Senate Bill No. 240
Introduced By beck, grady, hibbard, mesaros, bartlett, waterman
A Bill for an Act entitled: "An Act creating the voluntary consolidation and annexation incentive plan for school districts;
providing for state financial assistance through general bonus payments and transportation bonus payments to school
districts that consolidate or annex; statutorily appropriating the payments ALLOWING AN ELEMENTARY, HIGH
SCHOOL, OR K-12 SCHOOL DISTRICT THAT IS CONSOLIDATED OR ANNEXED TO RECEIVE ANB AND
ENTITLEMENT PAYMENTS OF THE COMPONENT DISTRICTS FOR 3 YEARS FOLLOWING THE
CONSOLIDATION OR ANNEXATION; amending sections 17-7-502, 20-6-703, and 20-9-104 SECTION 20-9-311,
MCA; and providing an effective date AND A RETROACTIVE APPLICABILITY DATE."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Definitions. As used in [sections 1 through 8], unless the context clearly indicates otherwise,
the following definitions apply:
(1) "Component district" means the elementary, high school, or K-12 district incorporated into the enlarged district.
(2) "Eligible pupils" means the average number belonging (ANB) in the operating schools of the component districts and
the tuition pupils residing in the component districts and attending another district's school under the tuition provisions of
the school laws except that the pupils residing in the component district having the largest total number of pupils are
ineligible for bonus payment consideration.
(3) "Enlarged district" means the elementary, high school, or K-12 district resulting from the consolidation or annexation
of two or more component districts.
(4) The "general bonus payment" for first- and second-class school districts must be $450 per eligible pupil a year for a
period of 3 years and must be deposited in the enlarged district's general fund. The general bonus payment for third-class
school districts must be $750 per eligible pupil a year for a period of 3 years and must be deposited in the enlarged district's
general fund. The general bonus payment must be made from the state school equalization aid account.
(5) "Transportation bonus payment" is the provision of 66 2/3% state financing of the on-schedule transportation amount
as provided by the transportation provisions of the school laws. When an eligible pupil is entitled to transportation, the
enlarged district is entitled to the transportation bonus payment for the eligible pupil for a period of 3 years. The payment
must be made from the state transportation aid account. When the eligible pupil rides a bus providing transportation for
ineligible pupils, the 66 2/3% state financing of the on-schedule amount for this payment must be prorated to provide
financing for the eligible pupil.
NEW SECTION. Section 2. Voluntary consolidation and annexation incentive plan. [Sections 1 through 8] shall be
known as the voluntary consolidation and annexation incentive plan. The purpose of this plan is to provide additional
financial assistance to school districts that consolidate or annex under the provisions of 20-6-203, 20-6-205, or 20-6-208 for
elementary school districts, 20-6-315 or 20-6-317 for high school districts, or Title 20, chapter 6, part 4, for K-12 districts.
NEW SECTION. Section 3. Application for bonus payments. Whenever two or more elementary school districts
consolidate or annex under the provisions of 20-6-203, 20-6-205, or 20-6-208; two or more high school districts
consolidate or annex under the provisions of 20-6-315 or 20-6-317; or two or more K-12 districts consolidate or annex
under Title 20, chapter 6, part 4, the enlarged district may apply for the bonus payments as provided in this section if the
consolidation or annexation results in the dissolution of at least one elementary, high school, or K-12 district. Application
for the bonus payments must be made during the school year of the order creating the enlarged school district.
NEW SECTION. Section 4. Application to superintendent of public instruction. Application for the bonus payments
must be made to the superintendent of public instruction and must include a copy of the order issued by the proper officials
creating the enlarged school district, the number of eligible pupils as defined in this section, and any other information the
superintendent of public instruction considers necessary.
NEW SECTION. Section 5. Approval or disapproval of application. The superintendent of public instruction shall
approve only those applications that demonstrate compliance with the requirements of this plan. When an application is
approved, the superintendent of public instruction shall determine the number of eligible pupils for the bonus payment.
The superintendent shall notify the enlarged district's board of trustees and the county superintendent of the disapproval of
the application or of the approval of the application establishing the number of eligible pupils.
NEW SECTION. Section 6. Disbursal and deposit of bonus payments. On or before June 30 of the next 3 consecutive
years following the year of application, the superintendent of public instruction shall disburse the bonus payments for
approved applications to the enlarged school district, and that disbursement is statutorily appropriated as provided in
17-7-502. The general bonus payment must be deposited by the county treasurer in the enlarged district's general fund, and
the transportation bonus payment must be deposited by the county treasurer in the transportation fund. These bonus
payments may not be considered as a part of the regular state equalization aid or state transportation aid received by the
enlarged district.
NEW SECTION. Section 7. Effect on plan of reduction in territory. Any reduction in the amount of territory
encompassed in the enlarged school district's territory during the 3-year period of bonus payments will cause the enlarged
district to be ineligible to receive any remaining bonus payments under this plan.
