604
‘‘(4) describes how assistance under this part
will contribute to improving student academic
achievement;
‘‘(5) provides assurances of compliance with the
provisions of this part, including the participation of
children enrolled in private, nonprofit schools in ac-
cordance with section 4142;
‘‘(6) provides assurance that the local edu-
cational agency will keep such records, and provide
such information to the State as may be reasonably
required for fiscal audit and program evaluation,
consistent with the responsibilities of the State
under this part;
‘‘(7) provides in the allocation of funds for the
assistance authorized by this part, and in the design,
planning, and implementation of such programs, for
systematic consultation with parents of children at-
tending elementary and secondary schools in the
area served by the local educational agency, with
teachers and administrative personnel in such
schools, and with other groups involved in the imple-
mentation of this part (such as librarians, school
counselors, and other pupil services personnel) as
may be considered appropriate by the local edu-
cational agency; and
605
‘‘(8) provides assurance that—
‘‘(A) programs, services, and activities will
be evaluated annually;
‘‘(B) such evaluation will be used to deter-
mine and implement appropriate changes in
program services and activities for the subse-
quent year;
‘‘(C) such evaluation will describe how as-
sistance under this part contributed toward im-
proving student academic achievement; and
‘‘(D) such evaluation will be submitted to
the State in the time and manner requested by
the State.
‘‘(b) TIME PERIOD TO WHICH APPLICATION RE-
LATES.—An application submitted by a local educational
agency under subsection (a) may seek allocations under
this part for a period of time not to exceed 3 fiscal years
and may be amended annually as may be necessary to re-
flect changes without the filing of a new application.
‘‘(c) LOCAL EDUCATIONAL AGENCY DISCRETION.—
‘‘(1) IN GENERAL.—Subject to the limitations
and requirements of this part, a local educational
agency shall have complete discretion in determining
how funds made available under this subpart will be
606
divided among programs and activities described in
section 4131.
‘‘(2) LIMITATION.—In exercising the discretion
described in paragraph (1), a local educational agen-
cy shall ensure that expenditures under this subpart
carry out the purposes of this part and are used to
meet the educational needs within the schools of
such local educational agency.
‘‘Subpart 4—General Provisions
‘‘SEC. 4141. MAINTENANCE OF EFFORT; FEDERAL FUNDS
SUPPLEMENTARY.
‘‘(a) MAINTENANCE OF EFFORT.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a State is entitled to receive its full allo-
cation of funds under this subpart for any fiscal
year only if the Secretary determines that either the
combined fiscal effort per student or the aggregate
expenditures within the State with respect to the
provision of free public education for the fiscal year
preceding the fiscal year for which the determination
is made was not less than 90 percent of such com-
bined fiscal effort or aggregate expenditures for the
fiscal year that is 2 fiscal years before the fiscal year
for which the determination is made.
607
‘‘(2) REDUCTION
OF
FUNDS.—The Secretary
shall reduce the amount of the allocation of funds
under this subpart in any fiscal year in the exact
proportion to which the State fails to meet the re-
quirements of paragraph (1) by falling below 90 per-
cent of both the fiscal effort per student and aggre-
gate expenditures (using the measure most favorable
to the State), and no such lesser amount shall be
used for computing the effort required under para-
graph (1) for subsequent years.
‘‘(3) WAIVER.—The Secretary may waive, for 1
fiscal year only, the requirements of this section if
the Secretary determines that such a waiver would
be equitable due to exceptional or uncontrollable cir-
cumstances such as a natural disaster or a precipi-
tous and unforeseen decline in the financial re-
sources of the State.
‘‘(b) FEDERAL FUNDS SUPPLEMENTARY.—A State
or local educational agency may use and allocate funds
received under this subpart only to supplement and, to the
extent practical, to increase the level of funds that would,
in the absence of Federal funds made available under this
subpart, be made available from non-Federal sources, and
in no case may such funds be used so as to supplant funds
from non-Federal sources.
608
‘‘SEC. 4142. PARTICIPATION OF CHILDREN ENROLLED IN
PRIVATE SCHOOLS.
