2017 Montana Legislature

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HOUSE BILL NO. 12

INTRODUCED BY D. HAYMAN

BY REQUEST OF THE OFFICE OF BUDGET AND PROGRAM PLANNING

 

A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLY REVISING EDUCATION FUNDING LAWS; PROVIDING INFLATION-RELATED ADJUSTMENTS TO THE BASIC ENTITLEMENT, THE PER-ANB ENTITLEMENT, AND THE GENERAL FUND PAYMENTS IN 20-9-327, 20-9-329, AND 20-9-330; ELIMINATING THE NATURAL RESOURCE DEVELOPMENT K-12 FUNDING PAYMENT; ELIMINATING THE STATUTORY APPROPRIATION FOR THE STATE SCHOOL OIL AND NATURAL GAS IMPACT ACCOUNT AND THE STATE SCHOOL OIL AND NATURAL GAS DISTRIBUTION ACCOUNT; REPEALING THE DATA-FOR-ACHIEVEMENT PAYMENT; REVISING TERMINATION DATES OF TEMPORARY VERSIONS OF 20-9-310, 20-9-517 AND 20-9-518, MCA; REVISING UNUSUAL ENROLLMENT FUNDING; REVISING EXCESS OIL AND NATURAL GAS REVENUE DISTRIBUTION; TEMPORARILY REDIRECTING AND STATUTORILY APPROPRIATING TECHNOLOGY FUNDING TO E-RATE BROADBAND MATCH; PROVIDING LEGISLATIVE INTENT; AMENDING SECTIONS 17-7-502, 20-7-102, 20-9-141, 20-9-306, 20-9-308, 20-9-310, 20-9-314, 20-9-323, 20-9-326, 20-9-342, 20-9-344, 20-9-366, 20-9-517, 20-9-518, 20-9-520, 20-9-534, AND 20-9-622, MCA; AMENDING SECTION 7, CHAPTER 433, LAWS OF 2015; REPEALING SECTION 20-9-325, MCA; AND PROVIDING EFFECTIVE DATES, AN APPLICABILITY DATE, AND A TERMINATION DATE."

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

 

     Section 1.  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: 2-17-105; 5-11-120; 5-11-407; 5-13-403; 7-4-2502; 10-1-108; 10-1-1202; 10-1-1303; 10-2-603; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-121; 15-1-218; 15-35-108; 15-36-332; 15-37-117; 15-39-110; 15-65-121; 15-70-101; 15-70-433; 15-70-601; 16-11-509; 17-3-106; 17-3-112; 17-3-212; 17-3-222; 17-3-241; 17-6-101; 17-7-215; 18-11-112; 19-3-319; 19-6-404; 19-6-410; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-506; 19-20-604; 19-20-607; 19-21-203; 20-8-107; 20-9-517; 20-9-520; 20-9-534; 20-9-622; 20-9-905; 20-26-617; 20-26-1503; 22-1-327; 22-3-116; 22-3-117; 22-3-1004; 23-4-105; 23-5-306; 23-5-409; 23-5-612; 23-7-301; 23-7-402; 30-10-1004; 37-43-204; 37-50-209; 37-51-501; 39-71-503; 41-5-2011; 42-2-105; 44-4-1101; 44-12-213; 44-13-102; 50-1-115; 53-1-109; 53-6-1304; 53-9-113; 53-24-108; 53-24-206; 60-11-115; 61-3-415; 69-3-870; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 76-13-150; 76-13-416; 77-1-108; 77-2-362; 80-2-222; 80-4-416; 80-11-518; 81-1-112; 81-7-106; 81-10-103; 82-11-161; 85-20-1504; 85-20-1505; [85-25-102]; 87-1-603; 90-1-115; 90-1-205; 90-1-504; 90-3-1003; 90-6-331; 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. 10, Ch. 360, L. 1999, the inclusion of 19-20-604 terminates contingently when the amortization period for the teachers' retirement system's unfunded liability is 10 years or less; pursuant to sec. 10, Ch. 10, Sp. L. May 2000, secs. 3 and 6, Ch. 481, L. 2003, and sec. 2, Ch. 459, L. 2009, the inclusion of 15-35-108 terminates June 30, 2019; pursuant to sec. 73, Ch. 44, L. 2007, the inclusion of 19-6-410 terminates contingently upon the death of the last recipient eligible under 19-6-709(2) for the supplemental benefit provided by 19-6-709; pursuant to sec. 5, Ch. 442, L. 2009, the inclusion of 90-6-331 terminates June 30, 2019; pursuant to sec. 16, Ch. 58, L. 2011, the inclusion of 30-10-1004 terminates June 30, 2017; pursuant to sec. 6, Ch. 61, L. 2011, the inclusion of 76-13-416 terminates June 30, 2019; pursuant to sec. 13, Ch. 339, L. 2011, the inclusion of 81-1-112 and 81-7-106 terminates June 30, 2017; pursuant to sec. 11(2), Ch. 17, L. 2013, the inclusion of 17-3-112 terminates on occurrence of contingency; pursuant to sec. 5, Ch. 244, L. 2013, the inclusion of 22-1-327 terminates July 1, 2017; pursuant to sec. 27, Ch. 285, L. 2015, and sec. 1, Ch. 292, L. 2015, the inclusion of 53-9-113 terminates June 30, 2021; pursuant to sec. 6, Ch. 291, L. 2015, the inclusion of 50-1-115 terminates June 30, 2021; pursuant to sec. 28, Ch. 368, L. 2015, the inclusion of 53-6-1304 terminates June 30, 2019; pursuant to sec. 5, Ch. 383, L. 2015, the inclusion of 85-25-102 is effective on occurrence of contingency; pursuant to sec. 5, Ch. 422, L. 2015, the inclusion of 17-7-215 terminates June 30, 2021; pursuant to sec. 6, Ch. 423, L. 2015, the inclusion of 22-3-116 and 22-3-117 terminates June 30, 2025; pursuant to sec. 10, Ch. 427, L. 2015, the inclusion of 37-50-209 terminates September 30, 2019; and pursuant to sec. 33, Ch. 457, L. 2015, the inclusion of 20-9-905 terminates December 31, 2023.)"

 

     Section 2.  Section 20-7-102, MCA, is amended to read:

     "20-7-102.  Accreditation of schools. (1) The conditions under which each elementary school, each middle school, each junior high school, 7th and 8th grades funded at high school rates, and each high school operates must be reviewed by the superintendent of public instruction to determine compliance with the standards of accreditation. The accreditation status of each school must then be established by the board of public education upon the recommendation of the superintendent of public instruction. Notification of the accreditation status for the applicable school year or years must be given to each district by the superintendent of public instruction.

     (2)  A school may be accredited for a period consisting of 1, 2, 3, 4, or 5 school years, except that multiyear accreditation may be granted only to schools that are in compliance with 20-4-101.

     (3)  A nonpublic school may, through its governing body, request that the board of public education accredit the school. Nonpublic schools may be accredited in the same manner as provided in subsection (1).

     (4)  As used in this section, "7th and 8th grades funded at high school rates" means an elementary school district or K-12 district elementary program whose 7th and 8th grades are funded as provided in 20-9-306(15)(c)(ii) 20-9-306(14)(c)(ii)."

