Part B—Public Charter Schools

subpart 1—charter school programs

§7221. Purpose

It is the purpose of this subpart to increase national understanding of the charter schools model by—

(1) providing financial assistance for the planning, program design, and initial implementation of charter schools;

(2) evaluating the effects of such schools, including the effects on students, student academic achievement, staff, and parents;

(3) expanding the number of high-quality charter schools available to students across the Nation; and

(4) encouraging the 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.

(Pub. L. 89–10, title V, §5201, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1788.)

Prior Provisions

A prior section 5201 of Pub. L. 89–10 was classified to section 7231 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

§7221a. Program authorized

(a) In general

The Secretary may award grants to State educational agencies having applications approved pursuant to section 7221b of this title to enable such agencies to conduct a charter school grant program in accordance with this subpart.

(b) Special rule

If a State educational agency elects not to participate in the program authorized by this subpart or does not have an application approved under section 7221b of this title, the Secretary may award a grant to an eligible applicant that serves such State and has an application approved pursuant to section 7221b(c) of this title.

(c) Program periods

(1) Grants to States

Grants awarded to State educational agencies under this subpart shall be for a period of not more than 3 years.

(2) Grants to eligible applicants

Grants awarded by the Secretary to eligible applicants or subgrants awarded by State educational agencies to eligible applicants under this subpart shall be for a period of not more than 3 years, of which the eligible applicant may use—

(A) not more than 18 months for planning and program design;

(B) not more than 2 years for the initial implementation of a charter school; and

(C) not more than 2 years to carry out dissemination activities described in section 7221c(f)(6)(B) of this title.

(d) Limitation

A charter school may not receive—

(1) more than one grant for activities described in subparagraphs (A) and (B) of subsection (c)(2) of this section; or

(2) more than one grant for activities under subparagraph (C) of subsection (c)(2) of this section.

(e) Priority treatment

(1) In general

In awarding grants under this subpart for fiscal year 2002 or any succeeding fiscal year from any funds appropriated under section 7221j of this title (other than funds reserved to carry out section 7221d(b) of this title), the Secretary shall give priority to States to the extent that the States meet the criteria described in paragraph (2) and one or more of the criteria described in subparagraph (A), (B), or (C) of paragraph (3).

(2) Review and evaluation priority criteria

The criteria referred to in paragraph (1) are that the State provides for periodic review and evaluation by the authorized public chartering agency of each charter school, at least once every 5 years unless required more frequently by State law, to determine whether the charter school is meeting the terms of the school's charter, and is meeting or exceeding the student academic achievement requirements and goals for charter schools as set forth under State law or the school's charter.

(3) Priority criteria

The criteria referred to in paragraph (1) are the following:

(A) The State has demonstrated progress, in increasing the number of high-quality charter schools that are held accountable in the terms of the schools' charters for meeting clear and measurable objectives for the educational progress of the students attending the schools, in the period prior to the period for which a State educational agency or eligible applicant applies for a grant under this subpart.

(B) The State—

(i) provides for one authorized public chartering agency that is not a local educational agency, such as a State chartering board, for each individual or entity seeking to operate a charter school pursuant to such State law; or

(ii) in the case of a State in which local educational agencies are the only authorized public chartering agencies, allows for an appeals process for the denial of an application for a charter school.

(C) The State ensures that each charter school has a high degree of autonomy over the charter school's budgets and expenditures.

(f) Amount criteria

In determining the amount of a grant to be awarded under this subpart to a State educational agency, the Secretary shall take into consideration the number of charter schools that are operating, or are approved to open, in the State.

(Pub. L. 89–10, title V, §5202, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1788.)

Prior Provisions

A prior section 5202 of Pub. L. 89–10 was classified to section 7232 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

§7221b. Applications

(a) Applications from State agencies

Each State educational agency desiring a grant from the Secretary under this subpart shall submit to the Secretary an application at such time, in such manner, and containing or accompanied by such information as the Secretary may require.

(b) Contents of a State educational agency application

Each application submitted pursuant to subsection (a) of this section shall—

(1) describe the objectives of the State educational agency's charter school grant program and a description of how such objectives will be fulfilled, including steps taken by the State educational agency to inform teachers, parents, and communities of the State educational agency's charter school grant program; and

(2) describe how the State educational agency—

(A) will inform each charter school in the State regarding—

(i) Federal funds that the charter school is eligible to receive; and

(ii) Federal programs in which the charter school may participate;

(B) will ensure that each charter school in the State receives the charter school's commensurate share of Federal education funds that are allocated by formula each year, including during the first year of operation of the charter school; and

(C) will disseminate best or promising practices of charter schools to each local educational agency in the State; and

