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113th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 113-423
======================================================================
SUCCESS AND OPPORTUNITY THROUGH QUALITY CHARTER SCHOOLS ACT
_______
April 29, 2014.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Kline, from the Committee on Education and the Workforce, submitted
the following
R E P O R T
[To accompany H.R. 10]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 10) to amend the charter school program
under the Elementary and Secondary Education Act of 1965,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Success and Opportunity through
Quality Charter Schools Act''.
SEC. 2. REFERENCES.
Except as otherwise specifically provided, whenever in this Act a
section or other provision is amended or repealed, such amendment or
repeal shall be considered to be made to that section or other
provision of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 6301 et seq.).
SEC. 3. SUBPART HEADING; PURPOSE.
(a) Subpart Heading.--The heading for subpart 1 of part B of title V
(20 U.S.C. 7221 et seq.) is amended to read as follows: ``Charter
School Program''.
(b) Purpose.--Section 5201 (20 U.S.C. 7221) is amended to read as
follows:
``SEC. 5201. PURPOSE.
``It is the purpose of this subpart to--
``(1) improve the United States education system and
education opportunities for all Americans by supporting
innovation in public education in public school settings that
prepare students to compete and contribute to the global
economy;
``(2) provide financial assistance for the planning, program
design, and initial implementation of charter schools;
``(3) expand the number of high-quality charter schools
available to students across the Nation;
``(4) evaluate the impact of such schools on student
achievement, families, and communities, and share best
practices between charter schools and other public schools;
``(5) encourage States to provide support to charter schools
for facilities financing in an amount more nearly commensurate
to the amount the States have typically provided for
traditional public schools;
``(6) improve student services to increase opportunities for
students with disabilities, limited English proficient
students, and other traditionally underserved students to
attend charter schools and meet challenging State academic
achievement standards;
``(7) support efforts to strengthen the charter school
authorizing process to improve performance management,
including transparency, oversight, monitoring, and evaluation
of such schools; and
``(8) support quality accountability and transparency in the
operational performance of all authorized public chartering
agencies, which include State educational agencies, local
educational agencies, and other authorizing entities.''.
SEC. 4. PROGRAM AUTHORIZED.
Section 5202 (20 U.S.C. 7221a) is amended to read as follows:
``SEC. 5202. PROGRAM AUTHORIZED.
``(a) In General.--This subpart authorizes the Secretary to carry out
a charter school program that supports charter schools that serve
elementary school and secondary school students by--
``(1) supporting the startup of charter schools, and the
replication and expansion of high-quality charter schools;
``(2) assisting charter schools in accessing credit to
acquire and renovate facilities for school use; and
``(3) carrying out national activities to support--
``(A) charter school development;
``(B) the dissemination of best practices of charter
schools for all schools;
``(C) the evaluation of the impact of the program on
schools participating in the program; and
``(D) stronger charter school authorizing.
``(b) Funding Allotment.--From the amount made available under
section 5211 for a fiscal year, the Secretary shall--
``(1) reserve 12.5 percent to support charter school
facilities assistance under section 5204;
``(2) reserve not more than 10 percent to carry out national
activities under section 5205; and
``(3) use the remaining amount after the Secretary reserves
funds under paragraphs (1) and (2) to carry out section 5203.
``(c) Prior Grants and Subgrants.--The recipient of a grant or
subgrant under this subpart or subpart 2, as such subpart was in effect
on the day before the date of enactment of the Success and Opportunity
through Quality Charter Schools Act, shall continue to receive funds in
accordance with the terms and conditions of such grant or subgrant.''.
SEC. 5. GRANTS TO SUPPORT HIGH-QUALITY CHARTER SCHOOLS.
Section 5203 (20 U.S.C. 7221b) is amended to read as follows:
``SEC. 5203. GRANTS TO SUPPORT HIGH-QUALITY CHARTER SCHOOLS.
``(a) In General.--From the amount reserved under section 5202(b)(3),
the Secretary shall award grants to State entities having applications
approved pursuant to subsection (f) to enable such entities to--
``(1) award subgrants to eligible applicants for opening and
preparing to operate--
``(A) new charter schools;
``(B) replicated, high-quality charter school models;
or
``(C) expanded, high-quality charter schools; and
``(2) provide technical assistance to eligible applicants and
authorized public chartering agencies in carrying out the
activities described in paragraph (1) and work with authorized
public chartering agencies in the State to improve authorizing
quality.
``(b) State Uses of Funds.--
``(1) In general.--A State entity receiving a grant under
this section shall--
``(A) use not less than 90 percent of the grant funds
to award subgrants to eligible applicants, in
accordance with the quality charter school program
described in the State entity's application approved
pursuant to subsection (f), for the purposes described
in subparagraphs (A) through (C) of subsection (a)(1);
``(B) reserve not less than 7 percent of such funds
to carry out the activities described in subsection
(a)(2); and
``(C) reserve not more than 3 percent of such funds
for administrative costs which may include technical
assistance.
``(2) Contracts and grants.--A State entity may use a grant
received under this section to carry out the activities
described in subparagraphs (A) and (B) of paragraph (1)
directly or through grants, contracts, or cooperative
agreements.
``(3) Rule of construction.--Nothing in this Act shall
prohibit the Secretary from awarding grants to States that use
a weighted lottery to give slightly better chances for
admission to all, or a subset of, educationally disadvantaged
students if--
``(A) the use of weighted lotteries in favor of such
students is not prohibited by State law, and such State
law is consistent with laws described in section
5210(1)(G); and
``(B) such weighted lotteries are not used for the
purpose of creating schools exclusively to serve a
particular subset of students.
``(c) Program Periods; Peer Review; Grant Number and Amount;
Diversity of Projects; Waivers.--
``(1) Program periods.--
``(A) Grants.--A grant awarded by the Secretary to a
State entity under this section shall be for a period
of not more than 5 years.
``(B) Subgrants.--A subgrant awarded by a State
entity under this section shall be for a period of not
more than 5 years, of which an eligible applicant may
use not more than 18 months for planning and program
design.
``(2) Peer review.--The Secretary, and each State entity
receiving a grant under this section, shall use a peer review
process to review applications for assistance under this
section.
``(3) Grant awards.--The Secretary shall--
``(A) for each fiscal year for which funds are
appropriated under section 5211--
``(i) award not less than 3 grants under this
section;
``(ii) wholly fund each grant awarded under
this section, without making continuation
awards; and
``(iii) fully obligate the funds appropriated
for the purpose of awarding grants under this
section in the fiscal year for which such
grants are awarded; and
``(B) midway through the grant period of each grant
awarded under this section to a State entity, review
the grant to determine whether the State entity will
meet the agreed upon uses of funds in the State
entity's application, and if not, reallot the grant
funds that will not be used for such agreed upon uses
of funds to other State entities during the succeeding
grant competition under this section.
``(4) Diversity of projects.--Each State entity receiving a
grant under this section shall award subgrants under this
section in a manner that, to the extent possible, ensures that
such subgrants--
``(A) are distributed throughout different areas,
including urban, suburban, and rural areas; and
``(B) will assist charter schools representing a
variety of educational approaches.
``(5) Waivers.--The Secretary may waive any statutory or
regulatory requirement over which the Secretary exercises
administrative authority except any such requirement relating
to the elements of a charter school described in section
5210(1), if--
``(A) the waiver is requested in an approved
application under this section; and
``(B) the Secretary determines that granting such a
waiver will promote the purpose of this subpart.
``(d) Limitations.--
``(1) Grants.--A State entity may not receive more than 1
grant under this section for a 5-year period.
``(2) Subgrants.--An eligible applicant may not receive more
than 1 subgrant under this section per individual charter
school for a 5-year period, unless the eligible applicant
demonstrates to the State entity not less than 3 years of
improved educational results in the areas described in
subparagraphs (A) and (D) of section 5210(8) for students
enrolled in such charter school.
``(e) Applications.--A State entity desiring to receive a grant under
this section shall submit an application to the Secretary at such time
and in such manner as the Secretary may require. The application shall
include the following:
``(1) Description of program.--A description of the State
entity's objectives under this section and how the objectives
of the program will be carried out, including a description--
``(A) of how the State entity--
``(i) will support the opening of new charter
schools, replicated, high-quality charter
school models, or expanded, high-quality
charter schools, and a description of the
proposed number of each type of charter school
or model, if applicable, to be opened under the
State entity's program;
``(ii) will inform eligible charter schools,
developers, and authorized public chartering
agencies of the availability of funds under the
program;
``(iii) will work with eligible applicants to
ensure that the eligible applicants access all
Federal funds that they are eligible to
receive, and help the charter schools supported
by the applicants and the students attending
the charter schools--
``(I) participate in the Federal
programs in which the schools and
students are eligible to participate;
``(II) receive the commensurate share
of Federal funds the schools and
students are eligible to receive under
such programs; and
``(III) meet the needs of students
served under such programs, including
student with disabilities and English
learners;
``(iv) will have clear plans and procedures
to assist students enrolled in a charter school
that closes or loses its charter to attend
other high-quality schools;
``(v) in the case in which the State entity
is not a State educational agency--
``(I) will work with the State
educational agency and the charter
schools in the State to maximize
charter school participation in Federal
and State programs for charter schools;
and
``(II) will work with the State
educational agency to adequately
operate the State entity's program
under this section, where applicable;
``(vi) will ensure each eligible applicant
that receives a subgrant under the State
entity's program to open and prepare to operate
a new charter school, a replicated, high-
quality charter school model, or an expanded,
high-quality charter school--
``(I) will ensure such school or
model meets the requirements under
section 5210(1); and
``(II) is prepared to continue to
operate such school or model, in a
manner consistent with the eligible
applicant's application, after the
subgrant funds have expired;
``(vii) will support charter schools in local
educational agencies with large numbers of
schools identified by the State for
improvement;
``(viii) will work with charter schools to
promote inclusion of all students and support
all students once they are enrolled to promote
retention;
``(ix) will work with charter schools on
recruitment practices, including efforts to
engage groups that may otherwise have limited
opportunities to participate in charter
schools, and to ensure such schools do not have
in effect policies or procedures that may
create barriers to enrollment of students,
including educationally disadvantaged students,
and are in compliance with all Federal and
State laws on enrollment practices;
``(x) will share best and promising practices
between charter schools and other public
schools, including, where appropriate,
instruction and professional development in
core academic subjects, and science,
technology, engineering, and math education,
including computer science;
``(xi) will ensure the charter schools
receiving funds under the State entity's
program meet the educational needs of their
students, including students with disabilities
and English learners;
``(xii) will support efforts to increase
quality initiatives, including meeting the
quality authorizing elements described in
paragraph (2)(E);
``(xiii) in the case of a State entity not
described in clause (xiv), will provide
oversight of authorizing activity, including
how the State will approve, actively monitor,
and re-approve or revoke the authority of an
authorized public chartering agency based on
the performance of the charter schools
authorized by such agency in the areas of
student achievement, student safety, financial
management, and compliance with all applicable
statutes and regulations; and
``(xiv) in the case of a State entity defined
in subsection (i)(4), will work with the State
to provide assistance to and oversight of
authorized public chartering agencies for
authorizing activity described in clause
(xiii);
``(B) of the extent to which the State entity--
``(i) is able to meet and carry out the
priorities listed in subsection (f)(2); and
``(ii) is working to develop or strengthen a
cohesive statewide system to support the
opening of new charter schools, replicated,
high-quality charter school models, or
expanded, high-quality charter schools;
``(C) of how the State entity will carry out the
subgrant competition, including--
``(i) a description of the application each
eligible applicant desiring to receive a
subgrant will submit, including--
``(I) a description of the roles and
responsibilities of eligible
applicants, partner organizations, and
management organizations, including the
administrative and contractual roles
and responsibilities;
``(II) a description of the quality
controls agreed to between the eligible
applicant and the authorized public
chartering agency involved, such as a
contract or performance agreement, how
a school's performance in the State's
academic accountability system will be
a primary factor for renewal or
revocation of the school's charter, and
how the State entity and the authorized
public chartering agency involved will
reserve the right to revoke or not
renew a school's charter based on
financial, structural, or operational
factors involving the management of the
school;
``(III) a description of how the
eligible applicant will solicit and
consider input from parents and other
members of the community on the
implementation and operation of each
charter school receiving funds under
the State entity's program; and
``(IV) a description of the planned
activities and expenditures for the
subgrant funds for purposes of opening
and preparing to operate a new charter
school, a replicated, high-quality
charter school model, or an expanded,
high-quality charter school, and how
the school or model will maintain
financial sustainability after the end
of the subgrant period; and
``(ii) a description of how the State entity
will review applications;
``(D) in the case of an entity that partners with an
outside organization to carry out the State entity's
quality charter school program, in whole or in part, of
the roles and responsibilities of this partner;
``(E) of how the State entity will help the charter
schools receiving funds under the State entity's
program consider the transportation needs of the
schools' students; and
``(F) of how the State entity will support diverse
charter school models, including models that serve
rural communities.
``(2) Assurances.--Assurances, including a description of how
the assurances will be met, that--
``(A) each charter school receiving funds under the
State entity's program will have a high degree of
autonomy over budget and operations;
``(B) the State entity will support charter schools
in meeting the educational needs of their students as
described in paragraph (1)(A)(x);
``(C) the State entity will ensure that the
authorized public chartering agency of any charter
school that receives funds under the State entity's
program--
``(i) adequately monitors each charter school
in recruiting, enrolling, and meeting the needs
of all students, including students with
disabilities and English learners; and
``(ii) ensures that each charter school
solicits and considers input from parents and
other members of the community on the
implementation and operation of the school;
``(D) the State entity will provide adequate
technical assistance to eligible applicants to--
``(i) meet the objectives described in
clauses (vii) and (viii) of paragraph (1)(A)
and paragraph (2)(B); and
``(ii) recruit, enroll, and retain
traditionally underserved students, including
students with disabilities and English
learners, at rates similar to traditional
public schools;
``(E) the State entity will promote quality
authorizing, such as through providing technical
assistance and supporting all authorized public
chartering agencies in the State to improve the
oversight of their charter schools, including by--
``(i) assessing annual performance data of
the schools, including, as appropriate,
graduation rates and student academic growth;
``(ii) reviewing the schools' independent,
annual audits of financial statements conducted
in accordance with generally accepted
accounting principles, and ensuring any such
audits are publically reported; and
``(iii) holding charter schools accountable
to the academic, financial, and operational
quality controls agreed to between the charter
school and the authorized public chartering
agency involved, such as through renewal, non-
renewal, or revocation of the school's charter;
``(F) the State entity will work to ensure that
charter schools are included with the traditional
public schools in decision-making about the public
school system in the State; and
``(G) the State entity will ensure that each charter
school in the State make publicly available, consistent
with the dissemination requirements of the annual State
report card, information to help parents make informed
decisions about the education options available to
their children, including information on the
educational program, student support services, and
annual performance and enrollment data for the groups
of students described in section 1111(b)(2)(C)(v)(II).
``(3) Requests for waivers.--A request and justification for
waivers of any Federal statutory or regulatory provisions that
the State entity believes are necessary for the successful
operation of the charter schools that will receive funds under
the State entity's program under this section, and a
description of any State or local rules, generally applicable
to public schools, that will be waived, or otherwise not apply
to such schools or, in the case of a State entity defined in
subsection (i)(4), a description of how the State entity will
work with the State to request necessary waivers where
applicable.
