S 92
112th CONGRESS
1st Session
S. 92
To amend the public charter school provisions of the Elementary
and Secondary Education Act of 1965, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 25 (legislative day, January 5), 2011
Mr. VITTER introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
A BILL
To amend the public charter school provisions of the Elementary
and Secondary Education Act of 1965, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `21st Century Charter
School Act'.
(b) Table of Contents- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 3. Program authorized.
Sec. 6. National activities.
Sec. 7. Federal formula allocation.
Sec. 8. Credit enhancement.
Sec. 10. Authorization of appropriations.
Sec. 12. Conforming amendments.
SEC. 2. PURPOSE.
Section 5201 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7221) is amended--
(1) in paragraph (3), by striking `and';
(2) by redesignating paragraph (4) as paragraph (6);
(3) by inserting after paragraph (3) the following:
`(4) encouraging the growth of high-quality charter schools through
the replication and expansion of successful charter school models;
`(5) disseminating charter school innovations throughout public education;
and'; and
(4) in paragraph (6) (as redesignated by paragraph (2))--
(A) by striking `more nearly'; and
(B) by striking `have typically provided' and inserting `provide'.
SEC. 3. PROGRAM AUTHORIZED.
Section 5202 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7221a) is amended--
(A) by striking `State educational agencies' and inserting `eligible
entities';
(B) by striking `such agencies' and inserting `such entities'; and
(C) by striking `this subpart' and inserting `section 5204';
(A) by striking `Special Rule- If' and inserting the following:
`Special Rule; Reserve Account-
(B) by striking `a State educational agency' and inserting `an eligible
entity';
(C) by striking `subpart' and inserting `section'; and
(D) by adding at the end the following:
`(A) IN GENERAL- In order to assist eligible entities to accomplish
the purposes described in section 5201, an eligible entity receiving
a grant under this section shall, directly or indirectly, alone
or in collaboration with others, deposit the funds received under
this section in a reserve account established and maintained by
the eligible entity for this purpose, in accordance with State and
local law.
`(B) INVESTMENT- Funds received under this section that are deposited
in the reserve account established under subparagraph (A), shall
be invested, to the extent practicable, in obligations issued or
guaranteed by the United States or a State, or in other similarly
low risk securities, in the same manner as funds of a State are
invested under chapter 65 of title 31, United States Code.
`(C) REINVESTMENT OF EARNINGS- Any earnings on funds received under
this section shall be deposited in a reserve account and used in
support of public charter schools in accordance with activities
authorized under this Act.';
(A) by striking `subpart' each place the term occurs and inserting
`section';
(i) by striking `State educational agencies' and inserting `eligible
entities'; and
(ii) by striking `not more than 3 years' and inserting `not more
than 5 years'; and
(i) by striking `State educational agencies' and inserting `eligible
entities'; and
(ii) by striking `not more than 3 years' and all that follows
through the period at the end and inserting `not more than 5 years.
An eligible applicant may use a portion of the grant period for
planning and program design.';
(4) by striking subsection (d) and inserting the following:
`(d) Charter Schools With Multiple Campuses- The Secretary shall allow
an eligible entity to award multiple subgrants under section 5204(f)(1)
to an eligible applicant in order to support multiple campuses of a
charter school.';
(A) by striking paragraph (1) and inserting the following:
`(1) IN GENERAL- In awarding grants under this section for fiscal
year 2011 or any succeeding fiscal year from any funds appropriated
under section 5212 (other than funds reserved to carry out section
5205(c)), the Secretary shall give priority to an eligible entity
to the extent that the State in which the eligible entity proposes
to carry out the activities under the grant meets the criteria described
in paragraph (2) and one or more of the criteria described in subparagraphs
(A) through (H) of paragraph (3).';
(i) in subparagraph (A)--
(I) by striking `a State educational agency' and inserting `an
eligible entity'; and
(II) by striking `subpart' and inserting `section';
(ii) by redesignating subparagraph (C) as subparagraph (D);
(iii) in subparagraph (B)--
(I) by redesignating clause (ii) as subparagraph (C), and aligning
the margins of such subparagraph with the margins of subparagraph
(A);
(II) by striking `The State' and all that follows through `provides'
and inserting `The State provides'; and
(III) by striking `law; or' and inserting `law.';
(iv) in subparagraph (C) (as redesignated by clause (iii)(I)),
by striking `in the case' and all that follows through `allows'
and inserting `The State allows';
(v) in subparagraph (D) (as redesignated by clause (ii))--
(I) by striking `school has a' and inserting `school has--
(II) by striking `expenditures.' and inserting `expenditures;
and'; and
(III) by adding at the end the following:
`(iii) an independent governing board that enters into a written
performance contract with an authorized public chartering agency.';
and
(vi) by adding at the end the following:
`(i) provides public charter schools with funding commensurate
with the funding provided to other public schools, including capital
or facilities aid distributed through a formula or revenue generated
by bonds; and
`(ii) ensures that the State and local educational agencies provide
public charter schools with the Federal, State, and local funds
to which the public charter schools are entitled in a timely manner.
