,,ii #aacth ,,congress #ast ,session ,s4 #hh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #bc 7legislative day1 ,january #c71 #bjac ,mr4 ,vitter introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the public charter school provisions of the ,elementary and ,secondary ,education ,act of #aife1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the #bast ,century ,charter ,school ,act4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,purpose4 ,sec4 #c4 ,program authorized4 ,sec4 #d4 ,applications4 ,sec4 #e4 ,administration4 ,sec4 #f4 ,national activities4 ,sec4 #g4 ,federal formula allocation4 ,sec4 #h4 ,credit enhancement4 ,sec4 #i4 ,definitions4 ,sec4 #aj4 ,authorization of appropriations4 ,sec4 #aa4 ,reorganization4 ,sec4 #ab4 ,conforming amendments4 #b4 ,purpose ,section #ebja of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba7 is amended-- 7#a7 in paragraph 7#c71 by striking and2 7#b7 by redesignating paragraph 7#d7 as paragraph 7#f72 7#c7 by inserting after paragraph 7#c7 the following3 7#d7 encouraging the growth of high-quality charter schools through the replication and expansion of successful charter school models2 7#e7 disseminating charter school innovations throughout public education2 and 2 and 7#d7 in paragraph 7#f7 7as redesignated by paragraph 7#b77-- 7,a7 by striking more nearly2 and 7,b7 by striking have typically provided and inserting provide4 #c4 ,program authorized ,section #ebjb of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;a7 is amended-- 7#a7 in subsection 7a7-- 7,a7 by striking ,state educational agencies and inserting eligible entities2 7,b7 by striking such agencies and inserting such entities2 and 7,c7 by striking this subpart and inserting section #ebjd2 7#b7 in subsection 7b7-- 7,a7 by striking ,special rule4--,if and inserting the following3 ,special rule2 reserve account4-- 7#a7 ,special rule ,if 2 7,b7 by striking a ,state educational agency and inserting an eligible entity2 7,c7 by striking subpart and inserting section2 and 7,d7 by adding at the end the following3 7#b7 ,reserve accounts 7,a7 ,in general ,in order to assist eligible entities to accomplish the purposes described in section #ebja1 an eligible entity receiving a grant under this section shall1 directly or indirectly1 alone or in collaboration with others1 deposit the funds received under this section in a reserve account established and maintained by the eligible entity for this purpose1 in accordance with ,state and local law4 7,b7 ,investment ,funds received under this section that are deposited in the reserve account established under subparagraph 7,a71 shall be invested1 to the extent practicable1 in obligations issued or guaranteed by the ,united ,states or a ,state1 or in other similarly low risk securities1 in the same manner as funds of a ,state are invested under chapter #fe of title #ca1 ,united ,states ,code4 7,c7 ,reinvestment of earnings ,any earnings on funds received under this section shall be deposited in a reserve account and used in support of public charter schools in accordance with activities authorized under this ,act4 2 7#c7 in subsection 7c7-- 7,a7 by striking subpart each place the term occurs and inserting section2 7,b7 in paragraph 7#a7-- 7i7 in the paragraph heading1 by striking states and inserting eligible entities2 7ii7 by striking ,state educational agencies and inserting eligible entities2 and 7iii7 by striking not more than #c years and inserting not more than #e years2 and 7,c7 in paragraph 7#b7-- 7i7 by striking ,state educational agencies and inserting eligible entities2 and 7ii7 by striking not more than #c years and all that follows through the period at the end and inserting not more than #e years4 ,an eligible applicant may use a portion of the grant period for planning and program design42 7#d7 by striking subsection 7d7 and inserting the following3 7d7 ,charter schools with multiple campuses ,the ,secretary shall allow an eligible entity to award multiple subgrants under section #ebjd7;f77#a7 to an eligible applicant in order to support multiple campuses of a charter school4 2 7#e7 in subsection 7e7-- 7,a7 by striking paragraph 7#a7 and inserting the following3 7#a7 ,in general ,in awarding grants under this section for fiscal year #bjac or any succeeding fiscal year from any funds appropriated under section #ebab 7other than funds reserved to carry out section #ebje7;c771 the ,secretary shall give priority to an eligible entity to the extent that the ,state in which the eligible entity proposes to carry out the activities under the grant meets the criteria described in paragraph 7#b7 and one or more of the criteria described in subparagraphs 7,a7 through 7,h7 of paragraph 7#c74 2 7,b7 in paragraph 7#c7-- 7i7 in subparagraph 7,a7-- 7,i7 by striking a ,state educational agency and inserting an eligible entity2 and 7,,ii7 by striking subpart and inserting section2 7ii7 by redesignating subparagraph 7,c7 as subparagraph 7,d72 7iii7 in subparagraph 7,b7-- 