(3) contain assurances that the State educational agency will require each eligible applicant desiring to receive a subgrant to submit an application to the State educational agency containing—

(A) a description of the educational program to be implemented by the proposed charter school, including—

(i) how the program will enable all students to meet challenging State student academic achievement standards;

(ii) the grade levels or ages of children to be served; and

(iii) the curriculum and instructional practices to be used;

(B) a description of how the charter school will be managed;

(C) a description of—

(i) the objectives of the charter school; and

(ii) the methods by which the charter school will determine its progress toward achieving those objectives;

(D) a description of the administrative relationship between the charter school and the authorized public chartering agency;

(E) a description of how parents and other members of the community will be involved in the planning, program design, and implementation of the charter school;

(F) a description of how the authorized public chartering agency will provide for continued operation of the school once the Federal grant has expired, if such agency determines that the school has met the objectives described in subparagraph (C)(i);

(G) a request and justification for waivers of any Federal statutory or regulatory provisions that the eligible applicant believes are necessary for the successful operation of the charter school, and a description of any State or local rules, generally applicable to public schools, that will be waived for, or otherwise not apply to, the school;

(H) a description of how the subgrant funds or grant funds, as appropriate, will be used, including a description of how such funds will be used in conjunction with other Federal programs administered by the Secretary;

(I) a description of how students in the community will be—

(i) informed about the charter school; and

(ii) given an equal opportunity to attend the charter school;

(J) an assurance that the eligible applicant will annually provide the Secretary and the State educational agency such information as may be required to determine if the charter school is making satisfactory progress toward achieving the objectives described in subparagraph (C)(i);

(K) an assurance that the eligible applicant will cooperate with the Secretary and the State educational agency in evaluating the program assisted under this subpart;

(L) a description of how a charter school that is considered a local educational agency under State law, or a local educational agency in which a charter school is located, will comply with sections 1413(a)(5) and 1413(e)(1)(B) of this title;

(M) if the eligible applicant desires to use subgrant funds for dissemination activities under section 7221a(c)(2)(C) of this title, a description of those activities and how those activities will involve charter schools and other public schools, local educational agencies, developers, and potential developers; and

(N) such other information and assurances as the Secretary and the State educational agency may require.

(c) Eligible applicant application

Each eligible applicant desiring a grant pursuant to section 7221a(b) of this title shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may reasonably require.

(d) Contents of eligible applicant application

Each application submitted pursuant to subsection (c) of this section shall contain—

(1) the information and assurances described in subparagraphs (A) through (N) of subsection (b)(3) of this section, except that for purposes of this subsection subparagraphs (J), (K), and (N) of such subsection shall be applied by striking "and the State educational agency" each place such term appears;

(2) assurances that the State educational agency—

(A) will grant, or will obtain, waivers of State statutory or regulatory requirements; and

(B) will assist each subgrantee in the State in receiving a waiver under section 7221c(e) of this title; and

(3) assurances that the eligible applicant has provided its authorized public chartering authority timely notice, and a copy, of the application, except that the State educational agency (or the Secretary, in the case of an application submitted to the Secretary) may waive the requirement of this paragraph in the case of an application for a precharter planning grant or subgrant if the authorized public chartering authority to which a charter school proposal will be submitted has not been determined at the time the grant or subgrant application is submitted.

(Pub. L. 89–10, title V, §5203, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1790.)

Prior Provisions

A prior section 5203 of Pub. L. 89–10 was classified to section 7233 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

§7221c. Administration

(a) Selection criteria for State educational agencies

The Secretary shall award grants to State educational agencies under this subpart on the basis of the quality of the applications submitted under section 7221b(b) of this title, after taking into consideration such factors as—

(1) the contribution that the charter schools grant program will make to assisting educationally disadvantaged and other students in meeting State academic content standards and State student academic achievement standards;

(2) the degree of flexibility afforded by the State educational agency to charter schools under the State's charter schools law;

(3) the ambitiousness of the objectives for the State charter school grant program;

(4) the quality of the strategy for assessing achievement of those objectives;

(5) the likelihood that the charter school grant program will meet those objectives and improve educational results for students;

(6) the number of high-quality charter schools created under this subpart in the State; and

(7) in the case of State educational agencies that propose to use grant funds to support dissemination activities under subsection (f)(6)(B) of this section, the quality of those activities and the likelihood that those activities will improve student academic achievement.

