CHARTER Act
- Bill Number
- H.R. 8606
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Education
- Status
- Introduced
- Latest Action
- 2026-04-30: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2026-06-23T08:05:56Z
AI-Generated Summary
H.R. 8606: Championing Honest And Responsible Transparency in Education Reform Act (CHARTER Act)
Purpose
The bill aims to prevent publicly funded charter schools—those receiving money under the Elementary and Secondary Education Act of 1965 (ESEA, the main federal law funding K-12 public schools) or the Individuals with Disabilities Education Act (IDEA, the federal law funding special education services)—from contracting with for-profit companies to run, oversee, or manage school operations. This ensures public funds prioritize student education over private profits.
Key Provisions
- Prohibits certain contracts: Charter schools and their charter management organizations (CMOs, groups that oversee multiple charter schools) cannot contract with for-profit entities for core operations like administration, curriculum development, budget management, or staff hiring/firing/supervision.
- Allows limited contracts: For-profit or nonprofit entities can still provide non-core services, such as food, payroll, facilities maintenance, transportation, classroom supplies (e.g., textbooks), or other ancillary goods/services.
- Updates definitions:
- Amends ESEA's charter school definition (Section 4310) to include these rules.
- Adds a cross-reference in ESEA's general definitions (Section 8101).
- Adopts ESEA's charter school definition into IDEA (Section 602).
- Effective date: Takes effect 3 years after enactment; applies only to new, renewed, or extended contracts on or after enactment.
Significant Changes to Existing Law
- Strengthens nonprofit requirements: Builds on ESEA and IDEA definitions that already limit "elementary" and "secondary" schools (including charters) to nonprofits, where no net earnings benefit private individuals.
- Closes loopholes: Responds to past cases (e.g., 2003 audit and 2006 Ninth Circuit ruling in Arizona State Bd. v. U.S. Dept. of Educ.) where for-profits reorganized as operators of nonprofits to access funds.
- Explicit ban on for-profit management: Previously unaddressed; now directly prohibits for-profits from influencing school management via revenue-sharing contracts.
Potential Impacts
- Government agencies: U.S. Department of Education and state education agencies must enforce new eligibility rules for ESEA/IDEA funds, potentially increasing audits and compliance reviews.
- Citizens: Taxpayers gain assurance that federal education dollars aren't diverted to profits; students may benefit from more funds directed to education rather than management fees.
- No direct international relations impact.
Main Stakeholders Affected
- Charter schools and CMOs: Must review and adjust contracts; some may lose funding if reliant on for-profit managers.
- For-profit education companies: Barred from core management roles in federally funded charters, potentially reducing their revenue.
- Students and families: Especially those in charters or needing special education, as funds stay focused on services.
- Taxpayers and public school advocates: Benefit from protected public spending.
- Nonprofit CMOs: Unaffected or potentially advantaged in competition for funds.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces court precedents limiting federal funds to nonprofits; provides clear compliance standards to avoid past audit issues or lawsuits.
- Constitutional: Aligns with Congress's spending power to set conditions on federal education grants; no apparent free speech or due process challenges.
- Political: Highlights debates over charter school accountability and privatization; could spark opposition from pro-charter groups while appealing to those favoring strict public fund oversight.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. DeLauro, Rosa L. [D-CT-3]
Cosponsors (17)
Rep. Bonamici, Suzanne [D-OR-1], Rep. Grijalva, Adelita S. [D-AZ-7], Rep. Castor, Kathy [D-FL-14], Rep. Davids, Sharice [D-KS-3], Rep. García, Jesús G. "Chuy" [D-IL-4], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Jayapal, Pramila [D-WA-7], Rep. Lee, Summer L. [D-PA-12], Rep. Quigley, Mike [D-IL-5], Rep. Schakowsky, Janice D. [D-IL-9], Rep. Simon, Lateefah [D-CA-12], Rep. Takano, Mark [D-CA-39], Rep. Thanedar, Shri [D-MI-13], Rep. Tlaib, Rashida [D-MI-12], Rep. Frost, Maxwell [D-FL-10], Rep. Stansbury, Melanie A. [D-NM-1], Rep. Cleaver, Emanuel [D-MO-5]
Recent Actions
- 2026-04-30: Referred to the House Committee on Education and Workforce.
- 2026-04-30: Introduced in House
- 2026-04-30: Introduced in House
Bill Versions
- Championing Honest And Responsible Transparency in Education Reform Act — issued 2026-04-30 — PDF (7 pages)