IIA
105TH CONGRESS
1ST SESSION
H. R. 2616
IN THE SENATE OF THE UNITED STATES
NOVEMBER 7, 1997
Received
NOVEMBER 13, 1997
Read twice and referred to the Committee on Labor and Human Resources
AN ACT
To amend titles VI and X of the Elementary and Secondary
Education Act of 1965 to improve and expand charter
schools.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Community-Designed
Charter Schools Act’’.
SEC. 2. INNOVATIVE CHARTER SCHOOLS.
Title VI of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7301 et seq.) is amended—
(1) in section 6201(a)—
(A) in paragraph (1)(C), by striking ‘‘and’’
after the semicolon;
(B) by redesignating paragraph (2) as
paragraph (3); and
(C) by inserting after paragraph (1) the
following:
‘‘(2) support for planning, designing, and initial
implementation of charter schools as described in
part C of title X; and’’; and
(2) in section 6301(b)—
(A) in paragraph (7), by striking ‘‘and’’
after the semicolon;
(B) by redesignating paragraph (8) as
paragraph (9); and
(C) by inserting after paragraph (7) the
following:
‘‘(8) planning, designing, and initial implemen-
tation of charter schools as described in part C of
title X; and’’.
SEC. 3. CHARTER SCHOOLS.
Part C of title X of the Elementary and Secondary
Education Act of 1965 is amended to read as follows:
‘‘PART C—PUBLIC CHARTER SCHOOLS
‘‘SEC. 10301. FINDINGS AND PURPOSE.
‘‘(a) FINDINGS.—The Congress finds that—
‘‘(1) enhancement of parent and student choices
among public schools can assist in promoting com-
prehensive educational reform and give more stu-
dents the opportunity to learn to challenging State
content standards and challenging State student
performance standards, if sufficiently diverse and
high-quality choices, and genuine opportunities to
take advantage of such choices, are available to all
students;
‘‘(2) useful examples of such choices can come
from States and communities that experiment with
methods of offering teachers and other educators,
parents, and other members of the public the oppor-
tunity to design and implement new public schools
and to transform existing public schools;
‘‘(3) charter schools are a mechanism for test-
ing a variety of educational approaches and should,
therefore, be exempted from restrictive rules and
regulations if the leadership of such schools commits
to attaining specific and ambitious educational re-
sults for educationally disadvantaged students con-
sistent with challenging State content standards and
challenging State student performance standards for
all students;
‘‘(4) charter schools, as such schools have been
implemented in a few States, can embody the nec-
essary mixture of enhanced choice, exemption from
restrictive regulations, and a focus on learning
gains;
‘‘(5) charter schools, including charter schools
that are schools-within-schools, can help reduce
school size, which can have a significant effect on
student achievement;
‘‘(6) the Federal Government should test, evalu-
ate, and disseminate information on a variety of
charter school models in order to help demonstrate
the benefits of this promising educational reform;
and
‘‘(7) there is a strong documented need for
cash-flow assistance to charter schools that are
starting up, because State and local operating reve-
nue streams are not immediately available.
‘‘(b) PURPOSES.—The purposes of this part are—
planning, design, or initial implementation of
charter schools, shall be awarded for a period of
not more than 5 years.
‘‘(B) EXTENSION.—Any State educational
agency that has received a grant or subgrant
under this part prior to October 1, 1997, shall
be eligible to receive an additional grant for a
period not to exceed 2 years in accordance with
this section, notwithstanding that such a State
does not meet the requirements of section
10309(1)(A).
‘‘(2) GRANTS TO ELIGIBLE APPLICANTS.—
‘‘(A) BASIC GRANTS.—Grants awarded by
the Secretary to eligible applicants or subgrants
awarded by State educational agencies to eligi-
ble applicants under this part shall be awarded
for planning, design, or initial implementation
of charter schools, for a period not to exceed
more than 5 years, of which the eligible appli-
cant may use—
‘‘(i) not more than 30 months for
planning and program design; and
‘‘(ii) not more than 4 years for the
initial implementation of a charter school.
‘‘(B) EXTENSION.—Any eligible applicant
that has received a grant or subgrant under
this part prior to October 1, 1997, shall be eli-
gible to receive an additional grant for a period
not to exceed 2 years in accordance with this
section, notwithstanding that such an eligible
applicant does not meet the requirements of
section 10309(1)(A).
‘‘(d) LIMITATION.—Except as otherwise provided
under subsection (c), the Secretary shall not award more
than one grant and State educational agencies shall not
award more than one subgrant under this part to support
a particular charter school.