``(f) Selection Criteria; Priority.--
``(1) Selection criteria.--The Secretary shall award grants
to State entities under this section on the basis of the
quality of the applications submitted under subsection (e),
after taking into consideration--
``(A) the degree of flexibility afforded by the
State's public charter school law and how the State
entity will work to maximize the flexibility provided
to charter schools under the law;
``(B) the ambitiousness of the State entity's
objectives for the quality charter school program
carried out under this section;
``(C) the quality of the strategy for assessing
achievement of those objectives;
``(D) the likelihood that the eligible applicants
receiving subgrants under the program will meet those
objectives and improve educational results for
students;
``(E) the State entity's plan to--
``(i) adequately monitor the eligible
applicants receiving subgrants under the State
entity's program;
``(ii) work with the authorized public
chartering agencies involved to avoid
duplication of work for the charter schools and
authorized public chartering agencies; and
``(iii) provide adequate technical assistance
and support for--
``(I) the charter schools receiving
funds under the State entity's program;
and
``(II) quality authorizing efforts in
the State; and
``(F) the State entity's plan to solicit and consider
input from parents and other members of the community
on the implementation and operation of the charter
schools in the State.
``(2) Priority.--In awarding grants under this section, the
Secretary shall give priority to State entities to the extent
that they meet the following criteria:
``(A) In the case of a State entity located in a
State that allows an entity other than a local
educational agency to be an authorized public
chartering agency, the State has a quality authorized
public chartering agency that is an entity other than a
local educational agency.
``(B) The State entity is located in a State that
does not impose any limitation on the number or
percentage of charter schools that may exist or the
number or percentage of students that may attend
charter schools in the State.
``(C) The State entity is located in a State that
ensures equitable financing, as compared to traditional
public schools, for charter schools and students in a
prompt manner.
``(D) The State entity is located in a State that
uses charter schools and best practices from charter
schools to help improve struggling schools and local
educational agencies.
``(E) The State entity partners with an organization
that has a demonstrated record of success in developing
management organizations to support the development of
charter schools in the State.
``(F) The State entity supports charter schools that
support at-risk students through activities such as
dropout prevention or dropout recovery.
``(G) The State entity authorizes all charter schools
in the State to serve as school food authorities.
``(H) The State entity has taken steps to ensure that
all authorizing public chartering agencies implement
best practices for charter school authorizing.
``(g) Local Uses of Funds.--An eligible applicant receiving a
subgrant under this section shall use such funds to carry out
activities related to opening and preparing to operate a new charter
school, a replicated, high-quality charter school model, or an
expanded, high-quality charter school, such as--
``(1) preparing teachers and school leaders, including
through professional development;
``(2) acquiring equipment, educational materials, and
supplies; and
``(3) necessary renovations and minor facilities repairs
(excluding construction).
``(h) Reporting Requirements.--Each State entity receiving a grant
under this section shall submit to the Secretary, at the end of the
third year of the 5-year grant period and at the end of such grant
period, a report on--
``(1) the number of students served by each subgrant awarded
under this section and, if applicable, how many new students
were served during each year of the subgrant period;
``(2) the progress the State entity made toward meeting the
priorities described in subsection (f)(2), as applicable;
``(3) how the State entity met the objectives of the quality
charter school program described in the State entity's
application under subsection (e);
``(4) how the State entity complied with, and ensured that
eligible applicants complied with, the assurances described in
the State entity's application;
``(5) how the State entity worked with authorized public
chartering agencies, including how the agencies worked with the
management company or leadership of the schools that received
subgrants under this section; and
``(6) the number of subgrants awarded under this section to
carry out each of the following:
``(A) The opening of new charter schools.
``(B) The opening of replicated, high-quality charter
school models.
``(C) The opening of expanded, high-quality charter
schools.
``(i) State Entity Defined.--For purposes of this section, the term
`State entity' means--
``(1) a State educational agency;
``(2) a State charter school board;
``(3) a Governor of a State; or
``(4) a charter school support organization.''.
SEC. 6. FACILITIES FINANCING ASSISTANCE.
Section 5204 (20 U.S.C. 7221c) is amended to read as follows:
``SEC. 5204. FACILITIES FINANCING ASSISTANCE.
``(a) Grants to Eligible Entities.--
``(1) In general.--From the amount reserved under section
5202(b)(1), the Secretary shall not use less than 50 percent to
award grants to eligible entities that have the highest-quality
applications approved under subsection (d), after considering
the diversity of such applications, to demonstrate innovative
methods of assisting charter schools to address the cost of
acquiring, constructing, and renovating facilities by enhancing
the availability of loans or bond financing.
``(2) Eligible entity defined.--For 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 determine whether
the application is sufficient to merit approval.
``(c) Grant Characteristics.--Grants under subsection (a) 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.
``(d) Applications.--
``(1) In general.--To receive a grant under subsection (a),
an eligible entity shall submit to the Secretary an application
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 proposed
to be undertaken with funds received under subsection
(a), including how the eligible entity will determine
which charter schools will receive assistance, 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 development and the design
of the proposed activities;
``(C) a description of the eligible entity'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 public
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 charter school program
for which facilities financing is sought; and
``(F) in the case of an application submitted by a
State governmental entity, a description of the actions
that the entity has taken, or will take, to ensure that
charter schools within the State receive the funding
the charter schools need to have adequate facilities.
``(e) Charter School Objectives.--An eligible entity receiving a
grant under this section 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, 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.
``(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.
``(3) The predevelopment costs required to assess sites for
purposes of paragraph (1) or (2) and which are necessary to
commence or continue the operation of a charter school.
``(f) Reserve Account.--
``(1) Use of funds.--To assist charter schools to accomplish
the objectives described in subsection (e), an eligible entity
receiving a grant under subsection (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 accordance with subsection (g)) 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:
``(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 private 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 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).
``(2) Investment.--Funds received under this section and
deposited in the reserve account established under paragraph
(1) shall be invested in obligations 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 subsection (a) shall be deposited in the reserve
account established under paragraph (1) and used in accordance
with such paragraph.
``(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
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
receiving a grant under subsection (a) annually shall
submit to the Secretary a report of its operations and
activities under this section.
``(B) Contents.--Each annual report submitted under
subparagraph (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;
``(ii) a copy of any report made on an audit
of the financial records of the eligible entity
that was conducted under paragraph (1) during
the reporting period;
``(iii) an evaluation by the eligible entity
of the effectiveness of its use of the Federal
funds provided under subsection (a) in
leveraging private funds;
``(iv) a listing and description of the
charter schools 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;
``(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 undertaken by
the eligible entity under this section
(excluding subsection (k)) during the reporting
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, 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 section.
``(j) Recovery of Funds.--
``(1) In general.--The Secretary, in accordance with chapter
37 of title 31, United States Code, shall collect--
``(A) all of the funds in a reserve account
established by an eligible entity under subsection
(f)(1) if the Secretary determines, not earlier than 2
years after the date on which the eligible entity first
received funds under this section (excluding subsection
(k)), that the eligible entity has failed to make
substantial progress in carrying out the purposes
described in subsection (f)(1); or
``(B) all or a portion of the funds in a reserve
account established by an eligible entity under
subsection (f)(1) 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 subsection (f)(1).
``(2) Exercise of authority.--The Secretary shall not
exercise the authority 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. 124,
1234a, 1234g shall apply to the recovery of funds under
paragraph (1).
``(4) Construction.--This subsection 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 (20
U.S.C. 1234 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 makes payments, on a per-pupil
basis, to charter schools to provide the schools with
financing--
``(A) that is dedicated solely for 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 under section
5202(b)(1) remaining after the Secretary makes grants
under subsection (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
fiscal year for which the program receives
assistance under this subsection;
``(ii) 80 percent in the second such year;
``(iii) 60 percent in the third such year;
``(iv) 40 percent in the fourth such year;
and
``(v) 20 percent in the fifth such year.
``(D) State share.--A State receiving a grant under
this subsection may partner with 1 or more
organizations to provide up to 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
such funds provided to charter schools increases 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
available through the grant to establish or enhance,
and administer, a per-pupil facilities aid program for
charter schools in the State of the applicant.
``(B) Evaluations; technical assistance;
dissemination.--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 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 and local public funds expended 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.--Except as provided in
clause (ii), to be eligible to receive a grant
under this subsection, a State shall establish
or enhance, and administer, a per-pupil
facilities 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
facilities.
``(ii) Special rule.--Notwithstanding clause
(i), a State that is required under State law
to provide its charter schools with access to
adequate facility space, but which does not
have a per-pupil facilities aid program for
charter schools specified in State law, may be
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 application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.''.
SEC. 7. NATIONAL ACTIVITIES.
Section 5205 (20 U.S.C. 7221d) is amended to read as follows:
``SEC. 5205. NATIONAL ACTIVITIES.
``(a) In General.--From the amount reserved under section 5202(b)(2),
the Secretary shall--
``(1) use not less than 75 percent of such funds to award
grants in accordance with subsection (b); and
``(2) use not more than 25 percent of such funds to--
``(A) provide technical assistance to State entities
in awarding subgrants under section 5203, and eligible
entities and States receiving grants under section
5204;
``(B) disseminate best practices; and
``(C) evaluate the impact of the charter school
program, including the impact on student achievement,
carried out under this subpart.
``(b) Grants.--
``(1) In general.--The Secretary shall make grants, on a
competitive basis, to eligible applicants for the purpose of
carrying out the activities described in section 5202(a)(1),
subparagraphs (A) through (C) of section 5203(a)(1), and
section 5203(g).
``(2) Terms and conditions.--Except as otherwise provided in
this subsection, grants awarded under this subsection shall
have the same terms and conditions as grants awarded to State
entities under section 5203.
``(3) Charter management organizations.--The Secretary
shall--
``(A) use not less than 75 percent of the funds
described in subsection (a)(1) to make grants, on a
competitive basis, to eligible applicants described in
paragraph (4)(C); and
``(B) notwithstanding paragraphs (1)(A) and (2) of
section 5203(f)--
``(i) award grants to eligible applicants on
the basis of the quality of the applications
submitted under this subsection; and
``(ii) in awarding grants to eligible
applicants described in paragraph (4)(C), give
priority to each such eligible applicant that--
``(I) demonstrates a high proportion
of high-quality charter schools within
the network of the eligible applicant;
``(II) demonstrates success in
serving students who are educationally
disadvantaged;
``(III) does not have a significant
proportion of charter schools that have
been closed, had their charter revoked
for compliance issues, or had their
affiliation with such eligible
applicant revoked;
``(IV) has sufficient procedures in
effect to ensure timely closure of low-
performing or financially-mismanaged
charter schools and clear plans and
procedures in effect for the students
in such schools to attend other high-
quality schools; and
``(V) demonstrates success in working
with schools identified for improvement
by the State.
``(4) Eligible applicant defined.--For purposes of this
subsection, the term `eligible applicant' means an eligible
applicant (as defined in section 5210) that--
``(A) desires to open a charter school in--
``(i) a State that did not apply for a grant
under section 5203; or
``(ii) a State that did not receive a grant
under section 5203; or
``(B) is a charter management organization.
``(c) Contracts and Grants.--The Secretary may carry out any of the
activities described in this section directly or through grants,
contracts, or cooperative agreements.''.
SEC. 8. RECORDS TRANSFER.
Section 5208 (20 U.S.C. 7221g) is amended--
(1) by inserting ``as quickly as possible and'' before ``to
the extent practicable''; and
(2) by striking ``section 602'' and inserting ``section
602(14)''.
SEC. 9. DEFINITIONS.
Section 5210 (20 U.S.C. 7221i) is amended--
(1) by amending paragraph (1) to read as follows:
``(1) Charter school.--The term `charter school' means a
public school that--
``(A) in accordance with a specific State statute
authorizing the granting of charters to schools, is
exempt from significant State or local rules that
inhibit the flexible operation and management of public
schools, but not from any rules relating to the other
requirements of this paragraph;
``(B) is created by a developer as a public school,
or is adapted by a developer from an existing public
school, and is operated under public supervision and
direction;
``(C) operates in pursuit of a specific set of
educational objectives determined by the school's
developer and agreed to by the authorized public
chartering agency;
``(D) provides a program of elementary or secondary
education, or both;
``(E) is nonsectarian in its programs, admissions
policies, employment practices, and all other
operations, and is not affiliated with a sectarian
school or religious institution;
``(F) does not charge tuition;
``(G) complies with the Age Discrimination Act of
1975, title VI of the Civil Rights Act of 1964, title
IX of the Education Amendments of 1972, section 504 of
the Rehabilitation Act of 1973, part B of the
Individuals with Disabilities Education Act, the
Americans with Disabilities Act of 1990 (42 U.S.C.
12101 et seq.), and section 444 of the General
Education Provisions Act (20 U.S.C. 1232(g)) (commonly
known as the `Family Education Rights and Privacy Act
of 1974');
``(H) is a school to which parents choose to send
their children, and admits students on the basis of a
lottery if more students apply for admission than can
be accommodated, except that in cases in which students
who are enrolled in a charter school affiliated (such
as by sharing a network) with another charter school,
those students may be automatically enrolled in the
next grade level at such other charter school, so long
as a lottery is used to fill seats created through
regular attrition in student enrollment;
``(I) agrees to comply with the same Federal and
State audit requirements as do other elementary schools
and secondary schools in the State, unless such State
audit requirements are waived by the State;
``(J) meets all applicable Federal, State, and local
health and safety requirements;
``(K) operates in accordance with State law;
``(L) has a written performance contract with the
authorized public chartering agency in the State that
includes a description of how student performance will
be measured in charter schools pursuant to State
assessments that are required of other schools and
pursuant to any other assessments mutually agreeable to
the authorized public chartering agency and the charter
school; and
``(M) may serve prekindergarten or postsecondary
students.'';
(2) by redesignating paragraphs (2) through (4) as paragraphs
(4) through (6), respectively;
(3) by inserting after paragraph (1), the following:
``(2) Charter management organization.--The term `charter
management organization' means a not-for-profit organization
that manages a network of charter schools linked by centralized
support, operations, and oversight.
``(3) Charter school support organization.--The term `charter
school support organization' means a nonprofit, nongovernmental
entity that is not an authorized public chartering agency,
which provides on a statewide basis--
``(A) assistance to developers during the planning,
program design, and initial implementation of a charter
school; and
``(B) technical assistance to charter schools to
operate such schools.'';
(4) in paragraph (5)(B), as so redesignated, by striking
``under section 5203(d)(3)''; and
(5) by adding at the end the following:
``(7) Expanded, high-quality charter school.--The term
`expanded, high-quality charter school' means a high-quality
charter school that has either significantly increased its
enrollment or added one or more grades to its school.
``(8) High-quality charter school.--The term `high-quality
charter school' means a charter school that--
``(A) shows evidence of strong academic results,
which may include strong academic growth as determined
by a State;
``(B) has no significant issues in the areas of
student safety, operational and financial management,
or statutory or regulatory compliance;
``(C) has demonstrated success in significantly
increasing student academic achievement, including
graduation rates where applicable, consistent with the
requirements under title I, for all students served by
the charter school; and
``(D) has demonstrated success in increasing student
academic achievement, including graduation rates where
applicable, for the groups of students described in
section 1111(b)(2)(C)(v)(II), except that such
demonstration is not required in a case in which the
number of students in a group is insufficient to yield
statistically reliable information or the results would
reveal personally identifiable information about an
individual student.
``(9) Replicated, high-quality charter school model.--The
term `replicated, high-quality charter school model' means a
high-quality charter school that has opened a new campus under
an existing charter or an additional charter if required by
State law.''.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
Section 5211 (20 U.S.C. 7221j) is amended to read as follows:
``SEC. 5211. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this subpart
$300,000,000 for fiscal year 2015 and each of the 5 succeeding fiscal
years.''.
