article: SECTION 1. LOAN PROGRAM FOR SCHOOL FACILITIES IMPROVEMENT. Title XII of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8501 et seq.) is amended to read as follows: ``TITLE XII--SCHOOL FACILITIES IMPROVEMENT ACT ``SEC. 12001. FINDINGS. ``The Congress finds the following: ``(1) According to a 1991 survey conducted by the American Association of School Administrators, 74 percent of all public school buildings in the United States need to be replaced. ``(2) Almost one-third of such buildings were built prior to World War II. ``(3) It is estimated that 1 of every 4 public school buildings in the United States is in inadequate condition, and of such buildings, 61 percent need maintenance or major repairs, 43 percent are obsolete, 42 percent contain environmental hazards, 25 percent are overcrowded, and 13 percent are structurally unsound. ``(4) According to a 1996 General Accounting Office report, 14,000,000 students attend schools in which 1 or more school buildings (original, additional, or temporary) are in need of extensive repair or replacement. ``(5) Large numbers of local educational agencies have difficulties securing financing for school facility improvement. ``SEC. 12002. PURPOSE. ``The purpose of this title is to leverage limited Federal funds to enable local educational agencies to finance the costs associated with the improvement of school facilities within their jurisdiction. ``SEC. 12003. FEDERAL ASSISTANCE IN THE FORM OF LOANS. ``(a) Authority and Conditions for Loans.--To assist local educational agencies in the construction of schools to replace schools which are 50 years of age or older, or in the reconstruction or renovation of schools which are 50 years of age or older, the Secretary may make loans of funds to such agencies for the construction, reconstruction, or renovation of such schools. Such assistance shall only be provided-- ``(1) to local educational agencies eligible for grants under section 1124A, schools located on Indian reservations, or local educational agencies eligible for payments under sections 8003 and 8004; and ``(2) if the Secretary finds that such constructions will be undertaken in an economical manner, and that any such construction, reconstruction or renovation is not or will not be of elaborate or extravagant design or materials. ``(b) Priorities.-- ``(1) In general.--In approving loans under this title, the Secretary shall consider-- ``(A) the difficulty of the applicant in securing affordable financing from other sources; ``(B) the threat the condition of the physical plant poses to the safety and well-being of students; ``(C) the demonstrated need for the construction, reconstruction, or renovation as based on the condition of the facility; and ``(D) the age of the facility to be renovated or replaced. ``(2) Preference.--In approving loans under this title, the Secretary shall give preference to applicants from States that have made a loan to the applicant in an amount not less than 25 percent of the amount of the loan amount requested in the application and for the purpose described in the application. ``(c) Amount and Conditions of Loans.--A loan to a local educational agency-- ``(1) may be in an amount not exceeding the total development cost of the facility, as determined by the Secretary; ``(2) shall be secured in such manner, as may be determined by the Secretary; ``(3) shall be repaid within 30 years; and ``(4) shall bear interest at a rate, determined by the Secretary, that will cover the cost (as defined in section 502 of the Federal Credit Reform Act of 1990) of the loan, and the administrative cost to the Federal Government of the loan. ``SEC. 12004. FEDERAL ASSISTANCE IN THE FORM OF DEBT GUARANTEES. ``(a) Authority and Conditions for Debt Guarantees.--To assist local educational agencies in the construction of schools to replace schools which are 50 years of age or older, or in the reconstruction or renovation of schools which are 50 years of age or older, the Secretary may guarantee and make commitments to guarantee eligible debt instruments issued by such agencies for the construction, reconstruction, or renovation of such schools. Such assistance shall only be provided-- ``(1) to local educational agencies eligible for grants under section 1124A, schools located on Indian reservations, or local educational agencies eligible for payments under sections 8003 and 8004; and ``(2) if the Secretary finds that such constructions will be undertaken in an economical manner, and that any such construction, reconstruction or renovation is not or will not be of elaborate or extravagant design or materials. ``(b) Priorities.-- ``(1) In general.--In approving debt guarantees under this title, the Secretary shall consider-- ``(A) the difficulty of the applicant in securing affordable financing guarantees from other sources; ``(B) the threat the condition of the physical plant poses to the safety and well-being of students; ``(C) the demonstrated need for the construction, reconstruction, or renovation as based on the condition of the facility; and ``(D) the age of the facility to be renovated or replaced. ``(2) Preference.