This document includes House Committee Amendments incorporated into the bill on Mon, Mar 11, 2019 at 5:33 PM by pflowers.

1 **MODIFICATIONS TO EDUCATION FUNDING**

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**Chief Sponsor: Norman K. Thurston**

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**LONG TITLE**

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**General Description:**

9 This bill amends provisions regarding public education funding.

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**Highlighted Provisions:**

11 This bill:

12 ▸ establishes a limit on the amount of an increase to the value of the weighted pupil

13 unit funded through the weighted pupil unit value tax rate;

14 ▸ requires a local education agency governing board to hold a public meeting

15 regarding the use of funds from the Teacher and Student Success Account; and

16 ▸ makes technical and conforming changes.

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**Money Appropriated in this Bill:**

18 None

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**Other Special Clauses:**

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**Ĥ→ [**

~~None~~]

__This bill provides a coordination clause.__←Ĥ21

**Utah Code Sections Affected:**

22 AMENDS:

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**53F-2-301**, as last amended by Laws of Utah 2018, Chapters 6, 456 and renumbered

24 and amended by Laws of Utah 2018, Chapter 2

25

**53F-2-301.5**, as enacted by Laws of Utah 2018, Chapter 456

26 ENACTS:

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**53G-7-217**, Utah Code Annotated 1953

27a

**Ĥ→**

__Utah Code Sections Affected by Coordination Clause:__27b

__53G-2-217, Utah Code Annotated 1953__←Ĥ28

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*Be it enacted by the Legislature of the state of Utah:*

30 Section 1. Section

**53F-2-301**is amended to read:

31

**53F-2-301.**

**Minimum basic tax rate for a fiscal year that begins after July 1, 2022.**

32 (1) The provisions of this section are not in effect for a fiscal year that begins on July 1,

33 2018, 2019, 2020, 2021, or 2022.

34 (2) As used in this section:

35 (a) "Basic levy increment rate" means a tax rate that will generate an amount of

36 revenue equal to $75,000,000.

37 (b) "Combined basic rate" means a rate that is the sum of:

38 (i) the minimum basic tax rate; and

39 (ii) the WPU value rate.

40 (c) "Commission" means the State Tax Commission.

41 (d) "Equity pupil tax rate" means the tax rate that will generate an amount of revenue

42 equal to the amount generated by the equity pupil tax rate as defined in Section 53F-2-301.5 in

43 the fiscal year that begins July 1, 2022.

44 (e) "Minimum basic local amount" means an amount that is:

45 (i) equal to the sum of:

46 (A) the school districts' contribution to the basic school program the previous fiscal

47 year;

48 (B) the amount generated by the basic levy increment rate;

49 (C) the amount generated by the equity pupil tax rate; and

50 (D) the eligible new growth, as defined in Section 59-2-924 and rules of the State Tax

51 Commission multiplied by the minimum basic rate; and

52 (ii) set annually by the Legislature in Subsection (3)(a).

53 (f) "Minimum basic tax rate" means a tax rate certified by the commission that will

54 generate an amount of revenue equal to the minimum basic local amount described in

55 Subsection (3)(a).

56 (g) "Weighted pupil unit value" or "WPU value" means the amount established each

57 year in the enacted public education budget that is multiplied by the number of weighted pupil

58 units to yield the funding level for the basic school program.

59 (h) "WPU value amount" means an amount:

60 (i) that is equal to the product of:

61 (A) [

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__the WPU value increase limit__; and

63 (B) the percentage share of local revenue to the cost of the basic school program in the

64 immediately preceding fiscal year; and

65 (ii) set annually by the Legislature in Subsection (4)(a).

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__(i) "WPU value increase limit" means the lesser of:__

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__(i) the total cost to the basic school program to increase the WPU value over the WPU__

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__value in the prior fiscal year; or__

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__(ii) the total cost to the basic school program to increase the WPU value by__

**Ĥ→ [**

]

__3__

__4__←Ĥ__%__

69a

__over__

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__the WPU value in the prior fiscal year.__

71 [

__(j)__"WPU value rate" means a tax rate certified by the commission that will

72 generate an amount of revenue equal to the WPU value amount described in Subsection (4)(a).

73 (3) (a) The minimum basic local amount for the fiscal year that begins on July 1, 2018,

74 is $408,073,800 in revenue statewide.

75 (b) The preliminary estimate of the minimum basic tax rate for a fiscal year that begins

76 on July 1, 2018, is .001498.

77 (4) (a) The WPU value amount for the fiscal year that begins on July 1, 2018, is

78 $18,650,000 in revenue statewide.

79 (b) The preliminary estimate of the WPU value rate for the fiscal year that begins on

80 July 1, 2018, is .000069.

81 (5) (a) On or before June 22, the commission shall certify for the year:

82 (i) the minimum basic tax rate; and

83 (ii) the WPU value rate.

