To repeal sections 160.538, 162.081, 163.036, 165.121, 166.260, 167.131 and 168.221, RSMo 1994, and sections 160.534, 163.011, 163.031, 165.011, 165.111 and 166.300, RSMo Supp. 1996, relating to education, and to enact in lieu thereof twenty-one new sections relating to the same subject.

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

     Section A. Sections 160.538, 162.081, 163.036, 165.121, 166.260, 167.131 and 168.221, RSMo 1994, and sections 160.534, 163.011, 163.031, 165.011, 165.111 and 166.300, RSMo Supp. 1996, are repealed and twenty-one new sections enacted in lieu thereof, to be known as sections 160.534, 160.538, 162.081, 162.1060, 163.011, 163.031, 163.036, 165.011, 165.111, 165.121, 166.260, 166.300, 167.131, 168.221, 1, 2, 3, 4, 5, 6 and 7, to read as follows:

     160.534. For fiscal year 1996 and each subsequent fiscal year, any amount of the excursion gambling boat proceeds deposited in the gaming proceeds for education fund in excess of the amount transferred to the school district bond fund as provided in section 164.303, RSMo, shall be transferred according to the following priority:

     (1) The first fifty million shall be transferred to the state school moneys fund to the extent necessary to fully fund the district entitlements less deductions as established in lines 1 to 10 of the state school aid formula established pursuant to subsection 6 of section 163.031, RSMo;

     (2) The next ten million shall be transferred to the school building revolving fund; and

     (3) Any remainder shall be transferred to the state school moneys fund for distribution pursuant to section 163.031, RSMo. Such moneys shall be transferred on a monthly basis and shall be distributed in the manner provided in [section] sections 163.031 and 166.300, RSMo.

     160.538. 1. By July 1, 1996, the state board of education shall develop a procedure and criteria for determining that a school in a school district is "academically deficient". In making such a determination for any school, the state board of education shall consider the results for the school from the assessment system developed pursuant to the provisions of section 160.518 together with the results from the education audit performed under subsection 2 of this section.

     2. (1) Prior to a decision that a school is academically deficient, the state board of education shall appoint an audit team of at least ten persons to conduct an education audit of the school to determine the factors that have contributed to the lack of student achievement at the school as measured by the district assessment system and make a finding as to whether the school is academically deficient. The specific standards and implementation of the education audit shall be pursuant to rules adopted by the state board of education.

     (2) The audit team shall report its findings to the state board. If the audit team finds that the school is academically deficient, then the state board shall declare the school to be academically deficient.

     (3) Following a decision that a school is academically deficient, the state board of education shall, within sixty days, appoint a management team of at least ten persons to conduct any necessary investigations and make any recommendations the team believes are appropriate for the administration and management of the school necessary to promote student achievement and any additional resources which are required. Funds shall be provided, upon appropriation, under subsection 2 of section 160.530 for the operation of the audit and management teams and resources needed in the district.

     (4) In the appointment of the audit and management teams, the state board of education shall appoint such persons so that at least fifty percent of the team is composed of active classroom teachers at the elementary, middle or secondary level grades. Further, no more than two persons of said team may be employees of the department of elementary and secondary education. At least one member of the team shall be a public school superintendent from another district.

     (5) The management team shall report its findings and recommendations to the state board within sixty school days. The commissioner of education shall, subject to availability of resources, provide resources to the district as recommended by the management team. The management team report may also include recommendations for one or more of the following: conducting a recall election for each member of the district school board, suspension of indefinite contracts for certificated staff in the school and a one-year maximum length for new or renewal of contracts for the superintendent or the principal of the school. The education audit team shall reevaluate the school two years after the filing of the management team report. No recall election, suspension of indefinite contract or maximum contract length limit may be imposed unless the audit team determines that the school is still academically deficient.

     (6) The commissioner of education shall, upon such recommendation by the management team and upon approval by the state board of education, but only in the case where the education audit team finds the school academically deficient in its reevaluation audit under subdivision (5) of this subsection, order an election in the district to be held for the purpose of conducting a recall election of all members of the district school board. The recall election shall be held on the next available election day thereafter as provided under section 115.123, RSMo, and shall be conducted pursuant to chapter 115, RSMo, except as otherwise provided herein.

     3. (1) A district school board member of a district which contains a school declared academically deficient may be removed by the voters in a recall election. Such election shall be held upon the submission of a petition signed by voters of the district equal in number to at least twenty-five percent of the number of persons voting at the last preceding election to elect a district board member. The petition shall be filed with the election authority and the secretary of the district board of education, which petition shall contain a general statement of the grounds for which the removal is sought. The signatures to the petition need not all be appended to one paper, but each signer shall add to his signature his place of residence, giving the street and number. One of the signers of each such paper shall make oath before an officer competent to administer oaths that the statements therein made are true as he believes and that each signature to the paper appended is the genuine signature of the person whose name it purports to be.

