---
kind: "section"
citation: "20 U.S.C. § 7221c"
title: "20"
title_heading: "Education"
number: "7221c"
heading: "Facilities financing assistance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/20/7221c"
units:
  - "Chapter 70 — Strengthening and Improvement of Elementary and Secondary Schools"
  - "Subchapter IV — 21st Century Schools"
  - "Part C — Expanding Opportunity Through Quality Charter Schools"
---

# §7221c. Facilities financing assistance

- (a) **Grants to eligible entities—**
  - (1) **In general—** From the amount reserved under [section 7221a(b)(1) of this title](/usc/20/7221a.md?p=b-1), the [Secretary](/usc/20/7801.md?p=46) shall use not less than 50 percent to award, on a competitive basis, not less than 3 grants to [eligible entities](/usc/20/6631.md?p=b-1) that have the highest-quality applications approved under [subsection (d)](#d), after considering the diversity of such applications, to demonstrate innovative methods of helping [charter schools](/usc/20/7221i.md?p=2) to address the cost of acquiring, constructing, and renovating facilities by enhancing the availability of loans or bond financing.
  - (2) **Eligible entity defined—** For the purposes of this section, the term “[eligible entity](/usc/20/6631.md?p=b-1)” means—
    - (A) a public entity, such as a [State](/usc/20/7171.md?p=b-6) or local governmental entity;
    - (B) a private nonprofit entity; or
    - (C) a consortium of entities described in subparagraphs [(A)](#a-2-A) and [(B)](#a-2-B).
- (b) **Grantee selection—** The [Secretary](/usc/20/7801.md?p=46) shall evaluate each application submitted under [subsection (d)](#d), and shall determine whether the application is sufficient to merit approval.
- (c) **Grant characteristics—** Grants under [subsection (a)](#a) shall be of sufficient size, scope, and quality so as to ensure an effective demonstration of an innovative means of enhancing credit for the financing of [charter school](/usc/20/7221i.md?p=2) acquisition, construction, or renovation.
- (d) **Applications—**
  - (1) **In general—** An [eligible entity](/usc/20/6631.md?p=b-1) desiring to receive a grant under this section shall submit an application to the [Secretary](/usc/20/7801.md?p=46) in such form as the [Secretary](/usc/20/7801.md?p=46) may reasonably require.
  - (2) **Contents—** An application submitted under [paragraph (1)](#d-1) shall contain—
    - (A) a statement identifying the activities that the [eligible entity](/usc/20/6631.md?p=b-1) proposes to carry out with funds received under [subsection (a)](#a), including how the [eligible entity](/usc/20/6631.md?p=b-1) will determine which [charter schools](/usc/20/7221i.md?p=2) will receive assistance, and how much and what types of assistance [charter schools](/usc/20/7221i.md?p=2) will receive;
    - (B) a description of the involvement of [charter schools](/usc/20/7221i.md?p=2) in the application’s development and the design of the proposed activities;
    - (C) a description of the [eligible entity](/usc/20/6631.md?p=b-1)’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](/usc/20/7221i.md?p=2), including how the [eligible entity](/usc/20/6631.md?p=b-1) will offer a combination of rates and terms more favorable than the rates and terms that a [charter school](/usc/20/7221i.md?p=2) could receive without assistance from the [eligible entity](/usc/20/6631.md?p=b-1) under this section;
    - (E) a description of how the [eligible entity](/usc/20/6631.md?p=b-1) possesses sufficient expertise in education to evaluate the likelihood of success of a [charter school](/usc/20/7221i.md?p=2) program for which facilities financing is sought; and
    - (F) in the case of an application submitted by a [State](/usc/20/7171.md?p=b-6) governmental entity, a description of the actions that the [eligible entity](/usc/20/6631.md?p=b-1) has taken, or will take, to ensure that [charter schools](/usc/20/7221i.md?p=2) within the [State](/usc/20/7171.md?p=b-6) receive the funding that [charter schools](/usc/20/7221i.md?p=2) need to have adequate facilities.
- (e) **Charter school objectives—** An [eligible entity](/usc/20/6631.md?p=b-1) receiving a grant under [subsection (a)](#a) shall use the funds deposited in the reserve account established under [subsection (f)](#f) to assist one or more [charter schools](/usc/20/7221i.md?p=2) 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](/usc/20/7221i.md?p=2)) in improved or unimproved real property that is necessary to commence or continue the operation of a [charter school](/usc/20/7221i.md?p=2).
  - (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](/usc/20/7221i.md?p=2).
  - (3) The predevelopment costs required to assess sites for purposes of paragraph [(1)](#e-1) or [(2)](#e-2) and that are necessary to commence or continue the operation of a [charter school](/usc/20/7221i.md?p=2).
- (f) **Reserve account—**