‘‘(e) PRIORITY AND REQUIREMENTS.—
‘‘(1) PRIORITY.—
‘‘(A) FISCAL YEARS 1998, 1999, AND 2000.—
In awarding grants under this part for any of
the fiscal years 1998, 1999, and 2000 from
funds appropriated under section 10310 that
are in excess of $51,000,000 for the fiscal year,
the Secretary shall give priority to State edu-
cational agencies in accordance with subpara-
graph (C).
‘‘(B) SUCCEEDING
FISCAL
YEARS.—In
awarding grants under this part for fiscal year
2001 or any succeeding fiscal year from any
funds appropriated under section 10310, the
Secretary shall consider the number of charter
schools in each State and shall give priority to
State educational agencies in accordance with
subparagraph (C).
‘‘(C) 
PRIORITY
ORDER.—In 
awarding
grants under subparagraphs (A) and (B), the
Secretary shall, in the order listed, give priority
to a State that—
‘‘(i) meets all requirements of para-
graph (2);
‘‘(ii) meets 2 requirements of para-
graph (2); and
‘‘(iii) meets 1 requirement of para-
graph (2).
‘‘(2) REQUIREMENTS.—The requirements re-
ferred to in paragraph (1)(C) are as follows:
‘‘(A) The State law regarding charter
schools ensures that each charter school has a
high degree of autonomy over its budgets and
expenditures.
‘‘(B) The State law regarding charter
schools provides that not less than 1 chartering
authority in the State allows for an increase in
the number of charter schools from 1 year to
the next year; and
‘‘(C) The State law regarding charter
schools provides for periodic review and evalua-
tion by the authorized public chartering agency
of each charter school to determine whether the
school is meeting or exceeding the academic
performance requirements and goals for charter
schools as set forth under State law or the
school’s charter.
‘‘SEC. 10303. APPLICATIONS.
‘‘(a) APPLICATIONS FROM STATE AGENCIES.—Each
State educational agency desiring a grant from the Sec-
retary under this part shall submit to the Secretary an
application at such time, in such manner, and containing
or accompanied by such information as the Secretary may
require.
‘‘(b) CONTENTS OF A STATE EDUCATIONAL AGENCY
APPLICATION.—Each application submitted pursuant to
subsection (a) shall—
‘‘(1) describe the objectives of the State edu-
cational agency’s charter school grant program and
a description of how such objectives will be fulfilled,
including steps taken by the State educational agen-
cy to inform teachers, parents, and communities of
the State educational agency’s charter school grant
program;
‘‘(2) describe how the State educational agency
will inform each charter school of available Federal
programs and funds that each such school is eligible
to receive and ensure that each such school receives
its appropriate share of Federal education funds al-
located by formula; and
‘‘(3) contain assurances that the State edu-
cational agency will require each eligible applicant
desiring to receive a subgrant to submit an applica-
tion to the State educational agency containing—
‘‘(A) a description of the educational pro-
gram to be implemented by the proposed char-
ter school, including—
‘‘(i) how the program will enable all
students to meet challenging State student
performance standards;
‘‘(ii) the grade levels or ages of chil-
dren to be served; and
‘‘(iii) the curriculum and instructional
practices to be used;
‘‘(B) a description of how the charter
school will be managed;
‘‘(C) a description of—
‘‘(i) the objectives of the charter
school; and
‘‘(ii) the methods by which the charter
school will determine its progress toward
achieving those objectives;
‘‘(D) a description of the administrative re-
lationship between the charter school and the
authorized public chartering agency;
‘‘(E) a description of how parents and
other members of the community will be in-
volved in the design and implementation of the
charter school;
‘‘(F) a description of how the authorized
public chartering agency will provide for contin-
ued operation of the school once the Federal
grant has expired, if such agency determines
that the school has met the objectives described
in subparagraph (C)(i);
‘‘(G) a request and justification for waivers
of any Federal statutory or regulatory provi-
sions that the applicant believes are necessary
for the successful operation of the charter
school, and a description of any State or local
rules, generally applicable to public schools,
that will be waived for, or otherwise not apply
to, the school;
‘‘(H) a description of how the subgrant
funds or grant funds, as appropriate, will be
used, including a description of how such funds
will be used in conjunction with other Federal
programs administered by the Secretary;
‘‘(I) a description of how students in the
community will be—
‘‘(i) 
informed 
about 
the 
charter
school; and
‘‘(ii) given an equal opportunity to at-
tend the charter school;
‘‘(J) an assurance that the eligible appli-
cant will annually provide the Secretary and the
State educational agency such information as
may be required to determine if the charter
school is making satisfactory progress toward
achieving the objectives described in subpara-
graph (C)(i);
‘‘(K) an assurance that the applicant will
cooperate with the Secretary and the State edu-
cational agency in evaluating the program as-
sisted under this part;
‘‘(L)(i) an assurance that the charter
school that is a local educational agency or the
local educational agency in which the charter
school is located, as the case may be, will com-
ply with the requirements of the Individuals
with Disabilities Education Act (20 U.S.C.
