By:  Shapiro                                           S.B. No. 562
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to computation and reporting requirements regarding a
 1-3     school district's expenditures and personnel.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter A, Chapter 44, Education Code, is
 1-6     amended by adding Section 44.0071 to read as follows:
 1-7           Sec. 44.0071.  COMPUTATION AND DISCLOSURE OF EXPENDITURES AND
 1-8     STAFFING.  (a)  Each fiscal year, the agency shall compute and
 1-9     report to each school district:
1-10                 (1)  for each accounting function code:
1-11                       (A)  the district's total expenditures for the
1-12     preceding fiscal year; and
1-13                       (B)  the percentage of the district's total
1-14     expenditures for the preceding fiscal year that the expenditures
1-15     for that code represent, with a comparison of that percentage to
1-16     the corresponding statewide average percentage of total
1-17     expenditures for that code;
1-18                 (2)  the number of the district's full-time equivalent
1-19     employees for the preceding fiscal year employed in each capacity;
1-20     and
1-21                 (3)  the percentage of the district's total full-time
1-22     equivalent employees for the preceding fiscal year employed in each
1-23     capacity, with a comparison of that percentage to the corresponding
1-24     statewide average percentage of total full-time equivalent
1-25     employees employed in each capacity.
 2-1           (b)  The agency shall include with the information reported
 2-2     in accordance with Subsection (a)  a simplified definition of each
 2-3     accounting function code and employment capacity used by the agency
 2-4     in making the computations required under that subsection.
 2-5           (c)  At least annually, a school district shall make
 2-6     available to the employees at each campus a list of all campus
 2-7     employees who were included in making the computations required
 2-8     under Subsections (a)(2) and (3).  The list must identify each
 2-9     employee by name and state the capacity in which the employee was
2-10     classified.
2-11           (d)  The commissioner shall adopt rules as necessary to
2-12     implement this section.
2-13           SECTION 2.  Section 39.053, Education Code, is amended by
2-14     adding Subsection (h) to read as follows:
2-15           (h)  The report must include:
2-16                 (1)  the district's administrative cost ratio
2-17     determined under Section 42.201 and a description of:
2-18                       (A)  the method used to determine that ratio; and
2-19                       (B)  the accounting function codes used in
2-20     determining that ratio; and
2-21                 (2)  information regarding the district's expenditures
2-22     and staffing provided to the district under Section 44.0071.
2-23           SECTION 3.  Subsection (a), Section 39.182, Education Code,
2-24     is amended to read as follows:
2-25           (a)  The agency shall prepare and deliver to the governor,
2-26     the lieutenant governor, the speaker of the house of
 3-1     representatives, each member of the legislature, the Legislative
 3-2     Budget Board, and the clerks of the standing committees of the
 3-3     senate and house of representatives with primary jurisdiction over
 3-4     the public school system a comprehensive report covering the
 3-5     preceding two school years and containing:
 3-6                 (1)  an evaluation of the achievements of the state
 3-7     educational program in relation to the statutory goals for the
 3-8     public education system under Section 4.002;
 3-9                 (2)  an evaluation of the status of education in the
3-10     state as reflected by the academic excellence indicators adopted
3-11     under Section 39.051;
3-12                 (3)  a summary compilation of overall student
3-13     performance on academic skills assessment instruments required by
3-14     Section 39.023, aggregated by grade level, subject area, campus,
3-15     and district, with appropriate interpretations and analysis and
3-16     disaggregated by race, ethnicity, sex, and socioeconomic status;
3-17                 (4)  an evaluation of the correlation between student
3-18     grades and student performance on academic skills assessment
3-19     instruments required by Section 39.023;
3-20                 (5)  a statement of the dropout rate of students in
3-21     grade levels 7 through 12, expressed in the aggregate and by grade
3-22     level;
3-23                 (6)  a statement of the projected cross-sectional and
3-24     longitudinal dropout rates for grade levels 7 through 12 for the
3-25     next five years, assuming no state action is taken to reduce the
3-26     dropout rate;
 4-1                 (7)  a description of a systematic plan for reducing
 4-2     the projected cross-sectional and longitudinal dropout rates to
 4-3     five percent or less for the 1997-1998 school year;
 4-4                 (8)  a summary of the information required by Section
 4-5     29.083 regarding grade level retention of students;
 4-6                 (9)  a list of each school district or campus that does
 4-7     not satisfy performance standards, with an explanation of the
 4-8     actions taken by the commissioner to improve student performance in
 4-9     the district or campus and an evaluation of the results of those
4-10     actions;
4-11                 (10)  an evaluation of the status of the curriculum
4-12     taught in public schools, with recommendations for legislative
4-13     changes necessary to improve or modify the curriculum required by
4-14     Section 28.002;
4-15                 (11)  a description of all funds received by and each
4-16     activity and expenditure of the agency;
4-17                 (12)  a summary and analysis of:
4-18                       (A)  the compliance of school districts with
4-19     administrative cost ratios set by the commissioner under Section
4-20     42.201, including any improvements and cost savings achieved by
4-21     school districts; and
4-22                       (B)  information regarding expenditures and
4-23     staffing of school districts computed under Section 44.0071;
4-24                 (13)  a summary of the effect of deregulation,
4-25     including exemptions and waivers granted under Section 7.056 or
4-26     39.112;
 5-1                 (14)  a statement of the total number and length of
 5-2     reports that school districts and school district employees must
 5-3     submit to the agency, identifying which reports are required by
 5-4     federal statute or rule, state statute, or agency rule, and a
 5-5     summary of the agency's efforts to reduce overall reporting
 5-6     requirements;
 5-7                 (15)  a list of each school district that is not in
 5-8     compliance with state special education requirements, including:
 5-9                       (A)  the period for which the district has not
5-10     been in compliance;
5-11                       (B)  the manner in which the agency considered
5-12     the district's failure to comply in determining the district's
5-13     accreditation status; and
5-14                       (C)  an explanation of the actions taken by the
5-15     commissioner to ensure compliance and an evaluation of the results
5-16     of those actions; and
5-17                 (16)  any additional information considered important
5-18     by the commissioner or the State Board of Education.
5-19           SECTION 4.  Subdivisions (2) and (3), Subsection (g), Section
5-20     42.201, Education Code, are amended to read as follows:
5-21                 (2)  "Administrative costs" are defined as operating
5-22     expenses made from funds other than federal funds associated with
5-23     managing, planning, directing, coordinating, and evaluating a
5-24     school district in accordance with Accounting function codes
5-25     [functions] 21 -- Instructional Leadership, and 41 -- General
5-26     Administration, as described in the Financial Accountability
 6-1     Resource guide, Bulletin 679, Module 1:  Financial Accounting and
 6-2     Reporting, First Edition, published by the Texas Education Agency.
 6-3                 (3)  "Instructional costs" are defined as operating
 6-4     expenses made from funds other than federal funds associated with
 6-5     teacher-student instruction in accordance with Accounting function
 6-6     codes [functions] 11 -- Instruction, 12 -- Instructional Resources
 6-7     and Media Services, 13 -- Curriculum Development and Instructional
 6-8     Staff Development, and 31 -- Guidance and Counseling Services, as
 6-9     described in the Financial Accountability Resource guide, Bulletin
6-10     679, Module 1:  Financial Accounting and Reporting, First Edition,
6-11     published by the Texas Education Agency.
6-12           SECTION 5.  This Act takes effect September 1, 2001.