‘‘(a) PARTICIPATION ON EQUITABLE BASIS.—
‘‘(1) IN
GENERAL.—To the extent consistent
with the number of children in the school district of
a local educational agency which is eligible to receive
funds under this part or which serves the area in
which a program or project assisted under this part
is located, who are enrolled in private nonprofit ele-
mentary and secondary schools, or with respect to
instructional or personnel training programs funded
by the State from funds made available for State
use, such agency, after consultation with appropriate
private school officials—
‘‘(A) shall provide for the benefit of such
children in such schools secular, neutral, and
nonideological services, materials, and equip-
ment, including the participation of the teach-
ers of such children (and other educational per-
sonnel serving such children) in training pro-
grams, and the repair or minor remodeling of
public facilities as may be necessary for their
provision (consistent with subsection (c) of this
section); or
‘‘(B) if such services, materials, and equip-
ment are not feasible or necessary in 1 or more
609
such private schools as determined by the local
educational agency after consultation with the
appropriate private school officials, shall pro-
vide such other arrangements as will assure eq-
uitable participation of such children in the
purposes and benefits of this part.
‘‘(2) OTHER PROVISIONS FOR SERVICES.—If no
program or project is carried out under paragraph
(1) in the school district of a local educational agen-
cy, the State shall make arrangements, such as
through contracts with nonprofit agencies or organi-
zations, under which children in private schools in
such district are provided with services and mate-
rials to the extent that would have occurred if the
local educational agency had received funds under
this part.
‘‘(3) APPLICATION
OF
REQUIREMENTS.—The
requirements of this section relating to the participa-
tion of children, teachers, and other personnel serv-
ing such children shall apply to programs and
projects carried out under this part by a State or
local educational agency, whether directly or through
grants to or contracts with other public or private
agencies, institutions, or organizations.
‘‘(b) EQUAL EXPENDITURES.—
610
‘‘(1) IN GENERAL.—Expenditures for programs
pursuant to subsection (a) shall be equal (consistent
with the number of children to be served) to expend-
itures for programs under this part for children en-
rolled in the public schools of the local educational
agency.
‘‘(2) CONCENTRATED PROGRAMS.—Taking into
account the needs of the individual children and
other factors which relate to the expenditures re-
ferred to in paragraph (1), and when funds available
to a local educational agency under this part are
used to concentrate programs or projects on a par-
ticular group, attendance area, or grade or age level,
children enrolled in private schools who are included
within the group, attendance area, or grade or age
level selected for such concentration shall, after con-
sultation with the appropriate private school offi-
cials, be assured equitable participation in the pur-
poses and benefits of such programs or projects.
‘‘(c) ADMINISTRATIVE RULES.—
‘‘(1) FUNDS AND PROPERTY.—The control of
funds provided under this part, and title to mate-
rials, equipment, and property repaired, remodeled,
or constructed with such funds, shall be in a public
agency for the uses and purposes provided in this
611
part, and a public agency shall administer such
funds and property.
‘‘(2) PROVISION OF SERVICES.—The provision
of services pursuant to this part shall be provided by
employees of a public agency or through contract by
such public agency with a person, an association,
agency, or corporation who or which, in the provi-
sion of such services, is independent of such private
school and of any religious organizations, and such
employment or contract shall be under the control
and supervision of such public agency, and the funds
provided under this part shall not be commingled
with State or local funds.
‘‘(d) WAIVER.—
‘‘(1) STATE PROHIBITION WAIVER.—If by rea-
son of any provision of law a State or local edu-
cational agency is prohibited from providing for the
participation in programs of children enrolled in pri-
vate elementary and secondary schools, as required
by this section, the Secretary shall waive such re-
quirements and shall arrange for the provision of
services to such children through arrangements
which shall be subject to the requirements of this
section.
612
‘‘(2) FAILURE TO COMPLY.—If the Secretary
determines that a State or a local educational agen-
cy has substantially failed or is unwilling to provide
for the participation on an equitable basis of chil-
dren enrolled in private elementary and secondary
schools as required by this section, the Secretary
may waive such requirements and shall arrange for
the provision of services to such children through ar-
rangements which shall be subject to the require-
ments of this section.
‘‘(e) WITHHOLDING OF ALLOCATION.—Pending final
resolution of any investigation or complaint that could re-
sult in a waiver under subsection (d)(1) or (d)(2), the Sec-
retary may withhold from the allocation of the affected
State or local educational agency the amount estimated
by the Secretary to be necessary to pay the cost of services
to be provided by the Secretary under such subsection.
