Second 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 . requires certain divided school districts to impose a capital outlay levy of at least
15 .0006 per dollar of taxable value;
16 . allocates the revenue generated under the capital outlay levy to school districts
17 located within the qualifying divided school district;
18 . establishes a combined capital property tax rate a school district must impose to
19 receive a full distribution from both the Capital Outlay Foundation Program and
20 Capital Outlay Enrollment Growth Program;
21 . provides for a pro-rated distribution if a school district imposes a combined capital
22 property tax rate less than the rate required for full funding;
23 . appropriates additional ongoing funding to the State Board of Education for the
24 Capital Outlay Foundation Program and Capital Outlay Enrollment Growth
25 Program;

26 . requires a reduction in the property tax certified tax rate for school districts
27 receiving state capital outlay funding increases;
28 . requires each school district in a county of the first class to levy a capital outlay
29 property tax at a specified rate in order to receive the state contribution toward the
30 minimum basic program;
31 . allocates the revenue generated under the capital outlay levy to school districts
32 located in a county of the first class;
33 . amends truth in taxation notice and hearing requirements for school districts
34 imposing the mandatory portion of the capital outlay levy;
35 . amends the calculation of the certified tax rate with respect to the capital outlay
36 levy; and
37 . makes technical corrections.
38 Monies Appropriated in this Bill:
39 This bill appropriates as an ongoing appropriation subject to future budget constraints,
40 $56,000,000 from the Uniform School Fund for fiscal year 2008-09 to the State Board
41 of Education.
42 Other Special Clauses:
43 This bill takes effect on July 1, 2008.
44 This bill coordinates with H.B. 1, Minimum School Program Base Budget
45 Amendments, by providing superseding amendments.
46 Utah Code Sections Affected:
47 AMENDS:
48 11-13-302, as last amended by Laws of Utah 2007, Chapter 108
49 53A-2-103, as last amended by Laws of Utah 2002, Chapter 301
50 53A-2-114, as last amended by Laws of Utah 1996, Chapter 326
51 53A-2-115, as last amended by Laws of Utah 1996, Chapter 326
52 53A-2-117, as last amended by Laws of Utah 2007, Chapters 215 and 297
53 53A-16-107, as last amended by Laws of Utah 1999, Chapter 332
54 53A-16-110, as last amended by Laws of Utah 2004, Chapter 371
55 53A-17a-135, as last amended by Laws of Utah 2007, Chapter 2
56 53A-21-102, as last amended by Laws of Utah 2003, Chapters 199 and 320

57 59-2-924, as last amended by Laws of Utah 2007, Chapters 107 and 329
58 ENACTS:
59 53A-2-118.3, Utah Code Annotated 1953
60 53A-16-107.1, Utah Code Annotated 1953
61 53A-21-101.5, Utah Code Annotated 1953
62 53A-21-201, Utah Code Annotated 1953
63 53A-21-202, Utah Code Annotated 1953
64 53A-21-301, Utah Code Annotated 1953
65 53A-21-302, Utah Code Annotated 1953
66 59-2-924.2, Utah Code Annotated 1953
67 59-2-924.3, Utah Code Annotated 1953
68 RENUMBERS AND AMENDS:
69 53A-21-401, (Renumbered from 53A-21-104, as last amended by Laws of Utah 2007,
70 Chapter 344)
71 53A-21-501, (Renumbered from 53A-21-105, as last amended by Laws of Utah 2007,
72 Chapter 2)
73 REPEALS:
74 53A-21-103, as last amended by Laws of Utah 2003, Chapter 320
75 53A-21-103.5, as last amended by Laws of Utah 2005, Chapters 171 and 184
76
77 Be it enacted by the Legislature of the state of Utah:
78 Section 1. Section 11-13-302 is amended to read:
79 11-13-302. Payment of fee in lieu of ad valorem property tax by certain energy
80 suppliers -- Method of calculating -- Collection -- Extent of tax lien.
81 (1) (a) Each project entity created under this chapter that owns a project and that sells
82 any capacity, service, or other benefit from it to an energy supplier or suppliers whose tangible
83 property is not exempted by Utah Constitution Article XIII, Section 3, from the payment of ad
84 valorem property tax, shall pay an annual fee in lieu of ad valorem property tax as provided in
85 this section to each taxing jurisdiction within which the project or any part of it is located.
86 (b) For purposes of this section, "annual fee" means the annual fee described in
87 Subsection (1)(a) that is in lieu of ad valorem property tax.

88 (c) The requirement to pay an annual fee shall commence:
89 (i) with respect to each taxing jurisdiction that is a candidate receiving the benefit of
90 impact alleviation payments under contracts or determination orders provided for in Sections
91 11-13-305 and 11-13-306 , with the fiscal year of the candidate following the fiscal year of the
92 candidate in which the date of commercial operation of the last generating unit, other than any
93 generating unit providing additional project capacity, of the project occurs, or, in the case of
94 any facilities providing additional project capacity, with the fiscal year of the candidate
95 following the fiscal year of the candidate in which the date of commercial operation of the
96 generating unit providing the additional project capacity occurs; and
97 (ii) with respect to any taxing jurisdiction other than a taxing jurisdiction described in
98 Subsection (1)(c)(i), with the fiscal year of the taxing jurisdiction in which construction of the
99 project commences, or, in the case of facilities providing additional project capacity, with the
100 fiscal year of the taxing jurisdiction in which construction of those facilities commences.
101 (d) The requirement to pay an annual fee shall continue for the period of the useful life
102 of the project or facilities.
103 (2) (a) The annual fees due a school district shall be as provided in Subsection (2)(b)
104 because the ad valorem property tax imposed by a school district and authorized by the
105 Legislature under Section 53A-17a-135 represents both:
106 (i) a levy mandated by the state for the state minimum school program under Section
107 53A-17a-135 ; and
108 (ii) local levies for capital outlay, maintenance, transportation, and other purposes
109 under Sections 11-2-7 , 53A-16-107 , 53A-16-110 , 53A-17a-126 , 53A-17a-127 , 53A-17a-133 ,
110 53A-17a-134 , 53A-17a-143 , and 53A-17a-145 [, and 53A-21-103 ].
111 (b) The annual fees due a school district shall be as follows:
112 (i) the project entity shall pay to the school district an annual fee for the state minimum
113 school program at the rate imposed by the school district and authorized by the Legislature
114 under Subsection 53A-17a-135 (1); and
115 (ii) for all other local property tax levies authorized to be imposed by a school district,
116 the project entity shall pay to the school district either:
117 (A) an annual fee; or
118 (B) impact alleviation payments under contracts or determination orders provided for

119 in Sections 11-13-305 and 11-13-306 .
120 (3) (a) An annual fee due a taxing jurisdiction for a particular year shall be calculated
121 by multiplying the tax rate or rates of the jurisdiction for that year by the product obtained by
122 multiplying the fee base or value determined in accordance with Subsection (4) for that year of
123 the portion of the project located within the jurisdiction by the percentage of the project which
124 is used to produce the capacity, service, or other benefit sold to the energy supplier or suppliers.
125 (b) As used in this section, "tax rate," when applied in respect to a school district,
126 includes any assessment to be made by the school district under Subsection (2) or Section
127 63-51-6 .
128 (c) There is to be credited against the annual fee due a taxing jurisdiction for each year,
129 an amount equal to the debt service, if any, payable in that year by the project entity on bonds,
130 the proceeds of which were used to provide public facilities and services for impact alleviation
131 in the taxing jurisdiction in accordance with Sections 11-13-305 and 11-13-306 .
132 (d) The tax rate for the taxing jurisdiction for that year shall be computed so as to:
133 (i) take into account the fee base or value of the percentage of the project located
134 within the taxing jurisdiction determined in accordance with Subsection (4) used to produce the
135 capacity, service, or other benefit sold to the supplier or suppliers; and
136 (ii) reflect any credit to be given in that year.
137 (4) (a) Except as otherwise provided in this section, the annual fees required by this
138 section shall be paid, collected, and distributed to the taxing jurisdiction as if:
139 (i) the annual fees were ad valorem property taxes; and
140 (ii) the project were assessed at the same rate and upon the same measure of value as
141 taxable property in the state.
142 (b) (i) Notwithstanding Subsection (4)(a), for purposes of an annual fee required by
143 this section, the fee base of a project may be determined in accordance with an agreement
144 among:
145 (A) the project entity; and
146 (B) any county that:
147 (I) is due an annual fee from the project entity; and
148 (II) agrees to have the fee base of the project determined in accordance with the
149 agreement described in this Subsection (4).

