To repeal sections 143.105, 143.106, 143.107, 160.011, 160.021, 160.545, 162.471, 162.970, 162.975, 162.980, 163.036, 163.161, 165.121, 165.211, 165.221, 165.231, 167.131, 167.270, 167.275, 174.125, 174.620 and 175.021, RSMo 1994, and sections 163.011, 163.031, 164.011, 165.011, 165.111, 166.275, 166.300, 167.126, 172.035, 174.055 and 174.610, RSMo Supp. 1996, relating to education, and to enact in lieu thereof forty-two new sections relating to the same subject.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

Section A. Sections 143.105, 143.106, 143.107, 160.011, 160.021, 160.545, 162.471, 162.970, 162.975, 162.980, 163.036, 163.161, 165.121, 165.211, 165.221, 165.231, 167.131, 167.270, 167.275, 174.125, 174.620 and 175.021, RSMo 1994, and sections 163.011, 163.031, 164.011, 165.111, 166.275, 166.300, 167.126, 172.035, 174.055 and 174.610, RSMo Supp. 1996, are repealed and forty-two new sections enacted in lieu thereof, to be known as sections 160.011, 160.021, 160.545, 162.471, 162.975, 163.011, 163.031, 163.036, 163.161, 164.011, 165.111, 165.121, 165.211, 165.221, 165.231, 166.275, 166.300, 167.126, 167.131, 167.270, 167.275, 172.035, 172.036, 172.037, 174.055, 174.056, 174.057, 174.125, 174.610, 174.620, 174.622, 175.021, 175.022, 175.023, 1, 2, 3, 4, 5, 6, 7, and 8, to read as follows:

[143.105. Notwithstanding the provisions of section 143.071, to the contrary, a tax is hereby imposed upon the Missouri taxable income of corporations in an amount equal to five percent of Missouri taxable income.]

[143.106. 1. Notwithstanding the provisions of section 143.171, to the contrary, a taxpayer shall be allowed a deduction for his federal income tax liability under chapter 1 of the Internal Revenue Code for the same taxable year for which the Missouri return is being filed after reduction for all credits thereon, except the credit for payments of federal estimated tax, the credit for the overpayment of any federal tax, and the credits allowed by the Internal Revenue Code by section 31 (tax withheld on wages), section 27 (tax of foreign country and United States possessions), and section 34 (tax on certain uses of gasoline, special fuels, and lubricating oils).

2. If a federal income tax liability for a tax year prior to the applicability of sections 143.011 to 143.996 for which he was not previously entitled to a Missouri deduction is later paid or accrued, he may deduct the federal tax in the later year to the extent it would have been deductible if paid or accrued in the prior year.]

[143.107. 1. Sections 143.105 and 143.106 shall become effective only if the question prescribed in subsection 2 of this section is submitted to a statewide vote and a majority of the qualified voters voting on the issue approve such question, and not otherwise.

2. If the supreme court of Missouri does not affirm in whole or in part the decision in the case of COMMITTEE FOR EDUCATION EQUALITY, et al., v. STATE OF MISSOURI, et al., No. CV 190-1371CC, and LEE'S SUMMIT SCHOOL DISTRICT R-VII, et al., v. STATE OF MISSOURI, et al., No. CV 190-510CC, a statewide election shall be held on the first regularly scheduled statewide election date after such a ruling at which an election can be held pursuant to chapter 115, RSMo. At such election the qualified voters of this state shall vote on the question of whether the taxes prescribed in sections 143.105 and 143.106 shall be applied to all taxable years beginning on or after the date of such election and not otherwise. If the voters approve such question, sections 160.500 to 160.538, sections 160.545 and 160.550, sections 161.099 and 161.610, RSMo, sections 162.203 and 162.1010, RSMo, section 163.023, RSMo, sections 166.275 and 166.300, RSMo, section 170.254, RSMo, section 173.750, RSMo, and sections 178.585 and 178.698, RSMo, shall expire thirty days after certification of the results of the election.]

160.011. As used in chapters 160, 161, 162, 163, 164, 165, 167, 168, 170, 171, 177 and 178, RSMo, the following terms mean:

(1) "District" or "school district", when used alone, may include [six-director] seven-director, urban, and metropolitan school districts;

(2) "Elementary school", a public school giving instruction in [two or more] a grade or grades not higher than the eighth grade;

(3) "High school", a public school giving instruction in [two or more] a grade or grades not lower than the ninth nor higher than the twelfth grade;

(4) "Householder", the head of a family who occupies a place of residence together with [his] such person's family or [his] such person's spouse;

(5) "Metropolitan school district", any school district the boundaries of which are coterminous with the limits of any city which is not within a county;

(6) "Public school" includes all elementary and high schools operated at public expense;

(7) "School board", the board of education having general control of the property and affairs of any [six-director, urban or metropolitan] school district;

(8) "School term", a minimum of one hundred seventy-four school days, as that term is defined in section 160.041, and one thousand forty-four hours of actual pupil attendance as scheduled by the board pursuant to section 171.031, RSMo, during a twelve-month period in which the academic instruction of pupils is actually and regularly carried on for a group of students in the public schools of any school district. A "school term" may be within a school year or may consist of parts of two consecutive school years, but does not include summer school. A district may choose to operate two or more terms for different groups of children;

(9) "Secretary", the secretary of the board of a school district;

(10) "[Six-director] Seven-director district", any school district which has [six] seven directors and includes urban districts regardless of the number of directors an urban district may have unless otherwise provided by law;

(11) "Taxpayer", any individual who has paid taxes to the state or any subdivision thereof within the immediately preceding [twelve months'] twelve-month period or the spouse of such individual;

(12) "Town", any town or village, whether or not incorporated, the plat of which has been filed in the office of the recorder of deeds of the county in which it is situated;

(13) "Urban school district", any district which includes [all or] more than half of the population or land area of any city which has not less than seventy thousand inhabitants, other than a city which is not within a county.

160.021. The public school districts existing under the laws of this state are divided into the following classes; namely, [six-director] seven-director, urban, and metropolitan school districts.

160.545. 1. There is hereby established within the department of elementary and secondary education the "A+ Schools Program" to be administered by the commissioner of education. The program shall consist of grant awards made to public secondary schools that demonstrate a commitment to ensure that:

(1) All students be graduated from school;

(2) All students complete a selection of high school studies that is challenging and for which there are identified learning expectations; and

(3) All students proceed from high school graduation to a college or postsecondary vocational or technical school or high wage job with work place skill development opportunities.

2. The state board of education shall promulgate rules and regulations for the approval of grants made under the program to schools that:

(1) Establish measurable district-wide performance standards for the goals of the program outlined in subsection 1 of this section; and

(2) Specify the knowledge, skills and competencies, in measurable terms, that students must demonstrate to successfully complete any individual course offered by the school, and any course of studies which will qualify a student for graduation from the school; and

(3) Do not offer a general track of courses that, upon completion, can lead to a high school diploma; and

(4) Require rigorous coursework with standards of competency in basic academic subjects for students pursuing vocational and technical education as prescribed by rule and regulation of the state board of education; and

(5) Have a partnership plan developed in cooperation and with the advice of local business persons, labor leaders, parents, and representatives of college and postsecondary vocational and technical school representatives, with the plan then approved by the local board of education. The plan shall specify a mechanism to receive information on an annual basis from those who developed the plan in addition to senior citizens, community leaders, and teachers to update the plan in order to best meet the goals of the program as provided in subsection 1 of this section. Further, the plan shall detail the procedures used in the school to identify students that may drop out of school and the intervention services to be used to meet the needs of such students. The plan shall outline counseling and mentoring services provided to students who will enter the work force upon graduation from high school, address apprenticeship and intern programs, and shall contain procedures for the recruitment of volunteers from the community of the school to serve in schools receiving program grants.

3. By rule and regulation, the state board of education may determine a local school district variable fund match requirement in order for a school or schools in the district to receive a grant under the program. However, no school in any district shall receive a grant under the program unless the district designates a salaried employee to serve as the program coordinator, with the district assuming a minimum of one-half the cost of the salary and other benefits provided to the coordinator. Further, no school in any district shall receive a grant under the program unless the district makes available facilities and services for adult literacy training as specified by rule of the state board of education.

4. For any school that meets the requirements for the approval of the grants authorized by this section and specified in subsection 2 of this section for three successive school years, by August first following the third such school year, the commissioner of education shall present a plan to the superintendent of the school district in which such school is located for the waiver of rules and regulations to promote flexibility in the operations of the school and to enhance and encourage efficiency in the delivery of instructional services in the school. The provisions of other law to the contrary notwithstanding, the plan presented to the superintendent shall provide a summary waiver, with no conditions, for the pupil testing requirements pursuant to section 160.257 in the school. Further, the provisions of other law to the contrary notwithstanding, the plan shall detail a means for the waiver of requirements otherwise imposed on the school related to the authority of the state board of education to classify school districts pursuant to subdivision (9) of section 161.092, RSMo, and such other rules and regulations as determined by the commissioner of education, except such waivers shall be confined to the school and not other schools in the school district unless such other schools meet the requirements of this subsection. However, any waiver provided to any school as outlined in this subsection shall be void on June thirtieth of any school year in which the school fails to meet the requirements for the approval of the grants authorized by this section as specified in subsection 2 of this section.

5. Within the amount appropriated for the program, in addition to the grants to public schools authorized by subsections 1 to 3 of this section, the commissioner of education shall, by rule and regulation of the state board of education and with the advice of the coordinating board for higher education, establish a procedure for the reimbursement of the cost of tuition, books and fees to Missouri Western State College, Missouri Southern State College or any public community college or vocational or technical school for any student for the purpose of obtaining an associate degree:

(1) Who has attended a public high school in the state for at least three years immediately prior to graduation that meets the requirements of subsection 2 of this section; and

(2) Who has made a good faith effort to first secure all available federal sources of funding that could be applied to the reimbursement described in this subsection; and

(3) Who has earned a minimal grade average while in high school as determined by rule of the state board of education, and other requirements for the reimbursement authorized by this subsection as determined by rule and regulation of said board.

6. The amount of the grant per student shall not exceed the average community college tuition in this state as determined by the coordinating board for higher education.

7. The commissioner of education shall develop a procedure for evaluating the effectiveness of the program described in this section. Such evaluation shall be conducted annually with the results of the evaluation provided to the governor, speaker of the house, and president pro tempore of the senate.

162.471. 1. The government and control of an urban school district is vested in a board of six directors, except that in urban districts containing the greater part of a city of more than three hundred thousand inhabitants the board shall be composed of nine directors. Each director shall be a voter of the district, who has resided within this state for one year next preceding his election or appointment and who is at least twenty-four years of age. All directors, except as [herein] provided in this subsection or subsection 2 of this section, hold their offices for six years and until their successors are duly elected and qualified. All vacancies occurring in the board shall be filled by appointment by the board as soon as practicable, and the person appointed shall hold his office until the next school board election, when his successor shall be elected for the remainder of the unexpired term. The power of the board to perform any official duty during the existence of a vacancy continues unimpaired thereby.

2. The terms shall be for four years and until their successors are duly elected and qualified for all directors elected in 1998 and thereafter, in any school district in any city with a population of one hundred thousand or more inhabitants which is located within a county of the first classification that adjoins no other county of the first classification.

[162.970. 1. Handicapped or severely handicapped children who are admitted to programs or facilities of the department of mental health or whose domicile is one school district in Missouri but who reside in another school district in Missouri as a result of placement arranged by or approved by the department of mental health, the department of social services or placement arranged by or ordered by a court of competent jurisdiction shall have a right to be provided the services described by sections 162.670 to 162.995 and shall not be denied admission to any appropriate regular public school or special school district program or program operated by the state board of education, as the case may be, where the child actually resides because of such admission or placement; provided, however, that nothing in sections 162.670 to 162.995 shall prevent the department of mental health, the department of social services or a court of competent jurisdiction from otherwise providing or procuring such special educational services for such child.

2. Each school district or special school district constituting the domicile of any handicapped or severely handicapped child for whom special educational services are provided or procured under this section shall pay toward the per pupil costs for special educational services for such child. A school district which is not a special school district shall pay an amount equal to the average sum produced per child by the local tax effort of the district of domicile. A special school district shall pay the average sum produced per child by the local tax efforts of the component districts.

3. When special educational services have been provided by the school district or special school district in which a handicapped or severely handicapped child actually resides, other than the district of domicile, the amounts as provided in subsection 2 for which the domiciliary school district or special school district is responsible shall be paid by such district directly to the serving district. The school district, or special school district, as the case may be, shall send a written voucher for payment to the regular or special district constituting the domicile of the child served and the domiciliary school district or special school district receiving such voucher shall pay the district providing or procuring the services the amount hereinabove provided. In the event the responsible district fails to pay the appropriate amount to the district within ninety days after a voucher is submitted, the state department of elementary and secondary education shall deduct the appropriate amount due from the next payments of any state financial aid due that district and shall pay the same to the appropriate district.

4. In cases where a handicapped or severely handicapped child whose domicile is in one district is placed in programs or facilities operated by the department of mental health or resides in another district pursuant to assignment by that department, the department of mental health shall pay the serving district from funds appropriated for that purpose the amount by which the per pupil costs of the special educational services exceeds the amounts received from the domiciliary district except that any other state money received by the serving district by virtue of rendering such special service shall reduce the balance due.

5. In cases where a handicapped or severely handicapped child whose domicile is in one district is placed by the division of family services into a residential care facility, as defined in section 210.481, RSMo, including any private residential group home, regardless of the number of children residing therein, the division of family services shall pay the serving district from funds appropriated for that purpose the amount by which the per pupil cost of the special educational services exceeds the amount received from the domiciliary district except that any other state money received by the serving district by virtue of rendering such special service shall reduce the balance due.

6. Institutions providing a place of residence for three or more handicapped or severely handicapped children whose parents or guardians do not reside in the district in which the institution is located shall have no authority to enroll such children in a program for handicapped or severely handicapped children in the district or special district in which the institution is located unless the institution contracts for such services and pays the actual per pupil cost for such services or unless such children are assigned pursuant to subsection 1 of this section. In the instance of severely handicapped children for whom special education services are requested from the state board of education, the state board shall also require evidence of assignment pursuant to subsection 1 of this section before such services are initiated, provided that such child would otherwise be eligible for such services.

