First Substitute S.B. 48

Senator Dan R. Eastman proposes the following substitute bill:

1 EQUALIZATION OF SCHOOL CAPITAL
2 OUTLAY FUNDING
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Dan R. Eastman
6 House Sponsor: Aaron Tilton
7
8 LONG TITLE
9 General Description:
10 This bill makes changes to the Public Education Capital Outlay Act.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . increases the combined capital property tax rate a school district must impose to
15 receive a full distribution from the Capital Outlay Foundation Program;
16 . provides for a pro-rated distribution if a school district imposes a combined capital
17 property tax rate less than the rate required for full funding;
18 . appropriates additional ongoing funding to the State Board of Education for the
19 Capital Outlay Foundation Program; and
20 . makes technical corrections.
21 Monies Appropriated in this Bill:
22 This bill appropriates as an ongoing appropriation subject to future budget constraints,
23 $55,788,900 from the Uniform School Fund for fiscal year 2008-09 to the State Board
24 of Education.
25 Other Special Clauses:

26 This bill takes effect on July 1, 2008.
27 This bill coordinates with H.B. 1, Minimum School Program Base Budget
28 Amendments, by providing which amendments supersede.
29 Utah Code Sections Affected:
30 AMENDS:
31 11-13-302, as last amended by Laws of Utah 2007, Chapter 108
32 53A-2-103, as last amended by Laws of Utah 2002, Chapter 301
33 53A-2-114, as last amended by Laws of Utah 1996, Chapter 326
34 53A-2-115, as last amended by Laws of Utah 1996, Chapter 326
35 53A-16-110, as last amended by Laws of Utah 2004, Chapter 371
36 53A-21-102, as last amended by Laws of Utah 2003, Chapters 199 and 320
37 59-2-924, as last amended by Laws of Utah 2007, Chapters 107 and 329
38 ENACTS:
39 53A-21-101.5, Utah Code Annotated 1953
40 53A-21-201, Utah Code Annotated 1953
41 53A-21-202, Utah Code Annotated 1953
42 53A-21-301, Utah Code Annotated 1953
43 RENUMBERS AND AMENDS:
44 53A-21-302, (Renumbered from 53A-21-103.5, as last amended by Laws of Utah 2005,
45 Chapters 171 and 184)
46 53A-21-401, (Renumbered from 53A-21-104, as last amended by Laws of Utah 2007,
47 Chapter 344)
48 53A-21-501, (Renumbered from 53A-21-105, as last amended by Laws of Utah 2007,
49 Chapter 2)
50 REPEALS:
51 53A-21-103, as last amended by Laws of Utah 2003, Chapter 320
52
53 Be it enacted by the Legislature of the state of Utah:
54 Section 1. Section 11-13-302 is amended to read:
55 11-13-302. Payment of fee in lieu of ad valorem property tax by certain energy
56 suppliers -- Method of calculating -- Collection -- Extent of tax lien.

57 (1) (a) Each project entity created under this chapter that owns a project and that sells
58 any capacity, service, or other benefit from it to an energy supplier or suppliers whose tangible
59 property is not exempted by Utah Constitution Article XIII, Section 3, from the payment of ad
60 valorem property tax, shall pay an annual fee in lieu of ad valorem property tax as provided in
61 this section to each taxing jurisdiction within which the project or any part of it is located.
62 (b) For purposes of this section, "annual fee" means the annual fee described in
63 Subsection (1)(a) that is in lieu of ad valorem property tax.
64 (c) The requirement to pay an annual fee shall commence:
65 (i) with respect to each taxing jurisdiction that is a candidate receiving the benefit of
66 impact alleviation payments under contracts or determination orders provided for in Sections
67 11-13-305 and 11-13-306 , with the fiscal year of the candidate following the fiscal year of the
68 candidate in which the date of commercial operation of the last generating unit, other than any
69 generating unit providing additional project capacity, of the project occurs, or, in the case of
70 any facilities providing additional project capacity, with the fiscal year of the candidate
71 following the fiscal year of the candidate in which the date of commercial operation of the
72 generating unit providing the additional project capacity occurs; and
73 (ii) with respect to any taxing jurisdiction other than a taxing jurisdiction described in
74 Subsection (1)(c)(i), with the fiscal year of the taxing jurisdiction in which construction of the
75 project commences, or, in the case of facilities providing additional project capacity, with the
76 fiscal year of the taxing jurisdiction in which construction of those facilities commences.
77 (d) The requirement to pay an annual fee shall continue for the period of the useful life
78 of the project or facilities.
79 (2) (a) The annual fees due a school district shall be as provided in Subsection (2)(b)
80 because the ad valorem property tax imposed by a school district and authorized by the
81 Legislature under Section 53A-17a-135 represents both:
82 (i) a levy mandated by the state for the state minimum school program under Section
83 53A-17a-135 ; and
84 (ii) local levies for capital outlay, maintenance, transportation, and other purposes
85 under Sections 11-2-7 , 53A-16-107 , 53A-16-110 , 53A-17a-126 , 53A-17a-127 , 53A-17a-133 ,
86 53A-17a-134 , 53A-17a-143 , and 53A-17a-145 [, and 53A-21-103 ].
87 (b) The annual fees due a school district shall be as follows:

88 (i) the project entity shall pay to the school district an annual fee for the state minimum
89 school program at the rate imposed by the school district and authorized by the Legislature
90 under Subsection 53A-17a-135 (1); and
91 (ii) for all other local property tax levies authorized to be imposed by a school district,
92 the project entity shall pay to the school district either:
93 (A) an annual fee; or
94 (B) impact alleviation payments under contracts or determination orders provided for
95 in Sections 11-13-305 and 11-13-306 .
96 (3) (a) An annual fee due a taxing jurisdiction for a particular year shall be calculated
97 by multiplying the tax rate or rates of the jurisdiction for that year by the product obtained by
98 multiplying the fee base or value determined in accordance with Subsection (4) for that year of
99 the portion of the project located within the jurisdiction by the percentage of the project which
100 is used to produce the capacity, service, or other benefit sold to the energy supplier or suppliers.
101 (b) As used in this section, "tax rate," when applied in respect to a school district,
102 includes any assessment to be made by the school district under Subsection (2) or Section
103 63-51-6 .
104 (c) There is to be credited against the annual fee due a taxing jurisdiction for each year,
105 an amount equal to the debt service, if any, payable in that year by the project entity on bonds,
106 the proceeds of which were used to provide public facilities and services for impact alleviation
107 in the taxing jurisdiction in accordance with Sections 11-13-305 and 11-13-306 .
108 (d) The tax rate for the taxing jurisdiction for that year shall be computed so as to:
109 (i) take into account the fee base or value of the percentage of the project located
110 within the taxing jurisdiction determined in accordance with Subsection (4) used to produce the
111 capacity, service, or other benefit sold to the supplier or suppliers; and
112 (ii) reflect any credit to be given in that year.
113 (4) (a) Except as otherwise provided in this section, the annual fees required by this
114 section shall be paid, collected, and distributed to the taxing jurisdiction as if:
115 (i) the annual fees were ad valorem property taxes; and
116 (ii) the project were assessed at the same rate and upon the same measure of value as
117 taxable property in the state.
118 (b) (i) Notwithstanding Subsection (4)(a), for purposes of an annual fee required by

119 this section, the fee base of a project may be determined in accordance with an agreement
120 among:
121 (A) the project entity; and
122 (B) any county that:
123 (I) is due an annual fee from the project entity; and
124 (II) agrees to have the fee base of the project determined in accordance with the
125 agreement described in this Subsection (4).
126 (ii) The agreement described in Subsection (4)(b)(i):
127 (A) shall specify each year for which the fee base determined by the agreement shall be
128 used for purposes of an annual fee; and
129 (B) may not modify any provision of this chapter except the method by which the fee
130 base of a project is determined for purposes of an annual fee.
131 (iii) For purposes of an annual fee imposed by a taxing jurisdiction within a county
132 described in Subsection (4)(b)(i)(B), the fee base determined by the agreement described in
133 Subsection (4)(b)(i) shall be used for purposes of an annual fee imposed by that taxing
134 jurisdiction.
135 (iv) (A) If there is not agreement as to the fee base of a portion of a project for any
136 year, for purposes of an annual fee, the State Tax Commission shall determine the value of that
137 portion of the project for which there is not an agreement:
138 (I) for that year; and
139 (II) using the same measure of value as is used for taxable property in the state.
140 (B) The valuation required by Subsection (4)(b)(iv)(A) shall be made by the State Tax
141 Commission in accordance with rules made by the State Tax Commission.
142 (c) Payments of the annual fees shall be made from:
143 (i) the proceeds of bonds issued for the project; and
144 (ii) revenues derived by the project entity from the project.
145 (d) (i) The contracts of the project entity with the purchasers of the capacity, service, or
146 other benefits of the project whose tangible property is not exempted by Utah Constitution
147 Article XIII, Section 3, from the payment of ad valorem property tax shall require each
148 purchaser, whether or not located in the state, to pay, to the extent not otherwise provided for,
149 its share, determined in accordance with the terms of the contract, of these fees.

150 (ii) It is the responsibility of the project entity to enforce the obligations of the
151 purchasers.
152 (5) (a) The responsibility of the project entity to make payment of the annual fees is
153 limited to the extent that there is legally available to the project entity, from bond proceeds or
154 revenues, monies to make these payments, and the obligation to make payments of the annual
155 fees is not otherwise a general obligation or liability of the project entity.
156 (b) No tax lien may attach upon any property or money of the project entity by virtue of
157 any failure to pay all or any part of an annual fee.
158 (c) The project entity or any purchaser may contest the validity of an annual fee to the
159 same extent as if the payment was a payment of the ad valorem property tax itself.
160 (d) The payments of an annual fee shall be reduced to the extent that any contest is
161 successful.
162 (6) (a) The annual fee described in Subsection (1):
163 (i) shall be paid by a public agency that:
164 (A) is not a project entity; and
165 (B) owns an interest in a facility providing additional project capacity if the interest is
166 otherwise exempt from taxation pursuant to Utah Constitution, Article XIII, Section 3; and
167 (ii) for a public agency described in Subsection (6)(a)(i), shall be calculated in
168 accordance with Subsection (6)(b).
169 (b) The annual fee required under Subsection (6)(a) shall be an amount equal to the tax
170 rate or rates of the applicable taxing jurisdiction multiplied by the product of the following:
171 (i) the fee base or value of the facility providing additional project capacity located
172 within the jurisdiction;
173 (ii) the percentage of the ownership interest of the public agency in the facility; and
174 (iii) the portion, expressed as a percentage, of the public agency's ownership interest
175 that is attributable to the capacity, service, or other benefit from the facility that is sold by the
176 public agency to an energy supplier or suppliers whose tangible property is not exempted by
177 Utah Constitution, Article XIII, Section 3, from the payment of ad valorem property tax.
178 (c) A public agency paying the annual fee pursuant to Subsection (6)(a) shall have the
179 obligations, credits, rights, and protections set forth in Subsections (1) through (5) with respect
180 to its ownership interest as though it were a project entity.

