Revise school district reorganization laws

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AN ACT GENERALLY REVISING EDUCATION LAWS RELATED TO SCHOOL DISTRICT
REORGANIZATION; CREATING A PATHWAY FOR VARIOUS TYPES OF SCHOOL DISTRICTS TO
REORGANIZE TO FORM A UNIFIED K-12 SCHOOL DISTRICT; REQUIRING COUNTY SUPERINTENDENTS
OF SCHOOLS TO MODIFY SCHOOL DISTRICT BOUNDARIES WHEN NECESSARY TO ACCOMMODATE
REORGANIZATIONS; REPLACING THE WORD CONSOLIDATION WITH REORGANIZATION AS
APPLICABLE IN EDUCATION LAWS; AMENDING SECTIONS 20-3-205, 20-3-302, 20-3-312, 20-3-342, 20-6-
202, 20-6-314, 20-6-410, 20-6-411, 20-6-413, 20-6-414, 20-6-423, 20-6-424, 20-6-704, 20-9-311, AND 20-9-
502, MCA; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, rural schools serve as the foundation of Montana’s rural communities, providing
educational, social, and economic stability; and
WHEREAS, ensuring administrative efficiencies and financial sustainability will help preserve the
viability of small rural schools for future generations; and
WHEREAS, collaboration among students, families, and educators fosters a stronger, more effective
learning environment; and
WHEREAS, school district reorganization does not equate to school closures but rather promotes
resource-sharing and operational efficiency; and
WHEREAS, aligning district boundaries will expand educational opportunities, enhance school choice,
and address tax inequities associated with out-of-district attendance; and
WHEREAS, unified K-12 school districts provide a seamless educational experience, ensuring
curricular consistency and student success from kindergarten through high school graduation; and
WHEREAS, the Montana Legislature upholds the principle of local governance in education,
recognizing the authority of elected school district trustees as enshrined in Article X, section 8, of the Montana
Constitution.
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 20-3-205, MCA, is amended to read:
"20-3-205. Powers and duties. (1) The county superintendent has general supervision of the schools
of the county within the limitations prescribed by this title and shall perform the following duties or acts:
(a) determine, establish, and reestablish trustee nominating districts in accordance with the
provisions of 20-3-352, 20-3-353, and 20-3-354;
(b) administer and file the oaths of members of the boards of trustees of the districts in the county
in accordance with the provisions of 20-3-307;
(c) register the teacher or specialist certificates or emergency authorization of employment of any
person employed in the county as a teacher, specialist, principal, or district superintendent in accordance with
the provisions of 20-4-202;
(d) file a copy of the audit report for a district in accordance with the provisions of 20-9-203;
(e) classify districts in accordance with the provisions of 20-6-201 and 20-6-301;
(f) keep a transcript of the district boundaries of the county;
(g) fulfill all responsibilities assigned under the provisions of this title regulating the organization,
alteration, or abandonment of districts;
(h) act on any unification proposition and, if approved, establish additional trustee nominating
districts in accordance with 20-6-312 and 20-6-313;
(i) estimate the average number belonging (ANB) of an opening school in accordance with the
provisions of 20-6-502, 20-6-503, 20-6-504, or 20-6-506;
(j) process and, when required, act on school isolation applications in accordance with the
provisions of 20-9-302;
(k) complete the budgets, compute the budgeted revenue and tax levies, file final budgets and
budget amendments, and fulfill other responsibilities assigned under the provisions of this title;
(l) monthly, unless otherwise provided by law, order the county treasurer to apportion state
money, county school money, and any other school money subject to apportionment in accordance with the
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provisions of 20-9-212, 20-9-347, 20-10-145, or 20-10-146;
(m) act on any request to transfer average number belonging (ANB) in accordance with the
provisions of 20-9-313(1)(c);
(n) calculate the estimated budgeted general fund sources of revenue in accordance with the
general fund revenue provisions of the general fund part of this title;
(o) compute the revenue and compute the district and county levy requirements for each fund
included in each district's final budget and report the computations to the board of county commissioners in
accordance with the provisions of the general fund, transportation, bonds, and other school funds parts of this
title;
(p) file and forward bus driver certifications, transportation contracts, and state transportation
reimbursement claims in accordance with the provisions of 20-10-103, 20-10-143, or 20-10-145;
(q) for districts that do not employ a district superintendent or principal, recommend library book
and textbook selections in accordance with the provisions of 20-7-204 or 20-7-602;
(r) notify the superintendent of public instruction of a textbook dealer's activities when required
under the provisions of 20-7-605 and otherwise comply with the textbook dealer provisions of this title;
(s) act on district requests to allocate federal money for indigent children for school food services
in accordance with the provisions of 20-10-205;
(t) perform any other duty prescribed from time to time by this title, any other act of the legislature,
the policies of the board of public education, the policies of the board of regents relating to community college
districts, or the rules of the superintendent of public instruction;
(u) administer the oath of office to trustees without the receipt of pay for administering the oath;
(v) keep a record of official acts, preserve all reports submitted to the superintendent under the
provisions of this title, preserve all books and instructional equipment or supplies, keep all documents
applicable to the administration of the office, and surrender all records, books, supplies, and equipment to the
next superintendent;
(w) within 90 days after the close of the school fiscal year, publish an annual report in the county
newspaper stating the following financial information for the school fiscal year just ended for each district of the
county:
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(i) the total of the cash balances of all funds maintained by the district at the beginning of the year;
(ii) the total receipts that were realized in each fund maintained by the district;
(iii) the total expenditures that were made from each fund maintained by the district; and
(iv) the total of the cash balances of all funds maintained by the district at the end of the school
fiscal year; and
(x) hold meetings for the members of the trustees from time to time at which matters for the good
of the districts must be discussed.
