H.B. 117 Enrolled

1

PUBLIC EDUCATION CAPITAL OUTLAY ACT
2 2010 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Melvin R. Brown
5 Senate Sponsor: John L. Valentine
6
7 LONG TITLE
8 General Description:
9 This bill modifies programs that provide state aid to school districts for school
10 buildings.
11 Highlighted Provisions:
12 This bill:
13 . modifies the Capital Outlay Foundation Program by:
14 . eliminating base funding except for school districts with fewer than 1,000
15 pupils in average daily membership;
16 . setting the base tax effort rate at the average of the highest school district's
17 capital and debt service levies and the statewide average of school districts'
18 capital and debt service levies; and
19 . directing the State Board of Education to determine a school district's allocation
20 of funds under the program using data from the fiscal year two years prior to
21 the fiscal year the school district receives the allocation;
22 . modifies the fiscal year of the data that is used to determine a school district's
23 allocation of funds under the Capital Outlay Enrollment Growth Program; and
24 . makes technical amendments.
25 Monies Appropriated in this Bill:
26 None
27 Other Special Clauses:
28 This bill takes effect on July 1, 2010.
29 Utah Code Sections Affected:

30 AMENDS:
31 53A-21-101.5, as enacted by Laws of Utah 2008, Chapter 236
32 53A-21-201, as enacted by Laws of Utah 2008, Chapter 236
33 53A-21-202, as enacted by Laws of Utah 2008, Chapter 236
34 53A-21-301, as enacted by Laws of Utah 2008, Chapter 236
35
36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 53A-21-101.5 is amended to read:
38 53A-21-101.5. Definitions.
39 As used in this chapter:
40 (1) "ADM" or "pupil in average daily membership" is as defined in Section
41 53A-17a-103 .
42 (2) "Base tax effort rate" means the average of:
43 (a) the highest combined capital levy rate; and
44 (b) the average combined capital levy rate for the school districts statewide.
45 [(2)] (3) "Combined capital levy rate" means a rate that includes the sum of the
46 following property tax levies:
47 (a) the capital outlay levy authorized in Section 53A-16-107 ;
48 (b) the portion of the 10% of basic levy described in Section 53A-17a-145 that is
49 budgeted for debt service or capital outlay;
50 (c) the debt service levy authorized in Section 11-14-310 ; and
51 (d) the voted capital outlay leeway authorized in Section 53A-16-110 .
52 [(3)] (4) "Derived net taxable value" means the quotient of:
53 (a) the total [current] property tax collections from April 1 through the following
54 March 31 for a school district for the calendar year preceding the March 31 date; divided by
55 (b) the school district's total tax rate for the calendar year preceding the March 31
56 referenced in Subsection [(3)] (4)(a).
57 [(4)] (5) "Highest combined capital levy rate" means the highest combined capital levy

58 rate imposed by [any] a school district within the state for a fiscal year.
59 [(5)] (6) "Property tax base per ADM" means the quotient of:
60 (a) a school district's derived net taxable value; divided by
61 (b) the school district's ADM [for the same year].
62 [(6)] (7) "Property tax yield per ADM" means:
63 (a) the product of:
64 (i) a school district's derived net taxable value; and
65 (ii) [the highest combined capital levy rate for the fiscal year of the March 31
66 referenced in Subsection (3)(a)] the base tax effort rate; divided by
67 (b) the school district's ADM [for the same fiscal year].
68 [(7)] (8) "Statewide average property tax base per ADM" means the quotient of:
69 (a) the sum of all school districts' derived net taxable value; divided by
70 (b) the sum of all school districts' ADM [statewide for the same year].
71 Section 2. Section 53A-21-201 is amended to read:
72 53A-21-201. Capital Outlay Foundation Program -- Creation -- Definitions.
73 (1) There is created the Capital Outlay Foundation Program to provide capital outlay
74 funding to a school district based on a district's local property tax effort and property tax yield
75 per student compared to a foundation guarantee funding level.
76 (2) As used in this part:
77 (a) "Foundation guarantee level per ADM" means a minimum revenue amount per
78 ADM generated by the [highest combined capital levy] base tax effort rate, including the
79 following:
80 (i) the revenue generated locally from a school district's combined capital levy rate;
81 and
82 (ii) the revenue allocated to a school district by the State Board of Education in
83 accordance with Section 53A-21-202 .
84 (b) "Qualifying school district" means a school district with a property tax yield per
85 ADM less than the foundation guarantee level per ADM.