 

     Section 3.  Section 20-9-141, MCA, is amended to read:

     "20-9-141.  Computation of general fund net levy requirement by county superintendent. (1) The county superintendent shall compute the levy requirement for each district's general fund on the basis of the following procedure:

     (a)  Determine the funding required for the district's final general fund budget less the sum of direct state aid, the natural resource development K-12 funding payment, and the special education allowable cost payment for the district by totaling:

     (i)  the district's nonisolated school BASE budget requirement to be met by a district levy as provided in 20-9-303; and

     (ii) any general fund budget amount adopted by the trustees of the district under the provisions of 20-9-308 and 20-9-353.

     (b)  Determine the money available for the reduction of the property tax on the district for the general fund by totaling:

     (i)  the general fund balance reappropriated, as established under the provisions of 20-9-104;

     (ii) amounts received in the last fiscal year for which revenue reporting was required for each of the following:

     (A)  interest earned by the investment of general fund cash in accordance with the provisions of 20-9-213(4); and

     (B)  any other revenue received during the school fiscal year that may be used to finance the general fund, excluding any guaranteed tax base aid;

     (iii) anticipated oil and natural gas production taxes;

     (iv) pursuant to subsection (4), anticipated revenue from coal gross proceeds under 15-23-703;

     (v)  school district block grants distributed under 20-9-630; and

     (vi) any portion of the increment remitted to a school district under 7-15-4291 used to reduce the BASE levy budget.

     (c)  Notwithstanding the provisions of subsection (2), subtract the money available to reduce the property tax required to finance the general fund that has been determined in subsection (1)(b) from any general fund budget amount adopted by the trustees of the district, up to the BASE budget amount, to determine the general fund BASE budget levy requirement.

     (d)  Determine the sum of:

     (i)  any amount remaining after the determination in subsection (1)(c);

     (ii) any portion of the increment remitted to a school district under 7-15-4291 used to reduce the over-BASE budget levy; and

     (iii) any tuition payments for out-of-district pupils to be received under the provisions of 20-5-320 through 20-5-324, except the amount of tuition received for a pupil who is a child with a disability in excess of the amount received for a pupil without disabilities, as calculated under 20-5-323(2).

     (e)  Subtract the amount determined in subsection (1)(d) from any additional funding requirement to be met by an over-BASE budget amount, a district levy as provided in 20-9-303, and any additional financing as provided in 20-9-353 to determine any additional general fund levy requirements.

     (2)  The county superintendent shall calculate the number of mills to be levied on the taxable property in the district to finance the general fund levy requirement for any amount that does not exceed the BASE budget amount for the district by dividing the amount determined in subsection (1)(c) by the sum of:

     (a)  the amount of guaranteed tax base aid that the district will receive for each mill levied, as certified by the superintendent of public instruction; and

     (b)  the current total taxable valuation of the district, as certified by the department of revenue under 15-10-202, divided by 1,000.

     (3)  The net general fund levy requirement determined in subsections (1)(c) and (1)(d) must be reported to the county commissioners by the later of the first Tuesday in September or within 30 calendar days after receiving certified taxable values by the county superintendent as the general fund net levy requirement for the district, and a levy must be set by the county commissioners in accordance with 20-9-142.

     (4)  For each school district, the department of revenue shall calculate and report to the county superintendent the amount of revenue anticipated for the ensuing fiscal year from revenue from coal gross proceeds under 15-23-703."

 

     Section 4.  Section 20-9-306, MCA, is amended to read:

     "20-9-306.  Definitions. As used in this title, unless the context clearly indicates otherwise, the following definitions apply:

     (1)  "BASE" means base amount for school equity.

     (2)  "BASE aid" means:

     (a)  direct state aid for 44.7% of the basic entitlement and 44.7% of the total per-ANB entitlement for the general fund budget of a district;

     (b)  the natural resource development K-12 funding payment for a variable percentage of the basic and per-ANB entitlements above the direct state aid for the general fund budget of a district, as referenced in subsection (10);

     (c)(b)  guaranteed tax base aid for an eligible district for any amount up to 35.3% of the basic entitlement, up to 35.3% of the total per-ANB entitlement budgeted in the general fund budget of a district, and 40% of the special education allowable cost payment;

     (d)(c)  the total quality educator payment;

     (e)(d)  the total at-risk student payment;

     (f)(e)  the total Indian education for all payment; and

     (g)(f)  the total American Indian achievement gap payment; and

     (h)  the total data-for-achievement payment.

     (3)  "BASE budget" means the minimum general fund budget of a district, which includes 80% of the basic entitlement, 80% of the total per-ANB entitlement, 100% of the total quality educator payment, 100% of the total at-risk student payment, 100% of the total Indian education for all payment, 100% of the total American Indian achievement gap payment, 100% of the total data-for-achievement payment, and 140% of the special education allowable cost payment.

     (4)  "BASE budget levy" means the district levy in support of the BASE budget of a district, which may be supplemented by guaranteed tax base aid if the district is eligible under the provisions of 20-9-366 through 20-9-369.

     (5)  "BASE funding program" means the state program for the equitable distribution of the state's share of the cost of Montana's basic system of public elementary schools and high schools, through county equalization aid as provided in 20-9-331 and 20-9-333 and state equalization aid as provided in 20-9-343, in support of the BASE budgets of districts and special education allowable cost payments as provided in 20-9-321.

     (6)  "Basic entitlement" means:

     (a)  for each high school district:

     (i)  $300,000 $309,554 for fiscal year 2016 2018 and $305,370 $312,650 for each succeeding fiscal year for school districts with an ANB of 800 or fewer; and

     (ii) $300,000 $309,554 for fiscal year 2016 2018 and $305,370 $312,650 for each succeeding fiscal year for school districts with an ANB of more than 800, plus $15,000 $15,478 for fiscal year 2016 2018 and $15,269 $15,633 for each succeeding fiscal year for each additional 80 ANB over 800;

     (b)  for each elementary school district or K-12 district elementary program without an approved and accredited junior high school, 7th and 8th grade program, or middle school:

     (i)  $50,000 $51,592 for fiscal year 2016 2018 and $50,895 $52,108 for each succeeding fiscal year for school districts or K-12 district elementary programs with an ANB of 250 or fewer; and

     (ii) $50,000 $51,592 for fiscal year 2016 2018 and $50,895 $52,108 for each succeeding fiscal year for school districts or K-12 district elementary programs with an ANB of more than 250, plus $2,500 $2,580 for fiscal year 2016 2018 and $2,545 $2,606 for each succeeding fiscal year for each additional 25 ANB over 250;

     (c)  for each elementary school district or K-12 district elementary program with an approved and accredited junior high school, 7th and 8th grade program, or middle school:

     (i)  for the district's kindergarten through grade 6 elementary program:

     (A)  $50,000 $51,592 for fiscal year 2016 2018 and $50,895 $52,108 for each succeeding fiscal year for school districts or K-12 district elementary programs with an ANB of 250 or fewer; and

     (B)  $50,000 $51,592 for fiscal year 2016 2018 and $50,895 $52,108 for each succeeding fiscal year for school districts or K-12 district elementary programs with an ANB of more than 250, plus $2,500 $2,580 for fiscal year 2016 2018 and $2,545 $2,606 for each succeeding fiscal year for each additional 25 ANB over 250; and

     (ii) for the district's approved and accredited junior high school, 7th and 8th grade programs, or middle school:

     (A)  $100,000 $103,185 for fiscal year 2016 2018 and $101,790 $104,217 for each succeeding fiscal year for school districts or K-12 district elementary programs with combined grades 7 and 8 with an ANB of 450 or fewer; and

     (B)  $100,000 $103,185 for fiscal year 2016 2018 and $101,790 $104,217 for each succeeding fiscal year for school districts or K-12 district elementary programs with combined grades 7 and 8 with an ANB of more than 450, plus $5,000 $5,160 for fiscal year 2016 2018 and $5,090 $5,212 for each succeeding fiscal year for each additional 45 ANB over 450.