‘‘(f) TERM OF DETERMINATIONS.—Any determina-
tion by the Secretary under this section shall continue in
effect until the Secretary determines that there will no
longer be any failure or inability on the part of the State
or local educational agency to meet the requirements of
subsections (a) and (b).
‘‘(g) PAYMENT FROM STATE ALLOTMENT.—When
the Secretary arranges for services pursuant to this sec-
613
tion, the Secretary shall, after consultation with the ap-
propriate public and private school officials, pay the cost
of such services, including the administrative costs of ar-
ranging for those services, from the appropriate allotment
of the State under this part.
‘‘(h) REVIEW.—
‘‘(1) WRITTEN
OBJECTIONS.—The Secretary
shall not take any final action under this section
until the State and the local educational agency af-
fected 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 or local edu-
cational 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 this action, as pro-
614
vided in section 2112 of title 28, United States
Code.
‘‘(3) REMAND TO SECRETARY.—The findings of
fact by the Secretary, if supported by substantial
evidence, shall be conclusive; but 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 mod-
ify 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 such
petition, 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 of
the United States upon certiorari or certification as
provided in section 1254 of title 28, United States
Code.
‘‘SEC. 4143. FEDERAL ADMINISTRATION.
‘‘(a) TECHNICAL ASSISTANCE.—The Secretary, upon
request, shall provide technical assistance to States and
local educational agencies under this part.
615
‘‘(b) RULEMAKING.—The Secretary shall issue regu-
lations under this part only to the extent that such regula-
tions are necessary to ensure that there is compliance with
the specific requirements and assurances required by this
part.
‘‘(c) AVAILABILITY OF APPROPRIATIONS.—Notwith-
standing any other provision of law, unless expressly in
limitation of this subsection, funds appropriated in any
fiscal year to carry out activities under this part shall be-
come available for obligation on July 1 of such fiscal year
and shall remain available for obligation until the end of
the subsequent fiscal year.
‘‘SEC. 4144. DEFINITIONS.
‘‘In this part, the following definitions apply:
‘‘(1) SCHOOL-AGE
POPULATION.—The term
‘school-age population’ means the population aged 5
through 17.
‘‘(2) STATE.—The term ‘State’ means each of
the 50 States, the District of Columbia, and the
Commonwealth of Puerto Rico.
‘‘SEC. 4145. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this part $472,000,000 for fiscal year 2002 and such sums
as may be necessary for each of fiscal years 2003 through
2006.’’.
616
PART B—PUBLIC CHARTER SCHOOLS
SEC. 411. PUBLIC CHARTER SCHOOLS.
Part B of title IV is amended to read as follows:
‘‘PART B—PUBLIC CHARTER SCHOOLS
‘‘SEC. 4201. 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-
617
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 reduction 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 rev-
enue streams are not immediately available.
‘‘(b) PURPOSE.—It is the purpose of this part to in-
crease national understanding of the charter schools model
by—
618
‘‘(1) providing financial assistance for the plan-
ning, program design and initial implementation of
charter schools;
‘‘(2) evaluating the effects of such schools, in-
cluding the effects on students, student achievement,
staff, and parents; and
‘‘(3) expanding the number of high-quality
charter schools available to students across the Na-
tion.
‘‘SEC. 4202. PROGRAM AUTHORIZED.
‘‘(a) IN GENERAL.—The Secretary may award grants
to State educational agencies having applications approved
pursuant to section 4203 to enable such agencies to con-
duct a charter school grant program in accordance with
this part.
‘‘(b) SPECIAL RULE.—If a State educational agency
elects not to participate in the program authorized by this
part or does not have an application approved under sec-
tion 4203, the Secretary may award a grant to an eligible
applicant that serves such State and has an application
approved pursuant to section 4203(c).
‘‘(c) PROGRAM PERIODS.—
‘‘(1) GRANTS TO STATES.—Grants awarded to
State educational agencies under this part shall be
awarded for a period of not more than 3 years.
619
‘‘(2) GRANTS
TO
ELIGIBLE
APPLICANTS.—
Grants awarded by the Secretary to eligible appli-
cants or subgrants awarded by State educational
agencies to eligible applicants under this part shall
be awarded for a period of not more than 3 years,
of which the eligible applicant may use—
‘‘(A) not more than 18 months for plan-
ning and program design;
‘‘(B) not more than 2 years for the initial
implementation of a charter school; and
‘‘(C) not more than 2 years to carry out
dissemination activities described in section
4204(f)(6)(B).
