MontanaHB 60669th Legislature, Regular Session (2025)House

Revise school district reorganization laws

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 1 costs, 2 mixed.

Job protections for school staff after mergers

When districts reorganize or annex to form one district, tenured principals, teachers, and other certified staff get first hiring preference for the first school fiscal year. If hired, they keep their tenure. Noncertified, nonprobationary staff get hiring preference for similar jobs in the first year and are not put on probation when hired. These protections apply in the first year after the reorganization.

More ways to count students for funding

Starting July 1, 2025, districts with at least 3 years of existence can set budgets using either current-year student counts or a 3‑year average, whichever gives a larger maximum general fund. Schools count eligible Montana Youth Challenge participants as half-time. Schools can also count some students for completed extracurriculars: each 6–18 week activity counts as 1/16 and each over 18 weeks counts as 1/8, up to one full-time per person. Qualifying activities include sanctioned school sports/contests, approved career and technical student groups, and school theater productions.

New school levies for maintenance and safety

Beginning July 1, 2025, trustees can ask voters to approve up to a 10‑mill levy for major maintenance. The cap on maintenance money is $15,000 plus $110 times last year’s budgeted student count. Trustees can add other lawful district funds to reach that cap. Voters can also approve a levy for transition costs (up to 6 years) capped at: years requested × the larger of 5% of the district’s maximum general fund budget or $250 per current-year student. Voters may approve a separate levy for school safety and security projects. The transition and safety levies are not treated as outstanding debt under state limits.

Who pays school debt after mergers

In most mergers, cash and debts move to the new district’s matching funds. If districts agree to share bond debt, bond cash and the bonds move too. For K–12 formations under the named reorganization path, bonded debt stays with the original territory, so those property owners keep paying it. Ballots must say if the new district will assume bonded debt, and a simple majority in each district approves the plan. When a district closes outside that reorganization process, cash first pays debts (bond cash pays bonds first). Remaining cash is split by taxable value, and tuition debts stay with the old territory and are paid by a mill levy unless the receiving district takes them on.

New path to combine school districts

The law lets more school districts join into one, including forming a single K–12 district. The county superintendent must order needed boundary changes and make the new district effective July 1 of the next school fiscal year. An interim board made up of all current trustees runs the new district until voters elect a new board. Initial trustee terms are set and may be shortened so most seats don’t expire at once. Boundary changes are not allowed from January 1 to the fourth Monday in August, except for full annexations or full reorganizations. If territory is attached without a full reorganization, current trustees keep serving; after a reorganization, appointed trustees take office under the new rules.

Sponsors & Cosponsors

Sponsor

Brad Barker
Republican • House

Cosponsors

Sue Vinton
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 286 • No: 11

Senate vote • 4/15/2025

Do Concur

Yes: 45 • No: 5

Senate vote • 4/14/2025

Do Concur

Yes: 44 • No: 6

House vote • 3/7/2025

Do Pass

Yes: 99 • No: 0

House vote • 3/5/2025