I 113th CONGRESS 1st Session H. R. 2252 IN THE HOUSE OF REPRESENTATIVES June 4, 2013 Mr. Polis (for himself, Mr. Petri , Mr. Hinojosa , Mr. Paulsen , Mr. Guthrie , Mrs. Davis of California , Mr. Delaney , and Mr. Schock ) introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To amend the charter school program under the Elementary and Secondary Education Act of 1965.

1. Short title This Act may be cited as the All Students Achieving through Reform Act of 2013 or the All-STAR Act of 2013 . 2. References Except as otherwise specifically provided, whenever in this Act a section or other provision is amended or repealed, such amendment or repeal shall be considered to be made to that section or other provision of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.). 3. Purpose Section 5201 ( 20 U.S.C. 7221 ) is amended to read as follows: 5201. Purpose It is the purpose of this subpart to— (1) improve the United States education system and educational opportunities for all Americans by supporting innovation in public education in public school settings that prepare students to compete and contribute to the global economy; (2) provide financial assistance for the planning, 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 student 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 opportunities for students with disabilities, limited English proficient students, and other traditionally underserved students to attend charter schools and meet challenging State academic achievement standards; and (7) support efforts to strengthen the charter school authorizing process to improve performance management, including transparency, monitoring, and evaluation of such schools. . 4. Program authorized Section 5202 (20 U.S.C. 7221a) is amended to read as follows: 5202. Program authorized (a) In general This subpart authorizes the Secretary to carry out a charter school program that supports charter schools that serve elementary school and secondary school students by— (1) supporting the startup, replication, and expansion of charter schools; (2) assisting charter schools in accessing credit to acquire and renovate facilities for school use; and (3) carrying out national and local activities to support— (A) the development of high-quality charter schools; (B) the dissemination of best practices of charter schools for all schools; and (C) the evaluation of the impact of the program on schools participating in the program. (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 2.5 percent to carry out the technical assistance and best practices under section 5205(a) and the evaluation under section 5205(b), of which 1 percent shall be used to carry out such evaluation; (3) reserve not more than 20 percent to award grants for local activities under section 5205(c); and (4) use the remaining amount after the Secretary reserves funds under paragraphs (1) through (4) to carry out section 5203. (c) Prior grants and subgrants The recipient 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 All Students Achieving through Reform Act of 2013, shall continue to receive funds in accordance with the terms and conditions of such grant or subgrant. . 5. Grants to support high-quality charter schools Section 5203 ( 20 U.S.C. 7221b ) is amended to read as follows: 5203. Grants to support high-quality charter schools (a) Grants to covered entities (1) In general Subject to paragraph (2), from the amount reserved under 5202(b)(5), the Secretary shall award grants to covered entities having applications approved pursuant to subsection (f) to enable such entities to— (A) award subgrants to eligible applicants for— (i) opening new charter schools; (ii) replicating high-quality charter school models; or (iii) expanding high-quality charter schools; and (B) provide technical assistance to eligible applicants 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. (2) Special rule In the case in which a covered entity that is a State educational agency elects not to receive a grant under this section or does not have an application approved under subsection (f), the Secretary may award a grant to an eligible applicant that— (A) serves such State; (B) submits an application to the Secretary that would be approved pursuant to section 5205(c) if such eligible applicant were to apply for a grant under such section; and (C) has not received a grant under such section 5205(c). (b) Uses of funds for covered entities (1) In general A covered entity receiving a grant under this section shall— (A) use 90 percent of the grant funds to award subgrants to eligible applicants, in accordance with the quality charter school program described in the covered entity’s application approved pursuant to subsection (f), for the purposes described in clauses (i) through (iii) of subsection (a)(1)(A); and (B) reserve 10 percent of such funds to carry out the activities described in subsection (a)(1)(B), of which not more than 30 percent may be used for administrative costs which may include technical assistance. (2) Contracts and grants A covered 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. (c) Program periods; peer review; grant number and amount; diversity of projects; waivers (1) Program periods (A) Grants A grant awarded by the Secretary to a covered entity under this section shall be for a period of not more than 3 years, except that the covered entity may, at the discretion of the Secretary, continue to expend grant funds after the end of such 3-year period to award subgrants in accordance with subsection (b)(1)(A) . (B) Subgrants A subgrant awarded by a covered entity to an eligible applicant under this section shall be for a period of not more than 3 years. (2) Peer Review The Secretary, and each covered entity receiving a grant