20 USC 7221c - Facilities financing assistance

U.S Code last checked for updates: May 18, 2024

§ 7221c.

Facilities financing assistance

(a)

Grants to eligible entities

(1)

In general

(2)

Eligible entity defined

For the purposes of this section, the term “eligible entity” means—

(A)

a public entity, such as a State or local governmental entity;

(B)

a private nonprofit entity; or

(C)

a consortium of entities described in subparagraphs (A) and (B).

(b)

Grantee selection

(c)

Grant characteristics

(d)

Applications

(1)

In general

(2)

Contents

An application submitted under paragraph (1) shall contain—

(A)

a statement identifying the activities that the eligible entity proposes to carry out with funds received under subsection (a), including how the eligible entity will determine which charter schools will receive assistance, and how much and what types of assistance charter schools will receive;

(B)

a description of the involvement of charter schools in the application’s development and the design of the proposed activities;

(C)

a description of the eligible entity’s expertise in capital market financing;

(D)

a description of how the proposed activities will leverage the maximum amount of private-sector financing capital relative to the amount of government funding used and otherwise enhance credit available to charter schools, including how the eligible entity will offer a combination of rates and terms more favorable than the rates and terms that a charter school could receive without assistance from the eligible entity under this section;

(E)

a description of how the eligible entity possesses sufficient expertise in education to evaluate the likelihood of success of a charter school program for which facilities financing is sought; and

(F)

in the case of an application submitted by a State governmental entity, a description of the actions that the eligible entity has taken, or will take, to ensure that charter schools within the State receive the funding that charter schools need to have adequate facilities.

(e)

Charter school objectives

An eligible entity receiving a grant under subsection (a) shall use the funds deposited in the reserve account established under subsection (f) to assist one or more charter schools to access private-sector capital to accomplish one or more of the following objectives:

(1)

The acquisition (by purchase, lease, donation, or otherwise) of an interest (including an interest held by a third party for the benefit of a charter school) in improved or unimproved real property that is necessary to commence or continue the operation of a charter school.

(2)

The construction of new facilities, or the renovation, repair, or alteration of existing facilities, necessary to commence or continue the operation of a charter school.

(3)

The predevelopment costs required to assess sites for purposes of paragraph (1) or (2) and that are necessary to commence or continue the operation of a charter school.

(f)

Reserve account

(1)

Use of funds

To assist charter schools in accomplishing the objectives described in subsection (e), an eligible entity receiving a grant under subsection (a) shall, in accordance with State and local law, directly or indirectly, alone or in collaboration with others, deposit the funds received under subsection (a) (other than funds used for administrative costs in accordance with subsection (g)) in a reserve account established and maintained by the eligible entity for this purpose. Amounts deposited in such account shall be used by the eligible entity for one or more of the following purposes:

(A)

Guaranteeing, insuring, and reinsuring bonds, notes, evidences of debt, loans, and interests therein, the proceeds of which are used for an objective described in subsection (e).

(B)

Guaranteeing and insuring leases of personal and real property for an objective described in subsection (e).

(C)

Facilitating financing by identifying potential lending sources, encouraging private lending, and other similar activities that directly promote lending to, or for the benefit of, charter schools.

(D)

Facilitating the issuance of bonds by charter schools, or by other public entities for the benefit of charter schools, by providing technical, administrative, and other appropriate assistance (including the recruitment of bond counsel, underwriters, and potential investors and the consolidation of multiple charter school projects within a single bond issue).

(2)

Investment

(3)

Reinvestment of earnings

(g)

Limitation on administrative costs

(h)

Audits and reports

(1)

Financial record maintenance and audit

(2)

Reports

(A)

Grantee annual reports

(B)

Contents

Each annual report submitted under subparagraph (A) shall include—

(i)

a copy of the most recent financial statements, and any accompanying opinion on such statements, prepared by the independent public accountant reviewing the financial records of the eligible entity;

(ii)

a copy of any report made on an audit of the financial records of the eligible entity that was conducted under paragraph (1) during the reporting period;

(iii)

an evaluation by the eligible entity of the effectiveness of its use of the Federal funds provided under subsection (a) in leveraging private funds;

(iv)

a listing and description of the charter schools served during the reporting period, including the amount of funds used by each school, the type of project facilitated by the grant, and the type of assistance provided to the charter schools;

(v)

a description of the activities carried out by the eligible entity to assist charter schools in meeting the objectives set forth in subsection (e); and

(vi)

a description of the characteristics of lenders and other financial institutions participating in the activities carried out by the eligible entity under this section (excluding subsection (k)) during the reporting period.

(C)

Secretarial report

(i)

No full faith and credit for grantee obligation

(j)

Recovery of funds

(1)

In general

The Secretary, in accordance with chapter 37 of title 31, shall collect—

(A)

all of the funds in a reserve account established by an eligible entity under subsection (f)(1) if the Secretary determines, not earlier than 2 years after the date on which the eligible entity first received funds under subsection (a), that the eligible entity has failed to make substantial progress in carrying out the purposes described in subsection (f)(1); or

(B)

all or a portion of the funds in a reserve account established by an eligible entity under subsection (f)(1) if the Secretary determines that the eligible entity has permanently ceased to use all or a portion of the funds in such account to accomplish any purpose described in subsection (f)(1).

(2)

Exercise of authority

(3)

Procedures

(4)

Construction

(k)

Per-pupil facilities aid program

(1)

Definition of per-pupil facilities aid program

In this subsection, the term “per-pupil facilities aid program” means a program in which a State makes payments, on a per-pupil basis, to charter schools to provide the schools with financing—

(A)

that is dedicated solely to funding charter school facilities; or

(B)

a portion of which is dedicated for funding charter school facilities.

(2)

Grants

(A)

In general

(B)

Period

(C)

Federal share

The Federal share of the cost described in subparagraph (A) for a per-pupil facilities aid program shall be not more than—

(i)

90 percent of the cost, for the first fiscal year for which the program receives assistance under this subsection;

(ii)

80 percent for the second such year;

(iii)

60 percent for the third such year;

(iv)

40 percent for the fourth such year; and

(v)

20 percent for the fifth such year.

(D)

State share

(E)

Multiple grants

(3)

Use of funds

(A)

In general

(B)

Evaluations; technical assistance; dissemination

(C)

Supplement, not supplant

(4)

Requirements

(A)

Voluntary participation

(B)

State law

(i)

In general

To be eligible to receive a grant under this subsection, a State shall establish or enhance, and administer, a per-pupil facilities aid program for charter schools in the State, that—

(I)

is specified in State law; and

(II)

provides annual financing, on a per-pupil basis, for charter school facilities.

(ii)

Special rule

(5)

Applications

(Pub. L. 89–10, title IV, § 4304, as added Pub. L. 114–95, title IV, § 4301(1), Dec. 10, 2015, 129 Stat. 2004.)

cite as: 20 USC 7221c