I don't know who makes the final decision, but you could use the Iowa scale as an indication of what would be appropriate.
At our school gifted EPs are talked about the same as IEPs in terms of the law, so we were able to really push on what "the data" was telling us.
Also, I don't remember who was playing devil's advocate about the yearly progress, but you would be surprised how many gifted kids don't actually make AYP because they have given up on academics and according to the test scores they have not increased their scores enough to be classified as having made a year's worth of progress. I would agree thought that a gifted kid's year's worth of progress is not the same as other students. We actually used that very argument in our meeting with the school last fall to get DD placed into algebra 1. They were saying her test scores from the previous year didn't qualify her to take the placement test into the class (it is considered an honors class in our middle school and counts for high school credit), let alone show she had made enough progress in math. Our response was that it was partially due to her lack of interest in the level of math being taught and her understanding that the test scores didn't really show whether or not she had learned everything taught during the year.
We successfully argues that she was ready for algebra based on what we know to be her rate of learning and that if she were not placed in a more challenging math class she would again not make the gains she is capable of in a year because of inappropriate placement rather than inability.
Good luck!