  - (1) **Use of funds—** To assist [charter schools](/usc/20/7221i.md?p=2) in accomplishing the objectives described in [subsection (e)](#e), an [eligible entity](/usc/20/6631.md?p=b-1) receiving a grant under [subsection (a)](#a) shall, in accordance with [State](/usc/20/7171.md?p=b-6) and local law, directly or indirectly, alone or in collaboration with others, deposit the funds received under [subsection (a)](#a) (other than funds used for administrative costs in accordance with [subsection (g)](#g)) in a reserve account established and maintained by the [eligible entity](/usc/20/6631.md?p=b-1) for this purpose. Amounts deposited in such account shall be used by the [eligible entity](/usc/20/6631.md?p=b-1) 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)](#e).
    - (B) Guaranteeing and insuring leases of personal and real property for an objective described in [subsection (e)](#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](/usc/20/7221i.md?p=2).
    - (D) Facilitating the issuance of bonds by [charter schools](/usc/20/7221i.md?p=2), or by other public entities for the benefit of [charter schools](/usc/20/7221i.md?p=2), 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](/usc/20/7221i.md?p=2) projects within a single bond issue).
  - (2) **Investment—** Funds received under [subsection (a)](#a) and deposited in the reserve account established under [paragraph (1)](#f-1) shall be invested in obligations issued or guaranteed by the United States or a [State](/usc/20/7171.md?p=b-6), or in other similarly low-risk securities.
  - (3) **Reinvestment of earnings—** Any earnings on funds received under [subsection (a)](#a) shall be deposited in the reserve account established under [paragraph (1)](#f-1) and used in accordance with this subsection.
- (g) **Limitation on administrative costs—** An [eligible entity](/usc/20/6631.md?p=b-1) may use not more than 2.5 percent of the funds received under [subsection (a)](#a) for the administrative costs of carrying out its responsibilities under this section (excluding [subsection (k)](#k)).
- (h) **Audits and reports—**
  - (1) **Financial record maintenance and audit—** The financial records of each [eligible entity](/usc/20/6631.md?p=b-1) receiving a grant under [subsection (a)](#a) shall be maintained in accordance with generally accepted accounting principles and shall be subject to an annual audit by an independent public accountant.
  - (2) **Reports—**
    - (A) **Grantee annual reports—** Each [eligible entity](/usc/20/6631.md?p=b-1) receiving a grant under [subsection (a)](#a) shall submit to the [Secretary](/usc/20/7801.md?p=46) an annual report of the entity’s operations and activities under this section (excluding [subsection (k)](#k)).
    - (B) **Contents—** Each annual report submitted under [subparagraph (A)](#h-2-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](/usc/20/6631.md?p=b-1);
      - (ii) a copy of any report made on an audit of the financial records of the [eligible entity](/usc/20/6631.md?p=b-1) that was conducted under [paragraph (1)](#h-1) during the reporting period;
      - (iii) an evaluation by the [eligible entity](/usc/20/6631.md?p=b-1) of the effectiveness of its use of the Federal funds provided under [subsection (a)](#a) in leveraging private funds;
      - (iv) a listing and description of the [charter schools](/usc/20/7221i.md?p=2) 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](/usc/20/7221i.md?p=2);
      - (v) a description of the activities carried out by the [eligible entity](/usc/20/6631.md?p=b-1) to assist [charter schools](/usc/20/7221i.md?p=2) in meeting the objectives set forth in [subsection (e)](#e); and
      - (vi) a description of the characteristics of lenders and other financial institutions participating in the activities carried out by the [eligible entity](/usc/20/6631.md?p=b-1) under this section (excluding [subsection (k)](#k)) during the reporting period.
    - (C) **Secretarial report—** The [Secretary](/usc/20/7801.md?p=46) shall review the reports submitted under [subparagraph (A)](#h-2-A) and shall provide a comprehensive annual report to Congress on the activities conducted under this section (excluding [subsection (k)](#k)).
- (i) **No full faith and credit for grantee obligation—** No financial obligation of an [eligible entity](/usc/20/6631.md?p=b-1) entered into pursuant to this section (such as an obligation under a guarantee, bond, note, evidence 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 obligation made by an [eligible entity](/usc/20/6631.md?p=b-1) pursuant to any provision of this section.
- (j) **Recovery of funds—**
  - (1) **In general—** The [Secretary](/usc/20/7801.md?p=46), in accordance with [chapter 37](/usc/31/chstIII/ch37.md) of title 31, shall collect—
    - (A) all of the funds in a reserve account established by an [eligible entity](/usc/20/6631.md?p=b-1) under [subsection (f)(1)](#f-1) if the [Secretary](/usc/20/7801.md?p=46) determines, not earlier than 2 years after the date on which the [eligible entity](/usc/20/6631.md?p=b-1) first received funds under [subsection (a)](#a), that the [eligible entity](/usc/20/6631.md?p=b-1) has failed to make substantial progress in carrying out the purposes described in [subsection (f)(1)](#f-1); or
    - (B) all or a portion of the funds in a reserve account established by an [eligible entity](/usc/20/6631.md?p=b-1) under [subsection (f)(1)](#f-1) if the [Secretary](/usc/20/7801.md?p=46) determines that the [eligible entity](/usc/20/6631.md?p=b-1) has permanently ceased to use all or a portion of the funds in such account to accomplish any purpose described in [subsection (f)(1)](#f-1).