     (7)  "Budget unit" means the unit for which the ANB of a district is calculated separately pursuant to 20-9-311.

     (8)  "Direct state aid" means 44.7% of the basic entitlement and 44.7% of the total per-ANB entitlement for the general fund budget of a district and funded with state and county equalization aid.

     (9)  "Maximum general fund budget" means a district's general fund budget amount calculated from the basic entitlement for the district, the total per-ANB entitlement for the district, the total quality educator payment, the total at-risk student payment, the total Indian education for all payment, the total American Indian achievement gap payment, the total data-for-achievement payment, and the greater of the district's special education allowable cost payment multiplied by:

     (a)  175%; or

     (b)  the ratio, expressed as a percentage, of the district's special education allowable cost expenditures to the district's special education allowable cost payment for the fiscal year that is 2 years previous, with a maximum allowable ratio of 200%.

     (10) "Natural resource development K-12 funding payment" means the payment of a variable percentage of the basic and per-ANB entitlements above the direct state aid for the general fund budget of a district. The total payment to school districts may not exceed the greater of 50% of the fiscal year 2012 oil and natural gas production taxes deposited into the general fund pursuant to 15-36-331(4) or 50% of the oil and natural gas production taxes deposited into the general fund pursuant to 15-36-331(4) for the fiscal year occurring 2 fiscal years prior to the school fiscal year in which the payment is provided, plus any excess interest and income revenue appropriated by the legislature pursuant to 20-9-622(2)(a). The amount of the natural resource development K-12 funding payment must be, subject to the limitations of this subsection (10), an amount sufficient to offset any estimated increase in statewide revenue from the general fund BASE budget levy provided for in 20-9-141 that is anticipated to result from increases in the basic or per-ANB entitlements plus any excess interest and income revenue appropriated by the legislature pursuant to 20-9-622(2)(a). The superintendent of public instruction shall incorporate a natural resource development K-12 funding payment calculated in compliance with this subsection (10) in preparing and submitting an agency budget pursuant to 17-7-111 and 17-7-112.

     (11)(10) "Over-BASE budget levy" means the district levy in support of any general fund amount budgeted that is above the BASE budget and below the maximum general fund budget for a district.

     (12)(11) "Total American Indian achievement gap payment" means the payment resulting from multiplying $205 $212 in fiscal year 2016 2018 and $209 $214 for each succeeding fiscal year times the number of American Indian students enrolled in the district as provided in 20-9-330.

     (13)(12) "Total at-risk student payment" means the payment resulting from the distribution of any funds appropriated for the purposes of 20-9-328.

     (14)(13) "Total Indian education for all payment" means the payment resulting from multiplying $20.88 $21.54 in fiscal year 2016 2018 and $21.25 $21.76 for each succeeding fiscal year times the ANB of the district or $100 for each district, whichever is greater, as provided for in 20-9-329.

     (15)(14) "Total per-ANB entitlement" means the district entitlement resulting from the following calculations and using either the current year ANB or the 3-year ANB provided for in 20-9-311:

     (a)  for a high school district or a K-12 district high school program, a maximum rate of $6,847 $7,065 for fiscal year 2016 2018 and $6,970 $7,136 for each succeeding fiscal year for the first ANB, decreased at the rate of 50 cents per ANB for each additional ANB of the district up through 800 ANB, with each ANB in excess of 800 receiving the same amount of entitlement as the 800th ANB;

     (b)  for an elementary school district or a K-12 district elementary program without an approved and accredited junior high school, 7th and 8th grade program, or middle school, a maximum rate of $5,348 $5,519 for fiscal year 2016 2018 and $5,444 $5,574 for each succeeding fiscal year for the first ANB, decreased at the rate of 20 cents per ANB for each additional ANB of the district up through 1,000 ANB, with each ANB in excess of 1,000 receiving the same amount of entitlement as the 1,000th ANB; and

     (c)  for an elementary school district or a K-12 district elementary program with an approved and accredited junior high school, 7th and 8th grade program, or middle school, the sum of:

     (i)  a maximum rate of $5,348 $5,519 for fiscal year 2016 2018 and $5,444 $5,574 for each succeeding fiscal year for the first ANB for kindergarten through grade 6, decreased at the rate of 20 cents per ANB for each additional ANB up through 1,000 ANB, with each ANB in excess of 1,000 receiving the same amount of entitlement as the 1,000th ANB; and

     (ii) a maximum rate of $6,847 $7,065 for fiscal year 2016 2018 and $6,970 $7,136 for each succeeding fiscal year for the first ANB for grades 7 and 8, decreased at the rate of 50 cents per ANB for each additional ANB for grades 7 and 8 up through 800 ANB, with each ANB in excess of 800 receiving the same amount of entitlement as the 800th ANB.

     (16) "Total data-for-achievement payment" means the payment provided in 20-9-325 resulting from multiplying $20 for fiscal year 2016 and $20.36 for each succeeding fiscal year by the district's ANB calculated in accordance with 20-9-311.

     (17)(15) "Total quality educator payment" means the payment resulting from multiplying $3,113 $3,212 in fiscal year 2016 2018 and $3,169 $3,244 for each succeeding fiscal year by the number of full-time equivalent educators as provided in 20-9-327."

 

     Section 5.  Section 20-9-308, MCA, is amended to read:

     "20-9-308.  BASE budgets and maximum general fund budgets. (1) (a) The trustees of a district shall adopt a general fund budget that is at least equal to the BASE budget established for the district. The trustees of a district may adopt a general fund budget up to the maximum general fund budget or the previous year's general fund budget, whichever is greater.

     (b)  For purposes of the budget limitation in subsection (1)(a), the trustees may add any increase in direct state aid for the basic and per-ANB entitlements and any increases in state funding of the data-for-achievement payment under 20-9-325 and in the general fund payments in 20-9-327 through 20-9-330 to the district's previous year's general fund budget.

     (2)  (a) Except as provided in subsection (2)(b), whenever the trustees of a district propose to adopt a general fund budget that exceeds the BASE budget for the district and propose to increase the over-BASE budget levy over the highest revenue previously authorized by the electors of the district or imposed by the district in any of the previous 5 years to support the general fund budget, the trustees shall submit a proposition to the electors of the district, as provided in 20-9-353.

     (b)  The intent of this section is to increase the flexibility and efficiency of elected school boards without increasing school district property taxes. In furtherance of this intent and provided that budget limitations otherwise specified in law are not exceeded, the trustees of a district may increase the district's over-BASE budget levy without a vote if the board of trustees reduces nonvoted property tax levies authorized by law to be imposed by action of the trustees of the district by at least as much as the amount by which the over-BASE budget levy is increased. The ongoing authority for any nonvoted increase in the over-BASE budget levy imposed under this subsection (2)(b) must be decreased in future years to the extent that the trustees of the district impose any increase in other nonvoted property tax levies.

