This manual is intended to help people working in local libraries collect and report statistics about what they do and complete the Texas State Library annual report form. Texas uses the annual reports to determine whether local libraries are eligible for membership in the Texas library system. Definitions and explanations are given for information requested in the following categories: (1) general information about the library; (2) financial statistics; (3) library collections and services; and (4) other information about the library. The value and use of statistics for program justification and the measurement of effectiveness are discussed; and how the state uses the statistics is reviewed. Three appendixes contain sample forms, sample graphic representations, and the annual report and membership application form. (SLD)