II 113th CONGRESS 2d Session S. 2304 IN THE SENATE OF THE UNITED STATES May 7, 2014 Mr. Kirk (for himself, Ms. Landrieu , Mr. Alexander , Mr. Bennet , Mrs. Feinstein , Mr. Paul , Mr. Isakson , Mr. Rubio , Mr. Vitter , Mr. Cornyn , Mr. Scott , Mr. Booker , Mr. Hatch , Mr. Carper , Mr. McConnell , and Mr. Cruz ) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 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 Expanding Opportunity through Quality Charter Schools Act . 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 References Except as otherwise specifically provided, whenever in this Act a section or other provision is amended or repealed, such amendment or repeal shall be considered to be made to that section or other provision of the Elementary and Secondary Education Act of 1965 (20 U.S.C.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 individuals in the United States by supporting innovation in public education in public school settings that prepare students to compete in, and contribute to, the global economy; (2) provide financial assistance for the planning, program design, and initial implementation of charter schools; (3) increase 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 among 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) expand opportunities for students with disabilities, students who are limited English proficient, 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 in order 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 The Secretary is authorized to carry out a charter school program that supports charter schools that serve elementary school and secondary school students by— (1) supporting the startup of charter schools, the replication of high-quality charter schools, and the expansion of high-quality charter schools; (2) assisting charter schools in accessing credit to acquire and renovate facilities for school use; and (3) carrying out national activities to support— (A) the startup of charter schools, the replication of high-quality charter schools, and the expansion of high-quality charter schools; (B) the dissemination of best practices of charter schools for all schools; (C) the evaluation of the impact of the charter school program on schools participating in such program; 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 less than 25 percent to carry out national activities under section 5205; and (3) use the remaining amount after the reservations under paragraphs (1) and (2) to carry out section 5203. (c) Prior grants and subgrants The recipient of a grant or subgrant under this subpart, as such subpart was in effect on the day before the date of enactment of the Expanding Opportunity through Quality Charter Schools Act, 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) 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. (b) Program authorized From the amount available under section 5202(b)(3), the Secretary shall award, on a competitive basis, grants to State entities having applications approved under subsection (f) to enable such entities to— (1) award subgrants to eligible applicants— (A) to open new charter schools; (B) to replicate high-quality charter schools; or (C) to expand high-quality charter schools; and (2) 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. (c) State entity 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 applicants, in accordance with the quality charter school program described in the entity's application pursuant to subsection (f), for the purposes described in subparagraphs (A) through (C) of subsection (b)(1); (B) reserve not less than 7 percent of such funds to carry out the activities described in subsection (b)(2); and (C) reserve not more than 3 percent of such funds for administrative costs, which may include the administrative costs of providing technical assistance. (2) Contracts and grants A State entity may use a grant received under this section to carry out the activities described in subparagraph (A) 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 State entities, or State entities from awarding subgrants to eligible applicants, that use a weighted lottery, or an equivalent lottery mechanism, to give better chances for school admission to all or a subset of educationally disadvantaged students if— (A) the use of a weighted lottery in favor of such students is not prohibited by State law, and such State law is consistent with the laws described in subparagraph (G) of section 5210(2); and (B) such weighted lottery is not used for the purpose of creating schools exclusively to serve a particular subset of students. (d) Program periods; peer review; distribution of subgrants; waivers (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 3 years, and may be renewed by the Secretary for 1 additional 2-year period. (B) Subgrants A subgrant awarded by a State entity under this section— (i) shall be for a period of not more than 3 years, of which an eligible applicant may use not more than 18 months for planning and program design; and (ii) may be renewed by the State entity for 1 additional 2-year period. (2) Peer Review The Secretary, and each State entity awarding subgrants under this section, shall use a peer review process to review applications for assistance under this section. (3) Distribution of subgrants Each State entity awarding subgrants under this section shall award subgrants in a manner that, to the extent practicable and applicable, ensures that such subgrants— (A) prioritize eligible applicants that plan to serve a significant number of students from low-income families; (B) are distributed throughout different areas, including urban, suburban, and rural areas; and (C) will assist charter schools representing a variety of educational approaches. (4) 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(2), 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 purposes of this subpart. (e) Limitations (1) Grants A State entity may not receive more than 1 grant under this section at a time. (2) Subgrants An eligible applicant may not receive more than 1 subgrant under this section for each individual charter school for each grant period or renewal period, unless the eligible applicant demonstrates to the State