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H.B. 195

             1     

DEBT SERVICE OBLIGATIONS OF A DIVIDED SCHOOL

             2     
DISTRICT

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Kenneth W. Sumsion

             6     
Senate Sponsor: Margaret Dayton

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies requirements for the imposition of a tax on property within a new
             11      district and remaining district to pay the debt service obligations of a divided school
             12      district.
             13      Highlighted Provisions:
             14          This bill:
             15          .    provides that, if a new district is created on or after May 10, 2011, a tax shall be
             16      imposed on property within the new district and the remaining district at a rate that:
             17              .    generates the amount of revenue required each year to meet the outstanding
             18      bonded debt obligations of the divided school district; and
             19              .    is uniform within the new district and remaining district; and
             20                  .    makes technical amendments.
             21      Money Appropriated in this Bill:
             22          None
             23      Other Special Clauses:
             24          None
             25      Utah Code Sections Affected:
             26      AMENDS:
             27          53A-2-120, as last amended by Laws of Utah 2007, Chapters 215 and 306


             28          53A-2-121, as last amended by Laws of Utah 2008, Chapter 92
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 53A-2-120 is amended to read:
             32           53A-2-120. Transfer of school property to new school district.
             33          (1) (a) (i) On July 1 of the year following the school board elections for [the new and
             34      existing districts] a new district created pursuant to a citizens' initiative petition or school board
             35      request under Section 53A-2-118 and an existing district as provided in Section 53A-2-119 , the
             36      board of the existing district shall convey and deliver to the board of the new district all school
             37      property which the new district is entitled to receive.
             38          [(b) (i)] (ii) Any disagreements as to the disposition of school property shall be
             39      resolved by the county legislative body.
             40          [(ii)] (iii) Subsection (1)[(b)(i)](a)(ii) does not apply to disagreements between
             41      transition teams about the proper allocation of property under Subsection 53A-2-118.1 (4).
             42          (b) An existing district shall transfer property to a new district created under Section
             43      53A-2-118.1 in accordance with Section 53A-2-118.1 .
             44          (2) Title vests in the new school board, including all rights, claims, and causes of
             45      action to or for the property, for the use or the income from the property, for conversion,
             46      disposition, or withholding of the property, or for any damage or injury to the property.
             47          (3) The new school board may bring and maintain actions to recover, protect, and
             48      preserve the property and rights of the district's schools and to enforce contracts.
             49          [(4) (a) The intangible property of the existing school district shall be prorated between
             50      it and the new district on the same basis used to determine the new district's proportionate
             51      share of the existing district's indebtedness under Section 53A-2-121 .]
             52          [(b) Subsection (4)(a) does not apply to the allocation of intangible property between a
             53      remaining district and a new district created under Section 53A-2-118.1 .]
             54          Section 2. Section 53A-2-121 is amended to read:
             55           53A-2-121. Tax to pay for indebtedness of divided school district.
             56          (1) (a) [The] For a new district created prior to May 10, 2011, the local school boards
             57      of the remaining and new districts shall determine the portion of the [existing] divided school
             58      district's bonded indebtedness and other indebtedness for which the property within the new


             59      district remains subject to the levy of taxes to pay a proportionate share of the [existing]
             60      divided school district's outstanding indebtedness.
             61          (b) The proportionate share of the [existing] divided school district's outstanding
             62      indebtedness for which property within the new district remains subject to the levy of taxes
             63      shall be calculated by determining the proportion that the total assessed valuation of the
             64      property within the new district bears to the total assessed valuation of the [existing] divided
             65      school district:
             66          (i) in the year immediately preceding the date the new district was created; or
             67          (ii) at a time mutually agreed upon by the [school district board] local school boards of
             68      the new district and [the school district board of] the remaining district.
             69          (c) The agreement reflecting the determinations made under this Subsection (1) shall
             70      take effect upon being filed with the county legislative body and the State Board of Education.
             71          (2) The local school board of [the] a remaining district shall continue to levy a tax on
             72      property within [the] a new district created prior to May 10, 2011 sufficient to pay the new
             73      district's proportionate share of the indebtedness determined under [this section] Subsection
             74      (1), and shall annually report the amount of the proceeds of the tax to the business
             75      administrator of the new district.
             76          (3) As used in Subsections (4) and (5), "outstanding bonded indebtedness" means debt
             77      owed for a general obligation bond issued by the divided school district:
             78          (a) prior to the creation of the new district; or
             79          (b) in accordance with a mutual agreement of the local school boards of the remaining
             80      and new districts under Subsection (6).
             81          (4) If a new district is created on or after May 10, 2011:
             82          (a) property within the new district and the remaining district is subject to the levy of a
             83      tax to pay the divided school district's outstanding bonded indebtedness; and
             84          (b) the local school board of the remaining district shall:
             85          (i) levy a tax each taxable year on property within the new district and remaining
             86      district until the outstanding bonded indebtedness of the divided school district is retired; and
             87          (ii) annually report the amount of the proceeds of the tax to the business administrator
             88      of the new district.
             89          (5) The local school board of the remaining district shall impose a tax levy under


             90      Subsection (4) at a rate that:
             91          (a) generates the amount of revenue required each year to meet the outstanding bonded
             92      indebtedness of the divided school district; and
             93          (b) is uniform within the new district and remaining district.
             94          [(3)] (6) (a) The local school boards of the remaining and new districts shall determine
             95      by mutual agreement the disposition of bonds approved but not issued by the [existing] divided
             96      school district before the creation of the new district based primarily on the representation
             97      made to the voters at the time of the bond election.
             98          (b) Before a determination is made under Subsection [(3)(a)] (6)(a), a remaining
             99      district may not issue bonds approved but not issued before the creation of the new district if
             100      property in the new district would be subject to the levy of a tax to pay the bonds.




Legislative Review Note
    as of 12-3-10 12:02 PM


Office of Legislative Research and General Counsel


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