 Education Act of 1965 (20 U.S.C. 8066(1)).
            (2) Community school.--The term ``community school'' means 
        a school, or part of a school, that serves as a center for 
        after-school and summer programs 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 private 
                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; children's day-care 
                services; nutrition services; services for individuals 
                with disabilities; employment counseling, training, and 
                placement; and other educational, health, cultural, and 
                recreational 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 ``construction'' means--
                    (i) the preparation of drawings and specifications 
                for school facilities;
                    (ii) erecting, building, acquiring, remodeling, 
                renovating, improving, repairing or extending school 
                facilities;
                    (iii) demolition, in preparation for rebuilding 
                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 facility'' 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 utilities 
                necessary or appropriate for school purposes.
            (B) The term ``school facility'' does not include an 
        athletic stadium, or any other structure or facility intended 
        primarily for athletic exhibitions, contests, 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 available for obligation by the 
Secretary of Education from October 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--
                    (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 Commonwealth of the Northern Mariana 
                Islands, in accordance with their respective needs, as 
                determined by the Secretary.
            (2) Grants provided under paragraph (1)(B) shall be used 
        for activities that the Secretary determines 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 remaining 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
            (3) 15 percent shall be used for competitive grants to 
        local educational agencies under section 127.

                        Part 2--Grants to States

                          allocation of funds

    Sec. 111. (a) Formula Grants to States.--Subject to subsection (b), 
the Secretary shall allocate the funds available under section 
105(b)(1) among the States in proportion to the relative amounts each 
State would have received for Basic Grants under subpart 2 of part A of 
title I of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6331 et seq.) for the most recent fiscal year if the Secretary 
had disregarded the numbers of children counted under that subpart who 
were enrolled in schools of local educational agencies that are 
eligible to receive direct grants under section 126 of this Act.
    (b) Adjustments to Allocations.--The Secretary shall adjust the 
allocations under subsection (a), as necessary, to ensure that, of the 
total amount allocated to States under subsection (a) and to local 
educational agencies under section 126, the percentage allocated to a 
State under this section and to localities in the State under section 
126 is at least the minimum percentage for the State described in 
section 1124(d) of the Elementary 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 administer 
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 subsidize the cost of 
eligible school construction projects described 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 issued or entered into by a 
        State or its instrumentality for the purpose of financing 
        eligible projects.
            (2) State-level expenditures approved by the Secretary for 
        credit enhancement for the debt or financing 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 educational agency) to other 
        qualified public agencies to subsidize--
                    (A) the interest cost (or another financing cost 
                approved by the Secretary) of bonds, certificates of 
                participation, purchase or lease arrangements, or other 
                forms of indebtedness issued or entered into by a local 
                educational agency or other agency or unit of local 
                government 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 subparagraph (A).
            (4) Other State and local expenditures approved by the 
        Secretary that leverage funds for additional school 
        construction.

         eligible construction projects; period for initiation

    Sec. 114. (a) Eligible Projects.--States and their subgrantees may 
use funds under this part, in accordance 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 quality, 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 energy 
        efficiency of school facilities;
            (4) construction that facilitates the use of modern 
        educational technologies;
            (5) construction of new school facilities that are needed 
        to accommodate growth in school enrollments; or
            (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 September 
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 Secretary, 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.