7. Handicapped and severely handicapped children residing in institutions providing a place of residence for three or more such children whose domicile is not in the state of Missouri may be admitted to schools or programs provided pursuant to sections 162.670 to 162.995 on a contractual basis between the school district, special district or state department or agency and the proper department or agency, or persons in the state where domicile is maintained. Such contracts shall not be permitted to place any financial burden whatsoever upon the state of Missouri, its political subdivisions, school districts or taxpayers.

8. For purposes of this section the "domicile of a child" shall be the place of residence of his parents or legal guardian. No provision of this section or of this act shall be construed to deny any handicapped or severely handicapped child domiciled in Missouri appropriate and necessary gratuitous public services as described in sections 162.670 to 162.995.]

162.975. 1. Each school district or special school district [maintaining one or more] which provides approved special [programs] education services for handicapped or severely handicapped children [under] pursuant to the provisions of sections 162.670 to 162.995 or approved extended school year services shall be entitled [under] pursuant to section 163.031, RSMo, to receive state aid [at the rate of eleven thousand six hundred forty-six dollars for each approved class of children per term of one hundred seventy-four days as provided by section 163.021, RSMo, except that approved classes for the educable mentally retarded shall be funded at ten thousand five hundred dollars in 1986-87 and thereafter shall be entitled under section 163.031, RSMo, to receive state aid at the same rate as granted for handicapped or severely handicapped children under the provisions of sections 162.670 to 162.995 and approved classes of remedial reading shall be funded at six thousand seven hundred ninety-four dollars per approved class. The rates of entitlement for approved classes in this subsection shall be adjusted annually by the lesser of the percentage change in state average per pupil operating costs or the percentage change in the total of the state's apportionments from the second preceding school year to the preceding school year. The rate of entitlement for this section for fiscal years 1994, 1995 and 1996 shall be the same as fiscal year 1993].

(1) An entitlement for state aid shall exist for each child receiving services on homebound status or served by contractual arrangement with a private or public agency approved by the department of elementary and secondary education. The amount paid from state aid for such services shall be adjusted annually by the percent change in the appropriation of state funds to this section for the current year compared with that for the first preceding year;

(2) An entitlement for state aid shall exist for approved extended school year services for handicapped or severely handicapped children. Prior to full implementation of subdivisions (4) and (5) of this subsection, state aid paid for each approved staff member shall bear the same ratio to the amount payable for such staff during the immediate preceding school year as the ratio of the number of hours in the approved extended school year program bears to the number of hours in regular term programs for each respective school district or special school district approved under this section. However, this amount shall be adjusted annually by the percent change in the appropriation of state funds to this section for the current year compared with the appropriation level for the first preceding year. After full implementation of subdivisions (4) and (5) of this subsection, state aid shall be paid for each approved staff in an amount which bears the same ratio to the amount payable for such staff during the immediate preceding school year as the ratio of the number of hours in the approved extended school year program bears to the number of hours in regular term programs for each respective school district or special school district approved under this section. However the amount payable per approved staff member shall be doubled for any year following full implementation of subdivisions (4) and (5) of this subsection;

(3) An entitlement for state aid shall exist for approved special education services provided by the department of social services, division of youth services. State aid shall be paid for each full-time equivalent professional and paraprofessional staff member approved by the department of elementary and secondary education at the rate paid during the first preceding year to when this section first becomes effective, plus an annual adjustment equal to the percent change in the appropriation of state funds to this section for the current year compared with the appropriation level for the first preceding year;

(4) An entitlement for state aid shall exist for approved professional and paraprofessional staff, employed or contracted to provide special education services for handicapped and severely handicapped children, including those used by a school district or special school district to provide services before and after the normal school day for students attending nonpublic schools, including children for whom declarations of enrollment pursuant to section 167.042, RSMo, have been filed. Each school district or special school district employing or contracting for professional services or paraprofessional staff in the provision of special education services, as defined and approved by the department of elementary and secondary education, shall receive state aid at a full-time equivalent rate resulting from allocating up to fifty percent of funds appropriated to this section among all eligible professional and paraprofessional staff, having first allocated sufficient funds for subdivisions (1), (2) and (3) of this subsection. Paraprofessional staff shall be paid at one-half the rate paid full-time equivalents of professional staff and contractors;

(5) Each school district or special school district providing special education services for handicapped or severely handicapped children shall receive state aid for each eligible pupil in K-12 education. In addition, such school districts shall receive state aid for each child domiciled in the district and enrolled in a nonpublic school, including children for whom declarations of enrollment pursuant to section 167.042, RSMo, have been filed. The per resident student rate paid for students enrolled in nonpublic schools shall be one-half that paid per eligible pupil for students enrolled in a school district or special school district. Up to fifty percent of the state aid appropriated to this section shall be distributed pursuant to this subsection, having first allocated sufficient funds for subdivisions (1), (2) and (3) of this subsection;

(6) Subdivisions (4) and (5) of this subsection shall be implemented proceeding from a point when all funds are distributed based on the staff hired or contracted, to a point when distributions are made fifty percent for staff hired or contracted and fifty percent based on a count of eligible pupils and resident nonpublic school children, including children for whom declarations of enrollment pursuant to section 167.042, RSMo, have been filed. Implementation shall proceed based on appropriations. No district shall receive less state aid pursuant to this section than received during the year preceding that when the phased implementation was begun;

(7) Contractors providing professional services funded pursuant to this section shall meet the state licensing and certification requirements appropriate to their contracted duties, as determined by the department of elementary and secondary education.

2. For approved [classes of] administrative, special education and related services provided for handicapped and severely handicapped children under five years of age, but not under the age of three, entitlements for state aid established [under] pursuant to this section and distributed pursuant to section 163.031, RSMo, shall not exceed [seventy-seven] ninety percent of approved cost of the program as specified in the project application. Such programs are not eligible to receive funds allocable pursuant to subsection 1 of this section.

[3. For approved programs for gifted children, districts shall be entitled to receive state aid under section 163.031, RSMo, not to exceed seventy-five percent of the cost of instructional personnel and special materials listed and approved on the project application shall be apportioned.

4. A district shall be entitled to receive, under section 163.031, RSMo, an additional amount of eight thousand dollars for each professional staff member, other than classroom teachers, who is employed to work full time with handicapped or severely handicapped children, ages five through twenty. The rate of entitlement provided by this subsection shall be adjusted annually by the lesser of the percentage change in state average teacher salary or the percentage change in the total of the state's apportionments from the second preceding school year to the preceding school year. The rate of entitlements for this section for fiscal years 1994, 1995 and 1996 shall be the same as for fiscal year 1993.

5. For classes of handicapped children, ages five through twenty, a district shall be entitled to receive under section 163.031, RSMo, the amount of four thousand dollars for each full-time teacher aide when such aide is employed in accordance with standards approved by the state board of education. The rate of entitlement provided by this subsection shall be adjusted annually by the lesser of the percentage change in state average teacher salary or the percentage change in the total of the state's apportionments from the second preceding school year to the preceding school year. The rate of entitlement for this section for fiscal years 1994, 1995 and 1996 shall be the same as for fiscal year 1993.

6. For the purposes of this section, "class" shall mean a group of not less than ten children; except that, fewer than ten children may constitute a class when it is found necessary and advisable by the state board of education.

7. Each school district or special school district maintaining one or more approved summer school programs for handicapped or severely handicapped children shall be entitled to receive state aid under section 163.031, RSMo, for each approved class of children in an amount which bears the same ratio to the amount payable under subsection 1 of this section as the ratio of the number of hours in the approved summer program bears to the number of hours in regular term programs approved under subsection 1 of this section.

8. Funds to which a district is entitled under this section shall be distributed as provided by section 163.031, RSMo.

9. No class under this section may be disapproved by the state because the class may be a part-time class, in which case the state aid will be prorated.]

3. Each school district or special school district which provides an approved remedial reading program pursuant to the provisions of sections 162.670 to 162.995 shall be entitled pursuant to section 163.031, RSMo, to receive state aid. The amount paid from state aid for such services shall be adjusted annually by the percent change in the appropriation of state funds for the school foundation program for the current year compared with that for the first preceding year. Such programs are not eligible to receive funds allocable pursuant to subsection 1 of this section.

4. For approved programs for gifted children, districts shall be entitled to receive state aid pursuant to section 163.031, RSMo, not to exceed seventy-five percent of the cost of instructional personnel and special materials listed in project applications and approved by the department of elementary and secondary education. Such programs are not eligible to receive funds allocable pursuant to subsection 1 of this section.

5. For purposes of this section, the department of elementary and secondary education may promulgate rules necessary for administration of this section.

6. No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo.

[162.980. Each school district or special district shall receive up to eight hundred dollars per year for each homebound child, child receiving special services outside the special class, or child served by contractual arrangement with a private or public agency. The rate of reimbursement provided by this section shall be increased by two hundred dollars annually in 1986-87, 1987-88, 1988-89 and 1989-90 and shall thereafter be adjusted annually by the same percent that the appropriation of state funds for the school foundation program is changed from the previous year.]

163.011. As used in this chapter unless the context requires otherwise:

(1) "Adjusted gross income":

(a) "District adjusted gross income per return" shall be the total Missouri individual adjusted gross income in a school district divided by the total number of Missouri income tax returns filed from the school district as reported by the state department of revenue for the second preceding year;

(b) "State adjusted gross income per return" shall be the total Missouri individual adjusted gross income divided by the total number of Missouri individual income tax returns, of those returns designating school districts, as reported by the state department of revenue for the second preceding year;

(c) "District income factor" shall be one plus thirty percent of the difference of the district income ratio minus one, except that the district income factor applied to the portion of the assessed valuation corresponding to any increase in assessed valuation above the assessed valuation of a district as of December 31, 1994, shall not exceed a value of one;

(d) "District income ratio" shall be the ratio of the district adjusted gross income per return divided by the state adjusted gross income per return;

(2) "Average daily attendance" means the quotient or the sum of the quotients obtained by dividing the total number of hours attended in a term by resident pupils between the ages of five and twenty-one by the actual number of hours school was in session in that term. To the average daily attendance of the school term shall be added the full-time equivalent average daily attendance of summer school students. "Full-time equivalent average daily attendance of summer school students" shall be computed by dividing the total number of hours attended by all summer school pupils by the number of hours required in section 160.011, RSMo, in the school term. For purposes of determining average daily attendance under this subdivision, the term "resident pupil" shall include all children between the ages of five and twenty-one who are residents of the school district and who are attending kindergarten through grade twelve in such district. If a child is attending school in a district other than the district of residence and the child's parent is teaching in the school district or is a regular employee of the school district which the child is attending, then such child shall be considered a resident pupil of the school district which the child is attending for such period of time when the district of residence is not otherwise liable for tuition. Average daily attendance for students below the age of five years for which a school district may receive state aid based on such attendance shall be computed as regular school term attendance unless otherwise provided by law;

(3) "District's tax rate ceiling", the highest tax rate ceiling in effect subsequent to the 1980 tax year or any subsequent year. Such tax rate ceiling shall not contain any tax levy for debt service;

(4) "Eligible pupils" shall be the sum of the average daily attendance of the school term plus the product of two times the average daily attendance for summer school;

(5) "Equalized assessed valuation of the property of a school district" shall be determined by multiplying the assessed valuation of the real property subclasses specified in section 137.115, RSMo, times the percent of true value as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent and dividing by either the percent of true value as determined by the state tax commission on or before March fifteenth preceding the fiscal year in which the valuation will be effective as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent or the average percent of true value for the highest three of the last four years as determined and certified by the state tax commission, whichever is greater. To the equalized locally assessed valuation of each district shall be added the assessed valuation of tangible personal property. The assessed valuation of property which has previously been excluded from the tax rolls, which is being contested as not being taxable and which increases the total assessed valuation of the school district by fifty percent or more, shall not be included in the calculation of equalized assessed valuation under this subdivision;

(6) "Free and reduced lunch eligible pupil count", the number of pupils eligible for free and reduced lunch on the last Wednesday in January for the preceding school year who were enrolled as students of the district, as approved by the department in accordance with applicable federal regulations;

(7) "Guaranteed tax base" means the amount of equalized assessed valuation per eligible pupil guaranteed each school district by the state in the computation of state aid. To compute the guaranteed tax base, school districts shall be ranked annually from lowest to highest according to the amount of equalized assessed valuation per pupil. The guaranteed tax base shall be based upon the amount of equalized assessed valuation per pupil of the school district in which the ninety-fifth percentile of the state aggregate number of pupils falls during the third preceding year and shall be equal to the state average equalized assessed valuation per eligible pupil for the third preceding year times two and one hundred and sixty-seven thousandths. The average equalized assessed valuation per pupil shall be the quotient of the total equalized assessed valuation of the state divided by the number of eligible pupils;

(8) "Membership" shall be the average of (1) the number of resident full-time students and the full-time equivalent number of part-time students who were enrolled in the public schools of the district on the last Wednesday in September of the previous year and who were in attendance one day or more during the preceding ten school days and (2) the number of resident full-time students and the full-time equivalent number of part-time students who were enrolled in the public schools of the district on the last Wednesday in January of the previous year and who were in attendance one day or more during the preceding ten school days, plus the full-time equivalent number of summer school pupils. "Full-time equivalent number of part-time students" is determined by dividing the total number of hours for which all part-time students are enrolled by the number of hours in the school term. "Full-time equivalent number of summer school pupils" is determined by dividing the total number of hours for which all summer school pupils were enrolled by the number of hours required pursuant to section 160.011, RSMo, in the school term. Only students eligible to be counted for average daily attendance shall be counted for membership;

