[Congressional Record Volume 145, Number 165 (Friday, November 19, 1999)]
[Senate]
[Pages S15106-S15108]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 1992. A bill to provide States with loans to enable State entities 
or local governments within the States to make interest payments on 
qualified school construction bonds issued by the State entities or 
local governments, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.


  building, renovating, improving, and constructing kids' schools act

  Ms. SNOWE. Mr. President, I rise today to introduce the ``Building, 
Renovating, Improving, and Constructing Kids' Schools (BRICKS) Act''--
legislation that would address our nation's burgeoning need for K-12 
school construction, renovation, and repair. The legislation would 
accomplish this in a fiscally-responsible manner while seeking to find 
the middle ground between those who support a very direct, active 
federal role in school construction, and those who are concerned about 
an expanded federal role in what has been--and remains--a state and 
local responsibility.
  Mr. President, the condition of many of our nation's existing public 
schools is abysmal even as the need for additional schools and 
classroom space grows. Specifically, according to reports issued by the 
General Accounting Office (GAO) in 1995 and 1996, fully one-third of 
all public schools needing extensive repair or replacement.
  As further evidence of this problem, an issue brief prepared by the 
National Center for Education Statistics (NCES) in 1999 stated that the 
average public school in America is 42 years old, with school buildings 
beginning rapid deterioration after 40 years. In addition, the NCES 
brief found that 29 percent of all public schools are in the ``oldest 
condition,'' which means that they were built prior to 1970 and have 
either never been renovated or were renovated prior to 1980.
  Not only are our nation's schools in need of repair and renovation, 
but there is a growing demand for additional schools and classrooms due 
to an ongoing surge in student enrollment. Specifically, according to 
the NCES, at least 2,400 new public schools will need to be built by 
the year 2003 to accommodate our nation's burgeoning school rolls, 
which will grow from a record 52.7 million children today to 54.3 
million by 2008.
  Needless to say, the cost of addressing our nation's need for school 
renovations and construction is enormous. In fact, according to the 
General Accounting Office (GAO), it will cost $112 billion just to 
bring our nation's schools into good overall condition. Nowhere is this 
cost better understood than in my home state of Maine, where a 
recently-completed study by the Maine Department of Education and the 
State Board of Education determined that the cost of addressing the 
state's school building and construction needs stood at $637 million.
  Mr. President, we simply cannot allow our nation's schools to fall 
into utter disrepair and obsolescence with children sitting in 
classrooms that have leaky ceilings or rotting walls. We cannot ignore 
the need for new schools as the record number of children enrolled in 
K-12 schools continues to grow.
  Accordingly, because the cost of repairing and building these 
facilities may prove to be more than many state and local governments 
can bear in a short period of time, I believe the federal government 
can and should assist Maine and other state and local governments in 
addressing this growing national crisis.
  Admittedly, not all members support strong federal intervention in 
what has been historically a state and local responsibility. In fact, 
many argue with merit that the best form of federal assistance for 
school construction or other local educational needs would be for the 
federal government to fulfill its commitment to fund 40 percent of the 
cost of special education. This long-standing commitment was made when 
the Individuals with Disabilities Education (IDEA) Act was signed into 
law more than 20 years ago, but the federal government has fallen 
woefully short in upholding its end of the bargain, only recently 
increasing its share to approximately 10 percent.
  Needless to say, I strongly agree with those who argue that the 
federal government's failure to fulfill this mandate represents nothing 
less than a raid on the pocketbook of every state and local government. 
Accordingly, I am pleased that recent efforts in the Congress have 
increased federal funding for IDEA by a full 85 percent over the past 
three years, and I support ongoing efforts to achieve the 40 percent 
federal commitment in the near future.
  Yet, even as we work to fulfill this long-standing commitment and 
thereby free up local resources to address local needs, I believe the 
federal government can do more to assist state and local governments in 
addressing their school construction needs without infringing on local 
control.

[[Page S15107]]