‘‘(d) LIMITATION.—A charter school may not
receive—
‘‘(1) more than one grant for activities de-
scribed in subparagraphs (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.—In awarding grants
under this part from any funds appropriated under section
4211, the Secretary shall give priority to States to the ex-
tent that the States meet the criteria described in para-
620
graph (2) and one or more of the criteria described in sub-
paragraph (A), (B), or (C) of paragraph (3).
‘‘(2) REVIEW AND EVALUATION PRIORITY CRI-
TERIA.—The criteria referred to in paragraph (1) is
that the State provides for periodic review and eval-
uation by the authorized public chartering agency of
each charter school, at least once every 5 years un-
less 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 ex-
ceeding the academic performance 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 paragraph (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 
educational
progress of the students attending the schools,
in the period prior to the period for which a
State educational agency or eligible applicant
applies for a grant under this part.
‘‘(B) The State—
621
‘‘(i) provides for one authorized public
chartering agency that is not a local edu-
cational 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 educational agencies are the only au-
thorized public chartering agencies, allows
for an appeals process for the denial of an
application for a charter school.
‘‘(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 part to a State edu-
cational agency, the Secretary shall take into consider-
ation the number of charter schools that are operating,
or are approved to open, in the State.
‘‘SEC. 4203. 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
622
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; 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 com-
mensurate share of Federal education funds
that are allocated by formula each year, includ-
623
ing during the first year of operation of the
charter school; and
‘‘(C) will disseminate best or promising
practices of charter schools to each local edu-
cational agency in the State; 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
624
‘‘(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 planning, program design and im-
plementation 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;
625
‘‘(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) a description of how a charter school
that is considered a local educational agency
under State law, or a local educational agency
626
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 4202(c)(2)(C), a description of
those activities and how those activities will in-
volve charter schools and other public schools,
local educational agencies, developers, and po-
tential developers; and
‘‘(N) such other information and assur-
ances as the Secretary and the State edu-
cational agency may require.
‘‘(c) CONTENTS OF ELIGIBLE APPLICANT APPLICA-
TION.—Each eligible applicant desiring a grant pursuant
to section 4202(b) 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 (N) of subsection
(b)(3), except that for purposes of this subsection
627
subparagraphs (J), (K), and (N) 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
4204(e).
‘‘SEC. 4204. 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
4203(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;
628
‘‘(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;
‘‘(6) the number of high quality charter schools
created under this part in the State; and
‘‘(7) in the case of State educational agencies
that propose to use grant funds to support dissemi-
nation activities under section 4202(c)(2)(C), the
quality of those activities and the likelihood that
those activities will improve student achievement.
‘‘(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 4203(c), after taking
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;
629
‘‘(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 re-
sults for students; and
‘‘(7) in the case of an eligible applicant that
proposes to use grant funds to support dissemina-
tion activities under section 4202(c)(2)(C), the qual-
ity 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 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—
630
‘‘(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 4210(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, 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).
631
‘‘(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, or to disseminate infor-
mation about the charter school and successful prac-
tices in the charter school, in accordance with this
part.
‘‘(3) ALLOWABLE ACTIVITIES.—An eligible ap-
plicant receiving a grant or subgrant under this part
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;
632
‘‘(iii) acquiring or developing cur-
riculum 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.
‘‘(5) REVOLVING
LOAN
FUNDS.—Each State
educational agency receiving a grant pursuant to
this part may reserve not more than 10 percent of
the grant amount for the establishment of a revolv-
ing loan fund. Such fund may be used to make loans
to eligible applicants that have received a subgrant
under this part, under such terms as may be deter-
mined by the State educational agency, for the ini-
tial operation of the charter school grant program of
such recipient until such time as the recipient begins
receiving ongoing operational support from State or
local financing sources.
