INSIGHT—Fall 2007 by Texas Association of School Administrators

TEXAS ASSOCIATION OF SCHOOL ADMINISTRATORS PROFESSIONAL JOURNAL

FALL 2007

INSIGHT

Fall 2007 Volume 22

No. 3 FEATURED Articles

p.â&#x20AC;&#x2030;6 To Disclose or Not to Disclose?

by Ramiro Canales Provides a summary of conflict disclosure requirements for school sictrict officials and vendors 2007â&#x20AC;&#x201C;09 Legislative Committee Members

Advisory Groups, Commissions, Committees, and Councils

by J. Casey McCreary Discusses the functions of, and lists current appointees to, six advisory bodies The Final 403(b) Regulations: New School District Responsibilities on the Horizon

by Mike Cochran Examines final regulations issued in July 2007 by the Internal Revenue Service applicable to plans offered by employers under Section 403(b) of Internal Revenue Code The Texas Public Schools Research Network

by Joe Neely Describes an innovative, collaborative educational research process being spearheaded by the CREATE consortium

FALL 2007

Officers Departments Upcoming Events at TASA

Executive Director’s View

President’s Message

TASA Headquarters Staff Johnny L. Veselka

Executive Committee Michael Sandroussi, Edcouch-Elsa ISD, 1 Henry D. Herrera, Alice ISD, 2 Larry W. Nichols, Calhoun County ISD, 3 Leland Williams, Dickinson ISD, 4 James McGowan, Silsbee ISD, 5 Mike Cargill, Bryan ISD, 6 Mary Ann Whiteker, Hudson ISD, 7 Eddie Johnson, Harts Bluff ISD, 8 John Baker, Seymour ISD, 9 H. John Fuller, Wylie ISD, 10 Jerry W. Roy, Lewisville ISD, 11 Rod Townsend, Hico ISD, 12 Ryder F. Warren, Marble Falls ISD, 13 Kent LeFevre, Jim Ned CISD, 14 Russ F. Perry, Nueces Canyon CISD, 15 David G. Foote, Dalhart ISD, 16 Mike Motheral, Sundown ISD, 17 Michael Downes, Big Spring ISD, 18 Rudy Barreda, Tornillo ISD, 19 Richard A. Middleton, North East ISD, 20

Executive Director

Associate Executive Director, Administrative Services

Assistant Executive Director, Communications & Information Systems

Design/Production

Anne Harpe

At-Large Members

Editorial Coordinator

Karen Limb

Rose Cameron, Copperas Cove ISD Jesus H. Chavez, Round Rock ISD Alton L. Frailey, Katy ISD Gloria Gallegos, Pasadena ISD

Paul L. Whitton, Jr. Ann M. Halstead

INSIGHT is published quarterly by the Texas Association of School Administrators, 406 East 11th Street, Austin, Texas, 78701-2617. Subscription is included in TASA membership dues. © 2007 by TASA. All rights reserved. TASA members may reprint articles in limited quantities for in-house educational use. Articles in INSIGHT are expressions of the author or interviewee and do not necessarily represent the views or policies of TASA. Advertisements do not necessarily carry the endorsement of the Texas Association of School Administrators. INSIGHT is printed by Thomas Graphics, Austin, Texas.

Thomas E. Randle, President, Lamar CISD Rick Howard, President-Elect, Comanche ISD John Folks, Vice-President, Northside ISD Kay E. Waggoner, Past President, Grapevine-Colleyville ISD

INSIGHT

Editorial Advisory Committee Thomas E. Randle, Lamar CISD, chair Alton L. Frailey, Katy ISD H. John Fuller, Wylie ISD Jim Hawkins, Killeen ISD Rick Howard, Comanche ISD Patricia Linares, Fort Worth ISD

Offering convenient protection for Texas educators Paying for insurance and planning for retirement — both can be a hassle. But imagine providing your employees the convenience of: • never having to remember to write a check for their auto or life insurance; • never having to mail a premium payment; • never having a late fee for insurance; and • making automatic payments to a retirement annuity. Employees can get it all with Horace Mann’s auto insurance, life insurance and 403(b) payroll plans because their payments are automatically made from their paychecks. Contact your local representative today to learn more.

Texas Agencies 800-536-0210 www.horacemann.com Horace Mann Insurance Company and its affiliates underwrite our auto insurance. Horace Mann Life Insurance Company underwrites our life insurance and retirement annuities.

AM-C03027 (May 07)

FALL 2007

Upcoming Events at TASA

Excerpts from TASA’s Professional Development Calendar For locations and other information about any of these workshops/trainings, please call TASA, 800-725-8272, or go online at www.TASAnet.org

October 2007 Handheld Technology Leadership Academy Lori Gracey October 8–9

Curriculum Management Audit Training, Level 1: Curriculum Assessment Design and Delivery

■ Target Audience: • Superintendents • Central Office Supervisors of Principals • Principals • Prior participants of the Technology Leadership Academy

■ What You Learn: • How to use handheld technology to increase your efficiency throughout daily interaction with teachers, students, and community • How to identify and select current software to meet your needs as a school leader • How to use the handheld’s capabilities to support teaching and learning

■ Target Audience: • District-Level Curriculum and Instructional Staff • Principals

■ What You Learn: • How to prepare participants to examine and evaluate deep alignment issues in order to take steps in a district and/or school to raise student achievement • How to embed external assessments into the curriculum along with real-world expectations and examine equality and equity issues in curriculum design and delivery

■ Target Audience: • Training Professionals • Strategic Planning Professionals • Association Membership Directors • Directors of Communications • College/University Staff and Administration

■ What You Learn: • More confidence in decision making and planning • Higher stakeholder engagement and satisfaction • Improved organizational communication • Enhanced involvement of employees at all levels in organizational direction setting • Increased support for organizational change

■ Target Audience: • Superintendents • Central Office Administrators • ESL and ELL Coordinators/Directors • Campus Administrators • Lead Teachers

■ What You Learn: • How to download and manage resources with iTunes, sync the iPod, and access materials from the iPod • How to use the iPod’s capabilities to support teaching and learning • How to create a podcast and make it accessible to a community of learners

Jan Jacob October 9–12

Joel Barker’s Implications Wheel Certification Training Master Wheel Trainers October 23–25

iPods and Podcasting in Education Maria Henderson October 25 or 26

INSIGHT

October/November 2007 Joel Barker’s Strategy Matrix Master Wheel Trainers October 26

Leading with Quality Questioning Jackie Walsh and Beth Sattes November 5–6

First-time Superintendents Academy, Session Two

■ What You Learn: • Create an ongoing process for exploring the strategic landscape • Set priorities for choices in organizational direction, marketing, and product development • Determine vulnerability of strategic objectives to competitor’s actions • Test the efficacy of new strategic objectives on already committed-to objectives • Track environmental forces • Set priorities for funding requests • Guide strategy discussions efficiently and fairly in a way that gives everyone the opportunity to contribute

■ Target Audience: • Principals and Assistant Principals • District Administrators • Staff Development Providers • Teacher Leaders and Coaches

■ What You Learn: • To improve your questioning practice through understanding and use of the Leading with Quality Questioning Framework • To formulate questions that promote thinking, problem solving, and reflection and that build buy-in and commitment • To use strategies that support skilled use of questioning in dialogue with individuals, as well as in small and large group interactions • To employ quality questioning to (1) motivate and mobilize individuals and groups, (2) monitor programs and practices, (3) mediate disagreements, and (4) mentor colleagues

■ Target Audience: • First- and Second-Year Superintendents

■ What You Learn: • Effective superintendent practices • School law • Contract negotiations • Facility planning • School finance and budgeting • Time management • Technology leadership • Instructional leadership • Productive superintendent/board relations

■ Target Audience: • Educators who have continuing professional development responsibilities • Building and district administrators • Staff development and curriculum specialists • Teacher leaders Teams are encouraged to attend!

