HOUSE BILL NO. 347

INTRODUCED BY J. MERCER, C. AHNER, S. ANDERSON J. BARNETT, S. BOOKOUT-REINICKE, R. BROWN, E. CLARK, R. CLARK, B. CRIPPEN, R. DALE, B. DEPRATU, G. DEVLIN, D. FUCHS, D. GRIMES, L. GRINDE, D. HAINES, M. HANSON, D. HARGROVE, J. HARP, C. HIBBARD, B. KEENAN, D. MAHLUM, G. MASOLO, D. MCGEE, J. MCKENNEY, D. MOOD, K. OHS, B. PAVLOVICH, S. ROSE, P. SLITER, R. SOMERVILLE, J. STOVALL, C. SWYSGOOD, B. TASH, L. TAYLOR, B. THOMAS, F. THOMAS, C. TREXLER, J. WITT

A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FUNDING FOR THE ENSUING BIENNIUM TO SUPPORT PUBLIC SCHOOLS; APPROPRIATING $50 MILLION FROM THE COAL SEVERANCE PERMANENT FUND IN SCHOOL FISCAL YEARS 2000 AND 2001 FOR INVESTMENT IN PUBLIC SCHOOLS FOR SCHOOL BUILDING MAINTENANCE, CONSTRUCTION, AND RECONSTRUCTION, TECHNOLOGY ACQUISITION, TEXTBOOKS, CLASSROOM SUPPLIES, AND LIBRARY MATERIALS; INCREASING THE TOTAL PER-ANB FOR AN ELEMENTARY SCHOOL DISTRICT OR A K-12 DISTRICT ELEMENTARY PROGRAM TO $3,546 FOR SCHOOL FISCAL YEAR 2000 AND TO $3,688 FOR SCHOOL FISCAL YEAR 2001; INCREASING THE TOTAL PER-ANB ENTITLEMENT FOR A HIGH SCHOOL DISTRICT OR A K-12 DISTRICT HIGH SCHOOL PROGRAM TO $4,868 FOR SCHOOL FISCAL YEAR 2000 AND TO $4,966 FOR SCHOOL FISCAL YEAR 2001; INCREASING THE BASIC ENTITLEMENT FOR EACH ELEMENTARY DISTRICT OR K-12 DISTRICT ELEMENTARY PROGRAM TO $25,000 FOR SCHOOL FISCAL YEARS 2000 AND 2001; INCREASING THE BASIC ENTITLEMENT FOR EACH HIGH SCHOOL DISTRICT OR K-12 DISTRICT HIGH SCHOOL PROGRAM TO $204,000 FOR SCHOOL FISCAL YEAR 2000 AND TO $208,080 FOR SCHOOL FISCAL YEAR 2001; APPROPRIATING MONEY FOR PER-ANB AND BASIC ENTITLEMENT INCREASES AND SPECIAL EDUCATION; AMENDING SECTIONS 17-5-703, 20-9-306, AND 20-9-375, MCA; REQUIRING A THREE-FOURTHS VOTE OF THE MEMBERS OF EACH HOUSE; AND PROVIDING EFFECTIVE DATES, APPLICABILITY DATES, AND A TERMINATION DATE."

WHEREAS, a 1996 survey by the United States General Accounting Office documented that 70% of all Montana schools reported that their school buildings were in need of repair or upgrade; and

WHEREAS, a 1996 survey completed by Governor Racicot, entitled "School Pride, State Pride", reported that 51.7% of the responding school districts identified lack of funding as a barrier to innovation, especially in the area of technology development; and

WHEREAS, appropriating $50 million in each fiscal year in the biennium from the coal severance tax permanent fund will provide each Montana school district with an increase of $313 per average number belonging in school fiscal year 2000 and $318 per average number belonging in school fiscal year 2001, which can be used to provide funds necessary for school construction, reconstruction, or repair, to improve student achievement through the acquisition of library materials or textbooks for the classrooms, for the purchase of classroom supplies, or for the addition or modernization of computer technology.

