OKLAHOMA CITY – Legislation creating the Oklahoma Education Infrastructure Linked Deposit Program to help charter schools and nonprofit schools' access affordable financing for construction and facility improvements has been signed into law.

The measure, authored by Rep. Mark Lepak, R-Claremore, and Sen. Julie Daniels, R-Bartlesville, establishes a new linked deposit program administered by the Oklahoma State Treasurer’s Office.

"This legislation is about helping schools access the resources they need to grow and improve their facilities without placing unnecessary financial strain on them," Lepak said. "When market conditions allow, approved applicants receive private loans through local lending institutions at reduced interest rates. It is modeled after the successful linked deposit program for agriculture, and it creates another opportunity for charter and nonprofit schools to invest in their students and communities."

The program will provide low-interest lending capital to eligible charter schools and nonprofits for new construction, expansions, repairs, improvements and integrated tangible personal property.  

"More and more parents are seeking the best educational fit for their children, and while legislation has increased mobility by providing various financial assistance options, classroom space is a limiting factor. I look forward to seeing if this program will provide some relief," Lepak said.

Daniels said the new law ultimately gives tools to the schools to help financial pressures families are facing.

"This new law expands a tried-and-true program to help local schools make capital improvements on their campuses," Daniels said. "By offering these low-cost loans, charter and nonprofit schools will be able to build larger, more modern facilities that meet current safety standards and accommodate growing enrollment. This measure gives schools another tool to keep up with demand without placing additional financial pressure on families."

Under the law, loan applications will first be reviewed by the State Treasurer before being forwarded to participating lending institutions for review and approval. Eligible borrowers may have one outstanding loan at a time for up to $1 million with a term of up to 10 years. Loan terms may be extended an additional five years with agreement from both the borrower and lender.

HB1590 is based on existing linked deposit programs administered through the Treasurer’s Office that support family farmers, small businesses and housing developers by providing low-interest certificates of deposit to participating financial institutions. Under the new law, institutions must collateralize the certificates of deposit received from the Treasurer's Office, so there is no risk of loss of public funds, even if the borrower defaults.

HB1590 was signed into law and becomes effective Nov. 1.