CCS/HS/HCS/SS/SCS/SB 781 - TAX CREDITS FOR MENTORING PROGRAMS - The act establishes a tax credit, subject to appropriations for expenses paid for the participation of a student in an approved sponsorship and mentoring program established by a school district. This portion of the act is similar to SB 824 from 1998.

REVIEW OF ASSESSMENTS - The act extends the period for the General Assembly to halt implementation of a statewide assessment from 30 to 60 legislative days.

ACADEMICALLY DEFICIENT SCHOOLS - Under current law, after a school is declared "academically deficient", a management team evaluates and makes recommendations. The act adds two possible recommendations: 1) require the district to develop a teacher recruitment and retention plan, and 2) appoint a school accountability council to monitor one or more schools. The State Board of Education may appoint an accountability council if the district fails to do so. The council may monitor a resource allocation plan which redirects discretionary local, state and federal funds in areas of academic deficiency. The act establishes criteria under which the resource allocation plan is required to address specific areas of concern, including reading and math scores, teachers working outside of certification area and special education. A district with academically deficient schools must provide summer school to any student who applies in the specific areas of concern. The State Board of Education may establish a financial aid program for prospective teachers to assist districts with academically deficient schools.

Districts with graduation rates below 65% shall determine which schools meet the criteria of "academically deficient" schools, and the district may suspend or terminate contracts of certificated staff, principals and other administrators of such school and may reconstitute the school or sponsor a charter school. Termination of a tenured teacher's contract shall be pursuant to applicable due process as provided by law. School districts which make self-determinations of "academically- deficient" schools shall establish a program of incentives and rewards for teachers to help improve such schools.

GRANTS FOR RESEARCH BASED REFORM - This act establishes a matching grant program to allow schools to choose and implement proven, research-based reforms at the school level. Grants are renewable for up to a total of three years. Priority is given to academically deficient schools. State Board rules implementing the program shall be subject to review of the Joint Committee on Administrative Rules.

RETENTION AND RECRUITMENT - The Department shall make an annual report on recruitment and retention of teachers.

FINANCIALLY STRESSED DISTRICTS - Stressed districts with above average wealth per pupil must get voter approval to forego Prop C rollback.

LAPSING DISTRICTS - A district shall lapse on June thirtieth of the second school year following classification as unaccredited. Prior to the lapse date, the Department of Elementary and Secondary Education shall conduct a hearing in the district and make recommendations to the State Board of Education. If the Kansas City or St. Louis City school districts lapse or if it is anticipated that another lapsing district will not return to accredited status, the State Board of Education may appoint a three-member special administrative board for the district to supervise the assets, financial operations, educational programs and any other provisions in the best interest of the education of children in the district. The special administrative board shall consist of two unpaid district residents and a paid, professional administrator. Upon lapse of the district, the State Board may authorize the special administrative board to continue to operate all or part of the district, attach the lapsed territory to one or more school districts, establish one or more districts within the lapsed territory or allow the district to remain for taxation purposes but be divided for operational purposes.

Territory of a lapsed district with an enrollment over 5000 pupils may not be attached to another district without approval of the school board of the receiving district.

DIVISION OF PROVISIONALLY ACCREDITED AND UNACCREDITED SCHOOL DISTRICTS - Districts declared provisionally accredited may and districts declared unaccredited shall prepare and present a district division plan to the voters of the district. The plan may allow the district to be maintained for purposes of taxation, but be divided for operational purposes.

REVISED GOVERNANCE FOR ST. LOUIS CITY SCHOOLS - The powers, number of members and election of the Board of Directors of St. Louis Public Schools is revised. Currently, the Board consists of 12 members elected at large to 6 year terms. The act provides for a transition to a 7 member board elected to 4 year terms to represent subdistricts. Each member shall reside in the subdistrict the member is elected to represent. No person who is employed by the district or who is related within the second degree to an employee of the district may run for election to the school board.

The Board will retain audit and public reporting powers at all times, but, if the district becomes unaccredited, all other powers are vested in the Special Administrative Board governing the Transitional School District created in this act.

