First Substitute H.B. 69

Representative John Dougall proposes the following substitute bill:

1 REPEAL OF BOARD LEEWAY FOR READING
2 IMPROVEMENT
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: John Dougall
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill modifies the funding of the K-3 Reading Improvement Program.
11 Highlighted Provisions:
12 This bill:
13 . consolidates the Base Level Program and the Guarantee Program;
14 . provides state funding for the K-3 Reading Improvement Program;
15 . modifies the distribution of program monies;
16 . repeals the local school board leeway to fund part of a school district's K-3 Reading
17 Improvement Program; and
18 . makes technical changes.
19 Monies Appropriated in this Bill:
20 This bill appropriates as an ongoing appropriation subject to future budget constraints,
21 $20,000,000 from the Uniform School Fund for fiscal year 2008-09 to the State Board
22 of Education.
23 Other Special Clauses:
24 This bill provides effective dates and provides for retrospective operation.
25 Utah Code Sections Affected:

26 AMENDS:
27 17-34-3, as last amended by Laws of Utah 2005, First Special Session, Chapter 9
28 17C-1-408, as renumbered and amended by Laws of Utah 2006, Chapter 359
29 53A-16-106, as last amended by Laws of Utah 1994, Chapter 12
30 53A-17a-133, as last amended by Laws of Utah 2006, Chapter 26
31 53A-17a-150, as enacted by Laws of Utah 2004, Chapter 305
32 53A-19-102, as last amended by Laws of Utah 2007, Chapter 92
33 53A-19-105, as last amended by Laws of Utah 2003, Chapter 122
34 59-2-908, as last amended by Laws of Utah 1995, Chapter 278
35 59-2-913, as last amended by Laws of Utah 2007, Chapter 107
36 59-2-914, as last amended by Laws of Utah 1995, Chapter 278
37 59-2-918, as last amended by Laws of Utah 2006, Chapters 26 and 104
38 59-2-924, as last amended by Laws of Utah 2007, Chapters 107 and 329
39 59-2-1330, as last amended by Laws of Utah 2002, Chapters 196 and 240
40 ENACTS:
41 59-2-924.2, Utah Code Annotated 1953
42 REPEALS:
43 53A-17a-151, as enacted by Laws of Utah 2004, Chapter 305
44
45 Be it enacted by the Legislature of the state of Utah:
46 Section 1. Section 17-34-3 is amended to read:
47 17-34-3. Taxes or service charges.
48 (1) (a) If a county furnishes the municipal-type services and functions described in
49 Section 17-34-1 to areas of the county outside the limits of incorporated cities or towns, the
50 entire cost of the services or functions so furnished shall be defrayed from funds that the county
51 has derived from:
52 (i) taxes that the county may lawfully levy or impose outside the limits of incorporated
53 towns or cities;
54 (ii) service charges or fees the county may impose upon the persons benefited in any
55 way by the services or functions; or
56 (iii) a combination of these sources.

57 (b) As the taxes or service charges or fees are levied and collected, they shall be placed
58 in a special revenue fund of the county and shall be disbursed only for the rendering of the
59 services or functions established in Section 17-34-1 within the unincorporated areas of the
60 county or as provided in Subsection 10-2-121 (2).
61 (2) For the purpose of levying taxes, service charges, or fees provided in this section,
62 the county legislative body may establish a district or districts in the unincorporated areas of
63 the county.
64 (3) Nothing contained in this chapter may be construed to authorize counties to impose
65 or levy taxes not otherwise allowed by law.
66 [(4) (a) A county required under Subsection 17-34-1 (4) to provide advanced life
67 support and paramedic services to the unincorporated area of the county and that previously
68 paid for those services through a countywide levy may increase its levy under Subsection
69 (1)(a)(i) to generate in the unincorporated area of the county the same amount of revenue as the
70 county loses from that area due to the required decrease in the countywide certified tax rate
71 under Subsection 59-2-924 (2)(k)(i).]
72 [(b) An increase in tax rate under Subsection (4)(a) is exempt from the notice and
73 hearing requirements of Sections 59-2-918 and 59-2-919 .]
74 [(5)] (4) Notwithstanding any other provision of this chapter, a county providing fire,
75 paramedic, and police protection services in a designated recreational area, as provided in
76 Subsection 17-34-1 (5), may fund those services from the county general fund with revenues
77 derived from both inside and outside the limits of cities and towns, and the funding of those
78 services is not limited to unincorporated area revenues.
79 Section 2. Section 17C-1-408 is amended to read:
80 17C-1-408. Base taxable value to be adjusted to reflect other changes.
81 (1) (a) (i) As used in this Subsection (1), "qualifying decrease" means:
82 (A) a decrease of more than 20% from the previous tax year's levy; or
83 (B) a cumulative decrease over a consecutive five-year period of more than 100% from
84 the levy in effect at the beginning of the five-year period.
85 (ii) The year in which a qualifying decrease under Subsection (1)(a)(i)(B) occurs is the
86 fifth year of the five-year period.
87 (b) If there is a qualifying decrease in the minimum basic school levy under Section

