Bill Summary – FastDemocracy

67th Legislature
                                                                                                             HB 67.1
                                                 HOUSE BILL NO. 67
                                            INTRODUCED BY L. JONES
                          BY REQUEST OF THE LEGISLATIVE FINANCE COMMITTEE
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 A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING COMMUNITY COLLEGE FUNDING
 LAWS; ESTABLISHING A BASE PLUS FORMULA THAT IS ADJUSTED FOR ACTUAL FTE IN WEIGHTED
 CATEGORIES TO BE USED BEGINNING WITH THE 2025 BIENNIUM; PROVIDING DEFINITIONS;
 ESTABLISHING A STATE SPECIAL REVENUE ACCOUNT AND PROVIDING A STATUTORY
 APPROPRIATION; AMENDING SECTIONS 17-7-142, 17-7-502, 20-15-309, 20-15-310, AND 20-15-312, MCA;
 AND PROVIDING EFFECTIVE DATES.”
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 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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         Section 1. Section 17-7-142, MCA, is amended to read:
         "17-7-142. Calculation of reversions for funded resident enrollment growth in Montana
 university system and community colleges. (1) The reversion calculation in this section is effective only in
 those years when the legislature funds resident enrollment growth based upon on resident enrollment
 projections and requires a reversion by the Montana university system or a community college if the resident
 enrollment projections are not met.
         (2)   The reversion must be calculated based upon on the marginal funding for each resident FTE
 identified in the general appropriations act.
         (3)   The total reversion is calculated based upon on the difference between the FTE resident
 enrollment projection and the actual FTE resident enrollment or the FTE resident enrollment projection and the
 prior 3-year average FTE resident enrollment, whichever is lower."
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         Section 2. Section 17-7-502, MCA, is amended to read:
         "17-7-502. Statutory appropriations -- definition -- requisites for validity. (1) A statutory
 appropriation is an appropriation made by permanent law that authorizes spending by a state agency without
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 the need for a biennial legislative appropriation or budget amendment.
         (2)   Except as provided in subsection (4), to be effective, a statutory appropriation must comply with
 both of the following provisions:
         (a)   The law containing the statutory authority must be listed in subsection (3).
         (b)   The law or portion of the law making a statutory appropriation must specifically state that a
 statutory appropriation is made as provided in this section.
         (3)   The following laws are the only laws containing statutory appropriations: 2-17-105; 5-11-120; 5-11-
 407; 5-13-403; 5-13-404; 7-4-2502; 10-1-108; 10-1-1202; 10-1-1303; 10-2-603; 10-2-807; 10-3-203; 10-3-310;
 10-3-312; 10-3-314; 10-3-802; 10-3-1304; 10-4-304; 15-1-121; 15-1-218; 15-31-1004; 15-31-1005; 15-35-108;
 15-36-332; 15-37-117; 15-39-110; 15-65-121; 15-70-101; 15-70-130; 15-70-433; 16-11-119; 16-11-509; 17-3-
 106; 17-3-212; 17-3-222; 17-3-241; 17-6-101; 17-7-215; 18-11-112; 19-3-319; 19-3-320; 19-6-404; 19-6-410;
 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-506; 19-20-604; 19-20-607; 19-21-203; 20-8-
 107; 20-9-534; 20-9-622; 20-9-905; [section 5]; 20-26-617; 20-26-1503; 22-1-327; 22-3-116; 22-3-117; 22-3-
 1004; 23-4-105; 23-5-306; 23-5-409; 23-5-612; 23-7-301; 23-7-402; 30-10-1004; 37-43-204; 37-50-209; 37-54-
 113; 39-71-503; 41-5-2011; 42-2-105; 44-4-1101; 44-12-213; 44-13-102; 50-1-115; 53-1-109; 53-6-148; 53-9-
 113; 53-24-108; 53-24-206; 60-11-115; 61-3-321; 61-3-415; 67-1-309; 69-3-870; 69-4-527; 75-1-1101; 75-5-
 1108; 75-6-214; 75-11-313; 75-26-308; 76-13-151; 76-13-150; 76-17-103; 76-22-109; 77-1-108; 77-2-362; 80-
 2-222; 80-4-416; 80-11-518; 80-11-1006; 81-1-112; 81-1-113; 81-7-106; 81-7-123; 81-10-103; 82-11-161; 85-2-
 526; 85-20-1504; 85-20-1505; [ 85-25-102]; 87-1-603; 90-1-115; 90-1-205; 90-1-504; 90-6-331; and 90-9-306.
