[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2616 Referred in Senate (RFS)]

  1st Session
                                H. R. 2616


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 7, 1997

                                Received

                           November 13, 1997

 Read twice and referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 AN ACT


 
To amend titles VI and X of the Elementary and Secondary Education Act 
             of 1965 to improve and expand charter schools.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community-Designed Charter Schools 
Act''.

SEC. 2. INNOVATIVE CHARTER SCHOOLS.

    Title VI of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7301 et seq.) is amended--
            (1) in section 6201(a)--
                    (A) in paragraph (1)(C), by striking ``and'' after 
                the semicolon;
                    (B) by redesignating paragraph (2) as paragraph 
                (3); and
                    (C) by inserting after paragraph (1) the following:
            ``(2) support for planning, designing, and initial 
        implementation of charter schools as described in part C of 
        title X; and''; and
            (2) in section 6301(b)--
                    (A) in paragraph (7), by striking ``and'' after the 
                semicolon;
                    (B) by redesignating paragraph (8) as paragraph 
                (9); and
                    (C) by inserting after paragraph (7) the following:
            ``(8) planning, designing, and initial implementation of 
        charter schools as described in part C of title X; and''.

SEC. 3. CHARTER SCHOOLS.

    Part C of title X of the Elementary and Secondary Education Act of 
1965 is amended to read as follows:

                    ``PART C--PUBLIC CHARTER SCHOOLS

``SEC. 10301. FINDINGS AND PURPOSE.

    ``(a) Findings.--The Congress finds that--
            ``(1) enhancement of parent and student choices among 
        public schools can assist in promoting comprehensive 
        educational reform and give more students the opportunity to 
        learn to challenging State content standards and challenging 
        State student performance standards, if sufficiently diverse 
        and high-quality choices, and genuine opportunities to take 
        advantage of such choices, are available to all students;
            ``(2) useful examples of such choices can come from States 
        and communities that experiment with methods of offering 
        teachers and other educators, parents, and other members of the 
        public the opportunity to design and implement new public 
        schools and to transform existing public schools;
            ``(3) charter schools are a mechanism for testing a variety 
        of educational approaches and should, therefore, be exempted 
        from restrictive rules and regulations if the leadership of 
        such schools commits to attaining specific and ambitious 
        educational results for educationally disadvantaged students 
        consistent with challenging State content standards and 
        challenging State student performance standards for all 
        students;
            ``(4) charter schools, as such schools have been 
        implemented in a few States, can embody the necessary mixture 
        of enhanced choice, exemption from restrictive regulations, and 
        a focus on learning gains;
            ``(5) charter schools, including charter schools that are 
        schools-within-schools, can help reduce school size, which can 
        have a significant effect on student achievement;
            ``(6) the Federal Government should test, evaluate, and 
        disseminate information on a variety of charter school models 
        in order to help demonstrate the benefits of this promising 
        educational reform; and
            ``(7) there is a strong documented need for cash-flow 
        assistance to charter schools that are starting up, because 
        State and local operating revenue streams are not immediately 
        available.
    ``(b) Purposes.--The purposes of this part are--
            ``(1) to provide financial assistance for the planning, 
        design, initial implementation of charter schools;
            ``(2) to facilitate the ability of States and localities to 
        increase the number of charter schools in the Nation to not 
        less than 3,000 by the year 2000; and
            ``(3) to evaluate the effects of charter schools, including 
        the effects on students, student achievement, staff, and 
        parents.

``SEC. 10302. PROGRAM AUTHORIZED.