under this section, shall use a peer review process to review applications for assistance under this section. (3) Grant number and amount The Secretary shall ensure that the number of grants awarded under this section and the award amounts will allow for a sufficient number of new grants to be awarded under this section for each succeeding fiscal year. (4) Diversity of Projects Each covered entity 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 representing 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) or to an applicable civil rights requirement, if— (A) the waiver is requested in an approved application under this section; and (B) the Secretary determines that granting such a waiver will promote the purpose of this subpart. (d) Limitations (1) Grants A covered entity may not receive more than 1 grant under this section, unless the entity— (A) for each charter school supported under the first grant received under this section, provides aggregate data demonstrating that the students enrolled in the charter school have experienced demonstrated improvement in academic achievement; and (B) demonstrates that the funds provided under the additional grant will be awarded to replicate high-quality charter school models or expand high-quality charter schools. (2) Subgrants A charter school may not receive funds from more than 1 subgrant awarded to an eligible applicant under this section. (e) Applications A covered entity desiring to receive 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 description of the covered entity’s objectives in carrying out a quality charter school program under this section and how the objectives of the program will be carried out, including a description— (A) of how the entity— (i) will support both new charter school startup and the expansion and replication of high-quality charter school models; (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 applicants access all Federal funds that they are eligible to receive, and help the charter schools supported 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; and (II) receive the commensurate share of Federal funds the schools and students are eligible to receive under such programs; (iv) in the case in which the entity is not a State educational agency— (I) will work with the State educational agency and the charter schools in the State to maximize charter school participation in Federal and State programs for charter schools; and (II) will work with the State educational agency to adequately operate the entity’s program under this section, where applicable; (v) will ensure eligible applicants that receive a subgrant under the entity’s program are prepared to continue to operate the charter schools receiving the subgrant funds once the funds have expired; (vi) will support charter schools participating in the entity’s program and that are in local educational agencies with large numbers of schools that must comply with the requirements of section 1116(b); (vii) will work with charter schools participating in the entity’s program to promote inclusion of all students and support all students once they are enrolled to promote retention; (viii) will work with such charter schools on recruitment practices, including efforts to engage groups that may otherwise have limited opportunities to participate in charter schools; (ix) will share best and promising practices between charter schools and other public schools, including, where appropriate, instruction and professional development in science, math, technology, and engineering education; (x) will ensure the charter schools they support can meet the educational needs of their students, including students with disabilities and limited English proficient students; and (xi) will support efforts to increase quality initiatives, including meeting the quality authorizing elements described in paragraph (2)(E); (B) of the extent to which the entity— (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, replication of high-quality charter school models, and the expansion of high-quality charter schools; (C) of how the 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 applicants, 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, and how a school’s performance on the State’s accountability system established under section 1111(b)(2)(A) will be a primary factor for renewal; and (III) a description of how the eligible applicant will solicit and consider input from parents and other members of the community on the planning, implementation, and operation of each charter school receiving funds under the entity’s program; and (ii) a description of how the entity will review applications; (D) in the case of an entity that partners with an outside organization to carry out the entity’s quality charter school program, in whole or in part, of the roles and responsibilities of this partner; (E) of how the entity will support charter schools in providing for the transportation needs of their students; and (F) of how the 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 entity’s program will have a high degree of autonomy over budget and operations; (B) the entity will support charter schools in meeting the educational needs of their students as described in paragraph (1)(A)(x); (C) the entity will ensure that the authorized public chartering agency of any charter school that receives funds under the entity’s program— (i) ensures that each charter school is meeting the obligations under this Act, part B of the Individuals with Disabilities Education Act, title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, the Americans with Disabilities Act of 1990, section 444 of the General Education Provisions Act (commonly known as the Family Educational Rights