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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 359 By: Pugh of the Senate
and
Lowe (Dick) of the House
COMMITTEE SUBSTITUTE
An Act relating to school funding; amending 70 O.S.
2021, Section 18-200.1, as last amended by Section 2,
Chapter 488, O.S.L. 2021, which relates to the
allocation of State Aid; increasing percentage of
certain funds to be retained; modif ying calculations
of foundation program income and salary incentive
aid; amending 70 O.S. 2021, Section 18 -107, which
relates to State Aid definitions; deleting certain
definition; updating statutory language; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF TH E STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 O.S. 2021, Section 18-200.1, as
last amended by Section 2, Chapter 488, O.S.L. 2021, is amended to
read as follows:
Section 18-200.1. A. Beginning with the 2022-2023 2024-2025
school year, and each school year thereafter, each school district
shall have its initial allocation of State A id calculated based on
the state dedicated revenue s actually collected during the preceding
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fiscal year, the adjusted assessed valuation of the pr eceding year
and the weighted average daily membership for the school district of
the preceding school year . Each school district sha ll submit the
following data based on the first nine (9) weeks, to be used in the
calculation of the average daily members hip of the school district:
1. Student enrollment by grade level;
2. Pupil category counts; and
3. Transportation supplement data.
On or before December 30, the State Department of Education
shall determine each school district ’s current year alloca tion
pursuant to subsection D of this section . The State Department of
Education shall complete an audit, using procedures established by
the Department, of the st udent enrollment by grade level data, pupil
category counts, and transportation supplement da ta to be used in
the State Aid Formula pursuant to subsection D of this section by
December 1 and by January 15 shall notify each school district of
the district’s final State Aid allocation for the current school
year. The January payment of State Aid an d each subsequent payment
for the remainder of the school year shall be based on the final
State Aid allocation as calculated in subsecti on D of this section.
Except for reductions made due to the assessment of penalties by the
State Department of Educati on according to law, the January payment
of State Aid and each subsequent payment for the remainder of the
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school year shall not decrease by an amount more than the amount
that the current chargeable revenue increases for that district.
B. The State Department of Education shall retain not less than
one and one-half percent (1 1/2%) four percent (4%) of the total
funds appropriated for financial support of schools, to be used to
make midyear adjustments in State Aid and which shall be reflected
in the final allocations . If the amount of appropriated f unds,
including the one and one-half percent (1 1/2%) four percent (4%)
retained, remaining after Jan uary 1 of each year is no t sufficient
to fully fund the final allocations, the Department shall
recalculate each school district ’s remaining allocation pursuant to
subsection D of this section using the reduced amount of
appropriated funds.
C. On and after July 1, 1997, the amoun t of State Aid each
district shall receive shall be the sum of the Foundation Aid, the
Salary Incentive Aid , and the Transportation Supplement, as adjusted
pursuant to the provisions of subsection G of this section and
Section 18-112.2 of this title; provi ded, no district having per
pupil revenue in excess of three hundred percent (300%) of the
average per pupil revenue o f all districts shall receive any State
Aid or Supplement in State Aid.
The July calculation of per pupil revenue shall be determined by
dividing the district’s second preceding year’s total weighted
average daily membership (ADM) into the district ’s preceding year’s
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total revenues excluding fed eral revenue, insurance loss payments,
reimbursements, recovery of overpa yments and refunds, unuse d
reserves, prior expenditur es recovered, prior year surpluses, and
less the amount of any transfer fees paid in that year.
The December calculation of per pu pil revenue shall be
determined by dividing the district’s preceding year’s total
weighted average daily membership (ADM) into the district’s
preceding year’s total revenues excluding federal revenue, insurance
loss payments, reimbursements, recovery of ov erpayments and refunds,
unused reserves, prior e xpenditures recovered, pr ior year surpluses,
and less the amount of any transf er fees paid in that year.