    ``(a) In General.--The Secretary may award grants to State 
educational agencies having applications approved pursuant to section 
10303 to enable such agencies to conduct a charter school grant program 
in accordance with this part.
    ``(b) Special Rule.--If a State educational agency elects not to 
participate in the program authorized by this part or does not have an 
application approved under section 10303, the Secretary may award a 
grant to an eligible applicant that serves such State and has an 
application approved pursuant to section 10303.
    ``(c) Program Periods.--
            ``(1) Grants to states.--
                    ``(A) Basic grants.--Grants awarded to State 
                educational agencies under this part for planning, 
                design, or initial implementation of charter schools, 
                shall be awarded for a period of not more than 5 years.
                    ``(B) Extension.--Any State educational agency that 
                has received a grant or subgrant under this part prior 
                to October 1, 1997, shall be eligible to receive an 
                additional grant for a period not to exceed 2 years in 
                accordance with this section, notwithstanding that such 
                a State does not meet the requirements of section 
                10309(1)(A).
            ``(2) Grants to eligible applicants.--
                    ``(A) Basic grants.--Grants awarded by the 
                Secretary to eligible applicants or subgrants awarded 
                by State educational agencies to eligible applicants 
                under this part shall be awarded for planning, design, 
                or initial implementation of charter schools, for a 
                period not to exceed more than 5 years, of which the 
                eligible applicant may use--
                            ``(i) not more than 30 months for planning 
                        and program design; and
                            ``(ii) not more than 4 years for the 
                        initial implementation of a charter school.
                    ``(B) Extension.--Any eligible applicant that has 
                received a grant or subgrant under this part prior to 
                October 1, 1997, shall be eligible to receive an 
                additional grant for a period not to exceed 2 years in 
                accordance with this section, notwithstanding that such 
                an eligible applicant does not meet the requirements of 
                section 10309(1)(A).
    ``(d) Limitation.--Except as otherwise provided under subsection 
(c), the Secretary shall not award more than one grant and State 
educational agencies shall not award more than one subgrant under this 
part to support a particular charter school.
    ``(e) Priority and Requirements.--
            ``(1) Priority.--
                    ``(A) Fiscal years 1998, 1999, and 2000.--In 
                awarding grants under this part for any of the fiscal 
                years 1998, 1999, and 2000 from funds appropriated 
                under section 10310 that are in excess of $51,000,000 
                for the fiscal year, the Secretary shall give priority 
                to State educational agencies in accordance with 
                subparagraph (C).
                    ``(B) Succeeding fiscal years.--In awarding grants 
                under this part for fiscal year 2001 or any succeeding 
                fiscal year from any funds appropriated under section 
                10310, the Secretary shall consider the number of 
                charter schools in each State and shall give priority 
                to State educational agencies in accordance with 
                subparagraph (C).
                    ``(C) Priority order.--In awarding grants under 
                subparagraphs (A) and (B), the Secretary shall, in the 
                order listed, give priority to a State that--
                            ``(i) meets all requirements of paragraph 
                        (2);
                            ``(ii) meets 2 requirements of paragraph 
                        (2); and
                            ``(iii) meets 1 requirement of paragraph 
                        (2).
            ``(2) Requirements.--The requirements referred to in 
        paragraph (1)(C) are as follows:
                    ``(A) The State law regarding charter schools 
                ensures that each charter school has a high degree of 
                autonomy over its budgets and expenditures.
                    ``(B) The State law regarding charter schools 
                provides that not less than 1 chartering authority in 
                the State allows for an increase in the number of 
                charter schools from 1 year to the next year; and
                    ``(C) The State law regarding charter schools 
                provides for periodic review and evaluation by the 
                authorized public chartering agency of each charter 
                school to determine whether the school is meeting or 
                exceeding the academic performance requirements and 
                goals for charter schools as set forth under State law 
                or the school's charter.

``SEC. 10303. APPLICATIONS.