     (2) Within ten days from the date of filing such petition the election authority shall examine and ascertain whether said petition is signed by the requisite number of voters; and he shall attach to the petition his certificate, showing the result of the examination. If the petition is shown to be insufficient, it may be amended within ten days from the date of said certificate. The election authority shall, within ten days after such amendment, make like examination of the amended petition and, if his certificate shall show the same to be insufficient, it shall be returned to the person filing the same, without prejudice, however, to the filing of a new petition to the same effect. If the petition shall be deemed to be sufficient, the election authority shall submit the same to the district board without delay. If the petition shall be found to be sufficient, the district board shall order the question to be submitted to the voters of the district.

     (3) If a majority of the voters vote in favor of retaining the member, he shall remain in office and shall not be subject to another recall election during his term of office except as provided in subsection 2 of this section. If a majority of voters vote to remove the member, his successor shall be chosen as provided in section 162.261, RSMo.

     4. Under subdivision (5) of subsection 2 of this section, a district board of education may suspend indefinite contracts and issue probationary contracts to all certificated staff in a school declared academically deficient. However, no such indefinite contract for any person may be suspended without providing the person an opportunity for a due process hearing, conducted according to the provisions of chapter 536, RSMo, and only after the school board demonstrates that the performance of the person's duties contributed to the school meeting the criteria for being declared academically deficient. The district board of any school which is declared academically deficient shall not issue new contracts or renew contracts to either the superintendent or the principal of the academically deficient school for a period of longer than one year. The provisions of other law to the contrary notwithstanding, a probationary teacher in a school declared academically deficient shall not be granted an indefinite contract until one year after such school is no longer determined to be academically deficient, and the probationary teacher meets all other requirements for permanent status required by law.

     5. In any school district whose graduation rate, as defined in section 163.011, RSMo, is below sixty-five percent, the district school board shall determine which schools in the district meet the criteria set forth under subsection 1 of this section as being academically deficient, based on the results of the assessment system developed pursuant to section 160.518, whether or not the state board of education has made a finding that the schools are academically deficient. With respect to any such school, notwithstanding any provision of state law or regulation, district rule or regulation, or contract, the school district board shall have the authority to suspend or terminate contracts of certificated staff, the principal and any administrators having responsibility for the school and to reconstitute the school with new teachers and administrative staff or to sponsor a charter school. The authority granted herein shall not preclude the district board from offering contracts to individual teachers or administrators as the board may deem appropriate. Any termination of a contract of an individual permanent teacher pursuant to this section shall be subject to the procedures of sections 168.114 to 168.120, RSMo.

     162.081. 1. Whenever any school district in this state fails or refuses in any school year to provide for the minimum school term required by section 163.021, RSMo, or is classified unaccredited for two successive school years by the state board of education, its corporate organization shall lapse. The corporate organization of any school district that is classified as unaccredited shall lapse on June thirtieth following the second such unaccredited classification. The territory theretofore embraced within any district that lapses pursuant to this section or any portion thereof, shall be attached to any district for school purposes by the state board of education; but no school district, except a district classified as unaccredited pursuant to section 163.023, RSMo, and section 160.538, RSMo, shall lapse where provision is lawfully made for the attendance of the pupils of the district at another school district that is classified as provisionally accredited or accredited by the state board of education.

     2. (1) When any school district in this state shall lapse, prior to a determination by the state board of education to attach the territory of the district to any district for school purposes, the department of elementary and secondary education shall appoint a special administrative board to conduct a public hearing at a location in the school district that has lapsed for the purpose of recommending the reassignment of the territory within the district and to supervise the financial operations, maintain and preserve the financial assets and, if needed, continue operation of the educational programs within the former district. The special administrative board shall consist of two persons who are residents of the school district, who shall serve without compensation, and one experienced school administrator, who shall be compensated with funds from the district. The purpose of the public hearing shall be to receive information from the voters of the school district that has lapsed pertaining to the school district or districts that should be considered to receive territory of said lapsed district or what provisions might otherwise be made in the best interest of the education of the children of the district.

     (2) The special administrative board may retain the authority granted to a board of education for the operation of the former school district under the laws of the state of Missouri in effect at the time of the notice of lapse. The authority of the special administrative board shall expire at the end of the third full school year following its appointment, unless extended by the state board.

     (3) If the district has lapsed because it has been classified unaccredited for two successive school years, the special administrative board may take control of those schools within the district that, in its sole discretion, such board determines are causing or contributing to cause the failure to achieve accreditation and return the remaining schools to the control of the local board of education.

