ND Department of Public Instruction New Administrators Conference August 2, 2013

1. ND Department of Public InstructionNew Administrators Conference August 2, 2013 Summary of Legislation Impacting K-12 Education to be the Impacting K-12 Education by the 63rd Legislative Assembly

2. Commission on Education Improvement No Longer in Existence – Legislatively and Resulted in: No Unified “Omnibus” K-12 Education Policy Bill Little or No Coordinated Effort of Education Associations with State Level Efforts Not Coordinated Major Education Bill HB1319 which became part of NDDPI Funding bill HB1013 on Last Day of Session

3. Highlights of Legislative Action on Major K-12 Funding Bill:HB1013 (aka HB1319)

4. SECTION 9Transportation Grants • $5 million increase for next biennium ($53,500,000) • Rates based on transportation formula as it existed on June 30, 2001, with the following rate changes: • Large bus (capacity 10 or more) • $1.13 per mile • $0.30 per one‐way trip • Small bus (capacity less than 10) • $0.52 per mile • $0.50 family transportation • Per day per one‐way trip • Per day up to two one‐way trips is required by IEP to attend outside the district

5. SECTION 2315.1-07-32Student Performance Strategist • Allows Special Ed teachers to be student performance strategists if: • School teacher is licensed to teach or approved to teach by ESPB and • Holds a special education endorsement or credential

6. SECTION 3215.1-27-03.1 (sunset) & 15.1-27-03.2 (2013-15)Weighted ADM Determination Resets all weighting factors back to current (2011-13) factors due to sunset on HB1013 in June 30, 2015 15.1-27-03.2 School District Size Weighting Factor – Weight Student Units 7/1//13 through 6/30/15 Keeps isolated school size at 100 students for eligibility Changes home based instruction monitoring weighting factor from 0.50 to 0.2 Increases Special Ed weighting factor by .0003 (.0790 to .0820) and adds testing for placement for purposes of identifying. FYs 2013-15) Reduces Powerschool factor from .0060 to.0030 because increases in PPP generates a lot more funds Reduces REA factor from 0.0040 to 0.0020 because increases generates a lot more funds FYs 2013-15

7. SECTION 3315.1-27-03.2School District Size Weighting Factor – Weight Student Units Resets all school district weighting factors on a new scale ranging from 1.35 for districts with fewer than 100 students to 1.00 for 900 or more students:

8. SECTION 3415.1-27-04.1Baseline Payment& Funding Formula • Basic Premise is a K‐12 Education Equity and Adequacy formula which provides that: • “Every student in elementary and secondary education in North Dakota should have a base of financial support that is adequate to allow the district to provide a quality education, regardless of where the student lives or how much taxable valuation is available to the local school district” • Per student base payment rates: $8,810 (FY 13-14) and $9,092 FY (14-15) • Property Tax Component • Ends the mill levy buy down program yet provides an additional 50 mills of property tax relief on top of the 75 mills currently provided. • Severs the relationship with property valuation changes. • Provides a base level of funding necessary to educate students to state standards from a combination of state and local taxes.

9. SECTION 3415.1-27-04.1Baseline Payment& Funding Formula Establishing the Baseline • Current state aid payment (2012-13) plus, • MLRG dollars (2012 taxable value) plus, • Dollars generated from the total of a district’s general fund levy or 110 mills whichever is less plus, • Dollars generated from the total of a district’s • Long distance learning and technology levy plus, • Alternative education program levies

10. SECTION 3415.1-27-04.1Baseline Payment Establishment - Continued • In lieu of moneys received by the district which include: • 75% of all mineral revenue • 75% of all tuition from sending district except for revenue received for operation of residential treatment facility and tuition received for adult farming management programs • 75% of all revenue from distribution and transmission of electric power • 75% of all revenue from electricity generated from sources other than coal • All (100%) revenue Mobile homes • All (100%) revenue from taxes on telecommunications • All (100%) revenue from taxes on homestead credit and disabled veteran’s • Divided by Districts wsu

11. SECTION 3415.1-27-04.1Baseline Payment Determination of State Aid 2013-14 Payment For 2013-14 payment NDDPI • Multiplies district’s wsu for 2013-14 by $8810 • Adjusts product so district gets at least equal to the greater of: • 102% or • 100% of districts 2012-13 baseline funding per wsu (Baseline minimum) • Adjusts product so district does not exceed • 110% of districts 2012-13 baseline funding per wsu (Baseline maximum)

