2003 Montana Legislature

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SENATE BILL NO. 424

INTRODUCED BY NELSON


AN ACT GENERALLY REVISING SCHOOL FINANCE; PROVIDING FOR ANNUAL INFLATION-RELATED ADJUSTMENTS TO THE BASE FUNDING PROGRAM AMOUNTS FOR SCHOOL DISTRICT BASIC ENTITLEMENTS AND PER-ANB ENTITLEMENTS; INCREASING THE BASIC AND PER-ANB ENTITLEMENTS FOR PUBLIC SCHOOLS FOR SCHOOL FISCAL YEAR 2004 AND SUCCEEDING YEARS; INCREASING SCHOOL FACILITY ENTITLEMENTS; DEFINING "FACILITY GUARANTEED MILL VALUE PER ANB"; CHANGING THE WAY IN WHICH A SCHOOL DISTRICT OR COOPERATIVE CHARGES EMPLOYER CONTRIBUTIONS FOR RETIREMENT, SOCIAL SECURITY, AND UNEMPLOYMENT INSURANCE; TERMINATING THE COUNTYWIDE SCHOOL RETIREMENT BLOCK GRANTS; REVISING THE SCHEDULE FOR STATE AND COUNTY TRANSPORTATION REIMBURSEMENT; ELIMINATING WEIGHTED RIDERSHIP; ESTABLISHING THREE SEPARATE BLOCK GRANTS; ALLOWING THE COMBINED FUND BLOCK GRANT TO BE DEPOSITED IN ANY BUDGETED FUND OF THE DISTRICT; AMENDING SECTIONS 20-9-306, 20-9-366, 20-9-370, 20-9-371, 20-9-501, 20-9-542, 20-10-101, AND 20-10-141, MCA; AMENDING SECTIONS 25 AND 26, CHAPTER 13, LAWS OF 2002; REPEALING SECTIONS 20-10-127 AND 20-10-128, MCA; AND PROVIDING EFFECTIVE DATES, APPLICABILITY DATES, AND A TERMINATION DATE.

 

AN ACT GENERALLY REVISING SCHOOL FINANCE; PROVIDING FOR ANNUAL INFLATION-RELATED ADJUSTMENTS TO THE BASE FUNDING PROGRAM AMOUNTS FOR SCHOOL DISTRICT BASIC ENTITLEMENTS AND PER-ANB ENTITLEMENTS; INCREASING THE BASIC AND PER-ANB ENTITLEMENTS FOR PUBLIC SCHOOLS FOR SCHOOL FISCAL YEAR 2004 AND SUCCEEDING YEARS; INCREASING SCHOOL FACILITY ENTITLEMENTS; DEFINING "FACILITY GUARANTEED MILL VALUE PER ANB"; CHANGING THE WAY IN WHICH A SCHOOL DISTRICT OR COOPERATIVE CHARGES EMPLOYER CONTRIBUTIONS FOR RETIREMENT, SOCIAL SECURITY, AND UNEMPLOYMENT INSURANCE; TERMINATING THE COUNTYWIDE SCHOOL RETIREMENT BLOCK GRANTS; REVISING THE SCHEDULE FOR STATE AND COUNTY TRANSPORTATION REIMBURSEMENT; ELIMINATING WEIGHTED RIDERSHIP; ESTABLISHING THREE SEPARATE BLOCK GRANTS; ALLOWING THE COMBINED FUND BLOCK GRANT TO BE DEPOSITED IN ANY BUDGETED FUND OF THE DISTRICT; AMENDING SECTIONS 20-9-306, 20-9-366, 20-9-370, 20-9-371, 20-9-501, 20-9-542, 20-10-101, AND 20-10-141, MCA; AMENDING SECTIONS 25 AND 26, CHAPTER 13, LAWS OF 2002; REPEALING SECTIONS 20-10-127 AND 20-10-128, MCA; AND PROVIDING EFFECTIVE DATES, APPLICABILITY DATES, AND A TERMINATION DATE.

