(a) The Legislative School Performance Recognition Program is created within the State Department of Education to reward public schools that either:

(1) Demonstrate high performance by being ranked in the top 25 percent of public schools, as ranked in the school grading system created in Section 16-6C-2.

(2) Demonstrate exemplary progress by improving the overall annual ranking of the school by at least one letter grade, as ranked in the school grading system created in Section 16-6C-2.

(b) All public schools that are ranked in the school grading system created in Section 16-6C-2 are eligible to participate in the program.

(c) The State Superintendent of Education shall prescribe guidelines for how the program shall be administered and implemented by not later than December 31, 2013, but the program may not be implemented by the State Superintendent of Education or the State Department of Education until both of the following have occurred:

(1) Rules governing how the program is to be administered and implemented have been promulgated by the State Department of Education pursuant to the Alabama Administrative Procedure Act.

(2) The school grading system created in Section 16-6C-2 is in its second academic year of implementation.

(d) In developing the program, the State Superintendent of Education shall seek input from parents, teachers, school administrators, existing State Department of Education advisory groups or task forces, and other education stakeholders on how the program may properly reflect not only the overall academic proficiency of each public school but also the academic improvements made by each public school.

(e) Selected schools shall receive financial awards depending on the availability of funds appropriated by the Legislature to the program. The State Superintendent of Education shall distribute funds to eligible schools on a competitive basis based on the criteria set forth in this section as well as in the rules governing how the program is to be administered and implemented. When funds are awarded, the State Superintendent of Education may award no more than 20 percent of the total appropriation to those schools eligible for an award pursuant to subdivision (1) of subsection (a). Any remaining amounts shall be awarded to those schools eligible for an award pursuant to subdivision (2) of subsection (a). No school may be eligible for an award pursuant to both subdivision (1) and subdivision (2) of subsection (a) at the same time.

(f) Subject to the rules governing how the program is to be administered and implemented, a school eligible for an award pursuant to subdivision (1) or subdivision (2) of subsection (a) shall be exempt from any statute or regulation related to the prescribed use of funds at the school level, or any categorical spending requirements imposed through the appropriation of funds from the state, except those requirements associated with the receipt of federal funds. A school eligible for an award pursuant to subdivision (1) or subdivision (2) of subsection (a) shall be eligible for the flexibility provided by this subsection regardless of whether the school receives a financial award as contemplated by subsection (e).

(g) A list of schools eligible for an award pursuant to subdivision (1) or subdivision (2) of subsection (a) shall be annually posted by the State Superintendent of Education on the website of the department.