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1 HOUSE BILL NO. 252
2 INTRODUCED BY L. JONES, W. GALT, S. NOVAK, L. MUSZKIEWICZ, M. NIKOLAKAKOS, P. ELVERUM, L.
3 BENNETT, C. SCHOMER, C. COCHRAN, S. ROSENZWEIG, E. TILLEMAN, D. BEDEY, M. BERTOGLIO, E.
4 BUTTREY, J. FULLER, B. GILLESPIE, E. MATTHEWS, W. MCKAMEY, C. SPRUNGER, J. KASSMIER, G.
5 LAMMERS, S. VINTON, K. WALSH, J. ETCHART, B. BARKER, L. BREWSTER, J. COHENOUR, C. KEOGH,
6 E. KERR-CARPENTER, G. NIKOLAKAKOS, S. MORIGEAU, G. PARRY, L. REKSTEN, M. ROMANO, P.
7 TUSS, J. DARLING
8
9 A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING SCHOOL FUNDING LAWS; ENHANCING
10 THE SCHOOL FUNDING FORMULA THROUGH INCENTIVES AND A HOUSING COST BUDGET
11 AUTHORITY INCREASE; REVISING THE INCENTIVE TO INCREASE TEACHER BASE SALARIES;
12 ESTABLISHING A NEW INCENTIVE RELATED TO RESOURCE SHARING AMONG SCHOOL DISTRICTS;
13 EXPANDING THE TYPES OF EDUCATIONAL ENTITIES THAT CAN RECEIVE INCENTIVES FOR MEETING
14 STARTING TEACHER PAY BENCHMARKS; RENAMING AND REVISING THE QUALITY EDUCATOR
15 FUNDING COMPONENT; RESTORING FULL FUNDING TO THE ADVANCED OPPORTUNITIES PROGRAM;
16 INCLUDING DISTRICT CLERKS PERFORMING CERTAIN FUNCTIONS IN THE QUALITY EDUCATOR AND
17 QUALIFIED STAFF FUNDING COMPONENT; INCLUDING CERTAIN INDIVIDUALS WORKING UNDER AN
18 EMERGENCY AUTHORIZATION IN THE QUALITY EDUCATOR AND QUALIFIED STAFF FUNDING
19 COMPONENT; ESTABLISHING A NEW K-12 BASE AID "FUTURE READY" FUNDING COMPONENT
20 RELATED TO POSTGRADUATION PREPARATION; PROVIDING INCREASED BUDGET AUTHORITY FOR
21 CERTAIN SCHOOL DISTRICTS IMPACTED BY HIGH HOUSING COSTS FOR USE IN ADDRESSING
22 THOSE COSTS; REQUIRING THE LEGISLATIVE FISCAL ANALYST TO CREATE A SCHOOL FUNDING
23 DATA DASHBOARD; PROVIDING DEFINITIONS; PROVIDING RULEMAKING AUTHORITY; PROVIDING AN
24 APPROPRIATION; AMENDING SECTIONS 20-3-325, 20-6-326, 20-6-812, 20-7-102, 20-7-1404, 20-7-1503,
25 20-7-1506, 20-7-1602, 20-9-306, 20-9-324, 20-9-327, 20-9-344, AND 20-9-366, MCA; AND PROVIDING AN
26 IMMEDIATE EFFECTIVE DATE AND AN APPLICABILITY DATE.”
27
28 WHEREAS, the definition of a "basic system of free quality public elementary and secondary schools" ****
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1 as provided in section 20-9-309, MCA, includes educational programs tailored to the specific needs of students
2 and the qualified and effective teachers, administrators, and other qualified staff needed to implement those
3 programs; and
4 WHEREAS, section 20-9-309, MCA, includes the requirement that in developing and maintaining a
5 funding formula the Legislature shall consider various educationally relevant factors, including the ability of
6 school districts to attract and retain qualified and effective teachers, administrators, and other qualified staff.
7
8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
9
10 Section 20-3-325, MCA, is amended to read:
11 "20-3-325. (1) As provided in 20-3-321, the trustees shall employ and appoint a
12 clerk of the district. The clerk of the district shall attend all meetings of the trustees to keep an accurate and
13 permanent record of all the proceedings of each meeting. If the clerk is not present at a meeting, the trustees
14 must have one of their members or a district employee act as clerk for the meeting, and that person shall
15 supply the clerk with a certified copy of the proceedings. The clerk of the district must be the custodian of all
16 documents, records, and reports of the trustees. Unless the trustees provide otherwise, the clerk shall:
17 (a) keep an accurate and detailed accounting record of all receipts and expenditures of the district
18 in accordance with the financial administration provisions of this title; and
19 (b) prepare the annual trustees' report required under the provisions of 20-9-213.
20 (2) The clerk of the district shall provide the county treasurer with a minimum of 30 hours' notice in
21 advance of cash demands to meet payrolls, claims, and electronic transfers that are in excess of $50,000. If the
22 clerk of the district fails to provide the required 30-hour notice, the district must be assessed a fee equal to any
23 charges demanded by the state investment pool or other permissible investment manager for improperly
24 noticed withdrawal of funds.
25 (3) In order to qualify for the payment provided in 20-9-327, a clerk of the district must have a job
26 description that includes performance of the following functions for the district:
27 (a) advise the trustees on financial and operational constraints as outlined by law;
28 (b) serve as a member of the administrative team, working closely with the district superintendent ****
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1 and other administrative staff to align the educational goals and financial stability of the district;
2 (c) assist the trustees in ensuring all district policies comply with local, state, and federal laws;
3 (d) attend trustees' meetings and ensure that a permanent record is maintained as required by
4 law, and, if unable to attend, ensure a qualified designee maintains an accurate permanent record;
5 (e) act as the custodian of all documents, records, and reports of the trustees, including the
6 trustees' report required under 20-9-213;
7 (f) maintain accurate and detailed accounting records of all financial transactions of the district,
8 serving as a liaison during any financial and labor audits, as required; and
9 (g) serve as the election administrator for the district unless the county administers an election at
10 the request of the district."
11
12 Section 20-6-326, MCA, is amended to read:
13 "20-6-326.
14 (1) An existing elementary district that is not part of a unified school system or governed by
15 a joint board with a high school district may expand into a K-12 district under the procedures outlined in this
16 section only if the elementary district's ANB, as calculated under the provisions of 20-9-311, is at least 1,000.
17 (2) The expansion to a K-12 district may be requested by the trustees of an existing elementary
18 district through passage of a resolution that includes the information outlined in 20-6-105(3) and requests the
19 county superintendent to order an election to allow the electors of the elementary district to consider the
20 proposition of expanding the elementary school district into a K-12 district. The trustees of an existing
21 elementary district with an ANB of at least 1,000 may not pass a resolution for expansion more than one time
22 within a 5-year period.
23 (3) (a) If the proposition for the expansion is approved by the electors of the elementary district and
24 the trustees issue a certificate of election as provided in 20-20-416, for a period of 2 years from the date of the
25 certification of the election the elementary trustees have the authority to propose to the electors of the
26 elementary district:
27 (i) a transition costs levy pursuant to 20-9-502; and
28 (ii) a general obligation bond pursuant to Title 20, chapter 9, part 4, for the purpose of building, ****
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1 altering, repairing, buying, furnishing, equipping, purchasing lands for, or obtaining a water supply for a school
2 to accommodate high school students.
3 (b) The bond limitations pursuant to 20-9-406 imposed on a district proposing a bond under
4 subsection (3)(a) must be calculated on the limits for a K-12 district with the high school ANB calculated by
5 dividing the ANB of the elementary district by 9 and multiplying the result by 4.
6 (c) A bond approved under subsection (3)(a) becomes a bond of, and may not be issued until the
7 creation of, the K-12 district formed pursuant to subsection (4).
8 (d) A district that issues a bond under this subsection (3) is eligible for facility reimbursements and
9 advances pursuant to 20-9-366 through 20-9-371 that, until the new high school has enrolled students in all
10 grades and has established an actual ANB for budgeting purposes, must be based on an estimated high school
11 ANB calculated by dividing the ANB of the elementary district by 9 and multiplying the result by 4.
12 (e) Until the county superintendent orders the creation of a new high school district and attachment
13 of the expanding elementary district to form a new K-12 district pursuant to subsection (4), the existing high
14 school district remains intact for all purposes.
15 (4) If elementary electors approve a bond pursuant to subsection (3), on July 1 following the
16 approval of the bond the county superintendent shall order the creation of a new high school district with
17 identical boundaries to the expanding elementary district and the immediate attachment of the expanding
18 elementary district to form a K-12 district. The county superintendent shall send a copy of the order to the board
19 of county commissioners and to the trustees of the districts affected by the creation of the district. The trustees
20 of the expanding elementary district must be designated as the trustees of the new K-12 district.
