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[DOCID: f:s98is.txt]






107th CONGRESS
  1st Session
                                 S. 98

To amend the Elementary and Secondary Education Act of 1965 to promote 
   parental involvement and parental empowerment in public education 
    through greater competition and choice, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 22, 2001

  Mr. Carper introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend the Elementary and Secondary Education Act of 1965 to promote 
   parental involvement and parental empowerment in public education 
    through greater competition and choice, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Empowering Parents Act of 2001''.

                     TITLE I--PUBLIC SCHOOL CHOICE

SEC. 101. SHORT TITLE OF TITLE.

    This title may be referred to as the ``Enhancing Public Education 
Through Choice Act''.

SEC. 102. FINDINGS.

    Congress finds that--
            (1) research shows that parental involvement in a child's 
        education is a key factor supporting student achievement;
            (2) parents are the most important enforcers of 
        accountability in public education;
            (3) whenever a child is left trapped in a failing school, 
        the Nation has failed to fulfill the promise of equal 
        opportunity for all;
            (4) high quality public school choice programs that are 
        genuinely open and accessible to all students (including poor, 
        minority, limited English proficient, and disabled students) 
        broaden educational opportunities and promote excellence in 
        education;
            (5) public school systems have begun to develop a variety 
        of innovative programs that offer expanded choices to parents 
        and students; and
            (6) the Federal Government should support and expand 
        efforts to give parents and students the high quality public 
        school choices the parents and students seek, to help eliminate 
        barriers to effective public school choice, and to disseminate 
        the lessons learned from high quality choice programs so that 
        all public schools can benefit from the efforts.

SEC. 103. PURPOSES.

    The purposes of this title are--
            (1) to prevent children from being consigned to, or left 
        trapped in, failing schools;
            (2) to ensure that parents of children in failing public 
        schools have the choice to send their children to higher 
        performing public schools, including public charter schools;
            (3) to support and stimulate improved public school 
        performance through increased public school competition and 
        increased Federal financial assistance;
            (4) to provide parents with more choices among public 
        school options; and
            (5) to assist local educational agencies with low-
        performing schools to implement districtwide public school 
        choice programs or enter into partnerships with other local 
        educational agencies to offer students interdistrict or 
        statewide public school choice programs.

SEC. 104. PUBLIC SCHOOL CHOICE PROGRAMS.

    Title X of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 10101 et seq.) is amended by adding at the end the following:

                ``PART L--PUBLIC SCHOOL CHOICE PROGRAMS

``SEC. 10995A. DEFINITIONS.

    ``In this part:
            ``(1) Lowest performing school.--The term `lowest 
        performing school' means a public school that has failed to 
        make adequate yearly progress, as described in section 1111, 
        for 2 or more years.
            ``(2) Poverty line.--The term `poverty line' means the 
        income official poverty line (as defined by the Office of 
        Management and Budget, and revised annually in accordance with 
        section 673(2) of the Community Services Block Grant Act (42 
        U.S.C. 9902(2))) applicable to a family of the size involved, 
        for the most recent fiscal year for which satisfactory data are 
        available.
            ``(3) Public charter school.--The term `public charter 
        school' has the meaning given the term in section 10996A.
            ``(4) Public school.--The term `public school' means a 
        public charter school, a public elementary school, and a public 
        secondary school.
            ``(5) Student in poverty.--The term `student in poverty' 
        means a student from a family with an income below the poverty 
        line.

``SEC. 10995B. GRANTS.

    ``The Secretary shall make grants, on a competitive basis, to State 
educational agencies and local educational agencies, to enable the 
agencies, including the agencies serving the lowest performing schools, 
to implement programs of universal public school choice.

``SEC. 10995C. USE OF FUNDS.