■ What You Learn: • To provide staff development and leadership to colleagues in classroom assessment FOR learning • To share the power of ideas through short, introductory presentations • To invite others to join learning teams and to assist learning teams to be successful

Experts in the Field November 6–8

Leading Professional Development in Classroom Assessment FOR Learning Jan Chappuis and Judy Arter November 14–15

FALL 2007

Here’s Something Aggies and Longhorns Can Agree On The FOS™ Texas Item Bank The FOS™ Texas Item Bank contains mathematics, reading and writing items carefully created for or aligned to Texas Knowledge and Skills (TEKS) and based on a review of the Texas Assessment of Knowledge and Skills (TAKS). It’s part of ETS’s new Focus on Standards™ solution, which equips Texas educators with the tools they need to implement a balanced assessment program that helps you meet federal and state accountability requirements. The FOS solution includes the FOS™ Assessment Technology,, which uses the IDMS® application to put online test building, scoring and analysis capabilities at your fingertips, and the FOS™ Assessment Literacy Modules professional development program.

Find out how you can participate in the FOS Preview Program by visiting us online at www.ets.org/FOS or calling 1-866-ETS-LEARN (1-866-387-5327).

Copyright © 2007 by Educational Testing Service. All rights reserved. ETS, the ETS logo and IDMS are registered trademarks of Educational Testing Service (ETS). LISTENING. LEARNING. LEADING., FOCUS ON STANDARDS and FOS are trademarks of ETS. 6739

A New Understanding of “Community”

President’s Message I think each of us would

A book making the education circuit this year is Applebee’s America. The book offers a new vision of what community is and what it means to those of us in leadership positions in our districts. When we used to think of community, we thought of “my district” or “my town.” The authors of Applebee’s America maintain that “community” no longer equates strictly with geographic boundaries. Instead, communities form around shared interests, beliefs, values, and goals. Furthermore, individuals in traditional leadership roles are not automatically community leaders; instead, leaders are those people who can understand and relate to the community members’ values and address their goals. Accepting this premise obviously necessitates a change in the way that we as superintendents relate to the communities that form around our schools. We must be able to identify our communities, understand their “gut values,” and tailor our message so that it is meaningful to them. Now added to the mix is the fact that technology has forever changed the essence of communication. Our traditional communication methods are no longer as effective as they once were, which calls for exploring and utilizing new communication tools. Our ability not only to acknowledge this conceptual shift in community and communication but also to embrace it is going to be crucial to our survival.

agree that our most helpful answers often come from one another, when we share experiences that only school leaders can understand and appreciate.

TASA members obviously have formed a community as well, gathered together because of our shared interests, beliefs, and goals. In fact, there are myriad communities within our community, with members crossing back and forth as needs and interests dictate. The complexity of public education and the challenges facing education leaders have created an unprecedented need for instant communication. We need solutions to problems and answers to questions, and we need them now. We need facts and figures not only to run our schools but also to promote them to the public. Gathering the information we need requires instant access to data, but we need the human touch as well. I think each of us would agree that our most helpful answers often come from one another, when we share experiences that only school leaders can understand and appreciate. TASA is dedicated to facilitating our need for community—both on the Web and in our opportunities for face-to-face networking. One of TASA’s most promising new ventures, launching this fall, is the e-Knowledge Portal, which will serve as the centerpiece of our community-building efforts. This online tool will enable us to create “Communities of Practice,” bringing individuals together for discussions, problem solving, and research. Complementing the e-Knowledge Portal will be other partnerships with Audio Education On-line and the School Improvement Network’s Professional Development on Demand (PD360), as well as our ongoing schedule of professional development programs and conferences—all designed to grow and support TASA’s community of members.

FALL 2007

Meet Vincent.

â&#x20AC;&#x153;I want to be an architect.â&#x20AC;? Helping educate 100 million people worldwide through a comprehensive selection of innovative, effective products and services. It's our commitment. www.PearsonSchool.com

Leading Public Schools in the Midst of Change

Executive director’s VIEW

With the passage of House Bill 1 by the Texas Legislature in May 2006, and subsequent legislation enacted during the 80th Legislature in 2007, numerous initiatives relating to educational program requirements, student assessment, campus and district accountability, and instruction have become law. As we begin the 2007-08 school year, many of these initiatives are still in the early stages of implementation. Others, like the appointment of a Joint Interim Committee to Review State Assessment that was to submit a report to the Legislature by September 1, 2007, never materialized. New graduation requirements were implemented for this year’s ninth graders, and each district will be required to implement a program in which students will be able to earn 12 hours of college credit by Fall 2008. Three education research centers, authorized in House Bill 1, were recently formed at the University of Texas at Austin, the University of Texas at Dallas, and Texas A&M University. The online Best Practices Clearinghouse, also authorized in HB 1, should be operational by January 31, 2008, and the Texas Principal Excellence Program and the Texas Records Exchange System, also required by HB 1, were recently launched.

At TASA, our mission “to promote and provide leadership that champions educational excellence” guides our service to TASA members. Our “to do” list now includes the development of a “to do” list for Texas superintendents.

Initiatives related to college readiness, required by HB 1, HB 2237 (80th Legislature), and Governor Perry’s executive order, are underway. The vertical teams required by HB 1 have broad responsibility in recommending college readiness standards and expectations, evaluating TEKS, and recommending strategies for aligning curricula with college readiness standards. HB 2237, among other provisions, calls for the creation of a high school completion and success council, while the Commission for a College Ready Texas, created by the Governor, is about to finalize its report and recommendations. And, SB 1031 established the yet-to-be-appointed Select Committee on Public School Accountability that, statutorily, should begin meeting in October. All of these efforts, alongside requirements for criminal background checks, new physical education requirements and fitness assessments, steroid testing, AEDs, new curriculum requirements, pay-for-performance, and the development of end-of-course exams, coupled with tight budgets and tax limitations, add to the challenges for school leaders. All of this, and more, prompted one superintendent to contact our office recently and ask for a “to do” list for superintendents, i.e., what’s required and when. Funding questions and uncertainty about rules and timelines for implementation among state officials only increase the complexity. At TASA, our mission “to promote and provide leadership that champions educational excellence” guides our service to TASA members. Our “to do” list now includes the development of a “to do” list for Texas superintendents. With the Superintendent’s Calendar, TASA Daily, Capitol Watch, and other resources on TASAnet, along with our responses to your questions, we remain committed to you, our community of members.

FALL 2007

Looking for the answer?

Region 4 has an array of innovative products and services designed to meet the educational needs of your campus or district. If you’re looking for curriculum and assessment materials; professional development; compliance, facility or financial services...