`(F) The State makes it a priority to create charter schools in
local educational agencies with large numbers of schools designated
as in need of improvement, corrective action, or restructuring under
paragraph (1), (7), or (8) of section 1116(b).
`(G) The State has developed a transparent authorizer accreditation,
training, or review process for evaluating the effectiveness and
quality of the State's authorized public chartering agencies, or
each authorized public chartering agency in the State has implemented
such a process, including--
`(i) a process for reviewing and evaluating the performance of
the authorized public chartering agencies in the State in authorizing
or approving public charter schools, including a process that
enables the authorized public chartering agencies to respond to
any State concerns or deficiencies regarding such authorizing
or approving; and
`(ii) any other necessary policies to ensure effective charter
school authorizing in the State that are developed in conjunction
with the State's charter school community and in accordance with
the principles of high quality charter school authorizing, as
determined by the State in consultation with the charter school
community and stakeholders.
`(H) The State does not have a cap on charter schools that constrains
growth and limits parental options in an unreasonable manner.';
and
(A) by striking `subpart to a State educational agency' and inserting
`section to an eligible entity'; and
(B) by striking `in the State' and inserting `in the State where
the grant activities will be carried out'.
SEC. 4. APPLICATIONS.
Section 5203 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7221b) is amended--
(1) by striking `this subpart' each place the term appears and inserting
`section 5202';
(2) in subsection (a), by striking `State Agencies- Each State educational
agency' and inserting `Eligible Entities- An eligible entity';
(A) in the subsection heading, by striking `a State Educational
Agency' and inserting `an Eligible Entity';
(i) by striking `State educational agency's' each place the term
appears and inserting `eligible entity's'; and
(ii) by striking `State educational agency' and inserting `eligible
entity';
(i) in the matter preceding subparagraph (A), by striking `describe
how the State educational agency--' and inserting `describe the
State's level of participation and involvement in the grant, including
a letter from the State describing how the State--';
(ii) in the matter preceding clause (i) of subparagraph (A), by
striking `in the State' and inserting `area served by the grant';
(iii) in subparagraph (B)--
(I) by striking `in the State' and inserting `in the area served
by the grant'; and
(II) by striking `and' after the semicolon;
(iv) in subparagraph (C), by striking `to each local' and all
that follows through `; and' and inserting `related to such areas
as budgeting, scheduling, staffing, and instruction to public
schools, including public charter schools in the State;'; and
(v) by adding at the end the following:
`(D) will ensure the proper handling and management of Federal funds;
and
`(E) will oversee and hold accountable the authorized public chartering
agencies in the State, including through a transparent authorizer
accreditation, training, and review process described in subsection
(e)(3)(G);';
(D) by redesignating paragraph (3) as paragraph (4);
(E) by inserting after paragraph (2) the following:
`(3) describe the criteria that the eligible entity will use to award
subgrants to eligible applicants to ensure high-quality charter schools;';
(F) in paragraph (4) (as redesignated by subparagraph (D))--
(i) in the matter preceding subparagraph (A), by striking `State
educational agency' each place the term appears and inserting
`eligible entity';
(ii) in subparagraph (A)--
(I) by redesignating clauses (ii) and (iii) as clauses (iii)
and (iv), respectively; and
(II) by inserting after clause (i) the following:
`(ii) the charter school's plan for using academic assessments
to measure and report student academic progress;';
(iii) in subparagraph (B), by striking `managed;' and inserting
the following: `managed, including--
`(i) the charter school's financial plan and policies, including
