1| STATE OF OKLAHOMA |
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2| 1st Session of the 59th Legislature (2023) |
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3|SENATE BILL 963 By: Montgomery |
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4| |
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5| |
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6| AS INTRODUCED |
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7| An Act relating to school funding; amending 70 O.S. |
| 2021, Section 18-200.1, as last amended by Section 2, |
8| Chapter 488, O.S.L. 2021, which relates to the |
| allocation of State Aid; modifying calculation of |
9| Foundation Program Income and Salary Incentive Aid |
| beginning in certain school year; directing the State |
10| Department of Education to include in its budget |
| request certain protested ad valorem tax revenue |
11| amount; providing for codification; and providing an |
| effective date. |
12| |
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13| |
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14|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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15| SECTION 1. AMENDATORY 70 O.S. 2021, Section 18-200.1, as |
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16|last amended by Section 2, Chapter 488, O.S.L. 2021, is amended to |
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17|read as follows: |
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18| Section 18-200.1. A. Beginning with the 2022-2023 2024-2025 |
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19|school year, and each school year thereafter, each school district |
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20|shall have its initial allocation of State Aid calculated based on |
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21|the state dedicated revenues actually collected during the preceding |
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22|fiscal year, the adjusted assessed valuation of the preceding year, |
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23|and the weighted average daily membership for the school district of |
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24|the preceding school year. Each school district shall submit the |
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Req. No. 553 Page 1
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1|following data based on the first nine (9) weeks, to be used in the |
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2|calculation of the average daily membership of the school district: |
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3| 1. Student enrollment by grade level; |
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4| 2. Pupil category counts; and |
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5| 3. Transportation supplement data. |
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6| On or before December 30, the State Department of Education |
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7|shall determine each school district's current year allocation |
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8|pursuant to subsection D of this section. The State Department of |
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9|Education shall complete an audit, using procedures established by |
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10|the Department, of the student enrollment by grade level data, pupil |
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11|category counts, and transportation supplement data to be used in |
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12|the State Aid Formula pursuant to subsection D of this section by |
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13|December 1 and by January 15 shall notify each school district of |
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14|the district's final State Aid allocation for the current school |
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15|year. The January payment of State Aid and each subsequent payment |
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16|for the remainder of the school year shall be based on the final |
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17|State Aid allocation as calculated in subsection D of this section. |
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18|Except for reductions made due to the assessment of penalties by the |
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19|State Department of Education according to law, the January payment |
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20|of State Aid and each subsequent payment for the remainder of the |
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21|school year shall not decrease by an amount more than the amount |
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22|that the current chargeable revenue increases for that district. |
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23| B. The State Department of Education shall retain not less than |
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24|one and one-half percent (1 1/2%) of the total funds appropriated |
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Req. No. 553 Page 2
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1|for financial support of schools, to be used to make midyear |
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2|adjustments in State Aid and which shall be reflected in the final |
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3|allocations. If the amount of appropriated funds, including the one |
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4|and one-half percent (1 1/2%) retained, remaining after January 1 of |
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5|each year is not sufficient to fully fund the final allocations, the |
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6|Department shall recalculate each school district's remaining |
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7|allocation pursuant to subsection D of this section using the |
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8|reduced amount of appropriated funds. |
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9| C. On and after July 1, 1997, the amount of State Aid each |
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10|district shall receive shall be the sum of the Foundation Aid, the |
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11|Salary Incentive Aid, and the Transportation Supplement, as adjusted |
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12|pursuant to the provisions of subsection G of this section and |
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13|Section 18-112.2 of this title; provided, no district having per |
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14|pupil revenue in excess of three hundred percent (300%) of the |
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15|average per pupil revenue of all districts shall receive any State |
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16|Aid or Supplement in State Aid. |
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17| The July calculation of per pupil revenue shall be determined by |
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18|dividing the district's second preceding year's total weighted |
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19|average daily membership (ADM) into the district's preceding year's |
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20|total revenues excluding federal revenue, insurance loss payments, |
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21|reimbursements, recovery of overpayments and refunds, unused |
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22|reserves, prior expenditures recovered, prior year surpluses, and |
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23|less the amount of any transfer fees paid in that year. |
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24| |
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1| The December calculation of per pupil revenue shall be |
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2|determined by dividing the district's preceding year's total |
