H. R. 1—362
or grade or age level selected for such concentration shall,
after consultation with the appropriate private school officials,
be assured equitable participation in the purposes and benefits
of such programs.
‘‘(c) ADMINISTRATIVE REQUIREMENTS.—
‘‘(1) FUNDS AND PROPERTY.—The control of funds provided
under this part, and title to materials, equipment, and property
repaired, remodeled, or constructed with such funds, shall be
in a public agency for the uses and purposes provided in this
part, and a public agency shall administer such funds and
property.
‘‘(2) PROVISION OF SERVICES.—Services provided under this
part shall be provided by employees of a public agency or
through contract by such a public agency with a person, associa-
tion, agency, or corporation that, in the provision of such serv-
ices, is independent of the private school and of any religious
organizations, and such employment or contract shall be under
the control and supervision of such a public agency. The funds
provided under this part shall not be commingled with State
or local funds.
‘‘(d) WAIVER.—
‘‘(1) STATE
PROHIBITION.—If a State educational agency
or local educational agency is prohibited, by reason of any
provision of law, from providing for the participation in pro-
grams of children enrolled in private elementary schools and
secondary schools as required by subsections (a) through (c),
the Secretary shall waive such requirements for the agency
involved and shall arrange for the provision of services to
such children through arrangements that shall be subject to
the requirements of this section.
‘‘(2) FAILURE TO COMPLY.—If the Secretary determines that
a State educational agency or a local educational agency has
substantially failed, or is unwilling, to provide for the participa-
tion on an equitable basis of children enrolled in private
elementary schools and secondary schools as required by sub-
sections (a) through (c), the Secretary may waive such require-
ments and shall arrange for the provision of services to such
children through arrangements that shall be subject to the
requirements of this section.
‘‘(e) WITHHOLDING OF ALLOTMENT OR ALLOCATION.—Pending
final resolution of any investigation or complaint that could result
in a waiver under subsection (d)(1) or (d)(2), the Secretary may
withhold from the allotment or allocation of the affected State
educational agency or local educational agency the amount esti-
mated by the Secretary to be necessary to pay the cost of services
to be provided by the Secretary under such subsection.
‘‘(f) DURATION OF DETERMINATION.—Any determination by the
Secretary under this section shall continue in effect until the Sec-
retary determines that there will no longer be any failure or
inability on the part of the State educational agency or local edu-
cational agency to meet the requirements of subsections (a) through
(c).
‘‘(g) PAYMENT FROM STATE ALLOTMENT.—When the Secretary
arranges for services under subsection (d), the Secretary shall,
after consultation with the appropriate public school and private
H. R. 1—363
school officials, pay the cost of such services, including the adminis-
trative costs of arranging for those services, from the appropriate
allotment of the State educational agency under this part.
‘‘(h) REVIEW OF DETERMINATION.—
‘‘(1) WRITTEN OBJECTIONS.—The Secretary shall not take
any final action under this section until the State educational
agency and the local educational agency affected by such action
have had an opportunity, for not less than 45 days after
receiving written notice thereof, to submit written objections
and to appear before the Secretary or the Secretary’s designee
to show cause why that action should not be taken.
‘‘(2) COURT ACTION.—If a State educational agency or local
educational agency is dissatisfied with the Secretary’s final
action after a proceeding under paragraph (1), such agency
may, not later than 60 days after notice of such action, file
with the United States court of appeals for the circuit in which
such State is located a petition for review of that action. A
copy of the petition shall be transmitted by the clerk of the
court to the Secretary. The Secretary thereupon shall file in
the court the record of the proceedings on which the Secretary
based the action, as provided in section 2112 of title 28, United
States Code.
‘‘(3) REMAND TO SECRETARY.—The findings of fact by the
Secretary with respect to a proceeding under paragraph (1),
if supported by substantial evidence, shall be conclusive. The
court, for good cause shown, may remand the case to the
Secretary to take further evidence and the Secretary may make
new or modified findings of fact and may modify the Secretary’s
previous action, and shall file in the court the record of the
further proceedings. Such new or modified findings of fact shall
likewise be conclusive, if supported by substantial evidence.
‘‘(4) COURT REVIEW.—Upon the filing of a petition under
paragraph (2), the court shall have jurisdiction to affirm the
action of the Secretary or to set such action aside, in whole
or in part. The judgment of the court shall be subject to review
by the Supreme Court upon certiorari or certification, as pro-
vided in section 1254 of title 28, United States Code.
‘‘(i) PRIOR DETERMINATION.—Any bypass determination by the
Secretary under title VI (as such title was in effect on the day
preceding the date of enactment of the No Child Left Behind Act
of 2001) shall, to the extent consistent with the purposes of this
part, apply to programs under this part.
‘‘SEC. 5143. FEDERAL ADMINISTRATION.
‘‘(a) TECHNICAL ASSISTANCE.—The Secretary, upon request,
shall provide technical assistance to State educational agencies
and local educational agencies under this part.
‘‘(b) RULEMAKING.—The Secretary shall issue regulations under
this part only to the extent that such regulations are necessary
to ensure that there is compliance with the specific requirements
and assurances required by this part.