entity that the charter school has demonstrated a strong track record of positive results over the course of the grant period regarding the elements described in subparagraphs (A) and (D) of section 5210(8). (f) Applications A State 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 State entity’s objectives in running a quality charter school program under this section and how the objectives of the program will be carried out, including— (A) a description of how the State entity will— (i) support the opening of new charter schools and, if applicable, the replication of high-quality charter schools and the expansion of high-quality charter schools, and the proposed number of charter schools to be opened, replicated, or expanded under the State entity’s program; (ii) inform eligible charter schools, developers, and authorized public chartering agencies of the availability of funds under the program; (iii) work with eligible applicants to ensure that the eligible applicants access all Federal funds that such applicants are eligible to receive, and help the charter schools supported by such applicants and the students attending those 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 of a State entity that is not a State educational agency— (I) 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) work with the State educational agency to operate the State entity’s program under this section, if applicable; (v) ensure each eligible applicant that receives a subgrant under the State entity’s program— (I) is opening or expanding schools that meet the definition of a charter school under section 5210(2); and (II) is prepared to continue to operate such charter schools once the subgrant funds under this section are no longer available; (vi) support charter schools in local educational agencies with large numbers of schools that have been identified by the State for improvement; (vii) work with charter schools to promote inclusion of all students and support all students upon enrollment in order to promote retention of students in the school; (viii) work with charter schools on recruitment practices, including efforts to engage groups that may otherwise have limited opportunities to attend charter schools; (ix) share best and promising practices among charter schools and other public schools; (x) ensure that charter schools receiving funds under the State entity’s program meet the educational needs of their students, including students with disabilities and students who are limited English proficient; and (xi) support efforts to increase charter school quality initiatives, including meeting the quality authorizing elements described in paragraph (2)(D) ; (B) a description of how the State will actively monitor and hold authorized public chartering agencies accountable to ensure high-quality authorizing activity, including by establishing authorizing standards and by approving, re-approving, and revoking the authority of an authorized public chartering agency based on the performance of the charter schools authorized by such agency in the areas of student achievement, student safety, financial management, and compliance with all applicable statutes; (C) a description of the extent to which the State entity— (i) is able to meet and carry out the priorities described in subsection (g)(2); and (ii) is working to develop or strengthen a cohesive statewide system to support the opening of new charter schools and, if applicable, the replication of high-quality charter schools and the expansion of high-quality charter schools; (D) a description of how the State entity will award subgrants, on a competitive basis, including— (i) a description of the application each eligible applicant desiring to receive a subgrant will be required to submit, which application shall include— (I) a description of the roles and responsibilities of eligible applicants and of any charter management organizations or other organizations with which the eligible applicant will partner to open charter schools, including 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 academic accountability system and impact on student achievement, which may include student growth, will be primary factors for renewal or revocation of the school’s charter; and (III) a description of how the autonomy and flexibility granted to the charter school are consistent with the definition of a charter school in section 5210(2); and (IV) a description of the planned activities and expenditures of subgrant funds for purposes of opening a new charter school, replicating a high-quality charter school, or expanding a high-quality charter school, and how the charter school will maintain financial sustainability after the end of the subgrant period; and (ii) a description of how the State entity will review applications from eligible applicants; (E) in the case of a State entity that partners with an outside organization to carry out the State entity’s quality charter school program, in whole or in part, a description of the roles and responsibilities of the partner; and (F) a description of how the State entity will help the charter schools receiving funds under the State entity’s program address the transportation needs of the schools’ students. (2) Assurances Assurances that— (A) each charter school receiving funds through the State entity’s grant program will have a high degree of autonomy over budget and operations, including autonomy over personnel decisions; (B) the State entity will support charter schools in meeting the educational needs of their students, as described in paragraph (1)(A)(x) ; (C) the State 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 under the authority of such agency is meeting the requirements of this Act, part B of the Individuals with Disabilities Education Act, title VI of the Civil Rights Act of 1964, and section 504 of the Rehabilitation Act of 1973; and (ii) adequately monitors and provides adequate technical assistance to each charter school under the authority of such agency in recruiting, enrolling, and meeting the needs of all students, including students with disabilities and students who are limited English proficient; (D) the State entity will promote quality authorizing, such