financial controls and annual audit requirements;
`(ii) a clear description of the roles and responsibilities for
the charter school's governing board, leadership, and management
team, and any other organizations critical to the charter school's
operations or success;
`(iii) plans for recruiting and developing the charter school's
leadership and staff;
`(iv) the charter school's leadership and teacher employment policies,
including performance evaluation plans;
`(v) the proposed governing bylaws of the charter school; and
`(vi) a detailed charter school start-up plan, that identifies
tasks, timelines, and responsible parties;';
(iv) in subparagraph (E), by inserting `, including documentation
of the parents' and community members' support for the school'
before the semicolon;
(v) in subparagraph (F), by striking `a description of how' and
inserting `an assurance from the authorized public chartering
agency that';
(vi) in subparagraph (H), by inserting `and how such funds will
be used for planning, program design, and the initial implementation
of a charter school' before the semicolon at the end;
(vii) in subparagraph (I)(ii), by inserting `, including through
a lottery process if the number of applicants exceeds the number
of seats available at the charter school' before the semicolon;
(viii) in subparagraphs (J) and (K), by striking `State educational
agency' each place the term appears and inserting `eligible entity';
(ix) by striking subparagraph (M);
(x) by redesignating subparagraph (N) as subparagraph (O);
(xi) by inserting after subparagraph (L) the following:
`(M) demonstration of support for the charter school from the State's
charter school community;
`(N) a description of how the independent governing board of the
charter school, including a board overseeing multi-campus charters,
is encouraged to include individuals with a diversity of skills,
including business management, financial management, real estate
finance, and curriculum and instruction; and'; and
(xii) in subparagraph (O) (as redesignated by clause (x))--
(I) by striking `State educational agency' and inserting `eligible
entity'; and
(II) by striking the period at the end and inserting `; and';
and
(G) by adding at the end the following:
`(5) in the case of an eligible entity that is an authorized public
chartering agency--
`(A) describe such eligible entity's strategic goal for chartering
schools and progress towards that goal; and
`(B) provide an assurance that the eligible entity will annually
file a plan with the State in which the eligible entity is located
that covers such topics necessary for effective charter school oversight,
including, at a minimum--
`(i) the academic and financial performance of all operating public
charter schools overseen by the eligible entity, according to
the performance expectations for each public charter school set
forth in the school's contract;
`(ii) the status of the eligible entity's public charter school
portfolio, identifying all public charter schools in each of the
following categories: approved (but not yet open), operating,
renewed, transferred, revoked, not renewed, voluntarily closed,
or never opened;
`(iii) the authorizing functions provided by the eligible entity
to the public charter schools the eligible entity oversees, including
the eligible entity's operating costs and expenses detailed in
annual audited financial statements that conform with generally
accepted accounting principles; and
`(iv) the services purchased from the eligible entity by the public
charter schools overseen by the eligible entity, including an
itemized accounting of the actual costs of these services.'; and
(i) by striking `(A) through (N)' and inserting `(A) through (O)';
(ii) by striking `and (N)' and inserting `and (O)'; and
(iii) by striking `State educational agency' and inserting `eligible
entity'; and
(i) in the matter preceding subparagraph (A), by striking `State
educational agency' and inserting `eligible entity'; and
(I) by striking `State educational agency' and inserting `eligible
entity'; and
(II) by striking `subgrant if' and all that follows through
the period and inserting `subgrant.'.
SEC. 5. ADMINISTRATION.
