HOUSE BILL NO. 859

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H0859...............................................by REVENUE AND TAXATION
SALES TAX - PUBLIC SCHOOL FUNDING - Repeals and amends existing law to
increase the sales tax to 6%; and to remove the three-tenths of one percent
property tax levy for maintenance and operation of public schools.
                                                                        
03/29    House intro - 1st rdg - to printing
03/30    Rpt prt - to 2nd rdg
03/31    2nd rdg - to 3rd rdg
04/11    Ret'd to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 859
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO TAXATION POLICIES FOR FUNDING PUBLIC  SCHOOLS;   AMENDING  SECTION
  3        33-701,  IDAHO  CODE, TO DELETE REFERENCE TO SCHOOL MAINTENANCE AND OPERA-
  4        TION LEVIES AND TO MAKE TECHNICAL CORRECTIONS;  AMENDING  SECTION  33-802,
  5        IDAHO  CODE,  TO  DELETE  REFERENCE  TO SCHOOL DISTRICT LEVIES THAT MAY BE
  6        IMPOSED WITHOUT VOTER APPROVAL, TO PROVIDE BUDGET STABILIZATION LEVIES FOR
  7        CERTAIN DISTRICTS, TO DELETE THE LOCAL DISTRICT  CONTRIBUTION  FOR  SCHOOL
  8        FORMULA  PURPOSES, TO CONTINUE IN EFFECT ALL VOTER APPROVED LEVIES FOR THE
  9        TERM AUTHORIZED  AND  TO  MAKE  TECHNICAL  CORRECTIONS;  AMENDING  SECTION
 10        33-802A,  IDAHO  CODE,  TO  CLARIFY REFERENCES TO SCHOOL LEVIES; REPEALING
 11        SECTION 33-808, IDAHO CODE, RELATING TO NOTICE  OF  ADJUSTMENT  TO  MARKET
 12        VALUE  FOR  ASSESSMENT  PURPOSES  UPON TERMINATION OF A REVENUE ALLOCATION
 13        AREA; AMENDING SECTION 33-905, IDAHO CODE, TO PROVIDE A CORRECT CODE  REF-
 14        ERENCE AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-1002, IDAHO
 15        CODE, TO REVISE HOW THE EDUCATIONAL SUPPORT PROGRAM IS CALCULATED, TO PRO-
 16        VIDE  ELIGIBILITY FOR CHARTER DISTRICTS TO CONTINUE TO RECEIVE SCHOOL FOR-
 17        MULA MONEYS AND TO MAKE TECHNICAL CORRECTIONS; REPEALING SECTION 33-1002A,
 18        IDAHO CODE, RELATING TO THE  LOCAL  DISTRICT  CONTRIBUTION  REDUCTION  AND
 19        REPEALING  SECTION 33-1002D, IDAHO CODE, RELATING TO PROPERTY TAX REPLACE-
 20        MENT; AMENDING SECTION 33-1003, IDAHO CODE,  TO  DELETE  REFERENCE  TO  AN
 21        OBSOLETE  PROVISION AND TO MAKE TECHNICAL CORRECTIONS; TO PROVIDE THAT THE
 22        STATE DEPARTMENT OF EDUCATION SHALL UTILIZE  THE  PROVISIONS  OF  SECTIONS
 23        33-802,  33-1002,  33-1002A,  33-1002D  AND  33-1003,  IDAHO CODE, AS THEY
 24        EXISTED PRIOR TO AMENDMENT OR REPEAL BY THE PROVISIONS OF THIS ACT FOR THE
 25        PURPOSES OF FUNDING PUBLIC SCHOOLS THROUGH THE END OF  FISCAL  YEAR  2006;
 26        AMENDING  SECTION 33-1004, IDAHO CODE, TO PROVIDE A CORRECT CODE REFERENCE
 27        AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-1114, IDAHO  CODE,
 28        TO  DELETE  REFERENCE TO SCHOOL DISTRICT MAINTENANCE AND OPERATION LEVIES;
 29        AMENDING SECTION 33-1408, IDAHO CODE,  TO  REVISE  THE  SPECIAL  LEVY  FOR
 30        TUITION  AND  TO  EXEMPT THE LEVY FROM THE THREE PERCENT PROPERTY TAX CAP;
 31        AMENDING SECTION 33-5208, IDAHO CODE, TO PROVIDE A CORRECT CODE REFERENCE;
 32        AMENDING SECTION 50-2908, IDAHO CODE, TO DELETE REFERENCE TO PROPERTY  TAX
 33        FOR  SCHOOLS  AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 63-315,
 34        IDAHO CODE, TO PROVIDE APPLICATION TO CHARTER SCHOOL DISTRICTS  LEVYING  A
 35        MAINTENANCE  AND  OPERATION LEVY IN THE PRIOR CALENDAR YEAR; AMENDING SEC-
 36        TION 63-802A, IDAHO CODE, TO DELETE REFERENCE TO SCHOOL  DISTRICT  MAINTE-
 37        NANCE AND OPERATION LEVIES, TO PROVIDE APPLICATION TO SCHOOL DISTRICTS AND
 38        TO  MAKE  A  TECHNICAL CORRECTION; AMENDING SECTION 63-811, IDAHO CODE, TO
 39        DELETE REFERENCE TO PROPERTY TAX ALLOCATED FOR SCHOOLS;  AMENDING  SECTION
 40        63-3619,  IDAHO  CODE,  TO INCREASE THE SALES TAX TO SIX PERCENT; AMENDING
 41        SECTION 63-3621, IDAHO CODE, TO INCREASE  THE  USE  TAX  TO  SIX  PERCENT;
 42        AMENDING SECTION 63-3638, IDAHO CODE, TO REVISE THE DISTRIBUTION FOR SALES
 43        TAX  REVENUES,  TO DELETE REFERENCE TO MAINTENANCE AND OPERATION TAXES FOR
 44        SCHOOL DISTRICTS AND TO MAKE A TECHNICAL CORRECTION; PROVIDING  SEVERABIL-
 45        ITY;  DECLARING  AN EMERGENCY,  PROVIDING RETROACTIVE APPLICATION AND PRO-
 46        VIDING EFFECTIVE DATES.
                                                                        
