Statute

Subpart 3—State and Local Flexibility

Demonstration

SEC. 6131. SHORT TITLE.

This subpart may be cited as the ‘State and Local Flexibility

Demonstration Act’.

SEC. 6132. PURPOSE.

The purpose of this subpart is to create options for selected

State educational agencies and local educational agencies—

(1) to improve the academic achievement of all students,

and to focus the resources of the Federal Government upon

such achievement;

(2) to improve teacher quality and subject matter mastery,

especially in mathematics, reading, and science;

(3) to better empower parents, educators, administrators,

and schools to effectively address the needs of their children

and students;

(4) to give participating State educational agencies and

local educational agencies greater flexibility in determining how

to increase their students’ academic achievement and implement

education reforms in their schools;

(5) to eliminate barriers to implementing effective State

and local education reform, while preserving the goals of opportunity

for all students and accountability for student progress;

(6) to hold participating State educational agencies and

local educational agencies accountable for increasing the academic

achievement of all students, especially disadvantaged

students; and

(7) to narrow achievement gaps between the lowest and

highest achieving groups of students so that no child is left

behind.

SEC. 6133. GENERAL PROVISION.

For purposes of this subpart, any State that is one local

educational agency shall be considered a State educational agency

and not a local educational agency.

CHAPTER B—LOCAL FLEXIBILITY DEMONSTRATION

SEC. 6151. LOCAL FLEXIBILITY DEMONSTRATION AGREEMENTS.

(a) AUTHORITY.—Except as otherwise provided in this chapter,

the Secretary shall, on a competitive basis, enter into local flexibility

demonstration agreements—

(1) with local educational agencies that submit approvable

proposed agreements under subsection (c) and that are selected

under subsection (b); and

(2) under which those agencies may consolidate and use

funds in accordance with section 6152.

(b) SELECTION OF LOCAL EDUCATIONAL AGENCIES.—

(1) IN GENERAL.—Subject to paragraph (2), the Secretary

shall enter into local flexibility demonstration agreements

under this chapter with not more than 80 local educational

agencies. Each local educational agency shall be selected on

a competitive basis from among those local educational agencies

that—

(A) submit a proposed local flexibility demonstration

agreement under subsection (c) to the Secretary and demonstrate,

to the satisfaction of the Secretary, that the

agreement—

(i) has a substantial promise of assisting the local

educational agency in meeting the State’s definition

of adequate yearly progress, advancing the education

priorities of the local educational agency, meeting the

general purposes of the programs included under this

chapter and the purposes of this part, improving student

achievement, and narrowing achievement gaps

in accordance with section 1111(b);

(ii) meets the requirements of this chapter; and

(iii) contains a plan to consolidate and use funds

in accordance with section 6152 in order to meet the

State’s definition of adequate yearly progress and the

local educational agency’s specific, measurable goals

for improving student achievement and narrowing

achievement gaps; and

(B) have consulted and involved parents and other

educators in the development of the proposed local flexibility

demonstration agreement.

(2) GEOGRAPHIC DISTRIBUTION.—

(A) INITIAL AGREEMENTS.—The Secretary may enter

into not more than three local flexibility demonstration

agreements under this chapter with local educational agencies

in each State that does not have a grant of flexibility

authority under chapter A.

(B) URBAN AND RURAL AREAS.—If more than three

local educational agencies in a State submit approvable

local flexibility demonstration agreements under this

chapter, the Secretary shall select local educational agencies

with which to enter into such agreements in a manner

that ensures an equitable distribution among such agencies

serving urban and rural areas.

(C) PRIORITY OF STATES TO ENTER INTO STATE FLEXIBILITY

DEMONSTRATION AGREEMENTS.—Notwithstanding

any other provision of this part, a local educational agency

may not seek to enter into a local flexibility demonstration

agreement under this chapter if that agency is located

in a State for which the State educational agency—

(i) has, not later than 4 months after the date

of enactment of the No Child Left Behind Act of 2001,

notified the Secretary of its intent to apply for a grant

of flexibility authority under chapter A and, within

such period of time as the Secretary may establish,

is provided with such authority by the Secretary; or

(ii) has, at any time after such period, been

granted flexibility authority under chapter A.

(c) REQUIRED TERMS OF LOCAL FLEXIBILITY DEMONSTRATION

AGREEMENT.—Each local flexibility demonstration agreement

entered into with the Secretary under this chapter shall contain

each of the following terms:

(1) DURATION.—The local flexibility demonstration agreement

shall be for a term of 5 years.

(2) APPLICATION OF PROGRAM REQUIREMENTS.—The local

flexibility demonstration agreement shall provide that no

requirements of any program described in section 6152 and

included by a local educational agency in the scope of its agreement

shall apply to that agency, except as otherwise provided

in this chapter.

(3) LIST OF PROGRAMS.—The local flexibility demonstration

agreement shall list which of the programs described in section

6152 are included in the scope of the agreement.

