SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Success and Oppor-
tunity through Quality Charter Schools Act’’. 
SEC. 2. REFERENCES. 
Except as otherwise specifically provided, whenever in 
this Act a section or other provision is amended or re-
pealed, such amendment or repeal shall be considered to 
be made to that section or other provision of the Elemen-
tary and Secondary Education Act of 1965 (20 U.S.C. 
6301 et seq.). 
SEC. 3. SUBPART HEADING; PURPOSE. 
(a) SUBPART HEADING.—The heading for subpart 1 
of part B of title V (20 U.S.C. 7221 et seq.) is amended 
to read as follows: ‘‘Charter School Program’’. 
(b) PURPOSE.—Section 5201 (20 U.S.C. 7221) is 
amended to read as follows: 
‘‘SEC. 5201. PURPOSE. 
‘‘It is the purpose of this subpart to— 
‘‘(1) improve the United States education sys-
tem and education opportunities for all Americans 
by supporting innovation in public education in pub-
lic school settings that prepare students to compete 
and contribute to the global economy; 
‘‘(2) provide financial assistance for the plan-
ning, program design, and initial implementation of 
charter schools;
‘‘(3) expand the number of high-quality charter 
schools available to students across the Nation; 
‘‘(4) evaluate the impact of such schools on stu-
dent achievement, families, and communities, and 
share best practices between charter schools and 
other public schools; 
‘‘(5) encourage States to provide support to 
charter schools for facilities financing in an amount 
more nearly commensurate to the amount the States 
have typically provided for traditional public schools; 
‘‘(6) improve student services to increase oppor-
tunities for students with disabilities, English learn-
ers, and other traditionally underserved students to 
attend charter schools and meet challenging State 
academic achievement standards; 
‘‘(7) support efforts to strengthen the charter 
school authorizing process to improve performance 
management, 
including 
transparency, 
oversight, 
monitoring, and evaluation of such schools; and 
‘‘(8) support quality accountability and trans-
parency in the operational performance of all au-
thorized public chartering agencies, which include 
State educational agencies, local educational agen-
cies, and other authorizing entities.’’.
SEC. 4. PROGRAM AUTHORIZED. 
Section 5202 (20 U.S.C. 7221a) is amended to read 
as follows: 
‘‘SEC. 5202. PROGRAM AUTHORIZED. 
‘‘(a) IN GENERAL.—This subpart authorizes the Sec-
retary to carry out a charter school program that supports 
charter schools that serve elementary school and sec-
ondary school students by— 
‘‘(1) supporting the startup of charter schools, 
and the replication and expansion of high-quality 
charter schools; 
‘‘(2) assisting charter schools in accessing cred-
it to acquire and renovate facilities for school use; 
and 
‘‘(3) carrying out national activities to sup-
port— 
‘‘(A) charter school development; 
‘‘(B) the dissemination of best practices of 
charter schools for all schools; 
‘‘(C) the evaluation of the impact of the 
program on schools participating in the pro-
gram; and 
‘‘(D) stronger charter school authorizing. 
‘‘(b) FUNDING
ALLOTMENT.—From the amount 
made available under section 5211 for a fiscal year, the 
Secretary shall—
‘‘(1) reserve 12.5 percent to support charter 
school facilities assistance under section 5204; 
‘‘(2) reserve not more than 10 percent to carry 
out national activities under section 5205; and 
‘‘(3) use the remaining amount after the Sec-
retary reserves funds under paragraphs (1) and (2) 
to carry out section 5203. 
‘‘(c) PRIOR GRANTS AND SUBGRANTS.—The recipi-
ent of a grant or subgrant under this subpart or subpart 
2, as such subpart was in effect on the day before the 
date of enactment of the Success and Opportunity through 
Quality Charter Schools Act, shall continue to receive 
funds in accordance with the terms and conditions of such 
grant or subgrant. 
‘‘(d) GAO REPORT.—Not later than 3 years after the 
date of enactment of the Success and Opportunity through 
Quality Charter Schools Act, the Comptroller General of 
the United States shall submit a report to the Secretary 
and Congress that— 
‘‘(1) examines whether the funds authorized to 
be reserved by State entities for administrative costs 
under section 5203(b)(1)(C) is appropriate; and 
‘‘(2) if determined not to be appropriate, makes 
recommendations on the appropriate reservation of 
funding for such administrative costs.’’.
SEC. 5. GRANTS TO SUPPORT HIGH-QUALITY CHARTER 
SCHOOLS. 
Section 5203 (20 U.S.C. 7221b) is amended to read 
as follows: 
‘‘SEC. 5203. GRANTS TO SUPPORT HIGH-QUALITY CHARTER 
SCHOOLS. 
‘‘(a) IN GENERAL.—From the amount reserved 
under section 5202(b)(3), the Secretary shall award 
grants to State entities having applications approved pur-
suant to subsection (f) to enable such entities to— 
‘‘(1) award subgrants to eligible applicants for 
opening and preparing to operate— 
‘‘(A) new charter schools; 
‘‘(B) replicated, high-quality charter school 
models; or 
‘‘(C) 
expanded, 
high-quality 
charter 
schools; and 
‘‘(2) provide technical assistance to eligible ap-
plicants and authorized public chartering agencies in 
carrying out the activities described in paragraph (1) 
and work with authorized public chartering agencies 
in the State to improve authorizing quality. 
‘‘(b) STATE USES OF FUNDS.— 
‘‘(1) IN GENERAL.—A State entity receiving a 
grant under this section shall—
‘‘(A) use not less than 90 percent of the 
grant funds to award subgrants to eligible ap-
plicants, in accordance with the quality charter 
school program described in the State entity’s 
application approved pursuant to subsection (f), 
for the purposes described in subparagraphs 
(A) through (C) of subsection (a)(1); 
‘‘(B) reserve not less than 7 percent of 
such funds to carry out the activities described 
in subsection (a)(2); and 
‘‘(C) reserve not more than 3 percent of 
such funds for administrative costs which may 
include technical assistance. 
