II 

113TH CONGRESS 

1ST SESSION S. 88 

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 23 (legislative day, JANUARY 3), 2013 

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. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘21st Century Charter School Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Purpose. 

Sec. 3. Program authorized. 

Sec. 4. Applications. 

Sec. 5. Administration. 


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Sec. 6. National activities. 

Sec. 7. Federal formula allocation. 

Sec. 8. Credit enhancement. 

Sec. 9. Definitions. 

Sec. 10. Authorization of appropriations. 

Sec. 11. Reorganization. 

Sec. 12. Conforming amendments. 

1 SEC. 2. PURPOSE. 

2 Section 5201 of the Elementary and Secondary Edu3 cation Act of 1965 (20 U.S.C. 7221) is amended— 

4 (1) in paragraph (3), by striking ‘‘and’’; 

5 (2) by redesignating paragraph (4) as para6 graph (6); 

7 (3) by inserting after paragraph (3) the fol8 lowing: 

9 ‘‘(4) encouraging the growth of high-quality 

10 charter schools through the replication and expan11 sion of successful charter school models; 

12 ‘‘(5) disseminating charter school innovations 

13 throughout public education; and’’; and 

14 (4) in paragraph (6) (as redesignated by para15 graph (2))— 

16 (A) by striking ‘‘more nearly’’; and 

17 (B) by striking ‘‘have typically provided’’ 

18 and inserting ‘‘provide’’. 

19 SEC. 3. PROGRAM AUTHORIZED. 

20 Section 5202 of the Elementary and Secondary Edu21 cation Act of 1965 (20 U.S.C. 7221a) is amended— 

22 (1) in subsection (a)— 


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1 (A) by striking ‘‘State educational agen2 cies’’ and inserting ‘‘eligible entities’’; 

3 (B) by striking ‘‘such agencies’’ and insert4 ing ‘‘such entities’’; and 

5 (C) by striking ‘‘this subpart’’ and insert6 ing ‘‘section 5204’’; 

7 (2) in subsection (b)— 

8 (A) by striking ‘‘SPECIAL RULE.—If’’ and 

9 inserting the following: ‘‘SPECIAL RULE; RE10 SERVE ACCOUNT.— 

11 ‘‘(1) SPECIAL RULE.—If’’; 

12 (B) by striking ‘‘a State educational agen13 cy’’ and inserting ‘‘an eligible entity’’; 

14 (C) by striking ‘‘subpart’’ and inserting 

15 ‘‘section’’; and 

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

17 ‘‘(2) RESERVE ACCOUNTS.— 

18 ‘‘(A) IN GENERAL.—In order to assist eli19 gible entities to accomplish the purposes de20 scribed in section 5201, an eligible entity receiv21 ing a grant under this section shall, directly or 

22 indirectly, alone or in collaboration with others, 

23 deposit the funds received under this section in 

24 a reserve account established and maintained 


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1 by the eligible entity for this purpose, in accord2 ance with State and local law. 

3 ‘‘(B) INVESTMENT.—Funds received under 

4 this section that are deposited in the reserve ac5 count established under subparagraph (A), shall 

6 be invested, to the extent practicable, in obliga7 tions issued or guaranteed by the United States 

8 or a State, or in other similarly low risk securi9 ties, in the same manner as funds of a State 

10 are invested under chapter 65 of title 31, 

11 United States Code. 

12 ‘‘(C) REINVESTMENT OF EARNINGS.—Any 

13 earnings on funds received under this section 

14 shall be deposited in a reserve account and used 

15 in support of public charter schools in accord16 ance with activities authorized under this Act.’’; 

17 (3) in subsection (c)— 

18 (A) by striking ‘‘subpart’’ each place the 

19 term occurs and inserting ‘‘section’’; 

20 (B) in paragraph (1)— 

21 (i) in the paragraph heading, by strik22 ing ‘‘STATES’’ and inserting ‘‘ELIGIBLE

23 ENTITIES’’; 


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1 (ii) by striking ‘‘State educational 

2 agencies’’ and inserting ‘‘eligible entities’’; 

3 and 

4 (iii) by striking ‘‘not more than 3 

5 years’’ and inserting ‘‘not more than 5 

6 years’’; and 

7 (C) in paragraph (2)— 

8 (i) by striking ‘‘State educational 

9 agencies’’ and inserting ‘‘eligible entities’’; 

10 and 

11 (ii) by striking ‘‘not more than 3 

12 years’’ and all that follows through the pe13 riod at the end and inserting ‘‘not more 

14 than 5 years. An eligible applicant may use 

15 a portion of the grant period for planning 

16 and program design.’’; 

17 (4) by striking subsection (d) and inserting the 

18 following: 

19 ‘‘(d) CHARTER SCHOOLS WITH MULTIPLE CAM20 PUSES.—The Secretary shall allow an eligible entity to 

21 award multiple subgrants under section 5204(f)(1) to an 

22 eligible applicant in order to support multiple campuses 

23 of a charter school.’’; 

24 (5) in subsection (e)— 


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1 (A) by striking paragraph (1) and insert2 ing the following: 

3 ‘‘(1) IN GENERAL.—In awarding grants under 

4 this section for fiscal year 2013 or any succeeding 

5 fiscal year from any funds appropriated under sec6 tion 5212 (other than funds reserved to carry out 

7 section 5205(c)), the Secretary shall give priority to 

8 an eligible entity to the extent that the State in 

9 which the eligible entity proposes to carry out the 

10 activities under the grant meets the criteria de11 scribed in paragraph (2) and one or more of the cri12 teria described in subparagraphs (A) through (H) of 

13 paragraph (3).’’; 

14 (B) in paragraph (3)— 

15 (i) in subparagraph (A)— 

16 (I) by striking ‘‘a State edu17 cational agency’’ and inserting ‘‘an el18 igible entity’’; and 

19 (II) by striking ‘‘subpart’’ and 

20 inserting ‘‘section’’; 

21 (ii) by redesignating subparagraph 

22 (C) as subparagraph (D); 