(b) Selection criteria for eligible applicants

The Secretary shall award grants to eligible applicants under this subpart on the basis of the quality of the applications submitted under section 7221b(c) of this title, after taking into consideration such factors as—

(1) the quality of the proposed curriculum and instructional practices;

(2) the degree of flexibility afforded by the State educational agency and, if applicable, the local educational agency to the charter school;

(3) the extent of community support for the application;

(4) the ambitiousness of the objectives for the charter school;

(5) the quality of the strategy for assessing achievement of those objectives;

(6) the likelihood that the charter school will meet those objectives and improve educational results for students; and

(7) in the case of an eligible applicant that proposes to use grant funds to support dissemination activities under subsection (f)(6)(B) of this section, the quality of those activities and the likelihood that those activities will improve student achievement.

(c) Peer review

The Secretary, and each State educational agency receiving a grant under this subpart, shall use a peer review process to review applications for assistance under this subpart.

(d) Diversity of projects

The Secretary and each State educational agency receiving a grant under this subpart, shall award grants and subgrants under this subpart in a manner that, to the extent possible, ensures that such grants and subgrants—

(1) are distributed throughout different areas of the Nation and each State, including urban and rural areas; and

(2) will assist charter schools representing a variety of educational approaches, such as approaches designed to reduce school size.

(e) 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 7221i(1) of this title, if—

(1) the waiver is requested in an approved application under this subpart; and

(2) the Secretary determines that granting such a waiver will promote the purpose of this subpart.

(f) Use of funds

(1) State educational agencies

Each State educational agency receiving a grant under this subpart shall use such grant funds to award subgrants to one or more eligible applicants in the State to enable such applicant to plan and implement a charter school in accordance with this subpart, except that the State educational agency may reserve not more than 10 percent of the grant funds to support dissemination activities described in paragraph (6).

(2) Eligible applicants

Each eligible applicant receiving funds from the Secretary or a State educational agency shall use such funds to plan and implement a charter school, or to disseminate information about the charter school and successful practices in the charter school, in accordance with this subpart.

(3) Allowable activities

An eligible applicant receiving a grant or subgrant under this subpart may use the grant or subgrant funds only for—

(A) post-award planning and design of the educational program, which may include—

(i) refinement of the desired educational results and of the methods for measuring progress toward achieving those results; and

(ii) professional development of teachers and other staff who will work in the charter school; and

(B) initial implementation of the charter school, which may include—

(i) informing the community about the school;

(ii) acquiring necessary equipment and educational materials and supplies;

(iii) acquiring or developing curriculum materials; and

(iv) other initial operational costs that cannot be met from State or local sources.

(4) Administrative expenses

(A) State educational agency administrative expenses

Each State educational agency receiving a grant pursuant to this subpart may reserve not more than 5 percent of such grant funds for administrative expenses associated with the charter school grant program assisted under this subpart.

(B) Local administrative expenses

A local educational agency may not deduct funds for administrative fees or expenses from a subgrant awarded to an eligible applicant, unless the eligible applicant enters voluntarily into a mutually agreed upon arrangement for administrative services with the relevant local educational agency. Absent such approval, the local educational agency shall distribute all such subgrant funds to the eligible applicant without delay.

(5) Revolving loan funds

Each State educational agency receiving a grant pursuant to this subpart may reserve not more than 10 percent of the grant funds for the establishment of a revolving loan fund. Such fund may be used to make loans to eligible applicants that have received a subgrant under this subpart, under such terms as may be determined by the State educational agency, for the initial operation of the charter school grant program of the eligible applicant until such time as the recipient begins receiving ongoing operational support from State or local financing sources.

(6) Dissemination

(A) In general

A charter school may apply for funds under this subpart, whether or not the charter school has applied for or received funds under this subpart for planning, program design, or implementation, to carry out the activities described in subparagraph (B) if the charter school has been in operation for at least 3 consecutive years and has demonstrated overall success, including—

(i) substantial progress in improving student academic achievement;

(ii) high levels of parent satisfaction; and

(iii) the management and leadership necessary to overcome initial start-up problems and establish a thriving, financially viable charter school.

(B) Activities

A charter school described in subparagraph (A) may use funds reserved under paragraph (1) to assist other schools in adapting the charter school's program (or certain aspects of the charter school's program), or to disseminate information about the charter school, through such activities as—

(i) assisting other individuals with the planning and start-up of one or more new public schools, including charter schools, that are independent of the assisting charter school and the assisting charter school's developers, and that agree to be held to at least as high a level of accountability as the assisting charter school;

(ii) developing partnerships with other public schools, including charter schools, designed to improve student academic achievement in each of the schools participating in the partnership;

(iii) developing curriculum materials, assessments, and other materials that promote increased student achievement and are based on successful practices within the assisting charter school; and

(iv) conducting evaluations and developing materials that document the successful practices of the assisting charter school and that are designed to improve student performance in other schools.