    ``(a) In General.--An agency that receives a grant under this part 
shall use the funds made available through the grant to pay for the 
expenses of implementing a public school choice program, including--
            ``(1) the expenses of providing transportation services or 
        the cost of transportation to eligible children, except that 
        not more than 10 percent of the funds may be used for expenses 
        described in this paragraph;
            ``(2) the cost of making tuition transfer payments to 
        public schools to which students transfer under the program;
            ``(3) the cost of school construction if the construction 
        is necessary to accommodate requests to transfer to high-demand 
        public schools;
            ``(4) the cost of carrying out public education campaigns 
        to inform students and parents about the program;
            ``(5) administrative costs; and
            ``(6) other costs reasonably necessary to implement the 
        program.
    ``(b) Supplement, Not Supplant.--Funds made available under this 
part shall supplement, and not supplant, State and local public funds 
expended to provide public school choice programs for eligible 
individuals.

``SEC. 10995D. REQUIREMENTS.

    ``(a) Inclusion in Program.--In carrying out a public school choice 
program under this part, a State educational agency or local 
educational agency shall--
            ``(1) allow all students attending public schools within 
        the State or school district involved to attend the public 
        school of their choice within the State or school district, 
        respectively;
            ``(2) provide all eligible students in all grade levels 
        equal access to the program;
            ``(3) include in the program public charter schools and any 
        other public school in the State or school district, 
        respectively; and
            ``(4) develop the program with the involvement of parents 
        and others in the community to be served, and individuals who 
        will carry out the program, including administrators, teachers, 
        principals, and other staff.
    ``(b) Notice.--In carrying out a public school choice program under 
this part, a State educational agency or local educational agency shall 
give parents of eligible students prompt notice of the existence of the 
program and the program's availability to such parents, and a clear 
explanation of how the program will operate.
    ``(c) Transportation.--In carrying out a public school choice 
program under this part, a State educational agency or local 
educational agency shall provide eligible students with transportation 
services or the cost of transportation to and from the public schools, 
including public ch
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arter schools, that the students choose to attend 
under this program.
    ``(d) Nondiscrimination.--Notwithstanding subsection (a)(3), no 
public school may discriminate on the basis of race, color, religion, 
sex, national origin, sexual orientation, or disability in providing 
programs and activities under this part.
    ``(e) Parallel Accountability.--Each State educational agency or 
local educational agency receiving a grant under this part for a 
program through which a public charter school receives assistance shall 
hold the school accountable for adequate yearly progress in improving 
student performance as described in title I and as established in the 
school's charter, including the use of the standards and assessments 
established under title I.

``SEC. 10995E. APPLICATIONS.

    ``(a) In General.--To be eligible to receive a grant under this 
part, a State educational agency or local educational agency shall 
submit an application to the Secretary at such time, in such manner, 
and containing such information as the Secretary may require.
    ``(b) Contents.--Each application for a grant under this part shall 
include--
            ``(1) a description of the program for which the agency 
        seeks funds and the goals for such program;
            ``(2) a description of how the program will be coordinated 
        with, and will complement and enhance, other related Federal 
        and non-Federal projects;
            ``(3) if the program is carried out by a partnership, the 
        name of each partner and a description of the partner's 
        responsibilities;
            ``(4) a description of the policies and procedures the 
        agency will use to ensure--
                    ``(A) accountability for results, including goals 
                and performance indicators; and
                    ``(B) that the program is open and accessible to, 
                and will promote high academic standards for, all 
                students; and
            ``(5) such other information as the Secretary may require.

``SEC. 10995F. PRIORITIES.

    ``In making grants under this part, the Secretary shall give 
priority to--
            ``(1) first, those State educational agencies and local 
        educational agencies serving the lowest performing schools;
            ``(2) second, those State educational agencies and local 
        educational agencies serving the highest percentage of students 
        in poverty; and
            ``(3) third, those State educational agencies or local 
        educational agencies forming a partnership that seeks to 
        implement an interdistrict approach to carrying out a public 
        school choice program.

``SEC. 10995G. EVALUATIONS, TECHNICAL ASSISTANCE, AND DISSEMINATION.

    ``(a) In General.--From the amount made available to carry out this 
part for any fiscal year, the Secretary may reserve not more than 5 
percent to carry out evaluations, to provide technical assistance, and 
to disseminate information.
    ``(b) Evaluations.--In carrying out evaluations under subsection 
(a), the Secretary may use the amount reserved under subsection (a) to 
carry out 1 or more evaluations of State and local programs assisted 
under this part, which shall, at a minimum, address--
            ``(1) how, and the extent to which, the programs promote 
        educational equity and excellence; and
            ``(2) the extent to which public schools carrying out the 
        programs are--
                    ``(A) held accountable to the public;
                    ``(B) effective in improving public education; and
                    ``(C) open and accessible to all students.