‘‘(2) CONTRACTS AND GRANTS.—A State entity 
may use a grant received under this section to carry 
out the activities described in subparagraphs (A) 
and (B) of paragraph (1) directly or through grants, 
contracts, or cooperative agreements. 
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in 
this Act shall prohibit the Secretary from awarding 
grants to States that use a weighted lottery to give 
slightly better chances for admission to all, or a sub-
set of, educationally disadvantaged students if— 
‘‘(A) the use of weighted lotteries in favor 
of such students is not prohibited by State law,
and such State law is consistent with laws de-
scribed in section 5210(1)(G); and 
‘‘(B) such weighted lotteries are not used 
for the purpose of creating schools exclusively 
to serve a particular subset of students. 
‘‘(c) PROGRAM PERIODS; PEER REVIEW; GRANT 
NUMBER AND AMOUNT; DIVERSITY OF PROJECTS; WAIV-
ERS.— 
‘‘(1) PROGRAM PERIODS.— 
‘‘(A) GRANTS.—A grant awarded by the 
Secretary to a State entity under this section 
shall be for a period of not more than 5 years. 
‘‘(B) SUBGRANTS.—A subgrant awarded 
by a State entity under this section shall be for 
a period of not more than 5 years, of which an 
eligible applicant may use not more than 18 
months for planning and program design. 
‘‘(2) PEER REVIEW.—The Secretary, and each 
State entity receiving a grant under this section, 
shall use a peer review process to review applications 
for assistance under this section. 
‘‘(3) GRANT AWARDS.—The Secretary shall— 
‘‘(A) for each fiscal year for which funds 
are appropriated under section 5211—
‘‘(i) award not less than 3 grants 
under this section; 
‘‘(ii) wholly fund each grant awarded 
under this section, without making con-
tinuation awards; and 
‘‘(iii) fully obligate the funds appro-
priated for the purpose of awarding grants 
under this section in the fiscal year for 
which such grants are awarded; and 
‘‘(B) prior to the start of the final year of 
the grant period of each grant awarded under 
this section to a State entity, review whether 
the State entity is using the grant funds for the 
agreed upon uses of funds and whether the full 
amount of the grant will be needed for the re-
mainder of the grant period and may, as deter-
mined necessary based on that review, termi-
nate or reduce the amount of the grant and re-
allocate the remaining grant funds to other 
State entities during the succeeding grant com-
petition under this section. 
‘‘(4) DIVERSITY OF PROJECTS.—Each State en-
tity receiving a grant under this section shall award 
subgrants under this section in a manner that, to 
the extent possible, ensures that such subgrants—
‘‘(A) are distributed throughout different 
areas, including urban, suburban, and rural 
areas; and 
‘‘(B) will assist charter schools rep-
resenting a variety of educational approaches. 
‘‘(5) WAIVERS.—The Secretary may waive any 
statutory or regulatory requirement over which the 
Secretary exercises administrative authority except 
any such requirement relating to the elements of a 
charter school described in section 5210(1), if— 
‘‘(A) the waiver is requested in an ap-
proved application under this section; and 
‘‘(B) the Secretary determines that grant-
ing such a waiver will promote the purpose of 
this subpart. 
‘‘(d) LIMITATIONS.— 
‘‘(1) GRANTS.—The Secretary shall not award 
a grant to a State entity under this section in a case 
in which such award would result in more than 1 
grant awarded under this section being carried out 
in a State at the same time. 
‘‘(2) SUBGRANTS.—An eligible applicant may 
not receive more than 1 subgrant under this section 
per individual charter school for a 5-year period, un-
less the eligible applicant demonstrates to the State
entity not less than 3 years of improved educational 
results in the areas described in subparagraphs (A) 
and (D) of section 5210(8) for students enrolled in 
such charter school. 