SEC. 11. CONFORMING AMENDMENTS.
(a) Repeal.--Subpart 2 of part B of title V (20 U.S.C. 7223 et seq.)
is repealed.
(b) Table of Contents.--The table of contents in section 2 is
amended--
(1) by striking the item relating to subpart 1 of part B of
title V and inserting the following:
``Subpart 1--Charter School Program'';
(2) by striking the item relating to section 5203 and
inserting the following:
``Sec. 5203. Grants to support high-quality charter schools.'';
(3) by striking the item relating to section 5204 and
inserting the following:
``Sec. 5204. Facilities financing assistance.''; and
(4) by striking the items relating to subpart 2 of part B of
title V.
H.R. 10, THE SUCCESS AND OPPORTUNITY THROUGH QUALITY CHARTER SCHOOLS
ACT
COMMITTEE REPORT
Purpose
H.R. 10, the Success and Opportunity through Quality
Charter Schools Act, reauthorizes and modernizes the Charter
School Program under the Elementary and Secondary Education
Act. The bill increases the number of high-quality charter
schools available to students and families; ensures charter
schools share their best practices with all public schools;
improves charter school access and services for all students,
including students with disabilities and English learners; and
emphasizes quality and accountability in charter school
authorizing.
Committee Action
H.R. 10 is the latest effort by the committee to
reauthorize and reform the Charter School Program under the
Elementary and Secondary Education Act. It builds on the
committee's legislation proposed in previous congresses, as
well as lessons learned from hearings and other activity in the
113th Congress.
111TH CONGRESS
Hearings
On June 4, 2009, the Committee on Education and Labor held
a hearing entitled ``Building on What Works at Charter
Schools.'' The purpose of the hearing was to learn how
representatives from the U.S. Department of Education, states,
charter school authorizers, and charter school providers
produce high-quality charter schools and how those programs can
be replicated and brought to scale. Testifying before the
committee were The Honorable Barbara O'Brien, Lieutenant
Governor, State of Colorado, Denver, CO; Mr. James Shelton,
Assistant Deputy Secretary for Innovation and Improvement, U.S.
Department of Education, Washington, DC; Mr. Steve Barr,
Founder and Chairman, Green Dot Public Schools, Los Angeles,
CA; Dr. John King, Managing Director, Excellence and
Preparatory Network of Uncommon Schools, New York, NY; Mr.
David Dunn, Executive Director, Texas Charter Schools
Association, Austin, TX; and Mr. James Goenner, Executive
Director, The Center for Charter Schools, Central Michigan
University, Mount Pleasant, MI.
On February 24, 2010, the Committee on Education and Labor
held a hearing on quality charter schools and H.R. 4330, the
All Students Achieving through Reform Act. The purpose of the
hearing was to discuss how charter school providers maintain
quality in charter schools, what student populations charter
schools serve, and the importance of keeping charter schools
autonomous. The hearing focused on H.R. 4330, which created a
new program under the Charter School Program to provide funding
for the expansion and replication of charter schools.
Testifying before the committee were Ms. Eva Moskowitz,
Founder, Success Charter Network, New York, NY; Ms. Robin J.
Lake, Associate Director, Center on Reinventing Public
Education, Seattle, WA; Dr. Thomas Hehir, Professor of
Practice, Harvard Graduate School of Education, Cambridge, MA;
Mr. Greg Richmond, President and CEO, National Association of
Charter School Authorizers, Chicago, IL; Ms. Eileen Ahern,
Director, National Association of State Directors of Special
Education, Alexandria, VA; and Dr. Caprice Young, President and
CEO, KC Distance Learning, Portland, OR.
Legislative action
In H.R. 3288, the Consolidated Appropriations Act of 2010,
the Committee on Appropriations provided $256 million for the
Charter School Program and reserved $50 million of those funds
to support the expansion and replication of existing high-
quality charter schools. H.R. 3288 was signed into law on
December 16, 2009.
112TH CONGRESS
Hearings
On April 7, 2011, the Committee on Education and the
Workforce held a hearing entitled ``Education Reforms:
Promoting Flexibility and Innovation.'' The purpose of the
hearing was to discuss the appropriate federal role in K-12
education and explore the work of state and local education
leaders who advocate for innovative approaches to education
reform and greater state and local flexibility. Testifying
before the committee were Dr. Janet Barresi, Oklahoma State
Superintendent of Public Instruction, Oklahoma City, OK; Dr.
Gary Amoroso, Superintendent, Lakeville Area Public Schools,
Lakeville, MN; Mr. Yohance Maqubela, Chief Operating Officer,
Howard University Middle School of Mathematics and Science,
Washington, DC; and Dr. Terry Grier, Superintendent, Houston
Independent School District, Houston, TX.
On June 1, 2011, the Committee on Education and the
Workforce Subcommittee on Early Childhood, Elementary, and
Secondary Education held a hearing entitled ``Education
Reforms: Exploring the Vital Role of Charter Schools.'' The
purpose of the hearing was to examine the contributions of
charter schools to state and local efforts to improve public
education and the importance of empowering parents to choose
the best school environment for their children. Testifying
before the subcommittee were Ms. DeAnna Rowe, Executive
Director, Arizona State Board for Charter Schools, Phoenix, AZ;
Ms. Debbie Beyer, Executive Director, Literacy First Charter
Schools, El Cajon, CA; Dr. Gary Miron, College of Education,
Western Michigan University, Kalamazoo, MI; and Dr. Beth
Purvis, Executive Director, Chicago International Charter
School, Chicago, IL.
Legislative action
H.R. 1473, the Department of Defense and Full-Year
Continuing Appropriations Act of 2011, included $256 million
for the Charter School Program and reserved $50 million to
support the expansion and replication of existing high-quality
charter schools. H.R. 1473 was signed into law on April 15,
2011.
On June 16, 2011, Rep. Duncan Hunter (R-CA) and Chairman
John Kline (R-MN) introduced H.R. 2218, the Empowering Parents
through Quality Charter Schools Act. This bill reauthorized and
improved the existing charter school provisions under the
Elementary and Secondary Education Act. H.R. 2218 was
cosponsored by Rep. George Miller (D-CA), Rep. Tom Petri (R-
WI), Rep. Howard P. ``Buck'' McKeon (R-CA), Rep. Phil Roe (R-
TN), Rep. Trey Gowdy (R-SC), Rep. Larry Bucshon (R-IN), Rep.
Tim Walberg (R-MI), Rep. Scott DesJarlais (R-TN), Rep. Mike
Kelly (R-PA), Rep. Jared Polis (D-CO), Rep. Todd Rokita (R-IN),
and Rep. Ander Crenshaw (R-FL).
On June 22, 2011, the Committee on Education and the
Workforce considered H.R. 2218 in legislative session and
reported it favorably, as amended, to the House of
Representatives by a bipartisan vote of 34-5. The committee
considered and adopted one amendment to the bill, an Amendment
in the Nature of a Substitute, offered by Rep. Duncan Hunter
(R-CA).
The Committee received letters of support for H.R. 2218
from the following organizations: The U.S. Chamber of Commerce,
Business Roundtable, Chiefs for Change, Knowledge Is Power
Program (KIPP) Foundation, Council for Exceptional Children,
Charter School Lenders Coalition, Democrats for Education
Reform, National Association for Charter School Authorizers,
National Alliance for Public Charter Schools, National
Association of State Directors of Special Education, New
Schools Venture Fund, the California Charter Schools
Association, and the Texas Charter Schools Association.
113TH CONGRESS
Hearings
On March 12, 2014, the Committee on Education and the
Workforce held a hearing entitled ``Raising the Bar: The Role
of Charter Schools in K-12 Education'' to highlight the role
charter schools play in improving K-12 education and discuss
innovative public school choice models from across the country.
Testifying before the committee were Dr. Deborah McGriff, Chair
of the Board, National Alliance for Public Charter Schools,
Milwaukee, WI; Mrs. Lisa Graham Keegan, Chair of the Board,
National Association of Charter School Authorizers, Peoria, AZ;
Mr. David Linzey, Executive Director, Clayton Valley Charter
High School, Concord, CA; Ms. Alyssa Whitehead-Bust, Chief of
Innovation and Reform, Denver Public Schools, Denver, CO; and
Mr. Alan Rosskamm, Chief Executive Officer, Breakthrough
Schools, Cleveland, OH.
Legislative action
On July 19, 2013, the House of Representatives passed H.R.
5, the Student Success Act, by a vote of 221-207. The House-
passage of H.R. 5 followed consideration of the bill by the
Committee on Education and the Workforce on June 19, 2013, in
legislative session and reported it favorably, as amended, to
the House of Representatives by a vote of 23-16. H.R. 5 was
introduced by Chairman John Kline (R-MN) on June 6, 2013, and
reauthorized the Elementary and Secondary Education Act in its
entirety, including the Charter School Program. The charter
school provisions in the bill differed slightly from H.R. 2218
(112th Congress), notably by adding charter support
organizations as entities eligible for state grants. An
amendment in the nature of a substitute to H.R. 5 offered by
the committee's senior democratic, Ranking Member George Miller
(D-CA), also included reauthorization of the Charter School
Program.
On April 1, 2014, Chairman Kline and Ranking Member Miller
introduced H.R. 10, the Success and Opportunity through Quality
Charter Schools Act. This bill reauthorizes and improves the
existing charter school provisions under the Elementary and
Secondary Education Act. H.R. 10 is cosponsored by Rep. Susan
Brooks (R-IN), Rep. Larry Bucshon (R-IN), Rep. Bradley Byrne
(R-AL), Rep. Scott DesJarlais (R-TN), Rep. Sean Duffy (R-WI),
Rep. Blake Farenthold (R-TX), Rep. Brett Guthrie (R-KY), Rep.
Joseph Heck (R-NV), Rep. Ruben Hinojosa (D-TX), Rep. Richard
Hudson (R-NC), Rep. Duncan Hunter (R-CA), Rep. Luke Messer (R-
IN), Rep. Scott Peters (D-CA), Rep. Tom Petri (R-WI), Rep.
Jared Polis (D-CO), Rep. Phil Roe (R-TN), Rep. Todd Rokita (R-
IN), Rep. Tim Walberg (R-MI), Rep. Daniel Webster (R-FL), Rep.
Joe Wilson (R-SC) and Rep. Steve Womack (R-AR).
On April 8, 2014, the Committee on Education and the
Workforce considered H.R. 10, the Success and Opportunity
through Quality Charter Schools Act, in legislative session and
reported the bill favorably, as amended, to the House of
Representatives by a vote of 36-3.
The committee considered and adopted the following
amendment to H.R. 10:
Rep. Luke Messer (R-IN) offered an amendment in the nature
of a substitute. It passed by voice. This amendment:
Makes technical edits, such as clarifying
the secretary ``provides'' technical assistance,
permitting local uses of funds to include acquiring
equipment and supplies, and clarifying the admission by
feeder pattern language.
Adds a phrase to ensure only schools meeting
the definition of a ``charter school'' are receiving
subgrants under this program.
Clarifies the definition of ``replicable,
high-quality charter school'' to ensure schools
replicating a high quality model can do it under a new
charter if the state requires each school operate under
a separate charter.
Adjusts the funding allocation by moving 2.5
percent of the funding for facilities aid to the state
grants. This provides more money to the states opening
new schools, and still leaves a significant share of
funding for facilities aid.
Clarifies computer science is a part of
technology within science, technology, engineering, and
math activities. Also provides states can share best
practices on core academic subjects.
Adds a new requirement for states to assist
students to find new schools in the event their charter
school closes.
Clarifies a weighted lottery may not be used
to create a school to serve a select population.
The Committee received letters of support for H.R. 10 from
the following organizations: The Arc, Autism National
Committee, Breakthrough Schools, U.S. Chamber of Commerce,
Charter Management Organizations Coalition, Chiefs for Change,
Consortium for Citizens with Disabilities, Council for
Exceptional Children, Council of Chief State School Officers,
Council of Parent Attorneys and Advocates, Inc., Education
Trust, National Association of Charter School Authorizers,
National Alliance for Public Charter Schools, National
Association of State Directors of Special Education, Inc.,
National Center for Learning Disabilities, the National Center
for Special Education in Charter Schools, Foundation for
Excellence in Education, National Council of La Raza, and the
Business Roundtable.
Summary
H.R. 10, the Success and Opportunity through Quality
Charter Schools Act, streamlines and modernizes the existing
charter school programs under the Elementary and Secondary
Education Act. In current law, two charter school programs
exist:
The Charter School Program supports grants
for charter school developers to open new charter
schools. The program also provides funds to disseminate
best practices and provide state facilities aid to
charter schools. The program was last authorized at
$300 million in FY 2002 and such sums as necessary for
FY 2003 through 2007.
The Charter School Credit Enhancement
Program assists charter schools in accessing better
credit terms for funding to acquire and renovate
facilities used to operate a charter school. The
program was last authorized at $150 million in FY 2002
and such sums as necessary for FY 2003 through 2007.
The Success and Opportunity through Quality Charter Schools
Act consolidates the two programs into one, refocuses the new
program to promote high-quality charter schools at the state
and local levels, and allows states to use federal funds to
start new charter schools as well as expand and replicate
existing high-quality charter schools. Additionally, the bill
authorizes a Charter Management Organization grant program to
support the organization's success in replicating and expanding
high-quality charter schools nationwide.
The new Charter School Program will consist of three parts:
Grants to support high-quality charter
schools will be awarded to a State Educational Agency,
the State Charter School Board, the Governor, or a
Charter School Support Organization. The grants will
support the expansion and replication of high-quality
charter schools, along with new, innovative charter
school models by state entities committed to charter
school quality, which increases opportunities for all
students to benefit from quality charter schools.
Additionally, each state will use a portion of the
funding to support quality initiatives aimed toward
improved charter school authorizing.
Facilities Aid will be awarded to continue
credit enhancement activities and support state
facilities aid for charter schools.
National Activities will allow the Secretary
of Education to operate a grant competition for charter
schools in states that did not win or compete for a
state grant and a grant competition for high quality
charter management organizations (CMO). This section
also requires the secretary to offer technical
assistance to eligible grantees applying for the grant,
and to grantees implementing the grant. The secretary
will also be allowed to disseminate best practices to
ensure all public schools may benefit from charter
schools' success. Finally, the secretary will conduct
an evaluation of the effects of the legislation on
charter schools, including on student achievement.
The Success and Opportunity through Quality Charter Schools
Act authorizes the Charter School Program at $300 million for
FY 2015 through FY 2020. The bill clarifies state-determined
weighted lotteries are permitted under this program and
clarifies students in affiliated charter schools can attend the
next immediate grade in that network's school.
Furthermore, the bill makes technical corrections to other
provisions in the Charter School Program, including modifying
the definition of a ``charter school'' to clarify a charter
school can serve early childhood students as well as
postsecondary students. Finally, the legislation adds five new
definitions to the law: ``charter management organization,''
``charter support organization,'' ``high-quality charter
school,'' ``expansion of a high-quality charter school,'' and
``replicable, high-quality charter school model.''
Committee Views
BACKGROUND
A public charter school is a publicly-funded elementary or
secondary school operated according to the terms of a charter
or contract granted by a public chartering agency. The terms of
a charter typically provide the charter school operator with
increased autonomy in how to operate the school in exchange for
greater accountability for results or student outcomes.
Charters are usually granted for a limited time period,
typically ranging from fewer than five years to as many as 15
years. In order to retain or renew its charter, a school must
adhere to the accountability requirements written into its
charter and attract enough students to continue functioning as
a viable school.
