‘‘(v) support any necessary activities 
associated with the school carrying out the 
purposes of this section. 
‘‘(D) PRIORITY.—In awarding subgrants 
under this subsection, an eligible entity shall 
give priority to an eligible public charter 
school— 
‘‘(i) that has significantly closed any 
achievement gap on the State academic as-
sessments described in section 1111(b)(3) 
among the groups of students described in 
section 1111(b)(2)(C)(v) by improving 
scores; 
‘‘(ii) that— 
‘‘(I)(aa) ranks in at least the top 
25th percentile of the schools in the 
State, as ranked by the percentage of 
students in the proficient or advanced 
level of achievement on the State aca-
demic assessments in mathematics 
and reading or language arts de-
scribed in section 1111(b)(3); or 
‘‘(bb) has an average student 
score on an examination (chosen by 
the Secretary) that is at least in the 
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60th percentile in reading and at least 
in the 75th percentile in mathematics; 
‘‘(II) has, if available, an average 
student academic, longitudinal growth 
on the State academic assessments in 
mathematics and reading described in 
section 1111(b)(3) (as defined by the 
Secretary or State law) that is at or 
above the State average growth on the 
assessments from 1 academic year to 
the next academic year; and 
‘‘(III) serves a high-need student 
population and is eligible to partici-
pate in a schoolwide program under 
section 1114, with additional priority 
given to schools that serve, as com-
pared to other schools that have sub-
mitted an application under this sub-
section— 
‘‘(aa) a greater percentage 
of low-income students; and 
‘‘(bb) a greater percentage 
of not less than 2 groups of stu-
dents 
described 
in 
section 
1111(b)(2)(C)(v)(II); and 
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‘‘(iii) that meets the criteria described 
in clause (i) and serves low-income stu-
dents who have transferred to such school 
under a cooperative agreement described in 
section 1116(b)(11). 
‘‘(E) 
DURATION
OF
SUBGRANT.—A 
subgrant under this subsection shall be awarded 
for a period of not more than 3 years, except 
that an eligible public charter school receiving a 
subgrant under this subsection may, at the dis-
cretion of the eligible entity, continue to expend 
subgrant funds after the end of the subgrant 
period. 
‘‘(2) FACILITY
FINANCING
AND
REVOLVING 
LOAN FUND.—An eligible entity may use not more 
than 25 percent of the amount of the grant funds 
received under this section to establish a reserve ac-
count described in subsection (f) to facilitate public 
charter school facility acquisition and development 
by— 
‘‘(A) conducting credit enhancement initia-
tives (as referred to in subpart 2) in support of 
the development of facilities for eligible public 
charter schools serving students; 
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‘‘(B) establishing a revolving loan fund for 
use by an eligible public charter school receiving 
a subgrant under this subsection from the eligi-
ble entity under such terms as may be deter-
mined by the eligible entity to allow such school 
to expand to serve additional students; 
‘‘(C) facilitating, through direct expendi-
ture or financing, the acquisition or develop-
ment of public charter school buildings by the 
eligible entity or an eligible public charter 
school receiving a subgrant under this sub-
section from the eligible entity, which may be 
used as both permanent locations for eligible 
public charter schools or incubators for growing 
charter schools; or 
‘‘(D) establishing a partnership with 1 or 
more community development financial institu-
tions (as defined in section 103 of the Commu-
nity Development Banking and Financial Insti-
tutions Act of 1994 (12 U.S.C. 4702)) or other 
mission-based financial institutions to carry out 
the activities described in subparagraphs (A), 
(B), and (C). 
‘‘(3) ADMINISTRATIVE TASKS, DISSEMINATION 
ACTIVITIES, AND OUTREACH.— 
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‘‘(A) IN GENERAL.—An eligible entity may 
use not more than 7.5 percent of the grant 
funds awarded under this section to cover ad-
ministrative tasks, dissemination activities, and 
outreach. 
‘‘(B) NONPROFIT
ASSISTANCE.—In car-
rying out the administrative tasks, dissemina-
tion activities, and outreach described in sub-
paragraph (A), an eligible entity may contract 
with an organization described in section 
501(c)(3) of the Internal Revenue Code of 1986 
(26 U.S.C. 501(c)(3)) and exempt from tax 
under section 501(a) of such Code (26 U.S.C. 
501(a)). 
‘‘(f) RESERVE ACCOUNT.— 
‘‘(1) IN GENERAL.—To assist eligible entities in 
the development of new public charter school build-
ings or facilities for eligible public charter schools, 
an eligible entity receiving a grant under this section 
may, in accordance with State and local law, directly 
or indirectly, alone or in collaboration with others, 
deposit the amount of funds described in subsection 
(e)(2) in a reserve account established and main-
tained by the eligible entity. 
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‘‘(2) INVESTMENT.—Funds received under this 
section and deposited in the reserve account estab-
lished under this subsection 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 this subsection shall be 
deposited in the reserve account established under 
this section and used in accordance with the purpose 
described in subsection (a). 
‘‘(4) RECOVERY OF FUNDS.— 
‘‘(A) IN GENERAL.—The Secretary, in ac-
cordance with chapter 37 of title 31, United 
States Code, shall collect— 
‘‘(i) all funds in a reserve account es-
tablished by an eligible entity under this 
subsection if the Secretary determines, not 
earlier than 2 years after the date the eli-
gible entity first received funds under this 
section, that the eligible entity has failed to 
make substantial progress carrying out the 
purpose described in paragraph (1); or 
‘‘(ii) all or a portion of the funds in 
a reserve account established by an eligible 
entity under this subsection if the Sec-
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retary determines that the eligible entity 
has permanently ceased to use all or a por-
tion of funds in such account to accomplish 
the purpose described in paragraph (1). 
