Allows state determinations of AYP pursuant to state academic achievement standards to employ a growth model, measuring the achievement of the same students and subgroups from year to year.

Requires that 4% of disabled students taking modified assessments be counted in measuring student proficiency pursuant to such standards.

Gives schools which are identified as needing improvement, due to having failed for two consecutive years to make AYP pursuant to such standards, a full new school year to meet the standards before its students must be given the option to transfer to another public school. (Currently, such transfers must be allowed at the beginning of the school year following such identification.)

Provides that, in determining AYP, a student in more than one group subject to measurable annual objectives shall be counted only toward one such group.

Allows states to consider new middle and secondary school special education and rural teachers to be highly qualified even if they do not pass a rigorous state academic subject test in every subject they teach, provided they pass such a test for one subject they teach and, with respect to each other subject they teach, work in close consultation with another teacher who is highly qualified in such other subject.