[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 3169 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 3169

  To provide for military charters between military installations and 
 local school districts, to provide credit enhancement initiatives to 
promote military charter school facility acquisition, construction, and 
                  renovation, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 14, 2002

 Ms. Landrieu introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
  To provide for military charters between military installations and 
 local school districts, to provide credit enhancement initiatives to 
promote military charter school facility acquisition, construction, and 
                  renovation, and for other purposes.

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

TITLE I--STABLE TRANSITIONS IN EDUCATION FOR ARMED SERVICES' DEPENDENT 
                                 YOUTH

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Stable Transitions in Education 
for Armed Services' Dependent Youth Act''.

SEC. 102. FINDINGS.

    Congress finds that--
            (1) States are establishing new and higher academic 
        standards for students in kindergarten through grade 12;
            (2) no Federal funding streams are specifically designed to 
        help States and school districts with the costs of providing 
        military or mobile students who are struggling academically, 
        with the extended learning time and accelerated curricula that 
        the students need to meet high academic standards;
            (3) forty-eight States now require State accountability 
        tests to determine student grade-level performance and 
        progress;
            (4) nineteen States currently rate the performance of all 
        schools or identify low-performing schools through State 
        accountability tests;
            (5) sixteen States now have the power to close, take over, 
        or overhaul chronically failing schools on the basis of those 
        tests;
            (6) fourteen States provide high-performing schools with 
        monetary rewards on the basis of those tests;
            (7) nineteen States currently require students to pass 
        State accountability tests to graduate from secondary school;
            (8) six States currently link student promotion to results 
        on State accountability tests;
            (9) thirty-seven States have a process in place that allows 
        charters to be a useful tool to bridge the gap created by 
        frequent school changes;
            (10) excessive percentages of students are not meeting 
        their State standards and are failing to perform at high levels 
        on State accountability tests; and
            (11) among mobile students, a common thread is that school 
        transcripts are not easily transferred and credits are not 
        accepted between public school districts in the United States.

SEC. 103. PURPOSE.

    The purpose of this title is to provide Federal support through a 
new demonstration program to States and local educational agencies, to 
enable the States and local educational agencies to develop models for 
high quality military charter schools that are specifically designed to 
help mobile military dependent students attending public school make a 
smooth transition from one school district to another, even across 
State lines, and achieve a symbiotic relationship between military 
installations and these school districts.

SEC. 104. DEFINITIONS.

    In this title:
            (1) Elementary school; secondary school; local educational 
        agency; state educational agency.--The terms ``elementary 
        school'', ``secondary school'', ``local educational agency'', 
        and ``State educational agency'' have the meanings given such 
        terms in section 9101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7801).
            (2) Military installation.--The term ``military 
        installation'' has the meaning given such term in section 
        2687(e)(1) of title 10, United States Code.
            (3) Military dependent student.--The term ``military 
        dependent student'' means an elementary school or secondary 
        school student who has a parent who is a member of the Armed 
        Forces, including a member of a reserve component of the Armed 
        Forces, without regard to whether the member is on active duty 
        or full-time National Guard duty (as defined in section 101(d) 
        of title 10, United States Code).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Defense.
            (5) Student.--The term ``student'' means an elementary 
        school or secondary school student.

SEC. 105. GRANTS TO STATES.