‘‘(c) AVAILABILITY OF APPROPRIATIONS.—Notwithstanding any
other provision of law, unless expressly in limitation of this sub-
section, funds appropriated in any fiscal year to carry out programs
under this part shall become available for obligation on July 1
of such fiscal year and shall remain available for obligation until
the end of the subsequent fiscal year.
H. R. 1—364
‘‘SEC. 5144. SUPPLEMENT, NOT SUPPLANT.
‘‘Funds made available under this part shall be used to supple-
ment, and not supplant, any other Federal, State, or local education
funds.
‘‘SEC. 5145. DEFINITIONS.
‘‘In this part:
‘‘(1) LOCAL EDUCATIONAL AGENCY.—The term ‘local edu-
cational agency’ means a local educational agency or a consor-
tium of such agencies.
‘‘(2) PUBLIC
SCHOOL.—The term ‘public school’ means a
public elementary school or a public secondary school.
‘‘(3) SCHOOL-AGE POPULATION.—The term ‘school-age popu-
lation’ means the population aged 5 through 17.
‘‘(4) STATE.—The term ‘State’ means each of the 50 States,
the District of Columbia, and the Commonwealth of Puerto
Rico.
‘‘SEC. 5146. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out this
part—
‘‘(1) $450,000,000 for fiscal year 2002;
‘‘(2) $475,000,000 for fiscal year 2003;
‘‘(3) $500,000,000 for fiscal year 2004;
‘‘(4) $525,000,000 for fiscal year 2005;
‘‘(5) $550,000,000 for fiscal year 2006; and
‘‘(6) $600,000,000 for fiscal year 2007.
‘‘PART B—PUBLIC CHARTER SCHOOLS
‘‘Subpart 1—Charter School Programs
‘‘SEC. 5201. PURPOSE.
‘‘It is the purpose of this subpart to increase national under-
standing of the charter schools model by—
‘‘(1) providing financial assistance for the planning, pro-
gram design, and initial implementation of charter schools;
‘‘(2) evaluating the effects of such schools, including the
effects on students, student academic achievement, staff, and
parents;
‘‘(3) expanding the number of high-quality charter schools
available to students across the Nation; and
‘‘(4) encouraging the 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.
‘‘SEC. 5202. PROGRAM AUTHORIZED.
‘‘(a) IN GENERAL.—The Secretary may award grants to State
educational agencies having applications approved pursuant to sec-
tion 5203 to enable such agencies to conduct a charter school
grant program in accordance with this subpart.
‘‘(b) SPECIAL RULE.—If a State educational agency elects not
to participate in the program authorized by this subpart or does
not have an application approved under section 5203, the Secretary
may award a grant to an eligible applicant that serves such State
and has an application approved pursuant to section 5203(c).
‘‘(c) PROGRAM PERIODS.—
H. R. 1—365
‘‘(1) GRANTS TO STATES.—Grants awarded to State edu-
cational agencies under this subpart shall be for a period of
not more than 3 years.
‘‘(2) GRANTS TO ELIGIBLE APPLICANTS.—Grants awarded by
the Secretary to eligible applicants or subgrants awarded by
State educational agencies to eligible applicants under this
subpart shall be for a period of not more than 3 years, of
which the eligible applicant may use—
‘‘(A) not more than 18 months for planning and pro-
gram design;
‘‘(B) not more than 2 years for the initial implementa-
tion of a charter school; and
‘‘(C) not more than 2 years to carry out dissemination
activities described in section 5204(f)(6)(B).
‘‘(d) LIMITATION.—A charter school may not receive—
‘‘(1) more than one grant for activities described in subpara-
graphs (A) and (B) of subsection (c)(2); or
‘‘(2) more than one grant for activities under subparagraph
(C) of subsection (c)(2).
‘‘(e) PRIORITY TREATMENT.—
‘‘(1) IN GENERAL.—In awarding grants under this subpart
for fiscal year 2002 or any succeeding fiscal year from any
funds appropriated under section 5211 (other than funds
reserved to carry out section 5205(b)), the Secretary shall give
priority to States to the extent that the States meet the criteria
described in paragraph (2) and one or more of the criteria
described in subparagraph (A), (B), or (C) of paragraph (3).
‘‘(2) REVIEW AND EVALUATION PRIORITY CRITERIA.—The cri-
teria referred to in paragraph (1) are that the State provides
for periodic review and evaluation by the authorized public
chartering agency of each charter school, at least once every
5 years unless required more frequently by State law, to deter-
mine whether the charter school is meeting the terms of the
school’s charter, and is meeting or exceeding the student aca-
demic achievement requirements and goals for charter schools
as set forth under State law or the school’s charter.
‘‘(3) PRIORITY CRITERIA.—The criteria referred to in para-
graph (1) are the following:
‘‘(A) 
The 
State 
has 
demonstrated 
progress, 
in
increasing the number of high-quality charter schools that
are held accountable in the terms of the schools’ charters
for meeting clear and measurable objectives for the edu-
cational progress of the students attending the schools,
in the period prior to the period for which a State edu-
cational agency or eligible applicant applies for a grant
under this subpart.
