SACRAMENTO - State education officials adopted the basics of a plan Wednesday that would streamline federal standards for teachers into the state's existing credential process.

The federal No Child Left Behind act calls for all teachers to be "highly qualified" by the 2005-06 school year. Schools will have to notify parents of children whose teachers haven't met the tougher requirements.

Under the plan, which will be formally adopted by the board at their July meeting, all new elementary school teachers will have to pass a test in the subject they are teaching. New middle school and high school teachers will need to have a degree in the subject they teach, or pass a test.

Veteran teachers will be required to take a test if they don't have a degree in the subject.

California's first attempt at meeting the new requirement was rejected by the U.S. Department of Education. It had included teachers on emergency permits and beginning teachers who are enrolled in a pre-intern program.

Under the new plan, pre-interns and those on emergency permits wouldn't meet the minimum standards. Neither would teachers who received waivers to teach a subject because they had a college minor in the subject.

The new rules attempt to merge the state's current tests with the federal rules, so teachers won't have to take a battery of tests to comply with the state and federal requirements.

By combining the state's credential process with the new federal guidelines, "we've been able to build the requirement into our state process," said board member Carol Katzman.

All teachers -- both veteran and beginners -- will have to meet the new requirements. Teachers in certain low-income schools are already required to meet the new standards.

"Most of our teachers are highly qualified, they just haven't taken the test to prove it," said board President Reed Hastings.

Most veteran teachers will automatically qualify because they have degrees in the subject they are teaching, he said.

Also Wednesday, the board took public comment on whether to postpone a requirement that graduates pass the high school exit exam.

The board will decide in July whether the class of 2004 must pass the test, which is based on academic standards the state adopted in 1997. A recent report on the test found that about half of English language learners and 75 percent of special education students probably won't pass the test and get diplomas.

The board could alter the test, so students could pass with a score that combined math and English results, Hastings said. That would allow students who had stronger skills in one subject to pass, even with a lower score in the other half of the test.

Linda Kaminski, with the Association of California School Administrators, warned that by changing the passing grade, it could lower the standard "so low that we'd be in a position of having to defend seventh-grade math as a requirement for graduation. ... We want to make sure our kids are meeting a standard that we're all proud of."