Sponsor and OPI clash over language that redirects school mental-health funding in HB 669

Representative David Beattie opened a hearing on House Bill 669, a statutory cleanup that would clarify how tuition payments should be calculated when students placed in children's psychiatric hospitals, residential treatment facilities or therapeutic group homes are educated by the local school district.

Beattie told the committee the bill mirrors the method used when students are placed outside their district for foster-care, adjudication or state protective care: the same tuition-calculation process should apply when districts educate children at qualifying facilities. "Specifically, it makes clear that the same process is to be used for calculating tuition as when the child is under the protective care of a state agency," Beattie said.

Proponents, including the Montana School Boards Association, described the bill as a cleanup to avoid conflicting interpretations between subsections of the statute (referred to in testimony as 20-7-435). They urged the committee to strike or clarify a subsection (page 3, lines 21–24 in the current draft) that they said could be read to allow the superintendent of public instruction to reallocate funds intended for educating children at qualifying facilities. "This section of law speaks to the negotiated contract between the office of public instruction and a school district," one witness said, and the contested language could create an "audit finding waiting to happen."

Susie Hedlund, Superintendent of Public Instruction, told the committee she appreciated the sponsor's cleanup but warned the committee that the subsection on lines 21–24 has been used in practice to operate a separate "significant needs grant" program administered by OPI. Hedlund said the grant program provides emergency funding to districts and cooperatives when students with high physical or behavioral needs arrive midyear and can carry costs "upward of $100,000" for a small district. She told the committee that the available significant-needs funding has varied year to year — "anywhere from $0 to ... $383,000" in recent years — and said OPI would need either statutory language or appropriations to continue the grants if the subsection is struck.

The sponsor said he intended to remove the subsection because the grants and the education-for-qualified-facilities funding are separate policy choices that should be transparent and funded through explicit appropriations, not an embedded statutory diversion. "This piece of code has no business being in this statute," Beattie said, adding that he preferred to strike it to avoid a hidden or nontransparent funding path. He suggested such significant mental-health funding would be better handled in a separate, dedicated appropriation.

Committee members repeatedly asked whether removing the subsection would immediately halt OPI's emergency grants and for how long OPI would need to set up a separate funding mechanism. Hedlund said she would need to work with staff to determine timing and implementation and warned that an immediate cut-off could harm districts that rely on the grants for high-need students.

No committee vote on HB 669 was recorded in the transcript. The hearing record shows competing priorities: sponsor emphasis on statutory clarity and legislative transparency; OPI emphasis on continuity of emergency funding for districts that serve high-need students.

Ending: The committee closed the hearing on HB 669 with divergent views: the sponsor asked to remove a statutory carve-out that appears to have funded OPI's significant-needs grants, while OPI urged caution and said additional statutory or appropriation language would be needed to avoid harming districts that rely on the grant program.