I 
111TH CONGRESS 
1ST SESSION H. R. 3683 
To amend the Elementary and Secondary Education Act of 1965 to establish 
the Teacher Incentive Fund Program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 30, 2009 
Mr. PRICE of Georgia (for himself and Mr. KLINE of Minnesota) 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 establish the Teacher Incentive Fund Pro-
gram, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Teacher Incentive 
Fund Act’’. 
SEC. 2. TEACHER INCENTIVE FUND PROGRAM. 
Part C of title II of the Elementary and Secondary 
Education Act of 1965 is amended by adding at the end 
the following: 
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‘‘Subpart 6—Teacher Incentive Fund Program 
‘‘SEC. 2371. PURPOSES; DEFINITIONS. 
‘‘(a) PURPOSES.—The purposes of this subpart are— 
‘‘(1) to assist States, local educational agencies, 
and nonprofit organizations to develop, implement, 
or improve comprehensive performance-based com-
pensation systems solely for teachers and principals, 
especially for teachers and principals in high-need 
schools, who raise student academic achievement and 
close the achievement gap; and 
‘‘(2) to study and review performance-based 
compensation systems for teachers and principals to 
evaluate their effectiveness, fairness, quality, consist-
ency, and reliability. 
‘‘(b) DEFINITIONS.—For purposes of this subpart: 
‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means— 
‘‘(A) a local educational agency (including 
a charter school that is a local educational 
agency), or a consortium of such agencies; 
‘‘(B) a State educational agency, or other 
State agency designated by the chief executive 
of the State to participate under this subpart; 
or 
‘‘(C) a partnership of— 
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‘‘(i) one or more agencies described in 
subparagraph (A) or (B), or both; and 
‘‘(ii) at least one nonprofit organiza-
tion. 
‘‘(2) HIGH-NEED LOCAL EDUCATIONAL AGEN-
CY.—The term ‘high-need local educational agency’ 
has the meaning given the term in section 2102. 
‘‘(3) HIGH-NEED
SCHOOL.—The term ‘high- 
need school’ has the meaning given the term in sec-
tion 2312. 
‘‘(4) 
PERFORMANCE-BASED
COMPENSATION 
SYSTEM.—The term ‘performance-based compensa-
tion system’ means a system of compensation solely 
for teachers and principals that— 
‘‘(A) differentiates levels of compensation 
primarily on the basis of measurable increases 
in student academic achievement; and 
‘‘(B) may include— 
‘‘(i) differentiated levels of compensa-
tion on the basis of high-quality teachers’ 
and principals’ employment and success in 
hard-to-staff schools or high-need subject 
areas; and 
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‘‘(ii) recognition of the skills and 
knowledge of teachers and principals as 
demonstrated through— 
‘‘(I) successful fulfillment of ad-
ditional responsibilities or job func-
tions; and 
‘‘(II) evidence of high achieve-
ment and mastery of content knowl-
edge and superior teaching skills that 
shall be gathered through classroom 
observations or other criteria devel-
oped through scientifically valid re-
search (as defined in section 200 of 
the Higher Education Act of 1965 (20 
U.S.C. 1021)). 
‘‘SEC. 2372. TEACHER INCENTIVE FUND GRANTS. 
‘‘(a) IN GENERAL.—From the amounts appropriated 
to carry out this subpart, the Secretary is authorized to 
make grants on a competitive basis to eligible entities to 
develop, implement, or improve performance-based com-
pensation systems in participating schools. 
‘‘(b) PRIORITY.—In making such a grant, the Sec-
retary shall give priority to an eligible entity that con-
centrates its proposed activities on teachers and principals 
serving in high-need schools. 
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‘‘(c) APPLICATIONS.—To be eligible to receive a grant 
under this subpart, an eligible entity shall submit an appli-
cation to the Secretary, at such time and in such manner 
as the Secretary may reasonably require, that includes— 
‘‘(1) a description of the performance-based 
compensation system that the applicant proposes to 
develop and implement or improve; 
‘‘(2) a description and demonstration of the 
support and commitment from teachers and prin-
cipals in the targeted schools, the community, and 
local educational agency or agencies for the perform-
ance-based compensation system, including dem-
onstration of consultation with teachers and prin-
cipals on the development and implementation of the 
performance-based compensation system; 
‘‘(3) a description of how the eligible entity will 
develop and implement a fair, rigorous, and objective 
process to evaluate teacher, principal, and student 
performance, including the baseline performance 
against which evaluations of improved performance 
will be made; 
‘‘(4) a description and demonstration of how 
teacher and principal views were included in the de-
velopment of the performance-based compensation 
system; 
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‘‘(5) a description of the local educational agen-
cy or local educational agencies to be served by the 
project, including such demographic information 
about students in the schools to be served by the 
project as the Secretary may request; 
‘‘(6) information on student academic achieve-
ment, the quality of the teachers and principals, and 
existing compensation, bonuses, and incentive sys-
tems for teachers and principals in the schools to be 
served by the project; 
‘‘(7) a description of how the applicant will use 
grant funds under this subpart in each year of the 
grant; 
‘‘(8) a description of the comprehensive, focused 
professional development that is aligned with stu-
dent content and achievement standards that the ap-
plicant will implement to support the performance- 
based compensation system; 
‘‘(9) an explanation of how the grantee will con-
tinue its performance-based compensation system 
after the grant ends; 
‘‘(10) a description, if applicable, of how the ap-
plicant will define the term ‘high-quality’ for the 
purposes of section 2371(b)(4)(B)(i), through the 
use of measurable indicators; 
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‘‘(11) a description of the State, local, or phil-
anthropic funds that will be used to supplement the 
grant and sustain the activities at the end of the 
grant period; and 
‘‘(12) A description of how the applicant will 
evaluate the project annually, including any objective 
measures that are clearly related to the goals for the 
project and information on how the evaluation will 
produce quantitative and qualitative data. 
‘‘(d) USE OF FUNDS.— 
‘‘(1) IN GENERAL.—A grantee shall use grant 
funds provided under this subpart only to develop, 
implement, or improve, in collaboration with teach-
ers, principals, other school administrators, and 
members of the public, a performance-based com-
pensation system consistent with the requirements of 
this subpart. 
‘‘(2) AUTHORIZED ACTIVITIES.—Authorized ac-
tivities under this subpart may include the following: 
‘‘(A) Developing appraisal systems that re-
flect clear and fair measures of student aca-
demic achievement. 
‘‘(B) Developing appraisal systems that re-
flect clear and fair measures of teacher and 
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principal performance based on demonstrated 
improvements in student academic achievement. 
‘‘(C) Conducting outreach within the local 
educational agency (or agencies) or the State to 
gain input on how to construct the appraisal 
system and to develop support for it. 
‘‘(D) Paying, as part of a comprehensive 
performance-based compensation system, bo-
nuses and increased salaries to teachers and 
principals who raise student academic achieve-
ment, so long as the grantee uses an increasing 
share of non-Federal funds to pay these mone-
tary rewards each year of the grant. 
‘‘(E) Paying, as part of a comprehensive 
performance-based compensation system, addi-
tional bonuses to teachers who both raise stu-
dent academic achievement and either teach in 
high-need schools or teach subjects that are dif-
ficult to staff, or both, so long as the grantee 
uses an increasing share of non-Federal funds 
to pay these monetary rewards each year of the 
grant. 
‘‘(F) Paying, as part of a comprehensive 
performance-based compensation system, addi-
tional bonuses to principals who both raise stu-
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