                  selection of localities and projects

    Sec. 115. (a) Priorities.--In determining which localities and 
activities to support with grant funds, each State shall give the 
highest priority to--
            (1) localities with the greatest needs, as demonstrated by 
        inadequate educational facilities, coupled 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 assistance under this part.
    (b) Additional Criteria.--In addition to the priorities 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 different 
        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-efficient architectural design.
            (3) The commitment of communities to finance school 
        construction and renovation projects with assistance from the 
        State's grant, as demonstrated by their incurring indebtedness 
        or by similar public or 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 communities 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 Secretary 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 consulting with the State board of education, and 
representatives of local school boards, school administrators, the 
business community, parents, and teachers in the State about the best 
means of carrying out this part.
    (2) If the State educational agency is not the State agency 
designated under section 112, the designated agency shall consult with 
the State educational agency and obtain its approval before submitting 
the State's application.
    (c) State Survey.--(1) Before submitting the State's application, 
the State agency designated under section 112, with the involvement of 
local school officials and experts in building construction and 
management, shall survey the needs throughout the State (including in 
localities receiving grants under part 3) for construction and 
renovation of school facilities, including, at a minimum--
            (A) the overall condition of school facilities in the 
        State, including health and safety problems;
            (B) the capacity of the schools in the State to house 
        projected enrollments; and
            (C) the extent to which the schools in the State offer the 
        physical infrastructure needed to provide a high-quality 
        education to all students.
    (2) A State need not conduct a new survey under paragraph (1) if it 
has previously completed a survey that meets the requirements of that 
paragraph and that the Secretary finds is sufficiently recent for the 
purpose of carrying out this part.
    (d) Application Contents.--Each State application under this part 
shall include--
            (1) an identification of the State agency designated 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 survey of its 
        school facility needs, as described in subsection (c);
            (3) a description of how the State will implement 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 described 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 subgrantees under this 
        part;
            (7) a description of the steps the State will take to 
        ensure that local educational agencies will adequately 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 period 
        beginning with the year the State receives its grant, the 
        combined expenditures for school construction 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 
        contributions) 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 Expenditures.--The Secretary 
may waive or modify the requirement 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 
school construction expenditures during the previous four years.

                       amount of federal subsidy

    Sec. 117. (a) Projects Funded With Subgrants.--For each 
construction project assisted by a State through a subgrant to a 
locality, the State shall determine the amount of the Federal subsidy 
under this part, taking into account the number or percentage of 
children from low-income families residing in the locality, subject 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 paragraph (4).
            (2) If the bonds to be subsidized are general obligation 
        bonds issued to finance more than one type of activity 
        (including school construction), the Federal 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, purchase or lease 
        arrangements, reduction of the amount of principal to be 
        borrowed, or credit enhancements for individual construction 
        projects, the Federal subsidy shall be not more than one-half 
        of the interest cost, as determined by the State in accordance 
        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 amortization 
                schedule and any other criteria and conditions the 
                Secretary considers necessary, including provisions to 
                ensure comparable treatment 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-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 Required.--Each State that 
receives a grant, and each recipient 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 prudent 
        manner, in order to generate amounts needed to make repayments 
        on bonds and other forms of indebtedness described in section 
        113; and
            (2) notwithstanding section 6503 of title 31, United States 
        Code or any other law, use the proceeds 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 Secretary may prescribe.
            (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 requirements of this part;
            (2) identify the specific school facilities constructed, 
        renovated, or modernized with support from the grant, and the 
        mechanisms used to finance those activities;
            (3) identify the level of Federal subsidy provided 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.

          Part 3--Direct Grants to Local Educational Agencies

                  eligible local educational agencies

    Sec. 121. (a) Eligible Agencies.--Except as provided in subsection 
(b), the local educational agencies that are eligible to receive 
formula grants under section 126 and competitive grants under section 
127 from the Secretary are 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 Secretary using the most 
recent data available from the Department of Commerce that are 
satisfactory to the Secretary.
    (b) Certain Jurisdictions Ineligible.--For the purpose of this 
part, the local educational agencies for Hawaii and the Commonwealth of 
Puerto Rico are not eligible local educational agencies.

                                grantees

    Sec. 122. For each local educational agency described in section 
121(a) for which an approvable application is submitted, the Secretary 
shall make any grant under this part to the local educational agency or 
to another public agency, on behalf of the local educational agency, if 
the Secretary determines, on the basis of the local educational 
agency's recommendation, that the other agency is better able to carry 
out activities under this part.

