STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000
State Revenues General Fund* Other Fund	Potential impact see note below
State Expenditures General Fund* Other Fund	Potential impact see note below
FTE Position Change	None	None
Local Government Impact — Additional school district resources may be required. School district cost savings may also occur. For further explanation, see the School District Impact section of the fiscal note.

*If administrative law judges from the Department of Personnel are used as hearing officers in dismissal actions, there would be a state General Fund revenue and expenditure impact.

This bill would make changes to current law regarding the grounds for dismissal of a teacher. It would also make several changes to the dismissal procedures.

Under current law, a teacher may be dismissed for physical or mental disability. Section 1 of the bill would eliminate this grounds for dismissal. Incompetency as grounds for dismissal would have to be based on the school district’s performance standards, and immorality as grounds for dismissal would have to be based on a code of conduct adopted by the State Board of Education. In addition, the bill requires that unsatisfactory performance as grounds for dismissal be documented and based on the school district’s performance standards. The bill adds other actions to the list of potential grounds for dismissal. This would include actions that a teacher knows or should know will result in endangering the health or safety of students and other good and just cause directly related to the performance of job-related duties.

Section 2 of the bill would make several changes in the administrative review procedure for dismissal. The time period for notification of a teacher of a dismissal recommendation would be shortened from 7 days to 3 days, the maximum period for which a suspended teacher may receive pay would be reduced from 120 days to 94 days, and the time in which a teacher may request a hearing would be changed from 7 days to 5 working days. This section would also make several changes to the teacher dismissal hearing process. These changes include: (1) if the teacher and chief administrative officer cannot agree on a hearing officer within five working days, the parties must request the assignment of an administrative law judge from the Department of Personnel; (2) the hearing officer may no longer place any conditions on a recommendation for retention; (3) the grounds for appeal would be limited to whether the school district board’s action in dismissing the teacher was based on the stated grounds and whether the hearing officer’s findings of fact showed significant evidence that the board did not act arbitrarily and capriciously in dismissing the teacher; and (4) the party who loses on appeal must pay the costs of the appeal, including attorney fees.

The bill would affect expenditures at the school district level. Therefore, the bill is assessed as having local fiscal impact. State fiscal impact is contingent upon the use of administrative law judges in dismissal actions. The bill would become effective July 1, 1998, and would apply to recommendations for dismissal made after that date.

It is assumed that ultimately, the State Board of Education will incorporate a statewide code of conduct for all school district personnel into the rules for the licensure program. The State Board would solicit input from school district boards of education, teachers, principals, administrators, and parents. As part of this process, the State Board may convene a series of ad hoc committee meetings on the subject to solicit input. The cost of these meetings is presumed to be minimal (approximately $500 per meeting) and would be conducted in conjunction with other meetings within the current budget of the department.

The bill provides that if the teacher and the chief administrative officer fail to agree on the selection of a hearing officer, they shall request assignment of an administrative law judge by the Department of Personnel to act as the hearing officer. The costs associated with using administrative law judges as hearing officers will be dependent upon the number of requests, which are anticipated to be less than ten requests per year. Costs of using administrative law judges would be reimbursed by the school district to the state General Fund.

It is assumed that local school districts will revise their personnel policies to conform with the revised grounds for dismissal provisions of the bill. The amount of school district resources necessary to provide these changes has not been identified. Additional local legal counsel may also be required for this requirement.

The bill makes several changes in the current-law timelines identified in the judicial review procedures for dismissal. These changes may reduce the school district administrative costs associated with judicial review. In addition, the number of days that a teacher may be paid while under suspension would be reduced from 120 days to 94 days. Based on an average daily rate of pay for teachers of $191, this provision may reduce the maximum pay per suspended teacher by an average of $5,730 per dismissal case. The number of future suspensions and the average term of the suspension is uncertain. Therefore, the statewide cost savings to school districts for this provision has not been identified.

If a local board of education dismisses a teacher following a hearing, the teacher may file an action for review in the Court of Appeals. The bill requires that the costs of the appeal incurred by both the teacher and the school district, including the costs of the transcript and attorney fees, will be paid in whole by the party who does not prevail on appeal. Since the school district’s costs in the appeal would be reimbursed by the teacher, this provision would reduce the costs of the appeal for school boards in cases where the court of appeals upholds the dismissal.

The fiscal note implies that no new expenditure of state moneys will be necessary in order to implement the provisions of the bill.