Findings

The Congress finds the following: (1)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. (2)Approximately 14,000,000 United States students attend schools that report the need for extensive repair or replacement of 1 or more buildings. (3)According to a 2005 study conducted by American School & University magazine, $29,088,000,000 was spent to address the Nation’s education infrastructure needs in 2004, with the average total cost of a new high school being $27,000,000. (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 condition could be expected to have test scores that are 10.9 percentage points lower than students in schools in excellent condition. Similar studies demonstrated improvement of up to 20 percent in test scores when students were moved from a facility in poor condition to a new facility. (5)The Director of the Education and Employment Issues division of the Government Accounting Office (currently known as the Education, Workforce, and Income Security division of the Government Accountability 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 the Nation’s public elementary schools and secondary schools and libraries require the concerted efforts of all levels of government and all sectors of communities. (8)The United States competitive position within the world economy is vulnerable if the future workforce of the United States continues to be educated in schools and libraries not equipped for the 21st century. (9)The deplorable state of collections in public school libraries in the United States 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.

State infrastructure bank pilot program

(a)

Establishment

(1)

Cooperative agreements

The Secretary of Education (referred to in this Act as the Secretary), after consultation with the Secretary of the Treasury, may enter into cooperative agreements with States under which— (A)the 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 States to be used as initial capital for the purpose of making loans through the infrastructure banks— (i)to local educational agencies to enable the agencies to construct, reconstruct, or renovate elementary schools or secondary schools that provide free public education; and (ii)to public libraries to enable the libraries to construct, reconstruct, or renovate 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 consent granted 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 to the bank, from non-Federal sources, an amount equal to not less than 25 percent of the amount of each grant made for the bank under subsection (a); (2)identify as recipient of the grant an operating entity of the State that has the capacity to manage loan funds, and issue debt instruments of the State for purposes of leveraging the funds made available through the grant or State contributions under paragraph (1) related to the grant; (3)allow such funds to be used as reserve for debt issued by the State, so long as proceeds are deposited in the appropriate accounts for loan purposes; (4)ensure that investment income generated by funds described in paragraph (2) and made available to an account of the bank will be— (A)credited to the account; (B)available for use in providing loans for a project 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 funds for projects assisted by the bank; (5)ensure that any loan from the bank will bear interest at or below the lowest interest rate being offered for bonds; (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 such 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 a loan under subsection (e). (2)

Applications for loans

(A)

In general

A local educational agency or public library desiring a loan under this section shall submit to such an infrastructure bank an application that includes— (i)in the case of an application for a renovation project for a facility— (I)a description of each architectural, civil, structural, mechanical, or electrical deficiency to be corrected with the loan funds and the priorities to be applied in determining which deficiency to address first; and (II)a description of the criteria used by the applicant to determine the type of corrective action necessary for the renovation of the facility; (ii)a description of any improvements to be made and a cost estimate for the improvements to be made with the loan; (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 under this section, an infrastructure bank shall consider— (A)the extent to which the local educational agency or public library desiring the loan would otherwise lack the fiscal capacity, including the ability to raise funds through the full use of 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 described in the application, based on the condition of the facility in the proposed project; and (D)the age of the facility proposed to be replaced, reconstructed, or renovated. (e)

Eligible projects

(1)

In general

A project shall be eligible for a loan from an infrastructure bank under this section if the project consists of— (A)the construction of an 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 at an educational facility, including the repair of leaking roofs, crumbling walls, inadequate plumbing, poor ventilation equipment, or inadequate heating or lighting equipment; (C)an activity to increase physical safety at an educational facility; (D)an activity to enhance an educational facility to provide access for students, teachers, and other individuals (such as staff and parents) who are individuals with disabilities; (E)an activity to address environmental hazards at an educational facility, 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, at an educational facility; (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 treatment, storage, and disposal requirements mandated under 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 at an educational facility; (I)work to detect, remove, or otherwise contain asbestos hazards in an educational facility; or (J)work to construct public library facilities or repair or upgrade public library facilities. (2)

Davis-Bacon

The wage requirements of subchapter IV of chapter 31 of title 40, United States Code 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, reconstruction, or renovation (including repair). (g)

Limitation on repayments

Notwithstanding any other provision of law, if an infrastructure bank makes a loan under this section with funds made available through a grant awarded to a State under subsection (a), the funds used to repay the loan may not be credited toward the contribution required for the State under subsection (c)(1) for a subsequent grant awarded under subsection (c). (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 to 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)

Income attributable to interest

The income attributable to interest described in subsection (c)(5) shall be exempt from Federal taxation. (k)

Management of Federal funds

Sections 3335 and 6503 of title 31, United States Code, shall not apply to funds contributed under this section. (l)

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. (m)

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.