‘‘(B) The State—
‘‘(i) provides for one authorized public chartering
agency that is not a local educational agency, such
as a State chartering board, for each individual or
entity seeking to operate a charter school pursuant
to such State law; or
‘‘(ii) in the case of a State in which local edu-
cational agencies are the only authorized public char-
tering agencies, allows for an appeals process for the
denial of an application for a charter school.
H. R. 1—366
‘‘(C) The State ensures that each charter school has
a high degree of autonomy over the charter school’s budgets
and expenditures.
‘‘(f) AMOUNT CRITERIA.—In determining the amount of a grant
to be awarded under this subpart to a State educational agency,
the Secretary shall take into consideration the number of charter
schools that are operating, or are approved to open, in the State.
‘‘SEC. 5203. APPLICATIONS.
‘‘(a) APPLICATIONS FROM STATE AGENCIES.—Each State edu-
cational agency desiring a grant from the Secretary under this
subpart 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 APPLICA-
TION.—Each application submitted pursuant to subsection (a)
shall—
‘‘(1) describe the objectives of the State educational agency’s
charter school grant program and a description of how such
objectives will be fulfilled, including steps taken by the State
educational agency to inform teachers, parents, and commu-
nities of the State educational agency’s charter school grant
program; and
‘‘(2) describe how the State educational agency—
‘‘(A) will inform each charter school in the State
regarding—
‘‘(i) Federal funds that the charter school is eligible
to receive; and
‘‘(ii) Federal programs in which the charter school
may participate;
‘‘(B) will ensure that each charter school in the State
receives the charter school’s commensurate share of Federal
education funds that are allocated by formula each year,
including during the first year of operation of the charter
school; and
‘‘(C) will disseminate best or promising practices of
charter schools to each local educational agency in the
State; and
‘‘(3) contain assurances that the State educational agency
will require each eligible applicant desiring to receive a
subgrant to submit an application to the State educational
agency containing—
‘‘(A) a description of the educational program to be
implemented by the proposed charter school, including—
‘‘(i) how the program will enable all students to
meet challenging State student academic achievement
standards;
‘‘(ii) the grade levels or ages of children 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
H. R. 1—367
‘‘(ii) the methods by which the charter school will
determine its progress toward achieving those objec-
tives;
‘‘(D) a description of the administrative relationship
between the charter school and the authorized public char-
tering agency;
‘‘(E) a description of how parents and other members
of the community will be involved in the planning, program
design, and implementation of the charter school;
‘‘(F) a description of how the authorized public char-
tering agency will provide for continued 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 provisions that the eligible
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 attend the
charter school;
‘‘(J) an assurance that the eligible applicant 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 subparagraph (C)(i);
‘‘(K) an assurance that the eligible applicant will
cooperate with the Secretary and the State educational
agency in evaluating the program assisted under this sub-
part;
‘‘(L) a description of how a charter school that is consid-
ered a local educational agency under State law, or a
local educational agency in which a charter school is
located, will comply with sections 613(a)(5) and 613(e)(1)(B)
of the Individuals with Disabilities Education Act;
‘‘(M) if the eligible applicant desires to use subgrant
funds 
for 
dissemination 
activities 
under 
section
5202(c)(2)(C), a description of those activities and how those
activities will involve charter schools and other public
schools, local educational agencies, developers, and poten-
tial developers; and
‘‘(N) such other information and assurances as the
Secretary and the State educational agency may require.
‘‘(c) ELIGIBLE APPLICANT APPLICATION.—Each eligible applicant
desiring a grant pursuant to section 5202(b) shall submit an applica-
tion to the Secretary at such time, in such manner, and accompanied
by such information as the Secretary may reasonably require.
‘‘(d) CONTENTS
OF ELIGIBLE APPLICANT APPLICATION.—Each
application submitted pursuant to subsection (c) shall contain—
H. R. 1—368
‘‘(1) the information and assurances described in subpara-
graphs (A) through (N) of subsection (b)(3), except that for
purposes of this subsection subparagraphs (J), (K), and (N)
of such subsection shall be applied by striking ‘and the State
educational agency’ each place such term appears;
‘‘(2) assurances that the State educational agency—
‘‘(A) will grant, or will obtain, waivers of State statu-
tory or regulatory requirements; and
‘‘(B) will assist each subgrantee in the State in
receiving a waiver under section 5204(e); and
‘‘(3) assurances that the eligible applicant has provided
its authorized public chartering authority timely notice, and
a copy, of the application, except that the State educational
agency (or the Secretary, in the case of an application submitted
to the Secretary) may waive the requirement of this paragraph
in the case of an application for a precharter planning grant
or subgrant if the authorized public chartering authority to
which a charter school proposal will be submitted has not
been determined at the time the grant or subgrant application
is submitted.
‘‘SEC. 5204. ADMINISTRATION.
‘‘(a) SELECTION CRITERIA FOR STATE EDUCATIONAL AGENCIES.—
The Secretary shall award grants to State educational agencies
under this subpart on the basis of the quality of the applications
submitted under section 5203(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 in meeting State academic content standards and
State student academic achievement standards;
‘‘(2) the degree of flexibility afforded by the State edu-
cational 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 educational results for
students;
‘‘(6) the number of high-quality charter schools created
under this subpart in the State; and
‘‘(7) in the case of State educational agencies that propose
to use grant funds to support dissemination activities under
subsection (f)(6)(B), the quality of those activities and the likeli-
hood that those activities will improve student academic
achievement.
