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69th Legislature 2025 HB 567
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ENROLLED BILL
AN ACT GENERALLY REVISING LAWS RELATED TO MULTIDISTRICT AGREEMENTS BETWEEN
SCHOOL DISTRICTS; INCREASING THE FLEXIBILITY OF SCHOOL DISTRICTS TO ENTER INTO
MULTIDISTRICT AGREEMENTS; PROVIDING A COUNTYWIDE RESOURCE-SHARING INCENTIVE
THROUGH THE TOTAL QUALITY EDUCATOR PAYMENT FOR SCHOOL DISTRICTS THAT ESTABLISH
CERTAIN MULTIDISTRICT AGREEMENTS WITH ALL DISTRICTS IN A COUNTY; ALLOWING
MULTIDISTRICT AGREEMENTS TO INCLUDE PRIVATE ENTITIES; AMENDING SECTIONS 20-3-363 AND
20-9-306, MCA; AND PROVIDING AN EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 20-3-363, MCA, is amended to read:
"20-3-363. Multidistrict agreements -- fund transfers. (1) (a) The boards of trustees of any two or
more school districts may enter into a multidistrict agreement to create a multidistrict cooperative to perform any
services, activities, and undertakings of the participating districts, including full and to provide for the joint
funding and operation and maintenance of all programs and services of the participating districts upon the
terms and conditions as may be mutually agreed to by the districts subject to the conditions of this section.
(b) A multidistrict agreement may include an agreement through which one district provides
culturally rooted instruction aligned to a learning environment for English language learners or an Indian
language immersion program to pupils of a district participating in the multidistrict agreement. The costs and
other terms of service must be reflected in the multidistrict agreement.
(c) An agreement must include provisions for dissolution of the cooperative, including the
conditions under which dissolution may occur and the disposition of any remaining funds that had been
transferred to an interlocal cooperative fund in support of the cooperative. An agreement must be approved by
the boards of trustees of all participating districts and must include a provision specifying terms upon which a
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district may exit the multidistrict cooperative. The agreement may be for a period of up to 3 years.
(2) All expenditures in support of the multidistrict agreement may be made from the each
participating school district's interlocal cooperative fund as specified in 20-9-703 and 20-9-704. Each The board
of trustees of each participating district of the multidistrict cooperative may transfer funds into the district's
interlocal cooperative fund from the district's general fund, budgeted funds other than the retirement fund or
debt service fund, or nonbudgeted funds other than the compensated absence liability fund. Transfers to the
district's interlocal cooperative fund from each participating the school district's general fund are limited to an
amount not to exceed the direct state aid in support of the respective school district's general fund. Transfers
from the retirement fund and debt service fund are prohibited. Transfers may not be made with funds restricted
by federal law unless the transfer is in compliance with any restrictions or conditions imposed by federal law.
(3) Expenditures from the interlocal cooperative fund under this section are limited to those may
include any expenditures that are permitted by law and that are within the final budget considered by the board
of trustees of the district to be reasonable and necessary to efficiently and effectively finance the expenditures
pursuant to the terms of the multidistrict agreement, not to exceed the total expenditures approved by the board
of trustees for the budgeted fund from which the transfer was made, including expenditures pursuant to any
budget amendment adopted pursuant to 20-9-165.
(4) The intent of this section is to increase the flexibility and efficiency of school districts without an
increase in local taxes. In furtherance of this intent, if transfers of funds are made from any school district fund
supported by a nonvoted levy, the district may not increase its nonvoted levy for the purpose of restoring the
amount of funds transferred.
(5) (a) Beginning in school fiscal year 2027, school districts that achieve the legislative goal for
countywide resource sharing outlined in this subsection (5) must receive a 50% increase in their total quality
educator payment as defined in 20-9-306.
(b) The legislative goal for countywide resource sharing is for each school district with a majority of
its territory in a county to participate in a countywide multidistrict agreement as specified in this subsection (5).
