This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Wed, Mar 11, 2020 at 5:51 PM by lpoole.
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7 LONG TITLE
8 General Description:
9 This bill provides for growth and stabilization in public education funding.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines terms;
13 ▸ amends the allowable purposes for the capital local levy in certain circumstances;
14 ▸ provides for the Minimum School Program to be funded from the Uniform School
15 Fund;
16 ▸ provides for ongoing funding, including an additional amount for enrollment growth
17 and inflation, for the Minimum School Program;
18 ▸ provides for funding to and appropriations from a restricted account to stabilize
19 education funding in circumstances in which revenues are insufficient to fund the
20 public education system;
21 ▸ provides for certain tax revenue to be distributed to the Uniform School Fund; and
22 ▸ makes technical and conforming changes.
23 Money Appropriated in this Bill:
24 None
25 Other Special Clauses:
26 This bill provides a special effective date.
27 Utah Code Sections Affected:
28 AMENDS:
29 53F-8-303, as last amended by Laws of Utah 2018, Chapters 281, 288, 456 and
30 renumbered and amended by Laws of Utah 2018, Chapter 2
31 53F-9-201, as last amended by Laws of Utah 2019, Chapter 191
32 53F-9-204, as renumbered and amended by Laws of Utah 2018, Chapter 2
33 59-7-532, as last amended by Laws of Utah 2007, Chapter 122
34 59-10-544, as last amended by Laws of Utah 2009, Chapter 212
35 ENACTS:
36 53F-2-208, Utah Code Annotated 1953
37 53F-9-201.1, Utah Code Annotated 1953
38 REPEALS:
39 53F-9-202, as last amended by Laws of Utah 2019, Chapter 186
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41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 53F-2-208 is enacted to read:
43 53F-2-208. Cost of adjustments for growth and inflation.
44 (1) In accordance with Subsection (2), the Legislature shall annually determine:
45 (a) the estimated state cost of adjusting for inflation in the next fiscal year, based on a
46 rolling five-year average ending in the current fiscal year, ongoing state tax fund appropriations
47 to the following programs:
48 (i) education for youth in custody, described in Section 53E-3-503;
49 (ii) the Basic Program, described in Title 53F, Chapter 2, Part 3, Basic Program
50 (Weighted Pupil Units), except for charter school administration described in Section
51 53F-2-306;
52 (iii) the Adult Education Program, described in Section 53F-2-401;
52a Ŝ→ (iv) state support of pupil transportation, described in Section 53F-4-402; ←Ŝ
53 Ŝ→ [
54 53F-2-408;
55 Ŝ→ [
56 Ŝ→ [
56a 53F-2-410;
57 and
58 Ŝ→ [
59 (b) the estimated state cost of adjusting for enrollment growth, in the next fiscal year,
60 the current fiscal year's ongoing state tax fund appropriations to the following programs:
61 (i) a program described in Subsection (1)(a), including charter school administration
62 described in Section 53F-2-306;
63 (ii) educator salary adjustments, described in Section 53F-2-405;
64 (iii) the Teacher Salary Supplement Program, described in Section 53F-2-504;
65 (iv) the Voted and Board Local Levy Guarantee programs, described in Section
66 53F-2-601; and
67 (v) charter school local replacement funding, described in Section 53F-2-702.
68 (2) (a) In or before December each year, the Executive Appropriations Committee shall
69 determine:
70 (i) the cost of the inflation adjustment described in Subsection (1)(a); and
71 (ii) the cost of the enrollment growth adjustment described in Subsection (1)(b).
72 (b) The Executive Appropriations Committee shall make the determinations described
73 in Subsection (2)(a) based on recommendations developed by the Office of the Legislative
74 Fiscal Analyst, in consultation with the state board and the Governor's Office of Management
75 and Budget.
76 Section 2. Section 53F-8-303 is amended to read:
77 53F-8-303. Capital local levy.
