(b) Except as provided in section 106, the Commissioner shall issue, to each State educational agency furnishing a statement in accordance with subsection (a), a commitment reserving, out of the State's allotment, for each project included in the statement, the amount requested by the State educational agency for that project. The Commissioner shall change any amount so reserved upon request of the State educational agency and receipt of an amended statement from such agency, but only to the extent the change is not inconsistent with other provisions of this title. Upon certification by the State educational agency that the financing of the remainder of the cost of construction of the project has been arranged, the Commissioner shall pay the amount reserved to the State educational agency in such installiments as he may determine. Funds so paid shall be used exclusively to meet the cost of constructing the project for which the amount was reserved.

(c) In lieu of certification by a State educational agency pursuant to subparagraph (B) of subsection (a) (3) with respect to a project, the Commissioner may accept certification by such agency that an amount equivalent to the State share of the payment with respect to such project has been arranged through provision for State payments toward the debt service on the loan (if any) to help finance part of the construction of such project, provision for waiver of payments due the State or any agency thereof with respect to such project, or other provision which, in the judgment of the Commissioner, is (or is estimated to be) equivalent to such State share.

(d) If any project for which one or more payments have been made under this section is abandoned or is not completed within a reasonable period determined under regulations of the Commissioner, the State to which such payments were made shall repay to the United States, for deposit in the Treasury of the United States as miscellaneous receipts, the amount of such payments or such lessor amount as may be reasonable under the circumstances (as determined by agreement of the parties or by action brought in the Federal district court for the district in which such project is located).

MATCHING BY STATES

SEC. 106. (a) The Commissioner may issue or modify a commitment under section 105 with respect to any project only if the amount to be reserved under the commitment, plus any amounts paid or to be paid under other commitments previously issued under this title to the same State educational agency, does not exceed the Federal share for such State of the sum of (1) the Federal-State grant toward the cost of constructing such project and (2) the total of the FederalState grants toward the cost of constructing the projects for which such other commitments have been issued. Until actual construction costs are available,

cost determinations under this section shall be made on the basis of the estimates furnished under section 105 (a) and revised estimates furnished in compliance with section 104 (h).

(b) For purposes of this title

(1) The "Federal share" for any State is the allotment ratio for such State, except that in no case shall it be less than .33% or more than .66%.

(2) The "Federal-State grant" for any project means the total of the Federal and State funds (including the equivalent thereof as provided in section 105(c)) paid or to be paid under the State plan toward the cost of construction of such project.

(3) The "State share" of a Federal-State grant with respect to any project is the difference between such grant and the amount paid to the State with respect to such project under this title.

(c) Notwithstanding the preceding provisions of this title, the Commissioner may, during the fiscal year ending June 30, 1960, issue or modify under section 105 a commitment of funds from a State's allotment for such year if the amount to be reserved under the commitment plus any amounts paid or to be paid under other commitments previously issued under this title to the same State educational agency, does not exceed the Federal share for such State of the sum of (1) the cost of constructing such project and (2) the total cost of constructing the projects for which such other commitments have been issued, and if the State educational agency certifies that the remainder of the cost of constructing the project in question will be paid from funds other than funds paid by the Commissioner under the Act of September 23, 1950 (Public Law 815, Eighty-first

Congress), as amended.

The cost determinations under this paragraph shall be made on the same basis as is provided in subsection (a). (d) In the case of any project to which subsection (c) is applicable—

(1) the amount of the Federal share and the amount of any other payments toward the cost of constructing such project shall be disregarded for purposes of determining under subsection (a) the amount of the commitment for any project which may be reserved during any fiscal year beginning after June 30, 1960;

(2) the statement required by section 105 (a) (2) shall be a statement of the amount of the reservation of funds requested with respect to such project instead of the amount of the "Federal-State grant";

(3) instead of the certification required under subparagraph (B) of section 105 (a) (3), the State shall certify that funds from State or local sources, or both, equal to the non-Federal share of the cost of construction will be available; and

(4) the requirement in section 104 (b) for standards and procedures assuring highest priority to certain local educational agencies shall be deemed met if such priority is assured subject to the matching requirements of this section.

LABOR STANDARDS

SEC. 107. (a) The Commissioner shall not make any payments under this title to assist in financing the construction of any school facilities project, except upon adequate assurance that all laborers and mechanics employed by contractors or subcontractors in the performance of work on such project will be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a 5), and will receive compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in any workweek in excess of eight hours in any workday or forty hours in the workweek, as the case may be.

(b) The Secretary of Labor shall have, with respect to the labor standards specified in subsection (a) of this section, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267), and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. 276c).

TITLE II-FEDERAL PURCHASE OF OBLIGATIONS OF SCHOOL

DISTRICTS

AUTHORITY TO PURCHASE; LIMITATIONS

SEC. 201. (a) In order to assist, as provided in this title, local educational agencies to finance the construction of needed school facilities, the Commissioner may purchase obligations of such local educational agencies pursuant to applications therefor filed under section 203 during the period beginning July 1, 1959, and ending June 30, 1963.