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3|weighted average daily membership (ADM) into the district's |
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4|preceding year's total revenues excluding federal revenue, insurance |
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5|loss payments, reimbursements, recovery of overpayments and refunds, |
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6|unused reserves, prior expenditures recovered, prior year surpluses, |
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7|and less the amount of any transfer fees paid in that year. |
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8| D. For the 1997-98 school year, and each school year |
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9|thereafter, Foundation Aid, the Transportation Supplement, and |
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10|Salary Incentive Aid shall be calculated as follows: |
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11| 1. Foundation Aid shall be determined by subtracting the amount |
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12|of the Foundation Program Income from the cost of the Foundation |
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13|Program and adding to this difference the Transportation Supplement. |
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14| a. The Foundation Program shall be a district's higher |
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15| weighted average daily membership based on the first |
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16| nine (9) weeks of the current school year or the |
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17| preceding school year of a school district, as |
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18| determined by the provisions of subsection A of |
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19| Section 18-201.1 of this title and paragraphs 1, 2, 3, |
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20| and 4 of subsection B of Section 18-201.1 of this |
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21| title, multiplied by the Base Foundation Support |
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22| Level. However, for the portion of weighted |
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23| membership derived from nonresident, transferred |
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24| pupils enrolled in online courses, the Foundation |
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1| Program shall be a district's weighted average daily |
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2| membership of the preceding school year or the first |
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3| nine (9) weeks of the current school year, whichever |
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4| is greater, as determined by the provisions of |
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5| subsection A of Section 18-201.1 of this title and |
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6| paragraphs 1, 2, 3, and 4 of subsection B of Section |
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7| 18-201.1 of this title, multiplied by the Base |
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8| Foundation Support Level. |
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9| b. The Foundation Program Income shall be the sum of the |
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10| following: |
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11| (1) The adjusted assessed valuation of the current |
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12| school year of the school district, minus the |
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13| previous year protested ad valorem tax revenues |
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14| held as prescribed in Section 2884 of Title 68 of |
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15| the Oklahoma Statutes, multiplied by the mills |
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16| levied pursuant to subsection (c) of Section 9 of |
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17| Article X of the Oklahoma Constitution, if |
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18| applicable, as adjusted in subsection (c) of |
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19| Section 8A of Article X of the Oklahoma |
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20| Constitution. For purposes of this subsection, |
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21| the "adjusted assessed valuation of the current |
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22| school year" shall be the adjusted assessed |
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23| valuation on which tax revenues are collected |
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24| during the current school year, and |
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1| (2) Seventy-five percent (75%) of the amount received |
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2| by the school district from the proceeds of the |
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3| county levy during the preceding fiscal year, as |
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4| levied pursuant to subsection (b) of Section 9 of |
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5| Article X of the Oklahoma Constitution, and |
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6| (3) Motor Vehicle Collections, and |
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7| (4) Gross Production Tax, and |
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8| (5) State Apportionment, and |
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9| (6) R.E.A. Tax. |
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10| The items listed in divisions (1), (3), (4), (5), and |
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11| (6) of this subparagraph shall consist of the amounts |
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12| actually collected from such sources during the |
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13| preceding fiscal year calculated on a per capita basis |
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14| on the unit provided for by law for the distribution |
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15| of each such revenue. |
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16| 2. The Transportation Supplement shall be equal to the average |
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17|daily haul times the per capita allowance times the appropriate |
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18|transportation factor. |
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19| a. The average daily haul shall be the number of children |
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20| in a district who are legally transported and who live |
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21| one and one-half (1 1/2) miles or more from school. |
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22| b. The per capita allowance shall be determined using the |
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23| following chart: |
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24| PER CAPITA PER CAPITA |
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1| |
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2|DENSITY FIGURE ALLOWANCE DENSITY FIGURE ALLOWANCE |
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3|.3000 - .3083 $167.00 .9334 - .9599 $99.00 |
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4|.3084 - .3249 $165.00 .9600 - .9866 $97.00 |
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5|.3250 - .3416 $163.00 .9867 - 1.1071 $95.00 |
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6|.3417 - .3583 $161.00 1.1072 - 1.3214 $92.00 |
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7|.3584 - .3749 $158.00 1.3215 - 1.5357 $90.00 |
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8|.3750 - .3916 $156.00 1.5358 - 1.7499 $88.00 |
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9|.3917 - .4083 $154.00 1.7500 - 1.9642 $86.00 |
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10|.4084 - .4249 $152.00 1.9643 - 2.1785 $84.00 |