 

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

 

     Section 1.  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 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 basic and per-ANB entitlements, 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 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 44.7% of the basic entitlement and 44.7% 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 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 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)  $213,819 $216,171 for each high school district;

     (b)  $19,244 $19,456 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)  $19,244 $19,456 times the ratio of the ANB for kindergarten through grade 6 to the total ANB of kindergarten through grade 8; plus

     (ii) $213,819 $216,171 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 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.

     (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 the greater of:

     (a)  175% of special education allowable cost payments; 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%.

     (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 $5,205 $5,262 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 $3,906 $3,949 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 $3,906 $3,949 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 $5,205 $5,262 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 44.7% of the basic entitlement and 44.7% 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 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 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)  $213,819 $220,646 for each high school district;

     (b)  $19,244 $19,859 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)  $19,244 $19,859 times the ratio of the ANB for kindergarten through grade 6 to the total ANB of kindergarten through grade 8; plus

     (ii) $213,819 $220,646 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 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.

     (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 the greater of:

     (a)  175% of special education allowable cost payments; 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%.

     (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 $5,205 $5,371 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 $3,906 $4,031 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 $3,906 $4,031 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 $5,205 $5,371 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 20-9-366, MCA, is amended to read:

     "20-9-366.  Definitions. As used in 20-9-366 through 20-9-369 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' current 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 divided by the sum of the district's current year BASE budget amount less direct state aid.

     (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 divided by 1,000, with the quotient divided by the ANB count of the district used to calculate the district's current 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 ANB amount used to calculate the school districts' current year total per-ANB entitlement.

     (3)(4)  (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 175% and divided by the total sum of either the state elementary school districts' or the high school districts' current year BASE budget amounts less total direct state aid.

     (b)  "Statewide mill value per elementary ANB" or "statewide mill value per high school ANB", for school facility entitlement and 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' current year total per-ANB entitlement amounts."

 

     Section 5.  Section 20-9-370, MCA, is amended to read:

     "20-9-370.  Definitions. As used in this title, unless the context clearly indicates otherwise, the following definitions apply:

     (1)  "School facility entitlement" means:

     (a)  $220 $300 per ANB for an elementary school district;

     (b)  $330 $450 per ANB for a high school district; or

     (c)  $270 $370 per ANB for an approved and accredited junior high school or middle school.

     (2)  "State advance for school facilities" is the amount of state equalization aid distributed to an eligible district to pay the debt service obligation for a bond in the first school fiscal year in which a debt service payment is due for the bond.

     (3)  "State reimbursement for school facilities" means the amount of state equalization aid distributed to a district that:

     (a)  has a district mill value per elementary ANB that is less than the corresponding statewide mill value per elementary ANB or a district mill value per high school ANB that is less than the corresponding statewide mill value per high school ANB facility guaranteed mill value per ANB; and

     (b)  has a debt service obligation in the ensuing school year on bonds for which the original issue was sold after July 1, 1991.

     (4)  "Total school facility entitlement" means the school facility entitlement times the total ANB for the district."

 

     Section 6.  Section 20-9-371, MCA, is amended to read:

     "20-9-371.  Calculation and uses of school facility entitlement amount. (1) The state reimbursement for school facilities for a district is the percentage determined in 20-9-346(2)(b) times (1-(district mill value per ANB/statewide facility guaranteed mill value per ANB)) times the lesser of the total school facility entitlement calculated under the provisions of 20-9-370 or the district's current year debt service obligations on bonds that qualify under the provisions of 20-9-370(3).

     (2)  The state advance for school facilities for a district is determined as follows:

     (a)  Calculate the percentage of the district's debt service payment that will be advanced by the state using the district ANB, the district mill value and the statewide mill value for the current year, and the percentage used to determine the proportionate share of state reimbursement for school facilities in the prior year.

     (b)  Multiply the percentage determined in subsection (2)(a) by the lesser of the total school facility entitlement calculated under the provisions of 20-9-370 or the district's current year debt service obligation for bonds to which the state advance applies.

     (3)  Within the available appropriation, the superintendent of public instruction shall first distribute to eligible districts the state advance for school facilities. From the remaining appropriation, the superintendent shall distribute to eligible districts the state reimbursement for school facilities.

