23.1166.01000
Sixty-eighth
Legislative Assembly SENATE BILL NO. 2398
of North Dakota
Introduced by
Legislative Management
1 A BILL for an Act to amend and reenact sections 15.1-27-04.1, 15.1-36-02, and 15.1-36-04 of
2 the North Dakota Century Code, relating to baseline funding and the determination of state
3 school aid, loans from the coal development trust fund, and evidences of indebtedness; to
4 provide an appropriation; to provide for retroactive application; and to provide an effective date.
5 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
6 SECTION 1. AMENDMENT. Section 15.1-27-04.1 of the North Dakota Century Code is
7 amended and reenacted as follows:
8 15.1-27-04.1. Baseline funding - Establishment - Determination of state aid. (Effective
9 through June 30, 2025)
10 1. To determine the amount of state aid payable to each district, the superintendent of
11 public instruction shall establish each district's baseline funding. A district's baseline
12 funding consists of:
13 a. All state aid received by the district in accordance with chapter 15.1-27 during the
14 2018-19 school year;
15 b. An amount equal to the property tax deducted by the superintendent of public
16 instruction to determine the 2018-19 state aid payment;
17 c. An amount equal to seventy-five percent of the revenue received by the school
18 district during the 2017-18 school year for the following revenue types:
19 (1) Revenue reported under code 2000 of the North Dakota school district
20 financial accounting and reporting manual, as developed by the
21 superintendent of public instruction in accordance with section 15.1-02-08;
22 (2) Mineral revenue received by the school district through direct allocation from
23 the state treasurer and not reported under code 2000 of the North Dakota
24 school district financial accounting and reporting manual, as developed by
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1 the superintendent of public instruction in accordance with section
2 15.1-02-08;
3 (3) Tuition reported under code 1300 of the North Dakota school district
4 financial accounting and reporting manual, as developed by the
5 superintendent of public instruction in accordance with section 15.1-02-08,
6 with the exception of revenue received specifically for the operation of an
7 educational program provided at a residential treatment facility, tuition
8 received for the provision of an adult farm management program, and
9 beginning in the 2021-22 school year, seventeen percent of tuition received
10 under an agreement to educate students from a school district on an
11 air force base with funding received through federal impact aid, and an
12 additional seventeen percent of tuition received under an agreement to
13 educate students from a school district on an air force base with funding
14 received through federal impact aid each school year thereafter, until the
15 2024-25 school year when sixty-eight percent of tuition received under an
16 agreement to educate students from a school district on an air force base
17 with funding received through federal impact aid must be excluded from the
18 tuition calculation under this paragraph;
19 (4) Revenue from payments in lieu of taxes on the distribution and transmission
20 of electric power;
21 (5) Revenue from payments in lieu of taxes on electricity generated from
22 sources other than coal; and
23 (6) Revenue from the leasing of land acquired by the United States for which
24 compensation is allocated to the state under 33 U.S.C. 701(c)(3);
25 d. An amount equal to the total revenue received by the school district during the
26 2017-18 school year for the following revenue types:
27 (1) Mobile home tax revenue;
28 (2) Telecommunications tax revenue; and
29 (3) Revenue from payments in lieu of taxes and state reimbursement of the
30 homestead credit and disabled veterans credit; and
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1 e. Beginning with the 2020-21 school year, the superintendent shall reduce the
2 baseline funding for any school district that becomes an elementary district
3 pursuant to section 15.1-07-27 after the 2012-13 school year. The reduction must
4 be proportional to the number of weighted student units in the grades that are
5 offered through another school district relative to the total number of weighted
6 student units the school district offered in the year before the school district
7 became an elementary district. The reduced baseline funding applies to the
8 calculation of state aid for the first school year in which the school district
9 becomes an elementary district and for each year thereafter. For districts that
10 become an elementary district prior to the 2020-21 school year, the
11 superintendent shall use the reduced baseline funding to calculate state aid for
12 the 2020-21 school year and for each year thereafter.
13 2. a. The superintendent shall divide the district's baseline funding determined in
14 subsection 1 by the district's 2017-18 weighted student units to determine the
15 district's baseline funding per weighted student unit.
16 b. For any school district that becomes an elementary district pursuant to section
17 15.1-07-27 after the 2017-18 school year, the superintendent shall adjust the
18 district's baseline funding per weighted student unit used to calculate state aid.
19 The superintendent shall divide the district's baseline funding determined in
20 subsection 1 by the district's weighted student units after the school district
21 becomes an elementary district to determine the district's adjusted baseline
22 funding per weighted student unit. The superintendent shall use the district's
23 adjusted baseline funding per weighted student unit in the calculation of state aid
24 for the first school year in which the school district becomes an elementary
25 district and for each year thereafter.
26 c. Beginning with the 2021-22 school year and for each school year thereafter, the
27 superintendent shall reduce the district's baseline funding per weighted student
28 unit. Each year the superintendent shall calculate the amount by which the
29 district's baseline funding per weighted student unit exceeds the payment per
30 weighted student unit provided in subsection 3. TheFor the 2023-24 school year
31 the superintendent shall reduce the district's baseline funding per weighted
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1 student unit by fifteenforty percent of the amount by which the district's baseline
2 funding per weighted student unit exceeds the payment per weighted student unit
3 for the 2021-222023-24 school year. For each year thereafter, the reduction
4 percentage is increased by an additional fifteen percent. However, the district's
5 baseline funding per weighted student unit, after the reduction, may not be less
6 than the payment per weighted student unit provided in subsection 3.