12. SECTION 3415.1-27-04.1Baseline Payment Determination of State Aid 2014-15 Payment For 2014-15 payment NDDPI • Multiplies district’s wsu for 2013-14 by $9092 • Adjusts product so district gets at least equal to the greater of: • 104% or • 100% of baseline per wsu or 12-13 baseline (Baseline minimum) or • Adjusts product so district does not exceed • 120% or (Baseline maximum)

13. SECTION 3415.1-27-04.1Baseline Payment Determination of State Aid Payment The NDDPI will then subtract from the above product for each year of the 2013-15 biennium: An amount equal to 60 mills multiplied by the taxable valuation of the school district, After 2013, the amount in dollars subtracted for purposes of this subdivision may not exceed the previous year's amount in dollars subtracted by more than twelve percent; and An amount equal to 75% of all “in lieu: of money described above An amount equal to 100% of all “in lieu: of money described above The amount remaining will be a districts state aid.

14. SECTION 3515.1-27-04.2State Aid Minimum Local Effort • For districts with state taxable valuation which is > 20% (was 40%): • State will use an amount equal to 60mills times • State Average Valuation Per Student times • Weighted Student Unit (wsu) of the district (60 mills x state Avg Valuation Per Student X wsu of district)

15. SECTION 3815.1-27-35Unobligated General Fund Balance (EFB) Beginning July 1, 2015, Ending Fund Balance (EFB) from preceding June 30th can not exceed 40% + $20,000 Beginning July 1, 2017, Ending Fund Balance (EFB) from preceding June 30th can not exceed 35% + $20,000 expenditures, plus twenty thousand dollars. A districts EFB includes all moneys in the district’s 12 mill “miscellaneous fund”

16. SECTION 3915.1-27-39Minimum Annual Salary Increases minimum teacher salary from $22,500 to $27,500 beginning 2014-15 70% rule for teachers salary is no longer applicable as that is “session “ law which was not renewed in HB1013

17. SECTION 43 15.1-27-39-09Beverages – Snack Breaks Allows school districts to use funds from “at-risk factor” (15.1-27-03.1 subdivision ‘n’) for students eligible for free or reduced lunches to get 1 serving of milk or juice if a mid-morning snack break is provided

18. SECTION 4415.1-27-36-02School Construction Loans • Loan Fund increased to $200 million • $50 million from the coal development trust for school construction loans and • $150 million from strategic investments and improvements fund to provide school construction loans • As of January 1, 2015 up to $50 million in any unused funds of $150 million from SI&I fund will be used to fund medical structure facility loan requests (SB2187) • 1% minimum interest rate • Eligibility based on district tax value per pupil: • < 80% up to $20 million … 90% of project … up to 4½% discount • 80%‐90% up to $15 million … 80% of project … up to 3½% discount • > 90% up to $10 million … 70% of project … up to 3% discount • A loan payable solely from OGPT (oil & gas property tax) receipts not subject to debt limit

19. SECTION 4757-15-01.1Protection of Taxpayers and Taxing Districts • Adds following language to current law which states that “Each taxing district may levy the lesser of the amount in dollars as certified in the budget of the governing body, or the amount in dollars as allowed in this section subject to the following”: • If the base taxable year before 2013, reduced by the amount of state aid in NDCC 15.1-27, which is determined by multiplying the budget year taxable valuation of the school district by the lesser of: • The base year of the school district minus 60 mills; or • 50 mills

20. SECTION 4957-15-14.2.1School District Levies • Eliminates all levies requiring board action and replaces it with the following: • Sets maximum levy at 82 mills for “any purpose related to provision of educational purposes” which after 2013 may not exceed the amount levied the year before plus 12% • Sets a maximum levy of 12 mills by a school board for miscellaneous purposes and expenses which must deposited in a special “miscellaneous fund” and may not be transferred to any other fund • A board may levy no more than 3 mills for deposit into a special reserve fund. • Board may levy "no more than the number of mills necessary" for HS tuition and the funds must be deposited in a special "tuition fund" and may not be transferred into any other fund. • Boards are not limited from levying for: • Mills for a building fund; and • Paying on principal and interest on bonded indebtedness, incurred before July 1, 2013.