7,i7 by redesignating clause 7ii7 as subparagraph 7,c71 and aligning the margins of such subparagraph with the margins of subparagraph 7,a72 7,,ii7 by striking ,the ,state and all that follows through provides and inserting ,the ,state provides2 and 7,,iii7 by striking law2 or and inserting law42 7iv7 in subparagraph 7,c7 7as redesignated by clause 7iii77,i771 by striking in the case and all that follows through allows and inserting ,the ,state allows2 7v7 in subparagraph 7,d7 7as redesignated by clause 7ii77-- 7,i7 by striking school has a and inserting 8school has-- 7i7 a 2 7,,ii7 by striking expenditures4 and inserting expenditures2 and2 and 7,,iii7 by adding at the end the following3 7ii7 an independent governing board that enters into a written performance contract with an authorized public chartering agency4 2 and 7vi7 by adding at the end the following3 7,e7 ,the ,state-- 7i7 provides public charter schools with funding commensurate with the funding provided to other public schools1 including capital or facilities aid distributed through a formula or revenue generated by bonds2 and 7ii7 ensures that the ,state educational agency and local educational agencies provide public charter schools with the ,federal1 ,state1 and local funds to which the public charter schools are entitled in a timely manner4 7,f7 ,the ,state makes it a priority to create charter schools in local educational agencies with large numbers of schools designated as in need of improvement1 corrective action1 or restructuring under paragraph 7#a71 7#g71 or 7#h7 of section #aaaf7;b74 7,g7 ,the ,state has developed a transparent authorizer accreditation1 training1 or review process for evaluating the effectiveness and quality of the ,state's authorized public chartering agencies1 or each authorized public chartering agency in the ,state has implemented such a process1 including-- 7i7 a process for reviewing and evaluating the performance of the authorized public chartering agencies in the ,state in authorizing or approving public charter schools1 including a process that enables the authorized public chartering agencies to respond to any ,state concerns or deficiencies regarding such authorizing or approving2 and 7ii7 any other necessary policies to ensure effective charter school authorizing in the ,state that are developed in conjunction with the ,state's charter school community and in accordance with the principles of high quality charter school authorizing1 as determined by the ,state in consultation with the charter school community and stakeholders4 7,h7 ,the ,state does not have a cap on charter schools that constrains growth and limits parental options in an unreasonable manner4 2 and 7#f7 in subsection 7f7-- 7,a7 by striking subpart to a ,state educational agency and inserting section to an eligible entity2 and 7,b7 by striking in the ,state4 and inserting in the ,state where the grant activities will be carried out44 #d4 ,applications ,section #ebjc of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;b7 is amended-- 7#a7 by striking this subpart each place the term appears and inserting section #ebjb2 7#b7 in subsection 7a71 by striking state agencies4--,each ,state educational agency and inserting eligible entities4--,an eligible entity2 7#c7 in subsection 7b7-- 7,a7 in the subsection heading1 by striking a state educational agency and inserting an eligible entity2 7,b7 in paragraph 7#a7-- 7i7 by striking ,state educational agency's each place the term appears and inserting eligible entity's2 and 7ii7 by striking ,state educational agency to and inserting eligible entity to2 7,c7 in paragraph 7#b7-- 7i7 in the matter preceding subparagraph 7,a71 by striking describe how the ,state educational agency-- and inserting describe the ,state's level of participation and involvement in the grant1 including a letter from the ,state describing how the ,state--2 7ii7 in the matter preceding clause 7i7 of subparagraph 7,a71 by striking in the ,state and inserting area served by the grant2 7iii7 in subparagraph 7,b7-- 7,i7 by striking in the ,state and inserting in the area served by the grant2 and 7,,ii7 by striking and after the semicolon2 7iv7 in subparagraph 7,c71 by striking to each local and all that follows through 2 and and inserting related to such areas as budgeting1 scheduling1 staffing1 and instruction to public schools1 including public charter schools in the ,state22 and 7v7 by adding at the end the following3 7,d7 will ensure the proper handling and management of ,federal funds2 and 7,e7 will oversee and hold accountable the authorized public chartering agencies in the ,state1 including through a transparent authorizer accreditation1 training1 and review process described in section #ebjb7;e77#c77;,g72 2 7,d7 by redesignating paragraph 7#c7 as paragraph 7#d72 7,e7 by inserting after paragraph 7#b7 the following3 7#c7 describe the criteria that the eligible entity will use to award subgrants to eligible applicants to ensure high-quality