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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - March 18, 1997)

Text of this article available as: TXT PDF [Pages S2416-S2439] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Ms. MOSELEY-BRAUN (for herself, Mr. Kennedy, Mr. Graham, Mr. Kerry, Mr. Levin, Mr. Torricelli, Mrs. Murray, Ms. Mikulski, Mr. Dodd, and Mr. Wellstone): S. 456. A bill to establish a partnership to rebuild and modernize America's school facilities; to the Committee on Labor and Human Resources. THE PARTNERSHIP TO REBUILD AMERICA'S SCHOOLS ACT OF 1997 Ms. MOSELEY-BRAUN. Mr. President, I send to the desk, and I am pleased to introduce, along with a number of my colleagues, the Partnership To Rebuild America's School Act of 1997. This legislation is designed to address one of the most fundamental problems that we currently face as a nation with regard to public elementary and secondary education: many of our schools are literally falling down around our children. This legislation will help us address this problem, the crisis of crumbling schools in America. On Friday, the President officially transmitted this legislation to the Congress. The bill is the result of months of work by the Department of Education, the Department of the Treasury, the White House, my office, and a number of other congressional offices. At the outset, I commend and thank everyone who has participated in the development of this legislation for their efforts. Mr. President, the Partnership To Rebuild America's Schools Act of 1997 will help States and local school districts finance the repair, renovation, modernization and construction of their schools. States and school districts will be able to use the Federal funds to assist them in financing their highest priority projects. This bill will allow school districts to do more of what they need to be doing, educating our children for the 21st century. In America, the rungs on the ladder of opportunity are still crafted in the classroom. High school graduates earn, on average, 46 percent more every year than those who do not graduate. College graduates earn 155 percent more every year than those who do not graduate from high school. Over the course of a lifetime, the most educated Americans will earn five times as much as the least educated. Education, however, is not just a matter of individual benefit. It is a public good as well. It affects and correlates to the status and the quality of life for our entire community. It correlates to just about every indicia of economic and social well-being. Educational attainment can be directly tied to income, health, the likelihood of being on welfare, the likelihood of being incarcerated, and the likelihood of voting and participating in our democracy. Education, therefore, has both national as well as individual implications. In a recent Wall Street Journal survey of leading U.S. economists, 43 percent of those surveyed said the single most important thing that we could do to increase our long-term economic growth rate would be to invest more in education and research and development. Nothing else even came close to education in the survey. One economist said, ``One of the few things that economists will agree upon is the fact that economic growth is very strongly dependent on our own abilities.'' In his State of the Union Address, President Clinton noted that education is a critical national security issue for our future. I believe this notion should be at the heart of our debate over education. In order to compete with cheap, Third World labor in a global economy, in an information age, and to maintain the standard of living to which we have grown accustomed as Americans, we will have to have a work force that works smarter, that works better, that can hold its own in this global economy at the high end of the productivity scale. So education then becomes a matter of national concern and, indeed, as the President pointed out, a matter of our national security, because it is directly linked to our ability to be able to maintain the standard of living that we have come to appreciate as Americans and our ability to compete in this global marketplace. We all have a role to play. That is why this legislation starts off calling itself a partnership, because there must be a partnership between State, local and National Government to [[Page S2417]] meet the challenge that this global economy, and changes in the world, have given us all to face. The Partnership To Rebuild America's Schools Act of 1997 will help us to meet the challenge by investing in education in ways that preserve the fundamental tenet of local control of education. By investing in bricks and mortar the Federal Government can contribute to a more balanced partnership among all levels of Government and in the private sector to rebuild and modernize our schools so they can serve all of our children in the 21st century. This legislation strikes that balance. This legislation does preserve local control, but, much to the point, it says that we at the national level have an obligation to participate in addressing those needs that can be most appropriately addressed at the national level; and that is rebuilding our crumbling schools. The bill uses 5 billion Federal dollars to leverage an additional $15 billion worth of State, local and private resources. Half of the money will be apportioned to States using the existing Title I basic grants formula. The remainder will flow directly to the 100 school districts in the country with the largest numbers of children living below the poverty level. Of the amount available for direct assistance to these impoverished communities, the Department of Education will apportion 70 percent by formula and will make the remaining 30 percent available on a competitive basis. In addition, the bill will allocate 2 percent of the funds to the Secretary of the Interior for administration to Indian schools and to the Secretary of Education for the outlying territories. Under both the State and local programs, States and school districts would have an enormous amount of flexibility in the use of these Federal funds to help finance school improvement projects. They could use the funds to subsidize State or local bond issues, certificates of participation, purchase or lease agreements, or other financial transactions used to finance school improvements. In addition, the States would be allowed to capitalize on entities similar to the State infrastructure banks which are currently used by a number of States to help finance highway improvement projects. These infrastructure banks could be used to leverage additional resources. This program is designed to stimulate new construction and renovation, and there are specific provisions in the bill to ensure that Federal funds are not used simply to finance school improvements that would have occurred anyway. The bill is designed to fill a real need that exists at both the State and local levels for school financing assistance, not to supplement districts that would have otherwise been able to finance their projects. It is carefully crafted to minimize administrative costs at the Federal level and to maximize local control over decisions that must be made with regard to school improvements. States and districts will be required to submit applications to the Secretary of Education describing their needs and the process that will be used to award the Federal funds. Once these applications are approved, grantees will immediately receive the full share of the $5 billion. In addition, other than following certain criteria, States and local districts will be free to finance their top-priority projects. The Federal Government will not be in the business of dictating priorities and needs to State and local school districts who know their schools best. This bill helps address a need that has completely overwhelmed States and local school districts. The magnitude of the school facilities problem is so great today that many districts cannot maintain the kind of educational environment necessary to teach all of our children the kind of skills they will need to compete in the 21st century, global economy. The U.S. General Accounting Office, which at my request conducted an intensive 2-year study of the condition of America's schools, recently concluded that 14 million children attend schools in need of major renovations or outright replacement, and 7 million children attend schools with life-threatening safety code violations. They found that it will cost $112 billion to essentially bring schools up to code, not to equip them with new computers and cosmetic improvements, but just to address the toll that decades of deferred maintenance have taken on our Nation's school facilities. That $112 billion price tag, as enormous as it may sound, does not include the cost of wiring schools for modern technology. One of the greatest barriers to the incorporation of modern computers into the classroom is the physical condition of many school buildings. You cannot very well use a computer if you do not have the electrical system to plug it into the wall. Too many schools across the country do not have the physical capacity to provide our youngsters with the instruments they will need in order to be educated for this information age. According to the General Accounting Office, almost half of all schools lack enough electrical power for the full-scale use of computers, 60 percent of them lack enough conduits in the walls to connect classroom computers to a network, and more than 60 percent lack enough phone lines for instructional use. For this generation, computers really are the functional equivalent of books. My son sometimes is amazed that computers were not around when I was in school. The fact of the matter is, though, that many of our schools were built before the advent of these technologies, and they have not been upgraded so that modern teaching tools can be used in the classroom. Our youngsters need modern technology if they are to be prepared for this information age and for this global economy. That $112 billion price tag also does not include the cost of expanding capacity to accommodate soaring enrollments. According to the U.S. Department of Education, just to keep up with growing enrollment, we will need to build 6,000 new schools over the next 10 years. Teachers and parents know full well that these conditions directly affect the ability of children to learn. Recent research, however, has lent scientific proof to that intuitive knowledge. Two separate studies found a 10 to 11 percent achievement gap between students in good school buildings and those in poor school buildings after controlling for all other factors. Other studies have found that when buildings are in poor condition, students are more likely to misbehave. That should come as no surprise to parents. Three leading researchers in this area recently concluded, ``Based on our research, there is no doubt that building condition affects academic performance.'' Mr. President, this legislation is in the interest, I believe, of not just the children of America who have to go to these school buildings, many of which are dilapidated and rundown and neglected, but it is also in the interest of communities that will need the help to finance school repairs, and it is in the interest of our Nation that will need to have an educated work force. Mr. President, the current system of school finance, which relies primarily on local property taxes, is not flexible enough to meet the enormous needs of our Nation's schools. This country, I believe, needs a new approach to solve the problem of crumbling schools, a partnership among all levels of government and the private sector that preserves local control of education, but creates some balance, and infuses, frankly, a little more reason into our school finance system that does not now adequately serve the schools, the children, the country, or the local property taxpayers. The Department of Education has looked closely at a number of communities around the country and assessed the effect that this legislation would have on their ability to finance their construction needs. The Department looked at, for example, Los Angeles. Most of the school buildings there are more than 40 years old and are not wired for technology. Mr. President, 245 schools need roof replacements, and 50 of them need new boilers. According to the Department, this legislation could accelerate many long overdue projects and facilitate the passage of bond referenda at the local level. The Department also looked at the State of Maine, which has many 100- year-old buildings and one-room [[Page S2418]] schoolhouses. According to the Department, most districts in that State cannot cover the total cost of bonds issued to finance repair and modernization projects. Again, this legislation would allow needed projects to go forward. The Department also looked at a school district in southern Florida suffering from severe overcrowding. Mr. President, 34,000 students in that district do not have permanent desks. There are 10,000 new students added to the system each year. The district would have to build a new school every month to keep up with this demand. According to the Department this legislation will help this district move away from the use of portable classrooms, which do not provide as conducive a learning environment as real schools. My own State of Illinois would benefit greatly from this legislation. As the GAO reported last week, my State has unfortunately one of the most inequitable school finance systems in the Nation. With a low State contribution to school resources, and with a poor State effort to target funds to the neediest districts, local property taxpayers in Illinois are saddled with almost 60 percent of the costs of educating their children. It is no wonder, then, that the State board of education estimates that Illinois' construction needs are $13 billion. Too many of Illinois' school districts have a difficult time even providing textbooks and pencils, let alone major capital improvements. This legislation would free up local resources in Illinois for education by providing Federal support for the construction, rehabilitation and renovation of the school buildings. I urge all my colleagues to take a close look at the needs of the schools in their States and consider joining us in cosponsoring this legislation. This initiative is not about partisan politics. In fact, I think most Americans would agree wholeheartedly with the President when he said that partisan politics should stop at the schoolhouse door. This is something that transcends partisan differences and goes to the heart of our ability to provide for our children's well-being and their needs going into the 21st century. Congress has a unique opportunity to take a fundamentally new approach to improving the quality of elementary and secondary education. This bill represents a chance to improve our system of school finance and help prepare our children for the 21st century. I believe this will be welcomed by taxpayers at the local level, particularly those who, at this point, are unfairly burdened with the costs of trying to keep up a school system that deserves the support of all levels of government in our country. Mr. President, I have several documents from the Department of Education that I would like to have printed in the Record. I have the letter of transmittal from the Secretary of Education to the President of the Senate, a fact sheet regarding the correlation between building conditions and student achievement, and seven case studies assessing the impact this legislation would have on communities across America. I ask unanimous consent that these materials, as well as the text of the bill itself, be printed at this point in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: S. 456 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the ``Partnership to Rebuild America's Schools Act of 1997.'' TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM TABLE OF CONTENTS SEC. 101. The table of contents for this Act is as follows: TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM Sec. 101. Table of contents. Part 1--Program Authorized Sec. 102. Findings and purpose. Sec. 103. Definitions. Sec. 104. Funds appropriated. Sec. 105. Allocation of funds. Part 2--Grants to States Sec. 111. Allocation of funds. Sec. 112. Eligible State agency. Sec. 113. Allowable uses of funds. Sec. 114. Eligible construction projects; period for initiation. Sec. 115. Selection of localities and projects. Sec. 116. State applications. Sec. 117. Amount of Federal subsidy. Sec. 118. Separate funds or accounts; prudent investment. Sec. 119. State reports. Part 3--Direct Grants to Local Educational Agencies Sec. 121. Eligible local educational agencies. Sec. 122. Grantees. Sec. 123. Allowable uses of funds. Sec. 124. Eligible construction projects; redistribution. Sec. 125. Local applications. Sec. 126. Formula grants. Sec. 127. Competitive grants. Sec. 128. Amount of Federal subsidy. Sec. 129. Separate funds or accounts; prudent investment. Sec. 130. Local reports. TITLE II--GENERAL PROVISIONS Sec. 201. Technical employees. Sec. 202. Wage rates. Sec. 203. No liability of Federal Government. Sec. 204. Consultation with Secretary of the Treasury. Part 1--Program Authorized findings and purpose Sec. 102. (a) Findings.--The Congress finds as follows: (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) School infrastructure problems exist across the country, but are most severe in central cities and in schools with high proportions of poor and minority children. (3) 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. (4) 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. (5) 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 the poorest communities have had the greatest difficulty meeting this need. (6) 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. definitions Sec. 103. Except as otherwise provided, as used in this Act, the following terms have the following meanings: (1) Charter school.--The term ``charter school'' has the meaning given that term in section 10306(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8066(1)). (2) Community school.