1     
SCHOOL FUNDING MODIFICATIONS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Joel K. Briscoe

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill establishes a statewide property tax levy for charter school funding.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     creates a statewide property tax levy for certain funding for charter schools;
14          ▸     repeals provisions that require:
15               •     a school district to allocate a certain portion of school district tax revenues for
16     charter schools; and
17               •     the Legislature to appropriate a certain amount of money for charter schools;
18          ▸     provides for the distribution of revenue from a statewide property tax levy for
19     charter school funding;
20          ▸     establishes the Charter School Tax Account; and
21          ▸     establishes the Class Size Reduction Account.
22     Money Appropriated in this Bill:
23          This bill appropriates for fiscal year 2018:
24          ▸     to the State Board of Education - Minimum School Program - Related to Basic
25     School Program, as an ongoing appropriation:
26               •     from Education Fund, ($99,946,200);
27          ▸     to the State Board of Education - Minimum School Program - Basic School
28     Program, as an ongoing appropriation:
29               •     from Education Fund Restricted - Class Size Reduction Account, $99,946,200;
30     and
31          ▸     to Fund and Account Transfers - Education Fund Restricted - Class Size Reduction
32     Account, as an ongoing appropriation:
33               •     from Education Fund, $99,946,200.
34     Other Special Clauses:
35          This bill provides a special effective date.
36     Utah Code Sections Affected:
37     AMENDS:
38          53A-1a-502.5, as last amended by Laws of Utah 2014, Chapter 406
39          53A-1a-513, as last amended by Laws of Utah 2015, Chapters 64 and 380
40          53A-17a-105, as last amended by Laws of Utah 2015, Chapter 449
41          53A-17a-146, as last amended by Laws of Utah 2011, Chapters 371 and 381
42          59-2-924.2, as last amended by Laws of Utah 2015, Chapter 224
43          63I-1-259, as last amended by Laws of Utah 2015, Chapters 224, 275, and 467
44     ENACTS:
45          53A-1a-513.1, Utah Code Annotated 1953
46          53A-1a-513.2, Utah Code Annotated 1953
47          53A-17a-124.6, Utah Code Annotated 1953
48     

49     Be it enacted by the Legislature of the state of Utah:
50          Section 1. Section 53A-1a-502.5 is amended to read:
51          53A-1a-502.5. Approval of increase in charter school enrollment capacity.
52          (1) For the purposes of this section:
53          (a) "High growth area" means an area of the state where school enrollment is
54     significantly increasing or projected to significantly increase.
55          (b) "Next school year" means the school year that begins on or after the July 1
56     immediately following the end of a general session of the Legislature.
57          (2) The State Board of Education may approve an increase in charter school enrollment
58     capacity in the 2012-13 school year or thereafter subject to the Legislature:
59          (a) appropriating funds for an increase in charter school enrollment capacity in the next
60     school year; or
61          (b) authorizing an increase in charter school enrollment capacity in the school year
62     immediately following the next school year.
63          (3) In appropriating funds for, or authorizing, an increase in charter school enrollment
64     capacity, the Legislature shall provide a separate appropriation or authorization of enrollment
65     capacity for a charter school proposed and approved in response to a request for applications
66     issued under Section 53A-1a-501.9.
67          (4) (a) A charter school may annually submit a request to the State Board of Education
68     for an increase in enrollment capacity in the amount of .25 times the number of students in
69     grades 9 through 12 enrolled in an online course in the previous school year through the
70     Statewide Online Education Program.
71          (b) A charter school shall submit a request for an increase in enrollment capacity
72     pursuant to Subsection (4)(a) on or before October 1 of the school year for which the increase
73     in enrollment capacity is requested.
74          (c) The State Board of Education shall approve a request for an increase in enrollment
75     capacity made under Subsection (4)(a) subject to the availability of sufficient funds
76     [appropriated under Section 53A-1a-513] available in the Charter School Tax Account created
77     under Section 53A-1a-513.2 to provide the full amount of the per student allocation for each
78     charter school student in the state [to supplement school district property tax revenues].
79          (d) An increase in enrollment capacity approved under Subsection (4)(c) shall be a
80     permanent increase in the charter school's enrollment capacity.
81          (5) (a) If the Legislature does not appropriate funds for an increase in charter school
82     enrollment capacity that is tentatively approved by the State Board of Education, the State
83     Board of Education shall prioritize the tentatively approved schools and expansions based on
84     approved funds.
85          (b) A charter school or expansion that is tentatively approved, but not funded, shall be
86     considered to be tentatively approved for the next application year and receive priority status
87     for available funding.
88          (6) (a) Except as provided in Subsection (5)(b) or (6)(b), in approving an increase in
89     charter school enrollment capacity for new charter schools and expanding charter schools, the
90     State Board of Education shall give:
91          (i) high priority to approving a new charter school or a charter school expansion in a
92     high growth area; and
93          (ii) low priority to approving a new charter school or a charter school expansion in an
94     area where student enrollment is stable or declining.
95          (b) An applicant seeking to establish a charter school in a high growth area may elect
96     to not receive high priority status as provided in Subsection (6)(a)(i).
97          Section 2. Section 53A-1a-513 is amended to read:
98          53A-1a-513. Funding for charter schools.
99          (1) As used in this section[:] "charter school tax per pupil revenue" means the same as
100     that term is defined in Section 53A-1a-513.1.
101          [(a) "Charter school students' average local revenues" means the amount determined as
102     follows:]
103          [(i) for each student enrolled in a charter school on the previous October 1, calculate
104     the district per pupil local revenues of the school district in which the student resides;]
105          [(ii) sum the district per pupil local revenues for each student enrolled in a charter
106     school on the previous October 1; and]
107          [(iii) divide the sum calculated under Subsection (1)(a)(ii) by the number of students
108     enrolled in charter schools on the previous October 1.]
109          [(b) "District local property tax revenues" means the sum of a school district's revenue
110     received from the following levies:]
111          [(i) a voted local levy imposed under Section 53A-17a-133;]
112          [(ii) a board local levy imposed under Section 53A-17a-164, excluding revenues
113     expended for:]
114          [(A) recreational facilities and activities authorized under Title 11, Chapter 2,
115     Playgrounds;]
116          [(B) pupil transportation, up to the amount of revenue generated by a .0003 per dollar
117     of taxable value of the school district's board local levy; and]
118          [(C) the K-3 Reading Improvement Program, up to the amount of revenue generated by
119     a .000121 per dollar of taxable value of the school district's board local levy; and]
120          [(iii) a capital local levy imposed under Section 53A-16-113.]
121          [(c) "District per pupil local revenues" means an amount equal to the following, using
122     data from the most recently published school district annual financial reports and state
123     superintendent's annual report:]
124          [(i) district local property tax revenues; divided by]
125          [(ii) the sum of:]
126          [(A) a school district's average daily membership; and]
127          [(B) the average daily membership of a school district's resident students who attend
128     charter schools.]
129          [(d) "Resident student" means a student who is considered a resident of the school
130     district under Title 53A, Chapter 2, Part 2, District of Residency.]
131          [(e) "Statewide average debt service revenues" means the amount determined as
132     follows, using data from the most recently published state superintendent's annual report:]
133          [(i) sum the revenues of each school district from the debt service levy imposed under
134     Section 11-14-310; and]
135          [(ii) divide the sum calculated under Subsection (1)(e)(i) by statewide school district
136     average daily membership.]
137          (2) (a) Charter schools shall receive funding as described in this section, except
138     Subsections (3) through (8) do not apply to charter schools described in Subsection (2)(b).
139          (b) Charter schools authorized by local school boards that are converted from district
140     schools or operate in district facilities without paying reasonable rent shall receive funding as
141     prescribed in Section 53A-1a-515.
142          (3) (a) Except as provided in Subsections (3)(b) and (3)(c), a charter school shall
143     receive state funds, as applicable, on the same basis as a school district receives funds.
144          (b) For the 2015-16 school year, the number of weighted pupil units assigned to a
145     charter school for the kindergarten and grades 1 through 12 programs of the Basic School
146     Program shall be:
147          (i) based on the higher of:
148          (A) October 1 enrollment in the current school year; or
149          (B) average daily membership in the prior school year plus growth as determined under
150     Section 53A-17a-106; and
151          (ii) weighted as provided in Subsection (3)(c).
152          (c) In distributing funds under Chapter 17a, Minimum School Program Act, to charter
153     schools, charter school pupils shall be weighted, where applicable, as follows:
154          (i) .55 for kindergarten pupils;
155          (ii) .9 for pupils in grades 1 through 6;
156          (iii) .99 for pupils in grades 7 through 8; and
157          (iv) 1.2 for pupils in grades 9 through 12.
158          [(4) (a) (i) A school district shall allocate a portion of school district revenues for each
159     resident student of the school district who is enrolled in a charter school on October 1 equal to
160     25% of the district per pupil local revenues.]
161          [(ii) Nothing in this Subsection (4)(a) affects the school bond guarantee program
162     established under Chapter 28, Utah School Bond Guaranty Act.]
163          [(b) The State Board of Education shall:]
164          [(i) deduct an amount equal to the allocation provided under Subsection (4)(a) from
165     state funds the school district is authorized to receive under Chapter 17a, Minimum School
166     Program Act; and]
167          [(ii) remit the money to the student's charter school.]
168          [(c) Notwithstanding the method used to transfer school district revenues to charter
169     schools as provided in Subsection (4)(b), a school district may deduct the allocations to charter
170     schools under this section from:]
171          [(i) unrestricted revenues available to the school district; or]
172          [(ii) the revenue sources listed in Subsection (1)(b) based on the portion of the
173     allocations to charter schools attributed to each of the revenue sources listed in Subsection
174     (1)(b).]
175          [(d) (i) Subject to future budget constraints, the Legislature shall provide an
176     appropriation for charter schools for each student enrolled on October 1 to supplement the
177     allocation of school district revenues under Subsection (4)(a).]
178          [(ii) Except as provided in Subsection (4)(d)(iii), the amount of money provided by the
179     state for a charter school student shall be the sum of:]
180          [(A) charter school students' average local revenues minus the allocation of school
181     district revenues under Subsection (4)(a); and]
182          [(B) statewide average debt service revenues.]
183          [(iii) If the total of a school district's allocation for a charter school student under
184     Subsection (4)(a) and the amount provided by the state under Subsection (4)(d)(ii) is less than
185     $1427, the state shall provide an additional supplement so that a charter school receives at least
186     $1427 per student under this Subsection (4).]
187          [(iv) (A) If the appropriation provided under this Subsection (4)(d) is less than the
188     amount prescribed by Subsection (4)(d)(ii) or (4)(d)(iii), the appropriation shall be allocated
189     among charter schools in proportion to each charter school's enrollment as a percentage of the
190     total enrollment in charter schools.]
191          [(B) If the State Board of Education makes adjustments to Minimum School Program
192     allocations as provided under Section 53A-17a-105, the allocation provided in Subsection
193     (4)(d)(iv)(A) shall be determined after adjustments are made under Section 53A-17a-105.]
194          [(e) Of the money provided to a charter school under this Subsection (4), 10% shall be
195     expended for funding school facilities only.]
196          (4) As described in Section 53A-1a-513.1, the State Board of Education shall distribute
197     charter school per pupil tax revenue to charter schools.
198          (5) Charter schools are eligible to receive federal funds if they meet all applicable
199     federal requirements and comply with relevant federal regulations.
200          (6) The State Board of Education shall distribute funds for charter school students
201     directly to the charter school.
202          (7) (a) Notwithstanding Subsection (3), a charter school is not eligible to receive state
203     transportation funding.
204          (b) The board shall also adopt rules relating to the transportation of students to and
205     from charter schools, taking into account Sections 53A-2-210 and 53A-17a-127.
206          (c) The governing body of the charter school may provide transportation through an
207     agreement or contract with the local school board, a private provider, or with parents.
208          (8) (a) (i) In accordance with Section 53A-1a-513.5, the State Charter School Board
209     may allocate grants for start-up costs to charter schools from money appropriated for charter
210     school start-up costs.
211          (ii) The governing board of a charter school that receives money from a grant under
212     Section 53A-1a-513.5 shall use the grant for expenses for planning and implementation of the
213     charter school.
214          (b) The State Board of Education shall coordinate the distribution of federal money
215     appropriated to help fund costs for establishing and maintaining charter schools within the
216     state.
217          (9) (a) A charter school may receive, hold, manage and use any devise, bequest, grant,
218     endowment, gift, or donation of any property made to the school for any of the purposes of this
219     part.
220          (b) It is unlawful for any person affiliated with a charter school to demand or request
221     any gift, donation, or contribution from a parent, teacher, employee, or other person affiliated
222     with the charter school as a condition for employment or enrollment at the school or continued
223     attendance at the school.
224          Section 3. Section 53A-1a-513.1 is enacted to read:
225          53A-1a-513.1. Charter school tax.
226          (1) As used in this section:
227          (a) "Board" means the State Board of Education.
228          (b) "Charter school per pupil tax revenue" means an amount equal to the following:
229          (i) charter school tax revenue for a given fiscal year; divided by
230          (ii) the number of students enrolled in a charter school on October 1 of the prior school
231     year.
232          (c) "Charter School Tax Account" means the Charter School Tax Account created in
233     Section 53A-1a-513.2.
234          (d) "Charter school tax revenue" means the tax revenue generated by a charter school
235     tax rate described in Subsection (2).
236          (e) "District local property tax revenues" means the sum of a school district's revenue
237     received from the following levies:
238          (i) a voted local levy imposed under Section 53A-17a-133;
239          (ii) a board local levy imposed under Section 53A-17a-164, excluding revenues
240     expended for:
241          (A) recreational facilities and activities authorized under Title 11, Chapter 2,
242     Playgrounds;
243          (B) pupil transportation, up to the amount of revenue generated by a .0003 per dollar of
244     taxable value of the school district's board local levy; and
245          (C) the K-3 Reading Improvement Program, up to the amount of revenue generated by
246     a .000121 per dollar of taxable value of the school district's board local levy; and
247          (iii) a capital local levy imposed under Section 53A-16-113.
248          (2) (a) Beginning with the taxable year beginning on January 1, 2017, the state shall
249     annually impose a charter school tax as described in this Subsection (2).
250          (b) On or before June 22, the State Tax Commission shall certify a rate for the charter
251     school tax to generate an amount of revenue equal to the sum of:
252          (i) district local property tax revenues for each school district; and
253          (ii) debt service levy revenue from a tax imposed under Section 11-14-310 for each
254     school district.
255          (c) To calculate the charter school tax rate under this Subsection (2), the State Tax
256     Commission shall use the calculation method described in Subsection 59-2-924(3)(c)(ii).
257          (d) The charter school tax shall be separately stated on a tax notice.
258          (3) (a) A county treasurer shall collect the charter school tax revenue for all school
259     districts located within the county treasurer's county and remit the money monthly to the state
260     treasurer.
261          (b) The state treasurer shall deposit the charter school tax revenue received from a
262     county treasurer into the Charter School Tax Account.
263          (4) (a) For each charter school student, the board shall distribute the charter school per
264     pupil tax revenue from the Charter School Tax Account to the student's charter school in
265     accordance with this Subsection (4).
266          (b) For a given fiscal year, if the actual charter school tax revenue is more than the
267     estimated charter school tax revenue, the board shall:
268          (i) use the estimated charter school tax revenue to calculate the charter school per pupil
269     tax revenue; and
270          (ii) deposit the difference between the actual charter school tax revenue and the
271     estimated charter school tax revenue into the Charter School Tax Account.
272          (c) For a given fiscal year, if the actual charter school tax revenue is less than the
273     estimated charter school tax revenue, the board shall:
274          (i) if sufficient funds are available in the Charter School Tax Account, add an amount
275     of funds from the Charter School Tax Account to the charter school tax total local revenue to
276     equal the estimated charter school tax revenue; and
277          (ii) if sufficient funds are not available in the Charter School Tax Account, calculate
278     the charter school per pupil tax revenue using the actual amount of the charter school tax
279     revenue.
280          (5) Of the money provided to a charter school under this section, 10% shall be
281     expended for funding school facilities only.
282          (6) The state is not required to comply with the notice and public hearing requirements
283     of Section 59-2-926 for an increase in revenue from the charter school tax imposed under this
284     section.
285          Section 4. Section 53A-1a-513.2 is enacted to read:
286          53A-1a-513.2. Charter School Tax Account.
287          (1) As used in this section, "account" means the Charter School Tax Account created in
288     this section.
289          (2) There is created within the Education Fund a restricted account known as the
290     "Charter School Tax Account."
291          (3) The account shall be funded by amounts deposited into the account in accordance
292     with Section 53A-1a-513.1.
293          (4) Upon appropriation from the Legislature, the State Board of Education shall
294     distribute funds from the account as described in Section 53A-1a-513.1.
295          (5) The account shall earn interest.
296          (6) Interest earned on the account shall be deposited into the account.
297          (7) Funds in the account are nonlapsing.
298          Section 5. Section 53A-17a-105 is amended to read:
299          53A-17a-105. Powers and duties of State Board of Education to adjust Minimum
300     School Program allocations -- Use of remaining funds at the end of a fiscal year.
301          (1) For purposes of this section:
302          (a) "Board" means the State Board of Education.
303          (b) "ESEA" means the Elementary and Secondary Education Act of 1965, 20 U.S.C.
304     Sec. 6301 et seq.
305          (c) "LEA" means:
306          (i) a school district; or
307          (ii) a charter school.
308          (d) "Program" means a program or allocation funded by a line item appropriation or
309     other appropriation designated as:
310          (i) Basic Program;
311          (ii) Related to Basic Programs;
312          (iii) Voted and Board Levy Programs; or
313          (iv) Minimum School Program.
314          (2) Except as provided in Subsection (3) or (5), if the number of weighted pupil units
315     in a program is underestimated, the board shall reduce the value of the weighted pupil unit in
316     that program so that the total amount paid for the program does not exceed the amount
317     appropriated for the program.
318          (3) If the number of weighted pupil units in a program is overestimated, the board shall
319     spend excess money appropriated for the following purposes giving priority to the purpose
320     described in Subsection (3)(a):
321          (a) to support the value of the weighted pupil unit in a program within the basic
322     state-supported school program in which the number of weighted pupil units is underestimated;
323          (b) to support the state guarantee per weighted pupil unit provided under the voted
324     local levy program established in Section 53A-17a-133 or the board local levy program
325     established in Section 53A-17a-164, if:
326          (i) local contributions to the voted local levy program or board local levy program are
327     overestimated; or
328          (ii) the number of weighted pupil units within school districts qualifying for a
329     guarantee is underestimated; or
330          [(c) to support the state supplement to local property taxes allocated to charter schools,
331     if the state supplement is less than the amount prescribed by Subsection 53A-1a-513(4); or]
332          [(d)] (c) to support a school district with a loss in student enrollment as provided in
333     Section 53A-17a-139.
334          (4) If local contributions from the minimum basic tax rate imposed under Section
335     53A-17a-135 are overestimated, the board shall reduce the value of the weighted pupil unit for
336     all programs within the basic state-supported school program so the total state contribution to
337     the basic state-supported school program does not exceed the amount of state funds
338     appropriated.
339          (5) If local contributions from the minimum basic tax rate imposed under Section
340     53A-17a-135 are underestimated, the board shall:
341          (a) spend the excess local contributions for the purposes specified in Subsection (3),
342     giving priority to supporting the value of the weighted pupil unit in programs within the basic
343     state-supported school program in which the number of weighted pupil units is underestimated;
344     and
345          (b) reduce the state contribution to the basic state-supported school program so the
346     total cost of the basic state-supported school program does not exceed the total state and local
347     funds appropriated to the basic state-supported school program plus the local contributions
348     necessary to support the value of the weighted pupil unit in programs within the basic
349     state-supported school program in which the number of weighted pupil units is underestimated.
350          (6) Except as provided in Subsection (3) or (5), the board shall reduce the guarantee
351     per weighted pupil unit provided under the voted local levy program established in Section
352     53A-17a-133 or board local levy program established in Section 53A-17a-164, if:
353          (a) local contributions to the voted local levy program or board local levy program are
354     overestimated; or
355          (b) the number of weighted pupil units within school districts qualifying for a
356     guarantee is underestimated.
357          (7) (a) The board may use program funds as described in Subsection (7)(b) if:
358          (i) the state loses flexibility due to the U.S. Department of Education's rejection of the
359     state's renewal application for flexibility under the ESEA; and
360          (ii) the state is required to fully implement the requirements of Title I of the ESEA, as
361     amended by the No Child Left Behind Act of 2001.
362          (b) Subject to the requirements of Subsections (7)(a) and (c), for fiscal year 2016, after
363     any transfers or adjustments described in Subsections (2) through (6) are made, the board may
364     use up to $15,000,000 of excess money appropriated to a program, remaining at the end of
365     fiscal year 2015, to mitigate a budgetary impact to an LEA due to the LEA's loss of flexibility
366     related to implementing the requirements of Title I of the ESEA, as amended by the No Child
367     Left Behind Act of 2001.
368          (c) In addition to the reporting requirement described in Subsection (9), the board shall
369     report actions taken by the board under this Subsection (7) to the Executive Appropriations
370     Committee.
371          (8) Money appropriated to the board is nonlapsing.
372          (9) The board shall report actions taken by the board under this section to the Office of
373     the Legislative Fiscal Analyst and the Governor's Office of Management and Budget.
374          Section 6. Section 53A-17a-124.6 is enacted to read:
375          53A-17a-124.6. Class Size Reduction Account.
376          (1) As used in this section:
377          (a) "Account" means the Class Size Reduction Account created in this section.
378          (b) "District local property tax revenues" means the same as that term is defined in
379     Section 53A-1a-513.1.
380          (c) "District per pupil local revenues" means an amount equal to the following, using
381     data from the most recently published school district annual financial reports and state
382     superintendent's annual report:
383          (i) district local property tax revenues; divided by
384          (ii) the sum of:
385          (A) a school district's average daily membership; and
386          (B) the average daily membership of a school district's resident students who attend
387     charter schools.
388          (d) "Local contribution" means an amount of revenue equal to the sum of 25% of
389     district per pupil local revenues for all school districts.
390          (e) "Statewide debt service revenues" means an amount of revenue equal to the sum of
391     all school districts' debt service levy revenue from a tax imposed under Section 11-14-310.
392          (f) "Statewide district local property tax revenues" means an amount of revenue equal
393     to the sum of all school districts' district local property tax revenues.
394          (2) There is created within the Education Fund a restricted account known as the
395     "Class Size Reduction Account."
396          (3) The account shall consist of:
397          (a) money appropriated into the account by the Legislature equal to the sum of:
398          (i) fiscal year 2016 statewide district local property tax revenues minus the fiscal year
399     2016 local contribution; and
400          (ii) fiscal year 2016 statewide average debt service revenues; and
401          (b) interest earned on money in the account.
402          (4) (a) The account shall be used to fund class size reduction as described in Section
403     53A-17a-124.5.
404          (b) The Legislature may not use money in the account to supplant an existing
405     appropriation for class size reduction described in Section 53A-17a-124.5.
406          (c) Upon appropriation by the Legislature, the State Board of Education shall distribute
407     money in the account to school districts and charter schools for class size reduction in
408     accordance with Section 53A-17a-124.5.
409          Section 7. Section 53A-17a-146 is amended to read:
410          53A-17a-146. Reduction of district allocation based on insufficient revenues.
411          (1) As used in this section, "Minimum School Program funds" means the total of state
412     and local funds appropriated for the Minimum School Program, excluding:
413          (a) the state-supported voted local levy program pursuant to Section 53A-17a-133; and
414          (b) the state-supported board local levy program pursuant to Section 53A-17a-164[;
415     and].
416          [(c) the appropriation to charter schools to replace local property tax revenues pursuant
417     to Section 53A-1a-513.]
418          (2) If the Legislature reduces appropriations made to support public schools under this
419     chapter because an Education Fund budget deficit, as defined in Section 63J-1-312, exists, the
420     State Board of Education, after consultation with each school district and charter school, shall
421     allocate the reduction among school districts and charter schools in proportion to each school
422     district's or charter school's percentage share of Minimum School Program funds.
423          (3) Except as provided in Subsection (5) and subject to the requirements of Subsection
424     (7), a school district or charter school shall determine which programs are affected by a
425     reduction pursuant to Subsection (2) and the amount each program is reduced.
426          (4) Except as provided in Subsections (5) and (6), the requirement to spend a specified
427     amount in any particular program is waived if reductions are made pursuant to Subsection (2).
428          (5) A school district or charter school may not reduce or reallocate spending of funds
429     distributed to the school district or charter school for the following programs:
430          (a) educator salary adjustments provided in Section 53A-17a-153;
431          (b) the Teacher Salary Supplement Program provided in Section 53A-17a-156;
432          (c) the extended year for special educators provided in Section 53A-17a-158;
433          (d) USTAR centers provided in Section 53A-17a-159;
434          (e) the School LAND Trust Program created in Section 53A-16-101.5; or
435          (f) a special education program within the Basic School Program.
436          (6) A school district or charter school may not reallocate spending of funds distributed
437     to the school district or charter school to a reserve account.
438          (7) A school district or charter school that reduces or reallocates funds in accordance
439     with this section shall report all transfers into, or out of, Minimum School Program programs
440     to the State Board of Education as part of the school district or charter school's Annual
441     Financial and Program report.
442          Section 8. Section 59-2-924.2 is amended to read:
443          59-2-924.2. Adjustments to the calculation of a taxing entity's certified tax rate.
444          (1) For purposes of this section, "certified tax rate" means a certified tax rate calculated
445     in accordance with Section 59-2-924.
446          (2) Beginning January 1, 1997, if a taxing entity receives increased revenues from
447     uniform fees on tangible personal property under Section 59-2-404, 59-2-405, 59-2-405.1,
448     59-2-405.2, or 59-2-405.3 as a result of any county imposing a sales and use tax under Chapter
449     12, Part 11, County Option Sales and Use Tax, the taxing entity shall decrease its certified tax
450     rate to offset the increased revenues.
451          (3) (a) Beginning July 1, 1997, if a county has imposed a sales and use tax under
452     Chapter 12, Part 11, County Option Sales and Use Tax, the county's certified tax rate shall be:
453          (i) decreased on a one-time basis by the amount of the estimated sales and use tax
454     revenue to be distributed to the county under Subsection 59-12-1102(3); and
455          (ii) increased by the amount necessary to offset the county's reduction in revenue from
456     uniform fees on tangible personal property under Section 59-2-404, 59-2-405, 59-2-405.1,
457     59-2-405.2, or 59-2-405.3 as a result of the decrease in the certified tax rate under Subsection
458     (3)(a)(i).
459          (b) The commission shall determine estimates of sales and use tax distributions for
460     purposes of Subsection (3)(a).
461          (4) Beginning January 1, 1998, if a municipality has imposed an additional resort
462     communities sales and use tax under Section 59-12-402, the municipality's certified tax rate
463     shall be decreased on a one-time basis by the amount necessary to offset the first 12 months of
464     estimated revenue from the additional resort communities sales and use tax imposed under
465     Section 59-12-402.
466          (5) (a) This Subsection (5) applies to each county that:
467          (i) establishes a countywide special service district under Title 17D, Chapter 1, Special
468     Service District Act, to provide jail service, as provided in Subsection 17D-1-201(10); and
469          (ii) levies a property tax on behalf of the special service district under Section
470     17D-1-105.
471          (b) (i) The certified tax rate of each county to which this Subsection (5) applies shall be
472     decreased by the amount necessary to reduce county revenues by the same amount of revenues
473     that will be generated by the property tax imposed on behalf of the special service district.
474          (ii) Each decrease under Subsection (5)(b)(i) shall occur contemporaneously with the
475     levy on behalf of the special service district under Section 17D-1-105.
476          (6) (a) As used in this Subsection (6):
477          (i) "Annexing county" means a county whose unincorporated area is included within a
478     public safety district by annexation.
479          (ii) "Annexing municipality" means a municipality whose area is included within a
480     public safety district by annexation.
481          (iii) "Equalized public safety protection tax rate" means the tax rate that results from:
482          (A) calculating, for each participating county and each participating municipality, the
483     property tax revenue necessary:
484          (I) in the case of a fire district, to cover all of the costs associated with providing fire
485     protection, paramedic, and emergency services:
486          (Aa) for a participating county, in the unincorporated area of the county; and
487          (Bb) for a participating municipality, in the municipality; or
488          (II) in the case of a police district, to cover all the costs:
489          (Aa) associated with providing law enforcement service:
490          (Ii) for a participating county, in the unincorporated area of the county; and
491          (IIii) for a participating municipality, in the municipality; and
492          (Bb) that the police district board designates as the costs to be funded by a property
493     tax; and
494          (B) adding all the amounts calculated under Subsection (6)(a)(iii)(A) for all
495     participating counties and all participating municipalities and then dividing that sum by the
496     aggregate taxable value of the property, as adjusted in accordance with Section 59-2-913:
497          (I) for participating counties, in the unincorporated area of all participating counties;
498     and
499          (II) for participating municipalities, in all the participating municipalities.
500          (iv) "Fire district" means a service area under Title 17B, Chapter 2a, Part 9, Service
501     Area Act:
502          (A) created to provide fire protection, paramedic, and emergency services; and
503          (B) in the creation of which an election was not required under Subsection
504     17B-1-214(3)(c).
505          (v) "Participating county" means a county whose unincorporated area is included
506     within a public safety district at the time of the creation of the public safety district.
507          (vi) "Participating municipality" means a municipality whose area is included within a
508     public safety district at the time of the creation of the public safety district.
509          (vii) "Police district" means a service area under Title 17B, Chapter 2a, Part 9, Service
510     Area Act, within a county of the first class:
511          (A) created to provide law enforcement service; and
512          (B) in the creation of which an election was not required under Subsection
513     17B-1-214(3)(c).
514          (viii) "Public safety district" means a fire district or a police district.
515          (ix) "Public safety service" means:
516          (A) in the case of a public safety district that is a fire district, fire protection,
517     paramedic, and emergency services; and
518          (B) in the case of a public safety district that is a police district, law enforcement
519     service.
520          (b) In the first year following creation of a public safety district, the certified tax rate of
521     each participating county and each participating municipality shall be decreased by the amount
522     of the equalized public safety tax rate.
523          (c) In the first budget year following annexation to a public safety district, the certified
524     tax rate of each annexing county and each annexing municipality shall be decreased by an
525     amount equal to the amount of revenue budgeted by the annexing county or annexing
526     municipality:
527          (i) for public safety service; and
528          (ii) in:
529          (A) for a taxing entity operating under a January 1 through December 31 fiscal year,
530     the prior calendar year; or
531          (B) for a taxing entity operating under a July 1 through June 30 fiscal year, the prior
532     fiscal year.
533          (d) Each tax levied under this section by a public safety district shall be considered to
534     be levied by:
535          (i) each participating county and each annexing county for purposes of the county's tax
536     limitation under Section 59-2-908; and
537          (ii) each participating municipality and each annexing municipality for purposes of the
538     municipality's tax limitation under Section 10-5-112, for a town, or Section 10-6-133, for a
539     city.
540          (e) The calculation of a public safety district's certified tax rate for the year of
541     annexation shall be adjusted to include an amount of revenue equal to one half of the amount
542     of revenue budgeted by the annexing entity for public safety service in the annexing entity's
543     prior fiscal year if:
544          (i) the public safety district operates on a January 1 through December 31 fiscal year;
545          (ii) the public safety district approves an annexation of an entity operating on a July 1
546     through June 30 fiscal year; and
547          (iii) the annexation described in Subsection (6)(e)(ii) takes effect on July 1.
548          (7) (a) The base taxable value under Subsection 17C-1-102(6) shall be reduced for any
549     year to the extent necessary to provide a community development and renewal agency
550     established under Title 17C, Limited Purpose Local Government Entities - Community
551     Development and Renewal Agencies Act, with approximately the same amount of money the
552     agency would have received without a reduction in the county's certified tax rate, calculated in
553     accordance with Section 59-2-924, if:
554          (i) in that year there is a decrease in the certified tax rate under Subsection (2) or (3)(a);
555          (ii) the amount of the decrease is more than 20% of the county's certified tax rate of the
556     previous year; and
557          (iii) the decrease results in a reduction of the amount to be paid to the agency under
558     Section 17C-1-403 or 17C-1-404.
559          (b) The base taxable value under Subsection 17C-1-102(6) shall be increased in any
560     year to the extent necessary to provide a community development and renewal agency with
561     approximately the same amount of money as the agency would have received without an
562     increase in the certified tax rate that year if:
563          (i) in that year the base taxable value under Subsection 17C-1-102(6) is reduced due to
564     a decrease in the certified tax rate under Subsection (2) or (3)(a); and
565          (ii) the certified tax rate of a city, school district, local district, or special service
566     district increases independent of the adjustment to the taxable value of the base year.
567          (c) Notwithstanding a decrease in the certified tax rate under Subsection (2) or (3)(a),
568     the amount of money allocated and, when collected, paid each year to a community
569     development and renewal agency established under Title 17C, Limited Purpose Local
570     Government Entities - Community Development and Renewal Agencies Act, for the payment
571     of bonds or other contract indebtedness, but not for administrative costs, may not be less than
572     that amount would have been without a decrease in the certified tax rate under Subsection (2)
573     or (3)(a).
574          (8) (a) For the calendar year beginning on January 1, 2014, the calculation of a county
575     assessing and collecting levy shall be adjusted by the amount necessary to offset:
576          (i) any change in the certified tax rate that may result from amendments to Part 16,
577     Multicounty Assessing and Collecting Levy, in Laws of Utah 2014, Chapter 270, Section 3;
578     and
579          (ii) the difference in the amount of revenue a taxing entity receives from or contributes
580     to the Property Tax Valuation Agency Fund, created in Section 59-2-1602, that may result from
581     amendments to Part 16, Multicounty Assessing and Collecting Levy, in Laws of Utah 2014,
582     Chapter 270, Section 3.
583          (b) A taxing entity is not required to comply with the notice and public hearing
584     requirements in Section 59-2-919 for an adjustment to the county assessing and collecting levy
585     described in Subsection (8)(a).
586          (9) (a) For the calendar year beginning on January 1, 2017, the commission shall
587     increase or decrease a school district's certified tax rate to offset a change in revenues from the
588     calendar year beginning on January 1, 2016, to the calendar year beginning on January 1, 2017,
589     as follows:
590          (i) the commission shall increase a school district's certified tax rate by the amount
591     necessary to offset a decrease in revenues that may result from the repeal of Section 59-2-924.3
592     on December 31, 2016; and
593          (ii) the commission shall decrease a school district's certified tax rate by the amount
594     necessary to offset an increase in revenues that may result from the repeal of Section
595     59-2-924.3 on December 31, 2016.
596          (b) (i) A school district is not required to comply with the notice and public hearing
597     requirements of Section 59-2-919 for an offset to the certified tax rate described in Subsection
598     (9)(a).
599          (ii) If a school district's certified tax rate is increased in accordance with Subsection
600     (9)(a)(i), the school district shall:
601          (A) on or before June 15, 2017, publish the statement provided in Subsection (9)(c)
602     one or more times in a newspaper or combination of newspapers of general circulation in the
603     taxing entity, in a portion of the newspaper where legal notices and classified advertisements
604     do not appear;
605          (B) on or before June 30, 2017, read the statement provided in Subsection (9)(c) at a
606     public meeting of the school district; and
607          (C) if the school district maintains a database containing electronic mail addresses of
608     one or more persons who reside within the school district boundaries, send the statement
609     provided in Subsection (9)(c) to those electronic mail addresses.
610          (c) For purposes of Subsection (9)(b)(ii), the statement is: "For calendar year 2017, the
611     State Tax Commission is required to increase a property tax rate of this school district to offset
612     a loss in revenue due to the repeal of a statute to equalize certain school district property taxes.
613     This offset may result in an increase in your property taxes."
614          (10) (a) As used in this Subsection (10):
615          (i) "District local property tax revenues" means the same as that term is defined in
616     Section 53A-1a-513.1.
617          (ii) "District per pupil local revenues" means an amount equal to the following, using
618     data from the most recently published school district annual financial reports and state
619     superintendent's annual report:
620          (A) district local property tax revenues; divided by
621          (B) the sum of a school district's average daily membership and the average daily
622     membership of a school district's resident students who attend charter schools.
623          (iii) "Resident student" means a student who is considered a resident of the school
624     district under Title 53A, Chapter 2, Part 2, District of Residency.
625          (b) For the calendar year beginning on January 1, 2017, and ending on December 31,
626     2017, the commission shall decrease a school district's certified tax rate by the amount
627     necessary to offset the increase in revenue from the charter school tax imposed under Section
628     53A-1a-513.1 equal to 25% of district per pupil local revenues.
629          (c) A local school board is not required to comply with the notice and public hearing
630     requirements of Section 59-2-919 for an offset to the increase described in Subsection (10)(b).
631          Section 9. Section 63I-1-259 is amended to read:
632          63I-1-259. Repeal dates, Title 59.
633          (1) Subsection 59-2-924(3)(g) is repealed on December 31, 2016.
634          (2) [Subsection] Subsections 59-2-924.2(9) [is] and (10) are repealed on December 31,
635     2017.
636          (3) Section 59-2-924.3 is repealed on December 31, 2016.
637          (4) Section 59-7-618 is repealed July 1, 2020.
638          (5) Section 59-9-102.5 is repealed December 31, 2020.
639          (6) Section 59-10-1033 is repealed July 1, 2020.
640          (7) Subsection 59-12-2219(10) is repealed on June 30, 2020.
641          Section 10. Appropriation.
642          Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, for
643     the fiscal year beginning July 1, 2017, and ending June 30, 2018, the following sums of money
644     are appropriated from resources not otherwise appropriated, or reduced from amounts
645     previously appropriated, out of the funds or amounts indicated. These sums of money are in
646     addition to amounts previously appropriated for fiscal year 2018.
647          To State Board of Education - Minimum School Program -
648           Related to Basic School Program
649               From Education Fund
($99,946,200)

650               Schedule of Programs:
651                    Charter School Local Replacement          ($99,946,200)
652          To State Board of Education - Minimum School Program - Basic School Program
653               From Education Fund Restricted - Class Size Reduction Account
$99,946,200

654               Schedule of Programs:
655                    Class Size Reduction (32,324 WPUs)     $99,946,200
656          To Fund and Account Transfers - Education Fund Restricted -
657           Class Size Reduction Account
658               From Education Fund
$99,946,200

659               Schedule of Programs:
660                    Class Size Reduction Account          $99,946,200
661          Section 11. Effective date.
662          (1) Section 53A-1a-513.1 takes effect on January 1, 2017.
663          (2) Except as provided in Subsection (1), this bill takes effect on July 1, 2017.




Legislative Review Note
Office of Legislative Research and General Counsel