PILOT PROGRAM OF "LOOPING" IN ST. LOUIS CITY SCHOOLS - A pilot program of "looping" is established in St. Louis City. The program shall establish multi-year teacher-student groupings. The program shall be implemented in no less than 20 schools in the district and shall be implemented for no less than five consecutive years and in at least six classrooms per school. Pupil to teacher ratios in such classrooms shall be not greater than 25-to-1. The board shall establish a policy and a procedure to review and act upon requests by a student or the parent of a student that the student be transferred to a different class with a different teacher. The program shall be subject to monitoring, review and approval by the State Board of Education.

STATE AID TO SPECIAL SCHOOL DISTRICT OF PEMISCOT COUNTY - The act provides that state aid shall be calculated for the combined levy of the component district and the Special School District (SSD) of Pemiscot County and then divided in proportion to the share of the total operating levy belonging to the school district and the SSD, respectively. The act provides a "hold harmless" clause which clarifies that the new distribution shall not decrease any district's aid below the 1992-93 per pupil amount. State aid for the Special School District (SSD) of St. Louis County is not changed by the act.

URBAN TRANSFER PROGRAM - The act creates the Metropolitan Schools Achieving Value In Transfer Corporation, which shall be a public body governed by a board of directors consisting of one representative of each district, selected by the governing body of that district. The vote of each member of the board shall be weighted proportionately to the percentage of the total of transfer students who attend school in the member's district. The Corporation shall begin operations based upon final settlement of the school desegregation cases. The program area will include St. Louis City and participating districts in St. Louis County. Participation is voluntary for districts and for students. The Board shall design and operate an urban voluntary school transfer program. First preference shall be provided to students currently attending under the existing transfer program. The Board may establish regional attendance zones mapping parts of the City with the county.

During the sixth year of operation, each participating district other than St. Louis City shall vote on whether to continue participation. Unless a majority vote to continue, the district shall establish a phase out plan the next year which will terminate transfers to the district no later than the following schedule:

1) The ninth year of operation for grades 1 to 3, 2) The tenth year of operation for grades 4 to 6, 3) The eleventh year of operation for grades 7 to 9, 4) The twelfth year of operation for grades 10 to 12,

Students participating in the program shall be counted for state aid by the district of residence (except that county students attending in St. Louis City shall be counted as pupils in the City) but the Department shall pay the additional state aid attributable to such students to the Corporation and the aid shall be distributed to districts educating participating students according to the plan approved by Board of Directors. The Corporation shall receive all federal and state aid which would other be paid to the district of residence on the basis of the student's attendance.

For the first two years, the Corporation shall receive transportation aid of $25 million per year. For the third year and thereafter, the transportation aid will be based upon transportation aid in the district of residence, but not to exceed 155% of the state average per pupil cost for transportation for the second preceding school year. Such aid may be used for any purpose.

The financial provisions of the transfer corporation may not be superceded by settlement of the school desegregation case in the program area.

The Corporation shall not have paid employees, but may provide services by contract. No contractor or employee of a contractor acting in a policy-making capacity, other than a transportation contractors or employee, shall have ever been a contractor or employee of the current, court-ordered transfer program supervised by the Voluntary Interdistrict Coordinating Council. When a district no longer participates, the district's Board member shall be removed. When no students participate, the Corporation shall cease operations and return remaining fund balances to the state.

A Joint Committee shall be established in 5 years to review the program, and the Committee shall be reestablished in 10 years to review the program and recommend whether the financial incentives should be extended.

ST. LOUIS TRANSITIONAL SCHOOL DISTRICT - Upon enactment, a transitional "overlay" school district would be established in St. Louis City. The governance of the transitional district shall be vested with a governing board consisting of appointees of the Mayor, the President of the Board of Aldermen and the governing body of the St. Louis City school district. If the district becomes unaccredited, the school district member shall, within 90 days, be replaced by a paid administrator appointed by the Governor with the advice and consent of the Senate from a list of nominees selected by the State Board of Education. Upon appointment of a paid administrator, the SAB shall have the powers and functions provided under the provisions of the act pertaining to lapsing districts. The SAB's powers are listed. The paid administrator member of the SAB shall have the power to appoint staff and all powers and duties of a superintendent of schools. The governing board's powers are listed.