21 (5) Prior to the first school fiscal year in which the K-12 district will enroll students in a particular
22 high school grade, the K-12 trustees shall prepare operating budgets for the new high school according to the
23 school budgeting provisions of this title, except that:
24 (a) the ANB for any inaugural grades for the high school program of the K-12 district must be
25 estimated by the trustees and may not exceed the number resulting from dividing the highest budgeted ANB of
26 the elementary program in the preceding 3 fiscal years by 9 and multiplying the result by the number of grades
27 in which the high school will enroll students for the first time in the ensuing school year;
28 (b) the number of quality educators for the high school program must be estimated by the trustees ****
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1 and may not exceed the number resulting from dividing the ANB estimated under subsection (5)(a) by 10;
2 (c) the taxable value for budgeting purposes of both the elementary and high school programs of
3 the K-12 district must be based on the taxable value as most recently determined by the department of
4 revenue;
5 (d) the general fund budget adopted by the trustees must be based on only the basic entitlement,
6 the total quality educator and qualified staff payment, and the budget components derived from ANB counts;
7 and
8 (e) the district's BASE aid for the upcoming year must be based on the general fund budget
9 adopted by the trustees for the upcoming school year.
10 (6) Until the first school year in which the K-12 school district enrolls high school students in all
11 grades and for a period of time not to exceed 6 years following the creation of the K-12 district:
12 (a) the high school district shall provide high school instruction to high school students of the K-12
13 district in any grades in which the K-12 district is not enrolling students;
14 (b) the K-12 district shall be responsible for providing transportation for its students enrolled in the
15 high school district pursuant to subsection (6)(a), may establish a transportation budget for this purpose, and
16 may receive state and county reimbursements under Title 20, chapter 10; and
17 (c) the K-12 district shall pay the high school district 20% of the per-ANB maximum rate
18 established in 20-9-306 for each of its students enrolled in the high school district with one-half of the amount
19 due by December 31 of the year following the year of attendance and the remainder due no later than June 15
20 of the year following the year of attendance. The K-12 trustees shall establish a tuition fund and levy to fund
21 these payments.
22 (7) (a) Bonded indebtedness of the high school district that is outstanding as of the date of creation
23 of the K-12 district must remain secured by and be the indebtedness of the original territory against which the
24 bonds of the high school district were issued and must be paid by tax levies against the original territory.
25 (b) Bonded indebtedness of the high school district that is issued by the high school district
26 following the creation of the K-12 district is secured by the territory of the high school district as of the date of
27 issuance of the high school district bonds and must be paid by tax levies against the territory of the high school
28 district. However, if bonds of the high school district were approved at a bond election conducted before the ****
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1 creation of the K-12 district, all bonds of the high school district issued by the high school district under the
2 bond election authority must remain secured by and be the indebtedness of the territory of the high school
3 district as of the date the bond authority was approved by voters and must be paid by tax levies against that
4 territory.
5 (c) Bonded indebtedness of the K-12 district is secured by the territory of the K-12 district as of the
6 date of issuance of the K-12 district bonds and must be paid by tax levies against the territory of the K-12
7 district.
8 (d) Bonded indebtedness of the elementary district that is outstanding as of the date of creation of
9 the K-12 district must become upon the date of creation of the K-12 district the bonded indebtedness of the K-
10 12 district and must be secured by the territory of the K-12 district and paid by tax levies against the territory of
11 the K-12 district. The debt service on the bonds must be allocated to the elementary program of the K-12
12 district.
13 (e) Bonded indebtedness of the high school district or the K-12 district that is subsequently
14 affected by a later reorganization of the high school district or the K-12 district is governed by the provisions of
15 Title 20, chapter 6, part 4.
16 (8) When a K-8 district expands to a K-12 district as provided for in this section, a principal,
17 teacher, or other certified employee of the original high school district who has a right of tenure under Montana
18 law must be given preference in hiring for a vacant position in the new K-12 district for which the employee is
19 qualified with the required certification endorsements."
20
21 Section 20-6-812, MCA, is amended to read:
22 "20-6-812. (1) It is the intent of the legislature that a public
23 charter school receive operational funding on a per-pupil basis that is equitable with the per-pupil funding of the
24 located school district.
25 (2) (a) For budgeting and funding purposes, when a public charter school is operated by a local
26 school board, a public charter school must be considered a separate budget unit of the located school district,
27 must have its ANB calculated separately from other budget units of the district, and must receive a basic
28 entitlement calculated separately from other budget units of the district when its ANB is greater than: ****
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1 (i) 70 for an elementary school or program;
2 (ii) 20 for a middle school or program; or
3 (iii) 40 for a high school or program.
4 (b) When a public charter school district exists, funding of the public charter school district must be
5 distributed as BASE aid, except as provided in subsection (2)(c), at 80% of the basic entitlement, 80% of the
6 total per-ANB entitlement, 100% of the total quality educator and qualified staff payment, 100% of the total at-
7 risk student payment, 100% of the total Indian education for all payment, 100% of the total American Indian
8 achievement gap payment, 100% of the total data-for-achievement payment, and 140% of the special
9 education allowable cost payment. The total amount of funding received by a public charter school district
10 under this subsection (2)(b) is both the minimum amount and the maximum amount of public funding for the
11 public charter school district.
12 (c) A public charter school district is not eligible for a basic entitlement unless its ANB is greater
13 than:
14 (i) 70 for an elementary school or program;
15 (ii) 20 for a middle school or program; or
16 (iii) 40 for a high school or program.
17 (3) Students attending a public charter school governed by a local school board who are not
18 residents of the located school district generate funding in the same manner as other nonresident students
19 attending a school of the located district under an out-of-district attendance agreement pursuant to Title 20,
20 chapter 5, part 3;
21 (4) A public charter school district is prohibited from charging tuition and fees.
22 (5) For a public charter school that is not governed by the local school board, the county treasurer
23 of the county in which a public charter school is located shall establish funds for the public charter school
24 separate from the funds of the located school district.
25 (6) The governing board of a public charter school shall report annually on the financial activities of
26 the public charter school in the manner prescribed in 20-9-213(6).
27 (7) A public charter school district may obligate the public charter school district to indebtedness
28 and is solely responsible for those debts. A public charter school district is not responsible for any debt service ****
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1 obligations that exist in the located school district.
2 (8) Nothing in this part may be construed to prohibit any person or organization from providing
3 funding or other assistance for the establishment or operation of a public charter school. The governing board
4 of a public charter school is authorized to accept gifts or donations of any kind made to the public charter
5 school and to expend or use the gifts or donations in accordance with the conditions prescribed by the donor. A
6 gift or donation may not be accepted if the gift or donation is subject to a condition that is contrary to any
7 provision of law or term of the charter contract.
8 (9) Money received by a public charter school from any source and remaining in the public charter
9 school's accounts at the end of a budget year must remain in the public charter school's accounts for use by the
10 public charter school in subsequent years."
11
12 Section 20-7-102, MCA, is amended to read:
13 "20-7-102. (1) The conditions under which each elementary school, each
14 middle school, each junior high school, 7th and 8th grades funded at high school rates, and each high school
15 operates must be reviewed by the superintendent of public instruction to determine compliance with the
16 standards of accreditation. The accreditation status of each school must then be established by the board of
17 public education upon the recommendation of the superintendent of public instruction. Notification of the
18 accreditation status for the applicable school year or years must be given to each district by the superintendent
19 of public instruction.
20 (2) A school may be accredited for a period consisting of 1, 2, 3, 4, or 5 school years, except that
21 multiyear accreditation may be granted only to schools that are in compliance with 20-4-101.
22 (3) A nonpublic school may, through its governing body, request that the board of public education
23 accredit the school. Nonpublic schools may be accredited in the same manner as provided in subsection (1).
24 (4) As used in this section, "7th and 8th grades funded at high school rates" means an elementary
25 school district or K-12 district elementary program whose 7th and 8th grades are funded as provided in 20-9-
26 306(15)(c)(ii)."
27
28 Section 20-7-1404, MCA, is amended to read: ****
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1 "20-7-1404. (1) School districts are
2 encouraged to create Indian language immersion programs and in doing so:
3 (a) collaborate with other school districts, the Montana digital academy, tribal governments, and
4 tribal colleges;
5 (b) utilize materials produced in the Montana Indian language preservation pilot program pursuant
6 to section 1, Chapter 410, Laws of 2013;
7 (c) utilize American Indian language and culture specialists as teachers of language and culture;
8 and
9 (d) look to existing native language schools in Montana and around the world for guidance and
10 best practices.