as through providing technical assistance, to support all authorized public chartering agencies in the State in improving the monitoring of the charter schools authorized by such agency, including by— (i) using annual performance data, which may include graduation rates and student academic growth data, as appropriate, to measure a school's progress toward becoming a high-quality charter school; (ii) reviewing the schools' independent, annual audits of financial statements conducted in accordance with generally accepted accounting principles, and ensuring any such audits are publically reported; and (iii) holding charter schools accountable to the academic, financial, and operational quality controls agreed to between the charter school and the authorized public chartering agency involved, such as through renewal, non-renewal, or revocation of the school’s charter; and (E) the State entity will ensure that each charter school in the State makes publicly available, consistent with the dissemination requirements of the annual State report card, information to help parents make informed decisions about the education 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 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 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 or, in the case of a State entity defined in subsection (a)(4), a description of how the State entity will work with the State to request necessary waivers, if applicable. (g) Selection criteria; priority (1) Selection criteria The Secretary shall award grants to State entities under this section on the basis of the quality of the applications submitted under subsection (f) , 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 flexibility provided to charter schools under the law; (B) the proposed number of new charter schools to be opened, and, if applicable, the number of high-quality charter schools to be replicated or expanded under the program, and the number of new students to be served by such schools; (C) the likelihood that the schools opened, replicated, or expanded by eligible applicants receiving subgrant funds will increase the academic achievement of the school's students and progress toward becoming high-quality charter schools; and (D) the quality of the State entity’s plan to— (i) monitor the eligible applicants receiving subgrants under the State entity’s program; and (ii) provide technical assistance and support for— (I) the eligible applicants receiving subgrants under the State entity’s program; and (II) quality authorizing efforts in the State. (2) Priority In awarding grants under this section, the Secretary shall give priority to a State entity to the extent that the entity meets the following criteria: (A) The State entity is located in a State that— (i) allows at least one entity that is not a local educational agency to be an authorized public chartering agency for each developer seeking to open a charter school in the State; or (ii) in the case of a State in which local educational agencies are the only authorized public chartering agencies, the State has an appeals process for the denial of an application for a charter school. (B) The State entity is located in a State that ensures that charter schools receive equitable financing, as compared to traditional public schools, in a prompt manner. (C) The State entity is located in a State that provides charter schools one or more of the following: (i) Funding for facilities. (ii) Assistance with facilities acquisition. (iii) Access to public facilities. (iv) The ability to share in bonds or mill levies. (v) The right of first refusal to purchase public school buildings. (vi) Low- or no-cost leasing privileges. (D) The State entity is located in a State that uses best practices from charter schools to help improve struggling schools and local educational agencies. (E) The State entity supports charter schools that support at-risk students through activities such as dropout prevention or dropout recovery. (F) The State entity ensures that each charter school has a high degree of autonomy over the charter school’s budget and operations, including autonomy over personnel decisions. (G) The State entity has taken steps to ensure that all authorizing public chartering agencies implement best practices for charter school authorizing. (h) Local uses of funds An eligible applicant receiving a subgrant under this section shall use such funds to carry out activities related to opening a new charter school, replicating a high-quality charter school, or expanding a high-quality charter school, which may include— (1) supporting the acquisition, expansion, or preparation of a charter school building to meet increasing enrollment needs, including financing the development of a new building and ensuring that a school building complies with applicable statutes and regulations; (2) paying costs associated with hiring additional teachers to serve additional students; (3) providing transportation to students to and from the charter school; (4) providing instructional materials, implementing teacher and principal professional development programs, and hiring additional non-teaching staff; and (5) supporting any necessary activities that assist the charter school in carrying out the purposes of this section, such as preparing individuals to serve as members of the charter school’s board. (i) Reporting requirements Each State entity receiving a grant under this section shall submit to the Secretary, at the end of the third year of the grant period and at the end of any renewal period, a report that includes the following: (1) The number of students served by each subgrant awarded under this section and, if applicable, the number of new students served during each year of the subgrant period. (2) The number and amount 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 schools. (C) The expansion of high-quality charter schools. (3) The progress the State entity made toward meeting the priorities described in subsection (g)(2), as applicable. (4) A description of— (A) how the State entity complied with, and ensured that eligible applicants complied with, the assurances described in the State entity’s application; and (B) how the State entity worked with authorized public chartering agencies, including how the agencies worked with the management company or leadership of the schools that received subgrant funds, if applicable. . 