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Montana Administrative Register Notice 10-10-127 No. 5   03/04/2016    
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BEFORE THE SUPERINTENDENT OF PUBLIC INSTRUCTION

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 10.10.301, 10.10.301B through 10.10.301D, 10.10.304, 10.10.311, 10.10.319, 10.10.320, 10.10.504, 10.10.613, 10.10.614, 10.15.101, 10.16.3817, 10.20.102, 10.20.104, 10.20.105, 10.21.101H, 10.22.102, 10.22.104, and 10.23.102 and the repeal of ARM 10.30.405 pertaining to school finance

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL

 

 

TO: All Concerned Persons

 

          1. On April 13, 2016, at 9:00 a.m., the Superintendent of Public Instruction will hold a public hearing in the Superintendent's conference room, 1227 11th Avenue, Helena, Montana, to consider the proposed amendment and repeal of the above-stated rules.

 

2. The Superintendent of Public Instruction will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Office of Public Instruction no later than 5:00 p.m. on April 6, 2016, to advise us of the nature of the accommodation that you need. Please contact Beverly Marlow, Office of Public Instruction, P.O. Box 202501, Helena, Montana, 59620-2501; telephone (406) 444-3172; fax (406) 444-2893; or e-mail bemarlow@mt.gov.

 

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

          10.10.301 CALCULATING TUITION RATES (1) The maximum regular education tuition rate a district may charge per student is 20% of the per ANB rate established in 20-9-306(10 15), MCA, for the first ANB for the year of attendance. For a kindergarten student enrolled in a half-time program as provided in 20-1-301(2)(a), MCA, and a preschool child with disabilities the rate is one-half the rate for an elementary student.

          (2) through (3)(a) remain the same.

          (b) the actual individual costs of providing that student's program minus 80% of the maximum per-ANB rate established in 20-9-306(10 15), MCA, for the first ANB for the year of attendance.

          (4) and (5) remain the same.

 

AUTH: 20-5-312, 20-9-102, 20-9-201, MCA

IMP:    Title 20, ch. 5, pt. 3, 20-6-702, MCA

 

          Statement of Reasonable Necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to correct the reference to an erroneous section of statute.

 

          10.10.301B OUT-OF-DISTRICT ATTENDANCE AGREEMENTS (1) through (7) remain the same.

          (8) When the state is obligated to pay tuition or transportation costs for a student placed under provisions of 20-5-321(1)(d) and (e), MCA, the trustees of the district of attendance shall send a completed copy of the student's attendance agreement to the Superintendent of Public Instruction for approval. The agreement must be submitted by June 30 of the year December 31 following the school year of attendance to be eligible for approval.

          (9) through (12) remain the same.

 

AUTH: 20-5-323, 20-9-102, MCA

IMP:    20-5-320, 20-5-321, 20-5-322, 20-5-323, 20-5-324, MCA

 

          Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to change the deadline to December 31 for submitting tuition reports and claims in order to accurately determine for the legislature whether a supplemental appropriation is needed.

 

          10.10.301C OUT-OF-STATE ATTENDANCE AGREEMENTS (1) through (4) remain the same.

          (a) Calculations will be based on the county superintendents' tuition reports submitted in accordance with ARM 10.10.301D.

          (b) The Superintendent of Public Instruction shall provide payment of the amount calculated in (4)(a), but not more than the amount of tuition paid by the district for resident students who attended school out-of-state, in the year the out-of-district attendance report is submitted, provided it is submitted, with documentation of payment, to the Superintendent of Public Instruction within the school year by December 31 following the school year of attendance. 

 

AUTH: 20-5-323, 20-9-102, MCA

IMP:    20-5-314, 20-5-316, 20-5-320, 20-5-321, 20-5-323, 20-5-324, MCA

 

Statement of Reasonable Necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to change the deadline to December 31 for submitting tuition reports and claims in order to accurately determine for the legislature whether a supplemental appropriation is needed and to clarify accountability.

 

          10.10.301D TUITION REPORTS (1) and (2) remain the same.

          (3) To be eligible to receive state payments for tuition and tuition reimbursements under 20-5-324, MCA, the trustees of a district must submit the tuition report in (1) and the electronic data in (2) to the Superintendent of Public Instruction by June 30 December 31 of the year following the student's year of attendance. 

 

AUTH: 20-5-323, 20-9-102, MCA

IMP:    20-5-320, 20-5-321, 20-5-323, 20-5-324, 20-7-431, MCA

 

Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to change the deadline to December 31 for submitting tuition reports and claims in order to accurately determine for the legislature whether a supplemental appropriation is needed and to clarify accountability.

 

          10.10.304 STUDENT EXTRACURRICULAR ACTIVITY FUNDS (1) through (4) remain the same.

          (5) Excess money in the student extracurricular activity fund may be invested in accordance with 20-9-213(4), MCA. Interest earned may either be credited to a general operating account within the fund to be used to offset administrative costs or distributed to the accounts within the fund based on cash balances.