and Privacy Act of 1974 ), and title IX of the Education Amendments of 1972; (ii) adequately monitors and hold accountable each charter school with respect to recruiting, enrolling, and meeting the needs of all students, including students with disabilities and limited English proficient students; (iii) ensures that each charter school provides substantive outreach to students from low-income families in its plans to open new charter schools, replicate high-quality charter school models, or expand existing high-quality charter schools; and (iv) 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 entity will provide adequate technical assistance to eligible applicants to— (i) meet the objectives described in clauses (vii) and (viii) of paragraph (1)(A) and paragraph (2)(B); and (ii) enroll traditionally underserved students, including students with disabilities and limited English proficient students, to promote an inclusive education environment; (E) the entity will promote quality authorizing, such as through providing technical assistance, to support all authorized public chartering agencies in the State to improve the monitoring of their charter schools, including by— (i) assessing annual performance data of the schools, including, as appropriate, graduation rates and student growth; and (ii) reviewing the schools’ independent, annual audits of financial statements conducted in accordance with generally accepted accounting principles, and ensuring any such audits are publicly reported; (F) the entity will work to ensure that charter schools are included with the traditional public local educational agencies in decision-making about the public school system in the State; and (G) the entity will ensure that each charter school in the State make publicly available, consistent with the dissemination requirements of the annual State report card, the information parents need to make informed decisions about the educational options available to their children, including information on the educational program, student support services, and annual performance and enrollment data for the groups of students described in section 1111(b)(2)(C)(v)(II). (3) Requests for waivers A request and justification, meeting the requirements of subparagraphs (A) and (B) of section 5203(c)(5), for waivers of any Federal statutory or regulatory provisions that the entity believes are necessary for the successful operation of the charter schools that will receive funds under the entity’s program under this section, and a description of any State or local rules, generally applicable to public schools, that will be waived, or otherwise not apply to such schools. (f) Selection criteria; priority (1) Selection criteria The Secretary shall award grants under this section to covered entities on the basis of the quality of the applications submitted under subsection (e), after taking into consideration— (A) for covered entities described in paragraphs (1) and (3) of subsection (i)— (i) the degree of flexibility afforded by the State’s public charter school law and how the entity will work to maximize the flexibility provided to charter schools under the law; (ii) the ambitiousness of the entity’s objectives for the quality charter school program carried out under this section; (iii) the quality of the strategy for assessing achievement of those objectives; (iv) the likelihood that the eligible applicants receiving subgrants under the program will meet those objectives and improve educational results for students; (v) the proposed number of new charter schools to be opened, and the proposed number of high-quality charter schools to be replicated or expanded under the program; (vi) the entity’s plan to— (I) adequately monitor the eligible applicants receiving subgrants under the entity’s program; and (II) work with the authorized public chartering agencies involved to avoid duplication of work for the charter schools and authorized public chartering agencies; (vii) the entity’s plan to provide adequate technical assistance, as described in the entity’s application under subsection (e) , for the eligible applicants receiving subgrants under the entity’s program under this section; (viii) the entity’s plan to support quality authorizing efforts in the State, consistent with the objectives described in clause (ii) ; and (ix) the 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; (B) for covered entities described in paragraphs (2) and (4) of subsection (i)— (i) the ambitiousness of the entity’s objectives for the quality charter school program carried out under this section; (ii) the quality of the strategy for assessing achievement of those objectives; (iii) the likelihood that the eligible applicants receiving subgrants under the entity’s program will meet those objectives and improve educational results for students; (iv) the proposed number of new charter schools to be opened, and the proposed number of high-quality charter schools to be replicated or expanded under the program; (v) the entity’s plan to adequately monitor the eligible applicants receiving subgrants under the entity’s program; (vi) the entity’s plan to provide adequate technical assistance, as described in the entity’s application under subsection (e), for the eligible applicants receiving subgrants under the entity’s program under this section; (vii) the extent to which the entity has policies and procedures to ensure that charter schools in the area served by the entity— (I) have equitable access to facilities available to other public schools in such area; or (II) are not denied access to available public school facilities in such area; and (viii) the extent to which the entity demonstrates support for public school choice and provides parents with