         (4)   There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing,
 paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued
 pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of
 Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined
 by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have
 statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 10, Ch. 360, L. 1999, the
 inclusion of 19-20-604 terminates contingently when the amortization period for the teachers' retirement
 system's unfunded liability is 10 years or less; pursuant to sec. 73, Ch. 44, L. 2007, the inclusion of 19-6-410
 terminates contingently upon the death of the last recipient eligible under 19-6-709(2) for the supplemental
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 benefit provided by 19-6-709; pursuant to sec. 27, Ch. 285, L. 2015, and sec. 1, Ch. 292, L. 2015, the inclusion
 of 53-9-113 terminates June 30, 2021; pursuant to sec. 6, Ch. 291, L. 2015, the inclusion of 50-1-115
 terminates June 30, 2021; pursuant to sec. 5, Ch. 383, L. 2015, the inclusion of 85-25-102 is effective on
 occurrence of contingency; pursuant to sec. 6, Ch. 423, L. 2015, the inclusion of 22-3-116 and 22-3-117
 terminates June 30, 2025; pursuant to sec. 33, Ch. 457, L. 2015, the inclusion of 20-9-905 terminates
 December 31, 2023; pursuant to sec. 12, Ch. 55, L. 2017, the inclusion of 37-54-113 terminates June 30, 2023;
 pursuant to sec. 4, Ch. 122, L. 2017, the inclusion of 10-3-1304 terminates September 30, 2025; pursuant to
 sec. 55, Ch. 151, L. 2017, the inclusion of 30-10-1004 terminates June 30, 2021; pursuant to sec. 1, Ch. 213, L.
 2017, the inclusion of 90-6-331 terminates June 30, 2027; pursuant to secs. 5, 8, Ch. 284, L. 2017, the
 inclusion of 81-1-112, 81-1-113, and 81-7-106 terminates June 30, 2023; pursuant to sec. 1, Ch. 340, L. 2017,
 the inclusion of 22-1-327 terminates July 1, 2023; pursuant to sec. 10, Ch. 374, L. 2017, the inclusion of 76-17-
 103 terminates June 30, 2027; pursuant to sec. 5, Ch, 50, L. 2019, the inclusion of 37-50-209 terminates
 September 30, 2023; pursuant to sec. 1, Ch. 408, L. 2019, the inclusion of 17-7-215 terminates June 30, 2029;
 pursuant to secs. 11, 12, and 14, Ch. 343, L. 2019, the inclusion of 15-35-108 terminates June 30, 2027;
 pursuant to sec. 7, Ch. 465, L. 2019, the inclusion of 85-2-526 terminates July 1, 2023; and pursuant to sec. 5,
 Ch. 477, L. 2019, the inclusion of 10-3-802 terminates June 30, 2023.)"
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          Section 3. Section 20-15-309, MCA, is amended to read:
          "20-15-309. Proposed budget Biennial budgeting. The board of trustees of a community college
 district shall submit a proposed budget enrollment projections and other data necessary for calculating the state
 appropriation under 20-15-310 to the board of regents by August 15 1 immediately preceding each regular
 legislative session. The proposed budget shall be for the next biennium and in a form approved by the state
 budget director and the commissioner of higher education and shall be calculated in the same manner as the
 operating budget described in 20-15-312. The board of regents shall review the proposed budget and all its
 components and make any changes it determines necessary. By the following September 1, the board of
 regents shall submit its proposal for funding the community colleges to the budget director and the legislative
 fiscal analyst."
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         Section 4. Section 20-15-310, MCA, is amended to read:
         "20-15-310. Appropriation -- definitions. (1)      As used in [section 5] and this section, the following
 definitions apply:
         (a)   "Adjusted base" means the state appropriation to a community college in the base year minus any
 one-time-only legislative appropriations and appropriations for auditing purposes, as well as any reversion
 pursuant to 17-7-142 before July 1, 2023, and adjusted for actual weighted FTE as described in [section 5],
 then multiplied by the inflationary factor for the second year of the current biennium.
         (b)   "Base year" means the first year of the current biennium.
         (c)   "Concurrent enrollment" means the form of dual enrollment through which a high school student
 receives instruction in a community college course from a high school instructor.
         (d)   "CTE FTE" means the FTE derived from students in courses determined by the commissioner of
 higher education to be career and technical education, based on national standard course classifications. For
 the purposes of the community college funding formula, FTE generated from a dual enrollment CTE course
 must be included in the calculation of CTE FTE and not in the concurrent enrollment or early college FTE
 categories.
         (e)   "Dual enrollment" means the circumstance in which a high school student is enrolled in both the
 student's high school and in a community college.
         (f)   "Early college" means the form of dual enrollment through which a high school student receives
 instruction in a community college course from a faculty member of the community college.
         (g)   "FTE" or “full-time equivalent" means the total number of undergraduate resident student credit
 hours in an academic year divided by 30.
         (h)   "FTE categories" means CTE FTE, general education FTE, the FTE derived from concurrent
 enrollment, and the FTE derived from early college. For the purposes of the community college funding formula,
 FTE generated from a dual enrollment CTE course must be included in the calculation of CTE FTE and not in
 the concurrent enrollment or early college FTE categories.