--The term ``community school'' means a school, or part of a school, that serves as a center for after-school and summer programs and the 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. (3)(A) Construction.--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. (4) 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)). (5) 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 [[Page S2419]] (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. (6) Secretary.--The term ``Secretary'' means the Secretary of Education. (7) State.--The term ``State'' means each of the 50 States and the Commonwealth of Puerto Rico. (8) 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)). funds appropriated Sec. 104. There are appropriated $5,000,000,000 for the purpose of carrying out this Act, which shall be available for obligation by the Secretary of Education from October 1, 1997 until September 30, 2001. allocation of funds Sec. 105. (a) Reservation for the Secretary of the Interior and the Outlying Areas.--(1) The Secretary shall reserve up to two percent of the funds appropriated by section 104 to-- (A) provide assistance to the Secretary of the Interior, which the Secretary of the Interior shall use for the school construction priorities described in section 1125(c) of the Education Amendment of 1978 (25 U.S.C. 2005(c)); and (B) make grants to America 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 paragraph (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. (b) Allocation of Remaining Funds.--Of the remaining funds appropriated by section 104-- (1) 50 percent shall be used for formula grants to States under section 111; (2) 35 percent shall be used for direct formula grants to local educational agencies under section 126; and (3) 15 percent shall be used for competitive grants to local educational agencies under section 127. Part 2--Grants to States allocation of funds Sec. 111. (A) Formula Grants to States.--Subject to subsection (b), the Secretary shall allocate the funds available under section 105(b)(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 126 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 State under subsection (a) and to local educational agencies under section 126, the percentage allocated to a State under this section and to localities in the State under section 126 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). eligible state agency Sec. 112. The Secretary shall award each State's grant to the State agency, such as a State educational agency, a State school construction agency, or a State bond bank, that the Governor, with the agreement of the chief State school officer, designates as best able to administer the grant. allowable uses of funds Sec. 113. Each State shall use its grant under this part only for one 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. eligible construction projects; period for initiation Sec. 114 (a) Eligible Projects.--States and their subgrantees may use funds under this part, 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 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 charter schools and community schools. (b) Period for Initiation of Project.--(1) Each State shall use its grant under this part 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 part 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 part. (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 part, the Secretary may reallocate all or part of those funds, including any interest earned by the State on those funds, to one or more other States that are making satisfactory progress. selection of localities and projects Sec. 115. (a) Priorities.--In determining which localities and activities to support with grant funds, each State shall give the highest priority to-- (1) localities with the greatest needs, as demonstrated by inadequate educational facilities, coupled with a low level of resources available to meet school construction needs; and (2) localities that will achieve the greatest leveraging effect on school construction from assistance under this part. (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 part: (1) The 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 Act. (6) The receipt by local educational agencies in the State of grants under part 3, except that a local educational agency is not ineligible for a subgrant under this part solely because it receives such a grant. state applications Sec. 116. (a) Application Required.--A State that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The State agency designated under section 112 shall develop the State's application under this part only after broadly consulting with the State board of education, and representatives of local school boards, school administrators, the business community, parents, and teachers in the State about the best means of carrying out this part. (2) If the State educational agency is not the State agency designated under section [[Page S2420]] 112, the designated agency shall consult with the State educational agency and obtain its approval before submitting the State's application. (c) State Survey.--(1) Before submitting the State's application, the State agency designated under section 112, with the involvement of local school officials and experts in building construction and management, shall survey the need throughout the State (including in localities receiving grants under part 3) 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 part. (d) Application Contents.--Each State application under this part shall include-- (1) an identification of the State agency designated by the Governor under section 112 to receive the State's grant under this party; (2) a summary of the results of the State's survey of its school facility needs, as described in subsection (c); (3) a description of how the State will implement its program under this part; (4) 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; (5)(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 117(a), to each local project that the State will support; (6) a description of how the State will ensure that the requirements of this part are met by subgrantees under this part; (7) 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 part; (8) 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 part, and not to supplant those funds; (9) an assurance that, during the four-year period beginning with the year the State receives its grant, the combined expenditures for school construction by the State and the localities that benefit from the State's program under this part (which at the State's option, may include private contributions) will be at least 125 percent of those combined expenditures for that purpose for the four preceding years; and (10) 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)(9) 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 a particularly high level of school construction expenditures during the previous four years. AMOUNT OF FEDERAL SUBSIDY Sec. 117. (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 part, 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 cost 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 one 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 part 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 part, 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). SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT Sec. 118. (a) Separate Funds or Accounts Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 part. (b) Prudent Investment Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 (2) Notwithstanding section 6503 of title 31, United States Code or any other law, use the proceeds of that investment to carry out this part. state reports Sec. 119. (a) Reports Required.--(1) Each State receiving a grant under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the State educational agency is not the State agency designated under section 112, the State's report shall include the approval of the State educational agency or its comments on the report. (b) Contents.--Each report shall-- (1) describe the State's implementation of this part, including how the State has met the requirements of this part; (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 grant under this part. (2) Each State shall submit an annual report for each of the three 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. Part 3--Direct Grants to Local Educational Agencies eligible local educational agencies Sec. 121. (a) Eligible Agencies.--Except as provided in subsection (b), the local educational agencies that are eligible to receive formula grants under section 126 and competitive grants under section 127 from the Secretary 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 part, the local educational agencies for Hawaii and the Commonwealth of Puerto Rico are not eligible local educational agencies. grantees Sec. 122. For each local educational agency described in section 121(a) for which an approvable application is submitted, the Secretary shall make any grant under this part 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 part. allowable uses of funds Sec. 123. Each grantee under this part shall use its grant only for one or more of the following activities to reduce the cost of financing eligible school construction projects described in section 124: (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. eligible construction projects; redistribution Sec. 124. (a) Eligible Projects.--A grantee under this part may use its grant, in accordance with section 123, 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 [[Page S2421]] 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 part, the Secretary may redistribute all or part of those funds, and any interest earned by that agency on those funds, to one or more other local educational agencies that are making satisfactory progress. local applications Sec. 125. (a) Application Required.--A local educational agency, or an alternative agency described in section 122 (both referred to in this part as the ``local agency''), that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The local agency shall develop the local application under this part only after broadly consulting with parents, administrators, teachers, the business community, and other members of the local community about the best means of carrying out this part. (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 part. (d) Application Contents.--Each local application under this part shall include-- (1) an identification of the local agency to receive the grant under this part; (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 part; (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 128(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 part 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 part, and not to supplant those funds; (10) an assurance that, during the four-year period beginning with the year the local educational agency receives its grant, its expenditures for school construction (which, at that agency's option, may include private contributions) will be at least 125 percent of its expenditures for that purpose for the four 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 four years. formula grants Sec. 126. (a) Allocations.--The Secretary shall allocate the funds available under section 105(b)(2) to the local educational agencies identified under section 121(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). competitive grants Sec. 127. (a) Grants Authorized.--The Secretary shall use funds available under section 105(b)(3) to make additional grants, on a competitive basis, to recipients of formula grants under section 126. (b) Additional Application Materials.--Any eligible applicant under section 126 that wishes to receive additional funds under this section shall include in its application under section 125 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) Information on the current financial effort the applicant is making for elementary and secondary education, including support from private sources, relative to its resources. (4) 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 four years. (5) A description of the energy efficiency and the effect on the environment of the projects that the applicant will undertake, both with its grant under this section and its grant under section 126, and of the extent to which those projects will use cost-efficient architectural design. (6) Other information that the Secretary may require. (c) Selection of Grantees.--The Secretary shall select grantees under this section on the basis of criteria, consistent with the purpose of this Act, that the Secretary may establish, which shall include-- (1) the relative need of applicants, as demonstrated by inadequate educational facilities and a low level of resources to meet their school construction needs; (2) the commitment of applicants to meet their school construction needs and the leveraging effect that assistance under this part would have, as demonstrated by the additional resources that they will provide, from non-Federal sources, to meet those needs, in accordance with subsection (b)(4). amount of federal subsidy Sec. 128. (a) Amount of Federal Subsidy.--For each construction project assisted under this part, the Secretary shall determine the amount of the Federal subsidy in accordance with section 117(a). (b) Non-Federal Share.--A grantee under this part 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). separate funds or accounts; prudent investment Sec. 129. (a) Separate Funds or Accounts Required.--Each grantee under this part 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 part. (b) Prudent Investment Required.--Each granteee under this part 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 part. local reports Sec. 130. (a) Reports Required.--(1) Each grantee under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the local educational agency is not the grantee under this part, 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 part, including how it has met the requirements of this part; (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 its grant under this part. (2) Each grantee shall submit an annual report for each of the three years after submitting its first report, and subsequently shall submit periodic reports as long as it is using grant funds. TITLE II--GENERAL PROVISIONS technical employees Sec. 201. For the purpose 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 [[Page S2422]] to classification and General Schedule pay rates. wage rates Sec. 202. (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 semi-colon and ``and''; and (3) by adding at the end thereof the following new paragraph: ``(7) The Partnership Rehabilitate America's Schools Act of 1997.''. NO LIABILITY OF FEDERAL GOVERNMENT Sec. 203. (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. Consultation with Secretary of the Treasury Sec. 204. The Secretary shall consult with the Secretary of the Treasury in carrying out this Act. ____ U.S. Department of Education, The Secretary March 13, 1997. Hon. Albert Gore, Jr., President of the Senate, Washington, DC. Dear Mr. President: Enclosed for consideration of the Congress is the Partnership to Rebuild America's Schools Act of 1997, a bill that would provide a one-time Federal stimulus to help States and localities bring all public school facilities up to acceptable standards and build the additional schools needed to serve increasing enrollments. Also enclosed is a section-by-section analysis summarizing the contents of the bill. I am sending an identical letter to the Speaker of the House. Mr. President, a number of factors have led the Administration to conclude that the Federal Government must assist the States and localities in providing the school facilities that our children will need if they are to achieve to challenging educational standards. First of all, recent General Accounting Office reports have documented the deplorable condition of too many of the Nation's schools. According to the GAO, one-third of all schools, serving more than 14 million students, need extensive repair or renovation of one or more buildings. Students are attending schools that have antiquated heating, plumbing, and electrical systems and even fail to meet local health and safety codes. Some schools do not provide full access to individuals with disabilities, and many do not have the infrastructure needed to adopt new educational technologies. All of these problems are most prevalent in urban districts. In addition to making repairs and renovations to their existing schools, many districts will have to build new schools in order to accommodate increasing enrollments. In fact, the Department has projected that States and localities will need to build 6,000 more schools in order to serve an additional 2.9 million students who will enroll in the next decade. This need will put further pressure on already strained school budgets. Clearly, school construction is, and will remain, primarily a State and local responsibility, and the vast majority of facilities needs will have to be met with non-Federal resources. Unfortunately, however, for a variety of reasons State and local governments have not been making substantial progress even in clearing the existing backlog of construction needs. The Federal Government can play a crucial role in addressing this problem by providing limited resources, on a one-time basis, in a manner that spurs States, communities, and even the private sector to bear the burden and provide adequate school facilities for all children. That is the purpose of the enclosed legislation. In order to have maximum impact, our bill would leverage State, local, and private support for school construction, rather than paying for 100 percent of the cost of construction projects. The proposal would provide interest subsidies for school construction bonds, or other financing mechanisms, to States and major urban school districts. States would, in turn, pass these subsidies along to localities, use them to reduce the servicing costs of State

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - March 18, 1997)