Section 5204 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7221c) is amended--
(A) in the subsection heading, by striking `State Educational Agencies'
and inserting `Eligible Entities';
(B) by striking `this subpart' each place the term appears and inserting
`section 5202';
(C) in the matter preceding paragraph (1), by striking `State educational
agencies' and inserting `eligible entities';
(D) in paragraph (1), by inserting `, including efforts at closing
the achievement gap by meeting the annual objectives described in
section 1111(b)(2)(C)(v)' before the semicolon;
(E) in paragraph (2), by inserting `and autonomy' after `flexibility';
(F) in paragraph (5), by inserting `and' after the semicolon;
(G) in paragraph (6), by striking `; and' and inserting a period;
and
(H) by striking paragraph (7);
(A) by striking `this subpart' and inserting `section 5202'; and
(B) by striking paragraph (7);
(A) by striking `this subpart' and inserting `section 5202'; and
(B) by striking `State educational agency' and inserting `eligible
entity';
(A) in the matter preceding paragraph (1)--
(i) by striking `State educational agency receiving a grant under
this subpart' and inserting `eligible entity receiving a grant
under section 5202'; and
(ii) by striking `this subpart in' and inserting `such section
in'; and
(B) in paragraph (2), by inserting `or use non-traditional curricula'
before the period at the end;
(A) in the matter preceding subparagraph (1), by striking `5210(1)'
and inserting `5211(1)'; and
(B) in paragraph (1), by striking `this subpart' and inserting `section
5203';
(i) in the paragraph heading, by striking `State Educational Agencies-
Each State educational agency' and inserting the following: `eligible
Entities-
`(A) IN GENERAL- Each eligible entity';
(ii) by striking `under this subpart' and inserting `under section
5202';
(iii) by inserting `, including a new campus or expansion of an
existing charter school,' after `charter school';
(iv) by striking `in the State' and inserting `in the area to
be served by the grant'; and
(v) by striking `except that' and all that follows through `paragraph
(6).' and inserting a period;
(B) by striking paragraph (6);
(C) by redesignating paragraphs (2) through (5) as paragraphs (4)
through (7), respectively;
(D) by inserting after paragraph (1) the following:
`(2) CHARTER SCHOOL DEVELOPERS- In awarding subgrants under this section,
an eligible entity shall ensure that--
`(A) most of the subgrant funds are awarded to eligible applicants
described in section 5211(3)(A); and
`(B) subgrants are awarded, to the extent practicable, to a mix
of such eligible applicants.
`(3) AMOUNT OF SUBGRANTS- An eligible entity may vary the amount of
a subgrant under this section based upon a variety of factors, including--
`(A) whether the eligible applicant is a start-up charter school
or a conversion charter school (as defined by the eligible entity);
and
`(B) whether the eligible applicant is creating a charter school
under a new charter or an existing charter.';
(E) in paragraph (4) (as redesignated by subparagraph (C))--
(i) by striking `a State educational agency' and inserting `an
eligible entity'; and
(ii) by striking `, or to disseminate information about the charter
school and successful practices in the charter school,';
(F) in paragraph (5) (as redesignated by subparagraph (C))--
(i) in the matter preceding subparagraph (A), by striking `this
subpart' and inserting `section 5202';
(ii) in subparagraph (A)(ii), by striking `and' after the semicolon;
(iii) in subparagraph (B)(iv), by striking the period and inserting
`; and'; and
(iv) by adding at the end the following:
`(C) providing assistance, through activities described in section
5205(b)(4), in implementing charter school innovations and disseminating
information regarding such innovations.';
(G) in paragraph (6)(A) (as redesignated by subparagraph (C))--
(i) in the subparagraph heading, by striking `State Educational
Agency' and inserting `Eligible Entity';
(ii) by striking `State educational agency' and inserting `eligible
entity';
(iii) by striking `pursuant to this subpart' and inserting `pursuant
to section 5202';
(iv) by striking `this subpart' and inserting `such section';
and
(v) by adding at the end the following: `An eligible entity may
use a portion of the reserved funds to improve the charter school
authorizing policies and practices of the area served by the eligible
entity, which may include the approval, monitoring, and renewal
of charter schools.'; and
(H) in paragraph (7) (as redesignated by subparagraph (C))--
(i) by striking `State educational agency' and inserting `eligible
entity';
(ii) by striking `this subpart' and inserting `section 5202';
(iii) by striking `10' and inserting `20'; and
(iv) by striking `the State educational agency' and all that follows
through `sources.' and inserting `the eligible entity, for expenses
necessary to plan, begin operations, and subsequently operate
a public charter school.'; and
(7) by striking subsection (g).
SEC. 6. NATIONAL ACTIVITIES.
Section 5205 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7221d) is amended--
(A) in paragraph (3)(E), by striking `schools' each place the term
occurs and inserting `schools, authorized public chartering agencies,
and charter support organizations'; and
(B) by adding at the end the following:
`(6) To provide technical assistance to charter schools on how to
meet the requirements of part B of the Individuals with Disabilities
Education Act.';
(2) by redesignating subsections (b) and (c) as subsections (c) and
(d), respectively;
(3) by inserting after subsection (a) the following:
`(b) National Dissemination-
`(1) IN GENERAL- To carry out this subsection, the Secretary shall
reserve for each fiscal year not more than $8,000,000 of the amount
appropriated to carry out this subpart.