     (3)  The BASE budget for the district must be financed by the following sources of revenue:

     (a)  state equalization aid, as provided in 20-9-343, including any guaranteed tax base aid for which the district may be eligible, as provided in 20-9-366 through 20-9-369;

     (b)  county equalization aid, as provided in 20-9-331 and 20-9-333;

     (c)  a district levy for support of a school not approved as an isolated school under the provisions of 20-9-302;

     (d)  payments in support of special education programs under the provisions of 20-9-321;

     (e)  nonlevy revenue, as provided in 20-9-141; and

     (f)  a BASE budget levy on the taxable value of all property within the district.

     (4)  The over-BASE budget amount of a district must be financed by a levy on the taxable value of all property within the district or other revenue available to the district, as provided in 20-9-141."

 

     Section 6.  Section 20-9-310, MCA, is amended to read:

     "20-9-310.  (Temporary) Oil and natural gas production taxes for school districts -- allocation and limits. (1) Except as provided in subsection (6), the maximum amount of oil and natural gas production taxes that a school district may retain is 130% of the school district's maximum budget, determined in accordance with 20-9-308.

     (2)  Upon receipt of school district budget reports required under 20-9-134, the superintendent of public instruction shall provide the department of revenue with a list reporting the maximum general fund budget for each school district.

     (3)  The department of revenue shall make the full quarterly distribution of oil and natural gas production taxes as required under 15-36-332(6) until the amount distributed reaches the limitation in subsection (1) of this section. The department of revenue shall deposit any amount exceeding the limitation in subsection (1) in the state school oil and natural gas distribution account provided for in 20-9-520.

     (4)  (a) By the last day of the month immediately following the month in which the quarterly distribution of oil and natural gas production taxes in subsection (3) is made, the office of public instruction shall distribute any amount of oil and natural gas production taxes exceeding the limitation in subsection (1) based on allocations determined by the department of revenue pursuant to subsection (3) to school districts that are directly impacted by oil and natural gas development, but that receive insufficient oil and natural gas revenue to address the oil and natural gas development impacts. The office of public instruction shall adopt administrative rules to establish a process, criteria, and a mechanism for distribution under this subsection (4), using the negotiated rulemaking process set forth in the Montana Negotiated Rulemaking Act, Title 2, chapter 5, part 1.

     (b)  In developing administrative rules, the office of public instruction shall establish two independent negotiated rulemaking committees to consider issues for the purpose of reaching a consensus to develop proposed rules for the distribution of the funds under this subsection (4).

     (c)  The members of the first negotiated rulemaking committee appointed by the office of public instruction must include public school officials and public school employees from school districts that are located in or are immediately adjacent to a county in which oil and natural gas production taxes are generated and professional organizations representing these public school officials and employees. This committee shall transmit proposed rules regarding distribution of 50% of the funds available under this subsection (4) in accordance with 2-5-108.

     (d)  The members of the second negotiated rulemaking committee appointed by the office of public instruction must include public school officials and public school employees from school districts around the state and professional organizations representing these public school officials and employees. This committee shall transmit proposed rules regarding the distribution of the remaining 50% of the funds available under this subsection (4) in accordance with 2-5-108.

     (5)  (a) Subject to the limitation in subsection (1) and the conditions in subsection (5)(b), the trustees shall budget and allocate the oil and natural gas production taxes anticipated by the district in any budgeted fund at the discretion of the trustees. Oil and natural gas production taxes allocated to the district general fund may be applied to the BASE or over-BASE portions of the general fund budget at the discretion of the trustees.

     (b)  Except as provided in subsection (5)(c), if the trustees apply an amount less than 12.5% of the total oil and natural gas production taxes received by the district in the prior school fiscal year to the district's general fund BASE budget for the upcoming school fiscal year, then:

     (i)  the trustees shall levy the number of mills required to raise an amount equal to the difference between 12.5% of the oil and natural gas production taxes received by the district in the prior school fiscal year and the amount of oil and natural gas production taxes the trustees budget in the district's general fund BASE budget for the upcoming school fiscal year;

     (ii) the mills levied under subsection (5)(b)(i) are not eligible for the guaranteed tax base subsidy under the provisions of 20-9-366 through 20-9-369; and

     (iii) the general fund BASE budget levy requirement calculated in 20-9-141 must be calculated as though the trustees budgeted 12.5% of the oil and natural gas production taxes received by the district in the prior year and the number of mills calculated in subsection (5)(b)(i) must be added to the number of mills calculated in 20-9-141(2).

     (c)  The provisions of subsection (5)(b) do not apply to the following:

     (i)  a district that has a maximum general fund budget of less than $1 million;

     (ii) a district whose oil and natural gas revenue combined with its adopted general fund budget totals 105% or less of its maximum general fund budget;

     (iii) a district that has a maximum general fund budget of $1 million or more and has had an unusual enrollment increase approved by the superintendent of public instruction as provided in 20-9-314 in the year immediately preceding the fiscal year to which the provisions of this subsection (5) would otherwise apply; or

     (iv) a district that has issued outstanding oil and natural gas revenue bonds. Funds received pursuant to this section must first be applied by the district to payment of debt service obligations for oil and natural gas revenue bonds for the next 12-month period.

     (6)  The limit on oil and natural gas production taxes that a school district may retain under subsection (1) must be increased for any school district with an unusual enrollment increase approved by the superintendent of public instruction as provided in 20-9-314. The increase in the limit on oil and natural gas production taxes that a school district may retain under subsection (1) applies in the year immediately following the fiscal year in which the office of public instruction has approved the district's unusual enrollment increase and must be calculated by multiplying $45,000 times each additional ANB approved by the superintendent of public instruction as provided in 20-9-314.

     (7)  In any year in which the actual oil and natural gas production taxes received by a school district are less than 50% of the total oil and natural gas production taxes received by the district in the prior year, the district may transfer money from any budgeted fund to its general fund in an amount not to exceed the amount of the shortfall. (Terminates June 30, 2019 2017--sec. 7, Ch. 433, L. 2015.)

     20-9-310.  (Effective July 1, 2019 2017) Oil and natural gas production taxes for school districts -- allocation and limits. (1) Except as provided in subsection (6), the maximum amount of oil and natural gas production taxes that a school district may retain is 130% of the school district's maximum budget, determined in accordance with 20-9-308.

     (2)  Upon receipt of school district budget reports required under 20-9-134, the superintendent of public instruction shall provide the department of revenue with a list reporting the maximum general fund budget for each school district.

     (3)  The department of revenue shall make the full quarterly distribution of oil and natural gas production taxes as required under 15-36-332(6) until the amount distributed reaches the limitation in subsection (1) of this section. The department of revenue shall deposit any amount exceeding the limitation in subsection (1) in the state school oil and natural gas distribution account provided for in 20-9-520 guarantee account provided for in 20-9-622.

     (4)  By the last day of the month immediately following the month in which the quarterly distribution of oil and natural gas production taxes in subsection (3) is made, the office of public instruction shall distribute any amount of oil and natural gas production taxes exceeding the limitation in subsection (1) based on allocations determined by the department of revenue pursuant to subsection (3) as follows:

     (a)  70% of the retained amount must be deposited in the guarantee account provided for in 20-9-622;

     (b)  5% of the retained amount must be deposited in the state school oil and natural gas impact account provided for in 20-9-517; and

     (c)  25% of the retained amount must be distributed to the counties in proportion to a county's oil and natural gas production taxes for the preceding 3 years compared to the total of all counties' oil and natural gas production taxes for the preceding 3 years. Funds distributed must be deposited in a county's county school oil and natural gas impact fund provided for in 20-9-518.