     (4) In assuming authority over part or all of the lapsed school district, the special administrative board may on behalf of the state board of education act as a sponsor of one or more charter schools pursuant to sections 1 to 4 of this act. Any such charter schools and any charter schools sponsored by the district at the time of the board's appointment shall continue under the sponsorship of a successor school district or the state board of education following expiration of the special administrative board.

     (5) The special administrative board shall, at the direction of the state board of education, make such study and recommendations as the state board may direct as to the reassignment of territory within the lapsed district. The state board of education may issue a decision establishing a new school district or districts, including governance structures which may provide for appointment of school boards of newly created districts or lapsed districts whose schools have been operated by the special administrative board, which shall take effect sixty days after the adjournment of the regular session of the general assembly next following the state board's decision unless a statute is enacted to nullify the state board's decision prior to such date.

     (6) The special administrative board shall provide an accounting of all funds, assets and liabilities of the former district and transfer such funds, assets, and liabilities of the former district as determined by the state board of education.

     (7) Upon recommendation of the special administrative board, the state board of education shall be authorized to assign the funds, assets and liabilities of the former district to another district or districts within the state. Upon assignment, all authority of the special administrative board shall transfer to the assigned districts.

     (8) Neither the special administrative board nor any district or other entity assigned territory, assets or funds from a lapsed district shall be considered a successor entity for the purpose of employment contracts or unemployment compensation payment pursuant to section 288.110, RSMo.

     3. If additional teachers are needed by a district as a result of increased enrollment due to the annexation of territory of a lapsed or dissolved district, such district shall grant an employment interview to any permanent teacher of the lapsed or dissolved district upon the request of such permanent teacher.

     162.1060. 1. Any school district located in whole or in part in a county containing all or part of a city with a population in excess of three hundred thousand persons or in a county with a population in excess of nine hundred thousand persons or in a city not within a county, may accept and enroll non-resident students. A district that opts to accept and enroll such students shall be governed by the provisions of sections 162.1045 and 162.1049, RSMo, and guidelines developed by the state board of education. In no event shall a school district be required to enroll students beyond the physical capacity of the district as determined by its board of education. Notwithstanding the provisions of chapter 163, RSMo, to the contrary, for the purposes of determining state aid under this section, the district enrolling the student shall be entitled to receive the higher of the state aid that would be paid to the district if the student is counted as a resident pupil of the district, or the state aid that would otherwise be paid to the student's district of residence.

     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] third 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] third 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 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) "Current operating costs", all expenditures for instruction for grades kindergarten through 12 and support services excluding capital outlay and debt service expenditures less the revenue from food services, student activities and payments from other districts;

     [(3)] (4) "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)] (5) "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)] (6) "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;

     (7) "Fiscal instructional ratio of efficiency" shall be the quotient of the sum of the district's current operating costs for all pre-kindergarten through grade twelve direct instructional and direct pupil support service functions, plus the cost of supplies for operation of the facilities housing those programs divided by the sum of the districts current operating cost for pre-kindergarten through grade twelve, plus all tuition revenue received from other districts and placed in the teachers' or incidental funds;

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

     (9) "Graduation rate", 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;

     [(7)] (10) "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 average of the state average equalized assessed valuation per eligible pupil for the second and third preceding [year] years times two and one hundred and [sixty-seven] twelve 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)] (11) "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)] (12) "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 of the second year 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. The tax rate adjustments required under this subdivision due to reassessment shall be cumulative 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;

     (13) "Poverty concentration ratio" means the free and reduced lunch eligible pupil count for the third preceding year divided by 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 third preceding year and who were in attendance on one day or more during the preceding ten school days, except that for any school district where the instructional fiscal efficiency ratio falls in excess of five percentage points below the state-wide average as determined by the department of elementary and secondary education, the poverty concentration ratio for that district shall be reduced by the number of percentage points that the district's instructional fiscal efficiency ratio is below the state-wide average;

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

     [(11)] (15) "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)] (16) "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; one hundred percent of the average amount received the [previous year] second and third preceding years 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 average amounts received the [previous year] second and third preceding years for school purposes from federal properties pursuant to sections 12.070 and 12.080, RSMo; the average amount of federal impact aid received the [previous year] second and third preceding years 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] based on an average of the second and third preceding years for school purposes from the school district trust fund pursuant to section 163.087; one hundred percent of the average amount received the [previous year] second and third preceding years for school purposes from the fair share fund pursuant to section 149.015, RSMo; and one hundred percent of the average amount received the [previous year] second and third preceding years 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 and provided that the proration factor for line 14(b) shall be set as needed to ensure that the total annual payments pursuant to line 14(b) are no greater than the amount of savings in desegregation payments under section 166.275 for the current year as compared to fiscal year 1997. 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 plus the greater of zero or the following quantity: (the district graduation rate minus five percent minus the statewide average graduation rate) 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; for districts with poverty concentration ratios greater than seventy percent, the free and reduced lunch eligible pupil count for the district, as defined in section 163.031 times the following quantity: (the poverty concentration ratio minus twenty percent minus (the statewide average fiscal instructional ratio of efficiency minus the district's fiscal instructional ratio of efficiency, if the district's fiscal instructional ratio of efficiency is at least five percent below the statewide average, or zero, otherwise)) 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 x proration, minus court-ordered state desegregation aid received by the district for operating purposes, and for districts with poverty concentration ratios greater than twenty percent and less than seventy percent, the free and reduced lunch eligible pupil count for the district, as defined in section 163.031 times the following quantity: (the poverty concentration ratio minus twenty percent) times the poverty concentration ratio 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 x proration, minus court-ordered state desegregation aid received by the district for operating purposes; 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 .... $........ 3. Intangible taxes, fines, forfeitures, escheats,