D. For the 1997-98 school year, and each school year
thereafter, Foundation Aid, the Transportation Su pplement, and
Salary Incentive Aid shall be calc ulated as follows:
1. Foundation Aid shall be det ermined by subtracting the am ount
of the Foundation Program Income from the cost of the Foundation
Program and adding to this difference the Transportation Su pplement.
a. The Foundation Program shall be a d istrict’s higher
weighted average daily membership based on the first
nine (9) weeks of the current school year or the
preceding school year of a school district, a s
determined by the provisions of subsection A of
Section 18-201.1 of this title and paragra phs 1, 2, 3,
and 4 of subsection B of Section 18 -201.1 of this
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title, multiplied by the Base Foundation Support
Level. However, for the portion of weighted
membership derived from nonresident, transferred
pupils enrolled in online courses, the Foundation
Program shall be a distri ct’s weighted average dai ly
membership of the preceding school year or the first
nine (9) weeks of the current school year, whichever
is greater, as determined by the provisions of
subsection A of Section 18-201.1 of this title and
paragraphs 1, 2, 3, and 4 of subsection B of Sect ion
18-201.1 of this title, mul tiplied by the Base
Foundation Support Level.
b. The Foundation Program Income shall be the sum of the
following:
(1) The adjusted assessed valuation of the current
school year of the school district , minus the
previous year protested ad valorem tax revenu es
held as prescribed in Section 2884 of Title 68 of
the Oklahoma Statutes, multiplied by the mills
levied the amount received by the school district
during the preceding fiscal year from the
proceeds of the mills levied pursuant to
subsection (c) of Section 9 of Article X of the
Oklahoma Constitution, if applica ble, as adjusted
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in subsection (c) of Section 8A of Article X of
the Oklahoma Constitution. For purposes of this
subsection, the “adjusted assessed valuation of
the current school year ” shall be the adjusted
assessed valuation on which tax revenues are
collected during the curren t school year, and
(2) Seventy-five seventy-five percent (75%) of the
amount received by the school district from the
proceeds of the county levy during the preceding
fiscal year, as levied pursuant to subsection (b)
of Section 9 of Article X o f the Oklahoma
Constitution, and
(3) Motor Vehicle Collections motor vehicle
collections, and
(4) Gross Production Tax gross production tax, and
(5) State Apportionment state apportionment, and
(6) R.E.A. Tax tax.
The items listed in divisions (3), (4), (5), and (6)
of this subparagraph shall consist of the amounts
actually collected from such s ources during the
preceding fiscal year calculated on a per capita basis
on the unit provided for by law for the distribution
of each such revenue.
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2. The Transportation Supplement shall be equal to the average
daily haul times the per capita allowance ti mes the appropriate
transportation factor.
a. The average daily haul shall be the number of children
in a district who are legally transported and who live
one and one-half (1 1/2) miles or more from school.
b. The per capita allowance shall be determined using the
following chart:
PER CAPITA PER CAPITA
DENSITY FIGURE ALLOWANCE DENSITY FIGURE ALLOWANCE
.3000 - .3083 $167.00 .9334 - .9599 $99.00
.3084 - .3249 $165.00 .9600 - .9866 $97.00
.3250 - .3416 $163.00 .9867 - 1.1071 $95.00
.3417 - .3583 $161.00 1.1072 - 1.3214 $92.00
.3584 - .3749 $158.00 1.3215 - 1.5357 $90.00
.3750 - .3916 $156.00 1.5358 - 1.7499 $88.00
.3917 - .4083 $154.00 1.7500 - 1.9642 $86.00
.4084 - .4249 $152.00 1.9643 - 2.1785 $84.00
.4250 - .4416 $150.00 2.1786 - 2.3928 $81.00
.4417 - .4583 $147.00 2.3929 - 2.6249 $79.00
.4584 - .4749 $145.00 2.6250 - 2.8749 $77.00
.4750 - .4916 $143.00 2.8750 - 3.1249 $75.00
.4917 - .5083 $141.00 3.1250 - 3.3749 $73.00
.5084 - .5249 $139.00 3.3750 - 3.6666 $70.00
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.5250 - .5416 $136.00 3.6667 - 3.9999 $68.00
.5417 - .5583 $134.00 4.0000 - 4.3333 $66.00
.5584 - .5749 $132.00 4.3334 - 4.6666 $64.00
.5750 - .5916 $130.00 4.6667 - 4.9999 $62.00
.5917 - .6133 $128.00 5.0000 - 5.5000 $59.00
.6134 - .6399 $125.00 5.5001 - 6.0000 $57.00
.6400 - .6666 $123.00 6.0001 - 6.5000 $55.00
.6667 - .6933 $121.00 6.5001 - 7.0000 $53.00
.6934 - .7199 $119.00 7.0001 - 7.3333 $51.00
.7200 - .7466 $117.00 7.3334 - 7.6667 $48.00
.7467 - .7733 $114.00 7.6668 - 8.0000 $46.00
.7734 - .7999 $112.00 8.0001 - 8.3333 $44.00
.8000 - .8266 $110.00 8.3334 - 8.6667 $42.00
.8267 - .8533 $108.00 8.6668 - 9.0000 $40.00
.8534 - .8799 $106.00 9.0001 - 9.3333 $37.00
.8800 - .9066 $103.00 9.3334 - 9.6667 $35.00
.9067 - .9333 $101.00 9.6668 or more $33.00
c. The formula transportation factor shall be 1.39.