          (5) remains the same but is renumbered (6).

 

AUTH: 20-9-102, 20-9-201, MCA

IMP:    20-9-102, 20-9-201, 20-9-504, MCA

 

Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-9-504, MCA (SB 32, 2013 Legislative Session) allowing excess money in a school extracurricular fund to be invested.

 

          10.10.311 BUS DEPRECIATION RESERVE FUND (1) Section 20-10-147, MCA, allows school districts to budget each year in a bus depreciation reserve fund an amount that does not exceed 20% of the original cost of a bus, communication system, or a two-way radio safety devices installed on the bus. The amount budgeted may not, over time, exceed 150% of the original cost of the bus, communication system, or radio safety devices

(2) Annual depreciation may not exceed 20% of the bus, communication system, or radio's safety devices' original cost.

(3) The cost of new parts added after the original purchase of a bus, communication system, or radio safety devices may not be depreciated.

          (4) Cameras for security purposes may be considered remodeling for purposes of the bus depreciation reserve fund.

          (5) through (7) remain the same but are renumbered (4) through (6).

 

AUTH: 20-9-102, MCA

IMP:    20-10-147, MCA

 

Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-10-147, MCA (HB 31, 2015 Legislative Session) expanding the use of the bus depreciation reserve fund to include communication systems and safety devices installed on a bus.

 

          10.10.319 CLOSURE OF A SCHOOL DISTRICT FUND (1) through (3) remain the same.

          (4) Pursuant to 20-10-147, MCA, when all the buses of a district have been sold or otherwise disposed of, trustees may close a bus depreciation reserve fund to any other fund of the district contingent on voter approval.

          (5) through (7) remain the same but are renumbered (4) through (6).

 

AUTH: 20-9-102, MCA

IMP:    20-9-201, 20-9-443, 20-9-505, 20-10-147, MCA

 

Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-10-147, MCA (SB 329, 2011 Legislative Session) removing the requirement that trustees submit to electors the proposition of transferring bus depreciation reserve funds to another fund.

 

          10.10.320 CASH AND BUDGET TRANSFERS BETWEEN SCHOOL DISTRICT FUNDS (1) through (2)(e) remain the same.

          (f) transfers under 20-3-363, MCA, from any budgeted or nonbudgeted fund, except the retirement fund, debt service fund, or compensated absence fund. Transfers from the general fund may not exceed the amount of direct state aid received by the district;

          (f) (g) closure of district funds to establish a nonoperating fund under 20-9-505, MCA;

          (g) transfers of any portion of the balance of a bus depreciation fund approved by the voters as provided in (4);

          (h) through (3) remain the same.

          (4) Pursuant to 20-10-147, MCA, when all the buses of a school district have been sold or otherwise disposed of, trustees may transfer any portion of the bus depreciation reserve fund balance to any other fund of the district contingent on voter approval.

          (5) remains the same but is renumbered (4).

          (6) (5) Except for the general fund, retirement fund, and debt service fund, and bus depreciation fund, trustees may transfer:

          (a) remains the same.

          (b)  tax revenues from one budgeted fund to another budgeted fund, provided the transfer has been approved by the qualified electors of the district in a properly held election and the ballot must state the purpose for which the funds will be used; or

          (c) tax revenues from one budgeted fund to another budgeted fund, provided the money is subsequently expended for purposes the same as, or directly related to, the purposes for which the taxes were levied. When tax receipts are transferred, the trustees' resolution shall state the purpose for which the taxes were levied and the purposes for which the funds will be used.

          (7) through (11) remain the same but are renumbered (6) through (10).

 

AUTH: 20-9-102, 20-10-112, MCA

IMP:    20-3-363, 20-9-208, 20-9-439, 20-9-443, 20-9-509, 20-9-512, 20-9-515, 20-

            9-703, 20-10-147, MCA

 

Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-9-208 and 20-3-363, MCA (SB 329, 2011 Legislative Session) allowing for multidistrict agreements; allowing trustees to decide the disposition of inactive tuition funds; and removing the requirement that trustees submit to electors the proposition of transferring bus depreciation reserve funds to another fund.

 

          10.10.504 FUNDING ADJUSTMENTS FOR PRIOR/CURRENT YEAR REPORTING ERRORS (1) through (4) remain the same.

          (5) Revisions to the annual trustees' financial summary report made by the district or cooperative after December 20 10 of the ensuing fiscal year will not be considered in calculating amounts used for special education reversion or for federal maintenance of effort requirements.

          (6) Material revisions to the annual trustees' financial summary submitted by December 20 10 shall be accepted, limited to the following types of adjustments:

          (a) through (7) remain the same.

          (8) Revisions to the annual trustees' financial summary submitted by December 20 10 will be filed for information purposes by the Office of Public Instruction. 

