20 U.S.C. § 7221c — Facilities financing assistance

Page 1492 TITLE 20—EDUCATION § 7221c (B) if known, the extent to which such practices were adopted and implemented by such other public schools. (3) The number and amount of subgrants awarded under this section to carry out activi- ties described in each of subparagraphs (A) through (C) of subsection (b)(1). (4) A description of— (A) how the State entity complied with, and ensured that eligible applicants com- plied with, the assurances included in the State entity’s application; and (B) how the State entity worked with au- thorized public chartering agencies, and how the agencies worked with the management company or leadership of the schools that received subgrant funds under this section, if applicable. (Pub. L. 89–10, title IV, § 4303, as added Pub. L. 114–95, title IV, § 4301(1), Dec. 10, 2015, 129 Stat. 1995.) Editorial Notes PRIOR PROVISIONS A prior section 7221b, Pub. L. 89–10, title IV, § 4303, formerly title V, § 5203, as added Pub. L. 107–110, title V, § 501, Jan. 8, 2002, 115 Stat. 1790; renumbered title IV, § 4303, Pub. L. 114–95, title IV, § 4001(b)(2)(A), (B), (D)(iii), Dec. 10, 2015, 129 Stat. 1967, related to applications from State agencies, prior to repeal by Pub. L. 114–95, § 5, title IV, § 4301(1), Dec. 10, 2015, 129 Stat. 1806, 1993, effec- tive Dec. 10, 2015, except with respect to certain non- competitive programs and competitive programs. A prior section 4303 of Pub. L. 89–10 was renumbered section 8573, and is classified to section 7973 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Dec. 10, 2015, except with respect to certain noncompetitive programs and competitive pro- grams, see section 5 of Pub. L. 114–95, set out as an Ef- fective Date of 2015 Amendment note under section 6301 of this title. § 7221c. Facilities financing assistance (a) Grants to eligible entities (1) In general From the amount reserved under section 7221a(b)(1) of this title, the Secretary shall use not less than 50 percent to award, on a com- petitive basis, not less than 3 grants to eligi- ble entities that have the highest-quality ap- plications approved under subsection (d), after considering the diversity of such applications, to demonstrate innovative methods of helping charter schools to address the cost of acquir- ing, constructing, and renovating facilities by enhancing the availability of loans or bond fi- nancing. (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 The Secretary shall evaluate each application submitted under subsection (d), and shall deter- mine whether the application is sufficient to merit approval. (c) Grant characteristics Grants under subsection (a) shall be of suffi- cient size, scope, and quality so as to ensure an effective demonstration of an innovative means of enhancing credit for the financing of charter school acquisition, construction, or renovation. (d) Applications (1) In general An eligible entity desiring to receive a grant under this section shall submit an application to the Secretary in such form as the Secretary may reasonably require. (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), in- cluding how the eligible entity will deter- mine which charter schools will receive as- sistance, 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 develop- ment and the design of the proposed activi- ties; (C) a description of the eligible entity’s ex- pertise in capital market financing; (D) a description of how the proposed ac- tivities 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 char- ter school program for which facilities fi- nancing is sought; and (F) in the case of an application submitted by a State governmental entity, a descrip- tion of the actions that the eligible entity has taken, or will take, to ensure that char- ter 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 sub- section (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, dona- tion, 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. Page 1493 TITLE 20—EDUCATION § 7221c (2) The construction of new facilities, or the renovation, repair, or alteration of existing fa- cilities, necessary to commence or continue the operation of a charter school. (3) The predevelopment costs required to as- sess sites for purposes of paragraph (1) or (2) and that are necessary to commence or con- tinue 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 sub- section (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 accord- ance with subsection (g)) in a reserve account established and maintained by the eligible en- tity for this purpose. Amounts deposited in such account shall be used by the eligible enti- ty 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 pri- vate 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 pro- viding technical, administrative, and other appropriate assistance (including the re- cruitment of bond counsel, underwriters, and potential investors and the consolidation of multiple charter school projects within a single bond issue). (2) Investment Funds received under subsection (a) and de- posited in the reserve account established under paragraph (1) shall be invested in obliga- tions issued or guaranteed by the United States or a State, or in other similarly low- risk securities. (3) Reinvestment of earnings Any earnings on funds received under sub- section (a) shall be deposited in the reserve ac- count established under paragraph (1) and used in accordance with this subsection. (g) Limitation on administrative costs An eligible entity may use not more than 2.5 percent of the funds received under subsection (a) for the administrative costs of carrying out its responsibilities under this section (excluding