[Congressional Record (Bound Edition), Volume 151 (2005), Part 6]
[Extensions of Remarks]
[Pages 7518-7519]
[From the U.S. Government Publishing Office, www.gpo.gov]




           INTEREST FREE FUNDS FOR PUBLIC SCHOOL CONSTRUCTION

                                 ______
                                 

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                       Wednesday, April 20, 2005

  Mr. RANGEL. Mr. Speaker, today I am introducing legislation that 
would provide $25.2 billion in interest-free funds over the next two 
years for public school construction and modernization projects.
  Currently, our public school system has extraordinary unmet needs for 
funds to construct and modernize schools. Consider the following facts:
  (1) The average age of a public school in the United States is 42 
years.
  (2) One-third of all public schools in the United States are in need 
of extensive repair or replacement.
  (3) Three and a half million students attend schools that need major 
repair or replacement.
  (4) According to a recent report from the National Education 
Association, it will cost $332 billion to bring the existing public 
schools into overall good condition. Billions more will be required to 
construct new schools to meet expanding student enrollments.
  President Bush's education program places strong emphasis on raising 
standards in America's classrooms, but does not provide promised 
Federal help for the cost of additional testing and services required 
to reach that goal. His program also ignores the fact that school 
facilities are an important part of raising student performance. 
Inferior facilities make teaching more difficult. They also send a 
clear message to the students that this nation does not value their 
education. The President's program seems to be designed to fail.
  My legislation will provide funds for school modernization projects 
through a federal tax credit. The tax credit will, in effect, pay the 
interest on $25.2 billion of school modernization bonds. All decisions 
relating to how those funds would be used would continue to be made at 
the local level.
  My legislation is based on a successful model, the Qualified Academy 
Bond (QZAB) program enacted in 1997. A California local school official 
described that program as a ``local school district's dream'' after 
having successfully participated in a bond offering subsidized under 
that program. U.S. Education Secretary Rodney Page endorsed a similar 
proposal in 1999 when he was Superintendent of the Houston schools. In 
a statement submitted to the Committee on Ways and Means, he said that 
school modernization bonds ``represent the approach to Federal aid that 
will have a truly consequential impact on meeting the infrastructure 
needs of Houston and other large urban high poverty districts.''
  Mr. Speaker, America's future can only prosper with the proper 
education of our children, and our children cannot receive such 
education with our public schools in a dilapidated state. Modernizing 
our schools is an investment in our future, and should be a main, 
bipartisan priority in the 109th Congress.
  Attached is a brief description of the bill and a table showing how 
the funds will be allocated among the States.

                                Summary

       The bill would subsidize $25.2 billion in zero-interest 
     school modernization bonds. The federal government would 
     provide tax credits for the interest normally paid on a bond. 
     Funds that would have gone to pay bond interest would be 
     freed for other education needs. For each $1000 of school 
     bonds, the net benefit of the program to State or local 
     school districts would be approximately $500.
  Funding: The bill divides the interest-free funds for public school 
construction and modernization as follows:
       (1) $22 billion over two years for zero-interest school 
     modernization bonds ($11 billion in both 2006 and 2007). The 
     bill would allocate 60 percent of the $22 billion in bonds to 
     states based on school-age population. The State education 
     agency has the authority to allocate the State's share among 
     the school districts in the State with no restrictions as to 
     what schools can qualify. The remaining 40 percent of these 
     bonds would be directly allocated to the 125 school districts 
     with the largest number of low-income students based on ESEA 
     Title I funding (poverty-based distribution).
       (2) $400 million in school modernization bonds for Bureau 
     of Indian Affairs (BIA) schools.
       (3) $2.8 billion for expansion of the existing Qualified 
     Zone Academy Bond program (QZAB). This amount is allocated 
     among the States based upon the number of poor students. The 
     State education agency has the authority to allocate the 
     State's share among the school districts in the State; except 
     that amount may be allocated only to schools with at least 
     35% poor students--those schools located in Empowerment 
     Zones, Enterprise Communities or which have at least 35 
     percent of their students eligible for free or reduced price 
     school lunch.
       Federal Role: The federal government would provide a tax 
     credit to the bond purchaser equal to the interest that would 
     otherwise be paid on a school construction bond. No new 
     federal bureaucracy would be created.
       Cost: The five-year cost to the Federal government is 
     approximately $1.7 billion and the ten-year cost is 
     approximately $6.8 billion.
  The following table shows the estimated allocations under the bill.

                    Estimated State Bond Allocations

Alabama........................................................$354,922
Alaska...........................................................53,398
Arizona...........................................................7,448

[[Page 7519]]

Arkansas........................................................183,516
California....................................................3,109,598
Colorado........................................................296,358
Connecticut.....................................................292,085
Delaware.........................................................49,070
District of Columbia.............................................88,904
Florida.......................................................1,188,467
Georgia.........................................................654,051
Hawaii...........................................................77,438
Idaho............................................................93,409
Illinois......................................................1,221,868
Indiana.........................................................459,436
Iowa............................................................196,453
Kansas..........................................................196,866
Kentucky........................................................295,249
Louisiana.......................................................473,051
Maine............................................................84,355
Maryland........................................................395,270
Massachusetts...................................................467,254
Michigan......................................................1,006,867
Minnesota.......................................................378,952
Mississippi.....................................................237,537
Missouri........................................................452,673
Montana..........................................................65,077
Nebraska........................................................131,275
Nevada...........................................................92,951
New Hampshire...................................................80,802.
New Jersey......................................................660,175
New Mexico......................................................157,627
New York......................................................2,476,435
North Carolina..................................................488,119
North Dakota.....................................................46,596
Ohio..........................................................1,019,626
Oklahoma........................................................277,839
Oregon..........................................................235,626
Pennsylvania..................................................1,044,126
Puerto Rico.....................................................378,751
Rhode Island.....................................................90,648
South Carolina..................................................284,932
South Dakota.....................................................56,180
Tennessee.......................................................421,577
Texas.........................................................1,998,390
Utah............................................................175,947
Vermont..........................................................42,022
Virginia........................................................422,902
Washington......................................................402,308
West Virginia...................................................123,951
Wisconsin.......................................................491,648
Wyoming..........................................................38,712
Outlying Areas...................................................51,263
BIA Schools.....................................................400,000
                                                             __________
                                                             
25,200,000........................................................

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