    (a) Grants Authorized.--
            (1) In general.--From amounts appropriated under section 
        110, the Secretary, in consultation with the Secretary of 
        Education, shall establish a demonstration program through 
        which the Secretary shall make grants to State educational 
        agencies, on a competitive basis, to enable the State 
        educational agencies to assist local educational agencies in 
        establishing and maintaining high quality military charter 
        schools.
            (2) Distribution rule.--In awarding grants under this title 
        the Secretary shall ensure that such grants serve not more than 
        10 States and not more than 35 local educational agencies with 
        differing demographics.
            (3) Special local rule.--
                    (A) Nonparticipating state.--If a State chooses not 
                to participate in the demonstration program assisted 
                under this title or does not have an application 
                approved under subsection (c), then the Secretary may 
                award a grant directly to a local educational agency in 
                the State to assist the local educational agency in 
                carrying out high quality military charter schools.
                    (B) Local educational agency application.--To be 
                eligible to receive a grant under this paragraph, a 
                local educational agency shall submit an application to 
                the Secretary at such time, in such manner, and 
                containing such information as the Secretary may 
                require.
                    (C) Regulations.--The Secretary shall promulgate 
                such regulations as the Secretary determines necessary 
                to carry out this paragraph.
    (b) Eligibility and Selection.--
            (1) Eligibility.--For a State educational agency to be 
        eligible to receive a grant under subsection (a), the State 
        served by the State educational agency shall--
                    (A) have in effect all standards and assessments 
                required under section 1111 of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 6311);
                    (B) compile and annually distribute to parents a 
                public school report card that, at a minimum, includes 
                information on student and school performance for each 
                of the assessments required under section 1111 of the 
                Elementary and Secondary Education Act of 1965;
                    (C) require each military charter school assisted 
                under this title to be an independent public school;
                    (D) require each military charter school assisted 
                under this title to operate under an initial 5-year 
                charter granted by a State charter authority, with 
                specified check points and renewal, as required by 
                State law; and
                    (E) require each military charter school assisted 
                under this title to participate in the State's testing 
                program.
            (2) Selection.--In selecting State educational agencies to 
        receive grants under this section, the Secretary shall make the 
        selections in a manner consistent with the purpose of this 
        title.
    (c) Application.--
            (1) In general.--To be eligible to receive a grant under 
        this section, a State educational agency shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may require.
            (2) Contents.--Such application shall include--
                    (A) information describing specific measurable 
                goals and objectives to be achieved in the State 
                through the military charter schools carried out under 
                this title, which may include specific measurable 
                annual educational goals and objectives relating to--
                            (i) increased student academic achievement;
                            (ii) decreased student dropout rates;
                            (iii) governance, parental involvement 
                        plans, and disciplinary policies;
                            (iv) a military charter school admissions 
                        policy that requires a minimum of 60 percent 
                        military dependent elementary school or 
                        secondary school students, and a maximum of 80 
                        percent of military dependent students, except 
                        where such percentages are impossible to 
                        maintain because of the demographics of the 
                        area around the military installation;
                            (v) liability and other insurance coverage, 
                        business and accounting practices, and the 
                        procedures and methods employed by the 
                        chartering authority in monitoring the school; 
                        and
                            (vi) such other factors as the State 
                        educational agency may choose to measure; and
                    (B) information on criteria, established or adopted 
                by the State, that--
                            (i) the State will use to select local 
                        educational agencies for participation in the 
                        military charter schools carried out under this 
                        title; and
                            (ii) at a minimum, will assure that grants 
                        provided under this title are provided to--
                                    (I) the local educational agencies 
                                in the State that are sympathetic to, 
                                and take actions to ease the transition 
                                burden upon, such local educational 
                                agencies' military dependent students;
                                    (II) the local educational agencies 
                                in the State that have the highest 
                                percentage of military dependent 
                                students impacting the local school 
                                system or not meeting basic or minimum 
                                required standards for State 
                                assessments required under section 1111 
                                of the Elementary and Secondary 
                                Education Act of 1965; and
                                    (III) an assortment of local 
                                educational agencies serving urban, 
                                suburban, and rural areas, and impacted 
                                by a local military installation.

