[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2878 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2878

    To amend the Elementary and Secondary Education Act of 1965 to 
 establish a loan program and a bond guarantee program to assist local 
     educational agencies in the construction, reconstruction, and 
         renovation of public elementary and secondary schools.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 7, 1997

  Mr. Andrews (for himself and Mr. Menendez) introduced the following 
    bill; which was referred to the Committee on Education and the 
                               Workforce

_______________________________________________________________________

                                 A BILL


 
    To amend the Elementary and Secondary Education Act of 1965 to 
 establish a loan program and a bond guarantee program to assist local 
     educational agencies in the construction, reconstruction, and 
         renovation of public elementary and secondary schools.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. LOAN PROGRAM FOR SCHOOL FACILITIES IMPROVEMENT.

    Title XII of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8501 et seq.) is amended to read as follows:

             ``TITLE XII--SCHOOL FACILITIES IMPROVEMENT ACT

``SEC. 12001. FINDINGS.

    ``The Congress finds the following:
            ``(1) According to a 1991 survey conducted by the American 
        Association of School Administrators, 74 percent of all public 
        school buildings in the United States need to be replaced.
            ``(2) Almost one-third of such buildings were built prior 
        to World War II.
            ``(3) It is estimated that 1 of every 4 public school 
        buildings in the United States is in inadequate condition, and 
        of such buildings, 61 percent need maintenance or major 
        repairs, 43 percent are obsolete, 42 percent contain 
        environmental hazards, 25 percent are overcrowded, and 13 
        percent are structurally unsound.
            ``(4) According to a 1996 General Accounting Office report, 
        14,000,000 students attend schools in which 1 or more school 
        buildings (original, additional, or temporary) are in need of 
        extensive repair or replacement.
            ``(5) Large numbers of local educational agencies have 
        difficulties securing financing for school facility 
        improvement.

``SEC. 12002. PURPOSE.

    ``The purpose of this title is to leverage limited Federal funds to 
enable local educational agencies to finance the costs associated with 
the improvement of school facilities within their jurisdiction.

``SEC. 12003. FEDERAL ASSISTANCE IN THE FORM OF LOANS.

    ``(a) Authority and Conditions for Loans.--To assist local 
educational agencies in the construction of schools to replace schools 
which are 50 years of age or older, or in the reconstruction or 
renovation of schools which are 50 years of age or older, the Secretary 
may make loans of funds to such agencies for the construction, 
reconstruction, or renovation of such schools. Such assistance shall 
only be provided--
            ``(1) to local educational agencies eligible for grants 
        under section 1124A, schools located on Indian reservations, or 
        local educational agencies eligible for payments under sections 
        8003 and 8004; and
            ``(2) if the Secretary finds that such constructions will 
        be undertaken in an economical manner, and that any such 
construction, reconstruction or renovation is not or will not be of 
elaborate or extravagant design or materials.
    ``(b) Priorities.--
            ``(1) In general.--In approving loans under this title, the 
        Secretary shall consider--
                    ``(A) the difficulty of the applicant in securing 
                affordable financing from other sources;
                    ``(B) the threat the condition of the physical 
                plant poses to the safety and well-being of students;
                    ``(C) the demonstrated need for the construction, 
                reconstruction, or renovation as based on the condition 
                of the facility; and
                    ``(D) the age of the facility to be renovated or 
                replaced.
            ``(2) Preference.--In approving loans under this title, the 
        Secretary shall give preference to applicants from States that 
        have made a loan to the applicant in an amount not less than 25 
        percent of the amount of the loan amount requested in the 
        application and for the purpose described in the application.
    ``(c) Amount and Conditions of Loans.--A loan to a local 
educational agency--
            ``(1) may be in an amount not exceeding the total 
        development cost of the facility, as determined by the 
        Secretary;
            ``(2) shall be secured in such manner, as may be determined 
        by the Secretary;
            ``(3) shall be repaid within 30 years; and
            ``(4) shall bear interest at a rate, determined by the 
        Secretary, that will cover the cost (as defined in section 502 
        of the Federal Credit Reform Act of 1990) of the loan, and the 
        administrative cost to the Federal Government of the loan.

``SEC. 12004. FEDERAL ASSISTANCE IN THE FORM OF DEBT GUARANTEES.

