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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2304 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2304

To amend the charter school program under the Elementary and Secondary 
                         Education Act of 1965.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 7, 2014

 Mr. Kirk (for himself, Ms. Landrieu, Mr. Alexander, Mr. Bennet, Mrs. 
 Feinstein, Mr. Paul, Mr. Isakson, Mr. Rubio, Mr. Vitter, Mr. Cornyn, 
 Mr. Scott, Mr. Booker, Mr. Hatch, Mr. Carper, Mr. McConnell, and Mr. 
Cruz) introduced the following bill; which was read twice and referred 
       to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL

 
To amend the charter school program under the Elementary and Secondary 
                         Education Act of 1965.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Expanding Opportunity through 
Quality Charter Schools Act''.

SEC. 2. REFERENCES.

    Except as otherwise specifically provided, whenever in this Act a 
section or other provision is amended or repealed, such amendment or 
repeal shall be considered to be made to that section or other 
provision of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6301 et seq.).

SEC. 3. PURPOSE.

    Section 5201 (20 U.S.C. 7221) is amended to read as follows:

``SEC. 5201. PURPOSE.

    ``It is the purpose of this subpart to--
            ``(1) improve the United States education system and 
        educational opportunities for all individuals in the United 
        States by supporting innovation in public education in public 
        school settings that prepare students to compete in, and 
        contribute to, the global economy;
            ``(2) provide financial assistance for the planning, 
        program design, and initial implementation of charter schools;
            ``(3) increase the number of high-quality charter schools 
        available to students across the Nation;
            ``(4) evaluate the impact of such schools on student 
        achievement, families, and communities, and share best 
        practices among charter schools and other public schools;
            ``(5) encourage States to provide support to charter 
        schools for facilities financing in an amount more nearly 
        commensurate to the amount the States have typically provided 
        for traditional public schools;
            ``(6) expand opportunities for students with disabilities, 
        students who are limited English proficient, and other 
        traditionally underserved students to attend charter schools 
        and meet challenging State academic achievement standards; and
            ``(7) support efforts to strengthen the charter school 
        authorizing process in order to improve performance management, 
        including transparency, monitoring, and evaluation of such 
        schools.''.

SEC. 4. PROGRAM AUTHORIZED.

    Section 5202 (20 U.S.C. 7221a) is amended to read as follows:

``SEC. 5202. PROGRAM AUTHORIZED.

    ``(a) In General.--The Secretary is authorized to carry out a 
charter school program that supports charter schools that serve 
elementary school and secondary school students by--
            ``(1) supporting the startup of charter schools, the 
        replication of high-quality charter schools, and the expansion 
        of high-quality charter schools;
            ``(2) assisting charter schools in accessing credit to 
        acquire and renovate facilities for school use; and
            ``(3) carrying out national activities to support--
                    ``(A) the startup of charter schools, the 
                replication of high-quality charter schools, and the 
                expansion of high-quality charter schools;
                    ``(B) the dissemination of best practices of 
                charter schools for all schools;
                    ``(C) the evaluation of the impact of the charter 
                school program on schools participating in such 
                program; and
                    ``(D) stronger charter school authorizing.
    ``(b) Funding Allotment.--From the amount made available under 
section 5211 for a fiscal year, the Secretary shall--
            ``(1) reserve 12.5 percent to support charter school 
        facilities assistance under section 5204;
            ``(2) reserve not less than 25 percent to carry out 
        national activities under section 5205; and
            ``(3) use the remaining amount after the reservations under 
        paragraphs (1) and (2) to carry out section 5203.
    ``(c) Prior Grants and Subgrants.--The recipient of a grant or 
subgrant under this subpart, as such subpart was in effect on the day 
before the date of enactment of the Expanding Opportunity through 
Quality Charter Schools Act, shall continue to receive funds in 
accordance with the terms and conditions of such grant or subgrant.''.

SEC. 5. GRANTS TO SUPPORT HIGH-QUALITY CHARTER SCHOOLS.

    Section 5203 (20 U.S.C. 7221b) is amended to read as follows:

``SEC. 5203. GRANTS TO SUPPORT HIGH-QUALITY CHARTER SCHOOLS.