 

AUTH: 20-9-102, 20-9-201, MCA

IMP:    20-9-344, MCA

 

          Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule and change the deadline to December 10 for making revisions to the annual trustees' financial summary report to allow adequate time to compile the data in order to meet state and federal reporting requirements.

 

          10.10.613 AGREEMENT WITH THE COUNTY TREASURER (1) through (3) remain the same.

          (4) A separate agreement must be used for each elementary, high school, or K-12 district or full service education cooperative.

          (5) remains the same but is renumbered (4).

 

AUTH: 20-9-102, 20-9-235, MCA

IMP:    20-9-235, MCA

 

          Statement of Reasonable Necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to reflect current practices. The Office of Public Instruction accepts agreements for school systems.

 

          10.10.614 PAYMENTS INTO AN INVESTMENT ACCOUNT (1) The school district or a full service education cooperative for special education that receives direct special education allowable cost payments and a quality educator payment for eligible full-time equivalent educators from the Superintendent of Public Instruction under 20-7-457(1), MCA, may apply in writing to the state Superintendent of Public Instruction to distribute the district's or cooperative's payments by direct electronic transfer of funds into an investment account as provided by 20-9-235 and 20-9-346(3), MCA.

          (2) through (6) remain the same.

 

AUTH: 20-9-102, 20-9-235, MCA

IMP:    20-9-235, MCA

 

          Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to include the quality educator payment to special education cooperatives.

 

          10.15.101 DEFINITIONS The following definitions apply to ARM Title 10, chapters 16, 20, 21, 22, and 23:

          (1) through (6) remain the same.

          (7) "BASE budget" means the minimum general fund budget a district is allowed to adopt. It is the sum of: 80% of the district's basic and per-ANB entitlements; 100% of the quality educator payment; 100% of the at-risk student payment; 100% of the Indian Eeducation for Aall payment; 100% of the American Indian achievement gap payment; 100% of the data-for-achievement payment; 140% of the district's special education allowable cost payment; and 40% of the district's related services block grant payment to cooperatives. 

          (8) remains the same.

          (9) "Basic entitlement" means the minimum dollar amount as defined in 20-9-306, MCA, that each high school, elementary, accredited middle school or 7-8 grade program, or K-12 district will receive if in operation. A district's total per-ANB entitlement and its basic entitlement determine its general fund budget limits.

          (10) "Budgeted ANB" means the ANB used on the final general fund budget for a district. Depending on calculations performed under 20-9-311, MCA, the budgeted ANB will either be the current ANB or the three-year average ANB.

          (11) through (17) remain the same.

          (18) "Date of official enrollment count" for purposes of determining the enrollment used for calculating ANB means the first Monday in October or the first Monday in February 1, or the nearest pupil instruction day if those dates do not occur on a pupil instruction day next school day if those dates do not fall on a school day.

          (19) through (24) remain the same.

          (25) "Eligible voters" are the voters who are eligible to vote in elections in both the elementary district and the high school district with the same boundaries, pursuant to the provisions of 20-20-301, MCA.

          (26) through (32) remain the same.

          (33) "GTBA budget area" means the portion of a district's general fund BASE budget minus direct state aid, minus state special education allowable cost payments, minus the quality educator payment, minus the Indian Eeducation for Aall payment, minus the at-risk student payment, and minus the American Indian achievement gap payment, and minus the data-for-achievement payment. For districts with lower than average tax bases, GTBA is paid to subsidize mills levied to fund the GTBA budget area.

          (34) through (37) remain the same.

          (38) "Maximum general fund budget" or "maximum GFB" means the maximum general fund budget a district is allowed to adopt. It is the sum of: 100% of the district's basic and per-ANB entitlements; 100% of the quality educator payment; 100% of the at-risk student payment; 100% of the Indian Eeducation for Aall payment; 100% of the American Indian achievement gap payment; 100% of the data-for-achievement payment; up to 200% of the district's special education allowable cost payment; and up to 100% of the district's related services block grant payment to cooperatives.

          (39) through (57) remain the same.

          (58) "Statewide retirement GTB mill value per elementary ANB" or "statewide retirement GTB mill value per high school ANB" means the CY 20XX-1 statewide mill value multiplied by 1.21, then divided by the statewide FY 20XX high school or elementary budgeted ANB.

          (59) and (60) remain the same.

          (61) "Three-year average ANB" means the average of current ANB for a three-year period, as calculated under 20-9-311, MCA. Three-year ANB for FY 20XX is based on the average of current ANB for FY 20XX, FY20XX-1, and FY 20XX-2, rounded up to the nearest whole ANB.

          (62) and (63) remain the same.

 

AUTH: 20-9-102, MCA

IMP:    Title 20, ch. 9, MCA

 

          Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to establish a data-for-achievement payment, revise the date for the enrollment count in February (SB 175, 2013 Legislative Session), and to clarify terminology.