7 3. a. For the 2023-24 school year, the superintendent shall calculate state aid as the
8 greater of:
9 (1) The district's weighted student units multiplied by ten thousand six hundred
10 forty-six dollars;
11 (2) One hundred two percent of the district's baseline funding per weighted
12 student unit, as established in subsection 2, multiplied by the district's
13 weighted student units, not to exceed the district's 2017-18 baseline
14 weighted student units, plus any weighted student units in excess of the
15 2017-18 baseline weighted student units multiplied by ten thousand
16 six hundred forty-six dollars; or
17 (3) The district's baseline funding as established in subsection 1 less the
18 amount in paragraph 1, with the difference reduced by forty-fiveforty percent
19 and then the difference added to the amount determined in paragraph 1.
20 b. For the 2024-25 school year and each school year thereafter, the superintendent
21 shall calculate state aid as the greater of:
22 (1) The district's weighted student units multiplied by eleven thousand
23 seventy-two dollars;
24 (2) One hundred two percent of the district's baseline funding per weighted
25 student unit, as established in subsection 2, multiplied by the district's
26 weighted student units, not to exceed the district's 2017-18 baseline
27 weighted student units, plus any weighted student units in excess of the
28 2017-18 baseline weighted student units multiplied by eleven thousand
29 seventy-two dollars; or
30 (3) The district's baseline funding as established in subsection 1 less the
31 amount in paragraph 1, with the difference reduced by sixtyfifty-five percent
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1 for the 2024-25 school year and the reduction percentage increasing by
2 fifteen percent each school year thereafter until the difference is reduced to
3 zero, and then the difference added to the amount determined in
4 paragraph 1.
5 4. After determining the product in accordance with subsection 3, the superintendent of
6 public instruction shall:
7 a. Subtract an amount equal to sixty mills multiplied by the taxable valuation of the
8 school district, except the amount in dollars subtracted for purposes of this
9 subdivision may not exceed the previous year's amount in dollars subtracted for
10 purposes of this subdivision by more than twelve percent, adjusted pursuant to
11 section 15.1-27-04.3; and
12 b. Subtract an amount equal to seventy-five percent of all revenue types listed in
13 subdivisions c and d of subsection 1. Before determining the deduction for
14 seventy-five percent of all revenue types, the superintendent of public instruction
15 shall adjust revenues as follows:
16 (1) Tuition revenue shall be adjusted as follows:
17 (a) In addition to deducting tuition revenue received specifically for the
18 operation of an educational program provided at a residential
19 treatment facility, tuition revenue received for the provision of an adult
20 farm management program, tuition received for the education of
21 high-cost and special education students, and tuition received under
22 an agreement to educate students from a school district on an
23 air force base with funding received through federal impact aid as
24 directed each school year in paragraph 3 of subdivision c of
25 subsection 1, the superintendent of public instruction also shall reduce
26 the total tuition reported by the school district by the amount of tuition
27 revenue received for the education of students not residing in the
28 state and for which the state has not entered a cross-border education
29 contract; and
30 (b) The superintendent of public instruction also shall reduce the total
31 tuition reported by admitting school districts meeting the requirements
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1 of subdivision e of subsection 2 of section 15.1-29-12 by the amount
2 of tuition revenue received for the education of students residing in an
3 adjacent school district.
4 (2) After adjusting tuition revenue as provided in paragraph 1, the
5 superintendent shall reduce all remaining revenues from all revenue types
6 by the percentage of mills levied in 2022 by the school district for sinking
7 and interest relative to the total mills levied in 2022 by the school district for
8 all purposes.
9 5. The amount remaining after the computation required under subsection 4 is the
10 amount of state aid to which a school district is entitled, subject to any other statutory
11 requirements or limitations.
12 6. On or before June thirtieth of each year, the school board shall certify to the
13 superintendent of public instruction the final average daily membership for the current
14 school year.
15 7. For purposes of the calculation in subsection 4, each county auditor, in collaboration
16 with the school districts, shall report the following to the superintendent of public
17 instruction on an annual basis:
18 a. The amount of revenue received by each school district in the county during the
19 previous school year for each type of revenue identified in subdivisions c and d of
20 subsection 1;
21 b. The total number of mills levied in the previous calendar year by each school
22 district for all purposes; and
23 c. The number of mills levied in the previous calendar year by each school district
24 for sinking and interest fund purposes.
25 Baseline funding - Establishment - Determination of state aid. (Effective after
26 June 30, 2025)
27 1. To determine the amount of state aid payable to each district, the superintendent of
28 public instruction shall establish each district's baseline funding. A district's baseline
29 funding consists of:
30 a. All state aid received by the district in accordance with chapter 15.1-27 during the
31 2018-19 school year;
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1 b. An amount equal to the property tax deducted by the superintendent of public
2 instruction to determine the 2018-19 state aid payment;
3 c. An amount equal to seventy-five percent of the revenue received by the school
4 district during the 2017-18 school year for the following revenue types:
5 (1) Revenue reported under code 2000 of the North Dakota school district
6 financial accounting and reporting manual, as developed by the
7 superintendent of public instruction in accordance with section 15.1-02-08;
8 (2) Mineral revenue received by the school district through direct allocation from
9 the state treasurer and not reported under code 2000 of the North Dakota
10 school district financial accounting and reporting manual, as developed by
11 the superintendent of public instruction in accordance with section
12 15.1-02-08;
13 (3) Tuition reported under code 1300 of the North Dakota school district
14 financial accounting and reporting manual, as developed by the
15 superintendent of public instruction in accordance with section 15.1-02-08,
16 with the exception of revenue received specifically for the operation of an
17 educational program provided at a residential treatment facility, tuition
18 received for the provision of an adult farm management program, and
19 beginning in the 2025-26 school year, eighty-five percent of tuition received
20 under an agreement to educate students from a school district on an
21 air force base with funding received through federal impact aid, until the
22 2026-27 school year, and each school year thereafter, when all tuition
23 received under an agreement to