21. SECTION 4957-15-14.2.1School District Levies • For taxable year 2013 only • Establish a baseline amount by multiplying 2013 taxable valuation by the sum of 60 mills plus the number of mills levied under former sections 57‐15‐14.5 (technology) and 57‐15‐17.1 (HVAC) in 2012 Example: If the district levied 5 mills for technology and 7 mills for remodeling under 57‐15‐17.1 for the 2012‐13 school year then: 60 plus 5 plus 7 = 72 mills x 2013 taxable valuation establishes the baseline amount. • The general fund and miscellaneous levy is limited to 112% of the baseline amount, up to a levy of 82 mills on the taxable valuation of the district • After taxable year 2013 • General fund levy is limited to 112% of the levy in dollars over the prior year, up to 70 mills on the taxable valuation of the district. • Miscfund levy is limited to a levy of 12 mills on the taxable valuation of the district.

22. SECTION 4957-15-14.2.1Establishing Levies – How It Works • For 2013 taxable year you may levy the amount in dollars up to 12% of what your district levied for 2012 taxable year up to a total of for a combined levy of 82 mills. • The maximum amount of the 10 mills available for a district by board vote for 2013 is capped at a 12% increase which would translate into a 7.2 mill increase. If a district has no additional mills for tech-HVAC-Alt HS this would be the maximum they could raise in mills. • The additional 12 mills above the 60 mills are to include any levies that districts had levied that year for those levies that will be lost (tech – Alt HS –HVAC-etc) in the 2014 taxable year and replaced with the 12 mill miscellaneous. • District A would include dollars generated by .11 mills tech and .11 mills for HVAC (.22 mills) • District B would include dollars generated by 5 mills for tech and 3.36 mills for Alt HS (8.36 mills) • District C would include dollars generated by 5 mills for tech and 7 mills for HVAC (12 mills) • The dollars generated from the levies in 3 above would be included in their base line for 2013 for the 12% rule in dollars • The total mills of all of the above cannot exceed a total combined levy of 82 mills as stated in first bullet above.

23. SECTION 49Establishing Levies – How It Works • Here is Are Examples for Three Districts Would Work • District A would include dollars generated by .11 mills tech and .11 mills for HVAC (.22 mills) • District B would include dollars generated by 5 mills for tech and 3.36 mills for Alt HS (8.36 mills) • District C would include dollars generated by 5 mills for tech and 7 mills for HVAC (12 mills) • The dollars generated from the levies in 3 above would be included in their base line for 2013 for the 12% rule in dollars • The total mills of all of the above cannot exceed a total combined levy of 82 mills as stated in previous slide above. • Here’s how the above districts mill levies would play out: • District A = dollars generated by 60+00.22 = 60.22mills x 1.12% = 67.45 mills • District B= dollars generated by 60+08.36 = 70.56 mills x 1.12% = 72.20 mills • District C = dollars generated by 60+12.00 = 72.00 mills x 1.12% = 80.64 mills

24. SECTIONS 50 & 5257-15-14.5 & 57-15-17.1Technology Levies • Education Technology and HVAC/Asbestos Levies are eliminated as of July 1, 2013 • Balance of funds remaining are to be transferred to a district’s general fund • Things to know: • Revenues transferred to general fund from this levy, along with the HVAC/Asbestos levy revenues are included in the calculation of the total allowable increase in local revenue for a school district for 2013-14 by 12% • Make sure district EFB (Ending Fund Balance) does not exceed: • 45% plus $20,000 by June 30, 2014 if don’t want to lose state funding • 25% if you plan on applying for a School Safety Grant (SB2267

25. SECTIONS 54,55, & 5657-19-01, 57-19-02 & 57-19-09Special Reserve Levy • Special Reserve Levy remains at 3 mills • New law limits Special Reserve Levy balance to no more than could be produced by 15 mills in the district for that year (was total dollars produced by all local levies) • Revenues from this levy in excess of the 15 mill cap are to be transferred to general fund on each July 1st (57-19-02) • Things to know if you have to transfer revenues from this fund this year: • Make sure district EFB (Ending Fund Balance) does not exceed: • 45% plus $20,000 by June 30, 2014 if you don’t want to lose state funding • 25% if you plan on applying for a School Safety Grant (SB2267)

26. Highlights of Legislative Action on Other K-12 Policy Bills:

27. School Safety GrantsSB2267 • $3 million appropriation • $10,000 plus pro rata share on ADM • Use for projects to improve safety • Eligibility • Not subject to ending fund balance offset • Provide equal monetary match • Ending fund balance cannot exceed 25%

28. School District Rapid Enrollment Growth Grants • HB 1261 • Appropriates $13.6 million • District must have 4% growth and at least 20 student increase • Uses Fall K‐12 Enrollment compared to Foundation Aid ADM • Provides payment of $3,900 for each student over 2%.