181 Section 2. Section 53A-2-103 is amended to read:
182 53A-2-103. Transfer of property to new school district -- Rights and obligations
183 of new school board -- Outstanding indebtedness -- Special tax.
184 (1) On July 1 following the approval of the creation of a new school district under
185 Section 53A-2-102 , the local school boards of the former districts shall convey and deliver all
186 school property to the local school board of the new district. Title vests in the new board. All
187 rights, claims, and causes of action to or for the property, for the use or the income from the
188 property, for conversion, disposition, or withholding of the property, or for any damage or
189 injury to the property vest at once in the new board.
190 (2) The new board may bring and maintain actions to recover, protect, and preserve the
191 property and rights of the district schools and to enforce contracts.
192 (3) The new board shall assume and be liable for all outstanding debts and obligations
193 of each of the former school districts.
194 (4) All of the bonded indebtedness, outstanding debts, and obligations of a former
195 district, which cannot be reasonably paid from the assets of the former district, shall be paid by
196 a special tax levied by the new board as needed. The tax shall be levied upon the property
197 within the former district which was liable for the indebtedness at the time of consolidation. If
198 bonds are approved in the new district under Section 53A-18-102 , the special tax shall be
199 discontinued and the bonded indebtedness paid as any other bonded indebtedness of the new
200 district.
201 (5) Bonded indebtedness of a former district which has been refunded shall be paid in
202 the same manner as that which the new district assumes under Section 53A-18-101 .
203 (6) State funds received by the new district under Section [ 53A-21-103 ] 53A-21-202
204 may be applied toward the payment of outstanding bonded indebtedness of a former district in
205 the same proportion as the bonded indebtedness of the territory within the former district bears
206 to the total bonded indebtedness of the districts combined.
207 Section 3. Section 53A-2-114 is amended to read:
208 53A-2-114. Additional levies -- School board options to abolish or continue after
209 consolidation.
210 (1) If a school district which has approved an additional levy under Section
211 53A-16-110 , 53A-17a-133 , 53A-17a-134 , or 53A-17a-145 [, or 53A-21-103 ] is consolidated

212 with a district which does not have such a levy, the board of education of the consolidated
213 district may choose to abolish the levy, or apply it in whole or in part to the entire consolidated
214 district.
215 (2) If the board chooses to apply any part of the levy to the entire district, the levy may
216 continue in force for no more than three years, unless approved by the electors of the
217 consolidated district in the manner set forth in Section 53A-16-110 .
218 Section 4. Section 53A-2-115 is amended to read:
219 53A-2-115. Additional levies in transferred territory -- Transferee board option
220 to abolish or continue.
221 If two or more districts undergo restructuring that results in a district receiving territory
222 that increases the population of the district by at least 25%, and if the transferred territory was,
223 at the time of transfer, subject to an additional levy under Section 53A-16-110 , 53A-17a-133 ,
224 53A-17a-134 , or 53A-17a-145 [, or 53A-21-103 ], the board of education of the transferee
225 district may abolish the levy or apply the levy in whole or in part to the entire restructured
226 district. Any such levy made applicable to the entire district may continue in force for no more
227 than five years, unless approved by the electors of the restructured district in the manner set
228 forth in Section 53A-16-110 .
229 Section 5. Section 53A-16-110 is amended to read:
230 53A-16-110. Special tax to buy school building sites, build and furnish
231 schoolhouses, or improve school property.
232 (1) (a) A local school board may, by following the process for special elections
233 established in Sections 20A-1-203 and 20A-1-204 , call a special election to determine whether
234 a special property tax should be levied for one or more years to buy building sites, build and
235 furnish schoolhouses, or improve the school property under its control.
236 (b) The tax may not exceed .2% of the taxable value of all taxable property in the
237 district in any one year.
238 (2) The board shall give reasonable notice of the election and follow the same
239 procedure used in elections for the issuance of bonds.
240 (3) If a majority of those voting on the proposition vote in favor of the tax, it is levied
241 in addition to [those] a levy authorized under [Sections] Section 53A-17a-145 [and
242 53A-21-103 ] and computed on the valuation of the county assessment roll for that year.

243 (4) (a) Within 20 days after the election, the board shall certify the amount of the
244 approved tax to the governing body of the county in which the school district is located.
245 (b) The governing body shall acknowledge receipt of the certification and levy and
246 collect the special tax.
247 (c) It shall then distribute the collected taxes to the business administrator of the school
248 district at the end of each calendar month.
249 (5) The special tax becomes due and delinquent and attaches to and becomes a lien on
250 real and personal property at the same time as state and county taxes.
251 Section 6. Section 53A-21-101.5 is enacted to read:
252 Part 1. General Provisions
253 53A-21-101.5. Definitions.
254 As used in this chapter:
255 (1) "ADM" or "pupil in average daily membership" is as defined in Section
256 53A-17a-103 .
257 (2) "Combined capital levy rate" means a rate that includes the sum of the following
258 property tax levies:
259 (a) the capital outlay levy authorized in Section 53A-16-107 ;
260 (b) the portion of the 10% of basic levy described in Section 53A-17a-145 that is
261 budgeted for debt service or capital outlay;
262 (c) the debt service levy authorized in Section 11-14-310 ; and
263 (d) the voted capital outlay leeway authorized in Section 53A-16-110 .
264 (3) "Derived net taxable value" means the total current property tax collections from
265 April 1 through the following March 31 for a school district, divided by the school district's
266 total tax rate for the same year.
267 (4) "Property tax yield per ADM" means:
268 (a) the product of:
269 (i) a school district's derived net taxable value; and
270 (ii) .0030; divided by
271 (b) the school district's ADM for the school year beginning after the April 1 referenced
272 in Subsection (3).
273 Section 7. Section 53A-21-102 is amended to read:

274 53A-21-102. Capital Outlay Foundation Program -- Enrollment Growth Program
275 -- Loan Program.
276 [(1) The Capital Outlay Foundation Program and the Enrollment Growth Program are
277 established to provide revenues to school districts for the purposes of capital outlay bonding,
278 construction, and renovation.]
279 [(2) The Capital Outlay Loan Program is established to provide:]
280 [(a) short-term help to school districts to meet district needs for school building
281 construction and renovation; and]
282 [(b) assistance to charter schools to meet school building construction and renovation
283 needs.]
284 [(3) School districts shall] A school district may only use the monies provided [to
285 them] under [the programs established by this section solely] this chapter for school district
286 capital outlay and debt service purposes.
287 Section 8. Section 53A-21-201 is enacted to read:
288 Part 2. Capital Outlay Foundation Program
289 53A-21-201. Capital Outlay Foundation Program -- Creation -- Definitions.
290 (1) There is created the Capital Outlay Foundation Program to guarantee a certain
291 amount of capital outlay funding to a school district that makes a sufficient local tax effort and
292 generates local property tax revenues below a foundation guarantee funding level.
293 (2) As used in this part:
294 (a) "Foundation guarantee level per ADM" means a minimum revenue amount per
295 ADM generated by a combined capital levy rate of .0030 per dollar of taxable value, including
296 the following:
297 (i) the revenue generated locally from a school district's combined capital levy rate; and
298 (ii) the revenue allocated to a school district by the State Board of Education in
299 accordance with Section 53A-21-202 .
300 (b) "Qualifying school district" means a school district with a property tax yield per
301 ADM less than the foundation guarantee level per ADM.
302 Section 9. Section 53A-21-202 is enacted to read:
303 53A-21-202. Capital Outlay Foundation Program -- Distribution Formulas --
304 Allocations.

305 (1) For fiscal years beginning on or after July 1, 2008, the State Board of Education
306 shall determine the foundation guarantee level per ADM that fully allocates the funds
307 appropriated to the State Board of Education for distribution under this section.
308 (2) If a qualifying school district imposes a current year combined capital levy rate of
309 at least .0030 per dollar of taxable value, the State Board of Education shall allocate to the
310 qualifying school district an amount equal to the product of the following:
311 (a) the qualifying school district's prior year ADM; and
312 (b) an amount equal to the difference between the following:
313 (i) the foundation guarantee level per ADM for that fiscal year, as determined in
314 accordance with Subsection (1); and
315 (ii) the qualifying school district's prior year property tax yield per ADM.
316 (3) Except as provided in Subsection (4), if a qualifying school district imposes a
317 current year combined capital levy rate less than .0030 per dollar of taxable value, the State
318 Board of Education shall allocate to the qualifying school district an amount equal to the
319 product of the following:
320 (a) the qualifying school district's prior year ADM;
321 (b) an amount equal to the difference between the following:
322 (i) the foundation guarantee level per ADM for that fiscal year, as determined in
323 accordance with Subsection (1); and
324 (ii) the qualifying school district's prior year property tax yield per ADM; and
325 (c) a percentage equal to the qualifying school district's current year combined capital
326 levy rate divided by .0030.
327 (4) Notwithstanding Subsection (3), if a qualifying school district imposes a combined
328 capital levy rate less than .0030 per dollar of taxable value, the State Board of Education shall
329 allocate funds to the qualifying school district in accordance with the allocation methodology
330 under Subsection (2) if:
331 (a) the qualifying school district imposed a combined capital levy rate of at least .0030
332 in either of the prior two years; and
333 (b) the qualifying school district imposes a combined capital levy rate less than .0030
334 solely due to a decrease in the qualifying school district's certified tax rate, calculated pursuant
335 to Section 59-2-924 , due to increases in the value of taxable property located within the

336 qualifying school district.
337 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
338 State Board of Education shall make rules to administer this section.
339 Section 10. Section 53A-21-301 is enacted to read:
340 Part 3. Capital Outlay Enrollment Growth Program
341 53A-21-301. Capital Outlay Enrollment Growth Program - Definitions.
342 (1) There is created the Capital Outlay Enrollment Growth Program to provide capital
343 outlay funding to school districts experiencing net enrollment increases.
344 (2) As used in this part, "statewide average property tax yield per ADM" means the
345 quotient of:
346 (a) the sum of all school districts' derived net taxable value multiplied by .0030;
347 divided by
348 (b) the sum of total school district ADM statewide.
349 Section 11. Section 53A-21-302 , which is renumbered from Section 53A-21-103.5 is
350 renumbered and amended to read:
351 [53A-21-103.5]. 53A-21-302. Capital Outlay Enrollment Growth Program --
352 Distribution Formulas -- Allocations.
353 [(1) As used in this section:]
354 [(a) "ADM" means average daily membership.]
355 [(b) "Derived valuation" means total school district property tax current collections
356 from April 1 through the following March 31, divided by the tax rates for the same year.]
357 [(c) "Yield per ADM" means the product of the derived valuation multiplied by .0024,
358 divided by average daily membership.]
359 [(2) (a)] (1) The State Board of Education shall annually distribute monies [in]
360 appropriated for the Capital Outlay Enrollment Growth Program to [qualifying] a school
361 [districts whose] district that:
362 [(i)] (a) has an average net increase in student enrollment for the prior three years [is a
363 net increase in enrollment]; and
364 [(ii)] (b) has a prior year property tax yield per ADM that is less than two times the
365 prior year's statewide average property tax yield per ADM [for Utah school districts].
366 [(b) A] (2) The State Board of Education shall allocate funding to a school district that