The overlay district may levy up to a $0.85 property tax levy, and voter approval shall be required. A sales tax equivalent amount, determined by the Department, may be substituted for all or part of the allowed property tax. The property or sales tax shall be placed before the district voters prior to March 15, 1999. Any tax levy of the transitional district shall be assigned to the district upon termination of the transitional district. Upon settlement under court order, the property tax rate would be added to the SLPS operating levy for state aid purposes and for the purpose of the additional line 14 aid. Tax abatements issued after the effective date of this act shall not apply to the transitional school district. A settlement may revise the provisions related to the transitional district, except for the financial provisions.

The transitional district governing board may study and report on and shall place before the district voters, no later than March 15, 1999, a proposal to establish neighborhood schools in the district for grades K-8.

The transitional district shall be terminated on July 1, 2008 unless the State Board determines that transitional district is still needed. The State Board may terminate or reestablish the transitional district at any time upon determining such action is needed and providing notice to the Governor and General Assembly.

SCHOOL FINANCE DEFINITIONS - Upon final settlement of both desegregation cases, "Operating Levy" is revised to provide equalization (state aid) for levies up to $4.95, including the operating levy of a transitional district, except that the levy used in the line 2 deduction for local property tax is capped at $4.70. Currently, levies are equalized to $4.60. The act defines the "Fiscal Instructional Ratio of Efficiency" (FIRE) used to determine administrative efficiency. For the sole purpose of determining line 14(b) aid, the Guaranteed Tax Base (GTB) shall not exceed the value for the 1998-99 payment year. Summer school attendance shall be included with the following school term for the purposes of payment of state school aid. Currently, summer school attendance is included with the immediately preceding school term for state aid purposes.

STATE AID ON PORTION OF DEBT SERVICE OR CAPITAL PROJECTS LEVIES - The act allows a portion of a school district's debt service and capital projects levies to be included in the operating levy, generate state aid and apply toward the minimum operating levy.

The district operating levy is redefined to allow districts not making lease purchase payments or the "24 cents" transfers from operating to capital funds under Section 165.011, RSMo, to include up to eighteen cents of the debt service or capital projects fund levies as part of the operating levy and generate additional state school aid. Any portion included over 10 cents shall be approved by district voters on or after August 28, 1998.

The minimum levy for 1998 and thereafter shall include no more than ten cents of the debt service or capital projects levies included in the operating levy under this act.

Similar provisions were included in SB 502 from 1998.

STATE AID AND LINE 14 CATEGORICAL AID - Upon final settlement of a desegregation case, the basic state aid entitlement line (line 1) is revised to two separate lines. Line 1(a) is based upon the first $2.75 of a district's levy and line 1(b) is based upon the remainder of the district's levy over $2.75 (but not over $4.95). When line 1 is funded at greater than 100%, line 1(a) is prorated up first, but line 1(b) shall be prorated no more than 5% below line 1(a). When line 1 is funded less than 100%, line 1(b) is prorated down first, but line 1(a) shall be no more than 5% above line 1(b).

Upon final settlement, the per pupil amount of line 14 aid shall revised to two separate lines for districts with operating levies greater than $2.75. Line 14(a) shall be distributed based upon a 20% factor times the first $2.75 of the district's operating levy, and Line 14(b) shall be distributed based upon a 30% factor times the remainder of the district's levy $2.75 (but not over $4.95). Beginning with the 2004-2005 school year, the increase in line 14 aid shall be multiplied by the quotient of the district's FIRE ratio divided by the state average FIRE ratio for 1997-98, if the district's FIRE is at least 5% below the state average for 1997-98. Beginning with the 2004-2005 school year, the line 14(b) aid shall also be reduced on a percent for percent basis based upon the extent to which the fraction of the district's pupils scoring at or above 5% below the statewide average on math or reading is below 65%.

Upon final settlement, the per pupil amount of line 14 aid for districts with an operating levy of $2.75 or less shall revised to be based upon a 22% factor. Currently, line 14 aid is based upon a 20% factor times the $2.75 minimum levy.