3. Salary Incentive Aid sh all be determined as follows:
a. Multiply the Incentive Aid guarantee by the district ’s
higher weighted average daily membership based on the
first nine (9) weeks of the current school year or the
preceding school year o f a school district, as
determined by the provisions of subsection A of
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Section 18-201.1 of this title and paragraphs 1, 2, 3 ,
and 4 of subsection B of Section 18 -201.1 of this
title.
b. Divide the district’s adjusted assessed valuation of
the current school year minus the previous year ’s
protested ad valorem tax revenues held as prescribed
in Section 2884 of Title 68 of the Oklahoma Statutes,
by one thousand (1,000) and subtract the quotient from
the product of subparagraph a of this paragraph. The
remainder shall not be less than zero (0).
c. Multiply the number of Subtract the amount received by
the school district from the proceeds of the mills
levied for general fund purposes above the fift een
(15) mills required to s upport Foundation Aid pursuant
to division (1) of subparagraph b of paragraph 1 of
this subsection, not including the county four-mill
levy, by the remainder product of subparagraph b a of
this paragraph. The product remainder shall be the
Salary Incentive Aid of the district.
E. By June 30, 1998, the State De partment of Education sha ll
develop and the Department and all school distr icts shall have
implemented a student identification system which is consistent with
the provisions of subsections C and D o f Section 3111 of Title 74 of
the Oklahoma Statutes . The student identification s ystem shall be
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used specifically for the purpose o f reporting enrollment data by
school sites and by school districts, the administration of the
Oklahoma School Testing Progr am Act, the collection of appropriate
and necessary data pursuant to the Oklahoma Educational Indicators
Program, determining studen t enrollment, establishing a student
mobility rate, allocation of th e State Aid Formula and midyear
adjustments in funding f or student growth. This enrollment data
shall be submitted to the State Departmen t of Education in
accordance with rules promulgate d by the State Board of Education .
Funding for the development, imp lementation, personnel training and
maintenance of the s tudent identification system shall be set out in
a separate line item in the alloc ation section of the appropriation
bill for the State Board of Education for each year.
F. 1. In the event that ad v alorem taxes of a school district
are determined to be u ncollectible because of bankruptcy, clerical
error, or a successful tax protest, a nd the amount of such taxes
deemed uncollectible e xceeds Fifty Thousand Dollars ($50,00 0.00) or
an amount greater than twenty-five percent (25%) of ad valorem taxes
per tax year, or the valuation of a district is lowered by order o f
the State Board of Equa lization, the school district’s State Aid,
for the school year that such ad valorem tax es are calculated in the
State Aid Formula, shall be determined by subtracting the net
assessed valuation of the property upon which taxes were deemed
uncollectible from the assessed valuation of the school district and
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the state. Upon request of the loca l board of education, it shall
be the duty of the county assessor to certify to the Dir ector of
Finance of the State Department of Education the net assessed
valuation of the property upon which taxes were determined
uncollectible.
2. In the event that th e amount of funds a school dist rict
receives for reimbursement from the Ad Valorem Reim bursement Fund is
less than the amount of funds claimed f or reimbursement by the
school district due to insufficiency of funds as pr ovided in Section
193 of Title 62 of the Oklahoma Statutes, then the school district’s
assessed valuation for the school yea r that such ad valorem
reimbursement is calculated in the State Aid Formula shall be
adjusted accordingly.
