Performance-based learning is one of the keys to cracking open the assumptions that undergird the current educational codes, structures, and practices. By finally moving beyond the traditions of a time-based system, greater customized educational services can flourish, preparing more and more students for college and careers. This proposed policy framework, designed to expedite state policy development in performance-based learning, may be applied to all next generation learning. Building upon the 2011 Competency-Based Learning Summit convened by the International Association for K-12 Online Learning (iNACOL) and the Council of Chief State School Officers (CCSSO), this discussion explores how state policy can loosen the regulatory environment that is handcuffing administrators and educators who are ready to move toward student-centered, competency-based models of learning. Transitioning to a competency-based system requires deep analysis and wide-reaching creativity. Thus, chief state school officers will want to work collaboratively, drawing on insights and innovations from other states in order to expedite the process of constructing a set of policies that promote innovation and breakthrough strategies, rather than the traditional compliance model. (Contains 8 resources, 7 online resources and 3 footnotes.) [Funding for this paper was provided by the Stupski Foundation. For related report, "It's Not a Matter of Time: Highlights from the 2011 Competency-Based Summit," see ED537332.]