Part B - Public Charter Schools. Subpart 2 - Credit Enhancement Initiatives To Assist Charter School Facility Acquisition, Construction, And Renovation. Reserve account.
(a) Use of funds
To assist charter schools to accomplish the objectives described in section 7223c of this title, an eligible entity receiving a grant under this subpart shall, in accordance with State and local law, directly or indirectly, alone or in collaboration with others, deposit the funds received under this subpart (other than funds used for administrative costs in accordance with section 7223e of this title) 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:
(1) Guaranteeing, insuring, and reinsuring bonds, notes, evidences of debt, loans, and interests therein, the proceeds of which are used for an objective described in section 7223c of this title.
(2) Guaranteeing and insuring leases of personal and real property for an objective described in section 7223c of this title.
(3) 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.
(4) 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).
Funds received under this subpart and deposited in the reserve account established under subsection (a) of this section 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 subpart shall be deposited in the reserve account established under subsection (a) of this section and used in accordance with such subsection.
(Pub. L. 89-10, title V, Sec. 5225, as added Pub. L. 107-110, title V, Sec. 501, Jan. 8, 2002, 115 Stat. 1801.)