11 (2) In acknowledgment of Article X, section 1, of the Montana constitution, the educationally
12 relevant factors for the school funding formula under 20-9-309(3), and the increased costs associated with
13 language immersion programs, a district creating an Indian language immersion program is entitled to the
14 following in addition to the school funding formula in Title 20, chapter 9:
15 (a) (i) subject to subsections (3) and (4), for every Indian student participating in an Indian
16 language immersion program, an additional American Indian achievement gap payment, as calculated in 20-9-
17 306, multiplied by 2; and
18 (ii) for every non-Indian student participating in an Indian language immersion program, an
19 additional Indian education for all payment, as calculated in 20-9-306, multiplied by 2; and
20 (b) for every full-time American Indian language and culture specialist teaching in an Indian
21 language immersion program, a quality educator and qualified staff payment as calculated in 20-9-306.
22 (3) For a district operating an Indian language immersion program that improves the district's
23 graduation rate for American Indians by 5 percentage points or more from the previous year as measured by
24 the office of public instruction, the multiplier in subsection (2)(a)(i) must be increased to 3.
25 (4) If the money appropriated for Indian language immersion programs is insufficient to provide the
26 amounts in subsections (2) and (3), the office of public instruction shall prorate the payments accordingly.
27 (5) The board of public education is encouraged to approve proposed variances to standards of
28 accreditation for Indian language immersion programs when the board finds the proposal to be educationally ****
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1 sound and in alignment with the purpose described in 20-7-1402(2).
2 (6) The cultural and intellectual property rights from materials developed for an Indian language
3 immersion program belong to the tribe to which the materials relate. Use of the cultural and intellectual property
4 outside of the Indian language immersion program may be negotiated with the tribe.
5 (7) A district may use payments received pursuant to this section as matching funds for federal or
6 private fund sources to accomplish the purposes of this part."
7
8 Section 20-7-1503, MCA, is amended to read:
9 "20-7-1503.
10 (1) "Advanced opportunity" means any course, exam, or experiential, online, or other learning
11 opportunity that is incorporated in a district's advanced opportunity plan and that is designed to advance each
12 qualifying pupil's opportunity for postsecondary career and educational success.
13 (2) "Advanced opportunity aid" means, for each fiscal year, the following percentages of a district's
14 total quality educator and qualified staff payment under 20-9-306 in the prior year after subtracting any
15 adjustments to the district's total quality educator and qualified staff payment made under 20-9-324 and [section
16 16]:
17 (a) for an elementary district, 4.5% of the district's total quality educator payment defined in 20-9-
18 306 in the prior year;
19 (b) for a high school district, 30% of the district's total quality educator payment defined in 20-9-
20 306 in the prior year; and
21 (c) for a K-12 district, 18% of the district's total quality educator payment defined in 20-9-306 in the
22 prior year.
23 (3) "Advanced opportunity plan" means a plan adopted by a board of trustees of a district that
24 provides advanced opportunities for the pupils of the district.
25 (4) "District" means a school district as defined in 20-6-101.
26 (5) "Qualifying pupil" means a pupil, as defined in 20-1-101, that is enrolled and admitted by a
27 district qualified for advanced opportunity aid under 20-7-1506(3) who is in grades 6 through 12."
28 ****
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1 Section 20-7-1506, MCA, is amended to read:
2 "20-7-1506. (1) A district that satisfies
3 the conditions of subsection (2) and is qualified by the board of public education pursuant to subsection (3) is
4 eligible for the funding and flexibilities in subsections (4) and (5).
5 (2) (a) To qualify for the funding and flexibilities in subsections (4) and (5), the board of trustees of
6 a district shall submit an application that has been approved by motion of the board and signed by the presiding
7 officer to the board of public education for approval of an advanced opportunity program on a form provided by
8 the superintendent of public instruction.
9 (b) The school board's application must include a strategic plan with appropriate planning horizons
10 for implementation, measurable objectives to ensure accountability, and planned strategies to:
11 (i) develop an advanced opportunity plan for each participating pupil from grades 6 through 12
12 that fosters individualized pathways for career and postsecondary educational opportunities and that honors
13 individual interests, passions, strengths, needs, and culture and is supported through relationships among
14 teachers, family, peers, the business community, postsecondary education officials, and other community
15 stakeholders;
16 (ii) embed community-based, experiential, online, and work-based learning opportunities and
17 foster a learning environment that incorporates both face-to-face and virtual connections; and
18 (iii) ensure equality of educational opportunity to participate by all qualifying pupils of the district.
19 (3) The board of public education shall:
20 (a) establish the opening and closing dates for receipt of applications and annual reports;
21 (b) no later than January 31, qualify for the subsequent school year nonparticipating districts that
22 submit an application meeting the requirements of subsection (2) for the funding in subsection (4) and the
23 flexibilities in subsection (5);
24 (c) no later than January 31, requalify for the subsequent school year participating districts that
25 submit an annual report demonstrating continued qualification for funding under this section and including a
26 report of progress toward measurable objectives under the district's advanced opportunity plan and any
27 updates to the plan; and
28 (d) limit the districts qualified under subsections (3)(b) and (3)(c) based on the appropriation ****
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1 available in the subsequent year and on the order of date received, after which further applications are to be
2 deferred for consideration in a subsequent year, in the order of date received. An application deferred for
3 consideration in a subsequent year due to lack of funding must be annually updated each year after more than
4 1 full fiscal year has passed from the date of original submission of the application in order for the application to
5 retain its priority by original date received.
6 (e)(d) on or before September 15 of even-numbered years, report to the education interim committee
7 pursuant to 5-11-210 on the progress made by districts operating under approved advanced opportunity plans.
8 The report must address, at a minimum:
9 (i) the number of pupils benefiting from advanced opportunity aid;
10 (ii) the number and type of credits and certifications or credentials earned by pupils that have been
11 paid for by the program;
12 (iii) projected growth in the program and funding needs for the next biennium; and
13 (iv) any issues with the program reported by pupils, parents, districts, postsecondary institutions, or
14 examination administrators and how these issues are being addressed and whether the issues require
15 legislative action.
16 (4) The superintendent of public instruction shall provide advanced opportunity aid to each district
17 qualified by the board of public education under subsection (3) by October 1. The aid under this section must
18 be distributed directly to the school district's flexibility fund under 20-9-543.
19 (5) Advanced opportunity aid may be expended on any qualifying pupil by the district subject to the
20 following conditions:
21 (a) at least 75% of a district's annual distribution of advanced opportunity aid must be spent or
22 encumbered to address out-of-pocket costs that would otherwise, in the absence of such expenditure, be
23 assumed by a qualifying pupil or the pupil's family as a result of participation in an advanced opportunity. The
24 trustees have full discretion to allocate expenditures among all pupils of the district or any select group of
25 pupils, using any reasonable method they consider appropriate in their full discretion to meet the individual
26 needs of each pupil who pursues an advanced opportunity. The trustees may create free district initiatives of
27 their own that satisfy the conditions of this subsection (5)(a). Permissible expenditures include but are not
28 limited to: ****
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1 (i) dual credit tuition at any institution under authority of the board of regents;
2 (ii) exam fees used for postsecondary advancement, placement, or credit, including but not limited
3 to exam fees associated with the ACT, SAT, CLEP, career advancement, international baccalaureate, and
4 advanced placement;
5 (iii) fees charged by and any out-of-pocket costs of any business providing work-based learning
6 opportunities to a qualifying pupil of the district, including the cost of workers' compensation insurance for work-
7 based learning opportunities;
8 (iv) exam and other fees of any industry-recognized credential or license for which a qualifying
9 pupil is eligible as a result of participation in an advanced opportunity;
10 (v) the costs of participation for qualifying pupils in out-of-school enrichment activities that, in the
11 discretion of the trustees, advance the pupil's opportunity for postsecondary career and educational success;
12 and
13 (vi) the costs of participation for qualifying pupils that are identified as necessary, in the discretion
14 of the district and upon request of a qualifying pupil, to maximize the benefit of an advanced opportunity for a
15 qualifying pupil;
16 (b) advanced opportunity aid remaining that is not expended or carried forward for the purposes of
17 subsection (5)(a) may be spent by the district to provide any K-12 career and vocational/technical education
18 course offered by the district.
19 (6) A district qualified for funding under subsection (3) may supplement state funding of advanced
20 opportunity aid with matched expenditures from its adopted adult education budget, not to exceed 25% of the
21 district's advanced opportunity aid. The conditions under subsection (5) apply to any matched expenditures
22 funded under this subsection (6).
23 (7) The present law base calculated for K-12 local assistance under Title 17, chapter 7, part 1,
24 must include advanced opportunity aid in an amount estimated to be sufficient to provide advanced opportunity
25 aid to all districts of the state based on prior demand. Any shortfalls must be addressed in the same manner as
26 funding of deficiencies in BASE aid under 20-9-351."