     (4)  The trustees of a district may apply the state reimbursement for school facilities to reduce the levy requirement in the ensuing school fiscal year for all outstanding bonded indebtedness on bonds sold in the debt service fund of the district after July 1, 1991. The trustees may apply the state advance for school facilities to reduce the levy requirement in the current school fiscal year for debt service payments on bonds to which the state advance for school facilities applies."

 

     Section 7.  Section 20-9-501, MCA, is amended to read:

     "20-9-501.  Retirement costs and retirement fund. (1) The trustees of a district or the management board of a cooperative employing personnel who are members of the teachers' retirement system or the public employees' retirement system or who are covered by unemployment insurance or who are covered by any federal social security system requiring employer contributions shall establish a retirement fund for the purposes of budgeting and paying the employer's contributions to the systems as provided in subsection (2)(a). The district's or the cooperative's contribution for each employee who is a member of the teachers' retirement system must be calculated in accordance with Title 19, chapter 20, part 6. The district's or the cooperative's contribution for each employee who is a member of the public employees' retirement system must be calculated in accordance with 19-3-316. The district's or the cooperative's contributions for each employee covered by any federal social security system must be paid in accordance with federal law and regulation. The district's or the cooperative's contribution for each employee who is covered by unemployment insurance must be paid in accordance with Title 39, chapter 51, part 11.

     (2) (a) The district or the cooperative shall pay the employer's contributions to the retirement, federal social security, and unemployment insurance systems from the retirement fund for the following:

     (i) a district employee whose salary and health-related benefits, if any health-related benefits are provided to the employee, are paid from state or local funding sources;

     (ii) a cooperative employee whose salary and health-related benefits, if any health-related benefits are provided to the employee, are paid from the cooperative's interlocal agreement fund if the fund is supported solely from districts' general funds and state special education allowable cost payments pursuant to 20-9-321; and

     (iii) a district employee whose salary and health-related benefits, if any health-related benefits are provided to the employee, are paid from the district's school food services fund provided for in 20-10-204.

     (b) For an employee whose benefits are not paid from the retirement fund, the district or the cooperative shall pay the employer's contributions to the retirement, federal social security, and unemployment insurance systems from the funding source that pays the employee's salary.

     (2)(3)  The trustees of a district required to make a contribution to a system referred to in subsection (1) shall include in the retirement fund of the final budget the estimated amount of the employer's contribution. After the final retirement fund budget has been adopted, the trustees shall pay the employer contributions to the systems in accordance with the financial administration provisions of this title.

     (3)(4)  When the final retirement fund budget has been adopted, the county superintendent shall establish the levy requirement by:

     (a)  determining the sum of the money available to reduce the retirement fund levy requirement by adding:

     (i)  any anticipated money that may be realized in the retirement fund during the ensuing school fiscal year;

     (ii) oil and natural gas production taxes;

     (iii) coal gross proceeds taxes under 15-23-703;

     (iv) countywide school retirement block grants distributed under section 245, Chapter 574, Laws of 2001;

     (v)  any fund balance available for reappropriation as determined by subtracting the amount of the end-of-the-year fund balance earmarked as the retirement fund operating reserve for the ensuing school fiscal year by the trustees from the end-of-the-year fund balance in the retirement fund. The retirement fund operating reserve may not be more than 35% of the final retirement fund budget for the ensuing school fiscal year and must be used for the purpose of paying retirement fund warrants issued by the district under the final retirement fund budget.

     (vi) any other revenue anticipated that may be realized in the retirement fund during the ensuing school fiscal year, excluding any guaranteed tax base aid.

     (b)  notwithstanding the provisions of subsection (8) (9), subtracting the money available for reduction of the levy requirement, as determined in subsection (3)(a) (4)(a), from the budgeted amount for expenditures in the final retirement fund budget.

     (4)(5)  The county superintendent shall:

     (a)  total the net retirement fund levy requirements separately for all elementary school districts, all high school districts, and all community college districts of the county, including any prorated joint district or special education cooperative agreement levy requirements; and

     (b)  report each levy requirement to the county commissioners on the fourth Monday of August as the respective county levy requirements for elementary district, high school district, and community college district retirement funds.

     (5)(6)  The county commissioners shall fix and set the county levy or district levy in accordance with 20-9-142.