The answer is

www.theansweris4.net 713.462.7708

7145 West Tidwell, Houston, TX 77092

To Disclose or Not to Disclose? by Ramiro Canales

Background During the 79th Regular Session (2005), the Texas Legislature overwhelmingly adopted HB 914, which added Chapter 176 to the Local Government Code. Chapter 176 imposed new conflict disclosure requirements on superintendents, school board members, and vendors. Interpreting the terms in HB 914 has been a difficult task because the bill did not define key provisions. On August 2, 2006, Texas Attorney General Greg Abbott issued Opinion No. GA-0446, which was intended to provide a plain meaning interpretation of Chapter 176. The opinion answered some questions regarding HB 914, but not all that were raised by interested parties. During the past regular session (2007), Texas lawmakers passed HB 1491, which codified some of the language in the Attorney General’s opinion and also provided new guidance to school districts. Previously ambiguous terms, such as “business relationship” and “contract,” have now been defined and exceptions to the reporting requirements have been clarified. The reporting requirements were also extended to charter schools.

Conflicts Disclosure Statement Effective January 1, 2006, superintendents and school board members are required to file a conflicts disclosure statement with the

records administrator of the school district within 7 days after the superintendent or school board member becomes aware of facts that require the filing of the disclosure statement. If a local school board elects, the reporting requirement can be extended to other employees within the school district who have the authority to approve contracts. Specifically, superintendents, school board members, and other designated employees are required to file a conflicts disclosure statement if the school district enters into a contract with a vendor or is considering entering into a contract with a vendor and the superintendent, school board member, or a family member of the superintendent or school board member within the first degree of consanguinity (blood) or affinity (marriage), except in limited cases of divorce or death, has an employment or other business relationship with the vendor and receives taxable income, other than investment income, that exceeds $2,500 during the 12-month period preceding the date that the superintendent or school board member becomes aware that a contract has been executed or the school district is considering entering into a contract with the vendor. “Investment income” means dividends, capital gains, or interest income generated from a personal or business checking or savings account, share draft or share account, or other similar account; a personal or business investment; or a personal or business loan. The disclosure requirement also applies if a vendor has given

Tex. Loc. Gov’t Code Ann. §176.003(a) (Vernon Supp. 2005)

HB 1491, 80th Texas Legislature, Regular Session

FALL 2007

a superintendent, school board member, or family member of the superintendent or school board member one or more gifts that have an aggregate value of more than $250 in a 12-month period preceding the date the superintendent or school board member became aware of the facts that require the filing of a conflicts disclosure statement. HB 1491 clarified what types of gifts would not trigger the filing of a conflicts disclosure statement. For example, a gift from a family member; a political contribution; or food, lodging, transportation, or entertainment accepted as a guest are not considered “gifts” for purposes of determining whether the reporting threshold has been met. A criminal penalty may be imposed by a local prosecuting attorney if the conflicts disclosure statement is not timely filed. However, a superintendent or school board member may avoid criminal penalties if the disclosure statement is filed no later than the seventh business day after receiving notice of the alleged violation from the school district. Under HB 1491, a school district is required to identify all employees who are required to file a conflicts disclosure statement and shall provide a list of the identified employees to any person who requests the list.

Vendor Questionnaire A vendor must file a questionnaire if the vendor has a business relationship with a school district and has an employment or other business relationship with the superintendent, board member, or a family member of the superintendent or board member; or has given the superintendent or family member of the superintendent or school board member one or more gifts that have an aggregate value of $250. The completed questionnaire must be filed with the records administrator of the school district not later than the seventh business day after the later of the date the vendor begins discussions or negotiations to enter into a contract with the

Tex. Loc. Gov’t Code Ann. §176.003(c) (Vernon Supp. 2005) (Class C misdemeanor)

Tex. Loc. Gov’t Code Ann. §176.003(b) (Vernon Supp. 2005)

INSIGHT

school district or submits to the school an application, a bid, an RFP, or other written material related to a potential contract with the school district or the date the vendor becomes aware of an employment or other business relationship with the superintendent, board member, or family member of the superintendent or school board member or that the vendor has given one or more gifts to the superintendent, board member, or family member of the superintendent or school board member that have an aggregate value of $250. The vendor must file an updated questionnaire no later than the seventh business day after the date of an event that would make the current questionnaire on file incomplete or inaccurate. A vendor that knowingly fails to comply with the filing requirements may be subject to a criminal penalty (Class C misdemeanor). A vendor that files the required questionnaire no later than the seventh business day after receiving notice from the school district of an alleged violation may not be subject to criminal penalties. According to HB 1491, school districts do not have a legal duty to ensure that a vendor files a conflict of interest questionnaire, and the validity of contracts will not be affected solely because the vendor fails to timely file the questionnaire.

Filing and Maintenance of Records The Texas Ethics Commission recently adopted new forms to be filed by superintendents, school board members, and vendors. The forms are available on the Commission’s Web site: http://www.ethics.state.tx.us. Under HB 1491, a person has to file a conflicts disclosure statement or a conflict of interest questionnaire no later than October 9, 2007, or the seventh day after the date the person received notice from the school district that the conflicts disclosure statement or conflict of interest questionnaire is required to be filed. It is important that

superintendents, school board members, and vendors file new forms since they contain new language mandated by HB 1491. The conflicts disclosure statement and vendor questionnaires required under Chapter 176 are filed with the records administrator of the school district. For local school districts, the records administrator is the superintendent or the superintendent’s designee. The forms are required to be posted on a school district’s Web site, if the school district maintains a Web site. A school district is not required to maintain a Web site. A records administrator shall maintain the statements and questionnaires in accordance with the school district’s records retention schedule. Additionally, a school district is not required to disclose any information that is excepted under the public information law.

Other Applicable Statutes and Rules The disclosure requirements in HB 1491 and HB 914 are in addition to any other disclosure requirements required by law. Additionally, there are statutes relating to public servants that superintendents and school board members must also consider: • Chapter 36, Sections 36.02-36.06, Texas Penal Code prohibits bribery and corrupt influence • Chapter 36, Section 36.07, Texas Penal Code prohibits the acceptance of an honorarium • Chapter 36, Section 36.08, Texas Penal Code prohibits gifts to public servants • Chapter 36, Section 39.02, Texas Penal Code prohibits abuse of official capacity • Chapter 171, Local Government Code regulates conflicts of interest of officers of municipalities, counties, and other local governments Each of the aforementioned statutes is complex and contains various elements to determine an offense. Out of an abundance

Tex. Loc. Gov’t Code Ann. §176.09 (Vernon Supp. 2005)

Tex. Loc. Gov’t Code Ann. §176.03(d) (Vernon Supp. 2005)

HB 1491, 80th Legislature, Regular Session

of caution, each of the statutes should be reviewed with the school district’s legal counsel to determine compliance on a case-bycase basis. Effective August, 2006, school districts are also required to comply with the new reporting requirements of the Financial Accountability Rating System (FIRST). Included in the new rules is the requirement that school districts report to TEA a summary schedule of the total dollar amount of gifts received by the executive officers and board members of gifts that had an economic value of $250 or more in the aggregate for the fiscal year. The gift reporting requirement also applies to family members related to another person within the first degree of consanguinity or affinity. Gifts received from vendors who made payments to the school districts and vendors who were not awarded contracts are included in the aggregate total. Transparency is an essential part of an open and efficient system of government and critical in keeping and maintaining public trust. Due diligence should be used to assure that the conflict disclosure statements or questionnaires are filed and updated to avoid the imposition of criminal penalties. ■

Disclaimer: Specific questions and circumstances regarding a superintendent’s or school board member’s activities and the content and filing of the forms should be individually discussed with the school district’s attorney. There are criminal penalties associated with not fully complying with this statute and thus superintendents and board members should contact the superintendent’s attorney or school district’s attorney, as appropriate, if any questions arise related to interpreting the new requirements and completing the applicable forms.