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

(Refer to Introduced Bill)

Strike everything after the enacting clause and insert:

Section 1. Section 17-5-703, MCA, is amended to read:

"17-5-703. Coal severance tax trust funds. (1) The trust established under Article IX, section 5, of the Montana constitution is composed of the following funds:

(a) a coal severance tax bond fund into which the constitutionally dedicated receipts from the coal severance tax must be deposited;

(b) a treasure state endowment fund;

(c) a coal severance tax permanent fund;

(d) a coal severance tax income fund; and

(e) a coal severance tax school bond contingency loan fund.

(2) (a) The state treasurer shall determine, on July 1 of each year, the amount necessary to meet all principal and interest payments on bonds payable from the coal severance tax bond fund during the next 12 months and retain that amount in the coal severance tax bond fund.

(b) The amount in the coal severance tax bond fund in excess of the amount required in subsection (2)(a) must be transferred from that fund as provided in subsections (3) through (5).

(3) (a) As long as any school district bonds secured by state loans under 20-9-466 are outstanding, the state treasurer shall from time to time and as provided in subsection (3)(b) transfer from the coal severance tax bond fund to the coal severance tax school bond contingency loan fund any amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund.

(b) The state treasurer shall transfer the amount referred to in subsection (3)(a) until and unless the balance in the coal severance tax school bond contingency loan fund is equal to the amount due as principal of and interest on the school district bonds secured by state loans under 20-9-466 during the next following 12 months.

(4) (a) Beginning July 1, 1993, and ending June 30, 2013, the state treasurer shall quarterly transfer to the treasure state endowment fund 50% of the amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2) to be retained in the fund and in excess of amounts that are transferred pursuant to subsection (3).

(b) The state treasurer shall monthly transfer from the treasure state endowment fund to the treasure state endowment special revenue account the amount of earnings required to meet the obligations of the state that are payable from the account in accordance with 90-6-710. Earnings not transferred to the treasure state endowment special revenue account must be retained in the treasure state endowment fund.

(5) Any amount in the coal severance tax bond fund in excess of the amount that is specified in subsection (2)(a) to be retained in the fund and that is not otherwise allocated under this section must be deposited in the coal severance tax permanent fund.

(6) The state treasurer shall transfer $50 million from the coal severance tax permanent fund to the superintendent of public instruction on July 1, 1999, and on July 1, 2000, for distribution to school districts as provided in 20-9-375."

Section 2. 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 40% of the basic entitlement and 40% of the total per-ANB entitlement for the general fund budget of a district; and

(b) guaranteed tax base aid for an eligible district for any amount up to 40% of the basic entitlement, up to 40% of the total per-ANB entitlement budgeted in the general fund budget of a district, and up to 40% of the special education allowable cost 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, and up to 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) $204,000 for each high school district;

(b) $25,000 for each elementary school district or K-12 district elementary program without an approved and accredited junior high school or middle school; and

(c) the prorated entitlement for each elementary school district or K-12 district elementary program with an approved and accredited junior high school or middle school, calculated as follows:

(i) $25,000 times the ratio of the ANB for kindergarten through grade 6 to the total ANB of kindergarten through grade 8; plus

(ii) $204,000 times the ratio of the ANB for grades 7 and 8 to the total ANB of kindergarten through grade 8.

(7) "Direct state aid" means 40% of the basic entitlement and 40% of the total per-ANB entitlement for the general fund budget of a district and funded with state and county equalization aid.

(8) "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, and up to 153% of special education allowable cost payments.

(9) "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.

(10) "Total per-ANB entitlement" means the district entitlement resulting from the following calculations:

(a) for a high school district or a K-12 district high school program, a maximum rate of $4,868 for the first ANB is 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 or middle school, a maximum rate of $3,546 for the first ANB is 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 or middle school, the sum of:

(i) a maximum rate of $3,546 for the first ANB for kindergarten through grade 6 is 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 $4,868 for the first ANB for grades 7 and 8 is 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."