    ``(a) State Entity Defined.--For purposes of this section, the term 
`State entity' means--
            ``(1) a State educational agency;
            ``(2) a State charter school board;
            ``(3) a Governor of a State; or
            ``(4) a charter school support organization.
    ``(b) Program Authorized.--From the amount available under section 
5202(b)(3), the Secretary shall award, on a competitive basis, grants 
to State entities having applications approved under subsection (f) to 
enable such entities to--
            ``(1) award subgrants to eligible applicants--
                    ``(A) to open new charter schools;
                    ``(B) to replicate high-quality charter schools; or
                    ``(C) to expand high-quality charter schools; and
            ``(2) provide technical assistance to eligible applicants 
        and authorized public chartering agencies in carrying out the 
        activities described in paragraph (1) and work with authorized 
        public chartering agencies in the State to improve authorizing 
        quality.
    ``(c) State Entity Uses of Funds.--
            ``(1) In general.--A State entity receiving a grant under 
        this section shall--
                    ``(A) use not less than 90 percent of the grant 
                funds to award subgrants to eligible applicants, in 
                accordance with the quality charter school program 
                described in the entity's application pursuant to 
                subsection (f), for the purposes described in 
                subparagraphs (A) through (C) of subsection (b)(1);
                    ``(B) reserve not less than 7 percent of such funds 
                to carry out the activities described in subsection 
                (b)(2); and
                    ``(C) reserve not more than 3 percent of such funds 
                for administrative costs, which may include the 
                administrative costs of providing technical assistance.
            ``(2) Contracts and grants.--A State entity may use a grant 
        received under this section to carry out the activities 
        described in subparagraph (A) of paragraph (1) directly or 
        through grants, contracts, or cooperative agreements.
            ``(3) Rule of construction.--Nothing in this Act shall 
        prohibit the Secretary from awarding grants to State entities, 
        or State entities from awarding subgrants to eligible 
        applicants, that use a weighted lottery, or an equivalent 
        lottery mechanism, to give better chances for school admission 
        to all or a subset of educationally disadvantaged students if--
                    ``(A) the use of a weighted lottery in favor of 
                such students is not prohibited by State law, and such 
                State law is consistent with the laws described in 
                subparagraph (G) of section 5210(2); and
                    ``(B) such weighted lottery is not used for the 
                purpose of creating schools exclusively to serve a 
                particular subset of students.
    ``(d) Program Periods; Peer Review; Distribution of Subgrants; 
Waivers.--
            ``(1) Program periods.--
                    ``(A) Grants.--A grant awarded by the Secretary to 
                a State entity under this section shall be for a period 
                of not more than 3 years, and may be renewed by the 
                Secretary for 1 additional 2-year period.
                    ``(B) Subgrants.--A subgrant awarded by a State 
                entity under this section--
                            ``(i) shall be for a period of not more 
                        than 3 years, of which an eligible applicant 
                        may use not more than 18 months for planning 
                        and program design; and
                            ``(ii) may be renewed by the State entity 
                        for 1 additional 2-year period.
            ``(2) Peer review.--The Secretary, and each State entity 
        awarding subgrants under this section, shall use a peer review 
        process to review applications for assistance under this 
        section.
            ``(3) Distribution of subgrants.--Each State entity 
        awarding subgrants under this section shall award subgrants in 
        a manner that, to the extent practicable and applicable, 
        ensures that such subgrants--
                    ``(A) prioritize eligible applicants that plan to 
                serve a significant number of students from low-income 
                families;
                    ``(B) are distributed throughout different areas, 
                including urban, suburban, and rural areas; and
                    ``(C) will assist charter schools representing a 
                variety of educational approaches.
            ``(4) Waivers.--The Secretary may waive any statutory or 
        regulatory requirement over which the Secretary exercises 
        administrative authority, except any such requirement relating 
        to the elements of a charter school described in section 
        5210(2), if--
                    ``(A) the waiver is requested in an approved 
                application under this section; and
                    ``(B) the Secretary determines that granting such a 
                waiver will promote the purposes of this subpart.
    ``(e) Limitations.--
            ``(1) Grants.--A State entity may not receive more than 1 
        grant under this section at a time.
            ``(2) Subgrants.--An eligible applicant may not receive 
        more than 1 subgrant under this section for each individual 
        charter school for each grant period or renewal period, unless 
        the eligible applicant demonstrates to the State entity that 
        the charter school has demonstrated a strong track record of 
        positive results over the course of the grant period regarding 
        the elements described in subparagraphs (A) and (D) of section 
        5210(8).
    ``(f) Applications.--A State entity desiring to receive a grant 
under this section shall submit an application to the Secretary at such 
time and in such manner as the Secretary may require. The application 
shall include the following:
            ``(1) Description of program.--A description of the State 
        entity's objectives in running a quality charter school program 
        under this section and how the objectives of the program will 
        be carried out, including--
                    ``(A) a description of how the State entity will--
                            ``(i) support the opening of new charter 
                        schools and, if applicable, the replication of 
                        high-quality charter schools and the expansion 
                        of high-quality charter schools, and the 
                        proposed number of charter schools to be 
                        opened, replicated, or expanded under the State 
                        entity's program;
                            ``(ii) inform eligible charter schools, 
                        developers, and authorized public chartering 
                        agencies of the availability of funds under the 
                        program;
                            ``(iii) work with eligible applicants to 
                        ensure that the eligible applicants access all 
                        Federal funds that such applicants are eligible 
                        to receive, and help the charter schools 
                        supported by such applicants and the students 
                        attending those charter schools--
                                    ``(I) participate in the Federal 
                                programs in which the schools and 
                                students are eligible to participate; 
                                and
                                    ``(II) receive the commensurate 
                                share of Federal funds the schools and 
                                students are eligible to receive under 
                                such programs;
                            ``(iv) in the case of a State entity that 
                        is not a State educational agency--
                                    ``(I) work with the State 
                                educational agency and the charter 
                                schools in the State to maximize 
                                charter school participation in Federal 
                                and State programs for charter schools; 
                                and
                                    ``(II) work with the State 
                                educational agency to operate the State 
                                entity's program under this section, if 
                                applicable;
                            ``(v) ensure each eligible applicant that 
                        receives a subgrant under the State entity's 
                        program--