(2) (a) When a district in one county annexes a district in another county, the county
superintendent of the county where the annexing district is located shall perform the duties required by this
section.
(b) When two or more districts in more than one county consolidate reorganize, the duties required
by this section must be performed by the county superintendent designated in the same manner as other
county officials in 20-9-202."
Section 2. Section 20-3-302, MCA, is amended to read:
"20-3-302. Legislative intent to elect less than majority of trustees. (1) It is the intention of the
legislature that the terms of a majority of the trustee positions of any district with elected trustees may not
regularly expire and be subject to election on the same regular school election day. In elementary districts,
there may not be more than three trustee positions in first-class districts, two trustee positions in second-class
districts or third-class districts having five trustee positions, or one trustee position in third-class districts having
three trustee positions regularly subject to election at the same time. In high school districts there may not be
more than two additional trustee positions in first- or second-class districts or more than one in third-class
districts regularly subject to election at the same time. In county high school districts, there may not be more
than two trustee positions to be filled by members residing in the elementary district where the county high
school building is located or more than one trustee position to be filled by members residing outside of the
elementary district where the county high school building is located subject to election at the same time.
(2) In the following circumstances relating to newly created trustee positions, the initial terms may
be shortened to comply with the intent of subsection (1):
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(a) the consolidation reorganization of school districts under the provisions of 20-6-423 of two or
more elementary districts to form an elementary district, of two or more high school districts to form a high
school district, or of two or more K-12 districts to form a K-12 district;
(b) the establishment of additional trustee positions of a high school district under the provisions of
20-3-353 or 20-3-354 or new trustee positions under the provisions of 20-3-352(3);
(c) the change of a district's classification under the provisions of 20-6-201 or 20-6-301;
(d) the establishment of additional elementary trustee positions under the provisions of 20-3-
341(3); or
(e) the establishment of additional high school trustee positions under the provisions of 20-6-313.
(3) If the change of a district's classification under 20-6-201 or 20-6-301 decreases the number of
trustee positions, the positions must be eliminated in a manner that complies with the intent of subsection (1).
(4) Although the legislature intends that the terms of a majority of trustees of any district may not
regularly expire and be subject to election at the same time, it is recognized that filling a vacancy under 20-3-
308 may lead to a subsequent school election in which a majority of trustee positions are subject to election at
the same time."
Section 3. Section 20-3-312, MCA, is amended to read:
"20-3-312. Trustees of district affected by boundary change. The trustees of any district to which
the territory of another district is attached as a result of annexation, abandonment, territory transfer, or any
other method of changing district boundaries, except by the consolidation reorganization of districts under 20-6-
423, continue to be the trustees of the district with the same powers, duties, and responsibilities and subject to
the same limitations provided by law as if there had been no boundary change. In the case of district
consolidation reorganization, the appointed trustees of the resulting district shall assume their trustee positions
under the authority of 20-6-423."
Section 4. Section 20-3-342, MCA, is amended to read:
"20-3-342. Determination of terms after consolidation reorganization of elementary districts.
Whenever the trustees are elected at one regular school election under the circumstances described in 20-3-
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302(2)(a), the members who are elected shall draw by lot to determine their terms of office. The terms of office
by trustee position must be:
(1) three for 3 years, two for 2 years, and two for 1 year in a first-class elementary district;
(2) two for 3 years, two for 2 years, and one for 1 year in second-class elementary districts and
third-class elementary districts having five trustee positions; or
(3) one for 3 years, one for 2 years, and one for 1 year in a third-class elementary district having
three trustee positions."
Section 5. Section 20-6-202, MCA, is amended to read:
"20-6-202. Time limitation for boundary changes. An elementary district may not be created and
elementary district boundaries may not be changed between the first day of January and the fourth Monday of
August of any calendar year except when:
(1) the entire territory of a district is annexed or attached to another district;
(2) the entire territory of the portion of a joint district located in one county is annexed or attached
to another district; or
(3) two or more districts are consolidated reorganized in their entirety."
Section 6. Section 20-6-314, MCA, is amended to read:
"20-6-314. Time limitations for boundary changes. A high school district may not be created and a
high school district boundary may not be changed between the first day of January and the fourth Monday of
August of any calendar year except when:
(1) the entire territory of a high school district is annexed or attached to another high school
district;
(2) the entire territory or portion of a joint high school district located in one county is annexed or
attached to another high school district; or
(3) two or more districts are consolidated reorganized in their entirety."
Section 7. Section 20-6-410, MCA, is amended to read:
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"20-6-410. Tenure protected -- hiring preference for employees. (1) Whenever two or more school
districts consolidate reorganize or join through annexation to organize into form a single district in the manner
provided for in Title 20, chapter 6, a principal, teacher, or other certified employee of the school districts who
has a right of tenure under Montana law must be given absolute preference in hiring for the first school fiscal
year for any vacant position with the consolidated reorganized or enlarged district for which the employee is
qualified with the required certification endorsements. Upon acceptance of a position, the certified employee
continues to have tenure in the consolidated reorganized or enlarged district and the board of trustees of the
consolidated reorganized or enlarged school district in which the person will perform duties shall recognize and
give effect to the right of tenure.