(4) USE OF FUNDS TO IMPROVE STUDENT ACHIEVEMENT.—

The local flexibility demonstration agreement shall contain a

5-year plan describing how the local educational agency intends

to consolidate and use the funds from programs included in

the scope of the agreement for any educational purpose authorized

under this Act to advance the education priorities of the

local educational agency, meet the general purposes of the

included programs, improve student achievement, and narrow

achievement gaps in accordance with section 1111(b).

(5) LOCAL INPUT.—The local flexibility demonstration

agreement shall contain an assurance that the local educational

agency will provide parents, teachers, and representatives of

schools with notice and an opportunity to comment on the

proposed terms of the local flexibility demonstration agreement.

(6) FISCAL RESPONSIBILITIES.—The local flexibility demonstration

agreement shall contain an assurance that the local

educational agency will use fiscal control and fund accounting

procedures that will ensure proper disbursement of, and

accounting for, Federal funds consolidated and used under the

agreement.

(7) CIVIL RIGHTS.—The local flexibility demonstration

agreement shall contain an assurance that the local educational

agency will meet the requirements of all applicable Federal

civil rights laws in carrying out the agreement and in consolidating

and using the funds under the agreement.

(8) PRIVATE SCHOOL PARTICIPATION.—The local flexibility

demonstration agreement shall contain an assurance that the

local educational agency agrees that in consolidating and using

funds under the agreement—

(A) the local educational agency, will provide for the

equitable participation of students and professional staff

in private schools consistent with section 9501; and

(B) that sections 9502, 9503, and 9504 shall apply

to all services and assistance provided with such funds

in the same manner as such sections apply to services

and assistance provided in accordance with section 9501.

(9) SUPPLANTING.—The local flexibility demonstration

agreement shall contain an assurance that the local educational

agency will, for the duration of the grant of authority, use

funds consolidated under section 6152 only to supplement the

amount of funds that would, in the absence of those Federal

funds, be made available from non-Federal sources for the

education of students participating in programs assisted with

the consolidated funds, and not to supplant those funds.

(10) ANNUAL REPORTS.—The local flexibility demonstration

agreement shall contain an assurance that the local educational

agency shall, not later than 1 year after the date on which

the Secretary enters into the agreement, and annually thereafter

during the term of the agreement, disseminate widely

to parents and the general public, transmit to the Secretary,

and the State educational agency for the State in which the

local educational agency is located, distribute to print and

broadcast media, and post on the Internet, a report that

includes a detailed description of how the local educational

agency used the funds consolidated under the agreement to

improve student academic achievement and reduce achievement

gaps.

(d) PEER REVIEW.—The Secretary shall—

(1) establish a peer review process to assist in the review

of proposed local flexibility demonstration agreements under

this chapter; and

(2) appoint individuals to the peer review process who

are representative of parents, teachers, State educational agencies,

and local educational agencies, and who are familiar with

educational standards, assessments, accountability, curriculum,

instruction and staff development, and other diverse educational

needs of students.

(e) AMENDMENT TO PERFORMANCE AGREEMENT.—

(1) IN GENERAL.—In each of the following circumstances,

the Secretary shall amend a local flexibility demonstration

agreement entered into with a local educational agency under

this chapter:

(A) REDUCTION IN SCOPE OF LOCAL FLEXIBILITY DEMONSTRATION

AGREEMENT.—Not later than 1 year after

entering into a local flexibility demonstration agreement,

the local educational agency seeks to amend the agreement

to remove from the scope any program described in section

6152.

(B) EXPANSION OF SCOPE OF LOCAL FLEXIBILITY DEMONSTRATION

AGREEMENT.—Not later than 1 year after

entering into the local flexibility demonstration agreement,

a local educational agency seeks to amend the agreement

to include in its scope any additional program described

in section 6251 or any additional achievement indicators

for which the local educational agency will be held accountable.

(2) APPROVAL AND DISAPPROVAL.—

(A) DEEMED APPROVAL.—A proposed amendment to

a local flexibility demonstration agreement pursuant to

paragraph (1) shall be deemed to be approved by the Secretary

unless the Secretary makes a written determination,

prior to the expiration of the 120-day period beginning

on the date on which the Secretary received the proposed

amendment, that the proposed amendment is not in compliance

with this chapter.

(B) DISAPPROVAL.—The Secretary shall not finally disapprove

the proposed amendment, except after giving the

local educational agency notice and an opportunity for a

hearing.

(C) NOTIFICATION.—If the Secretary finds that the

proposed amendment is not in compliance, in whole or

in part, with this chapter, the Secretary shall—

(i) give the local educational agency notice and

an opportunity for a hearing; and

(ii) notify the local educational agency of the

finding of noncompliance and, in such notification,

shall—

(I) cite the specific provisions in the proposed

amendment that are not in compliance; and

(II) request additional information, only as

to the noncompliant provisions, needed to make

the proposed amendment compliant.