150 (ii) The agreement described in Subsection (4)(b)(i):
151 (A) shall specify each year for which the fee base determined by the agreement shall be
152 used for purposes of an annual fee; and
153 (B) may not modify any provision of this chapter except the method by which the fee
154 base of a project is determined for purposes of an annual fee.
155 (iii) For purposes of an annual fee imposed by a taxing jurisdiction within a county
156 described in Subsection (4)(b)(i)(B), the fee base determined by the agreement described in
157 Subsection (4)(b)(i) shall be used for purposes of an annual fee imposed by that taxing
158 jurisdiction.
159 (iv) (A) If there is not agreement as to the fee base of a portion of a project for any
160 year, for purposes of an annual fee, the State Tax Commission shall determine the value of that
161 portion of the project for which there is not an agreement:
162 (I) for that year; and
163 (II) using the same measure of value as is used for taxable property in the state.
164 (B) The valuation required by Subsection (4)(b)(iv)(A) shall be made by the State Tax
165 Commission in accordance with rules made by the State Tax Commission.
166 (c) Payments of the annual fees shall be made from:
167 (i) the proceeds of bonds issued for the project; and
168 (ii) revenues derived by the project entity from the project.
169 (d) (i) The contracts of the project entity with the purchasers of the capacity, service, or
170 other benefits of the project whose tangible property is not exempted by Utah Constitution
171 Article XIII, Section 3, from the payment of ad valorem property tax shall require each
172 purchaser, whether or not located in the state, to pay, to the extent not otherwise provided for,
173 its share, determined in accordance with the terms of the contract, of these fees.
174 (ii) It is the responsibility of the project entity to enforce the obligations of the
175 purchasers.
176 (5) (a) The responsibility of the project entity to make payment of the annual fees is
177 limited to the extent that there is legally available to the project entity, from bond proceeds or
178 revenues, monies to make these payments, and the obligation to make payments of the annual
179 fees is not otherwise a general obligation or liability of the project entity.
180 (b) No tax lien may attach upon any property or money of the project entity by virtue of

181 any failure to pay all or any part of an annual fee.
182 (c) The project entity or any purchaser may contest the validity of an annual fee to the
183 same extent as if the payment was a payment of the ad valorem property tax itself.
184 (d) The payments of an annual fee shall be reduced to the extent that any contest is
185 successful.
186 (6) (a) The annual fee described in Subsection (1):
187 (i) shall be paid by a public agency that:
188 (A) is not a project entity; and
189 (B) owns an interest in a facility providing additional project capacity if the interest is
190 otherwise exempt from taxation pursuant to Utah Constitution, Article XIII, Section 3; and
191 (ii) for a public agency described in Subsection (6)(a)(i), shall be calculated in
192 accordance with Subsection (6)(b).
193 (b) The annual fee required under Subsection (6)(a) shall be an amount equal to the tax
194 rate or rates of the applicable taxing jurisdiction multiplied by the product of the following:
195 (i) the fee base or value of the facility providing additional project capacity located
196 within the jurisdiction;
197 (ii) the percentage of the ownership interest of the public agency in the facility; and
198 (iii) the portion, expressed as a percentage, of the public agency's ownership interest
199 that is attributable to the capacity, service, or other benefit from the facility that is sold by the
200 public agency to an energy supplier or suppliers whose tangible property is not exempted by
201 Utah Constitution, Article XIII, Section 3, from the payment of ad valorem property tax.
202 (c) A public agency paying the annual fee pursuant to Subsection (6)(a) shall have the
203 obligations, credits, rights, and protections set forth in Subsections (1) through (5) with respect
204 to its ownership interest as though it were a project entity.
205 Section 2. Section 53A-2-103 is amended to read:
206 53A-2-103. Transfer of property to new school district -- Rights and obligations
207 of new school board -- Outstanding indebtedness -- Special tax.
208 (1) On July 1 following the approval of the creation of a new school district under
209 Section 53A-2-102 , the local school boards of the former districts shall convey and deliver all
210 school property to the local school board of the new district. Title vests in the new board. All
211 rights, claims, and causes of action to or for the property, for the use or the income from the

212 property, for conversion, disposition, or withholding of the property, or for any damage or
213 injury to the property vest at once in the new board.
214 (2) The new board may bring and maintain actions to recover, protect, and preserve the
215 property and rights of the district schools and to enforce contracts.
216 (3) The new board shall assume and be liable for all outstanding debts and obligations
217 of each of the former school districts.
218 (4) All of the bonded indebtedness, outstanding debts, and obligations of a former
219 district, which cannot be reasonably paid from the assets of the former district, shall be paid by
220 a special tax levied by the new board as needed. The tax shall be levied upon the property
221 within the former district which was liable for the indebtedness at the time of consolidation. If
222 bonds are approved in the new district under Section 53A-18-102 , the special tax shall be
223 discontinued and the bonded indebtedness paid as any other bonded indebtedness of the new
224 district.
225 (5) Bonded indebtedness of a former district which has been refunded shall be paid in
226 the same manner as that which the new district assumes under Section 53A-18-101 .
227 (6) State funds received by the new district under Section [ 53A-21-103 ] 53A-21-202
228 may be applied toward the payment of outstanding bonded indebtedness of a former district in
229 the same proportion as the bonded indebtedness of the territory within the former district bears
230 to the total bonded indebtedness of the districts combined.
231 Section 3. Section 53A-2-114 is amended to read:
232 53A-2-114. Additional levies -- School board options to abolish or continue after
233 consolidation.
234 (1) If a school district which has approved an additional levy under Section
235 53A-16-110 , 53A-17a-133 , 53A-17a-134 , or 53A-17a-145 [, or 53A-21-103 ] is consolidated
236 with a district which does not have such a levy, the board of education of the consolidated
237 district may choose to abolish the levy, or apply it in whole or in part to the entire consolidated
238 district.
239 (2) If the board chooses to apply any part of the levy to the entire district, the levy may
240 continue in force for no more than three years, unless approved by the electors of the
241 consolidated district in the manner set forth in Section 53A-16-110 .
242 Section 4. Section 53A-2-115 is amended to read:

243 53A-2-115. Additional levies in transferred territory -- Transferee board option
244 to abolish or continue.
245 If two or more districts undergo restructuring that results in a district receiving territory
246 that increases the population of the district by at least 25%, and if the transferred territory was,
247 at the time of transfer, subject to an additional levy under Section 53A-16-110 , 53A-17a-133 ,
248 53A-17a-134 , or 53A-17a-145 [, or 53A-21-103 ], the board of education of the transferee
249 district may abolish the levy or apply the levy in whole or in part to the entire restructured
250 district. Any such levy made applicable to the entire district may continue in force for no more
251 than five years, unless approved by the electors of the restructured district in the manner set
252 forth in Section 53A-16-110 .
253 Section 5. Section 53A-2-117 is amended to read:
254 53A-2-117. Definitions.
255 As used in Sections 53A-2-117 through 53A-2-121 :
256 (1) "Divided school district", "existing district" or "existing school district" means a
257 school district from which a new district is created.
258 (2) "New district" or "new school district" means a school district created under
259 Section 53A-2-118 or 53A-2-118.1 .
260 (3) "Remaining district" or "remaining school district" means an existing district after
261 the creation of a new district.
262 Section 6. Section 53A-2-118.3 is enacted to read:
263 53A-2-118.3. Imposition of the capital outlay levy in qualifying divided school
264 districts.
265 (1) For purposes of this section, "qualifying divided school district" means a divided
266 school district:
267 (a) located within a county of the second through sixth class; and
268 (b) with a new school district created under Section 53A-2-118.1 that begins to provide
269 educational services after July 1, 2008.
270 (2) A school district within a qualifying divided school district shall impose a capital
271 outlay levy described in Section 53A-16-107 of at least .0006 per dollar of taxable value.
272 (3) The county treasurer of a county with a qualifying divided school district shall
273 distribute revenues generated by the .0006 portion of the capital outlay levy required in

274 Subsection (2) to the school districts located within the boundaries of the qualifying divided
275 school district as follows:
276 (a) 25% of the revenues shall be distributed in proportion to a school district's
277 percentage of the total enrollment growth in all of the school districts within the qualifying
278 divided school district that have an increase in enrollment, calculated on the basis of the
279 average annual enrollment growth over the prior three years in all of the school districts within
280 the qualifying divided school district that have an increase in enrollment during the prior three
281 years, as of the October 1 enrollment counts; and
282 (b) 75% of the revenues shall be distributed in proportion to a school district's
283 percentage of the total prior year enrollment in all of the school districts within the qualifying
284 divided school district, as of the October 1 enrollment counts.
285 (4) On or before December 31 of each year, the State Board of Education shall provide
286 a county treasurer with audited enrollment information from the fall enrollment audit necessary
287 to distribute revenues as required by this section.
288 (5) On or before March 31 of each year, a county treasurer in a county with a
289 qualifying divided school district shall distribute the revenue generated within the qualifying
290 divided school district during the prior calendar year from the capital outlay levy described in
291 Section 53A-2-118.3 .
292 Section 7. Section 53A-16-107 is amended to read:
293 53A-16-107. Capital outlay levy -- Maintenance of school facilities -- Authority to
294 use proceeds of .0002 tax rate -- Restrictions and procedure.
295 (1) [(a) A] Subject to Subsection (3), a local school board may annually impose a
296 capital outlay levy [a tax not to exceed .0024 per dollar of taxable value for debt service and
297 capital outlay.] not to exceed .0024 per dollar of taxable value to be used for:
298 (a) capital outlay;
299 (b) debt service; and
300 (c) subject to Subsection (2), school facility maintenance.
301 [(b) Each] (2) (a) A local school board may utilize the proceeds of a maximum of
302 .0002 per dollar of taxable value of [its] the local school board's annual capital outlay levy for
303 the maintenance of school [plants] facilities in [its] the school district.
304 [(2)] (b) A local school board that uses the option provided under Subsection [(1)(b)

305 must do the following] (2)(a) shall:
306 [(a)] (i) maintain the same level of expenditure for maintenance in the current year as it
307 did in the preceding year, plus the annual average percentage increase applied to the
308 maintenance and operation budget for the current year; and
309 [(b)] (ii) identify the expenditure of capital outlay funds for maintenance by a district
310 project number to ensure that the funds [were] are expended in the manner intended.
311 [(3)] (c) The State Board of Education shall establish by rule the expenditure
312 classification for maintenance under this program using a standard classification system.
313 (3) In order to qualify for receipt of the state contribution toward the basic program
314 described in Section 53A-17a-135 , a local school board in a county of the first class shall
315 impose a capital outlay levy of at least .0006 per dollar of taxable value.
316 (4) (a) The county treasurer of a county of the first class shall distribute revenues
317 generated by the .0006 portion of the capital outlay levy required in Subsection (3) to school
318 districts within the county in accordance with Section 53A-16-107.1 .
319 (b) If a school district in a county of the first class imposes a capital outlay levy
320 pursuant to this section which exceeds .0006, the county treasurer of a county of the first class
321 shall distribute revenues generated by the portion of the capital outlay levy which exceeds
322 .0006 to the school district imposing the levy.
323 Section 8. Section 53A-16-107.1 is enacted to read:
324 53A-16-107.1. School capital outlay in counties of the first class -- Allocation.
325 (1) The county treasurer of a county of the first class shall distribute revenues
326 generated by the .0006 portion of the capital outlay levy described in Subsection
327 53A-16-107 (3) to school districts located within the county of the first class as follows:
328 (a) 25% of the revenues shall be distributed in proportion to a school district's
329 percentage of the total enrollment growth in all of the school districts within the county that
330 have an increase in enrollment, calculated on the basis of the average annual enrollment growth
331 over the prior three years in all of the school districts within the county that have an increase in
332 enrollment during the prior three years, as of the October 1 enrollment counts; and
333 (b) 75% of the revenues shall be distributed in proportion to a school district's
334 percentage of the total prior year enrollment in all of the school districts within the county, as
335 of the October 1 enrollment counts.

336 (2) If a new school district is created or school district boundaries are adjusted, the
337 enrollment for each affected school district shall be calculated on the basis of enrollment in
338 school district schools located within that school district's newly created or adjusted
339 boundaries, as of October 1 enrollment counts.
340 (3) On or before December 31 of each year, the State Board of Education shall provide
341 a county treasurer with audited enrollment information from the fall enrollment audit necessary
342 to distribute revenues as required by this section.
343 (4) On or before March 31 of each year, a county treasurer in a county of the first class
344 shall distribute the revenue generated within the county of the first class during the prior
345 calendar year from the capital outlay levy described in Section 53A-16-107 .
346 Section 9. Section 53A-16-110 is amended to read:
347 53A-16-110. Special tax to buy school building sites, build and furnish
348 schoolhouses, or improve school property.
349 (1) (a) A local school board may, by following the process for special elections
350 established in Sections 20A-1-203 and 20A-1-204 , call a special election to determine whether
351 a special property tax should be levied for one or more years to buy building sites, build and
352 furnish schoolhouses, or improve the school property under its control.
353 (b) The tax may not exceed .2% of the taxable value of all taxable property in the
354 district in any one year.
355 (2) The board shall give reasonable notice of the election and follow the same
356 procedure used in elections for the issuance of bonds.
357 (3) If a majority of those voting on the proposition vote in favor of the tax, it is levied
358 in addition to [those] a levy authorized under [Sections] Section 53A-17a-145 [and
359 53A-21-103 ] and computed on the valuation of the county assessment roll for that year.
360 (4) (a) Within 20 days after the election, the board shall certify the amount of the
361 approved tax to the governing body of the county in which the school district is located.
362 (b) The governing body shall acknowledge receipt of the certification and levy and
363 collect the special tax.
364 (c) It shall then distribute the collected taxes to the business administrator of the school
365 district at the end of each calendar month.
366 (5) The special tax becomes due and delinquent and attaches to and becomes a lien on