‘‘(e) APPLICATIONS.—A State entity desiring to re-
ceive a grant under this section shall submit an application 
to the Secretary at such time and in such manner as the 
Secretary may require. The application shall include the 
following: 
‘‘(1) DESCRIPTION OF PROGRAM.—A descrip-
tion of the State entity’s objectives under this sec-
tion and how the objectives of the program will be 
carried out, including a description— 
‘‘(A) of how the State entity— 
‘‘(i) will support the opening of new 
charter schools, replicated, high-quality 
charter school models, or expanded, high- 
quality charter schools, and a description 
of the proposed number of each type of 
charter school or model, if applicable, to be 
opened under the State entity’s program; 
‘‘(ii) 
will 
inform 
eligible 
charter 
schools, developers, and authorized public 
chartering agencies of the availability of 
funds under the program;
‘‘(iii) will work with eligible applicants 
to ensure that the eligible applicants access 
all Federal funds that they are eligible to 
receive, and help the charter schools sup-
ported by the applicants and the students 
attending the charter schools— 
‘‘(I) participate in the Federal 
programs in which the schools and 
students are eligible to participate; 
‘‘(II) receive the commensurate 
share of Federal funds the schools 
and students are eligible to receive 
under such programs; and 
‘‘(III) meet the needs of students 
served under such programs, including 
student with disabilities and English 
learners; 
‘‘(iv) will have clear plans and proce-
dures to assist students enrolled in a char-
ter school that closes or loses its charter to 
attend other high-quality schools; 
‘‘(v) in the case in which the State en-
tity is not a State educational agency— 
‘‘(I) will work with the State edu-
cational 
agency 
and 
the 
charter
schools in the State to maximize char-
ter school participation in Federal and 
State programs for charter schools; 
and 
‘‘(II) will work with the State 
educational agency to adequately op-
erate the State entity’s program 
under this section, where applicable; 
‘‘(vi) will ensure each eligible appli-
cant that receives a subgrant under the 
State entity’s program to open and prepare 
to operate a new charter school, a rep-
licated, high-quality charter school model, 
or an expanded, high-quality charter 
school— 
‘‘(I) will ensure such school or 
model meets the requirements under 
section 5210(1); and 
‘‘(II) is prepared to continue to 
operate such school or model, in a 
manner consistent with the eligible 
applicant’s 
application, 
after 
the 
subgrant funds have expired; 
‘‘(vii) will support charter schools in 
local educational agencies with large num-
bers of schools identified by the State for 
improvement, including supporting the use 
of charter schools to improve, or in turning 
around, struggling schools; 
‘‘(viii) will work with charter schools 
to promote inclusion of all students, in-
cluding eliminating any barriers to enroll-
ment for foster youth or unaccompanied 
homeless youth, and support all students 
once they are enrolled to promote retention 
including through the use of fair discipli-
nary practice; 
‘‘(ix) will work with charter schools on 
recruitment practices, including efforts to 
engage groups that may otherwise have 
limited opportunities to participate in char-
ter schools, and to ensure such schools do 
not have in effect policies or procedures 
that may create barriers to enrollment of 
students, including educationally disadvan-
taged students, and are in compliance with 
all Federal and State laws on enrollment 
practices; 
‘‘(x) will share best and promising 
practices between charter schools and
other public schools, including, where ap-
propriate, instruction and professional de-
velopment in core academic subjects, and 
science, technology, engineering, and math 
education, including computer science; 
‘‘(xi) will ensure the charter schools 
receiving funds under the State entity’s 
program meet the educational needs of 
their students, including students with dis-
abilities and English learners; 
‘‘(xii) will support efforts to increase 
quality initiatives, including meeting the 
quality authorizing elements described in 
paragraph (2)(E); 
‘‘(xiii) in the case of a State entity 
not described in clause (xiv), will provide 
oversight of authorizing activity, including 
how the State will approve, actively mon-
itor, and re-approve or revoke the author-
ity of an authorized public chartering 
agency based on the performance of the 
charter schools authorized by such agency 
in the areas of student achievement, stu-
dent safety, financial management, and
compliance with all applicable statutes and 
regulations; 
‘‘(xiv) in the case of a State entity de-
fined in subsection (i)(4), will work with 
the State to provide assistance to and over-
sight of authorized public chartering agen-
cies for authorizing activity described in 
clause (xiii); and 
‘‘(xv) will work with eligible applicants 
receiving a subgrant under the State enti-
ty’s program to support the opening of 
charter schools or charter school models 
described in clause (i) that are secondary 
schools; 
‘‘(B) of the extent to which the State enti-
ty— 
‘‘(i) is able to meet and carry out the 
priorities listed in subsection (f)(2); and 
‘‘(ii) 
is 
working 
to 
develop 
or 
strengthen a cohesive statewide system to 
support the opening of new charter 
schools, replicated, high-quality charter 
school models, or expanded, high-quality 
charter schools;
‘‘(C) of how the State entity will carry out 
the subgrant competition, including— 
‘‘(i) a description of the application 
each eligible applicant desiring to receive a 
subgrant will submit, including— 
‘‘(I) a description of the roles 
and responsibilities of eligible appli-
cants, 
partner 
organizations, 
and 
management organizations, including 
the administrative and contractual 
roles and responsibilities; 
‘‘(II) a description of the quality 
controls agreed to between the eligible 
applicant and the authorized public 
chartering agency involved, such as a 
contract or performance agreement, 
how a school’s performance in the 
State’s academic accountability sys-
tem will be a primary factor for re-
newal or revocation of the school’s 
charter, and how the State entity and 
the authorized public chartering agen-
cy involved will reserve the right to re-
voke or not renew a school’s charter 
based on financial, structural, or oper-
ational factors involving the manage-
ment of the school; 
‘‘(III) a description of how the el-
igible applicant will solicit and con-
sider input from parents and other 
members of the community on the im-
plementation and operation of each 
charter school receiving funds under 
the State entity’s program; and 
‘‘(IV) 
a 
description 
of 
the 
planned activities and expenditures 
for the subgrant funds for purposes of 
opening and preparing to operate a 
new charter school, a replicated, high- 
quality charter school model, or an ex-
panded, high-quality charter school, 
and how the school or model will 
maintain financial sustainability after 
the end of the subgrant period; and 
‘‘(ii) a description of how the State 
entity will review applications; 
‘‘(D) in the case of an entity that partners 
with an outside organization to carry out the 
State entity’s quality charter school program, in
whole or in part, of the roles and responsibil-
ities of this partner; 
‘‘(E) of how the State entity will help the 
charter schools receiving funds under the State 
entity’s program consider the transportation 
needs of the schools’ students; and 
‘‘(F) of how the State entity will support 
diverse charter school models, including models 
that serve rural communities. 
