at the time of appointment and while serving on the 
Board. 
(5) NONEMPLOYEE.—No member of the Board 
may be an employee of the United States Govern-
ment or the District of Columbia Government when 
appointed to or during tenure on the Board, unless 
the individual is on a leave of absence from such a 
position while serving on the Board. 
(6) INCORPORATION.—The members of the ini-
tial Board shall serve as incorporators and shall take 
whatever steps are necessary to establish the Cor-
poration under the District of Columbia Nonprofit 
Corporation Act (sec. 29–301.01 et seq., D.C. Offi-
cial Code). 
(7) GENERAL
TERM.—The term of office of 
each member of the Board shall be 5 years, except 
that any member appointed to fill a vacancy occur-
ring prior to the expiration of the term for which the 
predecessor was appointed shall be appointed for the 
remainder of such term. 
(8) CONSECUTIVE TERM.—No member of the 
Board shall be eligible to serve in excess of two con-
secutive terms of 5 years each. A partial term shall 
be considered as one full term. Any vacancy on the
Board shall not affect the Board’s power, but shall 
be filled in a manner consistent with this Act. 
(9) NO BENEFIT.—No part of the income or as-
sets of the Corporation shall inure to the benefit of 
any Director, officer, or employee of the Corpora-
tion, except as salary or reasonable compensation for 
services. 
(10) POLITICAL
ACTIVITY.—The Corporation 
may not contribute to or otherwise support any po-
litical party or candidate for elective public office. 
(11) NOT
OFFICERS
OR
EMPLOYEES.—The 
members of the Board shall not, by reason of such 
membership, be considered to be officers or employ-
ees of the United States Government or of the Dis-
trict of Columbia Government. 
(12) STIPENDS.—The members of the Board, 
while attending meetings of the Board or while en-
gaged in duties related to such meetings or other ac-
tivities of the Board pursuant to this Act, shall be 
provided a stipend. Such stipend shall be at the rate 
of $150 per day for which the member of the Board 
is officially recorded as having worked, except that 
no member may be paid a total stipend amount in 
any calendar year in excess of $5,000. 
(c) OFFICERS AND STAFF.—
(1) EXECUTIVE
DIRECTOR.—The Corporation 
shall have an executive director, and such other 
staff, as may be appointed by the Board for terms 
and at rates of compensation, not to exceed level 
EG–16 of the Educational Service of the District of 
Columbia, to be fixed by the Board. 
(2) STAFF.—With the approval of the Board, 
the executive director may appoint and fix the salary 
of such additional personnel as the executive director 
considers appropriate. 
(3) ANNUAL RATE.—No staff of the Corpora-
tion may be compensated by the Corporation at an 
annual rate of pay greater than the annual rate of 
pay of the executive director. 
(4) SERVICE.—All officers and employees of the 
Corporation shall serve at the pleasure of the Board. 
(5) QUALIFICATION.—No political test or quali-
fication may be used in selecting, appointing, pro-
moting, or taking other personnel actions with re-
spect to officers, agents, or employees of the Cor-
poration. 
(d) POWERS OF THE CORPORATION.—
(1) GENERALLY.—The Corporation is author-
ized to obtain grants from, and make contracts with,
individuals and with private, State, and Federal 
agencies, organizations, and institutions. 
(2) HIRING AUTHORITY.—The Corporation may 
hire, or accept the voluntary services of, consultants,
experts, advisory boards, and panels to aid the Cor-
poration in carrying out this Act. 
(e) FINANCIAL MANAGEMENT AND RECORDS.—
(1) AUDITS.—The financial statements of the 
Corporation shall be—
(A) maintained in accordance with gen-
erally accepted accounting principles for non-
profit corporations; and 
(B) audited annually by independent cer-
tified public accountants. 
(2) REPORT.—The report for each such audit 
shall be included in the annual report to Congress 
required by section 11(c). 
(f) ADMINISTRATIVE RESPONSIBILITIES.—
(1) SCHOLARSHIP APPLICATION SCHEDULE AND 
PROCEDURES.—Not later than 30 days after the ini-
tial Board is appointed and the first executive direc-
tor of the Corporation is hired under this Act, the 
Corporation shall implement a schedule and proce-
dures for processing applications for, and awarding, 
student scholarships under this Act. The schedule
and procedures shall include establishing a list of 
certified eligible institutions located in the areas 
specified in section 4(d)(1)), distributing scholarship 
information to parents and the general public (in-
cluding through a newspaper of general circulation), 
and establishing deadlines for steps in the scholar-
ship application and award process. 