Text of this article available as: TXT PDF [Pages S2416-S2439] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Ms. MOSELEY-BRAUN (for herself, Mr. Kennedy, Mr. Graham, Mr. Kerry, Mr. Levin, Mr. Torricelli, Mrs. Murray, Ms. Mikulski, Mr. Dodd, and Mr. Wellstone): S. 456. A bill to establish a partnership to rebuild and modernize America's school facilities; to the Committee on Labor and Human Resources. THE PARTNERSHIP TO REBUILD AMERICA'S SCHOOLS ACT OF 1997 Ms. MOSELEY-BRAUN. Mr. President, I send to the desk, and I am pleased to introduce, along with a number of my colleagues, the Partnership To Rebuild America's School Act of 1997. This legislation is designed to address one of the most fundamental problems that we currently face as a nation with regard to public elementary and secondary education: many of our schools are literally falling down around our children. This legislation will help us address this problem, the crisis of crumbling schools in America. On Friday, the President officially transmitted this legislation to the Congress. The bill is the result of months of work by the Department of Education, the Department of the Treasury, the White House, my office, and a number of other congressional offices. At the outset, I commend and thank everyone who has participated in the development of this legislation for their efforts. Mr. President, the Partnership To Rebuild America's Schools Act of 1997 will help States and local school districts finance the repair, renovation, modernization and construction of their schools. States and school districts will be able to use the Federal funds to assist them in financing their highest priority projects. This bill will allow school districts to do more of what they need to be doing, educating our children for the 21st century. In America, the rungs on the ladder of opportunity are still crafted in the classroom. High school graduates earn, on average, 46 percent more every year than those who do not graduate. College graduates earn 155 percent more every year than those who do not graduate from high school. Over the course of a lifetime, the most educated Americans will earn five times as much as the least educated. Education, however, is not just a matter of individual benefit. It is a public good as well. It affects and correlates to the status and the quality of life for our entire community. It correlates to just about every indicia of economic and social well-being. Educational attainment can be directly tied to income, health, the likelihood of being on welfare, the likelihood of being incarcerated, and the likelihood of voting and participating in our democracy. Education, therefore, has both national as well as individual implications. In a recent Wall Street Journal survey of leading U.S. economists, 43 percent of those surveyed said the single most important thing that we could do to increase our long-term economic growth rate would be to invest more in education and research and development. Nothing else even came close to education in the survey. One economist said, ``One of the few things that economists will agree upon is the fact that economic growth is very strongly dependent on our own abilities.'' In his State of the Union Address, President Clinton noted that education is a critical national security issue for our future. I believe this notion should be at the heart of our debate over education. In order to compete with cheap, Third World labor in a global economy, in an information age, and to maintain the standard of living to which we have grown accustomed as Americans, we will have to have a work force that works smarter, that works better, that can hold its own in this global economy at the high end of the productivity scale. So education then becomes a matter of national concern and, indeed, as the President pointed out, a matter of our national security, because it is directly linked to our ability to be able to maintain the standard of living that we have come to appreciate as Americans and our ability to compete in this global marketplace. We all have a role to play. That is why this legislation starts off calling itself a partnership, because there must be a partnership between State, local and National Government to [[Page S2417]] meet the challenge that this global economy, and changes in the world, have given us all to face. The Partnership To Rebuild America's Schools Act of 1997 will help us to meet the challenge by investing in education in ways that preserve the fundamental tenet of local control of education. By investing in bricks and mortar the Federal Government can contribute to a more balanced partnership among all levels of Government and in the private sector to rebuild and modernize our schools so they can serve all of our children in the 21st century. This legislation strikes that balance. This legislation does preserve local control, but, much to the point, it says that we at the national level have an obligation to participate in addressing those needs that can be most appropriately addressed at the national level; and that is rebuilding our crumbling schools. The bill uses 5 billion Federal dollars to leverage an additional $15 billion worth of State, local and private resources. Half of the money will be apportioned to States using the existing Title I basic grants formula. The remainder will flow directly to the 100 school districts in the country with the largest numbers of children living below the poverty level. Of the amount available for direct assistance to these impoverished communities, the Department of Education will apportion 70 percent by formula and will make the remaining 30 percent available on a competitive basis. In addition, the bill will allocate 2 percent of the funds to the Secretary of the Interior for administration to Indian schools and to the Secretary of Education for the outlying territories. Under both the State and local programs, States and school districts would have an enormous amount of flexibility in the use of these Federal funds to help finance school improvement projects. They could use the funds to subsidize State or local bond issues, certificates of participation, purchase or lease agreements, or other financial transactions used to finance school improvements. In addition, the States would be allowed to capitalize on entities similar to the State infrastructure banks which are currently used by a number of States to help finance highway improvement projects. These infrastructure banks could be used to leverage additional resources. This program is designed to stimulate new construction and renovation, and there are specific provisions in the bill to ensure that Federal funds are not used simply to finance school improvements that would have occurred anyway. The bill is designed to fill a real need that exists at both the State and local levels for school financing assistance, not to supplement districts that would have otherwise been able to finance their projects. It is carefully crafted to minimize administrative costs at the Federal level and to maximize local control over decisions that must be made with regard to school improvements. States and districts will be required to submit applications to the Secretary of Education describing their needs and the process that will be used to award the Federal funds. Once these applications are approved, grantees will immediately receive the full share of the $5 billion. In addition, other than following certain criteria, States and local districts will be free to finance their top-priority projects. The Federal Government will not be in the business of dictating priorities and needs to State and local school districts who know their schools best. This bill helps address a need that has completely overwhelmed States and local school districts. The magnitude of the school facilities problem is so great today that many districts cannot maintain the kind of educational environment necessary to teach all of our children the kind of skills they will need to compete in the 21st century, global economy. The U.S. General Accounting Office, which at my request conducted an intensive 2-year study of the condition of America's schools, recently concluded that 14 million children attend schools in need of major renovations or outright replacement, and 7 million children attend schools with life-threatening safety code violations. They found that it will cost $112 billion to essentially bring schools up to code, not to equip them with new computers and cosmetic improvements, but just to address the toll that decades of deferred maintenance have taken on our Nation's school facilities. That $112 billion price tag, as enormous as it may sound, does not include the cost of wiring schools for modern technology. One of the greatest barriers to the incorporation of modern computers into the classroom is the physical condition of many school buildings. You cannot very well use a computer if you do not have the electrical system to plug it into the wall. Too many schools across the country do not have the physical capacity to provide our youngsters with the instruments they will need in order to be educated for this information age. According to the General Accounting Office, almost half of all schools lack enough electrical power for the full-scale use of computers, 60 percent of them lack enough conduits in the walls to connect classroom computers to a network, and more than 60 percent lack enough phone lines for instructional use. For this generation, computers really are the functional equivalent of books. My son sometimes is amazed that computers were not around when I was in school. The fact of the matter is, though, that many of our schools were built before the advent of these technologies, and they have not been upgraded so that modern teaching tools can be used in the classroom. Our youngsters need modern technology if they are to be prepared for this information age and for this global economy. That $112 billion price tag also does not include the cost of expanding capacity to accommodate soaring enrollments. According to the U.S. Department of Education, just to keep up with growing enrollment, we will need to build 6,000 new schools over the next 10 years. Teachers and parents know full well that these conditions directly affect the ability of children to learn. Recent research, however, has lent scientific proof to that intuitive knowledge. Two separate studies found a 10 to 11 percent achievement gap between students in good school buildings and those in poor school buildings after controlling for all other factors. Other studies have found that when buildings are in poor condition, students are more likely to misbehave. That should come as no surprise to parents. Three leading researchers in this area recently concluded, ``Based on our research, there is no doubt that building condition affects academic performance.'' Mr. President, this legislation is in the interest, I believe, of not just the children of America who have to go to these school buildings, many of which are dilapidated and rundown and neglected, but it is also in the interest of communities that will need the help to finance school repairs, and it is in the interest of our Nation that will need to have an educated work force. Mr. President, the current system of school finance, which relies primarily on local property taxes, is not flexible enough to meet the enormous needs of our Nation's schools. This country, I believe, needs a new approach to solve the problem of crumbling schools, a partnership among all levels of government and the private sector that preserves local control of education, but creates some balance, and infuses, frankly, a little more reason into our school finance system that does not now adequately serve the schools, the children, the country, or the local property taxpayers. The Department of Education has looked closely at a number of communities around the country and assessed the effect that this legislation would have on their ability to finance their construction needs. The Department looked at, for example, Los Angeles. Most of the school buildings there are more than 40 years old and are not wired for technology. Mr. President, 245 schools need roof replacements, and 50 of them need new boilers. According to the Department, this legislation could accelerate many long overdue projects and facilitate the passage of bond referenda at the local level. The Department also looked at the State of Maine, which has many 100- year-old buildings and one-room [[Page S2418]] schoolhouses. According to the Department, most districts in that State cannot cover the total cost of bonds issued to finance repair and modernization projects. Again, this legislation would allow needed projects to go forward. The Department also looked at a school district in southern Florida suffering from severe overcrowding. Mr. President, 34,000 students in that district do not have permanent desks. There are 10,000 new students added to the system each year. The district would have to build a new school every month to keep up with this demand. According to the Department this legislation will help this district move away from the use of portable classrooms, which do not provide as conducive a learning environment as real schools. My own State of Illinois would benefit greatly from this legislation. As the GAO reported last week, my State has unfortunately one of the most inequitable school finance systems in the Nation. With a low State contribution to school resources, and with a poor State effort to target funds to the neediest districts, local property taxpayers in Illinois are saddled with almost 60 percent of the costs of educating their children. It is no wonder, then, that the State board of education estimates that Illinois' construction needs are $13 billion. Too many of Illinois' school districts have a difficult time even providing textbooks and pencils, let alone major capital improvements. This legislation would free up local resources in Illinois for education by providing Federal support for the construction, rehabilitation and renovation of the school buildings. I urge all my colleagues to take a close look at the needs of the schools in their States and consider joining us in cosponsoring this legislation. This initiative is not about partisan politics. In fact, I think most Americans would agree wholeheartedly with the President when he said that partisan politics should stop at the schoolhouse door. This is something that transcends partisan differences and goes to the heart of our ability to provide for our children's well-being and their needs going into the 21st century. Congress has a unique opportunity to take a fundamentally new approach to improving the quality of elementary and secondary education. This bill represents a chance to improve our system of school finance and help prepare our children for the 21st century. I believe this will be welcomed by taxpayers at the local level, particularly those who, at this point, are unfairly burdened with the costs of trying to keep up a school system that deserves the support of all levels of government in our country. Mr. President, I have several documents from the Department of Education that I would like to have printed in the Record. I have the letter of transmittal from the Secretary of Education to the President of the Senate, a fact sheet regarding the correlation between building conditions and student achievement, and seven case studies assessing the impact this legislation would have on communities across America. I ask unanimous consent that these materials, as well as the text of the bill itself, be printed at this point in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: S. 456 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the ``Partnership to Rebuild America's Schools Act of 1997.'' TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM TABLE OF CONTENTS SEC. 101. The table of contents for this Act is as follows: TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM Sec. 101. Table of contents. Part 1--Program Authorized Sec. 102. Findings and purpose. Sec. 103. Definitions. Sec. 104. Funds appropriated. Sec. 105. Allocation of funds. Part 2--Grants to States Sec. 111. Allocation of funds. Sec. 112. Eligible State agency. Sec. 113. Allowable uses of funds. Sec. 114. Eligible construction projects; period for initiation. Sec. 115. Selection of localities and projects. Sec. 116. State applications. Sec. 117. Amount of Federal subsidy. Sec. 118. Separate funds or accounts; prudent investment. Sec. 119. State reports. Part 3--Direct Grants to Local Educational Agencies Sec. 121. Eligible local educational agencies. Sec. 122. Grantees. Sec. 123. Allowable uses of funds. Sec. 124. Eligible construction projects; redistribution. Sec. 125. Local applications. Sec. 126. Formula grants. Sec. 127. Competitive grants. Sec. 128. Amount of Federal subsidy. Sec. 129. Separate funds or accounts; prudent investment. Sec. 130. Local reports. TITLE II--GENERAL PROVISIONS Sec. 201. Technical employees. Sec. 202. Wage rates. Sec. 203. No liability of Federal Government. Sec. 204. Consultation with Secretary of the Treasury. Part 1--Program Authorized findings and purpose Sec. 102. (a) Findings.--The Congress finds as follows: (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) School infrastructure problems exist across the country, but are most severe in central cities and in schools with high proportions of poor and minority children. (3) 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. (4) 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. (5) 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 the poorest communities have had the greatest difficulty meeting this need. (6) 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. definitions Sec. 103. Except as otherwise provided, as used in this Act, the following terms have the following meanings: (1) Charter school.--The term ``charter school'' has the meaning given that term in section 10306(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8066(1)). (2) Community school.