367 real and personal property at the same time as state and county taxes.
368 Section 10. Section 53A-17a-135 is amended to read:
369 53A-17a-135. Minimum basic tax rate -- Certified revenue levy.
370 (1) (a) In order to qualify for receipt of the state contribution toward the basic program
371 and as its contribution toward its costs of the basic program[,]:
372 (i) each school district shall impose a minimum basic tax rate per dollar of taxable
373 value that generates $245,254,790 in revenues statewide[.]; and
374 (ii) a local school board in a county of the first class shall impose the capital outlay
375 levy described in Subsection 53A-16-107 (3) for distribution pursuant to Section 53A-16-107.1 .
376 (b) The preliminary estimate for the 2007-08 minimum basic tax rate is .001474.
377 (c) The State Tax Commission shall certify on or before June 22 the rate that generates
378 $245,254,790 in revenues statewide.
379 (d) If the minimum basic tax rate exceeds the certified revenue levy as defined in
380 Section 53A-17a-103 , the state is subject to the notice requirements of Section 59-2-926 .
381 (2) (a) The state shall contribute to each district toward the cost of the basic program in
382 the district that portion which exceeds the proceeds of the levy authorized under Subsection
383 (1).
384 (b) In accord with the state strategic plan for public education and to fulfill its
385 responsibility for the development and implementation of that plan, the Legislature instructs
386 the State Board of Education, the governor, and the Office of Legislative Fiscal Analyst in each
387 of the coming five years to develop budgets that will fully fund student enrollment growth.
388 (3) (a) If the proceeds of the levy authorized under Subsection (1) equal or exceed the
389 cost of the basic program in a school district, no state contribution shall be made to the basic
390 program.
391 (b) The proceeds of the levy authorized under Subsection (1) which exceed the cost of
392 the basic program shall be paid into the Uniform School Fund as provided by law.
393 Section 11. Section 53A-21-101.5 is enacted to read:
394 Part 1. General Provisions
395 53A-21-101.5. Definitions.
396 As used in this chapter:
397 (1) "ADM" or "pupil in average daily membership" is as defined in Section

398 53A-17a-103 .
399 (2) "Combined capital levy rate" means a rate that includes the sum of the following
400 property tax levies:
401 (a) the capital outlay levy authorized in Section 53A-16-107 ;
402 (b) the portion of the 10% of basic levy described in Section 53A-17a-145 that is
403 budgeted for debt service or capital outlay;
404 (c) the debt service levy authorized in Section 11-14-310 ; and
405 (d) the voted capital outlay leeway authorized in Section 53A-16-110 .
406 (3) "Derived net taxable value" means the total current property tax collections from
407 April 1 through the following March 31 for a school district, divided by the school district's
408 total tax rate for the same year.
409 (4) "Property tax yield per ADM" means:
410 (a) the product of:
411 (i) a school district's derived net taxable value; and
412 (ii) .0030; divided by
413 (b) the school district's ADM for the school year beginning after the April 1 referenced
414 in Subsection (3).
415 Section 12. Section 53A-21-102 is amended to read:
416 53A-21-102. Capital outlay programs -- Use of funds.
417 [(1) The Capital Outlay Foundation Program and the Enrollment Growth Program are
418 established to provide revenues to school districts for the purposes of capital outlay bonding,
419 construction, and renovation.]
420 [(2) The Capital Outlay Loan Program is established to provide:]
421 [(a) short-term help to school districts to meet district needs for school building
422 construction and renovation; and]
423 [(b) assistance to charter schools to meet school building construction and renovation
424 needs.]
425 [(3) School districts shall] A school district may only use the monies provided [to
426 them] under [the programs established by this section solely] this chapter for school district
427 capital outlay and debt service purposes.
428 Section 13. Section 53A-21-201 is enacted to read:

429 Part 2. Capital Outlay Foundation Program
430 53A-21-201. Capital Outlay Foundation Program -- Creation -- Definitions.
431 (1) There is created the Capital Outlay Foundation Program to guarantee a certain
432 amount of capital outlay funding to a school district that makes a sufficient local tax effort and
433 generates local property tax revenues below a foundation guarantee funding level.
434 (2) As used in this part:
435 (a) "Foundation guarantee level per ADM" means a minimum revenue amount per
436 ADM generated by a combined capital levy rate of .0030 per dollar of taxable value, including
437 the following:
438 (i) the revenue generated locally from a school district's combined capital levy rate; and
439 (ii) the revenue allocated to a school district by the State Board of Education in
440 accordance with Section 53A-21-202 .
441 (b) "Qualifying school district" means a school district with a property tax yield per
442 ADM less than the foundation guarantee level per ADM.
443 Section 14. Section 53A-21-202 is enacted to read:
444 53A-21-202. Capital Outlay Foundation Program -- Distribution formulas --
445 Allocations.
446 (1) For fiscal years beginning on or after July 1, 2008, the State Board of Education
447 shall determine the foundation guarantee level per ADM that fully allocates the funds
448 appropriated to the State Board of Education for distribution under this section.
449 (2) If a qualifying school district imposes a current year combined capital levy rate of
450 at least .0030 per dollar of taxable value, the State Board of Education shall allocate to the
451 qualifying school district an amount equal to the product of the following:
452 (a) the qualifying school district's prior year ADM; and
453 (b) an amount equal to the difference between the following:
454 (i) the foundation guarantee level per ADM for that fiscal year, as determined in
455 accordance with Subsection (1); and
456 (ii) the qualifying school district's prior year property tax yield per ADM.
457 (3) Except as provided in Subsection (4), if a qualifying school district imposes a
458 current year combined capital levy rate less than .0030 per dollar of taxable value, the State
459 Board of Education shall allocate to the qualifying school district an amount equal to the

460 product of the following:
461 (a) the qualifying school district's prior year ADM;
462 (b) an amount equal to the difference between the following:
463 (i) the foundation guarantee level per ADM for that fiscal year, as determined in
464 accordance with Subsection (1); and
465 (ii) the qualifying school district's prior year property tax yield per ADM; and
466 (c) a percentage equal to the qualifying school district's current year combined capital
467 levy rate divided by .0030.
468 (4) Notwithstanding Subsection (3), if a qualifying school district imposes a combined
469 capital levy rate less than .0030 per dollar of taxable value, the State Board of Education shall
470 allocate funds to the qualifying school district in accordance with the allocation methodology
471 under Subsection (2) if:
472 (a) the qualifying school district imposed a combined capital levy rate of at least .0030
473 in either of the prior two years; and
474 (b) the qualifying school district imposes a combined capital levy rate less than .0030
475 solely due to a decrease in the qualifying school district's certified tax rate, calculated pursuant
476 to Section 59-2-924 , due to increases in the value of taxable property located within the
477 qualifying school district.
478 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
479 State Board of Education shall make rules to administer this section.
480 Section 15. Section 53A-21-301 is enacted to read:
481 Part 3. Capital Outlay Enrollment Growth Program
482 53A-21-301. Capital Outlay Enrollment Growth Program - Definitions.
483 (1) There is created the Capital Outlay Enrollment Growth Program to provide capital
484 outlay funding to school districts experiencing net enrollment increases.
485 (2) As used in this part:
486 (a) "Average net enrollment increase" means the quotient of:
487 (i) (A) enrollment in the current year, based on October 1 enrollment counts; minus
488 (B) enrollment in the year three years prior, based on October 1 enrollment counts;
489 divided by
490 (ii) three.