367 meets the [criteria] requirements of Subsection [(2)(a) shall receive Enrollment Growth
368 Program monies] (1) in the same proportion that the district's three-year average net increased
369 enrollment bears to the total three-year net increased enrollment of all the school districts that
370 meet the criteria of Subsection [(2)(a)] (1).
371 (3) A school district may use the funds received pursuant to this section for the
372 following purposes:
373 (a) general obligation bond principal and interest costs;
374 (b) capital construction;
375 (c) facilities renovation; and
376 (d) other capital project needs.
377 [(c)] (4) The State Board of Education shall make rules in accordance with Title 63,
378 Chapter 46a, Utah Administrative Rulemaking Act, to administer this section.
379 Section 12. Section 53A-21-401 , which is renumbered from Section 53A-21-104 is
380 renumbered and amended to read:
381 Part 4. Capital Outlay Loan Program
382 [53A-21-104]. 53A-21-401. School Building Revolving Account -- Access to
383 the account.
384 (1) There is created:
385 (a) the "Capital Outlay Loan Program" to provide:
386 (i) short-term help to school districts to meet district needs for school building
387 construction and renovation; and
388 (ii) assistance to charter schools to meet school building construction and renovation
389 needs; and
390 (b) a nonlapsing "School Building Revolving Account" administered within the
391 Uniform School Fund by the state superintendent of public instruction in accordance with rules
392 adopted by the State Board of Education.
393 (2) [Monies received by a school district] The State Board of Education may not
394 allocate funds from the School Building Revolving Account [may not] that exceed [the] a
395 school district's bonding limit minus its outstanding bonds.
396 (3) In order to receive monies from the account, a school district [must do the
397 following] shall:

398 (a) levy a [tax of] combined capital levy rate of at least .0024 [for capital outlay and
399 debt service];
400 (b) contract with the state superintendent of public instruction to repay the monies,
401 with interest at a rate established by the state superintendent, within five years of [their] receipt,
402 using future state [building monies or] capital outlay allocations, local revenues, or both;
403 (c) levy sufficient ad valorem taxes under Section 11-14-310 to guarantee annual loan
404 repayments, unless the state superintendent of public instruction alters the payment schedule to
405 improve a hardship situation; and
406 (d) meet any other condition established by the State Board of Education pertinent to
407 the loan.
408 (4) (a) The state superintendent shall establish a committee, including representatives
409 from state and local education entities, to:
410 (i) review requests by school districts for loans under this section; and
411 (ii) make recommendations regarding approval or disapproval of the loan applications
412 to the state superintendent.
413 (b) If the committee recommends approval of a loan application under Subsection
414 (4)(a)(ii), the committee's recommendation shall include:
415 (i) the recommended amount of the loan;
416 (ii) the payback schedule; and
417 (iii) the interest rate to be charged.
418 (5) (a) There is established within the School Building Revolving Account the Charter
419 School Building Subaccount administered by the State Board of Education, in consultation
420 with the State Charter School Board, in accordance with rules adopted by the State Board of
421 Education.
422 (b) The Charter School Building Subaccount shall consist of:
423 (i) money appropriated to the subaccount by the Legislature;
424 (ii) money received from the repayment of loans made from the subaccount; and
425 (iii) interest earned on monies in the subaccount.
426 (c) The state superintendent of public instruction shall make loans to charter schools
427 from the Charter School Building Subaccount to pay for the costs of:
428 (i) planning expenses;

429 (ii) constructing or renovating charter school buildings;
430 (iii) equipment and supplies; or
431 (iv) other start-up or expansion expenses.
432 (d) Loans to new charter schools or charter schools with urgent facility needs may be
433 given priority.
434 (6) (a) The State Board of Education shall establish a committee, which shall include
435 individuals who have expertise or experience in finance, real estate, and charter school
436 administration, one of whom shall be nominated by the governor to:
437 (i) review requests by charter schools for loans under this section; and
438 (ii) make recommendations regarding approval or disapproval of the loan applications
439 to the State Charter School Board and the State Board of Education.
440 (b) If the committee recommends approval of a loan application under Subsection
441 (6)(a)(ii), the committee's recommendation shall include:
442 (i) the recommended amount of the loan;
443 (ii) the payback schedule; and
444 (iii) the interest rate to be charged.
445 (c) The committee members may not:
446 (i) be a relative, as defined in Section 53A-1a-518 , of a loan applicant; or
447 (ii) have a pecuniary interest, directly or indirectly, with a loan applicant or any person
448 or entity that contracts with a loan applicant.
449 (7) The State Board of Education, in consultation with the State Charter School Board,
450 shall approve all loans to a charter [schools] school under this section.
451 (8) [Loans] The term of a loan to a charter [schools] school under this section may not
452 exceed [a term of] five years.
453 (9) The State Board of Education may not approve loans to charter schools under this
454 section that exceed a total of $2,000,000 in any year.
455 Section 13. Section 53A-21-501 , which is renumbered from Section 53A-21-105 is
456 renumbered and amended to read:
457 Part 5. Fiscal Matters
458 [53A-21-105]. 53A-21-501. State contribution to capital outlay programs.
459 (1) As an ongoing appropriation subject to future budget constraints, there is

460 appropriated from the Uniform School Fund for fiscal year [2007-08, $27,288,900] 2008-09,
461 $55,788,900 to the State Board of Education for the capital outlay programs created in [Section
462 53A-21-102 ] this chapter.
463 (2) Of the monies appropriated in Subsection (1), the State Board of Education shall
464 distribute:
465 (a) [$24,358,000] $52,858,000 in accordance with the Capital Outlay Foundation
466 Program [described in Section 53A-21-103 ] pursuant to Section 53A-21-202 ; and
467 (b) $2,930,900 in accordance with the Enrollment Growth Program [described in
468 Section 53A-21-103.5 ] pursuant to Section 53A-21-301.
469 Section 14. Section 59-2-924 is amended to read:
470 59-2-924. Report of valuation of property to county auditor and commission --
471 Transmittal by auditor to governing bodies -- Certified tax rate -- Calculation of certified
472 tax rate -- Rulemaking authority -- Adoption of tentative budget.
473 (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
474 the county auditor and the commission the following statements:
475 (i) a statement containing the aggregate valuation of all taxable property in each taxing
476 entity; and
477 (ii) a statement containing the taxable value of any additional personal property
478 estimated by the county assessor to be subject to taxation in the current year.
479 (b) The county auditor shall, on or before June 8, transmit to the governing body of
480 each taxing entity:
481 (i) the statements described in Subsections (1)(a)(i) and (ii);
482 (ii) an estimate of the revenue from personal property;
483 (iii) the certified tax rate; and
484 (iv) all forms necessary to submit a tax levy request.
485 (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad
486 valorem property tax revenues for a taxing entity as were budgeted by that taxing entity for the
487 prior year.
488 (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
489 include:
490 (A) collections from redemptions;

