1. (a)

   1. (1) Student growth funding is calculated as the sum of the following amounts:

      1. (A) One quarter (1/4) of the current foundation funding amount per student as established by the General Assembly; multiplied by
      2. (B) The increase, if any, in the school district’s:

2. (i) Previous fiscal year fourth-quarter ADM compared to the fiscal year three-quarter ADM in the year prior to the aforementioned fourth-quarter ADM;

   1. (ii) Current fiscal year first-quarter ADM compared to the prior fiscal year three-quarter ADM;

      1. (iii) Current fiscal year second-quarter ADM compared to the prior fiscal year three-quarter ADM; and

         1. (iv) Current fiscal year third-quarter ADM compared to the prior fiscal year three-quarter ADM.

   2. (2)

      1. (A) A final comparison will be made of the ADM from quarters one (1), two (2), and three (3) used in subdivision (a)(1)(B) of this section.
      2. (B) The comparison will check for changes to quarters one (1), two (2), and three (3) ADM from Cycle 6 to Cycle 7 that have an effect on the student growth funding calculation.
      3. (C) The comparison will take place after the fiscal year has ended, but any resulting funding adjustments should be coded to the fiscal year just ended.

3. (b) If a school district’s net revenues minus any recoupment to the state above the ninety-eight percent (98%) URT plus miscellaneous funds calculated under Arkansas Code § 6-20-2308(b)(1)(A) exceed the foundation funding amount, a school district shall be eligible to receive the amount of calculated student growth funding that exceeds:

   1. (1) The net revenues; minus
   2. (2) Any recoupment to the state above the ninety-eight percent (98%) URT; plus

   3. (3) Miscellaneous funds calculated under Arkansas Code § 6-20-2308(b)(1)(A).

      1. (c) Increases in ADM resulting solely from consolidation or annexation shall be excluded from the student growth funding calculation.

         1. (d) No school district shall receive both:
   4. (1) Declining enrollment funding; and
   5. (2) Student growth funding.

4. (e)

   1. (1) Student growth funding is provided to eligible school districts and open-enrollment public charter schools to help bridge the gap between:

      1. (A) The foundation funding amount calculated using prior-year three-quarter ADM; and
      2. (B) Any quarterly growth in ADM subsequent to the prior-year three-quarter ADM.
   2. (2) Local education agencies that receive the foundation funding amount based on current year three-quarter ADM are ineligible for student growth funding.

5. (f)

   1. (1) Student growth funding is unrestricted funding.

   2. (2) However, under Arkansas Code § 6-20-2203, by February 15 of each year for each school district receiving student growth funding, the Department of Education shall submit to the State Board of Education, the Governor, the Senate Committee on Education, and the House Committee on Education a report listing:

      1. (A) The amount of student growth funding received under Arkansas Code § 6-20-2305(c)(2);
      2. (B) How the funds were expended;
      3. (C) The amount expended; and
      4. (D) Any other information required.
   3. (3) To enable the tracking of expenditures of student growth funding for these required reports, the funds may not be transferred to another fund prior to expenditure but must be expended directly from the student growth fund.

Codification Notes: "ADM" means average daily membership. "URT" means uniform rate of tax.