charter schools2 2 7,f7 in paragraph 7#d7 7as redesignated by subparagraph 7,d77-- 7i7 in the matter preceding subparagraph 7,a71 by striking ,state educational agency each place the term appears and inserting eligible entity2 7ii7 in subparagraph 7,a7-- 7,i7 by redesignating clauses 7ii7 and 7iii7 as clauses 7iii7 and 7iv71 respectively2 and 7,,ii7 by inserting after clause 7i7 the following3 7ii7 the charter school's plan for using academic assessments to measure and report student academic progress2 2 7iii7 in subparagraph 7,b71 by striking managed2 and inserting the following3 managed1 including-- 7i7 the charter school's financial plan and policies1 including financial controls and annual audit requirements2 7ii7 a clear description of the roles and responsibilities for the charter school's governing board1 leadership1 and management team1 and any other organizations critical to the charter school's operations or success2 7iii7 plans for recruiting and developing the charter school's leadership and staff2 7iv7 the charter school's leadership and teacher employment policies1 including performance evaluation plans2 7v7 the proposed governing bylaws of the charter school2 and 7vi7 a detailed charter school start-up plan that identifies tasks1 timelines1 and responsible parties2 2 7iv7 in subparagraph 7,e71 by inserting 1 including documentation of the parents' and community members' support for the school before the semicolon2 7v7 in subparagraph 7,f71 by striking a description of how and inserting an assurance from the authorized public chartering agency that2 7vi7 in subparagraph 7,h71 by inserting and how such funds will be used for planning1 program design1 and the initial implementation of a charter school before the semicolon at the end2 7vii7 in subparagraph 7,i77ii71 by inserting 1 including through a lottery process if the number of applicants exceeds the number of seats available at the charter school before the semicolon2 7viii7 in subparagraphs 7,j7 and 7,k71 by striking ,state educational agency each place the term appears and inserting eligible entity2 7ix7 by striking subparagraph 7,m72 7x7 by redesignating subparagraph 7,n7 as subparagraph 7,o72 7xi7 by inserting after subparagraph 7,l7 the following3 7,m7 a demonstration of support for the charter school from the ,state's charter school community2 7,n7 a description of how the independent governing board of the charter school1 including a board overseeing multi-campus charters1 is encouraged to include individuals with a diversity of skills1 including business management1 financial management1 real estate finance1 and curriculum and instruction2 and 2 and 7xii7 in subparagraph 7,o7 7as redesignated by clause 7x77-- 7,i7 by striking ,state educational agency and inserting eligible entity2 and 7,,ii7 by striking the period at the end and inserting 2 and2 and 7,g7 by adding at the end the following3 7#e7 in the case of an eligible entity that is an authorized public chartering agency-- 7,a7 describe such eligible entity's strategic goal for chartering schools and progress towards that goal2 and 7,b7 provide an assurance that the eligible entity will annually file a plan with the ,state in which the eligible entity is located that covers such topics necessary for effective charter school oversight1 including1 at a minimum-- 7i7 the academic and financial performance of all operating public charter schools overseen by the eligible entity1 according to the performance expectations for each public charter school set forth in the school's contract2 7ii7 the status of the eligible entity's public charter school portfolio1 identifying all public charter schools in each of the following categories3 approved 7but not yet open71 operating1 renewed1 transferred1 revoked1 not renewed1 voluntarily closed1 or never opened2 7iii7 the authorizing functions provided by the eligible entity to the public charter schools the eligible entity oversees1 including the eligible entity's operating costs and expenses detailed in annual audited financial statements that conform with generally accepted accounting principles2 and 7iv7 the services purchased from the eligible entity by the public charter schools overseen by the eligible entity1 including an itemized accounting of the actual costs of these services4 2 and 7#d7 in subsection 7d7-- 7,a7 in paragraph 7#a7-- 7i7 by striking 7,a7 through 7,n7 of subsection 7b77#c7 and inserting 7,a7 through 7,o7 of subsection 7b77#d72 7ii7 by striking and 7,n7 and inserting and 7,o72 and 7iii7 by striking ,state educational agency and inserting eligible entity2 and 7,b7 in paragraph 7#b7-- 7i7 in the matter preceding subparagraph 7,a71 by striking ,state educational agency and inserting eligible entity2 and 7ii7 in paragraph 7#c7-- 7,i7 by striking ,state educational agency and inserting eligible entity2 and 7,,ii7 by striking subgrant if and all that follows through the period and inserting subgrant44 #e4 ,administration ,section #ebjd