491 (B) interest;
492 (C) penalties; and
493 (D) revenue received by a taxing entity from personal property that is:
494 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
495 (II) semiconductor manufacturing equipment.
496 (iii) (A) Except as otherwise provided in this section, the certified tax rate shall be
497 calculated by dividing the ad valorem property tax revenues budgeted for the prior year by the
498 taxing entity by the amount calculated under Subsection (2)(a)(iii)(B).
499 (B) For purposes of Subsection (2)(a)(iii)(A), the legislative body of a taxing entity
500 shall calculate an amount as follows:
501 (I) calculate for the taxing entity the difference between:
502 (Aa) the aggregate taxable value of all property taxed; and
503 (Bb) any redevelopment adjustments for the current calendar year;
504 (II) after making the calculation required by Subsection (2)(a)(iii)(B)(I), calculate an
505 amount determined by increasing or decreasing the amount calculated under Subsection
506 (2)(a)(iii)(B)(I) by the average of the percentage net change in the value of taxable property for
507 the equalization period for the three calendar years immediately preceding the current calendar
508 year;
509 (III) after making the calculation required by Subsection (2)(a)(iii)(B)(II), calculate the
510 product of:
511 (Aa) the amount calculated under Subsection (2)(a)(iii)(B)(II); and
512 (Bb) the percentage of property taxes collected for the five calendar years immediately
513 preceding the current calendar year; and
514 (IV) after making the calculation required by Subsection (2)(a)(iii)(B)(III), calculate an
515 amount determined by subtracting from the amount calculated under Subsection
516 (2)(a)(iii)(B)(III) any new growth as defined in this section:
517 (Aa) within the taxing entity; and
518 (Bb) for the current calendar year.
519 (C) For purposes of Subsection (2)(a)(iii)(B)(I), the aggregate taxable value of all
520 property taxed:
521 (I) except as provided in Subsection (2)(a)(iii)(C)(II), includes the total taxable value of

522 the real and personal property contained on the tax rolls of the taxing entity; and
523 (II) does not include the total taxable value of personal property contained on the tax
524 rolls of the taxing entity that is:
525 (Aa) assessed by a county assessor in accordance with Part 3, County Assessment; and
526 (Bb) semiconductor manufacturing equipment.
527 (D) For purposes of Subsection (2)(a)(iii)(B)(II), for calendar years beginning on or
528 after January 1, 2007, the value of taxable property does not include the value of personal
529 property that is:
530 (I) within the taxing entity assessed by a county assessor in accordance with Part 3,
531 County Assessment; and
532 (II) semiconductor manufacturing equipment.
533 (E) For purposes of Subsection (2)(a)(iii)(B)(III)(Bb), for calendar years beginning on
534 or after January 1, 2007, the percentage of property taxes collected does not include property
535 taxes collected from personal property that is:
536 (I) within the taxing entity assessed by a county assessor in accordance with Part 3,
537 County Assessment; and
538 (II) semiconductor manufacturing equipment.
539 (F) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
540 the commission may prescribe rules for calculating redevelopment adjustments for a calendar
541 year.
542 (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
543 Act, the commission shall make rules determining the calculation of ad valorem property tax
544 revenues budgeted by a taxing entity.
545 (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
546 budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
547 revenues are calculated for purposes of Section 59-2-913 .
548 (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
549 shall be calculated as follows:
550 (A) except as provided in Subsection (2)(a)(v)(B), for new taxing entities the certified
551 tax rate is zero;
552 (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:

553 (I) in a county of the first, second, or third class, the levy imposed for municipal-type
554 services under Sections 17-34-1 and 17-36-9 ; and
555 (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
556 purposes and such other levies imposed solely for the municipal-type services identified in
557 Section 17-34-1 and Subsection 17-36-3 (22); and
558 (C) for debt service voted on by the public, the certified tax rate shall be the actual levy
559 imposed by that section, except that the certified tax rates for the following levies shall be
560 calculated in accordance with Section 59-2-913 and this section:
561 (I) school leeways provided for under Sections 11-2-7 , 53A-16-110 , 53A-17a-125 ,
562 53A-17a-127 , 53A-17a-133 , 53A-17a-134 , 53A-17a-143 , and 53A-17a-145 [, and
563 53A-21-103 ]; and
564 (II) levies to pay for the costs of state legislative mandates or judicial or administrative
565 orders under Section 59-2-906.3 .
566 (vi) (A) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 shall be
567 established at that rate which is sufficient to generate only the revenue required to satisfy one
568 or more eligible judgments, as defined in Section 59-2-102 .
569 (B) The ad valorem property tax revenue generated by the judgment levy shall not be
570 considered in establishing the taxing entity's aggregate certified tax rate.
571 (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use
572 the taxable value of property on the assessment roll.
573 (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
574 assessment roll does not include:
575 (A) new growth as defined in Subsection (2)(b)(iii); or
576 (B) the total taxable value of personal property contained on the tax rolls of the taxing
577 entity that is:
578 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
579 (II) semiconductor manufacturing equipment.
580 (iii) "New growth" means:
581 (A) the difference between the increase in taxable value of the taxing entity from the
582 previous calendar year to the current year; minus
583 (B) the amount of an increase in taxable value described in Subsection (2)(b)(v).