     (6)(7)  The net retirement fund levy requirement for a joint elementary district or a joint high school district must be prorated to each county in which a part of the district is located in the same proportion as the district ANB of the joint district is distributed by pupil residence in each county. The county superintendents of the counties affected shall jointly determine the net retirement fund levy requirement for each county as provided in 20-9-151.

     (7)(8)  The net retirement fund levy requirement for districts that are members of special education cooperative agreements must be prorated to each county in which the district is located in the same proportion as the special education cooperative budget is prorated to the member school districts. The county superintendents of the counties affected shall jointly determine the net retirement fund levy requirement for each county in the same manner as provided in 20-9-151, and the county commissioners shall fix and levy the net retirement fund levy for each county in the same manner as provided in 20-9-152.

     (8)(9)  The county superintendent shall calculate the number of mills to be levied on the taxable property in the county to finance the retirement fund net levy requirement by dividing the amount determined in subsection (4)(a) (5)(a) by the sum of:

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

     (b)  the taxable valuation of the district divided by 1,000.

     (9)(10)  The levy for a community college district may be applied only to property within the district."

 

     Section 8.  Section 20-9-542, MCA, is amended to read:

     "20-9-542.  School flexibility account -- distribution of funds. (1) There is a school flexibility account in the state special revenue fund. The superintendent of public instruction shall allocate the money in the account, including any interest earned on money allocated to the account, to each school district. Each school district's total allocation is the sum of the district K-12 public school funding amount, the district large K-12 public school funding amount, and the district student funding amount.

     (2)  In addition to funds allocated or appropriated to the school flexibility account, all money saved by the state if the actual statewide ANB in a given fiscal year is less than the statewide ANB projected by the legislature during the preceding legislative session must be deposited in the school flexibility account.

     (3) A portion of the money in the school flexibility account may be expended by a district to alleviate certified staff shortages in the district or for retirement incentives only if a portion of the account is specified for that purpose in a general appropriation act."

 

     Section 9.  Section 20-10-101, MCA, is amended to read:

     "20-10-101.  Definitions. As used in this title, unless the context clearly indicates otherwise, the following definitions apply:

     (1)  "Bus route" means a route approved by the board of trustees of a school district and by the county transportation committee.

     (2)  "Eligible transportee" means a public school pupil who:

     (a)  is 5 years of age or older and has not reached the age of 21 on or before September 10 of the current school year or who is a preschool child with a disability between the ages of 3 and 6;

     (b)  is a resident of the state of Montana;

     (c)  regardless of district and county boundaries:

     (i)  resides at least 3 miles, over the shortest practical route, from the nearest operating public elementary school or public high school, whichever the case may be; or

     (ii) has transportation identified as a related service in an individualized education program as developed and implemented in accordance with the Individuals With Disabilities Education Act, 20 U.S.C. 1400, et seq.; and

     (d)  is considered to reside with a parent or guardian who maintains legal residence within the boundaries of the district furnishing the transportation regardless of where the eligible transportee actually lives when attending school.

     (3)  "Passenger seating position" means, as defined in 49 CFR 571.222, the space on a school bus allocated for one passenger.

     (4)  (a) "School bus" means, except as provided in subsection (4)(b), any motor vehicle that:

     (i)  complies with the bus standards established by the board of public education as verified by the department of justice's semiannual inspection of school buses and the superintendent of public instruction; and

     (ii) is owned by a district or other public agency and operated for the transportation of pupils to or from school or owned by a carrier under contract with a district or public agency to provide transportation of pupils to or from school.

     (b)  A school bus does not include a vehicle that is:

     (i)  privately owned and not operated for compensation under this title;

     (ii) privately owned and operated for reimbursement under 20-10-142;

     (iii) either district-owned or privately owned, designed to carry not more than nine passengers, and used to transport pupils to or from activity events or to transport pupils to their homes in case of illness or other emergency situations; or

     (iv) an over-the-road passenger coach used only to transport pupils to activity events.

