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Fifth Substitute S.B. 175

Representative Kenneth W. Sumsion proposes the following substitute bill:


             1     
SCHOOL DISTRICT CAPITAL OUTLAY

             2     
EQUALIZATION AMENDMENTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Benjamin M. McAdams

             6     
House Sponsor: Kenneth W. Sumsion

             7      Cosponsor:Howard A. Stephenson              8     
             9      LONG TITLE
             10      General Description:
             11          This bill amends provisions related to public education financing and certain school
             12      property tax provisions.
             13      Highlighted Provisions:
             14          This bill:
             15          .    allows local school boards to use revenue collected from certain capital property tax
             16      levies for certain general fund purposes for fiscal years 2010-11 and 2011-12;
             17          .    requires a local school board to notify taxpayers of certain uses of property tax
             18      revenue;
             19          .    requires a school district in a county of the first class that receives property tax
             20      revenue from a capital outlay levy equalization program to report to the Education
             21      Interim Committee each year;
             22          .    requires the Education Interim Committee to consider reports of receiving school
             23      districts when determining whether to reauthorize certain capital outlay levy
             24      equalization programs during a sunset review;
             25          .    sunsets certain capital outlay levy equalization programs at the end of 2016; and


             26          .    makes technical changes.
             27      Monies Appropriated in this Bill:
             28          None
             29      Other Special Clauses:
             30          This bill provides retrospective operation for a taxable year beginning on or after
             31      January 1, 2010.
             32      Utah Code Sections Affected:
             33      AMENDS:
             34          53A-16-107, as last amended by Laws of Utah 2008, Chapter 236
             35          53A-16-107.1, as enacted by Laws of Utah 2008, Chapter 236
             36          53A-19-102, as last amended by Laws of Utah 2009, First Special Session, Chapter 5
             37          63I-1-253, as last amended by Laws of Utah 2009, Chapter 299
             38          63I-1-259, as renumbered and amended by Laws of Utah 2008, Chapter 382
             39     
             40      Be it enacted by the Legislature of the state of Utah:
             41          Section 1. Section 53A-16-107 is amended to read:
             42           53A-16-107. Capital outlay levy -- Maintenance of school facilities -- Authority to
             43      use proceeds of .0002 tax rate -- Restrictions and procedure -- Limited authority to use
             44      proceeds for general fund purposes -- Notification required when using proceeds for
             45      general fund purposes.
             46          (1) Subject to Subsection (3) and except as provided in Subsection (5), a local school
             47      board may annually impose a capital outlay levy not to exceed .0024 per dollar of taxable value
             48      to be used for:
             49          (a) capital outlay;
             50          (b) debt service; and
             51          (c) subject to Subsection (2), school facility maintenance.
             52          (2) (a) A local school board may utilize the proceeds of a maximum of .0002 per dollar
             53      of taxable value of the local school board's annual capital outlay levy for the maintenance of
             54      school facilities in the school district.
             55          (b) A local school board that uses the option provided under Subsection (2)(a) shall:
             56          (i) maintain the same level of expenditure for maintenance in the current year as it did