 

          10.16.3817 SPECIAL EDUCATION FUNDING REVERSION (1) through (3) remain the same.

          (4) Revisions to the annual trustees' financial summary report must be made in accordance with ARM 10.10.504. Revisions to the annual trustees' financial summary report made by the district after December 20 10 of the ensuing fiscal year, will not be considered in calculating the reversion amount. The Superintendent of Public Instruction may accept the adjustments after those dates for unusual circumstances.

          (5) remains the same.

 

AUTH: 20-9-321, MCA

IMP:    20-9-321, MCA

 

          Statement of Reasonable Necessity.  The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule and change the deadline to December 10 for making revisions to the annual trustees' financial summary report to allow adequate time to compile the data in order to meet state and federal reporting requirements.

 

          10.20.102 CALCULATION OF AVERAGE NUMBER BELONGING (ANB)

          (1) through (3) remain the same. 

          (4) The official count of enrolled students, as defined in ARM 10.15.101, is taken on the first Monday in October and the 1st of first Monday in February, or the first next school day that follows the count date if the official count date is not if those dates do not fall on a school day. 

          (a) through (8) remain the same.

          (9) A student enrolled in a course providing less than the required aggregate hours of pupil instruction who has demonstrated proficiency in the course content may be counted as enrolled and included in the calculation for ANB. The ANB for the student must be converted to an hourly equivalent based on the hours of instruction ordinarily provided for the course content.

          (9) and (10) remain the same but are renumbered (10) and (11).

          (11) (12) Trustees may apply for increased ANB for early graduates who are enrolled as of the first Monday of October as a senior in high school in the seventh semester of secondary school, and who complete the graduation requirements prior to the February 1 enrollment count date in accordance with 20-9-313, MCA, by stating in the enrollment reports submitted to the Superintendent of Public Instruction the names of pupils which were not included in the February 1 enrollment count because they graduated early and the date of the pupils' graduation. The information must be submitted by the deadline in ARM 10.20.103 preceding the year for which ANB is being calculated.

          (12) and (13) remain the same but are renumbered (13) and (14).

          (a) and (b) remain the same.

          (c) adjust the guaranteed tax base aid payment to reflect the amount which the district would be eligible for based on the budget recalculated in (13)(b).

          (14) remains the same but is renumbered (15).

          (a) through (a)(ii) remain the same.

          (iii) multiplying (14)(a)(i) by (ii) to determine the amount of the funding penalty; and

          (iv) remains the same.

          (b) However, if a school district fails to conduct the minimum number of hours by reason of one or more unforeseen emergencies as defined in 20-9-802, MCA, the Superintendent of Public Instruction shall reduce the direct state aid payments proportionally for each aggregate hour less than the minimum required by applying the calculation in (14)(a), divided by two.

          (c) remains the same.

          (15) (16) School districts will be funded based on the current ANB or three-year ANB, whichever generates the greatest maximum general fund budget. For the purpose of determining the BASE funding program of a district, current ANB and three-year average ANB will be calculated using the following methods:

          (a) To calculate current ANB:

          (i) the enrollment reported by the school district on the October and February enrollment report forms to the Superintendent of Public Instruction, pursuant to 20-9-311, MCA, will be adjusted and averaged by budget unit as follows:

          By budget unit: [(enrollment for first Monday in October + enrollment for first Monday in February 1) - (kindergarten enrollment for students receiving less than 180 hours of pupil instruction time per school year) - (one-half kindergarten enrollment for students enrolled in a half-time kindergarten program receiving180 hours or more of pupil instruction time per school year) - (prekindergarten enrollment) - (part-time enrollment for students in grades FTK through 12 receiving less than 180 hours of pupil instruction time per school year) - (0.75 times the part-time enrollment for students in grades FTK through 12 receiving 180 through 359 hours of pupil instruction time per school year) - (0.50 times the part-time enrollment for students in grades FTK through 12 receiving 360 through 539 hours of pupil instruction time per school year) - (0.25 times part-time enrollment for students in grades FTK through 12 receiving 540 through 719 hours of pupil instruction time per school year) - (enrolled students reaching 19 years of age by September 10 of the school year) - (0.50 times students enrolled in MT youth challenge) + (early graduates)] divided by 2 to get the average of the two enrollment counts by budget unit;

          (ii) multiply (15)(a)(i) by the sum of PIR days plus PI days, divided by 180, rounded up to the next whole number, equals current ANB; and

          (iii) add the additional approved enrollment, as determined in ARM 10.20.103 10.20.104 and 10.20.104A, to the enrollment used to calculate the current ANB.

          (b) To calculate three-year average ANB, the Superintendent of Public Instruction will do the following:

          (i) total the current ANB by budget unit for the budget year and the two years preceding the year for which three-year average ANB could be used for funding, divide the sum by three, and round up to the nearest whole number; and

          (ii) add the additional approved enrollment as determined in ARM 10.20.104A to the enrollment used to calculate three-year average ANB.