27
28 Section 20-7-1602, MCA, is amended to read: ****
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1 "20-7-1602. (1) (a) A
2 school district as defined in 20-6-101 that satisfies the conditions of subsection (2) and is qualified by the board
3 of public education pursuant to subsection (4) is eligible for a 4-consecutive-year provision of the transitional
4 funding and flexibilities in subsections (5) and (6).
5 (b) A school district may be qualified by the board of public education for no more than one 4-
6 consecutive-year provision of transitional funding and flexibilities in any 8-year period.
7 (2) To qualify for the transitional funding and flexibilities in subsections (5) and (6), the board of
8 trustees of a district shall submit an application that has been approved by motion of the board of trustees and
9 signed by the presiding officer to the board of public education for approval of a transformational learning
10 program on a form provided by the superintendent of public instruction. The school board's application must:
11 (a) identify the number of full-time equivalent educators meeting the criteria of 20-9-327(3) who will
12 participate in the district's transformational learning program, with full-time equivalence calculated and reported
13 by the district based on the planned portion of each qualifying educator's full-time equivalent assignment that is
14 dedicated to the district's transformational learning program;
15 (b) include the district's definition of proficiency within the meaning of the term as used in 20-9-
16 311(4)(d). The definition must be incorporated in the district's policies and must be used for purposes of
17 determining content and course proficiency and other progress, promotion from grade to grade, grades, and
18 graduation for pupils enrolled in the district's transformational learning program. The district must also describe
19 the district's plans for the implementation of proficiency-based learning as defined in 20-7-1601; and
20 (c) include a strategic plan with appropriate planning horizons for implementation, measurable
21 objectives to ensure accountability, and planned strategies to:
22 (i) develop a transformational learning plan for each participating pupil that honors individual
23 interests, passions, strengths, needs, and culture and that is rooted in relationships with teachers, family, peers,
24 and community members;
25 (ii) embed community-based, experiential, online, and work-based learning opportunities and
26 foster a learning environment that incorporates both face-to-face and virtual connections;
27 (iii) provide effective professional development to assist employees in transitioning to a
28 transformational learning model; and ****
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1 (iv) ensure equality of educational opportunity to participate by all pupils of the district.
2 (3) The board of public education shall establish by rule the opening and closing dates for receipt
3 of applications and annual reports.
4 (4) The board of public education shall:
5 (a) on an annual basis, qualify districts that submit an application meeting, in the determination of
6 the board or the board's designee, the requirements of subsection (2) for the funding in subsection (5) and the
7 flexibilities in subsection (6) until the annual appropriation is exhausted, after which further applications,
8 including first-time applications and annual reports requesting an expansion of a previously approved plan, are
9 to be deferred for consideration in a subsequent year, in the order of a lottery system draw, if and when
10 additional funds become available for distribution. The lottery system shall assign every first-time application or
11 request for expansion of a previously approved plan a number that will be placed into a lottery system draw that
12 will be done by a third party. The applications will be assigned a position in the order in which the numbers are
13 drawn. The drawing will continue until all districts are on the qualification list for the current year funding or
14 deferred for consideration in a subsequent year.
15 (b) require each participating school district to submit an annual report demonstrating, in the
16 determination of the board or the board's designee, continued qualification for funding under this section and
17 including a report of progress toward measurable objectives under the school district's transformational learning
18 plan. The school district shall include any decrease or requested increase in the number of participating full-
19 time equivalent educators under subsection (2)(a) for adjustments to its funding. Any increase in funding based
20 on requested increased levels of participation under subsection (2)(a) must be determined in the year in which
21 the request for a funding increase is received and augmented with a lottery system among all first-time
22 applications and annual reports requesting an expansion of a previously approved plan and must be contingent
23 on the availability of funds within any appropriation of the legislature. An application deferred for consideration
24 in a subsequent year due to lack of funding must be annually updated each year after more than 1 full fiscal
25 year has passed from the date of original submission of the application in order for the application to retain its
26 priority by original date received.
27 (c) report in accordance with 5-11-210 to the education interim committee on the progress made
28 by districts as submitted in the annual report and strategic plan operating under approved and funded ****
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1 transformational learning plans.
2 (5) (a) For a period of 4 consecutive fiscal years following the fiscal year in which a district is
3 qualified by the board of public education and contingent on satisfying the annual reporting requirements under
4 subsection (4), the superintendent of public instruction shall provide a transformational learning aid payment to
5 the district equivalent to 50% of the quality educator and qualified staff payment defined in 20-9-306 from the
6 immediate prior fiscal year multiplied by the number of the district's full-time equivalent educators reported
7 under subsection (2)(a) of this section.
8 (b) The payment under this subsection (5) must be distributed directly to the school district's
9 flexibility fund established under 20-9-543 by October 1 of each year of funding by the superintendent of public
10 instruction. The money must be expended by the district only for the purposes set forth in the district's approved
11 transformational learning program and within 2 years of the date of distribution.
12 (c) A school district may not receive more than 25% of the total amount of payments made under
13 this subsection (5).
14 (6) During each year that a school district remains qualified for funding under subsection (5), the
15 district's trustees may:
16 (a) if the obligations of transparency set forth in 20-9-116 are met, levy an annual permissive
17 property tax not to exceed 100% of any funds distributed to the district under subsection (5). Proceeds of the
18 levy must be deposited in the district's flexibility fund established under 20-9-543 and must be expended by the
19 district only for the purposes of the district's approved transformational learning plan.
20 (b) transfer state or local revenue from any budgeted or nonbudgeted fund, other than the debt
21 service fund or retirement fund, to the district's flexibility fund.
22 (7) (a) Any funds transferred pursuant to subsection (6)(b) may be expended by the district solely
23 for the purposes of implementing the district's approved transformational learning plan. Any transfers of funds
24 are not considered expenditures to be applied against budget authority.
25 (b) Any transfers that are not expended for the purposes of implementing the district's approved
26 transformational learning plan within 2 full school fiscal years after the funds are transferred must be transferred
27 back to the originating fund from which the revenue was transferred.
28 (c) The intent of subsection (6)(b) and this subsection (7) is to increase the flexibility and efficiency ****
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1 of school districts without an increase in local taxes. In furtherance of this intent, if transfers of funds are made
2 from any school district fund supported by a nonvoted levy, the district may not increase its nonvoted levy for
3 the purpose of restoring the amount of funds transferred.
4 (8) The present law base calculated for K-12 local assistance under Title 17, chapter 7, part 1,
5 must include transformational learning aid as defined in subsection (9).
6 (9) For the purposes of this title, the following definitions apply:
7 (a) "Transformational learning" means a flexible system of pupil-centered and proficiency-based
8 learning that is designed to develop the full educational potential of each pupil that:
9 (i) is customized to address each pupil's strengths, needs, and interests; and
10 (ii) actively engages each pupil in determining what, how, when, and where each pupil learns.
11 (b) "Transformational learning aid" means 50% of the quality educator and qualified staff payment
12 defined in 20-9-306 multiplied by 10% of the statewide number of full-time equivalent educators from the fiscal
13 year immediately preceding the year to which distribution of transformational aid applies calculated as provided
14 in 20-9-327. (Terminates June 30, 2027--sec. 7, Ch. 402, L. 2019.)"
15
16 Section 20-9-306, MCA, is amended to read:
17 "20-9-306.
18 following definitions apply:
19 (1) "BASE" means base amount for school equity.
20 (2) "BASE aid" means:
21 (a) direct state aid for 44.7% of the basic entitlement and 44.7% of the total per-ANB entitlement
22 for the general fund budget of a district;
23 (b) guaranteed tax base aid for an eligible district for any amount up to 35.3% of the basic
24 entitlement, up to 35.3% of the total per-ANB entitlement budgeted in the general fund budget of a district, and
25 40% of the special education allowable cost payment;
26 (c) the total quality educator and qualified staff payment;
27 (d) the total at-risk student payment;
28 (e) the total Indian education for all payment; ****
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1 (f) the total American Indian achievement gap payment;
2 (g) the total data-for-achievement payment; and
3 (h) the total future ready payment; and
4 (h)(i) the special education allowable cost payment.
5 (3) "BASE budget" means the minimum general fund budget of a district, which includes 80% of
6 the basic entitlement, 80% of the total per-ANB entitlement, 100% of the total quality educator and qualified
7 staff payment, 100% of the total at-risk student payment, 100% of the total Indian education for all payment,
8 100% of the total American Indian achievement gap payment, 100% of the total data-for-achievement payment,
9 100% of the total future ready payment; and 140% of the special education allowable cost payment.
10 (4) "BASE budget levy" means the district levy in support of the BASE budget of a district, which
11 may be supplemented by guaranteed tax base aid if the district is eligible under the provisions of 20-9-366
12 through 20-9-369.