                                    ``(I) is opening or expanding 
                                schools that meet the definition of a 
                                charter school under section 5210(2); 
                                and
                                    ``(II) is prepared to continue to 
                                operate such charter schools once the 
                                subgrant funds under this section are 
                                no longer available;
                            ``(vi) support charter schools in local 
                        educational agencies with large numbers of 
                        schools that have been identified by the State 
                        for improvement;
                            ``(vii) work with charter schools to 
                        promote inclusion of all students and support 
                        all students upon enrollment in order to 
                        promote retention of students in the school;
                            ``(viii) work with charter schools on 
                        recruitment practices, including efforts to 
                        engage groups that may otherwise have limited 
                        opportunities to attend charter schools;
                            ``(ix) share best and promising practices 
                        among charter schools and other public schools;
                            ``(x) ensure that charter schools receiving 
                        funds under the State entity's program meet the 
                        educational needs of their students, including 
                        students with disabilities and students who are 
                        limited English proficient; and
                            ``(xi) support efforts to increase charter 
                        school quality initiatives, including meeting 
                        the quality authorizing elements described in 
                        paragraph (2)(D);
                    ``(B) a description of how the State will actively 
                monitor and hold authorized public chartering agencies 
                accountable to ensure high-quality authorizing 
                activity, including by establishing authorizing 
                standards and by approving, re-approving, and revoking 
                the authority of an authorized public chartering agency 
                based on the performance of the charter schools 
                authorized by such agency in the areas of student 
                achievement, student safety, financial management, and 
                compliance with all applicable statutes;
                    ``(C) a description of the extent to which the 
                State entity--
                            ``(i) is able to meet and carry out the 
                        priorities described in subsection (g)(2); and
                            ``(ii) is working to develop or strengthen 
                        a cohesive statewide system to support the 
                        opening of new charter schools and, if 
                        applicable, the replication of high-quality 
                        charter schools and the expansion of high-
                        quality charter schools;
                    ``(D) a description of how the State entity will 
                award subgrants, on a competitive basis, including--
                            ``(i) a description of the application each 
                        eligible applicant desiring to receive a 
                        subgrant will be required to submit, which 
                        application shall include--
                                    ``(I) a description of the roles 
                                and responsibilities of eligible 
                                applicants and of any charter 
                                management organizations or other 
                                organizations with which the eligible 
                                applicant will partner to open charter 
                                schools, including administrative and 
                                contractual roles and responsibilities;
                                    ``(II) a description of the quality 
                                controls agreed to between the eligible 
                                applicant and the authorized public 
                                chartering agency involved, such as a 
                                contract or performance agreement, and 
                                how a school's performance on the 
                                State's academic accountability system 
                                and impact on student achievement, 
                                which may include student growth, will 
                                be primary factors for renewal or 
                                revocation of the school's charter; and
                                    ``(III) a description of how the 
                                autonomy and flexibility granted to the 
                                charter school are consistent with the 
                                definition of a charter school in 
                                section 5210(2); and
                                    ``(IV) a description of the planned 
                                activities and expenditures of subgrant 
                                funds for purposes of opening a new 
                                charter school, replicating a high-
                                quality charter school, or expanding a 
                                high-quality charter school, and how 
                                the charter school will maintain 
                                financial sustainability after the end 
                                of the subgrant period; and
                            ``(ii) a description of how the State 
                        entity will review applications from eligible 
                        applicants;
                    ``(E) in the case of a State entity that partners 
                with an outside organization to carry out the State 
                entity's quality charter school program, in whole or in 
                part, a description of the roles and responsibilities 
                of the partner; and
                    ``(F) a description of how the State entity will 
                help the charter schools receiving funds under the 
                State entity's program address the transportation needs 
                of the schools' students.
            ``(2) Assurances.--Assurances that--
                    ``(A) each charter school receiving funds through 
                the State entity's grant program will have a high 
                degree of autonomy over budget and operations, 
                including autonomy over personnel decisions;
                    ``(B) the State entity will support charter schools 
                in meeting the educational needs of their students, as 
                described in paragraph (1)(A)(x);
                    ``(C) the State entity will ensure that the 
                authorized public chartering agency of any charter 
                school that receives funds under the entity's program--
                            ``(i) ensures that each charter school 
                        under the authority of such agency is meeting 
                        the requirements of this Act, part B of the 
                        Individuals with Disabilities Education Act, 
                        title VI of the Civil Rights Act of 1964, and 
                        section 504 of the Rehabilitation Act of 1973; 
                        and
                            ``(ii) adequately monitors and provides 
                        adequate technical assistance to each charter 
                        school under the authority of such agency in 
                        recruiting, enrolling, and meeting the needs of 
                        all students, including students with 
                        disabilities and students who are limited 
                        English proficient;
                    ``(D) the State entity will promote quality 
                authorizing, such as through providing technical 
                assistance, to support all authorized public chartering 
                agencies in the State in improving the monitoring of 
                the charter schools authorized by such agency, 
                including by--
                            ``(i) using annual performance data, which 
                        may include graduation rates and student 
                        academic growth data, as appropriate, to 
                        measure a school's progress toward becoming a 
                        high-quality charter school;
                            ``(ii) reviewing the schools' independent, 
                        annual audits of financial statements conducted 