of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;c7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in the subsection heading1 by striking ,state educational agencies and inserting eligible entities2 7,b7 by striking this subpart each place the term appears and inserting section #ebjb2 7,c7 in the matter preceding paragraph 7#a71 by striking ,state educational agencies and inserting eligible entities2 7,d7 in paragraph 7#a71 by inserting 1 including efforts at closing the achievement gap by meeting the annual objectives described in section #aaaa7;b77#b77;,c77v7 before the semicolon2 7,e7 in paragraph 7#b71 by inserting and autonomy after flexibility2 7,f7 in paragraph 7#e71 by inserting and after the semicolon2 7,g7 in paragraph 7#f71 by striking 2 and and inserting a period2 and 7,h7 by striking paragraph 7#g72 7#b7 in subsection 7b7-- 7,a7 by striking this subpart and inserting section #ebjb2 and 7,b7 by striking paragraph 7#g72 7#c7 in subsection 7c7-- 7,a7 by striking this subpart and inserting section #ebjb2 and 7,b7 by striking ,state educational agency and inserting eligible entity2 7#d7 in subsection 7d7-- 7,a7 in the matter preceding paragraph 7#a7-- 7i7 by striking ,state educational agency receiving a grant under this subpart and inserting eligible entity receiving a grant under section #ebjb2 and 7ii7 by striking this subpart in and inserting such section in2 and 7,b7 in paragraph 7#b71 by inserting or use non-traditional curricula before the period at the end2 7#e7 in subsection 7e7-- 7,a7 in the matter preceding subparagraph 7#a71 by striking #ebaj7a7 and inserting #ebaa7b72 and 7,b7 in paragraph 7#a71 by striking this subpart and inserting section #ebjc2 7#f7 in subsection 7f7-- 7,a7 in paragraph 7#a7-- 7i7 in the paragraph heading1 by striking ,state educational agencies4-- and inserting the following3 ,state educational agencies4-- 7,a7 ,in general ,each eligible entity 2 7ii7 by striking under this subpart and inserting under section #ebjb2 7iii7 by inserting 1 including a new campus or expansion of an existing charter school1 after charter school2 7iv7 by striking in the ,state and inserting in the area to be served by the grant2 and 7v7 by striking 1 except that and all that follows through paragraph 7#f74 and inserting a period2 7,b7 by striking paragraph 7#f72 7,c7 by redesignating paragraphs 7#b7 through 7#e7 as paragraphs 7#d7 through 7#g71 respectively2 7,d7 by inserting after paragraph 7#a7 the following3 7#b7 ,charter school developers ,in awarding subgrants under this section1 an eligible entity shall ensure that-- 7,a7 most of the subgrant funds are awarded to eligible applicants described in section #ebaa7e77;,a72 and 7,b7 subgrants are awarded1 to the extent practicable1 to a mix of such eligible applicants4 7#c7 ,amount of subgrants ,an eligible entity may vary the amount of a subgrant under this section based upon a variety of factors1 including-- 7,a7 whether the eligible applicant is a start-up charter school or a conversion charter school 7as defined by the eligible entity72 and 7,b7 whether the eligible applicant is creating a charter school under a new charter or an existing charter4 2 7,e7 in paragraph 7#d7 7as redesignated by subparagraph 7,c77-- 7i7 by striking a ,state educational agency and inserting an eligible entity2 and 7ii7 by striking 1 or to disseminate information about the charter school and successful practices in the charter school12 7,f7 in paragraph 7#e7 7as redesignated by subparagraph 7,c77-- 7i7 in the matter preceding subparagraph 7,a71 by striking this subpart and inserting section #ebjb2 7ii7 in subparagraph 7,a77ii71 by striking and after the semicolon2 7iii7 in subparagraph 7,b77iv71 by striking the period and inserting 2 and2 and 7iv7 by adding at the end the following3 7,c7 providing assistance1 through activities described in section #ebje7;b77#d71 in implementing charter school innovations and disseminating information regarding such innovations4 2 7,g7 in paragraph 7#f77;,a7 7as redesignated by subparagraph 7,c77-- 7i7 in the subparagraph heading1 by striking ,state educational agency and inserting ,eligible entity2 7ii7 by striking ,state educational agency and inserting eligible entity2 7iii7 by striking pursuant to this subpart and inserting pursuant to section #ebjb2 7iv7 by striking this subpart and inserting such section2 and 7v7 by adding at the end the following3 ,an eligible entity may use a portion of the reserved funds to improve the charter school authorizing policies and practices of the area served by the eligible entity1 which may include the approval1 monitoring1 and renewal of charter schools42 and 7,h7 in paragraph 7#g7 7as redesignated by subparagraph 7,c77-- 7i7 by striking ,state educational agency and inserting eligible entity2 7ii7 by striking this subpart and inserting section #ebjb2 7iii7 by striking #aj and inserting #bj2 and 7iv7 by striking the ,state educational agency and all that follows through sources4 and inserting the