1400 et seq.) with respect to the provision of
special education and related services to chil-
dren with disabilities in charter schools; and
‘‘(ii) a description of how the charter
school that is a local educational agency or the
local educational agency in which the charter
school is located, as the case may be, will en-
sure, consistent with such requirements, the re-
ceipt of special education and related services
by children with disabilities in charter schools;
and
‘‘(M) such other information and assur-
ances as the Secretary and the State edu-
cational agency may require; and
‘‘(4) describe how the State educational agency
will use administrative funds provided under section
10304(f)(4) to disseminate best or promising prac-
tices of charter schools in such State to each local
educational agency in the State, except that such
dissemination shall result, to the extent practicable,
in a minimum of paperwork for a State educational
agency, eligible applicant, or charter school.
‘‘(c) CONTENTS OF ELIGIBLE APPLICANT APPLICA-
TION.—Each eligible applicant desiring a grant pursuant
to section 10302 shall submit an application to the State
educational agency or Secretary, respectively, at such
time, in such manner, and accompanied by such informa-
tion as the State educational agency or Secretary, respec-
tively, may reasonably require.
‘‘(d) CONTENTS OF APPLICATION.—Each application
submitted pursuant to subsection (c) shall contain—
‘‘(1) the information and assurances described
in subparagraphs (A) through (L) of subsection
(b)(3), except that for purposes of this subsection
subparagraphs (J), (K), and (L) of such subsection
shall be applied by striking ‘and the State edu-
cational agency’ each place such term appears; and
‘‘(2) assurances that the State educational
agency—
‘‘(A) will grant, or will obtain, waivers of
State statutory or regulatory requirements; and
‘‘(B) will assist each subgrantee in the
State in receiving a waiver under section
10304(e).
‘‘SEC. 10304. ADMINISTRATION.
‘‘(a) SELECTION
CRITERIA
FOR
STATE
EDU-
CATIONAL AGENCIES.—The Secretary shall award grants
to State educational agencies under this part on the basis
of the quality of the applications submitted under section
10303(b), after taking into consideration such factors
as—
‘‘(1) the contribution that the charter schools
grant program will make to assisting educationally
disadvantaged and other students to achieving State
content standards and State student performance
standards and, in general, a State’s education im-
provement plan;
‘‘(2) the degree of flexibility afforded by the
State educational agency to charter schools under
the State’s charter schools law;
‘‘(3) the ambitiousness of the objectives for the
State charter school grant program;
‘‘(4) the quality of the strategy for assessing
achievement of those objectives;
‘‘(5) the likelihood that the charter school grant
program will meet those objectives and improve edu-
cational results for students; and
‘‘(6) the number of charter schools created
under this part in the State.
‘‘(b) SELECTION CRITERIA FOR ELIGIBLE APPLI-
CANTS.—The Secretary shall award grants to eligible ap-
plicants under this part on the basis of the quality of the
applications submitted under section 10303(c), after tak-
ing into consideration such factors as—
‘‘(1) the quality of the proposed curriculum and
instructional practices;
‘‘(2) the degree of flexibility afforded by the
State educational agency and, if applicable, the local
educational agency to the charter school;
‘‘(3) the extent of community support for the
application;
‘‘(4) the ambitiousness of the objectives for the
charter school;
‘‘(5) the quality of the strategy for assessing
achievement of those objectives; and
‘‘(6) the likelihood that the charter school will
meet those objectives and improve educational re-
sults for students.
‘‘(c) PEER REVIEW.—The Secretary, and each State
educational agency receiving a grant under this part, shall
use a peer review process to review applications for assist-
ance under this part.
‘‘(d) DIVERSITY OF PROJECTS.—The Secretary and
each State educational agency receiving a grant under this
part, shall award subgrants under this part in a manner
that, to the extent possible, ensures that such grants and
subgrants—
‘‘(1) are distributed throughout different areas
of the Nation and each State, including urban and
rural areas; and
‘‘(2) will assist charter schools representing a
variety of educational approaches, such as ap-
proaches designed to reduce school size.