(D) RESPONSE.—If the local educational agency

responds to the Secretary’s notification described in

subparagraph (C)(ii) during the 45-day period beginning

on the date on which the agency received the notification,

and resubmits the proposed amendment with the requested

information described in subparagraph (C)(ii)(II), the Secretary

shall approve or disapprove such proposed amendment

prior to the later of—

(i) the expiration of the 45-day period beginning

on the date on which the proposed amendment is resubmitted;

or

(ii) the expiration of the 120-day period described

in subparagraph (A).

(E) FAILURE TO RESPOND.—If the local educational

agency does not respond to the Secretary’s notification

described in subparagraph (C)(ii) during the 45-day period

beginning on the date on which the agency received the

notification, such proposed amendment shall be deemed

to be disapproved.

(3) TREATMENT OF PROGRAM FUNDS WITHDRAWN FROM

AGREEMENT.—Beginning on the effective date of an amendment

executed under paragraph (1)(A), each program requirement

of each program removed from the scope of a local flexibility

demonstration agreement shall apply to the use of funds made

available under the program by the local educational agency.

SEC. 6152. CONSOLIDATION AND USE OF FUNDS.

(a) IN GENERAL.—

(1) AUTHORITY.—Under a local flexibility demonstration

agreement entered into under this chapter, a local educational

agency may consolidate Federal funds made available to the

agency under the provisions listed in subsection (b) and use

such funds for any educational purpose permitted under this

Act.

(2) PROGRAM REQUIREMENTS.—Except as otherwise provided

in this chapter, a local educational agency may use funds

under paragraph (1) notwithstanding the program requirements

of the program under which the funds were made available

to the agency.

(b) ELIGIBLE PROGRAMS.—Program funds made available to

local educational agencies on the basis of a formula under the

following provisions may be consolidated and used under subsection

(a):

(1) Subpart 2 of part A of title II.

(2) Subpart 1 of part D of title II.

(3) Subpart 1 of part A of title IV.

(4) Subpart 1 of part A of title V.

SEC. 6153. LIMITATIONS ON ADMINISTRATIVE EXPENDITURES.

Each local educational agency that has entered into a local

flexibility demonstration agreement with the Secretary under this

chapter may use for administrative purposes not more than 4

percent of the total amount of funds allocated to the agency under

the programs included in the scope of the agreement.

SEC. 6154. PERFORMANCE REVIEW AND PENALTIES.

(a) MIDTERM REVIEW.—

(1) FAILURE TO MAKE ADEQUATE YEARLY PROGRESS.—If,

during the term of a local flexibility demonstration agreement,

a local educational agency fails to make adequate yearly

progress for 2 consecutive years, the Secretary shall, after

notice and opportunity for a hearing, promptly terminate the

agreement.

(2) NONCOMPLIANCE.—The Secretary may, after providing

notice and an opportunity for a hearing (including the opportunity

to provide information as provided for in paragraph

(3)), terminate a local flexibility demonstration agreement

under this chapter if there is evidence that the local educational

agency has failed to comply with the terms of the agreement.

(3) EVIDENCE.—If a local educational agency believes that

the Secretary’s determination under this subsection is in error

for statistical or other substantive reasons, the local educational

agency may provide supporting evidence to the Secretary, and

the Secretary shall consider that evidence before making a

final early termination determination.

(b) FINAL REVIEW.—If, at the end of the 5-year term of a

local flexibility demonstration agreement entered into under this

chapter, the local educational agency has not met the requirements

described in section 6151(c), the Secretary may not renew the

agreement under section 6155 and, beginning on the date on which

such term ends, the local educational agency shall be required

to comply with each of the program requirements in effect on

such date for each program included in the local flexibility demonstration

agreement.

SEC. 6155. RENEWAL OF LOCAL FLEXIBILITY DEMONSTRATION

AGREEMENT.

(a) IN GENERAL.—Except as provided in section 6154 and

in accordance with this section, the Secretary shall renew for one

additional 5-year term a local flexibility demonstration agreement

entered into under this chapter if the local educational agency

has met, by the end of the original term of the agreement, the

requirements described in section 6151(c).

(b) NOTIFICATION.—The Secretary may not renew a local flexibility

demonstration agreement under this chapter unless, not less

than 6 months before the end of the original term of the agreement,

the local educational agency seeking the renewal notifies the Secretary

of its intention to renew.

(c) EFFECTIVE DATE.—A renewal under this section shall be

effective at the end of the original term of the agreement or on

the date on which the local educational agency seeking renewal

provides to the Secretary all data required under the agreement,

whichever is later.

SEC. 6156. REPORTS.

(a) TRANSMITTAL TO CONGRESS.—Not later than 60 days after

the Secretary receives a report described in section 6151(b)(10),

the Secretary shall make the report available to the Committee

on Education and the Workforce of the House of Representatives

and the Committee on Health, Education, Labor, and Pensions

of the Senate.

(b) LIMITATION.—A State in which a local educational agency

that has a local flexibility demonstration agreement is located may

not require such local educational agency to provide any application

information with respect to the programs included within the scope

of that agreement other than that information that is required

to be included in the report described in section 6151(b)(10).