584 (iv) For purposes of Subsection (2)(b)(iii), the taxable value of the taxing entity does
585 not include the taxable value of personal property that is:
586 (A) contained on the tax rolls of the taxing entity if that property is assessed by a
587 county assessor in accordance with Part 3, County Assessment; and
588 (B) semiconductor manufacturing equipment.
589 (v) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
590 (A) the amount of increase to locally assessed real property taxable values resulting
591 from factoring, reappraisal, or any other adjustments; or
592 (B) the amount of an increase in the taxable value of property assessed by the
593 commission under Section 59-2-201 resulting from a change in the method of apportioning the
594 taxable value prescribed by:
595 (I) the Legislature;
596 (II) a court;
597 (III) the commission in an administrative rule; or
598 (IV) the commission in an administrative order.
599 (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
600 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
601 59-2-405.2 , or 59-2-405.3 as a result of any county imposing a sales and use tax under Chapter
602 12, Part 11, County Option Sales and Use Tax, the taxing entity shall decrease its certified tax
603 rate to offset the increased revenues.
604 (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
605 Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
606 (A) decreased on a one-time basis by the amount of the estimated sales and use tax
607 revenue to be distributed to the county under Subsection 59-12-1102 (3); and
608 (B) increased by the amount necessary to offset the county's reduction in revenue from
609 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
610 59-2-405.2 , or 59-2-405.3 as a result of the decrease in the certified tax rate under Subsection
611 (2)(d)(i)(A).
612 (ii) The commission shall determine estimates of sales and use tax distributions for
613 purposes of Subsection (2)(d)(i).
614 (e) Beginning January 1, 1998, if a municipality has imposed an additional resort

615 communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
616 decreased on a one-time basis by the amount necessary to offset the first 12 months of
617 estimated revenue from the additional resort communities sales and use tax imposed under
618 Section 59-12-402 .
619 (f) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
620 Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
621 unincorporated area of the county shall be decreased by the amount necessary to reduce
622 revenues in that fiscal year by an amount equal to the difference between the amount the county
623 budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
624 countywide and the amount the county spent during fiscal year 2000 for those services,
625 excluding amounts spent from a municipal services fund for those services.
626 (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
627 (2)(f)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
628 year by the amount that the county spent during fiscal year 2000 for advanced life support and
629 paramedic services countywide, excluding amounts spent from a municipal services fund for
630 those services.
631 (ii) (A) A city or town located within a county of the first class to which Subsection
632 (2)(f)(i) applies may increase its certified tax rate by the amount necessary to generate within
633 the city or town the same amount of revenues as the county would collect from that city or
634 town if the decrease under Subsection (2)(f)(i) did not occur.
635 (B) An increase under Subsection (2)(f)(ii)(A), whether occurring in a single fiscal year
636 or spread over multiple fiscal years, is not subject to the notice and hearing requirements of
637 Sections 59-2-918 and 59-2-919 .
638 (g) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to
639 provide detective investigative services to the unincorporated area of the county shall be
640 decreased:
641 (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year
642 by at least $4,400,000; and
643 (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year
644 by an amount equal to the difference between $9,258,412 and the amount of the reduction in
645 revenues under Subsection (2)(g)(i)(A).

646 (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a
647 county to which Subsection (2)(g)(i) applies may increase its certified tax rate to generate
648 within the city or town the same amount of revenue as the county would have collected during
649 county fiscal year 2001 from within the city or town except for Subsection (2)(g)(i)(A).
650 (II) Beginning with municipal fiscal year 2003, a city or town located within a county
651 to which Subsection (2)(g)(i) applies may increase its certified tax rate to generate within the
652 city or town the same amount of revenue as the county would have collected during county
653 fiscal year 2002 from within the city or town except for Subsection (2)(g)(i)(B).
654 (B) (I) Except as provided in Subsection (2)(g)(ii)(B)(II), an increase in the city or
655 town's certified tax rate under Subsection (2)(g)(ii)(A), whether occurring in a single fiscal year
656 or spread over multiple fiscal years, is subject to the notice and hearing requirements of
657 Sections 59-2-918 and 59-2-919 .
658 (II) For an increase under this Subsection (2)(g)(ii) that generates revenue that does not
659 exceed the same amount of revenue as the county would have collected except for Subsection
660 (2)(g)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
661 (Aa) publishes a notice that meets the size, type, placement, and frequency
662 requirements of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed
663 by the county to one imposed by the city or town, and explains how the revenues from the tax
664 increase will be used; and
665 (Bb) holds a public hearing on the tax shift that may be held in conjunction with the
666 city or town's regular budget hearing.
667 (h) (i) This Subsection (2)(h) applies to each county that:
668 (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
669 13, Utah Special Service District Act, to provide jail service, as provided in Subsection
670 17A-2-1304 (1)(a)(x); and
671 (B) levies a property tax on behalf of the special service district under Section
672 17A-2-1322 .
673 (ii) (A) The certified tax rate of each county to which this Subsection (2)(h) applies
674 shall be decreased by the amount necessary to reduce county revenues by the same amount of
675 revenues that will be generated by the property tax imposed on behalf of the special service
676 district.