eligible entity1 for expenses necessary to plan1 begin operations1 and subsequently operate a public charter school42 and 7#g7 by striking subsection 7g74 #f4 ,national activities ,section #ebje of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;d7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#c77;,e71 by striking schools each place the term occurs and inserting schools1 authorized public chartering agencies1 and charter support organizations2 and 7,b7 by adding at the end the following3 7#f7 ,to provide technical assistance to charter schools on how to meet the requirements of part ,b of the ,individuals with ,disabilities ,education ,act4 2 7#b7 by redesignating subsections 7b7 and 7c7 as subsections 7c7 and 7d71 respectively2 7#c7 by inserting after subsection 7a7 the following3 7b7 ,national dissemination 7#a7 ,in general ,to carry out this subsection1 the ,secretary shall reserve for each fiscal year not more than #h1jjj1jjj of the amount appropriated to carry out this subpart4 7#b7 ,eligibility ,in order to receive a grant under this subsection1 an entity shall-- 7,a7 be-- 7i7 a charter school2 7ii7 an eligible applicant2 7iii7 an eligible entity2 or 7iv7 a consortium of entities described in clauses 7i71 7ii71 or 7iii72 and 7,b7 submit an application to the ,secretary at such time1 in such manner1 and containing such information as the ,secretary may require4 7#c7 ,criteria ,the ,secretary shall award grants under this subsection on the basis of-- 7,a7 the quality of the application2 7,b7 the capacity of the applicant to execute the application2 and 7,c7 the scale of the expected impact of the application4 7#d7 ,activities ,a recipient of a grant under this subsection shall use funds received under the grant to assist other schools in the recipient's ,state and in other ,states in adopting charter school innovations1 or to disseminate information about charter school innovations1 through activities such as-- 7,a7 assisting other entities with the planning and start-up of one or more new public schools1 including charter schools2 7,b7 developing partnerships designed to improve student academic achievement2 7,c7 developing curriculum materials1 assessments1 and other materials that promote increased student achievement and are based on successful practices at charter schools2 7,d7 conducting evaluations and developing materials that document successful practices at charter schools and that are designed to improve student performance in other schools2 and 7,e7 training1 regarding the innovative practices developed at the original site1 for personnel of-- 7i7 local educational agencies that are adopting innovations or successful practices used at charter schools2 7ii7 authorized public chartering agencies2 or 7iii7 charter support organizations4 2 and 7#d7 in subsection 7c7 7as redesignated by paragraph 7#b77-- 7,a7 in paragraph 7#b77;,a71 by striking paragraphs 7#b7 and 7#c77;,b7 of section #ebaa7;b7 and inserting section #ebab2 7,b7 by redesignating paragraphs 7#e7 and 7#f7 as paragraphs 7#f7 and 7#g71 respectively2 7,c7 by inserting after paragraph 7#d7 the following3 7#e7 ,special rule ,a ,state that provides public charter schools with access to existing adequate facility space may apply for a grant under this subsection1 if the ,state agrees that the ,state will1 upon receipt of the grant1 develop a capital aid program consistent with the program described in this subsection during the grant period4 2 and 7,d7 in paragraph 7#g7 7as redesignated by subparagraph 7,b771 by striking 7,a71 7,b71 and 7,c7 and inserting 7,a7 through 7,f74 #g4 ,federal formula allocation ,section #ebjf of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;e7 is amended-- 7#a7 by striking the section heading and inserting the following3 #ebjf4 ,federal formula allocation 2 and 7#b7 in subsection 7a71 by inserting or is in operation after actually opens4 #h4 ,credit enhancement ,subpart #a of part ,b of title ,v of the ,elementary and ,secondary ,education ,act of #aife 7as amended by this ,act7 7#bj ,u4,s4,c4 #gbba et seq47 is further amended-- 7#a7 by redesignating sections #ebjg through #ebaa as sections #ebjh through #ebab1 respectively2 and 7#b7 by inserting after section #ebjf the following3 #ebjg4 ,credit enhancement for charter school facilities programs 7a7 ,purpose ,the purpose of this section is to provide grants to eligible entities to permit the eligible entities to demonstrate innovative credit enhancement initiatives that assist charter schools to address the cost of acquiring1 constructing1 and renovating facilities4 7b7 ,grants to eligible entities ,after reserving any funds as necessary for grant evaluation or administration consistent with any applicable provisions 7including section #ifja7;a7 of this ,act and section #djb7;b77#a7 of the ,department of ,education ,organization ,act71 the ,secretary shall use the amounts available to carry out this section to award1 on a competitive basis1 not less than #c grants