          (c) To determine whether the current ANB or three-year average ANB will be used for budgeting and funding purposes, the Superintendent of Public Instruction will calculate the district's maximum general fund budget using the current ANB as determined in (15)(a) for every budget unit of the district and also using the three-year average ANB as determined in (15)(b) for every budget unit of the district. The ANB type that generates the highest maximum general fund budget will be used for budgeting and for determining the direct state aid funding for the district's general fund budget for the ensuing year. 

          (16) remains the same but is renumbered (17).

          (a) If the enrollment reporting error is discovered and reported to the Superintendent of Public Instruction before the budget for FY 20XX is adopted and before the date by which the trustees must commence the final budget meeting required by 20-9-131, MCA, the Superintendent of Public Instruction will recalculate and recertify the district's current or three-year average ANB for the FY 20XX budget using the corrected enrollment figures in the ANB calculations.

          (b) Except as provided in (16)(c), if an enrollment reporting error is discovered and reported to the Superintendent of Public Instruction on or after the date by which the trustees must commence the FY 20XX final budget meeting required by 20-9-131, MCA, the Superintendent of Public Instruction will determine the direct state aid and guaranteed tax base aid payments the district would have received for FY 20XX if enrollment had been correctly reported and will make a payment adjustment in the current year. Funding will be adjusted, but ANB figures will not be changed for the current year or changed for use in future years' ANB calculations or budgets.

          (c) If the Superintendent of Public Instruction determines the enrollment reporting error detected as described in (16)(b) would materially affect the ANB of a future year, resulting either in significant financial hardship or significant overpayment of state funds to a district's general fund budget for a future year if not corrected, the superintendent may use the correct enrollment to certify ANB for the following year's budget. That is, the enrollment error will be corrected and will be used in ANB calculations affecting future years only if the financial impacts are significant.

 

AUTH: 20-9-102, 20-9-346, 20-9-369, MCA

IMP:    20-1-301, 20-1-302, 20-1-304, 20-7-117, 20-9-311, 20-9-313, 20-9-314, 20-

           9-805, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to revise the calculation of ANB to include students mastering content in fewer hours than otherwise required, revise the date for the enrollment count in February (SB 175, 2013 Legislative Session), and to clarify terminology.

 

          10.20.104 ANTICIPATED UNUSUAL ENROLLMENT INCREASE - ANB CALCULATION (1) School district trustees may apply to the Superintendent of Public Instruction for increased ANB for unusual elementary or high school enrollment increases that exceed 6% the lesser of 4% or 40 students of the enrollment in the fiscal year prior to the year for which the increase is requested. Elementary district and high school district calculations are always separate. In the case of a K-12 district, make separate enrollment calculations for the elementary and high school levels of the K-12 district.

          (2) remains the same.

          (a) Estimate the district's anticipated enrollment for the next October count using information known to be accurate at the time the estimate is made. By budget unit: [(estimated enrollment for first Monday in October) - (estimated kindergarten enrollment for students receiving less than 180 hours of pupil instruction time per school year) - (one-half estimated kindergarten enrollment for students enrolled in a half-time kindergarten program and receiving 180 hours or more of pupil instruction time per school year) - (estimated prekindergarten enrollment) - (estimated part-time enrollment for students in grades FTK through 12 receiving less than 180 hours of pupil instruction time per school year) - (0.75 times the part-time estimated enrollment for students in grades FTK through 12 receiving 180 through 359 hours of pupil instruction time per school year) - (0.50 times the estimated part-time enrollment for students in grades FTK through 12 receiving 360 through 539 hours of pupil instruction time per school year) - (0.25 times estimated part-time enrollment for students in grades FTK through 12 receiving 540 through 719 hours of pupil instruction time per school year) - (estimated enrolled students reaching 19 years of age by September 10 of the school year) - (0.50 times estimated students enrolled in MT youth challenge) + early graduates]. This is anticipated enrollment (AE).

          (b) Determine the adjusted and averaged enrollment counts for October and February of the current school year using the calculation in ARM 10.20.102(15 16)(a)(i).  The average of the October and February adjusted enrollment counts is current year enrollment (CYE).

          (c) and (d) remain the same.

          (e) If the anticipated increase in enrollment calculated in (c) exceeds 40 students or, if the anticipated increase in enrollment as a percentage of the current year enrollment calculated in (2)(d) exceeds 6 4%, the Superintendent of Public Instruction shall approve the district's use of the AEI as determined in (3) in place of the current ANB for purposes of determining general fund payments and budget limitations in accordance with 20-9-311, MCA, to establish the ensuing year's BASE funding program and entitlement calculations in accordance with 20-9-314(5), MCA.

          (3) remains the same.

          (a) Determine the increase based on a percentage of the current year enrollment:

          (i) Determine AEI in excess of 6 4% of CYE. AEI - (.06 .04 x CYE). Round to nearest hundredth (.xx).