     (5)(4)  (a) Subject to the limitation in subsection (1) and the conditions in subsection (5)(b) (4)(b), the trustees shall budget and allocate the oil and natural gas production taxes anticipated by the district in any budgeted fund at the discretion of the trustees. Oil and natural gas production taxes allocated to the district general fund may be applied to the BASE or over-BASE portions of the general fund budget at the discretion of the trustees.

     (b)  Except as provided in subsection (5)(c) (4)(c), if the trustees apply an amount less than 12.5% of the total oil and natural gas production taxes received by the district in the prior school fiscal year to the district's general fund BASE budget for the upcoming school fiscal year, then:

     (i)  the trustees shall levy the number of mills required to raise an amount equal to the difference between 12.5% of the oil and natural gas production taxes received by the district in the prior school fiscal year and the amount of oil and natural gas production taxes the trustees budget in the district's general fund BASE budget for the upcoming school fiscal year;

     (ii) the mills levied under subsection (5)(b)(i) (4)(b)(i) are not eligible for the guaranteed tax base subsidy under the provisions of 20-9-366 through 20-9-369; and

     (iii) the general fund BASE budget levy requirement calculated in 20-9-141 must be calculated as though the trustees budgeted 12.5% of the oil and natural gas production taxes received by the district in the prior year and the number of mills calculated in subsection (5)(b)(i) (4)(b)(i) must be added to the number of mills calculated in 20-9-141(2).

     (c)  The provisions of subsection (5)(b) (4)(b) do not apply to the following:

     (i)  a district that has a maximum general fund budget of less than $1 million;

     (ii) a district whose oil and natural gas revenue combined with its adopted general fund budget totals 105% or less of its maximum general fund budget;

     (iii) a district that has a maximum general fund budget of $1 million or more and has had an unusual enrollment increase approved by the superintendent of public instruction as provided in 20-9-314 in the year immediately preceding the fiscal year to which the provisions of this subsection (5) (4) would otherwise apply; or

     (iv) a district that has issued outstanding oil and natural gas revenue bonds. Funds received pursuant to this section must first be applied by the district to payment of debt service obligations for oil and natural gas revenue bonds for the next 12-month period.

     (6)(5)  The limit on oil and natural gas production taxes that a school district may retain under subsection (1) must be increased for any school district with an unusual enrollment increase approved by the superintendent of public instruction as provided in 20-9-314. The increase in the limit on oil and natural gas production taxes that a school district may retain under subsection (1) applies in the year immediately following the fiscal year in which the office of public instruction has approved the district's unusual enrollment increase and must be calculated by multiplying $45,000 times each additional ANB approved by the superintendent of public instruction as provided in 20-9-314.

     (7)(6)  In any year in which the actual oil and natural gas production taxes received by a school district are less than 50% of the total oil and natural gas production taxes received by the district in the prior year, the district may transfer money from any budgeted fund to its general fund in an amount not to exceed the amount of the shortfall."

 

     Section 7.  Section 20-9-314, MCA, is amended to read:

     "20-9-314.  Procedures for determining eligibility and amount of increased average number belonging due to unusual enrollment increase. A district that anticipates an unusual increase in enrollment in the ensuing school fiscal year, as provided for in 20-9-313(1)(d), may increase its basic entitlement and total per-ANB entitlement for the ensuing school fiscal year in accordance with the following provisions:

     (1)  Prior to June 1, the district shall estimate the elementary or high school enrollment to be realized during the ensuing school fiscal year, based on as much factual information as may be available to the district.

     (2)  No later than June 1, the district shall submit its application for an anticipated unusual enrollment increase by elementary or high school level to the superintendent of public instruction. The application must include:

     (a)  the enrollment for the current school fiscal year;

     (b)  the average number belonging used to calculate the basic entitlement and total per-ANB entitlement for the current school fiscal year;

     (c)  the average number belonging that will be used to calculate the basic entitlement and total per-ANB entitlement for the ensuing school fiscal year;

     (d)  the anticipated enrollment, including the factual information on which the estimate is based, as provided in subsection (1); and

     (e)  any other information or data that may be requested by the superintendent of public instruction.

     (3)  The superintendent of public instruction shall immediately review all the factors of the application and shall approve or disapprove the application or adjust the enrollment used to calculate the budgeted average number belonging for the ensuing school fiscal year. After approving an estimate, with or without adjustment, the superintendent of public instruction shall:

     (a)  determine the percentage by which the adjusted enrollment exceeds the enrollment used for the budgeted average number belonging; and

     (b)  approve an increase of the average number belonging used to establish the ensuing year's basic entitlement and total per-ANB entitlement in accordance with subsection (5) if the increase in subsection (3)(a) is at least 4% or 40 students, whichever is less 6%.

     (4)  The superintendent of public instruction shall notify the district of the decision by the fourth Monday in June.

     (5)  Whenever an unusual enrollment increase is approved by the superintendent of public instruction, the maximum allowable increase to the average number belonging is equal to the adjusted enrollment as determined by the superintendent of public instruction in subsection (3) minus the sum of:

     (a)  the enrollment used to calculate the budgeted average number belonging for the ensuing school fiscal year; and

     (b)  the lesser of 40 students or 4% 6% of the enrollment used to calculate the budgeted average number belonging for the ensuing school fiscal year.

     (6)  (a) Any entitlement increases resulting from provisions of this section must be reviewed at the end of the ensuing school fiscal year.

     (b)  If the actual enrollment is less than the enrollment used to determine the budgeted ANB, the superintendent of public instruction shall revise the total per-ANB entitlement and basic entitlement calculations using the actual enrollment in place of the adjusted enrollment. All total per-ANB entitlements received by the district in excess of the revised entitlements are overpayments subject to the refund provisions of 20-9-344(4)."

 

     Section 8.  Section 20-9-323, MCA, is amended to read:

     "20-9-323.  Ending fund balance limits. (1) Beginning July 1, 2020, the combined ending fund balance for all budgeted funds of a school district may not exceed 300% of the maximum general fund budget. The 300% limit is not applicable to the building reserve fund, the debt service fund, or the bus depreciation reserve fund.

     (2)  The county superintendent shall, upon completion of a school fiscal year, redistribute any amounts in excess of the 300% limit among any other school districts in the same county whose combined ending fund balance for all budgeted funds included in subsection (1) has not exceeded the 300% limit. The county superintendent shall redistribute funds equally to the school districts qualifying for redistribution on a per-quality-educator basis, calculated by dividing the total funds by the total number of quality educators, as defined in 20-4-502, employed by the qualifying school districts in the county in the immediately preceding school fiscal year. School districts receiving the funds may place the funds in any budgeted fund of the district at the discretion of the board of trustees of each district.

     (3)  Unless an exception is granted under subsection (5), upon completion of a school fiscal year, a school district with combined ending fund balances in excess of the 300% limit shall cooperate with the county superintendent in effectuating the redistribution of excess funds as provided in subsection (2). A school district may make the payment required under this subsection from any fund or funds of the district other than the debt service fund, the building reserve fund, and the bus depreciation reserve fund.