G. 1. Notwithstanding the provisions of Section 18 -112.2 of
this title, a school district s hall have its State Aid reduced by an
amount equal to the amount of carryover in the general fund of the
district as of June 30 of the pre ceding fiscal year, that is in
excess of the following standards for two (2) consecutiv e years:
Total Amount of Amount of
General Fund Collections, General Fund
Excluding Previous Year Balance
Cash Surplus as of June 30 Allowable
Less than $1,000,000 48%
$1,000,000 - $2,999,999 42%
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$3,000,000 - $3,999,999 36%
$4,000,000 - $4,999,999 30%
$5,000,000 - $5,999,999 24%
$6,000,000 - $7,999,999 22%
$8,000,000 - $9,999,999 19%
$10,000,000 or more 17%
2. By February 1 the State Department of Educat ion shall send
by certified mail, with return rece ipt requested, to each School
District Superintendent, Audit or and Regional Accreditation Officer
school district superintendent, auditor, and regional accred itation
officer a notice of and calculatio n sheet reflecting the general
fund balance penalty to be assessed against that sc hool district.
Calculation of the general fund ba lance penalty shall not include
federal revenue. Within thirty (30) days of receipt of this written
notice the school distr ict shall submit to the Department a written
reply either accepting or protesting the penalty to be assessed
against the district . If protesting, the school district shall
submit with its reply the reasons for rejecting the calculations and
documentation supporting those reasons . The Department shall review
all school district penalty protest documentation and notify each
district by March 15 of its finding and the final penalty to be
assessed to each district. General fund balance penalties shall be
assessed to all school districts by April 1.
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3. Any school district which receives p roceeds from a tax
settlement or a Federal Emergen cy Management Agency settlement
during the last two (2) months of the preceding fiscal year shall be
exempt from the penalti es assessed in this subsection, if the
penalty would occur solely as a result of r eceiving funds from the
tax settlement.
4. Any school district which receives an increase in State Aid
because of a change in Foundation Aid and/or Salary Incentive Aid
factors during the last two (2) months of the preceding fiscal ye ar
shall be exempt from t he penalties assessed in this subsection, if
the penalty would occur solely as a result of receiving funds from
the increase in State Aid.
5. If a school district does not r eceive Foundation Aid and/or
Salary Incentive Aid during the preceding fiscal year, th e State
Board of Education may waive the penalty a ssessed in this subsection
if the penalty would result in a loss of more than forty percent
(40%) of the remaining State Aid to be allocated to the school
district between April 1 a nd the remainder of the s chool year and if
the Board determines the penalty will cause the school district not
to meet remaining financial obligations.
6. Any school district which receives gross pr oduction revenue
apportionment during the 2002 -2003 school year or in any subseque nt
school year that is greater than the gross prod uction revenue
apportionment of the p receding school year shall be exempt from the
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penalty assessed in this subsection, if t he penalty would occur
solely as a result of the gross pr oduction revenue apportio nment, as
determined by the State Board of Educati on.
7. Beginning July 1, 2003, schoo l districts that participate in
consolidation or annexation pursuant to the provisions of the
Oklahoma School Voluntary Consolidation and Annexa tion Act shall be
exempt from the penalty assessed in this subsection for t he school
year in which the consolida tion or annexation occurs and for the
next three (3) fiscal years.
8. Any school district which receives proceeds from a sales tax
levied by a municipality pursuant to Section 22-159 of Title 11 of
the Oklahoma Statute s or proceeds from a sales tax levied by a
county pursuant to Section 1370 of Title 68 of the Oklahoma Statutes
during the 2003-2004 school year or the 2004 -2005 school year shall
be exempt from the penalti es assessed in this subsection, if the
penalty would occur solely as a result of receiv ing funds from the
sales tax levy.
9. Any school district which has an amount of carry over in the
general fund of the district in excess of the limits established in
paragraph 1 of this subsection during the fiscal yea rs beginning
July 1, 2020, July 1, 20 21, July 1, 2022, and July 1, 2023, shall
not be assessed a general fund balance penalt y as provided for in
this subsection.
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10. For purposes of calculating the general fund balance
penalty, the terms “carryover” and “general fund balance” shall not
include federal revenue.