SEC. 106. GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    (a) In General.--
            (1) First year.--Except as provided in paragraph (3), for 
        the first year that a State educational agency receives a grant 
        under this title, the State educational agency shall use the 
        funds made available through the grant to make grants to 
        eligible local educational agencies in the State to pay for the 
        Federal share of the cost of planning for or carrying out the 
        military charter school programs.
            (2) Succeeding years.--Except as provided in paragraph (3), 
        for the second and third year that a State educational agency 
receives a grant under this title, the State educational agency shall 
use the funds made available through the grant to make grants to 
eligible local educational agencies in the State to pay for the Federal 
share of the cost of carrying out the military charter school programs.
            (3) Technical assistance and planning assistance.--The 
        State educational agency may use not more than 5 percent of the 
        grant funds received under this title for a fiscal year--
                    (A) to provide to the local educational agencies 
                technical assistance that is aligned with the 
                curriculum of the local educational agencies for the 
                programs;
                    (B) to enable the local educational agencies to 
                obtain such technical assistance from entities other 
                than the State educational agency that have 
                demonstrated success in using the curriculum; and
                    (C) to assist the local educational agencies in 
                evaluating activities carried out under this title.
    (b) Application.--
            (1) In general.--To be eligible to receive a grant under 
        this section, a local educational agency shall submit an 
        application to the State educational agency at such time, in 
        such manner, and containing such information as the Secretary 
        or the State educational agency may require.
            (2) Contents.--Each such application shall include, to the 
        greatest extent practicable--
                    (A) information that--
                            (i) demonstrates that the local educational 
                        agency will carry out a military charter school 
                        program funded under this section--
                                    (I) that provides intensive high 
                                quality programs that are aligned with 
                                challenging State content and student 
                                performance standards, and that is 
                                focused on reinforcing and boosting the 
                                core academic skills and knowledge of 
                                students who are struggling 
                                academically, as determined by the 
                                State;
                                    (II) that focuses on accelerated 
                                learning, rather than remediation, so 
                                that students served through the 
                                program will master the high level 
                                skills and knowledge needed to meet the 
                                highest State standards or to perform 
                                at high levels on all State assessments 
                                required under section 1111 of the 
                                Elementary and Secondary Education Act 
                                of 1965;
                                    (III) that is based on, and 
                                incorporates best practices relating to 
                                the charter schools including practices 
                                relating to the ``academic passport'' 
                                concept, which would ease transitions 
                                for mobile students;
                                    (IV) that has a proposed curriculum 
                                that is directly aligned with State 
                                student performance standards, and 
                                which may incorporate a curriculum from 
                                the Department of Defense Education 
                                Activity;
                                    (V) for which only teachers who are 
                                certified and licensed, and are 
                                otherwise fully qualified teachers, 
                                provide academic instruction to 
                                students enrolled in the program;
                                    (VI) that offers to staff in the 
                                program professional development and 
                                technical assistance that are aligned 
                                with the approved curriculum for the 
                                program; and
                                    (VII) that incorporates a parental 
                                involvement component that seeks to 
                                involve parents in the program's topics 
                                and students' daily activities; and
                            (ii) may include--
                                    (I) the proposed curriculum for the 
                                military charter school program;
                                    (II) the local educational agency's 
                                plan for recruiting highly qualified 
                                and highly effective teachers 
                                (including encouraging members of the 
                                Reserves and Guard who possess all 
                                required qualifications to serve as 
                                teachers) to participate in the 
                                program; and
                                    (III) a schedule for the program 
                                that indicates that the program is of 
                                sufficient duration and intensity to 
                                achieve the State's goals and 
                                objectives described in section 
                                105(c)(2)(A);
                    (B) an outline indicating how the local educational 
                agency will utilize applicable Federal, State, local, 
                or public funds, other than funds made available 
                through the grant, to support the program;
                    (C) an explanation of how the local educational 
                agency will ensure that the instruction provided 
                through the program will be provided by qualified 
                teachers;
                    (D) an explanation of the types of intensive 
                training or professional development, aligned with the 
                curriculum of the program, that will be provided for 
                staff of the program;
                    (E) an explanation of the facilities to be used for 
                the program;
                    (F) an explanation regarding the duration of the 
                periods of time that students and teachers in the 
                program will have contact for instructional purposes 
                (such as the hours per day and days per week of that 
                contact, and the total length of the program);
                    (G) an explanation of the proposed student-to-
                teacher ratio for the program, analyzed by grade level;
                    (H) an explanation of the grade levels that will be 
                served by the program;
                    (I) an explanation of the approximate cost per 
                student for the program;
                    (J) an explanation of the salary costs for teachers 
                in the program;
                    (K) a description of a method for evaluating the 
                effectiveness of the program at the local level;
                    (L) information describing specific measurable 
                goals and objectives, for each academic subject in 
                which the program will provide instruction, that are 
                consistent with, or more rigorous than, the adequate 
                yearly progress goals established by the State under 
                section 1111 of the Elementary and Secondary Education 
                Act of 1965;
                    (M) a description of how the local educational 
                agency will involve parents and the community in the 
                program in order to raise academic achievement;
                    (N) a description of how the local educational 
                agency will acquire any needed technical assistance 
                that is aligned with the curriculum of the local 
                educational agency for the program, from the State 
                educational agency or other entities with demonstrated 
                success in using the curriculum; and
                    (O) a statement of a clearly defined goal for 
                providing counseling and other transition burden relief 
                for military dependent children.
    (c) Priority.--In making grants under this section, the State 
educational agency shall give priority to local educational agencies 
that demonstrate a high level of need for the military charter school 
programs.
    (d) Federal Share.--
            (1) In general.--The Federal share of the cost described in 
        subsection (a) is 50 percent.
            (2) Non-federal share.--The non-Federal share of the cost 
        may be provided in cash or in kind, fairly evaluated, including 
        plant, equipment, or services.

