Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                            HB 707.1
                                                HOUSE BILL NO. 707
      INTRODUCED BY J. ETCHART, T. MCGILLVRAY, B. USHER, K. ZOLNIKOV, K. SEEKINS-CROWE, C.
         FRIEDEL, S. ESSMANN, M. YAKAWICH, G. PARRY, G. OBLANDER, L. DEMING, N. HASTINGS
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  A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING THE REQUIREMENTS FOR CREATION
  OF A NEW HIGH SCHOOL DISTRICT; AUTHORIZING MULTIPLE ADJACENT ELEMENTARY DISTRICTS
  WITH AT LEAST 1,000 COMBINED ANB TO CONTRACT FOR THE FORMATION OF A NEW HIGH SCHOOL
  DISTRICT ON APPROVAL OF THE ELECTORS OF EACH OF THE ELEMENTARY DISTRICTS; PROVIDING
  FOR THE PASSAGE OF A BOND TO BUILD OR OUTFIT A HIGH SCHOOL BUILDING; PROVIDING
  PROCEDURES TO ESTABLISH A BUDGET AND PROVIDE THE FUNDING OF THE NEW HIGH SCHOOL
  DISTRICT; REQUIRING THE FORMER HIGH SCHOOL DISTRICT TO PROVIDE INSTRUCTION FOR A
  TRANSITION PERIOD; CLARIFYING RESPONSIBILITIES AND REQUIREMENTS THROUGH THE
  PROCESS OF ESTABLISHING A NEW HIGH SCHOOL DISTRICT; AMENDING SECTIONS 20-6-104, 20-9-
  366, 20-9-439, AND 20-9-502, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          NEW SECTION. Section 1.        Procedure for two or more elementary school districts to create new
  high school district -- trustee resolution. (1) Two or more existing elementary districts that are adjacent to
  each other and that are not part of a unified school system or governed by a joint board with a high school
  district may contract to create a new high school district under the procedures outlined in [section 2] and this
  section only if the combined total of the ANB in the elementary districts, as calculated under the provisions of
  20-9-311, is at least 1,000.
          (2)      The creation of a new high school district may be requested by the trustees of each existing
  elementary district through passage of a resolution that includes the information outlined in 20-6-105(3) and
  requests the county superintendent to order an election to allow the electors of each elementary district to
  consider the proposition of creating a new high school district. The trustees of the existing elementary districts
  proposing a contract under this section may not pass a resolution for expansion more than one time within a 5-
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68th Legislature 2023                                                                                               HB 707.1
  year period.
          (3)       (a) If the proposition for the expansion is approved by the electors of each of the elementary
  districts and the trustees issue a certificate of election as provided in 20-20-416, for a period of 2 years from the
  date of the certification of the election the elementary trustees have the authority to propose to the electors of
  each of the elementary districts:
          (i)       a transition costs levy pursuant to 20-9-502; and
          (ii)      a general obligation bond pursuant to Title 20, chapter 9, part 4, for the purpose of building,
  altering, repairing, buying, furnishing, equipping, purchasing lands for, or obtaining a water supply for a school
  to accommodate high school students.
          (b)       The bond limitations pursuant to 20-9-406 imposed on a district proposing a bond under
  subsection (3)(a) must be calculated on the limits for a high school district with the high school ANB calculated
  by dividing the ANB of the elementary district by 9 and multiplying the result by 4.
          (c)       The electors of each elementary school district shall vote on the total amount of the general
  obligation bond required for the purposes of subsection (3)(a). A bond approved under subsection (3)(a)
  becomes a bond of, and may not be issued until the creation of, the new high school district formed pursuant to
  subsection (4).
          (d)       A new high school district that issues a bond under this subsection (3) is eligible for facility
  reimbursements and advances pursuant to 20-9-366 through 20-9-371 that, until the new high school has
  enrolled students in all grades and has established an actual ANB for budgeting purposes, must be based on
  an estimated high school ANB calculated by dividing the ANB of the elementary district by 9 and multiplying the
  result by 4.
          (4)       If elementary electors in each of the elementary districts approve a bond pursuant to
  subsection (3), on July 1 following the approval of the bond the county superintendent shall order the creation
  of a new high school district with identical boundaries to the contracting elementary districts and the immediate
  attachment of the contracting elementary districts to form a new high school district. The county superintendent
  shall send a copy of the order to the board of county commissioners and to the trustees of the districts affected
  by the creation of the new high school district. The trustees of the contracting elementary district in which the
  new high school will be operated must be designated as the trustees of the new high school district pursuant to
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68th Legislature 2023                                                                                                HB 707.1
  20-3-351 and 20-3-352. The trustees shall appoint a district superintendent pursuant to 20-4-401.