88 59-2-902 that would result in a reduction of the amount of tax increment to be paid to an
89 agency:
90 (i) the base taxable value of taxable property within the project area shall be reduced in
91 the year of the qualifying decrease to the extent necessary, even if below zero, to provide the
92 agency with approximately the same amount of tax increment that would have been paid to the
93 agency each year had the qualifying decrease not occurred; and
94 (ii) the amount of tax increment paid to the agency each year for the payment of bonds
95 and indebtedness may not be less than what would have been paid to the agency if there had
96 been no qualifying decrease.
97 (2) (a) The amount of the base taxable value to be used in determining tax increment
98 shall be:
99 (i) increased or decreased by the amount of an increase or decrease that results from:
100 (A) a statute enacted by the Legislature or by the people through an initiative;
101 (B) a judicial decision;
102 (C) an order from the State Tax Commission to a county to adjust or factor its
103 assessment rate under Subsection 59-2-704 (2);
104 (D) a change in exemption provided in Utah Constitution Article XIII, Section 2, or
105 Section 59-2-103 ; or
106 (E) an increase or decrease in the percentage of fair market value, as defined under
107 Section 59-2-102 ; and
108 (ii) reduced for any year to the extent necessary, even if below zero, to provide an
109 agency with approximately the same amount of money the agency would have received without
110 a reduction in the county's certified tax rate if:
111 (A) in that year there is a decrease in the county's certified tax rate under Subsection
112 [ 59-2-924 (2)(c) or (d)(i)] 59-2-924.2 (2) or (3)(a);
113 (B) the amount of the decrease is more than 20% of the county's certified tax rate of the
114 previous year; and
115 (C) the decrease would result in a reduction of the amount of tax increment to be paid
116 to the agency.
117 (b) Notwithstanding an increase or decrease under Subsection (2)(a), the amount of tax
118 increment paid to an agency each year for payment of bonds or other indebtedness may not be

119 less than would have been paid to the agency each year if there had been no increase or
120 decrease under Subsection (2)(a).
121 Section 3. Section 53A-16-106 is amended to read:
122 53A-16-106. Annual certification of tax rate proposed by local school board --
123 Inclusion of school district budget -- Modified filing date.
124 (1) Prior to June 22 of each year, each local school board shall certify to the county
125 legislative body in which the district is located, on forms prescribed by the State Tax
126 Commission, the proposed tax rate approved by the local school board.
127 (2) A copy of the district's budget, including items under Section 53A-19-101 , and a
128 certified copy of the local school board's resolution which approved the budget and set the tax
129 rate for the subsequent school year beginning July 1 shall accompany the tax rate.
130 (3) If the tax rate approved by the board is in excess of the "certified tax rate" as
131 defined under Subsection 59-2-924 [(2)](3)(a), the date for filing the tax rate and budget
132 adopted by the board shall be that established under Section 59-2-919 .
133 Section 4. Section 53A-17a-133 is amended to read:
134 53A-17a-133. State-supported voted leeway program authorized -- Election
135 requirements -- State guarantee -- Reconsideration of the program.
136 (1) An election to consider adoption or modification of a voted leeway program is
137 required if initiative petitions signed by 10% of the number of electors who voted at the last
138 preceding general election are presented to the local school board or by action of the board.
139 (2) (a) (i) To establish a voted leeway program, a majority of the electors of a district
140 voting at an election in the manner set forth in Section 53A-16-110 must vote in favor of a
141 special tax.
142 (ii) The tax rate may not exceed .002 per dollar of taxable value.
143 (b) The district may maintain a school program which exceeds the cost of the program
144 referred to in Section 53A-17a-145 with this voted leeway.
145 (c) In order to receive state support the first year, a district must receive voter approval
146 no later than December 1 of the year prior to implementation.
147 (3) (a) Under the voted leeway program, the state shall contribute an amount sufficient
148 to guarantee $17.54 per weighted pupil unit for each .0001 of the first .0016 per dollar of
149 taxable value.