84 (b) The estimate of the minimum basic tax rate provided in Subsection (3)(b) and the

85 estimate of the WPU value rate provided in Subsection (4)(b) are based on a forecast for

86 property values for the next calendar year.

87 (c) The certified minimum basic tax rate described in Subsection (5)(a)(i) and the

88 certified WPU value rate described in Subsection (5)(a)(ii) are based on property values as of

89 January 1 of the current calendar year, except personal property, which is based on values from

90 the previous calendar year.

91 (6) (a) To qualify for receipt of the state contribution toward the basic school program

92 and as a school district's contribution toward the cost of the basic school program for the school

93 district, each local school board shall impose the combined basic rate.

94 (b) (i) The state is not subject to the notice requirements of Section 59-2-926 before

95 imposing the tax rates described in this Subsection (6).

96 (ii) (A) Except as provided in Subsection (6)(b)(ii)(B), the state is subject to the notice

97 requirements of Section 59-2-926 if the state authorizes a tax rate that exceeds the tax rates

98 described in this Subsection (6).

99 (B) For a calendar year that begins on January 1, 2018, the state is not subject to the

100 notice and public hearing requirements of Section 59-2-926 if the state authorizes a combined

101 basic rate that exceeds the tax rates authorized in this section.

102 (7) (a) The state shall contribute to each school district toward the cost of the basic

103 school program in the school district an amount of money that is the difference between the

104 cost of the school district's basic school program and the sum of revenue generated by the

105 school district by the following:

106 (i) the combined basic rate;

107 (ii) the basic levy increment rate; and

108 (iii) the equity pupil tax rate.

109 (b) (i) If the difference described in Subsection (7)(a) equals or exceeds the cost of the

110 basic school program in a school district, no state contribution shall be made to the basic

111 school program for the school district.

112 (ii) The proceeds of the difference described in Subsection (7)(a) that exceed the cost

113 of the basic school program shall be paid into the Uniform School Fund as provided by law and

114 by the close of the fiscal year in which the proceeds were calculated.

115 (8) Upon appropriation by the Legislature, the Division of Finance shall deposit an

116 amount equal to the proceeds generated statewide:

117 (a) by the basic levy increment rate into the Minimum Basic Growth Account created

118 in Section 53F-9-302;

119 (b) by the equity pupil tax rate into the Local Levy Growth Account created in Section

120 53F-9-305; and

121 (c) by the WPU value rate into the Teacher and Student Success Account created in

122 Section 53F-9-306.

123 (9) After July 1, 2022, but before November 30, 2022, the Public Education

124 Appropriations Subcommittee:

125 (a) shall review the WPU value rate, the impact of revenues generated by the WPU

126 value rate on public education funding, and whether local school boards should continue to

127 levy the WPU value rate; and

128 (b) may recommend an increase, repeal, or continuance of the WPU value rate.

129 Section 2. Section

**53F-2-301.5**is amended to read:

130

**53F-2-301.5.**

**Minimum basic tax rate for a fiscal year that begins on July 1, 2018,**

131

**2019, 2020, 2021, or 2022.**

132 (1) The provisions of this section are in effect for a fiscal year that begins before July 1,

133 2023.

134 (2) As used in this section:

135 (a) "Basic levy increment rate" means a tax rate that will generate an amount of

136 revenue equal to $75,000,000.

137 (b) "Combined basic rate" means a rate that is the sum of:

138 (i) the rate floor; and

139 (ii) the WPU value rate.

140 (c) "Commission" means the State Tax Commission.

141 (d) "Equity pupil tax rate" means the tax rate that is:

142 (i) calculated by subtracting the minimum basic tax rate from the rate floor; or

143 (ii) zero, if the rate calculated in accordance with Subsection (2)(d)(i) is zero or less.

144 (e) "Minimum basic local amount" means an amount that is:

145 (i) equal to the sum of:

146 (A) the school districts' contribution to the basic school program the previous fiscal

147 year;

148 (B) the amount generated by the basic levy increment rate; and

149 (C) the eligible new growth, as defined in Section 59-2-924 and rules of the State Tax

150 Commission multiplied by the minimum basic tax rate; and

151 (ii) set annually by the Legislature in Subsection (3)(a).

152 (f) "Minimum basic tax rate" means a tax rate certified by the commission that will

153 generate an amount of revenue equal to the minimum basic local amount described in

154 Subsection (3)(a).

155 (g) "Rate floor" means a rate that is the greater of:

156 (i) a .0016 tax rate; or

157 (ii) the minimum basic tax rate.

158 (h) "Weighted pupil unit value" or "WPU value" means the amount established each

159 year in the enacted public education budget that is multiplied by the number of weighted pupil

160 units to yield the funding level for the basic school program.

161 (i) "WPU value amount" means an amount that is:

162 (i) equal to the product of:

163 (A) [

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__the WPU value increase limit__; and

165 (B) the percentage share of local revenue to the cost of the basic school program in the

166 prior fiscal year; and

167 (ii) set annually by the Legislature in Subsection (4)(a).

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__(j) "WPU value increase limit" means the lesser of:__

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__(i) the total cost to the basic school program to increase the WPU value over the WPU__

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__value in the prior fiscal year; or__

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__(ii) the total cost to the basic school program to increase the WPU value by__

**Ĥ→ [**

]

__3__

__4__←Ĥ__%__

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__over__

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__the WPU value in the prior fiscal year.__

173 [

__(k)__"WPU value rate" means a tax rate certified by the commission that will

174 generate an amount of revenue equal to the WPU value amount described in Subsection (4)(a).

175 (3) (a) The minimum basic local amount for the fiscal year that begins on July 1, 2018,

176 is $408,073,800 in revenue statewide.

177 (b) The preliminary estimate for the minimum basic tax rate for the fiscal year that

178 begins on July 1, 2018, is .001498.

179 (4) (a) The WPU value amount for the fiscal year that begins on July 1, 2018, is

180 $18,650,000 in revenue statewide.

181 (b) The preliminary estimate for the WPU value rate for the fiscal year that begins on

182 July 1, 2018, is .000069.

183 (5) (a) On or before June 22, the commission shall certify for the year:

184 (i) the minimum basic tax rate; and

185 (ii) the WPU value rate.

186 (b) The estimate of the minimum basic tax rate provided in Subsection (3)(b) and the

187 estimate of the WPU value rate provided in Subsection (4)(b) is based on a forecast for

188 property values for the next calendar year.

189 (c) The certified minimum basic tax rate described in Subsection (5)(a)(i) and the

190 certified WPU value rate described in Subsection (5)(a)(ii) are based on property values as of

191 January 1 of the current calendar year, except personal property, which is based on values from

192 the previous calendar year.

193 (6) (a) To qualify for receipt of the state contribution toward the basic school program

194 and as a school district's contribution toward the cost of the basic school program for the school

195 district, a local school board shall impose the combined basic rate.

196 (b) (i) The state is not subject to the notice requirements of Section 59-2-926 before

197 imposing the tax rates described in this Subsection (6).

198 (ii) The state is subject to the notice requirements of Section 59-2-926 if the state

199 authorizes a tax rate that exceeds the tax rates described in this Subsection (6).

200 (7) (a) The state shall contribute to each school district toward the cost of the basic

201 school program in the school district an amount of money that is the difference between the

202 cost of the school district's basic school program and the sum of the revenue generated by the

203 school district by the following:

204 (i) the minimum basic tax rate;

205 (ii) the basic levy increment rate;

206 (iii) the equity pupil tax rate; and

207 (iv) the WPU value rate.

208 (b) (i) If the difference described in Subsection (7)(a) equals or exceeds the cost of the

209 basic school program in a school district, no state contribution shall be made to the basic

210 school program for the school district.

211 (ii) The proceeds of the difference described in Subsection (7)(a) that exceed the cost

212 of the basic school program shall be paid into the Uniform School Fund as provided by law and

213 by the close of the fiscal year in which the proceeds were calculated.

214 (8) Upon appropriation by the Legislature, the Division of Finance shall deposit an

215 amount equal to the proceeds generated statewide:

216 (a) by the basic levy increment rate into the Minimum Basic Growth Account created

217 in Section 53F-9-302;

218 (b) by the equity pupil tax rate into the Local Levy Growth Account created in Section

219 53F-9-305; and

220 (c) by the WPU value rate into the Teacher and Student Success Account created in

221 Section 53F-9-306.

222 Section 3. Section

**53G-7-217**is enacted to read:

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__53G-7-217.__**Meeting requirement for using Teacher and Student Success Account**

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**funds.**

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__Before using funds distributed by the state board from the Teacher and Student Success__

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__Account described in Section 53F-9-306, an LEA governing board shall hold a meeting that is__

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__subject to Title 52, Chapter 4, Open and Public Meetings Act, to:__

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__(1) discuss how the LEA proposes to use the funds; and__

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__(2) allow for public comment on the proposed use of the funds.__

229a

**Ĥ→**

__Section 4. Coordinating H.B. 374 with S.B. 149 -- Substantive amendment.__229b

__If this H.B. 374 and S.B. 149, Teacher and Student Success Act, both pass and become__229c

__law, it is the intent of the Legislature that the Office of Legislative Research and General__229d

__Counsel, when preparing the Utah Code Database for publication, not enact Section 53G-7-__229e

__217.__←Ĥ