(9) "Operating levy for school purposes" means the sum of tax rates levied for teachers and incidental funds in the payment year and shall be, after all adjustments and equalization of the operating levy, no less than the minimum value required in section 163.021 for eligibility for increases in state aid as calculated pursuant to section 163.031 and no greater than a maximum value of four dollars and sixty cents per one hundred dollars assessed valuation. To equalize the operating levy, multiply the aggregate tax rates for teachers, incidental, and building funds by either the percent of true value, as determined by the state tax commission on or before March fifteenth preceding the fiscal year in which the evaluation will be effective as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent, or the average percent of true value for the highest three of the last four years as determined and certified by the state tax commission, whichever is greater, and divide by the percent of true value as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent, provided that for any district for which the equivalent sales ratio is equal to or greater than thirty-three and one-third percent, the equalized operating levy shall be the adjusted operating levy. For any county in which the equivalent sales ratio is less than thirty-one and two-thirds percent, the state tax commission shall conduct a second study in that county and shall use a sample at least twice as large as the one originally used. If the new ratio is higher than the original ratio provided by this subdivision, the new ratio shall be used for the purposes of this subdivision and for determining equalized assessed valuation pursuant to subdivision (5) of this section. For the purposes of calculating state aid pursuant to section 163.031, for any district which has not enacted a voluntary tax rate rollback nor increased the amount of a voluntary tax rate rollback from the previous year's amount, the tax rate used to determine a district's entitlement [shall be adjusted so that any decrease in the entitlement due to a decrease in the tax rate resulting from the reassessment shall equal the decrease in the deduction for the assessed valuation of the district as a result of the change in the tax rate due to reassessment] and deductions shall be no less than the largest operating levy for school purposes used pursuant to section 163.031, since and including property tax year 1994 or school year 1994-1995; provided that the use of this largest tax rate shall be a result of the change in tax rate due to reassessment to some smaller rate of taxation during tax year 1995 or any year thereafter pursuant to article X, section 22 of the Missouri Constitution. The tax rate adjustments required under this subdivision due to reassessment shall be [cumulative] continuing and shall be applied each year to determine the tax rate used to calculate the entitlement; except that whenever the actual current operating levy exceeds the tax rate calculated pursuant to this subdivision for the purpose of determining the district's entitlement, then the prior tax rate adjustments required under this subdivision due to reassessment shall be eliminated and shall not be applied in determining the tax rate used to calculate the district entitlement;

(10) "School purposes" pertains to teachers and incidental funds;

(11) "Teacher" means any teacher, teacher-secretary, substitute teacher, supervisor, principal, supervising principal, superintendent or assistant superintendent, school nurse, social worker, counselor or librarian who shall, regularly, teach or be employed for no higher than grade twelve more than one-half time in the public schools and who is certified under the laws governing the certification of teachers in Missouri;

(12) "Adjusted operating levy", the sum of tax rates for the current year for teachers and incidental funds for a school district as reported to the proper officer of each county pursuant to section 164.011, RSMo;

(13) "Current operating costs", all expenditures for instruction and support services excluding capital outlay and debt service expenditures less the revenue from federal categorical sources, food service, student activities and payments from other districts.

163.031. 1. School districts which meet the requirements of section 163.021 shall be entitled to an amount computed as follows: an amount determined by multiplying the number of eligible pupils by the district's equalized operating levy for school purposes as defined in section 163.011 multiplied by the guaranteed tax base per eligible pupil times the proration factor. For the purposes of this section, the proration factor shall be equal to the sum of the total appropriation for distribution under subsections 1 and 2 of this section; and the state total of the deductions as calculated in subsection 2 of this section which do not exceed the district entitlements as adjusted by the same proration factor; divided by the amount of the state total of district entitlements before proration as calculated pursuant to this subsection.

2. From the district entitlement for each district there shall be deducted the following amounts: an amount determined by multiplying the district equalized assessed valuation by the district's equalized operating levy for school purposes times the district income factor plus ninety percent of any payment received the current year of protested taxes due in prior years no earlier than the 1997 tax year minus the amount of any protested taxes due in the current year and for which notice of protest was received during the current year; one hundred percent of the amount received the previous year for school purposes from intangible taxes, fines, forfeitures and escheats, payments in lieu of taxes and receipts from state assessed railroad and utility tax, except that any penalty paid after July 1, 1995, by a concentrated animal feeding operation as defined by the department of natural resources rule shall not be included; one hundred percent of the amounts received the previous year for school purposes from federal properties pursuant to sections 12.070 and 12.080, RSMo; federal impact aid received the previous year for school purposes pursuant to P.L. 81-874 less fifty thousand dollars multiplied by ninety percent or the maximum percentage allowed by federal regulation if that percentage is less than ninety; fifty percent, or the percentage otherwise provided in section 163.087, of Proposition C revenues received the previous year for school purposes from the school district trust fund pursuant to section 163.087; one hundred percent of the amount received the previous year for school purposes from the fair share fund pursuant to section 149.015, RSMo; and one hundred percent of the amount received the previous year for school purposes from the free textbook fund, pursuant to section 148.360, RSMo.

3. School districts which meet the requirements of section 163.021 shall receive categorical add-on revenue as provided in this subsection. There shall be individual proration factors for each categorical entitlement provided for in this subsection, and each proration factor shall be determined by annual appropriations, but no categorical proration factor shall exceed the entitlement proration factor established pursuant to subsection 1 of this section, except that the vocational education entitlement proration factor established pursuant to line 16 of subsection 6 of this section and the educational and screening program entitlements proration factor established pursuant to line 17 of subsection 6 of this section may exceed the entitlement proration factor established pursuant to subsection 1 of this section. The categorical add-on for the district shall be the sum of: seventy-five percent of the district allowable transportation costs pursuant to section 163.161 multiplied by the proration factor; the special education approved or allowed cost entitlement for the district, provided for by section 162.975, RSMo, multiplied by the proration factor; seventy-five percent of the district gifted education approved or allowable cost entitlement as determined pursuant to section 162.975, RSMo, multiplied by the proration factor; the free and reduced lunch eligible pupil count for the district, as defined in section 163.011, multiplied by twenty percent times the guaranteed tax base per eligible pupil times the minimum value for an operating levy for school purposes as provided in section 163.011 times the proration factor; the career ladder entitlement for the district, as provided for in sections 168.500 to 168.515, RSMo, multiplied by the proration factor; the vocational education entitlement for the district, as provided for in section 167.332, RSMo, multiplied by the proration factor and the district educational and screening program entitlements as provided for in sections 178.691 to 178.699, RSMo, times the proration factor.

4. Each district's apportionment shall be the prorated categorical add-ons plus the greater of the district's prorated entitlement minus the total deductions for the district or zero.

5. (1) In the 1993-94 school year and all subsequent school years, pursuant to section 10(c) of article X of the state constitution, a school district shall adjust upward its operating levy for school purposes to the extent necessary for the district to at least maintain the current operating expenditures per pupil received by the district from all sources in the 1992-93 school year, except that its operating levy for school purposes shall not exceed the highest tax rate in effect subsequent to the 1980 tax year, or the minimum rate required by subsection 2 of section 163.021, whichever is less.

(2) Beginning with the 1993-94 school year, the revenue per eligible pupil received by a district from the following sources: line 1 minus line 10, or zero if line 1 minus line 10 is less than zero, plus line 14 of subsection 6 of this section; plus the product of the current assessed valuation of the district multiplied by the following tax rate - the greater of zero or the minimum rate required by subsection 2 of section 163.021 minus the district's equalized operating levy for school purposes for 1993, shall not be less than the revenue per eligible pupil received by a district in the 1992-93 school year from the foundation formula entitlement payment amount. The department of elementary and secondary education shall make an addition in the payment amount of line 19 of subsection 6 of this section to assure compliance with the provisions contained in this section.

(3) For any school district which meets the eligibility criteria for state aid as established in section 163.021, but which under subsections 1 to 4 of this section, receives no state aid for two successive school years, other than categorical add-ons, by August first following the second such school year, the commissioner of education shall present a plan to the superintendent of the school district for the waiver of rules and the duration of said waivers, in order to promote flexibility in the operations of the district and to enhance and encourage efficiency in the delivery of instructional services. The provisions of other law to the contrary notwithstanding, the plan presented to the superintendent shall provide a summary waiver, with no conditions, for the pupil testing requirements pursuant to section 160.257, RSMo. Further, the provisions of other law to the contrary notwithstanding, the plan shall detail a means for the waiver of requirements otherwise imposed on the school district related to the authority of the state board of education to classify school districts pursuant to section 161.092, RSMo, and such other rules as determined by the commissioner of education, except that such waivers shall not include the provisions established pursuant to sections 160.514 and 160.518, RSMo.

(4) In the 1993-94 school year and each school year thereafter for two years, those districts which are entitled to receive state aid under subsections 1 to 4 of this section, shall receive state aid in an amount per eligible pupil as provided in this subsection. For the 1993-94 school year, the amount per eligible pupil shall be twenty-five percent of the amount of state aid per eligible pupil calculated for the district for the 1993-94 school year pursuant to subsections 1 to 4 of this section plus seventy-five percent of the total amount of state aid received by the district from all sources for the 1992-93 school year for which the district is entitled and which are distributed in the 1993-94 school year pursuant to subsections 1 to 4 of this section. For the 1994-95 school year, the amount per eligible pupil shall be fifty percent of the amount of state aid per eligible pupil calculated for the district for the 1994-95 school year pursuant to subsections 1 to 4 of this section plus fifty percent of the total amount of state aid received by the district from all sources for the 1992-93 school year for which the district is entitled and which are distributed in the 1994-95 school year pursuant to subsections 1 to 4 of this section. For the 1995-96 school year, the amount of state aid per eligible pupil shall be seventy-five percent of the amount of state aid per eligible pupil calculated for the district for the 1995-96 school year pursuant to subsections 1 to 4 of this section plus twenty-five percent of the total amount of state aid received by the district from all sources for the 1992-93 school year for which the district is entitled and which are distributed in the 1995-96 school year pursuant to subsections 1 to 4 of this section. Nothing in this subdivision shall be construed to limit the authority of a school district to raise its district operating levy pursuant to subdivision (1) of this subsection.

(5) If the total of state aid apportionments to all districts pursuant to subdivision (3) of this subsection is less than the total of state aid apportionments calculated pursuant to subsections 1 to 4 of this section, then the difference shall be deposited in the outstanding schools trust fund. If the total of state aid apportionments to all districts pursuant to subdivision (1) of this subsection is greater than the total of state aid apportionments calculated pursuant to subsections 1 to 4 of this section, then funds shall be transferred from the outstanding schools trust fund to the state school moneys fund to the extent necessary to fund the district entitlements as modified by subdivision (4) of this subsection for that school year with a district entitlement proration factor no less than one and such transfer shall be given priority over all other uses for the outstanding schools trust fund as otherwise provided by law.

6. State aid shall be determined as follows:

District Entitlement

1. Number of eligible pupils x (district's equalized

operating levy for school purposes) x (proration

x GTB per EP) ................................... $........

Deductions

2. District equalized assessed valuation x district

income factor x district's equalized operating

levy for school purposes plus ninety percent of

any payment received the current year of

protested taxes due in prior years no earlier

than the 1997 tax year minus the amount of

any protested taxes due in the current year

and for which notice of protest was received

during the current year ......................... $........

3. Intangible taxes, fines, forfeitures, escheats,

payments in lieu of taxes, etc. (100% of the amount

received the previous year for school purposes) . $........

4. Receipts from state assessed railroad and utility tax (100% of the amount received the previous year

for school purposes) ............................ $........

5. Receipts from federal properties

pursuant to sections 12.070 and 12.080, RSMo

(100% of the amount received the previous year

for school purposes) ............................ $........

6. (Federal impact aid received the previous year

for school purposes pursuant to P.L. 81-874 less

$50,000) x 90% or the maximum percentage allowed

by federal regulations if less than 90% ......... $........

7. Fifty percent or the percentage otherwise provided

in section 163.087 of Proposition C receipts from

the school district trust fund received the

previous year for school purposes pursuant to

section 163.087, RSMo ........................... $........

8. One hundred percent of the amount received the

previous year for school purposes from the fair

share fund pursuant to section 149.015, RSMo .... $........

9. One hundred percent of the amount received the

previous year for school purposes from the free

textbook fund pursuant to section 148.360,

RSMo ............................................ $........

10. Total deductions (sum of lines 2-9) ............. $........

Categorical Add-ons

11. The amount distributed pursuant to section

163.161 x proration ............................. $........

12. Special education approved or allowed cost

entitlement for the district pursuant to section

162.975, RSMo, x proration ...................... $........

13. Seventy-five percent of the gifted education

approved or allowable cost entitlement as

determined pursuant to section 162.975, RSMo,

x proration ..................................... $........

14. Free and reduced lunch eligible pupil count for

the district, as defined in section 163.011, RSMo,

x .20 x GTB per EP x the minimum value for an

operating levy for school purposes as provided

in section 163.011 x proration ................. $........

15. Career ladder entitlement for the district as

provided for in sections 168.500 to 168.515,

RSMo, x proration ............................... $........

16. Vocational education entitlements for the

district as provided in section 167.332, RSMo,

x proration ..................................... $........

17. Educational and screening program entitlements

for the district as provided in sections 178.691

to 178.699, RSMo, x proration ................... $........

18. Sum of categorical add-ons for the district

(sum of lines 11-17)............................. $........

19. District apportionment (line 18 plus the greater

of line 1 minus line 10 or zero) ................ $........

7. Revenue received for school purposes by each school district pursuant to this section shall be placed in each of the incidental and teachers' funds based on the ratio of the property tax rate in the district for that fund to the total tax rate in the district for the two funds.

163.036. 1. In computing the amount of state aid a school district is entitled to receive under section 163.031, a school district may use an estimate of the number of eligible pupils for the ensuing year or the number of eligible pupils for the immediately preceding year whichever is greater. Any error made in the apportionment of state aid because of a difference between the actual number of eligible pupils and the estimated number of eligible pupils shall be corrected as provided in section 163.091, except that if the amount paid to a district estimating eligible pupils exceeds the amount to which the district was actually entitled by more than five percent, interest at the rate of six percent shall be charged on the excess and shall be added to the amount to be deducted from the district's apportionment the next succeeding year.

2. Notwithstanding the provisions of subsection 1 of this section or any other provision of law, the state board of education shall make an adjustment for the immediately preceding year for any increase in the actual number of eligible pupils above the number on which the state aid in section 163.031 was calculated. Said adjustment shall be made in the manner providing for correction of errors under subsection 1 of this section.