     (4)  Any funds that cannot be redistributed within a county without causing a school district in the county to exceed the 300% limit must be remitted by the county treasurer to the state for deposit in the guarantee account and distribution in the same manner as provided in 20-9-622(2) 20-9-622.

     (5)  In accordance with 20-9-161, a school district shall report to the education and local government interim committee for any exception taken to the limits prescribed by subsection (1) of this section.

     (6)  This section does not apply to school districts that are in a nonoperating status under 20-9-505 or that are in the first year of operation after reopening under 20-6-502 or 20-6-503.

     (7)  Beginning July 1, 2020, the balance of a school district's flexibility fund may not exceed 150% of the school district's maximum general fund budget."

 

     Section 9.  Section 20-9-326, MCA, is amended to read:

     "20-9-326.  Annual inflation-related adjustments to basic entitlements and per-ANB entitlements. (1) In preparing and submitting an agency budget pursuant to 17-7-111 and 17-7-112, the superintendent of public instruction shall determine the inflation factor for the basic and per-ANB entitlements, the data-for-achievement payment, and the general fund payments in 20-9-327 through 20-9-330 in each fiscal year of the ensuing biennium. The inflation factor is calculated as follows:

     (a)  for the first year of the biennium, divide the consumer price index for July 1 of the prior calendar year by the consumer price index for July 1 of the calendar year 3 years prior to the prior calendar year and raise the resulting ratio to the power of one-third; and

     (b)  for the second year of the biennium, divide the consumer price index for July 1 of the current calendar year by the consumer price index for July 1 of the calendar year 3 years prior to the current calendar year and raise the resulting ratio to the power of one-third.

     (2)  The present law base for the entitlements referenced in subsection (1), calculated under Title 17, chapter 7, part 1, must consist of any enrollment increases or decreases plus the inflation factor calculated pursuant to this section, not to exceed 3% in each year, applied to both years of the biennium.

     (3)  For the purposes of this section, "consumer price index" means the consumer price index, U.S. city average, all urban consumers, for all items, using the 1982-84 base of 100, as published by the bureau of labor statistics of the U.S. department of labor."

 

     Section 10.  Section 20-9-342, MCA, is amended to read:

     "20-9-342.  Deposit of interest and income money by state board of land commissioners. (1) Except as provided in 20-9-516, the state board of land commissioners shall deposit the interest and income money for each fiscal year into the guarantee account, provided for in 20-9-622, by the last business day of February and June before the close of the fiscal year in which the money was received. Except as provided in subsection (2), money Money in the guarantee account must be used for state equalization aid.

     (2)  Subject to subsection (3), any excess interest and income revenue deposited in the guarantee account in each fiscal year must be distributed in accordance with 20-9-622(2).

     (3)  The excess interest and income revenue must equal at least $1 million in order to be distributed pursuant to subsection (2). Excess interest and income revenue of $1 million or less must be carried forward and added to the excess interest and income revenue in the next ensuing school fiscal year and distributed in accordance with 20-9-622(2).

     (4)  For purposes of this section, "excess interest and income revenue" means an annual amount in excess of $56 million."

 

     Section 11.  Section 20-9-344, MCA, is amended to read:

     "20-9-344.  Duties of board of public education for distribution of BASE aid. (1) The board of public education shall administer and distribute the BASE aid and state advances for county equalization in the manner and with the powers and duties provided by law. The board of public education:

     (a)  shall adopt policies for regulating the distribution of BASE aid and state advances for county equalization in accordance with the provisions of law;

     (b)  may require reports from the county superintendents, county treasurers, and trustees that it considers necessary; and

     (c)  shall order the superintendent of public instruction to distribute the BASE aid on the basis of each district's annual entitlement to the aid as established by the superintendent of public instruction. In ordering the distribution of BASE aid, the board of public education may not increase or decrease the BASE aid distribution to any district on account of any difference that may occur during the school fiscal year between budgeted and actual receipts from any other source of school revenue.

     (2)  The board of public education may order the superintendent of public instruction to withhold distribution of BASE aid from a district when the district fails to:

     (a)  submit reports or budgets as required by law or rules adopted by the board of public education; or

     (b)  maintain accredited status because of failure to meet the board of public education's assurance and performance standards.

     (3)  Prior to any proposed order by the board of public education to withhold distribution of BASE aid or county equalization money, the district is entitled to a contested case hearing before the board of public education, as provided under the Montana Administrative Procedure Act.

     (4)  If a district or county receives more BASE aid than it is entitled to, the county treasurer shall return the overpayment to the state upon the request of the superintendent of public instruction in the manner prescribed by the superintendent of public instruction.

     (5)  Except as provided in 20-9-347(2), the BASE aid payment must be distributed according to the following schedule:

     (a)  from August to October of the school fiscal year, to each district 10% of:

     (i)  direct state aid;

     (ii) the total quality educator payment;

     (iii) the total at-risk student payment;

     (iv) the total Indian education for all payment; and

     (v)  the total American Indian achievement gap payment;

     (vi) the total data-for-achievement payment; and

     (vii) the total natural resource development K-12 funding payment;

     (b)  from December to April of the school fiscal year, to each district 10% of:

     (i)  direct state aid;

     (ii) the total quality educator payment;

     (iii) the total at-risk student payment;

     (iv) the total Indian education for all payment; and

     (v)  the total American Indian achievement gap payment;

     (vi) the total data-for-achievement payment; and

     (vii) the total natural resource development K-12 funding payment;

     (c)  in November of the school fiscal year, one-half of the guaranteed tax base aid payment to each district or county that has submitted a final budget to the superintendent of public instruction in accordance with the provisions of 20-9-134;

     (d)  in May of the school fiscal year, the remainder of the guaranteed tax base aid payment to each district or county; and

     (e)  in June of the school fiscal year, the remaining payment to each district of direct state aid, the total quality educator payment, the total at-risk student payment, the total Indian education for all payment, and the total American Indian achievement gap payment, the total data-for-achievement payment, and the total natural resource development K-12 funding payment.

     (6)  The distribution provided for in subsection (5) must occur by the last working day of each month."

 

     Section 12.  Section 20-9-366, MCA, is amended to read:

     "20-9-366.  Definitions. As used in 20-9-366 through 20-9-371, the following definitions apply:

     (1)  "County retirement mill value per elementary ANB" or "county retirement mill value per high school ANB" means the sum of the taxable valuation in the previous year of all property in the county divided by 1,000, with the quotient divided by the total county elementary ANB count or the total county high school ANB count used to calculate the elementary school districts' and high school districts' prior year total per-ANB entitlement amounts.

     (2)  (a) "District guaranteed tax base ratio" for guaranteed tax base funding for the BASE budget of an eligible district means the taxable valuation in the previous year of all property in the district, except for property value disregarded because of protested taxes under 15-1-409(2) or property subject to the creation of a new school district under 20-6-326, divided by the district's prior year GTBA budget area.

     (b)  "District mill value per ANB", for school facility entitlement purposes, means the taxable valuation in the previous year of all property in the district, except for property subject to the creation of a new school district under 20-6-326, divided by 1,000, with the quotient divided by the ANB count of the district used to calculate the district's prior year total per-ANB entitlement amount.

     (3)  "Facility guaranteed mill value per ANB", for school facility entitlement guaranteed tax base purposes, means the sum of the taxable valuation in the previous year of all property in the state, multiplied by 140% and divided by 1,000, with the quotient divided by the total state elementary ANB count or the total state high school ANB count used to calculate the elementary school districts' and high school districts' prior year total per-ANB entitlement amounts.