(g) Tribally controlled schools

Each State that receives a grant under this subpart and designates a tribally controlled school as a charter school shall not consider payments to a school under the Tribally Controlled Schools Act of 1988 [25 U.S.C. 2501 et seq.] in determining—

(1) the eligibility of the school to receive any other Federal, State, or local aid; or

(2) the amount of such aid.

(Pub. L. 89–10, title V, §5204, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1792.)

References in Text

The Tribally Controlled Schools Act of 1988, referred to in subsec. (g), is part B (§5201–5212) of title V of Pub. L. 100–297, Apr. 28, 1988, 102 Stat. 385, as amended, which is classified generally to chapter 27 (§2501 et seq.) of Title 25, Indians. For complete classification of this Act to the Code, see Short Title note set out under section 2501 of Title 25 and Tables.

Prior Provisions

A prior section 5204 of Pub. L. 89–10 was classified to section 7234 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

§7221d. National activities

(a) In general

The Secretary shall reserve for each fiscal year the greater of 5 percent or $5,000,000 of the amount appropriated to carry out this subpart, except that in no fiscal year shall the total amount so reserved exceed $8,000,000, to carry out the following activities:

(1) To provide charter schools, either directly or through State educational agencies, with—

(A) information regarding—

(i) Federal funds that charter schools are eligible to receive; and

(ii) other Federal programs in which charter schools may participate; and

(B) assistance in applying for Federal education funds that are allocated by formula, including assistance with filing deadlines and submission of applications.

(2) To provide for other evaluations or studies that include the evaluation of the impact of charter schools on student academic achievement, including information regarding—

(A) students attending charter schools reported on the basis of race, age, disability, gender, limited English proficiency, and previous enrollment in public school; and

(B) the professional qualifications of teachers within a charter school and the turnover of the teaching force.

(3) To provide—

(A) information to applicants for assistance under this subpart;

(B) assistance to applicants for assistance under this subpart with the preparation of applications under section 7221b of this title;

(C) assistance in the planning and startup of charter schools;

(D) training and technical assistance to existing charter schools; and

(E) for the dissemination to other public schools of best or promising practices in charter schools.

(4) To provide (including through the use of one or more contracts that use a competitive bidding process) for the collection of information regarding the financial resources available to charter schools, including access to private capital, and to widely disseminate to charter schools any such relevant information and model descriptions of successful programs.

(5) To carry out evaluations of, technical assistance for, and information dissemination regarding, the per-pupil facilities aid programs. In carrying out the evaluations, the Secretary may carry out one or more evaluations of State programs assisted under this subsection, which shall, at a minimum, address—

(A) how, and the extent to which, the programs promote educational equity and excellence; and

(B) the extent to which charter schools supported through the programs are—

(i) held accountable to the public;

(ii) effective in improving public education; and

(iii) open and accessible to all students.

(b) Per-pupil facilities aid programs

(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 made available to carry out this subsection under paragraphs (2) and (3)(B) of section 7221j(b) of this title for any fiscal year, 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.

(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 ¹ 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

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.

(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.

(6) Priorities

In making grants under this subsection, the Secretary shall give priority to States that meet the criteria described in paragraph (2), and subparagraphs (A), (B), and (C) of paragraph (3), of section 7221a(e) of this title.

(c) Rule of construction

Nothing in this section shall be construed to require charter schools to collect any data described in subsection (a) of this section.

(Pub. L. 89–10, title V, §5205, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1795.)

Prior Provisions

A prior section 5205 of Pub. L. 89–10 was classified to section 7235 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

¹ So in original. Probably should be "per-pupil".

§7221e. Federal formula allocation during first year and for successive enrollment expansions

(a) In general

For purposes of the allocation to schools by the States or their agencies of funds under part A of subchapter I of this chapter, and any other Federal funds which the Secretary allocates to States on a formula basis, the Secretary and each State educational agency shall take such measures as are necessary to ensure that every charter school receives the Federal funding for which the charter school is eligible not later than 5 months after the charter school first opens, notwithstanding the fact that the identity and characteristics of the students enrolling in that charter school are not fully and completely determined until that charter school actually opens. The measures similarly shall ensure that every charter school expanding its enrollment in any subsequent year of operation receives the Federal funding for which the charter school is eligible not later than 5 months after such expansion.

(b) Adjustment and late openings

(1) In general

The measures described in subsection (a) of this section shall include provision for appropriate adjustments, through recovery of funds or reduction of payments for the succeeding year, in cases where payments made to a charter school on the basis of estimated or projected enrollment data exceed the amounts that the school is eligible to receive on the basis of actual or final enrollment data.

(2) Rule

For charter schools that first open after November 1 of any academic year, the State, in accordance with guidance provided by the Secretary and applicable Federal statutes and regulations, shall ensure that such charter schools that are eligible for the funds described in subsection (a) of this section for such academic year have a full and fair opportunity to receive those funds during the charter schools' first year of operation.

