2011 legislative update
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2011 Legislative Update. Denise Ulberg, Administrator OPI School Finance Division MASBO Summer Conference – Billings June 23, 2011. 2011 Legislative Update. SB 329 Generally Revise K-12 Laws HB123 Revise Budget Deadlines HB288 Students with Caretaker Relatives HB372 Business Equipment Tax

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2011 Legislative Update

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2011 Legislative Update

Denise Ulberg, Administrator

OPI School Finance Division

MASBO Summer Conference – Billings

June 23, 2011


2011 Legislative Update

  • SB 329 Generally Revise K-12 Laws

  • HB123 Revise Budget Deadlines

  • HB288 Students with Caretaker Relatives

  • HB372 Business Equipment Tax

  • Other Important Legislation


SB 329

  • K-12 BASE Aid

  • School District Block Grants

  • FY2012 General Fund Budgets

  • Fund Transfers

  • State and County Impacts from Oil and Natural Gas Production

  • Pathway to Excellence Program

  • Multidistrict Cooperatives

  • Montana Digital Academy


K-12 BASE Aid - General Fund Entitlements


School District Block Grants

  • School district block grants (20-9-630, MCA) are frozen at FY2011 amounts:

    • General Fund

    • Transportation Fund

    • Combined Block Grant

      in FY2013, SB372 Business Equipment Tax Reimbursements will be added to these payments

  • Countywide transportation block grants (20-9-632, MCA) will continue to increase by .76% annually


FY2012 General Fund Budget

  • General Fund Balance Reappropriated (FBR)

    • Any unreserved fund balance in excess of 15% of a school district’s maximum general fund budget must be remitted to the state

      • FY2012 – 100% deposited to state general fund

      • FY2013 - deposited to:

        • 70% Guarantee account

        • 5% State school oil and natural gas impact account

        • 25% County school oil and natural gas impact fund

    • Note: This provision terminates June 30, 2016


FY2012 General Fund Budget

  • Districts may permissively adopt an over-BASE levy that is equal to the higher of:

    • the highest over-BASE amount imposed (actually levied) in any of the previous 5 years (FY2007 – FY2011), OR

    • The highest over-BASE amount authorized by voters, up to the highest budget allowed, in any of the previous 5 years (FY2007 – FY2011)


FY2012 General Fund Budget

Distribution of oil and natural gas production taxes to taxing units (15-36-332, MCA)

  • Dept. of Revenue (DOR) allocates per 15-36-331, MCA

  • DOR distributes to Counties

  • County deposits to school districts’ funds


FY2012 General Fund Budget

  • Limit on total oil and natural gas tax revenue

    • School district may receive 130% of its Maximum General Fund budget

    • DOR distributes until the limit is reached

    • Excess of the limitation is deposited to:

      • In FY2012, to the state general fund

      • Beginning in FY2013:

        • 70% to state guarantee account

        • 5% to state school oil and natural gas impact account

        • 25% to county school oil and natural gas impact fund

          Note: this provision terminates June 30, 2016


FY2012 General Fund Budget

  • A school district must budget a minimum amount of oil and natural gas production tax revenue in the General Fund equal to the lesser of:

    • 25% (FY2012) of the total oil and gas revenue received in all funds in the prior year, OR

    • The general fund levy requirement (BASE and over-BASE)

    • Required minimum receipts to be budgeted:

      FY201225%FY201445%

      FY201335%FY2015 and after 55%

      Note: this provision terminates June 30, 2016


Budget Amendments

  • Any budget amendment (s) adopted in the same fiscal year that exceed 10% of the district’s adopted general fund budget

  • Must be reported with an explanation of why the budget amendment is necessary to:

    • Board of Public Education

    • Education and Local Government Interim Committee


Fund Transfers – One Time Transfer

  • Transfer $$ prior to June 30, 2011

  • General Fund money in excess of 15% of 2011 GF budget

  • May transfer to any budgeted fund(s)

  • Notify OPI and county treasurer

    • Identify as “SB329 One-time transfer”

    • Amount transferred

    • Identify to which fund(s) $$ were transferred


Fund Transfers

  • Budgeted Fund to Budgeted Fund

    • Tax money (voted and non-voted) transferred:

      • Use must be related to the purpose for which the tax was levied and the trustees hold a public hearing to accept public comment, OR

      • Can hold election to obtain voter approval of the transfer; funds can be spent for purpose approved on the ballot

    • Non-tax money transferred may be used for any purpose allowed by law

    • Counts against expenditure budget

    • Public hearing, resolution, notification required


Fund Transfers

  • Note: if money is transferred from funds supported by a non-voted levy, cannot backfill in the next year to restore the amount transferred