(2) INSTITUTIONAL APPLICATIONS AND ELIGI-
BILITY.—
(A) IN GENERAL.—An eligible institution 
that desires to participate in the scholarship 
program under this Act shall file an application 
with the Corporation for certification for par-
ticipation in the scholarship program under this 
Act that shall—
(i) demonstrate that the eligible insti-
tution has operated with not fewer than 25 
students during the 3 years preceding the 
year for which the determination is made 
unless the eligible institution is applying 
for certification as a new eligible institu-
tion under subparagraph (C); 
(ii) contain an assurance that the eli-
gible institution will comply with all appli-
cable requirements of this Act;
(iii) contain an annual statement of 
the eligible institution’s budget; and 
(iv) describe the eligible institution’s 
proposed program, including personnel 
qualifications and fees. 
(B) CERTIFICATION.—
(i) IN GENERAL.—Except as provided 
in subparagraph (C), not later than 60 
days after receipt of an application in ac-
cordance with subparagraph (A), the Cor-
poration shall certify an eligible institution 
to participate in the scholarship program 
under this Act. 
(ii) CONTINUATION.—An eligible insti-
tution’s certification to participate in the 
scholarship program shall continue unless 
such eligible institution’s certification is re-
voked in accordance with subparagraph 
(D). 
(C) NEW ELIGIBLE INSTITUTION.—
(i) IN GENERAL.—An eligible institu-
tion that did not operate with at least 25 
students in the 3 years preceding the year 
for which the determination is made may 
apply for a 1-year provisional certification
to participate in the scholarship program 
under this Act for a single year by pro-
viding to the Corporation not later than 
July 1 of the year preceding the year for 
which the determination is made—
(I) a list of the eligible institu-
tion’s board of directors; 
(II) letters of support from not 
less than 10 members of the commu-
nity served by such eligible institution; 
(III) a business plan; 
(IV) an intended course of study; 
(V) assurances that the eligible 
institution will begin operations with 
not less than 25 students; 
(VI) assurances that the eligible 
institution will comply with all appli-
cable requirements of this Act; and 
(VII) a statement that satisfies 
the requirements of clauses (ii) and 
(iv) of subparagraph (A). 
(ii) CERTIFICATION.—Not later than 
60 days after the date of receipt of an ap-
plication described in clause (i), the Cor-
poration shall certify in writing the eligible
institution’s provisional certification to 
participate in the scholarship program 
under this Act unless the Corporation de-
termines that good cause exists to deny 
certification. 
(iii) RENEWAL OF PROVISIONAL CER-
TIFICATION.—After receipt of an applica-
tion under clause (i) from an eligible insti-
tution that includes a statement of the eli-
gible institution’s budget completed not 
earlier than 12 months before the date 
such application is filed, the Corporation 
shall renew an eligible institution’s provi-
sional certification for the second and third 
years of the school’s participation in the 
scholarship program under this Act unless 
the Corporation finds—
(I) good cause to deny the re-
newal, including a finding of a pattern 
of violation of requirements described 
in paragraph (3)(A); or 
(II) consistent failure of 25 per-
cent or more of the students receiving 
scholarships under this Act and at-
tending such school to make appro-
priate progress (as determined by the
Corporation) in academic achieve-
ment. 
(iv) DENIAL
OF
CERTIFICATION.—If 
provisional certification or renewal of pro-
visional certification under this subsection 
is denied, then the Corporation shall pro-
vide a written explanation to the eligible 
institution of the reasons for such denial. 
(D) REVOCATION OF ELIGIBILITY.—
(i) IN
GENERAL.—The Corporation, 
after notice and opportunity for a hearing, 
may revoke an eligible institution’s certifi-
cation to participate in the scholarship pro-
gram under this Act for a year succeeding 
the year for which the determination is 
made for—
(I) good cause, including a find-
ing of a pattern of violation of pro-
gram requirements described in para-
graph (3)(A); or 
(II) consistent failure of 25 per-
cent or more of the students receiving 
scholarships under this Act and at-
tending such school to make appro-
priate progress (as determined by the 
Corporation) in academic achieve-
ment. 
(ii) EXPLANATION.—If the certifi-
cation of an eligible institution is revoked, 
the Corporation shall provide a written ex-
planation of the Corporation’s decision to 
such eligible institution and require a pro 
rata refund of the proceeds of the scholar-
ship funds received under this Act. 
(iii) STUDENT ELIGIBILITY NOT AF-
FECTED.—A student receiving a scholar-
ship under this Act who attends an institu-
tion that has had its eligibility revoked 
under this subparagraph may utilize such 
scholarship at another eligible institution. 