H. In order to provide startup funds for the implementation of
early childhood programs, State Aid may be advanced to schoo l
districts that initiall y start early childhood instruction at a
school site. School districts that desire suc h advanced funding
shall make application to the State Department of Education no later
than September 15 of each year and advanced funding shal l be awarded
to the approved districts no later than October 30. The advanced
funding shall not exceed the per pupil amount of State Aid as
calculated in subsection D of this section per anticipated Head
Start eligible student . The total amount of advanc ed funding shall
be proportionately reduced from the monthly payments of th e
district’s State Aid payments durin g the last six (6) months of the
same fiscal year.
I. 1. Beginning July 1, 1996, the Oklahoma Tax Commission,
notwithstanding any provision of law to the contrary, sha ll report
monthly to the State Department of Educa tion the monthly
apportionment of the following information:
a. the assessed valuation of property,
b. motor vehicle collect ions,
c. R.E.A. tax collected, and
d. gross productions tax collected.
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2. Beginning July 1, 1997, the State Auditor and Inspector ’s
Office, notwithstanding any provisio n of law to the contrary, shall
report monthly to the State Department of Education the monthly
apportionment of the proceeds of the county levy .
3. Beginning July 1, 1996, the Commissioners of the Land
Office, notwithstanding any provision of law to the contrary, shall
report monthly to the State Department of Education the monthly
apportionment of state apportionment.
4. Beginning July 1, 1997 , the county treasurers ’ offices,
notwithstanding any provision of law to t he contrary, shall report
monthly to the State Department of Educati on the ad valorem tax
protest amounts for each county.
5. The information reported by the Tax Commission, the St ate
Auditor and Inspector ’s Office, the county treasurers’ offices and
the Commissioners of the Land Office, pur suant to this subsection
shall be reported by school district on forms developed by the State
Department of Education.
SECTION 2. AMENDATORY 70 O.S. 2021, Section 18-107, is
amended to read as follows:
Section 18-107. As used in this title:
1. “Average Daily Attendance ” (ADA) means the legal average
number of pupils, early childhood education programs through grade
twelve, in a school district during a school year as determined
pursuant to the provisions of Section 18-111 of this title. A day
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of school for early childhood education programs and kindergarten
shall be at least two and one -half (2 1/2) hours and, for early
childhood education, may be si x (6) hours.;
2. “Average Daily Membership ” (ADM) means the average number of
pupils present and absent in a school district during a school year.
Average Daily Membership daily membership shall be calculated by
dividing the sum of the pupil ’s total days present and total days
absent by the number of days tau ght.
a. A pupil who has been abs ent without excuse ten (10)
consecutive days shall be taken off the roll beginni ng
the eleventh day and thereafter shall not be
considered in a district ’s average daily membership
ADM calculation until the pupil is placed on the roll
in the district. For the purpose of this paragraph,
consecutive days means days for which enrollment is
recorded.
b. A pupil enrolled in a statewide virtual charter school
who is behind pace and has not completed instructional
activity as defined by Section 3-145.8 of this title
for a fifteen-school-day period, without excuse as
authorized by Section 10 -105 of this title, shall be
taken off the roll beginning the sixteenth day and
thereafter shall not be considered in the virtual
charter school’s Average Daily Membership ADM
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calculation until the pupil is placed on the roll in
the virtual charter school .; and
3. “Total Adjusted Assessed Valuation ” means the sum of public
service property assessed valuation, personal property assessed
valuation and real property assessed valuation as adjusted pursuant
to the provisions of Section 18 -109.1 of this title.
4. “Eighty-five percent (85%) of maximum allowable ”, for the
purpose of assessing class size pen alty pursuant to Sections 18-
113.1 and 18-113.2 of this title, means eighty-five percent (85%) of
ten percent (10%) of the preceding year ’s net assessed valuation of
a school district. The calculation of indebtedness as provided for
in paragraph a of subs ection G of Section 18-113.1 and subparagraph
a of paragraph 4 of subsection A of Section 18-113.2 of this title
shall include the outstanding principal amount of bonds issued by
the school district plus the principal amount of any bonds
authorized by a vote of the people for issuance but not yet issued
by the school district.
SECTION 3. This act shall becom e effective September 1, 2023.
59-1-1963 EB 2/28/2023 1:00:58 PM