(Pub. L. 89–10, title V, §5206, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1797.)

Prior Provisions

A prior section 5206 of Pub. L. 89–10 was classified to section 7236 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

§7221f. Solicitation of input from charter school operators

To the extent practicable, the Secretary shall ensure that administrators, teachers, and other individuals directly involved in the operation of charter schools are consulted in the development of any rules or regulations required to implement this subpart, as well as in the development of any rules or regulations relevant to charter schools that are required to implement part A of subchapter I of this chapter, the Individuals with Disabilities Education Act [20 U.S.C. 1400 et seq.], or any other program administered by the Secretary that provides education funds to charter schools or regulates the activities of charter schools.

(Pub. L. 89–10, title V, §5207, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1798.)

References in Text

The Individuals with Disabilities Education Act, referred to in text, is title VI of Pub. L. 91–230, Apr. 13, 1970, 84 Stat. 175, as amended, which is classified generally to chapter 33 (§1400 et seq.) of this title. For complete classification of this Act to the Code, see section 1400 of this title and Tables.

Prior Provisions

A prior section 5207 of Pub. L. 89–10 was classified to section 7237 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

§7221g. Records transfer

State educational agencies and local educational agencies, to the extent practicable, shall ensure that a student's records and, if applicable, a student's individualized education program as defined in section 1401 of this title, are transferred to a charter school upon the transfer of the student to the charter school, and to another public school upon the transfer of the student from a charter school to another public school, in accordance with applicable State law.

(Pub. L. 89–10, title V, §5208, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1798; amended Pub. L. 108–446, title III, §305(g)(2), Dec. 3, 2004, 118 Stat. 2805.)

Prior Provisions

A prior section 5208 of Pub. L. 89–10 was classified to section 7238 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

Amendments

2004—Pub. L. 108–446 substituted "section 1401" for "section 1401(11)".

§7221h. Paperwork reduction

To the extent practicable, the Secretary and each authorized public chartering agency shall ensure that implementation of this subpart results in a minimum of paperwork for any eligible applicant or charter school.

(Pub. L. 89–10, title V, §5209, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1798.)

§7221i. Definitions

In this subpart:

(1) Charter school

The term "charter school" means a public school that—

(A) in accordance with a specific State statute authorizing the granting of charters to schools, is exempt from significant State or local rules that inhibit the flexible operation and management of public schools, but not from any rules relating to the other requirements of this paragraph;

(B) is created by a developer as a public school, or is adapted by a developer from an existing public school, and is operated under public supervision and direction;

(C) operates in pursuit of a specific set of educational objectives determined by the school's developer and agreed to by the authorized public chartering agency;

(D) provides a program of elementary or secondary education, or both;

(E) is nonsectarian in its programs, admissions policies, employment practices, and all other operations, and is not affiliated with a sectarian school or religious institution;

(F) does not charge tuition;

(G) complies with the Age Discrimination Act of 1975 [42 U.S.C. 6101 et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C. 2000d et seq.], title IX of the Education Amendments of 1972 [20 U.S.C. 1681 et seq.], section 504 of the Rehabilitation Act of 1973 [29 U.S.C. 794], and part B of the Individuals with Disabilities Education Act [20 U.S.C. 1411 et seq.];

(H) is a school to which parents choose to send their children, and that admits students on the basis of a lottery, if more students apply for admission than can be accommodated;

(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 requirements are specifically waived for the purpose of this program;

(J) meets all applicable Federal, State, and local health and safety requirements;

(K) operates in accordance with State law; and

(L) has a written performance contract with the authorized public chartering agency in the State that includes a description of how student performance will be measured in charter schools pursuant to State assessments that are required of other schools and pursuant to any other assessments mutually agreeable to the authorized public chartering agency and the charter school.

(2) Developer

The term "developer" means an individual or group of individuals (including a public or private nonprofit organization), which may include teachers, administrators and other school staff, parents, or other members of the local community in which a charter school project will be carried out.

(3) Eligible applicant

The term "eligible applicant" means a developer that has—

(A) applied to an authorized public chartering authority to operate a charter school; and

(B) provided adequate and timely notice to that authority under section 7221b(d)(3) of this title.

(4) Authorized public chartering agency

The term "authorized public chartering agency" means a State educational agency, local educational agency, or other public entity that has the authority pursuant to State law and approved by the Secretary to authorize or approve a charter school.

(Pub. L. 89–10, title V, §5210, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1798.)

References in Text

The Age Discrimination Act of 1975, referred to in par. (1)(G), is title III of Pub. L. 94–135, Nov. 28, 1975, 89 Stat. 728, as amended, which is classified generally to chapter 76 (§6101 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 6101 of Title 42 and Tables.

