[Congressional Record Volume 144, Number 6 (Wednesday, February 4, 1998)]
[House]
[Pages H330-H335]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               AMENDMENTS

  Under clause 6 of rule XIII, proposed amendments were submitted as 
follows:

                               H.R. 2846

                          Offered By: Mr. Clay

               (Amendment in the Nature of a Substitute)

       Amendment No. 1: Strike all after the enacting clause and 
     insert the following:

     SECTION 1. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds the following:
       (1) Although the majority of our Nation's elementary and 
     secondary public schools provide high quality education for 
     our children, many schools need additional resources to 
     implement immediate assistance and reform to enable them to 
     provide a basic and safe education for their students.
       (2) The Government Accounting Office recently found that 
     \1/3\ of all elementary and secondary schools in the United 
     States, serving 14,000,000 students, need extensive repair 
     and renovation.
       (3) Recent reform of under-achieving schools in a number of 
     States and school districts demonstrates that parents, 
     teachers, school administrators, other educators, and local 
     officials, given adequate resources and expertise, can 
     succeed in dramatically improving public education and 
     creating high performance schools.
       (4) Such reform efforts show that parental and community 
     involvement in those reforms is indispensable to the 
     objective of high quality, safe, and accountable schools.
       (5) Despite the successes of such reforms, public schools 
     are facing tremendous challenges in educating children for 
     the 21st century. The elementary and secondary school 
     population will grow by 10 percent by the year 2005, and over 
     the next 10 years, schools will need more than 2,000,000 
     additional teachers to meet the demands of such expected 
     enrollments.
       (6) Almost 7 of 10 Americans support increased Federal 
     assistance to our Nation's public schools, and that support 
     crosses all boundaries, including cities, towns, and rural 
     areas.
       (7) When Federal investment in public schools and children 
     has increased, test scores have improved, and high school 
     graduation rates and college enrollments have increased.
       (8) The Federal Government should encourage communities 
     that demonstrate a strong commitment to restore and reform 
     their public schools.
       (b) Purpose.--It is the purpose of this Act to assist local 
     communities that are taking the initiative--
       (1) to overcome adverse conditions in their public schools;
       (2) to revitalize their public schools in accordance with 
     local plans to achieve higher academic standards and safer 
     and improved learning environments; and
       (3) to ensure that every community public school provides a 
     quality education for all students.

     SEC. 2. DEFINITIONS.

       For purposes of this Act:
       (1) Consortium.--The term ``consortium'' means a local 
     schools consortium as defined in paragraph (2).
       (2) Local schools consortium.--The term ``local schools 
     consortium'' means the local educational agency in 
     collaboration with a group composed of affected parents, 
     students, and representatives of teachers, school employees 
     and administrators, local business and community leaders and 
     representative of local higher education group working or 
     residing within the boundary of a local educational agency.
       (3) Parent.--The term ``parent'' includes any of the 
     following:
       (A) A grandparent.
       (B) A legal guardian.
       (C) Any other person standing in loco parentis.
       (3) Plan.--The term ``plan'' means a 3-year public schools 
     renewal and improvement plan described in section 4.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (5) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, the Commonwealth of Puerto Rico, 
     the American Virgin Islands, Guam, and American Samoa.

     SEC. 3. PROCEDURE FOR DECLARATION.

       (a) In General.--A request for a declaration by the 
     President that a ``public schools renewal effort is 
     underway'' shall be made by a local schools consortium.
       (b) Request.--The local education agency shall submit the 
     request to the Governor of the State who shall, with or 
     without comment, forward such request to the President not 
     more than 30 days after the Governor's receipt of such 
     request. Such request shall--

[[Page H331]]

       (1) include the plan;
       (2) describe the nature and amount of State and local 
     resources which have been or will be committed to the renewal 
     and improvement of the public schools; and
       (3) certify that State or local government obligations and 
     expenditures will comply with all applicable matching 
     requirements established pursuant to this Act.
       (c) Declaration.--Based on a request made under this Act, 
     the President, in consultation with the Secretary, may 
     declare that a ``public schools renewal effort is underway'' 
     in such community and authorize the Department of Education 
     and other Federal agencies to provide assistance under this 
     Act.
       (d) Progress Reports.--The consortium shall--
       (1) amend such request annually to include additional 
     initiatives and approaches undertaken by the local 
     educational agency to improve the academic effectiveness and 
     safety of its public school system.
       (2) submit annual performance reports to the Secretary 
     which shall describe progress in achieving the goals of the 
     plan.