491 (b) "Eligible district" or "eligible school district" means a school district that:
492 (i) has an average net enrollment increase; and
493 (ii) a prior year property tax yield per ADM that is less than two times the prior year
494 statewide average property tax yield per ADM.
495 (c) "Funding level per growth student" means the funding level per average net
496 enrollment increase student which fully allocates appropriated funds.
497 (d) "Statewide average property tax yield per ADM" means the quotient of:
498 (i) the sum of all school districts' derived net taxable value multiplied by .0030;
499 divided by
500 (ii) the sum of total school district ADM statewide for the same year.
501 Section 16. Section 53A-21-302 is enacted to read:
502 53A-21-302. Capital Outlay Enrollment Growth Program -- Distribution
503 formulas -- Allocations.
504 (1) The State Board of Education shall annually:
505 (a) determine the funding level per growth student which fully allocates appropriated
506 funds; and
507 (b) allocate appropriated funds to eligible school districts in accordance with this
508 section.
509 (2) If an eligible school district imposes a current year combined capital levy rate of at
510 least .0030 per dollar of taxable value, the State Board of Education shall allocate to the
511 eligible school district an amount equal to the product of the following:
512 (a) the eligible school district's average net enrollment increase; multiplied by
513 (b) the funding level per growth student.
514 (3) Except as provided in Subsection (4), if an eligible school district imposes a current
515 year combined capital levy rate less than .0030 per dollar of taxable value, the State Board of
516 Education shall allocate to the eligible school district an amount equal to the product of the
517 following:
518 (a) the eligible school district's average net enrollment increase; multiplied by
519 (b) the funding level per growth student; multiplied by
520 (c) a percentage equal to the eligible school district's current year combined capital
521 levy rate divided by .0030.

522 (4) Notwithstanding Subsection (3), if an eligible school district imposes a combined
523 capital levy rate less than .0030 per dollar of taxable value, the State Board of Education shall
524 allocate funds to the eligible school district in accordance with the allocation methodology
525 under Subsection (2) if:
526 (a) the eligible school district imposed a combined capital levy rate of at least .0030 in
527 either of the two prior years; and
528 (b) the eligible school district imposes a combined capital levy rate less than .0030
529 solely due to a decrease in the eligible school district's certified tax rate, calculated pursuant to
530 Section 59-2-924 , due to increases in the value of taxable property located within the eligible
531 school district.
532 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
533 State Board of Education shall make rules to administer this section.
534 Section 17. Section 53A-21-401 , which is renumbered from Section 53A-21-104 is
535 renumbered and amended to read:
536 Part 4. Capital Outlay Loan Program
537 [53A-21-104]. 53A-21-401. School Building Revolving Account -- Access to
538 the account.
539 (1) There is created:
540 (a) the "Capital Outlay Loan Program" to provide:
541 (i) short-term help to school districts to meet district needs for school building
542 construction and renovation; and
543 (ii) assistance to charter schools to meet school building construction and renovation
544 needs; and
545 (b) a nonlapsing "School Building Revolving Account" administered within the
546 Uniform School Fund by the state superintendent of public instruction in accordance with rules
547 adopted by the State Board of Education.
548 (2) [Monies received by a school district] The State Board of Education may not
549 allocate funds from the School Building Revolving Account [may not] that exceed [the] a
550 school district's bonding limit minus its outstanding bonds.
551 (3) In order to receive monies from the account, a school district [must do the
552 following] shall:

553 (a) levy a [tax of] combined capital levy rate of at least .0024 [for capital outlay and
554 debt service];
555 (b) contract with the state superintendent of public instruction to repay the monies,
556 with interest at a rate established by the state superintendent, within five years of [their] receipt,
557 using future state [building monies or] capital outlay allocations, local revenues, or both;
558 (c) levy sufficient ad valorem taxes under Section 11-14-310 to guarantee annual loan
559 repayments, unless the state superintendent of public instruction alters the payment schedule to
560 improve a hardship situation; and
561 (d) meet any other condition established by the State Board of Education pertinent to
562 the loan.
563 (4) (a) The state superintendent shall establish a committee, including representatives
564 from state and local education entities, to:
565 (i) review requests by school districts for loans under this section; and
566 (ii) make recommendations regarding approval or disapproval of the loan applications
567 to the state superintendent.
568 (b) If the committee recommends approval of a loan application under Subsection
569 (4)(a)(ii), the committee's recommendation shall include:
570 (i) the recommended amount of the loan;
571 (ii) the payback schedule; and
572 (iii) the interest rate to be charged.
573 (5) (a) There is established within the School Building Revolving Account the Charter
574 School Building Subaccount administered by the State Board of Education, in consultation
575 with the State Charter School Board, in accordance with rules adopted by the State Board of
576 Education.
577 (b) The Charter School Building Subaccount shall consist of:
578 (i) money appropriated to the subaccount by the Legislature;
579 (ii) money received from the repayment of loans made from the subaccount; and
580 (iii) interest earned on monies in the subaccount.
581 (c) The state superintendent of public instruction shall make loans to charter schools
582 from the Charter School Building Subaccount to pay for the costs of:
583 (i) planning expenses;

584 (ii) constructing or renovating charter school buildings;
585 (iii) equipment and supplies; or
586 (iv) other start-up or expansion expenses.
587 (d) Loans to new charter schools or charter schools with urgent facility needs may be
588 given priority.
589 (6) (a) The State Board of Education shall establish a committee, which shall include
590 individuals who have expertise or experience in finance, real estate, and charter school
591 administration, one of whom shall be nominated by the governor to:
592 (i) review requests by charter schools for loans under this section; and
593 (ii) make recommendations regarding approval or disapproval of the loan applications
594 to the State Charter School Board and the State Board of Education.
595 (b) If the committee recommends approval of a loan application under Subsection
596 (6)(a)(ii), the committee's recommendation shall include:
597 (i) the recommended amount of the loan;
598 (ii) the payback schedule; and
599 (iii) the interest rate to be charged.
600 (c) The committee members may not:
601 (i) be a relative, as defined in Section 53A-1a-518 , of a loan applicant; or
602 (ii) have a pecuniary interest, directly or indirectly, with a loan applicant or any person
603 or entity that contracts with a loan applicant.
604 (7) The State Board of Education, in consultation with the State Charter School Board,
605 shall approve all loans to a charter [schools] school under this section.
606 (8) [Loans] The term of a loan to a charter [schools] school under this section may not
607 exceed [a term of] five years.
608 (9) The State Board of Education may not approve loans to charter schools under this
609 section that exceed a total of $2,000,000 in any year.
610 Section 18. Section 53A-21-501 , which is renumbered from Section 53A-21-105 is
611 renumbered and amended to read:
612 Part 5. Fiscal Matters
613 [53A-21-105]. 53A-21-501. State contribution to capital outlay programs.
614 (1) As an ongoing appropriation subject to future budget constraints, there is

615 appropriated from the Uniform School Fund for fiscal year [2007-08, $27,288,900] 2008-09,
616 $56,000,000 to the State Board of Education for the capital outlay programs created in [Section
617 53A-21-102 ] this chapter.
618 (2) Of the monies appropriated in Subsection (1), the State Board of Education shall
619 distribute:
620 (a) [$24,358,000] $33,000,000 in accordance with the Capital Outlay Foundation
621 Program [described in Section 53A-21-103 ] pursuant to Section 53A-21-202 ; and
622 (b) [$2,930,900] $23,000,000 in accordance with the Capital Outlay Enrollment
623 Growth Program [described in Section 53A-21-103.5 ] pursuant to Section 53A-21-302 .
624 Section 19. Section 59-2-924 is amended to read:
625 59-2-924. Report of valuation of property to county auditor and commission --
626 Transmittal by auditor to governing bodies -- Certified tax rate -- Calculation of certified
627 tax rate -- Rulemaking authority -- Adoption of tentative budget.
628 (1) (a) Before June 1 of each year, the county assessor of each county shall deliver to
629 the county auditor and the commission the following statements:
630 (i) a statement containing the aggregate valuation of all taxable property in each taxing
631 entity; and
632 (ii) a statement containing the taxable value of any additional personal property
633 estimated by the county assessor to be subject to taxation in the current year.
634 (b) The county auditor shall, on or before June 8, transmit to the governing body of
635 each taxing entity:
636 (i) the statements described in Subsections (1)(a)(i) and (ii);
637 (ii) an estimate of the revenue from personal property;
638 (iii) the certified tax rate; and
639 (iv) all forms necessary to submit a tax levy request.
640 (2) (a) (i) The "certified tax rate" means a tax rate that will provide the same ad
641 valorem property tax revenues for a taxing entity as were budgeted by that taxing entity for the
642 prior year.
643 (ii) For purposes of this Subsection (2), "ad valorem property tax revenues" do not
644 include:
645 (A) collections from redemptions;

