COAT Act

I 116TH CONGRESS 2D SESSION H. R. 5984 To amend the Elementary and Secondary Education Act of 1965 to improve oversight of private charter management organizations, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 27, 2020 Ms. TLAIB (for herself, Mr. BLUMENAUER, Mr. CICILLINE, Mr. CLAY, Mr. DEFAZIO, Ms. DELAURO, Mrs. DINGELL, Mr. GARCI´A of Illinois, Ms. GARCIA of Texas, Ms. HAALAND, Mrs. HAYES, Ms. JAYAPAL, Ms. KELLY of Illinois, Mr. KHANNA, Mr. KILDEE, Mrs. LAWRENCE, Mr. LEVIN of Michigan, Mr. MCNERNEY, Ms. MOORE, Ms. OCASIO-CORTEZ, Ms. OMAR, Mr. POCAN, Ms. PORTER, Ms. PRESSLEY, Mr. RASKIN, Mr. RYAN, Ms. SCHAKOWSKY, Ms. SEWELL of Alabama, Ms. SHALALA, Ms. SLOTKIN, Ms. STEVENS, Mr. VELA, Ms. VELA´ZQUEZ, Ms. WILD, and Mr. WILSON of South Carolina) introduced the following bill; which was referred to the Committee on Education and Labor A BILL To amend the Elementary and Secondary Education Act of 1965 to improve oversight of private charter manage- ment organizations, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Charter Oversight, Ac- 4 countability, and Transparency Act’’ or the ‘‘COAT Act’’. 5 VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 5984 IH SEC. 2. OVERSIGHT OF PRIVATE CHARTER MANAGEMENT 1 ORGANIZATIONS. 2 (a) STATE PLAN ASSURANCE.—Section 1111(g) of 3 the Elementary and Secondary Education Act of 1965 (20 4 U.S.C. 6311(g)) is amended— 5 (1) in paragraph (2)— 6 (A) in subparagraph (M), by striking 7 ‘‘and’’ at the end; 8 (B) in subparagraph (N), by striking the 9 period at the end and inserting ‘‘; and’’; and 10 (C) by adding at the end the following new 11 subparagraph: 12 ‘‘(O) the State educational agency will en- 13 sure that each contract between a charter 14 school located in the State and a private char- 15 ter management organization for the operation 16 or management of the charter school satisfies 17 the requirements described in paragraph (5).’’; 18 and 19 (2) by adding at the end the following new 20 paragraph: 21 ‘‘(5) PRIVATE CHARTER MANAGEMENT ORGANI- 22 ZATION OVERSIGHT.— 23 ‘‘(A) IN GENERAL.—A contract described 24 in paragraph (2)(O) shall require a private 25 VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 5984 IH charter management organization to comply, 1 while under contract, with the following: 2 ‘‘(i) ANNUAL DISCLOSURES.—The pri- 3 vate charter management organization 4 shall disclose annually to the Secretary, for 5 the most recently completed fiscal year, the 6 following information: 7 ‘‘(I) The identity of each charter 8 school operated or managed by the 9 private charter management organiza- 10 tion. 11 ‘‘(II) The identity of each execu- 12 tive, including the chief executive offi- 13 cer, chief operating officer, chief fi- 14 nancial officer, and general counsel, of 15 the private charter management orga- 16 nization (with updates provided to the 17 Secretary not later than one month 18 after a change with respect to any 19 such executive). 20 ‘‘(III) The salary of each such 21 executive. 22 ‘‘(IV) The amount earned in ex- 23 cess of salary by each such executive. 24 VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 5984 IH ‘‘(V) The amount expended by 1 the private charter management orga- 2 nization on the following: 3 ‘‘(aa) The operations of each 4 charter school that is served by 5 the private charter management 6 organization. 7 ‘‘(bb) The administration of 8 the private charter management 9 organization, excluding amounts 10 accounted for under item (aa). 11 ‘‘(VI) An audited income state- 12 ment and balance sheet demonstrating 13 revenue, costs, and profit margin 14 (prepared in accordance with gen- 15 erally accepted accounting principles). 16 ‘‘(VII) The amount expended by 17 the private charter management orga- 18 nization, and the percentage of the 19 annual budget of the private charter 20 management organization that each 21 such amount comprises, for the fol- 22 lowing: 23 ‘‘(aa) Administrative costs. 24 VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 5984 IH ‘‘(bb) Costs of advertising 1 and marketing. 2 ‘‘(cc) Salary and benefits for 3 teachers, support staff, school 4 leaders (including the principal 5 and vice principal), and special 6 education instructional support 7 staff. 8 ‘‘(dd) Costs of instructional 9 supplies, including books, writing 10 material, and curriculum mate- 11 rial. 12 ‘‘(ee) Any other cost exceed- 13 ing one percent of the annual 14 budget of the private charter 15 management organization. 16 ‘‘(VIII) Whether the private 17 charter management organization is a 18 for-profit or nonprofit organization. 19 ‘‘(IX) The identity of any entity 20 that has entered into a contract with 21 the private charter management orga- 22 nization and with respect to which the 23 private charter management organiza- 24 tion— 25 VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 5984 IH ‘‘(aa) owns a security; 1 ‘‘(bb) extends credit; 2 ‘‘(cc) is a parent, subsidiary, 3 or sibling company; or 4 ‘‘(dd) is under common con- 5 trol. 6 ‘‘(ii) BOARD MEETINGS.—The private 7 charter management organization shall— 8 ‘‘(I) hold board meetings that are 9 open to the public; 10 ‘‘(II) one week prior to the date 11 of a board meeting, issue a public no- 12 tice of the meeting; and 13 ‘‘(III) ensure that board meet- 14 ings are reasonably accessible to the 15 community by holding the meetings 16 during a time of day that is reason- 17 ably convenient for the parents of 18 children enrolled in a charter school 19 served by the private charter manage- 20 ment organization. 21 ‘‘(B) PRIVATE CHARTER MANAGEMENT OR- 22 GANIZATION DEFINED.—For purposes of this 23 subsection, the term ‘private charter manage- 24 ment organization’ means a private organiza- 25 VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 5984 IH tion that operates or manages a charter school 1 or a network of charter schools linked by cen- 2 tralized support, operations, and oversight, 3 without regard to whether such organization is 4 a for-profit or nonprofit organization.’’. 5 (b) PUBLIC AVAILABILITY AND REPORT TO CON- 6 GRESS.—Not later than six months after receiving infor- 7 mation disclosed pursuant to section 1111(g)(5) of the El- 8 ementary and Secondary Education Act of 1965, as added 9 by subsection (a), the Secretary of Education shall— 10 (1) make available the information on a public 11 website of the Department of Education; and 12 (2) submit to the Committee on Education and 13 Labor of the House of Representatives and the Com- 14 mittee on Health, Education, Labor, and Pensions 15 of the Senate a report containing the information. 16 (c) EFFECTIVE DATE.—The amendment made in 17 subsection (a) shall apply with respect to contracts entered 18 into, renewed, or modified on or after the date of the en- 19 actment of this Act. 20 Æ VerDate Sep 11 2014 00:31 Feb 29, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H5984.IH H5984 pamtmann on DSKBC07HB2PROD with BILLS