Green Credit Enhancement Program

(a)Section 5205 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7221 et seq.) is amended— (1)by redesignating subsection (c) as subsection (d); and (2)by inserting after subsection (b) the following new subsection:

(d)

Green credit enhancement initiatives To assist charter school facility acquisition, construction, and renovation

(1)

Purpose

The purpose of this subsection is to provide grants to eligible entities to permit such entities to demonstrate innovative credit enhancement initiatives of assisting charter schools for addressing the costs of acquiring, constructing, and renovating facilities. (2)

Grants to eligible entities

(A)

Grants

Subject only to subparagraph (E), the Secretary shall award not less than three grants to eligible entities that have submitted applications that have been approved under this subsection for use to demonstrate innovative methods of assisting charter schools in addressing the cost of acquiring, constructing, and renovating facilities by enhancing the availability of loans or bond financing. (B)

Eligibility

For purposes of this subsection, an eligble entity is— (i)a public entity, such as a State or local governmental entity; (ii)a private nonprofit entity; or (iii)a consortium of entities described in clauses (i) or (ii). (C)

Grantee selection

(i)

Evaluation of application

The Secretary shall evaluate each application submitted under paragraph (3), and may approve only applications that the Secretary determines are sufficient to merit approval. (ii)

Priority

In evaluating each application, the Secretary shall give priority to the applications of eligible entities that propose to use at least 65 percent of the amounts received from a grant under this subsection to fund modernization, renovation, repair, or construction projects consistent with the applicable provisions of any one of the green building certification programs specified in paragraph (4)(B)(i). (iii)

Distribution of grants

If a sufficient number of applications are submitted that the Secretary determines are of sufficient quality to merit approval, the Secretary shall award at least one grant to an eligible entity described in subparagraph (A)(i), at least one grant to an eligible entity described in paragraph (A)(ii), and at least one grant to an eligible entity described in paragraph (A)(iii). (D)

Grant Characteristics

Grants under this subsection shall be of a 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 acquisition, construction, or renovation. (E)

Special Rule

If the Secretary determines that the funds made available under this subsection are insufficient to permit the Secretary to award three or more grants in accordance with subparagraphs (A), (C), and (D), the requirement to award three grants under subparagraph (A) and the requirements related to the distribution of grants under subparagraph (C)(iii) shall not apply, and the Secretary may determine the appropriate number of grants to be awarded in accordance with subparagraph (D). (3)

Applications

(A)

In general

To be eligible to receive a grant under this subsection, an eligible entity shall submit to the Secretary an application in such form as the Secretary may reasonably require. (B)

Contents

An application submitted under subparagraph (A) shall contain— (i)a statement identifying the activities the eligible entity proposes to undertake with funds received under this subsection, including the methods such entity shall use to determine which charter schools receive assistance, and how much and what types of assistance charter schools shall receive; (ii)a description of the involvement of charter schools in the development of such application and the design of the proposed activities described in such application; (iii)a description of the expertise of the eligible entity in capital market financing; (iv)a description of how the proposed activities leverage the maximum amount of private-sector capital relative to the amount of government funding used and how such activities otherwise enhance credit available to charter schools, including how the eligible entity plans to offer a combination of financing rates and terms more favorable than such rates and terms that a charter school could receive without assistance under this subsection; (v)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; (vi)in the case of an application submitted by a State governmental entity, a description of the actions that the entity has taken, or intends to take, to ensure that charter schools within the State receive the funding the charter schools need to have adequate facilities; and (vii)such other information as the Secretary may reasonably require. (4)

Charter school objectives

(A)

In general

Subject to subparagraph (B), an eligible entity receiving a grant under this subsection shall use the funds deposited in the reserve account established under paragraph (5)(A) to assist one or more charter schools to access private-sector capital to accomplish one or both of the following objectives: (i)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. (ii)The construction of new facilities (including predevelopment costs), or the renovation, repair, or alteration of existing facilities, necessary to commence or continue the operation of a charter school. (B)

Condition

(i)

In general

Except as provided in clause (ii), as a condition of receiving a grant under this subsection, an eligible entity shall agree to use not less than 50 percent of the amounts received from a grant under this subsection to fund projects consistent with the applicable provisions of any one of the following green building certification programs: (I)The United States Green Building Council Leadership in Energy and Environmental Design green building rating standard referred to as LEED Green Building Rating System. (II)The Energy Star program of the United States Department of Energy and the United States Environmental Protection Agency. (III)The CHPS green building rating program developed by the Collaborative for High Performance Schools. (IV)The Green Building Initiative environmental design and rating system referred to as Green Globes. (V)Any other program adopted by a State or entity within a State having authority over a local educational agency that provides for green building certification. (ii)