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 From the amount reserved under section 5202(b)(1), the Secretary shall use not less than 50 percent to award not less than 3 grants, on a competitive basis, to eligible entities that have the highest-quality applications approved under subsection (d) to demonstrate innovative methods of assisting charter schools to address the cost of acquiring, constructing, and renovating facilities by enhancing the availability of loans 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 Grants under subsection (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 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; and (F) 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. (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 in accessing private sector capital to accomplish one or more 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. (3) The predevelopment costs required to assess 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 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) ) 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 such subsection . (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 subsection. (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 the entity's 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 such subsection . (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) and 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 for the second such year; (iii) 60 percent for the third such year; (iv) 40 percent for the fourth such year; and (v) 20 percent for 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 grant 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. (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 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 A State that is required under State law to provide charter schools in the State with access to adequate facility space 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 (a) In general From the amount reserved under section 5202(b)(2), the Secretary shall— (1) use not less than 80 percent of such funds to award grants in accordance with subsection (b); and (2) use the remainder of such funds to— (A) disseminate technical assistance to State entities in awarding subgrants under section 5203(b)(1)(A); (B) disseminate best practices regarding public charter schools; (C) evaluate the impact of the charter school program carried out under this subpart, including the impact on student achievement; and (D) make grants, on a competitive basis, for the purpose of carrying out the activities described in section 5203(h), to eligible applicants that desire to open a charter school, replicate a high-quality charter school, or expand a high-quality 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. (b) Grants for the replication and expansion of high-Quality charter schools The Secretary shall make grants, on a competitive basis, to eligible entities having applications approved under paragraph (2) to enable such entities to replicate a high-quality charter school or expand a high-quality charter school. (1) Definition of eligible entity For purposes of this subsection, the term eligible entity means— (A) a charter management organization that, at the time of the application, operates or manages one or more high-quality charter schools; or (B) a nonprofit organization that oversees and coordinates the activities of a group of such charter management organizations. (2) Application requirements An eligible entity desiring to receive a grant under this subsection 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: (A) A description of the eligible entity’s objectives for implementing a high-quality charter school program with funding under this subsection, including a description of the proposed number of high-quality charter schools to be replicated or expanded with funding under this subsection. (B) A description of the educational program that the eligible entity will implement in the charter schools that the eligible entity proposes to replicate or expand, including information on how the program will enable all students to meet challenging State academic standards, the grade levels or ages of students that will be served, and the instructional practices that will be used. (C) A multi-year financial and operating model for the eligible entity, including a description of how the operation of the charter schools to be replicated or expanded will be sustained after the grant under this subsection has ended. (D) A description of how the eligible entity will inform all students in the community, including students with disabilities, students who are limited English proficient, and other educationally disadvantaged students, about the charter schools to be replicated or expanded with funding under this subsection. (E) For each charter school currently operated or managed by the eligible entity— (i) student assessment results for all students and for the subgroups of students described in section 1111(b)(2)(C)(v)(II); and (ii) attendance and student retention rates for the most recently completed school year and, if applicable, the most recent available 4-year adjusted cohort high school graduation rate (as defined in section 200.19(b)(1)(i)(A) of title 34, Code of Federal Regulations, or a successor regulation). (F) Information on any significant compliance issues encountered, within the last 3 years, by any school operated or managed by the eligible entity, including in the areas of student safety and financial management. (G) A request and justification for any waivers of Federal statutory or regulatory requirements that the eligible entity believes are necessary for the successful operation of the charter schools to be opened or expanded with funding under this subsection. (3) Selection criteria The Secretary shall select eligible entities to receive grants under this subsection, on the basis of the quality of the applications submitted under paragraph (2), after taking into consideration such factors