78 (1) As used in this section:
79 (a) "Cost of the basic program" means the cost of the programs described in Title 53F,
80 Chapter 2, Part 3, Basic Program (Weighted Pupil Units) in a school district.
81 (b) "Low-revenue year" means a fiscal year for which the Legislature appropriates
82 ongoing funding from the Public Education Economic Stabilization Restricted Account under
83 Subsection 53F-9-204(3)(b).
84 [
85 levy a tax to fund the school district's:
86 (a) capital projects; [
87 (b) technology programs or projects[
88 (c) subject to Subsection (4), operational expenses for a low-revenue year.
89 [
90 .0030 per dollar of taxable value in any calendar year.
91 (4) For a low-revenue year, a local school board may transfer an amount of revenue
92 from the school district's capital project fund to the school district's general fund for the local
93 school board's school district for operational expenses in an amount equal to:
94 (a) for a local school board in a county of the first, second, or third class, revenue
95 generated by up to .0002 per dollar of taxable value of the capital local levy; or
96 (b) for a local school board in a county of the fourth, fifth, or sixth class, up to the
97 lesser of:
98 (i) 10% of the cost of the basic program; or
99 (ii) 25% of the revenue that the school district's capital local levy generates.
100 (5) The state board shall notify local school boards, school district superintendents, and
101 business administrators in the event of a low-revenue year.
102 Section 3. Section 53F-9-201 is amended to read:
103 53F-9-201. Uniform School Fund -- Contents -- Trust Distribution Account.
104 (1) As used in this section:
105 (a) "Annual distribution calculation" means, for a given fiscal year, the average of:
106 (i) 4% of the average market value of the State School Fund for that fiscal year; and
107 (ii) the distribution amount for the prior fiscal year, multiplied by the sum of:
108 (A) one;
109 (B) the percent change in student enrollment from the school year two years prior to
110 the prior school year; and
111 (C) the actual total percent change of the consumer price index during the last 12
112 months as measured in June of the prior fiscal year.
113 (b) "Average market value of the State School Fund" means the results of a calculation
114 completed by the SITFO director each fiscal year that averages the value of the State School
115 Fund for the past 12 consecutive quarters ending in the prior fiscal year.
116 (c) "Consumer price index" means the Consumer Price Index for All Urban
117 Consumers: All Items Less Food & Energy, as published by the Bureau of Labor Statistics of
118 the United States Department of Labor.
119 (d) "SITFO director" means the director of the School and Institutional Trust Fund
120 Office appointed under Section 53D-1-401.
121 (e) "State School Fund investment earnings distribution amount" or "distribution
122 amount" means, for a fiscal year, the lesser of:
123 (i) the annual distribution calculation; or
124 (ii) 4% of the average market value of the State School Fund.
125 (2) The Uniform School Fund, a special revenue fund within the Education Fund,
126 established by Utah Constitution, Article X, Section 5, consists of:
127 (a) distributions derived from the investment of money in the permanent State School
128 Fund established by Utah Constitution, Article X, Section 5;
129 (b) money transferred to the fund pursuant to Title 67, Chapter 4a, Revised Uniform
130 Unclaimed Property Act; and
131 (c) all other constitutional or legislative allocations to the fund, including:
132 (i) appropriations for the Minimum School Program, enrollment growth, and inflation
133 under Section 53F-9-201.1; and
134 (ii) revenues received by donation.
135 (3) (a) There is created within the Uniform School Fund a restricted account known as
136 the Trust Distribution Account.
137 (b) The Trust Distribution Account consists of:
138 (i) in accordance with Subsection (4), quarterly deposits of the State School Fund
139 investment earnings distribution amount from the prior fiscal year;
140 (ii) all interest earned on the Trust Distribution Account in the prior fiscal year; and
141 (iii) any unused appropriation for the administration of the School LAND Trust
142 Program, as described in Subsection 53F-2-404(1)(c).
143 (4) If, at the end of a fiscal year, the Trust Distribution Account has a balance
144 remaining after subtracting the appropriation amount described in Subsection 53F-2-404(1)(a)
145 for the next fiscal year, the SITFO director shall, during the next fiscal year, apply the amount
146 of the remaining balance from the prior fiscal year toward the current fiscal year's distribution
147 amount by reducing a quarterly deposit to the Trust Distribution Account by the amount of the
148 remaining balance from the prior fiscal year.