86 (3) "Small school district" means a school district that has fewer than 1,000 pupils in
87 average daily membership.
88 Section 3. Section 53A-21-202 is amended to read:
89 53A-21-202. Capital Outlay Foundation Program -- Distribution formulas --
90 Allocations.
91 (1) (a) [For fiscal years beginning on or after July 1, 2008, the] The State Board of
92 Education shall determine the foundation guarantee level per ADM that fully allocates the
93 funds appropriated to the State Board of Education for distribution under this section.
94 (b) In determining the foundation guarantee level per ADM and a school district's
95 allocation of funds under this part, the State Board of Education shall use data from the fiscal
96 year that is two years prior to the fiscal year the school district receives the allocation,
97 including the:
98 (i) number of pupils in average daily membership;
99 (ii) tax rates; and
100 (iii) derived net taxable value.
101 (2) By June 1, a county treasurer shall report to the State Board of Education the
102 actual collections of property taxes in the school districts located within the county treasurer's
103 county for the period beginning April 1 through the following March 31 immediately
104 preceding that June 1.
105 (3) If a qualifying school district imposes [the highest] a combined capital levy rate [in
106 the prior year] that is greater than or equal to the base tax effort rate, the State Board of
107 Education shall allocate to the qualifying school district an amount equal to the product of the
108 following:
109 (a) the qualifying school district's [prior year] ADM; and
110 (b) an amount equal to the difference between the following:
111 (i) the foundation guarantee level per ADM [for that fiscal year], as determined in
112 accordance with Subsection (1); and
113 (ii) the qualifying school district's [prior year] property tax yield per ADM.

114 (4) If a qualifying school district imposes a [prior year] combined capital levy rate less
115 than the [highest combined capital levy] base tax effort rate, the State Board of Education
116 shall allocate to the qualifying school district an amount equal to the product of the following:
117 (a) the qualifying school district's [prior year] ADM;
118 (b) an amount equal to the difference between the following:
119 (i) the foundation guarantee level per ADM [for that fiscal year, as determined in
120 accordance with Subsection (1)]; and
121 (ii) the qualifying school district's [prior year] property tax yield per ADM; and
122 (c) a percentage equal to:
123 (i) the qualifying school district's [prior year] combined capital levy rate; divided by
124 (ii) the [highest combined capital levy] base tax effort rate.
125 (5) (a) The State Board of Education shall allocate:
126 (i) a minimum of $200,000 to each small school district with a property tax base per
127 ADM less than or equal to the statewide average property tax base per ADM;
128 (ii) a minimum of $100,000 to each small school district with a property tax base per
129 ADM that is:
130 (A) greater than the statewide average property tax base per ADM; and
131 (B) less than or equal to two times the statewide average property tax base per ADM;
132 and
133 (iii) a minimum of $50,000 to each small school district with a property tax base per
134 ADM that is:
135 (A) greater than two times the statewide average property tax base per ADM; and
136 (B) less than or equal to five times the statewide average property tax base per ADM.
137 (b) The State Board of Education shall incorporate the minimum allocations described
138 in Subsection (5)(a) in its calculation of the foundation guarantee level per ADM determined
139 in accordance with Subsection (1).
140 Section 4. Section 53A-21-301 is amended to read:
141 53A-21-301. Capital Outlay Enrollment Growth Program -- Definitions.

142 (1) There is created the Capital Outlay Enrollment Growth Program to provide capital
143 outlay funding to school districts experiencing net enrollment increases.
144 (2) As used in this part:
145 (a) "Average annual net enrollment increase" means the quotient of:
146 (i) (A) enrollment in the [current] prior fiscal year, based on October 1 enrollment
147 counts; minus
148 (B) enrollment in the year [three] four years prior, based on October 1 enrollment
149 counts; divided by
150 (ii) three.
151 (b) "Eligible district" or "eligible school district" means a school district that:
152 (i) has an average annual net enrollment increase; and
153 (ii) has a [prior year] property tax base per [student] ADM in the year two years prior
154 that is less than two times the [prior year] statewide average property tax base per [student]
155 ADM in the year two years prior.
156 Section 5. Effective date.
157 This bill takes effect on July 1, 2010.