Title: COAT Act
Policy area: Education

Summary:
Charter Oversight, Accountability, and Transparency Act or the COAT Act
This bill requires state educational agencies, in order to receive certain federal funds, to ensure that each contract between a charter school located in the state and a private charter management organization includes certain compliance requirements.
Specifically, such organization must annually disclose certain information to the Department of Education (ED), including the identity of each charter school it operates or manages, the amount expended on operations and administration, information about its contracts, and an audited income statement. ED must publish such information on its website.
Additionally, such organization must hold board meetings that are open and accessible to the public.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5984 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 5984

To amend the Elementary and Secondary Education Act of 1965 to improve 
 oversight of private charter management organizations, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 27, 2020

 Ms. Tlaib (for herself, Mr. Blumenauer, Mr. Cicilline, Mr. Clay, Mr. 
DeFazio, Ms. DeLauro, Mrs. Dingell, Mr. Garcia of Illinois, Ms. Garcia 
of Texas, Ms. Haaland, Mrs. Hayes, Ms. Jayapal, Ms. Kelly of Illinois, 
   Mr. Khanna, Mr. Kildee, Mrs. Lawrence, Mr. Levin of Michigan, Mr. 
   McNerney, Ms. Moore, Ms. Ocasio-Cortez, Ms. Omar, Mr. Pocan, Ms. 
Porter, Ms. Pressley, Mr. Raskin, Mr. Ryan, Ms. Schakowsky, Ms. Sewell 
   of Alabama, Ms. Shalala, Ms. Slotkin, Ms. Stevens, Mr. Vela, Ms. 
 Velazquez, Ms. Wild, and Mr. Wilson of South Carolina) introduced the 
 following bill; which was referred to the Committee on Education and 
                                 Labor

_______________________________________________________________________

                                 A BILL


 
To amend the Elementary and Secondary Education Act of 1965 to improve 
 oversight of private charter management organizations, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Charter Oversight, Accountability, 
and Transparency Act'' or the ``COAT Act''.

SEC. 2. OVERSIGHT OF PRIVATE CHARTER MANAGEMENT ORGANIZATIONS.

    (a) State Plan Assurance.--Section 1111(g) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6311(g)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (M), by striking ``and'' at the 
                end;
                    (B) in subparagraph (N), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(O) the State educational agency will ensure that 
                each contract between a charter school located in the 
                State and a private charter management organization for 
                the operation or management of the charter school 
                satisfies the requirements described in paragraph 
                (5).''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Private charter management organization oversight.--
                    ``(A) In general.--A contract described in 
                paragraph (2)(O) shall require a private charter 
                management organization to comply, while under 
                contract, with the following:
                            ``(i) Annual disclosures.--The private 
                        charter management organization shall disclose 
                        annually to the Secretary, for the most 
                        recently completed fiscal year, the following 
                        information:
                                    ``(I) The identity of each charter 
                                school operated or managed by the 
                                private charter management 
                                organization.
                                    ``(II) The identity of each 
                                executive, including the chief 
                                executive officer, chief operating 
                                officer, chief financial officer, and 
                                general counsel, of the private charter 
                                management organization (with updates 
                                provided to the Secretary not later 
                                than one month after a change with 
                                respect to any such executive).
                                    ``(III) The salary of each such 
                                executive.
                                    ``(IV) The amount earned in excess 
                                of salary by each such executive.
                                    ``(V) The amount expended by the 
                                private charter management organization 
                                on the following:
                                            ``(aa) The operations of 
                                        each charter school that is 
                                        served by the private charter 
                                        management organization.
                                            ``(bb) The administration 
                                        of the private charter 
                                        management organization, 
                                        excluding amounts accounted for 
                                        under item (aa).
                                    ``(VI) An audited income statement 
                                and balance sheet demonstrating 
                                revenue, costs, and profit margin 
                                (prepared in accordance with generally 
                                accepted accounting principles).
                                    ``(VII) The amount expended by the 
                                private charter management 
                                organization, and the percentage of the 
                                annual budget of the private charter 
                                management organization that each such 
                                amount comprises, for the following:
                                            ``(aa) Administrative 
                                        costs.
                                            ``(bb) Costs of advertising 
                                        and marketing.
                                            ``(cc) Salary and benefits 
                                        for teachers, support staff, 
                                        school leaders (including the 
                                        principal and vice principal), 
                                        and special education 
                                        instructional support staff.
                                            ``(dd) Costs of 
                                        instructional supplies, 
                                        including books, writing 
                                        material, and curriculum 
                                        material.
                                            ``(ee) Any other cost 
                                        exceeding one percent of the 
                                        annual budget of the private 
                                        charter management 
                                        organization.
                                    ``(VIII) Whether the private 
                                charter management organization is a 
                                for-profit or nonprofit organization.
                                    ``(IX) The identity of any entity 
                                that has entered into a contract with 
                                the private charter management 
                                organization and with respect to which 
                                the private charter management 
                                organization--
                                            ``(aa) owns a security;
                                            ``(bb) extends credit;
                                            ``(cc) is a parent, 
                                        subsidiary, or sibling company; 
                                        or
                                            ``(dd) is under common 
                                        control.
                            ``(ii) Board meetings.--The private charter 
                        management organization shall--
                                    ``(I) hold board meetings that are 
                                open to the public;
                                    ``(II) one week prior to the date 
                                of a board meeting, issue a public 
                                notice of the meeting; and
                                    ``(III) ensure that board meetings 
                                are reasonably accessible to the 
                                community by holding the meetings 
                                during a time of day that is reasonably 
                                convenient for the parents of children 
                                enrolled in a charter school served by 
                                the private charter management 
                                organization.
                    ``(B) Private charter management organization 
                defined.--For purposes of this subsection, the term 
                `private charter management organization' means a 
                private organization that operates or manages a charter 
                school or a network of charter schools linked by 
                centralized support, operations, and oversight, without 
                regard to whether such organization is a for-profit or 
                nonprofit organization.''.
    (b) Public Availability and Report to Congress.--Not later than six 
months after receiving information disclosed pursuant to section 
1111(g)(5) of the Elementary and Secondary Education Act of 1965, as 
added by subsection (a), the Secretary of Education shall--
            (1) make available the information on a public website of 
        the Department of Education; and
            (2) submit to the Committee on Education and Labor of the 
        House of Representatives and the Committee on Health, 
        Education, Labor, and Pensions of the Senate a report 
        containing the information.
    (c) Effective Date.--The amendment made in subsection (a) shall 
apply with respect to contracts entered into, renewed, or modified on 
or after the date of the enactment of this Act.
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