     (4)  "Guaranteed tax base aid budget area" or "GTBA budget area" means the portion of a district's BASE budget after the following payments are subtracted:

     (a)  direct state aid;

     (b)  the total data-for-achievement payment;

     (c)(b)  the total quality educator payment;

     (d)(c)  the total at-risk student payment;

     (e)(d)  the total Indian education for all payment;

     (f)(e)  the total American Indian achievement gap payment; and

     (g)(f)  the state special education allowable cost payment.

     (5)  (a) "Statewide elementary guaranteed tax base ratio" or "statewide high school guaranteed tax base ratio", for guaranteed tax base funding for the BASE budget of an eligible district, means the sum of the taxable valuation in the previous year of all property in the state, multiplied by 193% and divided by the prior year statewide GTBA budget area for the state elementary school districts or the state high school districts.

     (b)  "Statewide mill value per elementary ANB" or "statewide mill value per high school ANB", for school retirement guaranteed tax base purposes, means the sum of the taxable valuation in the previous year of all property in the state, multiplied by 121% and divided by 1,000, with the quotient divided by the total state elementary ANB count or the total state high school ANB amount used to calculate the elementary school districts' and high school districts' prior year total per-ANB entitlement amounts."

 

     Section 13.  Section 20-9-517, MCA, is amended to read:

     "20-9-517.  (Temporary) State school oil and natural gas impact account. (1) There is a state school oil and natural gas impact account in the state special revenue fund provided for in 17-2-102. The purpose of the account is to provide money to schools that are not receiving oil and natural gas production taxes under 15-36-331 in an amount sufficient to address oil and natural gas development impacts. The funds in this account are statutorily appropriated as provided in 17-7-502.

     (2)  A school district may apply to the superintendent of public instruction for funds from the account for circumstances that are directly related to impacts resulting from the development or cessation of development of oil and natural gas as follows:

     (a)  an unusual enrollment increase as determined pursuant to 20-9-161 and 20-9-314;

     (b)  an unusual enrollment decrease;

     (c)  higher rates of student mobility;

     (d)  a district's need to hire new teachers or staff as a result of increased enrollment;

     (e)  the opening or reopening of an elementary or high school approved by the superintendent of public instruction pursuant to 20-6-502 or 20-6-503; or

     (f)  major maintenance for a school or district.

     (3)  In reviewing an applicant's request for funding, the superintendent of public instruction shall consider the following:

     (a)  the local district's or school's need;

     (b)  the severity of the energy development impacts;

     (c)  availability of funds in the account; and

     (d)  the applicant district's ability to meet the needs identified in subsection (2).

     (4)  The superintendent of public instruction shall adopt rules necessary to implement the application and distribution process.

     (5)  The amount in the account may not exceed $7.5 million. Any amount over $7.5 million must be deposited in the guarantee account and distributed in the same manner as provided in 20-9-622(2). (Terminates June 30, 2019 2017--sec. 7, Ch. 433, L. 2015.)

     20-9-517.  (Effective July 1, 2019 2017) State school oil and natural gas impact account. (1) There is a state school oil and natural gas impact account in the state special revenue fund provided for in 17-2-102. The purpose of the account is to provide money to schools that are not receiving oil and natural gas production taxes under 15-36-331 in an amount sufficient to address oil and natural gas development impacts.

     (2)  There must be deposited in the account oil and natural gas production taxes, if any, pursuant to 20-9-310(4).

     (3)(2)  A school district may apply to the superintendent of public instruction for funds from the account for circumstances that are directly related to impacts resulting from the development or cessation of development of oil and natural gas as follows:

     (a)  an unusual enrollment increase as determined pursuant to 20-9-161 and 20-9-314;

     (b)  an unusual enrollment decrease;

     (c)  higher rates of student mobility;

     (d)  a district's need to hire new teachers or staff as a result of increased enrollment;

     (e)  the opening or reopening of an elementary or high school approved by the superintendent of public instruction pursuant to 20-6-502 or 20-6-503; or

     (f)  major maintenance for a school or district.

     (4)(3)  In reviewing an applicant's request for funding, the superintendent of public instruction shall consider the following:

     (a)  the local district's or school's need;

     (b)  the severity of the energy development impacts;

     (c)  availability of funds in the account; and

     (d)  the applicant district's ability to meet the needs identified in subsection (3).

     (5)(4)  The superintendent of public instruction shall adopt rules necessary to implement the application and distribution process.

     (6)(5)  The amount in the account may not exceed $7.5 million. Any amount over $7.5 million must be deposited in the guarantee account and distributed in the same manner as provided in 20-9-622(2) 20-9-622."

 

     Section 14.  Section 20-9-518, MCA, is amended to read:

     "20-9-518.  (Temporary) County school oil and natural gas impact fund. (1) The governing body of a county that has previously received an allocation under 20-9-310 shall maintain a county school oil and natural gas impact fund.

     (2)  Money previously received by a county pursuant to 20-9-310 must remain in the fund and may not be appropriated by the governing body until:

     (a)  the amount of oil and natural gas production taxes received by a school district for the fiscal year is 50% or less of the amount of the average received by the district in the previous 4 fiscal years; or

     (b)  the average price for a barrel of west Texas intermediate crude oil during a calendar quarter is less than $65. The average price for each barrel must be computed by dividing the sum of the daily price for a barrel of west Texas intermediate crude oil for the calendar quarter by the number of days on which the price was reported in the quarter.

     (3)  (a) Within 120 days following the end of the fiscal year, the superintendent of public instruction shall determine if the criteria in subsection (2)(a) have been met and the department of revenue shall determine if the criteria in subsection (2)(b) have been met.

     (b)  If it is determined under subsection (3)(a) that the criteria in subsection (2)(a) or (2)(b) have been met, the superintendent of public instruction or the department of revenue shall notify the county treasurer.

     (4)  Upon notification under subsection (3)(b), the county treasurer shall allocate 80% of the money proportionally to affected high school districts and elementary school districts in the county, which must be calculated by dividing the total funds available for distribution by the total number of quality educators, as defined in 20-4-502, employed by the qualifying school districts in the county in the immediately preceding school fiscal year. The number of quality educators used for the calculation under this subsection in a district with territory in more than one county must be prorated based on the average number belonging of the district residing in school district territory located in each respective county. A school district receiving this money may deposit the funds in any budgeted fund of the district at the discretion of the trustees.

     (5)  The governing body of the county may use 20% of the money in the fund to:

     (a)  pay for outstanding capital project bonds or other expenses incurred prior to the reduction in the price of oil or the reduction in the receipt of oil and natural gas production taxes described in subsection (2);

     (b)  offset property tax levy increases that are directly caused by the cessation or reduction of oil and natural gas activity;

     (c)  promote diversification and development of the economic base within the jurisdiction;

     (d)  attract new industry to the area impacted by changes in oil and natural gas activity leading to the reduction in the price of oil or the reduction in the receipt of oil and natural gas production taxes described in subsection (2); or

     (e)  provide cash incentives for expanding the employment base of the area impacted by the changes in oil and natural gas activity leading to the reduction in the price of oil or the reduction in the receipt of oil and natural gas production taxes described in subsection (2).