23 (iii) in subparagraph (B)— 

24 (I) by redesignating clause (ii) as 

25 subparagraph (C), and aligning the 


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1 margins of such subparagraph with 

2 the margins of subparagraph (A); 

3 (II) by striking ‘‘The State’’ and 

4 all that follows through ‘‘provides’’ 

5 and inserting ‘‘The State provides’’; 

6 and 

7 (III) by striking ‘‘law; or’’ and 

8 inserting ‘‘law.’’; 

9 (iv) in subparagraph (C) (as redesig10 nated by clause (iii)(I)), by striking ‘‘in the 

11 case’’ and all that follows through ‘‘allows’’ 

12 and inserting ‘‘The State allows’’; 

13 (v) in subparagraph (D) (as redesig14 nated by clause (ii))— 

15 (I) by striking ‘‘school has a’’ 

16 and inserting ‘‘school has— 

17 ‘‘(i) a’’; 

18 (II) by striking ‘‘expenditures.’’ 

19 and inserting ‘‘expenditures; and’’; 

20 and 

21 (III) by adding at the end the 

22 following: 

23 ‘‘(ii) an independent governing board 

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1 tract with an authorized public chartering 

2 agency.’’; and 

3 (vi) by adding at the end the fol4 lowing: 

5 ‘‘(E) The State— 

6 ‘‘(i) provides public charter schools 

7 with funding commensurate with the fund8 ing provided to other public schools, in9 cluding capital or facilities aid distributed 

10 through a formula or revenue generated by 

11 bonds; and 

12 ‘‘(ii) ensures that the State edu13 cational agency and local educational agen14 cies provide public charter schools with the 

15 Federal, State, and local funds to which 

16 the public charter schools are entitled in a 

17 timely manner. 

18 ‘‘(F) The State makes it a priority to cre19 ate charter schools in local educational agencies 

20 with large numbers of schools designated as in 

21 need of improvement, corrective action, or re22 structuring under paragraph (1), (7), or (8) of 

23 section 1116(b). 

24 ‘‘(G) The State has developed a trans25 parent authorizer accreditation, training, or reVerDate Mar 15 2010 03:04 Jan 26, 2013 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S88.IS S88

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1 view process for evaluating the effectiveness and 

2 quality of the State’s authorized public char3 tering agencies, or each authorized public char4 tering agency in the State has implemented 

5 such a process, including— 

6 ‘‘(i) a process for reviewing and evalu7 ating the performance of the authorized 

8 public chartering agencies in the State in 

9 authorizing or approving public charter 

10 schools, including a process that enables 

11 the authorized public chartering agencies 

12 to respond to any State concerns or defi13 ciencies regarding such authorizing or ap14 proving; and 

15 ‘‘(ii) any other necessary policies to 

16 ensure effective charter school authorizing 

17 in the State that are developed in conjunc18 tion with the State’s charter school com19 munity and in accordance with the prin20 ciples of high quality charter school au21 thorizing, as determined by the State in 

22 consultation with the charter school com23 munity and stakeholders. 

24 ‘‘(H) The State does not have a cap on 

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1 its parental options in an unreasonable man2 ner.’’; and 

3 (6) in subsection (f)— 

4 (A) by striking ‘‘subpart to a State edu5 cational agency’’ and inserting ‘‘section to an 

6 eligible entity’’; and 

7 (B) by striking ‘‘in the State.’’ and insert8 ing ‘‘in the State where the grant activities will 

9 be carried out.’’. 

10 SEC. 4. APPLICATIONS. 

11 Section 5203 of the Elementary and Secondary Edu12 cation Act of 1965 (20 U.S.C. 7221b) is amended— 

13 (1) by striking ‘‘this subpart’’ each place the 

14 term appears and inserting ‘‘section 5202’’; 

15 (2) in subsection (a), by striking ‘‘STATE

16 AGENCIES.—Each State educational agency’’ and in17 serting ‘‘ELIGIBLE ENTITIES.—An eligible entity’’; 

18 (3) in subsection (b)— 

19 (A) in the subsection heading, by striking 

20 ‘‘A STATE EDUCATIONAL AGENCY’’ and insert21 ing ‘‘AN ELIGIBLE ENTITY’’; 

22 (B) in paragraph (1)— 

23 (i) by striking ‘‘State educational 

24 agency’s’’ each place the term appears and 

25 inserting ‘‘eligible entity’s’’; and 


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1 (ii) by striking ‘‘State educational 

2 agency to’’ and inserting ‘‘eligible entity 

3 to’’; 

4 (C) in paragraph (2)— 

5 (i) in the matter preceding subpara6 graph (A), by striking ‘‘describe how the 

7 State educational agency—’’ and inserting 

8 ‘‘describe the State’s level of participation 

9 and involvement in the grant, including a 

10 letter from the State describing how the 

11 State—’’; 

12 (ii) in the matter preceding clause (i) 

13 of subparagraph (A), by striking ‘‘in the 

14 State’’ and inserting ‘‘area served by the 

15 grant’’; 

16 (iii) in subparagraph (B)— 

17 (I) by striking ‘‘in the State’’ and 

18 inserting ‘‘in the area served by the 

19 grant’’; and 

20 (II) by striking ‘‘and’’ after the 

21 semicolon; 

22 (iv) in subparagraph (C), by striking 

23 ‘‘to each local’’ and all that follows 

24 through ‘‘; and’’ and inserting ‘‘related to 

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1 ing, and instruction to public schools, in2 cluding public charter schools in the 

3 State;’’; and 

4 (v) by adding at the end the following: 

5 ‘‘(D) will ensure the proper handling and 

6 management of Federal funds; and 

7 ‘‘(E) will oversee and hold accountable the 

8 authorized public chartering agencies in the 

9 State, including through a transparent author10 izer accreditation, training, and review process 

11 described in section 5202(e)(3)(G);’’; 

12 (D) by redesignating paragraph (3) as 

13 paragraph (4); 

