The Kentucky Education Reform Act of 1990 (KERA) requires the implementation of school-based decision making in all Kentucky schools by July 1996. The school-based decision making process offers the opportunity for parents, teachers, and principals to use their knowledge and judgment in deciding how to best help children learn in their schools. A school council (two parents, three teachers, and one principal or administrator), advised by the school's staff, will make policies on curriculum, instructional practices, schedules for the school's staff and students, uses of school space, discipline and classroom management, and extracurricular programs. Staff shall divide into committees according to their areas of interest. These areas may include, but are not limited to, grade levels, subject areas, and special programs. Seven goals for Kentucky student education are described. This document provides an overview of the laws and regulations governing school-based decision making and a representation of areas of disagreement in interpretation. Appendices include: (1) the text of KRS 160.345, specifying the required adoption of school councils for school-based decision making, the composition of councils, their responsibilities, exemptions, and discretionary fund; (2) funding formula (702 KAR 3:240); and (3) discussion of funding for education. A glossary is also included. (LAP)