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

     average amount received the [previous year]

     second and third preceding years for

     school purposes) ............................... $........ 4. Receipts from state assessed

     railroad and utility tax (100% of

     the average amount received the [previous

     year] second and third preceding years for

     school purposes) ............................... $........ 5. Receipts from federal properties

     pursuant to sections 12.070 and

     12.080, RSMo (100% of the average amount

     received the [previous year] second and third

     preceding years for school purposes) ........... $........ 6. (The average amount of federal impact aid received

     the [previous year] second and third preceding

     years 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] based on an average of

     the second and third preceding years for school

     purposes pursuant to section 163.087, RSMo ...... $........ 8. One hundred percent of the average amount received

     the [previous year] second and third preceding years

     for school purposes from the fair share fund

     pursuant to section 149.015, RSMo ............... $........ 9. One hundred percent of the average amount received

     the [previous year] second and third preceding years

     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.] 14(a). Free and reduced lunch eligible pupil

     count for the district, as defined in section

     163.011, RSMo, x (.20 plus the greater of 0 or

     (the district graduation rate minus .05 minus the

     statewide average graduation rate) x GTB per EP x

     the minimum value for an operating levy for school

     purposes as provided in section 163.011 x

     proration ....................................... $........

14(b). For districts with poverty concentration ratios

     greater than twenty percent, free and reduced lunch

     eligible pupil count for the district, as defined in

     section 163.031 x (poverty concentration ratio minus

     20% minus (the statewide average fiscal instructional

     ratio of efficiency minus the district's fiscal

     instructional ratio of efficiency, if the district's

     fiscal instructional ratio of efficiency is at least

     five percent below the statewide average, or zero,

     otherwise)) x GTB per EP x the minimum value for an

     operating levy for school purposes as provided in

     section 163.011 x proration, minus court-ordered

     state desegregation aid for operating purposes, and

     for districts with poverty concentration ratios

     greater than twenty percent and less than seventy

     percent, the free and reduced lunch eligible pupil

     count for the district, as defined in section

     163.031 x (the poverty concentration ratio minus

     20%) x (poverty concentration ratio) x GTB per EP

     x the minimum value for an operating levy for school

     purposes as provided in section 163.011 x proration,

     minus court-ordered state desegregation aid received

     by the district for operating purposes ........ $........ 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 the average number of eligible pupils for the third and second preceding years, 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.

     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 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.

     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 required under subsection 1 of this section 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 approve and publish a budget for the district. Any approved budget shall be an open and public record and shall be prepared and approved during open and public meetings of the school board. In addition to the budget requirements of sections 67.010 to 67.110, RSMo, the budget approved by a school board shall:

     (1) Itemize budgeted current operating cost in total and per pupil for each school site operated, specify the percent of total current operating cost expended directly at school sites and specify the district's fiscal instructional ratio of efficiency;

     (2) Summarize budgeted receipts, expenditures, restricted and unrestricted fund balances, fund transfers and indebtedness in a form identical to the annual report required in section 162.821, RSMo;

     (3) Include calculation of budgeted current operating cost and the budgeted percentage of current operating cost expended for tuition, teacher retirement and compensation of certificated staff;

     (4) Include a capital acquisitions schedule detailing all budgeted expenditures of this type;

     (5) Include calculation of the amount of fund balance required to avoid tax anticipation borrowing for the incidental and teachers funds based on an analysis of revenues received, transferred and expended during each month of the second preceding fiscal year.

     4. If the district budget is amended during the fiscal year, revised summaries of the district budget required in subsection 3 of this section shall be published at least quarterly.

     5. Failure of a school district board to comply with subsections 3 and 4 of this section shall constitute a violation of section 162.091, RSMo, by the board members and school officials involved.

     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, and section 165.111;

     (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) The auditor's opinion as to whether salary and compensation amounts reported to teacher and school employee retirement systems established pursuant to chapter 169, RSMo, were accurately reported. This opinion shall be based on a comparison of district payroll records with retirement system records;

     (10) The auditor's opinion as to whether the record of school district receipts indicates compliance with section 168.151, RSMo.