Ramiro Canales is assistant executive director for Governmental Relations at TASA. He is an attorney licensed by the State Bar of Texas.

19 TAC, Chapter 109, Subchapter AA (Commissioner’s Rules Concerning Financial Accountability Rating System)

FALL 2007

2007-09 Legislative Committee Members Robert J. Duron (chair) Superintendent San Antonio ISD (20) Oscar Rodriguez, Jr. Superintendent Mission CISD (01) Norma Linda Salaiz Superintendent La Villa ISD (01) Paul Clore, Ph.D. Superintendent Gregory-Portland ISD (02)

Mary Ann Whiteker Superintendent Hudson ISD (07)

Greg Gibson Superintendent Crowley ISD (11) Karen G. Rue, Ed.D. Superintendent Northwest ISD (11) Kay E. Waggoner Superintendent Grapevine-Colleyville ISD (11)

Terry Myers Superintendent Mount Pleasant ISD (08)

Kevin Noack Superintendent Crawford ISD (12)

Dawson R. Orr Superintendent Wichita Falls ISD (09)

Roderick Emanuel Superintendent Bastrop ISD (13)

Cathy E. Bryce Superintendent Highland Park ISD (10)

Michael T. Smith Superintendent New Braunfels ISD (13)

Duncan F. Klussmann Superintendent Spring Branch ISD (04)

L. Curtis Culwell Superintendent Garland ISD (10)

Nola Wellman Superintendent Eanes ISD (13)

Thomas E. Randle Superintendent Lamar CISD (04)

Michael Hinojosa Superintendent Dallas ISD (10)

Shane Fields Superintendent Albany ISD (14)

Gene Paul Isabell Superintendent Newton ISD (05)

Douglas W. Otto Superintendent Plano ISD (10)

Rick Howard Superintendent Comanche ISD (14)

David G. Anthony, Ed.D. Superintendent Cypress-Fairbanks ISD (04) Rebecca Flores Director, Government Relations Houston ISD (04)

INSIGHT

Jim Gibson, Ed.D. Superintendent Montgomery ISD (06)

Darrell G. Floyd Superintendent Stephenville ISD (11)

David Fitts Superintendent Pewitt CISD (08)

Robert C. Wells Superintendent Edna ISD (03)

Lani Randall Superintendent Port Neches-Groves ISD (05)

Sue Jones Superintendent Brownwood ISD (15)

Berhl L. Robertson, Jr. Superintendent Roosevelt ISD (17)

John Folks Superintendent Northside ISD (20)

Rod Schroder Superintendent Amarillo ISD (16)

Gene Sheets Superintendent Muleshoe ISD (17)

Richard A. Middleton Superintendent North East ISD (20)

Keith Bryant Superintendent Lamesa ISD (17)

Kevin Allen Superintendent Iraan-Sheffield ISD (18)

Dan Troxell Superintendent Kerrville ISD (20)

Mike Motheral Superintendent Sundown ISD (17)

Jackie Dyer Superintendent Sierra Blanca ISD (19)

FALL 2007

Why Do More Athletic Programs Rely On Spectrum Scoreboards • Remarkable Performance • Exclusive Porcelain Finish • Competitive Prices • Over 50 Years of Service

Know the Difference! S050-0107

INSIGHT

Advisory Groups, Commissions, Committees, and Councils by J. Casey McCreary

Commission for a College Ready Texas Governor Rick Perry appointed 21 members to the Commission for a College Ready Texas (CCRT). The CCRT is to provide leadership and guidance to the State Board of Education to improve college readiness programs by aligning high school curriculum with college standards. Another goal of the CCRT is to support the statutorily created vertical teams of educators charged with defining college readiness per House Bill 1 requirements. The authority to incorporate college readiness standards into the Texas Essential Knowledge and Skills (TEKS) rests with the State Board of Education. The CCRT has been holding public meetings since April and will continue doing so through 2007. The committee will consider public testimony from these meetings when making recommendations to the State Board of Education. At a CCRT meeting held in Arlington on July 31 several project deadlines were noted, including: • Math TEKS Gap Analysis–final report due December 21, 2007; • English Language Arts and Reading TEKS Gap Analysis–final report due September 15, 2007; • College Readiness Crosswalk and Standards–report expected August 2007; • Higher Education Sampling Study– report expected August 2007; and • Final Commission Recommendations– report expected February 2008. Future meeting dates were scheduled for September 11 (Harlingen), September 14 (San Antonio), and October 30 (Austin).

The 21-member commission includes: • Sandy Kress, partner, Akin, Gump, Strauss, Hauer & Feld, L.L.P., as chair; • Albert Black, president, On-Target Supplies and Logistics of Dallas; • Jose Cuevas, founder and chief executive officer, JumBurrito; • Robert Duron, superintendent, San Antonio ISD; • Linda Evens, president of grants and planning, the Meadows Foundation of Dallas; • Bruce Esterline, vice president of grants and planning, the Meadows Foundation of Dallas; • Larry Faulkner, president, The Houston Endowment; and former president; The University of Texas at Austin; • David Garcia, chief executive officer, CEDRA Corporation of Austin; • Bill Hammond, president and chief executive officer, Texas Association of Business; • Dr. Eric Hanushek, senior fellow, Hoover Institution of Stanford University; • Woody L. Hunt, former chairman of the Board of Regents, The University of Texas System; • Jody Jiles, managing director, RBC Capital Markets of Houston; • Charles E. McMahen, chairman, Governor’s Business Council; • George McShan, former president and president-elect, Texas Association of School Boards; • Sonya Medina, executive director, AT&T Foundation; • Elaine Mendoza, member, Texas Higher Education Coordinating Board; • David Merrill, vice president-investments, AG Edwards & Sons, Inc.;

FALL 2007

• Dean Nafziger, chief executive officer, Edvance Research, Inc.; • Dr. Richard M. Rhodes, president, El Paso Community College; • Dr. Ricardo Romo, president, The University of Texas at San Antonio; and • Zeynep Young, foundation team member, Michael and Susan Dell Foundation. Also included as members of the commission are eight co-chairs who oversee the four subject-specific teams: • Dr. Linda Ferreira-Buckley, chair, Department of Rhetoric and Composition English, The University of Texas at Austin; • Selina Jackson, English teacher, Wall ISD; • Linda Gann, mathematics instructional specialist, Northside ISD; • Dr. Selina Vasquez-Mireles, associate professor of mathematics, Texas State University; • Mercedes Guzman, science teacher, El Paso ISD; • Dr. C. O. Patterson, professor of biology, Texas A&M University at College Station; • Larry Garibaldi, instructional team leader, Houston ISD; and • Dr. Jonathan Lee, associate professor of history, San Antonio College. De-facto members of the commission include: • Acting Commissioner Robert Scott, Texas Education Agency; • Commissioner Raymund Paredes, Texas Higher Education Coordinating Board; and • John Fitzpatrick, executive director, Texas High School Project - Communities Foundation of Texas.

