I 

110TH CONGRESS 

1ST SESSION H. R. 2577 

To amend the Elementary and Secondary Education Act of 1965 to provide 

additional flexibility to State and local educational agencies to raise 

the academic achievement of all students. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 6, 2007 

Mr. MCKEON (for himself, Mr. BOEHNER, Mr. CASTLE, Mr. REGULA, Mr. 

MARCHANT, Mr. HELLER of Nevada, Mr. WALBERG, Mr. RENZI, and Mr. 

PAUL) 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 provide additional flexibility to State and 

local educational agencies to raise the academic achievement of all students. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘State and Local Flexi5 bility Improvement Act’’. 


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1 SEC. 2. INCREASED USE OF STATE AND LOCAL TRANSFER2 ABILITY OF FUNDS. 

3 (a) TRANSFERS BY STATES.—Section 6123(a) of the 

4 Elementary and Secondary Education Act of 1965 (20 

5 U.S.C. 7305b(a)) is amended— 

6 (1) in paragraph (1)— 

7 (A) by striking ‘‘not more than 50 per8 cent’’ and inserting ‘‘up to 100 percent’’; and 

9 (2) in paragraph (2)— 

10 (A) by striking ‘‘and subject to the 50 per11 cent limitation described in paragraph (1).’’. 

12 (b) TRANSFERS BY LOCAL EDUCATIONAL AGEN13 CIES.—Section 6123(b) of the Elementary and Secondary 

14 Education Act of 1965 (20 U.S.C. 7305b(b))is amended— 

15 (1) in paragraph (1)— 

16 (A) by amending subparagraph (A) to read 

17 as follows: 

18 ‘‘(A) IN GENERAL.—In accordance with 

19 this subpart, a local educational agency may 

20 transfer up to 100 percent of the funds allo21 cated to it (including funds transferred under 

22 subparagraph (B)) under each of the provisions 

23 listed in paragraph (2) for a fiscal year to one 

24 or more of its allocations for such fiscal year 

25 under any other provision listed in paragraph 

26 (2).’’; 


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1 (B) by striking subparagraph (B); 

2 (C) by redesignating subparagraph (C) as 

3 subparagraph (B); and 

4 (D) in subparagraph (B), as redesignated, 

5 by striking, ‘‘and subject to the percentage limi6 tation described in subparagraph (A) or (B), as 

7 applicable’’; and 

8 (2) in paragraph (2), by striking ‘‘subpara9 graph (A), (B), or (C)’’ and inserting ‘‘subpara10 graph (A) or (B)’’. 

11 (c) Section 6123(e) of the Elementary and Secondary 

12 Education Act of 1965 (20 U.S.C. 7305b(e)) is amend13 ed— 

14 (1) in paragraph (1), by striking ‘‘IN GEN15 ERAL’’ and inserting ‘‘PARTIAL TRANSFER OF

16 FUNDS’’; 

17 (2) by redesignating paragraph (2) as para18 graph (3); and 

19 (3) by inserting after paragraph (2) the fol20 lowing: 

21 ‘‘(2) TOTAL TRANSFER OF FUNDS.—If a State 

22 or local educational agency transfers 100 percent of 

23 the funds allocated to it for any of the programs 

24 under subsection (a)(1) or subsection (b)(2) respec25 tively, the funds so transferred shall not be subject 


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1 to the rules and requirements applicable to the funds 

2 under the provision from which the transferred 

3 funds are transferred.’’. 

4 SEC. 3. STRENGTHENING STATE AND LOCAL CONTROL TO 

5 ENCOURAGE INNOVATION IN THE CLASS6 ROOM. 

7 Subpart 3 of part A of title VI of the Elementary 

8 and Secondary Education Act of 1965 (20 U.S.C. 7311 

9 et seq.) is amended to read as follows: 

10 ‘‘SUBPART 3—STATE FLEXIBILITY PERFORMANCE

11 AGREEMENTS

12 ‘‘SEC. 6131. PURPOSE. 

13 ‘‘The purpose of this subpart is to provide States 

14 greater flexibility in determining how— 

15 ‘‘(1) to increase the academic achievement of all 

16 students so that all students will meet or exceed the 

17 State’s proficient level of academic achievement in 

18 reading and math by school year 2013–2014; 

19 ‘‘(2) to narrow achievement gaps between the 

20 lowest- and highest-achieving groups of students; 

21 and 

22 ‘‘(3) to eliminate barriers to implementing ef23 fective education reforms and directing Federal re24 sources to where they are most needed. 