150 (b) The same dollar amount guarantee per weighted pupil unit for the .0016 per dollar
151 of taxable value under Subsection (3)(a) shall apply to the board-approved leeway authorized
152 in Section 53A-17a-134 , so that the guarantee shall apply up to a total of .002 per dollar of
153 taxable value if a school district levies a tax rate under both programs.
154 (c) (i) Beginning July 1, 2005, the $17.54 guarantee under Subsections (3)(a) and (b)
155 shall be indexed each year to the value of the weighted pupil unit by making the value of the
156 guarantee equal to .008544 times the value of the prior year's weighted pupil unit.
157 (ii) The guarantee shall increase by .0005 times the value of the prior year's weighted
158 pupil unit for each succeeding year until the guarantee is equal to .010544 times the value of
159 the prior year's weighted pupil unit.
160 (d) (i) The amount of state guarantee money to which a school district would otherwise
161 be entitled to under this Subsection (3) may not be reduced for the sole reason that the district's
162 levy is reduced as a consequence of changes in the certified tax rate under Section 59-2-924
163 pursuant to changes in property valuation.
164 (ii) Subsection (3)(d)(i) applies for a period of two years following any such change in
165 the certified tax rate.
166 (4) (a) An election to modify an existing voted leeway program is not a reconsideration
167 of the existing program unless the proposition submitted to the electors expressly so states.
168 (b) A majority vote opposing a modification does not deprive the district of authority to
169 continue an existing program.
170 (c) If adoption of a leeway program is contingent upon an offset reducing other local
171 school board levies, the board must allow the electors, in an election, to consider modifying or
172 discontinuing the program prior to a subsequent increase in other levies that would increase the
173 total local school board levy.
174 (d) Nothing contained in this section terminates, without an election, the authority of a
175 school district to continue an existing voted leeway program previously authorized by the
176 voters.
177 (5) Notwithstanding Section 59-2-918 , a school district may budget an increased
178 amount of ad valorem property tax revenue derived from a voted leeway imposed under this
179 section in addition to revenue from new growth as defined in Subsection 59-2-924 [(2)](4),
180 without having to comply with the advertisement requirements of Section 59-2-918 , if the

181 voted leeway is approved:
182 (a) in accordance with Section 53A-16-110 on or after January 1, 2003; and
183 (b) within the four-year period immediately preceding the year in which the school
184 district seeks to budget an increased amount of ad valorem property tax revenue derived from
185 the voted leeway.
186 (6) Notwithstanding Section 59-2-919 , a school district may levy a tax rate under this
187 section that exceeds the certified tax rate without having to comply with the advertisement
188 requirements of Section 59-2-919 if:
189 (a) the levy exceeds the certified tax rate as the result of a school district budgeting an
190 increased amount of ad valorem property tax revenue derived from a voted leeway imposed
191 under this section; and
192 (b) if the voted leeway was approved:
193 (i) in accordance with Section 53A-16-110 on or after January 1, 2003; and
194 (ii) within the four-year period immediately preceding the year in which the school
195 district seeks to budget an increased amount of ad valorem property tax revenue derived from
196 the voted leeway.
197 Section 5. Section 53A-17a-150 is amended to read:
198 53A-17a-150. K-3 Reading Improvement Program.
199 (1) As used in this section:
200 (a) "program" means the K-3 Reading Improvement Program; and
201 (b) "program monies" means [: (i) school district revenue from the levy authorized
202 under Section 53A-17a-151 ;(ii) school district revenue allocated to the program from other
203 monies available to the school district, except monies provided by the state, for the purpose of
204 receiving state funds under this section; and (iii)] monies appropriated by the Legislature to the
205 program.
206 (2) The K-3 Reading Improvement Program consists of program monies and is created
207 to achieve the state's goal of having third graders reading at or above grade level.
208 (3) Subject to future budget constraints, the Legislature may annually appropriate
209 money to the K-3 Reading Improvement Program.
210 (4) (a) Prior to using program monies, a school district or charter school shall submit a
211 plan to the State Board of Education for reading proficiency improvement that incorporates the

