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H.B. 98 Enrolled

             1     

CAPITAL OUTLAY FUNDING MODIFICATIONS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Christine F. Watkins

             5     
Senate Sponsor: Ralph Okerlund

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill expands the permitted uses of proceeds from a capital outlay levy imposed by
             10      a local school board.
             11      Highlighted Provisions:
             12          This bill:
             13          .    allows a local school board of a school district with an enrollment of fewer than
             14      2,500 students to use the proceeds of a capital outlay levy for certain maintenance
             15      and operations functions, in addition to capital outlay or debt service; and
             16          .    makes technical amendments.
             17      Money Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          53A-16-107, as last amended by Laws of Utah 2010, Chapters 3, 135, and 160
             24     
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 53A-16-107 is amended to read:
             27           53A-16-107. Capital outlay levy -- Authority to use proceeds of .0002 tax rate for
             28      maintenance of school facilities -- Restrictions and procedure -- Limited authority to use
             29      proceeds for general fund purposes -- Notification required when using proceeds for


             30      general fund purposes -- Authority for small school districts to use levy proceeds for
             31      operation and maintenance of plant services.
             32          (1) Subject to Subsection (3) and except as provided in [Subsection (5)] Subsections
             33      (2), (5), and (6), a local school board may annually impose a capital outlay levy not to exceed
             34      .0024 per dollar of taxable value to be used for:
             35          (a) capital outlay; or
             36          (b) debt service[; and].
             37          [(c) subject to Subsection (2), school facility maintenance.]
             38          (2) (a) A local school board with an enrollment of 2,500 students or more may utilize
             39      the proceeds of a maximum of .0002 per dollar of taxable value of the local school board's
             40      annual capital outlay levy for the maintenance of school facilities in the school district.
             41          (b) A local school board that uses the option provided under Subsection (2)(a) shall:
             42          (i) maintain the same level of expenditure for maintenance in the current year as it did
             43      in the preceding year, plus the annual average percentage increase applied to the maintenance
             44      and operation budget for the current year; and
             45          (ii) identify the expenditure of capital outlay funds for maintenance by a district project
             46      number to ensure that the funds are expended in the manner intended.
             47          (c) The State Board of Education shall establish by rule the expenditure classification
             48      for maintenance under this program using a standard classification system.
             49          (3) Beginning January 1, 2009, in order to qualify for receipt of the state contribution
             50      toward the minimum school program, a local school board in a county of the first class shall
             51      impose a capital outlay levy of at least .0006 per dollar of taxable value.
             52          (4) (a) The county treasurer of a county of the first class shall distribute revenues
             53      generated by the .0006 portion of the capital outlay levy required in Subsection (3) to school
             54      districts within the county in accordance with Section 53A-16-107.1 .
             55          (b) If a school district in a county of the first class imposes a capital outlay levy
             56      pursuant to this section which exceeds .0006 per dollar of taxable value, the county treasurer of
             57      a county of the first class shall distribute revenues generated by the portion of the capital outlay


             58      levy which exceeds .0006 to the school district imposing the levy.
             59          (5) (a) Notwithstanding Subsections (1)(a)[,] and (b)[, and (c)] and subject to
             60      Subsections (5)(b), (c), and (d), for fiscal years 2010-11 and 2011-12, a local school board may
             61      use the proceeds of the local school board's capital outlay levy for general fund purposes if the
             62      proceeds are not committed or dedicated to pay debt service or bond payments.
             63          (b) If a local school board uses the proceeds described in Subsection (5)(a) for general
             64      fund purposes, the local school board shall notify the public of the local school board's use of
             65      the capital outlay levy proceeds for general fund purposes:
             66          (i) prior to the board's budget hearing in accordance with the notification requirements
             67      described in Section 53A-19-102 ; and
             68          (ii) at a budget hearing required in Section 53A-19-102 .
             69          (c) A local school board may not use the proceeds described in Subsection (5)(a) to
             70      fund the following accounting function classifications as provided in the Financial Accounting
             71      for Local and State School Systems guidelines developed by the National Center for Education
             72      Statistics:
             73          (i) 2300 Support Services - General District Administration; or
             74          (ii) 2500 Support Services - Central Services.
             75          (d) A local school board may not use the proceeds from a distribution described in
             76      Section 53A-16-107.1 for general fund purposes.
             77          (6) (a) In addition to the uses described in Subsection (1), a local school board of a
             78      school district with an enrollment of fewer than 2,500 students, may use the proceeds of the
             79      local school board's capital outlay levy, in fiscal years 2011-12, 2012-13, and 2013-14, for
             80      expenditures made within the accounting function classification 2600, Operation and
             81      Maintenance of Plant Services, of the Financial Accounting for Local and State School
             82      Systems guidelines developed by the National Center for Education Statistics, excluding
             83      expenditures for mobile phone service and vehicle operation and maintenance.
             84          (b) If a local school board of a school district with an enrollment of fewer than 2,500
             85      students uses the proceeds of a capital outlay levy for the operation and maintenance of plant


             86      services as described in Subsection (6)(a), the local school board shall notify the public of the
             87      local school board's use of the capital outlay levy proceeds for operation and maintenance of
             88      plant services:
             89          (i) prior to the board's budget hearing in accordance with the notification requirements
             90      described in Section 53A-19-102 ; and
             91          (ii) at a budget hearing required in Section 53A-19-102 .


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