     (5)  "Transportation" means:

     (a)  a district's conveyance of a pupil by a school bus between the pupil's legal residence or an officially designated bus stop and the school designated by the trustees for the pupil's attendance; or

     (b)  "individual transportation" by which a district is relieved of actually conveying a pupil. Individual transportation may include paying the parent or guardian for conveying the pupil, reimbursing the parent or guardian for the pupil's board and room, or providing supervised correspondence study or supervised home study.

     (6)  "Transportation service area" means the geographic area of responsibility for school bus transportation for each district that operates a school bus transportation program.

     (7)  "Weighted ridership" means the sum of the passenger points assigned to the eligible transportees who are transported on a bus route."

 

     Section 10.  Section 20-10-141, MCA, is amended to read:

     "20-10-141.  Schedule of maximum reimbursement by mileage rates. (1) The following mileage rates in subsection (2) for school transportation constitute the maximum reimbursement to districts for school transportation from state and county sources of transportation revenue under the provisions of 20-10-145 and 20-10-146. These rates may not limit the amount that a district may budget in its transportation fund budget in order to provide for the estimated and necessary cost of school transportation during the ensuing school fiscal year. All bus miles traveled on bus routes approved by the county transportation committee are reimbursable. Nonbus mileage is reimbursable for a vehicle driven by a bus driver to and from an overnight location of a school bus when the location is more than 10 miles from the school. A district may approve additional bus or nonbus miles within its own district or approved service area but may not claim reimbursement for the mileage. Any vehicle, the operation of which is reimbursed for bus mileage under the rate provisions of this schedule, must be a school bus, as defined by this title, driven by a qualified driver on a bus route approved by the county transportation committee and the superintendent of public instruction.

     (2) (a) The rate per for each bus mile traveled must be determined in accordance with the following schedule when the weighted ridership assigned to a bus route is not less than one-half of the rated capacity of the school bus:

     (a)(i)  85 95 cents per bus mile for a school bus with a rated capacity of not more than 45 49 passenger seating positions;

     (ii) $1.15 for a school bus with a rated capacity of 50 to 59 passenger seating positions;

     (iii) $1.36 for a school bus with a rated capacity of 60 to 69 passenger seating positions;

     (iv) $1.57 for a school bus with a rated capacity of 70 to 79 passenger seating positions; and

     (v) $1.80 for a school bus with 80 or more passenger seating positions.

     (b)  when the rated capacity is more than 45 passenger seating positions, an additional 2.13 cents per bus mile for each additional passenger seating position in the rated capacity in excess of 45 must be added to a base rate of 85 cents per bus mile Nonbus mileage, as provided in subsection (1), must be reimbursed at a rate of 50 cents a mile.

     (3)  Reimbursement for nonbus mileage provided for in subsection (1) may not exceed 50% of the maximum reimbursement rate determined under subsection (2).

     (4)  When the weighted ridership assigned to a bus route is less than one-half of the rated capacity of the school bus, the rate per bus mile traveled must be computed as follows:

     (a)  determine the weighted ridership assigned to the bus route;

     (b)  multiply the number determined in subsection (4)(a) by two; and

     (c)  use the adjusted rated capacity determined in subsection (4)(b) as the rated capacity of the bus to determine the rate per bus mile traveled from the rate schedule in subsection (2).

     (5)(3)  The rated capacity is the number of passenger seating positions of a school bus as determined under the policy adopted by the board of public education. If modification of a school bus to accommodate pupils with disabilities reduces the rated capacity of the bus, the reimbursement to a district for pupil transportation is based on the rated capacity of the bus prior to modification.

     (6)(4)  The number of pupils riding the school bus may not exceed the passenger seating positions of the bus."

 

     Section 11.  Section 25, Chapter 13, Laws of 2002, is amended to read:

     "Section 25.  Section 244, Chapter 574, Laws of 2001, is amended to read:

     "Section 244.  School district block grants. (1) (a) The office of public instruction shall provide a block grant to each school district based on the revenue received by each district in fiscal year 2001 from vehicle taxes and fees, corporate license taxes paid by financial institutions, aeronautics fees, state land payments in lieu of taxes, and property tax reimbursements pursuant to sections 167(1) through (5) and 169(6), Chapter 584, Laws of 1999.