  • Budgeted Funds Supported by a Non-Voted Levy

    • 10 Transportation

    • 11 Bus Depreciation Reserve

    • 13 Tuition

    • 17 Adult Education

    • 19 Non-operating

      ~ Transfers from Retirement and Debt Service are not allowed ~


Fund Transfers- Closing Inactive Funds

  • 20-9-201, MCA

    • Inactive fund may be closed to any fund deemed appropriate by trustees

      • Removes restriction on closing inactive tuition fund to miscellaneous programs fund

    • Inactive fund must not have a deficit cash or fund balance

  • 20-10-147, MCA

    • SB329 removes restriction on transferring $$ from Bus Depreciation Reserve fund (11)

      • No longer have to sell all the buses and obtain voter approval to transfer


Impacts From Oil and Natural Gas Production

  • State School Oil and Natural Gas Impact Account (effective July 1, 2013)

    • Purpose: to provide money to schools not receiving oil and natural gas tax revenue but are impacted by contiguous counties that are benefitting from oil and natural gas tax revenue

    • Funding sources (FY2013 – FY2016):

      • Excess fund balance available for reappropriation

      • Excess oil and natural gas production tax revenue

    • Amount in fund is limited to $7.5 million; excess is deposited in the state general fund

    • School applies to OPI for funds

    • Awards based on need, impacts and other criteria


Impacts From Oil and Natural Gas Production

  • County School Oil and Natural Gas Impact Fund

    • County distributes 80% of the fund when:

      • A school district receives 30% or less of the district’s 4-year average oil and gas revenue, OR

      • The average price of oil is $50 or less for the fiscal year, OR

      • Production of oil in the county drops 50% or more below the county’s 5-year average production

    • County may retain 20% to:

      • Pay outstanding capital project bonds

      • Other expenses incurred prior to reduction in price,

      • Offset property taxes

      • Promote diversification and economic development in the county

      • Attract new industry

      • Provide cash incentives for expanding employment base in the impacted area


Pathway to Excellence Program

  • Promote education excellence in Montana’s public schools through data-driven decision-making

  • Maintain a focus on continuous improvement and increased academic achievement for public school students


Pathway to Excellence Program

  • OPI must develop an education data profile for each district

  • Each school district must annually report certain information to OPI and post the information on its website

  • OPI required to implement a data collection plan

  • OPI must gather, maintain and distribute longitudinal, actionable data


Growth and Enhancement of Montana Students (GEMS)

  • The GEMS Data Warehouse Project is Montana’s Statewide Longitudinal Data System (SLDS).

    • GEMS is a data repository that will provide access to multiple years of longitudinal data in order to track school and student information across time

    • GEMS will remove barriers to obtaining data in a usable form for decision-makers

    • GEMS will develop a blueprint that will serve as the basis for organizing longitudinal data on each student

    • GEMS will store all data collected by the OPI to provide an effective, timely and efficient approach to analyze student and school performance


Growth and Enhancement of Montana Students (GEMS)

  • The GEMS Project will help satisfy the Pathway to Excellence Program requirements.

    • GEMS will maintain a focus on continuous improvement and increased academic achievement for public school students

    • GEMS will allow for comparative data between schools and districts by developing an education data profile for each district

    • GEMS will measure state and local performance using criteria, which is more comprehensive than NCLB related reports

    • GEMS will utilize all of the pertinent and/or available data within the OPI and will manage data from a variety of sources

    • GEMS will promote education excellence in Montana’s public schools through data-driven decision-making by providing districts the ability to access data housed by the OPI


Growth and Enhancement of Montana Students (GEMS)

The OPI will be forming a GEMS User/ Stakeholder Committee to provide input on this project.

Those interested in participating

see sign up sheet or

contact Jamey Ereth at [email protected]


Multidistrict Cooperatives

  • Any two or more school districts

  • Multidistrict agreement creates a multidistrict cooperative

  • Perform any services, activities and undertakings of the participating districts

  • Provides for joint funding and operation and maintenance of all participating districts

  • Subject to terms and conditions mutually agreed upon by the districts


Multidistrict Cooperatives

  • Trustees of all participating districts must approve the agreement annually by April 1

    • If signed by April 1:

      • Effective retroactive back to July 1 of the current fiscal year, OR

      • Effective for the ensuing fiscal year

    • If signed after April 1, can only be effective for ensuing fiscal year


Multidistrict Cooperatives

“Multidistrict Cooperative” - created by a multidistrict agreement (two or more school districts) or by an interlocal agreement between a school district and other public entity under Title 20, chapter 9, part 7

Prime Agency (a.k.a. fiscal host or coordinating agency)

Could be a school district or other public entity

If the prime agency is a school district:

Maintains Interlocal Agreement Fund (82)

Financial reporting responsibilities:

Trustees Financial Summary (TFS)

Annual financial audit

Cooperating Agency(participating district)

Sends a warrant (funding) to Prime Agency


Multi-District Cooperatives - Funding Sources

  • If the prime agency and cooperating agencies are school districts, they may:

    • Transfer from General Fund - limited to DSA

    • Transfer from other budgeted funds (except Retirement and Debt Service)

  • Transfers count against adopted budget

  • Transfers must be made by April 1 each year

  • No transfers from non-budgeted funds


Multi-District Cooperatives

  • Note: if money is transferred from funds supported by a non-voted levy, you cannot backfill in the next year to restore the amount transferred.