Special rule

The condition under clause (i) shall not apply if— (I)the Secretary waives such condition upon application to the Secretary for such waiver by the eligible entity; or (II)compliance with such condition causes the cost of a project funded under the grant to increase by more than 10 percent. (5)

Reserve account

(A)

Use of funds

To assist charter schools to accomplish the objectives described in paragraph (4), an eligible entity receiving a grant under this subsection shall, in accordance with State and local law, directly or indirectly, alone or in collaboration with others, deposit the funds received under this subsection (other than funds used for administrative costs in accordance with paragraph (6)) in a reserve account established and maintained by the eligible entity. Amounts deposited in such account shall be used by the eligible entity for the objectives described in paragraph (4) through one or more of the following methods: (i)Guaranteeing, insuring, and reinsuring bonds, notes, evidences of debt, loans, and interests therein. (ii)Guaranteeing and insuring leases of personal and real property. (iii)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. (iv)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). (B)

Investment

Funds received under this subsection and deposited in the reserve account established under subparagraph (A) shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly low-risk securities. (C)

Reinvestment of earnings

Any earnings on funds received under this subsection shall be deposited in the reserve account established under subparagraph (A) and used in accordance with such subparagraph. (6)

Limitation and administrative costs

An eligible entity may use not more than 2.5 percent of the funds received under this subsection for the administrative costs of carrying out this subsection. (7)

Audits and reports

(A)

Financial Record Maintenance and Audit

The financial records of each eligible entity receiving a grant under this subsection shall be maintained in accordance with generally accepted accounting principles and shall be audited by an independent public accountant. (B)

Reports

(i)

Grantee annual reports

Each eligible entity receiving a grant under this subsection shall annually submit to the Secretary a report of its operations and activities under this subsection. (ii)

Contents

Each annual report submitted under clause (i) shall include— (I)a copy of the most recent financial statements of the eligible entity, 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 the audit of the financial records of the eligible entity that was conducted under subparagraph (A) during the annual reporting period; (III)an evaluation by the eligible entity of the effectiveness of its use of the funds provided under this subsection in leveraging private funds; (IV)a listing and description of the charter schools served by the eligible entity during the annual reporting period, including the amount of funds used by each charter school and the type of project facilitated by the funding; (V)a description of the activities carried out by the eligible entity to assist charter schools in meeting the objectives set forth in paragraph (4); and (VI)a description of the characteristics of lenders and other financial institutions participating in the activities undertaken by the eligible entity under this subsection during the reporting period. (iii)

Secretarial report

The Secretary shall review the reports submitted under clause (i) and shall provide a comprehensive annual report to the Congress on the activities conducted under this subsection. (8)

No full faith and credit for grantee obligations

No financial obligation of an eligible entity entered into pursuant to this subsection (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 which may be required to be paid under any obligation made by an eligible entity pursuant to any provision of this subsection. (9)

Recovery of funds

(A)

In general

The Secretary, in accordance with chapter 37 of title 31, United States Code, shall collect— (i)all of the funds in a reserve account established by an eligible entity under paragraph (5)(A) if the Secretary determines, not earlier than 2 years after the date on which the eligible entity first received funds under this subsection, that the eligible entity has failed to make substantial progress in carrying out the purposes described in such paragraph; or (ii)all or a portion of the funds in a reserve account established by an eligible entity under such paragraph 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 such paragraph. (B)

Limitation

The Secretary shall not exercise the authority under subparagraph (A) to collect from any eligible entity any funds that are being properly used to achieve one or more of the purposes described in paragraph (5)(A). (C)

Procedures

The provisions of sections 451, 452, and 458 of the General Education Provisions Act (20 U.S.C. 1234, 1234a, and 1234g) shall apply to the recovery of funds under subparagraph (A). (D)

Other authority to recover funds

This paragraph shall not be construed to impair or affect the authority of the Secretary to recover funds under part D of the General Education Provisions Act.

(b)

Conforming amendments

Part B of title V of such Act (20 U.S.C. 7221 et seq.) is amended—- (1)by striking subpart 2; (2)by redesignating subpart 3 as subpart 2; (3)by redesignating sections 5241 through 5248 as sections 5231 through 5238, respectively; and (4)by amending the items of the table of contents of such Act that follow subpart 1 to read as follows:

Subpart 2—Voluntary Public School Choice Programs

Sec. 5231. Grants.

Sec. 5232. Uses of funds.

Sec. 5233. Applications.

Sec. 5234. Priorities.

Sec. 5235. Requirements and voluntary participation.

Sec. 5236. Evaluations.

Sec. 5237. Definitions.

Sec. 5238. Authorization of appropriations.