State aid paid for incorrectly identified Free and Reduced Price Lunch Eligible Pupils shall be repaid to the state along with an equal penalty amount.

The act revises the "hold harmless" payment. Current law provides that the "hold harmless" payment shall ensure that the district receives (from basic formula and line 14 payments) no less than the 1992-93 per pupil amount. Under the act, a district shall receive, from the basic formula and line 14(a), no less than the 1992-93 per pupil amount plus the greater of the increase in the line 14 amount over the 1997-98 line 14 per pupil amount or the line 14(a) amount weighted by the ratio of the district's entitlement divided by the 1992-93 payment amount.

TRANSPORTATION AID - State transportation aid for special education shall not be reduced due to inefficiency. Local school boards shall select and approve bus routes using procedures established by the State Board of Education.

TEACHER SALARY EXPENDITURES - Transportation expenditures shall not be considered in calculating current operating costs as used to determine compliance with requirements for expenditure on salaries and benefits for teachers. Beginning in school year 1999-2000, districts may comply with teacher's salary expenditure requirements by maintaining or improving their FIRE ratio.

AUDIT OF ATTENDANCE - The Department may cause a district's attendance to be audited. Costs of audit shall be borne by the state. This provision is similar to SB 563.

USE OF LINE 14 "AT-RISK" MONEYS - Districts may use Line 14 funds to pay school building site operating costs in proportion to the number of students eligible for Free and Reduced Price Lunch attending the building site.

USE OF DESEGREGATION SAVINGS - Funds shall be distributed in the following order: 1) The $80 million saved from 1994 to 1997 shall remain in the foundation formula. 2) Up to the next $75 million shall be transferred, if needed, to fully fund the formula. 3) Beginning in FY 2000, up to the next $25 million shall be transferred, as needed, to fully fund the transportation aid categorical, and any such funds may be placed to the credit of the capital projects fund for FY 2000 and shall be placed in operating funds in succeeding years. 4) Any remainder shall be transferred to fully fund existing categorical aid programs.

PRINCIPAL TENURE - The act eliminates principal tenure in St. Louis City and increases the probationary period for St. Louis City teachers from 3 years to 5 years.

SPECIAL SCHOOL DISTRICT OF ST. LOUIS COUNTY - If the responsibility for educating all or some of the pupils of the Special School District of St. Louis County (SSD) is transferred to one or more school districts, such school districts are not required to employ such SSD teachers, but shall honor the existing SSD teacher contracts with regard to tenure status, salary scale position and fringe benefits for any such teachers they do employ.

SHELTERED WORKSHOPS - Current law, as enacted in SB 264 from 1997, provides for reimbursement of eleven dollars per day for fiscal year 1998, increasing to twelve dollars per day for fiscal year 1999 and thirteen dollars per day for fiscal year 2001 and thereafter. However, the state aid reimbursement for fiscal year 2000 is not specified. The act provides that the reimbursement rate of thirteen dollars per day shall begin for fiscal year 2000, not fiscal year 2001.

VIDEO PROGRAM - The act removes the January 1, 1999 sunset on the placement of video sales and rental funds to the Video Instructional Development and Educational Opportunity (VIDEO) Program.

SCHOOL RETIREMENT SYSTEMS - The Public School Retirement System and the Kansas City and St. Louis City school retirement systems shall jointly undertake a feasibility study to improve the portability of benefits to improve teacher recruitment and retention.

RECALCULATED OPERATING LEVY - The act revises the "recalculated" levy used to determine state aid for certain districts forced to roll back their operating levy due to reassessment. For such districts, the additional amount of the recalculated levy over the actual operating levy shall be retained for state aid purposes when the district votes an increase in operating levy in the year of reassessment or in a subsequent year. Currently, when a district votes a tax increase after reassessment, the recalculated levy is eliminated and the actual operating levy is used to calculate state aid.

CHARTER SCHOOLS - Charter schools may be established in St. Louis City and Kansas City School Districts by the school board or a four-year public college or university or a public community college in the same or an adjoining county. Applications denied by the local board may be appealed to the State Board.

