A bill to reauthorize the Rural Education Initiative in subpart 2 of part J of title X of the Elementary and Secondary Education Act of 1965.

Amends the Elementary and Secondary Education Act of 1965 (ESEA) to: (1) reauthorize the Rural Education Initiative (REI) which permits small, rural school districts to have flexibility in the use of funds from a limited number of Federal education programs under ESEA; and (2) extend the authorization of appropriations for supplemental grants to rural schools to improve student achievement, provide professional development opportunities for educators, or undertake education reform activities.

Makes rural local education agencies which receive such supplemental grants, in any fiscal year for which appropriations for such grants exceed a specified amount, ineligible for certain competitive grant programs under ESEA.

Authorizes the Secretary of Education to waive School Locale Code requirements under certain conditions.