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1 ‘‘SEC. 6132. STATE FLEXIBILITY PERFORMANCE AGREE2 MENTS. 

3 ‘‘(a) AUTHORITY.—In accordance with this subpart, 

4 a State may enter into a performance agreement with the 

5 Secretary under which, except as otherwise provided in 

6 this subpart, the State may— 

7 ‘‘(1) waive statutory or regulatory program re8 quirements pursuant to section 6133, including 

9 those requirements for any local educational agency 

10 or school within the State; 

11 ‘‘(2) consolidate the Federal funds described in 

12 section 6133 and use those funds for any edu13 cational purpose authorized under State law; 

14 ‘‘(3) enter into local performance agreements 

15 with local educational agencies in the State in ac16 cordance with section 6134 in order to— 

17 ‘‘(A) assist those agencies in making ade18 quate yearly progress (as described in section 

19 1111(b)); 

20 ‘‘(B) advance the educational priorities of 

21 the State; 

22 ‘‘(C) improve student achievement and 

23 narrow achievement gaps; and 

24 ‘‘(D) allow those agencies to consolidate 

25 funds under the Federal programs described in 


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1 section 6134 and use those funds for any edu2 cational purpose authorized under State law; 

3 ‘‘(4) use an alternative method for making allo4 cations to local educational agencies under part A of 

5 title I, provided that the Secretary determines that 

6 the method of allocation proposed by the State tar7 gets a greater proportion of funds to local edu8 cational agencies with high concentrations of chil9 dren from low-income families than would the alloca10 tion pursuant to subpart 2 of that part; and 

11 ‘‘(5) permit local educational agencies to use al12 ternative criteria for directing funds provided under 

13 part A of title I to schools, in order to target serv14 ices more effectively to schools that serve a high con15 centration of students from low-income families. 

16 ‘‘(b) TERMS OF PERFORMANCE AGREEMENT.—Each 

17 performance agreement entered into by the Secretary 

18 under this subpart shall include the following provisions: 

19 ‘‘(1) DURATION.—A statement that the dura20 tion of the performance agreement shall be for a pe21 riod of 5 years. 

22 ‘‘(2) LIST AND DESCRIPTION OF PROGRAM RE23 QUIREMENTS.—A list and description of the Federal 

24 statutory and regulatory program requirements de25 scribed in section 6133 that the State expects to 


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1 waive and included in the performance agreement, 

2 and an assurance that the State will waive only 

3 those requirements described in that section. 

4 ‘‘(3) APPLICATION OF PROGRAM REQUIRE5 MENTS.—A statement that no program requirements 

6 of any program included by the State in the per7 formance agreement shall apply, except as otherwise 

8 provided in this subpart. 

9 ‘‘(4) USE OF FUNDS TO IMPROVE STUDENT

10 ACHIEVEMENT.—A 5-year plan describing how the 

11 State intends to use the flexibility included in the 

12 performance agreement to advance the education 

13 priorities of the State, improve student achievement, 

14 and narrow achievement gaps between groups of stu15 dents. 

16 ‘‘(5) ACCOUNTABILITY REQUIREMENTS.—If a 

17 State includes any part of part A of title I in its per18 formance agreement, the State shall include a cer19 tification that the State has developed and continues 

20 to implement the challenging State academic stand21 ards, academic assessments, and accountability sys22 tems described in section 1111(b) and had those sys23 tems approved by the Secretary pursuant to section 

24 1111(e). 


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1 ‘‘(6) STUDENT ACADEMIC ACHIEVEMENT RE2 QUIREMENTS.—If a State includes any part of part 

3 A of title I in its performance agreement, the State 

4 shall include a description of how it will hold local 

5 educational agencies and schools accountable for stu6 dent performance that includes a procedure for iden7 tifying local educational agencies and schools in need 

8 of improvement, and assistance and interventions for 

9 those local educational agencies and schools to en10 sure that their students make substantial gains in 

11 achievement. 

12 ‘‘(7) PUBLIC SCHOOL CHOICE AND SUPPLE13 MENTAL EDUCATIONAL SERVICES.—If a State in14 cludes any part of part A of title I in its perform15 ance agreement, the State shall include a certifi16 cation that the State accountability system developed 

17 in paragraph (6) includes public school choice and 

18 supplemental education services for those schools not 

19 making adequate yearly progress for two or more 

20 consecutive years. 