   Mr. President, the legislation I am offering today--the ``BRICKS 
Act''--will do just that . Specifically, it addresses our nation's 
school construction needs in a responsible fiscal manner while bridging 
the gap between those who advocate a more activist federal role in 
school construction and those who do not.
  First, my legislation will provide $20 billion in federal loans to 
support school construction, renovation, and repair at the local level. 
By designating that these loans may only be used to pay the interests 
owed to bondholders on new, 15-year school construction bonds that are 
issued by state and local governments through the year 2002, the 
federal government will leverage the issuing of new bonds by states and 
localities that would not otherwise be made.
  Of importance, these loan moneys--which will be distributed on an 
annual basis using the Title I distribution formula--will become 
available to each state at the request of a Governor. While the federal 
loans can only be used to support bond issues that will supplement, and 
not supplant, the amount of school construction that would have 
occurred in the absence of the loans, there will be no requirement that 
states engage in a lengthy application process that does not even 
assure them of their rightful share of the $20 billion pot.
  Second, my bill ensures that these loans are made by the federal 
government in a fiscally responsible manner that does not cut into the 
Social Security surplus or claim a portion of non-Social Security 
surpluses that may prove ephemeral in the future.
  Specifically, my bill would make these loans to states from the 
Exchange Stabilization Fund (ESF)--a fund that was created through the 
Gold Reserve Act of 1934 and has grown to hold more than $40 billion in 
assets. The principal activity of the fund--which is controlled solely 
by the Secretary of the Treasury--is foreign exchange intervention that 
is intended to limit fluctuations in exchange rates. However, the fund 
has also been used to provide stabilization loans to foreign countries, 
including a $20 billion line of credit to Mexico in 1995 to support the 
peso.
  In light of the controversial manner in which the ESF has been used, 
some have argued that additional constraints should be placed on the 
fund. Still others--including former Federal Reserve Board Governor 
Lawrence B. Lindsey--have stated that, for various reasons, the fund 
should be liquidated.
  Regardless of how one feels about exercising greater constraint over 
the ESF or liquidating it, I believe that if this $40 billion fund can 
be used to bailout foreign currencies, it certainly can be used to help 
America's schools.
  Accordingly, I believe it is appropriate that the $20 billion in 
loans provided by my legislation will be made from the ESF--an amount 
identical to the line of credit that was extended to Mexico by the 
Secretary of the Treasury in 1995. Of importance, these loans will be 
made from the ESF on a progressive, annual basis--not in a sudden or 
immediate manner. Furthermore, these monies will be repaid to the fund 
with interest, to ensure that the ESF is compensated for the loans it 
makes.
  Although the ESF will recoup all of the monies it lends plus 
interest, it should also be noted that my proposal ensures that state 
and local governments will not be forced to pay excessive interest--or 
that they will be forced to repay over an unreasonable time line. 
Specifically, my bill sets the interest rate for the loans at the 
average prime lending rate for the year in which the bonds are issued, 
with a cap of 4.5 percent--an amount that is lower than the prime 
lending rate in any of the previous 15 years. Furthermore, no payments 
will be owed--and no interest will accrue--until 2005, unless the 
federal government fulfills its commitment to fund 40 percent of the 
cost of special education prior to that time.
  Combined, these provisions will minimize the cost of these loans to 
the states, and maximize the utilization of these loans for school 
construction, renovation, and repair.
   Mr. President, by providing low-interest loans to states and local 
governments to support school construction, I believe that my bill 
represents a fiscally-responsible, centrist solution to a national 
problem.
  For those who support a direct, active federal role in school 
construction, my bill provides substantial federal assistance by 
dedicating $20 billion to leverage a significant amount of new school 
construction bonds. For those who are concerned about the federal 
government becoming overly-engaged in an historically state and local 
responsibility--and thereby stepping on local control--my bill directs 
that the monies provided to states will be repaid with interest, and 
that no onerous applications or demands are placed on states to receive 
their share of these monies.
   Mr. President, I urge that my colleagues support the ``BRICKS 
Act''--legislation that is intended to bridge the gap between competing 
philosophies on the federal role in school construction. Ultimately, if 
we work together, we can make a tangible difference in the condition of 
America's schools without turning it into a partisan or ideological 
battle that is better suited to sound bites than actual solutions.
   Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1992

       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 ``Building, Renovating, 
     Improving, and Constructing Kids' Schools Act''.

     SEC. 2. FINDINGS.