(2) A noncertified, nonprobationary employee of a school district that consolidates reorganizes or
joins another district through annexation must be given preference in hiring for the first school fiscal year for any
vacant position with the consolidated reorganized or enlarged district for which the employee has substantially
equal qualifications and, upon acceptance of a position, may not be given probationary status."
Section 8. Section 20-6-411, MCA, is amended to read:
"20-6-411. Bonded indebtedness to remain with original territory except when assumed by
election. Whenever district boundaries are changed in any manner prescribed in this title, the existing bonded
indebtedness against any district or territory affected by a change of boundaries remains the indebtedness of
the original territory against which the bonds were issued and must be paid by levies on the original territory,
except when districts are consolidated reorganized with the mutual assumption of bonded indebtedness or
when a district is annexed with a joint assumption of the annexing district's bonded indebtedness. Any money to
the credit of the debt service fund of a district when its boundaries are changed must be used to pay the
existing bond principal and interest of the original territory issuing the bonds as it becomes due or for bond
redemption under the bonding provisions of this title."
Section 9. Section 20-6-413, MCA, is amended to read:
"20-6-413. Cash disposition when district ceases to exist -- special levy for tuition debt.
Whenever a district ceases to exist in any manner prescribed in this title, except when districts are consolidated
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reorganized under 20-6-423, the cash on hand to the credit of the funds of the district and the debts of the
former district must be allocated in the following manner:
(1) Any cash to the credit of the district must be used to pay any debts of the district, including
bonded indebtedness, except that any cash available in the debt service fund must be used first to pay bond
interest and all outstanding bonds.
(2) If any cash remains to the credit of the district after paying its debts, the cash must be
transferred by the county treasurer to the credit of the district or districts assuming its territory. When the
territory is assumed by more than one district, the remaining cash must be prorated between the districts on the
basis of the taxable value of the territory assumed by each district as determined by the county superintendent.
(3) If any tuition debt remains as an obligation of the district, the tuition debt is the obligation of the
taxable property of the discontinued district, except when the tuition debt has been assumed by the
consolidated newly formed or annexing district. The tuition debt must be financed by a mill levy on the property
of the discontinued district and paid from these proceeds by the county superintendent.
(4) If any debts, other than bonded indebtedness and tuition, remain as an obligation of the district
after the cash has been utilized under the provisions of subsection (1), the debts must be assigned in the same
manner prescribed for the transfer of cash under subsection (2)."
Section 10. Section 20-6-414, MCA, is amended to read:
"20-6-414. Cash disposition when districts consolidated reorganize. Whenever two or more
districts are consolidated reorganized without the mutual assumption of bonded indebtedness, all cash and
debts, other than cash credited to the debt service fund and debts for bonded indebtedness, must be credited
or debited to the same types of funds of the consolidated newly formed district as the funds from which they
were transferred by the county treasurer. In addition, when two or more districts are consolidated reorganized
with the mutual assumption of bonded indebtedness, the cash credited to the debt service fund and the bonded
indebtedness also must be transferred to a similar fund of the consolidated newly formed district."
Section 11. Section 20-6-423, MCA, is amended to read:
"20-6-423. District consolidation reorganization. (1) (a) Any two or more contiguous elementary
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school districts may consolidate to organize an reorganize to form a single elementary district.
(b) Any two or more contiguous high school districts may be consolidated to organize a reorganize
to form a single high school district.
(c) Any two or more contiguous K-12 school districts may be consolidated to organize a reorganize
to form a single K-12 school district.
(d) Any two or more school districts may reorganize to form a single K-12 school district.
(e) The consolidation reorganization must be conducted as provided in this section.
(2) (a) A consolidation reorganization proposition may be introduced, individually, in each of the
districts by either of the two following methods:
(i) the trustees may pass a resolution requesting the county superintendent of the county where
the district is located to order an election to consider a consolidation reorganization proposition involving their
district; or
(ii) not less than 20% of the electors of an individual district who are qualified to vote under the
provisions of 20-20-301 may petition the county superintendent of the county where the district is located
requesting an election to consider a consolidation reorganization proposition involving their district.
(b) (i) The When two or more districts reorganize under subsections (1)(a) through (1)(c), the
resolution or petition must state whether the consolidation reorganization is to be made with or without the joint
assumption of the bonded indebtedness of each district by all districts included in the consolidation
reorganization. The resolution or petition from each district must agree on whether or not there will be joint
assumption of bonded indebtedness. Without agreement, the consolidation reorganization proposition may not
be considered further.
(ii) When two or more districts reorganize under subsection (1)(d), any bonded indebtedness of a
district remains an obligation of the original territory of the district.
(3) When a county superintendent has received a resolution or a valid petition from each of the
districts included in the consolidation reorganization proposition, the county superintendent shall, within 10 days
after the receipt of the last resolution or petition and as provided by 20-20-201, order the trustees of each
district included in the consolidation reorganization proposition to call a consolidation reorganization election to
be held no later than December 31 preceding the school year in which the consolidation reorganization is to
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become effective. If the districts involved in the consolidation reorganization proposition are located in more
than one county, the county superintendents in both counties shall jointly order the district to call a
consolidation reorganization election.
(4) Each district, individually, shall call and conduct an election in the manner prescribed in this title
for school elections and subject to additional requirements of subsections (5) and (6). Any elector qualified to
vote under the provisions of 20-20-301 may vote.
(5) (a) If the districts to be consolidated reorganized are to jointly assume the bonded
indebtedness of each district involved in the consolidation reorganization, the ballots must read, after stating the
consolidation reorganization proposition, "FOR consolidation reorganization with assumption of bonded
indebtedness" and "AGAINST consolidation reorganization with assumption of bonded indebtedness".
