Legislative Update – May 2016

Since the School Year is drawing to a close and on Capital Hill the Congressmen and Congresswomen as well as the 50 state Senators are busy passing Legislation which will affect the Public Schools, I thought this would make for interesting reading. Please find below some of the many pieces of Legislation that Congress is working on.

House Child Nutrition Reauthorization Bill Clears Committee

The House Education & the Workforce Committee approved the Improving Child Nutrition and Education Act of 2016 (HR 5003) on May 18 with a largely partisan vote of 20 – 14. One Republican (Rep. Dave Brat  (R-VA)) voted against the bill. More than two dozen amendments were considered, several pertaining to the more controversial topics of community eligibility, verification requirements, the federal role in school meal implementation, and a last-minute provision to authorize a 3-state pilot block grant program for administration of school meal programs. Ultimately, HR 5003 was approved with these provisions intact.
With approval of HR 5003, both chambers now have committee-passed bills to reauthorize six major nutrition programs-including school breakfast and lunch. The Senate bill is the Improving Child Nutrition Integrity and Access Act (ICINA) (which has no bill number assigned at this time), and was approved by the Senate Agriculture Committee in January 2016. Both bills take steps to 1) increase flexibility for school districts, 2) meaningfully increase stakeholder engagement (including school boards) and 3) enhance program integrity provisions.
The last CNR reauthorization – the Healthy, Hunger-Free Kids Act – occurred five years ago.  It reauthorized six major nutrition programs-including school breakfast and lunch- and expired on September 30, 2015. However, school meal programs continue to operate at the status quo as long as Congress continues to appropriate funds for the programs.
Local school board engagement: Both bills increase stakeholder engagement – including school boards – in policy and implementation by the U.S. Department of Agriculture. For example, both the House and Senate bills would establish a School Nutrition Advisory Committee (SNAC) to advise the Secretary, and the Committee would include a school board representative. The House bill includes an additional provision for triennial review of national standards, and a requirement to consult with school boards as part of the process. Further, the House bill includes an ESSA-like provision prohibiting the Secretary from establishing regulations or requirements not explicitly authorized by statute.
There are some differences and provisions that are controversial, most notably changes to 1) verification requirements and 2) community eligibility. Below is additional information about these and other provisions.
Verification:  Additional program integrity requirements – such as verification – appear in both bills and have bipartisan support in Congress. While not identical, both bills increase the percentage of applications that school food authorities would verify for eligibility, from the current 3% to as much as 10% based on school performance and other factors. However, both bills also include a number of options to minimize the increase in verifications (called “drop downs”) to reduce the burden on schools and families. School districts may therefore be required to verify the same or potentially fewer applications than they do currently. In addition to appearing in both bills, increased program integrity has support from the Administration.
Community Eligibility Provision (CEP): CEP allows schools and local educational agencies with high poverty rates (40% or more) to provide free breakfast and lunch to all students. CEP eliminates collecting household applications to determine eligibility for school meals, relying instead on information from other means-tested programs such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).
A provision that has generated questions, found only in the House bill (HR 5003), would increase the poverty threshold for CEP eligibility from 40% to 60%. There are mitigating factors for the change, including a two-year transition period for schools and districts that do not meet the 60% threshold. In addition, HR 5003 would direct savings from the CEP change to a much-needed reimbursement increase for the School Breakfast program.
Overall, both the House and Senate bills increase flexibility for school districts and incorporate the school board perspective in meaningful ways. It is unclear when/whether the bills will go to the floor.  As noted above, the current reauthorization remains in effect until such time as a new reauthorization is enacted as long as funding is provided by Congress.