     SEC. 4. ELEMENTS OF RENEWAL AND IMPROVEMENT PLAN.

       (a) In General.--As part of its request to the President, 
     and in order to receive assistance under this section, a 
     consortium shall submit a plan that includes the elements 
     described in subsections (b) and (c).
       (b) Adverse Conditions.--The plan shall specify the 
     existence of any of the following factors:
       (1)(A) A substantial percentage of students in the affected 
     public schools have been performing well below the national 
     average, or below other benchmarks, including State developed 
     benchmarks in such basic skills as reading, math, and 
     science, consistent with Goals 2000 and title I of the 
     Elementary and Secondary Education Act of 1965; or
       (B) a substantial percentage of such students are failing 
     to complete high school.
       (2) Some or all of such schools are overcrowded or have 
     physical plant conditions that threaten the health, safety, 
     and learning environment of the schools' populations.
       (3) There is a substantial shortage of certified teachers, 
     teaching materials, and technology training.
       (4) Some or all of the schools are located where crime and 
     safety problems interfere with the schools' ability to 
     educate students to high academic standards.
       (c) Assurances.--The plan shall also include assurances 
     from the local educational agency that--
       (1) the plan was developed by the local schools consortium 
     after extensive public discussion with State education 
     officials, affected parents, students, teachers and 
     representatives of teachers and school employees, 
     administrators, higher education officials, other educators, 
     and business and community leaders;
       (2) describe how the consortium will use resources to meet 
     the types of reforms described in section 6;
       (3) provide effective opportunities for professional 
     development of public school teachers, school staff, 
     principals, and school administrators;
       (4) provide for greater parental involvement in school 
     affairs;
       (5) focus substantially on successful and continuous 
     improvement in the basic academic performance of the students 
     in the public schools;
       (6) address the unique responsibilities of all stake 
     holders in the public school system, including students, 
     parents, teachers, school administrators, other educators, 
     governmental officials, and business and community leaders, 
     for the effectiveness of the public school system especially 
     with respect to the schools targeted for greatest assistance;
       (7) provide for regular objective evaluation of the 
     effectiveness of the plan;
       (8) the agency will give priority to public schools that 
     need the most assistance in improving overcrowding, physical 
     problems and other health and safety concerns, readiness for 
     telecommunications equipment, and teacher training and the 
     pool of certified teachers;
       (9) ensure that funds received under this Act shall be used 
     to supplement, not supplant other non-Federal funds;
       (10) certify that the combined fiscal effort per student or 
     the aggregate expenditures within the State with respect to 
     the provision of free public education for the fiscal year 
     preceding the fiscal year for which the request for a 
     declaration is made was not less than 90 percent of such 
     combined fiscal effort or aggregate expenditures for the 
     second fiscal year preceding the fiscal year for which the 
     request for a declaration is made; and
       (11) will address other major issues which the local 
     schools consortium determines are critical to renewal of its 
     public schools.

     SEC. 5. ALLOWABLE FEDERAL ASSISTANCE.

       (a) In General.--To provide assistance under this Act, the 
     President may--
       (1) direct the Department of Education, with or without 
     reimbursement, to use the authority and the resources granted 
     to it under Federal law (including personnel, educational 
     equipment and supplies, facilities, and managerial, 
     technical, and advisory services) in support of State and 
     local assistance efforts;
       (2) direct any other Federal agency to provide assistance 
     as described in paragraph (1);
       (3) coordinate such assistance provided by Federal 
     agencies; and
       (4) provide technical assistance and advisory assistance to 
     the affected local educational agency.
       (b) Distribution of Assistance Funds.--
       (1) In general.--At the direction of the President, the 
     Secretary shall distribute funds and resources provided 
     pursuant to a declaration under this Act to local educational 
     agencies selected for assistance under this Act.
       (2) Existing procedures.--The Secretary shall determine the 
     best method of distributing funds under this Act through 
     personnel and existing procedures that are used to distribute 
     funds under other elementary and secondary education 
     programs.
       (c) Prohibition.--No provision of this Act shall be 
     construed to authorize any action or conduct prohibited under 
     the General Education Provisions Act.

     SEC. 6. USE OF ASSISTANCE.