information regarding charter school alternatives; and (C) for covered entities described in subsection (i)(2), in addition to taking into consideration the items described in clauses (i) through (viii) of subparagraph (B), the entity’s record of success in authorizing and supporting high-quality charter schools. (2) Priority In awarding grants under this section, the Secretary shall give priority to covered entities to the extent that such entities meet the following criteria: (A) States For covered entities described in paragraphs (1) and (3) of subsection (i): (i) The entity is located in a State that has a quality authorized public chartering agency that is an entity other than a local educational agency. (ii) The 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 students that may attend charter schools in the State. (iii) The 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. (iv) The 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. (v) The entity partners with an organization that has a demonstrated record of success in developing management organizations to support the development of charter schools in the State. (vi) The entity demonstrates quality policies and practices to support and monitor charter schools through factors including— (I) the proportion of high-quality charter schools in the State; and (II) the proportion of charter schools enrolling, at a rate similar to traditional public schools, traditionally underserved students, including students with disabilities and limited English proficient students. (vii) The entity supports charter schools that support at-risk students through activities such as dropout prevention or dropout recovery. (viii) The entity authorizes all charter schools in the State to serve as school food authorities. (ix) The entity is located in a State that authorizes any charter school to be a local educational agency in accordance with State law. (x) The entity is located in a State that allows appeals of decisions of authorized public chartering agencies. (xi) The entity is located in a State that funds local educational agencies based on an average daily enrollment or attendance count or based on more than one annual enrollment count. (xii) The entity is located in a State with a law or policy such that per pupil revenues are shared between local educational agencies to reflect split student enrollment in 2 or more part-time educational programs operated or authorized by different local educational agencies. (xiii) The entity has taken steps to ensure that all authorized public chartering agencies implement practices that comply with nationally recognized best practices for quality charter school authorizing. (xiv) The entity has policies and procedures to ensure that charter schools identified as failing under the accountability system established under section 1111(b)(2)(A) of the State in which the entity is located are closed, do not have their charters renewed, or are not otherwise allowed to continue operating, except in special circumstances determined by the State for charter schools— (I) designated through a State system as alternative education programs with an explicit mission to serve students who have failed in traditional systems or large proportions of extremely at-risk students, such as students with moderate to profound disabilities or incarcerated youth; and (II) that are required to comply with the accountability system established under section 1111(b)(2)(A) of the State. (B) Local educational agencies and authorized public chartering agencies For covered entities described in paragraphs (2) and (4) of subsection (i): (i) The entity does not impose, to the extent allowable under State law, any limitation on the number or percentage of charter schools that may exist or the number or percentage of students that may attend charter schools. (ii) The entity provides, to the extent allowed under State law, equitable financing, as compared to traditional public schools, for charter schools and students who attend such schools in a prompt manner. (iii) The entity demonstrates quality policies and practices to support and monitor charter schools through factors, including the proportion of charter schools enrolling, at a rate similar to traditional public schools, traditionally underserved students, including students with disabilities and limited English proficient students. (iv) The entity supports charter schools that support at-risk students through activities such as dropout prevention or dropout recovery. (v) The entity authorizes all charter schools it authorizes to serve as school food authorities to the extent allowed under State law. (vi) The entity has taken steps to ensure that it complies with nationally recognized best practices for quality charter school authorizing. (vii) The entity ensures that charter schools identified as failing under the accountability system established under section 1111(b)(2)(A) of the State in which the entity is located are closed, do not have their charter renewed, or are otherwise allowed to continue operating, except in special circumstances determined by the State for charter schools— (I) designated through a State system as alternative education programs with an explicit mission to serve students who have failed in traditional systems or large proportions of extremely at-risk students, such as students with moderate to profound disabilities or incarcerated youth; and (II) that are required to comply with the accountability system established under section 1111(b)(2)(A) of the State. (viii) The entity has authorized not less than 3 high-quality charter schools. (g) Local uses of funds An eligible applicant receiving a subgrant under this section shall use such funds to open new charter