High School Allotment Advisory Group Then-Commissioner of Education Shirley J. Neely appointed this 14-member group in May of 2007. The group members will develop standards for evaluating the results and cost-effectiveness of the state’s newly created $320 million investment in preparing high school students for college and

INSIGHT

career success. The High School Allotment, created by the Texas Legislature in May of 2006, provides districts with $275 per student in grades 9–12 based on average daily attendance. Some allowable uses of allotment funds include: • Increasing student skills and opportunities for success in college-level work while in high school; • Providing support and instruction to increase high school graduation rates; • Increasing access to college and financial aid; • Providing summer programs to help middle school students transition to high school; • Creating small learning communities within high schools; and • Aligning curriculum with college requirements. The 14-member advisory group includes: • Salem Abraham, school board member, Canadian ISD; • Celeste Alexander, education researcher, The University of Texas at Austin; • Benita Ashford, principal, Dallas ISD; • Dennis Brown, vice-president instruction, El Paso Community College; • Catherine Clark, education researcher, Texas Association of School Boards; • Roderick Emanuel, superintendent, Bastrop ISD; • Larry Johnson, superintendent, Quinlan ISD; • Barbara Lerner, coordinator P–16 initiatives, Texas Women’s University; • Charles Nix, principal, Rockwall ISD; • Christopher Ormiston, teacher, Boerne ISD; • Torrence Robinson, director of public affairs, Texas Instruments; • Debra Roesler, school business officer, Hurst-Euless-Bedford ISD; • Linda Villarreal, executive director, Region II Education Service Center; and • Kay Waggoner, superintendent, Grapevine-Colleyville ISD. The group met on June 22 to begin developing standards for effective use of the funds and is scheduled to meet again October 1 at the Texas Education Agency.

High School Completion and Success Initiative Council House Bill 2237 requires the establishment of this council whose nine members will identify priorities and make recommendations to improve the effectiveness, coordination, and alignment of high school completion and college and workforce readiness efforts. The Texas Education Agency will forward any council recommendations regarding needed statutory changes to the legislature. The commissioner of education will make progress reports to the standing officers of the senate and house education committees, the Legislative Budget Board, and the Governor’s Office of Policy and Planning. The council will be composed of: • The commissioner of education, presiding officer; • The commissioner of higher education; and • Seven members appointed by the commissioner of education. The seven members appointed by the commissioner of education must include: • Three members from a list of nominees provided by the governor; • Two members from a list of nominees provided by the lieutenant governor; and • Two members from a list of nominees provided by the speaker of the house of representatives. Those recommended for these additional seven council positions must have experience in developing and implementing high school reform strategies and promoting college workforce readiness. The appointed council members will serve two-year terms and may be reappointed. At press time, appointees to the commission had not been named.

House Select Committee on Higher and Public Education Finance The speaker appointed the nine-member committee during the 80th Legislative Session. The committee will have jurisdiction over all matters pertaining to the coordination of public and higher educa-

tion policy towards the goal of improving college and workforce readiness. The select committee’s jurisdiction includes:    • Examining the efficiency and effectiveness of state programs and initiatives to further student achievement; • Reviewing and aligning formula and non-formula funded programs with each other and with the educational goals of the state; • Reviewing and developing strategies for better leveraging and deploying federal funds; and • Reviewing and developing strategies for state obligations under the Texas Guaranteed Tuition Plan. The nine-member committee includes the following members of the House of Representatives: • Dan Branch, chair; • Scott Hochberg, vice chair; • Harold Dutton; • Rob Eissler; • Helen Giddings; • Ryan Guillen; • Louis Kolkhorst; • Geanie Morrison; and • John Otto. The committee held a hearing on June 28 for invited testimony regarding trends in college enrollment and cost of attendance, the Texas Tomorrow Fund, and guaranteed tuition plans. Dr. Steve Murdock, state demographer, provided detailed statistics on the challenges facing Texas; and Comptroller Susan Combs shared her recommendations. The committee will meet again on Thursday, September 6, to hear invited testimony on community college funding, including group health insurance.

P–16 Council In 2005, the Texas Legislature established the statutory members of the P–16 Council in House Bill 2808. Council members represent four Texas state agencies: the Texas Education Agency (TEA), the Texas Higher Education Coordinating Board (THECB), the Texas Workforce Commission (TWC), and the Texas Department of Assistive and Rehabilitative Services (DARS). The commissioner of education and the commissioner

of higher education serve as co-chairs of the council and may appoint three additional members who are education professionals, agency representatives, business representatives, or other members of the community. The council is charged with examining and making recommendations regarding the alignment of secondary and postsecondary education curricula and testing and assessment. The council is also charged with advising the State Board of Education on the coordination of postsecondary career and technology activities, and career and technology teacher education programs offered or proposed to be offered in colleges and universities. The council met August 1 at the THECB and received an update on the work of the vertical teams and the development of college readiness standards required by House Bill 1. Commissioner Paredes noted that he was in touch with Sandy Kress, chair, the Commission for a College Ready Texas, and would continue communications to find ways to integrate the work of the two groups and prevent conflicting standards from being developed. The next P–16 Council meeting is scheduled for 1–4 p.m. on Wednesday, November 7, at the Texas Education Agency. The seven-member council consists of four appointed members and three additional members appointed jointly by the commissioner of education and the commissioner of higher education: • Dr. Raymund Paredes, commissioner, Texas Higher Education Coordinating Board; • Larry Temple, executive director, Texas Workforce Commission; • Terrell Murphy, commissioner, Texas Department of Assistive and Rehabilitative Services; • Robert Scott, acting commissioner, Texas Education Agency; • Dr. Melody Johnson, superintendent, Ft. Worth ISD; • Cesar Maldonado, president, Harlingen Consolidated ISD Board of Trustees; and • Dr. Gregory D. Williams, president, Odessa College.

Select Committee on Public School Accountability Language establishing the 15-member select committee was included in SB 1031. Members are directed to provide a comprehensive review of the accountability system. The committee is to begin meeting by October 2007 and is required to report its findings and recommendations to the legislature by December 2008. The 15-member committee appointees will include: • Chair of the house education committee, as joint presiding officer; • Chair of the senate education committee, as joint presiding officer; • One member of the house of representatives, appointed by the house speaker; • One member of the senate, appointed by the lieutenant governor; • Commissioner of education; • Commissioner of higher education; • One public school superintendent, appointed jointly by the house speaker and lieutenant governor; • One public school teacher, appointed jointly; • One public school principal, appointed jointly; • Two members currently employed as educators in Texas public schools, appointed jointly; • One member of the business community, appointed by the lieutenant governor; • One member of the business community, appointed by the house speaker; and • Two members of the business community and the public, appointed by the governor. At press time, appointees to the committee had not been named. ■

J. Casey McCreary is assistant executive director of Education Policy and Leadership Development at TASA.

FALL 2007

CAREER DIRECTION IF THE CHOICES WERE EASY,

WE WOULDN’T NEED

GREAT TEACHERS THE TEXAS NATIONAL GUARD CAN SUPPORT YOUR CLASSROOM WITH AN INFORMATIVE, EDUCATOR-DESIGNED PRESENTATION THAT EXPLORES THE WEALTH OF COLLEGE, SCHOLARSHIP, TRAINING, AND CAREER OPTIONS AVAILABLE TO YOUR STUDENTS. TO FIND OUT MORE, VISIT WWW.CAREERTRAIN.COM/CAREERDIRECTION

TEXAS NATIONAL GUARD INSIGHT

The Final 403(b) Regulations: New School District Responsibilities on the Horizon by Mike Cochran

Tens of thousands of Texas educators depend on 403(b) accounts (“tax sheltered annuities”) to supplement their retirement savings. All or almost all Texas school districts offer these plans to their employees. Both school districts and their employees will soon experience radical changes in how their 403(b) plans work. On July 23, 2007, the Internal Revenue Service (IRS) issued final regulations applicable to plans offered by employers under Section 403(b) of Internal Revenue Code (the Code). You can find the full publication at: http://www.ustreas.gov/press/releases/ reports/td%2093403_checked_.pdf This article discusses only the effect of the new regulations on public school districts, particularly those in Texas. It attempts to address the most important issues that will affect public educational organizations and their employees. We also want to gratefully acknowledge the leadership of Representative Vicki Truitt, Chair of the Texas House Committee on Pensions & Investments and her predecessor chair of this committee, Representative Craig Eiland. Without the efforts of these legislators, Texas public school districts would face a major conflict between the requirements of the new 403(b) regulations and Texas law.

