AN ACT REVISING THE DISPOSITION OF CASH WHEN A SCHOOL DISTRICT CEASES TO EXIST TO REQUIRE THAT WHEN THE TERRITORY IS ASSUMED BY MORE THAN ONE DISTRICT, THE CASH REMAINING, AFTER PAYMENT OF DEBTS, MUST BE PRORATED BETWEEN THE DISTRICTS ON THE BASIS OF THE TAXABLE VALUE OF THE TERRITORY ASSUMED BY EACH DISTRICT; AMENDING SECTION 20-6-413, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.

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

Section 1. Section 20-6-413, MCA, is amended to read:

"20-6-413. Cash disposition when district ceases to exist -- special levy for tuition debt. Whenever a district ceases to exist in any manner prescribed in this title, except when districts are consolidated, the cash on hand to the credit of the funds of the district and the debts of the former district must be allocated in the following manner:

(1) Any cash to the credit of the district must be used to pay any debts of the district, including bonded indebtedness, except that any cash available in the debt service fund must be used first to pay bond interest and all outstanding bonds.

(2) If any cash remains to the credit of the district after paying its debts, the cash must be transferred by the county treasurer to the credit of the district or districts assuming its territory. When the territory is assumed by more than one district, the remaining cash must be prorated between the districts on the basis of the taxable value of the territory assumed by each district as determined by the county superintendent.

(3) If any tuition debt remains as an obligation of the district, the tuition debt is the obligation of the taxable property of the discontinued district, except when the tuition debt has been assumed by the consolidated or annexing district. The tuition debt must be financed by a mill levy on the property of the discontinued district and paid from these proceeds by the county superintendent.

(4) If any debts, other than bonded indebtedness and tuition, remain as an obligation of the district after the cash has been utilized under the provisions of subsection (1) , the debts must be assigned in the same manner prescribed for the transfer of cash under subsection (2) ."

Section 2. Effective date. [This act] is effective on passage and approval.

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I hereby certify that the within bill,

SB 0288, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 288

INTRODUCED BY L. NELSON

AN ACT REVISING THE DISPOSITION OF CASH WHEN A SCHOOL DISTRICT CEASES TO EXIST TO REQUIRE THAT WHEN THE TERRITORY IS ASSUMED BY MORE THAN ONE DISTRICT, THE CASH REMAINING, AFTER PAYMENT OF DEBTS, MUST BE PRORATED BETWEEN THE DISTRICTS ON THE BASIS OF THE TAXABLE VALUE OF THE TERRITORY ASSUMED BY EACH DISTRICT; AMENDING SECTION 20-6-413, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.