Charter schools are a state education reform initiative
that began in Minnesota in 1991. The Improving America's
Schools Act of 1994 included support for starting charter
schools. The Credit Enhancement Program, which began in 2001
through the appropriations process, provides grants to eligible
entities to help charter schools leverage other funds through
credit enhancement initiatives to acquire, construct, renovate,
or lease academic facilities.
The first charter school opened in 1992. Today, 6,400
charter schools in 42 states and the District of Columbia serve
more than 2.5 million students. Forty-two states have enacted
charter school laws, giving parents and students an education
alternative to traditional public schools. However, this growth
is not enough to meet the demand. An estimated 920,000 students
are on waitlists to enter charter schools. The demand is
understandable. Since 2010, 15 of 16 ``gold standard'' research
studies conducted on public charter school student achievement
have found public charter school students are outperforming
their traditional school peers. In 2013, the Center for
Research on Educational Outcomes released a study that found a
charter school education had a positive impact for many
subgroups, including Black students, students in poverty,
English learners, and students in special education. For
English learner students who are Hispanic, attending a charter
school resulted in 50 additional days of learning in reading
and 43 additional days of learning in math. Yet, charter
schools continue to face challenges in serving certain
populations of students, in particular students with
disabilities--including those with lower incidence
disabilities--and English learners.
LEGISLATIVE CHANGES
H.R. 10, the Success and Opportunity through Quality
Charter Schools Act, improves access for traditionally
underserved populations, supports the creation, replication and
expansion of high-quality charter schools, and strengthens
accountability for developers who receive federal funding to
open, replicate, or expand charter schools. Consolidating the
two charter school provisions into one program better focuses
support for all elements important to creating high-quality
charter schools.
The charter school movement has seen robust growth over the
past decade. There are now many high-quality charter schools
eligible to receive federal and state support to expand and
replicate their successes. The Committee on Appropriations
supported this effort through a reservation within the Charter
School Program appropriation, and the Committee on Education
and the Workforce believes it is important to update the
authorizing legislation to ensure states support these schools.
The Success and Opportunity through Quality Charter Schools Act
adds an expansion and replication use of funds under each State
Quality Charter School Grant to support the start-up of new,
innovative charter school models, as well as the expansion and
replication of high-quality charter schools. The committee
believes successful replication and expansion of high-quality
charter schools are dependent on state support and community
buy-in. This belief is reflected in the allowance of state
entity subgranting for these purposes and a decreased reliance
on funds awarded directly to developers from the secretary of
education.
Charter schools receiving funds under this program must
admit their students through a lottery system if the demand for
attendance exceeds the available slots in the schools. It is
important to assist these schools in reaching all students who
may benefit from the opening or expansion of charter schools.
However, the focus must be on increasing the number of quality
education options, not just increasing the number of charter
schools available. In order to expand access to quality public
charter schools, the legislation includes provisions to help
state grantees reach out to charter school developers and
school leaders to recruit traditionally underserved students,
including students with disabilities and English learners; to
promote inclusion and retention; and to meet the needs of those
students. Further, the state grantees must award grants to
urban, suburban, and rural areas (including Indian
reservations) to ensure quality charter school options reach as
many students as possible, including American Indian and Alaska
Native students.
The Success and Opportunity through Quality Charter Schools
Act supports charter schools in serving students with
disabilities, including students with lower incidence
disabilities, English learners, and other traditionally
underserved students. The legislation recognizes charter
schools need support in recruiting, enrolling, and retaining
these students and includes provisions to help charter schools
address those challenges. The committee believes the technical
assistance required of grantees will help charter schools with
these goals. H.R. 10 will allow weighted lotteries that help
ensure educationally disadvantaged students have a better
chance to attend a charter school. A weighted lottery is a
mechanism used to create diverse student populations. H.R. 10
permits the weighting of specific student attributes to give a
statistical advantage to disadvantaged students, or a subset of
those students. The lottery should remain a fair process to
ensure all students have the opportunity to attend these
sought-after schools. In addition, this provision clarifies
charter schools in receipt of Charter School Program funds may
use a weighted lottery for educationally disadvantaged
students, provided the weighted lottery is not prohibited by
state law and is not used to create a school made exclusively
of one student subgroup.
Ensuring grantees award funds for the creation,
replication, and expansion of high-quality charter school
remains paramount. When awarding subgrants, state entities
should ensure charter school developers open a school that
meets the intent and requirements of the law, and in
particular, the definition of a charter school. When
subgrantees are applying to expand or replicate already
existing charter school models, the state entity must ensure
the models meet the definition of high-quality charter school.
In particular, the state entity should ensure the charter
school is exempt from significant state and local requirements
that inhibit the operation of a school and has a high degree of
autonomy over budget and all operations.
When recruiting students, charter schools should ensure
parents have the information they need to make the best
decisions possible for their children. This includes
encouraging parents to examine the academic success of the
school, the teaching philosophy of the school, and the ability
of the school to meet the education needs of any student
admitted to the school. The legislation encourages state
entities to monitor charter schools to ensure compliance with
all federal civil rights statutes and there are no barriers to
enrollment that could prevent the enrollment of students based
on socioeconomic status, language proficiency, academic
performance, disability, or parental involvement. The
legislation supports charter schools that promote an inclusive
environment. High-quality charter schools, as defined in the
legislation, raise the achievement of all students, including
students with disabilities, English learners, and other
traditionally underserved populations.
In modernizing the Charter School Program, H.R. 10 includes
a new provision that reserves seven percent of each state grant
to support initiatives to improve charter school authorizing.
This initiative will help charter school authorizers identify
key indicators of quality, including how to ensure the school
and the authorizer clearly articulate the goals and
expectations of each party. It will also help charter schools
meet their obligations under existing laws and this Act. The
funds will also be used to increase the number of high-quality
charter schools available to students by opening new charter
schools and by helping charter schools recruit, enroll, and
meet the needs of students with disabilities, including
students with low-incidence disabilities, and English learners.
The bill requires eligible applicants to describe the
quality controls agreed to in the authorizing contract and the
terms of contracts with other organizations. In their
applications, charter schools must describe how their
authorizers evaluate the success of the schools primarily on
the academic achievement of all of their students, as well as
through other performance measures determined by state law, the
authorizer, and the school, as outlined in a legally binding
performance contract.
The legislation also requires charter schools to have
transparent contractual relationships with management
organizations. As stipulated in the U.S. Department of
Education non-regulatory guidance for the current Charter
School Program, charter schools receiving grants under this
program should avoid conflicts of interest. In promoting
quality authorizing practices, state grantees should support
authorizers that make annual, independent financial audits
publicly available and easily accessible, such as through
posting on the school or authorizer website. In addition, state
grantees must describe how they will provide oversight of
authorizing activity in their application.
The committee intends the requirement to describe such a
system will not inhibit participation or competition by states
with legal, constitutional, or structural barriers that
constrain the state's authority over the authorized public
chartering agency or the type or number of authorized public
chartering agencies. Further, as the purpose of the Success and
Opportunity through Quality Charter Schools Act is to expand
the number of high-quality charter schools available to
students across the nation, it is the committee's intent that
oversight of authorizing activity must not abolish all public
chartering agencies or all authorizing activity in any given
geographic area, as this would prevent the expansion of high-
quality charter schools and would be contrary to the purpose of
this Act. The committee believes it is important authorizers
and charter schools have as much flexibility in complying with
these provisions as possible to ensure charter schools meet the
expectations of their respective authorizers and still operate
in an autonomous manner to meet the goals of the school.
The Success and Opportunity through Quality Charter Schools
Act also allows new eligible entities to compete for funding
under State Quality Charter School Grants and provides
increased flexibility in the operation of the state grant
competition for start-up of charter schools. The bill expands
the eligible entities for state grants to include state charter
school boards, governors, and charter school support
organizations, in addition to the State Educational Agency
(SEA) allowed under current law. This expansion of eligible
grantees will ensure charter schools have an opportunity to
open and expand with the support of a grantee that believes in
the benefit of charter schools and offers the greatest
assistance to those schools that win subgrants. To ensure
grantees are able to meet the requirements of the program, the
legislation allows states to partner with an entity that can
help it operate a quality program that adequately supports the
thoughtful growth of charter schools in the state. While there
may be multiple eligible grantees for each state, the committee
supports limiting each state to one grant to avoid duplication
in the state, ensure funds are used to build a cohesive
statewide network of support and ensure funds reach as many
states, and therefore schools, as possible across the nation.
The new eligible grantees are also required to collaborate
with the SEA, where appropriate. While this provision does not
give the SEA any authority over the grantee or program the
grantee is running, it will ensure the SEA and charter school
operators are working together in a cohesive, statewide system,
rather than creating parallel systems. The SEA may help
distribute grants to schools, help the entity run the grant
competition, or provide guidance to support the peer review
requirement in the law. In addition, should a charter school
support organization administer the grant, nothing in this bill
shall be interpreted to grant the charter school support
organization any authority over authorized public chartering
agencies.
H.R. 10 includes a clear listing of assurances, priorities,
and selection criteria for awarding charter school grants,
which will improve charter schools, improve access to high-
quality charter schools, and expand the availability of high-
quality charter schools as an integral component of state
public school systems. For example, grantees will ensure
charter schools actively participate in decisions about the
public school system, providing charter schools, as public
schools, the same voice in decisions affecting the schools and
their students as traditional public schools. The committee
believes this important change is an opportunity to share best
practices between all public schools and ensure all schools
have an equal voice in the public school system. An assurance
each charter school has a high level of autonomy, particularly
over budgets and all operations (including personnel) will also
ensure the schools can be innovative in responding to the needs
of the community. Additionally, the bill includes a selection
priority for state entities in states that maximize the
flexibility of their charter school statute to foster
innovation and support quality charter schools.
The legislation incentivizes states to support more high-
quality charter schools that meet the needs of the local
community. Provisions supporting the elimination of caps on
students or schools will help get funds to states that can open
new schools. The bill includes a priority for those states that
have more than one statewide authorizer, or an appeals process
if the only local authorizer is the Local Educational Agency.
The committee believes this will ensure charter schools are not
held hostage to the traditional public school system that sees
charter schools as competition, rather than an enhancement to
the public school system. The committee believes these
provisions will help charter schools better serve students,
including students with disabilities and English learners.
H.R. 10 removes language in current law that impedes the
effective use of subgrants for start-up costs, and instead
permits funds to be used for appropriate activity related to
opening and preparing to operate a new charter school. The
committee believes this language will ensure charter schools
can use funds for any non-sustained costs, including costs not
permitted under current law. For example, transportation
outlays such as a school bus, initial personnel costs, and
building renovations and improvements to meet code would be
permitted under this language. H.R. 10 also requires all
subgrantees submit planned expenditures for the life of the
grant and demonstrate the financial sustainability of each
charter school receiving program funds following the grant
period.
The committee believes reporting requirements are an
important tool for evaluating the success of grantees in
fulfilling the purpose of the program. H.R. 10 requires
grantees to report to the secretary of education at the end of
the third year of the five-year grant period. The information
submitted to the secretary on the number of students served
during each year of the grant period should be reported by
subgrant, but is not intended to create any increased burdens
for the schools participating in the program.
The legislation consolidates the existing credit
enhancement program and the state facilities aid program to
clarify the law. The requirement to reserve 12.5 percent of the
total appropriated funds ensures there are funds sufficient to
award more than one grant each year under the credit
enhancement program. This program helps charter schools access
credit to obtain or renovate facilities to open the school. The
legislative changes made to this provision increase the
administrative reservation to 2.5 percent of each grant to
ensure the grantee can reach out to, serve, and properly
monitor charter schools assisted under the grant. The bill also
increases the flexibility in awarding grants under the credit
enhancement program to ensure the best grantees are receiving
federal funds.
The Success and Opportunity through Quality Charter Schools
Act updates the national activities provisions to allow the
Secretary of Education to run a competition for charter schools
wanting to open in states that did not win or compete for a
state grant. Additionally, the legislation authorizes the
secretary to run a competition for CMOs, targeted to those
having a proven record of success increasing academic
achievement for students, operating and managing a network of
schools, and partnering with states and districts to turn
around chronically low-performing schools, not simply open new
schools. These competitions will ensure students are not left
behind in states that have not demonstrated the leadership to
support charter schools. Successful CMOs can thoughtfully
replicate and expand high-quality charter school models,
approved by individual states in accordance with state laws.
It is the committee's expectation the secretary will assess
the quality of applicants in the same manner as in the state
competition and will consider their demonstrated track record
of opening high quality schools serving a high percentage of
economically disadvantaged students, and the application
requirements will reflect this purpose of the program. The
secretary will also be required to offer technical assistance
to maximize the impact of the funds. The secretary will
disseminate best practices to help all public schools benefit
from the success of charter schools. Finally, the secretary is
required to conduct an evaluation measuring the effectiveness
of the program on charter schools, including student
achievement. A rigorous evaluation is critical to determining
whether the program has been successful in meeting its purpose
of supporting high-quality charter schools.
The legislation makes a few key changes to the definitions
in the program. H.R. 10 adds five new definitions to the
program: ``charter school support organization,'' ``charter
management organization,'' ``high-quality charter school,''
``replicated high-quality charter school model,'' and
``expanded high-quality charter school.'' The bill outlines
charter schools must comply with the Americans with
Disabilities Act and section 444 of the General Education
Provisions Act (commonly known as the ``Family Education Rights
and Privacy Act of 1974''). Additionally, the definition of a
``charter school'' clarifies these schools must comply with all
applicable federal laws, such as those listed above and the
Individuals with Disabilities Education Act, section 504 of the
Rehabilitation Act, Title VI of the Civil Rights Act of 1964,
and the other applicable provisions of the Elementary and
Secondary Education Act. This addition clarifies the
requirements that must be met by the state grantees and the
charter schools they support. Another change in the definition
of a ``charter school'' clarifies admission is permissible to
the next grade in a school in the same network, known as a
feeder pattern. The schools must be affiliated and the student
must be entering the next succeeding grade. Schools may not use
this provision to stop utilizing a lottery to fill seats
created through regular attrition; each school must continue to
abide by the class size as envisioned in the creation of the
school.
CONCLUSION
H.R. 10, the Success and Opportunity through Quality
Charter Schools Act, modernizes and streamlines the charter
school provisions under the Elementary and Secondary Education
Act. The bill makes needed improvements to emphasize quality,
accountability, and equity to the Charter School Program to
better support high-quality charter schools. The bill
consolidates the current funding streams for charter schools
under one authorization at $300 million to increase
efficiencies within the operation of the program and better
leverage federal funding to improve the program.
Section-by-Section Analysis
SECTION 1--SHORT TITLE
States the short title as the ``Success and Opportunity
through Quality Charter Schools.''
SECTION 2--REFERENCES
References the Elementary and Secondary Education Act.
SECTION 3--SUBPART HEADING, PURPOSE
Amends the subpart heading and states the purpose of the
Charter School Program.
SECTION 4--PROGRAM AUTHORIZED
Authorizes the Charter School Program.
SECTION 5--GRANTS TO SUPPORT QUALITY CHARTER SCHOOLS
Specifies the general requirements of state grants to
support the startup or expansion and replication of charter
schools. Specifies the information the Secretary of Education
will look for in the state application, what assurances the
grantee will be required to provide, the criteria the secretary
will use to determine grant winners, and the priorities for
grant awards.
SECTION 6--FACILITIES FINANCING ASSISTANCE
Specifies the general requirements for facilities financing
assistance. Prioritizes credit enhancement activities over
state facilities aid.
SECTION 7--NATIONAL ACTIVITIES
Specifies the activities the Secretary of Education will
support under the program, including disseminating best
practices, providing technical assistance, operating a startup
competition for non-state grant winners, operating an expansion
and replication grant competition for charter management
organizations, and conducting an evaluation of the program.
