SENATE BILL NO. 261

INTRODUCED BY M. HALLIGAN

A BILL FOR AN ACT ENTITLED: "AN ACT RESTORING THE LANGUAGE OF HOUSE BILL NO. 667 BY REQUIRING VOTER APPROVAL FOR THE OVER-BASE BUDGET OF A SCHOOL DISTRICT FOR THE PORTION OF THE BUDGET THAT EXCEEDS THE GREATER OF EITHER THE PREVIOUS YEAR'S GENERAL FUND BUDGET OR THE PREVIOUS YEAR'S GENERAL FUND BUDGET PER-ANB; ELIMINATING THE VOTE ON BUDGET AUTHORITY; CONFORMING THE LANGUAGE ON THE BALLOT SUBMITTED TO THE ELECTORATE FOR THE GENERAL FUND LEVY TO ARTICLE VIII, SECTION 17, OF THE MONTANA CONSTITUTION; AMENDING SECTIONS 20-9-308 AND 20-9-353, MCA; AND PROVIDING EFFECTIVE DATES AND AN APPLICABILITY DATE."

WHEREAS, House Bill No. 667, commonly referred to as the Montana School Finance Reform Act, which was enacted by the 1993 Legislature as Chapter 633, Laws of 1993, equalized school budgets by setting formula-driven "maximum general fund budgets" and mandating that all districts budget no less than 80% of the maximum; and

WHEREAS, under House Bill No. 667, school districts were allowed to permissively adopt budgets up to "the greater of" the previous year's maximum general fund budget or the previous year's general fund budget per average number belonging (ANB); and

WHEREAS, the 1993 Legislature, in a special session held in November 1993, enacted House Bill No. 22, which requires districts to obtain voter approval for any amount of budget growth that exceeded "the lesser of" the prior year's budget or the prior year's budget per ANB; and

WHEREAS, as a result of the "lesser of" language imposed by House Bill No. 22, school districts with growing student enrollment are required to obtain voter approval of any increase in overall budget even when the budget level per student decreases over the prior year, while districts with declining student enrollment are required to obtain voter approval just to maintain the prior year's overall budget level; and

WHEREAS, should Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana Constitution, be declared invalid, this proposal is intended to restore House Bill No. 667 to its original language regarding voter authorization for budget growth and is not intended to be considered in lieu of any proposal requesting additional state funding in the basic entitlement for school districts.

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

Section 1. Section 20-9-308, MCA, is amended to read:

"20-9-308. BASE budgets and maximum general fund budgets. (1) The trustees of a district shall adopt a general fund budget that

is at least equal to the BASE budget established for the district

and that does not exceed the maximum general fund budget established for the district.

(2) (a) Whenever the trustees of a district adopt a general fund budget that exceeds the BASE budget for the district but does not exceed the maximum general fund budget for the district, the trustees

may adopt a general fund budget that does not exceed the greater of:

(i) 104% of the previous year's general fund budget ; or

(ii) 104% of the previous year's general fund budget per-ANB multiplied by the current year's ANB for budgeting purposes .

(3) If the maximum general fund budget for a district for the current school fiscal year is less than the general fund budget for the district for the previous school fiscal year, the trustees of the district may not adopt a general fund budget for the ensuing school fiscal year that is greater than the district's general fund budget for the previous school fiscal year.

(4) The trustees shall finance the BASE budget of the district with 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.

(5) 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 2. Section 20-9-353, MCA, is amended to read:

"20-9-353. Additional levy for general fund -- election for authorization to impose -- definition of tax increase.

.

(1) When the trustees of a district determine that a tax increase is required for the general fund budget, the trustees shall submit the proposition to authorize the tax increase for the general fund to the electors who are qualified under 20-20-301 to vote on the proposition at the tax election. The ballot must be in the following format:

PROPOSITION

SHALL THE GENERAL FUND LEVY TAX BE INCREASED ANNUALLY BY (STATE THE NUMBER OF MILLS) IN THE FOLLOWING MANNER?

[]	FOR increasing the district levy by (state the number of mills) to support the district's general fund budget.

[]	AGAINST increasing the district levy by (state the number of mills) to support the district's general fund budget.

(2) If the election on any additional levy for the general fund is approved by a majority vote of the electors voting at the election, the proposition carries and the trustees may use any portion or all of the authorized amount in adopting the final general fund budget. The trustees shall certify any additional levy amount authorized by the election on the budget form that is submitted to the county superintendent, and the county commissioners shall levy the authorized number of mills on the taxable value of all taxable property within the district as prescribed in 20-9-141 .