schools, replicate high-quality charter school models, or expand existing high-quality charter schools, which may include— (1) securing a school building through lease or purchase and providing the necessary renovations to ensure a strong school opening or to meet the needs of increased student enrollment; (2) paying startup costs associated with hiring teachers to ensure strong school starts; (3) providing transportation to students to and from charter schools opened, replicated, or expanded under this subsection, but only in the case of an applicant that demonstrates the capability to continue providing such transportation after the expiration of the subgrant funds; (4) purchasing instructional materials, implementing teacher and principal professional development programs, and hiring additional other staff for such charter schools; and (5) supporting any other necessary startup and expansion activities with respect to such charter schools. (h) Reporting requirements Each covered entity receiving a grant under this section shall submit to the Secretary, at the end of each year of the 3-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 applicable, how many new students were served during each year of the subgrant period; (2) the number of subgrants awarded under this section to carry out each of the following— (A) the opening of new charter schools; (B) the replication of high-quality charter school models; and (C) the expansion of high-quality charter schools; (3) the progress the entity made toward meeting the priorities described in subsection (f)(2), as applicable; (4) how the entity met the objectives of the quality charter school program described in the entity’s application under subsection (e); (5) how the entity complied with, and ensured that eligible applicants complied with, the assurances described in the entity’s application; and (6) how the entity worked with authorized public chartering agencies, including how the agencies worked with the management company or leadership of the schools that received subgrants under this section. (i) Covered entity defined For purposes of this section, the term covered entity means— (1) a State educational agency; (2) an authorized public chartering agency that is located in a State in which neither the State educational agency nor the Governor of the State has received a grant under this section; (3) a Governor of a State; or (4) a local educational agency that— (A) is not a charter school that is considered a local educational agency under State law; and (B) is located in a State in which neither the State educational agency nor the Governor of the State has received a grant under this section. . 6. Facilities financing assistance Section 5204 ( 20 U.S.C. 7221c ) is amended to read as follows: 5204. Facilities financing assistance (a) Grants to eligible entities (1) In general The Secretary shall use not less than 65 percent of the amount reserved under section 5202(b)(1) 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 innovative methods of assisting charter schools to address the cost of acquiring, constructing, and renovating facilities by enhancing the availability of loan or bond financing. (2) Eligible entity defined For purposes 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 In awarding grants under subsection (a), the Secretary shall award multiple grants of 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 Secretary 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 activities will leverage the maximum amount of private-sector financing capital relative to the amount of government funding used and otherwise enhance credit available to charter schools, including how the entity will offer a combination of rates and terms more favorable than the rates and terms that a charter school could receive without assistance from the entity under this section; (E) a description of how the eligible entity possesses sufficient expertise in education to evaluate the likelihood of success of a charter school program for which facilities financing is sought; (F) a description of how the eligible entity will encourage energy-efficient school building practices; (G) in the case of an application submitted by a State governmental entity, a description 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; and (H) such other information as the Secretary may reasonably require. (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 access private sector capital to accomplish one or both of the following objectives: (1) The acquisition (by purchase, lease, donation, or otherwise) of an interest (including an interest 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 operation of a charter school. (2) The construction of new facilities, including predevelopment costs, or the renovation, repair, or alteration of existing facilities, 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 subsection (a) shall, in accordance with State and local law, directly or indirectly, alone or in collaboration with others, deposit the funds received under subsection (a) (other than funds used for administrative costs in accordance with subsection (g) of this section) 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 reinsuring 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 described in subsection (e). (C) Facilitating financing by identifying potential lending sources, encouraging private lending, and other similar activities that directly 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 established under paragraph (1) shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly low-risk securities. (3) Reinvestment of Earnings Any earnings 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 maintained in accordance with generally