To receive the enhanced incentive, the multidistrict agreement executed by the participating districts must:
(i) include at least all school districts with a majority of their territory within the boundaries of the
same county. Provided that at least all school districts in at least one county have entered into a multidistrict
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agreement under this subsection (5), other school districts located in other counties that participate in the
multidistrict agreement must also receive the enhanced total quality educator payment calculated in accordance
with subsection (5)(a).
(ii) provide for the joint funding and operation of the participating districts as described in this
subsection (5);
(iii) contractually allocate an amount at least equal to each district's general fund direct state aid for
the support of joint funding and operations among all participating districts as described in this subsection (5);
and
(iv) to the extent of the funds committed, jointly and mutually establish, maintain, budget, and
finance the programs of the participating districts identified under this subsection (5). Activities must be in
compliance with the accreditation standards of the board of public education and may include the sharing of
staff among the participating districts when that is consistent with collective bargaining, if applicable, and when
that is determined by the board of trustees of each participating school district to be the most efficient and
effective use of district staff. The programs of the participating districts that are mutually administered must
include, at a minimum:
(A) administration functions, including budgeting, payroll, human resources, elections, and services
provided in support of the board of trustees;
(B) custodial services;
(C) instructional services and support, including remote instruction, selection of textbooks, library
and media services and curriculum development and implementation;
(D) K-12 career and vocational/technical education and work-based learning;
(E) school food services;
(F) software licensing and other information technology;
(G) extracurricular activities;
(H) special education programs; and
(I) transportation for instruction and school activities.
(6) Nothing in this section may be construed to prohibit a district that has entered into a
countywide multidistrict agreement from entering into any other multidistrict agreement otherwise meeting the
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requirements of this section other than subsection (5). Districts participating in a countywide multidistrict
agreement from one county may also cooperate with districts from any other county to form multicounty
regional multidistrict agreements.
(5)(7) As used in this title, "multidistrict cooperative" means a public entity created by two or more
school districts executing a multidistrict agreement under this section or any school district or other public entity
participating in an interlocal cooperative agreement under the provisions of Title 20, chapter 9, part 7, as either
a coordinating or a cooperating agency with each other or with any other public or private entity participating in
the cooperative and complying with the requirements of this section and other laws governing public schools in
the state."
Section 2. Section 20-9-306, MCA, is amended to read:
"20-9-306. Definitions. As used in this title, unless the context clearly indicates otherwise, the
following definitions apply:
(1) "BASE" means base amount for school equity.
(2) "BASE aid" means:
(a) direct state aid for 44.7% of the basic entitlement and 44.7% of the total per-ANB entitlement
for the general fund budget of a district;
(b) guaranteed tax base aid for an eligible district for any amount up to 35.3% of the basic
entitlement, up to 35.3% of the total per-ANB entitlement budgeted in the general fund budget of a district, and
40% of the special education allowable cost 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;
(g) the total data-for-achievement payment; and
(h) the special education allowable cost payment.
(3) "BASE budget" means the minimum general fund budget of a district, which includes 80% of
the basic entitlement, 80% of the total per-ANB entitlement, 100% of the total quality educator payment, 100%
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of the total at-risk student payment, 100% of the total Indian education for all payment, 100% of the total
American Indian achievement gap payment, 100% of the total data-for-achievement payment, and 140% of the
special education allowable cost payment.
(4) "BASE budget levy" means the district levy in support of the BASE budget of a district, which
may be supplemented by guaranteed tax base aid if the district is eligible under the provisions of 20-9-366
through 20-9-369.
(5) "BASE funding program" means the state program for the equitable distribution of the state's
share of the cost of Montana's basic system of public elementary schools and high schools, through county
equalization aid as provided in 20-9-331 and 20-9-333 and state equalization aid as provided in 20-9-343, in
support of the BASE budgets of districts and special education allowable cost payments as provided in 20-9-
321.