    ``(a) Applications From State Agencies.--Each State educational 
agency desiring a grant from the Secretary under this part 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;
            ``(2) describe how the State educational agency will inform 
        each charter school of available Federal programs and funds 
        that each such school is eligible to receive and ensure that 
        each such school receives its appropriate share of Federal 
        education funds allocated by formula; 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 
                        performance 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 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 
                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 applicant will 
                cooperate with the Secretary and the State educational 
                agency in evaluating the program assisted under this 
                part;
                    ``(L)(i) an assurance that the charter school that 
                is a local educational agency or the local educational 
                agency in which the charter school is located, as the 
                case may be, will comply with the requirements of the 
                Individuals with Disabilities Education Act (20 U.S.C. 
                1400 et seq.) with respect to the provision of special 
                education and related services to children with 
                disabilities in charter schools; and
                    ``(ii) a description of how the charter school that 
                is a local educational agency or the local educational 
                agency in which the charter school is located, as the 
                case may be, will ensure, consistent with such 
                requirements, the receipt of special education and 
                related services by children with disabilities in 
                charter schools; and
                    ``(M) such other information and assurances as the 
                Secretary and the State educational agency may require; 
                and
            ``(4) describe how the State educational agency will use 
        administrative funds provided under section 10304(f)(4) to 
        disseminate best or promising practices of charter schools in 
        such State to each local educational agency in the State, 
        except that such dissemination shall result, to the extent 
        practicable, in a minimum of paperwork for a State educational 
        agency, eligible applicant, or charter school.
    ``(c) Contents of Eligible Applicant Application.--Each eligible 
applicant desiring a grant pursuant to section 10302 shall submit an 
application to the State educational agency or Secretary, respectively, 
at such time, in such manner, and accompanied by such information as 
the State educational agency or Secretary, respectively, may reasonably 
require.
    ``(d) Contents of Application.--Each application submitted pursuant 
to subsection (c) shall contain--
            ``(1) the information and assurances described in 
        subparagraphs (A) through (L) of subsection (b)(3), except that 
        for purposes of this subsection subparagraphs (J), (K), and (L) 
        of such subsection shall be applied by striking `and the State 
        educational agency' each place such term appears; and
            ``(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 10304(e).

``SEC. 10304. ADMINISTRATION.

    ``(a) Selection Criteria for State Educational Agencies.--The 
Secretary shall award grants to State educational agencies under this 
part on the basis of the quality of the applications submitted under 
section 10303(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 to achieving State content standards and State 
        student performance standards and, in general, a State's 
        education improvement plan;
            ``(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; and
            ``(6) the number of charter schools created under this part 
        in the State.
    ``(b) Selection Criteria for Eligible Applicants.--The Secretary 
shall award grants to eligible applicants under this part on the basis 
of the quality of the applications submitted under section 10303(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; and
            ``(6) the likelihood that the charter school will meet 
        those objectives and improve educational results for students.
    ``(c) Peer Review.--The Secretary, and each State educational 
agency receiving a grant under this part, shall use a peer review 
process to review applications for assistance under this part.
    ``(d) Diversity of Projects.--The Secretary and each State 
educational agency receiving a grant under this part, shall award 
subgrants under this part 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 10309(1), if--
            ``(1) the waiver is requested in an approved application 
        under this part; and
            ``(2) the Secretary determines that granting such a waiver 
        will promote the purpose of this part.
    ``(f) Use of Funds.--
            ``(1) State educational agencies.--Each State educational 
        agency receiving a grant under this part 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 part.
            ``(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 in accordance with this part.
            ``(3) Allowable activities for basic grants.--An eligible 
        applicant receiving a basic grant or subgrant under section 
        10302(c)(2) 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.--Each State educational 
        agency receiving a grant pursuant to this part may reserve not 
        more than 5 percent of such grant funds for administrative 
        expenses associated with the charter school grant program 
        assisted under this part.
    ``(g) Tribally Controlled Schools.--Each State that receives a 
grant under this part 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. 10305. NATIONAL ACTIVITIES.