`(2) ELIGIBILITY- In order to receive a grant under this subsection,
an entity shall--
`(ii) an eligible applicant;
`(iii) an eligible entity; or
`(iv) a consortium of entities described in clauses (i), (ii),
and (iii); and
`(B) submit an application to the Secretary at such time, in such
manner, and containing such information as the Secretary may require.
`(3) CRITERIA- The Secretary shall award grants under this subsection
on the basis of--
`(A) the quality of the application;
`(B) the capacity of the applicant to execute the application; and
`(C) the scale of the expected impact of the application.
`(4) ACTIVITIES- A recipient of a grant under this subsection shall
use funds received under the grant to assist other schools in the
recipient's State and in other States in adopting charter school innovations,
or to disseminate information about charter school innovations, through
activities such as--
`(A) assisting other entities with the planning and start-up of
one or more new public schools, including charter schools;
`(B) developing partnerships designed to improve student academic
achievement;
`(C) developing curriculum materials, assessments, and other materials
that promote increased student achievement and are based on successful
practices at charter schools;
`(D) conducting evaluations and developing materials that document
successful practices at charter schools and that are designed to
improve student performance in other schools; and
`(E) training, regarding the innovative practices developed at the
original site, for personnel of--
`(i) local educational agencies that are adopting innovations
or successful practices used at charter schools;
`(ii) authorized public chartering agencies; or
`(iii) charter support organizations.'; and
(4) in subsection (c) (as redesignated by paragraph (2))--
(A) in paragraph (2)(A), by striking `paragraphs (2) and (3)(B)
of section 5211(b)' and inserting `section 5212';
(B) by redesignating paragraphs (5) and (6) as paragraphs (6) and
(7), respectively;
(C) by inserting after paragraph (4) the following:
`(5) SPECIAL RULE- A State that provides public charter schools with
access to existing adequate facility space may apply for a grant under
this subsection, if the State agrees that the State will, upon receipt
of the grant, develop a capital aid program consistent with the program
described in this subsection during the grant period.'; and
(D) in paragraph (7) (as redesignated by subparagraph (B)), by striking
`(A), (B), and (C)' and inserting `(A) through (F)'.
SEC. 7. FEDERAL FORMULA ALLOCATION.
Section 5206 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7221e) is amended--
(1) by striking the section heading and inserting the following:
`SEC. 5206. FEDERAL FORMULA ALLOCATION.';
(2) in subsection (a), by inserting `or is in operation' after `actually
opens'.
SEC. 8. CREDIT ENHANCEMENT.
Subpart 1 of part B of title V of the Elementary and Secondary Education
Act of 1965 (as amended by this Act) (20 U.S.C. 7221 et seq.) is further
amended--
(1) by redesignating sections 5207 through 5211 as sections 5208 through
5212, respectively; and
(2) by inserting after section 5206 the following:
`SEC. 5207. CREDIT ENHANCEMENT FOR CHARTER SCHOOL FACILITIES PROGRAMS.
`(a) Purpose- The purpose of this section is to provide grants to eligible
entities to permit the eligible entities to demonstrate innovative credit
enhancement initiatives that assist charter schools to address the cost
of acquiring, constructing, and renovating facilities.
`(b) Grants to Eligible Entities- After reserving any funds as necessary
for grant evaluation or administration consistent with any applicable
provisions (including section 9601(a) of this Act and section 402(b)(1)
of the Department of Education Organization Act), the Secretary shall
use the amounts available to carry out this section to award, on a competitive
basis, not less than 3 grants to eligible entities that have applications
approved under this section 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 for charter schools.
`(1) EVALUATION OF APPLICATION- The Secretary shall evaluate each
application submitted under subsection (e), and shall determine whether
the application is sufficient to merit approval.
