To amend the Elementary and Secondary Education Act of 1965 to provide States and local educational agencies with maximum flexibility in using Federal funds provided under such Act, and for other purposes.

SECTION 1. SHORT TITLE.

    The Act may be cited as the ``State and Local Funding Flexibility 
Act''.

SEC. 2. FLEXIBILITY TO USE FEDERAL FUNDS.

    (a) In General.--Subpart 2 of part A of title VI of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 7305 et seq.) is amended 
to read as follows:

   ``Subpart 2--Funding Flexibility for State and Local Educational 
                                Agencies

``SEC. 6121. SHORT TITLE.

    ``This subpart may be cited as the `State and Local Funding 
Flexibility Act'.

``SEC. 6122. PURPOSE.

    ``The purpose of this subpart is to allow States and local 
educational agencies the flexibility to--
            ``(1) design flexible programs that use Federal funds to 
        support student achievement for all students, including 
        students most at risk of failing to meet the State's academic 
        achievement standards; and
            ``(2) extend and enhance the funding flexibility provided 
        to rural local educational agencies under section 6211 to all 
        State educational agencies and local educational agencies by 
        providing such agencies flexibility in using Federal formula 
        funds received to carry out authorized State or local 
        activities for other authorized or required State or local 
        activities.

``SEC. 6123. FLEXIBILITY TO USE FEDERAL FUNDS.

    ``(a) Alternative Uses of Federal Funds for State Educational 
Agencies.--
            ``(1) In general.--Subject to subsections (c) and (d) and 
        notwithstanding any other provision of law, a State educational 
        agency may use the applicable funding that the agency receives 
        for a fiscal year to carry out any State activity authorized or 
        required under one or more of the following provisions:
                    ``(A) Section 1003.
                    ``(B) Section 1004.
                    ``(C) Subpart 1 of part B of title I.
                    ``(D) Part C of title I.
                    ``(E) Part D of title I.
                    ``(F) Part A of title II.
                    ``(G) Part B of title II.
                    ``(H) Title III.
                    ``(I) Part B of title IV.
                    ``(J) Part A of title V.
                    ``(K) Subpart 1 of part A of title VI.
                    ``(L) Subpart 2 of part B of title VI.
                    ``(M) Subpart 2 of part A of title VII.
            ``(2) Notification.--Not later than June 1 of each year, a 
        State educational agency shall notify the Secretary of the 
        State educational agency's intention to use the applicable 
        funding for any of the alternative uses under paragraph (1).
            ``(3) Applicable funding defined.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this subsection, the term 
                `applicable funding' means funds provided to carry out 
                State activities under one or more of the following 
                provisions:
                            ``(i) Section 1003(g)(2).
                            ``(ii) Section 1004.
                            ``(iii) Subpart I of Part B of title I.
                            ``(iv) Part C of title I.
                            ``(v) Part D of title I.
                            ``(vi) Part A of title II.
                            ``(vii) Part B of title II.
                            ``(viii) Part A of title III.
                            ``(ix) Part B of title IV.
                            ``(x) Part A of title V.
                            ``(xi) Title I of Public Law 111-226.
                    ``(B) Limitation.--In this subsection, the term 
                `applicable funding' does not include funds provided 
                under any of the provisions listed in subparagraph (A) 
                that State educational agencies are required by this 
                Act--
                            ``(i) to reserve, allocate, or spend for 
                        required activities;
                            ``(ii) to allot or award to local 
                        educational agencies or other entities eligible 
                        to receive such funds; or
                            ``(iii) to use for technical assistance or 
                        monitoring.
            ``(4) Disbursement.--The Secretary shall disburse the 
        applicable funding to State educational agencies for 
        alternative uses under paragraph (1) for a fiscal year at the 
        same time as the Secretary disburses the applicable funding to 
        State educational agencies that do not intend to use the 
        applicable funding for such alternative uses for the fiscal 
        year.
    ``(b) Alternative Uses of Federal Funds for Local Educational 
Agencies.--
            ``(1) In general.--Subject to subsections (c) and (d) and 
        notwithstanding any other provision of law, a local educational 
        agency may use the applicable funding that the agency receives 
        for a fiscal year to carry out any local activity authorized or 
        required under one or more of the following provisions:
                    ``(A) Section 1003.
                    ``(B) Part A of title I.
                    ``(C) Subpart 1 of part B of title I.
                    ``(D) Part C of title I.
                    ``(E) Part D of title I.
                    ``(F) Part A of title II.
                    ``(G) Part B of title II.
                    ``(H) Part A of title III.
                    ``(I) Part B of title IV.
                    ``(J) Part A of title V.
                    ``(K) Subpart 2 of part B of title VI.
                    ``(L) Part A of title VII.
                    ``(M) Section 613(f) of the Individuals with 
                Disabilities Education Act (20 U.S.C. 1413(f)).
            ``(2) Notification.--A local educational agency shall 
        notify the State educational agency of the local educational 
        agency's intention to use the applicable funding for any of the 
        alternative uses under paragraph (1) by a date that is 
        established by the State educational agency for the 
        notification.
            ``(3) Applicable funding defined.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this subsection, the term 
                `applicable funding' means funds provided to carry out 
                local activities under one or more of the following 
                provisions:
                            ``(i) Part A of title I.
                            ``(ii) Part C of title I.
                            ``(iii) Part D of title I.
                            ``(iv) Part A of title II.
                            ``(v) Part A of title III.
                            ``(vi) Part A of title V.
                            ``(vii) Part A of title VII.
                            ``(viii) Title I of Public Law 111-226.
                    ``(B) Limitation.--In this subsection, the term 
                `applicable funding' does not include funds provided 
                under any of the provisions listed in subparagraph (A) 
                that local educational agencies are required by this 
                Act--
                            ``(i) to reserve, allocate, or spend for 
                        required activities;
                            ``(ii) to allot or award to entities 
                        eligible to receive such funds; or
                            ``(iii) to use for technical assistance or 
                        monitoring.
            ``(4) Disbursement.--Each State educational agency that 
        receives applicable funding for a fiscal year shall disburse 
        the applicable funding to local educational agencies for 
        alternative uses under paragraph (1) for the fiscal year at the 
        same time as the State educational agency disburses the 
        applicable funding to local educational agencies that do not 
        intend to use the applicable funding for such alternative uses 
        for the fiscal year.
    ``(c) Rule for Administrative Costs.--A State educational agency or 
a local educational agency may only use applicable funding (as defined 
in subsection (a)(3) or (b)(3), respectively) for administrative costs 
incurred in carrying out a provision listed in subsection (a)(1) or 
(b)(1), respectively, to the extent that the agency, in the absence of 
this section, could have used funds for administrative costs with 
respect to a program listed in subsection (a)(3) or (b)(3), 
respectively.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to relieve a State educational agency or local educational 
agency of any requirements relating to--
            ``(1) maintenance of effort;
            ``(2) use of Federal funds to supplement, not supplant, 
        non-Federal funds;
            ``(3) comparability of services;
            ``(4) equitable participation of private school students 
        and teachers;
            ``(5) applicable civil rights requirements;
            ``(6) the selection of school attendance areas or schools 
        under subsections (a) and (b), and allocations to such areas or 
        schools under subsection (c), of section 1113;
            ``(7) section 1111;
            ``(8) section 1116; or
            ``(9) section 3122.''.
    (b) Conforming Amendment.--The table of contents of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) is amended 
by striking the items relating to subpart 2 of part A of title VI and 
inserting the following:

   ``Subpart 2--Funding Flexibility for State and Local Educational 
                                Agencies

``Sec. 6121. Short title.
``Sec. 6122. Purpose.
``Sec. 6123. Flexibility to use Federal funds.''.

Summary: State and Local Funding Flexibility Act - Amends part A of title IV (Flexibility and Accountability) of the Elementary and Secondary Education Act of 1965 (ESEA) to replace the existing program under subpart 2 with a new Funding Flexibility for State and Local Educational Agencies program.

Allows states to use funds that they receive under certain ESEA and Education Jobs Fund programs to carry out state activities authorized or required under the following ESEA programs:

 school improvement programs, under part A of title I; the Reading First program, under subpart 1 of part B of title I; the Education of Migratory Children program, under part C of title I; Prevention and Intervention Programs for Children and Youth who are Neglected, Delinquent, or At-Risk, under part D of title I; the Teacher and Principal Training and Recruiting Fund program, under part A of title II; the Mathematics and Science Partnerships program, under part B of title II; Language Instruction for Limited English Proficient and Immigrant Students programs, under title III; the 21st Century Community Learning Centers program, under part B of title IV; Innovative programs, under part A of title V; Accountability programs, under subpart 1 of part A of title VI; the Rural and Low-Income School program, under subpart 2 of part B of title VI; and Special Programs and Projects to Improve Educational Opportunities for Indian Children, under subpart 2 of part A of title VII. Lists the programs from which states may transfer funds as:

 school improvement programs, under part A of title I; the Reading First program, under subpart 1 of part B of title I; the Education of Migratory Children program, under part C of title I; Prevention and Intervention Programs for Children and Youth who are Neglected, Delinquent, or At-Risk, under part D of title I; the Teacher and Principal Training and Recruiting Fund program, under part A of title II; the Mathematics and Science Partnerships program, under part B of title II; the English Language Acquisition, Language Enhancement, and Academic Achievement Act program, under part A of title III; the 21st Century Community Learning Centers program, under part B of title IV; Innovative programs, under part A of title V of the ESEA; and Education Jobs Fund programs. Allows local educational agencies (LEAs) to use funds that they receive under certain ESEA and Education Jobs Fund programs to carry out local activities authorized or required under the following programs:

 school improvement programs, under part A of title I; the Reading First program, under subpart 1 of part B of title I; the Education of Migratory Children program, under part C of title I; Prevention and Intervention Programs for Children and Youth who are Neglected, Delinquent, or At-Risk, under part D of title I; the Teacher and Principal Training and Recruiting Fund program, under part A of title II; the Mathematics and Science Partnerships program, under part B of title II; the English Language Acquisition, Language Enhancement, and Academic Achievement Act program, under part A of title III; the 21st Century Community Learning Centers program, under part B of title IV; Innovative programs, under part A of title V; the Rural and Low-Income School program, under subpart 2 of part B of title VI; and Indian Education programs, under part A of title VII of the ESEA; and the Early Intervening Services program, under the Individuals with Disabilities Education Act. Lists the programs from which LEAs may transfer funds as:

 school improvement programs, under part A of title I; the Education of Migratory Children program, under part C of title I; Prevention and Intervention Programs for Children and Youth who are Neglected, Delinquent, or At-Risk, under part D of title I; the Teacher and Principal Training and Recruiting Fund program, under part A of title II; the English Language Acquisition, Language Enhancement, and Academic Achievement Act program, under part A of title III; Innovative programs, under part A of title V; Indian Education programs, under part A of title VII of the ESEA; and Education Jobs Fund programs. Prohibits states and LEAs from transferring the funds to such programs if the ESEA requires them to: (1) reserve, allocate, or spend the funds for required activities; (2) provide them to eligible entities; or (3) use them for technical assistance or monitoring.