     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.

     166.260. 1. There is hereby created the "Children At-Risk in Education Program" which shall be administered by the commissioner of education. The program shall be funded by moneys provided to school districts pursuant to line 14(a) of subsection 6 of section 163.031, RSMo, and used solely as determined by local boards of education for: reductions of class size below the desired sizes recommended for grades kindergarten through eight pursuant to subsection 9 of section 161.092, RSMo, in schools containing high concentrations of children who are least advantaged or who have specially identified educational needs according to rule and regulation of the state board of education; or the following:

     (1) The program of half-day instruction for developmentally delayed and at-risk children established pursuant to section 167.260, RSMo;

     (2) The program to provide teacher assistants in grades kindergarten through three established pursuant to section 167.263, RSMo;

     (3) The program to provide guidance counselors in grades kindergarten through nine established pursuant to section 167.265, RSMo;

     (4) The programs for pupils at risk of becoming high school dropouts established pursuant to section 167.270, RSMo, including specialized courses of instruction, alternative education programs for pregnant teens and teen mothers and supplemental services for teen mothers;

     (5) The program of direct support services to pupils identified as having a high risk of dropping out of school established pursuant to section 167.280, RSMo;

     (6) The program of professional development committees for in-service training on teaching children identified as at risk of failing in school pursuant to section 168.400, RSMo;

     (7) A program to contract for mental health services to meet the needs of children who are identified as being at risk of failing school as a result of emotional or environmental factors. Eligible contractors shall be approved by the department of mental health;

     (8) The program of special education and other special services for at-risk and handicapped children in grades kindergarten through third grade emphasizing prevention and early intervention, rather than remediation, known as the "Success for All Program"; and

     (9) Other programs as approved by the commissioner of education that are exclusively targeted to provide educational services for students who are least advantaged or who have specially identified educational needs.

     2. The "Children At-Risk in Education Program" shall be funded in part by monies provided to school districts pursuant to line 14(b) of subsection 6 of section 163.031, RSMo. The requirements of this subsection shall apply only to those districts receiving an amount in excess of one hundred thousand dollars for a budget year pursuant to line 14(b). School districts otherwise eligible to receive monies pursuant to line 14(b) must submit, biannually, a personnel assignment plan detailing how each student will have contact with tutors and teachers in small group settings in elementary and middle schools, and with counselors for multiple years in secondary schools. A personnel assignment plan must be approved by the department of elementary and secondary education before a district can receive line 14(b) revenue.

     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 riverboat gaming revenues in excess of those appropriated to fund lines 1 through 10 of the state school aid formula established in subsection 6 of section 163.031, RSMo and such moneys as may be appropriated to the fund shall be deposited into the school building revolving fund. After a fund balance has been established by prior years' deposits and interest, school districts may submit requests for loans [and grants] 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 from the school building revolving fund without first submitting a long-range capital improvements plan.

     3. To be eligible for loans [or grants] 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) The sum of the school district's current bonded indebtedness plus the school district's loan request shall be greater than ten percent of the assessed valuation of the district; and

     (4) A school district shall not incur a total debt, including short-term debt, lease purchases authorized by section 177.088, RSMo, obligations to the school building revolving fund 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.

     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. Ranking of [the] allowable projects for offering of credit shall be [based upon the following variables] done in the following order with the highest ranking district served first:

     (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 shall be rank ordered based on their percentage growth in fall membership for the fifth through the third preceding years beginning with the highest percentage district and ending with the lowest percentage district in excess of twelve percent;

     (3) [Increasing enrollment] Districts shall be rank ordered based on their percentage growth in fall membership during the thirteenth through the third preceding years beginning with the largest percentage district and ending with the lowest percentage district in excess of twenty percent; and

     (4) [Age or condition of facility; and] For all other districts not qualifying under subdivisions (1), (2) or (3), school buildings in active student use shall be rank ordered based on date of construction or last renovation beginning with the earliest date.

Any ties in ranked orders based on subdivision (2), (3) or (4) shall be broken with higher ranks given to districts with higher percentages of bonding capacity obligated.

     [(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] subsection 4 of this section. 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. Each school district receiving a loan from the school building revolving fund shall repay such loan, with interest, if required, in no more than ten annual payments made on or before June 30 of the first full fiscal year after receipt of loan proceeds. School districts shall make loan payments from revenues raised in the debt service fund to the department of elementary and secondary education after the board of education has placed sufficient tax rate in that fund. Loan payments shall be immediately deposited to the school building revolving fund by the department.