14 (E) by inserting after paragraph (2) the 

15 following: 

16 ‘‘(3) describe the criteria that the eligible entity 

17 will use to award subgrants to eligible applicants to 

18 ensure high-quality charter schools;’’; 

19 (F) in paragraph (4) (as redesignated by 

20 subparagraph (D))— 

21 (i) in the matter preceding subpara22 graph (A), by striking ‘‘State educational 

23 agency’’ each place the term appears and 

24 inserting ‘‘eligible entity’’; 

25 (ii) in subparagraph (A)— 


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1 (I) by redesignating clauses (ii) 

2 and (iii) as clauses (iii) and (iv), re3 spectively; and 

4 (II) by inserting after clause (i) 

5 the following: 

6 ‘‘(ii) the charter school’s plan for 

7 using academic assessments to measure 

8 and report student academic progress;’’; 

9 (iii) in subparagraph (B), by striking 

10 ‘‘managed;’’ and inserting the following: 

11 ‘‘managed, including— 

12 ‘‘(i) the charter school’s financial plan 

13 and policies, including financial controls 

14 and annual audit requirements; 

15 ‘‘(ii) a clear description of the roles 

16 and responsibilities for the charter school’s 

17 governing board, leadership, and manage18 ment team, and any other organizations 

19 critical to the charter school’s operations 

20 or success; 

21 ‘‘(iii) plans for recruiting and devel22 oping the charter school’s leadership and 

23 staff; 


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1 ‘‘(iv) the charter school’s leadership 

2 and teacher employment policies, including 

3 performance evaluation plans; 

4 ‘‘(v) the proposed governing bylaws of 

5 the charter school; and 

6 ‘‘(vi) a detailed charter school start-up 

7 plan that identifies tasks, timelines, and 

8 responsible parties;’’; 

9 (iv) in subparagraph (E), by inserting 

10 ‘‘, including documentation of the parents’ 

11 and community members’ support for the 

12 school’’ before the semicolon; 

13 (v) in subparagraph (F), by striking 

14 ‘‘a description of how’’ and inserting ‘‘an 

15 assurance from the authorized public char16 tering agency that’’; 

17 (vi) in subparagraph (H), by inserting 

18 ‘‘and how such funds will be used for plan19 ning, program design, and the initial im20 plementation of a charter school’’ before 

21 the semicolon at the end; 

22 (vii) in subparagraph (I)(ii), by insert23 ing ‘‘, including through a lottery process 

24 if the number of applicants exceeds the 


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1 number of seats available at the charter 

2 school’’ before the semicolon; 

3 (viii) in subparagraphs (J) and (K), 

4 by striking ‘‘State educational agency’’ 

5 each place the term appears and inserting 

6 ‘‘eligible entity’’; 

7 (ix) by striking subparagraph (M); 

8 (x) by redesignating subparagraph 

9 (N) as subparagraph (O); 

10 (xi) by inserting after subparagraph 

11 (L) the following: 

12 ‘‘(M) a demonstration of support for the 

13 charter school from the State’s charter school 

14 community; 

15 ‘‘(N) a description of how the independent 

16 governing board of the charter school, including 

17 a board overseeing multi-campus charters, is 

18 encouraged to include individuals with a diver19 sity of skills, including business management, 

20 financial management, real estate finance, and 

21 curriculum and instruction; and’’; and 

22 (xii) in subparagraph (O) (as redesig23 nated by clause (x))— 


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1 (I) by striking ‘‘State educational 

2 agency’’ and inserting ‘‘eligible enti3 ty’’; and 

4 (II) by striking the period at the 

5 end and inserting ‘‘; and’’; and 

6 (G) by adding at the end the following: 

7 ‘‘(5) in the case of an eligible entity that is an 

8 authorized public chartering agency— 

9 ‘‘(A) describe such eligible entity’s stra10 tegic goal for chartering schools and progress 

11 towards that goal; and 

12 ‘‘(B) provide an assurance that the eligible 

13 entity will annually file a plan with the State in 

14 which the eligible entity is located that covers 

15 such topics necessary for effective charter 

16 school oversight, including, at a minimum— 

17 ‘‘(i) the academic and financial per18 formance of all operating public charter 

19 schools overseen by the eligible entity, ac20 cording to the performance expectations 

21 for each public charter school set forth in 

22 the school’s contract; 

23 ‘‘(ii) the status of the eligible entity’s 

24 public charter school portfolio, identifying 

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1 lowing categories: approved (but not yet 

2 open), operating, renewed, transferred, re3 voked, not renewed, voluntarily closed, or 

4 never opened; 

5 ‘‘(iii) the authorizing functions pro6 vided by the eligible entity to the public 

7 charter schools the eligible entity oversees, 

8 including the eligible entity’s operating 

9 costs and expenses detailed in annual au10 dited financial statements that conform 

11 with generally accepted accounting prin12 ciples; and 

13 ‘‘(iv) the services purchased from the 

14 eligible entity by the public charter schools 

15 overseen by the eligible entity, including an 

16 itemized accounting of the actual costs of 

17 these services.’’; and 

18 (4) in subsection (d)— 

19 (A) in paragraph (1)— 

20 (i) by striking ‘‘(A) through (N) of 

21 subsection (b)(3)’’ and inserting ‘‘(A) 

22 through (O) of subsection (b)(4)’’; 

23 (ii) by striking ‘‘and (N)’’ and insert24 ing ‘‘and (O)’’; and 


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1 (iii) by striking ‘‘State educational 

2 agency’’ and inserting ‘‘eligible entity’’; 

3 and 

4 (B) in paragraph (2)— 

5 (i) in the matter preceding subpara6 graph (A), by striking ‘‘State educational 

7 agency’’ and inserting ‘‘eligible entity’’; 

8 and 

9 (ii) in paragraph (3)— 

10 (I) by striking ‘‘State educational 

11 agency’’ and inserting ‘‘eligible enti12 ty’’; and 

13 (II) by striking ‘‘subgrant if’’ 

14 and all that follows through the period 

15 and inserting ‘‘subgrant.’’. 