Senate HELP Committee Convenes Third Oversight Hearing on ESSA Implementation

On May 18, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing entitled, “ESSA Implementation: Perspectives from Education Stakeholders.” Chairman Lamar Alexander (R-TN) convened the hearing to discuss concerns over the U.S. Department of Education’s (ED) negotiated rulemaking regulatory proposal on Title I supplement, not supplant (SNS) and the unintended consequences of this regulation if it were to be implemented as currently written.  This is the third of six HELP Committee oversight hearings related to ESSA implementation.  In addition to asking witnesses for recommendations on how to better address inequities in allocation of resources, Committee Members posed questions on the appropriateness of the 1 percent cap on alternative assessments for students with cognitive disabilities. Specific to school districts, the following key points were made during the hearing:
Chairman Lamar Alexander (R-TN) stated that “the Department gets an “F” for following the law in regard to its proposal for Title I SNS.” The Chairman noted that comparability provisions should remain separate from supplement, not supplant provisions. He also noted that the law prohibits the Secretary of Education John B. King, Jr. from requiring districts to equalize spending and require use of a specific methodology.

Dr. Ahart also discussed specific details of ED’s proposed SNS regulations: “To comply, districts would have to spend additional state and local funds to cover salary differential between higher paid and lower paid teachers. Or, in an alternative compliance scenario, districts potentially could shift higher paid teachers to Title I schools, and lower paid teachers to non-Title I schools. Unfortunately, neither of these options correlate with improving student performance. To state it simply, there is no relationship between salary level and teacher effectiveness. School districts clearly do not have the state and local funds to cover salary differential costs of compliance, nor should districts disrupt instructional continuity and communities of practice in our schools by summarily transferring teachers. Moreover, the teacher transfer options would violate most bargaining agreements. Many districts literally would be faced with an impossibility of performance under these regulations, which have no reasonable basis in the act, and appear to violate at least three statutory provisions of ESSA. I hasten to add that neither solution, even if possible to implement, reflect best education practice.”
In writing the law last year, Congress debated and ultimately chose to leave out the comparability provision, particularly as it relates to including teacher salaries in reporting school expenditures. Chairman Alexander pointed out during the hearing that pursuant to Section 1605 of the law, “nothing in this title shall be construed to mandate equalized spending per pupil for a State, local educational agency or school,” and therefore ED could be seeking to regulate an area outside of Congress’ legislative intent and the letter of the law.

Career and Technical Education Reauthorization

The Education and the Workforce Committee held a hearing this week to discuss recommendations for reauthorizing the Perkins Career and Technical Education (CTE) Act.  Last reauthorized in 2006, CTE provides more than $1 billion to states and school districts annually to help support curricula and training for students, including apprenticeships and credentials needed in the workforce.  During the hearing, both witnesses and Committee members noted the success of CTE programs and provided insight about efforts underway to align CTE programs with local and regional workforce demands.  Sen. Tim Kaine (D-VA) testified before the Committee and discussed efforts he is championing in the Senate to support greater opportunities for college and career readiness, such as dual enrollment and expanded partnerships with business and industry.
Dr. Monty Sullivan, president of the Louisiana Community and Technical College System, encouraged the Committee to consider the following recommendations in its upcoming legislation to help respond to both workforce and industry needs and also improve the value proposition to students:
–Align Perkins with tenets of the Workforce Innovation and Opportunity Act, such as utilizing access to salary data and benchmarks for economic growth and competitiveness;
–Maximize investments in CTE programs;
–Emphasize regional plans/partnerships;
–Encourage dual enrollment opportunities focused on completion and credentials; and
–Consider allowances for special populations such as veterans entering workforce.
Committee Chairman John Kline (R-MN) reiterated that CTE programs have to work “at the speed of business.”
“We need to apply many of the same methods from the Every Student Succeeds Act,” Chairman Kline stated, while referencing greater state and local autonomy, better information for accountability, and “restricting the federal role.”
NSBA is engaged in the reauthorization process and has provided House and Senate education committee staff with resources to inform the legislation, including the Center for Public Education research series titled “The Path Least Taken: Preparing Non-College Goers for Success.” Findings show that advanced courses with an occupational focus make a difference in student outcomes.