     (b) Block grants must be calculated using the electronic reporting system that is used by the office of public instruction and school districts. The electronic reporting system must be used to allocate a portion of the block grant amount into each district's fiscal year 2002 budget as an anticipated revenue source by fund.

     (c) With the exception of vehicle taxes and fees, the office of public instruction shall use the amount actually received from the sources listed in subsection (1)(a) in fiscal year 2001 in its calculation of the block grant for fiscal year 2002 budgeting purposes. For vehicle taxes and fees, the office of public instruction shall use 93.4% of the amount actually received in fiscal year 2001 in calculating the block grant for fiscal year 2002.

     (2) If the biennial fiscal year 2003 appropriation provided in [section 248(1)] is insufficient to fund the school district block grants in fiscal year 2003 at the fiscal year 2002 level, the office of public instruction shall prorate the block grants to meet the remaining appropriation. School districts shall anticipate the prorated block grant amounts provided by the office of public instruction in their budgets for fiscal year 2003.

     (3) Each year, 70% of each district's block grant must be distributed in November and 30% of each district's block grant must be distributed in May at the same time that guaranteed tax base aid is distributed. If the appropriation for block grants is greater than or less than the amount received by schools from the sources enumerated in subsection (1), the office of public instruction shall prorate the amount appropriated based upon the fiscal year 2001 revenue.

     (4) (a) The average amount of the block grants in fiscal years 2002 and 2003 must be increased by 0.76% in fiscal year 2004 and in each succeeding fiscal year. The block grant for the district general fund is equal to the average amount received in fiscal years 2002 and 2003 by the district general fund from the block grants provided for in subsection (1). The block grant must be increased by 0.76% in fiscal year 2004 and in each succeeding fiscal year.

     (b) The block grant for the district transportation fund is equal to one-half of the average amount received in fiscal years 2002 and 2003 by the district transportation fund from the block grants provided for in subsection (1). The block grant must be increased by 0.76% in fiscal year 2004 and in each succeeding fiscal year.

     (c) (i) The combined fund block grant is equal to the average amount received in fiscal years 2002 and 2003 by the district tuition, bus depreciation reserve, building reserve, nonoperating, and adult education funds from the block grants provided for in subsection (1). The block grant must be increased by 0.76% in fiscal year 2004 and in each succeeding fiscal year.

     (ii) The school district may deposit the combined fund block grant into any budgeted fund of the district.""

 

     Section 12.  Section 26, Chapter 13, Special Laws of August 2002, is amended to read:

     "Section 26.  Section 245, Chapter 574, Laws of 2001, is amended to read:

     "Section 245.  Countywide school retirement block grants. (1) The office of public instruction shall distribute one-half of the amount appropriated for countywide school retirement in November and the remainder in May. The total amount for each county is as follows:

          & #160;                          0;            &# 160;FY 2002                      FY 2002                      FY 2003                       FY 2003

          & #160;                          0;        Elementary               0;  High School            ;      Elementary                 0; High School

          & #160;                          0;           &# 160;Payment                       Payment           60;          Payment           60;            Payment

Beaverhead         0;            &# 160;        $86,692               0;        $50,789 &# 160;      $87,351 $55,503           $51,175 $41,981

Big Horn                         0;            &# 160; 62,668            ;             36,963            ; 63,144 95,018        & #160;     37,244 33,837

Blaine         &# 160;                          0;       61,160            ;             10,193            ; 61,624 46,318        & #160;     10,271 81,109

Broadwater         0;            &# 160;                   0             0;            92,686            ;             60;       0             0;  93,390 34,949

Carbon         & #160;                          0;     43,451            ;             82,110           43,782 72.602        & #160;     82,734 58,957

Carter         &# 160;                          0;        9,751                         0; 5,453                9,825 8,478        &# 160;        5,495 6,155

Cascade         & #160;                          0;349,056         &# 160;            < /span>192,848        351,709 282,266           194,314 142,282

Chouteau                       0;            &# 160; 75,384        & #160;                41,034       0;     75,957 58,455        & #160;     41,346 29,474

Custer         &# 160;                          0;      78,925    60;            & #160;       36,930             79,525 57,608        & #160;     37,211 32,128

Daniels         & #160;                          0;            &# 160;0             0;            37,994          & #160;                     0             0;  38,283 36,083

