****
69th Legislature 2025 HB 573
- 1 - Authorized Print Version – HB 573
ENROLLED BILL
AN ACT REVISING LAWS RELATED TO TRANSFORMATIONAL LEARNING; MOVING THE TERMINATION
OF THE EXISTING TRANSFORMATIONAL LEARNING GRANT PROGRAM UP BY 1 YEAR; ESTABLISHING
A TRANSFORMATIONAL LEARNING PHASE II GRANT PROGRAM AND REQUIREMENTS FOR
ADMINISTERING THE PROGRAM FOR THE SUPERINTENDENT OF PUBLIC INSTRUCTION AND THE
BOARD OF PUBLIC EDUCATION; RELOCATING A DEFINITION; AMENDING SECTIONS 20-7-1601 AND
20-7-1602, MCA; AMENDING SECTION 7, CHAPTER 402, LAWS OF 2019; AND PROVIDING AN
EFFECTIVE DATE AND A TERMINATION DATE.”
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 20-7-1601, MCA, is amended to read:
"20-7-1601. (1) The legislature finds and
declares pursuant to Article X, section 1, of the 1972 Montana constitution that forms of personalized learning
authorized under Montana law, including but not limited to work-based learning pursuant to 20-7-1510,
proficiency-based learning as defined in subsection (2) of this section, determinations of course equivalency by
an elected board of trustees under 20-3-324(18), remote instruction under 20-7-118, and transformational
learning, are appropriate means of fulfilling the people's goal of developing the full educational potential of each
person. The provision of and participation in forms of personalized learning under this part and in compliance
with accreditation standards of the board of public education are constitutionally compliant and protected. The
legislature declares that any public or private regulation that discriminates against a district or pupil participating
in forms of personalized learning referenced in this section is inconsistent with constitutional goals and
guarantees under Article X of the Montana constitution.
(2) As used in this title, unless the context clearly indicates otherwise, the following definitions
apply: ****
69th Legislature 2025 HB 573
- 2 - Authorized Print Version – HB 573
ENROLLED BILL
(a) "Proficiency" means a measure of competence that is demonstrated through application in a
performance assessment.
(b) "Proficiency-based learning" means an education system in which student progress is based
on a student's demonstration of competence rather than on the basis of seat time or the age or grade level of
the student.
(c) "Transformational learning" means a flexible system of pupil-centered and proficiency-based
learning that is designed to develop the full educational potential of each pupil that:
(i) is customized to address each pupil's strengths, needs, and interests; and
(ii) actively engages each pupil in determining what, how, when, and where each pupil learns."
Section 2. Section 20-7-1602, MCA, is amended to read:
"20-7-1602. (1) (a) A
school district as defined in 20-6-101 that satisfies the conditions of subsection (2) and is qualified by the board
of public education pursuant to subsection (4) is eligible for a 4-consecutive-year provision of the transitional
funding and flexibilities in subsections (5) and (6).
(b) A school district may be qualified by the board of public education for no more than one 4-
consecutive-year provision of transitional funding and flexibilities in any 8-year period.
(2) To qualify for the transitional funding and flexibilities in subsections (5) and (6), the board of
trustees of a district shall submit an application that has been approved by motion of the board of trustees and
signed by the presiding officer to the board of public education for approval of a transformational learning
program on a form provided by the superintendent of public instruction. The school board's application must:
(a) identify the number of full-time equivalent educators meeting the criteria of 20-9-327(3) who will
participate in the district's transformational learning program, with full-time equivalence calculated and reported
by the district based on the planned portion of each qualifying educator's full-time equivalent assignment that is
dedicated to the district's transformational learning program;
(b) include the district's definition of proficiency within the meaning of the term as used in 20-9-
311(4)(d). The definition must be incorporated in the district's policies and must be used for purposes of
determining content and course proficiency and other progress, promotion from grade to grade, grades, and ****
69th Legislature 2025 HB 573
- 3 - Authorized Print Version – HB 573
ENROLLED BILL
graduation for pupils enrolled in the district's transformational learning program. The district must also describe
the district's plans for the implementation of proficiency-based learning as defined in 20-7-1601; and
(c) include a strategic plan with appropriate planning horizons for implementation, measurable
objectives to ensure accountability, and planned strategies to:
(i) develop a transformational learning plan for each participating pupil that honors individual
interests, passions, strengths, needs, and culture and that is rooted in relationships with teachers, family, peers,
and community members;
(ii) embed community-based, experiential, online, and work-based learning opportunities and
foster a learning environment that incorporates both face-to-face and virtual connections;
(iii) provide effective professional development to assist employees in transitioning to a
transformational learning model; and
(iv) ensure equality of educational opportunity to participate by all pupils of the district.
(3) The board of public education shall establish by rule the opening and closing dates for receipt
of applications and annual reports.