‘‘(6) DISSEMINATION.—
633
‘‘(A) IN GENERAL.—A charter school may
apply for funds under this part, whether or not
the charter school has applied for or received
funds under this part for planning, program de-
sign, or implementation, to carry out the activi-
ties described in subparagraph (B) if the char-
ter school has been in operation for at least 3
consecutive years and has demonstrated overall
success, including—
‘‘(i) substantial progress in improving
student achievement;
‘‘(ii) high levels of parent satisfaction;
and
‘‘(iii) the management and leadership
necessary to overcome initial start-up prob-
lems and establish a thriving, financially
viable charter school.
‘‘(B) ACTIVITIES.—A charter school de-
scribed in subparagraph (A) may use funds re-
served under paragraph (1) to assist other
schools in adapting the charter school’s pro-
gram (or certain aspects of the charter school’s
program), or to disseminate information about
the charter school, through such activities as—
634
‘‘(i) assisting other individuals with
the planning and start-up of one or more
new public schools, including charter
schools, that are independent of the assist-
ing charter school and the assisting charter
school’s developers, and that agree to be
held to at least as high a level of account-
ability as the assisting charter school;
‘‘(ii) developing partnerships with
other public schools, including charter
schools, designed to improve student per-
formance in each of the schools partici-
pating in the partnership;
‘‘(iii) developing curriculum materials,
assessments, and other materials that pro-
mote increased student achievement and
are based on successful practices within
the assisting charter school; and
‘‘(iv) conducting evaluations and de-
veloping materials that document the suc-
cessful 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 part and designates a trib-
635
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. 4205. 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 appropriated to carry out this part, 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
636
schools on student achievement, including informa-
tion regarding—
‘‘(A) students attending charter schools re-
ported on the basis of race, age, disability, gen-
der, limited English proficiency, and previous
enrollment in public school; and
‘‘(B) the professional qualifications of
teachers within a charter school and the turn-
over of the teaching force.
‘‘(3) To provide—
‘‘(A) information to applicants for assist-
ance under this part;
‘‘(B) assistance to applicants for assistance
under this part with the preparation of applica-
tions under section 4203;
‘‘(C) assistance in the planning and start-
up 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 collection of information regarding
637
the financial resources available to charter schools,
including access to private capital, and to widely dis-
seminate to charter schools any such relevant infor-
mation and model descriptions of successful pro-
grams.
‘‘(b) CONSTRUCTION.—Nothing in this section shall
be construed to require charter schools to collect any data
described in subsection (a).
‘‘SEC. 4206. FEDERAL FORMULA ALLOCATION DURING
FIRST YEAR AND FOR SUCCESSIVE ENROLL-
MENT 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 Sec-
retary and each State educational agency shall take such
measures not later than 6 months after the date of the
enactment of the Charter School Expansion Act of 1998
as are necessary to ensure that every charter school re-
ceives 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 actually opens. The measures similarly shall
638
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 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 regu-
lations, 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 oppor-
tunity to receive those funds during the charter
schools’ first year of operation.
639
‘‘SEC. 4207. SOLICITATION OF INPUT FROM CHARTER
SCHOOL OPERATORS.
‘‘To the extent practicable, the Secretary shall ensure
that administrators, teachers, and other individuals di-
rectly involved in the operation of charter schools are con-
sulted in the development of any rules or regulations re-
quired to implement this part, as well as in the develop-
ment 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 (20 U.S.C.
1400 et seq.), or any other program administered by the
Secretary that provides education funds to charter schools
or regulates the activities of charter schools.
‘‘SEC. 4208. RECORDS TRANSFER.
‘‘State educational agencies and local educational
agencies, to the extent practicable, shall ensure that a stu-
dent’s records and, if applicable, a student’s individualized
education program as defined in section 602(11) of the
Individuals with Disabilities Education Act (20 U.S.C.
1401(11)), are transferred to a charter school upon the
transfer of the student to the charter school, and to an-
other public school upon the transfer of the student from
a charter school to another public school, in accordance
with applicable State law.
640
‘‘SEC. 4209. 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. 4210. DEFINITIONS.
‘‘As used in this part:
‘‘(1) The term ‘charter school’ means a public
school that—
‘‘(A) in accordance with a specific State
statute authorizing the granting of charters to
schools, is exempted 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 require-
ments 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;
641
‘‘(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, or in another non-
discriminatory manner consistent with State
law, 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;
642
‘‘(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 char-
ter schools pursuant to State assessments that
are required of other schools and pursuant to
any other assessments mutually agreeable to
the authorized public chartering agency and the
charter school.