                        in accordance with generally accepted 
                        accounting principles, and ensuring any such 
                        audits are publically reported; and
                            ``(iii) holding charter schools accountable 
                        to the academic, financial, and operational 
                        quality controls agreed to between the charter 
                        school and the authorized public chartering 
                        agency involved, such as through renewal, non-
                        renewal, or revocation of the school's charter; 
                        and
                    ``(E) the State entity will ensure that each 
                charter school in the State makes publicly available, 
                consistent with the dissemination requirements of the 
                annual State report card, information to help parents 
                make informed decisions about the education options 
                available to their children, including information on 
                the educational program, student support services, and 
                annual performance and enrollment data for the groups 
                of students described in section 1111(b)(2)(C)(v)(II).
            ``(3) Requests for waivers.--A request and justification 
        for waivers of any Federal statutory or regulatory provisions 
        that the State entity believes are necessary for the successful 
        operation of the charter schools that will receive funds under 
        the entity's program under this section, and a description of 
        any State or local rules, generally applicable to public 
        schools, that will be waived, or otherwise not apply, to such 
        schools or, in the case of a State entity defined in subsection 
        (a)(4), a description of how the State entity will work with 
        the State to request necessary waivers, if applicable.
    ``(g) Selection Criteria; Priority.--
            ``(1) Selection criteria.--The Secretary shall award grants 
        to State entities under this section on the basis of the 
        quality of the applications submitted under subsection (f), 
        after taking into consideration--
                    ``(A) the degree of flexibility afforded by the 
                State's public charter school law and how the State 
                entity will work to maximize the flexibility provided 
                to charter schools under the law;
                    ``(B) the proposed number of new charter schools to 
                be opened, and, if applicable, the number of high-
                quality charter schools to be replicated or expanded 
                under the program, and the number of new students to be 
                served by such schools;
                    ``(C) the likelihood that the schools opened, 
                replicated, or expanded by eligible applicants 
                receiving subgrant funds will increase the academic 
                achievement of the school's students and progress 
                toward becoming high-quality charter schools; and
                    ``(D) the quality of the State entity's plan to--
                            ``(i) monitor the eligible applicants 
                        receiving subgrants under the State entity's 
                        program; and
                            ``(ii) provide technical assistance and 
                        support for--
                                    ``(I) the eligible applicants 
                                receiving subgrants under the State 
                                entity's program; and
                                    ``(II) quality authorizing efforts 
                                in the State.
            ``(2) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to a State entity to the extent 
        that the entity meets the following criteria:
                    ``(A) The State entity is located in a State that--
                            ``(i) allows at least one entity that is 
                        not a local educational agency to be an 
                        authorized public chartering agency for each 
                        developer seeking to open a charter school in 
                        the State; or
                            ``(ii) in the case of a State in which 
                        local educational agencies are the only 
                        authorized public chartering agencies, the 
                        State has an appeals process for the denial of 
                        an application for a charter school.
                    ``(B) The State entity is located in a State that 
                ensures that charter schools receive equitable 
                financing, as compared to traditional public schools, 
                in a prompt manner.
                    ``(C) The State entity is located in a State that 
                provides charter schools one or more of the following:
                            ``(i) Funding for facilities.
                            ``(ii) Assistance with facilities 
                        acquisition.
                            ``(iii) Access to public facilities.
                            ``(iv) The ability to share in bonds or 
                        mill levies.
                            ``(v) The right of first refusal to 
                        purchase public school buildings.
                            ``(vi) Low- or no-cost leasing privileges.
                    ``(D) The State entity is located in a State that 
                uses best practices from charter schools to help 
                improve struggling schools and local educational 
                agencies.
                    ``(E) The State entity supports charter schools 
                that support at-risk students through activities such 
                as dropout prevention or dropout recovery.
                    ``(F) The State entity ensures that each charter 
                school has a high degree of autonomy over the charter 
                school's budget and operations, including autonomy over 
                personnel decisions.
                    ``(G) The State entity has taken steps to ensure 
                that all authorizing public chartering agencies 
                implement best practices for charter school 
                authorizing.
    ``(h) Local Uses of Funds.--An eligible applicant receiving a 
subgrant under this section shall use such funds to carry out 
activities related to opening a new charter school, replicating a high-
quality charter school, or expanding a high-quality charter school, 
which may include--
            ``(1) supporting the acquisition, expansion, or preparation 
        of a charter school building to meet increasing enrollment 
        needs, including financing the development of a new building 
        and ensuring that a school building complies with applicable 
        statutes and regulations;
            ``(2) paying costs associated with hiring additional 
        teachers to serve additional students;
            ``(3) providing transportation to students to and from the 
        charter school;
            ``(4) providing instructional materials, implementing 
        teacher and principal professional development programs, and 
        hiring additional non-teaching staff; and
            ``(5) supporting any necessary activities that assist the 
        charter school in carrying out the purposes of this section, 
        such as preparing individuals to serve as members of the 
        charter school's board.
    ``(i) Reporting Requirements.--Each State entity receiving a grant 
under this section shall submit to the Secretary, at the end of the 
third year of the grant period and at the end of any renewal period, a 
report that includes the following:
            ``(1) The number of students served by each subgrant 
        awarded under this section and, if applicable, the number of 
        new students served during each year of the subgrant period.
            ``(2) The number and amount of subgrants awarded under this 
        section to carry out each of the following:
                    ``(A) The opening of new charter schools.
                    ``(B) The replication of high-quality charter 
                schools.
                    ``(C) The expansion of high-quality charter 
                schools.
            ``(3) The progress the State entity made toward meeting the 
        priorities described in subsection (g)(2), as applicable.
            ``(4) A description of--
                    ``(A) how the State entity complied with, and 
                ensured that eligible applicants complied with, the 
                assurances described in the State entity's application; 
                and
                    ``(B) how the State entity worked with authorized 
                public chartering agencies, including how the agencies 
                worked with the management company or leadership of the 
                schools that received subgrant funds, if applicable.''.