       Assistance provided pursuant to this Act may be used only 
     to carry out a plan, and to effectuate the following and 
     similar types of public school reforms:
       (1) Student-Targeted Resources.--
       (A) Increasing and improving high-quality early childhood 
     educational opportunities.
       (B) Providing comprehensive parent training so that parents 
     better prepare children before they reach school age.
       (C) Establishing intensive truancy prevention and dropout 
     prevention programs.
       (D) Establishing alternative public schools and programs 
     for troubled students and dropouts, and establishing other 
     public school learning ``safety nets''.
       (E) Enhancing assistance for students with special needs 
     (including limited English proficient students, English as a 
     second language, and students with disabilities).
       (2) Classroom focused school development.--
       (A) Establishing teacher and principal academies to assist 
     in training and professional development.
       (B) Establishing effective training links for students with 
     area colleges and universities.
       (C) Establishing career ladders for teachers and school 
     employees.
       (D) Establishing teacher mentor programs.
       (E) Establishing recruitment programs at area colleges and 
     universities to recruit and train college students for the 
     teaching profession.
       (F) Establishing stronger links between schools and law 
     enforcement and juvenile justice authority.
       (G) Establishing stronger links between schools and parents 
     concerning safe classrooms and effective classroom activities 
     and learning.
       (H) Establishing parent and community patrols in and around 
     schools to assist safe schools and passage to schools.
       (I) Implementing research-based promising educational 
     practices and promoting exemplary school recognition 
     programs.
       (J) Expanding the time students spend on school-based 
     learning activities and in extracurricular activities.
       (3) Accountability reforms.--
       (A) Establishing high learning standards and meaningful 
     assessments of whether standards are being met.
       (B) Monitoring school progress and determining how to more 
     effectively use school system resources.
       (C) Establishing performance criteria for teachers and 
     principals through such entities as joint school board and 
     union staff improvement committees.
       (D) Establishing promotion and graduation requirements for 
     students, including requirements for reading, mathematics, 
     and science performance.
       (E) Providing for strong accountability and corrective 
     action from a continuum of options, consistent with State law 
     and title I of the Elementary and Secondary Education Act of 
     1965.

     SEC. 7. DURATION OF ASSISTANCE.

       Assistance under this Act may be provided for each of 
     fiscal years 1998 through 2000.

     SEC. 8. REPORT.

       Not later than March 31, 2000, the Secretary shall submit a 
     report to the Committee on Education and the Workforce of the 
     House of Representatives and the Committee on Labor and Human 
     Resources of the Senate assessing the effectiveness of this 
     Act in assisting recipient local schools consortia in 
     carrying out their plans submitted under this Act.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS; MATCHING 
                   REQUIREMENT.

       (a) Authorization.--There are authorized to be appropriated 
     to carry out this Act--
       (1) for fiscal year 1998, $250,000,000; and
       (2) for fiscal year 1999, $500,000,000; and
       (3) for fiscal year 2000, such sums as may be necessary.
       (b) Matching Requirement.--
       (1) In general.--Federal funds expended or obligated under 
     this Act shall be matched (in an amount equal to such amount 
     so expended or obligated) from State or local funds.
       (2) Other federal resources.--The Secretary shall, by 
     regulation and in consultation with the heads of other 
     Federal agencies, establish matching requirements for other 
     Federal resources provided under this Act.
       (3) Waiver.--Based upon the recommendation of the 
     Secretary, the President may waive paragraph (1) or (2).

[[Page H332]]

                               H.R. 2846

                        Offered By: Mr. Martinez

               (Amendment in the Nature of a Substitute)

       Amendment No. 2: Strike all after the enacting clause and 
     insert the following:

     SECTION 1. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds the following:
       (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) 7,000,000 children attend schools with life safety code 
     problems.
       (3) School infrastructure problems exist across the country 
     in urban and nonurban schools; at least 1 building is in need 
     of extensive repair or replacement in 38 percent of urban 
     schools, 30 percent of rural schools, and 29 percent of 
     suburban schools.
       (4) 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.
       (5) 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.
       (6) 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 low-income 
     communities have had the greatest difficulty meting this 
     need.
       (7) 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.

     SEC. 2. DEFINITIONS.

       Except as otherwise provided, as used in this Act, the 
     following terms have the following meanings:
       (1) Community school.--The term ``community school'' means 
     a school facility, or part of a school facility, 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.
       (2) Construction.--(A) 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.
       (3) 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)).
       (4) School facility.--(A) The 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.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (6) State.--The term ``State'' means each of the 50 States 
     and the Commonwealth of Puerto Rico.
       (7) 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)).