‘‘(b) SELECTION CRITERIA FOR ELIGIBLE APPLICANTS.—The Sec-
retary shall award grants to eligible applicants under this subpart
on the basis of the quality of the applications submitted under
section 5203(c), after taking into consideration such factors as—
‘‘(1) the quality of the proposed curriculum and instruc-
tional practices;
‘‘(2) the degree of flexibility afforded by the State edu-
cational agency and, if applicable, the local educational agency
to the charter school;
H. R. 1—369
‘‘(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;
‘‘(6) the likelihood that the charter school will meet those
objectives and improve educational results for students; and
‘‘(7) in the case of an eligible applicant that proposes to
use grant funds to support dissemination activities under sub-
section (f)(6)(B), the quality of those activities and the likelihood
that those activities will improve student achievement.
‘‘(c) PEER REVIEW.—The Secretary, and each State educational
agency receiving a grant under this subpart, shall use a peer
review process to review applications for assistance under this
subpart.
‘‘(d) DIVERSITY OF PROJECTS.—The Secretary and each State
educational agency receiving a grant under this subpart, shall
award grants and subgrants under this subpart 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 approaches designed to reduce
school size.
‘‘(e) WAIVERS.—The Secretary may waive any statutory or regu-
latory requirement over which the Secretary exercises administra-
tive authority except any such requirement relating to the elements
of a charter school described in section 5210(1), if—
‘‘(1) the waiver is requested in an approved application
under this subpart; and
‘‘(2) the Secretary determines that granting such a waiver
will promote the purpose of this subpart.
‘‘(f) USE OF FUNDS.—
‘‘(1) STATE
EDUCATIONAL
AGENCIES.—Each State edu-
cational agency receiving a grant under this subpart shall
use such grant funds to award subgrants to one or more eligible
applicants in the State to enable such applicant to plan and
implement a charter school in accordance with this subpart,
except that the State educational agency may reserve not more
than 10 percent of the grant funds to support dissemination
activities described in paragraph (6).
‘‘(2) 
ELIGIBLE
APPLICANTS.—Each 
eligible 
applicant
receiving funds from the Secretary or a State educational
agency shall use such funds to plan and implement a charter
school, or to disseminate information about the charter school
and successful practices in the charter school, in accordance
with this subpart.
‘‘(3) 
ALLOWABLE
ACTIVITIES.—An 
eligible 
applicant
receiving a grant or subgrant under this subpart 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 educational 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
H. R. 1—370
‘‘(B) initial implementation of the charter school, which
may include—
‘‘(i) informing the community about the school;
‘‘(ii) acquiring necessary equipment and edu-
cational materials and supplies;
‘‘(iii) acquiring or developing curriculum materials;
and
‘‘(iv) other initial operational costs that cannot be
met from State or local sources.
‘‘(4) ADMINISTRATIVE EXPENSES.—
‘‘(A) STATE
EDUCATIONAL
AGENCY
ADMINISTRATIVE
EXPENSES.—Each State educational agency receiving a
grant pursuant to this subpart may reserve not more than
5 percent of such grant funds for administrative expenses
associated with the charter school grant program assisted
under this subpart.
‘‘(B) LOCAL ADMINISTRATIVE EXPENSES.—A local edu-
cational agency may not deduct funds for administrative
fees or expenses from a subgrant awarded to an eligible
applicant, unless the eligible applicant enters voluntarily
into a mutually agreed upon arrangement for administra-
tive services with the relevant local educational agency.
Absent such approval, the local educational agency shall
distribute all such subgrant funds to the eligible applicant
without delay.
‘‘(5) REVOLVING
LOAN
FUNDS.—Each State educational
agency receiving a grant pursuant to this subpart may reserve
not more than 10 percent of the grant funds for the establish-
ment of a revolving loan fund. Such fund may be used to
make loans to eligible applicants that have received a subgrant
under this subpart, under such terms as may be determined
by the State educational agency, for the initial operation of
the charter school grant program of the eligible applicant until
such time as the recipient begins receiving ongoing operational
support from State or local financing sources.
‘‘(6) DISSEMINATION.—
‘‘(A) IN GENERAL.—A charter school may apply for funds
under this subpart, whether or not the charter school has
applied for or received funds under this subpart for plan-
ning, program design, or implementation, to carry out the
activities described in subparagraph (B) if the charter
school has been in operation for at least 3 consecutive
years and has demonstrated overall success, including—
‘‘(i) substantial progress in improving student aca-
demic achievement;
‘‘(ii) high levels of parent satisfaction; and
‘‘(iii) the management and leadership necessary
to overcome initial start-up problems and establish
a thriving, financially viable charter school.