SEC. 6. FACILITIES FINANCING ASSISTANCE.

    Section 5204 (20 U.S.C. 7221c) is amended to read as follows:

``SEC. 5204. FACILITIES FINANCING ASSISTANCE.

    ``(a) Grants to Eligible Entities.--
            ``(1) In general.--From the amount reserved under section 
        5202(b)(1), the Secretary shall use not less than 50 percent to 
        award not less than 3 grants, on a competitive basis, to 
        eligible entities that have the highest-quality applications 
        approved under subsection (d) 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.
            ``(2) Eligible entity defined.--For purposes of this 
        section, the term `eligible entity' means--
                    ``(A) a public entity, such as a State or local 
                governmental entity;
                    ``(B) a private nonprofit entity; or
                    ``(C) a consortium of entities described in 
                subparagraphs (A) and (B).
    ``(b) Grantee Selection.--The Secretary shall evaluate each 
application submitted under subsection (d), and shall determine whether 
the application is sufficient to merit approval.
    ``(c) Grant Characteristics.--Grants under subsection (a) 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.
    ``(d) Applications.--
            ``(1) In general.--To receive a grant under subsection (a), 
        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 
                subsection (a), 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 government 
                funding used and otherwise enhance credit available to 
                charter schools, including how the entity will offer a 
                combination of rates and terms more favorable than the 
                rates and terms that a charter school could receive 
                without assistance from the entity 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; and
                    ``(F) in the case of an application submitted by a 
                State governmental entity, a description of the actions 
                that the entity has taken, or will take, to ensure that 
                charter schools within the State receive the funding 
                the charter schools need to have adequate facilities.
    ``(e) Charter School Objectives.--An eligible entity receiving a 
grant under this section shall use the funds deposited in the reserve 
account established under subsection (f) to assist one or more charter 
schools in accessing private sector capital 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 of new facilities, including 
        predevelopment costs, or the renovation, repair, or alteration 
        of existing facilities, necessary to commence or continue the 
        operation of a charter school.
            ``(3) The predevelopment costs required to assess sites for 
        purposes of paragraph (1) or (2) and which are necessary to 
        commence or continue the operation of a charter school.
    ``(f) Reserve Account.--
            ``(1) Use of funds.--To assist charter schools to 
        accomplish the objectives described in subsection (e), an 
        eligible entity receiving a grant under subsection (a) shall, 
        in accordance with State and local law, directly or indirectly, 
        alone or in collaboration with others, deposit the funds 
        received under subsection (a) (other than funds used for 
        administrative costs in accordance with subsection (g)) 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 (e).
                    ``(B) Guaranteeing and insuring leases of personal 
                and real property for an objective described in such 
                subsection.
                    ``(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).
            ``(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 subsection (a) shall be deposited in the reserve 
        account established under paragraph (1) and used in accordance 
        with such subsection.
    ``(g) Limitation on Administrative Costs.--An eligible entity may 
use not more than 2.5 percent of the funds received under subsection 
(a) for the administrative costs of carrying out its responsibilities 
under this section (excluding subsection (k)).
    ``(h) Audits and Reports.--
            ``(1) Financial record maintenance and audit.--The 
        financial records of each eligible entity receiving a grant 
        under subsection (a) shall be maintained in accordance with 
        generally accepted accounting principles and shall be subject 
        to an annual audit by an independent public accountant.
            ``(2) Reports.--
                    ``(A) Grantee annual reports.--Each eligible entity 
                receiving a grant under subsection (a) annually shall 
                submit to the Secretary a report of the 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 subsection (a) in 
                        leveraging private funds;
                            ``(iv) a listing and description of the 
                        charter schools served during the reporting 
                        period, including the amount of funds used by 
                        each school, the type of project facilitated by 
                        the grant, and the type of assistance provided 
                        to the charter schools;
                            ``(v) a description of the activities 
                        carried out by the eligible entity to assist 
                        charter schools in meeting the objectives set 
                        forth in subsection (e); 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 
                        (excluding subsection (k)) during the reporting 
                        period.
                    ``(C) Secretarial report.--The Secretary shall 
                review the reports submitted under subparagraph (A) and 
                shall provide a comprehensive annual report to Congress 
                on the activities conducted under this section 
                (excluding subsection (k)).
    ``(i) No Full Faith and Credit for Grantee Obligation.--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.
    ``(j) Recovery of Funds.--
            ``(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 
