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SENATE BILL NO. 107
INTRODUCED BY T. BROWN
A BILL FOR AN ACT ENTITLED: "AN ACT REVISING THE ELIGIBILITY CRITERIA, PROCEDURE, AND FUNDING FOR AN EXISTING ELEMENTARY DISTRICT TO EXPAND INTO A K-12 SCHOOL DISTRICT; AMENDING SECTIONS 20-6-326, 20-6-411, 20-6-417, 20-9-311, 20-9-502, AND 20-9-630, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 20-6-326, MCA, is amended to read:
"20-6-326. Procedure for creation of high school district solely for expansion into K-12 school district -- trustee resolution. (1) An existing elementary district that is not part of a unified school system or governed by a joint board with a high school district may create a high school district solely for the purpose of expanding an elementary district into a K-12 district only if the elementary district's ANB, as calculated under the provisions of 20-9-311, is at least 1,000.:
(a) the nearest elementary school building is located at a distance of at least 40 miles from the nearest accessible high school;
(b) the trip from the nearest elementary school building to the nearest accessible high school is 60 minutes or more over the shortest passable route;
(c) periodically during the school year, the condition of the road makes it impractical to attend the nearest accessible high school; and
(d) at least 50 high school students reside in the elementary district; and
(e) the taxable valuation and boundaries of the combining elementary and high school district are the same.
(2) The creation of a new high school district may be requested by the trustees of an existing elementary district through passage of a resolution that includes the information outlined in 20-6-105(3) and requests the county superintendent to order an election to allow the electors of the elementary district to consider the proposition to create a high school district solely for the purpose of expanding the elementary school district into a K-12 district. Approval of the proposition results in a tax levy for payments as provided in subsection (6)(b). When the trustees canvass the vote of a school district expansion election under this section, they shall determine the approval or rejection of the expansion proposition as follows:
(a) Except as provided in subsection (2)(c), if the school district expansion election is held at a regular school election or at a special election called by the trustees, the trustees shall:
(i) determine the total number of electors of the elementary school district who are qualified to vote under the provisions of 20-20-301 from the list of electors provided by the county registrar for the school district expansion election;
(ii) determine the total number of qualified electors voting at the school district expansion election from the tally sheets for the election; and
(iii) calculate the percentage of qualified electors voting at the school district expansion election by dividing the amount determined in subsection (2)(a)(ii) by the amount determined in subsection (2)(a)(i).
(b) When the calculated percentage in subsection (2)(a)(iii) is:
(i) 40% or more, the school district expansion proposition is approved and adopted only if a majority of the votes were cast in favor of the proposition;
(ii) more than 30% but less than 40%, the school district expansion proposition is approved and adopted only if 60% or more of the votes were cast in favor of the proposition; or
(iii) 30% or less, the school district expansion proposition is rejected.
(c) If the school district expansion election is held at a general election, at an election that is conducted by mail ballot as provided in Title 13, chapter 19, or at a special election that is held in conjunction with a regular or primary election, the determination of the approval or rejection of the school district expansion proposition is made by a majority of the votes cast on the issue.
(d) If the canvass of the vote establishes the approval and adoption of the school district expansion proposition, the trustees shall issue a certificate proclaiming the passage of the proposition.
(3) If the proposition to create a high school district solely for the purpose of expanding the elementary district into a K-12 district is approved by the electors of the district pursuant to subsection (2), the approval of the proposition results in a transition costs tax levy for payments as provided in subsection (8)(b).
(3)(4) If the proposition for the expansion and the transition levy provided for in 20-9-502(6) into a K-12 district is approved by the electors of the elementary district and the trustees issue a certificate of election as provided in 20-20-416, the county superintendent shall order the creation of the high school district and oversee the expansion of the high school district into a K-12 district pursuant to 20-6-701.
(5) If the proposition for expanding the elementary district into a K-12 district is approved under the procedure provided in subsection (2) and the trustees issue a certificate of election under 20-20-416, the county superintendent shall report the amount of the transition levy requirement to the county commissioners and a levy on the district must be made by the county commissioners in accordance with 20-9-142.
(4)(6) The county superintendent shall send a copy of the order to the board of county commissioners and to the trustees of the districts affected by the creation of the district.
(5)(7) If a new district is created, the effective date of its creation is the following July 1. The trustees of the elementary district must be designated as the trustees of the new K-12 district.
