Senate Bill No. 240 amends Oklahoma's school funding law, particularly the allocation of State Aid to school districts, starting in the 2026-2027 school year. The bill changes the calculation of State Aid to be based on ad valorem tax and state dedicated revenues from the previous fiscal year, along with the weighted average daily membership (ADM) from the preceding school year. It increases the percentage of funds retained by the State Department of Education for midyear adjustments from 1.5% to 4%, updates definitions for Average Daily Attendance and Average Daily Membership, and removes outdated language and certain reporting requirements. Additionally, the bill revises calculations for Foundation Aid, Salary Incentive Aid, and the Transportation Supplement, while eliminating the requirement for a student identification system and provisions related to uncollectible ad valorem taxes.

The bill also introduces a new requirement for school districts to have their State Aid reduced based on carryover amounts in their general fund that exceed specified thresholds for two consecutive years, with a process for protesting penalties. It modifies definitions and calculations for Foundation Aid and Salary Incentive Aid, clarifying that federal revenue will not be included in general fund balance penalties. Furthermore, the bill updates the methodology for calculating projected per pupil revenue, specifying that the December calculation will include ad valorem tax collections from the preceding fiscal year. It introduces a weighted teacher experience and degree index to assess teacher qualifications, with the State Department of Education responsible for determining this index. The bill is set to take effect on November 1, 2025.