3. For the purposes of distribution of state school aid pursuant to section 163.031, a school district may elect to use the district's equalized assessed valuation for the preceding year or an estimate of the current year's assessed valuation if the current year's equalized assessed valuation is estimated to be more than ten percent less than the district's equalized assessed valuation for the preceding year. A district shall give prior notice to the department of its intention to use the current year's assessed valuation pursuant to this subsection. Any error made in the apportionment of state aid because of a difference between the actual equalized assessed valuation for the current year and the estimated equalized assessed valuation for the current year shall be corrected as provided in section 163.091, except that if the amount paid to a district estimating current equalized assessed valuation exceeds the amount to which the district was actually entitled by more than five percent, interest at the rate of six percent shall be charged on the excess and shall be added to the amount to be deducted from the district's apportionment the next succeeding year.

163.161. 1. Any school district which makes provision for transporting pupils as provided in section 162.621, RSMo, and sections 167.231 and 167.241, RSMo, shall receive state aid for the ensuing year for such transportation on the basis of the cost of pupil transportation services provided the current year. A district shall receive, pursuant to section 163.031, an amount not greater than seventy-five percent of the allowable costs of providing pupil transportation services to and from school and to and from public accredited vocational courses, and shall not receive an amount per pupil greater than one hundred twenty-five percent of the state average approved cost per pupil transported the second preceding school year, except when the state board of education determines that sufficient circumstances exist to authorize amounts in excess of the one hundred twenty-five percent of the state average approved cost per pupil transported the second previous year.

2. The state board of education shall approve all bus routes or portions of routes and determine the total miles each district should have for effective and economical transportation of the pupils and shall determine allowable costs. Each school district shall allow each resident pupil to attend the same district school throughout the school year at which the pupil was first enrolled for that school year, provided that all transportation costs are borne by the pupil or the pupil's parent or guardian. Under circumstances where the state board approves only a portion of a route, the costs for the disapproved portion shall not be considered allowable costs. The local school board, in its discretion, may continue that portion of the route unless that portion of the route was discontinued by the state board of education for safety reasons. When the local school board decides to continue that portion of the route, costs incurred shall be paid from local money or by the parents of the students living on that portion of the route under consideration. State aid for any other portion of the route which shall otherwise be approved shall not be affected. No state aid shall be paid for the costs of transporting pupils living less than one mile from the school. However, if the state board of education determines that circumstances exist where no appreciable additional expenses are incurred in transporting pupils living less than one mile from school, such pupils may be transported without increasing or diminishing the district's entitlement to state aid for transportation.

3. State aid for transporting handicapped and severely handicapped students attending classes within the school district or in a nearby district under a contractual arrangement shall be paid in accordance with the provisions of section 163.031 and an amount equal to seventy-five percent of the additional cost of transporting handicapped and severely handicapped students above the average per pupil cost of transporting all students of the district shall be apportioned pursuant to section 163.031 where such special transportation is approved in advance by the department of elementary and secondary education. State aid for transportation of handicapped and severely handicapped children in a special school district shall be seventy-five percent of allowable costs as determined by the state board of education which may for sufficient reason authorize amounts in excess of one hundred twenty-five percent of the state average approved cost per pupil transported the second previous year. In no event shall state transportation aid exceed seventy-five percent of the total allowable cost of transporting all pupils eligible to be transported.

4. No state transportation aid received pursuant to section 163.031 shall be used to purchase any school bus manufactured prior to April 1, 1977, that does not meet the federal motor vehicle safety standards.

164.011. 1. The school board of each district annually shall prepare an estimate of the amount of money to be raised by taxation for the ensuing school year, the rate required to produce the amount, and the rate necessary to sustain the school or schools of the district for the ensuing school year, to meet principal and interest payments on the bonded debt of the district and to provide the funds to meet other legitimate district purposes. In preparing the estimate, the board shall have sole authority in determining what part of the total authorized rate shall be used to provide revenue for each of the funds as authorized by section 165.011, RSMo. Except as provided in subsection 3 of this section, for the 1996-97 school year and thereafter, prior to setting tax rates for the teachers' and incidental funds, the school board of each school district annually shall set the tax rate for the capital projects fund as necessary to meet the expenditures of the capital projects fund after all transfers allowed pursuant to subsection 7 of section 165.011, RSMo, for expenditures authorized by section 177.088, RSMo, and after the following transfers if needed: in the 1996-97 school year, one-twelfth of the maximum transfer allowed by section 165.011, RSMo; in the 1997-98 school year, one-sixth of the maximum transfer allowed by section 165.011, RSMo; in the 1998-99 school year, one-half of the maximum transfer allowed by section 165.011, RSMo; and in the 1999-2000 school year and thereafter, one hundred percent of the transfers allowed by section 165.011, RSMo. Furthermore, except that the tax rate set in the capital projects fund shall not require the reduction of the equalized combined tax rates for the teachers' and incidental funds to be less than the greater of the minimum operating levy for the current year for school purposes established under subsection 2 of section 163.021, RSMo, or the 1993 tax rate as used for state aid purposes in section 163.031, RSMo, plus that portion of the full amount of any voter approved increase in the tax rate ceiling as defined in section 137.073, RSMo, approved after the first day of January, 1994, and before the thirtieth day of March, 1994, as levied in the current year, in any school district located in a county of the fourth classification that had an existing lease purchase arrangement for capital project purposes at the time of the election.

2. The school board of each district shall forward the estimate to the county clerk on or before September first. In school districts divided by county lines, the estimate shall be forwarded to the proper officer of each county in which any part of the district lies.

3. (1) For the 1996-97 school year and thereafter, prior to setting tax rates for the teachers' and incidental funds, the school board of each school district meeting the criteria specified in subdivision (2) of this subsection annually shall set the tax rate for the capital projects fund as necessary to meet the expenditures of the capital projects fund after all transfers allowed pursuant to subsection 7 of section 165.011, RSMo, for expenditures authorized by section 177.088, RSMo, and after one hundred percent of the transfers allowed by section 165.011, RSMo.

(2) Subdivision (1) of this subsection shall apply to each district which satisfies all of the following criteria:

(a) The district has a membership count for school year 1996-97 which is at least sixteen percent greater than the district's membership count for the 1991-92 school year; and

(b) The district passed a full waiver of Proposition C tax rate rollback pursuant to section 164.013, or approved an increase to the district's tax rate ceiling on or after June 1, 1993; and

(c) The district is in compliance with or has paid all penalties required pursuant to section 165.016, RSMo, for the 1994-95, 1995-96 and 1996-97 school years without waiver or adjustment of the base school year certificated salary percentage.

165.111. 1. The school board of each district, for any year for which it does not cause an audit to be performed by October thirty-first after the close of the school year, shall make and publish, not later than September first, in some newspaper as described in section 493.050, RSMo, published in the school district, and if there is none then in some newspaper of general circulation within the district, a statement of all receipts of school moneys, when and from what source derived, and all expenditures, and on what account; also, the present indebtedness of the district and its nature, and the rate of taxation for all purposes for the year. The statement shall be duly attested by the president and secretary of the board, and the secretary shall forward a copy to the state board of education on forms prescribed by the board.

2. The state board of education shall not release the state aid apportioned to the district for the next ensuing school year until a copy of the required statement has been received at its office in Jefferson City and has been approved by it. Any school board which fails, refuses or neglects to order the statement to be made, and any officer of the board who fails, refuses, or neglects to prepare, publish and forward the statement, as required by subsection 1 of this section, when ordered by the board, is guilty of a misdemeanor and punishable by a fine not to exceed one hundred dollars. Annual or biennial audit summaries shall be published according to section 165.121.

3. Annually the school board of each school district shall, in a public meeting, discuss and approve a budget for the district. The budget shall be made available in printed form pursuant to sections 610.023 to 610.027, RSMo. In addition, amendments to the budget as required pursuant to sections 67.030 and 67.040, RSMo, shall be approved in public meetings and made available in printed form. The budget shall include, but not be limited to, the items specified in section 67.010, RSMo, and other items in the model budget created by the department of elementary and secondary education.

165.121. 1. The school board of each six-director district shall cause an audit examination to be made at least biennially of all financial, transportation and attendance records of the districts. Such examination shall be made in accordance with generally accepted auditing standards applicable in the circumstances, including such reviews and tests of the system of internal check and control and of the books, records and other underlying data as are necessary to enable the independent accountant performing the audit to come to an informed opinion as to the financial affairs (including attendance and transportation transactions) of the district. An independent auditor who is not regularly engaged as an employee of the school board shall perform the audit and make a written report of his findings.

2. The board shall supply each member thereof with a copy of the report and in addition shall furnish one copy each to the state department of elementary and secondary education and to the superintendent of schools of the county in which the district is located. The cost of the audit and report shall be paid for out of the incidental fund of the district.

3. The report shall contain the following information:

(1) A statement of the scope of examination;

(2) The auditor's opinion as to whether the audit was made in accordance with generally accepted auditing standards applicable in the circumstances;

(3) The auditor's opinion as to whether the financial statements included in the audit report present fairly the results of the operations during the period audited;

(4) The auditor's opinion as to whether the financial statements accompanying the audit report were prepared in accordance with generally accepted accounting principles applicable to school districts;

(5) The reason or reasons an opinion is not rendered with respect to items (3) and (4) in the event the auditor is unable to express an opinion with respect thereto;

(6) The auditor's opinion as to whether the district's budgetary and disbursement procedures conform to the requirements of chapter 67, RSMo;

(7) The auditor's opinion as to whether attendance and transportation records are so maintained by the district as to disclose accurately average daily attendance and average daily transportation of pupils during the period of the audit;

(8) Financial statements presented in such form as to disclose the operations of each fund of the school district and a statement of the operations of all funds;

(9) Documentation of an examination of whether salary and compensation amounts reported to teacher and school employee retirement systems established pursuant to chapter 169, RSMo,

were accurately reported based on a random comparison of district payroll records with retirement system records and a comparison of overall total between those records.

4. The school board shall furnish the state department of elementary and secondary education with its copy of the audit report not later than October thirty-first following the close of the fiscal period covered by the audit unless, for good cause shown prior to such date, the commissioner of education or some officer of the department of elementary and secondary education designated by him for this purpose grants an extension of time, not to exceed sixty additional days, for the filing of the report. In the event the report in the approved form is not filed within the period or extension thereof, further state aid to the district shall thereafter be withheld until the audit report has been received by the department of elementary and secondary education.

5. Within thirty days of the receipt of the audit report the school board shall cause a summary of the report to be prepared which shall include, together with any other matter the board deems appropriate, the following:

(1) A summary statement of fund balances and receipts and disbursements by major classifications of each fund and all funds;

(2) A summary statement of the scope of the audit examination;

(3) The auditor's opinion on the financial statements included in the audit report. Immediately upon the completion of the summary, the school board shall cause it to be published once in a newspaper within the county in which all or a part of the district is located which has general circulation within the district or, if there is none, then the board shall cause the summary to be posted in at least five public places within the district. The publication shall contain information as to where the audit report is available for inspection and examination. The report shall be kept available for such purposes thereafter.

165.211. [In six-director districts depositaries shall be selected in each odd-numbered year, except that in six-director districts other than urban districts depositaries may be selected each year.] In all seven-director districts, the school board shall select depositaries of the moneys and funds of the school district. Depositaries may be selected annually or the school district and depositary may enter into a one to five-year contract or agreement for the deposit of the district's moneys or funds at the discretion of the local board of education. Such contract or agreement may be terminated by the mutual consent of both parties at any time. The school board, in each year in which depositaries are to be selected, shall receive sealed proposals from banking institutions in the county or in adjoining counties which desire to be selected as depositaries of the moneys and funds of the school district. Notice that bids will be received shall be published by the secretary of the board at least twenty days before the date selected by the school board for the acceptance of bids in some newspaper published in the county at least five days in each week, or if there is none, then in a newspaper of general circulation within the county.

165.221. For the purpose of letting the funds the board shall divide the funds into not less than two nor more than ten equal parts. Each bidder may bid for any number of the parts, but the bid for each part shall be separate. Any banking institution in the county or in an adjoining county desiring to bid shall deliver to the secretary of the board, on or before the date selected for the acceptance of bids, a sealed bid, stating the rate of interest, or method by which the interest will be determined, that the banking institution offers to pay on one part of the funds and moneys of the school district for the term of one [year or two] to five years, as the case may be, next ensuing the date of the bid; or if the selection is made for a less term as provided in sections 165.201 to 165.291, then for the time between the date of the bid and the next regular time for the selection of depositaries, as fixed by section 165.211. Each bid shall be accompanied by a check in favor of the school district, on some solvent banking institution in the county or an adjoining county, duly certified, for not less than two thousand five hundred dollars, as a guaranty of good faith on the part of the bidder that if any of its bids are accepted by the board it will deposit the security required by law. It is a misdemeanor for the secretary of the board to directly or indirectly disclose the amount of any bid before [the selection of depositaries] all bids are opened at a public depositary bid opening.

165.231. The school board or their designee in [six-director] seven-director districts, on the date selected for the acceptance of bids, shall publicly open the bids and cause each bid to be verbally read and documented. Following discussion and clarification of bids with the financial institutions, the board of education shall cause each bid to be entered upon the records of the board and shall select from among the bidders, as depositaries of the funds and moneys of the school district, those whose bids are accepted, and shall notify each of the bidders so selected. The board may reject any and all bids. The interest upon the funds and moneys shall be computed upon the daily balances to the credit of the school district with each depositary and shall be payable by each depositary on the first day of each month to the treasurer of the school district, who shall place the same to the credit of the district. Each depositary, [on the first day of each] by at least the fifth day of the current month, shall render to the secretary of the board a statement, in writing, showing the amount of interest paid by the depositary. The secretary of the board shall return the certified checks accompanying the bids to the banking institutions whose bids which they accompanied were rejected and, upon the approval of the security provided for in sections 110.010 and 110.020, RSMo, return the certified checks accompanying the accepted bids to the banking institutions respectively, from which they were received.

166.275. 1. Any amount of the difference by which the total amount appropriated by the state to school districts, in accordance with a judgment or order based on the equal protection clause of the fourteenth amendment to the Constitution of the United States, for fiscal year 1997 is less than the amount appropriated for the same purpose in fiscal year 1994 in addition to any unexpended appropriation for the 1996 fiscal year that results in additional unobligated resources for the state in fiscal year 1997 shall be transferred to the state school moneys fund and distributed in the manner provided in section 163.031, RSMo.