          (5)      Prior to the first school fiscal year in which the new high school district will enroll students in a
  particular high school grade, the high school trustees shall prepare operating budgets for the new high school
  according to the school budgeting provisions of Title 20, except that:
          (a)      the ANB for any inaugural grades for the high school district must be estimated by the trustees
  and may not exceed the number resulting from dividing the highest budgeted ANB of the combined elementary
  districts in the preceding 3 fiscal years by 9 and multiplying the result by the number of grades in which the high
  school will enroll students for the first time in the ensuing school year;
          (b)      the number of quality educators must be estimated by the trustees and may not exceed the
  number resulting from dividing the ANB estimated under subsection (5)(a) by 10;
          (c)      the taxable value for budgeting purposes of the new high school district must be based on the
  taxable value as most recently determined by the department of revenue;
          (d)      the general fund budget adopted by the trustees must be based on only the basic entitlement,
  the quality educator payment, and the budget components derived from ANB counts; and
          (e)      the district's BASE aid for the upcoming year must be based on the general fund budget
  adopted by the trustees for the upcoming school year.
          (6)      Until the first school year in which the new high school district enrolls students in all grades and
  for a period of time not to exceed 6 years following the creation of the new high school district:
          (a)      the former high school district with which the contracting elementary districts were previously
  associated shall provide high school instruction to high school students of the new high school district in any
  grades in which the new high school district is not enrolling students;
          (b)      the new high school district shall be responsible for providing transportation for its students
  enrolled in the former high school district pursuant to subsection (6)(a), may establish a transportation budget
  for this purpose, and may receive state and county reimbursements under Title 20, chapter 10; and
          (c)      the new high school district shall pay the former high school district 20% of the per-ANB
  maximum rate established in 20-9-306 for each of its students enrolled in the former high school district, with
  one-half of the amount due by December 31 of the year following the year of attendance and the remainder due
  no later than June 15 of the year following the year of attendance. The new high school district trustees shall
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68th Legislature 2023                                                                                                HB 707.1
  establish a tuition fund and levy to fund these payments.
           (7)      (a) Bonded indebtedness of the former high school district that is outstanding as of the date of
  creation of the new high school district must remain secured by and be the indebtedness of the original territory
  against which the bonds of the former high school district were issued and must be paid by tax levies against
  the original territory.
           (b)      Bonded indebtedness of the former high school district that is issued by the former high school
  district following the creation of the new high school district is secured by the territory of the former high school
  district as of the date of issuance of the former high school district bonds and must be paid by tax levies against
  the territory of the former high school district. However, if bonds of the former high school district were
  approved at a bond election conducted before the creation of the new high school district, all bonds of the
  former high school district issued by the former high school district under the bond election authority must
  remain secured by and be the indebtedness of the territory of the former high school district as of the date the
  bond authority was approved by voters and must be paid by tax levies against that territory.
           (c)      Bonded indebtedness of the new high school district is secured by the territory of the new high
  school district as of the date of issuance of the new high school district bonds and must be paid by tax levies
  against the territory of the new high school district.
           (d)      Bonded indebtedness of any of the contracting elementary districts that is outstanding as of the
  date of creation of the new high school district must remain the bonded indebtedness of the issuing elementary
  district and must remain secured by the territory of the issuing elementary district and paid by tax levies against
  the territory of the appropriate elementary district. The debt service on the bonds must remain allocated to the
  issuing elementary district.
           (e)      Bonded indebtedness of the former high school district or the new high school district that is
  subsequently affected by a later reorganization of the former high school district or the new high school district
  is governed by the provisions of Title 20, chapter 6, part 4.
           (8)      When two or more elementary districts contract to create a new high school district as provided
  for in this section, a principal, teacher, or other certified employee of the former high school district who has a
  right of tenure under Montana law must be given preference in hiring for a vacant position in the new high
  school district for which the employee is qualified with the required certification endorsements.
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68th Legislature 2023                                                                                                HB 707.1
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              Section 2. Section 20-6-104, MCA, is amended to read:
              "20-6-104.   Moratorium on creation of new district -- exceptions. (1) Except as provided in
  subsections (2) and (3) through (4), a school district may not initiate the creation of a new elementary district or
  a new high school district.