‘‘(2) ASSURANCES.—Assurances, including a 
description of how the assurances will be met, 
that— 
‘‘(A) each charter school receiving funds 
under the State entity’s program will have a 
high degree of autonomy over budget and oper-
ations; 
‘‘(B) the State entity will support charter 
schools in meeting the educational needs of 
their students as described in paragraph 
(1)(A)(xi); 
‘‘(C) the State entity will ensure that the 
authorized public chartering agency of any 
charter school that receives funds under the 
State entity’s program—
‘‘(i) adequately monitors each charter 
school in recruiting, enrolling, and meeting 
the needs of all students, including stu-
dents with disabilities and English learn-
ers; and 
‘‘(ii) ensures that each charter school 
solicits and considers input from parents 
and other members of the community on 
the implementation and operation of the 
school; 
‘‘(D) the State entity will provide adequate 
technical assistance to eligible applicants to— 
‘‘(i) meet the objectives described in 
clauses (viii) and (ix) of paragraph (1)(A) 
and paragraph (2)(B); and 
‘‘(ii) recruit, enroll, and retain tradi-
tionally underserved students, including 
students with disabilities and English 
learners, at rates similar to traditional 
public schools; 
‘‘(E) the State entity will promote quality 
authorizing, such as through providing technical 
assistance and supporting all authorized public 
chartering agencies in the State to improve the
oversight of their charter schools, including 
by— 
‘‘(i) assessing annual performance 
data of the schools, including, as appro-
priate, graduation rates, student academic 
growth, and rates of student attrition; 
‘‘(ii) reviewing the schools’ inde-
pendent, annual audits of financial state-
ments conducted in accordance with gen-
erally accepted accounting principles, and 
ensuring any such audits are publically re-
ported; and 
‘‘(iii) holding charter schools account-
able to the academic, financial, and oper-
ational quality controls agreed to between 
the charter school and the authorized pub-
lic chartering agency involved, such as 
through renewal, non-renewal, or revoca-
tion of the school’s charter; 
‘‘(F) the State entity will work to ensure 
that charter schools are included with the tradi-
tional public schools in decision-making about 
the public school system in the State; and 
‘‘(G) The State entity will ensure that each 
charter school in the State makes publicly avail-
able, consistent with the dissemination require-
ments of the annual State report card, informa-
tion to help parents make informed decisions 
about the education options available to their 
children, including information for each school 
on— 
‘‘(i) the educational program; 
‘‘(ii) student support services; 
‘‘(iii) annual performance and enroll-
ment data, disaggregated by the groups of 
students 
described 
in 
section 
1111(b)(2)(C)(v)(II); and 
‘‘(iv) any other information the State 
requires all other public schools to report 
for purposes of section 1111(h)(1)(D). 
‘‘(3) REQUESTS FOR WAIVERS.—A request and 
justification for waivers of any Federal statutory or 
regulatory provisions that the State entity believes 
are necessary for the successful operation of the 
charter schools that will receive funds under the 
State entity’s program under this section, and a de-
scription of any State or local rules, generally appli-
cable to public schools, that will be waived, or other-
wise not apply to such schools or, in the case of a 
State entity defined in subsection (i)(4), a descrip-
tion of how the State entity will work with the State 
to request necessary waivers where applicable. 
‘‘(f) SELECTION CRITERIA; PRIORITY.— 
‘‘(1) SELECTION
CRITERIA.—The Secretary 
shall award grants to State entities under this sec-
tion on the basis of the quality of the applications 
submitted under subsection (e), after taking into 
consideration— 
‘‘(A) the degree of flexibility afforded by 
the State’s public charter school law and how 
the State entity will work to maximize the flexi-
bility provided to charter schools under the law; 
‘‘(B) the ambitiousness of the State enti-
ty’s objectives for the quality charter school 
program carried out under this section; 
‘‘(C) the quality of the strategy for assess-
ing achievement of those objectives; 
‘‘(D) the likelihood that the eligible appli-
cants receiving subgrants under the program 
will meet those objectives and improve edu-
cational results for students; 
‘‘(E) the State entity’s plan to— 
‘‘(i) adequately monitor the eligible 
applicants receiving subgrants under the 
State entity’s program;
‘‘(ii) work with the authorized public 
chartering agencies involved to avoid dupli-
cation of work for the charter schools and 
authorized public chartering agencies; and 
‘‘(iii) provide adequate technical as-
sistance and support for— 
‘‘(I) the charter schools receiving 
funds under the State entity’s pro-
gram; and 
‘‘(II) quality authorizing efforts 
in the State; and 
‘‘(F) the State entity’s plan to solicit and 
consider input from parents and other members 
of the community on the implementation and 
operation of the charter schools in the State. 
‘‘(2) PRIORITY.—In awarding grants under this 
section, the Secretary shall give priority to State en-
tities to the extent that they meet the following cri-
teria: 
‘‘(A) In the case of a State entity located 
in a State that allows an entity other than a 
local educational agency to be an authorized 
public chartering agency, the State has a qual-
ity authorized public chartering agency that is 
an entity other than a local educational agency.
‘‘(B) The State entity is located in a State 
that does not impose any limitation on the 
number or percentage of charter schools that 
may exist or the number or percentage of stu-
dents that may attend charter schools in the 
State. 
‘‘(C) The State entity is located in a State 
that ensures equitable financing, as compared 
to traditional public schools, for charter schools 
and students in a prompt manner. 
‘‘(D) The State entity is located in a State 
that uses charter schools and best practices 
from charter schools to help improve struggling 
schools and local educational agencies. 
‘‘(E) The State entity partners with an or-
ganization that has a demonstrated record of 
success in developing management organiza-
tions to support the development of charter 
schools in the State. 
‘‘(F) The State entity supports charter 
schools that support at-risk students through 
activities such as dropout prevention, dropout 
recovery, or comprehensive career counseling 
practices.
‘‘(G) The State entity authorizes all char-
ter schools in the State to serve as school food 
authorities. 
‘‘(H) The State entity has taken steps to 
ensure that all authorizing public chartering 
agencies implement best practices for charter 
school authorizing. 