NEW SECTION. Section 8. Effect of addition of component districts. The subsequent addition of other component
districts to the enlarged district entitles the enlarged district to additional bonus payments under the provisions of this plan.
Section 9. Section 17-7-502, MCA, is amended to read:
"17-7-502. Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an
appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative
appropriation or budget amendment.
(2) Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following
provisions:
(a) The law containing the statutory authority must be listed in subsection (3).
(b) The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is
made as provided in this section.
(3) The following laws are the only laws containing statutory appropriations: 2-9-202; 2-17-105; 2-18-812; 3-5-901;
5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-111; 15-23-706; 15-30-195; 15-31-702; 15-37-117;
15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-410; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-5-404; 17-5-424;
17-5-804; 17-6-101; 17-6-201; 17-7-304; 18-11-112; 19-2-502; 19-6-709; 19-9-1007; 19-17-301; 19-18-512; 19-18-513;
19-18-606; 19-19-205; 19-19-305; 19-19-506; [section 6]; 20-8-107; 20-8-111; 20-9-361; 20-26-1503; 23-5-136; 23-5-306;
23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 32-1-537; 37-43-204; 37-51-501; 39-71-503; 39-71-907;
39-71-2321; 39-71-2504; 44-12-206; 44-13-102; 50-4-623; 50-5-232; 50-40-206; 53-6-150; 53-6-703; 53-24-206;
60-2-220; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 76-12-123; 80-2-103; 80-2-222; 80-4-416; 81-5-111;
82-11-136; 82-11-161; 85-1-220; 85-20-402; 90-3-301; 90-4-215; 90-6-331; 90-7-220; 90-7-221; and 90-9-306.
(4) There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all
bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies
that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance
with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest
as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7,
Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; and
pursuant to sec. 7(2), Ch. 29, L. 1995, the inclusion of 15-30-195 terminates July 1, 2001.)"
Section 10. Section 20-6-703, MCA, is amended to read:
"20-6-703. Transitions after formation of K-12 school district. (1) When an attachment order for a K-12 school district
becomes effective on July 1 under the provisions of 20-6-701:
(a) the board of county commissioners shall execute all necessary and appropriate deeds, bills of sale, or other instruments
for the conveyance of title to all real and personal property of the elementary district to the high school district;
(b) the trustees of the elementary district shall entrust the minutes of the board of trustees, the elementary district
documents, and other records to the high school district to which it is attached; and
(c) the county treasurer shall transfer all end-of-the-year warrants and fund balances of the attached elementary district to
the similar funds established for the K-12 school district in the high school district.
(2) All taxes levied by and revenue due from a previous school fiscal year to an elementary district attached to a high
school district must be payable to the appropriate fund of the high school district.
(3) The previous year's general fund budget amounts for the elementary district and the high school district that form a
K-12 school district must be combined to determine the budget limitation for the ensuing school fiscal year pursuant to
20-9-308.
(4) An elementary district and a high school district that form a K-12 school district under the provisions of 20-6-701 may
not be considered an enlarged district for the purposes of bonus payments under [sections 1 through 8]."
Section 11. Section 20-9-104, MCA, is amended to read:
"20-9-104. General fund operating reserve. (1) At the end of each school fiscal year, the trustees of each district shall
designate the portion of the general fund end-of-the-year fund balance that is to be earmarked as operating reserve for the
purpose of paying general fund warrants issued by the district from July 1 to November 30 of the ensuing school fiscal
year. Except as provided in subsections (5) and (6), the amount of the general fund balance that is earmarked as operating
reserve may not exceed 10% of the final general fund budget for the ensuing school fiscal year.
(2) The amount held as operating reserve may not be used for property tax reduction in the manner permitted by
20-9-141(1)(b) for other receipts.
(3) Excess reserves as provided in subsection (5) may be appropriated to reduce the BASE budget levy, the over-BASE
budget levy, or the additional levy provided by 20-9-353.
(4) Any portion of the general fund end-of-the-year fund balance that is not reserved under subsection (2) or reappropriated
under subsection (3) is fund balance reappropriated and must be used for property tax reduction as provided in
20-9-141(1)(b).
(5) The limitation of subsection (1) does not apply when the amount in excess of the limitation is equal to or less than the
unused balance of any amount:
(a) (i) received in settlement of tax payments protested in a prior school fiscal year;
(ii) received in taxes from a prior school fiscal year as a result of a tax audit by the department of revenue or its agents;
(iii) received in delinquent taxes from a prior school fiscal year; and
(iv) received as a local government severance tax payment for calendar year 1995 production as provided in 15-36-325; or
(b) a district was entitled to as a general bonus payment prior to July 1, 1994 under the provisions of [sections 1 through
8].
(6) The limitation of subsection (1) does not apply when the amount earmarked as operating reserve is $10,000 or less."
NEW SECTION. Section 12. Codification instruction. [Sections 1 through 8] are intended to be codified as an integral
part of Title 20, chapter 6, part 4, and the provisions of Title 20, chapter 6, part 4, apply to [sections 1 through 8].