(b) When the trustees in each district conducting an election canvass the vote under the provisions
of 20-20-415, they shall determine the number of votes "FOR" and "AGAINST" the proposition.
(c) The proposition is approved in the district if a majority of those voting approve the proposition.
(6) If the districts to be consolidated reorganized are not to jointly assume the bonded
indebtedness of each district involved in the consolidation reorganization, the ballots must read, after stating the
consolidation reorganization proposition, "FOR consolidation reorganization without assumption of bonded
indebtedness" and "AGAINST consolidation reorganization without assumption of bonded indebtedness". The
consolidation reorganization proposition is approved by a district if a majority of those voting in a district
approve the proposition. Otherwise it is disapproved.
(7) (a) After the county superintendent of each county where a district involved in the consolidation
reorganization proposition is located has received the election certification provided for in 20-20-416 from the
trustees of each district included in a consolidation reorganization proposition, the appropriate county
superintendent shall determine if the consolidation reorganization proposition has been approved in each
district. If each district has approved the consolidation reorganization proposition, each county superintendent
shall, within 10 days after the receipt of the last election certificate, order the consolidation reorganization of the
districts effective July 1 of the ensuing school fiscal year. The order must:
(i) for consolidation reorganization with the joint assumption of bonded indebtedness, specify that
there will be joint assumption of bonded indebtedness between the owners of all taxable real and personal
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property in each district forming the consolidated reorganized district;
(ii) specify the number of the consolidated reorganized district;
(iii) for a reorganization under subsection (1)(d), order any boundary changes necessary to create
the K-12 district; and
(iii)(iv) establish an interim board of trustees for the consolidated reorganized district as provided in
20-6-424. The trustees shall serve until their successors are elected at the next succeeding regular school
election and qualified.
(b) Each county superintendent shall send a copy of the order to the board of county
commissioners of each county where a district involved in the consolidation reorganization proposition is
located and to the trustees of each district incorporated in the consolidation reorganization order.
(8) If any district included in the consolidation reorganization proposition disapproves the
consolidation reorganization proposition, the consolidation reorganization of all districts fails and the appropriate
county superintendent shall notify each district of the disapproval of the consolidation reorganization
proposition."
Section 12. Section 20-6-424, MCA, is amended to read:
"20-6-424. Interim governance of consolidated reorganized district. (1) Upon passage of a
consolidation reorganization proposition under the provisions of 20-6-423, an interim board of trustees made up
of all of the members of the boards of trustees of the districts that consolidated reorganized shall serve as the
trustees for the consolidated newly formed district from the date of the consolidation reorganization order until
the newly elected board of the consolidated newly formed district is organized under 20-3-321. The interim
board of trustees shall elect a presiding officer from among its members.
(2) The trustees of each district incorporated in the consolidation reorganization order shall
continue to perform those duties related to the operation of their individual districts until the effective date of the
consolidation reorganization. The interim board of trustees shall perform those duties related to the formation of
and transition to the consolidated newly formed district, including but not limited to:
(a) calling an election of the new board of trustees for the consolidated newly formed district to be
held on the regular election day preceding the effective date of the consolidation reorganization; and
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(b) if necessary, calling an election under 20-9-353 for the ensuing budget year of the consolidated
newly formed district.
(3) At the next regular school election following the consolidation reorganization election, trustees
for the consolidated newly formed district must be elected in accordance with the election provisions of Title 13
and Title 20. The term of office is 3 years, except that the initial terms of the newly elected trustees must be
selected by lot in order to comply with the provisions of 20-3-302.
(4) The interim board of trustees must be dissolved upon the organization of the newly elected
trustees pursuant to 20-3-321."
Section 13. Section 20-6-704, MCA, is amended to read:
"20-6-704. Dissolution of K-12 school district. (1) Except as provided in subsection (2), in order to
dissolve a K-12 district under the provisions of this section, the trustees of a district shall submit for approval to
the electors of the K-12 district a proposition dissolving the K-12 district for the purpose of annexing or
consolidating reorganizing the K-12 district's elementary or high school program with a contiguous school
district or districts in an ensuing school fiscal year under the provisions of 20-6-422 or 20-6-423.
(2) If the trustees of the school district determine that the creation or continuation of the K-12
district has resulted in or will result in the loss of federal funding for the elementary or high school programs and
that it is in the best interest of the district to dissolve into the original elementary district and high school district
that existed prior to the formation of the K-12 district, the trustees may dissolve the district under the following
procedure:
(a) The trustees of the district shall pass a resolution requesting the county superintendent to order
a dissolution of the district.
(b) When the county superintendent receives the resolution from the district, the county
superintendent shall, within 10 days, order the dissolution of the K-12 district into the original elementary district
and high school district, to take effect on July 1 of the ensuing school fiscal year. Within 30 days of the order,
the county superintendent shall send a copy of the order to the board of county commissioners, the trustees of
the district, and the superintendent of public instruction.
(3) If the entire territory of the dissolving K-12 district will be annexed to or consolidated
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reorganized with a contiguous district or districts, the resolution or petition required in subsection (1) or (2) must
contain a description of the manner in which the real and personal property and funds of the district are to be
apportioned in the dissolution of the district and the subsequent annexation to or consolidation reorganization
with one or more other districts. If a portion of the dissolving K-12 district will not be annexed or consolidated
reorganized with another district or districts, the resolution or petition must contain a description of the manner
in which the property, funds, and financial obligations, including bonded indebtedness, of the K-12 district are to
be apportioned to the district or districts whose territory is not annexed to or consolidated reorganized with
another district.