The Civil Rights Act of 1964, referred to in par. (1)(G), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241, as amended. Title VI of the Act is classified generally to subchapter V (§2000d et seq.) of chapter 21 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 2000a of Title 42 and Tables.

The Education Amendments of 1972, referred to in par. (1)(G), is Pub. L. 92–318, June 23, 1972, 86 Stat. 235, as amended. Title IX of the Act, known as the Patsy Takemoto Mink Equal Opportunity in Education Act, is classified principally to chapter 38 (§1681 et seq.) of this title. For complete classification of title IX to the Code, see Short Title note set out under section 1681 of this title and Tables.

The Individuals with Disabilities Education Act, referred to in par. (1)(G), is title VI of Pub. L. 91–230, Apr. 13, 1970, 84 Stat. 175, as amended. Part B of the Act is classified generally to subchapter II (§1411 et seq.) of chapter 33 of this title. For complete classification of this Act to the Code, see section 1400 of this title and Tables.

§7221j. Authorization of appropriations

(a) In general

There are authorized to be appropriated to carry out this subpart $300,000,000 for fiscal year 2002 and such sums as may be necessary for each of the 5 succeeding fiscal years.

(b) Reservation

From the amount appropriated under subsection (a) of this section for each fiscal year, the Secretary shall reserve—

(1) $200,000,000 to carry out this subpart, other than section 7221d(b) of this title; and

(2) any funds in excess of $200,000,000, that do not exceed $300,000,000, to carry out section 7221d(b) of this title; and

(3)(A) 50 percent of any funds in excess of $300,000,000 to carry out this subpart, other than section 7221d(b) of this title; and

(B) 50 percent of any funds in excess of $300,000,000 to carry out section 7221d(b) of this title.

(Pub. L. 89–10, title V, §5211, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1799.)

subpart 2—credit enhancement initiatives to assist charter school facility acquisition, construction, and renovation

§7223. Purpose

The purpose of this subpart 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 acquiring, constructing, and renovating facilities.

(Pub. L. 89–10, title V, §5221, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1800.)

§7223a. Grants to eligible entities

(a) Grants

The Secretary shall use 100 percent of the amount available to carry out this subpart to award not less than three grants to eligible entities that have applications approved under this subpart 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.

(b) Grantee selection

(1) Evaluation of application

The Secretary shall evaluate each application submitted under section 7223b of this title, and shall determine whether the application is sufficient to merit approval.

(2) Distribution of grants

The Secretary shall award at least one grant to an eligible entity described in section 7223i(2)(A) of this title, at least one grant to an eligible entity described in section 7223i(2)(B) of this title, and at least one grant to an eligible entity described in section 7223i(2)(C) of this title, if applications are submitted that permit the Secretary to do so without approving an application that is not of sufficient quality to merit approval.

(c) Grant characteristics

Grants under this subpart 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) Special rule

In the event the Secretary determines that the funds made available under this subpart are insufficient to permit the Secretary to award not less than three grants in accordance with subsections (a) through (c) of this section, such three-grant minimum and subsection (b)(2) of this section shall not apply, and the Secretary may determine the appropriate number of grants to be awarded in accordance with subsection (c) of this section.

(Pub. L. 89–10, title V, §5222, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1800.)

§7223b. Applications

(a) In general

To receive a grant under this subpart, an eligible entity shall submit to the Secretary an application in such form as the Secretary may reasonably require.

(b) Contents

An application submitted under subsection (a) of this section shall contain—

(1) a statement identifying the activities proposed to be undertaken with funds received under this subpart, 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;

(2) a description of the involvement of charter schools in the application's development and the design of the proposed activities;

(3) a description of the eligible entity's expertise in capital market financing;

(4) 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;

(5) 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;

(6) 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

(7) such other information as the Secretary may reasonably require.

(Pub. L. 89–10, title V, §5223, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1800.)

§7223c. Charter school objectives

An eligible entity receiving a grant under this subpart shall use the funds deposited in the reserve account established under section 7223d(a) of this title 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, or the renovation, repair, or alteration of existing facilities, necessary to commence or continue the operation of a charter school.

(Pub. L. 89–10, title V, §5224, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1801.)

§7223d. Reserve account

(a) Use of funds

To assist charter schools to accomplish the objectives described in section 7223c of this title, an eligible entity receiving a grant under this subpart shall, in accordance with State and local law, directly or indirectly, alone or in collaboration with others, deposit the funds received under this subpart (other than funds used for administrative costs in accordance with section 7223e of this title) 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:

(1) Guaranteeing, insuring, and reinsuring bonds, notes, evidences of debt, loans, and interests therein, the proceeds of which are used for an objective described in section 7223c of this title.