2. If the total amount appropriated by the state to school districts, in accordance with a judgment or order based on the equal protection clause of the fourteenth amendment to the Constitution of the United States, for fiscal year [1996] 1998 or any subsequent fiscal year is less than the amount appropriated for the same purpose in fiscal year [1994] 1997, any amount of the difference, in addition to any unexpended appropriation for the prior fiscal year that results in additional unobligated resources for the state beginning in fiscal year [1997, necessary to fund the district entitlements under section 163.031, RSMo, with a district entitlement proration factor no less than one, shall be transferred to the state school moneys fund and distributed in the manner provided in section 163.031, RSMo.] 1998, shall be distributed as follows:

(1) The first ten million dollars shall be appropriated for dropout prevention programs and activities pursuant to sections 167.260 to 167.380, RSMo, or other dropout prevention programs and activities as provided by law, provided that no less than two million dollars of that amount shall be appropriated pursuant to this section for A+ Schools pursuant to section 160.545, RSMo, and no less than two million dollars of that amount shall be appropriated for alternative schools pursuant to sections 167.320 to 167.332, RSMo;

(2) For fiscal years 1998, 1999 and 2000, the next fifty million dollars shall be transferred annually to the school building revolving fund and any remainder shall be transferred annually to the state school moneys fund for distribution pursuant to section 163.031, RSMo; and

(3) For fiscal year 2001 and thereafter, any remaining funds shall be transferred annually to the state school moneys fund for distribution pursuant to section 163.031, RSMo.

166.300. 1. As used in this section, the following words and phrases shall mean:

(1) "Capital improvement projects", expenditures for lands or existing buildings, improvements of grounds, construction of buildings, additions to buildings, remodeling of buildings and initial equipment purchases;

(2) "School facility", a structure dedicated primarily to housing teachers and students in the instructional process, but shall not include buildings dedicated primarily to administrative and support functions within the school.

2. There is hereby created a revolving fund to be known as the "School Building Revolving Fund". All revenues transferred pursuant to section 166.275, and such moneys as may be appropriated to the fund shall be deposited into the school building revolving fund; except that no more than one hundred fifty million dollars, in the aggregate, shall be transferred to the fund. After a fund balance has been established by prior years' deposits and interest, school districts may submit [requests] applications for [loans and grants] lease purchases from the revolving fund for specific projects consistent with rules and regulations of the state board of education and subsection 3 of this section, except that no school district may be permitted to [receive a loan] enter into a lease purchase from the school building revolving fund without first submitting a long-range capital improvements plan.

3. To be eligible for [loans or grants] a lease purchase authorized by this section:

(1) A school district shall meet the minimum criteria for state aid and for increases in state aid established pursuant to section 163.021, RSMo;

(2) A school district shall provide a program which is accredited by the state board of education for grades kindergarten through twelve; [and]

(3) [A school district shall not incur a total debt, including short-term debt and bonded indebtedness in excess of ten percent of the guaranteed tax base for the current payment year multiplied by the number of eligible pupils in the district in the preceding year.] A school district shall have an equalized, assessed valuation per eligible pupil for the preceding year which is less than the statewide average equalized, assessed valuation per eligible pupil for the preceding year; and

(4) A school district shall have a bonded indebtedness which is no less than nine percent of the equalized, assessed valuation of the district.

4. [If the balance in the school building revolving fund is insufficient to fund project plans for capital improvements, applications shall be funded based upon a priority ranking.] Lease purchase applications shall be funded, as funds allow, first for all applications pursuant to subdivision (1) of this subsection and then for applications pursuant to subdivision (2) of this subsection and then for applications pursuant to subdivision (3) of this subsection, and for funding of applications pursuant to a particular subdivision, applications shall be funded in the order that the applications are received by the department. If two or more applications are received on the same day, the district with the lowest appraised valuation per pupil shall be given priority. Ranking of the [projects] applications for offering of lease purchases shall be [based upon the following variables] done in the following order:

(1) [A rating of provisionally accredited or unaccredited as determined by the state board of education pursuant to section 161.092, RSMo, based upon the condition and adequacy of facilities pursuant to section 163.023, RSMo, and section 160.538, RSMo;] Districts with capital replacement costs in excess of insurance proceeds due to facility destruction caused by fire or natural disaster shall be ranked on the basis of percentage of bonding capacity;

(2) [Equalized assessed valuation per eligible pupil;] Districts with a cumulative percentage growth in fall membership for the third through the fifth preceding years in excess of twelve percent and which have a bonded indebtedness greater than nine percent of the assessed valuation of the district and an equalized assessed valuation per pupil which is less than the statewide average equalized assessed valuation per pupil; and

(3) [Increasing enrollment;

(4) Age or condition of facility; and

(5) Building destruction due to fire or natural disaster.

5. The state board of education shall promulgate, by rule, the methodology for prioritizing projects based upon these variables.] Districts with an equalized assessed valuation per pupil which is less than the statewide average equalized, assessed valuation per pupil and which have a bonded indebtedness greater than nine percent of the assessed valuation of the district.

5. When building replacement is caused by fire or natural disaster, the requirement for a school district to have a long-range capital improvements plan may be waived by the state board of education.

6. Funds received by a district pursuant to this section shall be placed to the credit of the capital projects fund. Each school district participating in a lease purchase from the school building revolving fund shall repay from the capital projects fund such lease purchase in no more than ten annual payments made on or before June thirtieth of each year. The first such payment shall be due and payable on June thirtieth of the first full fiscal year following receipt of lease purchase proceeds. Lease purchase repayments shall be immediately deposited to the school building revolving fund by the department. Interest charged to the school district shall not exceed three percent.

7. Any school district which fails to obligate the full amount of a loan from the school building revolving fund for the allowable lease purchase must return the unobligated amount plus interest earned to the department no later than June thirtieth of the second full fiscal year after receipt of loan proceeds.

8. If a school district fails to make an annual payment to the school building revolving fund after notice of nonpayment by the department, members of the board of education and the school district's superintendent shall have violated section 162.091, RSMo, and the attorney general of the state of Missouri shall be notified by the state board of education to begin prosecution procedures.

9. All property purchased pursuant to a lease purchase from the school building revolving fund shall remain the property of the state until such time as the lease purchase has been fully repaid pursuant to this section. If a school district does not make an annual payment to the school building revolving fund after notice of nonpayment by the department, the state board of education may, if the delinquency exceeds one hundred eighty days, take possession of the property. As a part of the lease purchase agreement, the school district shall agree to assume all costs, obligations and liabilities for or arising out of establishment, operation and maintenance of the lease purchase property. Other provisions of law to the contrary notwithstanding, neither the state nor any state agency shall have any obligation for such costs, obligations or liabilities unless and until the state board of education takes possession of the property pursuant to this subsection upon a school district's failure to make annual payments as required in the lease purchase agreement.

10. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, moneys in the school building revolving fund shall not be transferred to the credit of the general revenue fund at the end of the biennium. All yield, interest, income, increment or gain received from time deposit of moneys in the state treasury to the credit of the fund shall be credited by the state treasurer to the fund.

167.126. 1. Children who are admitted to programs or facilities of the department of mental health or whose domicile is one school district in Missouri but who reside in another school district in Missouri as a result of placement arranged by or approved by the department of mental health, the department of social services or placement arranged by or ordered by a court of competent jurisdiction shall have a right to be provided the educational services as provided by law and shall not be denied admission to any appropriate regular public school or special school district program or program operated by the state board of education, as the case may be, where the child actually resides because of such admission or placement; provided, however, that nothing in this section shall prevent the department of mental health, the department of social services or a court of competent jurisdiction from otherwise providing or procuring educational services for such child.

2. Each school district or special school district constituting the domicile of any child for whom educational services are provided or procured under this section shall pay toward the per pupil costs for educational services for such child. A school district which is not a special school district shall pay an amount equal to the average sum produced per child by the local tax effort of the district of domicile. A special school district shall pay an amount not to exceed the average sum produced per child by the local tax efforts of the domiciliary districts.

3. When educational services have been provided by the school district or special school district in which a child actually resides, other than the district of domicile, the amounts as provided in subsection 2 for which the domiciliary school district or special school district is responsible shall be paid by such district directly to the serving district. The school district, or special school district, as the case may be, shall send a written voucher for payment to the regular or special district constituting the domicile of the child served and the domiciliary school district or special school district receiving such voucher shall pay the district providing or procuring the services an amount not to exceed the average sum produced per child by the local tax efforts of the domiciliary districts. In the event the responsible district fails to pay the appropriate amount to the district within ninety days after a voucher is submitted, the state department of elementary and secondary education shall deduct the appropriate amount due from the next payments of any state financial aid due that district and shall pay the same to the appropriate district.

4. In cases where a child whose domicile is in one district is placed in programs or facilities operated by the department of mental health or resides in another district pursuant to assignment by that department or is placed by the department of social services or a court of competent jurisdiction into any type of publicly contracted residential site in Missouri, the department of [mental health] elementary and secondary education shall, as soon as funds are appropriated, pay the serving district from funds appropriated for that purpose the amount by which the per pupil costs of the educational services exceeds the amounts received from the domiciliary district except that any other state money received by the serving district by virtue of rendering such service shall reduce the balance due.

5. [In cases where a child whose domicile is in one district is placed by the division of family services into a residential care facility, as defined in section 210.481, RSMo, including any private residential group home, regardless of the number of children residing therein, the division of family services shall pay the serving district from funds appropriated for that purpose the amount by which the per pupil cost of the educational services exceeds the amount received from the domiciliary district except that any other state money received by the serving district by virtue of rendering such service shall reduce the balance due.

6.] Institutions providing a place of residence for three or more children whose parents or guardians do not reside in the district in which the institution is located shall have no authority to enroll such children in a program in the district or special district in which the institution is located unless the institution contracts for such services and pays the actual per pupil cost for such services or unless such children are assigned pursuant to subsection 1 of this section.

[7.] 6. Children residing in institutions providing a place of residence for three or more such children whose domicile is not in the state of Missouri may be admitted to schools or programs provided on a contractual basis between the school district, special district or state department or agency and the proper department or agency, or persons in the state where domicile is maintained. Such contracts shall not be permitted to place any financial burden whatsoever upon the state of Missouri, its political subdivisions, school districts or taxpayers.

[8.] 7. For purposes of this section the domicile of the child shall be the school district where the child would have been educated if the child had not been placed in a different school district by the department of mental health, the department of social services or the court. No provision of this section shall be construed to deny any child domiciled in Missouri appropriate and necessary, gratuitous public services. [As used in this section, the terms "child" and "children" shall refer to any children other than handicapped children or severely handicapped children, as defined under section 162.675, RSMo.]

[9.] 8. For the purpose of distributing state aid under section 163.031, RSMo, a child receiving educational services provided by the district in which the child actually resides, other than the district of domicile, shall be included as an "eligible pupil", as defined under section 163.011, RSMo, of the district providing the educational services for the child.

167.131. 1. The board of education of each district in this state that does not maintain an accredited school pursuant to the authority of the state board of education to classify schools as established in section 161.092, RSMo, shall pay the tuition of and provide transportation consistent with the provisions of section 167.241, RSMo, for each pupil resident therein who attends an accredited school in another district of the same or an adjoining county.

2. The rate of tuition to be charged by the district attended and paid by the sending district is the per pupil cost of maintaining the district's grade level grouping which includes the school attended. The cost of maintaining a grade level grouping shall be determined by the board of education of the district but in no case shall it exceed all amounts spent for teachers' wages, incidental purposes, debt service, maintenance and replacements minus the sum of tuition received, allowable transportation costs and state and federal categoricals other than state transportation aid. The term "debt service", as used in this section, means expenditures for the retirement of bonded indebtedness and expenditures for interest on bonded indebtedness. Per pupil cost of the grade level grouping shall be determined by dividing the cost of maintaining the grade level grouping by the average daily pupil attendance of resident students. If there is disagreement as to the amount of tuition to be paid, the facts shall be submitted to the state board of education, and its decision in the matter shall be final. Subject to the limitations of this section, each pupil shall be free to attend the public school of his or her choice.

167.270. 1. Local school districts are encouraged to offer additional specialized programs for any pupil who has a high risk of becoming a high school dropout. Additional financial assistance from state aid provided by section 167.260 and section 166.275, RSMo, shall be provided to those school districts which offer such courses. For any programs established pursuant to this section, such additional state aid shall be distributed according to rules and regulations developed by the state board of education.

2. The rate of reimbursement to local school districts for specialized courses of instruction designed to keep high school pupils from dropping out of school shall be determined on the basis of eight thousand eighty-three dollars for each full-time teacher who teaches such a course which is approved by the state department of elementary and secondary education.

3. A local school district shall be eligible for additional state aid, subject to appropriation therefor, for a program of alternative education programs for pregnant teens and teen mothers who are enrolled as pupils in the district. Such programs may include specialized courses of instruction established pursuant to subsection 1 of this section and such supplemental services as the district may establish within guidelines set by the state board of education to enable teen mothers to complete high school. For these supplemental services a district may accept funds from federal, local and private sources as may be available. Two or more districts may form a consortium to offer these supplemental services. A district which is not a member of a consortium and which does not offer these services may contract with a district which does. Such a district offering such services may waive all or a portion of the tuition for such a pupil.

167.275. 1. Effective January 1, 1991, all public and nonpublic secondary schools shall report to the state literacy hot line office in Jefferson City the name, mailing address and telephone number of all students sixteen years of age or older who drop out of school for any reason other than to attend another school, college or university, or enlist in the armed services. Such reports shall be made either by using the telephone hot line number or on forms developed by the department of elementary and secondary education. Upon such notification, the state literacy hot line office shall contact the student who has been reported and refer that student to the nearest location that provides adult basic education instruction leading to the completion of a general educational development certificate.