‘‘(B) EXERCISE OF AUTHORITY.—The Sec-
retary shall not exercise the authority provided 
under subparagraph (A) to collect from any eli-
gible entity any funds that are being properly 
used to achieve such purpose. 
‘‘(C) PROCEDURES.—Sections 451, 452, 
and 458 of the General Education Provisions 
Act shall apply to the recovery of funds under 
subparagraph (A). 
‘‘(D) 
CONSTRUCTION.—This 
paragraph 
shall not be construed to impair or affect the 
authority of the Secretary to recover funds 
under part D of the General Education Provi-
sions Act. 
‘‘(5) REALLOCATION.—Any funds collected by 
the Secretary under paragraph (4) shall be awarded 
to eligible entities receiving grants under this section 
in the next fiscal year. 
‘‘(g) FINANCIAL
RESPONSIBILITY.—The financial 
records of each eligible entity and eligible public charter 
school receiving a grant or subgrant, respectively, under 
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this section shall be maintained in accordance with gen-
erally accepted accounting principles and shall be subject 
to an annual audit by an independent public accountant. 
‘‘(h) NATIONAL EVALUATION.— 
‘‘(1) 
NATIONAL
EVALUATION.—From 
the 
amounts appropriated under section 5200, the Sec-
retary shall conduct an independent, comprehensive, 
and scientifically sound evaluation, by grant or con-
tract and using the highest quality research design 
available, of the impact of the activities carried out 
under this section on— 
‘‘(A) 
student 
achievement, 
including 
achievement on State academic assessments de-
scribed in section 1111(b)(3) and, if applicable, 
longitudinal academic growth on the assess-
ments (as defined by the Secretary or State 
law); and 
‘‘(B) other areas, as determined by the 
Secretary. 
‘‘(2) REPORT.—Not later than 4 years after the 
date of the enactment of the All Students Achieving 
through Reform Act of 2011, and biannually there-
after, the Secretary shall submit to Congress a re-
port on the results of the evaluation described in 
paragraph (1). 
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‘‘(i) REPORTS.—Each eligible entity receiving a grant 
under this section shall prepare and submit to the Sec-
retary the following: 
‘‘(1) REPORT.—A report that contains such in-
formation as the Secretary may require concerning 
use of the grant funds by the eligible entity, includ-
ing the academic achievement of the students at-
tending eligible public charter schools as a result of 
the grant. Such report shall be submitted before the 
end of the 4-year period beginning on the date of en-
actment of the All Students Achieving through Re-
form Act of 2011 and every 2 years thereafter. 
‘‘(2) PERFORMANCE INFORMATION.—Such per-
formance information as the Secretary may require 
for the national evaluation conducted under sub-
section (h)(1). 
‘‘(j) INAPPLICABILITY.—The provisions of sections 
5201 through 5209 shall not apply to the program under 
this section. 
‘‘(k) DEFINITIONS.—In this section: 
‘‘(1) ADEQUATE YEARLY PROGRESS.—The term 
‘adequate yearly progress’ has the meaning given 
such term in a State’s plan in accordance with sec-
tion 1111(b)(2)(C). 
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‘‘(2) ADMINISTRATIVE TASKS, DISSEMINATION 
ACTIVITIES, AND OUTREACH.—The term ‘adminis-
trative tasks, dissemination activities, and outreach’ 
includes costs and activities associated with— 
‘‘(A) recruiting and selecting students to 
attend eligible public charter schools; 
‘‘(B) outreach to parents of students en-
rolled in identified schools or schools with low 
graduation rates; 
‘‘(C) providing information to such parents 
and school officials at such schools regarding el-
igible public charter schools receiving subgrants 
under this section; 
‘‘(D) necessary oversight of the grant pro-
gram under this section; and 
‘‘(E) initiatives and activities to dissemi-
nate the best practices, programs, or strategies 
learned in eligible public charter schools to 
other public schools operating in the State 
where the eligible entity intends to award sub-
grants under this section. 
‘‘(3) CHARTER
SCHOOL.—The term ‘charter 
school’ means— 
‘‘(A) a charter school, as defined in section 
5211(1); or 
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‘‘(B) a school that meets the requirements 
of such section, except for subparagraph (D), 
and provides prekindergarten or adult education 
services. 
‘‘(4) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means— 
‘‘(A) a State educational agency; 
‘‘(B) an authorized public chartering agen-
cy; 
‘‘(C) a local educational agency that has 
authorized or is planning to authorize a public 
charter school; or 
‘‘(D) an organization, including a non-
profit charter management organization, that 
has an organizational mission and record of 
success supporting the replication and expan-
sion of high-quality charter schools and is— 
‘‘(i) described in section 501(c)(3) of 
the Internal Revenue Code of 1986 (26 
U.S.C. 501(c)(3)); and 
‘‘(ii) exempt from tax under section 
501(a) of such Code (26 U.S.C. 501(a)). 
‘‘(5) ELIGIBLE
PUBLIC
CHARTER
SCHOOL.— 
The term ‘eligible public charter school’ means a 
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