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act $5,000,000,000 for fiscal year 1998 and such sums as may 
     be necessary for each succeeding fiscal year.

     SEC. 4. ALLOCATION OF FUNDS.

       (a) Allocation of Funds.--Of the amounts appropriated to 
     carry out this Act, the Secretary shall make available--
       (1) 49 percent of such amounts for formula grants to States 
     under section 111;
       (2) 34 percent of such amounts for direct formula grants to 
     local educational agencies under section 206;
       (3) 15 percent of such amounts for competitive grants to 
     local educational agencies under section 127; and
       (4) 2 percent of such amounts to provide assistance to the 
     Secretary of the Interior as provided in subsection (b).
       (b) Reservation for the Secretary of the Interior and the 
     Outlying Areas.--
       (1) Funds allocated under subsection (a)(4) to provide 
     assistance to the Secretary of the interior shall be used--
       (A) for the school construction priorities described in 
     section 1125(c) of the Education Amendments of 1978 (25 
     U.S.C. 2005(c)); and
       (B) to 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 subsection (b)(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.
                       TITLE I--GRANTS TO STATES

     SEC. 111. ALLOCATION OF FUNDS.

       (a) Formula Grants to States.--Subject to subsection (b), 
     the Secretary shall allocate the funds available under 
     section 4(a)(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 206 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 206, the percentage allocated to a State under this 
     section and to localities in the State under section 206 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).

     SEC. 112. STATE ADMINISTRATION.

       The Secretary shall award each State's grant to the State 
     educational agency to administer the State grant, or to 
     another public agency in the State designated by the State 
     educational agency if the State educational agency determines 
     that the other agency is better able to administer the State 
     grant.

     SEC. 113. ALLOWABLE USES OF FUNDS.

       Each State shall use its grant under this title only for 1 
     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.

     SEC. 114. ELIGIBLE CONSTRUCTION PROJECTS; PERIOD FOR 
                   INITIATION

       (a) Eligible Projects.--States and their subgrantees may 
     use funds under this title, 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

[[Page H333]]

     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 community schools.
       (b) Period for Initiation of Project.--(1) Each State shall 
     use its grant under this title 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 title 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 title.
       (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 
     title, the Secretary may reallocate all or part of those 
     funds, including any interest earned by the State on those 
     funds, to 1 or more other States that are making satisfactory 
     progress.

     SEC. 115. SELECTION OF LOCALITIES AND PROJECTS.

       (a) Priorities.--In determining which localities and 
     activities to support with grant funds, each State shall give 
     the highest priority to localities with the greatest needs, 
     as demonstrated by inadequate educational facilities 
     (particularly facilities that pose a threat to the health and 
     safety of students), coupled with a low level of resources 
     available to meet school construction needs.
       (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 title:
       (1) The age and 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 title.
       (c) Ineligibility for Title 2 Subgrants.--Local educational 
     agencies in the State that receive direct grants under 
     section 206 shall be ineligible for a subgrant under this 
     title.

     SEC. 116. STATE APPLICATIONS.

       (a) Application Required.--A State that wishes to receive a 
     grant under this title shall submit through its State 
     educational agency, or through an alternative agency 
     described in section 112, an application to the Secretary, in 
     the manner the Secretary may require, not later than 2 years 
     after the date of enactment of this Act.
       (b) Development of Application.--The State educational 
     agency or alternative agency described in section 112, shall 
     develop the State's application under this title only after 
     broadly consulting with the State board of education, and 
     representatives of local school boards, school 
     administrators, and business community, parents, and teachers 
     in the State about the best means of carrying out this title.
       (c) State Survey.--(1) Before submitting the State's 
     application, the State educational agency or alternative 
     agency described in 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 title II) 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 
     title.
       (d) Application Contents.--Each State application under 
     this title shall include--
       (1) a summary of the results of the State's survey of its 
     school facility needs, as described in subsection (c);
       (2) a description of how the State will implement its 
     program under this title;
       (3) 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;
       (4)(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 517(a), to each local project that the State will 
     support;
       (5) a description of how the State will ensure that the 
     requirements of this title are met by subgrantees under this 
     title;
       (6) 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 title;
       (7) 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 title, and 
     not to supplant those funds;
       (8) an assurance that, during the 4-year period beginning 
     with the year the State receives its grant, the average 
     annual combined expenditures for school construction by the 
     State and the localities that benefit form the State's 
     program under this title (which, at the State's option, may 
     include private contributions) will be at least 125 percent 
     of the average of those annual combined expenditures for that 
     purpose during the 8 preceding years; and
       (9) 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)(8) 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 
     particularly high level of school construction expenditures 
     during the previous 8 years.