Dawson         & #160;                          0;    85,568      60;            & #160;     38,722             86,219 64,693        & #160;     39,016 24,827

Deer Lodge            ;             60;         39,980&# 160;                        17,0 59           &# 160;40,284 34,455        & #160;     17,189 16,807

Fallon         &# 160;                          0;            &# 160;  0             0;            &# 160;       0             0;            &# 160;      0             0;          0 30,444

Fergus         &# 160;                          0;   119,028      &# 160;                  78,809     0;     119,932 90,464        & #160;     79,408 55,527

Flathead                       0;            &# 160; 558,861                      0; 296,410        563,108 530,274           298,662 268,731

Gallatin         & #160;                          0;  383,035       &# 160;               181,743        60;385,946 537,244           183,125 107,717

Garfield         & #160;                          0;    12,337      60;            & #160;     10,170             12,431 12,100        & #160;       10,247 4,620

Glacier         & #160;                          0;     79,924     60;            & #160;      34,016           80,532 106,815               34,275 10,494

Golden Valley            ;             60;            & #160;0             0;            16,716          & #160;                     0             0;  16,843 14,492

Granite         & #160;                          0;     14,074     60;            & #160;      48,026             14,180 12,523        & #160;     48,391 30,727

Hill          0;            &# 160;                       142,867            &# 160;            82,538          143,953 59,593        & #160;     83,165 35,211

Jefferson                       0;            &# 160;116,679                       0;  59,523        60;117,565 143,901               59,976 59,690

Judith Basin                         0;          6,149            &# 160;            21,359            ;     6,196 4,744        &# 160;     21,521 30,198

Lake          60;            & #160;                    173,584   60;            & #160;      139,990    ;     174,903 156,485           141,054 103,365

Lewis & Clark                         0;    344,112     &# 160;                 211,726      60;  346,728 370,958           213,335 173,847

Liberty         & #160;                          0;      20,144    60;            & #160;       16,786               20,297 3,067        &# 160;     16,914 31,953

Lincoln         & #160;                          0;     73,001     60;            & #160;      98,835             73,556 61,499        & #160;     99,586 87,710

Madison                       0;            &# 160;            0             0;          103,163                       0 4,891             0;103,947 19,788

Mccone         & #160;                          0;    23,214      60;            & #160;     15,824             23,390 21,778        & #160;     15,945 14,004

Meagher                       0;            &# 160;  13,654       & #160;                 10,678      0;        13,758 9,250        &# 160;       10,759 9,492

Mineral         & #160;                          0;            &# 160;0             0;            32,206          & #160;                     0             0;  32,451 33,292

Missoula                       0;            &# 160;487,129                       0;362,756        490,832 587,637           365,513 357,669

Musselshell         0;            &# 160;            30,675            ;             60;21,577         &# 160;  30,908 48,959        & #160;     21,741 41,250

Park          0;            &# 160;                    154,192   60;            & #160;        81,696         155,364 135,256               82,317 78,135

Petroleum                       0;            &# 160;        0             0;            16,897          & #160;                      0             0;    17,026 9,510

Phillips         & #160;                          0;     10,502     60;            & #160;      95,084           10,582 103,747               95,806 54,728

Pondera         & #160;                          0;   79,805       60;            & #160;    60,307             80,411 18,821        & #160;     60,765 47,629

Powder River                         0;      18,815    60;            & #160;       15,011                0;      18,958 0                       0; 15,125 0

Powell         &# 160;                          0;      69,695    60;            & #160;       22,666             70,225 71,420        & #160;     22,838 30,458

Prairie         &# 160;                          0;            &# 160; 0             0;            26,791          & #160;                     0             0;  26,995 21,945

Ravalli         & #160;                          0;      85,333    60;            & #160;     169,769     ;          85,981 2,062        &# 160;   171,059 40,316

Richland                       0;            &# 160;   83,671      & #160;                  30,302     0;       84,307 15,500        & #160;     30,533 26,650

Roosevelt                       0;            &# 160; 71,090        & #160;                60,329       0;     71,630 96,278        & #160;     60,787 61,038