          (b) (ii) Determine AEI for each budget unit by subtracting CYE by budget unit from AE by budget unit. AEI by budget unit = AE by budget unit - CYE by budget unit. If the district has only one budget unit, go to (3)(d) (a)(iv).

          (c) (iii) Prorate anticipated enrollment increase exceeding 6 4% of CYE among the district's budget units by:

          (i) (A) calculating the ratio of AEI for each budget unit as calculated in (3)(b) (a)(i) to the total AEI for the district calculated in (2)(c); and

          (ii) (B) multiplying AEI in excess of 6 4% of CYE (AEI - (.06 .04 x CYE)) by the ratio calculated in (3)(c)(i) (a)(iii)(A) for each budget unit within the district. Round to the nearest hundredth (.xx).

          (d) (iv) Add the CYE by budget unit and the AEI in excess of 6 4% by budget unit as calculated in (3)(c) (a)(iii)(B).

          (b) Determine the increase based on number of students:

          (i) Determine AEI for each budget unit by subtracting CYE by budget unit from AE by budget unit.

          (ii) Add the CYE by budget unit and the AEI by budget unit.

          (c) The greater of (a)(iv) or (b)(ii) is the increased enrollment.

          (e) (d) Multiply the sum increased enrollment calculated in (3)(d)(c) by the total of PI days and PIR days approved for the current year and divide by 180 for each budget unit. Round the ANB up to the nearest whole number. This figure is used as current ANB for purposes of ARM 10.20.102(15) (16) in determining general fund payments and budgeting limitations for the district.

          (4) remains the same.

          (a) ANB is recalculated in accordance with (2), using actual enrollment as of the 1st first Monday in October in place of the anticipated enrollment.

          (b) If the ANB recalculated in (4)(a) based on the actual October enrollment equals or exceeds the ANB calculated in (3)(e) (d), the anticipated unusual enrollment increase materialized and the district is entitled to the increased BASE funding and entitlements approved by the Superintendent of Public Instruction in (2)(e).

          (c) If the ANB recalculated in (4)(a) based on the actual October enrollment is less than the ANB calculated in (3)(e) (d), (2) will be used to recalculate current ANB using actual enrollment as of the next February count in place of the anticipated enrollment ANB is recalculated in accordance with ARM 10.20.102(16)(a)(i), using actual enrollment as of the first Monday in February in place of the anticipated enrollment.

          (d) If the ANB recalculated in (4)(c) based on the actual February enrollment equals or exceeds the ANB calculated in (3)(e) (d), the anticipated unusual enrollment increase materialized and the district is entitled to the increased BASE funding and entitlements approved by the Superintendent of Public Instruction in (2)(e).

          (e) If the ANB recalculated in (4)(c) based on the actual February enrollment is less than the ANB calculated in (3)(e) (d), the anticipated unusual enrollment increase did not materialize and the Superintendent of Public Instruction makes the following adjustments:

          (i) remains the same.

          (ii) direct state aid and guaranteed tax base subsidies will be adjusted to reflect the amount which should be paid on the district's adjusted budget.

 

AUTH: 20-3-106, 20-9-102, MCA

IMP:    20-9-166, 20-9-311, 20-9-314, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the provisions of 20-9-314, MCA (SB 175, 2013 Legislative Session) by amending the threshold for determining eligibility for an increase in ANB due to an unusual enrollment increase. Also, preschool enrollment is not included in calculation of ANB.

 

          10.20.105 UNANTICIPATED ENROLLMENT INCREASE (1) and (1)(a) remain the same.

          (b) Determine the prior year enrollment. For purposes of this calculation, "prior year enrollment" (PYE) will mean the adjusted and averaged enrollment used for the current ANB or three-year average ANB, whichever was used as budgeted ANB.

          (c) Determine the "enrollment increase" (EI) by subtracting the prior year enrollment from the current year enrollment. EI = CYE - PYE.

          (d) remains the same.

          (e) If the enrollment increase calculated in (c) exceeds 40 students, or if the enrollment increase as a percentage of the prior year enrollment calculated in (1)(d) exceeds 6 4%, the Superintendent of Public Instruction will recalculate and adjust the current year's basic entitlement and total per-ANB entitlement in accordance with 20-9-314(5), MCA, using the recalculation of ANB in (2).

          (2) remains the same.

          (a) Determine the increase based on a percentage of the PYE:

           (i) Determine EI in excess of 6 4% of PYE. EI - (.06 .04 x PYE). Round the calculation to the nearest hundredth (.xx).

          (b) remains the same but is renumbered (ii).

          (c) (iii) Prorate enrollment increase exceeding 6 4% of PYE calculated in (2)(a)(i) among the budget units by:

          (i) (A) calculating the ratio of EI for each budget unit as calculated in (2)(b) (a)(i) to the total EI for the district calculated in (1)(c). If the EI calculated for a budget unit in (2)(b)(a)(i) is negative (enrollment loss), omit the budget unit from the proration and add the absolute value of the negative EI by budget unit to the EI determined in (1)(c); and

          (ii) (B) multiplying the EI in excess of 6 4% of PYE calculated in (2)(a) by the ratio calculated in (2)(c)(a)(i) for each budget unit within the district. Round the calculation to the nearest hundredth (.xx).