SECTION 8--RECORDS TRANSFER
Modifies the provision to encourage more timely delivery of
records transfer and amends the reference to the Individuals
with Disabilities Education Act.
SECTION 9--DEFINITIONS
Makes a change to the definition of a ``charter school''
and adds definitions for ``charter management organization,''
``charter school support organization,'' ``expansion of a high-
quality charter school,'' ``high-quality charter school,'' and
``replicable, high-quality charter school model.''
SECTION 10--AUTHORIZATION OF APPROPRIATIONS
Authorizes the program at $300 million for each year from
FY 2015 through FY 2020.
SECTION 11--CONFORMING AMENDMENTS
Modifies the Elementary and Secondary Education Act to
address the changes made under this legislation.
Explanation of Amendments
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 10 increases the number of high-quality charter
schools; ensures charter schools share best practices with all
public schools; improves charter school access and services for
all students, including students with disabilities and English
learners; and emphasizes quality and accountability in charter
school authorizing.
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement of
whether the provisions of the reported bill include unfunded
mandates. This issue is addressed in the CBO letter.
Earmark Statement
H.R. 10 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House Rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House Rule XIII, the
goal of H.R. 10 is to improve the quality of and access to
charter schools. The committee expects the U.S. Department of
Education to comply with these provisions and implement the law
in accordance with the stated goal.
Duplication of Federal Programs
No provision of H.R. 10 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The committee estimates that enacting H.R. 10 does not
specifically direct the completion of any specific rule makings
within the meaning of 5 U.S.C. 551.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the committee's oversight findings and recommendations are
reflected in the body of this report.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the committee has received
the following estimate for H.R. 10 from the Director of the
Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 18, 2014.
Hon. John Kline,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 10, the Success
and Opportunity through Quality Charter Schools Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Justin
Humphrey.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
H.R. 10--Success and Opportunity through Quality Charter Schools Act
H.R. 10 would amend and reauthorize both the Charter School
Programs and the Credit Enhancement for Charter School
Initiatives under Title V of the Elementary and Secondary
Education Act of 1965 through fiscal year 2020 and combine them
into a single authorization. (This authorization would
automatically be extended one year through 2021 under the
General Education Provisions Act.) The bill would authorize the
appropriation of $300 million for each of fiscal years 2015
through 2021 for grants to states to develop and expand charter
school facilities and to public and private nonprofit entities
to develop means of enhancing credit to finance the
construction and renovation of charter schools.
For fiscal year 2014, the Congress appropriated about $250
million for Charter School Programs, but provided no funding
for Credit Enhancement Initiatives. The previous authorization
for Charter School Programs expired in 2008 and the previous
authorization for Credit Enhancement for Charter School
Initiatives expired in 2004.\1\
---------------------------------------------------------------------------
\1\For Charter School Programs, prior law authorized the
appropriation of $300 million for fiscal year 2002 and such sums as
might be necessary through fiscal year 2008. For Credit Enhancement for
Charter School Initiatives, prior law authorized the appropriation of
$150 million for fiscal year 2002 and such sums as might be necessary
through fiscal year 2004.
---------------------------------------------------------------------------
As shown in the following table, CBO estimates that
implementing the bill would cost $1.0 billion over the 2015-
2019 period, assuming appropriation of the authorized amounts.
The costs of this legislation fall within budget function 500
(education, training, employment, and social services). For
this estimate, CBO assumes that spending will follow historical
patterns for the affected programs.
Enacting the bill would have no impact on direct spending
or revenues; therefore, pay-as-you-go procedures do not apply.
H.R. 10 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------
2015 2016 2017 2018 2019 2015-2019
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level........................... 300 300 300 300 300 1,500
Estimated Outlays............................. 15 150 255 300 300 1,020
----------------------------------------------------------------------------------------------------------------
The CBO staff contact for this estimate is Justin Humphrey.
This estimate was approved by Peter H. Fontaine, Assistant
Director for Budget Analysis.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 10. However,
clause 3(d)(2)(B) of that rule provides that this requirement
does not apply when the committee has included in its report a
timely submitted cost estimate of the bill prepared by the
Director of the Congressional Budget Office under section 402
of the Congressional Budget Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965
* * * * * * *
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
* * * * * * *
TITLE V--PROMOTING INFORMED PARENTAL CHOICE AND INNOVATIVE PROGRAMS
* * * * * * *
Part B--Public Charter Schools
[Subpart 1--Charter School Programs
Subpart 1--Charter School Program
* * * * * * *
[Sec. 5203. Applications.
[Sec. 5204. Administration.]
Sec. 5203. Grants to support high-quality charter schools.
Sec. 5204. Facilities financing assistance.
* * * * * * *
[Subpart 2--Credit Enhancement Initiatives To Assist Charter School
Facility Acquisition, Construction, and Renovation
[Sec. 5221. Purpose.
[Sec. 5222. Grants to eligible entities.
[Sec. 5223. Applications.
[Sec. 5224. Charter school objectives.
[Sec. 5225. Reserve account.
[Sec. 5226. Limitation on administrative costs.
[Sec. 5227. Audits and reports.
[Sec. 5228. No full faith and credit for grantee obligations.
[Sec. 5229. Recovery of funds.
[Sec. 5230. Definitions.
[Sec. 5231. Authorization of appropriations.]
* * * * * * *
TITLE V--PROMOTING INFORMED PARENTAL CHOICE AND INNOVATIVE PROGRAMS
* * * * * * *
PART B--PUBLIC CHARTER SCHOOLS
Subpart 1--[Charter School Programs] Charter School Program
[SEC. 5201. PURPOSE.
[It is the purpose of this subpart to increase national
understanding of the charter schools model by--
[(1) providing financial assistance for the planning,
program design, and initial implementation of charter
schools;
[(2) evaluating the effects of such schools,
including the effects on students, student academic
achievement, staff, and parents;
[(3) expanding the number of high-quality charter
schools available to students across the Nation; and
[(4) encouraging the States to provide support to
charter schools for facilities financing in an amount
more nearly commensurate to the amount the States have
typically provided for traditional public schools.
[SEC. 5202. PROGRAM AUTHORIZED.
[(a) In General.--The Secretary may award grants to State
educational agencies having applications approved pursuant to
section 5203 to enable such agencies to conduct a charter
school grant program in accordance with this subpart.
[(b) Special Rule.--If a State educational agency elects not
to participate in the program authorized by this subpart or
does not have an application approved under section 5203, the
Secretary may award a grant to an eligible applicant that
serves such State and has an application approved pursuant to
section 5203(c).
[(c) Program Periods.--
[(1) Grants to states.--Grants awarded to State
educational agencies under this subpart shall be for a
period of not more than 3 years.
[(2) Grants to eligible applicants.--Grants awarded
by the Secretary to eligible applicants or subgrants
awarded by State educational agencies to eligible
applicants under this subpart shall be for a period of
not more than 3 years, of which the eligible applicant
may use--
[(A) not more than 18 months for planning and
program design;
[(B) not more than 2 years for the initial
implementation of a charter school; and
[(C) not more than 2 years to carry out
dissemination activities described in section
5204(f)(6)(B).
[(d) Limitation.--A charter school may not receive--
[(1) more than one grant for activities described in
subparagraphs (A) and (B) of subsection (c)(2); or
[(2) more than one grant for activities under
subparagraph (C) of subsection (c)(2).
[(e) Priority Treatment.--
[(1) In general.--In awarding grants under this
subpart for fiscal year 2002 or any succeeding fiscal
year from any funds appropriated under section 5211
(other than funds reserved to carry out section
5205(b)), the Secretary shall give priority to States
to the extent that the States meet the criteria
described in paragraph (2) and one or more of the
criteria described in subparagraph (A), (B), or (C) of
paragraph (3).
[(2) Review and evaluation priority criteria.--The
criteria referred to in paragraph (1) are that the
State provides for periodic review and evaluation by
the authorized public chartering agency of each charter
school, at least once every 5 years unless required
more frequently by State law, to determine whether the
charter school is meeting the terms of the school's
charter, and is meeting or exceeding the student
academic achievement requirements and goals for charter
schools as set forth under State law or the school's
charter.
[(3) Priority criteria.--The criteria referred to in
paragraph (1) are the following:
[(A) The State has demonstrated progress, in
increasing the number of high-quality charter
schools that are held accountable in the terms
of the schools' charters for meeting clear and
measurable objectives for the educational
progress of the students attending the schools,
in the period prior to the period for which a
State educational agency or eligible applicant
applies for a grant under this subpart.
[(B) The State--
[(i) provides for one authorized
public chartering agency that is not a
local educational agency, such as a
State chartering board, for each
individual or entity seeking to operate
a charter school pursuant to such State
law; or
[(ii) in the case of a State in which
local educational agencies are the only
authorized public chartering agencies,
allows for an appeals process for the
denial of an application for a charter
school.
[(C) The State ensures that each charter
school has a high degree of autonomy over the
charter school's budgets and expenditures.
[(f) Amount Criteria.--In determining the amount of a grant
to be awarded under this subpart to a State educational agency,
the Secretary shall take into consideration the number of
charter schools that are operating, or are approved to open, in
the State.
[SEC. 5203. APPLICATIONS.
[(a) Applications From State Agencies.--Each State
educational agency desiring a grant from the Secretary under
this subpart shall submit to the Secretary an application at
such time, in such manner, and containing or accompanied by
such information as the Secretary may require.
[(b) Contents of a State Educational Agency Application.--
Each application submitted pursuant to subsection (a) shall--
[(1) describe the objectives of the State educational
agency's charter school grant program and a description
of how such objectives will be fulfilled, including
steps taken by the State educational agency to inform
teachers, parents, and communities of the State
educational agency's charter school grant program; and
[(2) describe how the State educational agency--
[(A) will inform each charter school in the
State regarding--
[(i) Federal funds that the charter
school is eligible to receive; and
[(ii) Federal programs in which the
charter school may participate;
[(B) will ensure that each charter school in
the State receives the charter school's
commensurate share of Federal education funds
that are allocated by formula each year,
including during the first year of operation of
the charter school; and
[(C) will disseminate best or promising
practices of charter schools to each local
educational agency in the State; and
[(3) contain assurances that the State educational
agency will require each eligible applicant desiring to
receive a subgrant to submit an application to the
State educational agency containing--
[(A) a description of the educational program
to be implemented by the proposed charter
school, including--
[(i) how the program will enable all
students to meet challenging State
student academic achievement standards;
[(ii) the grade levels or ages of
children to be served; and
[(iii) the curriculum and
instructional practices to be used;
[(B) a description of how the charter school
will be managed;
[(C) a description of--
[(i) the objectives of the charter
school; and
[(ii) the methods by which the
charter school will determine its
progress toward achieving those
objectives;
[(D) a description of the administrative
relationship between the charter school and the
authorized public chartering agency;
[(E) a description of how parents and other
members of the community will be involved in
the planning, program design, and
implementation of the charter school;
[(F) a description of how the authorized
public chartering agency will provide for
continued operation of the school once the
Federal grant has expired, if such agency
determines that the school has met the
objectives described in subparagraph (C)(i);
[(G) a request and justification for waivers
of any Federal statutory or regulatory
provisions that the eligible applicant believes
are necessary for the successful operation of
the charter school, and a description of any
State or local rules, generally applicable to
public schools, that will be waived for, or
otherwise not apply to, the school;
[(H) a description of how the subgrant funds
or grant funds, as appropriate, will be used,
including a description of how such funds will
be used in conjunction with other Federal
programs administered by the Secretary;
[(I) a description of how students in the
community will be--
[(i) informed about the charter
school; and
[(ii) given an equal opportunity to
attend the charter school;
[(J) an assurance that the eligible applicant
will annually provide the Secretary and the
State educational agency such information as
may be required to determine if the charter
school is making satisfactory progress toward
achieving the objectives described in
subparagraph (C)(i);
[(K) an assurance that the eligible applicant
will cooperate with the Secretary and the State
educational agency in evaluating the program
assisted under this subpart;
[(L) a description of how a charter school
that is considered a local educational agency
under State law, or a local educational agency
in which a charter school is located, will
comply with sections 613(a)(5) and 613(e)(1)(B)
of the Individuals with Disabilities Education
Act;
[(M) if the eligible applicant desires to use
subgrant funds for dissemination activities
under section 5202(c)(2)(C), a description of
those activities and how those activities will
involve charter schools and other public
schools, local educational agencies,
developers, and potential developers; and
[(N) such other information and assurances as
the Secretary and the State educational agency
may require.
[(c) Eligible Applicant Application.--Each eligible applicant
desiring a grant pursuant to section 5202(b) shall submit an
application to the Secretary at such time, in such manner, and
accompanied by such information as the Secretary may reasonably
require.
[(d) Contents of Eligible Applicant Application.--Each
application submitted pursuant to subsection (c) shall
contain--
[(1) the information and assurances described in
subparagraphs (A) through (N) of subsection (b)(3),
except that for purposes of this subsection
subparagraphs (J), (K), and (N) of such subsection
shall be applied by striking ``and the State
educational agency'' each place such term appears;
[(2) assurances that the State educational agency--
[(A) will grant, or will obtain, waivers of
State statutory or regulatory requirements; and
[(B) will assist each subgrantee in the State
in receiving a waiver under section 5204(e);
and
[(3) assurances that the eligible applicant has
provided its authorized public chartering authority
timely notice, and a copy, of the application, except
that the State educational agency (or the Secretary, in
the case of an application submitted to the Secretary)
may waive the requirement of this paragraph in the case
of an application for a precharter planning grant or
subgrant if the authorized public chartering authority
to which a charter school proposal will be submitted
has not been determined at the time the grant or
subgrant application is submitted.
[SEC. 5204. ADMINISTRATION.
[(a) Selection Criteria for State Educational Agencies.--The
Secretary shall award grants to State educational agencies
under this subpart on the basis of the quality of the
applications submitted under section 5203(b), after taking into
consideration such factors as--
[(1) the contribution that the charter schools grant
program will make to assisting educationally
disadvantaged and other students in meeting State
academic content standards and State student academic
achievement standards;
[(2) the degree of flexibility afforded by the State
educational agency to charter schools under the State's
charter schools law;
[(3) the ambitiousness of the objectives for the
State charter school grant program;
[(4) the quality of the strategy for assessing
achievement of those objectives;
[(5) the likelihood that the charter school grant
program will meet those objectives and improve
educational results for students;
[(6) the number of high-quality charter schools
created under this subpart in the State; and
[(7) in the case of State educational agencies that
propose to use grant funds to support dissemination
activities under subsection (f)(6)(B), the quality of
those activities and the likelihood that those
activities will improve student academic achievement.
[(b) Selection Criteria for Eligible Applicants.--The
Secretary shall award grants to eligible applicants under this
subpart on the basis of the quality of the applications
submitted under section 5203(c), after taking into
consideration such factors as--
[(1) the quality of the proposed curriculum and
instructional practices;
[(2) the degree of flexibility afforded by the State
educational agency and, if applicable, the local
educational agency to the charter school;
[(3) the extent of community support for the
application;
[(4) the ambitiousness of the objectives for the
charter school;
[(5) the quality of the strategy for assessing
achievement of those objectives;
[(6) the likelihood that the charter school will meet
those objectives and improve educational results for
students; and
[(7) in the case of an eligible applicant that
proposes to use grant funds to support dissemination
activities under subsection (f)(6)(B), the quality of
those activities and the likelihood that those
activities will improve student achievement.