    ``(a) Authority and Conditions for Debt Guarantees.--To assist 
local educational agencies in the construction of schools to replace 
schools which are 50 years of age or older, or in the reconstruction or 
renovation of schools which are 50 years of age or older, the Secretary 
may guarantee and make commitments to guarantee eligible debt 
instruments issued by such agencies for the construction, 
reconstruction, or renovation of such schools. Such assistance shall 
only be provided--
            ``(1) to local educational agencies eligible for grants 
        under section 1124A, schools located on Indian reservations, or 
        local educational agencies eligible for payments under sections 
        8003 and 8004; and
            ``(2) if the Secretary finds that such constructions will 
        be undertaken in an economical manner, and that any such 
        construction, reconstruction or renovation is not or will not 
        be of elaborate or extravagant design or materials.
    ``(b) Priorities.--
            ``(1) In general.--In approving debt guarantees under this 
        title, the Secretary shall consider--
                    ``(A) the difficulty of the applicant in securing 
                affordable financing guarantees from other sources;
                    ``(B) the threat the condition of the physical 
                plant poses to the safety and well-being of students;
                    ``(C) the demonstrated need for the construction, 
                reconstruction, or renovation as based on the condition 
                of the facility; and
                    ``(D) the age of the facility to be renovated or 
                replaced.
            ``(2) Preference.--In approving debt guarantees under this 
        title, the Secretary shall give preference to applicants from 
        States that have made a loan to the applicant for the purpose 
        described in the application and in an amount not less than 25 
        percent of the aggregate principal amount of the debt 
        instruments to be guaranteed.
    ``(c) Amount and Conditions of Guarantees.--A debt guarantee to a 
local educational agency--
            ``(1) may be in an amount not exceeding the total 
        development cost of the facility, as determined by the 
        Secretary;
            ``(2) shall be secured in such manner, as may be determined 
        by the Secretary; and
            ``(3) shall be made only with respect to debt instruments 
        that--
                    ``(A) have a maturity of 30 years;
                    ``(B) bear interest at a maximum rate, determined 
                by the Secretary taking into account the interest rate 
                paid by the Federal Government with respect to Federal 
                debt instruments of a similar nature; and
                    ``(C) otherwise are in such form and denomination, 
                and are subject to such other conditions, as the 
                Secretary shall prescribe.
    ``(d) Full Faith and Credit.--The full faith and credit of the 
United States is hereby pledged to the payment of all guarantees made 
under this section. Any such guarantee made by the Secretary shall be 
conclusive evidence of the eligibility of the debt instrument for such 
guarantee with respect to principal and interest, and the validity of 
any such guarantee so made shall be incontestable in the hands of a 
holder of the guaranteed debt instrument.

``SEC. 12005. GENERAL PROVISIONS.