(b) (1) There are hereby authorized to be appropriated for the fiscal year beginning July 1, 1959, and the next three fiscal years, such sums, not to exceed an aggregate of $750,000,000, as may be necessary for the purchase of obligations as authorized by this title.

(2) The sums appropriated pursuant to paragraph (1) for any fiscal year shall be allocated by the Commissioner to the States on the basis of the schoolage population. The amount allocated to each State for a fiscal year shall bear the same ratio to the sums so appropriated for such year as the school-age population of such State bears to the school-age population of all the States.

(3) The total of the obligations of local educational agencies in a State purchased by the Commissioner pursuant to applications filed under section 203 during any fiscal year may not exceed the allocation to such State under this section for such year. The sums appropriated pursuant to paragraph (1) for any fiscal year shall, subject to the limitation in the preceding sentence, remain available for ninety days after the close of such year for purchases by the Commissioner pursuant to applications filed under section 203 during such year.

TERMS OF OBLIGATIONS

SEC. 202. (a) Obligations purchased under this title may be either general or special obligations of a local educational agency, shall be purchased at par or face value, shall include such provisions as may be agreed upon by the State

educational agency and the Commissioner, shall be repaid within a period of thirty years or less, and shall bear interest at a rate equal to the quarterly rate which the Secretary of the Treasury shall specify as applicable to the calendar quarter during which the application for purchase of such obligations is filed under section 203, plus one-half of 1 per centum.

(b) The quarterly rate applicable to each calendar quarter shall be determined by the Secretary of the Treasury by estimating the average yield to maturity, on the basis of daily closing market bid quotations of prices during the month preceding such calendar quarter, on all outstanding marketable obligations of the United States having a maturity date of fifteen or more years from the first day of such month, and by adjusting such estimated average yield to the nearest one-eighth of 1 per centum.

CONDITIONS TO PURCHASE OF OBLIGATIONS

SEC. 203. Obligations of a local educational agency may be purchased under this title only upon application by the State educational agency to the Commissioner stating the amount of the obligations which the Commissioner is being requested to purchase and certifying that—

(a) such local educational agency is, as evidenced by a public offering of such obligations, unable to obtain the funds necessary to finance the cost of construction of the school facilities involved from other sources upon reasonable terms and at the interest rate applicable to obligations purchased under this title;

(b) there is an opinion by a qualified attorney, a copy of which shall be submitted with the application, that such obligations have been legally authorized and are binding on such local educational agency;

(c) the school facilities to be constructed with the proceeds from the sale of the obligations are needed for current or reasonably anticipated enrollments, are consistent with any applicable State redistricting plans or policies, and will be undertaken in compliance with applicable State construction laws and standards;

(d) such local educational agency is entitled to priority over other local educational agencies in the State with pending requests for purchase of their obligations under this title (with respect to which obligations the requirements of paragraphs (a), (b), and (c) are met);

and including such additional information as may be necessary to make a reasonable showing that the local educational agency issuing the obligations is financially able to pay them as they become due. The priority under paragraph (d) of a local educational agency in any State shall be determined by the State educational agency in accordance with standards and procedures, established by the State and approved by the Commissioner, which are designed to assure reasonable opportunity for local educational agencies to request purchase of their obligations under this title and which take into account (1) relative financial resources (2) relative urgency of need for school facilities, determined according to conditions of overcrowding or lack of facilities, or use of unhealthful or hazardous facilities, and (3) relative difficulty in marketing their obligations at reasonable rates of interest. In the case of any State in which a State agency has exclusive responsibility for the financing of the construction of school facilities, the provisions of paragraph (d) shall be inapplicable.

DISPOSAL OF PAYMENTS

SEC. 204. Payments of principal and interest by local educational agencies on obligations purchased by the Commissioner under this title and the proceeds from the sale of exchange of any such obligations shall be deposited in the Treasury of the United States as miscellaneous receipts.

ADMINISTRATIVE PROVISIONS

SEC. 205. (a) The Commissioner, notwithstanding the provisions of any other law, may

(1) sell or exchange at public or private sale, upon such terms and at such prices as he max fix, any obligations purchased by him under this title; and

(2) subject to the specific limitations in this title and where necessary to protect the financial interest of the United States, consent to the modification

of any term of any obligation purchased or otherwise acquired by him, or any agreement entered into by him, under this title.

(b) Financial transactions of the Commissioner pursuant to this title, and vouchers approved by the Commissioner in connection with such financial transactions, shall be final and conclusive upon all officers of the Government; except that all such transactions shall be subject to audit by the General Accounting Office at such times and in such manner as the Comptroller General may by regulation prescribe.

TITLE III-FEDERAL CREDIT ASSISTANCE TO STATE
SCHOOL-FINANCING AGENCIES

AUTHORIZATION TO ENTER INTO AGREEMENTS

SEC. 301. The Commissioner is authorized, as provided in this title, to enter into agreements, on behalf of the United States, with State school-financing agencies for making advances to reserve funds established by such agencies to help assure payment of obligations issued to finance the construction of school facilities for use by local educational agencies.