accepted accounting 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 subsection (a) annually shall submit to the Secretary a report of its operations and activities under this section. (B) Contents Each annual report submitted under subparagraph (A) shall include— (i) a copy of the most recent financial statements, and any accompanying opinion on such statements, prepared by the independent public accountant reviewing the financial records of the eligible entity; (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 entity 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 facilitated by the grant, and the type of assistance provided to the charter schools; (v) a description of the activities carried out by the eligible entity to assist charter schools in meeting the objectives set forth in subsection (e); and (vi) a description of the characteristics of lenders and other financial institutions participating in the activities undertaken by the eligible entity under this section (excluding subsection (k)) during the reporting period. (C) Secretarial report The Secretary shall review the reports submitted under subparagraph (A) and shall provide a comprehensive annual report to Congress on the activities 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 obligation under a guarantee, bond, note, evidence of debt, or loan) shall be an obligation of, or guaranteed in any respect 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 (1) In General The Secretary, in accordance with chapter 37 of title 31, United States Code, shall collect— (A) all of the funds in a reserve account established by an eligible entity under subsection (f)(1) if the Secretary determines, not earlier than 2 years after the date on which the eligible entity first received funds under this section (excluding subsection (k)), that the eligible entity has failed to make substantial progress in carrying out the purposes described in subsection (f)(1); or (B) all or a portion of the funds in a reserve account established by an eligible entity under subsection (f)(1) if the Secretary determines that the eligible entity has permanently ceased to use all or a portion of the funds in such account to accomplish any purpose described in subsection (f)(1). (2) Exercise of Authority The Secretary shall not exercise the authority provided in paragraph (1) to collect from any eligible entity any funds that are being properly used to achieve one or more of the purposes described in subsection (f)(1). (3) Procedures The provisions of sections 451, 452, and 458 of the General Education Provisions Act 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. (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 charter 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 reserved under section 5202(b)(1) remaining after the Secretary makes grants under subsection (a), the Secretary shall make grants, on a competitive basis, to States to pay for the Federal share of the cost of establishing or enhancing, and administering per-pupil facilities aid programs. (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 receives 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 percent of the State share of the cost of establishing or enhancing, and administering the per-pupil facilities aid program. (E) Multiple grants A State may receive more than 1 grant under this subsection, 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 establish or enhance, and administer, a per-pupil facilities aid program for charter schools in the State of the applicant. (B) Evaluations; technical assistance; 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 provide per pupil facilities aid programs, operations financing programs, or other programs, for charter schools. (4) Requirements (A) Voluntary participation No State may be required to participate in a program carried out under this subsection. (B) State law (i) In general Except as provided 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 Notwithstanding 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 Secretary may require. . 7. National activities Section 5205 (20 U.S.C. 7221d) is amended to read as follows: 5205. National Activities and grants for local activities (a) Technical assistance and best practices From the amount reserved under section 5202(b)(2) for carrying out this subsection, the Secretary shall— (1) disseminate technical assistance to covered entities in awarding subgrants under section 5203, and eligible entities and States receiving grants under section 5204; and (2) disseminate best practices. (b) Evaluation From the amount reserved under section 5202(b)(2) for carrying out this subsection, the Secretary shall, in partnership with the Institute for Education Sciences— (1) develop relevant performance metrics, including student outcome data, for covered entities, eligible applicants, and charter schools that receive funds under section 5203; (2) assist such covered entities, eligible applicants, and charter schools in collecting and submitting, on an annual basis, data on such performance metrics to the Secretary; (3) evaluate the performance of and conduct related research to— (A) determine which policies and practices of covered entities, eligible applicants, and charter schools have the greatest impact on student achievement; (B) drive continuous improvement with respect to relevant performance metrics, including student outcome data, for covered entities, eligible applicants, and charter schools that receive funds under section 5203; and (C) inform the distribution of funds to higher performing covered entities, eligible applicants, and charter schools; and (4) disseminate the findings of the research, evaluation, and data collection under this subsection to