1. (1) For the 2025-26 budget year through the 2027-28 budget year, the department shall use this section to determine each local education provider's postsecondary and workforce readiness start-up funding.

2. (2)

   1. (a) A local education provider's start-up funding is determined by a formula developed or adopted by the state board.

   2. (b) The state board shall develop or adopt a formula to determine a local education provider's start-up funding. The purpose of the formula is to enhance equity in access to postsecondary and workforce readiness programs by allocating funds to local education providers whose characteristics are considered by the formula's factors and demonstrate the need for resources to achieve equity through developing and implementing postsecondary and workforce readiness programs. At a minimum, the formula must include factors that reflect the local education provider's:

      1. (I) Participation in postsecondary and workforce readiness opportunities;
      2. (II) Percentage of students who are enrolled in grades nine through twelve and are eligible for free or reduced-price lunch pursuant to the provisions of the federal Richard B. Russell National School Lunch Act, 42 U.S.C. sec. 1751 et seq.;
      3. (III) Chronic absenteeism rate of students who are enrolled in grades nine through twelve;
      4. (IV) High school graduation rate; and
      5. (V) Dropout rate, excluding students who are or were enrolled in an alternative school.
   3. (c) The state board shall establish a minimum number of students and a maximum number of students to be used as a part of the student count in determining start-up funding so that, notwithstanding the local education provider's actual student count used for purposes of determining start-up funding, a local education provider's student count is not less than the minimum number or more than the maximum number. The purpose of establishing a minimum number of students and a maximum number of students is to ensure that start-up funding is not disproportionately distributed.
   4. (d) The data used for each factor of the formula must be the most recent data validated by the department.
   5. (e) The formula may apply a different weight to each factor.
   6. (f) The formula must apply a higher weight to previously low participation in postsecondary and workforce readiness opportunities.
   7. (g) The department shall calculate and distribute the start-up funds determined pursuant to this section.

3. (3)

   1. (a) A local education provider shall use start-up funding for eligible expenses that are associated with developing and implementing a postsecondary and workforce readiness program that aligns with the state's workforce demands or priorities and supports students in successfully earning postsecondary credit or industry-recognized credentials, or successfully completing work-based learning requirements. Categories of eligible expenses include, but are not limited to:

      1. (I) Program planning and design;
      2. (II) Course materials, technology, and equipment;
      3. (III) Professional development, certification, authorization, or licensure;
      4. (IV) Contracting with an entity or hiring school staff to support the development and implementation of a postsecondary and workforce readiness program;
      5. (V) Individual career and academic plan resources, as described in section 22-2-136, and supports, including academic and career advising and exploration; and
      6. (VI) Costs associated with concurrent enrollment.
   2. (b) Local education providers are encouraged to collaborate with each other to maximize economies of scale and expand student access to a postsecondary and workforce readiness program.

4. (4) The state board shall adopt rules governing:

   1. (a) Additional eligibility requirements for a local education provider to receive start-up funding pursuant to this section. Eligibility requirements may vary based on the type of local education provider.
   2. (b) The formula developed or adopted pursuant to subsection (2) of this section;
   3. (c) Categories of eligible expenses and eligible expenses within the categories;
   4. (d) Eligibility for, and distribution of, funding for eligible expenses within the categories described in subsection (3) of this section. Eligibility may require satisfaction of certain conditions. Eligibility and distribution rates may be categorized or limited based on local-education-provider-specific demographics or other features as specified by state board rule.
   5. (e) Requirements of local education providers that receive funding pursuant to this section; and
   6. (f) Any other rules deemed necessary by the state board for the purposes of this section.
5. (5) The department may not use more than five percent of the total amount of start-up funding in the 2026-27 budget year through the 2027-28 budget year to offset the direct and indirect costs incurred in administering start-up funding.
6. (6) This section is repealed, effective July 1, 2029.

Source: L. 2025: Entire part added, (SB 25-315), ch. 237, p. 1182, § 1, effective May 23.