21 ‘‘(8) LOCAL EDUCATIONAL AGENCIES RESPON22 SIBILITIES.—A description of how a State will select 

23 local educational agencies within the State with 

24 which to enter into local performance agreements 

25 pursuant to section 6134 and a description of how 


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1 the State will evaluate the performance of local edu2 cational agencies within the State with local per3 formance agreements pursuant to section 6134 and 

4 the circumstances under which it will terminate 

5 those agreements. 

6 ‘‘(9) ALTERNATIVE METHOD FOR ALLOCATING

7 FUNDS.—In the case of a State that seeks to use an 

8 alternative method for allocating funds under part A 

9 of title I to local educational agencies, a description 

10 of that method and evidence that demonstrates that 

11 the alternative method will target funds to local edu12 cational agencies with high concentrations of chil13 dren from low-income families more effectively than 

14 the allocation method required under that part. 

15 ‘‘(10) ALTERNATIVE CRITERIA FOR ALLO16 CATING FUNDS.—In the case of a State that intends 

17 to permit local educational agencies within the State 

18 to use alternative criteria for allocating funds under 

19 part A of title I to schools, a description of the cri20 teria and an analysis of the effect those criteria 

21 would have on those allocations. 

22 ‘‘(11) FISCAL RESPONSIBILITIES.—An assur23 ance that the State will use fiscal control and funds 

24 accounting procedures that will ensure proper dis25 bursement of, and accounting for, Federal funds 


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1 paid to the State under this Act and an assurance 

2 that the State will not reduce the level of spending 

3 of State funds for elementary and secondary edu4 cation during the term of the performance agree5 ment. 

6 ‘‘(12) CIVIL RIGHTS.—An assurance that the 

7 State will meet the requirements of applicable Fed8 eral civil rights laws. 

9 ‘‘(13) STATE APPROVAL.—An assurance that 

10 not less than 2 of the following approved the pro11 posed performance agreement: 

12 ‘‘(A) The Governor of the State. 

13 ‘‘(B) The State legislature. 

14 ‘‘(C) The State educational agency. 

15 ‘‘(c) APPROVAL OF PERFORMANCE AGREEMENT.— 

16 ‘‘(1) IN GENERAL.—Not later than 90 days 

17 after the receipt of a proposed performance agree18 ment submitted by a State, the Secretary shall ap19 prove the performance agreement or provide the 

20 State with a written determination detailing the rea21 sons why the performance agreement fails to satisfy 

22 the purposes, goals, or a requirement of this sub23 part. 

24 ‘‘(2) PEER-REVIEW PROCESS.—In carrying out 

25 paragraph (1), the Secretary shall establish a peerVerDate Aug 31 2005 21:58 Jun 08, 2007 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2577.IH H2577

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1 review process to assist in the review of applications 

2 under this section, and shall appoint as peer review3 ers individuals who represent a broad range of edu4 cational stakeholders. 

5 ‘‘(3) TREATMENT AS APPROVED.—Each per6 formance agreement for which the Secretary fails to 

7 take the action required in paragraph (1) in the 

8 time period described in that paragraph shall be con9 sidered to be approved. 

10 ‘‘(4) DISAPPROVAL OF PERFORMANCE AGREE11 MENT.—If the Secretary disapproves a State’s per12 formance agreement, the State shall have 30 days to 

13 resubmit a revised performance agreement. The Sec14 retary shall approve the revised performance agree15 ment within 30 days of receipt of the revised per16 formance agreement or provide the State with a 

17 written determination that the revised performance 

18 agreement fails to satisfy the purposes, goals, or a 

19 requirement of this subpart. 

20 ‘‘(d) AMENDMENT TO PERFORMANCE AGREE21 MENT.— 

22 ‘‘(1) IN GENERAL.—In each of the following 

23 circumstances, the Secretary, subject to approval 

24 under paragraph (2), shall agree to amend a perVerDate Aug 31 2005 21:58 Jun 08, 2007 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2577.IH H2577

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1 formance agreement entered into with a State under 

2 this subpart: 

3 ‘‘(A) REDUCTION IN SCOPE OF PERFORM4 ANCE AGREEMENT.—A State seeks to amend 

5 the performance agreement to remove from the 

6 scope of the performance agreement any pro7 gram requirement described in section 6133. 

8 ‘‘(B) EXPANSION OF SCOPE OF PERFORM9 ANCE AGREEMENT.—A State seeks to amend 

10 the performance agreement to include within 

11 the scope of the performance agreement any ad12 ditional program requirement described in sec13 tion 6133. 