2. The department shall develop a public school pupil attendance and dropout reporting system.

3. The department shall annually report the four-year public high school graduation rate for the previous year for the state and for each school district to the governor and general assembly on or before December fifteenth of the school year. School districts shall annually report all attendance and dropout information required by the department by rule to calculate the graduation rates. For the purposes of this section, the "four-year public high school graduation rate" shall be the quotient of the number of graduates in the current year as of June thirtieth divided by the sum of the number of graduates in the current year as of June thirtieth plus the number of twelfth-graders who dropped out in the current year plus the number of eleventh-graders who dropped out in the preceding year plus the number of tenth-graders who dropped out in the second preceding year plus the number of ninth-graders who dropped out in the third preceding year. Such school shall provide the number of years such drop out students have attended the reporting school district.

172.035. 1. The governor shall, by and with the advice and consent of the senate, appoint a student representative to the board of curators of the University of Missouri, who shall attend all meetings and participate in all deliberations of the board[, except any meeting, record or vote closed under the provisions of section 610.025, RSMo]. Such student representative shall not have the right to vote on any matter before the board.

2. Such student representative shall be a full-time student at the university as defined by the board, selected from a panel of three names submitted to the governor by the student government presidents of the campuses of the university, a citizen of the United States, and a resident of the state of Missouri. No person may be appointed who is not actually enrolled during the term of [his] such person's appointment as a student at the University of Missouri.

3. The term of the student representative shall be two years, except that the person first appointed shall serve until January 1, 1986.

4. If a vacancy occurs for any reason in the position of student representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until [his] the student representative's successor is appointed and qualified.

5. If the student representative ceases to be a student at the University of Missouri, or a resident of the state of Missouri, or fails to follow the board's attendance policy, the student representative's position shall at once become vacant, unless [his] such absence is caused by sickness or some accident preventing [his] such representative's arrival at the time and place appointed for the meeting.

[6. The student representative while attending meetings of the board shall receive his actual expenses which shall be paid out of the ordinary revenues of the university.]

6. The student representative shall receive the same reimbursement for expenses as other members of the board of curators receive pursuant to section 172.040.

7. Appointments made under this section shall be made in rotation from each of the four campuses of the University of Missouri, beginning with a student from the Columbia campus, next from the Rolla campus, next from the Kansas City campus, and then from the St. Louis campus.

8. The student representative shall have paid all student and tuition fees due prior to such appointment and shall pay all future student and tuition fees during the term of office when such fees are due.

172.036. 1. The governor shall, by and with the advice and consent of the senate, appoint a faculty representative to the board of curators of the University of Missouri, who shall attend all meetings and participate in all deliberations of the board. Such faculty representative shall have the same powers as other members of the board of curators except that such faculty member representative shall not have the right to vote on any matter before the board.

2. Such faculty member representative shall be selected from a panel of three names submitted to the governor by the faculty government presidents of the campuses of the university, be a full-time faculty member at the university, be a citizen of the United States, and a resident of the state of Missouri.

3. The term of the faculty member representative shall be two years.

4. If a vacancy occurs for any reason in the position of faculty member representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until such faculty member representative's successor is appointed and qualified.

5. If the faculty member representative ceases to be a full-time faculty member at such member's campus of the University of Missouri, or a resident of the state of Missouri, such position shall at once become vacant.

6. The faculty member representative shall receive the same reimbursement for expenses as other members of the board of curators receive pursuant to section 172.040.

7. Appointments made pursuant to this section shall be made in rotation from each of the four campuses of the University of Missouri, beginning with a faculty member from the Columbia campus, next from the Kansas City campus, next from the Rolla campus, and then from the St. Louis campus.

172.037. 1. For the purposes of this chapter, confidentiality, as determined by the board and as provided by law, shall apply to all members and representatives on the board.

2. Any member or representative on the board may recuse himself or herself from any deliberation or proceeding of the board.

3. Upon a unanimous affirmative vote of the members of the board who are present and who are not a student or faculty representative, a given meeting closed pursuant to sections 610.021 and 610.022, RSMo, shall be closed to the student representative, the faculty representative or both.

174.055. 1. The governor shall, by and with the advice and consent of the senate, appoint a student representative to the board of regents or governors of each educational institution referred to in section 174.020 who shall attend all meetings and participate in all deliberations of the board[, except any meeting, record or vote closed under the provisions of section 610.025, RSMo]. Such student representative shall not have the right to vote on any matter before the board.

2. Such student representative shall be a full-time student at the institution as defined by the board, selected from a panel of three names submitted to the governor by the student government president, a citizen of the United States, and a resident of the state of Missouri. No person may be appointed who is not actually enrolled during the term of [his] such person's appointment as a student at the institution.

3. The term of the student representative shall be two years, except that the person first appointed shall serve until January 1, 1986.

4. If a vacancy occurs for any reason in the position of student representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until [his] such representative's successor is appointed and qualified.

5. If the student representative ceases to be a student at the institution, or a resident of the state of Missouri, or fails to follow the board's attendance policy, the student representative's position shall at once become vacant, unless the student representative's absence is caused by sickness or some accident preventing the student representative's arrival at the time and place appointed for the meeting.

[6. The student representative shall receive no compensation or reimbursement for expenses.]

6. The student representative shall receive the same reimbursement for expenses as other members of the board of regents receive pursuant to section 174.100.

7. The student representative shall have paid all student and tuition fees due prior to such appointment and shall pay all future student and tuition fees during the term of office when such fees are due.

174.056. 1. There shall be a faculty representative to the board of regents or governors of each educational institution referred to in section 174.020, appointed by the governor with the advice and consent of the senate, who shall attend all meetings and participate in all deliberations of the board. Such faculty member representative shall have the same powers as the other members of the board, except that such faculty member representative shall not have the right to vote on any matter before the board.

2. Such faculty member representative shall be selected from a panel of three names submitted to the governor by the president of each institution's faculty government association, be a full-time faculty member at the institution, a citizen of the United States, and a resident of the state of Missouri.

3. The term of the faculty member representative shall be two years.

4. If a vacancy occurs for any reason in the position of faculty member representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until such faculty member representative's successor is appointed and qualified.

5. If the faculty member representative ceases to be a full-time faculty member at the institution, or a resident of the state of Missouri, such position shall at once become vacant.

6. The faculty member representative shall receive the same reimbursement for expenses as other members of the board of regents receive pursuant to section 174.100.

174.057. 1. For the purposes of this chapter, confidentiality, as determined by the board and as provided by law, shall apply to all members and representatives on the board.

2. Any member or representative on the board may recuse himself or herself from any deliberation or proceeding of the board.

3. Upon a unanimous affirmative vote of the members of the board who are present and who are not a student or faculty representative, a given meeting closed pursuant to sections 610.021 and 610.022, RSMo, shall be closed to the student representative, the faculty representative or both.

174.125. All teacher-training institutions, receiving state aid, shall provide courses in physical education, first aid and cardiopulmonary resuscitation for the proper preparation of teachers to carry out the rules and regulations of the state board of education under section 161.102, RSMo. Each of the five state colleges shall provide extension service of properly trained and qualified field advisers for the teachers and others engaged in carrying out the provisions of sections 161.102 and 168.171, RSMo, within their several territorial jurisdictions, such jurisdiction to be established and coordinated by the state commissioner of education.

174.610. [1.] The governing board of the Truman State University shall be a board of governors consisting of [ten] eleven members, composed of seven voting members and [three] four nonvoting members as provided in section 174.620, who shall be appointed by the governor of Missouri, by and with the advice and consent of the senate. No person shall be appointed a voting governor who is not a citizen of the United States and who has not been a resident of the state of Missouri for at least two years [next] immediately prior to [his] such person's appointment. Not more than four voting governors shall belong to any one political party. The appointed members of the board of regents serving on January 1, 1986, shall become members of the board of governors on January 1, 1986, and serve until the expiration of the terms for which they were appointed.

[2. The board of regents of the Truman State University is abolished.]

174.620. 1. The board of governors shall be appointed as follows:

(1) Four voting members [shall be selected] from the counties of Adair, Audrain, Boone, Callaway, Chariton, Clark, Howard, Knox, Lewis, Lincoln, Linn, Marion, Macon, Monroe, Montgomery, Pike, Putnam, Ralls, Randolph, St. Charles, Schuyler, Scotland, Shelby, Sullivan, and Warren, provided that not more than one member shall be appointed from the same county [of these aforementioned counties];

(2) Three voting members [shall be selected] from any of the seven college districts as contained in section 174.010, provided that no more than one member shall be appointed from the same congressional district;

(3) Two nonvoting members whose residence is other than the state of Missouri and who are knowledgeable of the educational mission of liberal arts institutions [shall be selected]; [and]

(4) One nonvoting member who is a student [shall be selected as provided in section 174.055]. Such student representative shall attend all meetings and participate in all deliberations of the board. Such student representative shall not have the right to vote on any matter before the board, but shall have all other powers and duties of section 174.055, and shall also meet the qualifications of section 174.055;

(5) One nonvoting member who is a full-time faculty member shall be selected as provided in section 174.622.

2. The term of service of the governors shall be as follows:

(1) The voting members shall be appointed for terms of six years; except, that of the voting members first appointed, two shall serve for terms of two years, two for terms of four years, and three for terms of six years;

(2) The nonvoting members who are not students or faculty members shall be appointed for terms of six years; except, that of the nonvoting members first appointed, one shall serve for a term of three years, and one shall serve a term of six years; and

(3) The nonvoting student member shall serve a two-year term as provided in section 174.055, and the nonvoting faculty member shall serve a two-year term as provided in section 174.622.

3. The governors, both nonvoting and voting, while attending the meetings of the board shall receive their actual and necessary expenses, which shall be paid out of the ordinary revenues of the university. Vacancies in terms of office caused by death, resignation or removal shall be filled in the manner provided by law for such vacancies on the board of curators of the [State] University of Missouri.

174.622. 1. The governor shall with the advice and consent of the senate appoint a faculty member representative to the board of governors of Truman State University, who shall attend all meetings and participate in all deliberations of the board. Such faculty member representative shall have the same powers and duties as the other members of the board of governors, except that such faculty member representative shall not have the right to vote on any matter before the board.

2. Such faculty member representative shall be selected from a panel of three names submitted to the governor by the president of the university's faculty senate, be a full-time faculty member at the university, a citizen of the United States, and a resident of the state of Missouri.

3. The term of the faculty member representative shall be two years.

4. If a vacancy occurs for any reason in the position of faculty member representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until such faculty member representative's successor is appointed and qualified.

5. If the faculty member representative ceases to be a full-time faculty member at the university, or a resident of the state of Missouri, such position shall at once become vacant.

175.021. 1. The governor shall, by and with the advice and consent of the senate, appoint a student representative to the board of curators of Lincoln University, who shall attend all meetings and participate in all deliberations of the board[, except any meeting, record or vote closed under the provisions of section 610.025, RSMo]. Such student representative shall not have the right to vote on any matter before the board.

2. Such student representative shall be a full-time student at the university as defined by the board, selected from a panel of three names submitted to the governor by the student government association of the university, a citizen of the United States, and a resident of the state of Missouri. No person may be appointed who is not actually enrolled during the term of [his] such person's appointment as a student at the university.

3. The term of the student representative shall be two years, except that the person first appointed shall serve until January 1, 1989.

4. If a vacancy occurs for any reason in the position of student representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until [his] such student representative's successor is appointed and qualified.

5. If the student representative ceases to be a student at the university, or a resident of the state of Missouri, or fails to attend any regularly called meeting of the board of which [he] such representative has due notice, [his] the position shall at once become vacant, unless [his] such student representative's absence is caused by sickness or some accident preventing [his] such representative's arrival at the time and place appointed for the meeting.

[6. The student representative shall receive no compensation or reimbursement for expenses.]

6. The student representative shall receive the same reimbursement for expenses as other members of the board of curators receive pursuant to section 175.030.

7. The student [representatives of all public colleges and universities] representative shall have paid all student and tuition fees due prior to [said appointments] such appointment and shall pay all future student and tuition fees during the term of office when [said] such fees are due.

     175.022. 1. The governor shall with the advice and consent of the senate appoint a faculty member representative to the board of curators of Lincoln University, who shall attend all meetings and participate in all deliberations of the board. Such faculty member representative shall have the same powers as the other members of the board of curators, except that such faculty member representative shall not have the right to vote on any matter before the board.

     2. Such faculty member representative shall be selected from a panel of three names submitted to the governor by the chair of the university faculty senate, be a full-time faculty member at the university, a citizen of the United States, and a resident of the state of Missouri.

     3. The term of the faculty member representative shall be two years.

     4. If a vacancy occurs for any reason in the position of faculty member representative, the governor shall appoint a replacement who meets the qualifications set forth in subsection 2 of this section and who shall serve until such faculty member representative's successor is appointed and qualified.

     5. If the faculty member representative ceases to be a full-time faculty member at the university, or a resident of the state of Missouri, such position shall at once become vacant.

     6. The faculty member representative shall receive the same reimbursement for expenses as other members of the board of curators receive pursuant to section 175.030.

     175.023. 1. For the purposes of this chapter, confidentiality, as determined by the board and as provided by law, shall apply to all members and representatives on the board.

     2. Any member or representative on the board may recuse himself or herself from any deliberation or proceeding of the board.

     3. Upon a unanimous affirmative vote of the members of the board who are present and who are not a student or faculty representative, a given meeting closed pursuant to sections 610.021 and 610.022, RSMo, shall be closed to the student representative, the faculty representative or both.

     Section 1. 1. Any urban school district under a court-ordered obligation to desegregate may adopt by resolution of its board of directors a policy of enrolling pupils who voluntarily apply for admission from other school districts where the race of such pupils will advance the receiving school district toward fulfillment of its court-ordered obligations.

     2. If any school district elects to accept voluntary transfer pupils, it shall, by resolution, determine the number of transfer pupils it is willing to admit and ensure that pupils admitted under the policy are selected through a random process that prohibits evaluation of whether or not the pupil should be enrolled based upon such pupil's academic, athletic, or artistic performance.

     3. The school district of residence of a pupil choosing to transfer pursuant to the terms of this act shall not adopt policies that in any way block or discourage pupils from applying for transfer to another district.

     4. The school district enrolling such nonresident pupils shall receive state aid payments pursuant to sections 148.360, 149.015, 163.031, and 163.087, RSMo, for such pupils in the lesser amount of such per pupil aid received for resident pupils of the district or such per pupil aid received for pupils residing in the district of residence of such transfer pupils.