13 (5) "BASE funding program" means the state program for the equitable distribution of the state's
14 share of the cost of Montana's basic system of public elementary schools and high schools, through county
15 equalization aid as provided in 20-9-331 and 20-9-333 and state equalization aid as provided in 20-9-343, in
16 support of the general fund BASE budgets of districts and special education allowable cost payments as
17 provided in 20-9-321.
18 (6) "Basic entitlement" means:
19 (a) for each high school district:
20 (i) $343,483 for fiscal year 2024 and $353,787 for each succeeding fiscal year for school districts
21 with an ANB of 800 or fewer; and
22 (ii) $343,483 for fiscal year 2024 and $353,787 for each succeeding fiscal year for school districts
23 with an ANB of more than 800, plus $17,175 for fiscal year 2024 and $17,690 for each succeeding fiscal year
24 for each additional 80 ANB over 800;
25 (b) for each elementary school district or K-12 district elementary program without an approved
26 and accredited junior high school, 7th and 8th grade program, or middle school:
27 (i) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
28 K-12 district elementary programs with an ANB of 250 or fewer; and ****
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1 (ii) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
2 K-12 district elementary programs with an ANB of more than 250, plus $2,863 for fiscal year 2024 and $2,949
3 for each succeeding fiscal year for each additional 25 ANB over 250;
4 (c) for each elementary school district or K-12 district elementary program with an approved and
5 accredited junior high school, 7th and 8th grade program, or middle school:
6 (i) for the district's kindergarten through grade 6 elementary program:
7 (A) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
8 K-12 district elementary programs with an ANB of 250 or fewer; and
9 (B) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
10 K-12 district elementary programs with an ANB of more than 250, plus $2,863 for fiscal year 2024 and $2,949
11 for each succeeding fiscal year for each additional 25 ANB over 250; and
12 (ii) for the district's approved and accredited junior high school, 7th and 8th grade programs, or
13 middle school:
14 (A) $114,493 for fiscal year 2024 and $117,928 for each succeeding fiscal year for school districts
15 or K-12 district elementary programs with combined grades 7 and 8 with an ANB of 450 or fewer; and
16 (B) $114,493 for fiscal year 2024 and $117,928 for each succeeding fiscal year for school districts
17 or K-12 district elementary programs with combined grades 7 and 8 with an ANB of more than 450, plus $5,724
18 for fiscal year 2024 and $5,896 for each succeeding fiscal year for each additional 45 ANB over 450.
19 (7) "Budget unit" means the unit for which the ANB of a district is calculated separately pursuant to
20 20-9-311.
21 (8) "Direct state aid" means 44.7% of the basic entitlement and 44.7% of the total per-ANB
22 entitlement for the general fund budget of a district and funded with state and county equalization aid.
23 (9) (a) "Maximum general fund budget" means, except as provided in subsection (9)(b), a district's
24 general fund budget amount calculated from the basic entitlement for the district, the total per-ANB entitlement
25 for the district, the total quality educator and qualified staff payment, the total at-risk student payment, the total
26 Indian education for all payment, the total American Indian achievement gap payment, the total data-for-
27 achievement payment, the total future ready payment, and the greater of the district's special education
28 allowable cost payment multiplied by: ****
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1 (a)(i) 175%; or
2 (b)(ii) the ratio, expressed as a percentage, of the district's special education allowable cost
3 expenditures to the district's special education allowable cost payment for the fiscal year that is 2 years
4 previous, with a maximum allowable ratio of 200%.
5 (b) (i) For a district that meets the legislative goal for base teacher pay under 20-9-324 and has
6 territory within a county in which the median market value for residential properties is greater than 105% of the
7 median county market value for residential properties in the state, the maximum general fund budget is
8 calculated by multiplying the amount calculated in subsection (9)(a) by the percentage by which the county
9 median market value exceeds the median county market value for residential properties in the state divided by
10 60 and rounded to the nearest hundredth of a percent.
11 (ii) The department of revenue shall calculate the median market values in subsection (9)(b)(i),
12 excluding properties with a market value of $50,000 or less, in odd-numbered calendar years and report this
13 information to the office of public instruction no later than December 1. The values reported must apply to the
14 calculations in subsection (9)(b)(i) and the maximum general fund budgets of districts calculated under this
15 subsection (9) in the 2 school fiscal years beginning the following July 1.
16 (iii) A district adopting a higher general fund budget under this subsection (9)(b) shall expend the
17 additional budget authority under this subsection (9)(b) on:
18 (A) housing stipends for employees;
19 (B) construction or purchase of district-owned housing provided for employees;
20 (C) rental assistance, including subsidies or discounts on rents on housing for employees;
21 (D) down-payment assistance, including district provided funds to assist employees with the initial
22 down payment on a primary residence;
23 (E) shared ownership of housing by the district and employee with an option for the employee to
24 buy out the district's interest over time;
25 (F) district guaranteed or subsidized housing loans, including payment of discount points on
26 housing loans secured by an employee;
27 (G) relocation assistance; or
28 (H) any other financial assistance to employees authorized by the Internal Revenue Code, the ****
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1 purpose of which is to improve employee access to affordable housing.
2 (10) "Over-BASE budget levy" means the district levy in support of any general fund amount
3 budgeted that is above the BASE budget and within the general fund budget limits established in 20-9-308 and
4 calculated as provided in 20-9-141.
5 (11) "State's share" means the state funding distributed to school districts in an equitable manner by
6 the state to support the basic elementary and secondary school system as provided in Article X, section 1(3), of
7 the Montana constitution, including:
8 (a) BASE aid for the school district general fund;
9 (b) retirement guaranteed tax base aid to the counties to support the countywide school retirement
10 funds that is then distributed to school districts to support employer contributions to the retirement systems;
11 (c) major maintenance aid for the school district building reserve fund;
12 (d) transportation reimbursements for the school district transportation fund;
13 (e) debt service assistance for the school district debt service fund;
14 (f) technology funding for the school district technology acquisition and depreciation fund;
15 (g) career and technical education funding for the school district miscellaneous programs fund;
16 (h) advanced opportunity aid for the school district flexibility fund to help develop the full
17 educational potential of each student;
18 (i) gifted and talented funding for the school district miscellaneous programs fund; and
19 (j) any other state funding provided by the legislature to support the basic elementary and
20 secondary school system.
21 (11)(12)"Total American Indian achievement gap payment" means the payment resulting from
22 multiplying $235 for fiscal year 2024 and $242 for each succeeding fiscal year times the number of American
23 Indian students enrolled in the district as provided in 20-9-330.
24 (12)(13)"Total at-risk student payment" means the payment resulting from the distribution of any funds
25 appropriated for the purposes of 20-9-328.
26 (13)(14)"Total data-for-achievement payment" means the payment provided in 20-9-325 resulting from
27 multiplying $22.89 for fiscal year 2024 and $23.58 for each succeeding fiscal year by the district's ANB
28 calculated in accordance with 20-9-311. ****
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1 (15) "Total future ready payment" means the payment provided in [section 14] resulting from adding:
2 (a) (i) for a high school district or K-12 school district, the product of 10% of the high school
3 maximum per-ANB payment under this section for every graduate of the district in the school year 2 years prior
4 who achieved the future ready level 1 goal as provided in [section 14]; and
5 (ii) for an elementary school district or K-12 school district, the product of 10% of the elementary
6 school maximum per-ANB payment under this section for every graduate counted under subsection (15)(a)(i)
7 who was included in the district's spring enrollment count in the graduate's 8th grade year.
8 (b) (i) for a high school district or K-12 school district, the product of 20% of the high school
9 maximum per-ANB payment under this section for every graduate of the district in the school year 2 years prior
10 who achieved the future ready level 2 goal as provided in [section 14]; and
11 (ii) for an elementary school district or K-12 school district, the product of 20% of the elementary
12 school maximum per-ANB payment under this section for every graduate counted under subsection (15)(b)(i)
13 who was included in the district's spring enrollment count in the graduate's 8th grade year.
14 (c) (i) for a high school district or K-12 school district, the product of 30% of the high school
15 maximum per-ANB payment under this section for every graduate of the district in the school year 2 years prior
16 who achieved the future ready level 3 goal as provided in [section 14]; and
17 (ii) for an elementary school district or K-12 school district, the product of 30% of the elementary
18 school maximum per-ANB payment under this section for every graduate counted under subsection (15)(c)(i)
19 who was included in the district's spring enrollment count in the graduate's 8th grade year.
20 (14)(16)"Total Indian education for all payment" means the payment resulting from multiplying $23.91
21 for fiscal year 2024 and $24.63 for each succeeding fiscal year times the ANB of the district or $100 for each
22 district, whichever is greater, as provided for in 20-9-329.
