text: 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.''.
target: 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.
feat_title: To amend the Elementary and Secondary Education Act of 1965 to 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.