‘‘(g) LOCAL USES OF FUNDS.—An eligible applicant 
receiving a subgrant under this section shall use such 
funds to carry out activities related to opening and pre-
paring to operate a new charter school, a replicated, high- 
quality charter school model, or an expanded, high-quality 
charter school, such as— 
‘‘(1) preparing teachers and school leaders, in-
cluding through professional development; 
‘‘(2) acquiring equipment, educational mate-
rials, and supplies; and 
‘‘(3) necessary renovations and minor facilities 
repairs (excluding construction). 
‘‘(h) REPORTING REQUIREMENTS.—Each State enti-
ty receiving a grant under this section shall submit to the 
Secretary, at the end of the third year of the 5-year grant 
period and at the end of such grant period, a report on— 
‘‘(1) the number of students served by each 
subgrant awarded under this section and, if applica-
ble, how many new students were served during each 
year of the subgrant period; 
‘‘(2) the progress the State entity made toward 
meeting the priorities described in subsection (f)(2), 
as applicable; 
‘‘(3) how the State entity met the objectives of 
the quality charter school program described in the 
State entity’s application under subsection (e), in-
cluding how the State entity met the objective of 
sharing best and promising practices described in 
subsection (e)(1)(A)(x) in areas such as instruction, 
professional development, curricula development, and 
operations between charter schools and other public 
schools, and the extent to which, if known, such 
practices were adopted and implemented by such 
other public schools; 
‘‘(4) how the State entity complied with, and 
ensured that eligible applicants complied with, the 
assurances described in the State entity’s applica-
tion; 
‘‘(5) how the State entity worked with author-
ized public chartering agencies, including how the 
agencies worked with the management company or 
leadership of the schools that received subgrants 
under this section;
‘‘(6) the number of subgrants awarded under 
this section to carry out each of the following: 
‘‘(A) The opening of new charter schools. 
‘‘(B) The opening of replicated, high-qual-
ity charter school models. 
‘‘(C) The opening of expanded, high-qual-
ity charter schools; and 
‘‘(7) how the State entity has worked with char-
ter schools receiving funds under the State entity’s 
program to foster community involvement in the 
planning for and opening of such schools. 
‘‘(i) STATE ENTITY DEFINED.—For purposes of this 
section, the term ‘State entity’ means— 
‘‘(1) a State educational agency; 
‘‘(2) a State charter school board; 
‘‘(3) a Governor of a State; or 
‘‘(4) a charter school support organization.’’. 
SEC. 6. FACILITIES FINANCING ASSISTANCE. 
Section 5204 (20 U.S.C. 7221c) is amended to read 
as follows: 
‘‘SEC. 5204. FACILITIES FINANCING ASSISTANCE. 
‘‘(a) GRANTS TO ELIGIBLE ENTITIES.— 
‘‘(1) IN GENERAL.—From the amount reserved 
under section 5202(b)(1), the Secretary shall not 
use less than 50 percent to award grants to eligible
entities that have the highest-quality applications 
approved under subsection (d), after considering the 
diversity of such applications, to demonstrate inno-
vative methods of assisting charter schools to ad-
dress the cost of acquiring, constructing, and ren-
ovating facilities by enhancing the availability of 
loans or bond financing. 
‘‘(2) ELIGIBLE
ENTITY
DEFINED.—For pur-
poses of this section, the term ‘eligible entity’ 
means— 
‘‘(A) a public entity, such as a State or 
local governmental entity; 
‘‘(B) a private nonprofit entity; or 
‘‘(C) a consortium of entities described in 
subparagraphs (A) and (B). 
‘‘(b) GRANTEE SELECTION.—The Secretary shall 
evaluate each application submitted under subsection (d), 
and shall determine whether the application is sufficient 
to merit approval. 
‘‘(c) GRANT CHARACTERISTICS.—Grants under sub-
section (a) shall be of a sufficient size, scope, and quality 
so as to ensure an effective demonstration of an innovative 
means of enhancing credit for the financing of charter 
school acquisition, construction, or renovation. 
‘‘(d) APPLICATIONS.—
‘‘(1) IN GENERAL.—To receive a grant under 
subsection (a), an eligible entity shall submit to the 
Secretary an application in such form as the Sec-
retary may reasonably require. 
‘‘(2) CONTENTS.—An application submitted 
under paragraph (1) shall contain— 
‘‘(A) a statement identifying the activities 
proposed to be undertaken with funds received 
under subsection (a), including how the eligible 
entity will determine which charter schools will 
receive assistance, and how much and what 
types of assistance charter schools will receive; 
‘‘(B) a description of the involvement of 
charter schools in the application’s development 
and the design of the proposed activities; 
‘‘(C) a description of the eligible entity’s 
expertise in capital market financing; 
‘‘(D) a description of how the proposed ac-
tivities will leverage the maximum amount of 
private-sector financing capital relative to the 
amount of public funding used and otherwise 
enhance credit available to charter schools, in-
cluding how the eligible entity will offer a com-
bination of rates and terms more favorable than 
the rates and terms that a charter school could
receive without assistance from the eligible enti-
ty under this section; 
‘‘(E) a description of how the eligible enti-
ty possesses sufficient expertise in education to 
evaluate the likelihood of success of a charter 
school program for which facilities financing is 
sought; and 
‘‘(F) in the case of an application sub-
mitted by a State governmental entity, a de-
scription of the actions that the entity has 
taken, or will take, to ensure that charter 
schools within the State receive the funding the 
charter schools need to have adequate facilities. 
‘‘(e) CHARTER SCHOOL OBJECTIVES.—An eligible 
entity receiving a grant under this section shall use the 
funds deposited in the reserve account established under 
subsection (f) to assist one or more charter schools to ac-
cess private sector capital to accomplish one or more of 
the following objectives: 
‘‘(1) The acquisition (by purchase, lease, dona-
tion, or otherwise) of an interest (including an inter-
est held by a third party for the benefit of a charter 
school) in improved or unimproved real property 
that is necessary to commence or continue the oper-
ation 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. 