16 SEC. 5. ADMINISTRATION. 

17 Section 5204 of the Elementary and Secondary Edu18 cation Act of 1965 (20 U.S.C. 7221c) is amended— 

19 (1) in subsection (a)— 

20 (A) in the subsection heading, by striking 

21 ‘‘STATE EDUCATIONAL AGENCIES’’ and insert22 ing ‘‘ELIGIBLE ENTITIES’’; 

23 (B) by striking ‘‘this subpart’’ each place 

24 the term appears and inserting ‘‘section 5202’’; 


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1 (C) in the matter preceding paragraph (1), 

2 by striking ‘‘State educational agencies’’ and in3 serting ‘‘eligible entities’’; 

4 (D) in paragraph (1), by inserting ‘‘, in5 cluding efforts at closing the achievement gap 

6 by meeting the annual objectives described in 

7 section 1111(b)(2)(C)(v)’’ before the semicolon; 

8 (E) in paragraph (2), by inserting ‘‘and 

9 autonomy’’ after ‘‘flexibility’’; 

10 (F) in paragraph (5), by inserting ‘‘and’’ 

11 after the semicolon; 

12 (G) in paragraph (6), by striking ‘‘; and’’ 

13 and inserting a period; and 

14 (H) by striking paragraph (7); 

15 (2) in subsection (b)— 

16 (A) by striking ‘‘this subpart’’ and insert17 ing ‘‘section 5202’’; and 

18 (B) by striking paragraph (7); 

19 (3) in subsection (c)— 

20 (A) by striking ‘‘this subpart’’ and insert21 ing ‘‘section 5202’’; and 

22 (B) by striking ‘‘State educational agency’’ 

23 and inserting ‘‘eligible entity’’; 

24 (4) in subsection (d)— 


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1 (A) in the matter preceding paragraph 

2 (1)— 

3 (i) by striking ‘‘State educational 

4 agency receiving a grant under this sub5 part’’ and inserting ‘‘eligible entity receiv6 ing a grant under section 5202’’; and 

7 (ii) by striking ‘‘this subpart in’’ and 

8 inserting ‘‘such section in’’; and 

9 (B) in paragraph (2), by inserting ‘‘or use 

10 non-traditional curricula’’ before the period at 

11 the end; 

12 (5) in subsection (e)— 

13 (A) in the matter preceding subparagraph 

14 (1), by striking ‘‘5210(1)’’ and inserting 

15 ‘‘5211(2)’’; and 

16 (B) in paragraph (1), by striking ‘‘this 

17 subpart’’ and inserting ‘‘section 5203’’; 

18 (6) in subsection (f)— 

19 (A) in paragraph (1)— 

20 (i) in the paragraph heading, by strik21 ing ‘‘STATE EDUCATIONAL AGENCIES.—’’ 

22 and inserting the following: STATE EDU23 CATIONAL AGENCIES.— 

24 ‘‘(A) IN GENERAL.—Each eligible entity’’; 


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1 (ii) by striking ‘‘under this subpart’’ 

2 and inserting ‘‘under section 5202’’; 

3 (iii) by inserting ‘‘, including a new 

4 campus or expansion of an existing charter 

5 school,’’ after ‘‘charter school’’; 

6 (iv) by striking ‘‘in the State’’ and in7 serting ‘‘in the area to be served by the 

8 grant’’; and 

9 (v) by striking ‘‘, except that’’ and all 

10 that follows through ‘‘paragraph (6).’’ and 

11 inserting a period; 

12 (B) by striking paragraph (6); 

13 (C) by redesignating paragraphs (2) 

14 through (5) as paragraphs (4) through (7), re15 spectively; 

16 (D) by inserting after paragraph (1) the 

17 following: 

18 ‘‘(2) CHARTER SCHOOL DEVELOPERS.—In 

19 awarding subgrants under this section, an eligible 

20 entity shall ensure that— 

21 ‘‘(A) most of the subgrant funds are 

22 awarded to eligible applicants described in sec23 tion 5211(5)(A); and 

24 ‘‘(B) subgrants are awarded, to the extent 

25 practicable, to a mix of such eligible applicants. 


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1 ‘‘(3) AMOUNT OF SUBGRANTS.—An eligible en2 tity may vary the amount of a subgrant under this 

3 section based upon a variety of factors, including— 

4 ‘‘(A) whether the eligible applicant is a 

5 start-up charter school or a conversion charter 

6 school (as defined by the eligible entity); and 

7 ‘‘(B) whether the eligible applicant is cre8 ating a charter school under a new charter or 

9 an existing charter.’’; 

10 (E) in paragraph (4) (as redesignated by 

11 subparagraph (C))— 

12 (i) by striking ‘‘a State educational 

13 agency’’ and inserting ‘‘an eligible entity’’; 

14 and 

15 (ii) by striking ‘‘, or to disseminate in16 formation about the charter school and 

17 successful practices in the charter school,’’; 

18 (F) in paragraph (5) (as redesignated by 

19 subparagraph (C))— 

20 (i) in the matter preceding subpara21 graph (A), by striking ‘‘this subpart’’ and 

22 inserting ‘‘section 5202’’; 

23 (ii) in subparagraph (A)(ii), by strik24 ing ‘‘and’’ after the semicolon; 


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1 (iii) in subparagraph (B)(iv), by strik2 ing the period and inserting ‘‘; and’’; and 

3 (iv) by adding at the end the fol4 lowing: 

5 ‘‘(C) providing assistance, through activi6 ties described in section 5205(b)(4), in imple7 menting charter school innovations and dissemi8 nating information regarding such innova9 tions.’’; 

10 (G) in paragraph (6)(A) (as redesignated 

11 by subparagraph (C))— 

12 (i) in the subparagraph heading, by 

13 striking ‘‘STATE EDUCATIONAL AGENCY’’ 

14 and inserting ‘‘ELIGIBLE ENTITY’’; 