     SEC. 117. AMOUNT OF FEDERAL SUBSIDY.

       (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 title, 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 1 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 title 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 title, 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).

     SEC. 118. SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT

       (a) Separate Funds or Accounts Required.--Each State that 
     receives a grant, and each recipient of a subgrant under this 
     title, 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 title.
       (b) Prudent Investment Required.--Each State that receives 
     a grant, and each recipient of a subgrant under this title, 
     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

[[Page H334]]

       (2) notwithstanding section 6503 of title 31, United States 
     Code, or any other law, use the proceeds of that investment 
     to carry out this title.

     SEC. 119. STATE REPORTS.

       (a) Reports Required.--Each State receiving a grant under 
     this title shall report to the Secretary on its activities 
     under this title, in the form and manner the Secretary may 
     prescribe.
       (b) Contents.--Each report shall--
       (1) describe the State's implementation of this title, 
     including how the State has met the requirements of this 
     title;
       (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 grants under this title.
       (2) Each State shall submit an annual report for each of 
     the 3 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.
         TITLE II--DIRECT GRANTS TO LOCAL EDUCATIONAL AGENCIES

     SEC. 201. ELIGIBLE LOCAL EDUCATIONAL AGENCIES

       (a) Eligible Agencies.--Except as provided in subsection 
     (b), the local educational agencies that are eligible to 
     receive formula grants under section 126 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 title, the local educational agencies for Hawaii and the 
     Commonwealth of Puerto Rico are not eligible local 
     educational agencies.

     SEC. 202. GRANTEES.

       For each local educational agency for which an approvable 
     application is submitted, the Secretary shall make any grant 
     under this title 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 
     title.

     SEC. 203. ALLOWABLE USES OF FUNDS.

       Each grantee under this title shall use its grant only for 
     1 or more of the following activities to reduce the cost of 
     financing eligible school construction projects described in 
     section 204:
       (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.

     SEC. 204. ELIGIBLE CONSTRUCTION PROJECTS; REDISTRIBUTION

       (a) Eligible Projects.--A grantee under this title may use 
     its grant, in accordance with section 203, 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 title, the Secretary may redistribute all or part 
     of those funds, and any interest earned by that agency on 
     those funds, to 1 or more other local educational agencies 
     that are making satisfactory progress.

     SEC. 205. LOCAL APPLICATIONS.

       (a) Application Required.--A local educational agency, or 
     an alternative agency described in section 122 (both referred 
     to in this title as the ``local agency''), that wishes to 
     receive a grant under this title shall submit an application 
     to the Secretary, in the manner the Secretary may require, 
     not later than 2 years after the date of enactment of this 
     Act.
       (b) Development of Application.--(1) The local agency shall 
     develop the local application under this title only after 
     broadly consulting with the State educational agency, 
     parents, administrators, teachers, the business community, 
     and other members of the local community about the best means 
     of carrying out this title.
       (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 title.
       (d) Applicable Contents.--Each local application under this 
     title shall include--
       (1) an identification of the local agency to receive the 
     grant under this title;
       (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 title;
       (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 
     208(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 title 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 title, and not to supplant those funds;
       (10) an assurance that, during the 4-year period beginning 
     with the year the local educational agency receives its 
     grant, its average annual expenditures for school 
     construction (which, at that agency's option, may include 
     private contributions) will be a least 125 percent of its 
     average annual expenditures for that purpose during the 8 
     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 8 years.

     SEC. 206. DIRECT FORMULA GRANTS.

       (a) Allocations.--The Secretary shall allocate the funds 
     available under section 4(a)(2) to the local educational 
     agencies identified under section 201(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).

     SEC. 207. DIRECT COMPETITIVE GRANTS.