‘‘(B) 
ACTIVITIES.—A 
charter 
school 
described 
in
subparagraph (A) may use funds reserved under paragraph
(1) to assist other schools in adapting the charter school’s
program (or certain aspects of the charter school’s pro-
gram), or to disseminate information about the charter
school, through such activities as—
‘‘(i) assisting other individuals with the planning
and start-up of one or more new public schools,
H. R. 1—371
including charter schools, that are independent of the
assisting charter school and the assisting charter
school’s developers, and that agree to be held to at
least as high a level of accountability as the assisting
charter school;
‘‘(ii) developing partnerships with other public
schools, including charter schools, designed to improve
student academic achievement in each of the schools
participating in the partnership;
‘‘(iii) developing curriculum materials, assess-
ments, and other materials that promote increased
student achievement and are based on successful prac-
tices within the assisting charter school; and
‘‘(iv) conducting evaluations and developing mate-
rials that document the successful practices of the
assisting charter school and that are designed to
improve student performance in other schools.
‘‘(g) TRIBALLY CONTROLLED SCHOOLS.—Each State that receives
a grant under this subpart and designates a tribally 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. 5205. NATIONAL ACTIVITIES.
‘‘(a) IN GENERAL.—The Secretary shall reserve for each fiscal
year the greater of 5 percent or $5,000,000 of the amount appro-
priated to carry out this subpart, except that in no fiscal year
shall the total amount so reserved exceed $8,000,000, to carry
out the following activities:
‘‘(1) To provide charter schools, either directly or through
State educational agencies, with—
‘‘(A) information regarding—
‘‘(i) Federal funds that charter schools are eligible
to receive; and
‘‘(ii) other Federal programs in which charter
schools may participate; and
‘‘(B) assistance in applying for Federal education funds
that are allocated by formula, including assistance with
filing deadlines and submission of applications.
‘‘(2) To provide for other evaluations or studies that include
the evaluation of the impact of charter schools on student
academic achievement, including information regarding—
‘‘(A) students attending charter schools reported on
the basis of race, age, disability, gender, limited English
proficiency, and previous enrollment in public school; and
‘‘(B) the professional qualifications of teachers within
a charter school and the turnover of the teaching force.
‘‘(3) To provide—
‘‘(A) information to applicants for assistance under this
subpart;
‘‘(B) assistance to applicants for assistance under this
subpart with the preparation of applications under section
5203;
H. R. 1—372
‘‘(C) assistance in the planning and startup of charter
schools;
‘‘(D) training and technical assistance to existing
charter schools; and
‘‘(E) for the dissemination to other public schools of
best or promising practices in charter schools.
‘‘(4) To provide (including through the use of one or more
contracts that use a competitive bidding process) for the collec-
tion of information regarding the financial resources available
to charter schools, including access to private capital, and to
widely disseminate to charter schools any such relevant
information and model descriptions of successful programs.
‘‘(5) To carry out evaluations of, technical assistance for,
and information dissemination regarding, the per-pupil facili-
ties aid programs. In carrying out the evaluations, the Secretary
may carry out one or more evaluations of State programs
assisted under this subsection, which shall, at a minimum,
address—
‘‘(A) how, and the extent to which, the programs pro-
mote educational equity and excellence; and
‘‘(B) the extent to which charter schools supported
through the programs are—
‘‘(i) held accountable to the public;
‘‘(ii) effective in improving public education; and
‘‘(iii) open and accessible to all students.
‘‘(b) PER-PUPIL FACILITIES AID PROGRAMS.—
‘‘(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 made available
to carry out this subsection under paragraphs (2) and (3)(B)
of section 5211(b) for any fiscal year, 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 in the second such year;
‘‘(iii) 60 percent in the third such year;
‘‘(iv) 40 percent in the fourth such year; and
‘‘(v) 20 percent in the fifth such year.
‘‘(3) USE OF FUNDS.—
‘‘(A) IN GENERAL.—A State that receives a grant under
this subsection shall use the funds made available through
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the grant to establish or enhance, and administer, a per-
pupil facilities aid program for charter schools in the State.
‘‘(B) EVALUATIONS; TECHNICAL ASSISTANCE; DISSEMINA-
TION.—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 evalua-
tions, to provide technical assistance, and to disseminate
information.
‘‘(C) SUPPLEMENT, NOT SUPPLANT.—Funds made avail-
able 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.—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.
‘‘(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.
‘‘(6) PRIORITIES.—In making grants under this subsection,
the Secretary shall give priority to States that meet the criteria
described in paragraph (2), and subparagraphs (A), (B), and
(C) of paragraph (3), of section 5202(e).
‘‘(c) RULE
OF CONSTRUCTION.—Nothing in this section shall
be construed to require charter schools to collect any data described
in subsection (a).
‘‘SEC. 5206. FEDERAL FORMULA ALLOCATION DURING FIRST YEAR AND
FOR SUCCESSIVE ENROLLMENT EXPANSIONS.
‘‘(a) IN GENERAL.—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 as are necessary to ensure that
every charter school receives the Federal funding for which the
charter school is eligible not later than 5 months after the charter
school first opens, notwithstanding the fact that the identity and
characteristics of the students enrolling in that charter school are
not fully and completely determined until that charter school actu-
ally opens. The measures similarly shall ensure that every charter
school expanding its enrollment in any subsequent year of operation
receives the Federal funding for which the charter school is eligible
not later than 5 months after such expansion.