     (6)  Except as provided in subsection (5)(b), money held in the fund may not be considered as fund balance for the purpose of reducing mill levies.

     (7)  Money in the fund must be invested as provided by law. Interest and income from the investment of money in the fund must be credited to the fund. (Terminates June 30, 2019 2017--sec. 7, Ch. 433, L. 2015.)

     20-9-518.  (Effective July 1, 2019 2017) County school oil and natural gas impact fund. (1) The governing body of a county receiving an allocation under 20-9-310(4)(b) 20-9-310 shall establish a county school oil and natural gas impact fund.

     (2)  Money received by a county pursuant to 20-9-310(4)(b) must remain in the fund and may not be appropriated by the governing body until:

     (a)  the amount of oil and natural gas production taxes received by a school district for the fiscal year is 50% or less of the amount of the average received by the district in the previous 4 fiscal years; or

     (b)  the average price for a barrel of west Texas intermediate crude oil during a calendar quarter is less than $65. The average price for each barrel must be computed by dividing the sum of the daily price for a barrel of west Texas intermediate crude oil for the calendar quarter by the number of days on which the price was reported in the quarter.

     (3)  (a) Within 120 days following the end of the fiscal year, the superintendent of public instruction shall determine if the criteria in subsection (2)(a) have been met and the department of revenue shall determine if the criteria in subsection (2)(b) have been met.

     (b)  If it is determined under subsection (3)(a) that the criteria in subsection (2)(a) or (2)(b) have been met, the superintendent of public instruction or the department of revenue shall notify the county treasurer.

     (4)  Upon notification under subsection (3)(b), the county treasurer shall allocate 80% of the money proportionally to affected high school districts and elementary school districts in the county, which must be calculated by dividing the total funds available for distribution by the total number of quality educators, as defined in 20-4-502, employed by the qualifying school districts in the county in the immediately preceding school fiscal year. The number of quality educators used for the calculation under this subsection in a district with territory in more than one county must be prorated based on the average number belonging of the district residing in school district territory located in each respective county. A school district receiving this money may deposit the funds in any budgeted fund of the district at the discretion of the trustees.

     (5)  The governing body of the county may use 20% of the money in the fund to:

     (a)  pay for outstanding capital project bonds or other expenses incurred prior to the reduction in the price of oil or the reduction in the receipt of oil and natural gas production taxes described in subsection (2);

     (b)  offset property tax levy increases that are directly caused by the cessation or reduction of oil and natural gas activity;

     (c)  promote diversification and development of the economic base within the jurisdiction;

     (d)  attract new industry to the area impacted by changes in oil and natural gas activity leading to the reduction in the price of oil or the reduction in the receipt of oil and natural gas production taxes described in subsection (2); or

     (e)  provide cash incentives for expanding the employment base of the area impacted by the changes in oil and natural gas activity leading to the reduction in the price of oil or the reduction in the receipt of oil and natural gas production taxes described in subsection (2).

     (6)  Except as provided in subsection (5)(b), money held in the fund may not be considered as fund balance for the purpose of reducing mill levies.

     (7)  Money in the fund must be invested as provided by law. Interest and income from the investment of money in the fund must be credited to the fund."

 

     Section 15.  Section 20-9-520, MCA, is amended to read:

     "20-9-520.  State school oil and natural gas distribution account. (1) There is a state school oil and natural gas distribution account in the state special revenue fund provided for in 17-2-102. The purpose of the account is for distribution of the oil and natural gas production revenue exceeding the limitation in 20-9-310(1) in accordance with 20-9-310(4). The funds deposited in this account for distribution to school districts and counties under 20-9-310(4) are statutorily appropriated as provided in 17-7-502.

     (2)  The department of revenue shall deposit in the account oil and natural gas production taxes that exceed the limitations in 20-9-310.

     (3)  The superintendent of public instruction shall distribute the money from the account in accordance with 20-9-310(4)."

 

     Section 16.  Section 20-9-534, MCA, is amended to read:

     "20-9-534.  Statutory appropriation for school technology purposes. (1) The amount of $1 million a year is statutorily appropriated, as provided in 17-7-502, from the school facility and technology account established in 20-9-516 to the department of commerce for providing funds for schools to use as a match for e-rate broadband matching funds. for grants for school technology purposes.

     (2)  By the third Friday in July, the superintendent of public instruction shall allocate the annual statutory appropriation for school technology purposes to each district based on the ratio that each district's BASE budget bears to the statewide BASE budget amount for all school districts multiplied by the amount of money provided in 20-9-343 for the purposes of 20-9-533."

 

     Section 17.  Section 20-9-622, MCA, is amended to read:

     "20-9-622.  Guarantee account. (1) There is a guarantee account in the state special revenue fund. The guarantee account is intended to:

     (a)(1)  stabilize the long-term growth of the permanent fund; and

     (b)(2)  maintain a constant and increasing distributable revenue stream. All realized capital gains and all distributable revenue must be deposited in the guarantee account. The guarantee account is statutorily appropriated, as provided in 17-7-502, for distribution to school districts through school equalization aid as provided in 20-9-343.

     (2)  Any excess interest and income revenue deposited in the guarantee account for distribution under this section must be allocated as follows:

     (a)  50% of the excess interest and income revenue must be reserved for an appropriation in the next regular session of the legislature as part of the natural resource development K-12 funding payment referred to in 20-9-306; and

     (b)  50% of the excess interest and income revenue must be distributed to schools on a per-quality-educator basis, with the amount to be distributed to each district calculated by dividing the total funds available for distribution under this subsection (2)(b) by the total number of quality educators, as defined in 20-4-502, employed by each school district in the state in the immediately preceding school fiscal year. A school district receiving funds under this section shall deposit the funds in its miscellaneous programs fund provided for in 20-9-507 and shall use the funds in the following order:

     (i)  to address any repairs categorized as "safety", "damage/wear out", or "codes and standards" in the facilities condition inventory for buildings of the school district as referenced in the K-12 public schools facility condition and needs assessment prepared by the Montana department of administration pursuant to section 1, Chapter 1, Special Laws of December 2005; and

     (ii) if repairs under subsection (2)(b)(i) have been completed, to any other purpose authorized by 20-9-543."

 

     Section 18.  Section 7, Chapter 433, Laws of 2015, is amended to read:

     "Section 7. Termination. [Sections 2, 3, and 4] terminate June 30, 2019 2017."

 

     NEW SECTION.  Section 19.  Legislative intent. It is the intent of this legislation that the superintendent of public instruction will reduce the reporting requirements on K-12 school districts to ensure time and money in schools are spent on educating students not on providing data.

 

     NEW SECTION.  Section 20.  Repealer. The following section of the Montana Code Annotated is repealed:

20-9-325.          Data-for-achievement payment.

 

     NEW SECTION.  Section 21.  Notification to tribal governments. The secretary of state shall send a copy of [this act] to each tribal government located on the seven Montana reservations and to the Little Shell Chippewa tribe.

 

     NEW SECTION.  Section 22.  Effective dates. (1) Except as provided in subsection (2), [this act] is effective July 1, 2017.

     (2) [Section 18] and this section are effective June 30, 2017.

 

     NEW SECTION.  Section 23.  Applicability. [This act] applies to school budgets for school years beginning on or after July 1, 2017.

 

     NEW SECTION.  Section 24.  Termination. [Section 16] terminates June 30, 2019.

- END -

 


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