(3) As used in this section, "tax increase" has the meaning provided in Article VIII, section 17, of the Montana constitution."

NEW SECTION. Section 3. Coordination instruction. If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution, is declared invalid, then [section 1 of this act], amending 20-9-308, and [section 2 of this act], amending 20-9-353, must read as follows:

"Section 1. Section 20-9-308, MCA, is amended to read:

"20-9-308. BASE budgets and maximum general fund budgets. (1) The trustees of a district shall adopt a general fund budget that

is at least equal to the BASE budget established for the district

and that, except as provided in subsection (3), does not exceed the maximum general fund budget established for the district.

(2) (a) Whenever the trustees of a district adopt a general fund budget that exceeds the BASE budget for the district but does not exceed the maximum general fund budget for the district, the trustees shall submit a proposition to the electors of the district, as provided in 20-9-353, for any budget amount that exceeds either the previous year's general fund budget amount or the previous year's general fund budget per-ANB multiplied by the current year's ANB for budgeting purposes, whichever is greater.

(b) A general fund budget adopted under this subsection (2) may not exceed the greater of:

(i) 104% of the previous year's general fund budget ; or

(ii) 104% of the previous year's general fund budget per-ANB multiplied by the current year's ANB for budgeting purposes .

(3) (a) If the maximum general fund budget for a district for the current school fiscal year is less than the general fund budget for the district for the previous school fiscal year, the trustees of the district may not adopt a general fund budget for the ensuing school fiscal year that is greater than the district's general fund budget for the previous school fiscal year.

(b) The trustees of the district shall submit a proposition to raise any general fund budget amount that is in excess of the maximum general fund budget for the district to the electors who are qualified under 20-20-301 to vote on the proposition, as provided in 20-9-353.

(4) The trustees shall finance the BASE budget of the district with 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.

(5) 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 2. Section 20-9-353, MCA, is amended to read:

"20-9-353. Additional financing for general fund -- election for authorization to impose. (1) The trustees of a district may propose to adopt:

(a) a budget amount up to the BASE budget amount for the district general fund provided in 20-9-308(1);

(b) an over-BASE budget amount for the district general fund that does not exceed the maximum general fund budget for the district or other limitations, as provided in 20-9-308(2); or

(c) a general fund budget amount in excess of the maximum general fund budget amount for the district, as provided in 20-9-308(3).

(2) When the trustees of a district determine that a voted amount of financing is required for the general fund budget, the trustees shall submit the proposition to finance the additional amount of general fund financing to the electors who are qualified under 20-20-301 to vote upon the proposition. The special election must be called and conducted in the manner prescribed by this title for school elections. The ballot for the election must state the amount of money to be financed, the approximate number of mills required to raise all or a portion of the money, and the purpose for which the money will be expended. The ballot must be in the following format:

PROPOSITION

Shall the district be authorized to expend the sum of (state the additional amount to be expended), and being approximately (give number) mills, for the purpose of (insert the purpose for which the additional financing is made)?

[]	FOR budget authority and any levy.

[]	AGAINST budget authority and any levy.

(3) If the election on any additional financing for the general fund is approved by a majority vote of the electors voting at the election, the proposition carries and the trustees may use any portion or all of the authorized amount in adopting the final general fund budget. The trustees shall certify any additional levy amount authorized by the special election on the budget form that is submitted to the county superintendent, and the county commissioners shall levy the authorized number of mills on the taxable value of all taxable property within the district, as prescribed in 20-9-141, to raise the amount of the additional levy.

(4) Authorization to levy an additional tax to support a budget amount adopted as allowed by 20-9-308(3) is effective for only 1 school fiscal year.

(5) All levies adopted under this section must be authorized by a special election conducted before August 1 of the school fiscal year for which it is effective.

(6) If the trustees of a district are required to submit a proposition to finance an increased amount up to the BASE budget amount, as provided in 20-9-308(1), an increased over-BASE budget amount, as provided in 20-9-308(2)(a), or an amount in excess of the maximum general fund budget amount for the district as allowed by 20-9-308(3) to the electors of the district, the trustees shall comply with the provisions of subsections (2) through (4) of this section.""

NEW SECTION. Section 4. Effective dates -- applicability. (1) Except as provided in subsection (2), [this act] is effective on passage and approval and applies to school budgets for school fiscal years beginning on or after July 1, 1999.

(2) [Section 2] is effective July 1, 1999, and applies to school budgets for school fiscal years beginning on or after July 1, 1999.

- END -