15 (ii) by striking ‘‘State educational 

16 agency’’ and inserting ‘‘eligible entity’’; 

17 (iii) by striking ‘‘pursuant to this sub18 part’’ and inserting ‘‘pursuant to section 

19 5202’’; 

20 (iv) by striking ‘‘this subpart’’ and in21 serting ‘‘such section’’; and 

22 (v) by adding at the end the following: 

23 ‘‘An eligible entity may use a portion of 

24 the reserved funds to improve the charter 

25 school authorizing policies and practices of 


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1 the area served by the eligible entity, which 

2 may include the approval, monitoring, and 

3 renewal of charter schools.’’; and 

4 (H) in paragraph (7) (as redesignated by 

5 subparagraph (C))— 

6 (i) by striking ‘‘State educational 

7 agency’’ and inserting ‘‘eligible entity’’; 

8 (ii) by striking ‘‘this subpart’’ and in9 serting ‘‘section 5202’’; 

10 (iii) by striking ‘‘10’’ and inserting 

11 ‘‘20’’; and 

12 (iv) by striking ‘‘the State educational 

13 agency’’ and all that follows through 

14 ‘‘sources.’’ and inserting ‘‘the eligible enti15 ty, for expenses necessary to plan, begin 

16 operations, and subsequently operate a 

17 public charter school.’’; and 

18 (7) by striking subsection (g). 

19 SEC. 6. NATIONAL ACTIVITIES. 

20 Section 5205 of the Elementary and Secondary Edu21 cation Act of 1965 (20 U.S.C. 7221d) is amended— 

22 (1) in subsection (a)— 

23 (A) in paragraph (3)(E), by striking 

24 ‘‘schools’’ each place the term occurs and in25 serting ‘‘schools, authorized public chartering 


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1 agencies, and charter support organizations’’; 

2 and 

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

4 ‘‘(6) To provide technical assistance to charter 

5 schools on how to meet the requirements of part B 

6 of the Individuals with Disabilities Education Act.’’; 

7 (2) by redesignating subsections (b) and (c) as 

8 subsections (c) and (d), respectively; 

9 (3) by inserting after subsection (a) the fol10 lowing: 

11 ‘‘(b) NATIONAL DISSEMINATION.— 

12 ‘‘(1) IN GENERAL.—To carry out this sub13 section, the Secretary shall reserve for each fiscal 

14 year not more than $8,000,000 of the amount ap15 propriated to carry out this subpart. 

16 ‘‘(2) ELIGIBILITY.—In order to receive a grant 

17 under this subsection, an entity shall— 

18 ‘‘(A) be— 

19 ‘‘(i) a charter school; 

20 ‘‘(ii) an eligible applicant; 

21 ‘‘(iii) an eligible entity; or 

22 ‘‘(iv) a consortium of entities de23 scribed in clauses (i), (ii), or (iii); and 

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1 taining such information as the Secretary may 

2 require. 

3 ‘‘(3) CRITERIA.—The Secretary shall award 

4 grants under this subsection on the basis of— 

5 ‘‘(A) the quality of the application; 

6 ‘‘(B) the capacity of the applicant to exe7 cute the application; and 

8 ‘‘(C) the scale of the expected impact of 

9 the application. 

10 ‘‘(4) ACTIVITIES.—A recipient of a grant under 

11 this subsection shall use funds received under the 

12 grant to assist other schools in the recipient’s State 

13 and in other States in adopting charter school inno14 vations, or to disseminate information about charter 

15 school innovations, through activities such as— 

16 ‘‘(A) assisting other entities with the plan17 ning and start-up of one or more new public 

18 schools, including charter schools; 

19 ‘‘(B) developing partnerships designed to 

20 improve student academic achievement; 

21 ‘‘(C) developing curriculum materials, as22 sessments, and other materials that promote in23 creased student achievement and are based on 

24 successful practices at charter schools; 


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1 ‘‘(D) conducting evaluations and devel2 oping materials that document successful prac3 tices at charter schools and that are designed to 

4 improve student performance in other schools; 

5 and 

6 ‘‘(E) training, regarding the innovative 

7 practices developed at the original site, for per8 sonnel of— 

9 ‘‘(i) local educational agencies that 

10 are adopting innovations or successful 

11 practices used at charter schools; 

12 ‘‘(ii) authorized public chartering 

13 agencies; or 

14 ‘‘(iii) charter support organizations.’’; 

15 and 

16 (4) in subsection (c) (as redesignated by para17 graph (2))— 

18 (A) in paragraph (2)(A), by striking 

19 ‘‘paragraphs (2) and (3)(B) of section 5211(b)’’ 

20 and inserting ‘‘section 5212’’; 

21 (B) by redesignating paragraphs (5) and 

22 (6) as paragraphs (6) and (7), respectively; 

23 (C) by inserting after paragraph (4) the 

24 following: 


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1 ‘‘(5) SPECIAL RULE.—A State that provides 

2 public charter schools with access to existing ade3 quate facility space may apply for a grant under this 

4 subsection, if the State agrees that the State will, 

5 upon receipt of the grant, develop a capital aid pro6 gram consistent with the program described in this 

7 subsection during the grant period.’’; and 

8 (D) in paragraph (7) (as redesignated by 

9 subparagraph (B)), by striking ‘‘(A), (B), and 

10 (C)’’ and inserting ‘‘(A) through (F)’’. 

11 SEC. 7. FEDERAL FORMULA ALLOCATION. 

12 Section 5206 of the Elementary and Secondary Edu13 cation Act of 1965 (20 U.S.C. 7221e) is amended— 

14 (1) by striking the section heading and insert15 ing the following: 

16 ‘‘SEC. 5206. FEDERAL FORMULA ALLOCATION.’’; 

17 and 

18 (2) in subsection (a), by inserting ‘‘or is in op19 eration’’ after ‘‘actually opens’’. 