as— (A) the degree to which the eligible entity has demonstrated success in increasing academic achievement and attainment for all students attending the charter schools the eligible entity operates or manages; (B) the degree to which the eligible entity has demonstrated success in increasing academic achievement and attainment for the subgroups of students described in section 1111(b)(2)(C)(v)(II); (C) the quality of the eligible entity’s financial and operating model as described under paragraph (2)(C), including the quality of the eligible entity’s plan for sustaining the operation of the charter schools to be replicated or expanded after the grant under this subsection has ended; (D) a determination that the eligible entity has not operated or managed a significant proportion of charter schools that— (i) have been closed; (ii) have had a school charter revoked due to problems with statutory or regulatory compliance; or (iii) have had the school's affiliation with the eligible entity revoked; and (E) a determination that the eligible entity has not experienced significant problems with statutory or regulatory compliance that could lead to the revocation of a school’s charter. (4) Priority In awarding grants under this section, the Secretary shall give priority to eligible entities that operate or manage charter schools that, in the aggregate, serve students at least 60 percent of whom are eligible for a free or reduced price lunch under the Richard B. Russell National School Lunch Act. (5) Terms and conditions Except as otherwise provided in this subsection, grants awarded under subsection (a)(2)(D) and subsection (b) shall have the same terms and conditions as grants awarded to State entities under section 5203. . 8. Records transfer Section 5208 (20 U.S.C. 7221g) is amended by inserting as quickly as possible and before to the extent practicable . 9. Definitions Section 5210 ( 20 U.S.C. 7221i ) is amended— (1) by redesignating paragraphs (1), (2), and (3) as paragraphs (2), (5), and (6), respectively; (2) by redesignating paragraph (4) as paragraph (1), and moving such paragraph so as to precede paragraph (2), as redesignated by paragraph (1) of this section; (3) in paragraph (2), as redesignated by paragraph (1)— (A) in subparagraph (G), by striking , and part B and inserting , the Americans with Disabilities Act of 1990 ( 42 U.S.C. 12101 et seq. ), section 444 of the General Education Provisions Act ( 20 U.S.C. 1232 ) (commonly referred to as the Family Educational Rights and Privacy Act of 1974 ), and part B ; (B) by striking subparagraph (H) and inserting the following: (H) is a school to which parents choose to send their children, and which— (i) admits students on the basis of a lottery, if more students apply for admission than can be accommodated; or (ii) in the case of a school that has an affiliated charter school (such as a school that is part of the same network of schools), automatically enrolls students who are enrolled in the immediate prior grade level of the affiliated charter school and, for any additional student openings or student openings created through regular attrition in student enrollment in the affiliated charter school and the enrolling school, admits students on the basis of a lottery as described in clause (i); ; (C) by striking subparagraph (I) and inserting the following: (I) agrees to comply with the same Federal 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; ; (D) in subparagraph (K), by striking and at the end; (E) in subparagraph (L), by striking the period at the end and inserting a semicolon; and (F) by adding at the end the following: (M) may serve prekindergarten or postsecondary students. ; (4) by inserting after paragraph (2), as redesignated by paragraph (1), the following: (3) Charter management organization The term charter management organization means a nonprofit organization that operates or manages multiple charter schools by centralizing or sharing certain functions or resources. (4) Charter school support organization The term charter school support organization means a nonprofit, nongovernmental entity that is not an authorized public chartering agency and provides on a statewide basis— (A) assistance to developers during the planning, program design, and initial implementation of a charter school; and (B) technical assistance to operating charter schools. ; (5) in paragraph (5)(B), as redesignated by paragraph (1), by striking under section 5203(d)(3) ; and (6) by adding at the end the following: (7) Expansion of a high-quality charter school The term expansion of a high-quality charter school means increasing the enrollment at a high-quality charter school by not less than 50 percent or adding 2 or more grades to a high-quality charter school. (8) High-quality charter school The term high-quality charter school means a charter school that— (A) shows evidence of strong academic results, which may include strong academic growth, as determined by a State; (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, including graduation rates where applicable, for all students served by the charter school; and (D) has demonstrated success in increasing student academic achievement, including graduation rates where applicable, for the subgroups of students described in section 1111(b)(2)(C)(v)(II), 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. (9) Replication of a high-quality charter school The term replication of a high-quality charter school means the opening of a charter school— (A) under an existing charter or an additional charter, if permitted by State law; (B) based on the model of a high-quality charter school; and (C) that will be operated or managed by the same nonprofit organization that operates or manages such high-quality charter school under an existing charter. . 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 $300,000,000 for fiscal year 2015 and such sums as may be necessary for 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 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. ; and (3) by striking the item relating to section 5204 and inserting the following: Sec. 5204. Facilities financing assistance. . (c) 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 .