The act specifies requirements for the proposed charter to be submitted to the sponsor by the entity seeking to establish a charter school. Applications to sponsors other than school boards shall also be submitted to the school board of the district where the school is to be located, and the school board may file objections with the proposed sponsor. Applications which are denied may be appealed to the State Board of Education. No more than five percent of the buildings currently in use in a district for instructional purposes may be converted to charter schools.

Charter schools may not limit admission based upon race or ability. A charter school shall be a nonprofit corporation established under Chapter 355, RSMo. Meetings of the charter school's board of directors shall be open meetings under Chapter 610, RSMo. Charter schools may affiliate with a four-year college or university or a community college for certain, specified purposes. An employee of a college sponsoring a charter school may not serve on the charter school's board of directors.

Geographical regions of charter schools shall not create racially or socio-economically isolated schools. One third of a sponsor's charters shall give priority to dropouts or at-risk students. Charter schools shall be nonsectarian, financially accountable, offer a comprehensive program of instruction for one or more grade levels, have methods to measure pupil progress towards state academic standards and comply with laws pertaining to health, safety and minimum educational standards. Charter schools shall be exempt from all other laws and rules pertaining to schools, except as provided in this act. Charter schools shall use accounting procedures consistent with the Missouri financial accounting manual.

Charter schools shall serve one or more grades from K-12 and may also provide Early Childhood education, if funding for that program is established by the state.

Pupils residing in the district or eligible to attend under the voluntary transfer program may be enrolled at a charter school.

Charter schools shall provide data for a comparable group study, and the Department shall commission a study, every two years, of the performance of charter schools and the impact of charter schools on school districts. Charter schools shall not be included in Missouri School Improvement Program (MSIP) reviews.

A charter school shall provide for special education needs of its students and the charter school may contract with a school district or other entity to provide special education services. A charter school and school district may agree for the charter school to contract with the school district for special education services, and, in such cases, the proportionate share of state and federal funds for disabled students shall go to charter schools educating such students.

The school district where the pupil resides shall pay the state and local share of per pupil operating revenues, plus any other federal or state aid received on behalf of such child, to the charter school. Each charter school shall report the names, address and eligibility for state categorical aid for each pupil to the school district of residence and to the Department, and each charter school shall promptly report to the district and the Department when a student discontinues enrollment. A charter school is eligible to receive transportation funding, which the charter school shall then use to either provide or contract for those services. Debt incurred by a charter school shall not be a debt of the school district. A charter school which incurs debt shall include a repayment plan in its financial plan. Upon dissolution, debts of the charter school shall be resolved under Chapter 355, RSMo.

Personnel at a charter school shall participate in the applicable school retirement system of the district in which the school is located. A teacher retains seniority rights and permanent teacher status if the teacher elects to teach at a charter school and remain an employee of the district.

A charter school may employ non-certificated teachers to comprise up to 20% of the instructional staff, but such teachers shall not be members of PSRS. Non-certificated instructional personnel must be supervised by certificated instructional personnel. All instructional staff shall have education, experience and skills appropriate to their instructional duties. School district employees may be employed by the district and the charter school contract may provide for employees to choose to remain employed by the district. A criminal and child abuse background check shall be conducted before hiring any employee of the charter school.

Similar provisions regarding charter schools are contained in SB 789.

CONTINGENT EFFECTIVE DATE FOR CERTAIN SECTIONS - Sections 162.1060 (transfer program), 163.011 (school finance formula definitions) and 163.031 (new state aid formula with 1(a)/1(b) and 14(a)/14(b)) shall only become effective upon determination by Attorney General of final settlement of both desegregation cases, provided that such final settlement agreement may provide for capital payments to be made after March 15, 1999, so long as the settlement specifies the complete state financial obligation. Notice to the Revisor of Statutes by March 15, 1999 shall cause the provisions to go into effect July 1, 1999. By March 15, 1999, the AG shall give notice to the Revisor as to whether or not final settlement is reached. If not, these sections shall not go into effect.
OTTO FAJEN