14 ‘‘(2) APPROVAL OF AMENDMENT.— 

15 ‘‘(A) IN GENERAL.—Not later than 60 

16 days after the receipt of a proposed perform17 ance agreement amendment submitted by a 

18 State, the Secretary shall approve the amend19 ment or provide the State with a written deter20 mination that the amendment fails to satisfy 

21 the purposes, goals, or a requirement of this 

22 subpart. 

23 ‘‘(B) TREATMENT AS APPROVED.—Each 

24 amendment for which the Secretary fails to 

25 take the action required in subparagraph (A) in 


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1 the time period described in such subparagraph 

2 shall be considered to be approved. 

3 ‘‘(3) TREATMENT OF PROGRAM REQUIREMENTS

4 WITHDRAWN FROM AGREEMENT.—Beginning on the 

5 effective date of an amendment executed under 

6 paragraph (1)(A), each program requirement of each 

7 program removed from the scope of a performance 

8 agreement shall apply to the State’s use of funds 

9 made available under the program. 

10 ‘‘(e) WITHIN-STATE DISTRIBUTION OF FUNDS.— 

11 ‘‘(1) IN GENERAL.—The distribution of funds 

12 from programs included in a performance agreement 

13 from a State to a local educational agency within the 

14 State shall be determined by the Governor of the 

15 State and the State legislature. In a State in which 

16 the constitution or State law designates another in17 dividual, entity, or agency to be responsible for edu18 cation, the allocation of funds from programs in19 cluded in the performance agreement from a State 

20 to a local educational agency within the State shall 

21 be determined by that individual, entity, or agency, 

22 in consultation with the Governor and State Legisla23 ture. Nothing in this section shall be construed to 

24 supersede or modify any provision of a State con25 stitution or State law. 


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1 ‘‘(2) LOCAL INPUT.—States shall provide par2 ents, teachers, and local schools and educational 

3 agencies notice and opportunity to comment on the 

4 proposed allocation of funds as provided under gen5 eral State law notice-and-comment provisions. 

6 ‘‘SEC. 6133. ELIGIBLE PROGRAM REQUIREMENTS. 

7 ‘‘(a) SCOPE.—A State may choose to include within 

8 the scope of its performance agreement— 

9 ‘‘(1) any statutory or regulatory program re10 quirement authorized under this Act, except section 

11 1111, 

12 ‘‘(2) any program for which Congress makes 

13 funds available to the State if the program is for a 

14 purpose described in section 1001, except any pro15 gram funded pursuant to the Individuals with Dis16 abilities Education Act, and 

17 ‘‘(3) notwithstanding paragraph (1), additional 

18 models and systems for measuring student progress 

19 for purposes of determining whether a local edu20 cational agency or school has made adequate yearly 

21 progress described in section 1111(b). 

22 Such models and systems that measure student progress 

23 under this paragraph may include growth models that 

24 demonstrate progress based on longitudinal student as25 sessment results indicating improvement in the academic 


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1 performance of individual students over time and ensure 

2 that all students will meet or exceed the State’s proficient 

3 level of academic achievement in reading and math by 

4 school year 2013–2014. 

5 ‘‘(b) USES OF FUNDS.—Funds made available to a 

6 State pursuant to a performance agreement under this 

7 subpart shall be used for any educational purpose per8 mitted by State law of the State participating in the per9 formance agreement. 

10 ‘‘SEC. 6134. LOCAL PERFORMANCE AGREEMENTS. 

11 ‘‘(a) IN GENERAL.— 

12 ‘‘(1) A State that has entered into a perform13 ance agreement with the Secretary pursuant to sec14 tion 6132 may enter into local performance agree15 ments with local educational agencies in the State to 

16 waive statutory or regulatory program requirements 

17 and consolidate Federal funds to improve student 

18 achievement and narrow achievement gaps. A State 

19 shall include a priority on entering into such agree20 ments with high-need local educational agencies as 

21 described in paragraph (3). 

22 ‘‘(2) TERMS OF PERFORMANCE AGREEMENT.— 

23 A local performance agreement entered into with the 

24 State under this subpart shall include specific, meas25 urable educational goals, with annual objectives, that 


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1 the local educational agency plans to accomplish 

2 under the agreement. The agreement shall waive 

3 only those statutory or regulatory program require4 ments included in the performance agreement au5 thorized under section 6132. 

6 ‘‘(3) HIGH-NEED LOCAL EDUCATIONAL AGEN7 CY.—The term ‘high-need local educational agency’ 

8 means a local educational agency that— 

9 ‘‘(A) has not made adequate yearly 

10 progress for the two preceding academic years; 

11 and 

12 ‘‘(B) serves a larger number, or percent13 age, of economically disadvantaged students 

14 than the average number or percentage, as the 

15 case may be, of such students served by local 

16 educational agencies in the State. 