(4) The board of public education shall:
(a) on an annual basis, qualify districts that submit an application meeting, in the determination of
the board or the board's designee, the requirements of subsection (2) for the funding in subsection (5) and the
flexibilities in subsection (6) until the annual appropriation is exhausted, after which further applications,
including first-time applications and annual reports requesting an expansion of a previously approved plan, are
to be deferred for consideration in a subsequent year, in the order of a lottery system draw, if and when
additional funds become available for distribution. The lottery system shall assign every first-time application or
request for expansion of a previously approved plan a number that will be placed into a lottery system draw that
will be done by a third party. The applications will be assigned a position in the order in which the numbers are
drawn. The drawing will continue until all districts are on the qualification list for the current year funding or
deferred for consideration in a subsequent year.
(b) require each participating school district to submit an annual report demonstrating, in the
determination of the board or the board's designee, continued qualification for funding under this section and
including a report of progress toward measurable objectives under the school district's transformational learning ****
69th Legislature 2025 HB 573
- 4 - Authorized Print Version – HB 573
ENROLLED BILL
plan. The school district shall include any decrease or requested increase in the number of participating full-
time equivalent educators under subsection (2)(a) for adjustments to its funding. Any increase in funding based
on requested increased levels of participation under subsection (2)(a) must be determined in the year in which
the request for a funding increase is received and augmented with a lottery system among all first-time
applications and annual reports requesting an expansion of a previously approved plan and must be contingent
on the availability of funds within any appropriation of the legislature. An application deferred for consideration
in a subsequent year due to lack of funding must be annually updated each year after more than 1 full fiscal
year has passed from the date of original submission of the application in order for the application to retain its
priority by original date received.
(c) report in accordance with 5-11-210 to the education interim committee on the progress made
by districts as submitted in the annual report and strategic plan operating under approved and funded
transformational learning plans.
(5) (a) For a period of 4 consecutive fiscal years following the fiscal year in which a district is
qualified by the board of public education and contingent on satisfying the annual reporting requirements under
subsection (4), the superintendent of public instruction shall provide a transformational learning aid payment to
the district equivalent to 50% of the quality educator payment defined in 20-9-306 from the immediate prior
fiscal year multiplied by the number of the district's full-time equivalent educators reported under subsection
(2)(a) of this section.
(b) The payment under this subsection (5) must be distributed directly to the school district's
flexibility fund established under 20-9-543 by October 1 of each year of funding by the superintendent of public
instruction. The money must be expended by the district only for the purposes set forth in the district's approved
transformational learning program and within 2 years of the date of distribution 6 years of the first year of
funding.
(c) A school district may not receive more than 25% of the total amount of payments made under
this subsection (5).
(6) During each year that a school district remains qualified for funding under subsection (5), the
district's trustees may:
(a) if the obligations of transparency set forth in 20-9-116 are met, levy an annual permissive ****
69th Legislature 2025 HB 573
- 5 - Authorized Print Version – HB 573
ENROLLED BILL
property tax not to exceed 100% of any funds distributed to the district under subsection (5). Proceeds of the
levy must be deposited in the district's flexibility fund established under 20-9-543 and must be expended by the
district only for the purposes of the district's approved transformational learning plan.
(b) transfer state or local revenue from any budgeted or nonbudgeted fund, other than the debt
service fund or retirement fund, to the district's flexibility fund.
(7) (a) Any funds transferred pursuant to subsection (6)(b) may be expended by the district solely
for the purposes of implementing the district's approved transformational learning plan. Any transfers of funds
are not considered expenditures to be applied against budget authority.
(b) Any transfers that are not expended for the purposes of implementing the district's approved
transformational learning plan within 2 full school fiscal years after the funds are transferred must be transferred
back to the originating fund from which the revenue was transferred.
(c) The intent of subsection (6)(b) and this subsection (7) is to increase the flexibility and efficiency
of school districts without an increase in local taxes. In furtherance of this intent, if transfers of funds are made
from any school district fund supported by a nonvoted levy, the district may not increase its nonvoted levy for
the purpose of restoring the amount of funds transferred.
(8) The present law base calculated for K-12 local assistance under Title 17, chapter 7, part 1,
must include transformational learning aid as defined in subsection (9).
(9) For the purposes of this title, the following definitions apply:
(a) "Transformational learning" means a flexible system of pupil-centered and proficiency-based
learning that is designed to develop the full educational potential of each pupil that:
(i) is customized to address each pupil's strengths, needs, and interests; and
(ii) actively engages each pupil in determining what, how, when, and where each pupil learns.
