Senate Bill No. 240 amends Oklahoma's school funding law to enhance the calculation and allocation of State Aid for school districts, effective from the 2026-2027 school year. The bill introduces a new method for initial allocations that incorporates ad valorem tax and state dedicated revenues from the previous fiscal year, alongside the weighted average daily membership (ADM) from the prior school year. It also increases the percentage of funds retained by the State Department of Education for midyear adjustments from 1.5% to 4%. Additionally, the bill updates definitions related to Average Daily Attendance and Average Daily Membership, while removing outdated requirements concerning student identification systems and uncollectible ad valorem taxes.

Moreover, the bill establishes a framework for assessing penalties for excess carryover in general funds, allowing school districts to protest these assessments. It introduces new provisions for calculating weighted membership for Foundation Aid and Salary Incentive Aid, emphasizing the use of higher weighted average daily membership from the first nine weeks of the current or preceding school year. The bill also modifies the calculation of projected per pupil revenue by replacing "net assessed valuation" with "the amount received by the school district from ad valorem tax collections" and updates references to the fiscal year. Additionally, it outlines the methodology for calculating a weighted teacher experience and degree index based on data from the previous year. The bill is set to take effect on November 1, 2025.