1-1     By:  Shapiro                                           S.B. No. 218
 1-2           (In the Senate - Filed January 11, 2001; January 16, 2001,
 1-3     read first time and referred to Committee on Education;
 1-4     March 8, 2001, reported favorably by the following vote:  Yeas 6,
 1-5     Nays 2; March 8, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to a financial accountability rating system for school
 1-9     districts.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Subchapter I, Chapter 39, Education Code, is
1-12     amended by adding Sections 39.201 through 39.204 to read as
1-13     follows:
1-14           Sec. 39.201.  DEFINITIONS.  In this subchapter:
1-15                 (1)  "Parent" includes a guardian or other person
1-16     having lawful control of a student.
1-17                 (2)  "System" means the financial accountability rating
1-18     system.
1-19           Sec. 39.202.  DEVELOPMENT AND IMPLEMENTATION.  (a)  The
1-20     commissioner shall develop and implement a financial accountability
1-21     rating system for school districts in this state.
1-22           (b)  The system must include uniform indicators adopted by
1-23     the commissioner by which to measure a district's financial
1-24     management performance.
1-25           Sec. 39.203.  REPORTING.  (a)  The commissioner shall
1-26     develop, as part of the system, a reporting procedure under which:
1-27                 (1)  each school district is required to prepare and
1-28     distribute an annual financial management report; and
1-29                 (2)  the public is provided an opportunity to comment
1-30     on the report at a hearing.
1-31           (b)  The annual financial management report must include:
1-32                 (1)  a description of the  district's financial
1-33     management performance based on a comparison, provided by the
1-34     agency, of the district's performance on the indicators adopted
1-35     under Section 39.202(b) to:
1-36                       (A)  state-established standards; and
1-37                       (B)  the district's previous performance on the
1-38     indicators; and
1-39                 (2)  any descriptive information required by the
1-40     commissioner.
1-41           (c)  The report may include:
1-42                 (1)  information concerning the district's:
1-43                       (A)  financial allocations;
1-44                       (B)  tax collections;
1-45                       (C)  financial strength;
1-46                       (D)  operating cost management;
1-47                       (E)  personnel management;
1-48                       (F)  debt management;
1-49                       (G)  facility acquisition and construction
1-50     management;
1-51                       (H)  cash management;
1-52                       (I)  budgetary planning;
1-53                       (J)  overall business management;
1-54                       (K)  compliance with rules; and
1-55                       (L)  data quality; and
1-56                 (2)  any other information the board of trustees
1-57     determines to be necessary or useful.
1-58           (d)  The board of trustees of each school district shall hold
1-59     a public hearing on the report.  The board shall give notice of the
1-60     hearing to  owners of real property in the district and to parents
1-61     of district students.  In addition to other notice required by law,
1-62     notice of the hearing must be provided:
1-63                 (1)  to a newspaper of general circulation in the
1-64     district; and
 2-1                 (2)  through electronic mail to media serving the
 2-2     district.
 2-3           (e)  After the hearing, the report shall be widely
 2-4     disseminated in the district in the manner prescribed by the
 2-5     commissioner.
 2-6           Sec. 39.204.  RULES.  The commissioner shall adopt rules as
 2-7     necessary for the implementation  and administration of this
 2-8     subchapter.
 2-9           SECTION 2.  Subsection (e), Section 39.073, Education Code,
2-10     is amended to read as follows:
2-11           (e)  In determining a district's accreditation rating, the
2-12     agency:
2-13                 (1)  shall consider the district's current special
2-14     education compliance status with the agency; and
2-15                 (2)  may consider the district's performance under the
2-16     financial accountability rating system prescribed by Subchapter I.
2-17           SECTION 3.  (a)  This Act takes effect September 1, 2001.
2-18           (b)  The commissioner of education shall implement a
2-19     transitional financial accountability management system not later
2-20     than September 1, 2002.
2-21           (c)  The commissioner of education shall fully implement the
2-22     financial accountability rating system prescribed by Subchapter I,
2-23     Chapter 39, Education Code, as amended by this Act, not later than
2-24     September 1, 2003.
2-25           (d)  Notwithstanding Subsection (e), Section 39.073,
2-26     Education Code, as amended by this Act, the commissioner of
2-27     education may not include a district's performance under the
2-28     financial accountability rating system until that system is fully
2-29     implemented.
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