(6)(8) Until the first school fiscal year in which the new K-12 district enrolls high school students in all grades, the existing high school district shall provide high school instruction to students residing in the newly created K-12 district with the K-12 district paying the existing high school district:
(a) tuition and transportation charged pursuant to the provisions of 20-5-320 and 20-5-321; and
(b) an amount equal to the BASE general fund mills for the existing high school district assessed against the taxable valuation in the new K-12 district and funded using a building reserve fund levy for transition costs as provided in 20-9-502. In calculating the number of BASE general fund mills to be levied in the existing high school district, the existing high school district shall include the taxable valuation of the new high school district. The payment to the existing high school district must be deposited in the district general fund and used to reduce the BASE budget levy.
(7) If bonded indebtedness has been approved by the voters of the existing high school district prior to April 12, 2007, but the bonds have not been sold prior to the creation of the new K-12 district, then the future indebtedness of those bonds when those bonds are sold must be paid by levies on the original territory.
(9) Upon the county superintendent's order of creation of the new high school district under subsection (4), the trustees of the new high school district shall enter into negotiations for a multidistrict cooperative agreement with the existing high school district under the provisions of 20-3-363. The agreement between the districts must address, at a minimum:
(a) how the districts will retire any bonded indebtedness approved by the voters of the existing high school district prior to the voters' approval for the creation of a new high school district for the purpose of expanding into a K-12 district; and
(b) how the districts will address the, AN EQUITABLE division of assets currently held in trust for the mutual benefit of all students in the existing district, including but not limited to property, buildings, buses, machinery, textbooks, and computers and related equipment. THE DIVISION OF ASSETS MUST CONSIDER ANY REMAINING BONDED INDEBTEDNESS APPROVED BY THE VOTERS OF THE EXISTING HIGH SCHOOL DISTRICT PRIOR TO THE VOTERS' APPROVAL FOR THE CREATION OF A NEW HIGH SCHOOL DISTRICT FOR THE PURPOSE OF EXPANDING INTO A K-12 DISTRICT.
(10) (a) If the school district trustees are unable to reach agreement as provided under subsection (9) within 90 days of the county superintendent's order of creation of the new high school district under subsection (4), the affected school districts shall submit their respective proposals to the county superintendent, who shall:
(i) not more than 40 days after the submission of the proposals, set a place, date, and time for a hearing to consider the unresolved issues; and
(ii) give notice of the place, date, and time of the hearing. The notice must be posted in the districts affected by the multidistrict cooperative agreement in the manner prescribed in this title for notices for school elections. Notice must also be delivered to the board of trustees in each of the districts affected.
(b) The county superintendent shall conduct a hearing as scheduled, and any resident, taxpayer, or representative of the existing or new district must, on request, be heard. At the hearing, the new district has the initial burden of presenting evidence on its proposal's effect on the educational opportunity in the existing and new districts, including but not limited to:
(i) class size;
(ii) ability to maintain demographic diversity;
(iii) local control;
(iv) parental involvement;
(v) the capability of the new district to provide educational services;
(vi) student transportation, including but not limited to safety, cost, and travel time of students; and
(vii) the economic viability of the new district. This analysis must include but is not limited to the existence of a significant burden on the taxpayers, the significance of any loss in state funding for students, the viability of the future bonding capacity, and the ability to meet minimum bonding requirements in both the existing district and the new district.
(c) After receiving evidence from representatives of the existing school district and the new school district, the county superintendent shall, within 30 days of the hearing, issue a resolution for each of the issues presented, which must be adopted into the multidistrict cooperative agreement between the existing district and the new district. The resolution of the county superintendent is final 30 days after the date of its issuance unless it is appealed to the district court by a resident, taxpayer, or representative of either district affected by the multidistrict cooperative agreement. The county superintendent's resolution must be upheld unless the court finds that the county superintendent's resolution constituted an abuse of discretion under this section.
(8)(11) If the K-12 school district does not open and operate a high school within 3 5 years after the effective date of the creation of the new district, the order of the county superintendent creating a new district under this section is void, the new district ceases to exist, and the trustees of the new district have no capacity to act. Those trustees retain authority as trustees of the elementary district."
Section 2. Section 20-6-411, MCA, is amended to read:
"20-6-411. Bonded indebtedness to remain with original territory except when assumed by election -- exceptions. Whenever district boundaries are changed in any manner prescribed in this title, the existing bonded indebtedness against any district or territory affected by a change of boundaries remains the indebtedness of the original territory against which the bonds were issued and must be paid by levies on the original territory, except when districts are consolidated with the mutual assumption of bonded indebtedness, or when a district is annexed with a joint assumption of the annexing district's bonded indebtedness, or when bonded indebtedness is negotiated when an elementary district expands into a K-12 district under 20-6-326. Any money to the credit of the debt service fund of a district when its boundaries are changed must be used to pay the existing bond principal and interest of the original territory issuing the bonds as it becomes due or for bond redemption under the bonding provisions of this title."