‘‘(e) WAIVERS.—The Secretary may waive any statu-
tory or regulatory requirement over which the Secretary
exercises administrative authority except any such require-
ment relating to the elements of a charter school described
in section 10309(1), if—
‘‘(1) the waiver is requested in an approved ap-
plication under this part; and
‘‘(2) the Secretary determines that granting
such a waiver will promote the purpose of this part.
‘‘(f) USE OF FUNDS.—
‘‘(1) STATE
EDUCATIONAL
AGENCIES.—Each
State educational agency receiving a grant under
this part shall use such grant funds to award sub-
grants to one or more eligible applicants in the State
to enable such applicant to plan and implement a
charter school in accordance with this part.
‘‘(2) ELIGIBLE APPLICANTS.—Each eligible ap-
plicant receiving funds from the Secretary or a State
educational agency shall use such funds to plan and
implement a charter school in accordance with this
part.
‘‘(3) 
ALLOWABLE
ACTIVITIES
FOR
BASIC
GRANTS.—An eligible applicant receiving a basic
grant or subgrant under section 10302(c)(2) may
use the grant or subgrant funds only for—
‘‘(A) post-award planning and design of
the educational program, which may include—
‘‘(i) refinement of the desired edu-
cational results and of the methods for
measuring progress toward achieving those
results; and
‘‘(ii) 
professional 
development 
of
teachers and other staff who will work in
the charter school; and
‘‘(B) initial implementation of the charter
school, which may include—
‘‘(i) informing the community about
the school;
‘‘(ii) acquiring necessary equipment
and educational materials and supplies;
‘‘(iii) acquiring or developing curricu-
lum materials; and
‘‘(iv) other initial operational costs
that cannot be met from State or local
sources.
‘‘(4) ADMINISTRATIVE EXPENSES.—Each State
educational agency receiving a grant pursuant to
this part may reserve not more than 5 percent of
such grant funds for administrative expenses associ-
ated with the charter school grant program assisted
under this part.
‘‘(g) TRIBALLY CONTROLLED SCHOOLS.—Each State
that receives a grant under this part and designates a trib-
ally controlled school as a charter school shall not consider
payments to a school under the Tribally Controlled
Schools Act of 1988 (25 U.S.C. 2507) in determining—
‘‘(1) the eligibility of the school to receive any
other Federal, State, or local aid; or
‘‘(2) the amount of such aid.
‘‘SEC. 10305. NATIONAL ACTIVITIES.
‘‘The Secretary shall reserve for each fiscal year the
lesser of 5 percent of the amount appropriated to carry
out this part for the fiscal year or $5,000,000, to carry
out, giving highest priority to carrying out paragraph (3),
the following:
‘‘(1) To provide charter schools, either directly
or through the State educational agency, with infor-
mation regarding available education funds that
such school is eligible to receive, and assistance in
applying for Federal education funds which are allo-
cated by formula, including filing deadlines and sub-
mission of applications; and
‘‘(2) To provide, through 1 or more contracts
using a competitive bidding process—
‘‘(A) charter schools with assistance in
accessing private capital;
‘‘(B) pilot projects in a variety of States to
better understand and improve access to private
capital by charter schools; and
‘‘(C) collection on a nationwide basis, of
information regarding successful programs that
access private capital for charter schools and
disseminate any such relevant information and
model descriptions to all charter schools.
‘‘(3) To provide for the completion of the 4-year
national study (which began in 1995) of charter
schools and any related present or future evaluations
or studies which shall include the evaluation of the
impact of charter schools on student achievement,
including information regarding—
‘‘(A) the number of students who applied
for admission to charter schools and the num-
ber of such students who enrolled in charter
schools, disaggregated on the basis of race, age,
disability, gender, limited English proficiency,
and previous enrollment in a public school;
‘‘(B) student achievement; and
‘‘(C) qualifications of school employees at
the charter school, including the number of
teachers within a charter school that have been
certified or licensed by the State and the turn-
over of the teaching force.
‘‘(4)(A) To provide information to applicants
for assistance under this part;
‘‘(B) assistance to applicants for assistance
under this part with the preparation of applications
under section 10303;
‘‘(C) assistance in the planning and startup of
charter schools;
‘‘(D) ongoing training and technical assistance
to existing charter schools; and
‘‘(E) for the dissemination of best practices in
charter schools to other public schools.
‘‘SEC. 10306. FEDERAL FORMULA ALLOCATION DURING
FIRST YEAR AND FOR SUCCESSIVE ENROLL-
MENT EXPANSIONS.