subsection (k)). (h) Audits and reports (1) Financial record maintenance and audit The financial records of each eligible entity receiving a grant under subsection (a) shall be maintained in accordance with generally ac- cepted accounting principles and shall be sub- ject to an annual audit by an independent pub- lic accountant. (2) Reports (A) Grantee annual reports Each eligible entity receiving a grant under subsection (a) shall submit to the Sec- retary an annual report of the entity’s oper- ations and activities under this section (ex- cluding subsection (k)). (B) Contents Each annual report submitted under sub- paragraph (A) shall include— (i) a copy of the most recent financial statements, and any accompanying opin- ion 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 eligi- ble entity that was conducted under para- graph (1) during the reporting period; (iii) an evaluation by the eligible entity of the effectiveness of its use of the Fed- eral funds provided under subsection (a) in leveraging private funds; (iv) a listing and description of the char- ter schools served during the reporting pe- riod, including the amount of funds used by each school, the type of project facili- tated by the grant, and the type of assist- ance 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 re- porting period. (C) Secretarial report The Secretary shall review the reports submitted under subparagraph (A) and shall provide a comprehensive annual report to Congress on the activities conducted under this section (excluding subsection (k)). (i) No full faith and credit for grantee obligation No financial obligation of an eligible entity entered into pursuant to this section (such as an obligation under a guarantee, bond, note, evi- dence of debt, or loan) shall be an obligation of, or guaranteed in any respect by, the United States. The full faith and credit of the United States is not pledged to the payment of funds that may be required to be paid under any obli- gation made by an eligible entity pursuant to any provision of this section. (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 es- tablished by an eligible entity under sub- section (f)(1) if the Secretary determines, Page 1494 TITLE 20—EDUCATION § 7221c 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 sub- section (f)(1); or (B) all or a portion of the funds in a re- serve account established by an eligible enti- ty under subsection (f)(1) if the Secretary de- termines that the eligible entity has perma- nently 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 The Secretary shall not exercise the author- ity provided in paragraph (1) to collect from any eligible entity any funds that are being properly used to achieve one or more of the purposes described in subsection (f)(1). (3) Procedures The provisions of sections 451, 452, and 458 of the General Education Provisions Act [20 U.S.C. 1234, 1234a, 1234g] shall apply to the re- covery of funds under paragraph (1). (4) Construction This subsection shall not be construed to im- pair or affect the authority of the Secretary to recover funds under part D of the General Edu- cation Provisions Act (20 U.S.C. 1234 et seq.). (k) Per-pupil facilities aid program (1) Definition of per-pupil facilities aid pro- gram In this subsection, the term ‘‘per-pupil fa- cilities 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 From the amount reserved under section 7221a(b)(1) of this title and remaining after the Secretary makes grants under sub- section (a), the Secretary shall make grants, on a competitive basis, to States to pay for the Federal share of the cost of establishing or enhancing, and administering, per-pupil facilities aid programs. (B) Period The Secretary shall award grants under this subsection for periods of not more than 5 years. (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 fis- cal year for which the program receives as- sistance 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 A State receiving a grant under this sub- section may partner with 1 or more organi- zations, and such organizations may provide not more than 50 percent of the State share of the cost of establishing or enhancing, and administering, the per-pupil facilities aid program. (E) Multiple grants A State may receive more than 1 grant under this subsection, so long as the amount of total funds provided to charter schools in- creases with each successive grant. (3) Use of funds (A) In general A State that receives a grant under this subsection shall use the funds made avail- able through the grant to establish or en- hance, and administer, a per-pupil facilities aid program for charter schools in the State of the applicant. (B) Evaluations; technical assistance; dis- semination From the amount made available to a State through a grant under this subsection for a fiscal year, the State may reserve not more than 5 percent to carry out evalua- tions, to provide technical assistance, and to disseminate information. (C) Supplement, not supplant Funds made available under this sub- section shall be used to supplement, and not supplant, State and local public funds ex- pended to provide per-pupil facilities aid programs, operations financing programs, or other programs, for charter schools. (4) Requirements (A) Voluntary participation No State may be required to participate in a program carried out under this subsection. (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 facili- ties 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 facili- ties. (ii) Special rule A State that is required under State law to provide its charter schools with access to adequate facility space, but that does not have a per-pupil facilities