`(2) DISTRIBUTION OF GRANTS-
`(A) IN GENERAL- Subject to subparagraph (B) and paragraph (3),
the Secretary shall award--
`(i) not less than 1 grant to an eligible entity described in
section 5211(6)(A);
`(ii) not less than 1 grant to an eligible entity described in
section 5211(6)(B); and
`(iii) not less than 1 grant to an eligible entity described in
section 5211(6)(C).
`(B) EXCEPTION- Subparagraph (A) shall only apply if applications
are submitted that permit the Secretary to do so without approving
an application that is not of sufficient quality to merit approval.
`(3) SPECIAL RULE- In the event the Secretary determines that the
funds made available under this section are insufficient to permit
the Secretary to award not less than 3 grants in accordance with this
section, the 3-grant minimum under paragraph (2) shall not apply,
and the Secretary may determine the appropriate number of grants to
be awarded in accordance with subsection (d).
`(d) Grant Characteristics- Grants under this section 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.
`(1) IN GENERAL- To receive a grant under this section, 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 this section, 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 Federal and State funds used and otherwise enhance
credit available to charter schools, including how the applicant
will offer a combination of rates and terms more favorable than
rates and terms that a charter school could receive without assistance
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;
`(F) in the case of an application submitted by an eligible entity
that is 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 needed to have adequate
facilities; and
`(G) such other information as the Secretary may reasonably require.
`(f) Charter School Objectives- An eligible entity receiving a grant
under this section shall use the funds deposited in the reserve account
established under subsection (g)(1) to assist 1 or more charter schools
to access private sector capital in order 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 (including predevelopment costs in a case where
construction or renovation cannot proceed as a result of predevelopment
findings) of new facilities, or the renovation, repair, or alteration
of existing facilities, necessary to commence or continue the operation
of a charter school.
`(1) USE OF FUNDS- To assist charter schools to accomplish the objectives
described in subsection (f), an eligible entity receiving a grant
under this section shall, in accordance with State and local law,
directly or indirectly, alone or in collaboration with others, deposit
the funds received under this section (other than funds used for administrative
costs in accordance with subsection (h)) 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 (f).
`(B) Guaranteeing and insuring leases of personal and real property
for an objective described in subsection (f).
`(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).
`(E) Making limited loans to charter schools, under such terms and
conditions as the Secretary may prescribe.
`(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
this section shall be deposited in the reserve account established
under paragraph (1) and used in accordance with such paragraph.
`(h) Limitation on Administrative Costs- An eligible entity may use
not more than 2 percent of the funds received for any fiscal year under
this section for the administrative costs of carrying out its responsibilities
under this section.
`(1) FINANCIAL RECORD MAINTENANCE AND AUDIT- The financial records
of each eligible entity receiving a grant under this section shall
be maintained in accordance with generally accepted accounting principles
and shall be subject to an annual audit by an independent public accountant.
`(A) GRANTEE ANNUAL REPORTS- Each eligible entity receiving a grant
under this section annually shall submit to the Secretary a report
of the eligible entity's 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 this section in
leveraging private funds;
`(iv) a listing and description of the charter schools served
during the reporting period;
`(v) a description of the activities carried out by the eligible
entity to assist charter schools in meeting the objectives set
forth in subsection (f); 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 during the reporting
period.
`(C) SECRETARIAL REPORT- The Secretary shall review the reports
submitted under paragraph (2)(A) and shall provide a comprehensive
annual report to Congress on the activities conducted under this
section.
`(j) No Full Faith and Credit for Grantee Obligations- 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.
`(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 (g)(1) if the Secretary determines, not
earlier than 2 years after the date on which the eligible entity
first received funds under this section, that the eligible entity
has failed to make substantial progress in carrying out the purposes
described in this section; or
`(B) all or a portion of the funds in a reserve account established
by an eligible entity under subsection (g)(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 this section.
`(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 objectives
described in subsection (f).
`(3) PROCEDURES- The provisions of sections 451, 452, and 458 of the
General Education Provisions Act shall apply to the recovery of funds
under paragraph (1).
`(4) CONSTRUCTION- Nothing in this section shall be construed to impair
or affect the authority of the Secretary to recover funds under part
D of the General Education Provisions Act.
`(l) Reservation- To carry out this section, the Secretary shall reserve
for each fiscal year not less than 5 percent and not more than 15 percent
of the amount appropriated under section 5212.'.
SEC. 9. DEFINITIONS.