29. ND Scholarships • Academic Scholarships • HB 1258 • Now allows for a Career and Technical Education “coordinated plan of study” to be meet foreign language requirement (15.1-21-02.5) • Removes CTE requirement from additional five units taken (15.1-21-02.5) • Lowers from 15 to 12 the requirements for required credits during final year in college • Home School Student Scholarship Eligibility • HB1291 • Allows eligibility for home schooled students for Career and Technical Education Scholarship (15.1-21-02.5) or an Academic Scholarship (15.1-21-02.5)

30. State Assessments • SB2102 (15.1-21-08) • State Assessments for Reading, Mathematics, Science – Test Administration • Math &reading annually grades 3, 4, 5, 6, 7, 8, and in at least one grade level selected from 9-11 • Science annually in one grade selected from 3-5; 6-9; and in at least one grade level selected from 9-11

31. Early Childhood Education Programs • HB 1429 (15.1-09-58) • Districts can operate an early childhood education program with local provided the program is approved by DPI (15.1-37) and can support the program with • Local tax revenues, other than those necessary to support the district’s kindergarten program and the provision of elementary and high school services • State moneys appropriated for the program • Federal funds appropriated for the program • Gifts, grants, and donations for the program

32. Concussion Management Program ChangesHB1028 15.1-18.2-04 Program must require student be removed from practice, training or competition of the signs and symptoms of a concussion Duty remove student is extended to officials, coaches, and any other individual designated by the school as having direct responsibility for the student Student must be evaluated as soon as possible by a licensed health care provider trained in the evaluation and management of concussion Student cannot return until authorized by licensed health care provider in writing, presented to the student’s school district, and that it be retained by the school or school district for 7 years after student’s conclusion of enrollment who

33. Zero Increase Number of Mills57-15-02.1 • Districts may not impose a property tax levy in a greater number of mills than the “zero increase number of mills” unless they advertise and hold a public hearing • “Zero increase number of mills” • Means the number of mills against the taxing district’s current year taxable valuation, excluding consideration of new growth, which will provide the same amount of property tax revenue as the property tax levy in the prior year

34. Zero Increase“Things to Keep In Mind” The law states that a "Property tax levy" means the tax rate, expressed in mills, for all property taxes levied by the taxing district – so you must include ALL property tax levies when doing your calculation. If you have any increase in total dollars from the 2013 levy over your 2012 levy you must post the hearing notification in your local newspaper. The notice must be published at least 7 days before the hearing and the hearing (generally when you adopt your preliminary budget in July) cannot be held before 6:00PM on that date.

35. Zero Increase“More Things to Keep In Mind” SB2036 requires notification by mail of each property owner who received notice of an assessment increase under 57-12-09 ($3,000 or 10% increase of last assessment) 7 days prior to the hearing. Contact you local auditor for this mailing list!!!! The hearing notice has very specific requirements which are on the NDCEL website and can be accessed by using the following link: Zero Increase Number of Mills Announce at your first hearing (preliminary budget) the date and time of your final meeting when you adopt your budget (usually in October). If you do that you do not need to post another notification in the your local newspaper.

36. Calculating “Zero Increase Mill Levy” for All Mills Levied

37. CalculatingZero Increase Number of Mills

39. Other Bills Impacting K12 Ed • HB1038-Human services will create an autism spectrum registry • HB1228-$160,000 in CTE grants for STEM advancement • HB1268-Drivers Education curriculum requirement • Beginning July 1, 2014, driver’s ed. curriculum must contain process for making an anatomical gift • Parents of driver’s ed. students must be notified in writing or electronically that the curriculum includes this process • HB1276- Exempts personnel dispensing medication to students from liability if trained • HB 1283- bill does not allow for guns on school property or at school functions • HB 1288-Requires a 55% vote of the people to use a building authority for any project $4 million or more • SB2238-Reimbursement to districts for student CPR training. $22.50/trained student first year; $15 second • SB2270-Allows bid advertisements to place in on-line publications • SB2329-Homeschoolers may opt out of testing under certain circumstances. Have to read it to believe it!