(4) After the county superintendent receives the certificate of election provided for in 20-20-416
from the trustees of the K-12 district and from each district included in a consolidation reorganization
proposition, the county superintendent shall determine whether the dissolution and annexation or consolidation
reorganization proposition or propositions have been approved. If the K-12 district has approved the dissolution
proposition and each district involved in a consolidation reorganization has approved the consolidation
reorganization proposition, the county superintendent shall, within 10 days after the receipt of the election
certificate, order the dissolution of the K-12 district into the original elementary district and high school district,
to take effect on July 1 of the ensuing school fiscal year. Within 30 days of the order, the county superintendent
shall send a copy of the dissolution order to the board of county commissioners, the trustees of the district
included in the dissolution order, and the superintendent of public instruction.
(5) Whenever a K-12 district is dissolved, the following provisions apply:
(a) The trustees of the district whose territory is not annexed or consolidated upon reorganized on
dissolution of the K-12 district are responsible for the execution of remaining financial obligations of the K-12
district and for the apportionment between the elementary and high school programs of any obligations not
identified in the resolution required under subsection (3).
(b) The provisions of 20-6-410 apply for tenure teachers in the dissolution of a K-12 district.
(c) For purposes of applying the budget limitation provisions of 20-9-308, the budget of a K-12
district during its last year of operations as a K-12 district will be prorated based on rules promulgated by the
superintendent of public instruction."
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Section 14. Section 20-9-311, MCA, is amended to read:
"20-9-311. Calculation of average number belonging (ANB) -- 3-year averaging. (1) Average
number belonging (ANB) must be computed for each budget unit as follows:
(a) compute an average enrollment by adding a count of regularly enrolled pupils who were
enrolled as of the first Monday in October of the prior school fiscal year to a count of regularly enrolled pupils on
the first Monday in February of the prior school fiscal year or the next school day if those dates do not fall on a
school day, and divide the sum by two; and
(b) multiply the average enrollment calculated in subsection (1)(a) by the sum of 180 and the
approved pupil-instruction-related days for the current school fiscal year and divide by 180.
(2) For the purpose of calculating ANB under subsection (1), up to 7 approved pupil-instruction-
related days may be included in the calculation.
(3) When a school district has approval to operate less than the minimum aggregate hours under
20-9-806, the total ANB must be calculated in accordance with the provisions of 20-9-805.
(4) (a) Except as provided in subsection (4)(d), for the purpose of calculating ANB, enrollment in
an education program:
(i) from 180 to 359 aggregate hours of pupil instruction per school year is counted as one-quarter-
time enrollment;
(ii) from 360 to 539 aggregate hours of pupil instruction per school year is counted as half-time
enrollment;
(iii) from 540 to 719 aggregate hours of pupil instruction per school year is counted as three-
quarter-time enrollment; and
(iv) 720 or more aggregate hours of pupil instruction per school year is counted as full-time
enrollment.
(b) Except as provided in subsection (4)(d), enrollment in a program intended to provide fewer than
180 aggregate hours of pupil instruction per school year may not be included for purposes of ANB.
(c) Enrollment in a self-paced program or course may be converted to an hourly equivalent based
on the hours necessary and appropriate to provide the course within a regular classroom schedule.
(d) A school district may include in its calculation of ANB a pupil who is enrolled in a program
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providing fewer than the required aggregate hours of pupil instruction required under subsection (4)(a) or (4)(b)
if the pupil has demonstrated proficiency in the content ordinarily covered by the instruction as determined by
the school board using district assessments. The ANB of a pupil under this subsection (4)(d) must be converted
to an hourly equivalent based on the hours of instruction ordinarily provided for the content over which the
student has demonstrated proficiency.
(e) (i) Except as provided in subsection (4)(e)(ii), a pupil in kindergarten through grade 12 who is
concurrently enrolled in more than one public school, program, or district may not be counted as more than one
full-time pupil for ANB purposes. When a pupil is concurrently enrolled in more than one district, any fractional
enrollment under subsection (4)(a) must be attributed first to a pupil's nonresident district.
(ii) A pupil who participates in a jumpstart program under Title 20, chapter 7, part 18, may be
counted as up to 1 1/4 enrollment for ANB purposes. A district shall add one-quarter enrollment for a pupil who
participated in an early literacy jumpstart program to the pupil's regular enrollment count under this subsection
(4) in both the October and February enrollment counts following the student's participation in the jumpstart
program.
(5) For a district that is transitioning from a half-time to a full-time kindergarten program, the state
superintendent shall count kindergarten enrollment in the previous year as full-time enrollment for the purpose
of calculating ANB for the elementary programs offering full-time kindergarten in the current year. For the
purposes of calculating the 3-year ANB, the superintendent of public instruction shall count the kindergarten
enrollment as one-half enrollment and then add the additional kindergarten ANB to the 3-year average ANB for
districts offering full-time kindergarten.
(6) When a pupil has been absent, with or without excuse, for more than 10 consecutive school
days, the pupil may not be included in the enrollment count used in the calculation of the ANB unless the pupil
resumes attendance prior to the day of the enrollment count.
(7) (a) The enrollment of preschool pupils, as provided in 20-7-117, may not be included in the
ANB calculations.
(b) Except as provided in subsection (7)(c), a pupil who has reached 19 years of age by
September 10 of the school year may not be included in the ANB calculations.