‘‘(b) ADJUSTMENT AND LATE OPENINGS.—
‘‘(1) IN GENERAL.—The measures described in subsection
(a) shall include provision for appropriate adjustments, through
recovery of funds or reduction of payments for the succeeding
year, in cases where payments made to a charter school on
H. R. 1—374
the basis of estimated or projected enrollment data exceed
the amounts that the school is eligible to receive on the basis
of actual or final enrollment data.
‘‘(2) RULE.—For charter schools that first open after
November 1 of any academic year, the State, in accordance
with guidance provided by the Secretary and applicable Federal
statutes and regulations, shall ensure that such charter schools
that are eligible for the funds described in subsection (a) for
such academic year have a full and fair opportunity to receive
those funds during the charter schools’ first year of operation.
‘‘SEC. 5207. SOLICITATION OF INPUT FROM CHARTER SCHOOL OPERA-
TORS.
‘‘To the extent practicable, the Secretary shall ensure that
administrators, teachers, and other individuals directly involved
in the operation of charter schools are consulted in the development
of any rules or regulations required to implement this subpart,
as well as in the development of any rules or regulations relevant
to charter schools that are required to implement part A of title
I, the Individuals with Disabilities Education Act, or any other
program administered by the Secretary that provides education
funds to charter schools or regulates the activities of charter schools.
‘‘SEC. 5208. RECORDS TRANSFER.
‘‘State educational agencies 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 Disabilities Edu-
cation Act, are transferred to a charter school upon the transfer
of the student to the charter school, and to another public school
upon the transfer of the student from a charter school to another
public school, in accordance with applicable State law.
‘‘SEC. 5209. PAPERWORK REDUCTION.
‘‘To the extent practicable, the Secretary and each authorized
public chartering agency shall ensure that implementation of this
subpart results in a minimum of paperwork for any eligible
applicant or charter school.
‘‘SEC. 5210. DEFINITIONS.
‘‘In this subpart:
‘‘(1) CHARTER SCHOOL.—The term ‘charter school’ means
a public school that—
‘‘(A) in accordance with a specific State statute author-
izing the granting of charters to schools, is exempt from
significant State or local rules that inhibit the flexible
operation and management of public schools, but not from
any rules relating to the other requirements of this para-
graph;
‘‘(B) is created by a developer as a public school, or
is adapted by a developer from an existing public school,
and is operated under public 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 authorized public chartering agency;
‘‘(D) provides a program of elementary or secondary
education, or both;
H. R. 1—375
‘‘(E) is nonsectarian in its programs, admissions poli-
cies, employment practices, and all other operations, and
is not affiliated with a sectarian school or religious institu-
tion;
‘‘(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 Disabilities 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 accommo-
dated;
‘‘(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 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 that
includes a description of how student performance will
be measured in charter schools pursuant to State assess-
ments that are required of other schools and pursuant
to any other assessments mutually agreeable to the author-
ized public chartering agency and the charter school.
‘‘(2) DEVELOPER.—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) ELIGIBLE
APPLICANT.—The term ‘eligible applicant’
means a developer that has—
‘‘(A) applied to an authorized public chartering
authority to operate a charter school; and
‘‘(B) provided adequate and timely notice to that
authority under section 5203(d)(3).
‘‘(4) AUTHORIZED PUBLIC CHARTERING AGENCY.—The term
‘authorized public chartering agency’ means a State educational
agency, local educational 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. 5211. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—There are authorized to be appropriated
to carry out this subpart $300,000,000 for fiscal year 2002 and
such sums as may be necessary for each of the 5 succeeding fiscal
years.
‘‘(b) RESERVATION.—From the amount appropriated under sub-
section (a) for each fiscal year, the Secretary shall reserve—
‘‘(1) $200,000,000 to carry out this subpart, other than
section 5205(b); and
‘‘(2) any funds in excess of $200,000,000, that do not exceed
$300,000,000, to carry out section 5205(b); and
H. R. 1—376
‘‘(3)(A) 50 percent of any funds in excess of $300,000,000
to carry out this subpart, other than section 5205(b); and
‘‘(B) 50 percent of any funds in excess of $300,000,000
to carry out section 5205(b).
‘‘Subpart 2—Credit Enhancement Initiatives To
Assist Charter School Facility Acquisition, Con-
struction, and Renovation
‘‘SEC. 5221. PURPOSE.
‘‘The purpose of this subpart is to provide grants to eligible
entities to permit the eligible entities to demonstrate innovative
credit enhancement initiatives that assist charter schools to address
the cost of acquiring, constructing, and renovating facilities.
‘‘SEC. 5222. GRANTS TO ELIGIBLE ENTITIES.
‘‘(a) GRANTS.—The Secretary shall use 100 percent of the
amount available to carry out this subpart to award not less than
three grants to eligible entities that have applications approved
under this subpart 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.
‘‘(b) GRANTEE SELECTION.—
‘‘(1) EVALUATION
OF
APPLICATION.—The Secretary shall
evaluate each application submitted under section 5223, and
shall determine whether the application is sufficient to merit
approval.
‘‘(2) DISTRIBUTION OF GRANTS.—The Secretary shall award
at least one grant to an eligible entity described in section
5230(2)(A), at least one grant to an eligible entity described
in section 5230(2)(B), and at least one grant to an eligible
entity described in section 5230(2)(C), if applications are sub-
mitted that permit the Secretary to do so without approving
an application that is not of sufficient quality to merit approval.