Section 5211 of the Elementary and Secondary Education Act of 1965 (as
redesignated by section 8(1)) (20 U.S.C. 7221i) is amended--
(A) by striking subparagraph (L);
(B) by redesignating subparagraphs (D) through (K) as subparagraphs
(E) through (L), respectively;
(C) by inserting after subparagraph (B) the following:
`(C) has an independent governing board that enters into a performance-based
agreement that encompasses one or more campuses with an authorized
public chartering agency in the State, which agreement shall include
a description of--
`(i) how student performance will be measured in each charter
school pursuant to the State assessments that are required of
other schools and any other assessments or evaluations mutually
agreeable to the authorized public chartering agency and the charter
school; and
`(ii) criteria for renewal or revocation of the charter;';
(D) in subparagraph (E) (as redesignated by subparagraph (B)), by
striking `elementary or secondary education, or both' and inserting
`prekindergarten, elementary, or secondary education, or adult education
if permitted by State charter law, or any combination of such types
of education';
(E) in subparagraph (I) (as redesignated by subparagraph (B))--
(i) by striking `school to' and inserting `school--
(ii) by striking `children, and that' and inserting `children;
(iii) by striking `accommodated;' and inserting `accommodated;
and
`(iii) that does not give admissions preference to any student
on the basis of prior academic achievement;';
(F) in subparagraph (K) (as redesignated by subparagraph (B)), by
inserting `and' after the semicolon; and
(G) in subparagraph (L) (as redesignated by subparagraph (B)), by
striking `; and' and inserting a period;
(2) by striking paragraph (3) and inserting the following:
`(3) ELIGIBLE APPLICANT- The term `eligible applicant' means--
`(A) a developer that has applied to an authorized public chartering
agency to operate a charter school and provided adequate and timely
notice to that authority under section 5203(d)(3); or
`(B) a charter support organization.';
(3) by adding at the end the following:
`(5) CHARTER SUPPORT ORGANIZATION- The term `charter support organization'
means a public or private nonprofit organization that provides assistance
to a developer of a charter school during the planning, program design,
and initial implementation of a charter school.
`(6) ELIGIBLE ENTITY- The term `eligible entity' means--
`(A) a public entity, such as a State educational agency or other
State or local governmental entity;
`(B) a private nonprofit entity; or
`(C) a consortium of entities described in subparagraph (A) or (B).';
and
(4) by redesignating paragraphs (1) through (6) as paragraphs (2),
(4), (5), (1), (3), and (6), respectively.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
Section 5212 of the Elementary and Secondary Education Act of 1965 (as
redesignated by section 8(1)) (20 U.S.C. 7221j) is amended to read as
follows:
`SEC. 5212. AUTHORIZATION OF APPROPRIATIONS.
`(a) In General- There are authorized to be appropriated to carry out
this subpart $650,000,000 for fiscal year 2011 and such sums as may
be necessary for each of the 5 succeeding fiscal years.
`(b) Allocation- In allocating funds under this subpart for any fiscal
year, the Secretary shall consider the relative need between the programs
under section 5202, section 5205(c), and section 5211 and the quality
of the applications submitted under such sections.'.
SEC. 11. REORGANIZATION.
Part B of title V of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 7221 et seq.) is amended--
(1) by striking subpart 2; and
(2) by redesignating subpart 3 as subpart 2.
SEC. 12. CONFORMING AMENDMENTS.
(a) Conforming Amendment- Section 5247(1) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7225f(1)) is amended by striking `5210'
and inserting `5211'.
(b) Table of Contents- The table of contents in section 2 of the Elementary
and Secondary Education Act of 1965 is amended--
(1) by striking the items relating to sections 5206 through 5211 and
inserting the following:
`Sec. 5206. Federal formula allocation.
`Sec. 5207. Credit enhancement for charter school facilities programs.
`Sec. 5208. Solicitation of input from charter school operators.
`Sec. 5209. Records transfer.
`Sec. 5210. Paperwork reduction.
`Sec. 5212. Authorization of appropriations.';
(2) by striking the item relating to subpart 2 of part B of title
V;
(3) by striking the items relating to sections 5221 through 5231;
and
(4) by striking the item relating to subpart 3 of part B of title
V and inserting the following:
`subpart 2--voluntary public school choice programs'.
END
