Requires the LEAs to: (1) establish tests and longitudinal data systems to track the academic progress of each elementary and secondary school student and use such performance measures in evaluating and awarding school personnel and programs; (2) work with teacher representatives and other community partners to attain the administrative flexibility to staff more equitably all agency schools with effective personnel; (3) evaluate and award effective teachers on the basis of student progress and observations of teacher performance; (4) provide grants to recent college graduates and mid-career professionals to attend LEA-established Teacher Academies which provide classroom mentoring and concurrent teacher education from partner institutions in exchange for three years of service in hard-to-staff schools; (5) establish career ladders allowing teachers to progress from novice to master with a concomitant increase in compensation and responsibility for the development of fellow teachers; and (6) plan for the recruitment, training, and evaluation of school principals who are to serve as instructional leaders in the schools and hold significant responsiblity for teacher hiring and placement.

Allows the LEAs to support new schools or networks of public schools, serving predominantly disadvantaged students, which are sponsored by universities, education management organizations, or nonprofit organizations.