         (i)   "FTE decrease funding factor" means a dollar figure for each year of the ensuing biennium that is
 determined by the legislature and must be specified in the appropriations act appropriating funds to the
 community colleges for each biennium.
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            (j)   "FTE increase funding factor" means a dollar figure for each year of the ensuing biennium that is
 determined by the legislature and must be specified in the appropriations act appropriating funds to the
 community colleges for each biennium.
            (k)   "FTE weighting factor" means a multiplier that is applied to changes in resident FTE in each of the
 FTE categories and that is determined by the legislature and must be specified in the appropriations act
 appropriating funds to the community colleges for each biennium.
            (l)   "General education FTE" means the FTE derived from non-dual-enrollment students in courses
 determined by the commissioner of higher education to not be career and technical education, based on
 national standard course classifications.
            (m)    "Inflationary factor" means the percentage calculated pursuant to 20-9-326, not to exceed 3% and
 subject to final determination by the legislature as specified in the appropriations act appropriating funds to the
 community colleges for each biennium.
            (n)   "Weighted FTE" means the sum of the FTE in each FTE category multiplied by the corresponding
 FTE weighting factor.
            (1) (2) It is the intent of the legislature that all community college spending, other than from restricted
 funds, designated funds, or funds generated by an optional, voted levy, be governed by the provisions of this
 part and the state general appropriations act.
            (2) (3)   (a) The state general fund appropriation for each community college must be determined as
 follows:
            (a)   For the first year of the next biennium, multiply the adjusted base by the inflationary factor for the
 first year of the next biennium, and to this number add the result of multiplying:
            (i) any change in the projected weighted resident FTE changes for the first year of the next biennium
 from the actual weighted resident FTE in the base year; and
            (ii) the FTE decrease funding factor or the FTE increase funding factor as appropriate for the first year
 of the next biennium.
            (b)   For the second year of the next biennium, multiply the adjusted base by the inflationary factor for
 the first year of the next biennium, multiply this result by the inflationary factor for the second year of the next
 biennium, and to this number add the result of multiplying:
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         (i) any change in the projected weighted resident FTE changes for the second year of the next
 biennium from the actual weighted resident FTE in the base year; and
         (ii) the FTE decrease funding factor or the FTE increase funding factor as appropriate for the second
 year of the next biennium.
         (i)   multiply the variable cost of education per student by the full-time equivalent student count and add
 the budget amount for the fixed cost of education; and
         (ii) multiply the total in subsection (2)(a)(i) by the state share.
         (b)   The variable cost of education per student, the budget amount for fixed costs, and the state share
 for each community college must be determined by the legislature. The state share for each community college,
 expressed as a percentage, and the variable cost of education per student must be specified in the
 appropriations act appropriating funds to the community colleges for each biennium.
         (3)   Except as provided in subsection (4), the state general fund appropriation for each full-time
 equivalent resident student at a community college may not exceed the weighted average of state support per
 resident full-time equivalent student among community colleges and 2-year and 4-year campuses of the
 Montana university system in the most recent year plus an amount equal to two standard deviations of the most
 recent 6 years of weighted averages of state support per resident full-time equivalent student among
 community colleges and 2-year and 4-year campuses of the Montana university system.
         (4)   If enrollment for a community college is less than 200 full-time equivalent resident students for 2
 consecutive fiscal years, the maximum state general fund appropriation in the subsequent fiscal year for that
 community college may not exceed the lesser of:
         (a)   the weighted average of state support per resident full-time equivalent student within the Montana
 university system; or
         (b)   the weighted average of state support per resident full-time equivalent student within the
 community college system.
         (5)   At any time enrollment at a community college falls below 200 full-time equivalent resident
 students, the community college shall submit a business plan to the board of regents for review, approval, and
 monitoring. The business plan must include identifying what measures the community college will take to
 increase enrollment. The plan must be submitted to the board of regents within 1 month after enrollment falls
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 below 200 full-time equivalent resident students.
         (6)    The student count may not include those enrolled in community service courses as defined by the
 board of regents.
         (7)    As used in this section, the following definitions apply:
         ( a)   "Adjusted cost of education" means the cost of education minus any reversion calculated
 under17-7-142, expenditures from one-time-only legislative appropriations, and expenditures funded by local
 mill levies provided for in 2-9-212 and 20-9-501 in excess of the 2012 mill levy levels.
         (b)    "Cost of education" means the actual costs incurred by the community colleges during the budget
 base fiscal year, as reported on the current unrestricted operating fund schedule that is statutorily required to
 be submitted to the board of regents.
         (c)    "Fixed cost of education" means that portion of the adjusted cost of education, as determined by
 the legislature, that is not influenced by increases or decreases in student enrollment.
         (d)    "