Section 3. 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 40% of the basic entitlement and 40% of the total per-ANB entitlement for the general fund budget of a district; and

(b) guaranteed tax base aid for an eligible district for any amount up to 40% of the basic entitlement, up to 40% of the total per-ANB entitlement budgeted in the general fund budget of a district, and up to 40% of the special education allowable cost 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, and up to 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) $208,080 for each high school district;

(b) $25,000 for each elementary school district or K-12 district elementary program without an approved and accredited junior high school or middle school; and

(c) the prorated entitlement for each elementary school district or K-12 district elementary program with an approved and accredited junior high school or middle school, calculated as follows:

(i) $25,000 times the ratio of the ANB for kindergarten through grade 6 to the total ANB of kindergarten through grade 8; plus

(ii) $208,080 times the ratio of the ANB for grades 7 and 8 to the total ANB of kindergarten through grade 8.

(7) "Direct state aid" means 40% of the basic entitlement and 40% of the total per-ANB entitlement for the general fund budget of a district and funded with state and county equalization aid.

(8) "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, and up to 153% of special education allowable cost payments.

(9) "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.

(10) "Total per-ANB entitlement" means the district entitlement resulting from the following calculations:

(a) for a high school district or a K-12 district high school program, a maximum rate of $4,966 for the first ANB is 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 or middle school, a maximum rate of $3,688 for the first ANB is 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 or middle school, the sum of:

(i) a maximum rate of $3,688 for the first ANB for kindergarten through grade 6 is 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 $4,966 for the first ANB for grades 7 and 8 is 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."

Section 4. Section 20-9-375, MCA, is amended to read:

"20-9-375. Investment for building maintenance, construction, and reconstruction, technology acquisition, textbooks, classroom supplies, and library materials. (1) Pursuant to this section, the superintendent of public instruction shall allocate the amount transferred from 17-5-703(6) and appropriated for building maintenance, construction, and reconstruction, technology acquisition, textbooks, classroom supplies, or library materials to each district based on the per-ANB of the district. A school district, by resolution of the board of trustees, is not required to accept an allocation of funds transferred under 17-5-703(6). Funds that are not accepted are redeposited in the permanent coal tax trust fund.

(2) The district may deposit all or a portion of the funds received under subsection (1) in the miscellaneous programs fund authorized in 20-9-507, the building fund authorized in 20-9-508, or the technology acquisition fund authorized in 20-9-533.

(3) Funds deposited in the miscellaneous programs fund may be used only for building maintenance, construction, or reconstruction, technology acquisition, textbooks, classroom supplies, or library materials.

(4) Funds deposited in the building fund must be used consistent with the requirements of 20-9-508.

(5) Funds deposited in the technology acquisition fund must be used consistent with the requirements of 20-9-533.

(6) The end-of-year balance of any funds deposited in the miscellaneous programs fund, building fund, or technology acquisition fund pursuant to this section may be carried forward but may not be transferred to another fund."

NEW SECTION. Section 5. Appropriation. (1) The money transferred from the coal severance tax permanent fund in 17-5-703(6) is appropriated to the superintendent of public instruction for the purposes provided in 20-9-375 as follows:

School fiscal year 2000	$50 million

School fiscal year 2001	$50 million

(2) There is appropriated from the general fund $12,673,007 for the school fiscal year beginning July 1, 1999, and $24,256,000 for the school fiscal year beginning July 1, 2000, to fund the per-ANB and basic entitlement increases provided for in [sections 2 and 3].

(3) There is appropriated from the general fund $5.2 million for the biennium beginning July 1, 1999, to the office of public instruction for special education.

NEW SECTION. Section 6. Three-fourths vote required. Because [this act] appropriates money from the coal severance tax trust fund, Article IX, section 5, of the Montana constitution requires a vote of three-fourths of the members of each house of the legislature for passage.

NEW SECTION. Section 7. Effective dates -- applicability. (1) Except as provided in subsection (2), [this act] is effective July 1, 1999, and applies to school budgets for school fiscal years beginning on or after July 1, 1999.

(2) [Section 3] is effective July 1, 2000, and applies to school budgets for school fiscal years beginning on or after July 1, 2000.

NEW SECTION. Section 8. Termination. [Section 2] terminates June 30, 2000.

- END -