SEC. 107. SUPPLEMENT NOT SUPPLANT.

    Funds appropriated pursuant to the authority of this title shall be 
used to supplement and not supplant other Federal, State, local, or 
private funds expended to support military charter school programs.

SEC. 108. REPORTS.

    (a) State Reports.--Each State educational agency that receives a 
grant under this title shall annually prepare and submit to the 
Secretary a report. The report shall describe--
            (1) the method the State educational agency used to make 
        grants to eligible local educational agencies and to provide 
        assistance to schools under this title;
            (2) the specific measurable goals and objectives described 
        in section 105(c)(2)(A) for the State as a whole and the extent 
        to which the State met each of the goals and objectives in the 
        year preceding the submission of the report;
            (3) the specific measurable goals and objectives described 
        in section 106(b)(2)(L) for each of the local educational 
        agencies receiving a grant under this title in the State and 
        the extent to which each of the agencies met each of the goals 
        and objectives in that preceding year;
            (4) the steps that the State educational agency will take 
        to ensure that any such local educational agency that did not 
        meet the goals and objectives in that year will meet the goals 
        and objectives in the year following the submission of the 
        report, or the plan that the State educational agency has for 
        revoking the grant awarded to such an agency and redistributing 
        the grant funds to existing or new military charter school 
        programs;
            (5) how eligible local educational agencies and schools 
        used funds provided by the State educational agency under this 
        title;
            (6) the degree to which progress has been made toward 
        meeting the goals and objectives described in section 
        105(c)(2)(A); and
            (7) best practices for the Secretary to share with 
        interested parties.
    (b) Report to Congress.--The Secretary shall annually prepare and 
submit to Congress a report. The report shall describe--
            (1) the methods the State educational agencies used to make 
        grants to eligible local educational agencies and to provide 
        assistance to schools under this title;
            (2) how eligible local educational agencies and schools 
        used funds provided under this title; and
            (3) the degree to which progress has been made toward 
        meeting the goals and objectives described in sections 
        105(c)(2)(A) and 106(b)(2)(L).
    (c) Government Accounting Office Report to Congress.--The 
Comptroller General of the United States shall conduct a study 
regarding the demonstration program carried out under this title and 
the impact of the program on student achievement. The Comptroller 
General shall prepare and submit to Congress a report containing the 
results of the study.

SEC. 109. ADMINISTRATION.

    (a) Federal.--The Secretary shall develop program guidelines for 
and oversee the demonstration program carried out under this title.
    (b) Local.--The commander of each military installation served by a 
military charter school assisted under this title shall establish a 
nonprofit corporation or an oversight group to provide the applicable 
local educational agency with oversight and guidance regarding the day-
to-day operations of the military charter school.

SEC. 110. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title--
            (1) $5,000,000 for fiscal year 2003;
            (2) $7,000,000 for fiscal year 2004;
            (3) $9,000,000 for fiscal year 2005;
            (4) $11,000,000 for fiscal year 2007; and
            (5) $13,000,000 for fiscal year 2008.

SEC. 111. TERMINATION.

    The authority provided by this title terminates 5 years after the 
date of enactment of this Act.

 TITLE II--CREDIT ENHANCEMENT INITIATIVES TO PROMOTE MILITARY CHARTER 
       SCHOOL FACILITY ACQUISITION, CONSTRUCTION, AND RENOVATION

SEC. 201. CREDIT ENHANCEMENT INITIATIVES TO PROMOTE MILITARY CHARTER 
              SCHOOL FACILITY ACQUISITION, CONSTRUCTION, AND 
              RENOVATION.