Section 2. Section 20-6-417, MCA, is amended to read:
"20-6-417. Property disposition when district boundaries changed. Whenever Except when the division of assets is negotiated as the result of elementary district expansion into a K-12 district under 20-6-326, whenever district boundaries are changed, title to the real and personal property of the districts involved in such boundary change shall vest in the district which that encompasses the territory where such real or personal property was located at the time the legal procedure to authorize the boundary change was introduced. The disposition or utilization of such property will be in the discretion of the trustees of the district encompassing the territory of its location, as provided by law."
Section 3. Section 20-9-311, MCA, is amended to read:
"20-9-311. Calculation of average number belonging (ANB) -- 3-year averaging. (1) Average number belonging (ANB) must be computed for each budget unit 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 the first Monday in December of the prior school fiscal year and to a count of regularly enrolled pupils on the first Monday in February of the prior school fiscal year or the next school day if those dates do not fall on a school day, and divide the sum by three; and
(b) multiply the average enrollment calculated in subsection (1)(a) by the sum of 180 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 the minimum aggregate hours under 20-9-806, the total ANB must be calculated in accordance with the provisions of 20-9-805.
(4) (a) Except as provided in subsection (4)(d), for the purpose of calculating ANB, enrollment in an education program:
(i) from 180 to 359 aggregate hours of pupil instruction per school year is counted as one-quarter-time enrollment;
(ii) from 360 to 539 aggregate hours of pupil instruction per school year is counted as half-time enrollment;
(iii) from 540 to 719 aggregate hours of pupil instruction per school year is counted as three-quarter-time enrollment; and
(iv) 720 or more aggregate hours of pupil instruction per school year is counted as full-time enrollment.
(b) Except as provided in subsection (4)(d), enrollment in a program intended to provide fewer than 180 aggregate hours of pupil instruction per school year may not be included for purposes of ANB.
(c) Enrollment in a self-paced program or course may be converted to an hourly equivalent based on the hours necessary and appropriate to provide the course within a regular classroom schedule.
(d) A school district may include in its calculation of ANB a pupil who is enrolled in a program providing fewer than the required aggregate hours of pupil instruction required under subsection (4)(a) or (4)(b) if the pupil has demonstrated proficiency in the content ordinarily covered by the instruction as determined by the school board using district assessments. The ANB of a pupil under this subsection (4)(d) must be converted to an hourly equivalent based on the hours of instruction ordinarily provided for the content over which the student has demonstrated proficiency.
(e) A pupil in kindergarten through grade 12 who is concurrently enrolled in more than one public school, program, or district may not be counted as more than one full-time pupil for ANB purposes.
(5) For a district that is transitioning from a half-time to a full-time kindergarten program, the state superintendent shall count kindergarten enrollment in the previous year as full-time enrollment for the purpose of calculating ANB for the elementary programs offering full-time kindergarten in the current year. For the purposes of calculating the 3-year ANB, the superintendent of public instruction shall count the kindergarten enrollment as one-half enrollment and then add the additional kindergarten ANB to the 3-year average ANB for districts offering full-time kindergarten.
(6) When a 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 preschool 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:
(a) the ANB is calculated as a separate budget unit when:
(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 as a separate budget unit 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 incorporated territory is not 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;
(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 districts consolidate or annex under the provisions of 20-6-422 or 20-6-423, 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. Each district shall retain a percentage of its basic entitlement for 3 additional years as follows:
(A) 75% of the basic entitlement for the fourth year;
(B) 50% of the basic entitlement for the fifth year; and
(C) 25% of the basic entitlement for the sixth year.
(b) when 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) when 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) when a school has been designated as nonaccredited by the board of public education because of failure to meet the board of public education's assurance and performance standards, 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) The district shall provide the superintendent of public instruction with semiannual reports of school attendance, absence, and enrollment for regularly enrolled students, using a format determined by the superintendent.
(10) (a) Except as provided in subsections (10)(b) and (10)(c), enrollment in a basic education program provided by the district through any combination of onsite or offsite instruction may be included for ANB purposes only if the pupil is offered access to the complete range of educational services for the basic education program required by the accreditation standards adopted by the board of public education.