‘‘(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
643
authority pursuant to State law and approved by the
Secretary to authorize or approve a charter school.
‘‘SEC. 4211. AUTHORIZATION OF APPROPRIATIONS.
‘‘For the purpose of carrying out this part, there are
authorized to be appropriated $200,000,000 for fiscal year
2002 and such sums as may be necessary for each of the
4 succeeding fiscal years.’’.
PART C—SCHOOL CHOICE RESEARCH AND
DEMONSTRATION
SEC. 421. SCHOOL CHOICE RESEARCH AND DEMONSTRA-
TION
Part C of title IV is amended to read as follows:
‘‘PART C—EDUCATIONAL OPPORTUNITY FUND
‘‘SEC. 4311. PURPOSE.
‘‘The purpose of this part is to determine the effec-
tiveness of school choice in improving the academic
achievement of disadvantaged students and the overall
quality of public schools and local educational agencies.
‘‘SEC. 4312. PROGRAM AUTHORIZED.
‘‘The Secretary is authorized to make competitive
awards to eligible entities to carry out and evaluate,
through contracts or grants, research projects that dem-
onstrate how school choice options increase the academic
achievement of students, schools, and local educational
agencies.
644
‘‘SEC. 4313. ELIGIBLE ENTITIES.
‘‘For purposes of this part an eligible entity is—
‘‘(1) a State educational agency;
‘‘(2) a county agency;
‘‘(3) a municipal agency;
‘‘(4) a local educational agency;
‘‘(5) a nonprofit corporation; or
‘‘(6) a consortia thereof.
‘‘SEC. 4314. APPLICATIONS.
‘‘Each eligible entity desiring an award under this
part shall submit an application to the Secretary that shall
include—
‘‘(1) a description of the proposed research
project, including a designation from which local
educational agency or agencies eligible students will
be selected to participate in a choice program;
‘‘(2) a description of the annual costs of the
project;
‘‘(3) a description of the research design that
the eligible entity will employ in carrying out the
project;
‘‘(4) a description of the project evaluation that
will be conducted by an independent third party en-
tity, including—
645
‘‘(A) the name and qualifications of the
independent entity that will conduct the evalua-
tion; and
‘‘(B) a description of how the evaluation
will measure the academic achievement of stu-
dents participating in the program, parental
satisfaction and the effect of the project on the
schools and agencies designated in paragraph
(1);
‘‘(5) a description of how the eligible entity will
ensure the participation of students selected for the
control group;
‘‘(6) a description of the assessment that the el-
igible entity will use to assess annually the progress
of participants in the research project in grades 3
through 8 in mathematics and reading and how it is
comparable to assessments used by the agency or
agencies described under paragraph (1);
‘‘(7) an assurance that the eligible entity will
assess all students that are participating in the pro-
gram or in the control group at the beginning of the
project;
‘‘(8) an assurance that the eligible entity will
report annually to the Secretary on the impact of
the project on student achievement, including a dis-
646
cussion of the meaning and an attestation of validity
of the achievement data;
‘‘(9) an assurance that, if the number of stu-
dents applying to participate in the project is greater
than the number of students the project can serve,
participants will be selected by lottery;
‘‘(10) a description of how the amount that will
be provided directly to students for tuition, fees,
transportation, or supplemental services will be de-
termined;
‘‘(11) an assurance that schools participating
under this part will abide by the nondiscrimination
requirements set forth in section 4319;
‘‘(12) an assurance that eligible students receiv-
ing assistance under this part will not be defined by
reference to religion and that grants will be allocated
on the basis of neutral, secular criteria that neither
favor nor disfavor religion, and will be made avail-
able to children attending secular and nonsecular in-
stitutions on a nondiscriminatory basis; and
‘‘(13) an assurance that no private school will
be required to participate in the project without its
consent.
647
‘‘SEC. 4315. PRIORITIES.
‘‘In awarding grants under this program, the Sec-
retary shall give priority to applications that—
‘‘(1) provide students and families with the
widest range of educational options;
‘‘(2) target resources to students and families
that lack the financial resources to take advantage
of available educational options;
‘‘(3) are of sufficient size to have a significant
impact on the public and private schools of the com-
munity that the project serves;
‘‘(4) propose using rigorous methodologies and
third party evaluators with experience in evaluating
school choice proposals; and
‘‘(5) propose serving students of varying age
and grade levels.