23 (15)(17)"Total per-ANB entitlement" means the district entitlement resulting from the following
24 calculations and using either the current year ANB or the 3-year ANB provided for in 20-9-311:
25 (a) for a high school district or a K-12 district high school program, a maximum rate of $7,840 for
26 fiscal year 2024 and $8,075 for each succeeding fiscal year for the first ANB, decreased at the rate of 50 cents
27 per ANB for each additional ANB of the district up through 800 ANB, with each ANB in excess of 800 receiving
28 the same amount of entitlement as the 800th ANB; ****
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1 (b) for an elementary school district or a K-12 district elementary program without an approved and
2 accredited junior high school, 7th and 8th grade program, or middle school, a maximum rate of $6,123 for fiscal
3 year 2024 and $6,307 for each succeeding fiscal year for the first ANB, decreased at the rate of 20 cents per
4 ANB for each additional ANB of the district up through 1,000 ANB, with each ANB in excess of 1,000 receiving
5 the same amount of entitlement as the 1,000th ANB; and
6 (c) for an elementary school district or a K-12 district elementary program with an approved and
7 accredited junior high school, 7th and 8th grade program, or middle school, the sum of:
8 (i) a maximum rate of $6,123 for fiscal year 2024 and $6,307 for each succeeding fiscal year for
9 the first ANB for kindergarten through grade 6, decreased at the rate of 20 cents per ANB for each additional
10 ANB up through 1,000 ANB, with each ANB in excess of 1,000 receiving the same amount of entitlement as the
11 1,000th ANB; and
12 (ii) a maximum rate of $7,840 for fiscal year 2024 and $8,075 for each succeeding fiscal year for
13 the first ANB for grades 7 and 8, decreased at the rate of 50 cents per ANB for each additional ANB for grades
14 7 and 8 up through 800 ANB, with each ANB in excess of 800 receiving the same amount of entitlement as the
15 800th ANB.
16 (16)(18)(a) "Total quality educator and qualified staff payment" means the payment resulting from
17 multiplying $3,566 for fiscal year 2024 and $3,673 for each succeeding fiscal year by the number of full-time
18 equivalent quality educators and qualified staff as provided in 20-9-327, or the sum of:
19 (a) the number of full-time equivalent educators as provided in 20-9-327;and
20 (b) as provided in 20-9-324, for a school district an educational entity meeting the legislative goal
21 for competitive base pay of teachers, the number of full-time equivalent teachers that were in the first 3 yearsof
22 the teacher's teaching career in the previous year by two times the number of full-time equivalent quality
23 educators and qualified staff as provided in 20-9-327.
24 (b) If an educational entity qualifies for enhanced quality educator and qualified staff payments
25 under 20-9-324 in a fiscal year, the entity retains that qualification in subsequent years unless the district fails to
26 qualify for 2 consecutive years. After 2 consecutive years of failure to qualify, an educational entity must
27 reestablish eligibility before the enhanced quality educator and qualified staff payments under 20-9-324 resume
28 for the educational entity. ****
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1 (c) For a school district qualifying for the shared resource incentive under [section 16], the district
2 must receive additions to the total quality educator and qualified staff payment as described in [section 16].
3 (17)(19)"Total special education allocation" means the state payment distributed pursuant to 20-9-321
4 that is the greater of the amount resulting from multiplying $293.74 for fiscal year 2024 and $302.55 for each
5 succeeding fiscal year by the statewide current year ANB or the amount of the previous year's total special
6 education allocation."
7
8 Section 20-9-324, MCA, is amended to read:
9 "20-9-324.
10 (1) A district, as defined in 20-6-
11 101 An educational entity eligible for a quality educator and qualified staff payment under 20-9-327, must
12 receive an extra enhanced quality educator and qualified staff payment for certain all quality educators and
13 qualified staff, calculated as provided in 20-9-306(16), if it meets the legislative goal for competitive base pay of
14 teachers in subsection (2).
15 (2) The legislative goal for competitive base pay of teachers is a teacher base pay in an
16 educational entity that in the applicable year:
17 (a) is equal to at least 10 11 times as much as the quality educator and qualified staff payment
18 amount provided in 20-9-306(16); and
19 (b) for a school district classified as first class pursuant to Title 20, chapter 6, is not less than 70%
20 of the teacher average pay in the school districtis not less than the following percentages of the teacher
21 average pay in the prior fiscal year in the educational entity:
22 (i) in fiscal year 2026, not less than 62%;
23 (ii) in fiscal year 2027, not less than 64%;
24 (iii) in fiscal year 2028, not less than 66%;
25 (iv) in fiscal year 2029, not less than 68%; and
26 (v) in fiscal year 2030 and succeeding fiscal years, not less than 70%.
27 (3) A district An educational entity seeking an incentive for the subsequent school fiscal year under
28 this section shall, by December 1, provide the data necessary, as determined by the superintendent of public ****
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1 instruction, to verify :
2 (a) that the district educational entity has met the legislative goal established in subsection (2) for
3 the current year; and
4 (b) the number of full-time equivalent teachers that are in the first 3 years of the teacher's teaching
5 career in the current year. The first 3 years of a teacher's teaching career do not include a year of teaching
6 under an emergency authorization pursuant to 20-4-111.
7 (4) For the purposes of this section, the following definitions apply:
8 (a) "Educational entity" means:
9 (i) public school districts, as defined in 20-6-101 and 20-6-701;
10 (ii) special education cooperatives, as described in 20-7-451;
11 (iii) the Montana school for the deaf and blind, as described in 20-8-101;
12 (iv) correctional facilities, as defined in 41-5-103; and
13 (v) the Montana youth challenge program.
14 (b) “Full-time equivalent teacher" means a teacher who is contracted for employment for the entire
15 academic year, fulfilling professional responsibilities throughout all periods of the day when the educational
16 entity offers instruction. This includes time spent preparing for classes, delivering instruction, mentoring others,
17 and performing other duties set forth in the teacher’s job description, individual contract, or in the collective
18 bargaining agreement governing the teacher’s employment.
19 (a)(c) "Teacher" means an individual who:
20 (i) holds a current class 1, 2, 4, 5, 6, or 7 license issued by the office of public instruction under
21 rules adopted by the board of public education pursuant to 20-4-102; and
22 (ii) is employed by a school district an educational entity in an instructional position requiring
23 teacher licensure.
24 (b)(d) "Teacher average pay" means the total compensation paid by a school district an educational
25 entity to all of its teachers, not including bonuses, stipends, or extended duty contracts, divided by the total full-
26 time equivalent teachers employed in the district, with full-time equivalence rounded to the nearest tenth by the
27 entity.
28 (c)(e) "Teacher base pay" means the lowest salary for a full-time equivalent beginning teacher for the ****
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1 current year as incorporated in the district's educational entity's collective bargaining agreement or a
2 memorandum of understanding executed between the entity and the applicable union if the teachers'
3 employment is covered by a collective bargaining agreement pursuant to Title 39, chapter 31, or incorporated in
4 district the entity's policy if the teachers' employment is not covered by a collective bargaining agreement, not
5 including bonuses, stipends, or extended duty contracts."
6
7 Section 20-9-327, MCA, is amended to read:
8 "20-9-327. (1) (a) The state shall provide a quality
9 educator payment to and qualified staff payment as calculated in 20-9-306 to the following educational entities:
10 (i) public school districts, as defined in 20-6-101 and 20-6-701;
11 (ii) special education cooperatives, as described in 20-7-451;
12 (iii) the Montana school for the deaf and blind, as described in 20-8-101;
13 (iv) correctional facilities, as defined in 41-5-103; and
14 (v) the Montana youth challenge program.
15 (b) A special education cooperative that has not met the requirements of 20-7-454 may not be
16 funded under the provisions of this section except by approval of the superintendent of public instruction.
17 (2) (a) The quality educator and qualified staff payment for special education cooperatives must be
18 distributed directly to those entities special education cooperatives by the superintendent of public instruction.
19 (b) The quality educator and qualified staff payment for the Montana school for the deaf and blind
20 must be distributed to the Montana school for the deaf and blind.
21 (c) The quality educator and qualified staff payment for Pine Hills correctional facility and the
22 facility under contract with the department of corrections for female, as defined in 1-1-201, youth must be
23 distributed to those facilities by the department of corrections.
24 (d) The quality educator and qualified staff payment for the Montana youth challenge program
25 must be distributed to that program by the department of military affairs.
26 (3) (a) The quality educator payment is calculated as provided in 20-9-306, using number of quality
27 educators is the number of full-time equivalent educators, as reported to the superintendent of public instruction
28 for accreditation purposes in the previous school year, each of whom: ****
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1 (a)(i) holds a valid certificate under the provisions of 20-4-106 and is employed by an educational
2 entity listed in subsection (1) of this section in a position that requires an educator license in accordance with
3 the administrative rules adopted by the board of public education; or
4 (ii) holds an American Indian language and culture specialist license and is employed by an entity
5 listed in subsection (1) to provide instruction in American Indian language and culture.