``SEC. 10995H. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part 
$200,000,000 for fiscal year 2002 and each subsequent fiscal year.''.

          TITLE II--PUBLIC CHARTER SCHOOL FACILITIES FINANCING

SEC. 201. SHORT TITLE OF TITLE.

    This title may be cited as the ``Public Charter Schools Equity 
Act''.

SEC. 202. FINDINGS.

    Congress finds that--
            (1) charter schools are public schools authorized by a 
        designated public body and operating on the principles of 
        parental involvement, accountability, flexibility, and choice;
            (2) in exchange for the flexibility and autonomy given to 
        charter schools, the schools are held accountable by their 
        sponsors for improving student achievement and for their 
        financial and other operations;
            (3) charter schools can be vehicles both for improving 
        student achievement for students who attend the schools and for 
        stimulating change and improvement in all public schools and 
        benefiting all public school students;
            (4) charter schools are laboratories of reform and serve as 
        models of how to educate children as effectively as possible;
            (5) students in charter schools nationwide have demographic 
        characteristics that are similar to the demographic 
        characteristics of students in all public schools;
            (6) charter schools in many States serve significant 
        numbers of students from lower income families, students of 
        color, and students with disabilities;
            (7) charter schools have enjoyed broad bipartisan support 
        from the executive branch, Congress, State Governors and 
        legislatures, educators, and parents across the Nation;
            (8) 36 States, the District of Columbia, and the 
        Commonwealth of Puerto Rico have passed laws authorizing 
        charter schools;
            (9) 32 States, the District of Columbia, and the 
        Commonwealth of Puerto Rico had operating charter schools in 
        the 1999-2000 school year;
            (10) the Charter School Expansion Act of 1998 (Public Law 
        105-278; 112 Stat. 2682) amended part C of title X of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 8061 
        et seq.), which authorizes the Federal grant program for 
        charter schools, to strengthen accountability provisions at the 
        Federal, State, and local levels to ensure that public charter 
        schools are of high quality and are truly accountable to the 
        public;
            (11) 7 of 10 charter schools report having a waiting list;
            (12) a survey of charter school developers, issued as part 
        of a Department of Education report entitled ``A National Study 
        of Charter Schools: Third Year Report'', found that a lack of 
        startup funds was the most frequently cited barrier to 
        developing and implementing charter schools, and was cited by 
        more than half of the charter school developers surveyed;
            (13) according to a September 2000 General Accounting 
        Office study--
                    (A) charter schools do not have access to the most 
                common source of facility financing, which is municipal 
                bonds;
                    (B) charter schools are frequently not part of a 
                school district and generally have no authority to 
                raise taxes or issue tax-exempt bonds;
                    (C) charter schools that are part of school 
                districts might not share in State or local school 
                construction funds because the charter schools must 
                compete with other public schools that have their own 
                construction or renovation needs;
                    (D) charter schools that are part of school 
                districts frequently receive less than the average 
                amount allocated for the schools in their districts for 
                operating expenses;
                    (E) few State charter laws address facility 
                financing, or provide funding for constructing, 
                renovating, or leasing buildings, for use by charter 
                schools;
                    (F) loans are not easily accessible or frequently 
                availab
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le to charter schools for facility financing 
                because the charter schools lack long credit histories 
                and have short-term charters that can be terminated by 
                their sponsors; and
                    (G) few charter schools have been successful in 
                obtaining a facility from a private donor, and surplus 
                buildings that can be made available by school 
                districts free or at reduced rent either need expensive 
                renovations or simply do not exist; and
            (14) the Federal Government should--
                    (A) help to encourage the growth of charter 
                schools, particularly in disadvantaged communities, by 
                helping charter school developers to access credit 
                markets at reasonable rates of interest; and
                    (B) encourage the States to provide facilities 
                funding, on a per-pupil basis, to charter schools, in 
                addition to the per-pupil funding the States provide 
                for operating expenses, on a per-pupil basis.