                                           2
                                                                        
  1    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  2        SECTION 1.  That Section 33-701, Idaho Code, be, and the  same  is  hereby
  3    amended to read as follows:
                                                                        
  4        33-701.  FISCAL  YEAR  -- PAYMENT AND ACCOUNTING OF FUNDS. The fiscal year
  5    of each school district shall be a period of twelve (12) months commencing  on
  6    the first day of July in each year.
  7        The  board  of  trustees  of each school district shall have the following
  8    powers and duties:
  9        1.  To determine and order paid all lawful expenses  for  salaries,  wages
 10    and  purchases,  whether  or not there be money in the treasury for payment of
 11    warrants drawn against any fund of the district. Warrants shall be  signed  by
 12    the treasurer of the district and countersigned by the chairman or vice-chair-
 13    man of the board of trustees.
 14        Whenever  any school district has sufficient funds on deposit so to do, it
 15    may pay any allowed claim for salaries, wages or  purchases  by  regular  bank
 16    check signed by the treasurer or assistant treasurer of the district and coun-
 17    tersigned by the chairman, or vice-chairman, of the board of trustees.
 18        The  total  amount  of  warrants or orders for warrants drawn on any fund,
 19    together with disbursements from such fund in any other manner made, shall not
 20    exceed ninety-five percent (95%) of the estimated income and  revenue  accrued
 21    or accruing to such fund for the same school year, until such income and reve-
 22    nue shall have been paid into the treasury to the credit of the district;
 23        2.  To  invest  all  or  part of any plant facilities reserve fund, or any
 24    fund accumulated for the payment of interest on, and the redemption  of,  out-
 25    standing  bonds, or other obligations of the district in bonds or certificates
 26    of indebtedness of the United States of America, or in bonds  or  warrants  of
 27    the  state of Idaho, or in warrants or tax anticipation notes of any county or
 28    school district of the state of Idaho, when such investments shall be due  and
 29    payable  on  or  before  the  date  any plant facilities reserve fund shall be
 30    required to be expended  or  any  bonds  or  other  obligations,  or  interest
 31    thereon, of the investing district shall become payable.
 32        Whenever  in  the  judgment  of the board of trustees, the proceeds of any
 33    bond issue should be temporarily invested pending the expenditure of such pro-
 34    ceeds for the purposes for which such bonds were issued, the proceeds  may  be
 35    invested in the manner and form hereinabove prescribed. Any interest, or prof-
 36    its  accruing  from  such investments shall be used for the purposes for which
 37    the bonds were issued. Unless otherwise provided by law, any interest or prof-
 38    its accruing from the investment of any funds shall be credited to the general
 39    fund of the district;
 40        3.  To insure any school house schoolhouse and  other  property,  and  the
 41    district, against any loss by fire, casualty, or liability, and the board, its
 42    officers  and  employees,  and to preserve its property for the benefit of the
 43    district. In case of loss of any insured property, any  proceeds  from  insur-
 44    ance:
 45        (a)  mMay  be expended in constructing a temporary or permanent structure,
 46        but no sum greater than the insurance proceeds shall be so expended except
 47        upon approval of a majority of the school district electors voting  in  an
 48        election called for that purpose; or
 49        (b)  mMay  be  placed  in  and  made a part of the school plant facilities
 50        reserve fund of the district, if the district has such a fund; or
 51        (c)  mMay be placed in a separate account in the bond interest and redemp-
 52        tion fund of the district to repay any kind of obligation incurred by  the
 53        district  in  replacing  or restoring the property for which the insurance
                                                                        