677 (B) Each decrease under Subsection (2)(h)(ii)(A) shall occur contemporaneously with
678 the levy on behalf of the special service district under Section 17A-2-1322 .
679 (i) (i) As used in this Subsection (2)(i):
680 (A) "Annexing county" means a county whose unincorporated area is included within a
681 fire district by annexation.
682 (B) "Annexing municipality" means a municipality whose area is included within a fire
683 district by annexation.
684 (C) "Equalized fire protection tax rate" means the tax rate that results from:
685 (I) calculating, for each participating county and each participating municipality, the
686 property tax revenue necessary to cover all of the costs associated with providing fire
687 protection, paramedic, and emergency services:
688 (Aa) for a participating county, in the unincorporated area of the county; and
689 (Bb) for a participating municipality, in the municipality; and
690 (II) adding all the amounts calculated under Subsection (2)(i)(i)(C)(I) for all
691 participating counties and all participating municipalities and then dividing that sum by the
692 aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
693 (Aa) for participating counties, in the unincorporated area of all participating counties;
694 and
695 (Bb) for participating municipalities, in all the participating municipalities.
696 (D) "Fire district" means a service area under Title 17B, Chapter 2a, Part 9, Service
697 Area Act, in the creation of which an election was not required under Subsection
698 17B-1-214 (3)(c).
699 (E) "Fire protection tax rate" means:
700 (I) for an annexing county, the property tax rate that, when applied to taxable property
701 in the unincorporated area of the county, generates enough property tax revenue to cover all the
702 costs associated with providing fire protection, paramedic, and emergency services in the
703 unincorporated area of the county; and
704 (II) for an annexing municipality, the property tax rate that generates enough property
705 tax revenue in the municipality to cover all the costs associated with providing fire protection,
706 paramedic, and emergency services in the municipality.
707 (F) "Participating county" means a county whose unincorporated area is included

708 within a fire district at the time of the creation of the fire district.
709 (G) "Participating municipality" means a municipality whose area is included within a
710 fire district at the time of the creation of the fire district.
711 (ii) In the first year following creation of a fire district, the certified tax rate of each
712 participating county and each participating municipality shall be decreased by the amount of
713 the equalized fire protection tax rate.
714 (iii) In the first year following annexation to a fire district, the certified tax rate of each
715 annexing county and each annexing municipality shall be decreased by the fire protection tax
716 rate.
717 (iv) Each tax levied under this section by a fire district shall be considered to be levied
718 by:
719 (A) each participating county and each annexing county for purposes of the county's
720 tax limitation under Section 59-2-908 ; and
721 (B) each participating municipality and each annexing municipality for purposes of the
722 municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a
723 city.
724 (j) For the calendar year beginning on January 1, 2007, the calculation of a taxing
725 entity's certified tax rate shall be adjusted by the amount necessary to offset any change in the
726 certified tax rate that may result from excluding the following from the certified tax rate under
727 Subsection (2)(a) enacted by the Legislature during the 2007 General Session:
728 (i) personal property tax revenue:
729 (A) received by a taxing entity;
730 (B) assessed by a county assessor in accordance with Part 3, County Assessment; and
731 (C) for personal property that is semiconductor manufacturing equipment; or
732 (ii) the taxable value of personal property:
733 (A) contained on the tax rolls of a taxing entity;
734 (B) assessed by a county assessor in accordance with Part 3, County Assessment; and
735 (C) that is semiconductor manufacturing equipment.
736 (3) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
737 (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
738 auditor of:

739 (i) its intent to exceed the certified tax rate; and
740 (ii) the amount by which it proposes to exceed the certified tax rate.
741 (c) The county auditor shall notify all property owners of any intent to exceed the
742 certified tax rate in accordance with Subsection 59-2-919 (2).
743 (4) (a) The taxable value for the base year under Subsection 17C-1-102 (6) shall be
744 reduced for any year to the extent necessary to provide a community development and renewal
745 agency established under Title 17C, Limited Purpose Local Government Entities - Community
746 Development and Renewal Agencies, with approximately the same amount of money the
747 agency would have received without a reduction in the county's certified tax rate if:
748 (i) in that year there is a decrease in the certified tax rate under Subsection (2)(c) or
749 (2)(d)(i);
750 (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
751 previous year; and
752 (iii) the decrease results in a reduction of the amount to be paid to the agency under
753 Section 17C-1-403 or 17C-1-404 .
754 (b) The base taxable value under Subsection 17C-1-102 (6) shall be increased in any
755 year to the extent necessary to provide a community development and renewal agency with
756 approximately the same amount of money as the agency would have received without an
757 increase in the certified tax rate that year if:
758 (i) in that year the base taxable value under Subsection 17C-1-102 (6) is reduced due to
759 a decrease in the certified tax rate under Subsection (2)(c) or (2)(d)(i); and
760 (ii) The certified tax rate of a city, school district, local district, or special service
761 district increases independent of the adjustment to the taxable value of the base year.
762 (c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c) or
763 (2)(d)(i), the amount of money allocated and, when collected, paid each year to a community
764 development and renewal agency established under Title 17C, Limited Purpose Local
765 Government Entities - Community Development and Renewal Agencies, for the payment of
766 bonds or other contract indebtedness, but not for administrative costs, may not be less than that
767 amount would have been without a decrease in the certified tax rate under Subsection (2)(c) or
768 (2)(d)(i).
769 Section 15. Repealer.

770 This bill repeals:
771 Section 53A-21-103, Qualifications for participation in the foundation program --
772 Distribution of monies -- Distribution formulas.
773 Section 16. Effective date.
774 This bill takes effect on July 1, 2008.
775 Section 17. Coordinating H.B. 1 with S.B. 48 -- Superseding amendments.
776 If this S.B. 48 and H.B. 1, Minimum School Program Base Budget Amendments, both
777 pass, it is the intent of the Legislature that the amendments to Section 53A-21-501 , renumbered
778 from Section 53A-21-105 , in this bill supersede the amendments to Section 53A-21-105 in
779 H.B. 1 when the Office of Legislative Research and General Counsel prepares the Utah Code
780 database for publication.