SEC. 203. PURPOSES.

    The purposes of this title are--
            (1) to help eliminate the barriers that prevent public 
        charter school developers from accessing the credit markets, by 
        encouraging lending institutions to lend funds to public 
        charter schools on terms more similar to the terms typically 
        extended to traditional public schools; and
            (2) to encourage the States to provide support to public 
        charter schools for facilities financing in an amount 
        commensurate to the amount the States have typically provided 
        for traditional public schools.

SEC. 204. LOAN GUARANTEES.

    Title X of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 10101 et seq.), as amended by section 104, is further amended by 
adding at the end the following:

            ``PART M--PUBLIC CHARTER SCHOOL LOAN GUARANTEES

``SEC. 10996A. DEFINITIONS.

    ``In this part:
            ``(1) Public charter school.--The term `public charter 
        school' means an institution defined as a public charter school 
        by the State in which the institution is located.
            ``(2) Startup costs.--The term `startup costs', used with 
        respect to a public charter school, means the costs of securing 
        facilities, training teachers, and purchasing equipment, 
        including instructional materials and computers, for the 
        school.

``SEC. 10996B. LOAN GUARANTEES.

    ``The Secretary shall carry out a program through which the 
Secretary provides loan guarantees to lending institutions on behalf of 
eligible public charter schools to guarantee payment of loans made by 
the lending institutions for the startup costs, including the costs of 
capital projects, of the schools.

``SEC. 10996C. USE OF FUNDS.

    ``In providing a loan guarantee under this part, the Secretary 
shall guarantee to the lending institution payment of 90 percent of the 
principal and interest on a loan described in section 10996B.

``SEC. 10996D. APPLICATIONS.

    ``(a) In General.--To be eligible to have a loan guaranteed under 
this part, a public charter school shall submit an application to the 
Secretary at such time, in such manner, and containing such information 
as the Secretary may require.
    ``(b) Contents.--The application shall contain--
            ``(1) a certification that the school is a public charter 
        school;
            ``(2) a certification that the school does not have access 
        to funding for the startup costs of the project involved 
        through the financing methods available to other public schools 
        in the jurisdiction involved;
            ``(3) an assurance that the school will be unable to obtain 
        financing for the project at a reasonably affordable rate of 
        interest unless the school obtains a loan guarantee under the 
        program carried out under this part; and
            ``(4) a business plan for the school that includes 
        reasonable assurances that the school will repay the loan for 
        which the guarantee will be made.

``SEC. 10996E. PRIORITIES.

    ``In providing loan guarantees on behalf of public charter schools 
under this part, the Secretary shall give priority to public charter 
schools in States that meet the criteria described in paragraph (2), 
and subparagraphs (A), (B), and (C) of paragraph (3), of section 
10302(e).

``SEC. 10996F. EVALUATIONS, TECHNICAL ASSISTANCE, AND DISSEMINATION.

    ``(a) In General.--From the amount made available to carry out this 
part for any fiscal year, the Secretary may reserve not more than 5 
percent to carry out evaluations, to provide technical assistance, and 
to disseminate information.
    ``(b) Evaluations.--In carrying out evaluations under subsection 
(a), the Secretary may use the amount reserved under subsection (a) to 
carry out 1 or more evaluations of the program carried out the 
Secretary under this part, which shall, at a minimum, address--
            ``(1) how, and the extent to which, the program promotes 
        educational equity and excellence; and
            ``(2) the extent to which public charter schools supported 
        through the program are--
                    ``(A) held accountable to the public;
                    ``(B) effective in improving public education; and
                    ``(C) open and accessible to all students.

``SEC. 10996G. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part 
$400,000,000 for fiscal year 2002 and each subsequent fiscal year.''.

SEC. 205. INCOME EXCLUSION FOR INTEREST PAID ON LOANS BY PUBLIC CHARTER 
              SCHOOLS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 139 and section 
140 and by inserting after section 138 the following new section:

``SEC. 139. INTEREST ON PUBLIC CHARTER SCHOOL LOANS.