Background of New Regulations It is important to understand the enforcement issues that the IRS is trying to address with the new rules.

In the mid-1990s, the IRS issued audit guidelines for 403(b) plans and began a large-scale enforcement program. In public school districts and other applicable governmental organizations, this consisted primarily of auditing the annual contribution limits. As a result of the IRS enforcement efforts, most education organizations either hired third party administrators to monitor the contribution limits or programmed their payroll systems to monitor them. The IRS is now focused on “cleaning up” the other aspects of 403(b) plan compliance. The final regulations address two areas that are necessary to assure compliance of 403(b) plans with all aspects of the tax rules: 1. Outdated Rules. The prior 403(b) regulations were outdated. For the most part, they had not been revised since the mid1960s. In addition, many practices with regard to these plans were either unclear or were not documented in the Code and regulations. Tom Reeder, Associate Benefits Tax Counsel, U.S. Department of the Treasury, in one speech referred to many of these unwritten 403(b) rules as “memorialized mythology.” 2. Clear Accountability. There has been no clear accountability with the prior 403(b) rules. In practice, it is difficult for employers to be held accountable for anything other than assuring that employees do not over-contribute to their plans. Most employers currently leave enforcement of other rules to the vendors. There are three primary problems with this practice:

FALL 2007

a. There is wide disparity in how vendors enforce (or do not enforce) rules regarding loans, distributions, hardship withdrawals, and other tax/plan rules. b. Employees can transfer their funds to any vendor they choose, even if the vendor is not accepting payroll deductions from the employer. Thus, employers often have no idea what vendors are even handling funds in their plans. c. The IRS has little enforcement jurisdiction over the operations of vendors. It will be easier for the IRS to enforce 403(b) rules if employers have more control of and responsibility for 403(b) plans. It is also important to note that the Treasury and IRS spokespeople have stated their intention to make 403(b) plan rules and enforcement much more like 401(k) and 457(b) plans, where employers already have significant compliance responsibility. The regulations include a statement that the effect of changes in 403(b) plan rules over the past 40 years has been to “diminish the extent to which the rules governing section 403(b) plans differ from the rules governing other arrangements that include salary reduction contribution, i.e., section 401(k) plans and section 457(b) plans for State and local governmental entities.” The final regulations take a significant step in making 403(b) plans much more like other employer sponsored and controlled tax-deferred plans.

Summary of New Regulations The new IRS regulations require a “written plan.” There is not a specified form that is required by the regulation. Thus, an employer is not required to have a “plan document” in the traditional sense. Rather, all the provisions of the employer’s 403(b) plan must be written in one document or collection of documents that is maintained by the employer. The employer may also delegate duties to vendors or third party administrators. However, ultimately the IRS wants the employer to have some form of plan that

INSIGHT

coordinates all plan rules and assures that there are no conflicting rules. The preamble to the final regulations states: “The final regulations clarify the requirement that the plan include all of the material provisions by permitting the plan to incorporate by reference other documents, including the insurance policy or custodial account, which as a result of such reference would become part of the plan. As a result, a plan may include a wide variety of documents, but it is important for the employer that adopts the plan to ensure that there is no conflict with other documents that are incorporated by reference. If a plan does incorporate other documents by reference, then, in the event of a conflict with another document, except in rare and unusual cases, the plan would govern. In the case of a plan that is funded through multiple issuers, it is expected that an employer would adopt a single plan document to coordinate administration among the issuers, rather than having a separate document for each issuer.” It is important to note that compliance responsibilities may not be delegated to participants. It has been the practice for some school districts to ask employees to sign forms taking responsibility for certain types of compliance with 403(b) rules, such as keeping their contributions within the limits of the Code. The IRS expressly rejected this practice. The IRS has announced that it will provide a model written plan for employers to use in the near future. In a Webcast in August, Robert Architect, Senior Tax Law Specialist at the IRS, indicated that the model plan would be released sometime in October 2007.

Plan Distributions and Loans Distributions and loans to participants will have to follow the written plan. The new regulations require an employer to monitor distributions to assure compliance with the written plan. This may be the second most significant change in the new regulations (next to the written plan requirement). Most employers have viewed the compliance

responsibility for distributions and loans as an issue between the participant and his or her vendor. This will now change. Like other duties, the employer may delegate this responsibility to a vendor or third party administrator. However, the employer must specify which duties are delegated and assure that the plan rules are followed in a consistent manner.

Participant Transfers from One 403(b) Vendor to Another A major issue for employers and participants that will affect them immediately is the ability to transfer from one 403(b) account to another. The regulations will repeal Revenue Ruling 90-24 effective September 24, 2007. This ruling allowed participants to transfer funds from one 403(b) account to another 403(b) account on a tax-free basis at will. The new regulations allow for transfers of funds between 403(b) accounts only when the following rules are met: 1. The written plan provides for the transfer. 2. The value transferred is the same after the transfer as it was immediately before. Since many annuity contracts have surrender charges, this would appear on the surface to stop transfers that would result in a reduction of the value of account after the transfer. Some industry comments have reflected this view. However, the regulations tie the final rule to Section 414(l) of the Code, which according to Robert Architect (in several public speeches), does not prohibit the imposition of distribution charges, surrender charges and other similar arrangements. 3. The employer enters into an agreement with the vendors that are allowed to participate in the transfers to exchange data about the participants making transfers. This data will be used by the vendor and employer to assure compliance with 403(b) rules. Thus, there appear to be two significant problems for participants who want to transfer their 403(b) accounts from one vendor

to another. First, they may not be able to make the transfer if there is any penalty imposed on the account value by the transferor (depending on the interpretation of the rules, per item 2 above). Second, from September 25, 2007 to January 1, 2009, many participants may not be able to make transfers. This is because the old transfer rules end on September 24, 2007 but employers are not required to implement the new rules until January 1, 2009. The latter will depend on how and when employers and vendors implement new transfer rules. It is also important to note that these same rules apply to beneficiaries of participants’ accounts, in the event of the participant’s death. Similar rules are provided for transfers between the 403(b) plan of one employer and another. However, normally a participant is transferring an account because he or she is changing employers. Termination of employment is a qualifying event that entitles the participant to receive a distribution. Under distribution rules, the participant can simply roll over his or her funds to an Individual Retirement Account (IRA) or other tax-qualified vehicle (see rollover discussion below). An interesting additional issue will face Texas school districts in addressing transfers. Currently, Texas statutes do not allow a participant to enter into a 403(b) salary reduction agreement with a vendor that is not on the approved list maintained by the Teacher Retirement System of Texas (TRS). However, Texas statutes do not appear to address 403(b) transfers. Thus, a school district would appear to have the ability to allow transfers to a vendor that is not on the TRS-approved list (but not ongoing salary deferrals), if it chooses to do this in its written plan.

