1. (1) For the 2026-27 budget year, and each budget year thereafter, the department shall use this section to determine each local education provider's postsecondary and workforce readiness sustain funding. To the extent possible, the department shall use existing data and each local education provider shall provide data to the department to inform the department of each local education provider's sustain funding amount.

2. (2)

   1. (a) A local education provider is eligible to receive reimbursement for students who, in the preceding budget year, successfully satisfied postsecondary credit, received an industry-recognized credential, or satisfied work-based learning requirements as specified by state board rule. A local education provider is eligible to receive multiple reimbursements for one student. A local education provider is eligible for reimbursement for students who are enrolled in a p-tech school or participating in a TREP program.

   2. (b)

      1. (I) For the 2026-27 budget year, the department shall divide the total amount of sustain funding for reimbursement into the following categories:

         1. (A) Twenty percent of the total amount of sustain funding for reimbursement for postsecondary credit attainment;
         2. (B) Forty percent of the total amount of sustain funding for reimbursement for industry-recognized credentials earned;
         3. (C) Thirty-five percent of the total amount of sustain funding for reimbursement for work-based learning; and
         4. (D) Five percent of the total amount of sustain funding to offset the direct and indirect costs incurred in administering the sustain funding.
      2. (II) Notwithstanding subsection (2)(b)(I) of this section, if money that is allocated to a category is not expended because of insufficient demand, the money may be reallocated to another category to satisfy that category's demand.
      3. (III) This subsection (2)(b) is repealed, effective July 1, 2028.

   3. (c)

      1. (I) For the 2027-28 budget year, and each budget year thereafter, the state board shall determine the percentages of the total amount of sustain funding for reimbursement assigned to the postsecondary credit attainment, industry-recognized credentials, and work-based learning categories; except that the five percent of the total amount of sustain funding to offset the direct and indirect costs incurred in administering the sustain funding must not be changed. The percentages for each category are determined by state board rule.
      2. (II) In determining the percentages of the total amount of sustain funding for reimbursement assigned to each category pursuant to subsection (2)(c)(I) of this section, the state board shall consider the availability of postsecondary and workforce readiness opportunities offered by local education providers, student participation, and evidence of student outcomes.
      3. (III) Notwithstanding subsection (2)(c)(I) of this section, if money that is allocated to a category is not expended because of insufficient demand, the money may be reallocated to another category to satisfy that category's demand.
   4. (d) A local education provider may receive funding from one or multiple categories described in subsection (2)(b)(I) of this section in each budget year; except that in a budget year when the general assembly does not appropriate a sufficient amount to fully fund the distributions required pursuant to this section, the department shall reduce the amount of each eligible local education provider's distribution by a proportionate percentage of the amount required to fully fund the distributions required pursuant to this section.

3. (3)

   1. (a) A local education provider shall use sustain funding for expenses that are associated with maintaining and expanding its postsecondary and workforce readiness program that aligns with the state's workforce demands or priorities. 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;
      6. (VI) Costs associated with concurrent enrollment; and
      7. (VII) Wages for employed apprentices participating in registered apprenticeships.
   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 funding pursuant to this section, including criteria that constitute a student's successful satisfaction of postsecondary credit, industry-recognized credential, or work-based learning requirements. Eligibility requirements may vary based on the type of local education provider.
   2. (b) Categories of eligible expenses, and eligible expenses within the categories;
   3. (c) Reimbursement eligibility and rates, including limits on a local education provider's annual total reimbursement and annual reimbursement from one or multiple categories, based on local-education-provider-specific features or other features;
   4. (d) Requirements of a local education provider that receives funding pursuant to this section; and
   5. (e) Any other rules deemed necessary by the state board for the purposes of this section.

5. (5)

   1. (a) A school district that authorizes a charter school shall forward to the district charter school an amount equal to one hundred percent of the sustain funding amount that the school district receives for a student who is enrolled in the district charter school and who satisfies the criteria that constitute the student's successful satisfaction of postsecondary credit, industry-recognized credential, or work-based learning requirements.
   2. (b) The state charter school institute shall forward to an institute charter school an amount equal to one hundred percent of the sustain funding amount that the state charter school institute receives for a student who is enrolled in the institute charter school and who satisfies the criteria that constitute the student's successful satisfaction of postsecondary credit, industry-recognized credential, or work-based learning requirements.

Source: L. 2025: Entire part added, (SB 25-315), ch. 237, p. 1186, § 1, effective May 23.