SB 360 - This act makes many revisions to school laws.

USE OF RIVERBOAT GAMING PROCEEDS - Excess riverboat receipts beyond those needed for School District Bond Fund shall be used as follows: the first fifty million dollars shall be used to fund formula entitlements, the next ten million dollars shall be transferred to the School Building Revolving Fund and any remainder shall be used to fund formula entitlements.

FAILING SCHOOL DISTRICTS -Provides for appointment of a special administrative board for any lapsed school district. The board shall be appointed by the Department of Elementary and Secondary Education and consist of two residents of the district and one experienced school administrator. The board may administer those schools which are determined to be causing or contributing to the failure to maintain accreditation. The board may sponsor one or more charter schools. The board may make a study and recommendations regarding reassignment of territory of the district. The board shall expire after the third school year following appointment, unless extended by the State Board of Education.

VOLUNTARY INTERDISTRICT ENROLLMENT - School districts in Jackson, Clay, Platte and St. Louis Counties and St. Louis City may accept and enroll non-resident students. The receiving district shall receive the greater of the state aid which would paid to such district or to the sending district on the basis of the attendance of such students.

SCHOOL FINANCE - State school aid formula definitions are revised to be based upon the average of the second and third preceding years. New terms include "fiscal instructional ratio of efficiency", "graduation rate" and "poverty concentration ratio".

CATEGORICAL AID FOR HIGH POVERTY DISTRICTS - Line 14, the free and reduced price lunch eligible pupil categorical add-on is revised. Line 14(a) functions similar to the existing twenty percent add-on, with an additional boost in proportion to the extent the district's graduation rate exceeds five percent over the state average graduation rate.

Line 14(b) adds an additional percentage for districts with poverty concentration ratios over twenty percent. Districts with poverty concentration ratios over seventy percent shall receive additional aid in proportion to the amount that the district's poverty concentration ratio exceeds twenty percent with a deduction for the extent to which the district's fiscal instructional ratio of efficiency is lower than the statewide average if the ratio is five or more percent below the statewide average. Districts with poverty concentration ratios between twenty and seventy percent shall receive additional aid in proportion to the amount that the district's poverty concentration ratio exceeds twenty percent with a proration factor equal to the poverty concentration ratio. All line 14(b) will be further prorated to ensure that total annual line 14(b) payments are no greater than state savings in court- ordered school desegregation payments as compared to fiscal year 1997.

SCHOOL FUNDS - A school district may borrow between the teachers', incidental and capital projects funds so long as the transfer is repaid during the same school year.

SCHOOL BUDGET REPORTING - The act revises school budget requirements. The annual budget shall show the fund balance needed to avoid tax anticipation borrowing, shall itemize operating costs for each school site and include a capital acquisitions schedule and compensation ratio calculation. District budgets shall be summarized in the same manner as the annual report to the State Board. School audits shall compare district payroll records with Public School Retirement System (PSRS) records for district employees.

USE OF CATEGORICAL AID - The "Children At-Risk in Education Program" shall be partly funded by moneys under line 14(b) of the formula. Districts receiving more than one hundred thousand dollars annually under line 14(b) shall file a personnel assignment plan with the Department.

SCHOOL BUILDING REVOLVING FUND - The School Building Revolving Fund is revised. If the fund balance in insufficient to fund all projects, projects will be ranked and highest ranking projects funded first. Rankings shall be based on: 1) uninsured costs due to fire or natural disaster, 2) growth from third to fifth preceding year (must be over twelve percent), 3) growth from thirteenth to third preceding year (must be over twenty percent), 4) age of construction or renovation of buildings in use and 5) fraction of bonding capacity used. Repayment terms and penalties are included.

ST. LOUIS CITY PRINCIPALS - The act removes tenure, as a principal, for principals in St. Louis city.

CHARTER SCHOOLS - Charter schools may be sponsored by school district boards in all school districts. A charter school shall be a Missouri nonprofit corporation under chapter 355, RSMo. Two or more school districts may cooperatively sponsor a charter school through a written agreement. Charter schools may also be sponsored by the State Board of Education in school districts with graduation rates below sixty percent and in Jackson, Clay, Platte and St. Louis Counties and St. Louis City. Public colleges, universities and community colleges may be affiliated with charter schools sponsored by school boards.

The act specifies those items which must be included in the written contract between the sponsor and the charter school. If approved by a school district, the State Board shall review the application and shall approve the application if it is in compliance with the act. If an application has been denied by a school district in which the State Board may act as a sponsor, the applicant may appeal to the State Board and the State Board may grant a charter if the State Board determines that the charter would provide educational benefit to the children of the district.

The act specifies the conditions under which a charter may be revoked and the procedures for revocation. School boards and school employees may not take unlawful reprisal, as defined in the act, against other employees who participate in the establishment or operation of a charter school.

The act contains requirements for the admission policies of charter schools.

The charter school shall receive the total state and local funding (the local levy of district in which child resides times the guaranteed tax base per eligible pupil) for each attending pupil from the district of residence. No transportation aid shall be required but the sending district may provide transportation.

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

The act creates the "Fund for Charter Schools and Alternative Educational Opportunities". The State Board may use the fund to make grants or loans for charter schools or alternative education programs.

LOCAL TAXES FOR EDUCATION - St. Louis City, Kansas City and Jackson County may, with voter approval, enact an education earnings tax of up to one-half percent. St. Louis City, Kansas City and Jackson County may, with voter approval, enact an education sales tax of up to one percent. Revenues shall be distributed to each district based upon the district's share of total school membership in the city or county. If a resident pupil is educated at a charter school or in another district, the net per pupil revenues, after considering tax rate rollbacks, shall follow the pupil to the charter school or district attended.

The State Board shall calculate an equivalent tax rate for any sales or earnings tax revenue and add the equivalent tax rate to the operating levy for calculating state aid (but not to exceed four dollars and sixty cents per one hundred dollars assessed valuation). If so provided in the issue authorizing the tax, a district may use twenty-five to fifty percent of the revenue from the sales or earnings tax for tax rate rollback.

MISSOURI TUITION ASSISTANCE PROGRAM - The act establishes 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 funds shall be provided to school districts with graduation rates which are lower than sixty percent, upon application and approval of the State Board. Funding shall be based on the district's dropouts for the two preceding years as a fraction of the total dropouts for the two preceding years of all districts approved to receive funding.

Each school district receiving funds shall select and award of grants, identify the allowable costs, which shall be limited to tuition and other mandatory fees, and provide for the funds received to be held in escrow in cooperation with the Missouri Access to Higher Education Trust until such time as the receiving student is attending an institution and is eligible to receive such funds.

A student may apply for a scholarship at any age. A student shall be eligible if: 1) the student is a citizen or permanent resident of the United States, 2) the student is a legal resident, or a 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 or guardian signs a written commitment to participate fully in a district program designed to actively involve parents in the education of their children, 5) the student graduates from an accredited Missouri high school and 6) the student enrolls in and is accepted at a Missouri approved public or private institution within twenty-four months following graduation from high school unless granted a leave of absence by the school district.

The administration and payment of scholarships under the Missouri Tuition Assistance Program shall be conducted in the manner provided for college tuition payment contracts pursuant to sections 166.200 to 166.242, RSMo.

OTTO FAJEN