              (2)      Pursuant to the provisions of 20-6-326, the trustees or the electors of an existing elementary
  district may initiate the creation of a new high school district solely for the purpose of expanding into a K-12
  district.
              (3)      Pursuant to the provisions of [section 1], the trustees or electors of two or more existing
  elementary districts may initiate the creation of a new high school district.
              (3)(4)   The moratorium in subsection (1) does not apply to a district that results from the procedure for
  the dissolution of a K-12 school district pursuant to 20-6-704."
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              Section 3. Section 20-9-366, MCA, is amended to read:
              "20-9-366.   Definitions. As used in 20-9-366 through 20-9-371, the following definitions apply:
              (1)      "County retirement mill value per elementary ANB" or "county retirement mill value per high
  school ANB" means the sum of the taxable valuation in the previous year of all property in the county divided by
  1,000, with the quotient divided by the total county elementary ANB count or the total county high school ANB
  count used to calculate the elementary school districts' and high school districts' prior year total per-ANB
  entitlement amounts.
              (2)      (a) "District guaranteed tax base ratio" for guaranteed tax base funding for the BASE budget of
  an eligible district means the taxable valuation in the previous year of all property in the district, except for
  property value disregarded because of protested taxes under 15-1-409(2) or property subject to the creation of
  a new school district under 20-6-326 or [section 1], divided by the district's prior year GTBA budget area.
              (b)      "District mill value per ANB", for school facility entitlement purposes, means the taxable
  valuation in the previous year of all property in the district, except for property subject to the creation of a new
  school district under 20-6-326 or [section 1], divided by 1,000, with the quotient divided by the ANB count of the
  district used to calculate the district's prior year total per-ANB entitlement amount.
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68th Legislature 2023                                                                                                 HB 707.1
          (3)      "Facility guaranteed mill value per ANB", for school facility entitlement guaranteed tax base
  purposes, means the sum of the taxable valuation in the previous year of all property in the state, multiplied by
  140% and divided by 1,000, with the quotient divided by the total state elementary ANB count or the total state
  high school ANB count used to calculate the elementary school districts' and high school districts' prior year
  total per-ANB entitlement amounts.
          (4)      "Guaranteed tax base aid budget area" or "GTBA budget area" means the portion of a district's
  BASE budget after the following payments are subtracted:
          (a)      direct state aid;
          (b)      the total data-for-achievement payment;
          (c)      the total quality educator payment;
          (d)      the total at-risk student payment;
          (e)      the total Indian education for all payment;
          (f)      the total American Indian achievement gap payment; and
          (g)      the state special education allowable cost payment.
          (5)      (a) Except as provided in subsection (6), "Statewide elementary guaranteed tax base ratio" or
  "statewide high school guaranteed tax base ratio", for guaranteed tax base funding for the BASE budget of an
  eligible district, means the sum of the taxable valuation in the previous year of all property in the state,
  multiplied by 250% for fiscal year 2022 and 254% for fiscal year 2023 and each succeeding fiscal year and
  divided by the prior year statewide GTBA budget area for the state elementary school districts or the state high
  school districts. For fiscal year 2024 and subsequent fiscal years, the superintendent of public instruction shall
  increase the multiplier in this subsection (5)(a) as follows:
          (i)      for fiscal years 2024 through 2031, if the revenue transferred to the state general fund pursuant
  to 16-12-111 in the prior fiscal year is at least $1 million more than the revenue transferred in the fiscal year 2
  years prior, then:
          (A)      multiply the amount of increased revenue transferred to the state general fund pursuant to 16-
  12-111 in the prior fiscal year above the amount of revenue transferred in the fiscal year 2 years prior by 0.25,
  divide the resulting product by $500,000, and round to the nearest whole number; and
          (B)      add the number derived in subsection (5)(a)(i)(A) as a percentage point increase to:
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68th Legislature 2023                                                                                              HB 707.1
           (I)      if the prior year was not affected by a contingency under subsection (6), the multiplier used for
  the prior fiscal year; or
           (II)     if the prior year was affected by a contingency under subsection (6), the multiplier for the prior
  fiscal year had the prior fiscal year not been affected by a contingency under subsection (6);
           (ii)     for fiscal years 2024 through 2031, if the revenue transferred to the state general fund pursuant
  to 16-12-111 in the prior fiscal year is less than $1 million more than the revenue transferred in the fiscal year 2
  years prior, then the multiplier is