Creates a system for the establishment and operation of locally authorized innovation schools. “Innovation school” means a public school that has been authorized by a school district board of directors in accordance with a plan for the establishment and operation of the innovation school. “Innovation zone” or “zone” means two or more innovation schools that have been authorized by a school district board of directors in accordance with a plan for the establishment and operation of the innovation schools in the zone that was jointly submitted by the participating schools. Innovation school and innovation zone plans must be capable of being implemented without supplemental state funds, but may include requests for supplemental funds from the school district or from the state for specified components of the plan. Each school district board of directors is authorized and encouraged to seek and accept public and private gifts, grants, and donations to offset the costs of developing and implementing innovation school and innovation zone plans.