149 (5) On or before October 1 of each year, the SITFO director shall:
150 (a) in accordance with this section, determine the distribution amount for the following
151 fiscal year; and
152 (b) report the amount described in Subsection (5)(a) as the funding amount, described
153 in Subsection 53F-2-404(1)(c), for the School LAND Trust Program, to:
154 (i) the State Treasurer;
155 (ii) the Legislative Fiscal Analyst;
156 (iii) the Division of Finance;
157 (iv) the director of the Land Trusts Protection and Advocacy Office, appointed under
158 Section 53D-2-203;
159 (v) the School and Institutional Trust Lands Administration created in Section
160 53C-1-201;
161 (vi) the State Board of Education; and
162 (vii) the Governor's Office of Management and Budget.
163 (6) The School and Institutional Trust Fund Board of Trustees created in Section
164 53D-1-301 shall:
165 (a) annually review the distribution amount; and
166 (b) make recommendations, if necessary, to the Legislature for changes to the formula
167 for calculating the distribution amount.
168 (7) Upon appropriation by the Legislature, the SITFO director shall place in the Trust
169 Distribution Account funds for the School LAND Trust Program as described in Subsections
170 53F-2-404(1)(a) and (c).
171 Section 4. Section 53F-9-201.1 is enacted to read:
172 53F-9-201.1. Appropriations to the Minimum School Program from the Uniform
173 School Fund.
174 (1) As used in this section:
175 (a) "Base budget" means the same as that term is defined in legislative rule.
176 (b) "Enrollment growth and inflation estimates" means the cost estimates regarding
177 enrollment growth and inflation described in Section 53F-2-208.
178 (2) Except as provided in Subsection 53F-9-204(3), for a fiscal year beginning on or
179 after July 1, 2021, when preparing the Public Education Base Budget, the Office of the
180 Legislative Fiscal Analyst shall include appropriations to the Minimum School Program from
181 the Uniform School Fund, and, subject to Subsection 53F-9-204(3), the Public Education
182 Economic Stabilization Restricted Account, in an amount that is greater than or equal to Ŝ→ the
182a sum of ←Ŝ :
183 (a) the ongoing Education Fund and Uniform School Fund appropriations to the
184 Minimum School Program in the current fiscal year; and
185 (b) subject to Subsection 53F-9-204(3)(b), enrollment growth and inflation estimates.
186 (3) The total annual amount deposited into the Uniform School Fund, including the
187 deposits through the distributions described in Sections 59-7-532 and 59-10-544, for a given
188 fiscal year may not exceed the amount appropriated from the Uniform School Fund for that
189 fiscal year.
190 Section 5. Section 53F-9-204 is amended to read:
191 53F-9-204. Public Education Economic Stabilization Restricted Account.
192 (1) There is created within the Uniform School Fund a restricted account known as the
193 "[
194 Account."
195 (2) (a) [
196 the following revenue sources:
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201 [
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203 (i) 15% of the difference between, as determined by the Office of the Legislative Fiscal
204 Analyst:
205 (A) the estimated amount of ongoing Education Fund and Uniform School Fund
206 revenue available for the Legislature to appropriate for the next fiscal year; and
207 (B) the amount of ongoing appropriations from the Education Fund and Uniform
208 School Fund in the current fiscal year; and
209 (ii) other appropriations as the Legislature may designate.