    ``(a) Exclusion.--Gross income does not include interest on any 
public charter school loan.
    ``(b) Public Charter School Loan.--For purposes of this section:
            ``(1) In general.--The term `public charter school loan' 
        means any indebtedness incurred by a public charter school.
            ``(2) Public charter school.--The term `public charter 
        school' means an institution defined as a public charter school 
        by the State in which the institution is located.''.
    (b) Conforming Amendment.--The table of sections for such part III 
is amended by striking the item relating to section 139 and inserting 
the following:

                              ``Sec. 139. Interest on public charter 
                                        school loans.
                              ``Sec. 140. Cross references to other 
                                        Acts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000, with respect 
to indebtedness incurred after the date of the enactment of this Act.

SEC. 206. GRANTS FOR PUBLIC CHARTER SCHOOL FACILITIES.

    Title X of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 10101 et seq.), as amended by section 204, is further amended by 
adding at the end the following:

         ``PART N--GRANTS FOR PUBLIC CHARTER SCHOOL FACILITIES

``SEC. 10997A. DEFINITION.

    ``In this part,

``SEC. 10997B. GRANTS.

    ``(a) In General.--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, programs in which the 
States make payments, on a per-pupil basis, to public charter schools 
to assist the schools in financing school facilities.
    ``(b) Period.--The Secretary shall award grants under this section 
for periods of 5 years.
    ``(c) Federal Share.--The Federal share of the cost described in 
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subsection (a) for a program shall be not more than--
            ``(1) 90 percent of the cost, for the first fiscal year for 
        which the program receives assistance under this part or its 
        predecessor authority;
            ``(2) 80 percent in the second such year;
            ``(3) 60 percent in the third such year;
            ``(4) 40 percent in the fourth such year; and
            ``(5) 20 percent in the fifth such year.

``SEC. 10997C. USE OF FUNDS.

    ``(a) In General.--A State that receives a grant under this part 
shall use the funds made available through the grant to establish or 
enhance, and administer, a facilities financing program for public 
charter schools in the State.
    ``(b) Evaluations; Technical Assistance; Dissemination.--From the 
amount made available to a State through a grant under this part for a 
fiscal year, the State may reserve not more than 5 percent of the 
amount to carry out evaluations, to provide technical assistance, and 
to disseminate information.
    ``(c) Supplement, Not Supplant.--Funds made available under this 
part shall supplement, and not supplant, State and local public funds 
expended to provide facilities financing programs, or operations 
financing programs, for public charter schools.

``SEC. 10997D. REQUIREMENTS.

    ``(a) Voluntary Participation.--No State may be required to 
participate in a program carried out under this part.
    ``(b) State Law.--To be eligible to receive a grant under this 
part, a State shall establish or enhance, and administer, a facilities 
financing program for public charter schools in the State, that--
            ``(1) is specified in State law;
            ``(2) provides equitable annual financing, on a per-pupil 
        basis, for public charter school facilities; and
            ``(3) provides financing that is dedicated solely for 
        funding the facilities.

``SEC. 10997E. APPLICATIONS.

    ``To be eligible to receive a grant under this part, a State shall 
submit an application to the Secretary at such time, in such manner, 
and containing such information as the Secretary may require.

``SEC. 10997F. PRIORITIES.

    ``In making grants under this part, 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 
10302(e).

``SEC. 10997G. EVALUATIONS, TECHNICAL ASSISTANCE, AND DISSEMINATION.

    ``(a) In General.--From the amount made available to carry out this 
part for any fiscal year, the Secretary may reserve not more than 5 
percent to carry out evaluations, to provide technical assistance, and 
to disseminate information.
    ``(b) Evaluations.--In carrying out evaluations under subsection 
(a), the Secretary may use the amount reserved under subsection (a) to 
carry out 1 or more evaluations of State programs assisted under this 
part, which shall, at a minimum, address--
            ``(1) how, and the extent to which, the programs promote 
        educational equity and excellence; and
            ``(2) the extent to which public charter schools supported 
        through the programs are--
                    ``(A) held accountable to the public;
                    ``(B) effective in improving public education; and
                    ``(C) open and accessible to all students.

``SEC. 10997H. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part 
$400,000,000 for fiscal year 2002 and each subsequent fiscal year.''.
                                 <all>

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