--The term ``community school'' means a school, or part of a school, that serves as a center for after-school and summer programs and the 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. (3)(A) Construction.--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. (4) 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)). (5) 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 [[Page S2419]] (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. (6) Secretary.--The term ``Secretary'' means the Secretary of Education. (7) State.--The term ``State'' means each of the 50 States and the Commonwealth of Puerto Rico. (8) 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)). funds appropriated Sec. 104. There are appropriated $5,000,000,000 for the purpose of carrying out this Act, which shall be available for obligation by the Secretary of Education from October 1, 1997 until September 30, 2001. allocation of funds Sec. 105. (a) Reservation for the Secretary of the Interior and the Outlying Areas.--(1) The Secretary shall reserve up to two percent of the funds appropriated by section 104 to-- (A) provide assistance to the Secretary of the Interior, which the Secretary of the Interior shall use for the school construction priorities described in section 1125(c) of the Education Amendment of 1978 (25 U.S.C. 2005(c)); and (B) make grants to America 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 paragraph (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. (b) Allocation of Remaining Funds.--Of the remaining funds appropriated by section 104-- (1) 50 percent shall be used for formula grants to States under section 111; (2) 35 percent shall be used for direct formula grants to local educational agencies under section 126; and (3) 15 percent shall be used for competitive grants to local educational agencies under section 127. Part 2--Grants to States allocation of funds Sec. 111. (A) Formula Grants to States.--Subject to subsection (b), the Secretary shall allocate the funds available under section 105(b)(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 126 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 State under subsection (a) and to local educational agencies under section 126, the percentage allocated to a State under this section and to localities in the State under section 126 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). eligible state agency Sec. 112. The Secretary shall award each State's grant to the State agency, such as a State educational agency, a State school construction agency, or a State bond bank, that the Governor, with the agreement of the chief State school officer, designates as best able to administer the grant. allowable uses of funds Sec. 113. Each State shall use its grant under this part only for one 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. eligible construction projects; period for initiation Sec. 114 (a) Eligible Projects.--States and their subgrantees may use funds under this part, 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 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 charter schools and community schools. (b) Period for Initiation of Project.--(1) Each State shall use its grant under this part 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 part 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 part. (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 part, the Secretary may reallocate all or part of those funds, including any interest earned by the State on those funds, to one or more other States that are making satisfactory progress. selection of localities and projects Sec. 115. (a) Priorities.--In determining which localities and activities to support with grant funds, each State shall give the highest priority to-- (1) localities with the greatest needs, as demonstrated by inadequate educational facilities, coupled with a low level of resources available to meet school construction needs; and (2) localities that will achieve the greatest leveraging effect on school construction from assistance under this part. (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 part: (1) The 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 Act. (6) The receipt by local educational agencies in the State of grants under part 3, except that a local educational agency is not ineligible for a subgrant under this part solely because it receives such a grant. state applications Sec. 116. (a) Application Required.--A State that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The State agency designated under section 112 shall develop the State's application under this part only after broadly consulting with the State board of education, and representatives of local school boards, school administrators, the business community, parents, and teachers in the State about the best means of carrying out this part. (2) If the State educational agency is not the State agency designated under section [[Page S2420]] 112, the designated agency shall consult with the State educational agency and obtain its approval before submitting the State's application. (c) State Survey.--(1) Before submitting the State's application, the State agency designated under section 112, with the involvement of local school officials and experts in building construction and management, shall survey the need throughout the State (including in localities receiving grants under part 3) 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 part. (d) Application Contents.--Each State application under this part shall include-- (1) an identification of the State agency designated by the Governor under section 112 to receive the State's grant under this party; (2) a summary of the results of the State's survey of its school facility needs, as described in subsection (c); (3) a description of how the State will implement its program under this part; (4) 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; (5)(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 117(a), to each local project that the State will support; (6) a description of how the State will ensure that the requirements of this part are met by subgrantees under this part; (7) 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 part; (8) 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 part, and not to supplant those funds; (9) an assurance that, during the four-year period beginning with the year the State receives its grant, the combined expenditures for school construction by the State and the localities that benefit from the State's program under this part (which at the State's option, may include private contributions) will be at least 125 percent of those combined expenditures for that purpose for the four preceding years; and (10) 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)(9) 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 a particularly high level of school construction expenditures during the previous four years. AMOUNT OF FEDERAL SUBSIDY Sec. 117. (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 part, 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 cost 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 one 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 part 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 part, 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). SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT Sec. 118. (a) Separate Funds or Accounts Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 part. (b) Prudent Investment Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 (2) Notwithstanding section 6503 of title 31, United States Code or any other law, use the proceeds of that investment to carry out this part. state reports Sec. 119. (a) Reports Required.--(1) Each State receiving a grant under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the State educational agency is not the State agency designated under section 112, the State's report shall include the approval of the State educational agency or its comments on the report. (b) Contents.--Each report shall-- (1) describe the State's implementation of this part, including how the State has met the requirements of this part; (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 grant under this part. (2) Each State shall submit an annual report for each of the three 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. Part 3--Direct Grants to Local Educational Agencies eligible local educational agencies Sec. 121. (a) Eligible Agencies.--Except as provided in subsection (b), the local educational agencies that are eligible to receive formula grants under section 126 and competitive grants under section 127 from the Secretary 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 part, the local educational agencies for Hawaii and the Commonwealth of Puerto Rico are not eligible local educational agencies. grantees Sec. 122. For each local educational agency described in section 121(a) for which an approvable application is submitted, the Secretary shall make any grant under this part 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 part. allowable uses of funds Sec. 123. Each grantee under this part shall use its grant only for one or more of the following activities to reduce the cost of financing eligible school construction projects described in section 124: (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. eligible construction projects; redistribution Sec. 124. (a) Eligible Projects.--A grantee under this part may use its grant, in accordance with section 123, 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 [[Page S2421]] 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 part, the Secretary may redistribute all or part of those funds, and any interest earned by that agency on those funds, to one or more other local educational agencies that are making satisfactory progress. local applications Sec. 125. (a) Application Required.--A local educational agency, or an alternative agency described in section 122 (both referred to in this part as the ``local agency''), that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The local agency shall develop the local application under this part only after broadly consulting with parents, administrators, teachers, the business community, and other members of the local community about the best means of carrying out this part. (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 part. (d) Application Contents.--Each local application under this part shall include-- (1) an identification of the local agency to receive the grant under this part; (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 part; (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 128(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 part 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 part, and not to supplant those funds; (10) an assurance that, during the four-year period beginning with the year the local educational agency receives its grant, its expenditures for school construction (which, at that agency's option, may include private contributions) will be at least 125 percent of its expenditures for that purpose for the four 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 four years. formula grants Sec. 126. (a) Allocations.--The Secretary shall allocate the funds available under section 105(b)(2) to the local educational agencies identified under section 121(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). competitive grants Sec. 127. (a) Grants Authorized.--The Secretary shall use funds available under section 105(b)(3) to make additional grants, on a competitive basis, to recipients of formula grants under section 126. (b) Additional Application Materials.--Any eligible applicant under section 126 that wishes to receive additional funds under this section shall include in its application under section 125 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) Information on the current financial effort the applicant is making for elementary and secondary education, including support from private sources, relative to its resources. (4) 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 four years. (5) A description of the energy efficiency and the effect on the environment of the projects that the applicant will undertake, both with its grant under this section and its grant under section 126, and of the extent to which those projects will use cost-efficient architectural design. (6) Other information that the Secretary may require. (c) Selection of Grantees.--The Secretary shall select grantees under this section on the basis of criteria, consistent with the purpose of this Act, that the Secretary may establish, which shall include-- (1) the relative need of applicants, as demonstrated by inadequate educational facilities and a low level of resources to meet their school construction needs; (2) the commitment of applicants to meet their school construction needs and the leveraging effect that assistance under this part would have, as demonstrated by the additional resources that they will provide, from non-Federal sources, to meet those needs, in accordance with subsection (b)(4). amount of federal subsidy Sec. 128. (a) Amount of Federal Subsidy.--For each construction project assisted under this part, the Secretary shall determine the amount of the Federal subsidy in accordance with section 117(a). (b) Non-Federal Share.--A grantee under this part 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). separate funds or accounts; prudent investment Sec. 129. (a) Separate Funds or Accounts Required.--Each grantee under this part 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 part. (b) Prudent Investment Required.--Each granteee under this part 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 part. local reports Sec. 130. (a) Reports Required.--(1) Each grantee under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the local educational agency is not the grantee under this part, 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 part, including how it has met the requirements of this part; (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 its grant under this part. (2) Each grantee shall submit an annual report for each of the three years after submitting its first report, and subsequently shall submit periodic reports as long as it is using grant funds. TITLE II--GENERAL PROVISIONS technical employees Sec. 201. For the purpose 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 [[Page S2422]] to classification and General Schedule pay rates. wage rates Sec. 202. (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 semi-colon and ``and''; and (3) by adding at the end thereof the following new paragraph: ``(7) The Partnership Rehabilitate America's Schools Act of 1997.''. NO LIABILITY OF FEDERAL GOVERNMENT Sec. 203. (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. Consultation with Secretary of the Treasury Sec. 204. The Secretary shall consult with the Secretary of the Treasury in carrying out this Act. ____ U.S. Department of Education, The Secretary March 13, 1997. Hon. Albert Gore, Jr., President of the Senate, Washington, DC. Dear Mr. President: Enclosed for consideration of the Congress is the Partnership to Rebuild America's Schools Act of 1997, a bill that would provide a one-time Federal stimulus to help States and localities bring all public school facilities up to acceptable standards and build the additional schools needed to serve increasing enrollments. Also enclosed is a section-by-section analysis summarizing the contents of the bill. I am sending an identical letter to the Speaker of the House. Mr. President, a number of factors have led the Administration to conclude that the Federal Government must assist the States and localities in providing the school facilities that our children will need if they are to achieve to challenging educational standards. First of all, recent General Accounting Office reports have documented the deplorable condition of too many of the Nation's schools. According to the GAO, one-third of all schools, serving more than 14 million students, need extensive repair or renovation of one or more buildings. Students are attending schools that have antiquated heating, plumbing, and electrical systems and even fail to meet local health and safety codes. Some schools do not provide full access to individuals with disabilities, and many do not have the infrastructure needed to adopt new educational technologies. All of these problems are most prevalent in urban districts. In addition to making repairs and renovations to their existing schools, many districts will have to build new schools in order to accommodate increasing enrollments. In fact, the Department has projected that States and localities will need to build 6,000 more schools in order to serve an additional 2.9 million students who will enroll in the next decade. This need will put further pressure on already strained school budgets. Clearly, school construction is, and will remain, primarily a State and local responsibility, and the vast majority of facilities needs will have to be met with non-Federal resources. Unfortunately, however, for a variety of reasons State and local governments have not been making substantial progress even in clearing the existing backlog of construction needs. The Federal Government can play a crucial role in addressing this problem by providing limited resources, on a one-time basis, in a manner that spurs States, communities, and even the private sector to bear the burden and provide adequate school facilities for all children. That is the purpose of the enclosed legislation. In order to have maximum impact, our bill would leverage State, local, and private support for school construction, rather than paying for 100 percent of the cost of construction projects. The proposal would provide interest subsidies for school construction bonds, or other financing mechanisms, to States and major urban school districts. States would, in turn, pass these subsidies along to localities, use them to reduce the servicing costs

Summary:

All articles in Senate section

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - March 18, 1997)

