The Finance and Taxation Committee debated Senate Bill 2158, which would allow a dissolving school district to grant its unobligated cash balance to another political subdivision rather than following the current statutory distribution methods. The committee voted down an amendment to reduce the proposed cap from $500,000 to $50,000 and to require any transferred funds be spent on the donated school building, then voted to recommend a do-not-pass on the bill.

The bill, discussed at the committee meeting, would change current Century Code procedures for distributing unobligated cash balances when a district dissolves. Lisonbee Hicks, assistant attorney general and general counsel to the State Board of Public School Education, told the committee, "To be clear, the law currently doesn't allow for this donation at all." She said the $500,000 figure does not appear in current law but was proposed based on a dissolution plan presented by Edmore.

Committee members argued over local control, taxpayer fairness and the proper dollar limit. Senator Wallen moved an amendment to reduce the cap to $50,000 and add a restriction that "those funds can only be used on that building that is being given." Senator Powers seconded the motion. Opponents said a single statutory dollar limit does not fit the wide variation in district sizes and circumstances; Senator Rummel said the state should avoid prescribing a one-size-fits-all amount in Century Code.

After debate the roll call on the amendment recorded: Chairman Weber — No; Vice Chair Romo — No; Senator Marcelino — No; Senator Patton — No; Senator Powers — Yes; Senator Wallen — Yes. The amendment failed.

The committee then considered a motion to pass the bill as introduced. Senator Patton moved a do-pass recommendation; the motion was seconded. On the final roll call the committee recorded: Chairman Weber — No; Vice Chair Romo — Yes; Senator Marcelino — No; Senator Patton — Yes; Senator Powers — No; Senator Wallen — No. The committee concluded with a recommendation of do not pass on Senate Bill 2158, and Senator Powers volunteered to carry the committee's do-not-pass recommendation to the floor.

Nut graf: The votes reflect a split between members who want a statutory cap to protect taxpayers and those who say local authorities should decide post-dissolution transfers. The bill would change the distribution rules now found in Century Code and apply statewide to any future school-district dissolution.

Supporters of the bill had argued the change would give dissolving districts discretion to grant unobligated cash balances to a political subdivision that would take ownership of facilities. Opponents raised two recurring concerns: (1) that a statutory cap is arbitrary and may not fit all dissolutions, and (2) that money granted to another political subdivision could be spent for purposes other than preserving the school building or returning value to local taxpayers.

Discussion points recorded in the hearing included that the current law does not permit grants of unobligated cash balances outside the statutory distribution (refunds, following students, or voter-directed uses), the proposed $500,000 cap was drawn from a local dissolution proposal rather than existing law, and that substantial portions of school funding originate from state Foundation Aid payments. Senator Rummel said roughly 75% of a typical district's revenue is Foundation Aid and argued the state may have claim to returned funds. Other senators emphasized taxpayer expectations that local school taxes benefit local services.

The committee made clear the statutory change would apply to all school-district dissolutions going forward and would amend Century Code. No amendments specifying phased application or exceptions were adopted. The bill was left with a do-not-pass recommendation and will be carried to the floor by Senator Powers with that recommendation.

Ending: The committee moved on to other business after the votes. No additional instructions to staff or follow-up reports were recorded for SB2158 during the meeting.