‘‘SEC. 4316. USE OF FUNDS.
‘‘(a) IN GENERAL.—A grantee may reserve up to 10
percent of its award for research and evaluation activities,
of which not more than 2 percent may be used for admin-
istrative purposes.
‘‘(b) GRANTS TO STUDENTS.—A grantee shall use at
least 90 percent of its award to provide grants to eligible
students, who shall use the grants to—
648
‘‘(1) pay the eligible educational expenses, in-
cluding tuition, fees, and transportation expenses re-
quired to attend the school of their choice; or
‘‘(2) purchase supplemental educational serv-
ices.
‘‘(c) ASSISTANCE.—All grants provided to students
by the project shall be deemed assistance to students rath-
er than to schools.
‘‘SEC. 4317. ELIGIBLE STUDENTS.
‘‘For purposes of the activities funded under this
part, an eligible student is defined as a student who—
‘‘(1) is eligible for a free or reduced-price lunch
subsidy under the National School Lunch program;
and
‘‘(2) attended a public elementary or secondary
school or was not yet of school age in the year pre-
ceding participation in this program.
‘‘SEC. 4318. REPORTING REQUIREMENTS.
‘‘(a) IN GENERAL.—Each grantee receiving an award
under this program shall, beginning with the second year
of the project, report annually to the Secretary
regarding—
‘‘(1) the activities carried out during the pre-
ceding 12 months with program funds; and
649
‘‘(2) the results of the assessments given to stu-
dents participating in the program and students se-
lected for the control group.
‘‘(b) PERFORMANCE REPORTS.—In addition, each
grantee shall, in the third year of the research project,
report annually to the Secretary regarding—
‘‘(1) the academic performance of students par-
ticipating in the project; and
‘‘(2) parental satisfaction; and
‘‘(3) changes in the overall performance and
quality of public and private elementary and sec-
ondary schools affected by the project, as well as
other indicators such as teacher quality, innovative
reforms, or special programs.
‘‘(c) REPORT TO CONGRESS.—The Secretary shall
submit to the appropriate congressional committees an an-
nual report on the findings of the reports submitted under
subsections (a) and (b), and include the comments of the
independent review panel in accordance with section
4019(3).
‘‘SEC. 4319. NONDISCRIMINATION.
‘‘(a) APPLICATION.—Except as provided in subpara-
graph (B), title VI of the Civil Rights Act of 1964, title
IX of the Education Amendments of 1972, and section
504 of the Rehabilitation Act of 1973, do not apply to
650
a private school that enrolls an eligible child who receives
funds under this part by virtue of that child’s use of those
funds to enroll at that school.
‘‘(b) RIGHT AT PRIVATE SCHOOLS.—The eligible en-
tity shall ensure that a private school that enrolls an eligi-
ble child described in subparagraph (A) shall afford the
child the same rights against discrimination provided by
the statutes identified in that subparagraph, and shall af-
ford those same rights to any eligible child who applies
to enroll in that school.
‘‘SEC. 4320. INDEPENDENT REVIEW PANEL.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish an independent review panel to advise the Secretary
on technical and methodological issues and in overseeing
the activities funded under this part.
‘‘(b) MEMBERSHIP.—The Secretary shall appoint
members of the independent review panel from among
qualified individuals who are—
‘‘(A) specialists in school choice research,
as well as experts in statistics, evaluation, re-
search, and assessment; and
‘‘(B) other individuals with technical ex-
pertise who will contribute to the overall rigor
and quality of the evaluations.
651
‘‘(c) POWERS.—The independent review panel shall
consult with and advise the Secretary—
‘‘(1) to ensure that the evaluations funded
under this part adhere to the highest possible stand-
ards of quality with respect to research design and
statistical analysis; and
‘‘(2) to evaluate and comment on the degree to
which annual reports submitted in accordance with
section 4318 meet the requirements under subpara-
graph (A) with such comments included with the re-
port submitted to the appropriate Congressional
committees.
‘‘SEC. 4321. AUTHORIZATION OF APPROPRIATIONS.
‘‘There 
are 
authorized 
to 
be 
appropriated
$25,000,000 for fiscal year 2002 and such sums as may
be necessary for each of the 4 succeeding fiscal years.’’.