     5. The school district of residence of such transfer pupils enrolled in another school district pursuant to this section shall not receive state aid payments on account of such pupils.

     6. The school district enrolling such nonresident pupils shall have no obligation to transport such pupils from their district of residence nor to provide or pay for any such transportation but such enrolling school districts may provide transportation to such nonresident pupils within the boundaries of the enrolling school district on the same basis as it provides transportation for its resident pupils; nothing in this section, however, shall obligate the school district of residence of such pupils to provide or pay for any transportation for pupils while they are enrolled in another school district.

     Section 2. 1. Any school district may adopt by resolution of its board of directors a policy of enrolling nonresident students where such pupils reside in an urban school district under a court-ordered obligation to desegregate and where the race of such pupils will advance the urban school district under a court-ordered obligation to desegregate toward fulfillment of its court-ordered obligations, provided that such nonresident admission policy prohibits evaluation of whether or not the pupil should be enrolled based upon such pupil's academic, athletic, or artistic performance.

     2. The school district enrolling such nonresident pupils shall receive state aid payments pursuant to sections 148.360, 149.015, 163.031 and 163.087, RSMo, for such pupils in the lesser amount of such per pupil aid received for resident pupils of the district or such per pupil aid received for pupils residing in the district of residence of such transfer pupils.

     3. The school district of residence of such transfer pupils enrolled in another school district pursuant to this section shall not receive state aid payments on account of such pupils.

     4. The school district enrolling such nonresident pupils shall have no obligation to transport such pupils from their district of residence nor to provide or pay for any such transportation but such enrolling school districts may provide transportation to such nonresident pupils within the boundaries of the enrolling school district on the same basis as it provides transportation for its resident pupils; nothing in this section, however, shall obligate the school district of residence of such pupils to provide or pay for any transportation for pupils while they are enrolled in another school district.

     Section 3. 1. Sections 1 to 3 of this act are not intended and shall not be construed to cause any increase in the financial obligations of the state of Missouri.

     2. The provisions of sections 1 to 3 of this act shall expire upon a final judgment that is in conflict with the provisions of this act, issued by a court of competent jurisdiction.

     Section 4. 1. A charter school is an independent, publicly supported school sponsored by a school district or in cooperation with a school district as provided in sections 4 to 7 of this act. Two or more school districts may cooperate in sponsoring a charter school pursuant to a written agreement among such school districts.

     2. Charter school pilot projects may be established in a metropolitan school district and an urban school district containing most or all of a city with a population greater than three hundred thousand inhabitants.

     Section 5. 1. An applicant seeking to establish a charter school shall submit a written application, as provided in subsection 3 of this section, to the school district or districts that the applicant is requesting to sponsor the charter school. The application shall include a mission statement for the charter school, a description of the charter school's organizational structure and the governing body, a financial plan for the first three years of operation of the charter school including provisions for annual audits, a description of the charter school's policy for securing personnel services, a description of the grades or ages of students being served, the school's calendar of operation, which shall include at least the equivalent of a full school term as defined in section 160.011, RSMo, and an outline of criteria specified in this section designed to measure the effectiveness of the school. The application shall also state:

     (1) The goals, objectives and pupil performance standards to be achieved by the charter school;

     (2) A statement of the need for a charter school in the geographic area in which the charter school is to be located;

     (3) A description of the charter school's education program, pupil performance standards, and curriculum, which must meet or exceed the academic standards adopted by the state board of education pursuant to section 160.514, RSMo, and must be designed to enable each pupil to achieve such standards; and

     (4) A description of the governance and operation of the charter school, including the nature and extent of parental, professional educator, and community involvement in the governance and operation of the charter school.

     2. The charter school shall be a Missouri nonprofit corporation incorporated under chapter 355, RSMo. The charter provided for herein shall constitute a contract between the sponsor and the charter school. A charter school may be affiliated with a college, university or community college, provided that the school's programs, admissions policies, employment practices and all other operations are nonsectarian.

     3. An application shall be subject to the following requirements:

     (1) An applicant shall submit its application to a school district sponsor on or before the first day of October of the school year preceding the proposed charter school's opening day, unless the sponsor and the applicant otherwise agree;

     (2) A charter school application may be approved when the sponsor determines that the requirements of this section are met and determines that the applicant is sufficiently qualified to operate a charter school. The sponsor's decision shall be made within sixty days of the filing of the application; and

     (3) If the application is denied, the proposed sponsor shall notify the applicant in writing as to the reasons for its denial. The sponsor may provide technical assistance to an applicant if the sponsor determines that the applicant is sufficiently qualified to operate a charter school.

     4. (1) If an application is approved by a school district, it shall be submitted to the state board of education which shall, within forty-five days, approve or disapprove the granting of the charter. The state board of education may disapprove a charter only on grounds that the application fails to meet the requirements of sections 4 to 7 of this act.

     (2) If an application is denied by a school district, the application may be submitted to the state board of education, along with the school district's written reasons for its denial. If the state board determines that the applicant meets the requirements of this section and that granting a charter to the applicant would be likely to provide educational benefit to the children of the district, the state board shall grant a charter and act as sponsor of the charter school.

     5. Any granting or disapproval of a charter pursuant to subsection 4 of this section shall be subject to judicial review pursuant to chapter 536, RSMo. This review shall not include the decision of the state board to sponsor a charter school.

     6. A charter school shall, as provided in its charter:

     (1) Comply with laws and regulations of the state relating to health, safety, and minimum educational standards;

     (2) Be nonsectarian in its programs, admission policies, employment practices and all other operations;

     (3) Provide a comprehensive program of instruction for at least one grade or age group from kindergarten to grade twelve. A school may offer a curriculum with an emphasis on a specific learning philosophy or style or certain subject areas such as mathematics, science, social sciences, fine arts, performance arts, language arts, or foreign language, or may emphasize education for pupils at risk of educational failure;

     (4) Design a method to measure pupil progress toward the pupil academic standards adopted by the state board of education pursuant to section 160.514, RSMo, collect baseline data during at least the first three years for determining how the charter school is performing, participate in the essential skills tests and the nationally standardized norm-referenced achievement tests, as designated by the state board pursuant to section 160.518, RSMo, complete and distribute an annual report card as prescribed in section 160.522, RSMo, and report to its sponsor, local school districts, and the state board of education as to its teaching methods and any educational innovations and the results thereof;

     (5) Except as provided in sections 4 to 7 of this act, be exempt from all laws and rules relating to schools, governing boards and school districts;

     (6) Work cooperatively with local districts to ensure that the needs of special education children are met;

     (7) Provide for a governing body for the charter school that is responsible for the policy and operational decisions of the charter school; and

     (8) Be financially accountable, provide for an annual audit by a certified public accountant, and provide liability insurance to indemnify the school, its board, staff and teachers against tort claims. For the purposes of securing such insurance, a charter school shall be eligible for the Missouri public entity risk management fund under section 573.700, RSMo.

     7. The charter of a charter school shall include a description of the school's personnel policies, personnel qualifications and method of school governance and the specific role and duties of the sponsor of the charter school.

     8. The charter of a charter school may be amended at the request of the governing body of the charter school and on the approval of the sponsor. The sponsor and the governing board and staff of the charter school shall jointly review the school's performance, management, and operations at least once every three years.

     9. (1) A sponsor may revoke a charter at any time if the charter school commits a serious breach of one or more provisions of its charter or on any of the following grounds: failure to meet the academic performance standards required of public schools, failure to meet generally accepted standards of fiscal management or violation of law.

     (2) At least sixty days before acting to revoke a charter, the sponsor shall notify the board of directors of the charter school of the proposed action in writing. The notice shall state the grounds for the proposed action. The school's board of directors may request in writing a hearing before the sponsor within two weeks of receiving the notice.

     (3) The sponsor of a charter school shall establish procedures to conduct administrative hearings upon determination by the sponsor that grounds exist to revoke a charter. Procedures for administrative hearings shall be similar to procedures prescribed for adjudication proceedings. Final decisions of a sponsor from hearings conducted pursuant to this subsection are subject to judicial review pursuant to chapter 536, RSMo.

     (4) A termination shall be effective only at the conclusion of the school year, unless the sponsor determines that continued operation of the school presents a clear and immediate threat to health and safety of the children.

     10. A charter school sponsored by the state board of education may not be located on the property of a school district unless the district governing board grants this authority. A school district may enter into a lease with a charter school for physical facilities.

     11. A governing board or a school district employee who has control over personnel actions shall not take unlawful reprisal against another employee at the school district because the employee is directly or indirectly involved in an application to establish a charter school. A governing board or a school district employee shall not take unlawful reprisal against an educational program of the school or the school district because an application to establish a charter school proposes the conversion of all or a portion of the educational program to a charter school. As used in this subsection, "unlawful reprisal" means an action that is taken by a governing board or a school district employee as a direct result of a lawful application to establish a charter school and that is adverse to another employee or an educational program and:

     (1) With respect to a school district employee, results in one or more of the following:

     (a) Disciplinary or corrective action;

     (b) Transfer or reassignment;

     (c) Suspension, demotion or dismissal;

     (d) An unfavorable performance evaluation;

     (e) A reduction in pay, benefits or awards;

     (f) Elimination of the employee's position without a reduction in force by reason of lack of money or work;

     (g) Other significant changes in duties or responsibilities that are inconsistent with the employee's salary or employment classification;

     (2) With respect to an educational program, results in one or more of the following:

     (a) Suspension or termination of the program;

     (b) Transfer or reassignment of the program to a less favorable department;

     (c) Relocation of the program to a less favorable site within the school or school district;

     (d) Significant reduction or termination of funding for the program.

     12. Charter schools shall not have the power to acquire property by eminent domain.

     13. A school district governing board and its agents and employees are not liable for any acts or omissions of a charter school that is sponsored by the school district, including acts or omissions relating to the application submitted by the charter school, the operation of the charter school and the performance of the charter school.

     Section 6. 1. A charter school shall enroll all pupils who submit a timely application, unless the number of applications exceeds the capacity of a program, class, grade level or building. If capacity is insufficient to enroll all pupils who submit a timely application, the charter school shall have an admissions process that assures all applicants of an equal chance of gaining admission except that:

     (1) A charter school may establish a geographical area around the school whose residents will receive a preference for enrolling in the school, provided such preferences conform to policies and guidelines established by the state board of education; and

     (2) A charter school may also give a preference for admission of children whose siblings attend the school, or whose parents are employed at the school.

     2. A charter school shall not limit admission based on ethnicity, national origin, disability, gender, income level, proficiency in the English language or athletic ability, but may limit admission to pupils within a given age group or grade level.

     Section 7. 1. For the purposes of distribution of state school aid under section 163.031, RSMo, pupils enrolled in a charter school shall be included in the pupil enrollment of the school district within which each pupil resides. Each charter school shall determine the school district in which each pupil who is enrolled in the charter school resides and shall report the names, addresses, and eligibility for free or reduced price lunch or other categorical aid, of pupils resident in a school district who are enrolled in the charter school to the school district or districts in which those pupils reside and to the state department of elementary and secondary education. Each charter school shall promptly notify the state department of elementary and secondary education and the pupil's school district when a student discontinues enrollment at a charter school.

     2. Each school district in which one or more resident pupils attend a charter school shall provide, according to a timetable established in the charter of the charter school, an annual amount equal to the product of the school district's equalized, adjusted operating levy for school purposes for the current year times the guaranteed tax base per eligible pupil, as defined in section 163.011, RSMo, times the number of resident pupils attending the charter school. The amount shall be prorated for partial year enrollment for a pupil.

     3. If a school district fails to make timely payments pursuant to subsection 2 of this section, the state department of elementary and secondary education shall authorize payment to the charter school of the amount due pursuant to subsection 2 and shall deduct the same amount from the next state school aid apportionment to the owing school district.

     4. The charter school and a local school board may agree by contract for services to be provided by the school district to the charter school. Such services may include but are not limited to food service, custodial service, maintenance, curriculum assistance, media services, libraries, and transportation and shall be subject to negotiation between the charter school and the local school board. Actual costs of such services shall be paid for by the charter school out of revenues that are provided pursuant to this section, except transportation and any other services that are provided by a school district and for which aid is paid to the district. No sponsor may charge the charter school for the sponsor's overhead or indirect costs.

     5. With the permission of a student's school district of residence, a student in a charter school may opt to participate in athletic or other extracurricular activities of the school the student would otherwise attend in the student's district of residence.

     6. A charter school shall not be eligible for transportation state aid pursuant to section 163.161, RSMo. A school district may, however, provide transportation to pupils attending a charter school and shall obtain transportation state aid on the same basis that it receives such aid for pupils attending schools in the district.

     7. The proportionate share of state and federal resources generated by students with disabilities or staff serving them shall be directed in full to charter schools enrolling those students by their school districts where such enrollment is through a contract for services described in this section. The proportionate share of money generated under other federal or state categorical aid programs shall be directed to charter schools serving such students eligible for that aid.

     (1) A school district may, pursuant to contract with a charter school, provide all or part of the special services provided pursuant to section 162.705, RSMo.

     (2) Where there is no contract for special services for students with disabilities, enrollment of students in a charter school shall not entitle the student to special education services at the charter school. Such students may obtain special education and related services pursuant to state regulation provisions relating to access by private school students.

     (3) Notwithstanding any provision to the contrary in section 162.857, RSMo, each school district located within a special school district may enroll a student with a disability residing in the school district in a charter school. Such enrollment shall be by contract pursuant to section 162.705, RSMo, and shall only occur by joint agreement of the parent, charter school and school district. Agreement from the special school district is not required. Such enrollment shall only occur if the school district has filed, and obtained approval of, a compliance plan specifically addressing students with disabilities placed with the school district in a charter school, with the department of elementary and secondary education. Waiver of compliance requirements may be requested from the department of elementary and secondary education. The department of elementary and secondary education may seek waiver approval from the United States Department of Education.

     8. The governing body of a charter school is authorized to accept grants, gifts, or donations of any kind and to expend or use such grants, gifts, or donations in accordance with the conditions prescribed by the donor. A grant, gift, or donation may not be accepted by the governing body if it is subject to any condition contrary to law applicable to the school or contrary to the terms of the contract between the charter school and its sponsor.