‘‘(c) GRANT CHARACTERISTICS.—Grants under this subpart 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) SPECIAL RULE.—In the event the Secretary determines
that the funds made available under this subpart are insufficient
to permit the Secretary to award not less than three grants in
accordance with subsections (a) through (c), such three-grant min-
imum and subsection (b)(2) shall not apply, and the Secretary
may determine the appropriate number of grants to be awarded
in accordance with subsection (c).
‘‘SEC. 5223. APPLICATIONS.
‘‘(a) IN GENERAL.—To receive a grant under this subpart, an
eligible entity shall submit to the Secretary an application in such
form as the Secretary may reasonably require.
‘‘(b) CONTENTS.—An application submitted under subsection (a)
shall contain—
‘‘(1) a statement identifying the activities proposed to be
undertaken with funds received under this subpart, including
how the eligible entity will determine which charter schools
H. R. 1—377
will receive assistance, and how much and what types of assist-
ance charter schools will receive;
‘‘(2) a description of the involvement of charter schools
in the application’s development and the design of the proposed
activities;
‘‘(3) a description of the eligible entity’s expertise in capital
market financing;
‘‘(4) a description of how the proposed activities will lever-
age the maximum amount of private-sector financing capital
relative to the amount of government funding used and other-
wise enhance credit available to charter schools;
‘‘(5) a description of how the eligible entity possesses suffi-
cient expertise in education to evaluate the likelihood of success
of a charter school program for which facilities financing is
sought;
‘‘(6) 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; and
‘‘(7) such other information as the Secretary may reason-
ably require.
‘‘SEC. 5224. CHARTER SCHOOL OBJECTIVES.
‘‘An eligible entity receiving a grant under this subpart shall
use the funds deposited in the reserve account established under
section 5225(a) to assist one or more charter schools to access
private sector capital to accomplish one or both of the following
objectives:
‘‘(1) The acquisition (by purchase, lease, donation, or other-
wise) of an interest (including an interest held by a third
party for the benefit of a charter school) in improved or unim-
proved real property that is necessary to commence or continue
the operation of a charter school.
‘‘(2) The construction of new facilities, or the renovation,
repair, or alteration of existing facilities, necessary to commence
or continue the operation of a charter school.
‘‘SEC. 5225. RESERVE ACCOUNT.
‘‘(a) USE OF FUNDS.—To assist charter schools to accomplish
the objectives described in section 5224, an eligible entity receiving
a grant under this subpart shall, in accordance with State and
local law, directly or indirectly, alone or in collaboration with others,
deposit the funds received under this subpart (other than funds
used for administrative costs in accordance with section 5226) 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:
‘‘(1) Guaranteeing, insuring, and reinsuring bonds, notes,
evidences of debt, loans, and interests therein, the proceeds
of which are used for an objective described in section 5224.
‘‘(2) Guaranteeing and insuring leases of personal and real
property for an objective described in section 5224.
‘‘(3) Facilitating financing by identifying potential lending
sources, encouraging private lending, and other similar activi-
ties that directly promote lending to, or for the benefit of,
charter schools.
H. R. 1—378
‘‘(4) 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, under-
writers, and potential investors and the consolidation of mul-
tiple charter school projects within a single bond issue).
‘‘(b) INVESTMENT.—Funds received under this subpart and
deposited in the reserve account established under subsection (a)
shall be invested in obligations issued or guaranteed by the United
States or a State, or in other similarly low-risk securities.
‘‘(c) REINVESTMENT
OF EARNINGS.—Any earnings on funds
received under this subpart shall be deposited in the reserve account
established under subsection (a) and used in accordance with such
subsection.
‘‘SEC. 5226. LIMITATION ON ADMINISTRATIVE COSTS.
‘‘An eligible entity may use not more than 0.25 percent of
the funds received under this subpart for the administrative costs
of carrying out its responsibilities under this subpart.
‘‘SEC. 5227. AUDITS AND REPORTS.
‘‘(a) FINANCIAL RECORD MAINTENANCE AND AUDIT.—The finan-
cial records of each eligible entity receiving a grant under this
subpart shall be maintained in accordance with generally accepted
accounting principles and shall be subject to an annual audit by
an independent public accountant.
‘‘(b) REPORTS.—
‘‘(1) GRANTEE
ANNUAL
REPORTS.—Each eligible entity
receiving a grant under this subpart annually shall submit
to the Secretary a report of its operations and activities under
this subpart.
‘‘(2) CONTENTS.—Each annual report submitted under para-
graph (1) shall include—
‘‘(A) a copy of the most recent financial statements,
and any accompanying opinion on such statements, pre-
pared by the independent public accountant reviewing the
financial records of the eligible entity;
‘‘(B) a copy of any report made on an audit of the
financial records of the eligible entity that was conducted
under subsection (a) during the reporting period;
‘‘(C) an evaluation by the eligible entity of the effective-
ness of its use of the Federal funds provided under this
subpart in leveraging private funds;
‘‘(D) a listing and description of the charter schools
served during the reporting period;
‘‘(E) a description of the activities carried out by the
eligible entity to assist charter schools in meeting the objec-
tives set forth in section 5224; and
‘‘(F) a description of the characteristics of lenders and
other financial institutions participating in the activities
undertaken by the eligible entity under this subpart during
the reporting period.
