[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10 Referred in Senate (RFS)]
113th CONGRESS
2d Session
H. R. 10
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 12, 2014
Received; read twice and referred to the Committee on Health,
Education, Labor, and Pensions
_______________________________________________________________________
AN ACT
To amend the charter school program under the Elementary and Secondary
Education Act of 1965.
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 ``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section or other provision is amended or repealed, such amendment or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, English learners, 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.
``(d) GAO Report.--Not later than 3 years after the date of
enactment of the Success and Opportunity through Quality Charter
Schools Act, the Comptroller General of the United States shall submit
a report to the Secretary and Congress that--
``(1) examines whether the funds authorized to be reserved
by State entities for administrative costs under section
5203(b)(1)(C) is appropriate; and
``(2) if determined not to be appropriate, makes
recommendations on the appropriate reservation of funding for
such administrative costs.''.
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) prior to the start of the final year of the
grant period of each grant awarded under this section
to a State entity, review whether the State entity is
using the grant funds for the agreed upon uses of funds
and whether the full amount of the grant will be needed
for the remainder of the grant period and may, as
determined necessary based on that review, terminate or
reduce the amount of the grant and reallocate the
remaining grant 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.--The Secretary shall not award a grant to a
State entity under this section in a case in which such award
would result in more than 1 grant awarded under this section
being carried out in a State at the same time.
``(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, including supporting the use of
charter schools to improve, or in turning
around, struggling schools;
``(viii) will work with charter schools to
promote inclusion of all students, including
eliminating any barriers to enrollment for
foster youth or unaccompanied homeless youth,
and support all students once they are enrolled
to promote retention including through the use
of fair disciplinary practice;
``(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;
``(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); and
``(xv) will work with eligible applicants
receiving a subgrant under the State entity's
program to support the opening of charter
schools or charter school models described in
clause (i) that are secondary schools;
``(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)(xi);
``(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 (viii) and (ix) 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, student academic growth, and
rates of student attrition;
``(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 makes 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 for
each school on--
``(i) the educational program;
``(ii) student support services;
``(iii) annual performance and enrollment
data, disaggregated by the groups of students
described in section 1111(b)(2)(C)(v)(II); and
``(iv) any other information the State
requires all other public schools to report for
purposes of section 1111(h)(1)(D).
``(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, dropout recovery, or
comprehensive career counseling practices.
``(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), including how the State
entity met the objective of sharing best and promising
practices described in subsection (e)(1)(A)(x) in areas such as
instruction, professional development, curricula development,
and operations between charter schools and other public
schools, and the extent to which, if known, such practices were
adopted and implemented by such other public schools;
``(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;
``(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; and
``(7) how the State entity has worked with charter schools
receiving funds under the State entity's program to foster
community involvement in the planning for and opening of such
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)(B); 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)(B), take
into consideration whether such an eligible
applicant--
``(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 or
permitted 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.
Passed the House of Representatives May 9, 2014.
Attest:
KAREN L. HAAS,
Clerk.