aid program for charter schools specified in State law, is eligible to receive a grant under this subsection if the State agrees to use the funds to develop a per-pupil facilities aid program consistent with the requirements of this subsection. (5) Applications To be eligible to receive a grant under this subsection, a State shall submit an applica- Page 1495 TITLE 20—EDUCATION § 7221d tion to the Secretary at such time, in such manner, and containing such information as the Secretary may require. (Pub. L. 89–10, title IV, § 4304, as added Pub. L. 114–95, title IV, § 4301(1), Dec. 10, 2015, 129 Stat. 2004.) Editorial Notes REFERENCES IN TEXT The General Education Provisions Act, referred to in subsec. (j)(4), is title IV of Pub. L. 90–247, Jan. 2, 1968, 81 Stat. 814. Part D of the Act is classified generally to subchapter IV (§ 1234 et seq.) of chapter 31 of this title. For complete classification of this Act to the Code, see section 1221 of this title and Tables. PRIOR PROVISIONS A prior section 7221c, Pub. L. 89–10, title IV, § 4304, formerly title V, § 5204, as added Pub. L. 107–110, title V, § 501, Jan. 8, 2002, 115 Stat. 1792; renumbered title IV, § 4304, Pub. L. 114–95, title IV, § 4001(b)(2)(A), (B), (D)(iii), Dec. 10, 2015, 129 Stat. 1967, related to administration, prior to repeal by Pub. L. 114–95, § 5, title IV, § 4301(1), Dec. 10, 2015, 129 Stat. 1806, 1993, effective Dec. 10, 2015, except with respect to certain noncompetitive pro- grams and competitive programs. A prior section 4304 of Pub. L. 89–10 was renumbered section 8574, and is classified to section 7974 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Dec. 10, 2015, except with respect to certain noncompetitive programs and competitive pro- grams, see section 5 of Pub. L. 114–95, set out as an Ef- fective Date of 2015 Amendment note under section 6301 of this title. § 7221d. National activities (a) In general From the amount reserved under section 7221a(b)(2) of this title, the Secretary shall— (1) use not more than 80 percent of such funds to award grants in accordance with sub- section (b); (2) use not more than 9 percent of such funds to award grants, on a competitive basis, to eli- gible applicants for the purpose of carrying out the activities described in section 7221b(h) of this title in a State that did not receive a grant under section 7221b of this title; and (3) after the uses described in paragraphs (1) and (2), use the remainder of such funds to— (A) disseminate technical assistance to— (i) State entities in awarding subgrants under section 7221b(b)(1) of this title; and (ii) eligible entities and States receiving grants under section 7221c of this title; (B) disseminate best practices regarding charter schools; and (C) evaluate the impact of the charter school program carried out under this part, including the impact on student achieve- ment. (b) Grants for the replication and expansion of high-quality charter schools (1) In general The Secretary shall make grants, on a com- petitive basis, to eligible entities having appli- cations approved under paragraph (3) to enable such entities to open and prepare for the oper- ation of one or more replicated high-quality charter schools or to expand one or more high- quality charter schools. (2) Definition of eligible entity For purposes of this subsection, the term ‘‘eligible entity’’ means a charter manage- ment organization. (3) Application requirements An eligible entity desiring to receive a grant under this subsection shall submit an applica- tion to the Secretary at such time and in such manner as the Secretary may require. The ap- plication shall include the following: (A) Existing charter school data For each charter school currently operated or managed by the eligible entity— (i) student assessment results for all stu- dents and for each subgroup of students de- scribed in section 6311(c)(2) of this title; (ii) attendance and student retention rates for the most recently completed school year and, if applicable, the most re- cent available 4-year adjusted cohort grad- uation rates and extended-year adjusted cohort graduation rates; and (iii) information on any significant com- pliance and management issues encoun- tered within the last 3 school years by any school operated or managed by the eligible entity, including in the areas of student safety and finance. (B) Descriptions A description of— (i) the eligible entity’s objectives for im- plementing a high-quality charter school program with funding under this sub- section, including a description of the pro- posed number of high-quality charter schools the eligible entity proposes to open as a result of the replication of a high-quality charter school or to expand with funding under this subsection; (ii) the educational program that the eli- gible entity will implement in such char- ter schools, including— (I) information on how the program will enable all students to meet the chal- lenging State academic standards; (II) the grade levels or ages of students who will be served; and (III) the instructional practices that will be used; (iii) how the operation of such charter schools will be sustained after the grant under this subsection has ended, which shall include a multi-year financial and operating model for the eligible entity; (iv) how the eligible entity will ensure that such charter schools will recruit and enroll students, including children with disabilities, English learners, and other educationally disadvantaged students; and (v) any request and justification for any waivers of Federal statutory or regulatory requirements that the eligible entity be- lieves are necessary for the successful op- eration of such charter schools.