     9. A charter school may enter into contracts with community partnerships and state agencies acting in collaboration with such partnerships that provide services to children and their families linked to the school.

     10. A charter school may not charge tuition, nor may it impose fees that a school district is prohibited from imposing.

     11. If a charter school offers to retain the services of an employee of a school district, and the employee accepts a position at the charter school, the contract between the charter school and the school district may provide that an employee at the employee's option may remain an employee of the district and the charter school shall pay to the district the district's full costs of salary and benefits provided to the employee. A teacher who accepts a position at a charter school and opts to remain an employee of the district retains such teacher's permanent teacher status and seniority rights in the district. Certificated teachers at a charter school may, at the school's option, participate in the public school retirement system created pursuant to sections 169.010 to 169.141, RSMo.

     12. A charter school may employ noncertificated instructional personnel; provided that no more than twenty percent, up to a maximum of ten persons, of the full-time equivalent instructional staff positions at the school are filled by noncertificated personnel. The charter school shall ensure that all instructional employees of the charter school have experience, training and skills appropriate to the instructional duties of the employee, and the charter school shall ensure that a criminal background check and child abuse registry check are conducted for each employee of the charter school prior to the hiring of the employee. Appropriate experience, training and skills of noncertificated instructional personnel shall be determined considering:

     (1) Teaching certificates issued by another state or states;

     (2) Certification by the National Standards Board;

     (3) College degrees in the appropriate field;

     (4) Evidence of technical training and competence when such is appropriate; and

     (5) Level of supervision and coordination with certificated instructional staff.

     13. Noninstructional personnel employed by the charter school shall participate in the nonteachers retirement system established pursuant to sections 169.600 to 169.715, RSMo, subject to the same terms, conditions, requirements and other provisions applicable to noninstructional personnel employed by school districts.

     14. Noncertificated instructional staff shall not participate in any retirement system established pursuant to chapter 169, RSMo, on the basis of employment by a charter school.

     15. A charter school is authorized to incur debt of duration one year or less to pay operating and other expenses in anticipation of receipt of funds. A charter school may also borrow to finance facilities and other capital items. A school district may incur bonded indebtedness or take other measures to provide for physical facilities for charter schools that it sponsors or contracts with.

     Section 8. 1. In any action challenging any rule promulgated pursuant to the provisions of this bill, the agency as defined in section 536.010 promulgating such rule shall be required to prove by a preponderance of the evidence that the rule or threatened application of the rule is valid, is authorized by law, is not in conflict with any law and is not arbitrary and capricious.

     2. The court shall award reasonable fees and expenses as defined in section 536.085 to any party who prevails in such action.

     3. All rules promulgated pursuant to the provisions of this section shall expire on August 28 of the year after the year in which the rule became effective unless the general assembly extends by statute the rule or set of rules beyond that date to a date specified by the general assembly.

     4. Any rulemaking authority granted pursuant to the provisions of this bill is subject to any rulemaking authority contained in chapter 536 including any subsequent amendments to chapter 536.

     5. The provisions of this section shall terminate if legislation amending the provisions of section 536.024 has been signed into law prior to the effective date of this act.

     Section B. Section 165.011, RSMo Supp. 1996, is repealed and one new section enacted in lieu thereof, to be known as section 165.011, to read as follows:

     165.011. 1. The following funds are created for the accounting of all school moneys: teachers' fund, incidental fund, free textbook fund, capital projects fund and debt service fund. The treasurer of the school district shall open an account for each fund specified in this section, and all moneys received from the county school fund and all moneys derived from taxation for teachers' wages shall be placed to the credit of the teachers' fund. All tuition fees, state moneys received under sections 162.975, RSMo, and 163.031, RSMo, and all other moneys received from the state except as herein provided shall be placed to the credit of the teachers' and incidental funds at the discretion of the district board of education. Money received from other districts for transportation, and money derived from taxation for incidental expenses shall be credited to the incidental fund. Money apportioned for free textbooks shall be credited to the free textbook fund. All money derived from taxation or received from any other source for the erection of buildings or additions thereto and the remodeling or reconstruction of buildings and the furnishing thereof, for the payment of lease purchase obligations, for the purchase of real estate, or from sale of real estate, schoolhouses or other buildings of any kind, or school furniture, from insurance, from sale of bonds other than refunding bonds shall be placed to the credit of the capital projects fund. All moneys derived from the sale or lease of sites, buildings, facilities, furnishings and equipment by a school district as authorized under section 177.088, RSMo, shall be credited to the capital projects fund. Money derived from taxation for the retirement of bonds and the payment of interest thereon shall be credited to the debt service fund which shall be maintained as a separate bank account. Receipts from delinquent taxes shall be allocated to the several funds on the same basis as receipts from current taxes, except that where the previous years' obligations of the district would be affected by such distribution, the delinquent taxes shall be distributed according to the tax levies made for the years in which the obligations were incurred. All refunds received shall be placed to the credit of the fund from which the original expenditures were made. Money donated to the school districts shall be placed to the credit of the fund where it can be expended to meet the purpose for which it was donated and accepted. Money received from any other source whatsoever shall be placed to the credit of the fund or funds designated by the board.

     2. The school board may expend from the incidental fund the sum that is necessary for the ordinary repairs of school property and an amount not to exceed the sum of expenditures for classroom instructional capital outlay, as defined by the department of elementary and secondary education by rule, in state-approved area vocational-technical schools and .06 dollars per one hundred dollars equalized assessed valuation multiplied by the guaranteed tax base for the second preceding year multiplied by the number of resident and nonresident eligible pupils educated in the district for the second preceding year for classroom instructional capital outlay, including but not limited to payments authorized pursuant to section 177.088, RSMo. Any and all payments authorized under section 177.088, RSMo, except as otherwise provided in this subsection, for the purchase or lease of sites, buildings, facilities, furnishings and equipment and all other expenditures for capital outlay shall be made from the capital projects fund. If a balance remains in the free textbook fund after books are furnished to pupils as provided in section 170.051, RSMo, it shall be transferred to the teachers' fund. The board may transfer the portion of the balance remaining in the incidental fund to the teachers' fund that is necessary for the total payment of all contracted obligations to teachers. If a balance remains in the debt service fund, after the total outstanding indebtedness for which the fund was levied is paid, the board may transfer the unexpended balance to the capital projects fund. If a balance remains in the bond proceeds after completion of the project for which the bonds were issued, the balance shall be transferred from the incidental or capital projects fund to the debt service fund. After making all placements of interest otherwise provided by law, a school district may transfer from the capital projects fund to the incidental fund the interest earned from undesignated balances in the capital projects fund. A school district may borrow from one of the following funds: teachers' fund, incidental fund or capital projects fund, as necessary to meet obligations in another of those funds; provided that the full amount is repaid to the lending fund within the same fiscal year.

     3. Tuition shall be paid from either the teachers' or incidental funds.

     4. Other provisions of law to the contrary notwithstanding, the school board of a school district that satisfies the criteria specified in subsection 5 of this section may transfer from the incidental fund to the capital projects fund an amount not to exceed the greater of zero or the sum of .18 dollars per one hundred dollars equalized assessed valuation multiplied by the guaranteed tax base for the second preceding year multiplied by the number of resident and nonresident eligible pupils educated in the district for the second preceding year and the amount to be expended for transportation equipment that is considered an allowable cost under state board of education rules for transportation reimbursements during the current year and any amount necessary to satisfy obligations of the capital projects fund for state-approved area vocational-technical schools and an amount not to exceed .06 dollars per one hundred dollars equalized assessed valuation multiplied by the guaranteed tax base for the second preceding year multiplied by the number of resident and nonresident eligible pupils educated in the district for the second preceding year less any amount transferred pursuant to subsection 7 of this section, provided that any amount transferred pursuant to this subsection shall only be transferred as necessary to satisfy obligations of the capital projects fund less any amount expended from the incidental fund for classroom instructional capital outlay pursuant to subsection 2 of this section. For the purposes of this subsection, the guaranteed tax base and a district's count of resident and nonresident eligible pupils educated in the district shall not be less than their respective values calculated from data for the 1992-93 school year.

     5. In order to transfer funds pursuant to subsection 4 of this section, a school district shall:

     (1) Meet the minimum criteria for state aid and for increases in state aid for the current year established pursuant to section 163.021, RSMo;

     (2) Not incur a total debt, including short-term debt and bonded indebtedness in excess of ten percent of the guaranteed tax base for the preceding payment year multiplied by the number of resident and nonresident eligible pupils educated in the district in the preceding year;

     (3) Set tax rates pursuant to section 164.011, RSMo;

     (4) First apply any voluntary rollbacks or reductions to the total tax rate levied to the teachers' and incidental funds;

     (5) In order to be eligible to transfer funds for paying lease purchase obligations:

     (a) Incur such obligations, except for obligations for lease purchase for school buses, prior to January 1, 1997;

     (b) Limit the term of such obligations to no more than twenty years;

     (c) Limit annual installment payments on such obligations to an amount no greater than the amount of the payment for the first full year of the obligation, including all payments of principal and interest, except that the amount of the final payment shall be limited to an amount no greater than two times the amount of such first-year payment;

     (d) Limit such payments to leasing nonathletic, classroom, instructional facilities as defined by the state board of education through rule; and

     (e) Not offer instruction at a higher grade level than was offered by the district on July 12, 1994.

     6. A school district shall be eligible to transfer funds pursuant to subsection 7 of this section if:

     (1) Prior to August 28, 1993:

     (a) The school district incurred an obligation for the purpose of funding payments under a lease purchase contract authorized under section 177.088, RSMo;

     (b) The school district notified the appropriate local election official to place an issue before the voters of the district for the purpose of funding payments under a lease purchase contract authorized under section 177.088, RSMo; or

     (c) An issue for funding payments under a lease purchase contract authorized under section 177.088, RSMo, was approved by the voters of the district; or

     (2) Prior to November 1, 1993, a school board adopted a resolution authorizing an action necessary to comply with subsection 9 of section 177.088, RSMo. Any increase in the operating levy of a district above the 1993 tax rate resulting from passage of an issue described in paragraph (b) of subdivision (1) of this subsection shall be considered as part of the 1993 tax rate for the purposes of subsection 1 of section 164.011, RSMo.

     7. Prior to transferring funds pursuant to subsection 4 of this section, a school district may transfer, pursuant to this subsection, from the incidental fund to the capital projects funds an amount as necessary to satisfy an obligation of the capital projects fund that satisfies at least one of the conditions specified in subsection 6 of this section, but not to exceed its payments authorized under section 177.088, RSMo, for the purchase or lease of sites, buildings, facilities, furnishings, equipment, and all other expenditures for capital outlay, plus the amount to be expended for transportation equipment that is considered an allowable cost under state board of education rules for transportation reimbursements during the current year plus any amount necessary to satisfy obligations of the capital projects fund for state-approved area vocational-technical schools. A school district with a levy for school purposes no greater than the minimum levy specified in section 163.021, RSMo, and an obligation in the capital projects fund that satisfies at least one of the conditions specified in subsection 6 of this section, may transfer from the incidental fund to the capital projects fund the amount necessary to meet the obligation plus the transfers pursuant to subsection 4 of this section.

     8. Beginning in the 1995-96 school year, the department of elementary and secondary education shall deduct from a school district's state aid calculated pursuant to section 163.031, RSMo, an amount equal to the amount of any transfer of funds from the incidental fund to the capital projects fund performed during the previous year in violation of this section.

     9. On or before June 30, 1995, a school district may transfer to the capital projects fund from the balances of the teachers' and incidental funds any amount, but only to the extent that the teachers' and incidental fund unrestricted balances on June 30, 1995, are equal to or greater than eight percent of expenditures from the teachers' and incidental funds for the year ending June 30, 1995.

     10. (1) Other provisions of law to the contrary notwithstanding, a school district which satisfies all conditions specified in subdivision (2) of this subsection may make the transfer allowed in subdivision (3) of this subsection.

     (2) To make the transfer allowed under subdivision (3) of this subsection, a school district shall:

     (a) Have a membership count for school year 1996-97 which is at least sixteen percent greater than the district's membership count for the 1991-92 school year; and

     (b) Have passed a full waiver of Proposition C tax rate rollback pursuant to section 164.013, RSMo, or approved an increase to the district's tax rate ceiling on or after June 1, 1993; and

     (c) Be in compliance or have paid all penalties required pursuant to section 165.016 for the 1994-95, 1995-96 and 1996-97 school years without waiver or adjustment of the base school year certificated salary percentage.

     (3) A district which satisfies all of the criteria specified in paragraphs (a) to (c) of subdivision (2) of this subsection may, on or before June 30, 1997, make a one-time combined transfer from the teacher's and incidental funds to the capital projects fund of an amount no greater than the sum of the following amounts:

     (a) The product of the district's equalized assessed valuation for 1994 times the difference of the district's equalized operating levy for school purposes for 1994 minus the district's equalized operating levy for school purposes for 1993;

     (b) The product of the district's equalized assessed valuation for 1995 times the difference of the district's equalized operating levy for school purposes for 1995 minus the district's equalized operating levy for school purposes for 1993;

     (c) The product of the district's equalized assessed valuation for 1996 times the difference of the district's equalized operating levy for school purposes for 1996 minus the district's equalized operating levy for school purposes for 1993;

provided that the remaining balance in the incidental fund shall be no less than twelve percent of the total expenditures during that fiscal year from the incidental fund.

     (4) A district which makes a transfer pursuant to subdivision (3) of this subsection shall be subject to compliance with the requirements of section 165.016 for fiscal years 1998, 1999 and 2000, without the option to request a waiver or an adjustment of the base school year certificated salary percentage.

     (5) Other provisions of section 165.016 to the contrary notwithstanding, the transfer of an amount of funds from either the teachers' or incidental funds to the capital projects fund pursuant to subdivision (3) of this subsection shall not be considered an expenditure from the teachers' or incidental funds for the purpose of determining compliance with the provisions of subsections 1 and 2 of section 165.016.

     Section C. Because immediate action is necessary to properly educate the children of this state, section B of this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and section B of this act shall be in full force and effect upon its passage and approval.