6 (b) The number of qualified staff is the number of full-time equivalent staff, each of whom:
7 (i) is employed by an educational entity listed in subsection (1) to provide services to students as
8 a licensed professional under 37-8-405, 37-8-415, 37-11-301, 37-15-301, 37-17-302, 37-24-301, 37-25-302,
9 37-39-308, 37-39-309, or 37-39-311; and
10 (ii) is employed by an entity listed in subsection (1) to provide services to students; or
11 (c) (i) holds an American Indian language and culture specialist license; and
12 (ii) is employed by an entity listed in subsection (1) to provide services to students in an Indian
13 language immersion program pursuant to Title 20, chapter 7, part 14
14 (ii) is employed by an educational entity listed in subsection (1) and has been issued an
15 emergency authorization of employment under 20-4-111 for that entity for no more than 3 school years; or
16 (iii) is employed by a public school district, as defined in 20-6-101 and 20-6-701, as clerk of the
17 district and performs the functions described in 20-3-325(3)."
18
19 Section 20-9-344, MCA, is amended to read:
20 "20-9-344.
21 public education shall administer and distribute the BASE aid and state advances for county equalization in the
22 manner and with the powers and duties provided by law. The board of public education:
23 (a) shall adopt policies for regulating the distribution of BASE aid and state advances for county
24 equalization in accordance with the provisions of law;
25 (b) may require reports from the county superintendents, county treasurers, and trustees that it
26 considers necessary; and
27 (c) shall order the superintendent of public instruction to distribute the BASE aid on the basis of
28 each district's annual entitlement to the aid as established by the superintendent of public instruction. In ****
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1 ordering the distribution of BASE aid, the board of public education may not increase or decrease the BASE aid
2 distribution to any district on account of any difference that may occur during the school fiscal year between
3 budgeted and actual receipts from any other source of school revenue.
4 (2) The board of public education may order the superintendent of public instruction to withhold
5 distribution of BASE aid from a district when the district fails to:
6 (a) submit reports or budgets as required by law or rules adopted by the board of public education;
7 or
8 (b) maintain accredited status because of failure to meet the board of public education's assurance
9 and performance standards.
10 (3) Prior to any proposed order by the board of public education to withhold distribution of BASE
11 aid or county equalization money, the district is entitled to a contested case hearing before the board of public
12 education, as provided under the Montana Administrative Procedure Act.
13 (4) If a district or county receives more BASE aid than it is entitled to, the county treasurer shall
14 return the overpayment to the state upon the request of the superintendent of public instruction in the manner
15 prescribed by the superintendent of public instruction.
16 (5) Except as provided in 20-9-347(2), the BASE aid payment must be distributed according to the
17 following schedule:
18 (a) from August to November of the school fiscal year, to each district 10% of:
19 (i) direct state aid;
20 (ii) the total quality educator and qualified staff payment;
21 (iii) the total at-risk student payment;
22 (iv) the total Indian education for all payment;
23 (v) the total American Indian achievement gap payment; and
24 (vi) the total data-for-achievement payment;
25 (b) from January to April of the school fiscal year, to each district 10% of:
26 (i) direct state aid;
27 (ii) the total quality educator and qualified staff payment;
28 (iii) the total at-risk student payment; ****
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1 (iv) the total Indian education for all payment;
2 (v) the total American Indian achievement gap payment; and
3 (vi) the total data-for-achievement payment;
4 (c) in December of the school fiscal year, one-half of the guaranteed tax base aid payment to each
5 district or county that has submitted a final budget to the superintendent of public instruction in accordance with
6 the provisions of 20-9-134;
7 (d) in May of the school fiscal year, the remainder of the guaranteed tax base aid payment to each
8 district or county; and
9 (e) in June of the school fiscal year, the remaining payment to each district of direct state aid, the
10 total quality educator and qualified staff payment, the total at-risk student payment, the total Indian education
11 for all payment, the total American Indian achievement gap payment, and the total data-for-achievement
12 payment.
13 (6) The distribution provided for in subsection (5) must occur by the last working day of each
14 month."
15
16 Section 20-9-366, MCA, is amended to read:
17 "20-9-366.
18 20-9-371, the following definitions apply:
19 (1) "County retirement mill value per elementary ANB" or "county retirement mill value per high
20 school ANB" means the sum of the taxable valuation in the previous year of all property in the county divided by
21 1,000, with the quotient divided by the total county elementary ANB count or the total county high school ANB
22 count used to calculate the elementary school districts' and high school districts' prior year total per-ANB
23 entitlement amounts.
24 (2) (a) "District guaranteed tax base ratio" for guaranteed tax base funding for the BASE budget of
25 an eligible district means the taxable valuation in the previous year of all property in the district, except for
26 property value disregarded because of protested taxes under 15-1-409(2) or property subject to the creation of
27 a new school district under 20-6-326, divided by the district's prior year GTBA budget area.
28 (b) "District mill value per ANB", for school facility entitlement purposes, means the taxable ****
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1 valuation in the previous year of all property in the district, except for property subject to the creation of a new
2 school district under 20-6-326, divided by 1,000, with the quotient divided by the ANB count of the district used
3 to calculate the district's prior year total per-ANB entitlement amount.
4 (3) "Facility guaranteed mill value per ANB", for school facility entitlement guaranteed tax base
5 purposes, means, subject to adjustment under 20-9-336, the sum of the taxable valuation in the previous year
6 of all property in the state, multiplied by 140% and divided by 1,000, with the quotient divided by the total state
7 elementary ANB count or the total state high school ANB count used to calculate the elementary school
8 districts' and high school districts' prior year total per-ANB entitlement amounts.
9 (4) "Guaranteed tax base aid budget area" or "GTBA budget area" means the portion of a district's
10 BASE budget after the following payments are subtracted:
11 (a) direct state aid;
12 (b) the total data-for-achievement payment;
13 (c) the total quality educator and qualified staff payment;
14 (d) the total at-risk student payment;
15 (e) the total Indian education for all payment;
16 (f) the total American Indian achievement gap payment; and
17 (g) the state special education allowable cost payment.
18 (5) (a) "Statewide elementary guaranteed tax base ratio" or "statewide high school guaranteed tax
19 base ratio", for guaranteed tax base funding for the BASE budget of an eligible district, means, subject to
20 adjustment under 20-9-336, the sum of the taxable valuation in the previous year of all property in the state,
21 multiplied by 254% for fiscal year 2024 and by 259% for fiscal year 2025 and each succeeding fiscal year and
22 divided by the prior year statewide GTBA budget area for the state elementary school districts or the state high
23 school districts. For fiscal year 2024 and subsequent fiscal years, the superintendent of public instruction shall
24 increase the multiplier, not to exceed 262%, in this subsection (5)(a) as follows:
25 (i) for fiscal years 2024 through 2031, if the revenue transferred to the state general fund pursuant
26 to 16-12-111 in the prior fiscal year is at least $1 million more than the revenue transferred in the fiscal year 2
27 years prior, then:
28 (A) multiply the amount of increased revenue transferred to the state general fund pursuant to 16- ****
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1 12-111 in the prior fiscal year above the amount of revenue transferred in the fiscal year 2 years prior by 0.25,
2 divide the resulting product by $500,000, and round to the nearest whole number; and
3 (B) add the number derived in subsection (5)(a)(i)(A) as a percentage point increase to the
4 multiplier used for the prior fiscal year;
5 (ii) for fiscal years 2024 through 2031, if the revenue transferred to the state general fund pursuant
6 to 16-12-111 in the prior fiscal year is less than $1 million more than the revenue transferred in the fiscal year 2
7 years prior, then the multiplier is equal to the multiplier used for the prior fiscal year;
8 (iii) for fiscal years 2032 and subsequent fiscal years, the multiplier is equal to the multiplier used
9 for fiscal year 2031; and
10 (iv) for all multiplier increases under this subsection (5)(a), the calculations are made in the year
11 prior to the year in which the increase to the multiplier takes effect and impacts distribution of guaranteed tax
12 base aid.
13 (b) "Statewide mill value per elementary ANB" or "statewide mill value per high school ANB", for
14 school retirement guaranteed tax base purposes, means, subject to adjustment under 20-9-336, the sum of the
15 taxable valuation in the previous year of all property in the state, multiplied by 189% and divided by 1,000, with
16 the quotient divided by the total state elementary ANB count or the total state high school ANB amount used to
17 calculate the elementary school districts' and high school districts' prior year total per-ANB entitlement
18 amounts."
