- House Committee Substitute -

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

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

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

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

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

LAPSING DISTRICTS - A district shall lapse on June thirtieth of the second school year following classification as unaccredited. Prior to the lapse date, the Department of Elementary and Secondary Education shall conduct a hearing in the district and make recommendations to the State Board of Education. Upon recommendation of the Department, the State Board of Education may appoint a three-member special administrative board for the district to supervise the assets, financial operations, educational programs and any other provisions in the best interest of the education of children in the district. The special administrative board shall consist of two unpaid district residents and a paid, professional administrator. Upon lapse of the district, the State Board may authorize the special administrative board to continue to operate all or part of the district, attach the lapsed territory to one or more school districts or establish one or more districts within the lapsed territory.

REVISED GOVERNANCE FOR ST. LOUIS CITY SCHOOLS - The powers, number of members and election of the Board of Directors of St. Louis Public Schools is revised. Currently, the Board consists of 12 members elected at large to 6 year terms. The act provides for a transition to a 9 member board elected city-wide to 4 year terms, with 2 at-large members and 7 members elected to represent subdistricts. Each member shall reside in the subdistrict the member is elected to represent. No person may run for election to the school board who is employed by the district or who is related within the second degree to an employee of the district.

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

PILOT PROGRAM OF "LOOPING" IN ST. LOUIS CITY SCHOOLS - A pilot program of "looping" is established in St. Louis City. The program shall establish multi-year teacher-student groupings. The program shall be implemented in no less than 20 schools in the district and shall be implemented for no less than five consecutive years and in at least six classrooms per school. The board shall establish a policy and a procedure to review and act upon requests by a student or the parent of a student that the student be transferred to a different class with a different teacher. The program shall be subject to monitoring, review and approval by the State Board of Education.

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

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

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

1) The seventh year of operation for grades 1 to 3,

2) The eighth year of operation for grades 4 to 6,

3) The ninth year of operation for grades 7 to 9,

4) The tenth year of operation for grades 10 to 12,

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

For the first two years, the Corporation shall receive transportation aid of $25 million per year. For the third year and thereafter, the transportation aid will be based upon transportation aid in the district of residence, but not to exceed 155% of the state average per pupil cost for transportation for the 1997-98 school year. Such aid may be used for any purpose.

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

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

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

Upon final settlement of the case, the court may allow the overlay district to levy up to a $0.85 property tax levy, but only upon approval by a majority of district voters. A sales tax equivalent amount, determined by the Department, may be substituted for all or part of the allowed property tax. The property or sales tax shall be placed before the district voters prior to March 31, 1999. Upon settlement and final payment under court order, the property tax rate would be added to the SLPS operating levy for state aid purposes and for the purpose of the additional line 14 aid. Tax abatements issued after the effective date of this act shall not apply to the transitional school district.

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

The SAB may establish school site councils to implement school based management at one or more schools.

The SAB shall implement a comprehensive school improvement plan to ensure that all students meet or exceed grade level standards established by the State Board of Education. All students in the district who do not achieve the state grade level standards shall be required to attend summer school. Social promotion shall not be allowed for students who are more than one year behind current grade level in reading.

The SAB shall implement a professional development plan for teachers and other support staff. The school improvement plan shall ensure open enrollment and program access to all students in the district. Students who change residence within the district shall be allowed to continue to attend the school in which they were initially enrolled for the remainder of their education at that school with transportation provided by the district.

The school improvement plan and professional development plan shall be subject to review and approval by the State Board of Education.

Per pupil expenditures and pupil-teacher ratios shall be the same for all schools at a given grade level. The SAB shall ensure that Early Childhood education is available throughout the district. The SAB shall ensure that vocational education instruction is provided within the district.

The Board shall hire an accountability officer to improve schools within two years. The State Board shall not limit determinations of schools as "academically deficient" based upon the location of the school or the number of deficient schools in a district.

