MontanaHB 60669th Legislature, Regular Session (2025)HouseWALLET

Revise school district reorganization laws

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 2 benefits, 2 costs, 3 mixed.

Job protections after school mergers

Beginning July 1, 2025, tenured certified staff get absolute hiring preference for open jobs in the new district during the first school fiscal year. Taking a job keeps your tenure. Noncertified, nonprobationary staff get first‑year hiring preference and keep nonprobationary status if rehired.

Temporary funding after district mergers

After a merger or annexation, each former district keeps its own student count and basic funding calculation for three years. In year 4, each former district keeps 75% of its basic entitlement. In year 5 it keeps 50%. In year 6 it keeps 25%. This phases in the new funding over six years.

Voter tax for merger transition costs

Trustees can ask voters for a building reserve tax to cover transition costs, like opening or closing a school or merging districts. Money goes in a special subfund. The levy is capped at the greater of 5% of the current maximum general fund budget or $250 per student (ANB) per year, for up to six years. For mergers or annexations, the cap uses the combined districts’ budgets and student counts, and voters in the combined area must approve.

Who pays school bonds after mergers

Beginning July 1, 2025, when district lines change, bonded debt stays with the original taxing area. Property tax levies to pay those bonds continue there unless a joint debt assumption is approved at consolidation or annexation. District debt‑service money must go to bond payments. If a district ends, its cash first pays debts; any unpaid tuition bills can be covered by a mill levy on property in the discontinued district.

Path to dissolve a K-12 district

Trustees can ask voters to dissolve a K‑12 district so its elementary or high school programs join nearby districts. If trustees find staying open would lose federal funding, they can ask the county superintendent to order dissolution instead. The plan must say how to split property, money, and debt. After approval and certification, the order takes effect July 1. Employee tenure protections and budget proration rules apply.

How districts merge and transition

Two or more neighboring districts can combine into one. A board vote or a petition signed by at least 20% of voters in each district can start it. A majority in each included district must approve. The ballot must state whether the new district will jointly assume bonded debt. County superintendents run the election, set the new district number and boundaries, and issue the order effective July 1 before the school year. In multi‑county mergers, the designated county superintendent handles the process. Until voters elect a new board, all current trustees serve together as an interim board. These rules apply starting July 1, 2025.

New rules for boards and boundaries

Beginning July 1, 2025, the law staggers school board terms after mergers so not all seats end at once. Initial terms are set by drawing lots, with set 3‑, 2‑, and 1‑year splits by district size. After territory moves between districts, current trustees keep serving with the same powers until the new board is seated. Elementary and high school districts generally cannot create new districts or change boundaries from January 1 to the fourth Monday in August, except for full annexations, some joint‑district annexations, or full consolidations.

Sponsors & Cosponsors

Sponsor

Brad Barker
Republican • House

Cosponsors

Sue Vinton
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 283 • No: 11

House vote • 4/15/2025

Do Concur

Yes: 45 • No: 5

House vote • 4/14/2025

Do Concur

Yes: 42 • No: 6

House vote • 3/7/2025

Do Pass

Yes: 99 • No: 0

House vote • 3/5/2025