‘‘For purposes of the allocation to schools by the
States or their agencies of funds under part A of title I,
and any other Federal funds which the Secretary allocates
to States on a formula basis, the Secretary and each State
educational agency shall take such measures not later
than 6 months after the date of the enactment of this part
as are necessary to ensure that every charter school re-
ceives the Federal funding for which it is eligible not later
than 5 months after first opening, notwithstanding the
fact that the identity and characteristics of the students
enrolling in that school are not fully and completely deter-
mined until that school actually opens. These measures
shall similarly ensure that every charter school expanding
its enrollment in any subsequent year of operation receives
the Federal funding for which it is eligible not later than
5 months after such expansion.
‘‘SEC. 10307. RECORDS TRANSFER.
‘‘State and local educational agencies, to the extent
practicable, shall ensure that a student’s records and if
applicable a student’s individualized education program as
defined in section 602(11) of the Individuals with Disabil-
ities Education Act (20 U.S.C. 1401(11)), are transferred
to the charter school upon transfer of a student to a char-
ter school in accordance with applicable State law.
‘‘SEC. 10308. PAPERWORK REDUCTION.
‘‘To the extent practicable, the Secretary and each
authorized public chartering agency, shall ensure that im-
plementation of this part results in a minimum of paper-
work for any eligible applicant or charter school.
‘‘SEC. 10309. DEFINITIONS.
‘‘As used in this part:
‘‘(1) The term ‘charter school’ means a public
school that—
‘‘(A) in accordance with a specific State
charter school statute, is exempted from signifi-
cant State or local rules that inhibit the flexible
operation and management of public schools,
but not from any rules relating to the other re-
quirements of this paragraph;
‘‘(B) is created by a developer as a public
school, or is adapted by a developer from an ex-
isting public school, and is operated under pub-
lic supervision and direction;
‘‘(C) operates in pursuit of a specific set of
educational 
objectives 
determined 
by 
the
school’s developer and agreed to by the author-
ized public chartering agency;
‘‘(D) provides a program of elementary or
secondary education, or both;
‘‘(E) is nonsectarian in its programs, ad-
missions policies, employment practices, and all
other operations, and is not affiliated with a
sectarian school or religious institution;
‘‘(F) does not charge tuition;
‘‘(G) complies with the Age Discrimination
Act of 1975, title VI of the Civil Rights Act of
1964, title IX of the Education Amendments of
1972, section 504 of the Rehabilitation Act of
1973, and part B of the Individuals with Dis-
abilities Education Act;
‘‘(H) is a school to which parents choose to
send their children, and that admits students
on the basis of a lottery, if more students apply
for admission than can be accommodated;
‘‘(I) agrees to comply with the same Fed-
eral and State audit requirements as do other
elementary and secondary schools in the State,
unless such requirements are specifically waived
for the purpose of this program;
‘‘(J) meets all applicable Federal, State,
and local health and safety requirements;
‘‘(K) operates in accordance with State
law; and
‘‘(L) has a written performance contract
with the authorized public chartering agency in
the State.
‘‘(2) The term ‘developer’ means an individual
or group of individuals (including a public or private
nonprofit organization), which may include teachers,
administrators and other school staff, parents, or
other members of the local community in which a
charter school project will be carried out.
‘‘(3) The term ‘eligible applicant’ means an au-
thorized public chartering agency participating in a
partnership with a developer to establish a charter
school in accordance with this part.
‘‘(4) The term ‘authorized public chartering
agency’ means a State educational agency, local edu-
cational agency, or other public entity that has the
authority pursuant to State law and approved by the
Secretary to authorize or approve a charter school.
‘‘SEC. 10310. AUTHORIZATION OF APPROPRIATIONS.
‘‘For the purpose of carrying out this part, there are
authorized to be appropriated $100,000,000 for fiscal year
1998 and such sums as may be necessary for each of the
four succeeding fiscal years.
‘‘SEC. 10311. PROHIBITION OF CONTRACTS.
‘‘If it has been finally determined by a court or Fed-
eral agency that any person intentionally affixed a fraudu-
lent label bearing a ‘Made in America’ inscription, or any
inscription with the same meaning, to any product sold
in or shipped to the United States that was not made in
the United States, such person shall be ineligible to receive
any contract or subcontract made with funds provided
pursuant to this part, pursuant to the debarment, suspen-
sion, and ineligibility procedures described in section
9.400 through 9.409 of title 48, Code of Federal Regula-
tions.’’.
Passed the House of Representatives November 7,
1997.
Attest:
ROBIN H. CARLE,
Clerk.