646 (B) interest;
647 (C) penalties; and
648 (D) revenue received by a taxing entity from personal property that is:
649 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
650 (II) semiconductor manufacturing equipment.
651 (iii) (A) Except as otherwise provided in this section, the certified tax rate shall be
652 calculated by dividing the ad valorem property tax revenues budgeted for the prior year by the
653 taxing entity by the amount calculated under Subsection (2)(a)(iii)(B).
654 (B) For purposes of Subsection (2)(a)(iii)(A), the legislative body of a taxing entity
655 shall calculate an amount as follows:
656 (I) calculate for the taxing entity the difference between:
657 (Aa) the aggregate taxable value of all property taxed; and
658 (Bb) any redevelopment adjustments for the current calendar year;
659 (II) after making the calculation required by Subsection (2)(a)(iii)(B)(I), calculate an
660 amount determined by increasing or decreasing the amount calculated under Subsection
661 (2)(a)(iii)(B)(I) by the average of the percentage net change in the value of taxable property for
662 the equalization period for the three calendar years immediately preceding the current calendar
663 year;
664 (III) after making the calculation required by Subsection (2)(a)(iii)(B)(II), calculate the
665 product of:
666 (Aa) the amount calculated under Subsection (2)(a)(iii)(B)(II); and
667 (Bb) the percentage of property taxes collected for the five calendar years immediately
668 preceding the current calendar year; and
669 (IV) after making the calculation required by Subsection (2)(a)(iii)(B)(III), calculate an
670 amount determined by subtracting from the amount calculated under Subsection
671 (2)(a)(iii)(B)(III) any new growth as defined in this section:
672 (Aa) within the taxing entity; and
673 (Bb) for the current calendar year.
674 (C) For purposes of Subsection (2)(a)(iii)(B)(I), the aggregate taxable value of all
675 property taxed:
676 (I) except as provided in Subsection (2)(a)(iii)(C)(II), includes the total taxable value of

677 the real and personal property contained on the tax rolls of the taxing entity; and
678 (II) does not include the total taxable value of personal property contained on the tax
679 rolls of the taxing entity that is:
680 (Aa) assessed by a county assessor in accordance with Part 3, County Assessment; and
681 (Bb) semiconductor manufacturing equipment.
682 (D) For purposes of Subsection (2)(a)(iii)(B)(II), for calendar years beginning on or
683 after January 1, 2007, the value of taxable property does not include the value of personal
684 property that is:
685 (I) within the taxing entity assessed by a county assessor in accordance with Part 3,
686 County Assessment; and
687 (II) semiconductor manufacturing equipment.
688 (E) For purposes of Subsection (2)(a)(iii)(B)(III)(Bb), for calendar years beginning on
689 or after January 1, 2007, the percentage of property taxes collected does not include property
690 taxes collected from personal property that is:
691 (I) within the taxing entity assessed by a county assessor in accordance with Part 3,
692 County Assessment; and
693 (II) semiconductor manufacturing equipment.
694 (F) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
695 the commission may prescribe rules for calculating redevelopment adjustments for a calendar
696 year.
697 (iv) (A) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
698 Act, the commission shall make rules determining the calculation of ad valorem property tax
699 revenues budgeted by a taxing entity.
700 (B) For purposes of Subsection (2)(a)(iv)(A), ad valorem property tax revenues
701 budgeted by a taxing entity shall be calculated in the same manner as budgeted property tax
702 revenues are calculated for purposes of Section 59-2-913 .
703 (v) The certified tax rates for the taxing entities described in this Subsection (2)(a)(v)
704 shall be calculated as follows:
705 (A) except as provided in Subsection (2)(a)(v)(B), for new taxing entities the certified
706 tax rate is zero;
707 (B) for each municipality incorporated on or after July 1, 1996, the certified tax rate is:

708 (I) in a county of the first, second, or third class, the levy imposed for municipal-type
709 services under Sections 17-34-1 and 17-36-9 ; and
710 (II) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
711 purposes and such other levies imposed solely for the municipal-type services identified in
712 Section 17-34-1 and Subsection 17-36-3 (22); and
713 (C) for debt service voted on by the public, the certified tax rate shall be the actual levy
714 imposed by that section, except that the certified tax rates for the following levies shall be
715 calculated in accordance with Section 59-2-913 and this section:
716 (I) school leeways provided for under Sections 11-2-7 , 53A-16-110 , [ 53A-17a-125 ,]
717 53A-17a-127 , 53A-17a-133 , 53A-17a-134 , 53A-17a-143 , and 53A-17a-145 [, and
718 53A-21-103 ]; and
719 (II) levies to pay for the costs of state legislative mandates or judicial or administrative
720 orders under Section 59-2-906.3 .
721 (vi) (A) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 shall be
722 established at that rate which is sufficient to generate only the revenue required to satisfy one
723 or more eligible judgments, as defined in Section 59-2-102 .
724 (B) The ad valorem property tax revenue generated by the judgment levy shall not be
725 considered in establishing the taxing entity's aggregate certified tax rate.
726 (vii) The ad valorem property tax revenue generated by the capital outlay levy
727 described in Section 53A-16-107 within a taxing entity in a county of the first class:
728 (A) may not be considered in establishing the taxing entity's aggregate certified tax
729 rate; and
730 (B) shall be included by the commission in establishing a certified tax rate for that
731 capital outlay levy determined in accordance with the calculation described in Subsection
732 59-2-913 (3).
733 (b) (i) For the purpose of calculating the certified tax rate, the county auditor shall use
734 the taxable value of property on the assessment roll.
735 (ii) For purposes of Subsection (2)(b)(i), the taxable value of property on the
736 assessment roll does not include:
737 (A) new growth as defined in Subsection (2)(b)(iii); or
738 (B) the total taxable value of personal property contained on the tax rolls of the taxing

739 entity that is:
740 (I) assessed by a county assessor in accordance with Part 3, County Assessment; and
741 (II) semiconductor manufacturing equipment.
742 (iii) "New growth" means:
743 (A) the difference between the increase in taxable value of the taxing entity from the
744 previous calendar year to the current year; minus
745 (B) the amount of an increase in taxable value described in Subsection (2)(b)(v).
746 (iv) For purposes of Subsection (2)(b)(iii), the taxable value of the taxing entity does
747 not include the taxable value of personal property that is:
748 (A) contained on the tax rolls of the taxing entity if that property is assessed by a
749 county assessor in accordance with Part 3, County Assessment; and
750 (B) semiconductor manufacturing equipment.
751 (v) Subsection (2)(b)(iii)(B) applies to the following increases in taxable value:
752 (A) the amount of increase to locally assessed real property taxable values resulting
753 from factoring, reappraisal, or any other adjustments; or
754 (B) the amount of an increase in the taxable value of property assessed by the
755 commission under Section 59-2-201 resulting from a change in the method of apportioning the
756 taxable value prescribed by:
757 (I) the Legislature;
758 (II) a court;
759 (III) the commission in an administrative rule; or
760 (IV) the commission in an administrative order.
761 (c) Beginning January 1, 1997, if a taxing entity receives increased revenues from
762 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
763 59-2-405.2 , or 59-2-405.3 as a result of any county imposing a sales and use tax under Chapter
764 12, Part 11, County Option Sales and Use Tax, the taxing entity shall decrease its certified tax
765 rate to offset the increased revenues.
766 (d) (i) Beginning July 1, 1997, if a county has imposed a sales and use tax under
767 Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
768 (A) decreased on a one-time basis by the amount of the estimated sales and use tax
769 revenue to be distributed to the county under Subsection 59-12-1102 (3); and

