The State Flexibility Demonstration program (State-Flex) is authorized under the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the No Child Left Behind Act of 2001. This program provides participating State educational agencies (SEAs), and the local educational agencies (LEAs) with which they enter into performance agreements, with flexibility to use Federal funds to meet State and local needs. An SEA with State-Flex authority may (1) consolidate and use certain Federal funds reserved for State administration and State-level activities for any educational purpose authorized under the ESEA; (2) specify how local educational agencies (LEAs) in the State use Innovative Program funds under Part A of Title V; and (3) enter into performance agreements with four to ten LEAs in the State, permitting those LEAs to consolidate certain Federal funds and to use those funds for any ESEA purpose consistent with the SEA's State-Flex plan.