[(c) Peer Review.--The Secretary, and each State educational
agency receiving a grant under this subpart, shall use a peer
review process to review applications for assistance under this
subpart.
[(d) Diversity of Projects.--The Secretary and each State
educational agency receiving a grant under this subpart, shall
award grants and subgrants under this subpart in a manner that,
to the extent possible, ensures that such grants and
subgrants--
[(1) are distributed throughout different areas of
the Nation and each State, including urban and rural
areas; and
[(2) will assist charter schools representing a
variety of educational approaches, such as approaches
designed to reduce school size.
[(e) Waivers.--The Secretary may waive any statutory or
regulatory requirement over which the Secretary exercises
administrative authority except any such requirement relating
to the elements of a charter school described in section
5210(1), if--
[(1) the waiver is requested in an approved
application under this subpart; and
[(2) the Secretary determines that granting such a
waiver will promote the purpose of this subpart.
[(f) Use of Funds.--
[(1) State educational agencies.--Each State
educational agency receiving a grant under this subpart
shall use such grant funds to award subgrants to one or
more eligible applicants in the State to enable such
applicant to plan and implement a charter school in
accordance with this subpart, except that the State
educational agency may reserve not more than 10 percent
of the grant funds to support dissemination activities
described in paragraph (6).
[(2) Eligible applicants.--Each eligible applicant
receiving funds from the Secretary or a State
educational agency shall use such funds to plan and
implement a charter school, or to disseminate
information about the charter school and successful
practices in the charter school, in accordance with
this subpart.
[(3) Allowable activities.--An eligible applicant
receiving a grant or subgrant under this subpart may
use the grant or subgrant funds only for--
[(A) post-award planning and design of the
educational program, which may include--
[(i) refinement of the desired
educational results and of the methods
for measuring progress toward achieving
those results; and
[(ii) professional development of
teachers and other staff who will work
in the charter school; and
[(B) initial implementation of the charter
school, which may include--
[(i) informing the community about
the school;
[(ii) acquiring necessary equipment
and educational materials and supplies;
[(iii) acquiring or developing
curriculum materials; and
[(iv) other initial operational costs
that cannot be met from State or local
sources.
[(4) Administrative expenses.--
[(A) State educational agency administrative
expenses.--Each State educational agency
receiving a grant pursuant to this subpart may
reserve not more than 5 percent of such grant
funds for administrative expenses associated
with the charter school grant program assisted
under this subpart.
[(B) Local administrative expenses.--A local
educational agency may not deduct funds for
administrative fees or expenses from a subgrant
awarded to an eligible applicant, unless the
eligible applicant enters voluntarily into a
mutually agreed upon arrangement for
administrative services with the relevant local
educational agency. Absent such approval, the
local educational agency shall distribute all
such subgrant funds to the eligible applicant
without delay.
[(5) Revolving loan funds.--Each State educational
agency receiving a grant pursuant to this subpart may
reserve not more than 10 percent of the grant funds for
the establishment of a revolving loan fund. Such fund
may be used to make loans to eligible applicants that
have received a subgrant under this subpart, under such
terms as may be determined by the State educational
agency, for the initial operation of the charter school
grant program of the eligible applicant until such time
as the recipient begins receiving ongoing operational
support from State or local financing sources.
[(6) Dissemination.--
[(A) In general.--A charter school may apply
for funds under this subpart, whether or not
the charter school has applied for or received
funds under this subpart for planning, program
design, or implementation, to carry out the
activities described in subparagraph (B) if the
charter school has been in operation for at
least 3 consecutive years and has demonstrated
overall success, including--
[(i) substantial progress in
improving student academic achievement;
[(ii) high levels of parent
satisfaction; and
[(iii) the management and leadership
necessary to overcome initial start-up
problems and establish a thriving,
financially viable charter school.
[(B) Activities.--A charter school described
in subparagraph (A) may use funds reserved
under paragraph (1) to assist other schools in
adapting the charter school's program (or
certain aspects of the charter school's
program), or to disseminate information about
the charter school, through such activities
as--
[(i) assisting other individuals with
the planning and start-up of one or
more new public schools, including
charter schools, that are independent
of the assisting charter school and the
assisting charter school's developers,
and that agree to be held to at least
as high a level of accountability as
the assisting charter school;
[(ii) developing partnerships with
other public schools, including charter
schools, designed to improve student
academic achievement in each of the
schools participating in the
partnership;
[(iii) developing curriculum
materials, assessments, and other
materials that promote increased
student achievement and are based on
successful practices within the
assisting charter school; and
[(iv) conducting evaluations and
developing materials that document the
successful practices of the assisting
charter school and that are designed to
improve student performance in other
schools.
[(g) Tribally Controlled Schools.--Each State that receives a
grant under this subpart and designates a tribally controlled
school as a charter school shall not consider payments to a
school under the Tribally Controlled Schools Act of 1988 (25
U.S.C. 2507) in determining--
[(1) the eligibility of the school to receive any
other Federal, State, or local aid; or
[(2) the amount of such aid.
[SEC. 5205. NATIONAL ACTIVITIES.
[(a) In General.--The Secretary shall reserve for each fiscal
year the greater of 5 percent or $5,000,000 of the amount
appropriated to carry out this subpart, except that in no
fiscal year shall the total amount so reserved exceed
$8,000,000, to carry out the following activities:
[(1) To provide charter schools, either directly or
through State educational agencies, with--
[(A) information regarding--
[(i) Federal funds that charter
schools are eligible to receive; and
[(ii) other Federal programs in which
charter schools may participate; and
[(B) assistance in applying for Federal
education funds that are allocated by formula,
including assistance with filing deadlines and
submission of applications.
[(2) To provide for other evaluations or studies that
include the evaluation of the impact of charter schools
on student academic achievement, including information
regarding--
[(A) students attending charter schools
reported on the basis of race, age, disability,
gender, limited English proficiency, and
previous enrollment in public school; and
[(B) the professional qualifications of
teachers within a charter school and the
turnover of the teaching force.
[(3) To provide--
[(A) information to applicants for assistance
under this subpart;
[(B) assistance to applicants for assistance
under this subpart with the preparation of
applications under section 5203;
[(C) assistance in the planning and startup
of charter schools;
[(D) training and technical assistance to
existing charter schools; and
[(E) for the dissemination to other public
schools of best or promising practices in
charter schools.
[(4) To provide (including through the use of one or
more contracts that use a competitive bidding process)
for the collection of information regarding the
financial resources available to charter schools,
including access to private capital, and to widely
disseminate to charter schools any such relevant
information and model descriptions of successful
programs.
[(5) To carry out evaluations of, technical
assistance for, and information dissemination
regarding, the per-pupil facilities aid programs. In
carrying out the evaluations, the Secretary may carry
out one or more evaluations of State programs assisted
under this subsection, which shall, at a minimum,
address--
[(A) how, and the extent to which, the
programs promote educational equity and
excellence; and
[(B) the extent to which charter schools
supported through the programs are--
[(i) held accountable to the public;
[(ii) effective in improving public
education; and
[(iii) open and accessible to all
students.
[(b) Per-Pupil Facilities Aid Programs.--
[(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 makes payments, on a per-pupil basis, to charter
schools to provide the schools with financing--
[(A) that is dedicated solely for 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 made
available to carry out this subsection under
paragraphs (2) and (3)(B) of section 5211(b)
for any fiscal year, 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 fiscal year for which the program
receives assistance under this
subsection;
[(ii) 80 percent in the second such
year;
[(iii) 60 percent in the third such
year;
[(iv) 40 percent in the fourth such
year; and
[(v) 20 percent in the fifth such
year.
[(3) Use of funds.--
[(A) In general.--A State 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 in
the State.
[(B) Evaluations; technical assistance;
dissemination.--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
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 and
local public funds expended 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.--To be eligible to receive a
grant under this subsection, a State shall
establish or enhance, and administer, a per-
pupil facilities 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
facilities.
[(5) Applications.--To be eligible to receive a grant
under this subsection, a State shall submit an
application to the Secretary at such time, in such
manner, and containing such information as the
Secretary may require.
[(6) Priorities.--In making grants under this
subsection, the Secretary shall give priority to States
that meet the criteria described in paragraph (2), and
subparagraphs (A), (B), and (C) of paragraph (3), of
section 5202(e).
[(c) Rule of Construction.--Nothing in this section shall be
construed to require charter schools to collect any data
described in subsection (a).]
SEC. 5201. PURPOSE.
It is the purpose of this subpart to--
(1) improve the United States education system and
education opportunities for all Americans by supporting
innovation in public education in public school
settings that prepare students to compete and
contribute to the global economy;
(2) provide financial assistance for the planning,
program design, and initial implementation of charter
schools;
(3) expand the number of high-quality charter schools
available to students across the Nation;
(4) evaluate the impact of such schools on student
achievement, families, and communities, and share best
practices between charter schools and other public
schools;
(5) encourage States to provide support to charter
schools for facilities financing in an amount more
nearly commensurate to the amount the States have
typically provided for traditional public schools;
(6) improve student services to increase
opportunities for students with disabilities, limited
English proficient students, and other traditionally
underserved students to attend charter schools and meet
challenging State academic achievement standards;
(7) support efforts to strengthen the charter school
authorizing process to improve performance management,
including transparency, oversight, monitoring, and
evaluation of such schools; and
(8) support quality accountability and transparency
in the operational performance of all authorized public
chartering agencies, which include State educational
agencies, local educational agencies, and other
authorizing entities.
SEC. 5202. PROGRAM AUTHORIZED.
(a) In General.--This subpart authorizes the Secretary to
carry out a charter school program that supports charter
schools that serve elementary school and secondary school
students by--
(1) supporting the startup of charter schools, and
the replication and expansion of high-quality charter
schools;
(2) assisting charter schools in accessing credit to
acquire and renovate facilities for school use; and
(3) carrying out national activities to support--
(A) charter school development;
(B) the dissemination of best practices of
charter schools for all schools;
(C) the evaluation of the impact of the
program on schools participating in the
program; and
(D) stronger charter school authorizing.
(b) Funding Allotment.--From the amount made available under
section 5211 for a fiscal year, the Secretary shall--
(1) reserve 12.5 percent to support charter school
facilities assistance under section 5204;
(2) reserve not more than 10 percent to carry out
national activities under section 5205; and
(3) use the remaining amount after the Secretary
reserves funds under paragraphs (1) and (2) to carry
out section 5203.
(c) Prior Grants and Subgrants.--The recipient of a grant or
subgrant under this subpart or subpart 2, as such subpart was
in effect on the day before the date of enactment of the
Success and Opportunity through Quality Charter Schools Act,
shall continue to receive funds in accordance with the terms
and conditions of such grant or subgrant.
SEC. 5203. GRANTS TO SUPPORT HIGH-QUALITY CHARTER SCHOOLS.
(a) In General.--From the amount reserved under section
5202(b)(3), the Secretary shall award grants to State entities
having applications approved pursuant to subsection (f) to
enable such entities to--
(1) award subgrants to eligible applicants for
opening and preparing to operate--
(A) new charter schools;
(B) replicated, high-quality charter school
models; or
(C) expanded, high-quality charter schools;
and
(2) provide technical assistance to eligible
applicants and authorized public chartering agencies in
carrying out the activities described in paragraph (1)
and work with authorized public chartering agencies in
the State to improve authorizing quality.
(b) State Uses of Funds.--
(1) In general.--A State entity receiving a grant
under this section shall--
(A) use not less than 90 percent of the grant
funds to award subgrants to eligible
applicants, in accordance with the quality
charter school program described in the State
entity's application approved pursuant to
subsection (f), for the purposes described in
subparagraphs (A) through (C) of subsection
(a)(1);
(B) reserve not less than 7 percent of such
funds to carry out the activities described in
subsection (a)(2); and
(C) reserve not more than 3 percent of such
funds for administrative costs which may
include technical assistance.
(2) Contracts and grants.--A State entity may use a
grant received under this section to carry out the
activities described in subparagraphs (A) and (B) of
paragraph (1) directly or through grants, contracts, or
cooperative agreements.
(3) Rule of construction.--Nothing in this Act shall
prohibit the Secretary from awarding grants to States
that use a weighted lottery to give slightly better
chances for admission to all, or a subset of,
educationally disadvantaged students if--
(A) the use of weighted lotteries in favor of
such students is not prohibited by State law,
and such State law is consistent with laws
described in section 5210(1)(G); and
(B) such weighted lotteries are not used for
the purpose of creating schools exclusively to
serve a particular subset of students.
(c) Program Periods; Peer Review; Grant Number and Amount;
Diversity of Projects; Waivers.--
(1) Program periods.--
(A) Grants.--A grant awarded by the Secretary
to a State entity under this section shall be
for a period of not more than 5 years.
(B) Subgrants.--A subgrant awarded by a State
entity under this section shall be for a period
of not more than 5 years, of which an eligible
applicant may use not more than 18 months for
planning and program design.
(2) Peer review.--The Secretary, and each State
entity receiving a grant under this section, shall use
a peer review process to review applications for
assistance under this section.
(3) Grant awards.--The Secretary shall--
(A) for each fiscal year for which funds are
appropriated under section 5211--
(i) award not less than 3 grants
under this section;
(ii) wholly fund each grant awarded
under this section, without making
continuation awards; and
(iii) fully obligate the funds
appropriated for the purpose of
awarding grants under this section in
the fiscal year for which such grants
are awarded; and
(B) midway through the grant period of each
grant awarded under this section to a State
entity, review the grant to determine whether
the State entity will meet the agreed upon uses
of funds in the State entity's application, and
if not, reallot the grant funds that will not
be used for such agreed upon uses of funds to
other State entities during the succeeding
grant competition under this section.
(4) Diversity of projects.--Each State entity
receiving a grant under this section shall award
subgrants under this section in a manner that, to the
extent possible, ensures that such subgrants--
(A) are distributed throughout different
areas, including urban, suburban, and rural
areas; and
(B) will assist charter schools representing
a variety of educational approaches.
(5) Waivers.--The Secretary may waive any statutory
or regulatory requirement over which the Secretary
exercises administrative authority except any such
requirement relating to the elements of a charter
school described in section 5210(1), if--
(A) the waiver is requested in an approved
application under this section; and
(B) the Secretary determines that granting
such a waiver will promote the purpose of this
subpart.
(d) Limitations.--
(1) Grants.--A State entity may not receive more than
1 grant under this section for a 5-year period.
(2) Subgrants.--An eligible applicant may not receive
more than 1 subgrant under this section per individual
charter school for a 5-year period, unless the eligible
applicant demonstrates to the State entity not less
than 3 years of improved educational results in the
areas described in subparagraphs (A) and (D) of section
5210(8) for students enrolled in such charter school.
(e) Applications.--A State entity desiring to receive a grant
under this section shall submit an application to the Secretary
at such time and in such manner as the Secretary may require.