maximize lessons learned for other educators, charter schools, and policy makers. (c) Grants for local activities (1) In general From the amount reserved under section 5202(b)(3), the Secretary shall make grants, on a competitive basis, to eligible applicants for the purpose of carrying out the activities described in section 5202(a)(1), clauses (i) through (iii) of section 5203(a)(1)(A), and section 5203(g). (2) Terms and conditions Except as otherwise provided in this subsection, each grant awarded under this subsection shall have the same terms and conditions as a grant awarded to covered entities under section 5203, including the grant limitations described in subparagraphs (A) and (B) in section 5203(d)(1), except that— (A) a charter school that has previously used funds received under this subpart for planning or charter school program design to open a new charter school may not use funds under this subsection for such planning or program design; and (B) notwithstanding subparagraph (A), an eligible applicant that is a charter management organization may receive more than 1 grant under this subsection during a grant period to expand a high-quality charter school, replicate a high-quality charter school model, or open or one or more high-quality charter schools that are based on the charter school model for which the eligible applicant has presented evidence of success to the Secretary. (3) Definitions For purposes of this subsection— (A) the term charter management organization a nonprofit organization, other nonprofit entity, or a group or consortium of such organizations or entities that— (i) operates, manages, or oversees multiple charter schools by centralizing or sharing certain functions and resources among such schools; or (ii) desires to open, replicate, or expand a high-quality charter school. (B) the term eligible applicant means— (i) an eligible applicant (as defined in section 5210) that has not received a grant or subgrant under section 5203; or (ii) a charter management organization. (d) Contracts and grants The Secretary may carry out any of the activities described in this section directly or through grants, contracts, or cooperative agreements. . 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) . 9. Definitions Section 5210 ( 20 U.S.C. 7221i ) is amended— (1) in paragraph (1)— (A) in subparagraph (H) by inserting (which, if authorized under the State law of the school and the school’s charter agreement, may be a lottery that gives added weight to students eligible for free or reduced price lunch under the Richard B. Russell National School Lunch Act) after lottery ; (B) by striking and at the end of subparagraph (K); (C) by striking the period at the end of subparagraph (L) and inserting ; and ; and (D) by adding at the end, the following: (M) may serve prekindergarten or post secondary students. ; (2) in paragraph (3)(B), by striking under section 5203(d)(3) ; and (3) by adding at the end the following: (5) Expansion of a high-quality charter school The term expansion of a high-quality charter school means significantly increasing the enrollment of a high-quality charter school or adding 1 or more grades to such school. (6) High-quality charter school The term high-quality charter school means a charter school that— (A) shows evidence of strong academic results, including through— (i) the percentage of students in the proficient or advanced levels of achievements on the State academic assessments required under section 1111(b)(3), compared to demographically similar schools in the State; (ii) the average student academic, longitudinal growth from one school year to next school year, if available and as determined by the State, on the State academic assessments required under section 1111(b)(3) that is above such growth in demographically similar schools in the State; (iii) in the case of a charter school that is a secondary school, high school graduation rates; and (iv) college attendance and persistence rates, when available; (B) has no significant issues in the areas of student safety, financial management, or statutory or regulatory compliance; (C) has demonstrated success in significantly increasing student academic achievement and attainment for all students served by the charter school; and (D) has demonstrated success in— (i) increasing student academic achievement as described in subparagraph (A) for each group of students described in section 1111(b)(2)(C)(v)(II) and served by the charter school, except that such demonstration is not required in a case in which the number of students in a group is insufficient to yield statistically reliable information or the results would reveal personally identifiable information about an individual student; and (ii) closing achievement gaps between each such group and all populations served by the charter school. (7) High-quality charter school model The term high-quality charter school model means a high-quality charter school that has the capability of opening another such charter school under an existing charter, such as a feeder middle school or a secondary school that a middle school feeds students into. . 10. Authorization of appropriations Section 5211 ( 20 U.S.C. 7221j ) is amended to read as follows: 5211. Authorization of appropriations There are authorized to be appropriated to carry out this subpart $330,000,000 for fiscal year 2014 and each of the 5 succeeding fiscal years. . 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 section 5203 and inserting the following: Sec. 5203. Grants to support high-quality charter schools. ; (2) by striking the item relating to section 5204 and inserting the following: Sec. 5204. Facilities Financing Assistance. ; and (3) by striking subpart 2 of part B of title V.