Chapter 670 Oregon Laws 2001

AN ACT

SB 519

Relating to school finance; creating new provisions; amending ORS 327.013; appropriating money; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 to 8 of this 2001 Act are added to and made a part of ORS 327.006 to 327.081.

SECTION 2. (1) There is transferred to the Small School District Supplement Fund from the State School Fund, for the fiscal year beginning July 1, 2001, the amount of $4.5 million.

(2) There is transferred to the Small School District Supplement Fund from the State School Fund, for the fiscal year beginning July 1, 2002, the amount of $4.5 million.

SECTION 3. (1) There is established the Small School District Supplement Fund, separate and distinct from the General Fund.

(2) The moneys in the Small School District Supplement Fund are appropriated continuously to the Department of Education for purposes of the grant program created by section 5 of this 2001 Act.

SECTION 4. As used in sections 4 to 6 of this 2001 Act:

(1)(a) “Small high school” means a public school that is operated by a small school district and that has students in:

(A) Grades 9 through 12, with an ADM of less than 350 in grades 9 through 12; or

(B) Grades 10 through 12 only, with an ADM of less than 267.

(b) “Small high school” does not include an alternative education program or a public charter school.

(2) “Small school district” means a school district with a weighted average daily membership (ADMw) of less than 8,500.

SECTION 5. (1) In addition to those moneys distributed through the State School Fund, for the fiscal years beginning July 1, 2001, and July 1, 2002, the Department of Education shall award grants to small school districts with one or more small high schools from moneys appropriated to the department from the Small School District Supplement Fund in the following order of priorities:

(a) First priority, base grants as determined under subsection (2) of this section.

(b) Second priority, needs grants as determined under subsection (3) of this section.

(c) Third priority, any moneys remaining after awarding base grants and needs grants under paragraphs (a) and (b) of this subsection shall be divided per ADM among all small school districts with small high schools and added to the amount of each small school district’s base grant. Amounts distributed under this paragraph shall be in addition to the amount of the base grant specified in subsection (2) of this section.

(2) Each fiscal year, the department shall award a base grant to each small school district with one or more small high schools that is equal to $200 per ADM of each small high school in the small school district.

(3) Each fiscal year, the department may award a needs grant to each small school district with one or more small high schools based on the financial needs of the district. The needs grants shall be awarded through an application process. The criteria for determining the financial needs of the district shall include, but not be limited to:

(a) The size of the small school district;

(b) Whether enrollment in the small school district is declining and the degree to which the enrollment is declining;

(c) The ratio of staff to students in the small school district;

(d) The balance of funds available to the small school district at the end of the prior fiscal year; and

(e) The resources available to the small school district from an education service district.

(4) The State Board of Education shall adopt any rules necessary for the administration of this section.

SECTION 6. (1) The Department of Education shall conduct a study on the relationship between the size of Oregon’s small school districts and the cost of and need for programs. Based on the study, the department shall develop recommendations about small school districts.

(2) Prior to October 1, 2002, the department shall report to the appropriate interim legislative committees about the study and the recommendations.

SECTION 7. (1) For the fiscal year beginning July 1, 2001, the Department of Education may spend up to $100,000 from the State School Fund for purposes of conducting the review under section 8 of this 2001 Act.

(2) For the fiscal year beginning July 1, 2002, the Department of Education may spend up to $50,000 from the State School Fund for purposes of conducting the review under section 8 of this 2001 Act.

SECTION 8. (1) The Department of Education shall conduct a review of the funding of programs and services currently provided for Oregon’s children with disabilities. The review shall include all programs and services that are funded through school districts, education service districts and the Department of Education. Based on the review, the department shall develop recommendations about the funding of programs and services for children with disabilities.

(2) Prior to October 1, 2002, the department shall report to the appropriate interim legislative committees about the review and the recommendations.

SECTION 9. Sections 1 to 8 of this 2001 Act are repealed on June 30, 2003.

SECTION 10. ORS 327.013 is amended to read:

327.013. The State School Fund distributions shall be computed as follows:

(1) General Purpose Grant = Funding Percentage ´ Target Grant ´ District extended ADMw.

(2) The funding percentage shall be calculated by the Superintendent of Public Instruction to distribute as nearly as practicable the total sum available for distribution of money.

(3) Target Grant = Statewide Target per ADMw Grant + Teacher Experience Factor.

(4) Statewide Target per ADMw Grant = $4,500.

(5) Teacher Experience Factor = $25 ´ {District average teacher experience - statewide average teacher experience}. “Average teacher experience” means the average, in years, of teaching experience of certified teachers as reported to the Department of Education.

(6) District extended ADMw = ADMw or ADMw of the prior year, whichever is greater.