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11|.4250 - .4416 $150.00 2.1786 - 2.3928 $81.00 |
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12|.4417 - .4583 $147.00 2.3929 - 2.6249 $79.00 |
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13|.4584 - .4749 $145.00 2.6250 - 2.8749 $77.00 |
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14|.4750 - .4916 $143.00 2.8750 - 3.1249 $75.00 |
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15|.4917 - .5083 $141.00 3.1250 - 3.3749 $73.00 |
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16|.5084 - .5249 $139.00 3.3750 - 3.6666 $70.00 |
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17|.5250 - .5416 $136.00 3.6667 - 3.9999 $68.00 |
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18|.5417 - .5583 $134.00 4.0000 - 4.3333 $66.00 |
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19|.5584 - .5749 $132.00 4.3334 - 4.6666 $64.00 |
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20|.5750 - .5916 $130.00 4.6667 - 4.9999 $62.00 |
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21|.5917 - .6133 $128.00 5.0000 - 5.5000 $59.00 |
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22|.6134 - .6399 $125.00 5.5001 - 6.0000 $57.00 |
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23|.6400 - .6666 $123.00 6.0001 - 6.5000 $55.00 |
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24|.6667 - .6933 $121.00 6.5001 - 7.0000 $53.00 |
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1|.6934 - .7199 $119.00 7.0001 - 7.3333 $51.00 |
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2|.7200 - .7466 $117.00 7.3334 - 7.6667 $48.00 |
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3|.7467 - .7733 $114.00 7.6668 - 8.0000 $46.00 |
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4|.7734 - .7999 $112.00 8.0001 - 8.3333 $44.00 |
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5|.8000 - .8266 $110.00 8.3334 - 8.6667 $42.00 |
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6|.8267 - .8533 $108.00 8.6668 - 9.0000 $40.00 |
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7|.8534 - .8799 $106.00 9.0001 - 9.3333 $37.00 |
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8|.8800 - .9066 $103.00 9.3334 - 9.6667 $35.00 |
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9|.9067 - .9333 $101.00 9.6668 or more $33.00 |
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10| c. The formula transportation factor shall be 1.39. |
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11| 3. Salary Incentive Aid shall be determined as follows: |
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12| a. Multiply the Incentive Aid guarantee by the district's |
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13| higher weighted average daily membership based on the |
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14| first nine (9) weeks of the current school year or the |
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15| preceding school year of a school district, as |
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16| determined by the provisions of subsection A of |
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17| Section 18-201.1 of this title and paragraphs 1, 2, 3, |
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18| and 4 of subsection B of Section 18-201.1 of this |
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19| title. |
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20| b. Divide the district's adjusted assessed valuation of |
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21| the current school year minus the previous year's |
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22| protested ad valorem tax revenues held as prescribed |
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23| in Section 2884 of Title 68 of the Oklahoma Statutes, |
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24| by one thousand (1,000) and subtract the quotient from |
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1| the product of subparagraph a of this paragraph. The |
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2| remainder shall not be less than zero (0). |
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3| c. Multiply the number of mills levied for general fund |
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4| purposes above the fifteen (15) mills required to |
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5| support Foundation Aid pursuant to division (1) of |
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6| subparagraph b of paragraph 1 of this subsection, not |
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7| including the county four-mill levy, by the remainder |
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8| of subparagraph b of this paragraph. The product |
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9| shall be the Salary Incentive Aid of the district. |
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10| E. By June 30, 1998, the State Department of Education shall |
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11|develop and the Department and all school districts shall have |
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12|implemented a student identification system which is consistent with |
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13|the provisions of subsections C and D of Section 3111 of Title 74 of |
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14|the Oklahoma Statutes. The student identification system shall be |
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15|used specifically for the purpose of reporting enrollment data by |
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16|school sites and by school districts, the administration of the |
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17|Oklahoma School Testing Program Act, the collection of appropriate |
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18|and necessary data pursuant to the Oklahoma Educational Indicators |
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19|Program, determining student enrollment, establishing a student |
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20|mobility rate, allocation of the State Aid Formula and midyear |
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21|adjustments in funding for student growth. This enrollment data |
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22|shall be submitted to the State Department of Education in |
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23|accordance with rules promulgated by the State Board of Education. |
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24|Funding for the development, implementation, personnel training and |
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1|maintenance of the student identification system shall be set out in |
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2|a separate line item in the allocation section of the appropriation |
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3|bill for the State Board of Education for each year. |
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4| F. 1. In the event that ad valorem taxes of a school district |
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5|are determined to be uncollectible because of bankruptcy, clerical |
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6|error, or a successful tax protest, and the amount of such taxes |
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7|deemed uncollectible exceeds Fifty Thousand Dollars ($50,000.00) or |
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8|an amount greater than twenty-five percent (25%) of ad valorem taxes |
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9|per tax year, or the valuation of a district is lowered by order of |
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10|the State Board of Equalization, the school district's State Aid, |
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11|for the school year that such ad valorem taxes are calculated in the |
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12|State Aid Formula, shall be determined by subtracting the net |
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13|assessed valuation of the property upon which taxes were deemed |
