Committee backs HB 567 to incentivize multi-district school collaboration; sponsors, supporters say statewide rollout will be gradual

The Montana House Appropriations Committee voted unanimously to give House Bill 567 a do-pass recommendation after a hearing in which sponsors and education advocates argued the measure encourages districts to share services while preserving local control.

Representative Barker, the bill sponsor, said the proposal lets districts voluntarily form countywide agreements to collaborate on services such as transportation, curriculum support and administration and offers an incentive tied to the state—s quality educator payment. "There are no mandates in this bill. It's still local control, local choice," Barker said in closing remarks before the committee voted to advance the bill.

Paul Taylor, an Office of Public Instruction (OPI) staff member, appeared as an informational witness to answer fiscal questions. A longset of technical questions in the fiscal note prompted extended testimony from an attorney who said he was speaking on behalf of the coalition of advocates for Montana's public schools and who identified himself as a school attorney with roughly 30 years of school law practice. "This is a big lift. It's a big change in culture," the attorney said, arguing that the fiscal note's estimate of "a little over $5,000,000" should not be assumed to take effect in the current biennium because qualification for the incentive requires signed interdistrict contracts and an OPI certification process that would not be completed quickly.

He detailed a number of technical-note issues flagged in the fiscal analysis, including how the bill treats contracting with private entities, where expenditures are recorded, and how OPI would calculate and distribute the incentive. "The contract is king under this bill," he told the committee, adding that the statute as drafted would allow districts to contract with public or private entities but would not shift state funds into private accounts.

Committee members pressed on reporting and accountability. Representative Kroll raised concerns tied to a pending class-action, Yellow Kidney v. OPI, and asked how the bill would ensure "robust reporting requirements" so funds intended for American Indian education and other specified purposes are used as required. Representative Barker and the attorney replied that the bill does not change existing reporting requirements and that OPI already has rulemaking authority and an audit process to verify compliance. The committee also noted specific funding line items cited in the fiscal note, including the American Indian achievement-gap payment ($695,750) and an "Internet for all" line ($70,808), and asked for clearer reporting language.

Members described anticipated benefits: shared transportation fleets, joint curriculum support, and ability to pool specialized teachers or programs across low-enrollment districts. Members who supported the bill said those efficiencies could reduce local property-tax pressure over time, while critics warned the measure requires a substantial commitment from districts and that many small districts receive only modest annual funding today.

Representative Barker asked for the committee's support, and the committee approved a do-pass recommendation by voice vote; the clerk recorded the action as passing unanimously.

The bill now moves forward from the committee with a do-pass recommendation.