Charter School Transparency, Accountability, and Quality Act

Summary: Charter School Transparency, Accountability, and Quality Act Amends part A of title I of the Elementary and Secondary Education Act of 1965 (ESEA) to require a state's school improvement plan to include assurances that its authorized public chartering agencies:   meet nationally recognized professional standards;  annually file and disclose independently audited financial statements for the charter schools they authorize, adopt and enforce employee compensation and conflict of interest guidelines for such schools, and  enter into a legally binding charter or performance contract with each such school that bases charter renewal and revocation decisions on the state's school improvement accountability system.  Requires each state that seeks a grant under part B (Public Charter Schools) of title V of the ESEA to:  ensure that each charter school in the state makes available to the public information on student support services and annual performance and enrollment data for specified student subgroups and the student body as a whole; ensure that each charter school board in the state has the right to fiscally oversee the education management organization it contracts with; work with charter schools to help them recruit, enroll, and retain traditionally underserved students; ensure that each charter school that receives funds under the state's charter school grant program meets its students' educational needs; and share best and promising practices between charter schools and other public schools.  Allows state grantees to use a weighted lottery to give slightly better chances for admission to educationally disadvantaged students. Expands the eligibility criteria for each charter school to receive part B funds from its state for the purpose of assisting other schools in adapting the charter school's program, or of disseminating information about the charter school, to include:  community involvement in the school's development and operation; three successful consecutive annual audits without any indication of fiscal difficulties, as defined by typical accounting standards; and maintenance of a student population that is demographically similar to the local educational agency (LEA) that encompasses the school or is geographically closest to it.  Requires national studies on the impact of charter schools on the LEAs that encompass them or that are geographically closest to them.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Charter School Transparency, 
Accountability, and Quality Act''.

SEC. 2. REFERENCES.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6301 et seq.).

SEC. 3. STATE PLANS.

    Section 1111(c) (20 U.S.C. 6311(c)) is amended--
            (1) in paragraph (13), by striking ``and'' at the end;
            (2) in paragraph (14) by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(15) any State educational agency with a charter school 
        law will support high-quality public charter schools that 
        receive funds under this title by--
                    ``(A) ensuring the quality of the authorized public 
                chartering agencies in the State by establishing--
                            ``(i) a system of periodic evaluation and 
                        certification of public chartering agencies 
                        using nationally recognized professional 
                        standards; or
                            ``(ii) a statewide, independent chartering 
                        agency that meets nationally recognized 
                        professional standards; and
                    ``(B) including in the procedure established 
                pursuant to subparagraph (A) requirements for--
                            ``(i) the annual filing and public 
                        reporting of independently audited financial 
                        statements including disclosure of amount and 
                        duration of any nonpublic financial and in-kind 
                        contributions of support, by each public 
                        chartering agency, for each school authorized 
                        by such agency, and by each local educational 
                        agency and the State;
                            ``(ii) the adoption and enforcement of 
                        employee compensation and conflict of interest 
                        guidelines for all schools authorized, which 
                        shall include disclosure of executive pay and 
                        affiliated parties with a financial interest in 
                        the management, operations, or contractual 
                        obligations of a charter school; and
                            ``(iii) a legally binding charter or 
                        performance contract between each charter 
                        school and the school's authorized public 
                        chartering agency that--
                                    ``(I) describes the rights, duties, 
                                and remedies of the school and the 
                                public chartering agency; and
                                    ``(II) for each student subgroup 
                                described in subsection (b)(2)(C)(v), 
                                bases charter renewal and revocation 
                                decisions on an accountability plan 
                                based on the statewide State 
                                accountability system described in 
                                section 1111(b)(2).''.

SEC. 4. PURPOSE.

    Section 5201 (20 U.S.C. 7221) is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding at end the following:
            ``(5) carrying out national activities to support--
                    ``(A) stronger charter school authorizing; and
                    ``(B) the dissemination of best practices of 
                charter schools for all schools.''.

SEC. 5. APPLICATIONS.

    Section 5203 (20 U.S.C. 7221b) is amended--
            (1) in subsection (b)(2)--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking ``and'' at the end of subparagraph 
                (C);
                    (C) by adding at the end the following:
                    ``(D) will ensure that each charter school in the 
                State makes publicly available information on student 
                support services, and annual performance and enrollment 
                data disaggregated by the categories of students 
                identified in section 1111(b)(2)(C)(v), except that 
                such disaggregation shall not be required in a case in 
                which the number of students in a category is 
                insufficient to yield statistically reliable 
                information or the results would reveal personally 
                identifiable information about an individual student;
                    ``(E) will ensure that each charter school board in 
                the State has the right to provide fiscal oversight of 
                the education management organization that it contracts 
                with;
                    ``(F) will work with charter schools in the State 
                on efforts to recruit students who may otherwise have 
                limited opportunities to participate in charter schools 
                and eliminate barriers to enrollment, including for 
                educationally disadvantaged students, foster youth, and 
                unaccompanied homeless youth;
                    ``(G) will ensure that each charter school 
                receiving funds under the State educational agency's 
                charter school grant program meet the educational needs 
                of its students, including students with disabilities 
                and English learners;
                    ``(H) will provide technical assistance to each 
                charter school to recruit, enroll, and retain 
                traditionally underserved students, including students 
                with disabilities and English learners, at rates 
                similar to traditional public schools; and
                    ``(I) 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; 
                and''; and
            (2) by adding at the end the following:
    ``(e) Rule of Construction.--Nothing in this subpart shall prohibit 
the Secretary from awarding grants to State educational agencies under 
this part that use a weighted lottery to give slightly better chances 
for admission to all, or a subset of, educationally disadvantaged 
students if--
            ``(1) 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
            ``(2) such weighted lotteries are not used for the purpose 
        of creating schools exclusively to serve a particular subset of 
        students.''.

SEC. 6. ADMINISTRATION.

    Section 5204(f)(6)(A) (20 U.S.C. 7221c(f)(6)(A)) is amended--
            (1) by striking ``and'' at the end of clause (ii);
            (2) by striking the period at the end of clause (iii); and
            (3) by adding at the end the following:
                            ``(iv) community involvement during the 
                        development and operation of the school;
                            ``(v) has had 3 successful consecutive 
                        annual audits that have not indicated fiscal 
                        difficulties as defined by typical accounting 
                        standards; and
                            ``(vi) has maintained a student population 
                        demographically similar to the local 
                        educational agency that is closest 
                        geographically to the charter school or in 
                        which the charter school is located.''.

SEC. 7. NATIONAL ACTIVITIES.

    Section 5205(a)(2) (20 U.S.C. 7221d(a)(2))--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``and the local educational agency that is closest 
        geographically to the charter school or in which the charter 
        school is located'' before ``, including information 
        regarding'';
            (2) by striking ``and'' at the end of subparagraph (A);
            (3) by striking the period at the end of subparagraph (B) 
        and inserting a semicolon; and
            (4) by adding at the end the following:
                    ``(C) the impact of charter schools on the finances 
                of local educational agencies;
                    ``(D) demographic trends in enrollment in both the 
                traditional public school and charter school sectors;
                    ``(E) increasing or easing segregation of students 
                within the two sectors; and
                    ``(F) the representation of students with special 
                needs in either sector.''.