          (d) (iv) Add the PYE by budget unit and the EI in excess of 6 4% by budget unit as calculated in (2)(c)(ii)(a)(iii)(B).

          (b) Determine the increase based on number of students:

          (i) Determine EI for each budget unit by subtracting PYE by budget unit from CYE by budget unit. EI by budget unit = CYE by budget unit - PYE by budget unit. If the EI calculated for a budget unit is negative (enrollment loss), omit the budget unit from the proration and add the absolute value of the negative EI by budget unit to the EI determined in (1)(c).

          (ii) Add the PYE by budget unit and the EI by budget unit.

          (c) The greater of (a)(iv) or (b)(ii) is the increased enrollment.

          (e) (d) Multiply the sum increased enrollment calculated in (2)(d)(c) by the total of PI days and PIR days approved for the current year, and divide the total by 180.

          (f) (e) Round the result calculated in (2)(e)(d) up to the next whole number to determine the funding adjustment ANB.

          (3) remains the same.

 

AUTH: 20-9-102, MCA

IMP:    20-9-313, 20-9-314, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the provisions of 20-9-314, MCA (SB 175, 2013 Legislative Session) by amending the threshold for determining eligibility for an increase in ANB due to an unusual enrollment increase.

 

          10.21.101H CALCULATION OF DEBT LIMITS (1) and (2) remain the same.

          (a) For an elementary district,

Statewide mill value per elementary ANB x Elementary ANB x 1000 x 50 100%;

          (b) For a high school district,

Statewide mill value per high school ANB x High School ANB x 1000 x 50 100%.

          (3) and (4) remain the same.

          (5) For a K-12 district, formed pursuant to 20-6-701, MCA, that is ineligible to receive guaranteed tax base aid under the provisions of 20-9-367, MCA, the maximum amount for which the district may become indebted is the sum of the amounts computed separately for the elementary and high school programs 200% of the taxable valuation of the property within the district.

          (a) The maximum amount for which a K-12 district may become indebted for elementary school program purposes is limited to the amount calculated for the elementary program under (1) and (2).

          (b) The maximum amount for which a K-12 district may become indebted for high school program purposes is limited to the amount calculated for the high school program under (1) and (2).

          (6) For a K-12 district, in which both the elementary and the high school programs are eligible to receive guaranteed tax base aid under the provisions of 20-9-367, MCA, the maximum amount for which the district may become indebted is the sum of the amounts computed separately in (2)(a) and (2)(b).

          (7) For a K-12 district, in which either the elementary or the high school program, but not both, is eligible to receive guaranteed tax base aid under the provisions of 20-9-367, MCA, the maximum amount for which the district may become indebted is the sum of 100% of the taxable value of the K-12 district plus 100% of the product of the applicable statewide mill value per-ANB multiplied by the eligible program's ANB multiplied by 1000.

          (8) In addition to the requirements in 20-9-422, MCA, a K-12 district bond resolution authorizing the issuance of bonds must indicate the portion of the bond obligation which will be considered an obligation for the elementary program and the portion which will be considered an obligation for the high school program.

 

AUTH: 20-9-102, MCA

IMP:    20-9-367, 20-9-406, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-9-406, MCA (HB 373, 2015 Legislative Session) amending the debt limit for school districts and to clarify the calculation of the debt capacity for K-12 districts in order to reflect statutory intent and to be consistent with practice.

 

          10.22.102 GENERAL FUND SPENDING LIMITS (1) through (2)(a) remain the same.

          (i) the direct state aid associated with the basic entitlement;

          (ii) the direct state aid associated with the per-ANB entitlement;

          (iii) the quality educator payment;

          (ii) (iv) the at-risk student payment;

          (iii) (v) the Indian Eeducation for Aall payment deposited into the general fund; and

          (iv) (vi)  the American Indian achievement gap payment; or

          (vii) the data-for-achievement payment.

          (b) in the initial year of implementation of a full-time kindergarten program, an amount equal to (one-half the kindergarten enrollment in the current year) times (the sum of the maximum per-ANB rate for an elementary ANB and the Indian Eeducation for Aall payment for an ANB for the current year).

          (3) through (3)(a)(i) remain the same.

          (ii) the highest revenue previously authorized by the electors of the district or imposed by the district in any of the previous year's over-BASE levy amount five years to support the general fund budget;

          (iii) remains the same.

          (iv) the prior year's excess reserves under 20-9-141, MCA, available to fund the over-BASE budget; and

          (v) the estimated tuition revenue available to fund the over-BASE budget.;

          (vi) the amount of the reduction of flexible nonvoted property tax levy authority in the transportation fund, the bus depreciation fund, the tuition fund, and the adult education fund; and

          (vii) the estimated oil and natural gas production taxes for school districts available to fund the over-BASE budget.