(c) A pupil with disabilities who is over 19 years of age and has not yet reached 21 years of age by
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September 10 of the school year and who is receiving special education services from a school district pursuant
to 20-7-411(4)(a) may be included in the ANB calculations if:
(i) the student has not graduated;
(ii) the student is eligible for special education services and is likely to be eligible for adult services
for individuals with developmental disabilities due to the significance of the student's disability; and
(iii) the student's individualized education program has identified transition goals that focus on
preparation for living and working in the community following high school graduation since age 16 or the
student's disability has increased in significance after age 16.
(d) A school district providing special education services pursuant to subsection (7)(c) is
encouraged to collaborate with agencies and programs that serve adults with developmental disabilities in
meeting the goals of a student's transition plan.
(8) The average number belonging of the regularly enrolled pupils for the public schools of a
district must be based on the aggregate of all the regularly enrolled pupils attending the schools of the district,
except that:
(a) the ANB is calculated as a separate budget unit when:
(i) a school of the district is located more than 20 miles beyond the incorporated limits of a city or
town located in the district and at least 20 miles from any other school of the district, the number of regularly
enrolled pupils of the school must be calculated as a separate budget unit for ANB purposes and the district
must receive a basic entitlement for the school calculated separately from the other schools of the district;
(ii) a school of the district is located more than 20 miles from any other school of the district and
incorporated territory is not involved in the district, the number of regularly enrolled pupils of the school must be
calculated separately for ANB purposes and the district must receive a basic entitlement for the school
calculated separately from the other schools of the district;
(iii) the superintendent of public instruction approves an application not to aggregate when
geographic barriers exist affecting transportation, such as poor roads, mountains, rivers, or other obstacles to
travel, that would result in an unusual hardship to the pupils of the school if they were transported to another
school, the number of regularly enrolled pupils of the school must be calculated separately for ANB purposes
and the district must receive a basic entitlement for the school calculated separately from the other schools of
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the district; or
(iv) two or more districts consolidate reorganize or annex under the provisions of 20-6-422 or 20-6-
423, the ANB and the basic entitlements of the component districts must be calculated separately for a period
of 3 years following the consolidation reorganization or annexation. Each district shall retain a percentage of its
basic entitlement for 3 additional years as follows:
(A) 75% of the basic entitlement for the fourth year;
(B) 50% of the basic entitlement for the fifth year; and
(C) 25% of the basic entitlement for the sixth year.
(b) when a junior high school has been approved and accredited as a junior high school, all of the
regularly enrolled pupils of the junior high school must be considered as high school district pupils for ANB
purposes;
(c) when a middle school has been approved and accredited, all pupils below the 7th grade must
be considered elementary school pupils for ANB purposes and the 7th and 8th grade pupils must be considered
high school pupils for ANB purposes; or
(d) when a school has been designated as nonaccredited by the board of public education
because of failure to meet the board of public education's assurance and performance standards, the regularly
enrolled pupils attending the nonaccredited school are not eligible for average number belonging calculation
purposes, nor will an average number belonging for the nonaccredited school be used in determining the BASE
funding program for the district.
(9) The district shall provide the superintendent of public instruction with semiannual reports of
school attendance, absence, and enrollment for regularly enrolled students, using a format determined by the
superintendent.
(10) (a) Except as provided in subsections (10)(b) and (10)(c), enrollment in a basic education
program provided by the district through any combination of in-person or remote instruction may be included for
ANB purposes only if the pupil is offered access to the complete range of educational services for the basic
education program required by the accreditation standards adopted by the board of public education.
(b) Access to school programs and services for a student placed by the trustees in a private
program for special education may be limited to the programs and services specified in an approved individual
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education plan supervised by the district.
(c) Access to school programs and services for a student who is incarcerated in a facility, other
than a youth detention center, may be limited to the programs and services provided by the district at district
expense under an agreement with the incarcerating facility.
(d) This subsection (10) may not be construed to require a school district to offer access to
activities governed by an organization having jurisdiction over interscholastic activities, contests, and
tournaments to a pupil who is not otherwise eligible under the rules of the organization.
(11) A district may include only, for ANB purposes, an enrolled pupil who is otherwise eligible under
this title and who is:
(a) a resident of the district or a nonresident student admitted by trustees under a student
attendance agreement and who is attending a school or an offsite instructional setting of the district;
(b) unable to attend school due to a medical reason certified by a medical doctor and receiving
individualized educational services supervised by the district, at district expense, at a home or facility that does
not offer an educational program;
(c) unable to attend school due to the student's incarceration in a facility, other than a youth
detention center, and who is receiving individualized educational services supervised by the district, at district
expense, at a home or facility that does not offer an educational program;
(d) receiving special education and related services, other than day treatment, under a placement
by the trustees at a private nonsectarian school or private program if the pupil's services are provided at the
district's expense under an approved individual education plan supervised by the district;
(e) participating in the running start program at district expense under 20-9-706;
(f) receiving educational services, provided by the district, using appropriately licensed district staff
at a private residential program or private residential facility licensed by the department of public health and
human services;
(g) enrolled in an educational program or course provided at district expense using remote delivery
methods, including but not limited to tutoring, distance learning programs, online programs, and technology
delivered learning programs. The pupil:
(i) must meet the residency requirements for that district as provided in 1-1-215;
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(ii) shall live in the district and must be eligible for educational services under the Individuals With
Disabilities Education Act or under 29 U.S.C. 794; or
(iii) must be enrolled in the educational program or course under a mandatory attendance
agreement as provided in 20-5-321; or
(iv) must be receiving remote instruction under 20-7-118(1)(c).