     7. Any school district which fails to obligate the full amount of a loan from the school building revolving fund for the allowable project must return the unobligated amount plus interest earned to the department no later than June 30 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 non-payment 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 with loans from the school building revolving fund shall remain the property of the state until such time as the loan has been fully repaid pursuant to this section. If a school district fails to make an annual payment to the school building revolving fund after notice of non-payment by the department, the state board of education may, if the delinquency exceeds one hundred and eighty days, take possession of the property and use the property to establish a charter school pursuant to sections 1 to 4 of this act.

     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.

     167.131. 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] shall be the lesser of:

     (1) The product of the equalized, adjusted operating levy for school purposes of the sending district times the guaranteed tax base per eligible pupil for the current payment year; or

     (2) 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. 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. 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.

     168.221. 1. The first three years of employment of all teachers [and principals] entering the employment of the metropolitan school district shall be deemed a period of probation during which period all appointments of teachers [and principals] shall expire at the end of each school year. During the probationary period any probationary teacher [or principal] whose work is unsatisfactory shall be furnished by the superintendent of schools with a written statement setting forth the nature of his incompetency. If improvement satisfactory to the superintendent is not made within one semester after the receipt of the statement, the probationary teacher [or principal] shall be dismissed. The semester granted the probationary teacher [or principal] in which to improve shall not in any case be a means of prolonging the probationary period beyond three years and six months from the date on which the teacher [or principal] entered the employ of the board of education. The superintendent of schools on or before the fifteenth day of April in each year shall notify probationary teachers [or principals] who will not be retained by the school district of the termination of their services. Any probationary teacher [or principal] who is not so notified shall be deemed to have been appointed for the next school year.

     2. After completion of satisfactory probationary services, appointments of teachers [and principals] shall become permanent, subject to removal for any one or more causes herein described and to the right of the board to terminate the services of all who attain the age of compulsory retirement fixed by the retirement system. In determining the duration of the probationary period of employment in this section specified, the time of service rendered as a substitute teacher or substitute principal shall not be included.

     3. No teacher [or principal] whose appointment has become permanent may be removed except for one or more of the following causes: Immorality, inefficiency in line of duty, violation of the published regulations of the school district, violation of the laws of Missouri governing the public schools of the state, or physical or mental condition which incapacitates him for instructing or associating with children, and then only by a vote of not less than a majority of all the members of the board, upon written charges presented by the superintendent of schools, to be heard by the board after thirty days' notice, with copy of the charges served upon the person against whom they are preferred, who shall have the privilege of being present, together with counsel, offering evidence and making defense thereto. Notifications received by an employee during a vacation period shall be considered as received on the first day of the school term following. At the request of any person so charged the hearing shall be public. The action and decision of the board upon the charges shall be final. Pending the hearing of the charges, the person charged may be suspended if the rules of the board so prescribe, but in the event the board does not by a majority vote of all the members remove the teacher [or principal] upon charges presented by the superintendent, the person shall not suffer any loss of salary by reason of the suspension. Inefficiency in line of duty is cause for dismissal only after the teacher or principal has been notified in writing at least one semester prior to the presentment of charges against him by the superintendent. The notification shall specify the nature of the inefficiency with such particularity as to enable the teacher or principal to be informed of the nature of his inefficiency.

     4. No teacher [or principal] whose appointment has become permanent shall be demoted nor shall his salary be reduced unless the same procedure is followed as herein stated for the removal of the teacher [or principal] because of inefficiency in line of duty, and any teacher [or principal] whose salary is reduced or who is demoted may waive the presentment of charges against him by the superintendent and a hearing thereon by the board. The foregoing provision shall apply only to permanent teachers [and principals] prior to the compulsory retirement age under the retirement system. Nothing herein contained shall in any way restrict or limit the power of the board of education to make reductions in the number of teachers or principals, or both, because of insufficient funds, decrease in pupil enrollment, or abolition of particular subjects or courses of instruction, except that the abolition of particular subjects or courses of instruction shall not cause those teachers who have been teaching the subjects or giving the courses of instruction to be placed on leave of absence as herein provided who are qualified to teach other subjects or courses of instruction, if positions are available for the teachers in the other subjects or courses of instruction.

     5. Whenever it is necessary to decrease the number of teachers [or principals, or both,] because of insufficient funds or a substantial decrease of pupil population within the school district, the board of education upon recommendation of the superintendent of schools may cause the necessary number of teachers [or principals, or both,] beginning with those serving probationary periods, to be placed on leave of absence without pay, but only in the inverse order of their appointment. Nothing herein stated shall prevent a readjustment by the board of education of existing salary schedules. No teacher [or principal] placed on a leave of absence shall be precluded from securing other employment during the period of the leave of absence. Each teacher [or principal] placed on leave of absence shall be reinstated in inverse order of his placement on leave of absence. Such reemployment shall not result in a loss of status or credit for previous years of service. No new appointments shall be made while there are available teachers [or principals] on leave of absence who are seventy years of age or less and who are adequately qualified to fill the vacancy unless the teachers [or principals] fail to advise the superintendent of schools within thirty days from the date of notification by the superintendent of schools that positions are available to them that they will return to employment and will assume the duties of the position to which appointed not later than the beginning of the school year next following the date of the notice by the superintendent of schools.