(6) "Basic entitlement" means:
(a) for each high school district:
(i) $343,483 for fiscal year 2024 and $353,787 for each succeeding fiscal year for school districts
with an ANB of 800 or fewer; and
(ii) $343,483 for fiscal year 2024 and $353,787 for each succeeding fiscal year for school districts
with an ANB of more than 800, plus $17,175 for fiscal year 2024 and $17,690 for each succeeding fiscal year
for each additional 80 ANB over 800;
(b) for each elementary school district or K-12 district elementary program without an approved
and accredited junior high school, 7th and 8th grade program, or middle school:
(i) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
K-12 district elementary programs with an ANB of 250 or fewer; and
(ii) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
K-12 district elementary programs with an ANB of more than 250, plus $2,863 for fiscal year 2024 and $2,949
for each succeeding fiscal year for each additional 25 ANB over 250;
(c) for each elementary school district or K-12 district elementary program with an approved and
accredited junior high school, 7th and 8th grade program, or middle school:
(i) for the district's kindergarten through grade 6 elementary program:
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(A) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
K-12 district elementary programs with an ANB of 250 or fewer; and
(B) $57,246 for fiscal year 2024 and $58,963 for each succeeding fiscal year for school districts or
K-12 district elementary programs with an ANB of more than 250, plus $2,863 for fiscal year 2024 and $2,949
for each succeeding fiscal year for each additional 25 ANB over 250; and
(ii) for the district's approved and accredited junior high school, 7th and 8th grade programs, or
middle school:
(A) $114,493 for fiscal year 2024 and $117,928 for each succeeding fiscal year for school districts
or K-12 district elementary programs with combined grades 7 and 8 with an ANB of 450 or fewer; and
(B) $114,493 for fiscal year 2024 and $117,928 for each succeeding fiscal year for school districts
or K-12 district elementary programs with combined grades 7 and 8 with an ANB of more than 450, plus $5,724
for fiscal year 2024 and $5,896 for each succeeding fiscal year for each additional 45 ANB over 450.
(7) "Budget unit" means the unit for which the ANB of a district is calculated separately pursuant to
20-9-311.
(8) "Direct state aid" means 44.7% of the basic entitlement and 44.7% of the total per-ANB
entitlement for the general fund budget of a district and funded with state and county equalization aid.
(9) "Maximum general fund budget" means a district's general fund budget amount calculated from
the basic entitlement for the district, the total per-ANB entitlement for the district, the total quality educator
payment, the total at-risk student payment, the total Indian education for all payment, the total American Indian
achievement gap payment, the total data-for-achievement payment, and the greater of the district's special
education allowable cost payment multiplied by:
(a) 175%; or
(b) the ratio, expressed as a percentage, of the district's special education allowable cost
expenditures to the district's special education allowable cost payment for the fiscal year that is 2 years
previous, with a maximum allowable ratio of 200%.
(10) "Over-BASE budget levy" means the district levy in support of any general fund amount
budgeted that is above the BASE budget and within the general fund budget limits established in 20-9-308 and
calculated as provided in 20-9-141.
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(11) "Total American Indian achievement gap payment" means the payment resulting from
multiplying $235 for fiscal year 2024 and $242 for each succeeding fiscal year times the number of American
Indian students enrolled in the district as provided in 20-9-330.
(12) "Total at-risk student payment" means the payment resulting from the distribution of any funds
appropriated for the purposes of 20-9-328.
(13) "Total data-for-achievement payment" means the payment provided in 20-9-325 resulting from
multiplying $22.89 for fiscal year 2024 and $23.58 for each succeeding fiscal year by the district's ANB
calculated in accordance with 20-9-311.
(14) "Total Indian education for all payment" means the payment resulting from multiplying $23.91
for fiscal year 2024 and $24.63 for each succeeding fiscal year times the ANB of the district or $100 for each
district, whichever is greater, as provided for in 20-9-329.