The application shall include the following:
(1) Description of program.--A description of the
State entity's objectives under this section and how
the objectives of the program will be carried out,
including a description--
(A) of how the State entity--
(i) will support the opening of new
charter schools, replicated, high-
quality charter school models, or
expanded, high-quality charter schools,
and a description of the proposed
number of each type of charter school
or model, if applicable, to be opened
under the State entity's program;
(ii) will inform eligible charter
schools, developers, and authorized
public chartering agencies of the
availability of funds under the
program;
(iii) will work with eligible
applicants to ensure that the eligible
applicants access all Federal funds
that they are eligible to receive, and
help the charter schools supported by
the applicants and the students
attending the charter schools--
(I) participate in the
Federal programs in which the
schools and students are
eligible to participate;
(II) receive the commensurate
share of Federal funds the
schools and students are
eligible to receive under such
programs; and
(III) meet the needs of
students served under such
programs, including student
with disabilities and English
learners;
(iv) will have clear plans and
procedures to assist students enrolled
in a charter school that closes or
loses its charter to attend other high-
quality schools;
(v) in the case in which the State
entity is not a State educational
agency--
(I) will work with the State
educational agency and the
charter schools in the State to
maximize charter school
participation in Federal and
State programs for charter
schools; and
(II) will work with the State
educational agency to
adequately operate the State
entity's program under this
section, where applicable;
(vi) will ensure each eligible
applicant that receives a subgrant
under the State entity's program to
open and prepare to operate a new
charter school, a replicated, high-
quality charter school model, or an
expanded, high-quality charter school--
(I) will ensure such school
or model meets the requirements
under section 5210(1); and
(II) is prepared to continue
to operate such school or
model, in a manner consistent
with the eligible applicant's
application, after the subgrant
funds have expired;
(vii) will support charter schools in
local educational agencies with large
numbers of schools identified by the
State for improvement;
(viii) will work with charter schools
to promote inclusion of all students
and support all students once they are
enrolled to promote retention;
(ix) will work with charter schools
on recruitment practices, including
efforts to engage groups that may
otherwise have limited opportunities to
participate in charter schools, and to
ensure such schools do not have in
effect policies or procedures that may
create barriers to enrollment of
students, including educationally
disadvantaged students, and are in
compliance with all Federal and State
laws on enrollment practices;
(x) will share best and promising
practices between charter schools and
other public schools, including, where
appropriate, instruction and
professional development in core
academic subjects, and science,
technology, engineering, and math
education, including computer science;
(xi) will ensure the charter schools
receiving funds under the State
entity's program meet the educational
needs of their students, including
students with disabilities and English
learners;
(xii) will support efforts to
increase quality initiatives, including
meeting the quality authorizing
elements described in paragraph (2)(E);
(xiii) in the case of a State entity
not described in clause (xiv), will
provide oversight of authorizing
activity, including how the State will
approve, actively monitor, and re-
approve or revoke the authority of an
authorized public chartering agency
based on the performance of the charter
schools authorized by such agency in
the areas of student achievement,
student safety, financial management,
and compliance with all applicable
statutes and regulations; and
(xiv) in the case of a State entity
defined in subsection (i)(4), will work
with the State to provide assistance to
and oversight of authorized public
chartering agencies for authorizing
activity described in clause (xiii);
(B) of the extent to which the State entity--
(i) is able to meet and carry out the
priorities listed in subsection (f)(2);
and
(ii) is working to develop or
strengthen a cohesive statewide system
to support the opening of new charter
schools, replicated, high-quality
charter school models, or expanded,
high-quality charter schools;
(C) of how the State entity will carry out
the subgrant competition, including--
(i) a description of the application
each eligible applicant desiring to
receive a subgrant will submit,
including--
(I) a description of the
roles and responsibilities of
eligible applicants, partner
organizations, and management
organizations, including the
administrative and contractual
roles and responsibilities;
(II) a description of the
quality controls agreed to
between the eligible applicant
and the authorized public
chartering agency involved,
such as a contract or
performance agreement, how a
school's performance in the
State's academic accountability
system will be a primary factor
for renewal or revocation of
the school's charter, and how
the State entity and the
authorized public chartering
agency involved will reserve
the right to revoke or not
renew a school's charter based
on financial, structural, or
operational factors involving
the management of the school;
(III) a description of how
the eligible applicant will
solicit and consider input from
parents and other members of
the community on the
implementation and operation of
each charter school receiving
funds under the State entity's
program; and
(IV) a description of the
planned activities and
expenditures for the subgrant
funds for purposes of opening
and preparing to operate a new
charter school, a replicated,
high-quality charter school
model, or an expanded, high-
quality charter school, and how
the school or model will
maintain financial
sustainability after the end of
the subgrant period; and
(ii) a description of how the State
entity will review applications;
(D) in the case of an entity that partners
with an outside organization to carry out the
State entity's quality charter school program,
in whole or in part, of the roles and
responsibilities of this partner;
(E) of how the State entity will help the
charter schools receiving funds under the State
entity's program consider the transportation
needs of the schools' students; and
(F) of how the State entity will support
diverse charter school models, including models
that serve rural communities.
(2) Assurances.--Assurances, including a description
of how the assurances will be met, that--
(A) each charter school receiving funds under
the State entity's program will have a high
degree of autonomy over budget and operations;
(B) the State entity will support charter
schools in meeting the educational needs of
their students as described in paragraph
(1)(A)(x);
(C) the State entity will ensure that the
authorized public chartering agency of any
charter school that receives funds under the
State entity's program--
(i) adequately monitors each charter
school in recruiting, enrolling, and
meeting the needs of all students,
including students with disabilities
and English learners; and
(ii) ensures that each charter school
solicits and considers input from
parents and other members of the
community on the implementation and
operation of the school;
(D) the State entity will provide adequate
technical assistance to eligible applicants
to--
(i) meet the objectives described in
clauses (vii) and (viii) of paragraph
(1)(A) and paragraph (2)(B); and
(ii) recruit, enroll, and retain
traditionally underserved students,
including students with disabilities
and English learners, at rates similar
to traditional public schools;
(E) the State entity will promote quality
authorizing, such as through providing
technical assistance and supporting all
authorized public chartering agencies in the
State to improve the oversight of their charter
schools, including by--
(i) assessing annual performance data
of the schools, including, as
appropriate, graduation rates and
student academic growth;
(ii) reviewing the schools'
independent, annual audits of financial
statements conducted in accordance with
generally accepted accounting
principles, and ensuring any such
audits are publically reported; and
(iii) holding charter schools
accountable to the academic, financial,
and operational quality controls agreed
to between the charter school and the
authorized public chartering agency
involved, such as through renewal, non-
renewal, or revocation of the school's
charter;
(F) the State entity will work to ensure that
charter schools are included with the
traditional public schools in decision-making
about the public school system in the State;
and
(G) the State entity will ensure that each
charter school in the State make publicly
available, consistent with the dissemination
requirements of the annual State report card,
information to help parents make informed
decisions about the education options available
to their children, including information on the
educational program, student support services,
and annual performance and enrollment data for
the groups of students described in section
1111(b)(2)(C)(v)(II).
(3) Requests for waivers.--A request and
justification for waivers of any Federal statutory or
regulatory provisions that the State entity believes
are necessary for the successful operation of the
charter schools that will receive funds under the State
entity's program under this section, and a description
of any State or local rules, generally applicable to
public schools, that will be waived, or otherwise not
apply to such schools or, in the case of a State entity
defined in subsection (i)(4), a description of how the
State entity will work with the State to request
necessary waivers where applicable.
(f) Selection Criteria; Priority.--
(1) Selection criteria.--The Secretary shall award
grants to State entities under this section on the
basis of the quality of the applications submitted
under subsection (e), after taking into consideration--
(A) the degree of flexibility afforded by the
State's public charter school law and how the
State entity will work to maximize the
flexibility provided to charter schools under
the law;
(B) the ambitiousness of the State entity's
objectives for the quality charter school
program carried out under this section;
(C) the quality of the strategy for assessing
achievement of those objectives;
(D) the likelihood that the eligible
applicants receiving subgrants under the
program will meet those objectives and improve
educational results for students;
(E) the State entity's plan to--
(i) adequately monitor the eligible
applicants receiving subgrants under
the State entity's program;
(ii) work with the authorized public
chartering agencies involved to avoid
duplication of work for the charter
schools and authorized public
chartering agencies; and
(iii) provide adequate technical
assistance and support for--
(I) the charter schools
receiving funds under the State
entity's program; and
(II) quality authorizing
efforts in the State; and
(F) the State entity's plan to solicit and
consider input from parents and other members
of the community on the implementation and
operation of the charter schools in the State.
(2) Priority.--In awarding grants under this section,
the Secretary shall give priority to State entities to
the extent that they meet the following criteria:
(A) In the case of a State entity located in
a State that allows an entity other than a
local educational agency to be an authorized
public chartering agency, the State has a
quality authorized public chartering agency
that is an entity other than a local
educational agency.
(B) The State entity is located in a State
that does not impose any limitation on the
number or percentage of charter schools that
may exist or the number or percentage of
students that may attend charter schools in the
State.
(C) The State entity is located in a State
that ensures equitable financing, as compared
to traditional public schools, for charter
schools and students in a prompt manner.
(D) The State entity is located in a State
that uses charter schools and best practices
from charter schools to help improve struggling
schools and local educational agencies.
(E) The State entity partners with an
organization that has a demonstrated record of
success in developing management organizations
to support the development of charter schools
in the State.
(F) The State entity supports charter schools
that support at-risk students through
activities such as dropout prevention or
dropout recovery.
(G) The State entity authorizes all charter
schools in the State to serve as school food
authorities.
(H) The State entity has taken steps to
ensure that all authorizing public chartering
agencies implement best practices for charter
school authorizing.
(g) Local Uses of Funds.--An eligible applicant receiving a
subgrant under this section shall use such funds to carry out
activities related to opening and preparing to operate a new
charter school, a replicated, high-quality charter school
model, or an expanded, high-quality charter school, such as--
(1) preparing teachers and school leaders, including
through professional development;
(2) acquiring equipment, educational materials, and
supplies; and
(3) necessary renovations and minor facilities
repairs (excluding construction).
(h) Reporting Requirements.--Each State entity receiving a
grant under this section shall submit to the Secretary, at the
end of the third year of the 5-year grant period and at the end
of such grant period, a report on--
(1) the number of students served by each subgrant
awarded under this section and, if applicable, how many
new students were served during each year of the
subgrant period;
(2) the progress the State entity made toward meeting
the priorities described in subsection (f)(2), as
applicable;
(3) how the State entity met the objectives of the
quality charter school program described in the State
entity's application under subsection (e);
(4) how the State entity complied with, and ensured
that eligible applicants complied with, the assurances
described in the State entity's application;
(5) how the State entity worked with authorized
public chartering agencies, including how the agencies
worked with the management company or leadership of the
schools that received subgrants under this section; and
(6) the number of subgrants awarded under this
section to carry out each of the following:
(A) The opening of new charter schools.
(B) The opening of replicated, high-quality
charter school models.
(C) The opening of expanded, high-quality
charter schools.
(i) State Entity Defined.--For purposes of this section, the
term ``State entity'' means--
(1) a State educational agency;
(2) a State charter school board;
(3) a Governor of a State; or
(4) a charter school support organization.
SEC. 5204. FACILITIES FINANCING ASSISTANCE.
(a) Grants to Eligible Entities.--
(1) In general.--From the amount reserved under
section 5202(b)(1), the Secretary shall not use less
than 50 percent to award grants to eligible entities
that have the highest-quality applications approved
under subsection (d), after considering the diversity
of such applications, to demonstrate innovative methods
of assisting charter schools to address the cost of
acquiring, constructing, and renovating facilities by
enhancing the availability of loans or bond financing.
(2) Eligible entity defined.--For 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 determine
whether the application is sufficient to merit approval.
(c) Grant Characteristics.--Grants under subsection (a) 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.
(d) Applications.--
(1) In general.--To receive a grant under subsection
(a), an eligible entity shall submit to the Secretary
an application 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
proposed to be undertaken with funds received
under subsection (a), including how the
eligible entity will determine which charter
schools will receive assistance, 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
development and the design of the proposed
activities;
(C) a description of the eligible entity'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 public 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 charter
school program for which facilities financing
is sought; and
(F) in the case of an application submitted
by a State governmental entity, a description
of the actions that the entity has taken, or
will take, to ensure that charter schools
within the State receive the funding the
charter schools need to have adequate
facilities.
(e) Charter School Objectives.--An eligible entity receiving
a grant under this section 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, 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.
(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.
(3) The predevelopment costs required to assess sites
for purposes of paragraph (1) or (2) and which are
necessary to commence or continue the operation of a
charter school.
(f) Reserve Account.--
(1) Use of funds.--To assist charter schools to
accomplish the objectives described in subsection (e),
an eligible entity receiving a grant under subsection
(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
accordance with subsection (g)) 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:
(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 private
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
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).
(2) Investment.--Funds received under this section
and deposited in the reserve account established under
paragraph (1) shall be invested in obligations 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 subsection (a) shall be deposited in the
reserve account established under paragraph (1) and
used in accordance with such paragraph.
(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 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 receiving a grant under subsection (a)
annually shall submit to the Secretary a report
of its operations and activities under this
section.
(B) Contents.--Each annual report submitted
under subparagraph (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;
(ii) a copy of any report made on an
audit of the financial records of the
eligible entity that was conducted
under paragraph (1) during the
reporting period;
(iii) an evaluation by the eligible
entity of the effectiveness of its use
of the Federal funds provided under
subsection (a) in leveraging private
funds;
(iv) a listing and description of the
charter schools 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;
(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 undertaken by the
eligible entity under this section
(excluding subsection (k)) during the
reporting 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, 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 section.
(j) Recovery of Funds.--
(1) In general.--The Secretary, in accordance with
chapter 37 of title 31, United States Code, shall
collect--
(A) all of the funds in a reserve account
established by an eligible entity under
subsection (f)(1) if the Secretary determines,
not earlier than 2 years after the date on
which the eligible entity first received funds
under this section (excluding subsection (k)),
that the eligible entity has failed to make
substantial progress in carrying out the
purposes described in subsection (f)(1); or
(B) all or a portion of the funds in a
reserve account established by an eligible
entity under subsection (f)(1) 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 subsection (f)(1).
(2) Exercise of authority.--The Secretary shall not
exercise the authority 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. 124, 1234a, 1234g shall apply to the recovery of
funds under paragraph (1).
(4) Construction.--This subsection 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 (20 U.S.C. 1234 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 makes
payments, on a per-pupil basis, to charter schools to
provide the schools with financing--
(A) that is dedicated solely for 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 under
section 5202(b)(1) remaining after the
Secretary makes grants under subsection (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 fiscal year for which the program
receives assistance under this
subsection;
(ii) 80 percent in the second such
year;
(iii) 60 percent in the third such
year;
(iv) 40 percent in the fourth such
year; and
(v) 20 percent in the fifth such
year.
(D) State share.--A State receiving a grant
under this subsection may partner with 1 or
more organizations to provide up to 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 such funds provided to
charter schools increases 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 available through the grant to establish
or enhance, and administer, a per-pupil
facilities aid program for charter schools in
the State of the applicant.
(B) Evaluations; technical assistance;
dissemination.--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
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 and
local public funds expended 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.--Except as provided
in clause (ii), to be eligible to
receive a grant under this subsection,
a State shall establish or enhance, and
administer, a per-pupil facilities 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
facilities.
(ii) Special rule.--Notwithstanding
clause (i), a State that is required
under State law to provide its charter
schools with access to adequate
facility space, but which does not have
a per-pupil facilities aid program for
charter schools specified in State law,
may be 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
application to the Secretary at such time, in such
manner, and containing such information as the
Secretary may require.
SEC. 5205. NATIONAL ACTIVITIES.
(a) In General.--From the amount reserved under section
5202(b)(2), the Secretary shall--
(1) use not less than 75 percent of such funds to
award grants in accordance with subsection (b); and
(2) use not more than 25 percent of such funds to--
(A) provide technical assistance to State
entities in awarding subgrants under section
5203, and eligible entities and States
receiving grants under section 5204;
(B) disseminate best practices; and
(C) evaluate the impact of the charter school
program, including the impact on student
achievement, carried out under this subpart.