                (f)(1) if the Secretary determines, not earlier than 2 
                years after the date on which the eligible entity first 
                received funds under this section (excluding subsection 
                (k)), that the eligible entity has failed to make 
                substantial progress in carrying out the purposes 
                described in subsection (f)(1); or
                    ``(B) all or a portion of the funds in a reserve 
                account established by an eligible entity under 
                subsection (f)(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 such subsection.
            ``(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 purposes described in subsection 
        (f)(1).
            ``(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.--This subsection shall not be construed 
        to impair or affect the authority of the Secretary to recover 
        funds under part D of the General Education Provisions Act.
    ``(k) Per-Pupil Facilities Aid Program.--
            ``(1) Definition of per-pupil facilities aid program.--In 
        this subsection, the term `per-pupil facilities aid program' 
        means a program in which a State makes payments, on a per-pupil 
        basis, to charter schools to provide the schools with 
        financing--
                    ``(A) that is dedicated solely for funding charter 
                school facilities; or
                    ``(B) a portion of which is dedicated for funding 
                charter school facilities.
            ``(2) Grants.--
                    ``(A) In general.--From the amount reserved under 
                section 5202(b)(1) and remaining after the Secretary 
                makes grants under subsection (a), the Secretary shall 
                make grants, on a competitive basis, to States to pay 
                for the Federal share of the cost of establishing or 
                enhancing, and administering, per-pupil facilities aid 
                programs.
                    ``(B) Period.--The Secretary shall award grants 
                under this subsection for periods of not more than 5 
                years.
                    ``(C) Federal share.--The Federal share of the cost 
                described in subparagraph (A) for a per-pupil 
                facilities aid program shall be not more than--
                            ``(i) 90 percent of the cost, for the first 
                        fiscal year for which the program receives 
                        assistance under this subsection;
                            ``(ii) 80 percent for the second such year;
                            ``(iii) 60 percent for the third such year;
                            ``(iv) 40 percent for the fourth such year; 
                        and
                            ``(v) 20 percent for the fifth such year.
                    ``(D) State share.--A State receiving a grant under 
                this subsection may partner with 1 or more 
                organizations to provide up to 50 percent of the State 
                share of the cost of establishing or enhancing, and 
                administering, the per-pupil facilities aid program.
                    ``(E) Multiple grants.--A State may receive more 
                than 1 grant under this subsection, so long as the 
                amount of such grant funds provided to charter schools 
                increases with each successive grant.
            ``(3) Use of funds.--
                    ``(A) In general.--A State that receives a grant 
                under this subsection shall use the funds made 
                available through the grant to establish or enhance, 
                and administer, a per-pupil facilities aid program for 
                charter schools in the State.
                    ``(B) Evaluations; technical assistance; 
                dissemination.--From the amount made available to a 
                State through a grant under this subsection for a 
                fiscal year, the State may reserve not more than 5 
                percent to carry out evaluations, to provide technical 
                assistance, and to disseminate information.
                    ``(C) Supplement, not supplant.--Funds made 
                available under this subsection shall be used to 
                supplement, and not supplant, State and local public 
                funds expended to provide per-pupil facilities aid 
                programs, operations financing programs, or other 
                programs, for charter schools.
            ``(4) Requirements.--
                    ``(A) Voluntary participation.--No State may be 
                required to participate in a program carried out under 
                this subsection.
                    ``(B) State law.--
                            ``(i) In general.--To be eligible to 
                        receive a grant under this subsection, a State 
                        shall establish or enhance, and administer, a 
                        per-pupil facilities aid program for charter 
                        schools in the State, that--
                                    ``(I) is specified in State law; 
                                and
                                    ``(II) provides annual financing, 
                                on a per-pupil basis, for charter 
                                school facilities.
                            ``(ii) Special rule.--A State that is 
                        required under State law to provide charter 
                        schools in the State with access to adequate 
                        facility space may be eligible to receive a 
                        grant under this subsection if the State agrees 
                        to use the funds to develop a per-pupil 
                        facilities aid program consistent with the 
                        requirements of this subsection.
            ``(5) Applications.--To be eligible to receive a grant 
        under this subsection, a State shall submit an application to 
        the Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.''.

SEC. 7. NATIONAL ACTIVITIES.

    Section 5205 (20 U.S.C. 7221d) is amended to read as follows:

``SEC. 5205. NATIONAL ACTIVITIES.