19
20 NEW SECTION. Section 14. (1)
21 Beginning in fiscal year 2027, the state shall provide a future ready payment to school districts. The payment is
22 composed of incentive amounts as described in 20-9-306 and this section. The purpose of the payment is to:
23 (a) expand personalized career and technical education opportunities for middle school and high
24 school pupils;
25 (b) reduce out-of-pocket costs for pupils and families in support of a pupil's postsecondary
26 success;
27 (c) empower pupils to actively engage in forming their postsecondary success path; and
28 (d) provide expanded flexibility to districts to support the alignment of each pupil's postsecondary ****
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1 success path with each pupil's individual interests, passions, strengths, needs, and culture.
2 (2) The incentive amount of the future ready payment is based on three goal levels:
3 (a) goal level 1, high school graduates who while in high school earned 15 or more postsecondary
4 or CTE-equivalent credits;
5 (b) goal level 2, high school graduates who while in high school earned 30 or more postsecondary
6 or CTE-equivalent credits; and
7 (c) goal level 3, high school graduates who while in high school earned an associate-level degree.
8 (3) (a) A high school graduate may reach goal levels 1 and 2 using any combination of
9 postsecondary and CTE-equivalent credits.
10 (b) A high school graduate who achieves a higher future ready goal level does not generate a
11 lower goal level payment.
12 (4) For the purposes of [section 15] and this section, the following definitions apply:
13 (a) "CTE-equivalent credit" means the career and technical education (CTE) credit value ascribed
14 by the department of labor and industry as set forth in [section 15].
15 (b) (i) "Postsecondary credit" means the successful completion of a course of study by a student
16 enrolled in a high school district or K-12 school district that results in the student’s eligibility for transcripted
17 credit within the Montana university system.
18 (ii) No later than December 1, the commissioner of higher education shall provide to the office of
19 public instruction an annually updated list of the criteria of courses of study, including any completion or
20 examination requirements, that a high school student may take that result in eligibility for transcripted credit at
21 any unit of the Montana university system based on the adopted policies of the board of regents of higher
22 education. If the number of credits differs based on examination results, the list must include these
23 differentiated credit values. The list submitted applies to the achievements of high school graduates from the
24 prior school year.
25
26 NEW SECTION. Section 15.
27 (1) Annually, but not later than December 1, the department of labor and industry shall adopt in
28 rule a list of industry-recognized credentials, combinations of credentials, and work-based learning experiences, ****
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1 and the credit value of each. The list must:
2 (a) be developed, in part, with input from industry stakeholders, school districts, the office of public
3 instruction, and the office of the commissioner of higher education;
4 (b) include credentials, combinations of credentials, and work-based learning experiences that
5 lead to enhanced employment opportunities at higher rates of compensation and, when feasible, are stackable
6 toward further credentialing;
7 (c) note the credit value available in 3-credit increments; and
8 (d) be applicable from the date of adoption until the date a new list is adopted. However, if a
9 credential or work-based learning experience is removed from the list, a high school student who is already
10 enrolled in a listed course may receive credit for the course through the end of the current school term.
11 (2) The department of labor and industry shall adopt a process to add recognition for credentials
12 and work-based learning experiences between list updates that are available to any student. The process must:
13 (a) be set forth in administrative rule, written to include factors for consideration of inclusion and
14 exclusion;
15 (b) solely allow for a high school district or K-12 school district to submit proposed recognition; and
16 (c) provide for posting added credentials and work-based learning experiences to the department
17 of labor and industry website.
18 (3) The department of labor and industry may adopt rules necessary for the implementation of this
19 section.
20
21 NEW SECTION. Section 16.
22 Beginning in school fiscal year 2027, a school district must receive an enhanced quality educator and qualified
23 staff payment, calculated as provided in 20-9-306 and this section, if it meets the legislative goals for resource
24 sharing as described in this section.
25 (2) If two or more school districts, or three or more school districts when one district is either an
26 elementary or high school district of a unified school system, cooperate to jointly employ an individual who
27 qualifies as a quality educator or qualified staff under 20-9-327, with each district employing the individual as no
28 less than a 0.33 full-time equivalent employee, that employee must be counted as a 1.0 full-time equivalent ****
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1 employee for the purposes of calculating the total quality educator and qualified staff payment provided in 20-9-
2 306 for each district participating in the joint employment of the individual.
3 (3) Joint employment for school districts qualifies is met if the districts employ the individual directly
4 or through the terms of a multidistrict agreement as provided in 20-3-363.
5
6 NEW SECTION. Section 17.
7 develop publicly available and interactive data tools related to school funding. The purpose of these tools is to
8 help Montanans better understand school funding and to assist policymakers in monitoring the status of school
9 funding.
10 (2) The data tools must:
11 (a) be based on the most accurate and current financial data available;
12 (b) allow for longitudinal analysis and disaggregation based on district type, size, and location; and
13 (c) include data measures related to but not limited to:
14 (i) the percent of total K-12 revenues provided by the state's share as defined in 20-9-306;
15 (ii) the percent of total K-12 revenues made up of property tax revenue;
16 (iii) the equitable distribution of the state's share and the equity of the funding formula;
17 (iv) base, average, and top teacher and administrator salaries compared regionally, nationally, and
18 by state rankings; and
19 (v) other data measures as determined by the legislative fiscal analyst or as directed by the
20 legislative finance committee.
21 (3) In developing the data tools, the legislative fiscal analyst shall collaborate with:
22 (a) the board of public education;
23 (b) the office of public instruction;
24 (c) the governor's office of budget and program planning;
25 (d) the legislative services division; and
26 (e) other organizations or entities as determined by the legislative fiscal analyst or as directed by
27 the legislative finance committee.
28 ****
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1 NEW SECTION. Section 18. (1) (a) The legislature intends that the enhanced incentive
2 and flexibility in meeting the legislative goals for competitive teacher base pay under [this act] apply for and are
3 to be distributed in fiscal year 2026 and that the superintendent of public instruction robustly support
4 educational entities in fulfilling the data submission requirements to meet the legislative goals.
5 (b) For school fiscal year 2026 only:
6 (i) an educational entity must receive the enhanced incentives based on the entity's written
7 commitment to meet the revised legislative goals for fiscal year 2026 established in [this act]:
8 (A) a teacher base salary in fiscal year 2026 that is at least 11 times the fiscal year 2026 quality
9 educator and qualified staff payment amount provided in 20-9-306, as amended in House Bill No. 15; and
10 (B) a teacher base salary in fiscal year 2026 that is at least 62% of the teacher average salary in
11 fiscal year 2025; and
12 (ii) the superintendent of public instruction shall allow an educational entity the opportunity to
13 provide this written commitment until [the effective date of this act] or May 15, 2025, whichever is later, and
14 adjust the entity's general fund BASE and maximum general fund budget limits and quality educator and
15 qualified staff payment for fiscal year 2026 accordingly and as applicable.
16 (2) The legislature intends that eligible district clerks and emergency authorized teachers are
17 included with the quality educator and qualified staff payments distributed beginning in fiscal year 2027.
18 (3) The legislature intends that the increases in maximum general fund budget limits related to
19 housing costs under [this act] apply for fiscal year 2026 and that the department of revenue and the
20 superintendent of public instruction collaborate to meet this intention. As applies to school fiscal year 2026:
21 (a) the department of revenue shall provide the housing cost data as described in [this act] that it
22 would have provided in December 2023, had [this act] been effective then, to OPI within 10 days of [the
23 effective date of this act]; and
24 (b) the superintendent of public instruction shall inform a school district of any increase to the
25 district's maximum general fund budget limit for fiscal year 2026 within 20 days of [the effective date of this act].
26 (4) The legislature intends that the future ready payment component provided for in [section 14] be
27 fully operational for and result in initial distribution of funding by the office of public instruction during fiscal year
28 2027, based on the achievements of high school graduates of school year 2025 during their high school ****
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1 careers.
2 (5) The legislature intends that the incentive for resource sharing under [section 16] be fully
3 operational for and result in distribution of funding by the office of public instruction during fiscal year 2027.
4
5 NEW SECTION. Section 19. [Sections 14 through 17] are intended to be
6 codified as an integral part of Title 20, chapter 9, part 3, and the provisions of Title 20, chapter 9, part 3, apply
7 to [sections 14 through 17].
8
9 NEW SECTION. Section 20. There is appropriated from the general fund to the
10 office of public instruction $100,000 for each fiscal year of the biennium beginning July 1, 2025, for advanced
11 opportunity aid. The money is in addition to the amount appropriated in House Bill No. 2 for advanced
12 opportunity aid.
13
14 NEW SECTION. Section 21. [This act] is effective on passage and approval.
15
16 NEW SECTION. Section 22. [This act] applies to school years beginning on or after
17 July 1, 2025.
18 - END -