       Congress make the following findings:
       (1) According to a 1999 issue brief prepared by the 
     National Center for Education Statistics, the average public 
     school in America is 42 years old, and school buildings begin 
     rapid deterioration after 40 years. In addition, 29 percent 
     of all public schools are in the oldest condition, meaning 
     that the schools were built before 1970 and have either never 
     been renovated or were renovated prior to 1980.
       (2) According to reports issued by the General Accounting 
     Office (GAO) in 1995 and 1996, it would cost $112,000,000,000 
     to bring the Nation's schools into good overall condition, 
     and one-third of all public schools need extensive repair or 
     replacement.
       (3) Many schools do not have the appropriate infrastructure 
     to support computers and other technologies that are 
     necessary to prepare students for the jobs of the 21st 
     century.
       (4) Without impeding on local control, the Federal 
     Government appropriately can assist State and local 
     governments in addressing school construction, renovation, 
     and repair needs by providing low-interest loans for purposes 
     of paying interest on related bonds.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Bond.--The term ``bond'' includes any obligation.
       (2) Governor.--The term ``Governor'' includes the chief 
     executive officer of a State.
       (3) Local educational agency.--The term ``local educational 
     agency'' has the meaning given to such term by section 14101 
     of the Elementary and Secondary Education Act of 1965.
       (4) Public school facility.--The term public school 
     facility shall not include--
       (A) any stadium or other facility primarily used for 
     athletic contests or exhibitions, or other events for which 
     admission is charged to the general public; or
       (B) any facility which is not owned by a State or local 
     government or any agency or instrumentality of a State or 
     local government.
       (5) Qualified school construction bond.--The term 
     ``qualified school construction bond'' means any bond issued 
     as part of an issue if--
       (A) 95 percent or more of the proceeds of such issue are to 
     be used for the construction, rehabilitation, or repair of a 
     public school facility or for the acquisition of land on 
     which such a facility is to be constructed with part of the 
     proceeds of such issue;
       (B) the bond is issued by a State entity or local 
     government;
       (C) the issuer designates such bonds for purposes of this 
     section; and
       (D) the term of each bond which is part of such issue does 
     not exceed 15 years.
       (6) Stabilization fund.--The term ``stabilization fund'' 
     means the stabilization fund established under section 5302 
     of title 31, United States Code.
       (7) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, the Republic of the Marshall 
     Islands, the Federated States of Micronesia, and the Republic 
     of Palau.

     SEC. 4. LOANS FOR SCHOOL CONSTRUCTION BOND INTEREST PAYMENTS.

       (a) Loan Authority.--
       (1) In general.--From funds made available to a State under 
     section 5(b) the State

[[Page S15108]]

     shall make loans to State entities or local governments 
     within the State to enable the entities and governments to 
     make annual interest payments on qualified school 
     construction bonds that are issued by the entities and 
     governments not later than December 31, 2002.
       (2) Requests.--The Governor of each State desiring 
     assistance under this Act shall submit a request to the 
     Secretary of the Treasury at such time and in such manner as 
     the Secretary of the Treasury may require.
       (b) Loan Repayment.--
       (1) In general.--Subject to paragraph (2), a State entity 
     or local government that receives a loan under this Act shall 
     repay to the stabilization fund the amount of the loan, plus 
     interest, at the average prime lending rate for the year in 
     which the bond is issued, not to exceed 4.5 percent.
       (2) Exception.--A State entity or local government shall 
     not repay the amount of a loan made under this Act, plus 
     interest, and the interest on a loan made under this Act 
     shall not accrue, prior to January 1, 2005, unless the amount 
     appropriated to carry out part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.) for any 
     fiscal year prior to fiscal year 2006 is sufficient to fully 
     fund such part for the fiscal year at the originally promised 
     level, which promised level would provide to each State 40 
     percent of the average per-pupil expenditure for providing 
     special education and related services for each child with a 
     disability in the State.
       (c) Federal Responsibilities.--The Secretary of the 
     Treasury and the Secretary of Education--
       (1) jointly shall be responsible for ensuring that funds 
     provided under this Act are properly distributed;
       (2) shall ensure that funds provided under this Act only 
     are used to pay the interest on qualified school construction 
     bonds; and
       (3) shall not have authority to approve or disapprove 
     school construction plans assisted pursuant to this Act, 
     except to ensure that funds made available under this Act are 
     used only to supplement, and not supplant, the amount of 
     school construction, rehabilitation, and repair in the State 
     that would have occurred in the absence of such funds.

     SEC. 5. AMOUNTS AVAILABLE TO EACH STATE.

       (a) Reservation for Indians.--From $20,000,000,000 of the 
     funds in the stabilization fund, the Secretary of the 
     Treasury shall make available $400,000,000 to Indian tribes 
     for loans to enable the Indian tribes to make annual interest 
     payments on qualified school construction bonds in accordance 
     with the requirements of this Act that the Secretary of the 
     Treasury determines appropriate.
       (b) Amounts Available.--
       (1) In general.--From $20,000,000,000 of the funds in the 
     stabilization fund that are not reserved under subsection 
     (a), the Secretary of the Treasury shall make available to 
     each State submitting a request under section 4(a)(2) an 
     amount that bears the same relation to such remainder as the 
     amount the State received under part A of title I of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) for fiscal year 2000 bears to the amount 
     received by all States under such part for such year.
       (2) Disbursal.--The Secretary of the Treasury shall 
     disburse the amount made available to a State under paragraph 
     (1), on an annual basis, during the period beginning on 
     October 1, 2000, and ending September 30, 2017.
       (c) Notification.--The Secretary of the Treasury and the 
     Secretary of Education jointly shall notify each State of the 
     amount of funds the State may borrow under this Act.
                                 ______