Text of this article available as: TXT PDF [Pages S2416-S2439] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Ms. MOSELEY-BRAUN (for herself, Mr. Kennedy, Mr. Graham, Mr. Kerry, Mr. Levin, Mr. Torricelli, Mrs. Murray, Ms. Mikulski, Mr. Dodd, and Mr. Wellstone): S. 456. A bill to establish a partnership to rebuild and modernize America's school facilities; to the Committee on Labor and Human Resources. THE PARTNERSHIP TO REBUILD AMERICA'S SCHOOLS ACT OF 1997 Ms. MOSELEY-BRAUN. Mr. President, I send to the desk, and I am pleased to introduce, along with a number of my colleagues, the Partnership To Rebuild America's School Act of 1997. This legislation is designed to address one of the most fundamental problems that we currently face as a nation with regard to public elementary and secondary education: many of our schools are literally falling down around our children. This legislation will help us address this problem, the crisis of crumbling schools in America. On Friday, the President officially transmitted this legislation to the Congress. The bill is the result of months of work by the Department of Education, the Department of the Treasury, the White House, my office, and a number of other congressional offices. At the outset, I commend and thank everyone who has participated in the development of this legislation for their efforts. Mr. President, the Partnership To Rebuild America's Schools Act of 1997 will help States and local school districts finance the repair, renovation, modernization and construction of their schools. States and school districts will be able to use the Federal funds to assist them in financing their highest priority projects. This bill will allow school districts to do more of what they need to be doing, educating our children for the 21st century. In America, the rungs on the ladder of opportunity are still crafted in the classroom. High school graduates earn, on average, 46 percent more every year than those who do not graduate. College graduates earn 155 percent more every year than those who do not graduate from high school. Over the course of a lifetime, the most educated Americans will earn five times as much as the least educated. Education, however, is not just a matter of individual benefit. It is a public good as well. It affects and correlates to the status and the quality of life for our entire community. It correlates to just about every indicia of economic and social well-being. Educational attainment can be directly tied to income, health, the likelihood of being on welfare, the likelihood of being incarcerated, and the likelihood of voting and participating in our democracy. Education, therefore, has both national as well as individual implications. In a recent Wall Street Journal survey of leading U.S. economists, 43 percent of those surveyed said the single most important thing that we could do to increase our long-term economic growth rate would be to invest more in education and research and development. Nothing else even came close to education in the survey. One economist said, ``One of the few things that economists will agree upon is the fact that economic growth is very strongly dependent on our own abilities.'' In his State of the Union Address, President Clinton noted that education is a critical national security issue for our future. I believe this notion should be at the heart of our debate over education. In order to compete with cheap, Third World labor in a global economy, in an information age, and to maintain the standard of living to which we have grown accustomed as Americans, we will have to have a work force that works smarter, that works better, that can hold its own in this global economy at the high end of the productivity scale. So education then becomes a matter of national concern and, indeed, as the President pointed out, a matter of our national security, because it is directly linked to our ability to be able to maintain the standard of living that we have come to appreciate as Americans and our ability to compete in this global marketplace. We all have a role to play. That is why this legislation starts off calling itself a partnership, because there must be a partnership between State, local and National Government to [[Page S2417]] meet the challenge that this global economy, and changes in the world, have given us all to face. The Partnership To Rebuild America's Schools Act of 1997 will help us to meet the challenge by investing in education in ways that preserve the fundamental tenet of local control of education. By investing in bricks and mortar the Federal Government can contribute to a more balanced partnership among all levels of Government and in the private sector to rebuild and modernize our schools so they can serve all of our children in the 21st century. This legislation strikes that balance. This legislation does preserve local control, but, much to the point, it says that we at the national level have an obligation to participate in addressing those needs that can be most appropriately addressed at the national level; and that is rebuilding our crumbling schools. The bill uses 5 billion Federal dollars to leverage an additional $15 billion worth of State, local and private resources. Half of the money will be apportioned to States using the existing Title I basic grants formula. The remainder will flow directly to the 100 school districts in the country with the largest numbers of children living below the poverty level. Of the amount available for direct assistance to these impoverished communities, the Department of Education will apportion 70 percent by formula and will make the remaining 30 percent available on a competitive basis. In addition, the bill will allocate 2 percent of the funds to the Secretary of the Interior for administration to Indian schools and to the Secretary of Education for the outlying territories. Under both the State and local programs, States and school districts would have an enormous amount of flexibility in the use of these Federal funds to help finance school improvement projects. They could use the funds to subsidize State or local bond issues, certificates of participation, purchase or lease agreements, or other financial transactions used to finance school improvements. In addition, the States would be allowed to capitalize on entities similar to the State infrastructure banks which are currently used by a number of States to help finance highway improvement projects. These infrastructure banks could be used to leverage additional resources. This program is designed to stimulate new construction and renovation, and there are specific provisions in the bill to ensure that Federal funds are not used simply to finance school improvements that would have occurred anyway. The bill is designed to fill a real need that exists at both the State and local levels for school financing assistance, not to supplement districts that would have otherwise been able to finance their projects. It is carefully crafted to minimize administrative costs at the Federal level and to maximize local control over decisions that must be made with regard to school improvements. States and districts will be required to submit applications to the Secretary of Education describing their needs and the process that will be used to award the Federal funds. Once these applications are approved, grantees will immediately receive the full share of the $5 billion. In addition, other than following certain criteria, States and local districts will be free to finance their top-priority projects. The Federal Government will not be in the business of dictating priorities and needs to State and local school districts who know their schools best. This bill helps address a need that has completely overwhelmed States and local school districts. The magnitude of the school facilities problem is so great today that many districts cannot maintain the kind of educational environment necessary to teach all of our children the kind of skills they will need to compete in the 21st century, global economy. The U.S. General Accounting Office, which at my request conducted an intensive 2-year study of the condition of America's schools, recently concluded that 14 million children attend schools in need of major renovations or outright replacement, and 7 million children attend schools with life-threatening safety code violations. They found that it will cost $112 billion to essentially bring schools up to code, not to equip them with new computers and cosmetic improvements, but just to address the toll that decades of deferred maintenance have taken on our Nation's school facilities. That $112 billion price tag, as enormous as it may sound, does not include the cost of wiring schools for modern technology. One of the greatest barriers to the incorporation of modern computers into the classroom is the physical condition of many school buildings. You cannot very well use a computer if you do not have the electrical system to plug it into the wall. Too many schools across the country do not have the physical capacity to provide our youngsters with the instruments they will need in order to be educated for this information age. According to the General Accounting Office, almost half of all schools lack enough electrical power for the full-scale use of computers, 60 percent of them lack enough conduits in the walls to connect classroom computers to a network, and more than 60 percent lack enough phone lines for instructional use. For this generation, computers really are the functional equivalent of books. My son sometimes is amazed that computers were not around when I was in school. The fact of the matter is, though, that many of our schools were built before the advent of these technologies, and they have not been upgraded so that modern teaching tools can be used in the classroom. Our youngsters need modern technology if they are to be prepared for this information age and for this global economy. That $112 billion price tag also does not include the cost of expanding capacity to accommodate soaring enrollments. According to the U.S. Department of Education, just to keep up with growing enrollment, we will need to build 6,000 new schools over the next 10 years. Teachers and parents know full well that these conditions directly affect the ability of children to learn. Recent research, however, has lent scientific proof to that intuitive knowledge. Two separate studies found a 10 to 11 percent achievement gap between students in good school buildings and those in poor school buildings after controlling for all other factors. Other studies have found that when buildings are in poor condition, students are more likely to misbehave. That should come as no surprise to parents. Three leading researchers in this area recently concluded, ``Based on our research, there is no doubt that building condition affects academic performance.'' Mr. President, this legislation is in the interest, I believe, of not just the children of America who have to go to these school buildings, many of which are dilapidated and rundown and neglected, but it is also in the interest of communities that will need the help to finance school repairs, and it is in the interest of our Nation that will need to have an educated work force. Mr. President, the current system of school finance, which relies primarily on local property taxes, is not flexible enough to meet the enormous needs of our Nation's schools. This country, I believe, needs a new approach to solve the problem of crumbling schools, a partnership among all levels of government and the private sector that preserves local control of education, but creates some balance, and infuses, frankly, a little more reason into our school finance system that does not now adequately serve the schools, the children, the country, or the local property taxpayers. The Department of Education has looked closely at a number of communities around the country and assessed the effect that this legislation would have on their ability to finance their construction needs. The Department looked at, for example, Los Angeles. Most of the school buildings there are more than 40 years old and are not wired for technology. Mr. President, 245 schools need roof replacements, and 50 of them need new boilers. According to the Department, this legislation could accelerate many long overdue projects and facilitate the passage of bond referenda at the local level. The Department also looked at the State of Maine, which has many 100- year-old buildings and one-room [[Page S2418]] schoolhouses. According to the Department, most districts in that State cannot cover the total cost of bonds issued to finance repair and modernization projects. Again, this legislation would allow needed projects to go forward. The Department also looked at a school district in southern Florida suffering from severe overcrowding. Mr. President, 34,000 students in that district do not have permanent desks. There are 10,000 new students added to the system each year. The district would have to build a new school every month to keep up with this demand. According to the Department this legislation will help this district move away from the use of portable classrooms, which do not provide as conducive a learning environment as real schools. My own State of Illinois would benefit greatly from this legislation. As the GAO reported last week, my State has unfortunately one of the most inequitable school finance systems in the Nation. With a low State contribution to school resources, and with a poor State effort to target funds to the neediest districts, local property taxpayers in Illinois are saddled with almost 60 percent of the costs of educating their children. It is no wonder, then, that the State board of education estimates that Illinois' construction needs are $13 billion. Too many of Illinois' school districts have a difficult time even providing textbooks and pencils, let alone major capital improvements. This legislation would free up local resources in Illinois for education by providing Federal support for the construction, rehabilitation and renovation of the school buildings. I urge all my colleagues to take a close look at the needs of the schools in their States and consider joining us in cosponsoring this legislation. This initiative is not about partisan politics. In fact, I think most Americans would agree wholeheartedly with the President when he said that partisan politics should stop at the schoolhouse door. This is something that transcends partisan differences and goes to the heart of our ability to provide for our children's well-being and their needs going into the 21st century. Congress has a unique opportunity to take a fundamentally new approach to improving the quality of elementary and secondary education. This bill represents a chance to improve our system of school finance and help prepare our children for the 21st century. I believe this will be welcomed by taxpayers at the local level, particularly those who, at this point, are unfairly burdened with the costs of trying to keep up a school system that deserves the support of all levels of government in our country. Mr. President, I have several documents from the Department of Education that I would like to have printed in the Record. I have the letter of transmittal from the Secretary of Education to the President of the Senate, a fact sheet regarding the correlation between building conditions and student achievement, and seven case studies assessing the impact this legislation would have on communities across America. I ask unanimous consent that these materials, as well as the text of the bill itself, be printed at this point in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: S. 456 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the ``Partnership to Rebuild America's Schools Act of 1997.'' TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM TABLE OF CONTENTS SEC. 101. The table of contents for this Act is as follows: TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM Sec. 101. Table of contents. Part 1--Program Authorized Sec. 102. Findings and purpose. Sec. 103. Definitions. Sec. 104. Funds appropriated. Sec. 105. Allocation of funds. Part 2--Grants to States Sec. 111. Allocation of funds. Sec. 112. Eligible State agency. Sec. 113. Allowable uses of funds. Sec. 114. Eligible construction projects; period for initiation. Sec. 115. Selection of localities and projects. Sec. 116. State applications. Sec. 117. Amount of Federal subsidy. Sec. 118. Separate funds or accounts; prudent investment. Sec. 119. State reports. Part 3--Direct Grants to Local Educational Agencies Sec. 121. Eligible local educational agencies. Sec. 122. Grantees. Sec. 123. Allowable uses of funds. Sec. 124. Eligible construction projects; redistribution. Sec. 125. Local applications. Sec. 126. Formula grants. Sec. 127. Competitive grants. Sec. 128. Amount of Federal subsidy. Sec. 129. Separate funds or accounts; prudent investment. Sec. 130. Local reports. TITLE II--GENERAL PROVISIONS Sec. 201. Technical employees. Sec. 202. Wage rates. Sec. 203. No liability of Federal Government. Sec. 204. Consultation with Secretary of the Treasury. Part 1--Program Authorized findings and purpose Sec. 102. (a) Findings.--The Congress finds as follows: (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) School infrastructure problems exist across the country, but are most severe in central cities and in schools with high proportions of poor and minority children. (3) 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. (4) 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. (5) 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 the poorest communities have had the greatest difficulty meeting this need. (6) 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. definitions Sec. 103. Except as otherwise provided, as used in this Act, the following terms have the following meanings: (1) Charter school.--The term ``charter school'' has the meaning given that term in section 10306(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8066(1)). (2) Community school.--The term ``community school'' means a school, or part of a school, that serves as a center for after-school and summer programs and the 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. (3)(A) Construction.