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H.B. 292

This document includes House Committee Amendments incorporated into the bill on Thu, Mar 4, 2010 at 9:18 AM by jeyring. -->              1     

EQUALIZATION OF FUNDING FOR DIVIDED

             2     
SCHOOL DISTRICTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Jim Bird

             6     
Senate Sponsor: ____________

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill provides for equalization of property tax revenues when a school district
             11      division takes place.
             12      Highlighted Provisions:
             13          This bill:
             14          .    creates the divided school district levy;
             15          .    requires equalization of school property taxes at a certain amount per student when
             16      a school district is divided;
             17          .    sets the rate for the divided school district levy;
             18          .    requires the state superintendent to report certain information;
             19          .    requires county officials to perform certain functions;
             20          .    modifies the notice and public hearing requirements for property tax increases
             21      related to the equalization of school property taxes in a divided school district;
             22          .    defines terms; and
             23          .    makes technical changes.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          This bill has retrospective operation for a taxable year beginning on or after January 1,


             28      2010.
             29      Utah Code Sections Affected:
             30      AMENDS:
             31          53A-2-118.3, as enacted by Laws of Utah 2008, Chapter 236
             32          59-2-924.4, as last amended by Laws of Utah 2009, Chapter 204
             33     
             34      Be it enacted by the Legislature of the state of Utah:
             35          Section 1. Section 53A-2-118.3 is amended to read:
             36           53A-2-118.3. Imposition of the divided school district levy in qualifying divided
             37      school districts.
             38          (1) For purposes of this section:
             39          (a) "Capital outlay increment" is as defined in Section 59-2-924.3 .
             40          (b) "Contributing divided school district" is as defined in Section 59-2-924.4 .
             41          (c) "Divided school district levy" means a property tax levy imposed in accordance
             42      with this section.
             43          (d) "Equalized property tax revenues per enrolled student" means:
             44          (i) the total amount of property tax, including fee-in-lieu revenues, imposed by a
             45      qualifying divided school district in the calendar year preceding a qualifying taxable year; less
             46          (ii) revenue generated by:
             47          (A) the minimum basic tax rate imposed under Section 53A-17a-135 ; and
             48          (B) a levy for bonded indebtedness imposed under Title 11, Chapter 14, Local
             49      Government Bonding Act; divided by
             50          (iii) the qualifying divided school district enrollment for the year preceding the
             51      qualifying taxable year, as of the October 1 enrollment count.
             52          [(a)] (e) "Qualifying divided school district" means a divided school
             52a      H. [ [ ] district [ ] ] .H [: (i)
             53      located within a county of the second through sixth class; and (ii)] with a new school district
             54      created under Section 53A-2-118.1 that begins to provide educational services on or after July
             55      1, 2008.
             56          [(b)] (f) "Qualifying taxable year" means the calendar year in which a new school
             57      district begins to provide educational services.
             58          (g) "Receiving divided school district" is as defined in Section 59-2-924.4 .
             58a      H. (h) "Total equalized property tax revenues" means the equalized property tax revenues
             58b      per enrolled student multiplied by the total enrollment within the qualifying divided school
             58c      district, as of the October 1 counts in the preceding calendar year. .H


             59          (2) When a new school district is created pursuant to Section 53A-2-118.1 , the state
             60      superintendent shall:
             61          (a) (i) determine the amount of equalized property tax revenues per enrolled student
             62      generated in the qualifying divided school district during the calendar year preceding the
             63      qualifying taxable year; and
             64          (ii) notify the affected districts within a qualifying divided school district and the
             65      county auditor of the superintendent's:
             66          (A) initial estimate of the equalized property tax revenues per enrolled student by
             67      January 1 of the calendar year preceding the qualifying taxable year; and
             68          (B) final estimate of the equalized property tax revenues per enrolled student by June 1
             69      of the calendar year preceding the qualifying taxable year; and
             70          (b) annually calculate and notify the affected school districts within a qualifying
             71      divided school district and the county auditor of the superintendent's:
             72          (i) initial estimate of the total equalized property tax revenues by January 1 of the
             73      calendar year preceding the qualifying taxable year; and
             74          (ii) final estimate of the total equalized property tax revenues by June 1 of the calendar
             75      year preceding the qualifying taxable year.
             76          (3) (a) The county auditor of a county with a qualifying divided school district shall
             77      determine the property tax rates described in Subsections (3)(b) and (c) by July 1 of each
             78      taxable year beginning with the qualifying taxable year.
             79          (b) Except as provided in Subsection (3)(c), the tax rate for a qualifying school
             80      district's divided school district levy is a tax rate that generates an amount of property tax
             81      revenues equal to the qualifying divided school district's total equalized property tax revenues.
             82          (c) If the qualifying divided school district is located within a county of the first class,
             83      the tax rate for a qualifying divided school district's divided school district levy is a tax rate that
             84      generates an amount of property tax revenues equal to:
             85          (i) the qualifying divided school district's total equalized property tax revenues; minus
             86          (ii) the sum of the capital outlay increments of all receiving divided school districts
             87      located within the qualifying divided school district.
             88          [(2)] (4) Beginning with the qualifying taxable year, in order to qualify for receipt of
             89      the state contribution toward the minimum school program described in Section 53A-17a-104 ,