(h) a resident of the district attending the Montana youth challenge program or a Montana job
corps program under an interlocal agreement with the district under 20-9-707.
(12) A district shall, for ANB purposes, calculate the enrollment of an eligible Montana youth
challenge program participant as half-time enrollment.
(13) (a) A district may, for ANB purposes, include in the October and February enrollment counts an
individual who is otherwise eligible under this title and who during the prior school year:
(i) resided in the district;
(ii) was not enrolled in the district or was not enrolled full time; and
(iii) completed an extracurricular activity with a duration of at least 6 weeks.
(b) (i) Except as provided in subsection (13)(b)(ii), each completed extracurricular activity under
subsection (13)(a) may be counted as one-sixteenth enrollment for the individual, but under this subsection (13)
the individual may not be counted as more than one full-time enrollment for ANB purposes.
(ii) Each completed extracurricular activity lasting longer than 18 weeks may be counted as one-
eighth enrollment.
(c) For the purposes of this section, "extracurricular activity" means:
(i) a sport or activity sanctioned by an organization having jurisdiction over interscholastic
activities, contests, and tournaments;
(ii) an approved career and technical student organization, pursuant to 20-7-306; or
(iii) a school theater production.
(14) (a) For an elementary or high school district that has been in existence for 3 years or more, the
district's maximum general fund budget and BASE budget for the ensuing school fiscal year must be calculated
using the current year ANB for all budget units or the 3-year average ANB for all budget units, whichever
generates the greatest maximum general fund budget.
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(b) For a K-12 district that has been in existence for 3 years or more, the district's maximum
general fund budget and BASE budget for the ensuing school fiscal year must be calculated separately for the
elementary and high school programs pursuant to subsection (14)(a) and then combined.
(15) The term "3-year ANB" means an average ANB over the most recent 3-year period, calculated
by:
(a) adding the ANB for the budget unit for the ensuing school fiscal year to the ANB for each of the
previous 2 school fiscal years; and
(b) dividing the sum calculated under subsection (15)(a) by three."
Section 15. Section 20-9-502, MCA, is amended to read:
"20-9-502. Purpose and authorization of building reserve fund -- subfund structure. (1) The
trustees of any district may establish a building reserve fund to budget for and expend funds for any of the
purposes set forth in this section. Appropriate subfunds must be created to ensure separate tracking of the
expenditure of funds from voted and nonvoted levies and transfers for school safety pursuant to 20-9-236.
(2) (a) A voted levy may be imposed and a subfund must be created with the approval of the
qualified electors of the district for the purpose of raising money for the future construction, equipping, or
enlarging of school buildings or for the purpose of purchasing land needed for school purposes in the district. In
order to submit to the qualified electors of the district a building reserve proposition for the establishment of or
addition to a building reserve, the trustees shall pass a resolution that specifies:
(i) the purpose or purposes for which the new or addition to the building reserve will be used;
(ii) the duration of time over which the new or addition to the building reserve will be raised in
annual, equal installments;
(iii) the total amount of money that will be raised during the duration of time specified for the levy;
and
(iv) any other requirements under 15-10-425 and 20-20-201 for the calling of an election.
(b) Except as provided in subsection (4)(b), a building reserve tax authorization may not be for
more than 20 years.
(c) The election must be conducted in accordance with the school election laws of this title, and
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the electors qualified to vote in the election must be qualified under the provisions of 20-20-301. The ballot for a
building reserve proposition must be substantially in compliance with 15-10-425.
(d) The building reserve proposition is approved if a majority of those electors voting at the election
approve the establishment of or addition to the building reserve. The annual budgeting and taxation authority of
the trustees for a building reserve is computed by dividing the total authorized amount by the specified number
of years. The authority of the trustees to budget and impose the taxation for the annual amount to be raised for
the building reserve lapses when, at a later time, a bond issue is approved by the qualified electors of the
district for the same purpose or purposes for which the building reserve fund of the district was established.
Whenever a subsequent bond issue is made for the same purpose or purposes of a building reserve, the
money in the building reserve must be used for the purpose or purposes before any money realized by the
bond issue is used.
(3) (a) A subfund must be created to account for revenue and expenditures for school major
maintenance and repairs authorized under this subsection (3). The trustees of a district may authorize and
impose a levy of no more than 10 mills on the taxable value of all taxable property within the district for that
school fiscal year for the purposes of raising revenue for identified improvements or projects meeting the
requirements of 20-9-525(2). The 10-mill limit under this subsection (3) must be calculated using the district's
total taxable valuation most recently certified by the department of revenue under 15-10-202. The amount of
money raised by the levy, the deposits and transfers authorized under subsection (3)(f) of this section, and
anticipated state aid pursuant to 20-9-525(3) may not exceed the district's school major maintenance amount.
For the purposes of this section, the term "school major maintenance amount" means the sum of $15,000 and
the product of $110 multiplied by the district's budgeted ANB for the prior fiscal year. To authorize and impose a
levy under this subsection (3), the trustees shall:
(i) following public notice requirements pursuant to 20-9-116, adopt no later than March 31 of
each fiscal year a resolution:
(A) identifying the anticipated improvements or projects for which the proceeds of the levy, the
deposits and transfers authorized under subsection (3)(f) of this section, and anticipated state aid pursuant to
20-9-525(3) will be used; and
(B) estimating a total dollar amount of money to be raised by the levy, the deposits and transfers
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authorized under subsection (3)(f) of this section, anticipated state aid pursuant to 20-9-525(3), and the
resulting estimated number of mills to be levied using the district's taxable valuation most recently certified by
the department of revenue under 15-10-202; and
(ii) include the amount of any final levy to be imposed as part of its final budget meeting noticed in
compliance with 20-9-131.