--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. (4) 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)). (5) 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 [[Page S2419]] (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. (6) Secretary.--The term ``Secretary'' means the Secretary of Education. (7) State.--The term ``State'' means each of the 50 States and the Commonwealth of Puerto Rico. (8) 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)). funds appropriated Sec. 104. There are appropriated $5,000,000,000 for the purpose of carrying out this Act, which shall be available for obligation by the Secretary of Education from October 1, 1997 until September 30, 2001. allocation of funds Sec. 105. (a) Reservation for the Secretary of the Interior and the Outlying Areas.--(1) The Secretary shall reserve up to two percent of the funds appropriated by section 104 to-- (A) provide assistance to the Secretary of the Interior, which the Secretary of the Interior shall use for the school construction priorities described in section 1125(c) of the Education Amendment of 1978 (25 U.S.C. 2005(c)); and (B) make grants to America 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 paragraph (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. (b) Allocation of Remaining Funds.--Of the remaining funds appropriated by section 104-- (1) 50 percent shall be used for formula grants to States under section 111; (2) 35 percent shall be used for direct formula grants to local educational agencies under section 126; and (3) 15 percent shall be used for competitive grants to local educational agencies under section 127. Part 2--Grants to States allocation of funds Sec. 111. (A) Formula Grants to States.--Subject to subsection (b), the Secretary shall allocate the funds available under section 105(b)(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 126 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 State under subsection (a) and to local educational agencies under section 126, the percentage allocated to a State under this section and to localities in the State under section 126 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). eligible state agency Sec. 112. The Secretary shall award each State's grant to the State agency, such as a State educational agency, a State school construction agency, or a State bond bank, that the Governor, with the agreement of the chief State school officer, designates as best able to administer the grant. allowable uses of funds Sec. 113. Each State shall use its grant under this part only for one 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. eligible construction projects; period for initiation Sec. 114 (a) Eligible Projects.--States and their subgrantees may use funds under this part, 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 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 charter schools and community schools. (b) Period for Initiation of Project.--(1) Each State shall use its grant under this part 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 part 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 part. (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 part, the Secretary may reallocate all or part of those funds, including any interest earned by the State on those funds, to one or more other States that are making satisfactory progress. selection of localities and projects Sec. 115. (a) Priorities.--In determining which localities and activities to support with grant funds, each State shall give the highest priority to-- (1) localities with the greatest needs, as demonstrated by inadequate educational facilities, coupled with a low level of resources available to meet school construction needs; and (2) localities that will achieve the greatest leveraging effect on school construction from assistance under this part. (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 part: (1) The 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 Act. (6) The receipt by local educational agencies in the State of grants under part 3, except that a local educational agency is not ineligible for a subgrant under this part solely because it receives such a grant. state applications Sec. 116. (a) Application Required.--A State that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The State agency designated under section 112 shall develop the State's application under this part only after broadly consulting with the State board of education, and representatives of local school boards, school administrators, the business community, parents, and teachers in the State about the best means of carrying out this part. (2) If the State educational agency is not the State agency designated under section [[Page S2420]] 112, the designated agency shall consult with the State educational agency and obtain its approval before submitting the State's application. (c) State Survey.--(1) Before submitting the State's application, the State agency designated under section 112, with the involvement of local school officials and experts in building construction and management, shall survey the need throughout the State (including in localities receiving grants under part 3) 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 part. (d) Application Contents.--Each State application under this part shall include-- (1) an identification of the State agency designated by the Governor under section 112 to receive the State's grant under this party; (2) a summary of the results of the State's survey of its school facility needs, as described in subsection (c); (3) a description of how the State will implement its program under this part; (4) 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; (5)(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 117(a), to each local project that the State will support; (6) a description of how the State will ensure that the requirements of this part are met by subgrantees under this part; (7) 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 part; (8) 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 part, and not to supplant those funds; (9) an assurance that, during the four-year period beginning with the year the State receives its grant, the combined expenditures for school construction by the State and the localities that benefit from the State's program under this part (which at the State's option, may include private contributions) will be at least 125 percent of those combined expenditures for that purpose for the four preceding years; and (10) 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)(9) 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 a particularly high level of school construction expenditures during the previous four years. AMOUNT OF FEDERAL SUBSIDY Sec. 117. (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 part, 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 cost 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 one 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 part 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 part, 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). SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT Sec. 118. (a) Separate Funds or Accounts Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 part. (b) Prudent Investment Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 (2) Notwithstanding section 6503 of title 31, United States Code or any other law, use the proceeds of that investment to carry out this part. state reports Sec. 119. (a) Reports Required.--(1) Each State receiving a grant under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the State educational agency is not the State agency designated under section 112, the State's report shall include the approval of the State educational agency or its comments on the report. (b) Contents.--Each report shall-- (1) describe the State's implementation of this part, including how the State has met the requirements of this part; (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 grant under this part. (2) Each State shall submit an annual report for each of the three 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. Part 3--Direct Grants to Local Educational Agencies eligible local educational agencies Sec. 121. (a) Eligible Agencies.--Except as provided in subsection (b), the local educational agencies that are eligible to receive formula grants under section 126 and competitive grants under section 127 from the Secretary 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 part, the local educational agencies for Hawaii and the Commonwealth of Puerto Rico are not eligible local educational agencies. grantees Sec. 122. For each local educational agency described in section 121(a) for which an approvable application is submitted, the Secretary shall make any grant under this part 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 part. allowable uses of funds Sec. 123. Each grantee under this part shall use its grant only for one or more of the following activities to reduce the cost of financing eligible school construction projects described in section 124: (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. eligible construction projects; redistribution Sec. 124. (a) Eligible Projects.--A grantee under this part may use its grant, in accordance with section 123, 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 [[Page S2421]] 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 part, the Secretary may redistribute all or part of those funds, and any interest earned by that agency on those funds, to one or more other local educational agencies that are making satisfactory progress. local applications Sec. 125. (a) Application Required.--A local educational agency, or an alternative agency described in section 122 (both referred to in this part as the ``local agency''), that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The local agency shall develop the local application under this part only after broadly consulting with parents, administrators, teachers, the business community, and other members of the local community about the best means of carrying out this part. (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 part. (d) Application Contents.--Each local application under this part shall include-- (1) an identification of the local agency to receive the grant under this part; (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 part; (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 128(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 part 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 part, and not to supplant those funds; (10) an assurance that, during the four-year period beginning with the year the local educational agency receives its grant, its expenditures for school construction (which, at that agency's option, may include private contributions) will be at least 125 percent of its expenditures for that purpose for the four 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 four years. formula grants Sec. 126. (a) Allocations.--The Secretary shall allocate the funds available under section 105(b)(2) to the local educational agencies identified under section 121(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). competitive grants Sec. 127. (a) Grants Authorized.--The Secretary shall use funds available under section 105(b)(3) to make additional grants, on a competitive basis, to recipients of formula grants under section 126. (b) Additional Application Materials.--Any eligible applicant under section 126 that wishes to receive additional funds under this section shall include in its application under section 125 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) Information on the current financial effort the applicant is making for elementary and secondary education, including support from private sources, relative to its resources. (4) 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 four years. (5) A description of the energy efficiency and the effect on the environment of the projects that the applicant will undertake, both with its grant under this section and its grant under section 126, and of the extent to which those projects will use cost-efficient architectural design. (6) Other information that the Secretary may require. (c) Selection of Grantees.--The Secretary shall select grantees under this section on the basis of criteria, consistent with the purpose of this Act, that the Secretary may establish, which shall include-- (1) the relative need of applicants, as demonstrated by inadequate educational facilities and a low level of resources to meet their school construction needs; (2) the commitment of applicants to meet their school construction needs and the leveraging effect that assistance under this part would have, as demonstrated by the additional resources that they will provide, from non-Federal sources, to meet those needs, in accordance with subsection (b)(4). amount of federal subsidy Sec. 128. (a) Amount of Federal Subsidy.--For each construction project assisted under this part, the Secretary shall determine the amount of the Federal subsidy in accordance with section 117(a). (b) Non-Federal Share.--A grantee under this part 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). separate funds or accounts; prudent investment Sec. 129. (a) Separate Funds or Accounts Required.--Each grantee under this part 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 part. (b) Prudent Investment Required.--Each granteee under this part 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 part. local reports Sec. 130. (a) Reports Required.--(1) Each grantee under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the local educational agency is not the grantee under this part, 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 part, including how it has met the requirements of this part; (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 its grant under this part. (2) Each grantee shall submit an annual report for each of the three years after submitting its first report, and subsequently shall submit periodic reports as long as it is using grant funds. TITLE II--GENERAL PROVISIONS technical employees Sec. 201. For the purpose 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 [[Page S2422]] to classification and General Schedule pay rates. wage rates Sec. 202. (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 semi-colon and ``and''; and (3) by adding at the end thereof the following new paragraph: ``(7) The Partnership Rehabilitate America's Schools Act of 1997.''. NO LIABILITY OF FEDERAL GOVERNMENT Sec. 203. (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. Consultation with Secretary of the Treasury Sec. 204. The Secretary shall consult with the Secretary of the Treasury in carrying out this Act. ____ U.S. Department of Education, The Secretary March 13, 1997. Hon. Albert Gore, Jr., President of the Senate, Washington, DC. Dear Mr. President: Enclosed for consideration of the Congress is the Partnership to Rebuild America's Schools Act of 1997, a bill that would provide a one-time Federal stimulus to help States and localities bring all public school facilities up to acceptable standards and build the additional schools needed to serve increasing enrollments. Also enclosed is a section-by-section analysis summarizing the contents of the bill. I am sending an identical letter to the Speaker of the House. Mr. President, a number of factors have led the Administration to conclude that the Federal Government must assist the States and localities in providing the school facilities that our children will need if they are to achieve to challenging educational standards. First of all, recent General Accounting Office reports have documented the deplorable condition of too many of the Nation's schools. According to the GAO, one-third of all schools, serving more than 14 million students, need extensive repair or renovation of one or more buildings. Students are attending schools that have antiquated heating, plumbing, and electrical systems and even fail to meet local health and safety codes. Some schools do not provide full access to individuals with disabilities, and many do not have the infrastructure needed to adopt new educational technologies. All of these problems are most prevalent in urban districts. In addition to making repairs and renovations to their existing schools, many districts will have to build new schools in order to accommodate increasing enrollments. In fact, the Department has projected that States and localities will need to build 6,000 more schools in order to serve an additional 2.9 million students who will enroll in the next decade. This need will put further pressure on already strained school budgets. Clearly, school construction is, and will remain, primarily a State and local responsibility, and the vast majority of facilities needs will have to be met with non-Federal resources. Unfortunately, however, for a variety of reasons State and local governments have not been making substantial progress even in clearing the existing backlog of construction needs. The Federal Government can play a crucial role in addressing this problem by providing limited resources, on a one-time basis, in a manner that spurs States, communities, and even the private sector to bear the burden and provide adequate school facilities for all children. That is the purpose of the enclosed legislation. In order to have maximum impact, our bill would leverage State, local, and private support for school construction, rather than paying for 100 percent of the cost of construction projects. The proposal would provide interest subsidies for school construction bonds, or other financing mechanisms, to States and major urban school districts. States would, in turn, pass these subsidies along to localities, use them to reduce the servicing costs of State

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - March 18, 1997)

