[Congressional Record Volume 149, Number 74 (Monday, May 19, 2003)]
[Senate]
[Pages S6628-S6631]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU:
  S. 1078. 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; to the Committee 
on Health, Education, Labor, and Pensions.
  Ms. LANDRIEU. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1078

       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.

[[Page S6629]]

       (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.--

[[Page S6630]]

       (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 2004;
       (2) $7,000,000 for fiscal year 2005;
       (3) $9,000,000 for fiscal year 2006;
       (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 the 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

[[Page S6631]]

     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 2004 and each succeeding 
     fiscal year.''.
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