210 (b) If the appropriation described in Subsection (2)(a) would cause the ongoing
211 appropriations to the account to exceed 11% of Uniform School Fund appropriations described
212 in Section 53F-9-201.1 for the same fiscal year, the Legislature shall appropriate only those
213 funds necessary to ensure that the ongoing appropriations to the account equal 11% of Uniform
214 School Fund appropriations for that fiscal year.
215 (3) Subject to the availability of ongoing appropriations to the account, in accordance
216 with Utah Constitution, Article X, Section 5, Subsection (4), the ongoing appropriation to the
217 account shall be used to fund:
218 (a) except for a year described in Subsection (3)(b), one-time appropriations to the
219 public education system; and
220 (b) the Minimum School Program for a year in which Education Fund revenue and
221 Uniform School Fund revenue are insufficient to fund:
222 (i) ongoing appropriations to the public education system; and
223 (ii) enrollment growth and inflation estimates, as defined in Section 53F-9-201.1.
224 (4) (a) The account shall earn interest.
225 (b) All interest earned on account money shall be deposited in the account.
226 (5) On or before December 31, 2023, and every three years thereafter, the Office of the
227 Legislative Fiscal Analyst shall:
228 (a) review the percentages described in Subsections Ŝ→ [
228a (2) ←Ŝ (b); and
229 (b) recommend to the Executive Appropriations Subcommittee any changes based on
230 the review described in Subsection (5)(a).
231 Section 6. Section 59-7-532 is amended to read:
232 59-7-532. Revenue received by commission -- Deposit with state treasurer --
233 Distribution or crediting to Education Fund -- Refund claim payments.
234 (1) (a) [
235 received by the commission under this chapter [
236 treasurer. [
237 (b) The commission shall, subject to the refund provisions of this section, [
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239 rata share of Education Fund and Uniform School Fund appropriations for the current fiscal
240 year, the revenue described in Subsection (1)(a) to:
241 (i) the Education Fund[
242 (ii) the Uniform School Fund in accordance with Section 53F-9-201.1.
243 (c) The commission may credit to or draw from the Education Fund and the Uniform
244 School Fund:
245 (i) annually to adjust for differences between estimates and actual amounts; or
246 (ii) in the proportion described in Subsection (1)(b) to issue a refund.
247 (2) The commission shall from time to time certify to the state auditor the amount of
248 any refund authorized by it, the amount of interest computed on it under the provisions of
249 Section 59-7-533, from whom the tax to be refunded was collected, or by whom it was paid,
250 and such refund claims shall be paid in order out of the funds first accruing to the Education
251 Fund from the provisions of this section.
252 Section 7. Section 59-10-544 is amended to read:
253 59-10-544. General powers and duties of the commission -- Deposit, distribution,
254 or credit of revenues -- Refund reverts to state under certain circumstances.
255 (1) (a) The commission shall administer and enforce a tax imposed under this chapter
256 for which purpose it may divide the state into districts in each of which a branch office of the
257 commission may be maintained.
258 (b) A county may not be divided in forming a district.
259 (2) (a) The commission shall [
260 received by the commission under this chapter with the state treasurer.
261 (b) Subject to Sections 59-10-529 and 59-10-531, the [
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263 credit, at least quarterly and based on a pro rata share of Education Fund and Uniform School
264 Fund appropriations for the current fiscal year, the revenue described in Subsection (2)(a) to:
265 (i) the Education Fund[
266 (ii) the Uniform School Fund in accordance with Section 53F-9-201.1.
267 (c) The commission may credit to or draw from the Education Fund and the Uniform
268 School Fund:
269 (i) annually to adjust for differences between estimates and actual amounts; or
270 (ii) in the proportion described in Subsection (2)(b) to issue a refund.
271 [
272 date the commission issues the refund:
273 (i) the refund reverts to the state to be credited to the Education Fund; and
274 (ii) no further claim may be made on the commission for the amount of the refund.
275 Section 8. Repealer.
276 This bill repeals:
277 Section 53F-9-202, Duty of Division of Finance -- Apportionment of fund by state
278 board -- Certification of apportionments.
279 Section 9. Effective date.
280 This bill takes effect January 1, 2021, if the amendment to the Utah Constitution
281 proposed by S.J.R. 9, Proposal to Amend Utah Constitution - Use of Tax Revenue, 2020
282 General Session, passes the Legislature and is approved by a majority of those voting on it at
283 the next regular general election.