**EDUCATION FUNDING AMENDMENTS**

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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; and

14 ▸ makes technical and conforming changes.

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**Money Appropriated in this Bill:**

16 None

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**Other Special Clauses:**

18 None

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**Utah Code Sections Affected:**

20 AMENDS:

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

22 and amended by Laws of Utah 2018, Chapter 2

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**53F-2-301.5**, as last amended by Laws of Utah 2019, Chapter 408

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

26 Section 1. Section

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

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**53F-2-301.**

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

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

29 2018, 2019, 2020, 2021, or 2022.

30 (2) As used in this section:

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

32 revenue equal to $75,000,000.

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

34 (i) the minimum basic tax rate; and

35 (ii) the WPU value rate.

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

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

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

39 the fiscal year that begins July 1, 2022.

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

41 (i) equal to the sum of:

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

43 year;

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

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

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

47 Commission multiplied by the minimum basic rate; and

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

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

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

51 Subsection (3)(a).

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

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

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

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

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

57 (A) [

58 WPU value [

__increase limit__; and

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

60 immediately preceding fiscal year; and

61 (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 4% over__

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__the WPU value in the prior fiscal year.__

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

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

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

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

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

72 on July 1, 2018, is .001498.

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

74 $18,650,000 in revenue statewide.

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

76 July 1, 2018, is .000069.

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

78 (i) the minimum basic tax rate; and

79 (ii) the WPU value rate.

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

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

82 property values for the next calendar year.

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

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

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

86 the previous calendar year.

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

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

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

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

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

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

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

94 described in this Subsection (6).

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

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

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

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

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

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

101 school district by the following:

102 (i) the combined basic rate;

103 (ii) the basic levy increment rate; and

104 (iii) the equity pupil tax rate.

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

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

107 school program for the school district.

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

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

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

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

112 amount equal to the proceeds generated statewide:

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

114 in Section 53F-9-302;

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

116 53F-9-305; and

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

118 Section 53F-9-306.

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

120 Appropriations Subcommittee:

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

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

123 levy the WPU value rate; and

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

125 Section 2. Section

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

126

**53F-2-301.5.**

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

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

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

129 2023.

130 (2) As used in this section:

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

132 revenue equal to $75,000,000.

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

134 (i) the rate floor; and

135 (ii) the WPU value rate.

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

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

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

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

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

141 (i) equal to the sum of:

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

143 year;

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

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

146 Commission multiplied by the minimum basic tax rate; and

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

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

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

150 Subsection (3)(a).

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

152 (i) a .0016 tax rate; or

153 (ii) the minimum basic tax rate.

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

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

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

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

158 (i) equal to the product of:

159 (A) [

160 WPU value [

__increase limit__; and

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

162 prior fiscal year; and

163 (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 4% over__

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__the WPU value in the prior fiscal year.__

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

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

171 (3) (a) The minimum basic local amount for the fiscal year that begins on July 1, 2019,

172 is $490,684,600 in revenue statewide.

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

174 begins on July 1, 2019, is .001588.

175 (4) (a) The WPU value amount for the fiscal year that begins on July 1, 2019, is

176 $18,800,000 in revenue statewide.

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

178 July 1, 2019, is .000061.

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

180 (i) the minimum basic tax rate; and

181 (ii) the WPU value rate.

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

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

184 property values for the next calendar year.

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

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

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

188 the previous calendar year.

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

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

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

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

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

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

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

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

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

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

199 school district by the following:

200 (i) the minimum basic tax rate;

201 (ii) the basic levy increment rate;

202 (iii) the equity pupil tax rate; and

203 (iv) the WPU value rate.

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

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

206 school program for the school district.

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

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

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

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

211 amount equal to the proceeds generated statewide:

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

213 in Section 53F-9-302;

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

215 53F-9-305; and

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

217 Section 53F-9-306.