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14|uncollectible from the assessed valuation of the school district and |
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15|the state. Upon request of the local board of education, it shall |
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16|be the duty of the county assessor to certify to the Director of |
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17|Finance of the State Department of Education the net assessed |
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18|valuation of the property upon which taxes were determined |
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19|uncollectible. |
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20| 2. In the event that the amount of funds a school district |
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21|receives for reimbursement from the Ad Valorem Reimbursement Fund is |
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22|less than the amount of funds claimed for reimbursement by the |
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23|school district due to insufficiency of funds as provided in Section |
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24|193 of Title 62 of the Oklahoma Statutes, then the school district's |
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1|assessed valuation for the school year that such ad valorem |
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2|reimbursement is calculated in the State Aid Formula shall be |
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3|adjusted accordingly. |
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4| G. 1. Notwithstanding the provisions of Section 18-112.2 of |
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5|this title, a school district shall have its State Aid reduced by an |
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6|amount equal to the amount of carryover in the general fund of the |
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7|district as of June 30 of the preceding fiscal year, that is in |
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8|excess of the following standards for two (2) consecutive years: |
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9| Total Amount of Amount of |
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10| General Fund Collections, General Fund |
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11| Excluding Previous Year Balance |
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12| Cash Surplus as of June 30 Allowable |
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13| Less than $1,000,000 48% |
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14| $1,000,000 - $2,999,999 42% |
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15| $3,000,000 - $3,999,999 36% |
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16| $4,000,000 - $4,999,999 30% |
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17| $5,000,000 - $5,999,999 24% |
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18| $6,000,000 - $7,999,999 22% |
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19| $8,000,000 - $9,999,999 19% |
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20| $10,000,000 or more 17% |
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21| 2. By February 1 the State Department of Education shall send |
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22|by certified mail, with return receipt requested, to each School |
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23|District Superintendent, Auditor and Regional Accreditation Officer |
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24|a notice of and calculation sheet reflecting the general fund |
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1|balance penalty to be assessed against that school district. |
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2|Calculation of the general fund balance penalty shall not include |
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3|federal revenue. Within thirty (30) days of receipt of this written |
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4|notice the school district shall submit to the Department a written |
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5|reply either accepting or protesting the penalty to be assessed |
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6|against the district. If protesting, the school district shall |
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7|submit with its reply the reasons for rejecting the calculations and |
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8|documentation supporting those reasons. The Department shall review |
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9|all school district penalty protest documentation and notify each |
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10|district by March 15 of its finding and the final penalty to be |
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11|assessed to each district. General fund balance penalties shall be |
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12|assessed to all school districts by April 1. |
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13| 3. Any school district which receives proceeds from a tax |
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14|settlement or a Federal Emergency Management Agency settlement |
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15|during the last two (2) months of the preceding fiscal year shall be |
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16|exempt from the penalties assessed in this subsection, if the |
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17|penalty would occur solely as a result of receiving funds from the |
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18|tax settlement. |
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19| 4. Any school district which receives an increase in State Aid |
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20|because of a change in Foundation and/or Salary Incentive Aid |
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21|factors during the last two (2) months of the preceding fiscal year |
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22|shall be exempt from the penalties assessed in this subsection, if |
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23|the penalty would occur solely as a result of receiving funds from |
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24|the increase in State Aid. |
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1| 5. If a school district does not receive Foundation and/or |
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2|Salary Incentive Aid during the preceding fiscal year, the State |
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3|Board of Education may waive the penalty assessed in this subsection |
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4|if the penalty would result in a loss of more than forty percent |
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5|(40%) of the remaining State Aid to be allocated to the school |
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6|district between April 1 and the remainder of the school year and if |
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7|the Board determines the penalty will cause the school district not |
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8|to meet remaining financial obligations. |
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9| 6. Any school district which receives gross production revenue |
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10|apportionment during the 2002-2003 school year or in any subsequent |
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11|school year that is greater than the gross production revenue |
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12|apportionment of the preceding school year shall be exempt from the |
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13|penalty assessed in this subsection, if the penalty would occur |
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14|solely as a result of the gross production revenue apportionment, as |
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15|determined by the State Board of Education. |