                                           3
                                                                        
  1        proceeds were received, and shall not be included in the  computations  of
  2        bond and bond interest levies as provided in section 33-802A, Idaho Code.
  3        If  the  proceeds of any insurance received by a school district by reason
  4    of loss on real property shall be less than five  thousand  dollars  ($5,000),
  5    such proceeds may  be credited to the general fund of the district;
  6        4.  To pay from the general fund of the district the expense of any member
  7    of the board incurred while traveling on the business of the board, or attend-
  8    ing  any meeting called by the state board of education or by the state super-
  9    intendent of public instruction, or attending any annual or  special  meetings
 10    of the state school trustees association, and to pay the membership fee of the
 11    board  of  trustees  in  said association. Whenever any member of the board of
 12    trustees resides at such distance from the meeting place of the  board  as  to
 13    require,  in  the  judgment  of  the board, such member to incur extraordinary
 14    expense in traveling from his home to and from said meeting place,  the  board
 15    may  approve  payment  to such member of the extraordinary expense incurred in
 16    attending any meeting of the board.
 17        For the purpose of this paragraph, the term  "expense"  or  "extraordinary
 18    expense"  shall  include allowance for mileage or actual travel expense incur-
 19    red;
 20        5.  To prepare, or cause to be prepared and published, in the manner here-
 21    inafter prescribed, within one hundred twenty (120) days from the last day  of
 22    each fiscal year, an annual statement of financial condition and report of the
 23    school  district as of the end of such fiscal year in a form prescribed by the
 24    state superintendent  of  public  instruction.  Such  annual  statement  shall
 25    include, but not be limited to, the amounts of money budgeted and received and
 26    from  what  sources,  and  the  amounts budgeted and expended for salaries and
 27    other expenses by category. Salaries may be reported  in  gross  amount.  Each
 28    school  district  shall  have  available  at  the  administrative office, upon
 29    request, a full and complete list of vendors and the amount paid to each and a
 30    list of the number of teachers paid at each of the several stated gross salary
 31    levels in effect in the district.
 32        Nothing herein provided shall be construed as limiting any school district
 33    as to any additional or supplementary statements and reports it may  elect  to
 34    make  for  the  purpose  of  informing the public of its financial operations,
 35    either as to form, content, method, or frequency; and if all  the  information
 36    required  herein  to be published shall have been published as provided herein
 37    at regular intervals during the fiscal year covering  successive  portions  of
 38    the  fiscal  year, then such information may be omitted from the annual state-
 39    ment of financial condition and report for such portions of the fiscal year as
 40    already have been reported.
 41        The annual statement of financial condition and report shall be  published
 42    within  the  time above prescribed in one (1) issue of a newspaper printed and
 43    published within the district, or, if there be none, then in  a  newspaper  as
 44    provided  in section 60-106, Idaho Code, published within the district, or, if
 45    there be none, then in a newspaper as provided in section 60-106, Idaho  Code,
 46    in  the  county  in which the school district is located, or, if more than one
 47    (1) newspaper is published in said district or county, then in  the  newspaper
 48    most  likely to give best general notice of the contents of such annual state-
 49    ment of financial condition and report to the residents of said district; pro-
 50    vided, that if no newspaper is published in the district or county, then  such
 51    statement  of financial condition and report shall be published in a newspaper
 52    as provided in section 60-106, Idaho Code, most likely to  give  best  general
 53    notice of the contents to the residents of said district.
 54        The  chairman,  clerk  and treasurer of each school district shall certify
 55    the annual statement of financial condition and report to be true and correct,
                                                                        
                                           4
                                                                        
  1    and the certification shall be included in each published statement.
  2        In the event the board of trustees of any school district  shall  fail  to
  3    prepare  or  cause to be prepared or to publish the annual statement of finan-
  4    cial condition and report as herein required, the state superintendent of pub-
  5    lic instruction shall cause the same to be prepared  and  published,  and  the
  6    cost  thereof  shall  be an obligation of the school district. One (1) copy of
  7    the annual statement of financial condition and report shall  be  retained  in
  8    the  office of the clerk of the board of school trustees, where the same shall
  9    be open at all times to examination and inspection by any person;
 10        6.  To cause to be made a full and complete audit of the financial  state-
 11    ments of the district as required in section 67-450B, Idaho Code.
 12        The auditor shall be employed on written contract.
 13        One  (1) copy of the audit report shall be filed with the state department
 14    of education, after its acceptance by the board of  trustees,  but  not  later
 15    than October 15;
 16        7.  To file annually with the state department of education such financial
 17    and statistical reports as said state superintendent of public instruction may
 18    require;
 19        8.  To order and have destroyed any canceled check or warrant, or any form
 20    of claim or voucher which has been paid, at any time after five (5) years from
 21    the date the same was canceled and paid;
 22        9.  To review the school district budget periodically and make appropriate
 23    budget  adjustments  to reflect the availability of funds and the requirements
 24    of the school district. Revenue derived from maintenance and operation  levies
 25    made  pursuant  to section 33-802 2, Idaho Code, shall be excluded from budget
 26    adjustments as provided in this paragraph. Any person or persons  proposing  a
 27    budget  adjustment  under  this section shall notify in writing each member of
 28    the board of trustees one (1) week prior to the meeting at which such proposal
 29    will be made. Prior to the final vote on such  a  proposal,  notice  shall  be
 30    posted and published once, as prescribed in section 33-402, Idaho Code. A bud-
 31    get  adjustment shall not be approved unless voted affirmatively by sixty per-
 32    cent (60%) of the members of the board of trustees. Such amended budgets shall
 33    be submitted to the state superintendent of public instruction;
 34        10. To invest any money coming into the hands of the  school  district  in
 35    investments  permitted  by  section 67-1210, Idaho Code. Unless otherwise pro-
 36    vided by law, any interest or profits accruing  from  the  investment  of  any
 37    funds shall be credited to the general fund of the district.
                                                                        
 38        SECTION  2.  That  Section  33-802, Idaho Code, be, and the same is hereby
 39    amended to read as follows:
                                                                        
 40        33-802.  SCHOOL LEVIES. Any tax levied for school purposes shall be a lien
 41    on the property against which the tax is levied. The board of  trustees  shall
 42    determine  the levies upon each dollar of taxable property in the district for
 43    the ensuing fiscal year as follows:
 44        (1.)  Bond, Interest and Judgment Obligation Levies. Such levies as  shall
 45    be  required to satisfy all maturing bond, bond interest, and judgment obliga-
 46    tions.
 47        (2.)  Maximum School Maintenance  and  Operation  Credit  Against  Prepaid
 48    Taxes  -- Budget Stabilization Levies. Such levies for maintaining and operat-
 49    ing the schools of the district and for the payment of tuition and transporta-
 50    tion, that do not exceed an amount equal to four-tenths of one  percent  (.4%)
 51    during tax year 1994, and do not exceed an amount equal to three-tenths of one
 52    percent  (.3%)  during  tax year 1995 and thereafter, applied to the actual or
 53    adjusted market value for assessment purposes of the district as  such  valua-
                                                                        
                                           5
                                                                        
  1    tion existed on December 31 of the previous year, but aAllowances necessary as
  2    a  credit for prepaid taxes, as provided in section 63-1607, Idaho Code, shall
  3    not be included in such maximum  levies. Provided however, that in  the  event
  4    property  within  a district's boundaries is contained in a revenue allocation
  5    area established under chapter 29, title 50,  Idaho  Code,  and  such  revenue
  6    allocation area has given notice of termination thereunder, then, only for the
  7    purpose of determining the levy described in this subsection, the district may
  8    add  the  increment  value,  as defined in section 50-2903, Idaho Code, to the
  9    actual or adjusted market value for assessment purposes  of  the  district  as
 10    such value existed on December 31 of the previous year.
 11        3.  Authorized  School  Maintenance  and Operation Levies. Such levies for
 12    maintaining and operating the schools of the district and for the  payment  of
 13    tuition  and  transportation  that  do  not  exceed one hundred eleven percent
 14    (111%) of the local district's contribution authorized  in  subsection  2.  of
 15    section  33-1002, Idaho Code. Implementation of the provisions of this subsec-
 16    tion shall be authorized only after approval by a majority of  the  district's
 17    electors  voting on the question. Levies otherwise authorized by law shall not
 18    require an election School districts not receiving state equalization funds in
 19    fiscal year 2006 may authorize a budget stabilization levy  for  fiscal  years
 20    2007  through  2011.  Such  levies shall not exceed the difference between the
 21    amount of equalized funds that the state department of education estimates the
 22    school district will receive  in  fiscal  year  2007,   based  on  the  school
 23    district's  fiscal  year 2006 reporting data, and the combined amount of money
 24    the school district received from its maintenance and operation levy and state
 25    property tax replacement funds in fiscal year 2006. The  state  department  of
 26    education  shall  notify the state tax commission and affected counties of the
 27    maximum levy amounts permitted, by no later than August 1, 2006.
 28        4.(3)  Supplemental Maintenance and Operation Levies. No levy in excess of
 29    the levy permitted by subsection 2. or 3. of this section shall be made  by  a
 30    noncharter  school  district  unless  such  a supplemental levy in a specified
 31    amount and for a specified time not to exceed two (2) years  be  first  autho-
 32    rized  through  an  election held pursuant to chapter 4, title 33, Idaho Code,
 33    and approved by a majority of the district electors voting in such election. A
 34    levy approved pursuant to this subsection may be reduced by a majority vote of
 35    the board of trustees in the second year.
 36        5.(4)  Charter District Supplemental  Maintenance  and  Operation.  Levies
 37    pursuant to the respective charter of any such charter district shall be first
 38    authorized  through  an  election  held pursuant to chapter 4, title 33, Idaho
 39    Code, and approved by a majority of the district electors voting in such elec-
 40    tion.
 41        6.  The Local District Contribution. The local school  district  contribu-
 42    tion  levy is the amount utilized for calculating local district participation
 43    in the educational foundation  program, which is applied to the adjusted  mar-
 44    ket value for assessment purposes, as such valuation existed on December 31 of
 45    the  previous  year,  together with the increment value, as defined in section
 46    50-2903, Idaho Code, if applicable under the circumstance described in subsec-
 47    tion 2. of this section, relating to termination of a revenue allocation area.
 48        7.(5)  The board of trustees of any school district that has, for at least
 49    seven (7) consecutive years, been authorized through an election held pursuant
 50    to chapter 4, title 33, Idaho Code, to certify a supplemental  levy  that  has
 51    annually  been equal to or greater than twenty percent (20%) of the total gen-
 52    eral maintenance and operation fund, may submit the question of an  indefinite
 53    term  supplemental  levy to the electors of the school district. Such question
 54    shall clearly state the dollar amount that will be certified annually and that
 55    the levy will be for an indefinite number  of  years.  The  question  must  be
                                                                        
                                           6
                                                                        
  1    approved  by  a majority of the district electors voting on the question in an
  2    election held pursuant to chapter 4, title 33,  Idaho Code. The levy  approved
  3    pursuant  to this subsection may be reduced by a majority vote of the board of
  4    trustees during any fiscal year.
  5        (6)  All voter approved levies, whether  in  charter  or  noncharter  dis-
  6    tricts,  that  were authorized prior to June 30, 2006, are hereby continued in
  7    full force and effect for the duration of the term authorized.
                                                                        
  8        SECTION 3.  That Section 33-802A, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
                                                                        
 10        33-802A.  COMPUTATION  OF BOND AND BOND INTEREST LEVIES. When the board of
 11    trustees of any school district determines  and  makes  the  a  levy  required
 12    allowed by section 33-802, Idaho Code, and incorporates such levy as a part of
 13    the  school  district's  budget to service all maturing bond and bond interest
 14    payments for the ensuing fiscal year, it shall  take  into  consideration  any
 15    state  bond levy equalization funds provided pursuant to section 33-906, Idaho
 16    Code, and any balances remaining or that may remain in its bond  interest  and
 17    redemption  fund  after meeting its bond and bond interest obligations for its
 18    current fiscal year. The levy so made for the ensuing fiscal year shall be  an
 19    amount  which,  together  with any state bond levy equalization funds provided
 20    pursuant to section 33-906, Idaho Code, and the balance in its  bond  interest
 21    and  redemption  fund remaining after meeting its current fiscal year bond and
 22    bond interest obligations, shall satisfy all maturing bond and  bond  interest
 23    payments  for  at  least the ensuing twelve (12) months, and not to exceed the
 24    ensuing twenty-one (21) months counted from July 1  of  the  current  calendar
 25    year.
                                                                        