             90      a school district within a qualifying divided school district shall impose a [capital outlay levy
             91      described in Section 53A-16-107 of at least .0006 per dollar of taxable value] divided school
             92      district levy at the rate calculated by the county auditor under Subsection (3).
             93          [(3)] (5) The county treasurer of a county with a qualifying divided school district shall
             94      distribute revenues generated by the [.0006 portion of the capital outlay] divided school district
             95      levy required in Subsection [(2)] (4) to [the] a school [districts] district located within the
             96      boundaries of the qualifying divided school district [as follows:] in proportion to each school
             97      district's proportion of total current year enrollment within the qualifying divided school
             98      district, as of the October 1 enrollment counts in the calendar year in which the levy is
             99      imposed.
             100          [(a) 25% of the revenues shall be distributed in proportion to a school district's
             101      percentage of the total enrollment growth in all of the school districts within the qualifying
             102      divided school district that have an increase in enrollment, calculated on the basis of the
             103      average annual enrollment growth over the prior three years in all of the school districts within
             104      the qualifying divided school district that have an increase in enrollment over the prior three
             105      years, as of the October 1 enrollment counts; and]
             106          [(b) 75% of the revenues shall be distributed in proportion to a school district's
             107      percentage of the total current year enrollment in all of the school districts within the qualifying
             108      divided school district, as of the October 1 enrollment counts.]
             109          [(4)] (6) If a new school district is created or school district boundaries are adjusted,
             110      the enrollment [and average annual enrollment growth] for each affected school district shall be
             111      calculated on the basis of enrollment in school district schools located within that school
             112      district's newly created or adjusted boundaries, as of October 1 enrollment counts.
             113          [(5) On or before December 31 of each year, the State Board of Education shall
             114      provide a county treasurer with audited enrollment information from the fall enrollment audit
             115      necessary to distribute revenues as required by this section.]
             116          [(6)] (7) On or before March 31 of each year, a county treasurer in a county with a
             117      qualifying divided school district shall distribute, in accordance with Subsection [(3)] (5), the
             118      revenue generated within the qualifying divided school district during the prior calendar year
             119      from the [capital outlay] levy required in Subsection [(2)] (4).
             120          Section 2. Section 59-2-924.4 is amended to read:


             121           59-2-924.4. Adjustment of the calculation of the certified tax rate for certain
             122      divided school districts -- Aggregate tax rate limitation.
             123          (1) As used in this section:
             124          [(a) "Capital outlay increment" means the amount of revenue equal to the difference
             125      between:]
             126          [(i) the amount of revenue generated by a levy of .0006 per dollar of taxable value
             127      within a qualifying divided school district during a fiscal year; and]
             128          [(ii) the amount of revenue the qualifying divided school district received during the
             129      same fiscal year from the distribution described in Section 53A-2-118.3 .]
             130          (a) "Aggregate tax rate" means a tax rate that equals the sum of the tax rates of the
             131      following levies:
             132          (i) Section 11-2-7 ;
             133          (ii) Section 53A-2-118.3 ;
             134          (iii) Section 53A-16-107 ;
             135          (iv) Section 53A-16-111 ;
             136          (v) Section 53A-17a-127 ;
             137          (vi) Section 53A-17a-133 ;
             138          (vii) Section 53A-17a-134 ;
             139          (viii) Section 53A-17a-143 ;
             140          (ix) Section 53A-17a-145 ;
             141          (x) Section 53A-17a-151 ; and
             142          (xi) Section 63-7-704 .
             143          (b) "Contributing divided school district" means a school district located within a
             144      qualifying divided school district that in a fiscal year receives less revenue from the distribution
             145      described in [Section] Subsection 53A-2-118.3 (5) than it would have received during the same
             146      fiscal year from [a levy imposed within the school district of .0006 per dollar of taxable value]
             147      the imposition of the divided school district levy within the contributing divided school district.
             148          (c) "Divided school district" means a school district from which a new school district is
             149      created.
             150          (d) "Divided school district increment" means the amount of revenue equal to the
             151      difference between:


             152          (i) the amount of revenue generated by the imposition of the divided school district
             153      levy within a qualifying divided school district during a fiscal year; and
             154          (ii) the amount of revenue the qualifying divided school district received during the
             155      same fiscal year from the distribution described in Section 53A-2-118.3 (5).
             156          (e) "Divided school district levy" means a property tax levy imposed in accordance
             157      with Section 53A-2-118.3 .
             158          [(d)] (f) "New school district" means a school district:
             159          (i) created under Section 53A-2-118.1 ;
             160          (ii) that begins to provide educational services after July 1, 2008; and
             161          (iii) located in a qualifying divided school district.
             162          [(e)] (g) "Qualifying divided school district" means a divided school district[: (i)
             163      located within a county of the second through sixth class; and (ii)] with a new school district
             164      created under Section 53A-2-118.1 that begins to provide educational services after July 1,
             165      2008.
             166          [(f)] (h) "Qualifying fiscal year" means the first fiscal year that a new school district
             167      begins to provide educational services.
             168          [(g)] (i) "Receiving divided school district" means a school district located within a
             169      qualifying divided school district that in a fiscal year receives more revenue from the
             170      distribution described in [Section] Subsection 53A-2-118.3 (5) than it would have received
             171      during the same fiscal year from [a levy imposed within the school district of .0006 per dollar
             172      of taxable value] the imposition of the divided school district levy within the receiving divided
             173      school district.
             174          (2) For the qualifying fiscal year, a contributing school district is exempt from the
             175      notice and public hearing provisions of Section 59-2-919 if the contributing school district
             176      budgets an amount of ad valorem property tax revenue for the contributing school district's
             177      aggregate tax rate in an amount equal to or less than the sum of the following:
             178          (a) an amount of revenue equal to:
             179          (i) the amount of revenue generated by the contributing school district's aggregate tax
             180      rate for the prior year; and
             181          (ii) revenue from new growth as defined in Subsection 59-2-924 (4); and
             182          (b) an amount equal to the contributing school district's estimated divided school


             183      district increment for the qualifying fiscal year.
             184          (3) For the qualifying fiscal year, a receiving school district is exempt from the notice
             185      and public hearing provisions of Section 59-2-919 if the receiving school district budgets an
             186      amount of ad valorem property tax revenue for the receiving school district's aggregate tax rate
             187      in an amount equal to or less than the difference of the following:
             188          (a) an amount of revenue equal to:
             189          (i) the amount of revenue generated by the contributing school district's aggregate tax
             190      rate for the prior year; and
             191          (ii) revenue from new growth as defined in Subsection 59-2-924 (4); and
             192          (b) an amount equal to the receiving school district's estimated divided school district
             193      increment for the qualifying fiscal year.
             194          [(2) A] (4) Beginning with the fiscal year after the qualifying fiscal year, a receiving
             195      divided school district shall decrease its certified tax rate calculated in accordance with Section
             196      59-2-924 by the amount required to offset the receiving divided school district's [capital outlay]
             197      divided school district increment for the prior fiscal year.
             198          [(3)] (5) Beginning with the fiscal year after the qualifying fiscal year, a contributing
             199      divided school district is exempt from the notice and public hearing provisions of Section
             200      59-2-919 for the contributing divided school district's certified tax rate calculated pursuant to
             201      Section 59-2-924 if:
             202          (a) the contributing divided school district budgets an increased amount of ad valorem
             203      property tax revenue exclusive of new growth as defined in Subsection 59-2-924 (4) for the
             204      [capital outlay] divided school district levy required in Section 53A-2-118.3 ; and
             205          (b) the increased amount of ad valorem property tax revenue described in Subsection
             206      (3)(a) is less than or equal to that contributing divided school district's [capital outlay] divided
             207      school district increment for the prior year.
             208          [(4) Beginning with the fiscal year after the qualifying fiscal year, a contributing
             209      divided school district is exempt from the notice and public hearing provisions of Section
             210      59-2-919 for the contributing divided school district's certified tax rate calculated pursuant to
             211      Section 59-2-924 if:]
             212          [(a) the contributing divided school district budgets an increased amount of ad valorem
             213      property tax revenue exclusive of new growth as defined in Subsection 59-2-924 (4) for the


             214      capital outlay levy described in Section 53A-2-118.3 ; and]
             215          [(b) the increased amount of ad valorem property tax revenue described in Subsection
             216      (4)(a) is less than or equal to the difference between:]
             217          [(i) the amount of revenue generated by a levy of .0006 per dollar of taxable value
             218      imposed within the contributing divided school district during the current taxable year; and]
             219          [(ii) the amount of revenue generated by a levy of .0006 per dollar of taxable value
             220      imposed within the contributing divided school district during the prior taxable year.]
             221          [(5)] (6) Regardless of the amount a school district receives from the revenue collected
             222      from the [.0006 portion of the capital outlay] divided school district levy described in Section
             223      53A-2-118.3 , the revenue generated within the school district from the [.0006 portion of the
             224      capital outlay] divided school district levy described in Section 53A-2-118.3 shall be
             225      considered to be budgeted ad valorem property tax revenues of the school district that levies
             226      the [.0006 portion of the capital outlay] divided school district levy for purposes of calculating
             227      the school district's certified tax rate in accordance with Section 59-2-924 .
             228          (7) Notwithstanding the statutory property tax rate caps allowed by statute, beginning
             229      with the qualifying fiscal year, the aggregate tax rate of a school district located in a qualifying
             230      divided school district may not exceed .0062 per dollar of taxable value.
             231          Section 3. Retrospective operation.
             232          This bill has retrospective operation for a taxable year beginning on or after January 1,
             233      2010.




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