    ``(a) Budget and Accounting.--In the performance of, and with 
respect to, the functions, powers, and duties under this title, the 
Secretary, notwithstanding the provisions of any other law, shall--
            ``(1) prepare annually and submit a budget program as 
        provided for wholly owned Government corporations by chapter 91 
        of title 31, United States Code; and
            ``(2) maintain a set of accounts which shall be audited by 
        the Comptroller General in accordance with the provisions of 
        chapter 35 of title 31, United States Code.
    ``(b) Use of Funds.--Funds made available to the Secretary pursuant 
to the provisions of this title shall be deposited in a checking 
account or accounts with the Treasurer of the United States. Receipts 
and assets obtained or held by the Secretary in connection with the 
performance of functions under this title, and all funds available for 
carrying out the functions of the Secretary under this title (including 
appropriations therefor, which are hereby authorized), shall be 
available, in such amounts as may from year to year be authorized by 
the Congress, for the administrative expenses of the Secretary in 
connection with the performance of such functions.
    ``(c) Legal Powers.--In the performance of, and with respect to, 
the functions, powers, and duties under this title, the Secretary, 
notwithstanding the provisions of any other law, may--
            ``(1) prescribe such rules and regulations as may be 
        necessary to carry out the purposes of this title;
            ``(2) sue and be sued;
            ``(3) foreclose on any property or commence any action to 
        protect or enforce any right conferred upon the Secretary by 
        any law, contract, or other agreement, and bid for and purchase 
        at any foreclosure or any other sale any property in connection 
        with which the Secretary has made a loan pursuant to this 
        title;
            ``(4) in the event of any such acquisition, notwithstanding 
        any other provision of law relating to the acquisition, 
        handling, or disposal of real property by the United States, 
        complete, administer, remodel and convert, dispose of, lease, 
        and otherwise deal with, such property, but any such 
        acquisition of real property shall not deprive any State or 
        political subdivision thereof of its civil or criminal 
        jurisdiction in and over such property or impair the civil 
        rights under the State or local laws of the inhabitants on such 
        property;
            ``(5) sell or exchange at public or private sale, or lease, 
        real or personal property, and sell or exchange any securities 
        or obligations, upon such terms as the Secretary may fix;
            ``(6) obtain insurance against loss in connection with 
        property and other assets held; and
            ``(7) include in any contract or instrument made pursuant 
        to this title such other covenants, conditions, or provisions 
        as may be necessary to assure that the purposes of this title 
        will be achieved.
    ``(d) Contracts for Supplies or Services.--Section 3709 of the 
Revised Statutes shall not apply to any contract for services or 
supplies on account of any property acquired pursuant to this title if 
the amount of such contract does not exceed $1,000.
    ``(e) Applicability of Government Corporation Control Act.--The 
provisions of section 9107(a) of title 31, United States Code, which 
are applicable to corporations or agencies subject to chapter 91 of 
such title, shall also be applicable to the activities of the Secretary 
under this title.
    ``(f) Labor Standards.--
            ``(1) Laborers and mechanics.--All laborers and mechanics 
        employed by contractors or subcontractors in the performance of 
        any contract or subcontract for the repair, renovation, 
        alteration, or construction, including painting or decorating, 
        of any building or work that is financed in whole or in part by 
        a grant, loan, or debt guarantee under this title, shall be 
        paid wages not less than those determined by the Secretary of 
        Labor in accordance with the Act of March 3, 1931 (Davis Bacon 
        Act), as amended. The Secretary of Labor shall have the 
        authority and functions set forth in Reorganization Plan Number 
        14 of 1950 (15 FR 3176; 64 Stat. 1267) and section 276c of 
        title 40.
            ``(2) Exceptions.--The requirements of this subsection 
        shall not apply to an individual--
                    ``(A) who volunteers--
                            ``(i) to perform a service directly to a 
                        local educational agency for civic, charitable, 
                        or humanitarian reasons, without promise, 
                        expectation, or receipt of compensation for 
                        services rendered, other than expenses, 
                        reasonable benefits, or a nominal fee (as 
                        defined in subsection (b) of this section), but 
                        solely for the personal purpose or pleasure of 
                        the individual; and
                            ``(ii) to provide such service freely and 
                        without pressure or coercion, direct or 
                        implied, from any employer;
                    ``(B) whose contribution of service is not for the 
                direct or indirect benefit of any contractor otherwise 
                performing or seeking to perform work on the same 
                project for which the individual is volunteering;
                    ``(C) who is not employed by and does not provide 
                services to a contractor or subcontractor at any time 
                on any contract or subcontract for the repair, 
                renovation, alteration, or construction, including 
                painting or decorating, of any building or work that is 
                financed in part by a loan, or debt guarantee under 
                this subchapter, for which the individual is 
                volunteering; and
                    ``(D) who is not otherwise employed by the same 
                local educational agency to perform the same type of 
                services as those for which the individual proposes to 
                volunteer.
            ``(3) Payments to volunteers.--Payments of expenses, 
        reasonable benefits, or a nominal fee may be provided to 
        volunteers described in paragraph (2) of this subsection only 
        in accordance with regulations issued by the Secretary of 
        Labor. In prescribing the regulations, the Secretary shall take 
        into consideration criteria such as the total amount of 
        payments made (relating to expenses, benefits, or fees) in the 
        context of the economic realities. The regulations shall 
        include provisions that provide that--
                    ``(A) a payment for an expense may be received by a 
                volunteer for items such as uniform allowances, 
                protective gear and clothing, reimbursement for 
                approximate out-of-pocket expenses, or for the cost or 
                expense of meals and transportation;
                    ``(B) a reasonable benefit may include the 
                inclusion of a volunteer in a group insurance plan 
                (such as a liability, health, life, disability, or 
                worker's compensation plan) or pension plan, or the 
                awarding of a length of service award; and
                    ``(C) a nominal fee may not be used as a substitute 
                for compensation and may not be connected to 
                productivity.
        The decision as to what constitutes a nominal fee for purposes 
        of subparagraph (C) shall be determined based on the context of 
        the economic realities of the situation involved and shall be 
        made by the Secretary of Labor.
            ``(4) Determination of payment.--For purposes of paragraph 
        (2) of this subsection, in determining whether an expense, 
        benefit, or fee described in such subsection may be paid to 
        volunteers in the context of the economic realities of the 
        particular situation, the Secretary of Labor may not permit any 
        such expense, benefit, or fee that has the effect of 
        undermining labor standards by creating downward pressure on 
        prevailing wages in the local construction industry.
    ``(g) Limitations.--
            ``(1) Successive loans.--No loan or bond guarantee shall be 
        made under this title to any local educational agency until 5 
        years after the date on which a previous loan or bond guarantee 
        to that agency was made under this title, unless the loan is 
        intended to be used to construct or reconstruct a facility 
        damaged as a result of a natural disaster, as declared by the 
        President.
            ``(2) Schools in one state.--Not more than 12.5 percent of 
        the amount of the funds annually provided for in this title in 
        the form of loans or bond guarantees shall be made available to 
        educational institutions within any one State.

``SEC. 12006. DEFINITION.

    ``The term `school' is defined as public structures suitable for 
use as classrooms, laboratories, libraries, and related facilities, the 
primary purpose of which is the instruction of elementary and secondary 
school students.

``SEC. 12007. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this title, 
$200,000,000 for fiscal year 1999 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.''.
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