‘‘(3) SECRETARIAL REPORT.—The Secretary shall review the
reports submitted under paragraph (1) and shall provide a
comprehensive annual report to Congress on the activities con-
ducted under this subpart.
H. R. 1—379
‘‘SEC. 5228. NO FULL FAITH AND CREDIT FOR GRANTEE OBLIGATIONS.
‘‘No financial obligation of an eligible entity entered into pursu-
ant to this subpart (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 subpart.
‘‘SEC. 5229. RECOVERY OF FUNDS.
‘‘(a) IN GENERAL.—The Secretary, in accordance with chapter
37 of title 31, United States Code, shall collect—
‘‘(1) all of the funds in a reserve account established by
an eligible entity under section 5225(a) if the Secretary deter-
mines, not earlier than 2 years after the date on which the
eligible entity first received funds under this subpart, that
the eligible entity has failed to make substantial progress in
carrying out the purposes described in section 5225(a); or
‘‘(2) all or a portion of the funds in a reserve account
established by an eligible entity under section 5225(a) 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 section 5225(a).
‘‘(b) EXERCISE OF AUTHORITY.—The Secretary shall not exercise
the authority provided in subsection (a) to collect from any eligible
entity any funds that are being properly used to achieve one or
more of the purposes described in section 5225(a).
‘‘(c) PROCEDURES.—The provisions of sections 451, 452, and
458 of the General Education Provisions Act shall apply to the
recovery of funds under subsection (a).
‘‘(d) CONSTRUCTION.—This section 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.
‘‘SEC. 5230. DEFINITIONS.
‘‘In this subpart:
‘‘(1) CHARTER SCHOOL.—The term ‘charter school’ has the
meaning given such term in section 5210.
‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible entity’ means—
‘‘(A) a public entity, such as a State or local govern-
mental entity;
‘‘(B) a private nonprofit entity; or
‘‘(C) a consortium of entities described in subpara-
graphs (A) and (B).
‘‘SEC. 5231. AUTHORIZATION OF APPROPRIATIONS.
‘‘For the purpose of carrying out this subpart, there are author-
ized to be appropriated $150,000,000 for fiscal year 2002 and such
sums as may be necessary for fiscal year 2003.
‘‘Subpart 3—Voluntary Public School Choice
Programs
‘‘SEC. 5241. GRANTS.
‘‘(a) AUTHORIZATION.—From funds made available under section
5248 to carry out this subpart, the Secretary shall award grants,
on a competitive basis, to eligible entities to enable the entities
H. R. 1—380
to establish or expand a program of public school choice (referred
to in this subpart as a ‘program’) in accordance with this subpart.
‘‘(b) DURATION.—Grants awarded under subsection (a) may be
awarded for a period of not more than 5 years.
‘‘SEC. 5242. USES OF FUNDS.
‘‘(a) REQUIRED USE OF FUNDS.—An eligible entity that receives
a grant under this subpart shall use the grant funds to provide
students selected to participate in the program with transportation
services or the cost of transportation to and from the public
elementary schools and secondary schools, including charter schools,
that the students choose to attend under the program.
‘‘(b) PERMISSIBLE USES
OF FUNDS.—An eligible entity that
receives a grant under this subpart may use the grant funds for—
‘‘(1) planning or designing a program (for not more than
1 year);
‘‘(2) the cost of making tuition transfer payments to public
elementary schools or secondary schools to which students
transfer under the program;
‘‘(3) the cost of capacity-enhancing activities that enable
high-demand public elementary schools or secondary schools
to accommodate transfer requests under the program;
‘‘(4) the cost of carrying out public education campaigns
to inform students and parents about the program; and
‘‘(5) other costs reasonably necessary to implement the
program.
‘‘(c) NONPERMISSIBLE USES OF FUNDS.—An eligible entity that
receives a grant under this subpart may not use the grant funds
for school construction.
‘‘(d) ADMINISTRATIVE EXPENSES.—The eligible entity may use
not more than 5 percent of the funds made available through
the grant for any fiscal year for administrative expenses.
‘‘SEC. 5243. APPLICATIONS.
‘‘(a) SUBMISSION.—An eligible entity that desires a grant under
this subpart shall submit an application to the Secretary at such
time, in such manner, and containing such information as the
Secretary may require.
‘‘(b) CONTENTS.—An application submitted under subsection (a)
shall include—
‘‘(1) a description of the program for which the eligible
entity seeks funds and the goals for such program;
‘‘(2) a description of how and when parents of students
will be given the notice required under section 5245(a)(2);
‘‘(3) a description of how students will be selected for the
program;
‘‘(4) a description of how the program will be coordinated
with, and will complement and enhance, other related Federal
and non-Federal projects;
‘‘(5) if the program is to be carried out by a partnership,
the name of each partner and a description of the partner’s
responsibilities; and
‘‘(6) such other information as the Secretary may require.
‘‘SEC. 5244. PRIORITIES.
‘‘In awarding grants under this subpart, the Secretary shall
give priority to an eligible entity—