(15) "Total per-ANB entitlement" means the district entitlement resulting from the following
calculations and using either the current year ANB or the 3-year ANB provided for in 20-9-311:
(a) for a high school district or a K-12 district high school program, a maximum rate of $7,840 for
fiscal year 2024 and $8,075 for each succeeding fiscal year for the first ANB, decreased at the rate of 50 cents
per ANB for each additional ANB of the district up through 800 ANB, with each ANB in excess of 800 receiving
the same amount of entitlement as the 800th ANB;
(b) for an elementary school district or a K-12 district elementary program without an approved and
accredited junior high school, 7th and 8th grade program, or middle school, a maximum rate of $6,123 for fiscal
year 2024 and $6,307 for each succeeding fiscal year for the first ANB, decreased at the rate of 20 cents per
ANB for each additional ANB of the district up through 1,000 ANB, with each ANB in excess of 1,000 receiving
the same amount of entitlement as the 1,000th ANB; and
(c) for an elementary school district or a K-12 district elementary program with an approved and
accredited junior high school, 7th and 8th grade program, or middle school, the sum of:
(i) a maximum rate of $6,123 for fiscal year 2024 and $6,307 for each succeeding fiscal year for
the first ANB for kindergarten through grade 6, decreased at the rate of 20 cents per ANB for each additional
ANB up through 1,000 ANB, with each ANB in excess of 1,000 receiving the same amount of entitlement as the
1,000th ANB; and
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(ii) a maximum rate of $7,840 for fiscal year 2024 and $8,075 for each succeeding fiscal year for
the first ANB for grades 7 and 8, decreased at the rate of 50 cents per ANB for each additional ANB for grades
7 and 8 up through 800 ANB, with each ANB in excess of 800 receiving the same amount of entitlement as the
800th ANB.
(16) (a) "Total quality educator payment" means the payment resulting from multiplying $3,566 for
fiscal year 2024 and $3,673 for each succeeding fiscal year by the sum of:
(a)(i) the number of full-time equivalent educators as provided in 20-9-327; and
(b)(ii) as provided in 20-9-324, for a school district meeting the legislative goal for competitive base
pay of teachers, the number of full-time equivalent teachers that were in the first 3 years of the teacher's
teaching career in the previous year.
(b) The total quality educator payment for a district meeting the legislative goal for countywide
resource sharing under 20-3-363 must have its total quality educator payment under subsection (16)(a) of this
section increased by 50% as described in 20-3-363.
(17) "Total special education allocation" means the state payment distributed pursuant to 20-9-321
that is the greater of the amount resulting from multiplying $293.74 for fiscal year 2024 and $302.55 for each
succeeding fiscal year by the statewide current year ANB or the amount of the previous year's total special
education allocation."
Section 3. Effective date. [This act] is effective July 1, 2025.
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I hereby certify that the within bill,
HB 567, originated in the House.
___________________________________________
Chief Clerk of the House
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
HOUSE BILL NO. 567
INTRODUCED BY B. BARKER, D. BEDEY, L. DEMING, L. MUSZKIEWICZ, F. NAVE, J. FULLER, C. KEOGH,
E. MATTHEWS, M. ROMANO
AN ACT GENERALLY REVISING LAWS RELATED TO MULTIDISTRICT AGREEMENTS BETWEEN SCHOOL
DISTRICTS; INCREASING THE FLEXIBILITY OF SCHOOL DISTRICTS TO ENTER INTO MULTIDISTRICT
AGREEMENTS; PROVIDING A COUNTYWIDE RESOURCE-SHARING INCENTIVE THROUGH THE TOTAL
QUALITY EDUCATOR PAYMENT FOR SCHOOL DISTRICTS THAT ESTABLISH CERTAIN MULTIDISTRICT
AGREEMENTS WITH ALL DISTRICTS IN A COUNTY; ALLOWING MULTIDISTRICT AGREEMENTS TO
INCLUDE PRIVATE ENTITIES; AMENDING SECTIONS 20-3-363 AND 20-9-306, MCA; AND PROVIDING AN
EFFECTIVE DATE.