    ``(a) In General.--From the amount reserved under section 
5202(b)(2), the Secretary shall--
            ``(1) use not less than 80 percent of such funds to award 
        grants in accordance with subsection (b); and
            ``(2) use the remainder of such funds to--
                    ``(A) disseminate technical assistance to State 
                entities in awarding subgrants under section 
                5203(b)(1)(A);
                    ``(B) disseminate best practices regarding public 
                charter schools;
                    ``(C) evaluate the impact of the charter school 
                program carried out under this subpart, including the 
                impact on student achievement; and
                    ``(D) make grants, on a competitive basis, for the 
                purpose of carrying out the activities described in 
                section 5203(h), to eligible applicants that desire to 
                open a charter school, replicate a high-quality charter 
                school, or expand a high-quality charter school in--
                            ``(i) a State that did not apply for a 
                        grant under section 5203; or
                            ``(ii) a State that did not receive a grant 
                        under section 5203.
    ``(b) Grants for the Replication and Expansion of High-Quality 
Charter Schools.--The Secretary shall make grants, on a competitive 
basis, to eligible entities having applications approved under 
paragraph (2) to enable such entities to replicate a high-quality 
charter school or expand a high-quality charter school.
            ``(1) Definition of eligible entity.--For purposes of this 
        subsection, the term `eligible entity' means--
                    ``(A) a charter management organization that, at 
                the time of the application, operates or manages one or 
                more high-quality charter schools; or
                    ``(B) a nonprofit organization that oversees and 
                coordinates the activities of a group of such charter 
                management organizations.
            ``(2) Application requirements.--An eligible entity 
        desiring to receive a grant under this subsection shall submit 
        an application to the Secretary at such time and in such manner 
        as the Secretary may require. The application shall include the 
        following:
                    ``(A) A description of the eligible entity's 
                objectives for implementing a high-quality charter 
                school program with funding under this subsection, 
                including a description of the proposed number of high-
                quality charter schools to be replicated or expanded 
                with funding under this subsection.
                    ``(B) A description of the educational program that 
                the eligible entity will implement in the charter 
                schools that the eligible entity proposes to replicate 
                or expand, including information on how the program 
                will enable all students to meet challenging State 
                academic standards, the grade levels or ages of 
                students that will be served, and the instructional 
                practices that will be used.
                    ``(C) A multi-year financial and operating model 
                for the eligible entity, including a description of how 
                the operation of the charter schools to be replicated 
                or expanded will be sustained after the grant under 
                this subsection has ended.
                    ``(D) A description of how the eligible entity will 
                inform all students in the community, including 
                students with disabilities, students who are limited 
                English proficient, and other educationally 
                disadvantaged students, about the charter schools to be 
                replicated or expanded with funding under this 
                subsection.
                    ``(E) For each charter school currently operated or 
                managed by the eligible entity--
                            ``(i) student assessment results for all 
                        students and for the subgroups of students 
                        described in section 1111(b)(2)(C)(v)(II); and
                            ``(ii) attendance and student retention 
                        rates for the most recently completed school 
                        year and, if applicable, the most recent 
                        available 4-year adjusted cohort high school 
                        graduation rate (as defined in section 
                        200.19(b)(1)(i)(A) of title 34, Code of Federal 
                        Regulations, or a successor regulation).
                    ``(F) Information on any significant compliance 
                issues encountered, within the last 3 years, by any 
                school operated or managed by the eligible entity, 
                including in the areas of student safety and financial 
                management.
                    ``(G) A request and justification for any waivers 
                of Federal statutory or regulatory requirements that 
                the eligible entity believes are necessary for the 
                successful operation of the charter schools to be 
                opened or expanded with funding under this subsection.
            ``(3) Selection criteria.--The Secretary shall select 
        eligible entities to receive grants under this subsection, on 
        the basis of the quality of the applications submitted under 
        paragraph (2), after taking into consideration such factors 
        as--
                    ``(A) the degree to which the eligible entity has 
                demonstrated success in increasing academic achievement 
                and attainment for all students attending the charter 
                schools the eligible entity operates or manages;
                    ``(B) the degree to which the eligible entity has 
                demonstrated success in increasing academic achievement 
                and attainment for the subgroups of students described 
                in section 1111(b)(2)(C)(v)(II);
                    ``(C) the quality of the eligible entity's 
                financial and operating model as described under 
                paragraph (2)(C), including the quality of the eligible 
                entity's plan for sustaining the operation of the 
                charter schools to be replicated or expanded after the 
                grant under this subsection has ended;
                    ``(D) a determination that the eligible entity has 
                not operated or managed a significant proportion of 
                charter schools that--
                            ``(i) have been closed;
                            ``(ii) have had a school charter revoked 
                        due to problems with statutory or regulatory 
                        compliance; or
                            ``(iii) have had the school's affiliation 
                        with the eligible entity revoked; and
                    ``(E) a determination that the eligible entity has 
                not experienced significant problems with statutory or 
                regulatory compliance that could lead to the revocation 
                of a school's charter.
            ``(4) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to eligible entities that operate 
        or manage charter schools that, in the aggregate, serve 
        students at least 60 percent of whom are eligible for a free or 
        reduced price lunch under the Richard B. Russell National 
        School Lunch Act.
            ``(5) Terms and conditions.--Except as otherwise provided 
        in this subsection, grants awarded under subsection (a)(2)(D) 
        and subsection (b) shall have the same terms and conditions as 
        grants awarded to State entities under section 5203.''.

SEC. 8. RECORDS TRANSFER.

    Section 5208 (20 U.S.C. 7221g) is amended by inserting ``as quickly 
as possible and'' before ``to the extent practicable''.

SEC. 9. DEFINITIONS.