‘‘(3) The predevelopment costs required to as-
sess sites for purposes of paragraph (1) or (2) and 
which are necessary to commence or continue the 
operation of a charter school. 
‘‘(f) RESERVE ACCOUNT.— 
‘‘(1) USE OF FUNDS.—To assist charter schools 
to accomplish the objectives described in subsection 
(e), an eligible entity receiving a grant under sub-
section (a) shall, in accordance with State and local 
law, directly or indirectly, alone or in collaboration 
with others, deposit the funds received under sub-
section (a) (other than funds used for administrative 
costs in accordance with subsection (g)) in a reserve 
account established and maintained by the eligible 
entity for this purpose. Amounts deposited in such 
account shall be used by the eligible entity for one 
or more of the following purposes: 
‘‘(A) Guaranteeing, insuring, and rein-
suring bonds, notes, evidences of debt, loans, 
and interests therein, the proceeds of which are
used for an objective described in subsection 
(e). 
‘‘(B) Guaranteeing and insuring leases of 
personal and real property for an objective de-
scribed in subsection (e). 
‘‘(C) Facilitating financing by identifying 
potential lending sources, encouraging private 
lending, and other similar activities that di-
rectly promote lending to, or for the benefit of, 
charter schools. 
‘‘(D) Facilitating the issuance of bonds by 
charter schools, or by other public entities for 
the benefit of charter schools, by providing 
technical, administrative, and other appropriate 
assistance (including the recruitment of bond 
counsel, underwriters, and potential investors 
and the consolidation of multiple charter school 
projects within a single bond issue). 
‘‘(2) INVESTMENT.—Funds received under this 
section and deposited in the reserve account estab-
lished under paragraph (1) shall be invested in obli-
gations issued or guaranteed by the United States or 
a State, or in other similarly low-risk securities. 
‘‘(3) REINVESTMENT OF EARNINGS.—Any earn-
ings on funds received under subsection (a) shall be
deposited in the reserve account established under 
paragraph (1) and used in accordance with such 
paragraph. 
‘‘(g) LIMITATION ON ADMINISTRATIVE COSTS.—An 
eligible entity may use not more than 2.5 percent of the 
funds received under subsection (a) for the administrative 
costs of carrying out its responsibilities under this section 
(excluding subsection (k)). 
‘‘(h) AUDITS AND REPORTS.— 
‘‘(1) FINANCIAL
RECORD
MAINTENANCE
AND 
AUDIT.—The financial records of each eligible entity 
receiving a grant under subsection (a) shall be main-
tained in accordance with generally accepted ac-
counting principles and shall be subject to an annual 
audit by an independent public accountant. 
‘‘(2) REPORTS.— 
‘‘(A) GRANTEE ANNUAL REPORTS.—Each 
eligible entity receiving a grant under sub-
section (a) annually shall submit to the Sec-
retary a report of its operations and activities 
under this section. 
‘‘(B) CONTENTS.—Each annual report 
submitted under subparagraph (A) shall in-
clude—
‘‘(i) a copy of the most recent finan-
cial statements, and any accompanying 
opinion on such statements, prepared by 
the independent public accountant review-
ing the financial records of the eligible en-
tity; 
‘‘(ii) a copy of any report made on an 
audit of the financial records of the eligible 
entity that was conducted under paragraph 
(1) during the reporting period; 
‘‘(iii) an evaluation by the eligible en-
tity of the effectiveness of its use of the 
Federal funds provided under subsection 
(a) in leveraging private funds; 
‘‘(iv) a listing and description of the 
charter schools served during the reporting 
period, including the amount of funds used 
by each school, the type of project facili-
tated by the grant, and the type of assist-
ance provided to the charter schools; 
‘‘(v) a description of the activities car-
ried out by the eligible entity to assist 
charter schools in meeting the objectives 
set forth in subsection (e); and
‘‘(vi) a description of the characteris-
tics of lenders and other financial institu-
tions participating in the activities under-
taken by the eligible entity under this sec-
tion (excluding subsection (k)) during the 
reporting period. 
‘‘(C) SECRETARIAL
REPORT.—The Sec-
retary shall review the reports submitted under 
subparagraph (A) and shall provide a com-
prehensive annual report to Congress on the ac-
tivities conducted under this section (excluding 
subsection (k)). 
‘‘(i) NO FULL FAITH AND CREDIT FOR GRANTEE 
OBLIGATION.—No financial obligation of an eligible entity 
entered into pursuant to this section (such as an obliga-
tion under a guarantee, bond, note, evidence of debt, or 
loan) shall be an obligation of, or guaranteed in any re-
spect by, the United States. The full faith and credit of 
the United States is not pledged to the payment of funds 
which may be required to be paid under any obligation 
made by an eligible entity pursuant to any provision of 
this section. 
‘‘(j) RECOVERY OF FUNDS.—
‘‘(3) PROCEDURES.—The provisions of sections 
451, 452, and 458 of the General Education Provi-
sions Act 20 U.S.C. 124, 1234a, 1234g shall apply 
to the recovery of funds under paragraph (1). 
‘‘(4) CONSTRUCTION.—This subsection shall 
not be construed to impair or affect the authority of 
the Secretary to recover funds under part D of the 
General Education Provisions Act (20 U.S.C. 1234 
et seq.). 
‘‘(k) PER-PUPIL FACILITIES AID PROGRAM.— 
‘‘(1) DEFINITION OF PER-PUPIL FACILITIES AID 
PROGRAM.—In this subsection, the term ‘per-pupil 
facilities aid program’ means a program in which a 
State makes payments, on a per-pupil basis, to char-
ter 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 
under section 5202(b)(1) remaining after the 
Secretary makes grants under subsection (a), 
the Secretary shall make grants, on a competi-
tive basis, to States to pay for the Federal
share of the cost of establishing or enhancing, 
and administering per-pupil facilities aid pro-
grams. 