(3) PARTICIPATION REQUIREMENTS FOR ELIGI-
BLE INSTITUTIONS.—
(A) REQUIREMENTS.—Each eligible insti-
tution participating in the scholarship program 
under this Act shall—
(i) provide to the Corporation not 
later than June 30 of each year the most 
recent annual statement of the eligible in-
stitution’s budget; and
(ii) charge a student that receives a 
scholarship under this Act not more than 
the cost of tuition and mandatory fees for, 
and (as appropriate) transportation to at-
tend, such eligible institution as other stu-
dents who are residents of the District of 
Columbia and enrolled in such eligible in-
stitution. 
(B) COMPLIANCE.—The Corporation may 
require documentation of compliance with the 
requirements of subparagraph (A), but neither 
the Corporation nor any governmental entity 
may impose requirements upon an eligible insti-
tution as a condition for participation in the 
scholarship program under this Act, other than 
requirements established under this Act. 
SEC. 4. SCHOLARSHIPS AUTHORIZED. 
(a) ELIGIBLE STUDENTS.—The Corporation may 
award tuition scholarships under subsection (d)(1) and en-
hanced achievement scholarships under subsection (d)(2) 
to students preparing to enter kindergarten through grade 
12—
(1) who are residents of the District of Colum-
bia; and
(2) whose family income does not exceed 185 
percent of the poverty line. 
(b) SCHOLARSHIP PRIORITY.—Subject to subsection 
(c), the Corporation shall award scholarships based on the 
following priorities: 
(1) PREVIOUS SCHOLARSHIP RECIPIENTS.—For 
the second and subsequent academic years for which 
scholarships are awarded, the Corporation first shall 
award scholarships to students eligible under sub-
section (a) who received a scholarship from the Cor-
poration in the preceding academic year. 
(2) VICTIMS OF SCHOOL VIOLENCE.—For any 
academic year, if funds remain available after the 
application of paragraph (1), the Corporation shall 
award scholarships to eligible students who do not 
receive an award under such paragraph and who 
have been victims of a documented violent act on 
school grounds. 
(3) DISTRICT OF COLUMBIA SCHOOL AGE CHIL-
DREN.—For any academic year, if funds remain 
after the application of paragraphs (1) and (2), the 
Corporation shall award scholarships to eligible stu-
dents who do not receive an award under such para-
graphs and who are—
(A) enrolled in a public, private, or inde-
pendent elementary or secondary school; or 
(B) 
preparing 
to 
enter 
kindergarten 
through grade 12 at such a school. 
(c) LOTTERY SELECTION.—If, in applying subsection 
(b), the number of students described in a paragraph of 
such subsection is such that the amount available is insuf-
ficient to award the appropriate scholarship amount to 
each such student, the Corporation shall select by lottery 
the students who will receive an award. 
(d) USE OF SCHOLARSHIP.—
(1) TUITION SCHOLARSHIPS.—A tuition schol-
arship may be used for the payment of the cost of 
the tuition and mandatory fees for, and (as appro-
priate) transportation to attend, an eligible institu-
tion located within the geographic boundaries of—
(A) the District of Columbia; 
(B) Montgomery County, Maryland; 
(C) Prince George’s County, Maryland; 
(D) Arlington County, Virginia; 
(E) Alexandria City, Virginia; 
(F) Falls Church City, Virginia;
(G) Fairfax City, Virginia; or 
(H) Fairfax County, Virginia.
(2) ENHANCED ACHIEVEMENT SCHOLARSHIP.—
An enhanced achievement scholarship may be used 
only for the payment of the costs of tuition and 
mandatory fees for, and (as appropriate) transpor-
tation to attend, a program of instruction provided 
by an eligible institution which enhances student 
achievement of the core curriculum and is operated 
outside of regular school hours to supplement the 
regular school program. 
(e) NOT SCHOOL AID.—A scholarship under this Act 
shall be considered assistance to the student and shall not 
be considered assistance to an eligible institution. 
SEC. 5. SCHOLARSHIP AWARDS. 
(a) AWARDS.—From the funds made available under 
this Act, the Corporation shall award a scholarship to a 
student and make scholarship payments in accordance 
with section 6. 
(b) NOTIFICATION.—Each eligible institution that re-
ceives the proceeds of a scholarship payment under sub-
section (a) shall provide the following notifications: 
(1) ENROLLMENT.—Not later than 10 days 
after the date that a student receiving a scholarship 
under this Act is enrolled, the institution shall notify 
the Corporation of the name, address, and grade 
level of such student.
(2) WITHDRAWAL OR EXPULSION.—Not later 
than 10 days after the date of the withdrawal or ex-
pulsion of any student receiving a scholarship under 
this Act, the institution shall notify the Corporation 
of the withdrawal or expulsion. 