    • This is true regardless of the source of the money transferred, i.e., whether it is tax or non-tax money

      Budgeted Funds Supported by a Non-Voted Levy:

      10 Transportation17 Adult Education

      11 Bus Depreciation Reserve19 Non-operating

      13 Tuition

      ~ Transfers from Retirement and Debt Service are not allowed ~


Multi-District Cooperatives

  • One-Time Payment for Districts Participating in Multi-District Cooperatives

    • Participating as of December 31, 2012

    • SB329 and HB2 appropriated $2 million

    • Allocation is based on the proration of each district’s FY2013 BASE budget to the total BASE budgets for all districts participating in multi-district cooperatives

    • Payment to districts no later than Feb. 1, 2013

    • $ may be used to fund cooperative efforts


Cooperative Purchasing Contracts

  • 20-9-204(4), MCA

  • Two or more districts may enter into a cooperative purchasing contract for procurement of supplies or services

  • Can purchase supplies and services through a cooperative purchasing group

    • Group must have a publicly available master list of items available with pricing

    • Group must provide opportunity at least twice yearly for any vendor to compete for inclusion on the list

  • Advertisement for bids not required


Montana Digital Academy

  • Montana Virtual Academy is now the Montana Digital Academy (MTDA)


HB123 Revise Budget Deadlines

  • Effective with FY2012 Budgets

  • Significant changes:

    • ByJuly 20: County Treasurer provides cash balances

    • 3rd Friday in July: OPI allocates appropriation for technology fund

    • Between July 1 and August 10: Clerk publishes one notice of the final budget meeting

    • On or before August 20: Trustees meet to consider budgets


HB123 Revise Budget Deadlines

  • Not later than August 25: Trustees adopt final budgets

  • Within 3 daysof final approval: Deliver adopted budgets to county superintendent

  • By1st Tuesday in September: County superintendent reports school district levy requirements to county commissioners

  • On or before September 15: Electronically submit TFS and Budgets to OPI


HB288 Students with Caretaker Relatives

  • Amends 1-1-215, MCA Residency

    • The residence of an unmarried minor is the residence of :

      • the minor’s parents

      • the parent having legal custody (if parents don’t share the same residence or one parent is deceased)

      • the legal guardian or custodian appointed by a court of competent jurisdiction, or

      • the caretaker relative, if conditions in 20-5-502, MCA are met


HB288 Students with Caretaker Relatives

  • Conditions in 20-5-502, MCA

    • Parent voluntarily gives custody to caretaker relative

    • Parent expressed no definite time period in which they would return for the child,

    • Child resides with the caretaker relative full-time

    • Caretaker unable to contact parent, or parent(s) unable or unwilling to regain custody of the child

    • No appointment of a guardian or power of attorney has been made for educational needs of the child

    • Caretaker completes an educational authorization affidavit


HB288 Students with Caretaker Relatives

  • Students expelled or suspended through formal disciplinary action

    • New school may:

      • Implement the previous school district’s disciplinary action without further due process,

      • Hold a hearing and determine whether the student’s conduct in the previous district merits denial of enrollment,

      • New school may require compliance with a behavior contract as a condition of enrollment.

        Effective July 1, 2011


SB372 Business Equipment Tax

  • Class 8 Property Tax rate reduced

  • Provides for full reimbursement for reduction in tax base to local governments, including school districts and tax increment financing (TIF) districts

  • School districts will be reimbursed through the school block grant payments

    • Reimbursement begins with FY2013 block grant payments


Other Important Legislation

  • HB70 Revise PERS laws

  • HB86 Revise TRS laws

  • HB116 Actuarial Funding for TRS

  • SB219 Revise Property Tax Protest Laws

  • HB15 Quality Schools Facility Grant Program

  • HB182 Financing Energy Conservation Measures

  • HB538 Allow Sale of Bonds at Private Sale


Other Important Legislation

Election Bills

- HB327 Revise School Election Laws

- HB91 Revise Election Laws

- HB99 Generally Revise Laws for Absentee

Ballots and Mail Ballots

- HB484 Absentee Ballot List


OPI School Finance Division

  • Denise [email protected]

  • Nica [email protected]

  • Janelle Mickelson [email protected]

  • Rebecca [email protected]

  • Donell [email protected]

  • Paul [email protected]

  • Brenda [email protected]

  • Kathleen [email protected]


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