to eligible entities that have applications approved under this section to demonstrate innovative methods of assisting charter schools to address the cost of acquiring1 constructing1 and renovating facilities by enhancing the availability of loans or bond financing for charter schools4 7c7 ,grantee selection 7#a7 ,evaluation of application ,the ,secretary shall evaluate each application submitted under subsection 7e71 and shall determine whether the application is sufficient to merit approval4 7#b7 ,distribution of grants 7,a7 ,in general ,subject to subparagraph 7,b7 and paragraph 7#c71 the ,secretary shall award-- 7i7 not less than #a grant to an eligible entity described in section #ebaa7f77;,a72 7ii7 not less than #a grant to an eligible entity described in section #ebaa7f77;,b72 and 7iii7 not less than #a grant to an eligible entity described in section #ebaa7f77;,c74 7,b7 ,exception ,subparagraph 7,a7 shall only apply if applications are submitted that permit the ,secretary to do so without approving an application that is not of sufficient quality to merit approval4 7#c7 ,special rule ,in the event the ,secretary determines that the funds made available under this section are insufficient to permit the ,secretary to award not less than #c grants in accordance with this section1 the #c-;grant minimum under paragraph 7#b7 shall not apply1 and the ,secretary may determine the appropriate number of grants to be awarded in accordance with subsection 7d74 7d7 ,grant characteristics ,grants under this section shall be of a sufficient size1 scope1 and quality so as to ensure an effective demonstration of an innovative means of enhancing credit for the financing of charter school acquisition1 construction1 or renovation4 7e7 ,applications 7#a7 ,in general ,to receive a grant under this section1 an eligible entity shall submit to the ,secretary an application in such form as the ,secretary may reasonably require4 7#b7 ,contents ,an application submitted under paragraph 7#a7 shall contain-- 7,a7 a statement identifying the activities proposed to be undertaken with funds received under this section1 including how the eligible entity will determine which charter schools will receive assistance1 and how much and what types of assistance charter schools will receive2 7,b7 a description of the involvement of charter schools in the application's development and the design of the proposed activities2 7,c7 a description of the eligible entity's expertise in capital market financing2 7,d7 a description of how the proposed activities will leverage the maximum amount of private-sector financing capital relative to the amount of ,federal and ,state funds used and otherwise enhance credit available to charter schools1 including how the applicant will offer a combination of rates and terms more favorable than rates and terms that a charter school could receive without assistance under this section2 7,e7 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 sought2 7,f7 in the case of an application submitted by an eligible entity that is a ,state governmental entity1 a description of the actions that the entity has taken1 or will take1 to ensure that charter schools within the ,state receive the funding needed to have adequate facilities2 and 7,g7 such other information as the ,secretary may reasonably require4 7f7 ,charter school objectives ,an eligible entity receiving a grant under this section shall use the funds deposited in the reserve account established under subsection 7g77#a7 to assist #a or more charter schools to access private sector capital in order to accomplish one or more of the following objectives3 7#a7 ,the acquisition 7by purchase1 lease1 donation1 or otherwise7 of an interest 7including an interest held by a third party for the benefit of a charter school7 in improved or unimproved real property that is necessary to commence or continue the operation of a charter school4 7#b7 ,the construction 7including predevelopment costs in a case where construction or renovation cannot proceed as a result of predevelopment findings7 of new facilities1 or the renovation1 repair1 or alteration of existing facilities1 necessary to commence or continue the operation of a charter school4 7g7 ,reserve account 7#a7 ,use of funds ,to assist charter schools to accomplish the objectives described in subsection 7f71 an eligible entity receiving a grant under this section shall1 in accordance with ,state and local law1 directly or indirectly1 alone or in collaboration with others1 deposit the funds received under this section 7other than funds used for administrative costs in accordance with subsection 7h77 in a reserve account established and maintained by the eligible entity for this purpose4 ,amounts deposited in such account shall be used by the eligible entity for one or more of the following purposes3 7,a7 ,guaranteeing1 insuring1 and reinsuring bonds1 notes1 evidences of debt1 loans1 and interests therein1 the proceeds of which are