NEW SECTION. Section 13. Saving clause. [This act] does not affect rights and duties that matured, penalties that were
incurred, or proceedings that were begun before [the effective date of this act].
SECTION 1. SECTION 20-9-311, MCA, IS AMENDED TO READ:
"20-9-311. Calculation of average number belonging (ANB). (1) Average number belonging (ANB) must be computed as follows:
(a) compute an average enrollment by adding a count of regularly enrolled full-time pupils who were enrolled as of the first Monday in October of the prior school fiscal year to a count of regularly enrolled pupils on February 1 of the prior school fiscal year, or the nearest school day if those dates do not fall on a school day, and divide the sum by two; and
(b) multiply the average enrollment calculated in subsection (1)(a) by the sum of the pupil-instruction and the approved pupil-instruction-related days for the current school fiscal year and divide by 180.
(2) For the purpose of calculating ANB under subsection (1), up to 7 approved pupil-instruction-related days may be included in the calculation.
(3) When a school district has approval to operate less than 180 school days under 20-9-804, the total ANB must be calculated in accordance with the provisions of 20-9-805.
(4) Enrollment for a part of a morning session or a part of an afternoon session by a pupil must be counted as enrollment for one-half day.
(5) In calculating the ANB for pupils enrolled in a program established under 20-7-117(1), enrollment at a regular session of the program for at least 2 hours of either a morning or an afternoon session must be counted as one-half pupil for ANB purposes. If a variance has been granted as provided in 20-1-302, ANB must be computed in a manner prescribed by the superintendent of public instruction, but the ANB for a kindergarten student may not exceed one-half for each kindergarten pupil.
(6) When any pupil has been absent, with or without excuse, for more than 10 consecutive school days, the pupil may not be included in the enrollment count used in the calculation of the ANB unless the pupil resumes attendance prior to the day of the enrollment count.
(7) The enrollment of prekindergarten pupils, as provided in 20-7-117, may not be included in the ANB calculations.
(8) The average number belonging of the regularly enrolled, full-time pupils for the public schools of a district must be based on the aggregate of all the regularly enrolled, full-time pupils attending the schools of the district, except that when:
(a) (i) a school of the district is located more than 20 miles beyond the incorporated limits of a city or town located in the district and at least 20 miles from any other school of the district, the number of regularly enrolled, full-time pupils of the school must be calculated separately for ANB purposes and the district must receive a basic entitlement for the school calculated separately from the other schools of the district;
(ii) a school of the district is located more than 20 miles from any other school of the district and no incorporated territory
is involved in the district, the number of regularly enrolled, full-time pupils of the school must be calculated separately for
ANB purposes and the district must receive a basic entitlement for the school calculated separately from the other schools
of the district; or
(iii) the superintendent of public instruction approves an application not to aggregate when conditions exist affecting transportation, such as poor roads, mountains, rivers, or other obstacles to travel, or when any other condition exists that would result in an unusual hardship to the pupils of the school if they were transported to another school, the number of regularly enrolled, full-time pupils of the school must be calculated separately for ANB purposes and the district must receive a basic entitlement for the school calculated separately from the other schools of the district; or
(iv) two or more elementary districts consolidate or annex under the provisions of 20-6-203, 20-6-205, or 20-6-208; two or more high school districts consolidate or annex under the provisions of 20-6-315 or 20-6-317; or two or more K-12 districts consolidate or annex under Title 20, chapter 6, part 4, the ANB and the basic entitlements of the component districts must be calculated separately for a period of 3 years following the consolidation or annexation;
(b) a junior high school has been approved and accredited as a junior high school, all of the regularly enrolled, full-time pupils of the junior high school must be considered as high school district pupils for ANB purposes;
(c) a middle school has been approved and accredited, all pupils below the 7th grade must be considered elementary school pupils for ANB purposes and the 7th and 8th grade pupils must be considered high school pupils for ANB purposes; or
(d) a school has not been accredited by the board of public education, the regularly enrolled, full-time pupils attending the nonaccredited school are not eligible for average number belonging calculation purposes, nor will an average number belonging for the nonaccredited school be used in determining the BASE funding program for the district.
(9) When 11th or 12th grade students are regularly enrolled on a part-time basis, high schools may calculate the ANB to include an "equivalent ANB" for those students. The method for calculating an equivalent ANB must be determined in a manner prescribed by the superintendent of public instruction.
(10) For average daily attendance reporting purposes, districts shall provide the superintendent of public instruction with annual reports of school attendance for regularly enrolled students and special education students, using a format determined by the superintendent."
NEW SECTION. Section 2. Effective date -- RETROACTIVE APPLICABILITY. [This act] is effective July 1, 1997, AND APPLIES RETROACTIVELY, WITHIN THE MEANING OF 1-2-109, TO A DISTRICT THAT IS CONSOLIDATED OR ANNEXED ON OR AFTER JANUARY 1, 1997.
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