    Title V of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7201 et seq.) is amended by adding at the end the following:

 ``PART E--CREDIT ENHANCEMENT INITIATIVES TO PROMOTE MILITARY CHARTER 
       SCHOOL FACILITY ACQUISITION, CONSTRUCTION, AND RENOVATION.

``SEC. 5701. PURPOSE.

    ``The purpose of this part is to provide grants to eligible 
entities to permit the eligible entities to establish or improve 
innovative credit enhancement initiatives that assist military charter 
schools to address the cost of acquiring, constructing, and renovating 
facilities.

``SEC. 5702. GRANTS TO ELIGIBLE ENTITIES.

    ``(a) Grants for Initiatives.--
            ``(1) In general.--The Secretary shall use 100 percent of 
        the amount available to carry out this part to award grants to 
        eligible entities that have applications approved under this 
        part, to enable the eligible entities to carry out innovative 
        initiatives for assisting military charter schools to address 
        the cost of acquiring, constructing, and renovating facilities 
        by enhancing the availability of loans or bond financing.
            ``(2) Number of grants.--The Secretary shall award not less 
        than 4 grants under this part in each fiscal year.
    ``(b) Grantee Selection.--
            ``(1) Determination.--The Secretary shall evaluate each 
        application submitted, and shall determine which applications 
        are of sufficient quality to merit approval and which are not.
            ``(2) Minimum grants.--The Secretary shall award at least--
                    ``(A) 1 grant to an eligible entity described in 
                section 5710(1)(A);
                    ``(B) 1 grant to an eligible entity described in 
                section 5710(1)(B); and
                    ``(C) 1 grant to an eligible entity described in 
                section 5710(1)(C),
        if applications are submitted that permit the Secretary to 
        award the grants without approving an application that is not 
        of sufficient quality to merit approval.
    ``(c) Grant Characteristics.--Grants under this part shall be in 
sufficient amounts, and for initiatives of sufficient scope and 
quality, so as to effectively enhance credit for the financing of 
military charter school acquisition, construction, or renovation.
    ``(d) Special Rule.--In the event the Secretary determines that the 
funds available to carry out this part are insufficient to permit the 
Secretary to award not less than 4 grants in accordance with 
subsections (a) through (c)--
            ``(1) subsections (a)(2) and (b)(2) shall not apply; and
            ``(2) the Secretary may determine the appropriate number of 
        grants to be awarded in accordance with subsections (a)(1), 
        (b)(1), and (c).

``SEC. 5703. APPLICATIONS.

    ``(a) In General.--To receive a grant under this part, 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 part, including how 
        the eligible entity will determine which military charter 
        schools will receive assistance, and how much and what types of 
        assistance the military charter schools will receive;
            ``(2) a description of the involvement of military 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--
                    ``(A) leverage private sector financing capital, to 
                obtain the maximum amount of private sector financing 
                capital, relative to the amount of government funding 
                used, to assist military charter schools; and
                    ``(B) otherwise enhance credit available to 
                military charter schools;
            ``(5) a description of how the eligible entity possesses 
        sufficient expertise in education to evaluate the likelihood of 
success of a military 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 military charter 
        schools within the State receive the funding the schools need 
        to have adequate facilities;
            ``(7) an assurance that the eligible entity will give 
        priority to funding initiatives that assist military charter 
        schools in which students have demonstrated academic excellence 
        or improvement during the 2 consecutive academic years 
        preceding submission of the application; and
            ``(8) such other information as the Secretary may 
        reasonably require.

``SEC. 5704. MILITARY CHARTER SCHOOL OBJECTIVES.

    ``An eligible entity receiving a grant under this part shall use 
the funds received through the grant, and deposited in the reserve 
account established under section 5705(a), to assist 1 or more military 
charter schools to access private sector capital to accomplish 1 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 military charter school) in 
        improved or unimproved real property that is necessary to 
        commence or continue the operation of a military 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 military 
        charter school.
            ``(3) The payment of startup costs, including the costs of 
        training teachers and purchasing materials and equipment, 
        including instructional materials and computers, for a military 
        charter school.

``SEC. 5705. RESERVE ACCOUNT.