    Section 5210 (20 U.S.C. 7221i) is amended--
            (1) by redesignating paragraphs (1), (2), and (3) as 
        paragraphs (2), (5), and (6), respectively;
            (2) by redesignating paragraph (4) as paragraph (1), and 
        moving such paragraph so as to precede paragraph (2), as 
        redesignated by paragraph (1) of this section;
            (3) in paragraph (2), as redesignated by paragraph (1)--
                    (A) in subparagraph (G), by striking ``, and part 
                B'' and inserting ``, the Americans with Disabilities 
                Act of 1990 (42 U.S.C. 12101 et seq.), section 444 of 
                the General Education Provisions Act (20 U.S.C. 1232) 
                (commonly referred to as the `Family Educational Rights 
                and Privacy Act of 1974'), and part B'';
                    (B) by striking subparagraph (H) and inserting the 
                following:
                    ``(H) is a school to which parents choose to send 
                their children, and which--
                            ``(i) admits students on the basis of a 
                        lottery, if more students apply for admission 
                        than can be accommodated; or
                            ``(ii) in the case of a school that has an 
                        affiliated charter school (such as a school 
                        that is part of the same network of schools), 
                        automatically enrolls students who are enrolled 
                        in the immediate prior grade level of the 
                        affiliated charter school and, for any 
                        additional student openings or student openings 
                        created through regular attrition in student 
                        enrollment in the affiliated charter school and 
                        the enrolling school, admits students on the 
                        basis of a lottery as described in clause 
                        (i);'';
                    (C) by striking subparagraph (I) and inserting the 
                following:
                    ``(I) agrees to comply with the same Federal and 
                State audit requirements as do other elementary schools 
                and secondary schools in the State, unless such State 
                audit requirements are waived by the State;'';
                    (D) in subparagraph (K), by striking ``and'' at the 
                end;
                    (E) in subparagraph (L), by striking the period at 
                the end and inserting a semicolon; and
                    (F) by adding at the end the following:
                    ``(M) may serve prekindergarten or postsecondary 
                students.'';
            (4) by inserting after paragraph (2), as redesignated by 
        paragraph (1), the following:
            ``(3) Charter management organization.--The term `charter 
        management organization' means a nonprofit organization that 
        operates or manages multiple charter schools by centralizing or 
        sharing certain functions or resources.
            ``(4) Charter school support organization.--The term 
        `charter school support organization' means a nonprofit, 
        nongovernmental entity that is not an authorized public 
        chartering agency and provides on a statewide basis--
                    ``(A) assistance to developers during the planning, 
                program design, and initial implementation of a charter 
                school; and
                    ``(B) technical assistance to operating charter 
                schools.'';
            (5) in paragraph (5)(B), as redesignated by paragraph (1), 
        by striking ``under section 5203(d)(3)''; and
            (6) by adding at the end the following:
            ``(7) Expansion of a high-quality charter school.--The term 
        `expansion of a high-quality charter school' means increasing 
        the enrollment at a high-quality charter school by not less 
        than 50 percent or adding 2 or more grades to a high-quality 
        charter school.
            ``(8) High-quality charter school.--The term `high-quality 
        charter school' means a charter school that--
                    ``(A) shows evidence of strong academic results, 
                which may include strong academic growth, as determined 
                by a State;
                    ``(B) has no significant issues in the areas of 
                student safety, financial management, or statutory or 
                regulatory compliance;
                    ``(C) has demonstrated success in significantly 
                increasing student academic achievement, including 
                graduation rates where applicable, for all students 
                served by the charter school; and
                    ``(D) has demonstrated success in increasing 
                student academic achievement, including graduation 
                rates where applicable, for the subgroups of students 
                described in section 1111(b)(2)(C)(v)(II), except that 
                such demonstration is not required in a case in which 
                the number of students in a group is insufficient to 
                yield statistically reliable information or the results 
                would reveal personally identifiable information about 
                an individual student.
            ``(9) Replication of a high-quality charter school.--The 
        term `replication of a high-quality charter school' means the 
        opening of a charter school--
                    ``(A) under an existing charter or an additional 
                charter, if permitted by State law;
                    ``(B) based on the model of a high-quality charter 
                school; and
                    ``(C) that will be operated or managed by the same 
                nonprofit organization that operates or manages such 
                high-quality charter school under an existing 
                charter.''.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    Section 5211 (20 U.S.C. 7221j) is amended to read as follows:

``SEC. 5211. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this subpart 
$300,000,000 for fiscal year 2015 and such sums as may be necessary for 
each of the 5 succeeding fiscal years.''.

SEC. 11. CONFORMING AMENDMENTS.

    (a) Repeal.--Subpart 2 of part B of title V (20 U.S.C. 7223 et 
seq.) is repealed.
    (b) Table of Contents.--The table of contents in section 2 is 
amended--
            (1) by striking the item relating to subpart 1 of part B of 
        title V and inserting the following:

                 ``subpart 1--charter school program'';

            (2) by striking the item relating to section 5203 and 
        inserting the following:

``Sec. 5203. Grants to support high-quality charter schools.'';
        and
            (3) by striking the item relating to section 5204 and 
        inserting the following:

``Sec. 5204. Facilities financing assistance.''.
    (c) Subpart Heading.--The heading for subpart 1 of part B of title 
V (20 U.S.C. 7221 et seq.) is amended to read as follows: ``Charter 
School Program''.
                                 <all>
```