Patterns of state aid for capital outlay and debt services range from full state assumption to no state participation. This paper, one of two related documents, examines current issues in state aid for capital outlay and then details five schemes employed by states that participated in the financing of local school building construction. The five schemes, which are accompanied by a brief description of each state program, include full state funding, state and local sharing, state flat grants, state equalizing grants, and state loans. The final section of the paper analyzes current essential practices for the development of alternative models when designing capital outlay programs. These include determination of need, allocation procedures, use of proceeds, and source of funds. (Author/LD)