212 following components:
213 (i) assessment;
214 (ii) intervention strategies;
215 (iii) professional development;
216 (iv) reading performance standards; and
217 (v) specific measurable goals that are based upon gain scores.
218 (b) The State Board of Education shall provide model plans which a school district or
219 charter school may use, or the district or school may develop its own plan.
220 (c) Plans developed by a school district or charter school shall be approved by the State
221 Board of Education.
222 (5) There is created within the K-3 Reading Achievement Program [three] two funding
223 programs:
224 (a) the [Base Level] K-3 Student Program; and
225 [(b) the Guarantee Program; and]
226 [(c)] (b) the [Low Income] At Risk Students Program.
227 (6) Monies appropriated to the State Board of Education for the K-3 Reading
228 Improvement Program shall be allocated to the [three] two funding programs as follows:
229 (a) [8%] 50% to the [Base Level] K-3 Student Program; and
230 [(b) 46% to the Guarantee Program; and]
231 [(c)] (b) [46%] 50% to the [Low Income] At Risk Students Program.
232 (7) (a) To participate in the [Base Level] K-3 Reading Achievement Program, a school
233 district or charter school shall submit a reading proficiency improvement plan to the State
234 Board of Education as provided in Subsection (4) and [must] shall receive approval of the plan
235 from the board.
236 (b) [(i) Each] A school district qualifying for [Base Level] K-3 Reading Achievement
237 Program funds and the qualifying elementary charter schools combined shall receive [a base
238 amount] the allocations provided in Subsections (8) and (9).
239 [(ii) The base amount for the qualifying elementary charter schools combined shall be
240 allocated among each school in an amount proportionate to:]
241 [(A)] (8) [each existing charter school's prior] The State Board of Education shall
242 distribute K-3 Student Program funds to:

243 (a) provide qualifying school districts that have necessarily existent small schools, as
244 defined in Section 53A-17a-109 , a base amount; and
245 (b) allocate the remaining funds in an amount proportionate to the current year fall
246 enrollment in grades kindergarten through grade 3[; and] in each qualifying school district or
247 charter school.
248 [(B) each new charter school's estimated fall enrollment in grades kindergarten through
249 grade 3.]
250 [(8) (a) A school district that applies for program monies in excess of the Base Level
251 Program funds shall choose to first participate in either the Guarantee Program or the Low
252 Income Students Program.]
253 [(b) A school district must fully participate in either the Guarantee Program or the Low
254 Income Students Program before it may elect to either fully or partially participate in the other
255 program.]
256 [(c) To fully participate in the Guarantee Program, a school district shall:]
257 [(i) levy a tax rate of .000056 under Section 53A-17a-151 ;]
258 [(ii) allocate to the program other monies available to the school district, except monies
259 provided by the state, equal to the amount of revenue that would be generated by a tax rate of
260 .000056; or]
261 [(iii) levy a tax under Section 53A-17a-151 and allocate to the program other monies
262 available to the school district, except monies provided by the state, so that the total revenue
263 from the combined revenue sources equals the amount of revenue that would be generated by a
264 tax rate of .000056.]
265 [(d) To fully participate in the Low Income Students Program, a school district shall:]
266 [(i) levy a tax rate of .000065 under Section 53A-17a-151 ;]
267 [(ii) allocate to the program other monies available to the school district, except monies
268 provided by the state, equal to the amount of revenue that would be generated by a tax rate of
269 .000065; or]
270 [(iii) levy a tax under Section 53A-17a-151 and allocate to the program other monies
271 available to the school district, except monies provided by the state, so that the total revenue
272 from the combined revenue sources equals the amount of revenue that would be generated by a
273 tax rate of .000065.]

274 [(9) (a) A school district that fully participates in the Guarantee Program shall receive
275 state funds in an amount that is:]
276 [(i) equal to the difference between $21 times the district's total WPUs and the revenue
277 the school district is required to generate or allocate under Subsection (8)(c) to fully participate
278 in the Guarantee Program; and]
279 [(ii) not less than $0.]
280 [(b) An elementary charter school shall receive under the Guarantee Program an
281 amount equal to $21 times the school's total WPUs.]
282 [(10)] (9) The State Board of Education shall distribute [Low Income] At Risk
283 Students Program funds in an amount proportionate to the number of students in kindergarten
284 through grade 3 in each qualifying school district or charter school who qualify for free or
285 reduced price school lunch [multiplied by two].
286 [(11) A school district that partially participates in the Guarantee Program or Low
287 Income Students Program shall receive program funds based on the amount of district revenue
288 generated for or allocated to the program as a percentage of the amount of revenue that could
289 have been generated or allocated if the district had fully participated in the program.]
290 [(12)] (10) (a) Each school district and charter school shall use program monies for
291 reading proficiency improvement in grades kindergarten through grade three.
292 (b) Program monies may not be used to supplant funds for existing programs, but may
293 be used to augment existing programs.
294 [(13)] (11) (a) Each school district and charter school shall annually submit a report to
295 the State Board of Education accounting for the expenditure of program monies in accordance
296 with its plan for reading proficiency improvement.
297 (b) If a school district or charter school uses program monies in a manner that is
298 inconsistent with Subsection [(12)] (10), the school district or charter school is liable for
299 reimbursing the State Board of Education for the amount of program monies improperly used,
300 up to the amount of program monies received from the State Board of Education.
301 [(14)] (12) (a) The State Board of Education shall make rules to implement the
302 program.
303 (b) (i) The rules under Subsection [(14)] (12)(a) shall require each school district or
304 charter school to annually report progress in meeting goals stated in the district's or charter