(3) REFUSAL OF ADMISSION.—Not later than 
10 days after the date that a student receiving a 
scholarship under this Act is refused admission, the 
institution shall notify the Corporation of the rea-
sons for such a refusal. 
(c) TUITION SCHOLARSHIP.—
(1) EQUAL TO OR BELOW POVERTY LINE.—For 
a student whose family income is equal to or below 
the poverty line, a tuition scholarship may not ex-
ceed the lesser of—
(A) the cost of tuition and mandatory fees 
for, and (as appropriate) transportation to at-
tend, an eligible institution; or 
(B) $5,000 for fiscal year 2004, with such 
amount adjusted in proportion to changes in 
the Consumer Price Index for All Urban Con-
sumers published by the Department of Labor 
for each of fiscal years 2005 through 2008. 
(2) ABOVE
POVERTY
LINE.—For a student 
whose family income is greater than the poverty line,
but not more than 185 percent of the poverty line, 
a tuition scholarship may not exceed the lesser of—
(A) 75 percent of the cost of tuition and 
mandatory fees for, and (as appropriate) trans-
portation to attend, an eligible institution; or 
(B) $3,750 for fiscal year 2004, with such 
amount adjusted in proportion to changes in 
the Consumer Price Index for All Urban Con-
sumers published by the Department of Labor 
for each of fiscal years 2005 through 2008. 
(d) ENHANCED ACHIEVEMENT SCHOLARSHIP.—An 
enhanced achievement scholarship may not exceed the 
lesser of—
(1) the costs of tuition and mandatory fees for, 
and (as appropriate) transportation to attend, a pro-
gram of instruction at an eligible institution; or 
(2) $800 for fiscal year 2004, with such 
amount adjusted in proportion to changes in the 
Consumer Price Index for All Urban Consumers 
published by the Department of Labor for each of 
fiscal years 2005 through 2008. 
SEC. 6. SCHOLARSHIP PAYMENTS. 
(a) PAYMENTS.—The Corporation shall make schol-
arship payments to the parent of a student awarded a 
scholarship under this Act.
(b) DISTRIBUTION OF SCHOLARSHIP FUNDS.—Schol-
arship funds may be distributed by check, or another form 
of disbursement, issued by the Corporation and made pay-
able directly to a parent of a student awarded a scholar-
ship under this Act. The parent may use the scholarship 
funds only for payment of tuition, mandatory fees, and 
transportation costs as described in this Act. 
(c) PRO RATA AMOUNTS
FOR STUDENT WITH-
DRAWAL.—If a student receiving a scholarship under this 
Act withdraws or is expelled from an eligible institution 
after the proceeds of a scholarship is paid to the eligible 
institution, then the eligible institution shall refund to the 
Corporation on a pro rata basis the proportion of any such 
proceeds received for the remaining days of the school 
year. Such refund shall occur not later than 30 days after 
the date of the withdrawal or expulsion of the student. 
SEC. 7. CIVIL RIGHTS. 
(a) IN GENERAL.—An eligible institution partici-
pating in the scholarship program under this Act shall not 
discriminate on the basis of race, color, national origin, 
or sex in carrying out the provisions of this Act. 
(b) APPLICABILITY AND CONSTRUCTION WITH RE-
SPECT TO DISCRIMINATION ON THE BASIS OF SEX.—
(1) APPLICABILITY.—With respect to discrimi-
nation on the basis of sex, subsection (a) shall not
apply to an eligible institution that is controlled by 
a religious organization if the application of sub-
section (a) is inconsistent with the religious tenets 
of the eligible institution. 
(2) CONSTRUCTION.—With respect to discrimi-
nation on the basis of sex, nothing in subsection (a) 
shall be construed to require any person, or public 
or private entity to provide or pay, or to prohibit any 
such person or entity from providing or paying, for 
any benefit or service, including the use of facilities, 
related to an abortion. Nothing in the preceding sen-
tence shall be construed to permit a penalty to be 
imposed on any person or individual because such 
person or individual is seeking or has received any 
benefit or service related to a legal abortion. 
(3) SINGLE-SEX SCHOOLS, CLASSES, OR ACTIVI-
TIES.—With respect to discrimination on the basis 
of sex, nothing in subsection (a) shall be construed 
to prevent a parent from choosing, or an eligible in-
stitution from offering, a single-sex school, class, or 
activity.
(c) 
REVOCATION.—Notwithstanding 
section 
3(f)(2)(D), if the Corporation determines that an eligible 
institution participating in the scholarship program under 
this Act is in violation of subsection (a), then the Corpora-