       (a) Grants Authorized.--The Secretary shall use funds 
     available under section 4(a)(3) to make additional grants, on 
     a competitive basis to local educational agencies, or 
     alternative agencies described in section 202.
       (b) Additional Application Materials.--Any local 
     educational agency, or an alternative agency described in 
     section 202, that wishes to receive funds under this section 
     shall submit an application to the Secretary that meets the 
     requirements under section 205 and includes 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) A description of the extent to which the proposed 
     construction activities would enhance the health and safety 
     of students.
       (4) A description of the extent to which the proposed 
     construction activities address compliance with Federal 
     mandates, including providing accessibility for the disabled 
     and removal of hazardous materials.
       (5) Information on the current financial effort the 
     applicant is making for elementary

[[Page H335]]

     and secondary education, including support from private 
     sources, relative to its resources.
       (6) 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 8 years.
       (7) A description of the energy efficiency and the effect 
     on the environment of the projects that the applicant will 
     undertake and of the extent to which those projects will use 
     cost-efficient architectural design.
       (8) Other information that the Secretary may require.
       (c) Selection of Grantees.--In determining which local 
     educational agencies shall receive direct grants under this 
     title, the Secretary shall give the highest priority to local 
     educational agencies that--
       (1) have a need to repair, remodel, renovate, or otherwise 
     improve school facilities posing a threat to the health and 
     physical safety of students, coupled with a low level of 
     resources available to meet school construction needs, and 
     have demonstrated a high level of financial effort for 
     elementary and secondary education relative to their local 
     resources;
       (2) have a need to repair, remodel, renovate, or construct 
     school facilities in order to comply with Federal mandates, 
     including providing for accessibility for the disabled and 
     removal of hazardous materials, coupled with a low level of 
     resources available to meet school construction needs, and 
     have demonstrated a high level of financial effort for 
     elementary and secondary education relative to their local 
     resources; and
       (3) demonstrate a need for emergency assistance for to 
     repair, remodel, renovate, or construct school facilities, 
     coupled with a low level of resources available to meet 
     school construction needs, and have demonstrated a high level 
     of financial effort for elementary and secondary education 
     relative to their local resources.
       (d) Minimum Allocations.--Of the amount available for 
     competitive awards under section 4(a)(3), the Secretary shall 
     ensure that, in making awards under subsection (a), no less 
     than 40 percent of such amount is available to the local 
     educational agencies described in section 121(a) and no less 
     than 40 percent of such amount is available to the local 
     educational agencies eligible for subgrants under title I.
       (e) Additional Criteria.--The Secretary may establish 
     additional criteria, consistent with subsections (c) and (d), 
     and with purposes of this title, for the purpose of electing 
     grantees under this title.

     SEC. 208. AMOUNT OF FEDERAL SUBSIDY.

       (a) Amount of Federal Subsidy.--For each construction 
     project assisted under this title, the Secretary shall 
     determine the amount of the Federal subsidy in accordance 
     with section 117(a).
       (b) Non-Federal Share.--A grantee under this title 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).

     SEC. 209. SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT

       (a) Separate Funds or Accounts Required.--Each grantee 
     under this title 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 title.
       (b) Prudent Investment Required.--Each grantee under this 
     title 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 title.

     SEC. 210. LOCAL REPORTS.

       (a) Reports Required.--(1) Each grantee under this title 
     shall report to the Secretary on its activities under this 
     title, in the form and manner the Secretary may prescribe.
       (2) If the local educational agency is not the grantee 
     under this title, 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 title, 
     including how it has met the requirements of this title;
       (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 it grant under this title.
       (2) Each grantee shall submit an annual report for each of 
     the 3 years after submitting its first report, and 
     subsequently shall submit periodic reports as long as it is 
     using grant funds.
                  TITLE III--MISCELLANEOUS PROVISIONS

     SEC. 301. TECHNICAL EMPLOYEES.

       For purposes 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.

     SEC. 302. WAGE RATES

       (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 semicolon and ``and''; and
       (3) by adding at the end thereof the following new 
     paragraph:
       ``(7) title V of the Reading Excellence Act,''.

     SEC. 303. NO LIABILITY OF FEDERAL GOVERNMENT.

       (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.

     SEC. 304. REPORT TO CONGRESS.

       The Secretary shall report on the activities conducted by 
     States and local educational agencies with assistance 
     provided under this Act, and shall assess State and local 
     educational agency compliance with the requirements of this 
     Act. Such report shall be submitted to Congress not later 
     than 3 years after the date of enactment of this Act and 
     annually thereafter as long as States or local educational 
     agencies are using grant funds.

     SEC. 305. CONSULTATION WITH SECRETARY OF THE TREASURY.

       The Secretary shall consult with the Secretary of the 
     Treasury in carrying out this Act.