--In approving debt guarantees under this title, the Secretary shall give preference to applicants from States that have made a loan to the applicant for the purpose described in the application and in an amount not less than 25 percent of the aggregate principal amount of the debt instruments to be guaranteed. ``(c) Amount and Conditions of Guarantees.--A debt guarantee to a local educational agency-- ``(1) may be in an amount not exceeding the total development cost of the facility, as determined by the Secretary; ``(2) shall be secured in such manner, as may be determined by the Secretary; and ``(3) shall be made only with respect to debt instruments that-- ``(A) have a maturity of 30 years; ``(B) bear interest at a maximum rate, determined by the Secretary taking into account the interest rate paid by the Federal Government with respect to Federal debt instruments of a similar nature; and ``(C) otherwise are in such form and denomination, and are subject to such other conditions, as the Secretary shall prescribe. ``(d) Full Faith and Credit.--The full faith and credit of the United States is hereby pledged to the payment of all guarantees made under this section. Any such guarantee made by the Secretary shall be conclusive evidence of the eligibility of the debt instrument for such guarantee with respect to principal and interest, and the validity of any such guarantee so made shall be incontestable in the hands of a holder of the guaranteed debt instrument. ``SEC. 12005. GENERAL PROVISIONS. ``(a) Budget and Accounting.--In the performance of, and with respect to, the functions, powers, and duties under this title, the Secretary, notwithstanding the provisions of any other law, shall-- ``(1) prepare annually and submit a budget program as provided for wholly owned Government corporations by chapter 91 of title 31, United States Code; and ``(2) maintain a set of accounts which shall be audited by the Comptroller General in accordance with the provisions of chapter 35 of title 31, United States Code. ``(b) Use of Funds.--Funds made available to the Secretary pursuant to the provisions of this title shall be deposited in a checking account or accounts with the Treasurer of the United States. Receipts and assets obtained or held by the Secretary in connection with the performance of functions under this title, and all funds available for carrying out the functions of the Secretary under this title (including appropriations therefor, which are hereby authorized), shall be available, in such amounts as may from year to year be authorized by the Congress, for the administrative expenses of the Secretary in connection with the performance of such functions. ``(c) Legal Powers.--In the performance of, and with respect to, the functions, powers, and duties under this title, the Secretary, notwithstanding the provisions of any other law, may-- ``(1) prescribe such rules and regulations as may be necessary to carry out the purposes of this title; ``(2) sue and be sued; ``(3) foreclose on any property or commence any action to protect or enforce any right conferred upon the Secretary by any law, contract, or other agreement, and bid for and purchase at any foreclosure or any other sale any property in connection with which the Secretary has made a loan pursuant to this title; ``(4) in the event of any such acquisition, notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and otherwise deal with, such property, but any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property; ``(5) sell or exchange at public or private sale, or lease, real or personal property, and sell or exchange any securities or obligations, upon such terms as the Secretary may fix; ``(6) obtain insurance against loss in connection with property and other assets held; and ``(7) include in any contract or instrument made pursuant to this title such other covenants, conditions, or provisions as may be necessary to assure that the purposes of this title will be achieved. ``(d) Contracts for Supplies or Services.--Section 3709 of the Revised Statutes shall not apply to any contract for services or supplies on account of any property acquired pursuant to this title if the amount of such contract does not exceed $1,000. ``(e) Applicability of Government Corporation Control Act.--The provisions of section 9107(a) of title 31, United States Code, which are applicable to corporations or agencies subject to chapter 91 of such title, shall also be applicable to the activities of the Secretary under this title. ``(f) Labor Standards.-- ``(1) Laborers and mechanics.