(2) Guaranteeing and insuring leases of personal and real property for an objective described in section 7223c of this title.

(3) 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.

(4) 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).

(b) Investment

Funds received under this subpart and deposited in the reserve account established under subsection (a) of this section shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly low-risk securities.

(c) Reinvestment of earnings

Any earnings on funds received under this subpart shall be deposited in the reserve account established under subsection (a) of this section and used in accordance with such subsection.

(Pub. L. 89–10, title V, §5225, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1801.)

§7223e. Limitation on administrative costs

An eligible entity may use not more than 0.25 percent of the funds received under this subpart for the administrative costs of carrying out its responsibilities under this subpart.

(Pub. L. 89–10, title V, §5226, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1802.)

§7223f. Audits and reports

(a) Financial record maintenance and audit

The financial records of each eligible entity receiving a grant under this subpart shall be maintained in accordance with generally accepted accounting principles and shall be subject to an annual audit by an independent public accountant.

(b) Reports

(1) Grantee annual reports

Each eligible entity receiving a grant under this subpart annually shall submit to the Secretary a report of its operations and activities under this subpart.

(2) Contents

Each annual report submitted under paragraph (1) shall include—

(A) 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;

(B) a copy of any report made on an audit of the financial records of the eligible entity that was conducted under subsection (a) of this section during the reporting period;

(C) an evaluation by the eligible entity of the effectiveness of its use of the Federal funds provided under this subpart in leveraging private funds;

(D) a listing and description of the charter schools served during the reporting period;

(E) a description of the activities carried out by the eligible entity to assist charter schools in meeting the objectives set forth in section 7223c of this title; and

(F) a description of the characteristics of lenders and other financial institutions participating in the activities undertaken by the eligible entity under this subpart during the reporting period.

(3) Secretarial report

The Secretary shall review the reports submitted under paragraph (1) and shall provide a comprehensive annual report to Congress on the activities conducted under this subpart.

(Pub. L. 89–10, title V, §5227, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1802.)

§7223g. No full faith and credit for grantee obligations

No financial obligation of an eligible entity entered into pursuant to this subpart (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 subpart.

(Pub. L. 89–10, title V, §5228, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1803.)

§7223h. Recovery of funds

(a) In general

The Secretary, in accordance with chapter 37 of title 31, shall collect—

(1) all of the funds in a reserve account established by an eligible entity under section 7223d(a) of this title if the Secretary determines, not earlier than 2 years after the date on which the eligible entity first received funds under this subpart, that the eligible entity has failed to make substantial progress in carrying out the purposes described in section 7223d(a) of this title; or

(2) all or a portion of the funds in a reserve account established by an eligible entity under section 7223d(a) of this title 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 section 7223d(a) of this title.

(b) Exercise of authority

The Secretary shall not exercise the authority provided in subsection (a) of this section to collect from any eligible entity any funds that are being properly used to achieve one or more of the purposes described in section 7223d(a) of this title.

(c) Procedures

The provisions of sections 451, 452, and 458 of the General Education Provisions Act [20 U.S.C. 1234, 1234a, 1234g] shall apply to the recovery of funds under subsection (a) of this section.

(d) Construction

This section 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 [20 U.S.C. 1234 et seq.].

(Pub. L. 89–10, title V, §5229, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1803.)

References in Text

The General Education Provisions Act, referred to in subsec. (d), is title IV of Pub. L. 90–247, Jan. 2, 1968, 81 Stat. 814, as amended. Part D of the Act is classified generally to subchapter IV (§1234 et seq.) of chapter 31 of this title. For complete classification of this Act to the Code, see section 1221 of this title and Tables.

§7223i. Definitions

In this subpart:

(1) Charter school

The term "charter school" has the meaning given such term in section 7221i of this title.

(2) Eligible entity

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).

(Pub. L. 89–10, title V, §5230, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1803.)

§7223j. Authorization of appropriations

For the purpose of carrying out this subpart, there are authorized to be appropriated $150,000,000 for fiscal year 2002 and such sums as may be necessary for fiscal year 2003.

(Pub. L. 89–10, title V, §5231, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1803.)

subpart 3—voluntary public school choice programs

§7225. Grants

(a) Authorization

From funds made available under section 7225g of this title to carry out this subpart, the Secretary shall award grants, on a competitive basis, to eligible entities to enable the entities to establish or expand a program of public school choice (referred to in this subpart as a "program") in accordance with this subpart.

(b) Duration

Grants awarded under subsection (a) of this section may be awarded for a period of not more than 5 years.

(Pub. L. 89–10, title V, §5241, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1803.)