BASIC CONDITIONS TO ENTERING INTO AGREEMENTS

SEC. 302. The Commissioner shall enter into an agreement with the State school-financing agency of any State only if—

(a) such agency is empowered to enter into an agreement with the Commissioner under this title and otherwise comply with the provisions of this title; and

(b) in States where the State school-financing agency is not the State educational agency, the governor of such State certifies to the Commissioner that methods for securing effective coordination between the two agencies have been provided.

ESTABLISHMENT OF RESERVE FUNDS

SEC. 303. (a) An agreement pursuant to this title shall provide that the State school-financing agency shall establish and thereafter maintain a basic reserve fund and a supplemental reserve fund with respect to each issue of obligations, which funds, so long as any such obligations remain outstanding, shall be held in trust for and irrevocably pledged to the payment and retirement of such obligations and for payments as provided in section 308.

(b) Where so provided in the agreement at the request of the State schoolfinancing agency, such basic reserve fund, or such fund and such supplemental reserve fund, may be established with respect to two or more issues of obligations; and in such case such issues shall, to the extent provided in the agreement, be regarded as a single issue of obligations.

SEC. 304. Such agreement shall provide for establishment of the basic reserve fund with respect to an issue of obligations on or before the date of delivery of any such obligations to the purchasers thereof, and for deposit by the State therein, upon establishment of such fund, of an amount equal to one-half of the maximum annual debt service on such obligations. The amounts so advanced, plus any amounts subsequently advanced by the State thereto, together with any interest thereon or increments thereof accrued, shall be known as the "State account".

FEDERAL ADVANCES TO BASIC RESERVE FUND

SEC. 305. (a) In the case of any State school-financing agency which has entered into an agreement as provided in this title with respect to an issue of obligations, the Commissioner shall advance to such State school-financing agency for deposit in the basic reserve fund for such issue an amount equal to onehalf of the maximum annual debt service on such obligations. Such advance shall be made on or before the date of delivery of any such obligations to the purchasers thereof. The advance so made, plus subsequent advances by the Commissioner, together with interest thereon or increments thereof accrued, shall be known as the "Federal account".

(b) If any funds are withdrawn in any year (other than the year in which occurs the latest maturity date of the obligations) from the Federal account in a basic reserve fund pursuant to an agreement under this title, the Commissioner shall make an additional advance to such account in an amount equal to that withdrawn.

(c) The faith of the United States is solemnly pledged to the payment of all advances contracted to be made to the Federal account in a basic reserve fund pursuant to this title.

(d) Advances by the Commissioner to the Federal account in a basic reserve fund, together with any other sums in such account, shall be invested, as provided in the agreement

(1) in interest-bearing securities of the United States or securities guaranteed as to both principal and interest by the United States; or

(2) in bonds or other obligations which are lawful investments for fiduciary, trust, and public funds of the United States.

PAYMENT TO SUPPLEMENTAL RESERVE FUND

SEC. 306. An agreement pursuant to this title shall provide for payment into the supplemental reserve fund established with respect to an issue of obligations of all sums collected for such purpose pursuant to section 309 (d) (2).

USE OF SUPPLEMENTAL AND BASIC RESERVE FUNDS

SEC. 307. The agreement pursuant to this title shall provide that if, after payment of the other expenses specified in section 309(d) (3) with respect to any school facilities, the payments for the use of such facilities and other funds available for the purpose for any year are insufficient to meet the annual debt service for such year on any issue of obligations

(a) the State school financing agency shall use the sums, if any, in the supplemental reserve fund established for such issue for meeting such debt service;

(b) if such sums are insufficient for this purpose, such agency shall use the sums available in the basic reserve fund established for such issue;

(c) withdrawals from the basic reserve fund for this purpose shall be equally divided between the State account and the Federal account in the fund, to the extent the balance in the State account is adequate therefor; and

(d) if such balance is not adequate, the amount of any remaining deficiency shall be withdrawn from the Federal account to the extent of any balance therein, except that the total of the withdrawals from such account with respect to such debt service may not exceed one-half of such debt service.

REPAYMENTS OF ADVANCES

SEC. 308. (a) An agreement under this title with respect to any issue of obligations shall provide that if, at the end of any year, the aggregate of the sums in the basic and supplemental reserve funds, including interest or other increments from the investment thereof, exceeds two times the maximum annual debt service on such issue for any of the ensuing years, the State school-financing agency shall pay to the Commissioner, first (and until all advances made by the Commissioner, subsequent to the original advance made by him, together with interest or other increment received from the investment of such advances, have been repaid), an amount which bears the same ratio to the amount of such excess as the sum of such subsequent advances bears to the sum of such advances plus the sum of any payments made by the State to the State account in the basic reserve fund in addition to the original amount of such State account; and second (and until all advances made by the Commissioner, together with interest or other increment received from the investment of such advances, have been repaid), an amount which bears the same ratio to the amount of such excess as the sum of all advances made by the Commissioner bears to such sum plus the sum of all payments made to the State account.

(b) Whenever any portion of an excess is repaid to the Commissioner under subsection (a), the remainder, if any, of such excess shall be paid to the State or left in the basic or supplemental reserve, or shall be disposed of in such other manner as may be provided, at the request of the State school-financing agency, by or pursuant to the agreement.