(b) Access to school programs and services for a student placed by the trustees in a private program for special education may be limited to the programs and services specified in an approved individual education plan supervised by the district.
(c) Access to school programs and services for a student who is incarcerated in a facility, other than a youth detention center, may be limited to the programs and services provided by the district at district expense under an agreement with the incarcerating facility.
(d) This subsection (10) may not be construed to require a school district to offer access to activities governed by an organization having jurisdiction over interscholastic activities, contests, and tournaments to a pupil who is not otherwise eligible under the rules of the organization.
(11) A district may include only, for ANB purposes, an enrolled pupil who is otherwise eligible under this title and who is:
(a) a resident of the district or a nonresident student admitted by trustees under a student attendance agreement and who is attending a school of the district;
(b) unable to attend school due to a medical reason certified by a medical doctor and receiving individualized educational services supervised by the district, at district expense, at a home or facility that does not offer an educational program;
(c) unable to attend school due to the student's incarceration in a facility, other than a youth detention center, and who is receiving individualized educational services supervised by the district, at district expense, at a home or facility that does not offer an educational program;
(d) receiving special education and related services, other than day treatment, under a placement by the trustees at a private nonsectarian school or private program if the pupil's services are provided at the district's expense under an approved individual education plan supervised by the district;
(e) participating in the running start program at district expense under 20-9-706;
(f) receiving educational services, provided by the district, using appropriately licensed district staff at a private residential program or private residential facility licensed by the department of public health and human services;
(g) enrolled in an educational program or course provided at district expense using electronic or offsite delivery methods, including but not limited to tutoring, distance learning programs, online programs, and technology delivered learning programs, while attending a school of the district or any other nonsectarian offsite instructional setting with the approval of the trustees of the district. The pupil shall:
(i) meet the residency requirements for that district as provided in 1-1-215;
(ii) live in the district and must be eligible for educational services under the Individuals With Disabilities Education Act or under 29 U.S.C. 794; or
(iii) attend school in the district under a mandatory attendance agreement as provided in 20-5-321.
(h) a resident of the district attending the Montana youth challenge program or a Montana job corps program under an interlocal agreement with the district under 20-9-707.
(12) A district shall, for ANB purposes, calculate the enrollment of an eligible Montana youth challenge program participant as half-time enrollment.
(13) (a) For an elementary or high school district that has been in existence for 3 years or more, the district's maximum general fund budget and BASE budget for the ensuing school fiscal year must be calculated using the current year ANB for all budget units or the 3-year average ANB for all budget units, whichever generates the greatest maximum general fund budget.
(b) For a K-12 district that has been in existence for 3 years or more, the district's maximum general fund budget and BASE budget for the ensuing school fiscal year must be calculated separately for the elementary and high school programs pursuant to subsection (13)(a) and then combined.
(c) For the purposes of school funding calculations under this chapter in a K-12 district created pursuant to 20-6-326, the high school ANB for the first year that the district enrolls high school students in all grades, and for any prior years, must be estimated by dividing the ANB of the elementary district by 9 and then multiplying by 4. The superintendent of public instruction shall adjust the district's BASE aid for the remainder of the initial year of high school operations based on the October enrollment count described in subsection (1)(a).
(14) The term "3-year ANB" means an average ANB over the most recent 3-year period, calculated by:
(a) adding the ANB for the budget unit for the ensuing school fiscal year to the ANB for each of the previous 2 school fiscal years; and
(b) dividing the sum calculated under subsection (14)(a) by three 3."
Section 4. Section 20-9-502, MCA, is amended to read:
"20-9-502. Purpose and authorization of building reserve fund by election -- levy for school transition costs. (1) The trustees of any district, with the approval of the qualified electors of the district, may establish a building reserve for the purpose of raising money for the future construction, equipping, or enlarging of school buildings, for the purpose of purchasing land needed for school purposes in the district, or for the purpose of funding school transition costs as provided in subsections (5) and (6). In order to submit to the qualified electors of the district a building reserve proposition for the establishment of or addition to a building reserve, the trustees shall pass a resolution that specifies:
(a) the purpose or purposes for which the new or addition to the building reserve will be used;
(b) the duration of time over which the new or addition to the building reserve will be raised in annual, equal installments;
(c) the total amount of money that will be raised during the duration of time specified in subsection (1)(b); and
(d) any other requirements under 15-10-425 and 20-20-201 for the calling of an election.
(2) Except as provided in subsections (5)(b) and (6), a building reserve tax authorization may not be for more than 20 years.