Rollovers It is common for employers and participants to use the terms “transfer” and “rollovers” interchangeably. However, there are important distinctions between these terms. A transfer is either an exchange of 403(b) funds with one vendor to another vendor within the employer’s plan, a transfer of a

403(b) account from one employer’s plan to another, or a transfer of 403(b) funds to TRS to purchase certain types of service credit. A rollover occurs when a 403(b) account has been subject to a distributable event and the participant can then move the funds to an IRA or other tax-qualified vehicle. Under the regulations, it is reasonably clear what the rules will be if an individual works for an employer and wants to transfer funds or leaves a job and wants to roll over the 403(b) funds. However, what happens to the many “orphan” 403(b) accounts owned by individuals retired or not employed by an employer having a 403(b) plan? The law firm of Sutherland Asbill & Brennan LLP has published an article stating its belief that these orphan accounts will have to be rolled over to IRAs before January 1, 2009, or lose their tax-deferred status. If this proves to be true, then a major additional problem is that IRAs cannot have loan provisions. Thus, all of the orphan 403(b) accounts that have outstanding loans could face the prospect of having to pay off the loans early. This could be done by using the funds in the 403(b) account to pay off the loan before rolling over the account to an IRA, since the loan should be collateralized by the funds in the account. To read more about this problem, you can go to the Sutherland Asbill & Brennan LLP Web site at www.sablaw.com and find the article dated August 3, 2007, titled “Legal Alert: Intended Operation of New 403(b) Transfer Rules Requires Immediate Attention.” The regulations provide the IRS with authority to issue additional guidance on transfers and rollovers. Based on our reading of the regulations and the opinion of legal experts, it would appear that there are significant issues that need to be addressed so that “unintended consequences” do not affect tens of thousands of 403(b) account holders.

Employer Paid Accounts Many Texas school districts have plans, at least for key administrators, to which they make contributions for certain employees. These are commonly referred to as “annui-

ties” in employment agreements. In a number of these arrangements, the employee acquires a vested interest in the account for each year he or she remains employed with the district. There are a number of provisions in the final regulations that address these arrangements. Employers should take two precautionary measures. First, employer contributions should be segregated in a separate account and not co-mingled with employee deferrals. Second, vested and non-vested employer paid funds should be segregated in different accounts. There are new tax rules related to non-vested funds, so you should be sure that the company holding these funds is aware of the new rules and prepared to administer the account properly.

Timely Deposit of Funds The new regulations hold employers to a standard for timely deposit of employee deferrals similar to the rules that apply to 401(k) plans. Under the new regulations, 403(b) plans will be subject to a requirement that funds be remitted to the investment companies within a time period that is reasonable for the administration of the plan. The regulations use as an example 15 days after the end of the month in which the funds were deducted from the employee’s pay.

Universal Availability and Nondiscrimination One of the areas of greatest enforcement activity by the IRS in the past two years has been in the area of employer restrictions on the ability of employees to participate in 403(b) plans. Although governmental employers are generally exempt from pension nondiscrimination rules, 403(b) plans have specific nondiscrimination rules regarding plan availability (“universal availability”) that apply to all employers. This rule requires that the plan be available to all employees who wish to contribute $200 or more each calendar year. The only exceptions to this rule are for “excludable employees.” From a practical perspective, school districts may only exclude employees from their

FALL 2007

403(b) plans who are eligible to participate in a 457(b) deferred compensation plan, certain students and employees who normally work fewer than 20 hours per week. The greatest problem in this rule for many school districts is part-time employees such as substitute teachers who do not receive regular recurring pay. Some school districts have payroll systems that may not handle setting up payroll deductions for these employees, or may not handle this well. However, under the new regulations it is very important that (a) no employees be excluded from participation in the 403(b) plan unless the employer is absolutely certain that they can be excluded under the regulations and (b) the eligibility for employees to participate in the 403(b) plan be widely and clearly communicated to all employees. Where the IRS has found violations of this rule, they have sought to have the offending employers make restitution to the excluded employees in the form of contributions to their 403(b) account. This could involve significant cost to the employer. If it is necessary for the employer to exclude certain part-time employees (e.g., those working under 20 hours per week), then the employer should follow the following guidance excerpted from the regulations: An employee normally works fewer than 20 hours per week if and only if: 1. For the 12-month period beginning on the date the employee’s employment commenced, the employer reasonably expects the employee to work fewer than 1,000 hours of service; and 2. For each plan year ending after the close of the 12-month period beginning on the date the employee’s employment commenced (or, if the plan so provides, each subsequent 12-month period), the employee worked fewer than 1,000 hours of service in the preceding 12-month period. The new regulations also state that the employer may not restrict the right of employees to make 403(b) Roth contributions, if Roth accounts are allowed in the employer’s plan.

INSIGHT

Elimination of Tax Sheltered Life Under the new regulations, only annuity policies and mutual fund accounts established pursuant to Section 403(b)(7) of the Code may be used as 403(b) investments. Life insurance policies of any kind may no longer be issued as funding for 403(b) accounts after September 24, 2007.

Texas Law In 2001, the Texas Legislature passed House Bill 273. This bill attempted to address abuses in the 403(b) industry in Texas. It also restricted the authority of public school districts and other educational organizations to control their 403(b) plans. When the IRS proposed the new 403(b) regulations in November 2004, it appeared that local districts would be required to impose their own plan rules. However, the ability to enforce these rules would depend on the cooperation

of 403(b) vendors. Texas law no longer gives districts enforcement authority over these vendors. Our company obtained an opinion from attorney Mary Keller of the law firm of York, Keller & Field, L.L.P. as to the potential effect of this conflict. Ms. Keller is a former Senior Associate Commissioner of Insurance, Texas Department of Insurance, and former Deputy Attorney General in the Texas Attorney General’s Office. Her opinion confirmed that districts would face a major conflict between state and federal law that could potentially leave districts with an untenable choice. We contacted Rep. Craig Eiland, then-Chair of the House Committee on Pensions & Investments, about the issue. He held hearings on the subject and introduced House Bill 169 in 2006, during the Third-Called

Special Session of the 79th Texas Legislature, to provide relief to school districts on this issue. When Rep. Vicki Truitt became chair of the committee during the 80th Session of the legislature, she and her staff reviewed the issue. Rep. Truitt then introduced House Bill 2341 that provided relief on the 403(b) conflict. She and her staff worked diligently to get the bill through both houses of the legislature. The Governor signed the bill in June 2007. The new Texas law allows school districts and other educational institutions to exclude vendors from their 403(b) plans who do not comply with the district’s administrative plan rules if such rules are necessary to comply with any change in federal 403(b) rules that occurs after January 1, 2008. It is important to note that the law does not allow districts to exclude vendors for any other reason than to comply with IRS rules.

3. Be sure the company you use has regulatory expertise. Ask specific questions about exactly how they propose to resolve the issues discussed in this article. Be sure they have in-depth knowledge of the Code and regulations. 4. Read the opinions of different experts. There are many articles being written right now about the new regulations. As the “dust settles” and the effect of the changes becomes more apparent, these opinions will become more consistent. Sources to find good information are www.benefitslink.com and www.403bwise.com. 5. Be sure the material you review applies to public employers. There are many issues under the regulations that affect only plans subject to ERISA. As public employers, school districts are not subject to ERISA. Many articles do not clearly make this distinction. You do not want to spend time on issues that do not affect your organization.

