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H.B. 117

             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 pupils
             15      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 the
             21      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 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; and
             81          (ii) the revenue allocated to a school district by the State Board of Education in
             82      accordance with Section 53A-21-202 .
             83          (b) "Qualifying school district" means a school district with a property tax yield per
             84      ADM less than the foundation guarantee level per ADM.
             85          (3) "Small school district" means a school district that has fewer than 1,000 pupils in
             86      average daily membership.
             87          Section 3. Section 53A-21-202 is amended to read:
             88           53A-21-202. Capital Outlay Foundation Program -- Distribution formulas --
             89      Allocations.


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


             121          (c) a percentage equal to:
             122          (i) the qualifying school district's [prior year] combined capital levy rate; divided by
             123          (ii) the [highest combined capital levy] base tax effort rate.
             124          (5) (a) The State Board of Education shall allocate:
             125          (i) a minimum of $200,000 to each small school district with a property tax base per
             126      ADM less than or equal to the statewide average property tax base per ADM;
             127          (ii) a minimum of $100,000 to each small school district with a property tax base per
             128      ADM that is:
             129          (A) greater than the statewide average property tax base per ADM; and
             130          (B) less than or equal to two times the statewide average property tax base per ADM;
             131      and
             132          (iii) a minimum of $50,000 to each small school district with a property tax base per
             133      ADM that is:
             134          (A) greater than two times the statewide average property tax base per ADM; and
             135          (B) less than or equal to five times the statewide average property tax base per ADM.
             136          (b) The State Board of Education shall incorporate the minimum allocations described
             137      in Subsection (5)(a) in its calculation of the foundation guarantee level per ADM determined in
             138      accordance with Subsection (1).
             139          Section 4. Section 53A-21-301 is amended to read:
             140           53A-21-301. Capital Outlay Enrollment Growth Program -- Definitions.
             141          (1) There is created the Capital Outlay Enrollment Growth Program to provide capital
             142      outlay funding to school districts experiencing net enrollment increases.
             143          (2) As used in this part:
             144          (a) "Average annual net enrollment increase" means the quotient of:
             145          (i) (A) enrollment in the [current] prior fiscal year, based on October 1 enrollment
             146      counts; minus
             147          (B) enrollment in the year [three] four years prior, based on October 1 enrollment
             148      counts; divided by
             149          (ii) three.
             150          (b) "Eligible district" or "eligible school district" means a school district that:
             151          (i) has an average annual net enrollment increase; and


             152          (ii) has a [prior year] property tax base per [student] ADM in the year two years prior
             153      that is less than two times the [prior year] statewide average property tax base per [student]
             154      ADM in the year two years prior.
             155          Section 5. Effective date.
             156          This bill takes effect on July 1, 2010.




Legislative Review Note
    as of 1-5-10 1:52 PM


Office of Legislative Research and General Counsel


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