SCHOOL FINANCE DEFINITIONS -Upon final settlement of both desegregation cases, "Operating Levy" is revised to provide equalization (state aid) for levies up to $4.95, including the operating levy of a transitional district, except that the levy used in the line 2 deduction for local property tax is capped at $4.70. Currently, levies are equalized to $4.60. Defines the "Fiscal Instructional Ratio of Efficiency" (FIRE) used to determine administrative efficiency. Defines "Graduation Rate". Defines "district target rate" for computing possible reduction of line 14(b) payment due to low student performance. Some existing definitions are moved into proper alphabetical order. Beginning in FY 2000 and after final settlement of both desegregation cases, the Guaranteed Tax Base will be based upon the statewide average assessed valuation in the fourth preceding year and state aid deductions will be based upon revenues received the second preceding year.

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

Upon final settlement, the per pupil amount of line 14 aid shall revised to two separate lines. Line 14(a) shall be distributed based upon a 20% factor times the first $2.75 of the district's operating levy, and Line 14(b) shall be distributed based upon a 30% factor times the remainder of the district's levy $2.75 (but not over $4.95). After five years, the line 14(b) aid shall be reduced by the proportion by which the district's FIRE ratio is less than the state average, if the district's FIRE is at least 5% below the state average.

After five years, the line 14(b) aid shall be reduced on a percent for percent basis based upon the district's deficiency in reaching the "district target rate" derived from the five-year average of math and reading scores. The target rate increases one percentage point each year.

The act revises the "hold harmless" payment. Current law provides that the "hold harmless" payment shall ensure that the district receives (from basic formula and line 14 payments) no less than the 92-93 per pupil amount. Under the act, a district shall receive, from the basic formula and line 14(a), no less than the 92-93 per pupil amount plus the line 14(a) amount weighted by the ratio of the district's formula state aid (line 1 minus line 10) divided by the 92-93 per pupil amount.

SPECIAL EDUCATION TRANSPORTATION AID - State transportation aid for special education shall not be reduced due to inefficiency.

TEACHER SALARY EXPENDITURES - Transportation expenditures shall not be considered in calculating current operating costs as used to determine compliance with requirements for expenditure on salaries and benefits for teachers.

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

USE OF DESEGREGATION SAVINGS - Funds shall be distributed in the following order:

1) The $80 million saved from 1994 to 1997 shall remain in the foundation formula.

2) Up to the next $75 million shall be transferred, if needed, to fully fund the formula.

3) Beginning in FY 2000, up to the next $25 million shall be transferred, as needed, to fully fund the transportation aid categorical, and any such funds may be placed to the credit of the capital projects fund.

4) Any remainder shall be transferred to fully fund existing categorical aid programs.

PRINCIPAL TENURE - The act eliminates principal tenure in St. Louis City.

TEACHER PROFESSIONAL DEVELOPMENT SCHEDULES - The State Board of Education shall annually establish, by April first of each school year, a schedule of four to six specific professional development days for the next school year. The State Board of Education shall only schedule professional development activities, workshops, conferences and other work sessions for certificated personnel on the scheduled professional development days for that school year or on Saturdays, Sundays or any day during the months of June, July or August.

This requirement will be effective for the 1999-2000 school year and each school year thereafter, and shall not apply to activities scheduled for the 1998-99 school year. This portion of the act is the same as SB 655 from 1998.

CONTINGENT EFFECTIVE DATE FOR CERTAIN SECTIONS - Sections 162.1060 (transfer program), 163.011 (school finance formula definitions) and 163.031 (new state aid formula with 1(a)/1(b) and 14(a)/14(b)) shall only become effective upon determination by Attorney General of final settlement of both desegregation cases. Notice to the Revisor of Statutes by March 31, 1999 shall cause the provisions to go into effect July 1, 1999. By March 31, 1999, the AG shall give notice to the Revisor as to whether or not final settlement is reached. If not, these sections shall not go into effect.

OTTO FAJEN