Conclusion The final regulations cannot be ignored. The effect of these changes on employers and 403(b) plan participants will be far-reaching and significant. It is likely that these regulations will result in a very different 403(b) market five years from now. It is up to employers to be sure that the resulting change for their employees is as positive as it can be. ■

Mike Cochran is a partner in TCG Group Holdings, LLP. He has been managing retirement plans in both the public and private sectors since 1976. TCG owns several companies that provide consulting, investment advisory, employee benefits, and third party administration services to public school districts, cities, and other employers. TCG is a corporate sponsor of TASA. You can reach Mike at mike.cochran@ pension-consulting.com

Getting Ready to Comply What should employers do to get ready to comply with the new rules? Our advice is as follows: 1. Do not act hastily. There is much uncertainty about exactly how the new regulations will actually work on a practical level. It is very likely that the IRS will provide some additional guidance, in the form of speeches by key officials, articles, and perhaps more formal guidance. 2. Beware of those selling a quick fix. Many companies of every kind (vendors, consultants, third party administrators, and others) are now trying to take advantage of the fear of these new regulations. They are telling employers that they have all of the answers and that the employer should buy their services now. No one has all of the answers right now, and a hasty decision is likely to benefit only the company selling the services. Also, be careful about the background of the companies. Some vendors have good compliance programs and are up front about what they sell. Other companies present themselves as independent when they are actually selling 403(b) products.

FALL 2007

Save THE DATE! Energize your leadership team at the premier conference for Texas public school administrators!

TASA Presents

Midwinter Conference January 27-30, 2008 Austin Convention Center, Austin

Leadership • Curriculum • Instruction • Assessment

INSIGHT

The Texas Public Schools Research Network by Joe Neely

Educational research conducted within colleges of education is often criticized for a lack of relevance to the needs of public school educators seeking assistance in improving instructional programs. To improve the focus, design, and application of educational research and to create a research agenda that is more responsive to the needs of public schools, an exciting new initiative has been established to promote collaboration between universities and public school personnel. This initiative is spearheaded by the Center for Research, Evaluation, and Advancement of Teacher Education (CREATE), a consortium of 31 universities within 5 Texas university systems—The University of Texas, Texas A&M University, University of Houston, Texas State University, and University of North Texas. CREATE has been instrumental in bringing school districts together to prioritize a research agenda. The Texas Public School Research Network (TPSRN) consists of a selected group of public school districts that are vitally interested in ongoing university research as a means of improving instructional programs for their students. The network includes superintendent-designated representatives from a maximum of 25 school districts located throughout the state. These representatives participate in a process that enables periodic, focused deliberation on a variety of potential research topics that the public schools want addressed by leading university researchers. Opportunities are created for public school educators to interact directly and collaboratively with each other, as well as with university partners, to gather data for analysis, identifying that which holds the most promise for accelerating public school educational improvement.

One function of the school district representatives involved in the network is to generate ideas for CREATE's research agenda. Multiple opportunities are provided by CREATE to discuss relevant research needs and to receive input from the school district representatives. Working conferences and workshops are held in various regions of the state three times a year. Results of ongoing research efforts are presented and particular research requests are discussed. Once the TPSRN committee reaches a consensus on issues that best address the current research needs from the school practitioner’s perspective, the issues are formulated into research recommendations by the CREATE staff. The final recommendations are presented to CREATE’s Research Advisory Council—a group of public, state, and national educators—which determines the implications of specific research possibilities with member universities. Following the approval of the Research Advisory Council, CREATE solicits requests for proposals from member universities, evaluates these proposals, and awards grants for the research. CREATE currently has two collaborative research studies underway. The emphasis is on promoting "responsive" research projects that yield results with direct and immediate benefits to school programs. Without the help of the TPSRN network of schools, this research would not have been possible. A synopsis of the current research projects is discussed below. The Texas Teacher Induction Study: This research study investigates the effects of mentoring and induction on novice teacher retention and pupil achievement. Teams of investigators from 4 universities interviewed

FALL 2007

447 first-year teachers from 12 school districts in 140 elementary, middle, and high school campuses. Classroom-level TAKS scores were collected from the 447 sample teachers and 3,000+ control teachers who were teaching at the same school and grade as the sample teachers. During fall 2006, Year 1 results were presented by the principal investigators, Drs. Leslie Huling and Virginia Resta. The presentations were made to participating school districts collectively, as well as separately through individualized analyses and a series of reports discussing strengths and weaknesses found in the mentoring program and recommendations for improvement. Year 2 TAKS and teacher retention data is being collected, and results are expected to be presented in early 2008. 50 Texas Teacher Study: This three-year, in-depth study of 50 Texas mathematics and science teachers was funded by the Sid Richardson Foundation. Mathematics and science are traditionally areas in which teacher shortages are the greatest. Because of the continual shortages, this study seeks to understand the characteristics of this population of teachers and why they enter the profession, choose to stay in the same school, migrate to another school, or leave the profession altogether. The 50 teachers selected have undergone extensive interviews, attended yearly focus groups, and completed questionnaires. Year 2 preliminary results will be available in fall 2007. Districts participating in the TSPRN receive multiple benefits that include access to the most current, school-focused educational research; opportunities to influence the kind of education research that would most benefit practitioners; and publication and/or presentation opportunities in local, state, and national forums. During the past year, representatives from 17 school districts participated in network activities: Aldine, Beeville, Calallen, Carrollton-Farmers Branch, Columbia-Brazoria, Dallas, Fort Worth, Houston, Lamar Consolidated, Magnolia, Northside (San Antonio), Richardson, San Marcos, Southside (San Antonio), Wichita Falls, McAllen, and Copperas Cove. As a result of input received from public school participants this year, new research efforts

INSIGHT

are likely to explore the relationship between teacher effectiveness/ quality to preparation. Membership on the TPSRN Committee is currently limited to 25 school districts in order to provide a manageable forum where all members can be assured significant opportunities for input. However, for any district that truly desires to become involved with the initiative, Create will find a way for them to be a meaningful participant. There is no fee for the district to be a member of TSPRN; however, member districts are required to pay travel expenses for their staff member(s) to attend workshops and conferences. â&#x2013;

Dr. Joe Neely is a liaison for the Texas Public School Research Network. If you are interested in learning more about TPSRN, or in having your district join this initiative, he can be reached at 936-273-7661.

Demographic Analysis & Enrollment Forecast Enhanced Demographic Services Comprehensive School Facility Studies For more information or to obtain a cost estimate for a study in your district, contact Paul Whitton, Jr. (pwhitton@tasanet. org), associate executive director, TASA, 512-477-6361 or 800-725-8272; or Jerry Gideon (jmgideon@suddenlink.net), project coordinator, 325-223-1113.

to a few of our Convention sponsors

Titanium

Diamond

Platinum

Gold

Silver

Bronze

tasa.tasb.org

Pfluger Associates Architects Skanska VLK Architects, Inc.

inspired.

inspired design. inspired educators. Every educator has enjoyed that moment when a student “gets it.” When the sun breaks through, your students' faces light up, and as a teacher, you know you have changed lives. The spaces we design are inspired by the ingenuity of experience, industry research and collaboration with our clients. We consider each project a journey—where, with the client, we explore places where generations will grow, learn and discover.

406 East 11th Street Austin, TX 78701-2617

shwgroup.com

Presorted Standard U.S. Postage PAID Austin, TX Permit No. 1941