(b) Proceeds from the levy may be expended only for the purposes under 20-9-525(2), and the
expenditure of the money must be reported in the annual trustees' report as required by 20-9-213.
(c) Whenever the trustees of a district impose a levy pursuant to this subsection (3) during the
current school fiscal year, they shall budget for the proceeds of the levy, the deposits and transfers authorized
under subsection (3)(f) of this section, and anticipated state aid pursuant to 20-9-525(3) in the district's building
reserve fund budget. Any expenditures of the funds must be made in accordance with the financial
administration provisions of this title for a budgeted fund.
(d) When a tax levy pursuant to this subsection (3) is included as a revenue item on the final
building reserve fund budget, the county superintendent shall report the levy requirement to the county
commissioners by the later of the first Tuesday in September or within 30 calendar days after receiving certified
taxable values and a levy on the district must be made by the county commissioners in accordance with 20-9-
142.
(e) A subfund in the building reserve fund must be created for the deposit of proceeds from the
levy, the deposits and transfers authorized under subsection (3)(f) of this section, and anticipated state aid
pursuant to 20-9-525(3).
(f) If the imposition of 10 mills pursuant to subsection (3)(a) is estimated by the trustees to
generate an amount less than the maximum levy revenue specified in subsection (3)(a), the trustees may
deposit additional funds from any lawfully available revenue source and may transfer additional funds from any
lawfully available fund of the district to the subfund provided for in subsection (3)(a), up to the difference
between the revenue estimated to be raised by the imposition of 10 mills and the maximum levy revenue
specified in subsection (3)(a). The district's local effort for purposes of calculating its eligibility for state school
major maintenance aid pursuant to 20-9-525 consists of the combined total of funds raised from the imposition
of 10 mills and additional funds raised from deposits and transfers in compliance with this subsection (3)(f).
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(4) (a) A voted levy may be imposed and a subfund must be created with the approval of the
qualified electors of the district to provide funding for transition costs incurred when the trustees:
(i) open a new school under the provisions of Title 20, chapter 6;
(ii) close a school;
(iii) replace a school building;
(iv) consolidate reorganize with or annex another district under the provisions of Title 20, chapter 6;
or
(v) receive approval from voters to expand an elementary district into a K-12 district pursuant to
20-6-326.
(b) Except as provided in subsection (4)(c), the total amount the trustees may submit to the
electorate for transition costs may not exceed the number of years specified in the proposition times the greater
of 5% of the district's maximum general fund budget for the current year or $250 per ANB for the current year.
The duration of the levy for transition costs may not exceed 6 years.
(c) If the levy for transition costs is for consolidation reorganization under 20-6-423 or annexation
under 20-6-422:
(i) the limitation on the amount levied is calculated using the ANB and the maximum general fund
budget for the districts that are being combined; and
(ii) the proposition must be submitted to the qualified electors in the combined district.
(d) The levy for transition costs may not be considered as outstanding indebtedness for the
purpose of calculating the limitation in 20-9-406.
(5) (a) A subfund in the building reserve fund must be created for:
(i) the funds transferred to the building reserve fund for school safety and security pursuant to 20-
9-236; and
(ii) funds generated by a voter-approved levy for school and student safety and security pursuant
to subsection (5)(b) of this section.
(b) A voted levy may be imposed with the approval of the qualified electors of the district to provide
funding for improvements to school and student safety and security that meet any of the criteria set forth in 20-
9-236(1)(a) through (1)(e). A voted levy for school and student safety and security may not be considered as
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outstanding indebtedness for the purpose of calculating the limitation in 20-9-406. The election for a voted levy
for school and student safety and security must be conducted in accordance with the school election laws of
this title, and the electors qualified to vote in the election must be qualified under the provisions of 20-20-301.
The ballot for a building reserve proposition must be substantially in compliance with 15-10-425."
Section 16. Effective date. [This act] is effective July 1, 2025.
- END -
I hereby certify that the within bill,
HB 606, 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. 606
INTRODUCED BY B. BARKER, S. FITZPATRICK, L. DEMING
AN ACT GENERALLY REVISING EDUCATION LAWS RELATED TO SCHOOL DISTRICT REORGANIZATION;
CREATING A PATHWAY FOR VARIOUS TYPES OF SCHOOL DISTRICTS TO REORGANIZE TO FORM A
UNIFIED K-12 SCHOOL DISTRICT; REQUIRING COUNTY SUPERINTENDENTS OF SCHOOLS TO MODIFY
SCHOOL DISTRICT BOUNDARIES WHEN NECESSARY TO ACCOMMODATE REORGANIZATIONS;
REPLACING THE WORD CONSOLIDATION WITH REORGANIZATION AS APPLICABLE IN EDUCATION
LAWS; AMENDING SECTIONS 20-3-205, 20-3-302, 20-3-312, 20-3-342, 20-6-202, 20-6-314, 20-6-410, 20-6-
411, 20-6-413, 20-6-414, 20-6-423, 20-6-424, 20-6-704, 20-9-311, AND 20-9-502, MCA; AND PROVIDING AN
EFFECTIVE DATE.