‘‘(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 re-
ceives 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. 
‘‘(D) STATE SHARE.—A State receiving a 
grant under this subsection may partner with 1 
or more organizations to provide up to 50 per-
cent of the State share of the cost of estab-
lishing or enhancing, and administering the per- 
pupil facilities aid program. 
‘‘(E) MULTIPLE
GRANTS.—A State may 
receive more than 1 grant under this sub-
section, so long as the amount of such funds 
provided to charter schools increases with each 
successive grant. 
‘‘(3) USE OF FUNDS.— 
‘‘(A) IN GENERAL.—A State that receives 
a grant under this subsection shall use the 
funds made available through the grant to es-
tablish or enhance, and administer, a per-pupil 
facilities aid program for charter schools in the 
State of the applicant. 
‘‘(B) EVALUATIONS; TECHNICAL
ASSIST-
ANCE; 
DISSEMINATION.—From the amount 
made available to a State through a grant 
under this subsection for a fiscal year, the State 
may reserve not more than 5 percent to carry 
out evaluations, to provide technical assistance, 
and to disseminate information. 
‘‘(C) SUPPLEMENT, 
NOT
SUPPLANT.— 
Funds made available under this subsection 
shall be used to supplement, and not supplant, 
State and local public funds expended to pro-
vide per pupil facilities aid programs, oper-
ations financing programs, or other programs, 
for charter schools. 
‘‘(4) REQUIREMENTS.— 
‘‘(A) 
VOLUNTARY
PARTICIPATION.—No 
State may be required to participate in a pro-
gram carried out under this subsection. 
‘‘(B) STATE LAW.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), to be eligible to receive 
a grant under this subsection, a State shall 
establish or enhance, and administer, a 
per-pupil facilities aid program for charter 
schools in the State, that— 
‘‘(I) is specified in State law; and 
‘‘(II) provides annual financing, 
on a per-pupil basis, for charter 
school facilities. 
‘‘(ii) 
SPECIAL
RULE.—Notwith-
standing clause (i), a State that is required 
under State law to provide its charter 
schools with access to adequate facility 
space, but which does not have a per-pupil 
facilities aid program for charter schools 
specified in State law, may be eligible to
receive a grant under this subsection if the 
State agrees to use the funds to develop a 
per-pupil facilities aid program consistent 
with the requirements of this subsection. 
‘‘(5) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, a State shall submit an 
application to the Secretary at such time, in such 
manner, and containing such information as the Sec-
retary may require.’’. 
SEC. 7. NATIONAL ACTIVITIES. 
Section 5205 (20 U.S.C. 7221d) is amended to read 
as follows: 
‘‘SEC. 5205. NATIONAL ACTIVITIES. 
‘‘(a) IN GENERAL.—From the amount reserved 
under section 5202(b)(2), the Secretary shall— 
‘‘(1) use not less than 75 percent of such funds 
to award grants in accordance with subsection (b); 
and 
‘‘(2) use not more than 25 percent of such 
funds to— 
‘‘(A) provide technical assistance to State 
entities in awarding subgrants under section 
5203, and eligible entities and States receiving 
grants under section 5204; 
‘‘(B) disseminate best practices; and
‘‘(C) evaluate the impact of the charter 
school program, including the impact on stu-
dent achievement, carried out under this sub-
part. 
‘‘(b) GRANTS.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
grants, on a competitive basis, to eligible applicants 
for the purpose of carrying out the activities de-
scribed in section 5202(a)(1), subparagraphs (A) 
through (C) of section 5203(a)(1), and section 
5203(g). 
‘‘(2) TERMS AND CONDITIONS.—Except as oth-
erwise provided in this subsection, grants awarded 
under this subsection shall have the same terms and 
conditions as grants awarded to State entities under 
section 5203. 
‘‘(3) 
CHARTER
MANAGEMENT
ORGANIZA-
TIONS.—The Secretary shall— 
‘‘(A) use not less than 75 percent of the 
funds described in subsection (a)(1) to make 
grants, on a competitive basis, to eligible appli-
cants described in paragraph (4)(B); and 
‘‘(B) notwithstanding paragraphs (1)(A) 
and (2) of section 5203(f)—
‘‘(i) award grants to eligible appli-
cants on the basis of the quality of the ap-
plications submitted under this subsection; 
and 
‘‘(ii) in awarding grants to eligible ap-
plicants described in paragraph (4)(B), 
take into consideration whether such an el-
igible applicant— 
‘‘(I) demonstrates a high propor-
tion of high-quality charter schools 
within the network of the eligible ap-
plicant; 
‘‘(II) demonstrates success in 
serving students who are educationally 
disadvantaged; 
‘‘(III) does not have a significant 
proportion of charter schools that 
have been closed, had their charter re-
voked for compliance issues, or had 
their affiliation with such eligible ap-
plicant revoked; 
‘‘(IV) has sufficient procedures in 
effect to ensure timely closure of low- 
performing or financially-mismanaged 
charter schools and clear plans and
procedures in effect for the students 
in such schools to attend other high- 
quality schools; and 
‘‘(V) demonstrates success in 
working with schools identified for im-
provement by the State. 
‘‘(4) ELIGIBLE APPLICANT DEFINED.—For pur-
poses of this subsection, the term ‘eligible applicant’ 
means an eligible applicant (as defined in section 
5210) that— 
‘‘(A) desires to open a charter school in— 
‘‘(i) a State that did not apply for a 
grant under section 5203; or 
‘‘(ii) a State that did not receive a 
grant under section 5203; or 
‘‘(B) is a charter management organiza-
tion. 