     6. If any regulation which deals with the promotion of either teachers [or principals, or both,] is amended by increasing the qualifications necessary to be met before a teacher [or principal] is eligible for promotion, the amendment shall fix an effective date which shall allow a reasonable length of time within which teachers [or principals] may become qualified for promotion under the regulations.

     7. A principal shall serve in that role at the pleasure of the superintendent of schools. If a principal is removed from that position, he shall retain the tenure rights of a teacher as provided by this section.

     Section 1. A charter school is an independent, publicly-supported school sponsored by a school district or the state board of education in cooperation with a school district as provided in section 1 to 4 of this act.

     Section 2. 1. (1) A school district or the state board of education may sponsor charter schools pursuant to sections 1 to 4 of this act in school districts which have a four-year persistence to graduation rate of less than sixty percent as calculated for the most recent graduating cohort and school districts in any county which contains a school district subject to a federal school desegregation court order and school districts in any first class county adjoining such county.

     (2) In school districts other than those specified in subdivision (1) of this subsection, a local school board may sponsor a charter school pursuant to sections 1 to 4 of this act. Two or more school districts may cooperate in sponsoring a charter school, pursuant to a written agreement among such school districts.

     (3) An applicant seeking to establish a charter school shall submit a written application to a proposed sponsor as established in subsection 3 of this section. 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 charter school's personnel policies which shall provide for dismissal for just cause after a probationary period of no more than eighteen months with the right to an impartial hearing officer, 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:

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

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

     (c) 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

     (d) 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, community college or community-based nonprofit entity, provided that the school's programs, admissions policies, employment practices and all other operations are nonsectarian.

     3. An application for a charter school, in districts described in subdivision (1) of subsection 1 of this section, may be made to a school district or the state board of education. If the district board of education denies an application, the applicant may present the application to the state board of education in accordance with subsection 5 of this section. In other districts, the application shall be made to the local school district. If two or more school districts are to sponsor a charter school pursuant to a written agreement, an application may be made to such districts. An application may be made to an appropriate sponsor subject to the following requirements:

     (1) An applicant shall submit its application to a proposed 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. A district board of education has no legal authority over or responsibility for a charter school sponsored by the state board of education.

     5. (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 1 to 4 of this act, and any such disapproval shall be subject to judicial review under chapter 536, RSMo.

     (2) If an application submitted pursuant to subdivision (1) of subsection 1 of this section is denied by a school district, the application may be submitted to the state board of education, and, if the state board determines that granting a charter to the applicant would be likely to provide educational benefit to the children of the district, the state board may grant a charter and act as sponsor of the charter school.

     (3) Any decision of the state board shall constitute final administrative action.

     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 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 1 to 4 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 3. 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, 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; provided, however, that a charter school may be established to serve persons of the same gender.

     Section 4. 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 of 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 his 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 pro rated for partial year enrollment for a pupil.

     3. If a school district fails to make timely payments under subsection 2 of this section, the state department of elementary and secondary education shall authorize payment to the charter school of the amount due under 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 he would otherwise attend in his 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 unless the district is required by law to provide services to individual students. 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.

     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 his 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 his permanent teacher status and seniority rights in the district.

     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. Non-instructional personnel employed by the charter school shall participate in the nonteachers retirement system established under 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 under 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 5. 1. There is hereby established with the state treasury a "Fund for Charter Schools and Alternative Educational Opportunities," from which the state board of education may make grants or loans for public charter schools or to school districts for providing alternative educational opportunities. The fund shall include any federal, state or other public or private monies received by the fund for such purposes.

     2. To the extent that funds are available under section 163.031, RSMo, for districts that have poverty concentration ratios greater than twenty percent, any funds not paid to a district because its fiscal instructional ratio of efficiency, as defined in section 163.011, RSMo, deviates more than five percent from the state average shall be credited to this fund for charter schools and alternative educational opportunities. Notwithstanding the provisions of section 33.080, RSMO, to the contrary, moneys in the fund shall not be transferred to the credit of the general revenue fund at the end of the biennium. All interest or other gain received from investment of moneys in the fund shall be credited to the fund.

     Section 6. 1. The governing body of any city not within a county or any city with a population of more than three hundred thousand inhabitants or any first class county containing any part of such city may place before the voters of such political subdivision an issue to approve an education earnings tax of no more than one-half percent to be imposed on all earnings in the political subdivision, and such earnings tax shall become effective in such political subdivision upon receiving a majority of the votes of qualified voters voting on the issue upon the effective date specified in the issue.