    ``The Secretary shall reserve for each fiscal year the lesser of 5 
percent of the amount appropriated to carry out this part for the 
fiscal year or $5,000,000, to carry out, giving highest priority to 
carrying out paragraph (3), the following:
            ``(1) To provide charter schools, either directly or 
        through the State educational agency, with information 
        regarding available education funds that such school is 
        eligible to receive, and assistance in applying for Federal 
        education funds which are allocated by formula, including 
        filing deadlines and submission of applications; and
            ``(2) To provide, through 1 or more contracts using a 
        competitive bidding process--
                    ``(A) charter schools with assistance in accessing 
                private capital;
                    ``(B) pilot projects in a variety of States to 
                better understand and improve access to private capital 
                by charter schools; and
                    ``(C) collection on a nationwide basis, of 
                information regarding successful programs that access 
                private capital for charter schools and disseminate any 
                such relevant information and model descriptions to all 
                charter schools.
            ``(3) To provide for the completion of the 4-year national 
        study (which began in 1995) of charter schools and any related 
        present or future evaluations or studies which shall include 
        the evaluation of the impact of charter schools on student 
        achievement, including information regarding--
                    ``(A) the number of students who applied for 
                admission to charter schools and the number of such 
                students who enrolled in charter schools, disaggregated 
                on the basis of race, age, disability, gender, limited 
                English proficiency, and previous enrollment in a 
                public school;
                    ``(B) student achievement; and
                    ``(C) qualifications of school employees at the 
                charter school, including the number of teachers within 
                a charter school that have been certified or licensed 
                by the State and the turnover of the teaching force.
            ``(4)(A) To provide information to applicants for 
        assistance under this part;
            ``(B) assistance to applicants for assistance under this 
        part with the preparation of applications under section 10303;
            ``(C) assistance in the planning and startup of charter 
        schools;
            ``(D) ongoing training and technical assistance to existing 
        charter schools; and
            ``(E) for the dissemination of best practices in charter 
        schools to other public schools.

``SEC. 10306. FEDERAL FORMULA ALLOCATION DURING FIRST YEAR AND FOR 
              SUCCESSIVE ENROLLMENT EXPANSIONS.

    ``For purposes of the allocation to schools by the States or their 
agencies of funds under part A of title I, and any other Federal funds 
which the Secretary allocates to States on a formula basis, the 
Secretary and each State educational agency shall take such measures 
not later than 6 months after the date of the enactment of this part as 
are necessary to ensure that every charter school receives the Federal 
funding for which it is eligible not later than 5 months after first 
opening, notwithstanding the fact that the identity and characteristics 
of the students enrolling in that school are not fully and completely 
determined until that school actually opens. These measures shall 
similarly ensure that every charter school expanding its enrollment in 
any subsequent year of operation receives the Federal funding for which 
it is eligible not later than 5 months after such expansion.

``SEC. 10307. RECORDS TRANSFER.

    ``State and local educational agencies, 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(11) of the 
Individuals with Disabilities Education Act (20 U.S.C. 1401(11)), are 
transferred to the charter school upon transfer of a student to a 
charter school in accordance with applicable State law.

``SEC. 10308. PAPERWORK REDUCTION.

    ``To the extent practicable, the Secretary and each authorized 
public chartering agency, shall ensure that implementation of this part 
results in a minimum of paperwork for any eligible applicant or charter 
school.

``SEC. 10309. DEFINITIONS.

    ``As used in this part:
            ``(1) The term `charter school' means a public school 
        that--
                    ``(A) in accordance with a specific State charter 
                school statute, is exempted 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 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.
            ``(2) 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) The term `eligible applicant' means an authorized 
        public chartering agency participating in a partnership with a 
        developer to establish a charter school in accordance with this 
        part.
            ``(4) 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.

``SEC. 10310. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated $100,000,000 for fiscal year 1998 and such sums as 
may be necessary for each of the four succeeding fiscal years.

``SEC. 10311. PROHIBITION OF CONTRACTS.

    ``If it has been finally determined by a court or Federal agency 
that any person intentionally affixed a fraudulent label bearing a 
`Made in America' inscription, or any inscription with the same 
meaning, to any product sold in or shipped to the United States that 
was not made in the United States, such person shall be ineligible to 
receive any contract or subcontract made with funds provided pursuant 
to this part, pursuant to the debarment, suspension, and ineligibility 
procedures described in section 9.400 through 9.409 of title 48, Code 
of Federal Regulations.''.

            Passed the House of Representatives November 7, 1997.

            Attest:

                                                ROBIN H. CARLE,

                                                                 Clerk.