             57      in the preceding year, plus the annual average percentage increase applied to the maintenance
             58      and operation budget for the current year; and
             59          (ii) identify the expenditure of capital outlay funds for maintenance by a district project
             60      number to ensure that the funds are expended in the manner intended.
             61          (c) The State Board of Education shall establish by rule the expenditure classification
             62      for maintenance under this program using a standard classification system.
             63          (3) Beginning January 1, 2009, in order to qualify for receipt of the state contribution
             64      toward the minimum school program described in Section 53A-17a-104 , a local school board
             65      in a county of the first class shall impose a capital outlay levy of at least .0006 per dollar of
             66      taxable value.
             67          (4) (a) The county treasurer of a county of the first class shall distribute revenues
             68      generated by the .0006 portion of the capital outlay levy required in Subsection (3) to school
             69      districts within the county in accordance with Section 53A-16-107.1 .
             70          (b) If a school district in a county of the first class imposes a capital outlay levy
             71      pursuant to this section which exceeds .0006 per dollar of taxable value, the county treasurer of
             72      a county of the first class shall distribute revenues generated by the portion of the capital outlay
             73      levy which exceeds .0006 to the school district imposing the levy.
             74          (5) (a) Notwithstanding Subsections (1)(a), (b), and (c) and subject to Subsections
             75      (5)(b), (c), and (d), for fiscal years 2010-11 and 2011-12, a local school board may use the
             76      proceeds of the local school board's capital outlay levy for general fund purposes if the
             77      proceeds are not committed or dedicated to pay debt service or bond payments.
             78          (b) If a local school board uses the proceeds described in Subsection (5)(a) for general
             79      fund purposes, the local school board shall notify the public of the local school board's use of
             80      the capital outlay levy proceeds for general fund purposes:
             81          (i) prior to the board's budget hearing in accordance with the notification requirements
             82      described in Section 53A-19-102 ; and
             83          (ii) at a budget hearing required in Section 53A-19-102 .
             84          (c) A local school board may not use the proceeds described in Subsection (5)(a) to
             85      fund the following accounting function classifications as provided in the Financial Accounting
             86      for Local and State School Systems guidelines developed by the National Center for Education
             87      Statistics:


             88          (i) 2300 Support Services - General District Administration; or
             89          (ii) 2500 Support Services - Central Services.
             90          (d) A local school board may not use the proceeds from a distribution described in
             91      Section 53A-16-107.1 for general fund purposes.
             92          Section 2. Section 53A-16-107.1 is amended to read:
             93           53A-16-107.1. School capital outlay in counties of the first class -- Allocation --
             94      Report to Education Interim Committee.
             95          (1) For purposes of this section:
             96          (a) "Average annual enrollment growth over the prior three years" means the quotient
             97      of:
             98          (i) (A) enrollment in the current school year, based on October 1 enrollment counts;
             99      minus
             100          (B) enrollment in the year three years prior, based on October 1 enrollment counts;
             101      divided by
             102          (ii) three.
             103          (b) "Capital outlay increment monies" means the amount of revenue equal to the
             104      difference between:
             105          (i) the amount of revenue generated by a levy of .0006 per dollar of taxable value
             106      within a receiving school district during a fiscal year; and
             107          (ii) the amount of revenue the receiving school district received during the same fiscal
             108      year from the distribution described in Subsection (2).
             109          (c) "Contributing school district" means a school district in a county of the first class
             110      that in a fiscal year receives less revenue from the distribution described in Subsection (2) than
             111      it would have received during the same fiscal year from a levy imposed within the school
             112      district of .0006 per dollar of taxable value.
             113          (d) "Receiving school district" means a school district in a county of the first class that
             114      in a fiscal year receives more revenue from the distribution described in Subsection (2) than it
             115      would have received during the same fiscal year from a levy imposed within the school district
             116      of .0006 per dollar of taxable value.
             117          [(1)] (2) The county treasurer of a county of the first class shall distribute revenues
             118      generated by the .0006 portion of the capital outlay levy required in Subsection 53A-16-107 (3)