770 (B) increased by the amount necessary to offset the county's reduction in revenue from
771 uniform fees on tangible personal property under Section 59-2-404 , 59-2-405 , 59-2-405.1 ,
772 59-2-405.2 , or 59-2-405.3 as a result of the decrease in the certified tax rate under Subsection
773 (2)(d)(i)(A).
774 (ii) The commission shall determine estimates of sales and use tax distributions for
775 purposes of Subsection (2)(d)(i).
776 (e) Beginning January 1, 1998, if a municipality has imposed an additional resort
777 communities sales tax under Section 59-12-402 , the municipality's certified tax rate shall be
778 decreased on a one-time basis by the amount necessary to offset the first 12 months of
779 estimated revenue from the additional resort communities sales and use tax imposed under
780 Section 59-12-402 .
781 (f) (i) (A) For fiscal year 2000, the certified tax rate of each county required under
782 Subsection 17-34-1 (4)(a) to provide advanced life support and paramedic services to the
783 unincorporated area of the county shall be decreased by the amount necessary to reduce
784 revenues in that fiscal year by an amount equal to the difference between the amount the county
785 budgeted in its 2000 fiscal year budget for advanced life support and paramedic services
786 countywide and the amount the county spent during fiscal year 2000 for those services,
787 excluding amounts spent from a municipal services fund for those services.
788 (B) For fiscal year 2001, the certified tax rate of each county to which Subsection
789 (2)(f)(i)(A) applies shall be decreased by the amount necessary to reduce revenues in that fiscal
790 year by the amount that the county spent during fiscal year 2000 for advanced life support and
791 paramedic services countywide, excluding amounts spent from a municipal services fund for
792 those services.
793 (ii) (A) A city or town located within a county of the first class to which Subsection
794 (2)(f)(i) applies may increase its certified tax rate by the amount necessary to generate within
795 the city or town the same amount of revenues as the county would collect from that city or
796 town if the decrease under Subsection (2)(f)(i) did not occur.
797 (B) An increase under Subsection (2)(f)(ii)(A), whether occurring in a single fiscal year
798 or spread over multiple fiscal years, is not subject to the notice and hearing requirements of
799 Sections 59-2-918 and 59-2-919 .
800 (g) (i) The certified tax rate of each county required under Subsection 17-34-1 (4)(b) to

801 provide detective investigative services to the unincorporated area of the county shall be
802 decreased:
803 (A) in fiscal year 2001 by the amount necessary to reduce revenues in that fiscal year
804 by at least $4,400,000; and
805 (B) in fiscal year 2002 by the amount necessary to reduce revenues in that fiscal year
806 by an amount equal to the difference between $9,258,412 and the amount of the reduction in
807 revenues under Subsection (2)(g)(i)(A).
808 (ii) (A) (I) Beginning with municipal fiscal year 2002, a city or town located within a
809 county to which Subsection (2)(g)(i) applies may increase its certified tax rate to generate
810 within the city or town the same amount of revenue as the county would have collected during
811 county fiscal year 2001 from within the city or town except for Subsection (2)(g)(i)(A).
812 (II) Beginning with municipal fiscal year 2003, a city or town located within a county
813 to which Subsection (2)(g)(i) applies may increase its certified tax rate to generate within the
814 city or town the same amount of revenue as the county would have collected during county
815 fiscal year 2002 from within the city or town except for Subsection (2)(g)(i)(B).
816 (B) (I) Except as provided in Subsection (2)(g)(ii)(B)(II), an increase in the city or
817 town's certified tax rate under Subsection (2)(g)(ii)(A), whether occurring in a single fiscal year
818 or spread over multiple fiscal years, is subject to the notice and hearing requirements of
819 Sections 59-2-918 and 59-2-919 .
820 (II) For an increase under this Subsection (2)(g)(ii) that generates revenue that does not
821 exceed the same amount of revenue as the county would have collected except for Subsection
822 (2)(g)(i), the requirements of Sections 59-2-918 and 59-2-919 do not apply if the city or town:
823 (Aa) publishes a notice that meets the size, type, placement, and frequency
824 requirements of Section 59-2-919 , reflects that the increase is a shift of a tax from one imposed
825 by the county to one imposed by the city or town, and explains how the revenues from the tax
826 increase will be used; and
827 (Bb) holds a public hearing on the tax shift that may be held in conjunction with the
828 city or town's regular budget hearing.
829 (h) (i) This Subsection (2)(h) applies to each county that:
830 (A) establishes a countywide special service district under Title 17A, Chapter 2, Part
831 13, Utah Special Service District Act, to provide jail service, as provided in Subsection

832 17A-2-1304 (1)(a)(x); and
833 (B) levies a property tax on behalf of the special service district under Section
834 17A-2-1322 .
835 (ii) (A) The certified tax rate of each county to which this Subsection (2)(h) applies
836 shall be decreased by the amount necessary to reduce county revenues by the same amount of
837 revenues that will be generated by the property tax imposed on behalf of the special service
838 district.
839 (B) Each decrease under Subsection (2)(h)(ii)(A) shall occur contemporaneously with
840 the levy on behalf of the special service district under Section 17A-2-1322 .
841 (i) (i) As used in this Subsection (2)(i):
842 (A) "Annexing county" means a county whose unincorporated area is included within a
843 fire district by annexation.
844 (B) "Annexing municipality" means a municipality whose area is included within a fire
845 district by annexation.
846 (C) "Equalized fire protection tax rate" means the tax rate that results from:
847 (I) calculating, for each participating county and each participating municipality, the
848 property tax revenue necessary to cover all of the costs associated with providing fire
849 protection, paramedic, and emergency services:
850 (Aa) for a participating county, in the unincorporated area of the county; and
851 (Bb) for a participating municipality, in the municipality; and
852 (II) adding all the amounts calculated under Subsection (2)(i)(i)(C)(I) for all
853 participating counties and all participating municipalities and then dividing that sum by the
854 aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913 :
855 (Aa) for participating counties, in the unincorporated area of all participating counties;
856 and
857 (Bb) for participating municipalities, in all the participating municipalities.
858 (D) "Fire district" means a service area under Title 17B, Chapter 2a, Part 9, Service
859 Area Act, in the creation of which an election was not required under Subsection
860 17B-1-214 (3)(c).
861 (E) "Fire protection tax rate" means:
862 (I) for an annexing county, the property tax rate that, when applied to taxable property

863 in the unincorporated area of the county, generates enough property tax revenue to cover all the
864 costs associated with providing fire protection, paramedic, and emergency services in the
865 unincorporated area of the county; and
866 (II) for an annexing municipality, the property tax rate that generates enough property
867 tax revenue in the municipality to cover all the costs associated with providing fire protection,
868 paramedic, and emergency services in the municipality.
869 (F) "Participating county" means a county whose unincorporated area is included
870 within a fire district at the time of the creation of the fire district.
871 (G) "Participating municipality" means a municipality whose area is included within a
872 fire district at the time of the creation of the fire district.
873 (ii) In the first year following creation of a fire district, the certified tax rate of each
874 participating county and each participating municipality shall be decreased by the amount of
875 the equalized fire protection tax rate.
876 (iii) In the first year following annexation to a fire district, the certified tax rate of each
877 annexing county and each annexing municipality shall be decreased by the fire protection tax
878 rate.
879 (iv) Each tax levied under this section by a fire district shall be considered to be levied
880 by:
881 (A) each participating county and each annexing county for purposes of the county's
882 tax limitation under Section 59-2-908 ; and
883 (B) each participating municipality and each annexing municipality for purposes of the
884 municipality's tax limitation under Section 10-5-112 , for a town, or Section 10-6-133 , for a
885 city.
886 (j) For the calendar year beginning on January 1, 2007, the calculation of a taxing
887 entity's certified tax rate shall be adjusted by the amount necessary to offset any change in the
888 certified tax rate that may result from excluding the following from the certified tax rate under
889 Subsection (2)(a) enacted by the Legislature during the 2007 General Session:
890 (i) personal property tax revenue:
891 (A) received by a taxing entity;
892 (B) assessed by a county assessor in accordance with Part 3, County Assessment; and
893 (C) for personal property that is semiconductor manufacturing equipment; or