used for an objective described in subsection 7f74 7,b7 ,guaranteeing and insuring leases of personal and real property for an objective described in subsection 7f74 7,c7 ,facilitating financing by identifying potential lending sources1 encouraging private lending1 and other similar activities that directly promote lending to1 or for the benefit of1 charter schools4 7,d7 ,facilitating the issuance of bonds by charter schools1 or by other public entities for the benefit of charter schools1 by providing technical1 administrative1 and other appropriate assistance 7including the recruitment of bond counsel1 underwriters1 and potential investors and the consolidation of multiple charter school projects within a single bond issue74 7,e7 ,making limited loans to charter schools1 under such terms and conditions as the ,secretary may prescribe4 7#b7 ,investment ,funds received under this section and deposited in the reserve account established under paragraph 7#a7 shall be invested in obligations issued or guaranteed by the ,united ,states or a ,state1 or in other similarly low-risk securities4 7#c7 ,reinvestment of earnings ,any earnings on funds received under this section shall be deposited in the reserve account established under paragraph 7#a7 and used in accordance with such paragraph4 7h7 ,limitation on administrative costs ,an eligible entity may use not more than #b percent of the funds received for any fiscal year under this section for the administrative costs of carrying out its responsibilities under this section4 7i7 ,audits and reports 7#a7 ,financial record maintenance and audit ,the financial records of each eligible entity receiving a grant under this section shall be maintained in accordance with generally accepted accounting principles and shall be subject to an annual audit by an independent public accountant4 7#b7 ,reports 7,a7 ,grantee annual reports ,each eligible entity receiving a grant under this section annually shall submit to the ,secretary a report of the eligible entity's operations and activities under this section4 7,b7 ,contents ,each annual report submitted under subparagraph 7,a7 shall include-- 7i7 a copy of the most recent financial statements1 and any accompanying opinion on such statements1 prepared by the independent public accountant reviewing the financial records of the eligible entity2 7ii7 a copy of any report made on an audit of the financial records of the eligible entity that was conducted under paragraph 7#a7 during the reporting period2 7iii7 an evaluation by the eligible entity of the effectiveness of its use of the ,federal funds provided under this section in leveraging private funds2 7iv7 a listing and description of the charter schools served during the reporting period2 7v7 a description of the activities carried out by the eligible entity to assist charter schools in meeting the objectives set forth in subsection 7f72 and 7vi7 a description of the characteristics of lenders and other financial institutions participating in the activities undertaken by the eligible entity under this section during the reporting period4 7,c7 ,secretarial report ,the ,secretary shall review the reports submitted under paragraph 7#b77;,a7 and shall provide a comprehensive annual report to ,congress on the activities conducted under this section4 7j7 ,no full faith and credit for grantee obligations ,no financial obligation of an eligible entity entered into pursuant to this section 7such as an obligation under a guarantee1 bond1 note1 evidence of debt1 or loan7 shall be an obligation of1 or guaranteed in any respect by1 the ,united ,states4 ,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 section4 7k7 ,recovery of funds 7#a7 ,in general ,the ,secretary1 in accordance with chapter #cg of title #ca1 ,united ,states ,code1 shall collect-- 7,a7 all of the funds in a reserve account established by an eligible entity under subsection 7g77#a7 if the ,secretary determines1 not earlier than #b years after the date on which the eligible entity first received funds under this section1 that the eligible entity has failed to make substantial progress in carrying out the purposes described in this section2 or 7,b7 all or a portion of the funds in a reserve account established by an eligible entity under subsection 7g77#a7 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 this section4 7#b7 ,exercise of authority ,the ,secretary shall not exercise the authority provided in paragraph 7#a7 to collect from any eligible entity any funds that are being properly used to achieve one or more of the objectives described in subsection 7f74 7#c7 ,procedures ,the provisions of sections #dea1 #deb1 and #deh of the ,general ,education ,provisions ,act shall apply to the recovery of funds under paragraph 7#a74 7#d7 ,construction ,nothing in this section shall be construed to impair or affect the authority of the ,secretary to recover funds under part ,d of the ,general ,education ,provisions ,act4 7l7 ,reservation ,to