Text of this article available as: TXT PDF [Pages S2416-S2439] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Ms. MOSELEY-BRAUN (for herself, Mr. Kennedy, Mr. Graham, Mr. Kerry, Mr. Levin, Mr. Torricelli, Mrs. Murray, Ms. Mikulski, Mr. Dodd, and Mr. Wellstone): S. 456. A bill to establish a partnership to rebuild and modernize America's school facilities; to the Committee on Labor and Human Resources. THE PARTNERSHIP TO REBUILD AMERICA'S SCHOOLS ACT OF 1997 Ms. MOSELEY-BRAUN. Mr. President, I send to the desk, and I am pleased to introduce, along with a number of my colleagues, the Partnership To Rebuild America's School Act of 1997. This legislation is designed to address one of the most fundamental problems that we currently face as a nation with regard to public elementary and secondary education: many of our schools are literally falling down around our children. This legislation will help us address this problem, the crisis of crumbling schools in America. On Friday, the President officially transmitted this legislation to the Congress. The bill is the result of months of work by the Department of Education, the Department of the Treasury, the White House, my office, and a number of other congressional offices. At the outset, I commend and thank everyone who has participated in the development of this legislation for their efforts. Mr. President, the Partnership To Rebuild America's Schools Act of 1997 will help States and local school districts finance the repair, renovation, modernization and construction of their schools. States and school districts will be able to use the Federal funds to assist them in financing their highest priority projects. This bill will allow school districts to do more of what they need to be doing, educating our children for the 21st century. In America, the rungs on the ladder of opportunity are still crafted in the classroom. High school graduates earn, on average, 46 percent more every year than those who do not graduate. College graduates earn 155 percent more every year than those who do not graduate from high school. Over the course of a lifetime, the most educated Americans will earn five times as much as the least educated. Education, however, is not just a matter of individual benefit. It is a public good as well. It affects and correlates to the status and the quality of life for our entire community. It correlates to just about every indicia of economic and social well-being. Educational attainment can be directly tied to income, health, the likelihood of being on welfare, the likelihood of being incarcerated, and the likelihood of voting and participating in our democracy. Education, therefore, has both national as well as individual implications. In a recent Wall Street Journal survey of leading U.S. economists, 43 percent of those surveyed said the single most important thing that we could do to increase our long-term economic growth rate would be to invest more in education and research and development. Nothing else even came close to education in the survey. One economist said, ``One of the few things that economists will agree upon is the fact that economic growth is very strongly dependent on our own abilities.'' In his State of the Union Address, President Clinton noted that education is a critical national security issue for our future. I believe this notion should be at the heart of our debate over education. In order to compete with cheap, Third World labor in a global economy, in an information age, and to maintain the standard of living to which we have grown accustomed as Americans, we will have to have a work force that works smarter, that works better, that can hold its own in this global economy at the high end of the productivity scale. So education then becomes a matter of national concern and, indeed, as the President pointed out, a matter of our national security, because it is directly linked to our ability to be able to maintain the standard of living that we have come to appreciate as Americans and our ability to compete in this global marketplace. We all have a role to play. That is why this legislation starts off calling itself a partnership, because there must be a partnership between State, local and National Government to [[Page S2417]] meet the challenge that this global economy, and changes in the world, have given us all to face. The Partnership To Rebuild America's Schools Act of 1997 will help us to meet the challenge by investing in education in ways that preserve the fundamental tenet of local control of education. By investing in bricks and mortar the Federal Government can contribute to a more balanced partnership among all levels of Government and in the private sector to rebuild and modernize our schools so they can serve all of our children in the 21st century. This legislation strikes that balance. This legislation does preserve local control, but, much to the point, it says that we at the national level have an obligation to participate in addressing those needs that can be most appropriately addressed at the national level; and that is rebuilding our crumbling schools. The bill uses 5 billion Federal dollars to leverage an additional $15 billion worth of State, local and private resources. Half of the money will be apportioned to States using the existing Title I basic grants formula. The remainder will flow directly to the 100 school districts in the country with the largest numbers of children living below the poverty level. Of the amount available for direct assistance to these impoverished communities, the Department of Education will apportion 70 percent by formula and will make the remaining 30 percent available on a competitive basis. In addition, the bill will allocate 2 percent of the funds to the Secretary of the Interior for administration to Indian schools and to the Secretary of Education for the outlying territories. Under both the State and local programs, States and school districts would have an enormous amount of flexibility in the use of these Federal funds to help finance school improvement projects. They could use the funds to subsidize State or local bond issues, certificates of participation, purchase or lease agreements, or other financial transactions used to finance school improvements. In addition, the States would be allowed to capitalize on entities similar to the State infrastructure banks which are currently used by a number of States to help finance highway improvement projects. These infrastructure banks could be used to leverage additional resources. This program is designed to stimulate new construction and renovation, and there are specific provisions in the bill to ensure that Federal funds are not used simply to finance school improvements that would have occurred anyway. The bill is designed to fill a real need that exists at both the State and local levels for school financing assistance, not to supplement districts that would have otherwise been able to finance their projects. It is carefully crafted to minimize administrative costs at the Federal level and to maximize local control over decisions that must be made with regard to school improvements. States and districts will be required to submit applications to the Secretary of Education describing their needs and the process that will be used to award the Federal funds. Once these applications are approved, grantees will immediately receive the full share of the $5 billion. In addition, other than following certain criteria, States and local districts will be free to finance their top-priority projects. The Federal Government will not be in the business of dictating priorities and needs to State and local school districts who know their schools best. This bill helps address a need that has completely overwhelmed States and local school districts. The magnitude of the school facilities problem is so great today that many districts cannot maintain the kind of educational environment necessary to teach all of our children the kind of skills they will need to compete in the 21st century, global economy. The U.S. General Accounting Office, which at my request conducted an intensive 2-year study of the condition of America's schools, recently concluded that 14 million children attend schools in need of major renovations or outright replacement, and 7 million children attend schools with life-threatening safety code violations. They found that it will cost $112 billion to essentially bring schools up to code, not to equip them with new computers and cosmetic improvements, but just to address the toll that decades of deferred maintenance have taken on our Nation's school facilities. That $112 billion price tag, as enormous as it may sound, does not include the cost of wiring schools for modern technology. One of the greatest barriers to the incorporation of modern computers into the classroom is the physical condition of many school buildings. You cannot very well use a computer if you do not have the electrical system to plug it into the wall. Too many schools across the country do not have the physical capacity to provide our youngsters with the instruments they will need in order to be educated for this information age. According to the General Accounting Office, almost half of all schools lack enough electrical power for the full-scale use of computers, 60 percent of them lack enough conduits in the walls to connect classroom computers to a network, and more than 60 percent lack enough phone lines for instructional use. For this generation, computers really are the functional equivalent of books. My son sometimes is amazed that computers were not around when I was in school. The fact of the matter is, though, that many of our schools were built before the advent of these technologies, and they have not been upgraded so that modern teaching tools can be used in the classroom. Our youngsters need modern technology if they are to be prepared for this information age and for this global economy. That $112 billion price tag also does not include the cost of expanding capacity to accommodate soaring enrollments. According to the U.S. Department of Education, just to keep up with growing enrollment, we will need to build 6,000 new schools over the next 10 years. Teachers and parents know full well that these conditions directly affect the ability of children to learn. Recent research, however, has lent scientific proof to that intuitive knowledge. Two separate studies found a 10 to 11 percent achievement gap between students in good school buildings and those in poor school buildings after controlling for all other factors. Other studies have found that when buildings are in poor condition, students are more likely to misbehave. That should come as no surprise to parents. Three leading researchers in this area recently concluded, ``Based on our research, there is no doubt that building condition affects academic performance.'' Mr. President, this legislation is in the interest, I believe, of not just the children of America who have to go to these school buildings, many of which are dilapidated and rundown and neglected, but it is also in the interest of communities that will need the help to finance school repairs, and it is in the interest of our Nation that will need to have an educated work force. Mr. President, the current system of school finance, which relies primarily on local property taxes, is not flexible enough to meet the enormous needs of our Nation's schools. This country, I believe, needs a new approach to solve the problem of crumbling schools, a partnership among all levels of government and the private sector that preserves local control of education, but creates some balance, and infuses, frankly, a little more reason into our school finance system that does not now adequately serve the schools, the children, the country, or the local property taxpayers. The Department of Education has looked closely at a number of communities around the country and assessed the effect that this legislation would have on their ability to finance their construction needs. The Department looked at, for example, Los Angeles. Most of the school buildings there are more than 40 years old and are not wired for technology. Mr. President, 245 schools need roof replacements, and 50 of them need new boilers. According to the Department, this legislation could accelerate many long overdue projects and facilitate the passage of bond referenda at the local level. The Department also looked at the State of Maine, which has many 100- year-old buildings and one-room [[Page S2418]] schoolhouses. According to the Department, most districts in that State cannot cover the total cost of bonds issued to finance repair and modernization projects. Again, this legislation would allow needed projects to go forward. The Department also looked at a school district in southern Florida suffering from severe overcrowding. Mr. President, 34,000 students in that district do not have permanent desks. There are 10,000 new students added to the system each year. The district would have to build a new school every month to keep up with this demand. According to the Department this legislation will help this district move away from the use of portable classrooms, which do not provide as conducive a learning environment as real schools. My own State of Illinois would benefit greatly from this legislation. As the GAO reported last week, my State has unfortunately one of the most inequitable school finance systems in the Nation. With a low State contribution to school resources, and with a poor State effort to target funds to the neediest districts, local property taxpayers in Illinois are saddled with almost 60 percent of the costs of educating their children. It is no wonder, then, that the State board of education estimates that Illinois' construction needs are $13 billion. Too many of Illinois' school districts have a difficult time even providing textbooks and pencils, let alone major capital improvements. This legislation would free up local resources in Illinois for education by providing Federal support for the construction, rehabilitation and renovation of the school buildings. I urge all my colleagues to take a close look at the needs of the schools in their States and consider joining us in cosponsoring this legislation. This initiative is not about partisan politics. In fact, I think most Americans would agree wholeheartedly with the President when he said that partisan politics should stop at the schoolhouse door. This is something that transcends partisan differences and goes to the heart of our ability to provide for our children's well-being and their needs going into the 21st century. Congress has a unique opportunity to take a fundamentally new approach to improving the quality of elementary and secondary education. This bill represents a chance to improve our system of school finance and help prepare our children for the 21st century. I believe this will be welcomed by taxpayers at the local level, particularly those who, at this point, are unfairly burdened with the costs of trying to keep up a school system that deserves the support of all levels of government in our country. Mr. President, I have several documents from the Department of Education that I would like to have printed in the Record. I have the letter of transmittal from the Secretary of Education to the President of the Senate, a fact sheet regarding the correlation between building conditions and student achievement, and seven case studies assessing the impact this legislation would have on communities across America. I ask unanimous consent that these materials, as well as the text of the bill itself, be printed at this point in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: S. 456 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the ``Partnership to Rebuild America's Schools Act of 1997.'' TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM TABLE OF CONTENTS SEC. 101. The table of contents for this Act is as follows: TITLE I--SCHOOL CONSTRUCTION ASSISTANCE PROGRAM Sec. 101. Table of contents. Part 1--Program Authorized Sec. 102. Findings and purpose. Sec. 103. Definitions. Sec. 104. Funds appropriated. Sec. 105. Allocation of funds. Part 2--Grants to States Sec. 111. Allocation of funds. Sec. 112. Eligible State agency. Sec. 113. Allowable uses of funds. Sec. 114. Eligible construction projects; period for initiation. Sec. 115. Selection of localities and projects. Sec. 116. State applications. Sec. 117. Amount of Federal subsidy. Sec. 118. Separate funds or accounts; prudent investment. Sec. 119. State reports. Part 3--Direct Grants to Local Educational Agencies Sec. 121. Eligible local educational agencies. Sec. 122. Grantees. Sec. 123. Allowable uses of funds. Sec. 124. Eligible construction projects; redistribution. Sec. 125. Local applications. Sec. 126. Formula grants. Sec. 127. Competitive grants. Sec. 128. Amount of Federal subsidy. Sec. 129. Separate funds or accounts; prudent investment. Sec. 130. Local reports. TITLE II--GENERAL PROVISIONS Sec. 201. Technical employees. Sec. 202. Wage rates. Sec. 203. No liability of Federal Government. Sec. 204. Consultation with Secretary of the Treasury. Part 1--Program Authorized findings and purpose Sec. 102. (a) Findings.--The Congress finds as follows: (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) School infrastructure problems exist across the country, but are most severe in central cities and in schools with high proportions of poor and minority children. (3) 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. (4) 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. (5) 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 the poorest communities have had the greatest difficulty meeting this need. (6) 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. definitions Sec. 103. Except as otherwise provided, as used in this Act, the following terms have the following meanings: (1) Charter school.--The term ``charter school'' has the meaning given that term in section 10306(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8066(1)). (2) Community school.--The term ``community school'' means a school, or part of a school, that serves as a center for after-school and summer programs and the 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. (3)(A) Construction.