20 SEC. 8. CREDIT ENHANCEMENT. 

21 Subpart 1 of part B of title V of the Elementary and 

22 Secondary Education Act of 1965 (as amended by this 

23 Act) (20 U.S.C. 7221 et seq.) is further amended— 


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1 (1) by redesignating sections 5207 through 

2 5211 as sections 5208 through 5212, respectively; 

3 and 

4 (2) by inserting after section 5206 the fol5 lowing: 

6 ‘‘SEC. 5207. CREDIT ENHANCEMENT FOR CHARTER SCHOOL 

7 FACILITIES PROGRAMS. 

8 ‘‘(a) PURPOSE.—The purpose of this section is to 

9 provide grants to eligible entities to permit the eligible en10 tities to demonstrate innovative credit enhancement initia11 tives that assist charter schools to address the cost of ac12 quiring, constructing, and renovating facilities. 

13 ‘‘(b) GRANTS TO ELIGIBLE ENTITIES.—After reserv14 ing any funds as necessary for grant evaluation or admin15 istration consistent with any applicable provisions (includ16 ing section 9601(a) of this Act and section 402(b)(1) of 

17 the Department of Education Organization Act), the Sec18 retary shall use the amounts available to carry out this 

19 section to award, on a competitive basis, not less than 3 

20 grants to eligible entities that have applications approved 

21 under this section to demonstrate innovative methods of 

22 assisting charter schools to address the cost of acquiring, 

23 constructing, and renovating facilities by enhancing the 

24 availability of loans or bond financing for charter schools. 

25 ‘‘(c) GRANTEE SELECTION.— 


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1 ‘‘(1) EVALUATION OF APPLICATION.—The Sec2 retary shall evaluate each application submitted 

3 under subsection (e), and shall determine whether 

4 the application is sufficient to merit approval. 

5 ‘‘(2) DISTRIBUTION OF GRANTS.— 

6 ‘‘(A) IN GENERAL.—Subject to subpara7 graph (B) and paragraph (3), the Secretary 

8 shall award— 

9 ‘‘(i) not less than 1 grant to an eligi10 ble entity described in section 5211(6)(A); 

11 ‘‘(ii) not less than 1 grant to an eligi12 ble entity described in section 5211(6)(B); 

13 and 

14 ‘‘(iii) not less than 1 grant to an eligi15 ble entity described in section 5211(6)(C). 

16 ‘‘(B) EXCEPTION.—Subparagraph (A) 

17 shall only apply if applications are submitted 

18 that permit the Secretary to do so without ap19 proving an application that is not of sufficient 

20 quality to merit approval. 

21 ‘‘(3) SPECIAL RULE.—In the event the Sec22 retary determines that the funds made available 

23 under this section are insufficient to permit the Sec24 retary to award not less than 3 grants in accordance 

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1 graph (2) shall not apply, and the Secretary may de2 termine the appropriate number of grants to be 

3 awarded in accordance with subsection (d). 

4 ‘‘(d) GRANT CHARACTERISTICS.—Grants under this 

5 section shall be of a sufficient size, scope, and quality so 

6 as to ensure an effective demonstration of an innovative 

7 means of enhancing credit for the financing of charter 

8 school acquisition, construction, or renovation. 

9 ‘‘(e) APPLICATIONS.— 

10 ‘‘(1) IN GENERAL.—To receive a grant under 

11 this section, an eligible entity shall submit to the 

12 Secretary an application in such form as the Sec13 retary may reasonably require. 

14 ‘‘(2) CONTENTS.—An application submitted 

15 under paragraph (1) shall contain— 

16 ‘‘(A) a statement identifying the activities 

17 proposed to be undertaken with funds received 

18 under this section, including how the eligible 

19 entity will determine which charter schools will 

20 receive assistance, and how much and what 

21 types of assistance charter schools will receive; 

22 ‘‘(B) a description of the involvement of 

23 charter schools in the application’s development 

24 and the design of the proposed activities; 


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1 ‘‘(C) a description of the eligible entity’s 

2 expertise in capital market financing; 

3 ‘‘(D) a description of how the proposed ac4 tivities will leverage the maximum amount of 

5 private-sector financing capital relative to the 

6 amount of Federal and State funds used and 

7 otherwise enhance credit available to charter 

8 schools, including how the applicant will offer a 

9 combination of rates and terms more favorable 

10 than rates and terms that a charter school 

11 could receive without assistance under this sec12 tion; 

13 ‘‘(E) a description of how the eligible enti14 ty possesses sufficient expertise in education to 

15 evaluate the likelihood of success of a charter 

16 school program for which facilities financing is 

17 sought; 

18 ‘‘(F) in the case of an application sub19 mitted by an eligible entity that is a State gov20 ernmental entity, a description of the actions 

21 that the entity has taken, or will take, to ensure 

22 that charter schools within the State receive the 

23 funding needed to have adequate facilities; and 

24 ‘‘(G) such other information as the Sec25 retary may reasonably require. 


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1 ‘‘(f) CHARTER SCHOOL OBJECTIVES.—An eligible en2 tity receiving a grant under this section shall use the funds 

3 deposited in the reserve account established under sub4 section (g)(1) to assist 1 or more charter schools to access 

5 private sector capital in order to accomplish one or more 

6 of the following objectives: 

7 ‘‘(1) The acquisition (by purchase, lease, dona8 tion, or otherwise) of an interest (including an inter9 est held by a third party for the benefit of a charter 

10 school) in improved or unimproved real property 

11 that is necessary to commence or continue the oper12 ation of a charter school. 

13 ‘‘(2) The construction (including predevelop14 ment costs in a case where construction or renova15 tion cannot proceed as a result of predevelopment 

16 findings) of new facilities, or the renovation, repair, 

17 or alteration of existing facilities, necessary to com18 mence or continue the operation of a charter school. 