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16| 7. Beginning July 1, 2003, school districts that participate in |
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17|consolidation or annexation pursuant to the provisions of the |
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18|Oklahoma School Voluntary Consolidation and Annexation Act shall be |
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19|exempt from the penalty assessed in this subsection for the school |
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20|year in which the consolidation or annexation occurs and for the |
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21|next three (3) fiscal years. |
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22| 8. Any school district which receives proceeds from a sales tax |
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23|levied by a municipality pursuant to Section 22-159 of Title 11 of |
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24|the Oklahoma Statutes or proceeds from a sales tax levied by a |
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1|county pursuant to Section 1370 of Title 68 of the Oklahoma Statutes |
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2|during the 2003-2004 school year or the 2004-2005 school year shall |
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3|be exempt from the penalties assessed in this subsection, if the |
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4|penalty would occur solely as a result of receiving funds from the |
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5|sales tax levy. |
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6| 9. Any school district which has an amount of carryover in the |
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7|general fund of the district in excess of the limits established in |
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8|paragraph 1 of this subsection during the fiscal years beginning |
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9|July 1, 2020, July 1, 2021, July 1, 2022, and July 1, 2023, shall |
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10|not be assessed a general fund balance penalty as provided for in |
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11|this subsection. |
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12| 10. For purposes of calculating the general fund balance |
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13|penalty, the terms "carryover" and "general fund balance" shall not |
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14|include federal revenue. |
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15| H. In order to provide startup funds for the implementation of |
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16|early childhood programs, State Aid may be advanced to school |
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17|districts that initially start early childhood instruction at a |
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18|school site. School districts that desire such advanced funding |
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19|shall make application to the State Department of Education no later |
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20|than September 15 of each year and advanced funding shall be awarded |
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21|to the approved districts no later than October 30. The advanced |
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22|funding shall not exceed the per pupil amount of State Aid as |
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23|calculated in subsection D of this section per anticipated Head |
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24|Start eligible student. The total amount of advanced funding shall |
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1|be proportionately reduced from the monthly payments of the |
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2|district's State Aid payments during the last six (6) months of the |
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3|same fiscal year. |
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4| I. 1. Beginning July 1, 1996, the Oklahoma Tax Commission, |
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5|notwithstanding any provision of law to the contrary, shall report |
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6|monthly to the State Department of Education the monthly |
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7|apportionment of the following information: |
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8| a. the assessed valuation of property, |
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9| b. motor vehicle collections, |
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10| c. R.E.A. tax collected, and |
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11| d. gross productions tax collected. |
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12| 2. Beginning July 1, 1997, the State Auditor and Inspector's |
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13|Office, notwithstanding any provision of law to the contrary, shall |
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14|report monthly to the State Department of Education the monthly |
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15|apportionment of the proceeds of the county levy. |
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16| 3. Beginning July 1, 1996, the Commissioners of the Land |
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17|Office, notwithstanding any provision of law to the contrary, shall |
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18|report monthly to the State Department of Education the monthly |
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19|apportionment of state apportionment. |
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20| 4. Beginning July 1, 1997, the county treasurers' offices, |
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21|notwithstanding any provision of law to the contrary, shall report |
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22|monthly to the State Department of Education the ad valorem tax |
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23|protest amounts for each county. |
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24| |
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1| 5. The information reported by the Tax Commission, the State |
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2|Auditor and Inspector's Office, the county treasurers' offices and |
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3|the Commissioners of the Land Office, pursuant to this subsection |
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4|shall be reported by school district on forms developed by the State |
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5|Department of Education. |
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6| SECTION 2. NEW LAW A new section of law to be codified |
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7|in the Oklahoma Statutes as Section 18-200.2 of Title 70, unless |
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8|there is created a duplication in numbering, reads as follows: |
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9| The State Department of Education shall include in its annual |
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10|budget request required pursuant to Section 34.36 of Title 62 of the |
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11|Oklahoma Statutes the amount of protested ad valorem tax revenues |
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12|held as prescribed in Section 2884 of Title 68 of the Oklahoma |
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13|Statutes for all school districts in this state for the preceding |
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14|year. |
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15| SECTION 3. This act shall become effective September 1, 2023. |
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17| 59-1-553 EB 1/19/2023 12:47:26 PM |
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Req. No. 553 Page 16