§7225a. Uses of funds

(a) Required use of funds

An eligible entity that receives a grant under this subpart shall use the grant funds to provide students selected to participate in the program with transportation services or the cost of transportation to and from the public elementary schools and secondary schools, including charter schools, that the students choose to attend under the program.

(b) Permissible uses of funds

An eligible entity that receives a grant under this subpart may use the grant funds for—

(1) planning or designing a program (for not more than 1 year);

(2) the cost of making tuition transfer payments to public elementary schools or secondary schools to which students transfer under the program;

(3) the cost of capacity-enhancing activities that enable high-demand public elementary schools or secondary schools to accommodate transfer requests under the program;

(4) the cost of carrying out public education campaigns to inform students and parents about the program; and

(5) other costs reasonably necessary to implement the program.

(c) Nonpermissible uses of funds

An eligible entity that receives a grant under this subpart may not use the grant funds for school construction.

(d) Administrative expenses

The eligible entity may use not more than 5 percent of the funds made available through the grant for any fiscal year for administrative expenses.

(Pub. L. 89–10, title V, §5242, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1804.)

§7225b. Applications

(a) Submission

An eligible entity that desires a grant under this subpart shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

(b) Contents

An application submitted under subsection (a) of this section shall include—

(1) a description of the program for which the eligible entity seeks funds and the goals for such program;

(2) a description of how and when parents of students will be given the notice required under section 7225d(a)(2) of this title;

(3) a description of how students will be selected for the program;

(4) a description of how the program will be coordinated with, and will complement and enhance, other related Federal and non-Federal projects;

(5) if the program is to be carried out by a partnership, the name of each partner and a description of the partner's responsibilities; and

(6) such other information as the Secretary may require.

(Pub. L. 89–10, title V, §5243, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1804.)

§7225c. Priorities

In awarding grants under this subpart, the Secretary shall give priority to an eligible entity—

(1) whose program would provide the widest variety of choices to all students in participating schools;

(2) whose program would, through various choice options, have the most impact in allowing students in low-performing schools to attend higher-performing schools; and

(3) that is a partnership that seeks to implement an interdistrict approach to carrying out a program.

(Pub. L. 89–10, title V, §5244, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1804.)

§7225d. Requirements and voluntary participation

(a) Parent and community involvement and notice

In carrying out a program under this subpart, an eligible entity shall—

(1) develop the program with—

(A) the involvement of parents and others in the community to be served; and

(B) individuals who will carry out the program, including administrators, teachers, principals, and other staff; and

(2) provide to parents of students in the area to be served by the program with prompt notice of—

(A) the existence of the program;

(B) the program's availability; and

(C) a clear explanation of how the program will operate.

(b) Selection of students

An eligible entity that receives a grant under this subpart shall select students to participate in a program on the basis of a lottery, if more students apply for admission to the program than can be accommodated.

(c) Voluntary participation

Student participation in a program funded under this subpart shall be voluntary.

(Pub. L. 89–10, title V, §5245, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1805.)

§7225e. Evaluations

(a) In general

From the amount made available to carry out this subpart for any fiscal year, the Secretary may reserve not more than 5 percent—

(1) to carry out evaluations;

(2) to provide technical assistance; and

(3) to disseminate information.

(b) Evaluations

In carrying out the evaluations under subsection (a) of this section, the Secretary shall, at a minimum, address—

(1) how, and the extent to which, the programs promote educational equity and excellence;

(2) the characteristics of the students participating in the programs; and

(3) the effect of the programs on the academic achievement of students participating in the programs, particularly students who move from schools identified under section 6316 of this title to schools not so identified, and on the overall quality of participating schools and districts.

(Pub. L. 89–10, title V, §5246, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1805.)

§7225f. Definitions

In this subpart:

(1) Charter school

The term "charter school" has the meaning given such term in section 7221i of this title.

(2) Eligible entity

The term "eligible entity" means—

(A) one or more State educational agencies;

(B) one or more local educational agencies; or

(C) a partnership of—

(i) one or more—

(I) State educational agencies; and

(II) local educational agencies or other public, for-profit, or nonprofit entities; or

(ii) one or more—

(I) local educational agencies; and

(II) public, for-profit, or nonprofit entities.

(3) Low-performing school

The term "low-performing school" means a public elementary school or secondary school that has failed to make adequate yearly progress, as described in section 6311(b) of this title, for two or more consecutive years.

(Pub. L. 89–10, title V, §5247, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1805.)

§7225g. Authorization of appropriations

There are authorized to be appropriated to carry out this subpart $100,000,000 for fiscal year 2002 and each of the 5 succeeding fiscal years.

(Pub. L. 89–10, title V, §5248, as added Pub. L. 107–110, title V, §501, Jan. 8, 2002, 115 Stat. 1806.)