--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. (4) 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)). (5) 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 [[Page S2419]] (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. (6) Secretary.--The term ``Secretary'' means the Secretary of Education. (7) State.--The term ``State'' means each of the 50 States and the Commonwealth of Puerto Rico. (8) 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)). funds appropriated Sec. 104. There are appropriated $5,000,000,000 for the purpose of carrying out this Act, which shall be available for obligation by the Secretary of Education from October 1, 1997 until September 30, 2001. allocation of funds Sec. 105. (a) Reservation for the Secretary of the Interior and the Outlying Areas.--(1) The Secretary shall reserve up to two percent of the funds appropriated by section 104 to-- (A) provide assistance to the Secretary of the Interior, which the Secretary of the Interior shall use for the school construction priorities described in section 1125(c) of the Education Amendment of 1978 (25 U.S.C. 2005(c)); and (B) make grants to America 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 paragraph (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. (b) Allocation of Remaining Funds.--Of the remaining funds appropriated by section 104-- (1) 50 percent shall be used for formula grants to States under section 111; (2) 35 percent shall be used for direct formula grants to local educational agencies under section 126; and (3) 15 percent shall be used for competitive grants to local educational agencies under section 127. Part 2--Grants to States allocation of funds Sec. 111. (A) Formula Grants to States.--Subject to subsection (b), the Secretary shall allocate the funds available under section 105(b)(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 126 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 State under subsection (a) and to local educational agencies under section 126, the percentage allocated to a State under this section and to localities in the State under section 126 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). eligible state agency Sec. 112. The Secretary shall award each State's grant to the State agency, such as a State educational agency, a State school construction agency, or a State bond bank, that the Governor, with the agreement of the chief State school officer, designates as best able to administer the grant. allowable uses of funds Sec. 113. Each State shall use its grant under this part only for one 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. eligible construction projects; period for initiation Sec. 114 (a) Eligible Projects.--States and their subgrantees may use funds under this part, 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 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 charter schools and community schools. (b) Period for Initiation of Project.--(1) Each State shall use its grant under this part 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 part 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 part. (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 part, the Secretary may reallocate all or part of those funds, including any interest earned by the State on those funds, to one or more other States that are making satisfactory progress. selection of localities and projects Sec. 115. (a) Priorities.--In determining which localities and activities to support with grant funds, each State shall give the highest priority to-- (1) localities with the greatest needs, as demonstrated by inadequate educational facilities, coupled with a low level of resources available to meet school construction needs; and (2) localities that will achieve the greatest leveraging effect on school construction from assistance under this part. (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 part: (1) The 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 Act. (6) The receipt by local educational agencies in the State of grants under part 3, except that a local educational agency is not ineligible for a subgrant under this part solely because it receives such a grant. state applications Sec. 116. (a) Application Required.--A State that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The State agency designated under section 112 shall develop the State's application under this part only after broadly consulting with the State board of education, and representatives of local school boards, school administrators, the business community, parents, and teachers in the State about the best means of carrying out this part. (2) If the State educational agency is not the State agency designated under section [[Page S2420]] 112, the designated agency shall consult with the State educational agency and obtain its approval before submitting the State's application. (c) State Survey.--(1) Before submitting the State's application, the State agency designated under section 112, with the involvement of local school officials and experts in building construction and management, shall survey the need throughout the State (including in localities receiving grants under part 3) 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 part. (d) Application Contents.--Each State application under this part shall include-- (1) an identification of the State agency designated by the Governor under section 112 to receive the State's grant under this party; (2) a summary of the results of the State's survey of its school facility needs, as described in subsection (c); (3) a description of how the State will implement its program under this part; (4) 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; (5)(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 117(a), to each local project that the State will support; (6) a description of how the State will ensure that the requirements of this part are met by subgrantees under this part; (7) 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 part; (8) 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 part, and not to supplant those funds; (9) an assurance that, during the four-year period beginning with the year the State receives its grant, the combined expenditures for school construction by the State and the localities that benefit from the State's program under this part (which at the State's option, may include private contributions) will be at least 125 percent of those combined expenditures for that purpose for the four preceding years; and (10) 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)(9) 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 a particularly high level of school construction expenditures during the previous four years. AMOUNT OF FEDERAL SUBSIDY Sec. 117. (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 part, 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 cost 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 one 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 part 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 part, 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). SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT Sec. 118. (a) Separate Funds or Accounts Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 part. (b) Prudent Investment Required.--Each State that receives a grant, and each recipient of a subgrant under this part, 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 (2) Notwithstanding section 6503 of title 31, United States Code or any other law, use the proceeds of that investment to carry out this part. state reports Sec. 119. (a) Reports Required.--(1) Each State receiving a grant under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the State educational agency is not the State agency designated under section 112, the State's report shall include the approval of the State educational agency or its comments on the report. (b) Contents.--Each report shall-- (1) describe the State's implementation of this part, including how the State has met the requirements of this part; (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 grant under this part. (2) Each State shall submit an annual report for each of the three 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. Part 3--Direct Grants to Local Educational Agencies eligible local educational agencies Sec. 121. (a) Eligible Agencies.--Except as provided in subsection (b), the local educational agencies that are eligible to receive formula grants under section 126 and competitive grants under section 127 from the Secretary 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 part, the local educational agencies for Hawaii and the Commonwealth of Puerto Rico are not eligible local educational agencies. grantees Sec. 122. For each local educational agency described in section 121(a) for which an approvable application is submitted, the Secretary shall make any grant under this part 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 part. allowable uses of funds Sec. 123. Each grantee under this part shall use its grant only for one or more of the following activities to reduce the cost of financing eligible school construction projects described in section 124: (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. eligible construction projects; redistribution Sec. 124. (a) Eligible Projects.--A grantee under this part may use its grant, in accordance with section 123, 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 [[Page S2421]] 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 part, the Secretary may redistribute all or part of those funds, and any interest earned by that agency on those funds, to one or more other local educational agencies that are making satisfactory progress. local applications Sec. 125. (a) Application Required.--A local educational agency, or an alternative agency described in section 122 (both referred to in this part as the ``local agency''), that wishes to receive a grant under this part shall submit an application to the Secretary, in the manner the Secretary may require, not later than two years after the date of enactment of this Act. (b) Development of Application.--(1) The local agency shall develop the local application under this part only after broadly consulting with parents, administrators, teachers, the business community, and other members of the local community about the best means of carrying out this part. (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 part. (d) Application Contents.--Each local application under this part shall include-- (1) an identification of the local agency to receive the grant under this part; (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 part; (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 128(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 part 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 part, and not to supplant those funds; (10) an assurance that, during the four-year period beginning with the year the local educational agency receives its grant, its expenditures for school construction (which, at that agency's option, may include private contributions) will be at least 125 percent of its expenditures for that purpose for the four 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 four years. formula grants Sec. 126. (a) Allocations.--The Secretary shall allocate the funds available under section 105(b)(2) to the local educational agencies identified under section 121(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). competitive grants Sec. 127. (a) Grants Authorized.--The Secretary shall use funds available under section 105(b)(3) to make additional grants, on a competitive basis, to recipients of formula grants under section 126. (b) Additional Application Materials.--Any eligible applicant under section 126 that wishes to receive additional funds under this section shall include in its application under section 125 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) Information on the current financial effort the applicant is making for elementary and secondary education, including support from private sources, relative to its resources. (4) 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 four years. (5) A description of the energy efficiency and the effect on the environment of the projects that the applicant will undertake, both with its grant under this section and its grant under section 126, and of the extent to which those projects will use cost-efficient architectural design. (6) Other information that the Secretary may require. (c) Selection of Grantees.--The Secretary shall select grantees under this section on the basis of criteria, consistent with the purpose of this Act, that the Secretary may establish, which shall include-- (1) the relative need of applicants, as demonstrated by inadequate educational facilities and a low level of resources to meet their school construction needs; (2) the commitment of applicants to meet their school construction needs and the leveraging effect that assistance under this part would have, as demonstrated by the additional resources that they will provide, from non-Federal sources, to meet those needs, in accordance with subsection (b)(4). amount of federal subsidy Sec. 128. (a) Amount of Federal Subsidy.--For each construction project assisted under this part, the Secretary shall determine the amount of the Federal subsidy in accordance with section 117(a). (b) Non-Federal Share.--A grantee under this part 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). separate funds or accounts; prudent investment Sec. 129. (a) Separate Funds or Accounts Required.--Each grantee under this part 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 part. (b) Prudent Investment Required.--Each granteee under this part 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 part. local reports Sec. 130. (a) Reports Required.--(1) Each grantee under this part shall report to the Secretary on its activities under this part, in the form and manner the Secretary may prescribe. (2) If the local educational agency is not the grantee under this part, 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 part, including how it has met the requirements of this part; (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 its grant under this part. (2) Each grantee shall submit an annual report for each of the three years after submitting its first report, and subsequently shall submit periodic reports as long as it is using grant funds. TITLE II--GENERAL PROVISIONS technical employees Sec. 201. For the purpose 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 [[Page S2422]] to classification and General Schedule pay rates. wage rates Sec. 202. (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 semi-colon and ``and''; and (3) by adding at the end thereof the following new paragraph: ``(7) The Partnership Rehabilitate America's Schools Act of 1997.''. NO LIABILITY OF FEDERAL GOVERNMENT Sec. 203. (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. Consultation with Secretary of the Treasury Sec. 204. The Secretary shall consult with the Secretary of the Treasury in carrying out this Act. ____ U.S. Department of Education, The Secretary March 13, 1997. Hon. Albert Gore, Jr., President of the Senate, Washington, DC. Dear Mr. President: Enclosed for consideration of the Congress is the Partnership to Rebuild America's Schools Act of 1997, a bill that would provide a one-time Federal stimulus to help States and localities bring all public school facilities up to acceptable standards and build the additional schools needed to serve increasing enrollments. Also enclosed is a section-by-section analysis summarizing the contents of the bill. I am sending an identical letter to the Speaker of the House. Mr. President, a number of factors have led the Administration to conclude that the Federal Government must assist the States and localities in providing the school facilities that our children will need if they are to achieve to challenging educational standards. First of all, recent General Accounting Office reports have documented the deplorable condition of too many of the Nation's schools. According to the GAO, one-third of all schools, serving more than 14 million students, need extensive repair or renovation of one or more buildings. Students are attending schools that have antiquated heating, plumbing, and electrical systems and even fail to meet local health and safety codes. Some schools do not provide full access to individuals with disabilities, and many do not have the infrastructure needed to adopt new educational technologies. All of these problems are most prevalent in urban districts. In addition to making repairs and renovations to their existing schools, many districts will have to build new schools in order to accommodate increasing enrollments. In fact, the Department has projected that States and localities will need to build 6,000 more schools in order to serve an additional 2.9 million students who will enroll in the next decade. This need will put further pressure on already strained school budgets. Clearly, school construction is, and will remain, primarily a State and local responsibility, and the vast majority of facilities needs will have to be met with non-Federal resources. Unfortunately, however, for a variety of reasons State and local governments have not been making substantial progress even in clearing the existing backlog of construction needs. The Federal Government can play a crucial role in addressing this problem by providing limited resources, on a one-time basis, in a manner that spurs States, communities, and even the private sector to bear the burden and provide adequate school facilities for all children. That is the purpose of the enclosed legislation. In order to have maximum impact, our bill would leverage State, local, and private support for school construction, rather than paying for 100 percent of the cost of construction projects. The proposal would provide interest subsidies for school construction bonds, or other financing mechanisms, to States and major urban school districts. States would, in turn, pass these subsidies along to localities, use them to reduce the servicing costs