     2. The governing body of any city not within a county or any city with a population of more than three hundred thousand inhabitants or any first class county containing any part of such city may place before the voters of such city or county an issue to approve a tax of no more than one percent to be imposed on all sellers for the privilege of engaging in the business of selling of personal property or rendering taxable service, and such sales tax shall become effective in such city or county upon receiving a majority of the votes of qualified voters voting on the issue upon the effective date specified in the issue.

     3. Revenues derived under this section shall be distributed to each school district in such city or county in the same ratio that the number of pupils residing in such city or county and enrolled in a district as defined by law is to the total number of pupils residing in such city or county and enrolled in all school districts on the last Wednesday in September of the preceding year. Each district receiving such funds on behalf of a resident pupil shall remit the net per pupil amount of such earnings or sales tax revenue to any other school district or charter school where the pupil actually attends school. As used in this section, "net per pupil amount of such earnings or sales tax revenue" shall mean the total amount of such earnings or sales tax revenue received minus the amount of property tax reduction imposed pursuant to this section and shall be calculated on a per pupil basis for all pupils resident in the city or county.

     4. The state board of education shall credit the amount of the tax revenue received by a school district under this section to an equivalent property tax rate for the district and, for districts with enrollments in excess of thirty thousand pupils, shall include such equivalent tax rate in the determination of the district's operating levy for school purposes, as defined in section 163.011, RSMo, for the purpose of computing state aid to school districts under section 163.031, RSMo; provided that no such inclusion of equivalent tax rate shall cause a school district to receive payment of state school aid on an operating levy for school purposes in excess of four dollars and sixty cents per one hundred dollars assessed valuation.

     5. At the option of the governing body of the city or county placing a sales tax for education proposition to the voters of the city or county, the proposition may include a provision that, for the second full calendar year after approval of such tax pursuant to this section, and for each calendar year thereafter, a district receiving revenues under this section shall reduce its property tax levy rate by at least twenty-five percent but not more than fifty percent of the amount of tax rate credited to the district by the state board of education under subsection 4 of this section.

     Section 7. 1. There is hereby established a "Missouri Tuition Assistance Program", to be administered by local school districts to provide scholarships for Missouri citizens to attend a Missouri college, university or vocational or technical school of their choice. The general assembly may appropriate funds pursuant to this section to school districts with graduation rates, as defined in section 163.011, RSMo, which are lower than sixty percent. Funding shall be provided to each school which applies pursuant to subsection 2 and meets the qualifications of this subsection in proportion to the district's average annual number of dropouts for the two preceding years as a fraction of the total average number of dropouts for the two preceding years of all districts which apply pursuant to subsection 2 and meet the qualifications of this subsection. The definitions of terms set forth in section 173.205, RSMo, shall be applicable to such terms as used in this section.

     2. To receive funding under this section, a school district shall apply to the state board of education and include complete documentation of the determination of the district's graduation rate.

     3. Each school district receiving funds under this section shall:

     (1) Select qualified students to receive grants, make awards of grants to qualified students based, at least in part, on financial need and determine the manner and method of payment to such students;

     (2) Identify the allowable costs of resident students enrolled in the various approved public or private institutions of higher education in this state. Such allowable costs shall be limited to tuition or fees charged to resident students by the institution for enrollment and other mandatory fees;

     (3) Provide for the funds received to be held in escrow in cooperation with the Missouri access to higher education trust, pursuant to sections 166.200 to 166.242, RSMo, until such time as the receiving student is attending a Missouri approved public or private institution and is eligible to receive such funds.

     4. A student may apply for a scholarship at any age and shall be eligible to receive a grant if at the time of his application:

     (1) The student is a citizen or permanent resident of the United States;

     (2) The student has been a legal resident, or whose custodial parent or legal guardian has been a legal resident, of the state of Missouri for a minimum of twenty-four months preceding enrollment;

     (3) The student signs a commitment to graduate from high school;

     (4) The student's parent, guardian or a person having legal custody of the student signs a written commitment to participate fully in a district program involving parents, teachers and students which program is designed to have all parents and guardians of pupils of the district be more actively involved in the education of such parent's or guardian's child.

     (5) Graduates from a high school in Missouri accredited by the state board of education; or the North Central Association of Colleges and Schools, the Independent Schools Association of the 40 Central States, or the University of Missouri School Accreditation Program, or any such respective successor organization; and

     (6) Enrolls in and is accepted at a Missouri approved public or private institution within twenty-four months graduation from high school provided that any student who is temporarily unable to avail himself of the award due to illness, military service or other cause identified by the board prior to receipt of the first payment of a grant, may be granted a leave of absence by the school district.

     5. Except as otherwise provided in this section, the administration and payment of scholarships under this section shall be conducted in the manner provided for college tuition payment contracts pursuant to sections 166.200 to 166.242, RSMo.