894 (ii) the taxable value of personal property:
895 (A) contained on the tax rolls of a taxing entity;
896 (B) assessed by a county assessor in accordance with Part 3, County Assessment; and
897 (C) that is semiconductor manufacturing equipment.
898 (3) (a) On or before June 22, each taxing entity shall annually adopt a tentative budget.
899 (b) If the taxing entity intends to exceed the certified tax rate, it shall notify the county
900 auditor of:
901 (i) its intent to exceed the certified tax rate; and
902 (ii) the amount by which it proposes to exceed the certified tax rate.
903 (c) The county auditor shall notify all property owners of any intent to exceed the
904 certified tax rate in accordance with Subsection 59-2-919 (2).
905 (4) (a) The taxable value for the base year under Subsection 17C-1-102 (6) shall be
906 reduced for any year to the extent necessary to provide a community development and renewal
907 agency established under Title 17C, Limited Purpose Local Government Entities - Community
908 Development and Renewal Agencies, with approximately the same amount of money the
909 agency would have received without a reduction in the county's certified tax rate if:
910 (i) in that year there is a decrease in the certified tax rate under Subsection (2)(c) or
911 (2)(d)(i);
912 (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
913 previous year; and
914 (iii) the decrease results in a reduction of the amount to be paid to the agency under
915 Section 17C-1-403 or 17C-1-404 .
916 (b) The base taxable value under Subsection 17C-1-102 (6) shall be increased in any
917 year to the extent necessary to provide a community development and renewal agency with
918 approximately the same amount of money as the agency would have received without an
919 increase in the certified tax rate that year if:
920 (i) in that year the base taxable value under Subsection 17C-1-102 (6) is reduced due to
921 a decrease in the certified tax rate under Subsection (2)(c) or (2)(d)(i); and
922 (ii) The certified tax rate of a city, school district, local district, or special service
923 district increases independent of the adjustment to the taxable value of the base year.
924 (c) Notwithstanding a decrease in the certified tax rate under Subsection (2)(c) or

925 (2)(d)(i), the amount of money allocated and, when collected, paid each year to a community
926 development and renewal agency established under Title 17C, Limited Purpose Local
927 Government Entities - Community Development and Renewal Agencies, for the payment of
928 bonds or other contract indebtedness, but not for administrative costs, may not be less than that
929 amount would have been without a decrease in the certified tax rate under Subsection (2)(c) or
930 (2)(d)(i).
931 Section 20. Section 59-2-924.2 is enacted to read:
932 59-2-924.2. Adjustment of the calculation of the certified tax rate for a school
933 district imposing a capital outlay levy.
934 (1) As used in this section:
935 (a) "Capital outlay increment" means the amount of revenue equal to the difference
936 between:
937 (i) the amount of revenue generated by a levy of .0006 per dollar of taxable value
938 within a school district during a fiscal year; and
939 (ii) the amount of revenue the school district received during the same fiscal year from
940 the distribution described in Subsection 53A-16-107.1 (1).
941 (b) "Contributing school district" means a school district in a county of the first class
942 that in a fiscal year receives less revenue from the distribution described in Subsection
943 53A-16-107.1 (1) than it would have received during the same fiscal year from a levy imposed
944 within the school district of .0006 per dollar of taxable value.
945 (c) "Receiving school district" means a school district in a county of the first class that
946 in a fiscal year receives more revenue from the distribution described in Subsection
947 53A-16-107.1 (1) than it would have received during the same fiscal year from a levy imposed
948 within the school district of .0006 per dollar of taxable value.
949 (2) A receiving school district shall decrease its capital outlay certified tax rate under
950 Subsection 59-2-924 (2)(a)(vii)(B) by the amount required to offset the receiving school
951 district's capital outlay increment for that fiscal year.
952 (3) Beginning with fiscal year 2009-10, a contributing school district is exempt from
953 the public notice and hearing requirements of Sections 59-2-918 and 59-2-919 for the school
954 district's capital outlay levy certified tax rate calculated pursuant to Subsection
955 59-2-924 (2)(a)(vii)(B) if:

956 (a) the contributing school district budgets an increased amount of ad valorem property
957 tax revenue exclusive of new growth as defined in Subsection 59-2-924 (2) for the capital
958 outlay levy described in Section 53A-16-107 ; and
959 (b) the increased amount of ad valorem property tax revenue described in Subsection
960 (3)(a) is less than or equal to that contributing school district's capital outlay increment for the
961 prior year.
962 (4) Regardless of the amount a school district receives from the revenue collected from
963 the .0006 portion of the capital outlay levy described in Subsection 53A-16-107 (3), the revenue
964 generated within the school district from the .0006 portion of the capital outlay levy described
965 in Subsection 53A-16-107 (3) shall be considered to be budgeted ad valorem property tax
966 revenues of the school district that levies the .0006 portion of the capital outlay levy for
967 purposes of calculating the school district's certified tax rate in accordance with Subsection
968 59-2-924 (2)(a)(vii)(B).
969 Section 21. Section 59-2-924.3 is enacted to read:
970 59-2-924.3. Adjustment to certified tax rate of school districts receiving funds
971 from capital outlay programs.
972 (1) For purposes of this section:
973 (a) "New ongoing funding increment" means an amount equal to the difference
974 between the following:
975 (i) the ongoing appropriation for a program for fiscal year 2007-08 as provided in
976 Section 53A-21-105 ; and
977 (ii) the ongoing appropriation for the program for fiscal year 2008-09 as provided in
978 Section 53A-21-501 .
979 (b) "Receiving school district" means a school district that in fiscal year 2008-09
980 receives a distribution from the funds appropriated in Section 53A-21-501 .
981 (2) For the taxable year beginning January 1, 2009, a receiving school district shall
982 decrease its certified tax rate calculated in accordance with Section 59-2-924 by an amount
983 equal to the amount of revenue the receiving school district receives from the new ongoing
984 funding increment of:
985 (a) the Capital Outlay Foundation Program in accordance with Section 53A-21-202 ;
986 and

987 (b) the Capital Outlay Enrollment Growth Program in accordance with Section
988 53A-21-302 .
989 Section 22. Repealer.
990 This bill repeals:
991 Section 53A-21-103, Qualifications for participation in the foundation program --
992 Distribution of monies -- Distribution formulas.
993 Section 53A-21-103.5, Qualifications for participation in the Enrollment Growth
994 Program -- State Board of Education rules -- Distribution formula.
995 Section 23. Effective date.
996 This bill takes effect on July 1, 2008.
997 Section 24. Coordinating H.B. 1 with S.B. 48 -- Superseding amendments.
998 If this S.B. 48 and H.B. 1, Minimum School Program Base Budget Amendments, both
999 pass, it is the intent of the Legislature that the amendments to Section 53A-21-501 , renumbered
1000 from Section 53A-21-105 , in this bill supersede the amendments to Section 53A-21-105 in
1001 H.B. 1 when the Office of Legislative Research and General Counsel prepares the Utah Code
1002 database for publication.