1-1     By:  Shapiro                                           S.B. No. 562
 1-2           (In the Senate - Filed February 6, 2001; February 7, 2001,
 1-3     read first time and referred to Committee on Education;
 1-4     March 19, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 6, Nays 0; March 19, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 562                     By:  Cain
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to computation and reporting requirements regarding a
1-11     school district's expenditures and personnel.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subchapter A, Chapter 44, Education Code, is
1-14     amended by adding Section 44.0071 to read as follows:
1-15           Sec. 44.0071.  COMPUTATION AND DISCLOSURE OF EXPENDITURES AND
1-16     STAFFING.  (a)  Each fiscal year, the agency shall compute and
1-17     report to each school district:
1-18                 (1)  for each accounting function code:
1-19                       (A)  the district's total expenditures for the
1-20     preceding fiscal year; and
1-21                       (B)  the percentage of the district's total
1-22     expenditures for the preceding fiscal year that the expenditures
1-23     for that code represent, with a comparison of that percentage to
1-24     the corresponding statewide average percentage of total
1-25     expenditures for that code;
1-26                 (2)  the number of the district's full-time equivalent
1-27     employees for the preceding fiscal year employed in each capacity;
1-28     and
1-29                 (3)  the percentage of the district's total full-time
1-30     equivalent employees for the preceding fiscal year employed in each
1-31     capacity, with a comparison of that percentage to the corresponding
1-32     statewide average percentage of total full-time equivalent
1-33     employees employed in each capacity.
1-34           (b)  The agency shall include with the information reported
1-35     in accordance with Subsection (a)  a simplified definition of each
1-36     accounting function code and employment capacity used by the agency
1-37     in making the computations required under that subsection.
1-38           (c)  At least annually, a school district shall make
1-39     available to the employees at each campus a list of all campus
1-40     employees who were included in making the computations required
1-41     under Subsections (a)(2) and (3).  The list must identify each
1-42     employee by name and state the capacity in which the employee was
1-43     classified.
1-44           (d)  The commissioner shall adopt rules as necessary to
1-45     implement this section.
1-46           SECTION 2.  Section 39.053, Education Code, is amended by
1-47     adding Subsection (h) to read as follows:
1-48           (h)  The report must include:
1-49                 (1)  the district's administrative cost ratio
1-50     determined under Section 42.201 and a description of:
1-51                       (A)  the method used to determine that ratio; and
1-52                       (B)  the accounting function codes used in
1-53     determining that ratio; and
1-54                 (2)  information regarding the district's expenditures
1-55     and staffing provided to the district under Section 44.0071.
1-56           SECTION 3.  Subsection (a), Section 39.182, Education Code,
1-57     is amended to read as follows:
1-58           (a)  The agency shall prepare and deliver to the governor,
1-59     the lieutenant governor, the speaker of the house of
1-60     representatives, each member of the legislature, the Legislative
1-61     Budget Board, and the clerks of the standing committees of the
1-62     senate and house of representatives with primary jurisdiction over
1-63     the public school system a comprehensive report covering the
1-64     preceding two school years and containing:
 2-1                 (1)  an evaluation of the achievements of the state
 2-2     educational program in relation to the statutory goals for the
 2-3     public education system under Section 4.002;
 2-4                 (2)  an evaluation of the status of education in the
 2-5     state as reflected by the academic excellence indicators adopted
 2-6     under Section 39.051;
 2-7                 (3)  a summary compilation of overall student
 2-8     performance on academic skills assessment instruments required by
 2-9     Section 39.023, aggregated by grade level, subject area, campus,
2-10     and district, with appropriate interpretations and analysis and
2-11     disaggregated by race, ethnicity, sex, and socioeconomic status;
2-12                 (4)  an evaluation of the correlation between student
2-13     grades and student performance on academic skills assessment
2-14     instruments required by Section 39.023;
2-15                 (5)  a statement of the dropout rate of students in
2-16     grade levels 7 through 12, expressed in the aggregate and by grade
2-17     level;
2-18                 (6)  a statement of the projected cross-sectional and
2-19     longitudinal dropout rates for grade levels 7 through 12 for the
2-20     next five years, assuming no state action is taken to reduce the
2-21     dropout rate;
2-22                 (7)  a description of a systematic plan for reducing
2-23     the projected cross-sectional and longitudinal dropout rates to
2-24     five percent or less for the 1997-1998 school year;
2-25                 (8)  a summary of the information required by Section
2-26     29.083 regarding grade level retention of students;
2-27                 (9)  a list of each school district or campus that does
2-28     not satisfy performance standards, with an explanation of the
2-29     actions taken by the commissioner to improve student performance in
2-30     the district or campus and an evaluation of the results of those
2-31     actions;
2-32                 (10)  an evaluation of the status of the curriculum
2-33     taught in public schools, with recommendations for legislative
2-34     changes necessary to improve or modify the curriculum required by
2-35     Section 28.002;
2-36                 (11)  a description of all funds received by and each
2-37     activity and expenditure of the agency;
2-38                 (12)  a summary and analysis of:
2-39                       (A)  the compliance of school districts with
2-40     administrative cost ratios set by the commissioner under Section
2-41     42.201, including any improvements and cost savings achieved by
2-42     school districts; and
2-43                       (B)  information regarding expenditures and
2-44     staffing of school districts computed under Section 44.0071;
2-45                 (13)  a summary of the effect of deregulation,
2-46     including exemptions and waivers granted under Section 7.056 or
2-47     39.112;
2-48                 (14)  a statement of the total number and length of
2-49     reports that school districts and school district employees must
2-50     submit to the agency, identifying which reports are required by
2-51     federal statute or rule, state statute, or agency rule, and a
2-52     summary of the agency's efforts to reduce overall reporting
2-53     requirements;
2-54                 (15)  a list of each school district that is not in
2-55     compliance with state special education requirements, including:
2-56                       (A)  the period for which the district has not
2-57     been in compliance;
2-58                       (B)  the manner in which the agency considered
2-59     the district's failure to comply in determining the district's
2-60     accreditation status; and
2-61                       (C)  an explanation of the actions taken by the
2-62     commissioner to ensure compliance and an evaluation of the results
2-63     of those actions; and
2-64                 (16)  any additional information considered important
2-65     by the commissioner or the State Board of Education.
2-66           SECTION 4.  Subdivisions (2) and (3), Subsection (g), Section
2-67     42.201, Education Code, are amended to read as follows:
2-68                 (2)  "Administrative costs" are defined as operating
2-69     expenses made from funds other than federal funds associated with
 3-1     managing, planning, directing, coordinating, and evaluating a
 3-2     school district in accordance with Accounting function codes
 3-3     [functions] 21 -- Instructional Leadership, and 41 -- General
 3-4     Administration, as described in the Financial Accountability
 3-5     Resource guide, Bulletin 679, Module 1:  Financial Accounting and
 3-6     Reporting, First Edition, published by the Texas Education Agency.
 3-7                 (3)  "Instructional costs" are defined as operating
 3-8     expenses made from funds other than federal funds associated with
 3-9     teacher-student instruction in accordance with Accounting function
3-10     codes [functions] 11 -- Instruction, 12 -- Instructional Resources
3-11     and Media Services, 13 -- Curriculum Development and Instructional
3-12     Staff Development, and 31 -- Guidance and Counseling Services, as
3-13     described in the Financial Accountability Resource guide, Bulletin
3-14     679, Module 1:  Financial Accounting and Reporting, First Edition,
3-15     published by the Texas Education Agency.
3-16           SECTION 5.  This Act takes effect September 1, 2001.
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