  - (2) **Exercise of authority—** The [Secretary](/usc/20/7801.md?p=46) shall not exercise the authority provided in [paragraph (1)](#j-1) to collect from any [eligible entity](/usc/20/6631.md?p=b-1) any funds that are being properly used to achieve one or more of the purposes described in [subsection (f)(1)](#f-1).
  - (3) **Procedures—** The provisions of sections 451, 452, and 458 of the General Education Provisions Act [[20 U.S.C. 1234](/usc/20/1234.md), 1234a, 1234g] shall apply to the recovery of funds under [paragraph (1)](#j-1).
  - (4) **Construction—** This subsection shall not be construed to impair or affect the authority of the [Secretary](/usc/20/7801.md?p=46) to recover funds under part D of the General Education Provisions Act ([20 U.S.C. 1234](/usc/20/1234.md) et seq.).
- (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](/usc/20/7171.md?p=b-6) makes payments, on a per-pupil basis, to [charter schools](/usc/20/7221i.md?p=2) to provide the schools with financing—
    - (A) that is dedicated solely to funding [charter school](/usc/20/7221i.md?p=2) facilities; or
    - (B) a portion of which is dedicated for funding [charter school](/usc/20/7221i.md?p=2) facilities.
  - (2) **Grants—**
    - (A) **In general—** From the amount reserved under [section 7221a(b)(1) of this title](/usc/20/7221a.md?p=b-1) and remaining after the [Secretary](/usc/20/7801.md?p=46) makes grants under [subsection (a)](#a), the [Secretary](/usc/20/7801.md?p=46) shall make grants, on a competitive basis, to [States](/usc/20/7171.md?p=b-6) to pay for the Federal share of the cost of establishing or enhancing, and administering, per-pupil facilities aid programs.
    - (B) **Period—** The [Secretary](/usc/20/7801.md?p=46) 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)](#k-2-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—** A [State](/usc/20/7171.md?p=b-6) receiving a grant under this subsection may partner with 1 or more organizations, and such organizations may provide not more than 50 percent of the [State](/usc/20/7171.md?p=b-6) share of the cost of establishing or enhancing, and administering, the per-pupil facilities aid program.
    - (E) **Multiple grants—** A [State](/usc/20/7171.md?p=b-6) may receive more than 1 grant under this subsection, so long as the amount of total funds provided to [charter schools](/usc/20/7221i.md?p=2) increases with each successive grant.
  - (3) **Use of funds—**
    - (A) **In general—** A [State](/usc/20/7171.md?p=b-6) that receives a grant under this subsection shall use the funds made available through the grant to establish or enhance, and administer, a per-pupil facilities aid program for [charter schools](/usc/20/7221i.md?p=2) in the [State](/usc/20/7171.md?p=b-6) of the applicant.
    - (B) **Evaluations; technical assistance; dissemination—** From the amount made available to a [State](/usc/20/7171.md?p=b-6) through a grant under this subsection for a fiscal year, the [State](/usc/20/7171.md?p=b-6) may reserve not more than 5 percent to carry out evaluations, to provide technical assistance, and to disseminate information.
    - (C) **Supplement, not supplant—** Funds made available under this subsection shall be used to supplement, and not supplant, [State](/usc/20/7171.md?p=b-6) and local public funds expended to provide per-pupil facilities aid programs, operations financing programs, or other programs, for [charter schools](/usc/20/7221i.md?p=2).
  - (4) **Requirements—**
    - (A) **Voluntary participation—** No [State](/usc/20/7171.md?p=b-6) 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](/usc/20/7171.md?p=b-6) shall establish or enhance, and administer, a per-pupil facilities aid program for [charter schools](/usc/20/7221i.md?p=2) in the [State](/usc/20/7171.md?p=b-6), that—
        - (I) is specified in [State](/usc/20/7171.md?p=b-6) law; and
        - (II) provides annual financing, on a per-pupil basis, for [charter school](/usc/20/7221i.md?p=2) facilities.
      - (ii) **Special rule—** A [State](/usc/20/7171.md?p=b-6) that is required under [State](/usc/20/7171.md?p=b-6) law to provide its [charter schools](/usc/20/7221i.md?p=2) with access to adequate facility space, but that does not have a per-pupil facilities aid program for [charter schools](/usc/20/7221i.md?p=2) specified in [State](/usc/20/7171.md?p=b-6) law, is eligible to receive a grant under this subsection if the [State](/usc/20/7171.md?p=b-6) 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](/usc/20/7171.md?p=b-6) shall submit an application to the [Secretary](/usc/20/7801.md?p=46) at such time, in such manner, and containing such information as the [Secretary](/usc/20/7801.md?p=46) may require.

## Source credit

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

## Notes

### 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 programs 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 programs, see section 5 of Pub. L. 114–95, set out as an Effective Date of 2015 Amendment note under section 6301 of this title.