H.R. 8606

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8606 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 8606

To amend the Elementary and Secondary Education Act of 1965 and the 
Individuals with Disabilities Education Act to ensure no funds made 
available under such Acts may be awarded to a charter school or charter 
management organization that enters into a contract with a for-profit 
entity for operating, overseeing, or managing the charter school, and 
for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 30, 2026

Ms. DeLauro (for herself, Ms. Bonamici, Mrs. Grijalva, Ms. Castor of 
Florida, Ms. Davids of Kansas, Mr. Garcia of Illinois, Ms. Norton, Ms. 
Jayapal, Ms. Lee of Pennsylvania, Mr. Quigley, Ms. Schakowsky, Ms. 
Simon, Mr. Takano, Mr. Thanedar, and Ms. Tlaib) introduced the 
following bill; which was referred to the Committee on Education and 
Workforce

_______________________________________________________________________

A BILL

To amend the Elementary and Secondary Education Act of 1965 and the 
Individuals with Disabilities Education Act to ensure no funds made 
available under such Acts may be awarded to a charter school or charter 
management organization that enters into a contract with a for-profit 
entity for operating, overseeing, or managing the charter school, 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 ``Championing Honest And Responsible 
Transparency in Education Reform Act'' or the ``CHARTER Act''.

SEC. 2. PURPOSE AND FINDINGS.

(a) Purpose.--The purpose of this Act is to ensure that each 
charter school that receives funding under the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6301 et seq.) (in this section 
referred to as the ``ESEA'') or the Individuals with Disabilities 
Education Act (20 U.S.C. 1400 et seq.) (in this section referred to as 
the ``IDEA'')--
(1) complies with the intent of the requirements for 
funding under such Act; and
(2) best serves the educational needs of students by 
prohibiting such charter school and its charter management 
organization from entering into a contract with a for-profit 
entity under which the for-profit entity--
(A) operates, oversees, or manages the charter 
school in order to exert influence in school 
management; and
(B) receives a portion of school revenue in order 
to extract profit for itself or its related entities.
(b) Findings.--Congress finds the following:
(1) An ``elementary school'' is defined as ``a nonprofit 
institutional day or residential school, including a public 
elementary charter school, that provides elementary education, 
as determined under State law'' under section 8101 of the ESEA 
(20 U.S.C. 7801) and section 602 of the IDEA (20 U.S.C. 1401).
(2) A ``secondary school'' is defined as ``a nonprofit 
institutional day or residential school, including a public 
secondary charter school, that provides secondary education, as 
determined under State law, except that the term does not 
include any education beyond grade 12'' under section 8101 of 
the ESEA (20 U.S.C. 7801) and section 602 of the IDEA (20 
U.S.C. 1401).
(3) The term ``nonprofit'' as applied to a school, agency, 
organization, or institution means ``a school, agency, 
organization, or institution owned and operated by 1 or more 
nonprofit corporations or associations no part of the net 
earnings of which inures, or may lawfully inure, to the benefit 
of any private shareholder or individual'' under section 602 of 
the IDEA (20 U.S.C. 1401).
(4) In 2003, the Department of Education Office of 
Inspector General, upon auditing the Arizona Department of 
Education, concluded that the State educational agency in 
Arizona had improperly distributed funds under the ESEA and the 
IDEA to for-profit charter schools.
(5) In 2006, the United States Court of Appeals Ninth 
Circuit Court in Arizona State Bd. v. U.S. Dept. of Educ., 464 
F.3d 1003 (9th Cir. 2006) found that the terms ``elementary 
school'' and ``secondary school'' in the ESEA and the IDEA were 
limited to nonprofit entities, holding that for-profit charter 
schools were ineligible for Federal funds under the ESEA and 
the IDEA.
(6) In response to the decision in Arizona State Bd. v. 
U.S. Dept. of Educ., the appellant for-profit charter schools 
reorganized as for-profit operators of nonprofit organizations, 
enabling the appellants to continue to receive Federal funds 
under the ESEA and the IDEA.
(7) Every student in a publicly funded school in the United 
States, including charter school students, is entitled to 
access education services without having publicly funded 
resources depleted due to profit extraction.
(8) Every taxpayer in the United States should be confident 
that public funds are responsibly stewarded and not funding the 
enrichment of for-profit charter operators at the expense of 
students and taxpayers.

SEC. 3. ESEA DEFINITION OF CHARTER SCHOOL.

(a) Prohibition of Contracting With For-Profit Entity for Essential 
Services.--Section 4310(2) of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7221i(2)) is amended--
(1) in subparagraph (L), by striking ``and'' at the end;
(2) in subparagraph (M)--
(A) by moving the margins of such paragraph 2 ems 
to the left; and
(B) by striking the period and inserting a 
semicolon; and
(3) by adding at the end the following:
``(N) does not enter into a contract with a for-
profit entity, or have a charter management 
organization or other nonprofit entity enter into such 
a contract on behalf of such school, under which the 
for-profit entity operates, oversees, manages, or 
otherwise carries out the administration of such 
school, which may include curriculum development, 
budget management, and faculty management (such as 
hiring, terminating, or supervising school-level 
staff); and
``(O) may enter into a contract with a for-profit 
or nonprofit entity for the provision of--
``(i) food, payroll, facilities 
maintenance, or transportation services;
``(ii) classroom supplies (such as 
textbooks); or
``(iii) ancillary services or supplies.''.
(b) General Definitions.--Section 8101 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7801) is amended by adding 
at the end the following:
``(53) Charter school.--The term `charter school' has the 
meaning given the term in section 4310.''.

SEC. 4. IDEA DEFINITION OF CHARTER SCHOOL.

Section 602 of the Individuals with Disabilities Education Act (20 
U.S.C. 1401) is amended by adding at the end the following:
``(37) Charter school.--The term `charter school' has the 
meaning given the term in section 4310 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7221i).''.

SEC. 5. EFFECTIVE DATE; APPLICABILITY.

The amendments made by this Act--
(1) shall take effect on the date that is 3 years after the 
date of the enactment of this Act; and
(2) shall only apply with respect to any contract entered 
into, renewed, or extended on or after the date of the 
enactment of this Act.
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