                        allowable uses of funds

    Sec. 123. Each grantee under this part shall use its grant only for 
one or more of the following activities to reduce the cost of financing 
eligible school construction projects described in section 124:
            (1) Providing a portion of the interest cost (or of any 
        other financing cost approved by the Secretary) on bonds, 
        certificates of participation, purchase or lease arrangements, 
        or other forms of indebtedness issued or entered into by a 
        local educational agency or other unit or agency of local 
        government for the purpose of financing eligible school 
        construction projects.
            (2) Local expenditures approved by the Secretary for credit 
        enhancement for the debt or financing instruments described in 
        paragraph (1).
            (3) Other local expenditures approved by the Secretary that 
        leverage funds for additional school construction.

             eligible construction projects; redistribution

    Sec. 124. (a) Eligible Projects.--A grantee under this part may use 
its grant, in accordance with section 123, to subsidize the cost of the 
activities described in section 114(a) for projects that the local 
educational agency has chosen to initiate, through the vote of the 
school board, passage of a bond issue, or similar public 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 Secretary, that a local educational 
agency is not making satisfactory 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 satisfactory 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 
manner 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.
    (2) If the local educational agency is not the applicant, 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 application, 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 
minimum--
            (A) the overall condition of school facilities in the local 
        educational agency, including health and safety problems;
            (B) the capacity of the local educational agency'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 students.
    (2) A local educational agency need not conduct a new survey under 
paragraph (1) if it has previously completed a survey that meets the 
requirements of that paragraph and that the Secretary finds is 
sufficiently recent for the purpose of carrying out this part.
    (d) Application Contents.--Each local application under this part 
shall include--
            (1) an identification of the local agency to receive 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 demographic 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 maintained;
            (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 include private contributions) will 
        be at least 125 percent 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 Expenditures.--The Secretary 
may waive or modify the requirement 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 construction 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 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 application, the Secretary may reallocate all 
or a portion of its allocation, as the case may be, to the remaining 
local educational 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 eligible applicant under 
section 126 that wishes to receive additional funds under this section 
shall include in its application under section 125 the following 
additional information:
            (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 relative size of the 
        eligible applicants.
            (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 secondary education, 
        including support from private sources, relative to its 
        resources.
            (4) Information on the extent to which the applicant will 
        increase its own (or other public or private) 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--
            (1) the relative need of applicants, as demonstrated by 
        inadequate educational facilities and a low level of resources 
        to meet their school construction needs;
            (2) the commitment of applicants to meet their school 
        construction needs and the leveraging effect that assistance 
        under this part would have, as demonstrated 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 Secretary 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 Required.--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 allowable under this part.
    (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 indebtedness; and
            (2) Notwithstanding section 6503 of title 31, United States 
        Code or any other law, use the proceeds of that investment to 
        carry out this part.

                             local reports

    Sec. 130. (a) Reports Required.--(1) Each grantee under this part 
shall report to the Secretary on its activities under this part, in the 
form and manner the Secretary may prescribe.
    (2) If the local educational agency is not the grantee under this 
part, the grantee's report shall include the approval 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 constructed, 
        renovated, or modernized with support from the grant, and the 
        mechanisms used to finance those activities; and
            (3) other information the Secretary may require.
    (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 competitive service, may appoint not more 
than 10 technical employees who may be paid without regard to the 
provisions 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 
accordance with the Act of March 3, 1931, as amended (40 U.S.C. 276a et 
seq.). The Secretary of Labor has, with respect to this section, the 
authority and functions established in Reorganization Plan Numbered 14 
of 1950 (effective 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 financial instruments, 
including but not limited to contracts, bonds, bills, notes, 
certificates of participation, or purchase or lease arrangements, 
issued by States, localities or instrumentalities thereof in connection 
with any assistance provided by the Secretary under this Act are 
obligations of such States, localities or instrumentalities and not 
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, certificates 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 Secretary of the 
Treasury in carrying out this Act.
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