(7)(a) Weighted average daily membership or ADMw = average daily membership + an additional amount computed as follows:

(A) 1.0 for each student in average daily membership eligible for special education as a child with disabilities under ORS 343.035, applicable to not to exceed 11 percent of the district’s ADM without review and approval of the Department of Education. Children with disabilities eligible for special education in adult local correctional facilities as defined in ORS 169.005 or adult regional correctional facilities as defined in ORS 169.620 shall not be included in the calculation of the 11 percent.

(B) 0.5 for each student in average daily membership eligible for and enrolled in an English as a Second Language program under ORS 336.079.

(C) 0.2 for each student in average daily membership enrolled in a union high school district or in an area of a unified school district where the district is only responsible for educating students in grades 9 through 12 in that area.

(D) -0.1 for each student in average daily membership enrolled in an elementary district operating kindergarten through grade 6 or kindergarten through grade 8 or in an area of a unified school district where the district is only responsible for educating students in kindergarten through grade 8.

(E) 0.25 times the sum of the following:

(i) The number of children 5 to 17 years of age in poverty families in the district, as determined by the Department of Education from a report of the federal Department of Education based on the most recent federal decennial census, as adjusted by the school district’s proportion of students in the county receiving free or reduced price lunches under the United States Department of Agriculture’s current Income Eligibility Guidelines if the number is higher than the number determined from census data and only if the school district had an average daily membership of 2,500 or less for the 1995-1996 school year, and as further adjusted by the number of students in average daily membership in June of the year of distribution divided by number of students in average daily membership in the district, or its predecessors, in June [1990] of the year of the most recent federal decennial census;

(ii) The number of children in foster homes in the district as determined by the report of the Department of Human Services to the federal Department of Education, “Annual Statistical Report on Children in Foster Homes and Children in Families Receiving AFDC Payments in Excess of the Poverty Income Level,” or its successor, for October 31 of the year prior to the year of distribution; and

(iii) The number of children in the district in state-recognized facilities for neglected and delinquent children, based on information from the Department of Human Services for October 31 of the year prior to the year of distribution.

(F)(i) An additional amount as determined by ORS 327.077 (1997 Edition) shall be added to the ADMw for each remote small school in the district.

(ii) An additional amount as determined by section 23, chapter 1066, Oregon Laws 1999, for each small high school in the district that is equal to the small high school additional weighting amount.

(G) All numbers of children used for the computation in this section must reflect any district consolidations that have occurred since the numbers were compiled.

(b) The total additional weight that shall be assigned to any student in average daily membership in a district, exclusive of students described in paragraph (a)(E) and (F) of this subsection shall not exceed 2.0.

(8) Transportation Grant = 70 percent of Approved Transportation Costs.

(9) Local Revenues are the total of the following:

(a) The amount of revenue offset against local property taxes as determined by the Department of Revenue under ORS 311.175 (3)(a)(A);

(b) The amount of property taxes actually received by the district including penalties and interest on taxes;

(d) The amount of revenue received by the district from the county school fund;

(e) The amount of revenue received by the district from the 25 percent of federal forest reserve revenues required to be distributed to schools by ORS 294.060 (1);

(f) The amount of revenue received by the district from state managed forestlands under ORS 530.115 (1)(b) and (c);

(g) The amount of revenue received under ORS 334.400 by a school district in an education service district that provides equalization under ORS 334.400;

(h) Moneys received in lieu of property taxes;

(i) Federal funds received without specific application by the school district and which are not deemed under federal law to be nonsupplantable; and

(j) Any positive amount obtained by subtracting the operating property taxes actually imposed by the district, based on the rate certified pursuant to ORS 310.060, from the amount that would have been imposed by the district if the district had certified the maximum rate of operating property taxes allowed by law.

(10) Notwithstanding subsection (9) of this section, Local Revenues do not include:

(a) The amount of revenue actually received by the district, including penalties and interest on taxes, that is used for payment of bonds issued to finance or refinance an unfunded obligation for prior service costs under a contract of integration pursuant to ORS 238.685 (2)(a); and

(b) If a school district imposes local option taxes pursuant to ORS 280.040 to 280.145, an amount equal to the lesser of:

(A) The amount of revenue actually received by the district from local option taxes imposed pursuant to ORS 280.040 to 280.145;

(B) Ten percent of the combined total for the school district of the general purpose grant, the transportation grant and the facility grant of the district; or

(11)(a) Facility Grant = 8 percent of total construction costs of new school buildings.

(b) A school district shall receive a Facility Grant in the distribution year that a new school building is first used.

(A) “New school building” includes new school buildings, adding structures onto existing school buildings and adding premanufactured structures to a school district if those buildings or structures are to be used for instructing students.

(B) “Construction costs” does not include costs for land acquisition.

SECTION 11. The amendments to ORS 327.013 by section 10 of this 2001 Act affect State School Fund distributions commencing with the 2001-2002 distribution.

SECTION 12. ORS 327.013, as amended by section 30, chapter 1066, Oregon Laws 1999, is amended to read: