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H.B. 275

             1     

SCHOOL DISTRICT DIVISION AMENDMENTS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Kenneth W. Sumsion

             5     
Senate Sponsor: Margaret Dayton

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies requirements for the imposition of property taxes in a new and
             10      remaining school district after a school district split.
             11      Highlighted Provisions:
             12          This bill:
             13          .    requires a new district and remaining district to continue to impose for five years
             14      certain property tax levies that were imposed by the divided school district if the
             15      property tax base per student of the new district is greater than the property tax base
             16      per student of the remaining district;
             17          .    provides for the distribution of the property tax revenues;
             18          .    repeals a requirement to impose a .0006 capital outlay levy on a school district that
             19      splits in a county of the second through sixth class; 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-2-117, as last amended by Laws of Utah 2008, Chapters 92 and 236


             28          53A-16-107, as last amended by Laws of Utah 2010, Chapters 3, 135, and 160
             29          63I-1-253, as last amended by Laws of Utah 2010, Chapters 79, 160, and 319
             30          63I-1-259, as last amended by Laws of Utah 2010, Chapters 160 and 319
             31      ENACTS:
             32          53A-2-118.4, Utah Code Annotated 1953
             33      REPEALS:
             34          53A-2-118.3, as last amended by Laws of Utah 2010, Chapter 3
             35          59-2-924.4, as last amended by Laws of Utah 2009, Chapter 204
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 53A-2-117 is amended to read:
             39           53A-2-117. Definitions.
             40          As used in Sections 53A-2-117 through [53A-2-121 ] 53A-2-122 , except Section
             41      53A-2-118.4 :
             42          (1) "Allocation date" means:
             43          (a) June 30 of the second calendar year after the creation election date; or
             44          (b) another date that the transition teams under Section 53A-1-118.1 mutually agree to.
             45          (2) "Canvass date" means the date of the canvass of an election under Subsection
             46      53A-2-118 (5) at which voters approve the creation of a new school district under Section
             47      53A-2-118.1 .
             48          (3) "Creation election date" means the date of the election under Subsection
             49      53A-2-118 (5) at which voters approve the creation of a new school district under Section
             50      53A-2-118.1 .
             51          (4) "Divided school district, "existing district," or "existing school district" means a
             52      school district from which a new district is created.
             53          (5) "New district" or "new school district" means a school district created under
             54      Section 53A-2-118 or 53A-2-118.1 .
             55          (6) "Remaining district" or "remaining school district" means an existing district after
             56      the creation of a new district.
             57          Section 2. Section 53A-2-118.4 is enacted to read:
             58          53A-2-118.4. Property tax levies in new district and remaining district --


             59      Distribution of property tax revenue.
             60          (1) As used in this section:
             61          (a) "Divided school district" or "existing district" means a school district from which a
             62      new district is created.
             63          (b) "New district" means a school district created under Section 53A-2-118.1 after May
             64      10, 2011.
             65          (c) "Property tax levy" means a property tax levy that a school district is authorized to
             66      impose, except:
             67          (i) the minimum basic rate imposed under Section 53A-17a-135 ;
             68          (ii) a debt service levy imposed under Section 11-14-310 ; or
             69          (iii) a judgment levy imposed under Section 53A-16-111 or 59-2-1330 .
             70          (d) "Property tax base per student" means the quotient of:
             71          (i) the assessed valuation of property within the boundaries of a new district or
             72      remaining district in the taxable year prior to the qualifying taxable year; divided by
             73          (ii) the number of students enrolled in schools located within the boundaries of a new
             74      district or remaining district on October 1 of the taxable year prior to the qualifying taxable
             75      year.
             76          (e) "Qualifying taxable year" means the calendar year in which a new district begins to
             77      provide educational services.
             78          (f) "Remaining district" means an existing district after the creation of a new district.
             79          (2) (a) If the property tax base per student of a new district is greater than the property
             80      tax base per student of a remaining district, the new district and remaining district shall, for a
             81      period of five consecutive years beginning in the qualifying taxable year, continue to impose
             82      property tax levies that were imposed by the divided school district in the taxable year prior to
             83      the qualifying taxable year.
             84          (b) Notwithstanding Subsection (2)(a), a new district and remaining district may not
             85      continue to impose a voted capital levy under Section 53A-16-110 beyond the date authorized
             86      by the divided school district's voters.
             87          (3) Except as provided in Subsection (6), a property tax levy that a new district and
             88      remaining district are required to impose under Subsection (2) shall be set at a rate that:
             89          (a) is uniform in the new district and remaining district; and


             90          (b) generates the same amount of revenue that was generated by the property tax levy
             91      within the divided school district in the taxable year prior to the qualifying taxable year.
             92          (4) (a) Except as provided in Subsection (4)(b), the county treasurer of the county in
             93      which a property tax levy is imposed under Subsection (2) shall distribute revenues generated
             94      by the property tax levy to the new district and remaining district in proportion to the
             95      percentage of the divided school district's enrollment on the October 1 prior to the new district
             96      commencing educational services that were enrolled in schools currently located in the new
             97      district or remaining district.
             98          (b) The county treasurer of a county of the first class shall distribute revenues
             99      generated by a capital outlay levy of .0006 that a school district in a county of the first class is
             100      required to impose under Section 53A-16-107 in accordance with the distribution method
             101      specified in Section 53A-16-107.1 .
             102          (5) On or before March 31, a county treasurer shall distribute revenues generated by a
             103      property tax levy imposed under Subsection (2) in the prior calendar year to a new district and
             104      remaining district as provided in Subsection (4).
             105          (6) (a) Subject to the notice and public hearing requirements of Section 59-2-919 , a
             106      new district or remaining district may set a property tax rate higher than the rate required by
             107      Subsection (3), up to:
             108          (i) the maximum rate, if any, allowed by law; or
             109          (ii) the maximum rate authorized by voters for a voted leeway under Section
             110      53A-17a-133 or a voted capital levy under Section 53A-16-110 .
             111          (b) The revenues generated by the portion of a property tax rate in excess of the rate
             112      required by Subsection (3) shall be retained by the district that imposes the higher rate.
             113          Section 3. Section 53A-16-107 is amended to read:
             114           53A-16-107. Capital outlay levy -- Maintenance of school facilities -- Authority to
             115      use proceeds of .0002 tax rate -- Restrictions and procedure -- Limited authority to use
             116      proceeds for general fund purposes -- Notification required when using proceeds for
             117      general fund purposes.
             118          (1) Subject to Subsection (3) and except as provided in Subsection (5), a local school
             119      board may annually impose a capital outlay levy not to exceed .0024 per dollar of taxable value
             120      to be used for:


             121          (a) capital outlay;
             122          (b) debt service; and
             123          (c) subject to Subsection (2), school facility maintenance.
             124          (2) (a) A local school board may utilize the proceeds of a maximum of .0002 per dollar
             125      of taxable value of the local school board's annual capital outlay levy for the maintenance of
             126      school facilities in the school district.
             127          (b) A local school board that uses the option provided under Subsection (2)(a) shall:
             128          (i) maintain the same level of expenditure for maintenance in the current year as it did
             129      in the preceding year, plus the annual average percentage increase applied to the maintenance
             130      and operation budget for the current year; and
             131          (ii) identify the expenditure of capital outlay funds for maintenance by a district project
             132      number to ensure that the funds are expended in the manner intended.
             133          (c) The State Board of Education shall establish by rule the expenditure classification
             134      for maintenance under this program using a standard classification system.
             135          (3) Beginning January 1, 2009, in order to qualify for receipt of the state contribution
             136      toward the minimum school program, a local school board in a county of the first class shall
             137      impose a capital outlay levy of at least .0006 per dollar of taxable value.
             138          (4) (a) The county treasurer of a county of the first class shall distribute revenues
             139      generated by the .0006 portion of the capital outlay levy required in Subsection (3) to school
             140      districts within the county in accordance with Section 53A-16-107.1 .
             141          (b) (i) [If] Except as provided in Subsection (4)(b)(ii), if a school district in a county of
             142      the first class imposes a capital outlay levy pursuant to this section which exceeds .0006 per
             143      dollar of taxable value, the county treasurer of a county of the first class shall distribute
             144      revenues generated by the portion of the capital outlay levy which exceeds .0006 to the school
             145      district imposing the levy.
             146          (ii) If a new district and a remaining district are required to impose property tax levies
             147      pursuant to Subsection 53A-2-118.4 (2), the county treasurer shall distribute revenues of the
             148      new district or remaining district generated by the portion of a capital outlay levy that exceeds
             149      .0006 in accordance with Section 53A-2-118.4 .
             150          (5) (a) Notwithstanding Subsections (1)(a), (b), and (c) and subject to Subsections
             151      (5)(b), (c), and (d), for fiscal years 2010-11 and 2011-12, a local school board may use the


             152      proceeds of the local school board's capital outlay levy for general fund purposes if the
             153      proceeds are not committed or dedicated to pay debt service or bond payments.
             154          (b) If a local school board uses the proceeds described in Subsection (5)(a) for general
             155      fund purposes, the local school board shall notify the public of the local school board's use of
             156      the capital outlay levy proceeds for general fund purposes:
             157          (i) prior to the board's budget hearing in accordance with the notification requirements
             158      described in Section 53A-19-102 ; and
             159          (ii) at a budget hearing required in Section 53A-19-102 .
             160          (c) A local school board may not use the proceeds described in Subsection (5)(a) to
             161      fund the following accounting function classifications as provided in the Financial Accounting
             162      for Local and State School Systems guidelines developed by the National Center for Education
             163      Statistics:
             164          (i) 2300 Support Services - General District Administration; or
             165          (ii) 2500 Support Services - Central Services.
             166          (d) A local school board may not use the proceeds from a distribution described in
             167      Section 53A-16-107.1 for general fund purposes.
             168          Section 4. Section 63I-1-253 is amended to read:
             169           63I-1-253. Repeal dates, Titles 53, 53A, and 53B.
             170          The following provisions are repealed on the following dates:
             171          (1) Section 53-3-232 , Conditional licenses, is repealed July 1, 2015.
             172          (2) Title 53A, Chapter 1a, Part 6, Public Education Job Enhancement Program is
             173      repealed July 1, 2020.
             174          (3) Title 53A, Chapter 1a, Part 9, Voluntary Extended-day Kindergarten Program, is
             175      repealed July 1, 2011.
             176          [(4) Section 53A-2-118.3 is repealed December 31, 2016.]
             177          [(5)] (4) The State Instructional Materials Commission, created in Section 53A-14-101 ,
             178      is repealed July 1, 2011.
             179          [(6)] (5) Subsections 53A-16-107 (3) and (4) are repealed December 31, 2016.
             180          [(7)] (6) Section 53A-16-107.1 is repealed December 31, 2016.
             181          [(8)] (7) Section 53A-17a-163 , Performance-based Compensation Pilot Program is
             182      repealed July 1, 2011.


             183          [(9)] (8) Subsection 53C-3-203 (5), which provides for the distribution of money from
             184      the Land Exchange Distribution Account to the Geological Survey for test wells, other
             185      hydrologic studies, and air quality monitoring in the West Desert, is repealed July 1, 2020.
             186          Section 5. Section 63I-1-259 is amended to read:
             187           63I-1-259. Repeal dates, Title 59.
             188          (1) Subsection 59-2-924 (3)(g) is repealed on December 31, 2016.
             189          (2) Section 59-2-924.3 is repealed on December 31, 2016.
             190          [(3) Section 59-2-924.4 is repealed on December 31, 2016.]
             191          [(4)] (3) Section 59-9-102.5 is repealed December 31, 2020.
             192          Section 6. Repealer.
             193          This bill repeals:
             194          Section 53A-2-118.3, Imposition of the capital outlay levy in qualifying divided
             195      school districts.
             196          Section 59-2-924.4, Adjustment of the calculation of the certified tax rate for
             197      certain divided school districts.




Legislative Review Note
    as of 1-4-11 10:10 AM


Office of Legislative Research and General Counsel


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