(a) Purposes
The purposes of this subpart are—

(1) to assist States, local educational agencies, and nonprofit organizations to develop, implement, improve, or expand comprehensive performance-based compensation systems or human capital management systems for teachers, principals, or other school leaders (especially for teachers, principals, or other school leaders in high-need schools) who raise student academic achievement and close the achievement gap between high- and low-performing students; and

(2) to study and review performance-based compensation systems or human capital management systems for teachers, principals, or other school leaders to evaluate the effectiveness, fairness, quality, consistency, and reliability of the systems.

(b) Definitions
In this subpart:

(1) Eligible entity
The term "eligible entity" means—

(A) a local educational agency, including a charter school that is a local educational agency, or a consortium of local educational agencies;

(B) a State educational agency or other State agency designated by the chief executive of a State to participate under this subpart;

(C) the Bureau of Indian Education; or

(D) a partnership consisting of—

(i) 1 or more agencies described in subparagraph (A), (B), or (C); and

(ii) at least 1 nonprofit or for-profit entity.

(2) High-need school
The term "high-need school" means a public elementary school or secondary school that is located in an area in which the percentage of students from families with incomes below the poverty line is 30 percent or more.

(3) Human capital management system
The term "human capital management system" means a system—

(A) by which a local educational agency makes and implements human capital decisions, such as decisions on preparation, recruitment, hiring, placement, retention, dismissal, compensation, professional development, tenure, and promotion; and

(B) that includes a performance-based compensation system.

(4) Performance-based compensation system
The term "performance-based compensation system" means a system of compensation for teachers, principals, or other school leaders—

(A) that differentiates levels of compensation based in part on measurable increases in student academic achievement; and

(B) which may include—

(i) differentiated levels of compensation, which may include bonus pay, on the basis of the employment responsibilities and success of effective teachers, principals, or other school leaders in hard-to-staff schools or high-need subject areas; and

(ii) recognition of the skills and knowledge of teachers, principals, or other school leaders as demonstrated through—

(I) successful fulfillment of additional responsibilities or job functions, such as teacher leadership roles; and

(II) evidence of professional achievement and mastery of content knowledge and superior teaching and leadership skills.