Changes to Labor’s Overtime Rules

On May 18, President Obama and Secretary Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations under the Fair Labor Standards Act (FLSA).  The rule will be published in the Federal Register and therefore final on May 23.   The rule, which does not impact teachers and administrators, will go into effect for public, private and non-profit employers on December 1, 2016.  Additional details can be found here.  NSBA has been a continuous advocate for school district flexibility in the proposed rule.

To date, Congress has conducted several oversight hearings of the Department of Labor to examine the requirements of the rule. Now that the Department of Labor is taking final steps to finalize the rule, individual members of Congress have stated that they are evaluating and considering ways to delay or nullify the rule prior to the rule becoming effective.

NSBA has initially reviewed the final rule and identified the following changes affecting school districts as employers:

Rule:  Though the U.S. Department of Labor’s (DOL) new overtime rule is anticipated to be published on May 23, 2016, the final rule does not take effect until December 1, 2016.  That means that all employers, of all shapes and sizes, must be in compliance with the salary threshold requirements by that date, irrespective of their fiscal year start dates.

Implications:  This could be a challenge for school districts, because by this time in a school district’s calendar, most school districts have likely already prepared their budgets for the upcoming 2016-17 school year.  However, there may still be time to make modifications based on a July 1 fiscal year.

Rule:  Although the executive, administrative, and professional exemptions expressly apply to an “employee employed in the capacity of academic administrative personnel or teacher[s],” the salary level and salary basis requirements do not apply to bona fide teachers.

Implications:  Administrators and teachers are exempt from the overtime rule, and are not eligible for overtime compensation.

Rule:  The minimum salary threshold for all non-highly-compensated employee categories (executive, administrative, and professional) is $47,476/year, based on the lowest-wage Census Region (Southern).

Implications:  This is lower than what was in the proposed rule.  DOL initially proposed $50,440/yr., however, the final rule set the salary threshold at $47,476/yr.  This lower threshold means fewer school district employees will likely be affected by the rule change.

Rule:  The minimum salary threshold for all highly compensated employees has been raised to $134,004/year.

Implications:  This is higher than what the proposed rule initially set forth, and is based on national wages. DOL initially proposed $122,148/yr., while the final rule set the amount at $134,004/yr.  This higher threshold means more highly paid school district employees will continue to be ineligible for overtime under the rule.

Rule:  The proposed annual update to the minimum salary threshold has been changed from every year to every THREE years, setting the date for the increase to a firm January 1st date, beginning on January 1, 2020.  Again, this triennial automatic salary update will occur irrespective of a school district’s fiscal year start date.

Implications:  A longer period for threshold changes means school districts do not have to anticipate yearly budgetary changes based on the final rule.  This shift to a calendar year update schedule means that school districts will have to make these financial changes mid-budgetary cycle.  However, the three-year period provided in the final rule gives school districts more time to include changes in annual budget cycles as they prepare for the triennial increase.  Thus, a school district can prepare for the January 1, 2020 increase during the development of the 2019-20 SY budget in early Spring 2019.

Rule:  The final rule allows employers to include NON-discretionary bonuses, incentives, and commissions, paid quarterly or more frequently, as part of the total annual salary for exempt-status determinations.

Implications:  Likely will not affect school district employees or budgets, since most if not all school employee compensation is paid pursuant to scheduled budgetary authorizations and schedules.

Rule:  No change to the “Duties Test.”

Implications:  None.  Salaried workers who primarily perform executive, administrative, or professional duties continue to be exempt from DOL’s overtime rules.  DOL may move to alter the duties test in the future based on comments received during this notice and comment period.

NSBA will continue to review the impact of the rule on school districts and we welcome your feedback on how it may impact your school districts.  Stay tuned for additional information.

These are just a few of the many pieces of Legislation that passes through Congress each session that gives the Federal Government the over reaching arm to have a say in the day to day business of the States’ Public School Systems.

Have a wonderful day!

Jeanne S. Dozier