PART D—MAGNET SCHOOLS ASSISTANCE
SEC. 431. MAGNET SCHOOLS ASSISTANCE.
Part D of title IV is amended to read as follows:
‘‘PART D—MAGNET SCHOOLS ASSISTANCE
‘‘SEC. 4401. STATEMENT OF PURPOSE.
‘‘The purpose of this part is to assist in the desegre-
gation of schools served by local educational agencies by
providing financial assistance to eligible local educational
agencies for—
652
‘‘(1) the elimination, reduction, or prevention of
minority group isolation in elementary and sec-
ondary schools with substantial proportions of mi-
nority students;
‘‘(2) the development and implementation of
magnet school projects that will assist local edu-
cational agencies in achieving systemic reforms and
providing all students the opportunity to meet chal-
lenging State content standards and challenging
State student performance standards;
‘‘(3) the development and design of innovative
educational methods and practices that promote di-
versity and increase choices in public elementary and
secondary schools and educational programs; and
‘‘(4) courses of instruction within magnet
schools that will substantially strengthen the knowl-
edge of academic subjects and the grasp of tangible
and marketable vocational and technical skills of
students attending such schools.
‘‘SEC. 4402. PROGRAM AUTHORIZED.
‘‘The Secretary, in accordance with this part, is au-
thorized to make grants to eligible local educational agen-
cies, and consortia of such agencies where appropriate, to
carry out the purpose of this part for magnet schools that
are—
653
‘‘(1) part of an approved desegregation plan;
and
‘‘(2) designed to bring students from different
social, economic, ethnic, and racial backgrounds to-
gether.
‘‘SEC. 4403. DEFINITION.
‘‘For the purpose of this part, the term ‘magnet
school’ means a public elementary or secondary school or
public elementary or secondary education center that of-
fers a special curriculum capable of attracting substantial
numbers of students of different racial backgrounds.
‘‘SEC. 4404. ELIGIBILITY.
‘‘A local educational agency, or consortium of such
agencies where appropriate, is eligible to receive assistance
under this part to carry out the purpose of this part if
such agency or consortium—
‘‘(1) is implementing a plan undertaken pursu-
ant to a final order issued by a court of the United
States, or a court of any State, or any other State
agency or official of competent jurisdiction, that re-
quires the desegregation of minority-group-seg-
regated children or faculty in the elementary and
secondary schools of such agency; or
‘‘(2) without having been required to do so, has
adopted and is implementing, or will, if assistance is
654
made available to such local educational agency or
consortium of such agencies under this part, adopt
and implement a plan that has been approved by the
Secretary as adequate under title VI of the Civil
Rights Act of 1964 for the desegregation of minor-
ity-group-segregated children or faculty in such
schools.
‘‘SEC. 4405. APPLICATIONS AND REQUIREMENTS.
‘‘(a) APPLICATIONS.—An eligible local educational
agency, or consortium of such agencies, desiring to receive
assistance under this part shall submit an application to
the Secretary at such time, in such manner, and con-
taining such information and assurances as the Secretary
may reasonably require.
‘‘(b) INFORMATION AND ASSURANCES.—Each such
application shall include—
‘‘(1) a description of—
‘‘(A) how assistance made available under
this part will be used to promote desegregation,
including how the proposed magnet school
project will increase interaction among students
of different social, economic, ethnic, and racial
backgrounds;
‘‘(B) the manner and extent to which the
magnet school project will increase student
655
achievement in the instructional area or areas
offered by the school;
‘‘(C) how an applicant will continue the
magnet school project after assistance under
this part is no longer available, including, if ap-
plicable, an explanation of why magnet schools
established or supported by the applicant with
funds under this part cannot be continued with-
out the use of funds under this part;
‘‘(D) how funds under this part will be
used to improve student academic performance
for all students attending the magnet schools;
and
‘‘(E) the criteria to be used in selecting
students to attend the proposed magnet school
projects; and
‘‘(2) assurances that the applicant will—
‘‘(A) use funds under this part for the pur-
pose specified in section 4401;
‘‘(B) employ fully qualified teachers in the
courses of instruction assisted under this part;
‘‘(C) not engage in discrimination based on
race, religion, color, national origin, sex, or dis-
ability in—