| (a) Definitions. In this section, the following terms
have the following meanings.
(1) Severance payment--Any amount paid by the board
of trustees of an independent school district or open-enrollment charter
school to or in behalf of a superintendent on early termination of
the superintendent's contract that exceeds the amount earned by the
superintendent under the contract as of the date of termination, including
any amount that exceeds the amount of earned standard salary and benefits
that is paid as a condition of early termination of the contract.
Payments to a former superintendent who remains employed by a school
district or an open-enrollment charter school in another capacity
or contracts with a school district or an open-enrollment charter
school to provide the district or charter school services may be severance
payments in whole or in part if the payments are compensation for
the early termination of a prior employment agreement. Severance payments
include any payment for actual or threatened litigation involving
or related to the employment contract.
(2) Superintendent--The educational leader and chief
executive officer of an independent school district or open-enrollment
charter school. "Departing superintendent" means an individual no
longer acting as superintendent and includes a former superintendent
who is employed or contracted to work in any other capacity by the
same school district or open-enrollment charter school that previously
employed him or her as superintendent.
(3) Foundation School Program (FSP) funding reduction
amount--The portion of the amount of a severance payment to a superintendent
that is deducted from an independent school district's or open-enrollment
charter school's FSP funding. The FSP funding reduction amount is
calculated according to the provisions in subsection (c) of this section.
(b) Severance payment reporting and identification
of districts or open-enrollment charter schools subject to funding
reductions.
(1) An independent school district or open-enrollment
charter school that makes a payment of any kind to a departing superintendent
must file with the Texas Education Agency (TEA) a Superintendent Payment
Disclosure Form, which is available on the TEA website. However, no
form is required to be filed for a payment already earned and payable
under the terms of a terminated employment contract, such as a payment
for accrued vacation.
(2) The form must be filed by the 60th day after the
district or open-enrollment charter school executes the agreement
to make the payment or the 60th day after any payment under such an
agreement, whichever is sooner. The interim superintendent, new superintendent,
or school board president is responsible for timely filing of the
Superintendent Payment Disclosure Form. Filing of the disclosure form
is required regardless of whether a school district or an open-enrollment
charter school considers a payment to be a severance payment as that
term is defined in subsection (a) of this section. As stated in the
disclosure form, a school district or an open-enrollment charter school
must enclose with the submitted form a copy of the superintendent
employment contract and a copy of the termination or severance agreement.
(3) The commissioner of education determines whether
a payment to a departing superintendent is a severance payment for
purposes of this section, and whether an independent school district
or open-enrollment charter school is subject to reductions in FSP
funding under this section, based on information the district or charter
school reports on the Superintendent Payment Disclosure Form and any
additional documentation the commissioner requires to make these determinations.
The commissioner may also make these determinations based on agency
documents that are made available to the district or charter school.
The commissioner's determinations under this paragraph are the final
agency administrative decisions and may not be appealed under Texas
Education Code (TEC), §7.057(a).
(4) A school district or an open-enrollment charter
school must provide the commissioner with any information or documentation
that the commissioner requests to make the determinations described
in paragraph (3) of this subsection. Information and documentation
that the commissioner may request includes but is not limited to the
following:
(A) the canceled check for any payment made to the
departing superintendent beyond the amount earned under the contract
at the time employment was terminated;
(B) the Internal Revenue Service Form W-2, Wage and
Tax Statement, reporting any payment of supplemental wages (compensation
paid in addition to the employee's regular wages) and any special
wage payment (amount paid to an employee or former employee for services
performed in a prior year) made to the departing superintendent;
(C) worksheets documenting calculation of earned payroll
amounts through the departing superintendent's last day of employment;
(D) general ledger detail documenting transactions
involving payments to the departing superintendent;
(E) minutes of the meeting of the board of trustees
documenting approval of a final agreement to make a payment or payments
to the departing superintendent;
(F) the departing superintendent's employment contract
for the period (year) of employment immediately preceding the most
recent period (year), if applicable;
(G) the compensation plan or salary schedule for the
departing superintendent for the most recent contractual period (year)
of employment and for the period (year) immediately preceding, if
applicable;
(H) salary distribution records for the departing superintendent's
most recent contractual period (year) of employment and for the period
(year) immediately preceding, if applicable;
(I) any agreement for employment of the departing superintendent
after that individual's employment as superintendent; and
(J) the board policy covering employee benefits, including
monthly allowances, deferred compensation, and payments for leave
(sick, personal, vacation, compensatory, or any other type of leave)
that is earned but unused upon termination, that was in effect at
the time the departing superintendent's employment was terminated.
(c) Reduction in FSP funding.
(1) The commissioner will reduce a school district's
or an open-enrollment charter school's FSP funding by the amount that
a severance payment to a superintendent exceeds the amount that is
equal to one year's salary and benefits under the superintendent's
terminated contract. The commissioner will reduce the district's or
charter school's FSP funding for the school year following the school
year in which the first payment requiring an FSP funding reduction
under this section is made to the former superintendent. The commissioner
also will reduce the district's or charter school's FSP funding in
the school year following each school year that any additional payment
requiring an FSP reduction under this section is made to the former
superintendent. If a school district's or an open-enrollment charter
school's liability to the state under this section exceeds the total
of the district's or charter school's estimated payments of FSP funding
for the remainder of the school year, the district or charter school
is subject to reductions in its FSP funding for subsequent school
years until the liability has been fully liquidated. The reduction
in FSP funding may be applied to any source of FSP estimated earned
revenue. A proportionate amount of the reduction in FSP funding will
be deducted from each FSP state aid payment for the school year or
years.
(2) A reduction in FSP funding under this section does
not affect a school district's or open-enrollment charter school's
obligation to comply with all provisions of the TEC, Chapter 48, including
its obligation under that chapter to provide educational services
to special populations.
(d) Review and consequences of failure to comply with
this section. The information a district or open-enrollment charter
school reports on its Superintendent Payment Disclosure Form is subject
to review by the TEA division responsible for school financial reviews.
Compliance with the reporting requirements of this section is considered
part of the district's or open-enrollment charter school's compliance
with required financial accounting practices under the TEC, §39.057(a)(4).
Failure to comply with this section's reporting requirements may result
in sanctions as authorized by the TEC, §39.057(d) and (e).
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| Source Note: The provisions of this §105.1021 adopted to be effective August 14, 2014, 39 TexReg 6045; amended to be effective January 11, 2021, 46 TexReg 302; amended to be effective June 14, 2022, 47 TexReg 3457 |