carry out this section1 the ,secretary shall reserve for each fiscal year not less than #e percent and not more than #ae percent of the amount appropriated under section #ebab4 4 #i4 ,definitions ,section #ebaa of the ,elementary and ,secondary ,education ,act of #aife 7as redesignated by section #h7a77 7#bj ,u4,s4,c4 #gbba;i7 is amended-- 7#a7 in paragraph 7#a7-- 7,a7 by striking subparagraph 7,l72 7,b7 by redesignating subparagraphs 7,d7 through 7,k7 as subparagraphs 7,e7 through 7,l71 respectively2 7,c7 by inserting after subparagraph ,c7 the following3 7,d7 has an independent governing board that enters into a performance-based agreement that encompasses one or more campuses with an authorized public chartering agency in the ,state1 which agreement shall include a description of-- 7i7 how student performance will be measured in each charter school pursuant to the ,state assessments that are required of other schools and any other assessments or evaluations mutually agreeable to the authorized public chartering agency and the charter school2 and 7ii7 criteria for renewal or revocation of the charter2 2 7,d7 in subparagraph 7,e7 7as redesignated by subparagraph 7,b771 by striking elementary or secondary education1 or both and inserting prekindergarten1 elementary1 or secondary education1 or adult education if permitted by ,state charter law1 or any combination of such types of education2 7,e7 in subparagraph 7,i7 7as redesignated by subparagraph 7,b77-- 7i7 by striking school to and inserting 8school-- 7i7 to 2 7ii7 by striking children1 and that and inserting 8children2 7ii7 that 2 and 7iii7 by striking accommodated2 and inserting 8accommodated2 and 7iii7 that does not give admissions preference to any student on the basis of prior academic achievement2 2 7,f7 in subparagraph 7,k7 7as redesignated by subparagraph 7,b771 by inserting and after the semicolon2 and 7,g7 in subparagraph 7,l7 7as redesignated by subparagraph 7,b771 by striking 2 and and inserting a period2 7#b7 by striking paragraph 7#c7 and inserting the following3 7#c7 ,eligible applicant ,the term eligible applicant means-- 7,a7 a developer that has applied to an authorized public chartering agency to operate a charter school and provided adequate and timely notice to that authority under section #ebjc7;d77#c72 or 7,b7 a charter support organization4 2 7#c7 by adding at the end the following3 7#e7 ,charter support organization ,the term charter support organization means a public or private nonprofit organization that provides assistance to a developer of a charter school during the planning1 program design1 and initial implementation of a charter school4 7#f7 ,eligible entity ,the term eligible entity means-- 7,a7 a public entity1 such as a ,state educational agency or other ,state or local governmental entity2 7,b7 a private nonprofit entity2 or 7,c7 a consortium of entities described in subparagraph 7,a7 or 7,b74 2 and 7#d7 by redesignating paragraphs 7#a7 through 7#f7 as paragraphs 7#b71 7#d71 7#e71 7#a71 7#c71 and 7#f71 respectively4 #aj4 ,authorization of appropriations ,section #ebab of the ,elementary and ,secondary ,education ,act of #aife 7as redesignated by section #h7a77 7#bj ,u4,s4,c4 #gbba;j7 is amended to read as follows3 #ebab4 ,authorization of appropriations 7a7 ,in general ,there are authorized to be appropriated to carry out this subpart #fej1jjj1jjj for fiscal year #bjac and such sums as may be necessary for each of the #e succeeding fiscal years4 7b7 ,allocation ,in allocating funds under this subpart for any fiscal year1 the ,secretary shall consider the relative need between the programs under section #ebjb1 section #ebje7;c71 and section #ebjg and the quality of the applications submitted under such sections4 4 #aa4 ,reorganization ,part ,b of title ,v of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba et seq47 is amended-- 7#a7 by striking subpart #b2 and 7#b7 by redesignating subpart #c as subpart #b4 #ab4 ,conforming amendments 7a7 ,conforming amendment ,section #ebdg7a7 of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbbe;f7#a77 is amended by striking #ebaj and inserting #ebaa4 7b7 ,table of contents ,the table of contents in section #b of the ,elementary and ,secondary ,education ,act of #aife is amended-- 7#a7 by striking the items relating to sections #ebjf through #ebaa and inserting the following3 ,sec4 #ebjf4 ,federal formula allocation4 ,sec4 #ebjg4 ,credit enhancement for charter school facilities programs4 ,sec4 #ebjh4 ,solicitation of input from charter school operators4 ,sec4 #ebji4 ,records transfer4 ,sec4 #ebaj4 ,paperwork reduction4 ,sec4 #ebaa4 ,definitions4 ,sec4 #ebab4 ,authorization of appropriations4 2 7#b7 by striking the item relating to subpart #b of part ,b of title ,v2 7#c7 by striking the items relating to sections #ebba through #ebca2 and 7#d7 by striking the item relating to subpart #c of part ,b of title ,v and inserting the following3 ,subpart #b--,voluntary public school choice programs 4