          (b) through (4)(a)(i) remain the same.

          (ii) the highest revenue previously authorized by the electors of the district or imposed by the district in any of the previous year's over-BASE levy amount five years to support the general fund budget;

          (iii) remains the same.

          (iv) the prior year's excess reserves under 20-9-141, MCA, that will be used to fund the over-BASE budget; and

          (v) the estimated tuition revenue available to fund the over-BASE budget.;

          (vi) the amount of the reduction of flexible nonvoted property tax levy authority in the transportation fund, the bus depreciation fund, the tuition fund, and the adult education fund; and

          (vii) the estimated oil and natural gas production taxes for school districts available to fund the over-BASE budget.

          (b) remains the same.

          (5) With respect to (3)(a)(vi) and (4)(a)(vi), the ongoing authority for any nonvoted increase in the over-BASE budget levy imposed must be decreased in future years to the extent that any increase in other nonvoted property tax levies is imposed.

          (5) through (8) remain the same but are renumbered (6) through (9).

 

AUTH: 20-9-102, MCA

IMP:    20-9-308, 20-9-315, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend ARM 10.22.102 to implement the new provisions of 20-9-308, MCA (SB 175, 2013 Legislative Session) amending the general fund spending limits.

 

          10.22.104 UNRESERVED FUND BALANCE REAPPROPRIATED (1) Any unreserved general fund end-of-the-year balance must be reappropriated, up to an amount not exceeding 15% of a school district's maximum general fund budget, to be used for property tax reduction, in accordance with 20-9-308 and 20-9-141, MCA. 

          (2) through (4) remain the same.

          (5) Any unreserved fund balance in excess of 15% of a school district's maximum general fund budget must be remitted to the state.

          (6) Any amounts remitted to the state under (5) are not considered expenditures to be applied against budget authority.

 

AUTH: 20-9-102, MCA

IMP:    20-9-104, 20-9-105, 20-9-308, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-9-308, MCA (SB 329, 2011 Legislative Session) establishing a limit on the amount of fund balance that can be reappropriated with any excess being remitted to the state.

          10.23.102 FUNDING THE BASE BUDGET LEVY (1) through (1)(e) remain the same.

          (f) Indian Eeducation for Aall payments deposited into the general fund;

          (g) and (h) remain the same.

          (i) data-for-achievement payment;

          (i) and (j) remain the same but are renumbered (j) and (k).

          (2) through (4) remain the same.

 

AUTH: 20-9-102, MCA

IMP:    20-5-321, 20-5-322, 20-5-323, 20-5-324, 20-9-141, 20-9-308, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to amend this rule to implement the new provisions of 20-9-308, MCA (SB 175, 2013 Legislative Session) amending the calculation for determining the BASE budget levy.

 

          4. The Superintendent of Public Instruction proposes to repeal the following rule:

 

          10.30.405 K-12 DISTRICT ISSUANCE OF BONDS

 

AUTH: 20-3-106, MCA

IMP:    20-9-406, MCA

 

          Statement of reasonable necessity. The Superintendent of Public Instruction has determined it is reasonable and necessary to repeal this rule as the calculation is inaccurate and clarified in ARM 10.21.101H.

 

          5. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Beverly Marlow, Office of Public Instruction, P.O. Box 202501, Helena, Montana, 59620-2501; telephone (406) 444-3172; fax (406) 444-2893; or e-mail bemarlow@mt.gov, and must be received no later than 5:00 p.m., April 13, 2016.

 

6. Ann Gilkey, Chief Legal Counsel for the Superintendent of Public Instruction, has been designated to preside over and conduct this hearing.

 

7. The Office of Public Instruction maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 5 above or may be made by completing a request form at any rules hearing held by the agency.

 

8. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

9. The bill sponsor contact requirements of 2-4-302, MCA, apply. Senator Zinke, sponsor of SB 329 (2011 Legislative Session) and Senator Jones, sponsor of SB 175 (2013 Legislative Session) were contacted on October 15, 2014. Senator Tom Facey, sponsor of SB 32 (2013 Legislative Session), Representative Kathy Kelker, sponsor of HB 31 (2015 Legislative Session), and Representative Scott Staffanson, sponsor of HB 373 (2015 Legislative Session) were contacted on January 15, 2016. All of the above sponsors were sent a copy of a preliminary draft of the proposed amendments and repeal on February 5, 2016.

 

10. With regard to the requirements of 2-4-111, MCA, the agency has determined that the amendment and repeal of the above-referenced rules will not significantly and directly impact small businesses.

 

 

 

/s/ Ann Gilkey                                       /s/ Madalyn Quinlan, Chief of Staff, for

Ann Gilkey                                            Denise Juneau

Rule Reviewer                                      Superintendent of Public Instruction      

         

Certified to the Secretary of State February 22, 2016.

 

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