--All laborers and mechanics employed by contractors or subcontractors in the performance of any contract or subcontract for the repair, renovation, alteration, or construction, including painting or decorating, of any building or work that is financed in whole or in part by a grant, loan, or debt guarantee under this title, shall be paid wages not less than those determined by the Secretary of Labor in accordance with the Act of March 3, 1931 (Davis Bacon Act), as amended. The Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Number 14 of 1950 (15 FR 3176; 64 Stat. 1267) and section 276c of title 40. ``(2) Exceptions.--The requirements of this subsection shall not apply to an individual-- ``(A) who volunteers-- ``(i) to perform a service directly to a local educational agency for civic, charitable, or humanitarian reasons, without promise, expectation, or receipt of compensation for services rendered, other than expenses, reasonable benefits, or a nominal fee (as defined in subsection (b) of this section), but solely for the personal purpose or pleasure of the individual; and ``(ii) to provide such service freely and without pressure or coercion, direct or implied, from any employer; ``(B) whose contribution of service is not for the direct or indirect benefit of any contractor otherwise performing or seeking to perform work on the same project for which the individual is volunteering; ``(C) who is not employed by and does not provide services to a contractor or subcontractor at any time on any contract or subcontract for the repair, renovation, alteration, or construction, including painting or decorating, of any building or work that is financed in part by a loan, or debt guarantee under this subchapter, for which the individual is volunteering; and ``(D) who is not otherwise employed by the same local educational agency to perform the same type of services as those for which the individual proposes to volunteer. ``(3) Payments to volunteers.--Payments of expenses, reasonable benefits, or a nominal fee may be provided to volunteers described in paragraph (2) of this subsection only in accordance with regulations issued by the Secretary of Labor. In prescribing the regulations, the Secretary shall take into consideration criteria such as the total amount of payments made (relating to expenses, benefits, or fees) in the context of the economic realities. The regulations shall include provisions that provide that-- ``(A) a payment for an expense may be received by a volunteer for items such as uniform allowances, protective gear and clothing, reimbursement for approximate out-of-pocket expenses, or for the cost or expense of meals and transportation; ``(B) a reasonable benefit may include the inclusion of a volunteer in a group insurance plan (such as a liability, health, life, disability, or worker's compensation plan) or pension plan, or the awarding of a length of service award; and ``(C) a nominal fee may not be used as a substitute for compensation and may not be connected to productivity. The decision as to what constitutes a nominal fee for purposes of subparagraph (C) shall be determined based on the context of the economic realities of the situation involved and shall be made by the Secretary of Labor. ``(4) Determination of payment.--For purposes of paragraph (2) of this subsection, in determining whether an expense, benefit, or fee described in such subsection may be paid to volunteers in the context of the economic realities of the particular situation, the Secretary of Labor may not permit any such expense, benefit, or fee that has the effect of undermining labor standards by creating downward pressure on prevailing wages in the local construction industry. ``(g) Limitations.-- ``(1) Successive loans.--No loan or bond guarantee shall be made under this title to any local educational agency until 5 years after the date on which a previous loan or bond guarantee to that agency was made under this title, unless the loan is intended to be used to construct or reconstruct a facility damaged as a result of a natural disaster, as declared by the President. ``(2) Schools in one state.--Not more than 12.5 percent of the amount of the funds annually provided for in this title in the form of loans or bond guarantees shall be made available to educational institutions within any one State. ``SEC. 12006. DEFINITION. ``The term `school' is defined as public structures suitable for use as classrooms, laboratories, libraries, and related facilities, the primary purpose of which is the instruction of elementary and secondary school students. ``SEC. 12007. AUTHORIZATION OF APPROPRIATIONS. ``There are authorized to be appropriated to carry out this title, $200,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years.''.
summary: Amends the Elementary and Secondary Education Act of 1965 to: (1) revise and rename title XII the School Facilities Improvement Act; and (2) establish a loan program and a bond guarantee program to assist local educational agencies in the construction, reconstruction, and renovation of public elementary and secondary schools which are 50 years of age or older. Sets forth program eligibility requirements, priorities, preferences, and amounts and conditions of such loans and debt instrument guarantees. Authorizes appropriations.