(3) The election must be conducted in accordance with the school election laws of this title, and the electors qualified to vote in the election must be qualified under the provisions of 20-20-301. The ballot for a building reserve proposition must be substantially in compliance with 15-10-425.
(4) The building reserve proposition is approved if a majority of those electors voting at the election approve the establishment of or addition to the building reserve. The annual budgeting and taxation authority of the trustees for a building reserve is computed by dividing the total authorized amount by the specified number of years. The authority of the trustees to budget and impose the taxation for the annual amount to be raised for the building reserve lapses when, at a later time, a bond issue is approved by the qualified electors of the district for the same purpose or purposes for which the building reserve fund of the district was established. Whenever a subsequent bond issue is made for the same purpose or purposes of a building reserve, the money in the building reserve must be used for the purpose or purposes before any money realized by the bond issue is used.
(5) (a) The trustees may submit a proposition to the qualified electors of the district for a levy to provide funding for transition costs incurred when the trustees:
(i) open a new school under the provisions of Title 20, chapter 6;
(ii) close a school;
(iii) replace a school building; or
(iv) consolidate with or annex another district under the provisions of Title 20, chapter 6.
(b) Except as provided in subsections (5)(c) and (6), the total amount the trustees may submit to the electorate for transition costs may not exceed the number of years specified in the proposition times the greater of 5% of the district's maximum general fund budget for the current year or $250 per ANB for the current year. Except as provided in subsection (6), the duration of the levy for transition costs may not exceed 6 years.
(c) If the levy for transition costs is for consolidation or annexation:
(i) the limitation on the amount levied is calculated using the ANB and the maximum general fund budget for the districts that are being combined; and
(ii) the proposition must be submitted to the qualified electors in the combined district.
(d) The levy for transition costs may not be considered as outstanding indebtedness for the purpose of calculating the limitation in 20-9-406.
(6) The trustees of a K-12 district shall impose a levy for transition costs to fund the payment required by 20-6-326(6)(b)(8)(b) when a proposition to create the K-12 district and to assess the transition levy has been approved pursuant to 20-6-326(2) through (4). The levy is limited to the amount required by 20-6-326(6)(b)(8)(b) for a period not to exceed 3 5 years."
Section 5. Section 20-9-630, MCA, is amended to read:
"20-9-630. School district block grants. (1) (a) The office of public instruction shall provide a block grant to each school district based on:
(i) the revenue received by each district in fiscal year 2001 from vehicle taxes and fees, corporate income taxes paid by financial institutions, aeronautics fees, state land payments in lieu of taxes, and property tax reimbursements pursuant to sections 167(1) through (5) and 169(6), Chapter 584, Laws of 1999; and
(ii) any reimbursement to be made to a school district pursuant to subsection (2).
(b) Block grants must be calculated using the electronic reporting system that is used by the office of public instruction and school districts. The electronic reporting system must be used to allocate the block grant amount into each district's budget as an anticipated revenue source by fund.
(2) If the legislature enacts a reimbursement provision that is to be distributed pursuant to this section, the office of public instruction shall determine the reimbursement amount as provided in the enactment and add the appropriate amount to block grant distributions under this section. Except for the reimbursement made under 15-1-123(3)(b), the total of reimbursement distributions made pursuant to this subsection in a fiscal year must be added to all other distributions to the school district in the fiscal year to determine the distribution for the subsequent fiscal year.
(3) Each year, 70% of each district's block grant must be distributed in November and 30% of each district's block grant must be distributed in May at the same time that guaranteed tax base aid is distributed.
(4) (a) The block grant for the district general fund is equal to the amount received in fiscal year 2011 by the district general fund from the block grants provided for in subsection (1) and the amount received by the district general fund under subsection (2), except the amount received under 15-1-123(3)(b).
(b) The block grant for the district transportation fund is equal to the amount received in fiscal year 2011 by the district transportation fund from the block grants provided for in subsection (1) and the amount received by the district transportation fund under subsection (2), except the amount received under 15-1-123(3)(b).
(c) (i) The combined fund block grant is equal to the amount received in fiscal year 2011 and the amount received under subsection (2), except the amount received under 15-1-123(3)(b).
(ii) The school district may deposit the combined fund block grant into any budgeted fund of the district.
(5) When a new K-12 district is created under the provisions of 20-6-326, new block grant payments to the resulting high school district and the new K-12 district must be established by the office of public instruction based on the proportion of high school ANB in each."
NEW SECTION. Section 6. Effective date. [This act] is effective on passage and approval.
- END -
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