17 ‘‘(b) FUNDS AVAILABLE TO BE CONSOLIDATED.— 

18 A local educational agency that has entered into a local 

19 performance agreement with a State under this section 

20 may consolidate the funds received by the local educational 

21 agency and use the consolidated funds for any educational 

22 purpose authorized under State law. 

23 ‘‘(c) TERMINATION OF LOCAL PERFORMANCE

24 AGREEMENT.—A State may, after providing notice and an 

25 opportunity for a hearing, terminate a local educational 


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1 agency’s local performance agreement if the State deter2 mines that the local educational agency has failed to com3 ply with the performance agreement. 

4 ‘‘SEC. 6135. ADMINISTRATIVE EXPENSES. 

5 ‘‘(a) STATE CONSOLIDATING FUNDS UNDER PART A 

6 OF TITLE I.—Each State that includes part A of title I 

7 within the scope of a performance agreement under this 

8 subpart may use, for administrative expenses, not more 

9 than 1 percent of the total amount of funds made available 

10 to the State under the programs included within the scope 

11 of the performance agreement. 

12 ‘‘(b) STATES NOT CONSOLIDATING FUNDS UNDER

13 PART A OF TITLE I.—Each State that does not include 

14 part A of title I within the scope of a performance agree15 ment under this subpart may use, for administrative ex16 penses, not more than 3 percent of the total amount of 

17 funds made available to the State under the programs in18 cluded within the scope of the performance agreement. 

19 ‘‘(c) LOCAL EDUCATIONAL AGENCIES.—Each local 

20 educational agency that enters into a local performance 

21 agreement with a State pursuant to section 6134 may use, 

22 for administrative expenses, not more than 4 percent of 

23 the total amount of funds allocated to such agency under 

24 the programs included within the scope of the performance 

25 agreement. 


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1 ‘‘SEC. 6136. PARTICIPATION BY PRIVATE SCHOOL CHIL2 DREN AND TEACHERS. 

3 ‘‘Each State consolidating and using funds pursuant 

4 to a performance agreement under this subpart shall pro5 vide for the participation of private school children and 

6 teachers in the activities assisted under the performance 

7 agreement in the same manner as participation is provided 

8 to private school children and teachers under section 

9 9501. 

10 ‘‘SEC. 6137. ANNUAL REPORTS. 

11 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

12 execution of the performance agreement, and annually 

13 thereafter, each State shall disseminate widely to the par14 ents, the general public, and the Secretary, a report that 

15 includes— 

16 ‘‘(1) student performance data disaggregated in 

17 the same manner as data are disaggregated under 

18 section 1111(b)(3)(C)(xiii); and 

19 ‘‘(2) a description of how the State has used 

20 Federal funds to improve academic achievement, 

21 narrow the achievement gap, and improve edu22 cational opportunities for the disadvantaged. 

23 ‘‘(b) SUBMISSION TO CONGRESS.—Not later than 60 

24 days after the Secretary receives a report under subsection 

25 (a), the Secretary shall submit that report to the ConVerDate Aug 31 2005 19:54 Jun 09, 2007 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\H2577.IH H2577

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1 gress, together with any other information the Secretary 

2 considers appropriate. 

3 ‘‘SEC. 6138. PERFORMANCE REVIEW AND EARLY TERMI4 NATION. 

5 ‘‘(a) REVIEW.—For each State having in effect a per6 formance agreement under this subpart, the Secretary 

7 shall carry out a review of the performance agreement, 

8 at the midpoint of the duration of the performance agree9 ment, in order to determine whether the State has met 

10 the terms of the performance agreement described in sec11 tion 6132. 

12 ‘‘(b) EARLY TERMINATION.—The Secretary may ter13 minate a performance agreement, before the duration of 

14 that performance agreement expires, if the State does not, 

15 for 3 consecutive school years, meet the terms of the per16 formance agreement described in section 6132. Such ter17 mination shall occur after the Secretary provides notice 

18 and an opportunity for a hearing.’’. 

19 SEC. 4. ENHANCING FLEXIBILITY FOR LOCAL SCHOOL DIS20 TRICTS THAT OFFER SCHOOLWIDE PRO21 GRAMS. 

22 Section 1114(a)(1) of the Elementary and Secondary 

23 Education Act is amended by striking ‘‘40 percent’’ each 

24 place it appears and inserting ‘‘25 percent’’. 

Æ 


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