             119      to school districts located within the county of the first class as follows:
             120          (a) 25% of the revenues shall be distributed in proportion to a school district's
             121      percentage of the total enrollment growth in all of the school districts within the county that
             122      have an increase in enrollment, calculated on the basis of the average annual enrollment growth
             123      over the prior three years in all of the school districts within the county that have an increase in
             124      enrollment over the prior three years, as of the October 1 enrollment counts; and
             125          (b) 75% of the revenues shall be distributed in proportion to a school district's
             126      percentage of the total current year enrollment in all of the school districts within the county, as
             127      of the October 1 enrollment counts.
             128          [(2)] (3) If a new school district is created or school district boundaries are adjusted,
             129      the enrollment and average annual enrollment growth for each affected school district shall be
             130      calculated on the basis of enrollment in school district schools located within that school
             131      district's newly created or adjusted boundaries, as of October 1 enrollment counts.
             132          [(3)] (4) On or before December 31 of each year, the State Board of Education shall
             133      provide a county treasurer with audited enrollment information from the fall enrollment audit
             134      necessary to distribute revenues as required by this section.
             135          [(4)] (5) On or before March 31 of each year, a county treasurer in a county of the first
             136      class shall distribute the revenue generated within the county of the first class during the prior
             137      calendar year from the capital outlay levy described in Section 53A-16-107 .
             138          (6) On or before the November meeting of the Education Interim Committee of each
             139      year, a receiving school district shall report to the committee:
             140          (a) how the receiving school district spent the district's capital outlay increment monies
             141      during the prior fiscal year; and
             142          (b) the receiving school district's plan to increase student capacity of existing school
             143      buildings within the district.
             144          (7) The Education Interim Committee shall consider the reports of receiving school
             145      districts described in Subsection (6) as part of a review to reauthorize this section and
             146      provisions related to this section, if the committee is directed to conduct a review pursuant to
             147      Title 63I, Legislative Oversight and Sunset Act.
             148          Section 3. Section 53A-19-102 is amended to read:
             149           53A-19-102. Local school boards budget procedures.


             150          (1) (a) Prior to June 22 of each year, [each] a local school board shall adopt a budget
             151      and make appropriations for the next fiscal year.
             152          (b) If the tax rate in the proposed budget exceeds the certified tax rate defined in
             153      Section 59-2-924 , the local school board shall comply with Section 59-2-919 in adopting the
             154      budget, except as provided by Section 53A-17a-133 .
             155          (2) (a) Prior to the adoption or amendment of a budget containing a tax rate which does
             156      not exceed the certified tax rate, [the] a local school board shall hold a public hearing, as
             157      defined in Section 10-9a-103 , on the proposed budget or budget amendment.
             158          (b) In addition to complying with Title 52, Chapter 4, Open and Public Meetings Act,
             159      in regards to the public hearing described in Subsection (2)(a), the board shall:
             160          (i) publish the required newspaper notice at least 10 days before the day on which the
             161      hearing is held; and
             162          (ii) file a copy of the proposed budget with the local school board's business
             163      administrator for public inspection at least 10 days prior to the hearing.
             164          (3) [The] A local school board shall file a copy of the adopted budget with the state
             165      auditor and the State Board of Education.
             166          Section 4. Section 63I-1-253 is amended to read:
             167           63I-1-253. Repeal dates, Titles 53, 53A, and 53B.
             168          The following provisions are repealed on the following dates:
             169          (1) Section 53-3-232 , Conditional licenses, is repealed July 1, 2015.
             170          (2) Title 53A, Chapter 1a, Part 6, Public Education Job Enhancement Program is
             171      repealed July 1, 2010.
             172          (3) Title 53A, Chapter 1a, Part 9, Voluntary Extended-day Kindergarten Program, is
             173      repealed July 1, 2011.
             174          (4) Section 53A-2-118.3 is repealed December 31, 2016.
             175          [(4)] (5) The State Instructional Materials Commission, created in Section 53A-14-101 ,
             176      is repealed July 1, 2011.
             177          (6) Subsections 53A-16-107 (3) and (4) are repealed December 31, 2016.
             178          (7) Section 53A-16-107.1 is repealed December 31, 2016.
             179          [(5)] (8) Section 53A-17a-163 , Performance-based Compensation Pilot Program is
             180      repealed July 1, 2011.


             181          Section 5. Section 63I-1-259 is amended to read:
             182           63I-1-259. Repeal dates, Title 59.
             183          (1) Subsection 59-2-924 (3)(g) is repealed on December 31, 2016.
             184          (2) Section 59-2-924.3 is repealed on December 31, 2016.
             185          (3) Section 59-2-924.4 is repealed on December 31, 2016.
             186          (4) Section 59-9-102.5 is repealed December 31, 2010.
             187          Section 6. Retrospective operation.
             188          This bill provides retrospective operation for a taxable year beginning on or after
             189      January 1, 2010.


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