Rosebud                       0;            &# 160;359,662                       0;286,411        362,395 475,055           288,588 126,246

Sanders         & #160;                          0; 203,863        &# 160;              127,694        205,413 197,286             128,665 14,442

Sheridan                       0;            &# 160;          0             0;            46,231          & #160;                     0             0;  46,583 47,628

Silver Bow                         0;         249,821&# 160;                      141,541 60;       251,719 193,304           142,617 119,358

Stillwater                       0;            &# 160;  91,487       & #160;                 75,926      0;      92,182 91,185        & #160;     76,503 51,769

Sweet Grass                         0;       36,996   60;            & #160;        36,327             37,277 24,214        & #160;     36,603 12,316

Teton          60;            & #160;                    57,760   0;            &# 160;        41,547 & #160;          58,199 45,217        & #160;     41,863 40,769

Toole          60;            & #160;                     43,323  0;            &# 160;         51,399& #160;           43,652 36,109        & #160;     51,790 73,362

Treasure                       0;            &# 160;          0             0;            18,947          & #160;                     0             0;  19,091 16,243

Valley         &# 160;                          0;       15,824   60;            & #160;        90,532             15,944 10,558        & #160;   91,220 143,204

Wheatland          ;             60;            20,946                        0; 12,103         60;   21,105 15,031        & #160;     12,195 12,109

Wibaux         & #160;                          0;            &# 160;0             0;            14,585          & #160;                      0             0;  14,696 25,103

Yellowstone         60;            & #160;     1,125,488    60;            & #160;     643,136  1,134,042 1,070,887        0;  648,024 612,203

Total          60;            & #160;                 6,269,374     &# 160;              4,650,865  6,317,022 6,139,506    4,686,212 3,723,973

     (2)  The average amount of the block grants in fiscal years 2002 and 2003 must be increased by 0.76% in fiscal year 2004 and in each succeeding fiscal year.""

 

     Section 13.  Repealer. Sections 20-10-127 and 20-10-128, MCA, are repealed.

 

     Section 14.  Extension of school election deadlines. In order to allow for the orderly and efficient conduct of the regular school elections scheduled for May 6, 2003, it may not be possible to comply with certain statutory deadlines relating to a school election. Therefore, in 2003 only, a school district may limit the regular school election scheduled for May 6, 2003, to trustee elections only and may reschedule a single general fund operating levy election at any time prior to the adoption of a final budget pursuant to 20-9-131. In addition, all statutory deadlines for the May 6, 2003, regular school election that fall on or before April 18 are extended to April 28, 2003, except that the timeline for posting the election notice is changed to April 28, 2003, through May 2, 2003.

 

     Section 15.  Restrictions on retirement fund for fiscal year 2004. (1) For school fiscal year 2004, the amount that a school district or cooperative may charge to the retirement fund for the employer's contributions to the retirement, federal social security, and unemployment insurance systems for all employees whose salaries are paid from a federal funding source is limited to the amount that the district or cooperative charged to the retirement fund for those same purposes for the same group of employees in school fiscal year 2003.

     (2) The restriction in subsection (1) does not apply to employees whose salaries are paid from the district's school food services fund.

 

     Section 16.  Codification instruction. [Section 1] is intended to be codified as an integral part of Title 20, chapter 9, part 3, and the provisions of Title 20, chapter 9, part 3, apply to [section 1].

 

     Section 17.  Effective dates -- applicability. (1) [Section 1] is effective July 1, 2004, and applies to school budgets for the fiscal years beginning on or after July 1, 2005.

     (2) [Section 2] is effective July 1, 2003, and applies to school budgets for the school fiscal year beginning July 1, 2003.

     (3) [Section 3] is effective July 1, 2004, and applies to school budgets for the school fiscal years beginning on or after July 1, 2004.

     (4) [Sections 4 through 6 and 8 through 13] are effective July 1, 2003.

     (5) [Section 7] is effective July 1, 2004.

     (6) [Sections 14, 15, 16, 18, 19, and this section] are effective on passage and approval.

 

     Section 18.  Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to actions taken by the trustees of a school district on or after March 27, 2003.

 

     Section 19.  Termination. [Section 2] terminates June 30, 2004.

- END -

 


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