19 ‘‘(g) RESERVE ACCOUNT.— 

20 ‘‘(1) USE OF FUNDS.—To assist charter schools 

21 to accomplish the objectives described in subsection 

22 (f), an eligible entity receiving a grant under this 

23 section shall, in accordance with State and local law, 

24 directly or indirectly, alone or in collaboration with 

25 others, deposit the funds received under this section 


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1 (other than funds used for administrative costs in 

2 accordance with subsection (h)) in a reserve account 

3 established and maintained by the eligible entity for 

4 this purpose. Amounts deposited in such account 

5 shall be used by the eligible entity for one or more 

6 of the following purposes: 

7 ‘‘(A) Guaranteeing, insuring, and rein8 suring bonds, notes, evidences of debt, loans, 

9 and interests therein, the proceeds of which are 

10 used for an objective described in subsection (f). 

11 ‘‘(B) Guaranteeing and insuring leases of 

12 personal and real property for an objective de13 scribed in subsection (f). 

14 ‘‘(C) Facilitating financing by identifying 

15 potential lending sources, encouraging private 

16 lending, and other similar activities that di17 rectly promote lending to, or for the benefit of, 

18 charter schools. 

19 ‘‘(D) Facilitating the issuance of bonds by 

20 charter schools, or by other public entities for 

21 the benefit of charter schools, by providing 

22 technical, administrative, and other appropriate 

23 assistance (including the recruitment of bond 

24 counsel, underwriters, and potential investors 


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1 and the consolidation of multiple charter school 

2 projects within a single bond issue). 

3 ‘‘(E) Making limited loans to charter 

4 schools, under such terms and conditions as the 

5 Secretary may prescribe. 

6 ‘‘(2) INVESTMENT.—Funds received under this 

7 section and deposited in the reserve account estab8 lished under paragraph (1) shall be invested in obli9 gations issued or guaranteed by the United States or 

10 a State, or in other similarly low-risk securities. 

11 ‘‘(3) REINVESTMENT OF EARNINGS.—Any earn12 ings on funds received under this section shall be de13 posited in the reserve account established under 

14 paragraph (1) and used in accordance with such 

15 paragraph. 

16 ‘‘(h) LIMITATION ON ADMINISTRATIVE COSTS.—An 

17 eligible entity may use not more than 2 percent of the 

18 funds received for any fiscal year under this section for 

19 the administrative costs of carrying out its responsibilities 

20 under this section. 

21 ‘‘(i) AUDITS AND REPORTS.— 

22 ‘‘(1) FINANCIAL RECORD MAINTENANCE AND

23 AUDIT.—The financial records of each eligible entity 

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1 counting principles and shall be subject to an annual 

2 audit by an independent public accountant. 

3 ‘‘(2) REPORTS.— 

4 ‘‘(A) GRANTEE ANNUAL REPORTS.—Each 

5 eligible entity receiving a grant under this sec6 tion annually shall submit to the Secretary a re7 port of the eligible entity’s operations and ac8 tivities under this section. 

9 ‘‘(B) CONTENTS.—Each annual report 

10 submitted under subparagraph (A) shall in11 clude— 

12 ‘‘(i) a copy of the most recent finan13 cial statements, and any accompanying 

14 opinion on such statements, prepared by 

15 the independent public accountant review16 ing the financial records of the eligible en17 tity; 

18 ‘‘(ii) a copy of any report made on an 

19 audit of the financial records of the eligible 

20 entity that was conducted under paragraph 

21 (1) during the reporting period; 

22 ‘‘(iii) an evaluation by the eligible en23 tity of the effectiveness of its use of the 

24 Federal funds provided under this section 

25 in leveraging private funds; 


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1 ‘‘(iv) a listing and description of the 

2 charter schools served during the reporting 

3 period; 

4 ‘‘(v) a description of the activities car5 ried out by the eligible entity to assist 

6 charter schools in meeting the objectives 

7 set forth in subsection (f); and 

8 ‘‘(vi) a description of the characteris9 tics of lenders and other financial institu10 tions participating in the activities under11 taken by the eligible entity under this sec12 tion during the reporting period. 

13 ‘‘(C) SECRETARIAL REPORT.—The Sec14 retary shall review the reports submitted under 

15 paragraph (2)(A) and shall provide a com16 prehensive annual report to Congress on the ac17 tivities conducted under this section. 

18 ‘‘(j) NO FULL FAITH AND CREDIT FOR GRANTEE

19 OBLIGATIONS.—No financial obligation of an eligible enti20 ty entered into pursuant to this section (such as an obliga21 tion under a guarantee, bond, note, evidence of debt, or 

22 loan) shall be an obligation of, or guaranteed in any re23 spect by, the United States. The full faith and credit of 

24 the United States is not pledged to the payment of funds 

25 which may be required to be paid under any obligation 


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1 made by an eligible entity pursuant to any provision of 

2 this section. 

3 ‘‘(k) RECOVERY OF FUNDS.— 

4 ‘‘(1) IN GENERAL.—The Secretary, in accord5 ance with chapter 37 of title 31, United States 

6 Code, shall collect— 

7 ‘‘(A) all of the funds in a reserve account 

8 established by an eligible entity under sub9 section (g)(1) if the Secretary determines, not 

10 earlier than 2 years after the date on which the 

11 eligible entity first received funds under this 

12 section, that the eligible entity has failed to 

13 make substantial progress in carrying out the 

14 purposes described in this section; or 

15 ‘‘(B) all or a portion of the funds in a re16 serve account established by an eligible entity 

17 under subsection (g)(1) if the Secretary deter18 mines that the eligible entity has permanently 

19 ceased to use all or a portion of the funds in 

20 such account to accomplish any purpose de21 scribed in this section. 

22 ‘‘(2) EXERCISE OF AUTHORITY.—The Secretary 

23 shall not exercise the authority provided in para24 graph (1) to collect from any eligible entity any 


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1 funds that are being properly used to achieve one or 

2 more of the objectives described in subsection (f). 

3 ‘‘(3) PROCEDURES.—The provisions of sections 

4 451, 452, and 458 of the General Education Provi5 sions Act shall apply to the recovery of funds under 

6 paragraph (1). 

7 ‘‘(4) CONSTRUCTION.—Nothing in this section 

8 shall be construed to impair or affect the authority 

9 of the Secretary to recover funds under part D of 

10 the General Education Provisions Act. 