(b) Grants.--
(1) In general.--The Secretary shall make grants, on
a competitive basis, to eligible applicants for the
purpose of carrying out the activities described in
section 5202(a)(1), subparagraphs (A) through (C) of
section 5203(a)(1), and section 5203(g).
(2) Terms and conditions.--Except as otherwise
provided in this subsection, grants awarded under this
subsection shall have the same terms and conditions as
grants awarded to State entities under section 5203.
(3) Charter management organizations.--The Secretary
shall--
(A) use not less than 75 percent of the funds
described in subsection (a)(1) to make grants,
on a competitive basis, to eligible applicants
described in paragraph (4)(C); and
(B) notwithstanding paragraphs (1)(A) and (2)
of section 5203(f)--
(i) award grants to eligible
applicants on the basis of the quality
of the applications submitted under
this subsection; and
(ii) in awarding grants to eligible
applicants described in paragraph
(4)(C), give priority to each such
eligible applicant that--
(I) demonstrates a high
proportion of high-quality
charter schools within the
network of the eligible
applicant;
(II) demonstrates success in
serving students who are
educationally disadvantaged;
(III) does not have a
significant proportion of
charter schools that have been
closed, had their charter
revoked for compliance issues,
or had their affiliation with
such eligible applicant
revoked;
(IV) has sufficient
procedures in effect to ensure
timely closure of low-
performing or financially-
mismanaged charter schools and
clear plans and procedures in
effect for the students in such
schools to attend other high-
quality schools; and
(V) demonstrates success in
working with schools identified
for improvement by the State.
(4) Eligible applicant defined.--For purposes of this
subsection, the term ``eligible applicant'' means an
eligible applicant (as defined in section 5210) that--
(A) desires to open a charter school in--
(i) a State that did not apply for a
grant under section 5203; or
(ii) a State that did not receive a
grant under section 5203; or
(B) is a charter management organization.
(c) Contracts and Grants.--The Secretary may carry out any of
the activities described in this section directly or through
grants, contracts, or cooperative agreements.
* * * * * * *
SEC. 5208. RECORDS TRANSFER.
State educational agencies and local educational agencies, as
quickly as possible and to the extent practicable, shall ensure
that a student's records and, if applicable, a student's
individualized education program as defined in [section 602]
section 602(14) of the Individuals with Disabilities Education
Act, are transferred to a charter school upon the transfer of
the student to the charter school, and to another public school
upon the transfer of the student from a charter school to
another public school, in accordance with applicable State law.
* * * * * * *
SEC. 5210. DEFINITIONS.
In this subpart:
[(1) Charter school.--The term ``charter school''
means a public school that--
[(A) in accordance with a specific State
statute authorizing the granting of charters to
schools, is exempt from significant State or
local rules that inhibit the flexible operation
and management of public schools, but not from
any rules relating to the other requirements of
this paragraph;
[(B) is created by a developer as a public
school, or is adapted by a developer from an
existing public school, and is operated under
public supervision and direction;
[(C) operates in pursuit of a specific set of
educational objectives determined by the
school's developer and agreed to by the
authorized public chartering agency;
[(D) provides a program of elementary or
secondary education, or both;
[(E) is nonsectarian in its programs,
admissions policies, employment practices, and
all other operations, and is not affiliated
with a sectarian school or religious
institution;
[(F) does not charge tuition;
[(G) complies with the Age Discrimination Act
of 1975, title VI of the Civil Rights Act of
1964, title IX of the Education Amendments of
1972, section 504 of the Rehabilitation Act of
1973, and part B of the Individuals with
Disabilities Education Act;
[(H) is a school to which parents choose to
send their children, and that admits students
on the basis of a lottery, if more students
apply for admission than can be accommodated;
[(I) agrees to comply with the same Federal
and State audit requirements as do other
elementary schools and secondary schools in the
State, unless such requirements are
specifically waived for the purpose of this
program;
[(J) meets all applicable Federal, State, and
local health and safety requirements;
[(K) operates in accordance with State law;
and
[(L) has a written performance contract with
the authorized public chartering agency in the
State that includes a description of how
student performance will be measured in charter
schools pursuant to State assessments that are
required of other schools and pursuant to any
other assessments mutually agreeable to the
authorized public chartering agency and the
charter school.]
(1) Charter school.--The term ``charter school''
means a public school that--
(A) in accordance with a specific State
statute authorizing the granting of charters to
schools, is exempt from significant State or
local rules that inhibit the flexible operation
and management of public schools, but not from
any rules relating to the other requirements of
this paragraph;
(B) is created by a developer as a public
school, or is adapted by a developer from an
existing public school, and is operated under
public supervision and direction;
(C) operates in pursuit of a specific set of
educational objectives determined by the
school's developer and agreed to by the
authorized public chartering agency;
(D) provides a program of elementary or
secondary education, or both;
(E) is nonsectarian in its programs,
admissions policies, employment practices, and
all other operations, and is not affiliated
with a sectarian school or religious
institution;
(F) does not charge tuition;
(G) complies with the Age Discrimination Act
of 1975, title VI of the Civil Rights Act of
1964, title IX of the Education Amendments of
1972, section 504 of the Rehabilitation Act of
1973, part B of the Individuals with
Disabilities Education Act, the Americans with
Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.), and section 444 of the General Education
Provisions Act (20 U.S.C. 1232(g)) (commonly
known as the ``Family Education Rights and
Privacy Act of 1974'');
(H) is a school to which parents choose to
send their children, and admits students on the
basis of a lottery if more students apply for
admission than can be accommodated, except that
in cases in which students who are enrolled in
a charter school affiliated (such as by sharing
a network) with another charter school, those
students may be automatically enrolled in the
next grade level at such other charter school,
so long as a lottery is used to fill seats
created through regular attrition in student
enrollment;
(I) agrees to comply with the same Federal
and State audit requirements as do other
elementary schools and secondary schools in the
State, unless such State audit requirements are
waived by the State;
(J) meets all applicable Federal, State, and
local health and safety requirements;
(K) operates in accordance with State law;
(L) has a written performance contract with
the authorized public chartering agency in the
State that includes a description of how
student performance will be measured in charter
schools pursuant to State assessments that are
required of other schools and pursuant to any
other assessments mutually agreeable to the
authorized public chartering agency and the
charter school; and
(M) may serve prekindergarten or
postsecondary students.
(2) Charter management organization.--The term
``charter management organization'' means a not-for-
profit organization that manages a network of charter
schools linked by centralized support, operations, and
oversight.
(3) Charter school support organization.--The term
``charter school support organization'' means a
nonprofit, nongovernmental entity that is not an
authorized public chartering agency, which provides on
a statewide basis--
(A) assistance to developers during the
planning, program design, and initial
implementation of a charter school; and
(B) technical assistance to charter schools
to operate such schools.
[(2)] (4) Developer.--The term ``developer'' means an
individual or group of individuals (including a public
or private nonprofit organization), which may include
teachers, administrators and other school staff,
parents, or other members of the local community in
which a charter school project will be carried out.
[(3)] (5) Eligible applicant.--The term ``eligible
applicant'' means a developer that has--
(A) applied to an authorized public
chartering authority to operate a charter
school; and
(B) provided adequate and timely notice to
that authority[ under section 5203(d)(3)].
[(4)] (6) Authorized public chartering agency.--The
term ``authorized public chartering agency'' means a
State educational agency, local educational agency, or
other public entity that has the authority pursuant to
State law and approved by the Secretary to authorize or
approve a charter school.
(7) Expanded, high-quality charter school.--The term
``expanded, high-quality charter school'' means a high-
quality charter school that has either significantly
increased its enrollment or added one or more grades to
its school.
(8) High-quality charter school.--The term ``high-
quality charter school'' means a charter school that--
(A) shows evidence of strong academic
results, which may include strong academic
growth as determined by a State;
(B) has no significant issues in the areas of
student safety, operational and financial
management, or statutory or regulatory
compliance;
(C) has demonstrated success in significantly
increasing student academic achievement,
including graduation rates where applicable,
consistent with the requirements under title I,
for all students served by the charter school;
and
(D) has demonstrated success in increasing
student academic achievement, including
graduation rates where applicable, for the
groups of students described in section
1111(b)(2)(C)(v)(II), except that such
demonstration is not required in a case in
which the number of students in a group is
insufficient to yield statistically reliable
information or the results would reveal
personally identifiable information about an
individual student.
(9) Replicated, high-quality charter school model.--
The term ``replicated, high-quality charter school
model'' means a high-quality charter school that has
opened a new campus under an existing charter or an
additional charter if required by State law.
[SEC. 5211. AUTHORIZATION OF APPROPRIATIONS.
[(a) In General.--There are authorized to be appropriated to
carry out this subpart $300,000,000 for fiscal year 2002 and
such sums as may be necessary for each of the 5 succeeding
fiscal years.
[(b) Reservation.--From the amount appropriated under
subsection (a) for each fiscal year, the Secretary shall
reserve--
[(1) $200,000,000 to carry out this subpart, other
than section 5205(b); and
[(2) any funds in excess of $200,000,000, that do not
exceed $300,000,000, to carry out section 5205(b); and
[(3)(A) 50 percent of any funds in excess of
$300,000,000 to carry out this subpart, other than
section 5205(b); and
[(B) 50 percent of any funds in excess of
$300,000,000 to carry out section 5205(b).]
SEC. 5211. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
subpart $300,000,000 for fiscal year 2015 and each of the 5
succeeding fiscal years.
[Subpart 2--Credit Enhancement Initiatives To Assist Charter School
Facility Acquisition, Construction, and Renovation
[SEC. 5221. PURPOSE.
[The purpose of this subpart is to provide grants to eligible
entities to permit the eligible entities to demonstrate
innovative credit enhancement initiatives that assist charter
schools to address the cost of acquiring, constructing, and
renovating facilities.
[SEC. 5222. GRANTS TO ELIGIBLE ENTITIES.
[(a) Grants.--The Secretary shall use 100 percent of the
amount available to carry out this subpart to award not less
than three grants to eligible entities that have applications
approved under this subpart to demonstrate innovative methods
of assisting charter schools to address the cost of acquiring,
constructing, and renovating facilities by enhancing the
availability of loans or bond financing.
[(b) Grantee Selection.--
[(1) Evaluation of application.--The Secretary shall
evaluate each application submitted under section 5223,
and shall determine whether the application is
sufficient to merit approval.
[(2) Distribution of grants.--The Secretary shall
award at least one grant to an eligible entity
described in section 5230(2)(A), at least one grant to
an eligible entity described in section 5230(2)(B), and
at least one grant to an eligible entity described in
section 5230(2)(C), if applications are submitted that
permit the Secretary to do so without approving an
application that is not of sufficient quality to merit
approval.
[(c) Grant Characteristics.--Grants under this subpart 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.
[(d) Special Rule.--In the event the Secretary determines
that the funds made available under this subpart are
insufficient to permit the Secretary to award not less than
three grants in accordance with subsections (a) through (c),
such three-grant minimum and subsection (b)(2) shall not apply,
and the Secretary may determine the appropriate number of
grants to be awarded in accordance with subsection (c).
[SEC. 5223. APPLICATIONS.
[(a) In General.--To receive a grant under this subpart, 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 subsection (a)
shall contain--
[(1) a statement identifying the activities proposed
to be undertaken with funds received under this
subpart, including how the eligible entity will
determine which charter schools will receive
assistance, and how much and what types of assistance
charter schools will receive;
[(2) a description of the involvement of charter
schools in the application's development and the design
of the proposed activities;
[(3) a description of the eligible entity's expertise
in capital market financing;
[(4) 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;
[(5) 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;
[(6) in the case of an application submitted by a
State governmental entity, a description of the actions
that the entity has taken, or will take, to ensure that
charter schools within the State receive the funding
the charter schools need to have adequate facilities;
and
[(7) such other information as the Secretary may
reasonably require.
[SEC. 5224. CHARTER SCHOOL OBJECTIVES.
[An eligible entity receiving a grant under this subpart
shall use the funds deposited in the reserve account
established under section 5225(a) to assist one or more charter
schools to access private sector capital to accomplish one or
both 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) in improved or unimproved real property that is
necessary to commence or continue the operation of a
charter school.
[(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.
[SEC. 5225. RESERVE ACCOUNT.
[(a) Use of Funds.--To assist charter schools to accomplish
the objectives described in section 5224, 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 5226) 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 5224.
[(2) Guaranteeing and insuring leases of personal and
real property for an objective described in section
5224.
[(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).
[(b) Investment.--Funds received under this subpart and
deposited in the reserve account established under subsection
(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 subpart shall be deposited in the reserve
account established under subsection (a) and used in accordance
with such subsection.
[SEC. 5226. LIMITATION ON ADMINISTRATIVE COSTS.
[An eligible entity may use not more than 0.25 percent of the
funds received under this subpart for the administrative costs
of carrying out its responsibilities under this subpart.
[SEC. 5227. AUDITS AND REPORTS.
[(a) Financial Record Maintenance and Audit.--The financial
records of each eligible entity receiving a grant under this
subpart shall be maintained in accordance with generally
accepted accounting principles and shall be subject to an
annual audit by an independent public accountant.
[(b) Reports.--
[(1) Grantee annual reports.--Each eligible entity
receiving a grant under this subpart annually shall
submit to the Secretary a report of its operations and
activities under this subpart.
[(2) Contents.--Each annual report submitted under
paragraph (1) shall include--
[(A) 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;
[(B) a copy of any report made on an audit of
the financial records of the eligible entity
that was conducted under subsection (a) during
the reporting period;
[(C) an evaluation by the eligible entity of
the effectiveness of its use of the Federal
funds provided under this subpart in leveraging
private funds;
[(D) a listing and description of the charter
schools served during the reporting period;
[(E) a description of the activities carried
out by the eligible entity to assist charter
schools in meeting the objectives set forth in
section 5224; and
[(F) a description of the characteristics of
lenders and other financial institutions
participating in the activities undertaken by
the eligible entity under this subpart during
the reporting period.
[(3) Secretarial report.--The Secretary shall review
the reports submitted under paragraph (1) and shall
provide a comprehensive annual report to Congress on
the activities conducted under this subpart.
[SEC. 5228. NO FULL FAITH AND CREDIT FOR GRANTEE OBLIGATIONS.
[No financial obligation of an eligible entity entered into
pursuant to this subpart (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 subpart.
[SEC. 5229. RECOVERY OF FUNDS.
[(a) In General.--The Secretary, in accordance with chapter
37 of title 31, United States Code, shall collect--
[(1) all of the funds in a reserve account
established by an eligible entity under section 5225(a)
if the Secretary determines, not earlier than 2 years
after the date on which the eligible entity first
received funds under this subpart, that the eligible
entity has failed to make substantial progress in
carrying out the purposes described in section 5225(a);
or
[(2) all or a portion of the funds in a reserve
account established by an eligible entity under section
5225(a) 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 section 5225(a).
[(b) Exercise of Authority.--The Secretary shall not exercise
the authority provided in subsection (a) to collect from any
eligible entity any funds that are being properly used to
achieve one or more of the purposes described in section
5225(a).
[(c) Procedures.--The provisions of sections 451, 452, and
458 of the General Education Provisions Act shall apply to the
recovery of funds under subsection (a).
[(d) Construction.--This section 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.
[SEC. 5230. DEFINITIONS.
[In this subpart:
[(1) Charter school.--The term ``charter school'' has
the meaning given such term in section 5210.
[(2) Eligible entity.--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).
[SEC. 5231. AUTHORIZATION OF APPROPRIATIONS.
[For the purpose of carrying out this subpart, there are
authorized to be appropriated $150,000,000 for fiscal year 2002
and such sums as may be necessary for fiscal year 2003.]
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