(1) The State Board of Education shall establish an accountability system to be used to measure the performance of individual public schools and school districts. The accountability system shall combine multiple indicators, including, but not limited to, graduation rates, student growth and student improvement on the assessment instruments provided in section 79-760.03, student discipline, and other indicators of the performance of public schools and school districts as established by the state board.

(2) The indicators selected by the state board for the accountability system shall be combined annually into a school performance score and district performance score. The state board shall establish levels of performance based upon school performance scores and district performance scores in order to annually classify and report the performance of public schools and school districts beginning with the reporting of data from school year 2014-15. The department shall classify and report the performance of public schools and school districts annually on or before December 31 of each calendar year.

(3) The state board shall designate priority schools based on such classification. Schools designated as priority schools shall be at the lowest performance level at the time of the initial priority school designation. Schools designated as priority schools shall remain priority schools until such designation is removed by the state board. No less than three schools may have a priority school designation at one time. Schools designated as priority schools shall be subject to the requirements of section 79-760.07. The State Department of Education shall annually report the performance level of individual public schools and school districts as part of the statewide assessment and reporting system.