‘‘(c) CONTRACTS AND GRANTS.—The Secretary may 
carry out any of the activities described in this section di-
rectly or through grants, contracts, or cooperative agree-
ments.’’. 
SEC. 8. RECORDS TRANSFER. 
Section 5208 (20 U.S.C. 7221g) is amended— 
(1) by inserting ‘‘as quickly as possible and’’ 
before ‘‘to the extent practicable’’; and
(2) by striking ‘‘section 602’’ and inserting 
‘‘section 602(14)’’. 
SEC. 9. DEFINITIONS. 
Section 5210 (20 U.S.C. 7221i) is amended— 
(1) by amending paragraph (1) to read as fol-
lows: 
‘‘(1) CHARTER
SCHOOL.—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 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 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;
‘‘(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, part B of the Individuals with Disabil-
ities Education Act, the Americans with Dis-
abilities Act of 1990 (42 U.S.C. 12101 et seq.), 
and section 444 of the General Education Pro-
visions Act (20 U.S.C. 1232(g)) (commonly 
known as the ‘Family Education Rights and 
Privacy Act of 1974’); 
‘‘(H) is a school to which parents choose to 
send their children, and admits students on the 
basis of a lottery if more students apply for ad-
mission than can be accommodated, except that 
in cases in which students who are enrolled in 
a charter school affiliated (such as by sharing 
a network) with another charter school, those 
students may be automatically enrolled in the 
next grade level at such other charter school, so
long as a lottery is used to fill seats created 
through regular attrition in student enrollment; 
‘‘(I) agrees to comply with the same Fed-
eral and State audit requirements as do other 
elementary schools and secondary schools in the 
State, unless such State audit requirements are 
waived by the State; 
‘‘(J) meets all applicable Federal, State, 
and local health and safety requirements; 
‘‘(K) operates in accordance with State 
law; 
‘‘(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; and 
‘‘(M) may serve prekindergarten or post-
secondary students.’’; 
(2) by redesignating paragraphs (2) through 
(4) as paragraphs (4) through (6), respectively;
(3) by inserting after paragraph (1), the fol-
lowing: 
‘‘(2) CHARTER MANAGEMENT ORGANIZATION.— 
The term ‘charter management organization’ means 
a not-for-profit organization that manages a network 
of charter schools linked by centralized support, op-
erations, and oversight. 
‘‘(3) CHARTER
SCHOOL
SUPPORT
ORGANIZA-
TION.—The term ‘charter school support organiza-
tion’ means a nonprofit, nongovernmental entity that 
is not an authorized public chartering agency, which 
provides on a statewide basis— 
‘‘(A) assistance to developers during the 
planning, program design, and initial implemen-
tation of a charter school; and 
‘‘(B) technical assistance to charter schools 
to operate such schools.’’; 
(4) in paragraph (5)(B), as so redesignated, by 
striking ‘‘under section 5203(d)(3)’’; and 
(5) by adding at the end the following: 
‘‘(7) 
EXPANDED, 
HIGH-QUALITY
CHARTER 
SCHOOL.—The term ‘expanded, high-quality charter 
school’ means a high-quality charter school that has 
either significantly increased its enrollment or added 
one or more grades to its school.
‘‘(8) HIGH-QUALITY
CHARTER
SCHOOL.—The 
term ‘high-quality charter school’ means a charter 
school that— 
‘‘(A) shows evidence of strong academic re-
sults, which may include strong academic 
growth as determined by a State; 
‘‘(B) has no significant issues in the areas 
of student safety, operational and financial 
management, or statutory or regulatory compli-
ance; 
‘‘(C) has demonstrated success in signifi-
cantly increasing student academic achieve-
ment, including graduation rates where applica-
ble, consistent with the requirements under title 
I, for all students served by the charter school; 
and 
‘‘(D) has demonstrated success in increas-
ing student academic achievement, including 
graduation rates where applicable, for the 
groups 
of 
students 
described 
in 
section 
1111(b)(2)(C)(v)(II), except that such dem-
onstration is not required in a case in which the 
number of students in a group is insufficient to 
yield statistically reliable information or the re-
sults would reveal personally identifiable infor-
mation about an individual student. 
‘‘(9) REPLICATED, 
HIGH-QUALITY
CHARTER 
SCHOOL MODEL.—The term ‘replicated, high-quality 
charter school model’ means a high-quality charter 
school that has opened a new campus under an ex-
isting charter or an additional charter if required or 
permitted by State law.’’. 
SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 
Section 5211 (20 U.S.C. 7221j) is amended to read 
as follows: 
‘‘SEC. 5211. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this subpart $300,000,000 for fiscal year 2015 and each 
of the 5 succeeding fiscal years.’’. 
SEC. 11. CONFORMING AMENDMENTS. 
(a) REPEAL.—Subpart 2 of part B of title V (20 
U.S.C. 7223 et seq.) is repealed. 
(b) TABLE OF CONTENTS.—The table of contents in 
section 2 is amended— 
(1) by striking the item relating to subpart 1 
of part B of title V and inserting the following: 
‘‘Subpart 1—Charter School Program’’; 
(2) by striking the item relating to section 5203 
and inserting the following: 
‘‘Sec. 5203. Grants to support high-quality charter schools.’’;
(3) by striking the item relating to section 5204 
and inserting the following: 
‘‘Sec. 5204. Facilities financing assistance.’’; 
and 
(4) by striking the items relating to subpart 2 
of part B of title V. 
Passed the House of Representatives May 9, 2014. 
Attest: 
Clerk.
113TH CONGRESS 
2D SESSION 
H. R. 10 
AN ACT 
To amend the charter school program under the 
Elementary and Secondary Education Act of 1965.