(b) "Transformational learning aid" means 50% of the quality educator payment defined in 20-9-
306 multiplied by 10% of the statewide number of full-time equivalent educators from the fiscal year
immediately preceding the year to which distribution of transformational aid applies calculated as provided in
20-9-327. (Terminates June 30, 2027 2026--sec. 7, Ch. 402, L. 2019.)"
Section 3. (1) There is a transformational ****
69th Legislature 2025 HB 573
- 6 - Authorized Print Version – HB 573
ENROLLED BILL
learning phase II grant program administered by the superintendent of public instruction. The purposes of the
grant program are to:
(a) further develop the efforts of the most innovative transformational learning grantees toward
district-wide implementation of transformational and proficiency-based learning; and
(b) use the knowledge gained by phase II grantees to develop recommendations and guidance for
other districts interested in innovating in a similar manner.
(2) The superintendent of public instruction shall:
(a) invite those school districts that are awarded transformational learning grants to submit an
application for a transformational learning phase II grant. The application must include at a minimum:
(i) evidence of the progress made by the district in implementing transformational and proficiency-
based learning as the terms are defined in 20-7-1601; and
(ii) a detailed description of how the district plans to continue its progress toward district-wide
transformational and proficiency-based learning, including cost estimates;
(b) no later than February 1, 2026, determine a list of no more than five districts to recommend for
a phase II grant to the board of public education for the board's approval; and
(c) no later than July 15, 2026, and contingent on appropriation from the legislature, distribute to
no more than five districts a transformational learning phase II grant. The superintendent shall base the award
amounts on the district's size and the costs outlined in its application and utilize 90% of the amount
appropriated by the legislature for the grants.
(3) A district receiving a transformational learning phase II grant shall:
(a) deposit the money in the district's flexibility fund and use the money prior to June 30, 2028, for
the purposes described in the district's grant application; and
(b) participate in collaborative activities organized by the superintendent of public instruction for
grantees as described in subsection (4).
(4) (a) With the remaining 10% of the amount appropriated by the legislature, the superintendent
shall provide technical assistance and collaborative opportunities for the grantees. In supporting grantees, the
superintendent may:
(i) host convenings of the grantees; ****
69th Legislature 2025 HB 573
- 7 - Authorized Print Version – HB 573
ENROLLED BILL
(ii) provide professional development for grantees;
(iii) enlist the assistance of organizations with expertise in supporting school districts in
implementing transformational and proficiency-based learning; and
(iv) provide other types of support requested by grantees or determined to be beneficial by the
superintendent.
(b) No later than September 1, 2028, the office of public instruction and the phase II grantees shall
provide a joint report to the education interim committee and the education interim budget committee on the
progress made by the grantees. The report must include:
(i) a detailed description of how the grantees furthered their progress toward district-wide
transformational and proficiency-based learning as a result of the grant;
(ii) a guidance document for other school districts in implementing transformational and
proficiency-based learning; and
(iii) recommendations for legislative action to support districts in implementing transformational and
proficiency-based learning.
Section 4. Section 7, Chapter 402, Laws of 2019, is amended to read:
"Section 7. [This act] terminates June 30, 2026."
Section 5. [Section 3] is intended to be codified as an integral part of Title
20, chapter 7, part 16, and the provisions of Title 20, chapter 7, part 16, apply to [section 3].
Section 6. If both House Bill No. 2 and [this act] are passed and
approved, then the appropriation in House Bill No. 2 for transformational learning must be used for the
transformational learning phase II grant program as described in [section 3].
Section 7. [This act] is effective July 1, 2025.
Section 8. [Section 3] terminates December 31, 2028. ****
69th Legislature 2025 HB 573
- 8 - Authorized Print Version – HB 573
ENROLLED BILL- END - I hereby certify that the within bill,
HB 573, originated in the House.
___________________________________________
Chief Clerk of the House
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025. HOUSE BILL NO. 573
INTRODUCED BY D. BEDEY, C. SCHOMER, M. BERTOGLIO, W. MCKAMEY, C. SPRUNGER, L. REKSTEN
AN ACT REVISING LAWS RELATED TO TRANSFORMATIONAL LEARNING; MOVING THE TERMINATION
OF THE EXISTING TRANSFORMATIONAL LEARNING GRANT PROGRAM UP BY 1 YEAR; ESTABLISHING
A TRANSFORMATIONAL LEARNING PHASE II GRANT PROGRAM AND REQUIREMENTS FOR
ADMINISTERING THE PROGRAM FOR THE SUPERINTENDENT OF PUBLIC INSTRUCTION AND THE
BOARD OF PUBLIC EDUCATION; RELOCATING A DEFINITION; AMENDING SECTIONS 20-7-1601 AND 20-
7-1602, MCA; AMENDING SECTION 7, CHAPTER 402, LAWS OF 2019; AND PROVIDING AN EFFECTIVE
DATE AND A TERMINATION DATE.”