11 ‘‘(l) RESERVATION.—To carry out this section, the 

12 Secretary shall reserve for each fiscal year not less than 

13 5 percent and not more than 15 percent of the amount 

14 appropriated under section 5212.’’. 

15 SEC. 9. DEFINITIONS. 

16 Section 5211 of the Elementary and Secondary Edu17 cation Act of 1965 (as redesignated by section 8(1)) (20 

18 U.S.C. 7221i) is amended— 

19 (1) in paragraph (1)— 

20 (A) by striking subparagraph (L); 

21 (B) by redesignating subparagraphs (D) 

22 through (K) as subparagraphs (E) through (L), 

23 respectively; 

24 (C) by inserting after subparagraph C) the 

25 following: 


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1 ‘‘(D) has an independent governing board 

2 that enters into a performance-based agreement 

3 that encompasses one or more campuses with 

4 an authorized public chartering agency in the 

5 State, which agreement shall include a descrip6 tion of— 

7 ‘‘(i) how student performance will be 

8 measured in each charter school pursuant 

9 to the State assessments that are required 

10 of other schools and any other assessments 

11 or evaluations mutually agreeable to the 

12 authorized public chartering agency and 

13 the charter school; and 

14 ‘‘(ii) criteria for renewal or revocation 

15 of the charter;’’; 

16 (D) in subparagraph (E) (as redesignated 

17 by subparagraph (B)), by striking ‘‘elementary 

18 or secondary education, or both’’ and inserting 

19 ‘‘prekindergarten, elementary, or secondary 

20 education, or adult education if permitted by 

21 State charter law, or any combination of such 

22 types of education’’; 

23 (E) in subparagraph (I) (as redesignated 

24 by subparagraph (B))— 


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1 (i) by striking ‘‘school to’’ and insert2 ing ‘‘school— 

3 ‘‘(i) to’’; 

4 (ii) by striking ‘‘children, and that’’ 

5 and inserting ‘‘children; 

6 ‘‘(ii) that’’; and 

7 (iii) by striking ‘‘accommodated;’’ and 

8 inserting ‘‘accommodated; and 

9 ‘‘(iii) that does not give admissions 

10 preference to any student on the basis of 

11 prior academic achievement;’’; 

12 (F) in subparagraph (K) (as redesignated 

13 by subparagraph (B)), by inserting ‘‘and’’ after 

14 the semicolon; and 

15 (G) in subparagraph (L) (as redesignated 

16 by subparagraph (B)), by striking ‘‘; and’’ and 

17 inserting a period; 

18 (2) by striking paragraph (3) and inserting the 

19 following: 

20 ‘‘(3) ELIGIBLE APPLICANT.—The term ‘eligible 

21 applicant’ means— 

22 ‘‘(A) a developer that has applied to an au23 thorized public chartering agency to operate a 

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1 ly notice to that authority under section 

2 5203(d)(3); or 

3 ‘‘(B) a charter support organization.’’; 

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

5 ‘‘(5) CHARTER SUPPORT ORGANIZATION.—The 

6 term ‘charter support organization’ means a public 

7 or private nonprofit organization that provides as8 sistance to a developer of a charter school during the 

9 planning, program design, and initial implementa10 tion of a charter school. 

11 ‘‘(6) ELIGIBLE ENTITY.—The term ‘eligible en12 tity’ means— 

13 ‘‘(A) a public entity, such as a State edu14 cational agency or other State or local govern15 mental entity; 

16 ‘‘(B) a private nonprofit entity; or 

17 ‘‘(C) a consortium of entities described in 

18 subparagraph (A) or (B).’’; and 

19 (4) by redesignating paragraphs (1) through 

20 (6) as paragraphs (2), (4), (5), (1), (3), and (6), re21 spectively. 

22 SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 

23 Section 5212 of the Elementary and Secondary Edu24 cation Act of 1965 (as redesignated by section 8(1)) (20 

25 U.S.C. 7221j) is amended to read as follows: 


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1 ‘‘SEC. 5212. AUTHORIZATION OF APPROPRIATIONS. 

2 ‘‘(a) IN GENERAL.—There are authorized to be ap3 propriated to carry out this subpart $650,000,000 for fis4 cal year 2013 and such sums as may be necessary for each 

5 of the 5 succeeding fiscal years. 

6 ‘‘(b) ALLOCATION.—In allocating funds under this 

7 subpart for any fiscal year, the Secretary shall consider 

8 the relative need between the programs under section 

9 5202, section 5205(c), and section 5207 and the quality 

10 of the applications submitted under such sections.’’. 

11 SEC. 11. REORGANIZATION. 

12 Part B of title V of the Elementary and Secondary 

13 Education Act of 1965 (20 U.S.C. 7221 et seq.) is amend14 ed— 

15 (1) by striking subpart 2; and 

16 (2) by redesignating subpart 3 as subpart 2. 

17 SEC. 12. CONFORMING AMENDMENTS. 

18 (a) CONFORMING AMENDMENT.—Section 5247(1) of 

19 the Elementary and Secondary Education Act of 1965 (20 

20 U.S.C. 7225f(1)) is amended by striking ‘‘5210’’ and in21 serting ‘‘5211’’. 

22 (b) TABLE OF CONTENTS.—The table of contents in 

23 section 2 of the Elementary and Secondary Education Act 

24 of 1965 is amended— 

25 (1) by striking the items relating to sections 

26 5206 through 5211 and inserting the following: 


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‘‘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. 5211. Definitions. 

‘‘Sec. 5212. Authorization of appropriations.’’; 

1 (2) by striking the item relating to subpart 2 

2 of part B of title V; 

3 (3) by striking the items relating to sections 

4 5221 through 5231; and 

5 (4) by striking the item relating to subpart 3 

6 of part B of title V and inserting the following: 

‘‘SUBPART 2—VOLUNTARY PUBLIC SCHOOL CHOICE PROGRAMS’’. 

Æ 


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