305 school's plan for student reading proficiency as measured by gain scores.
306 (ii) (A) If a school district or charter school does not meet or exceed the goals, the
307 school district or charter school shall prepare a new plan which corrects deficiencies.
308 (B) The new plan must be approved by the State Board of Education before the school
309 district or charter school receives an allocation for the next year.
310 [(15) If after 36 months of program operation, a school district fails to meet goals
311 stated in the district's plan for student reading proficiency as measured by gain scores, the
312 school district shall terminate any levy imposed under Section 53A-17a-151 .]
313 Section 6. Section 53A-19-102 is amended to read:
314 53A-19-102. Local school boards budget procedures.
315 (1) Prior to June 22 of each year, each local school board shall adopt a budget and
316 make appropriations for the next fiscal year. If the tax rate in the proposed budget exceeds the
317 certified tax rate defined in [Subsection] Section 59-2-924 [(2)], the board shall comply with
318 Sections 59-2-918 and 59-2-919 in adopting the budget, except as provided by Section
319 53A-17a-133 .
320 (2) Prior to the adoption of a budget containing a tax rate which does not exceed the
321 certified tax rate, the board shall hold a public hearing, as defined in Section 10-9a-103 , on the
322 proposed budget. In addition to complying with Title 52, Chapter 4, Open and Public Meetings
323 Act, in regards to the hearing, the board shall do the following:
324 (a) publish the required newspaper notice at least ten days prior to the hearing; and
325 (b) file a copy of the proposed budget with the board's business administrator for public
326 inspection at least ten days prior to the hearing.
327 (3) The board shall file a copy of the adopted budget with the state auditor and the
328 State Board of Education.
329 Section 7. Section 53A-19-105 is amended to read:
330 53A-19-105. School district interfund transfers.
331 (1) A school district shall spend revenues only within the fund for which they were
332 originally authorized, levied, collected, or appropriated.
333 (2) Except as otherwise provided in this section, school district interfund transfers of
334 residual equity are prohibited.
335 (3) The State Board of Education may authorize school district interfund transfers of

336 residual equity when a district states its intent to create a new fund or expand, contract, or
337 liquidate an existing fund.
338 (4) The State Board of Education may also authorize school district interfund transfers
339 of residual equity for a financially distressed district if the board determines the following:
340 (a) the district has a significant deficit in its maintenance and operations fund caused
341 by circumstances not subject to the administrative decisions of the district;
342 (b) the deficit cannot be reasonably reduced under Section 53A-19-104 ; and
343 (c) without the transfer, the school district will not be capable of meeting statewide
344 educational standards adopted by the State Board of Education.
345 (5) The board shall develop standards for defining and aiding financially distressed
346 school districts under this section in accordance with Title 63, Chapter 46a, Utah
347 Administrative Rulemaking Act.
348 (6) (a) All debt service levies not subject to certified tax rate hearings shall be recorded
349 and reported in the debt service fund.
350 (b) Debt service levies under Subsection 59-2-924 [(2)(a)(v)(C)](3)(e)(iii) that are not
351 subject to the certified tax rate hearing requirements of Sections 59-2-918 and 59-2-919 may
352 not be used for any purpose other than retiring general obligation debt.
353 (c) Amounts from these levies remaining in the debt service fund at the end of a fiscal
354 year shall be used in subsequent years for general obligation debt retirement.
355 (d) Any amounts left in the debt service fund after all general obligation debt has been
356 retired may be transferred to the capital projects fund upon completion of the budgetary hearing
357 process required under Section 53A-19-102 .
358 Section 8. Section 59-2-908 is amended to read:
359 59-2-908. Single aggregate limitation -- Maximum levy.
360 (1) Except as provided in Subsection (2), each county shall have a single aggregate
361 limitation on the property tax levied for all purposes by the county. Except as provided in
362 Section 59-2-911 , this limitation may not exceed the maximum set forth in this section. The
363 maximum is:
364 (a) .0032 per dollar of taxable value in all counties with a total taxable value of more
365 than $100,000,000; and
366 (b) .0036 per dollar of taxable value in all counties with a total taxable value of less

367 than $100,000,000.
368 (2) (a) Beginning January 1, 1995, a county may impose a tax rate in excess of the