    ``(a) In General.--For the purpose of assisting military charter 
schools to accomplish the objectives described in section 5704, an 
eligible entity receiving a grant under this part shall deposit the 
funds received through the grant (other than funds used for 
administrative costs in accordance with section 5706) in a reserve 
account established and maintained by the eligible entity for that 
purpose. The eligible entity shall make the deposit in accordance with 
State and local law and may make the deposit directly or indirectly, 
and alone or in collaboration with others.
    ``(b) Use of Funds.--Amounts deposited in such account shall be 
used by the eligible entity for 1 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 5704.
            ``(2) Guaranteeing and insuring leases of personal and real 
        property for such an objective.
            ``(3) Facilitating financing for such an objective by 
        identifying potential lending sources, encouraging private 
        lending, and carrying out other similar activities that 
        directly promote lending to, or for the benefit of, military 
        charter schools.
            ``(4) Facilitating the issuance of bonds by military 
        charter schools, or by other public entities for the benefit of 
        military charter schools, for such an objective, by providing 
        technical, administrative, and other appropriate assistance 
        (including the recruitment of bond counsel, underwriters, and 
        potential investors and the consolidation of multiple military 
        charter school projects within a single bond issue).
    ``(c) Investment.--Funds received under this part and deposited in 
the reserve account shall be invested in obligations issued or 
guaranteed by the United States or a State, or in other similarly low-
risk securities.
    ``(d) Reinvestment of Earnings.--Any earnings on funds received 
under this part shall be deposited in the reserve account established 
under subsection (a) and used in accordance with subsection (b).

``SEC. 5706. LIMITATION ON ADMINISTRATIVE COSTS.

    ``An eligible entity that receives a grant under this part may use 
not more than 0.25 percent of the funds received through the grant for 
the administrative costs of carrying out the eligible entity's 
responsibilities under this part.

``SEC. 5707. AUDITS AND REPORTS.

    ``(a) Financial Record Maintenance and Audit.--The financial 
records of each eligible entity receiving a grant under this part 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) Eligible entity annual reports.--Each eligible entity 
        receiving a grant under this part annually shall submit to the 
        Secretary a report of the eligible entity's operations and 
        activities under this part.
            ``(2) Contents.--Each such annual report shall include--
                    ``(A) a copy of the eligible entity's most recent 
                financial statements, and any accompanying opinion on 
                such statements, prepared by the independent public 
                accountant auditing 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 the entity's use of the Federal funds 
                provided under this part in leveraging private funds;
                    ``(D) a listing and description of the military 
                charter schools served by the eligible entity with such 
                Federal funds during the reporting period;
                    ``(E) a description of the activities carried out 
                by the eligible entity to assist military charter 
                schools in meeting the objectives set forth in section 
                5704; and
                    ``(F) a description of the characteristics of 
                lenders and other financial institutions participating 
                in the activities undertaken by the eligible entity 
                under this part 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 part.

``SEC. 5708. NO FULL FAITH AND CREDIT FOR GRANTEE OBLIGATIONS.

    ``No financial obligation of an eligible entity entered into 
pursuant to this part (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 that 
may be required to be paid under any obligation made by an eligible 
entity pursuant to any provision of this part.

``SEC. 5709. 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 5705(a), if the Secretary 
        determines, not earlier than 2 years after the date on which 
        the entity first received funds under this part, that the 
        entity has failed to make substantial progress in carrying out 
        the purposes described in section 5705(b); or
            ``(2) all or a portion of the funds in a reserve account 
        established by an eligible entity under section 5705(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 5705(b).
    ``(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 1 or more of 
the purposes described in section 5705(b).
    ``(c) Procedures.--The provisions of sections 451, 452, and 458 of 
the General Education Provisions Act (20 U.S.C. 1234, 1234a, 1234g) 
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 (20 U.S.C. 1234 et seq.).

``SEC. 5710. DEFINITIONS.

    ``In this part:
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) a public entity, such as a military 
                installation as defined in section 2687(e)(1) of title 
                10, United States Code;
                    ``(B) a private nonprofit entity; or
                    ``(C) a consortium of entities described in 
                subparagraphs (A) and (B).
            ``(2) Military charter school.--The term `military charter 
        school' has the meaning given such term by regulations 
        promulgated by the Secretary of Defense.

``SEC. 5711. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$10,000,000 for fiscal year 2003 and each succeeding fiscal year.''.
                                 <all>