I 

118TH CONGRESS 

2D SESSION H. R. 8886 

To amend the Elementary and Secondary Education Act of 1965 and the 

Individuals with Disabilities Education Act to ensure no funds made 

available under such Acts may be awarded to a charter school that 

enters into a contract with a for-profit entity for operating, overseeing, 

or managing the charter school, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 28, 2024 

Ms. DELAURO (for herself and Ms. BONAMICI) introduced the following bill; 

which was referred to the Committee on Education and the Workforce 

A BILL 

To amend the Elementary and Secondary Education Act 

of 1965 and the Individuals with Disabilities Education 

Act to ensure no funds made available under such Acts 

may be awarded to a charter school that enters into 

a contract with a for-profit entity for operating, overseeing, or managing the charter school, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Championing Honest 

3 And Responsible Transparency in Education Reform Act’’ 

4 or the ‘‘CHARTER Act’’. 

5 SEC. 2. PURPOSE AND FINDINGS. 

6 (a) PURPOSE.—The purpose of this Act is to ensure 

7 that each charter school that receives funding under the 

8 Elementary and Secondary Education Act of 1965 (20 

9 U.S.C. 6301 et seq.) (in this section referred to as the 

10 ‘‘ESEA’’) or the Individuals with Disabilities Education 

11 Act (20 U.S.C. 1400 et seq.) (in this section referred to 

12 as the ‘‘IDEA’’)— 

13 (1) complies with the intent of the requirements 

14 for funding under such Act; and 

15 (2) best serves the educational needs of stu16 dents by prohibiting such charter school and its 

17 charter management organization from entering into 

18 a contract with a for-profit entity under which the 

19 for-profit entity— 

20 (A) operates, oversees, or manages the 

21 charter school in order to exert influence in 

22 school management; and 

23 (B) receives a portion of school revenue in 

24 order to extract profit for itself or its related 

25 entities. 

26 (b) FINDINGS.—Congress finds the following: 


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1 (1) An ‘‘elementary school’’ is defined as ‘‘a 

2 nonprofit institutional day or residential school, in3 cluding a public elementary charter school, that pro4 vides elementary education, as determined under 

5 State law’’ under section 8101 of the ESEA (20 

6 U.S.C. 7801) and section 602 of the IDEA (20 

7 U.S.C. 1401). 

8 (2) A ‘‘secondary school’’ is defined as ‘‘a non9 profit institutional day or residential school, includ10 ing a public secondary charter school, that provides 

11 secondary education, as determined under State law, 

12 except that the term does not include any education 

13 beyond grade 12’’ under section 8101 of the ESEA 

14 (20 U.S.C. 7801) and section 602 of the IDEA (20 

15 U.S.C. 1401). 

16 (3) The term ‘‘nonprofit’’ as applied to a 

17 school, agency, organization, or institution means ‘‘a 

18 school, agency, organization, or institution owned 

19 and operated by 1 or more nonprofit corporations or 

20 associations no part of the net earnings of which in21 ures, or may lawfully inure, to the benefit of any pri22 vate shareholder or individual’’ under section 602 of 

23 the IDEA (20 U.S.C. 1401). 

24 (4) In 2003, the Department of Education Of25 fice of Inspector General, upon auditing the Arizona 


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1 Department of Education, concluded that the State 

2 educational agency in Arizona had improperly dis3 tributed funds under the ESEA and the IDEA to 

4 for-profit charter schools. 

5 (5) In 2006, the United States Court of Ap6 peals Ninth Circuit Court in Arizona State Bd. v. 

7 U.S. Dept. of Educ., 464 F.3d 1003 (9th Cir. 2006) 

8 found that the terms ‘‘elementary school’’ and ‘‘sec9 ondary school’’ in the ESEA and the IDEA were 

10 limited to nonprofit entities, holding that for-profit 

11 charter schools were ineligible for Federal funds 

12 under the ESEA and the IDEA. 

13 (6) In response to the decision in Arizona State 

14 Bd. v. U.S. Dept. of Educ., the appellant for-profit 

15 charter schools reorganized as for-profit operators of 

16 nonprofit organizations, enabling the appellants to 

17 continue to receive Federal funds under the ESEA 

18 and the IDEA. 

19 (7) Every student in a publicly funded school in 

20 the United States, including charter school students, 

21 is entitled to access education services without hav22 ing publicly funded resources depleted due to profit 

23 extraction. 

24 (8) Every taxpayer in the United States should 

25 be confident that public funds are responsibly 


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1 stewarded and not funding the enrichment of for2 profit charter operators at the expense of students 

3 and taxpayers. 

4 SEC. 3. ESEA DEFINITION OF CHARTER SCHOOL. 

5 (a) PROHIBITION OF CONTRACTING WITH FOR6 PROFIT ENTITY FOR ESSENTIAL SERVICES.—Section 

7 4310(2) of the Elementary and Secondary Education Act 

8 of 1965 (20 U.S.C. 7221i(2)) is amended— 

9 (1) in subparagraph (L), by striking ‘‘and’’ at 

10 the end; 

11 (2) in subparagraph (M)— 

12 (A) by moving the margins of such para13 graph 2 ems to the left; and 

14 (B) by striking the period and inserting a 

15 semicolon; and 

16 (3) by adding at the end the following: 

17 ‘‘(N) does not enter into a contract with a 

18 for-profit entity, or have a charter management 

19 organization or other nonprofit entity enter into 

20 such a contract on behalf of such school, under 

21 which the for-profit entity operates, oversees, 

22 manages, or otherwise carries out the adminis23 tration of such school, which may include cur24 riculum development, budget management, and 


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1 faculty management (such as hiring, termi2 nating, or supervising school-level staff); and 

3 ‘‘(O) may enter into a contract with a for4 profit or nonprofit entity for the provision of— 

5 ‘‘(i) food, payroll, facilities mainte6 nance, or transportation services; 

7 ‘‘(ii) classroom supplies (such as text8 books); or 

9 ‘‘(iii) ancillary services or supplies.’’. 

10 (b) GENERAL DEFINITIONS.—Section 8101 of the 

11 Elementary and Secondary Education Act of 1965 (20 

12 U.S.C. 7801) is amended by adding at the end the fol13 lowing: 

14 ‘‘(53) CHARTER SCHOOL.—The term ‘charter 

15 school’ has the meaning given the term in section 

16 4310.’’. 

17 SEC. 4. IDEA DEFINITION OF CHARTER SCHOOL. 

18 Section 602 of the Individuals with Disabilities Edu19 cation Act (20 U.S.C. 1401) is amended by adding at the 

20 end the following: 

21 ‘‘(37) CHARTER SCHOOL.—The term ‘charter 

22 school’ has the meaning given the term in section 

23 4310 of the Elementary and Secondary Education 

24 Act of 1965 (20 U.S.C. 7221i).’’. 


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1 SEC. 5. EFFECTIVE DATE; APPLICABILITY. 

2 The amendments made by this Act— 

3 (1) shall take effect on the date that is 3 years 

4 after the date of the enactment of this Act; and 

5 (2) shall only apply with respect to any contract 

6 entered into, renewed, or extended on or after the 

7 date of the enactment of this Act. 

Æ 


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