 26        SECTION  4.  That  Section  33-808, Idaho Code, be, and the same is hereby
 27    repealed.
                                                                        
 28        SECTION 5.  That Section 33-905, Idaho Code, be, and the  same  is  hereby
 29    amended to read as follows:
                                                                        
 30        33-905.  SCHOOL DISTRICT BUILDING ACCOUNT -- PAYMENTS TO ACCOUNT -- MONEYS
 31    APPROPRIATED TO STATE BOARD -- APPLICATION FOR MONEYS -- PAYMENTS TO DISTRICTS
 32    -- REPORTS ON APPLICATIONS -- USES OF MONEYS. 1. The state of Idaho, recogniz-
 33    ing  its responsibility to establish and maintain a general, uniform and thor-
 34    ough system of public, free common schools, in an effort to partially  fulfill
 35    this responsibility, hereby creates and establishes the school district build-
 36    ing  account in the state treasury. The school district building account shall
 37    have paid into it such appropriations or revenues as may be provided by law.
 38        2.  Moneys in the school district building account are hereby appropriated
 39    to and may be expended by the state board of education at  any  time  for  the
 40    purposes  provided  in  this  section,  any provision of chapter 35, title 67,
 41    Idaho Code, or chapter 36, title 67, Idaho Code, notwithstanding.
 42        3.  (a) As to any moneys in the account other than lottery dividends  dis-
 43        tributed  pursuant to subsection 4. of this section, the board of trustees
 44        of any school district may apply  to  the  state  board  of  education  to
 45        receive  a  payment or payments from the school district building account;
 46        provided, a district demonstrates to the state board of education that  it
 47        has  a  substantial  and  serious need based upon the district's classroom
 48        student-teacher ratios, past efforts to levy for such construction, physi-
 49        cal condition of existing structures, and the total assessed market  value
 50        of the district, all of which shall be further defined by actual need cri-
                                                                        
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  1        teria established by the state board of education.
  2        (b)  When  an  application  for moneys from the account is approved by the
  3        state board of education, the state board shall inform the school district
  4        that the application has been approved, citing  the  amount  approved  for
  5        payment  and an estimate of the time when the payment can actually be made
  6        to the school district.
  7        4.  By not later than August 31, moneys in the account pursuant to distri-
  8    bution from section 67-7434, Idaho Code, the lottery  dividends  and  interest
  9    earned  thereon, shall be distributed to each of the several school districts,
 10    in the proportion that the average daily attendance of that district  for  the
 11    previous  school year bears to the total average daily attendance of the state
 12    during the previous school year. For the purposes of this subsection 4.  only,
 13    the  Idaho school for the deaf and the blind shall be considered a school dis-
 14    trict, and shall receive a distribution based upon the  average  daily  atten-
 15    dance  of the school. Average daily attendance shall be calculated as provided
 16    in section 33-1002 4.(3), Idaho Code.
 17        5.  All payments from the school district building account shall  be  paid
 18    out  directly to the school district in warrants drawn by the state controller
 19    upon presentation of proper vouchers from the state board of education.  Pend-
 20    ing  payments  out  of the school district building account, the moneys in the
 21    account shall be invested by the state treasurer in the same  manner  as  pro-
 22    vided  under section 67-1210, Idaho Code, with respect to other idle moneys in
 23    the state treasury. Interest earned on the investments shall  be  returned  to
 24    the school district building account.
 25        6.  Payments  from  the  school  district  building  account received by a
 26    school district may be used by the school district for the purposes authorized
 27    in section 33-1102, Idaho Code.
 28        7.  (a) By not later than December 1, each school district shall report to
 29        the state department of education the projects on  which  moneys  received
 30        from the school district building account were expended. The state depart-
 31        ment of education shall transmit a summary of such reports to the legisla-
 32        ture by not later than January 15 of the following year.
 33        (b)  By  not  later  than December 1, each school district shall report to
 34        the state department of education the planned uses for the moneys received
 35        from the school district building account.  The state department of educa-
 36        tion shall transmit a summary of the reports to  the  legislature  by  not
 37        later than January 15 of the following year.
                                                                        
 38        SECTION  6.  That  Section 33-1002, Idaho Code, be, and the same is hereby
 39    amended to read as follows:
                                                                        
 40        33-1002.  EDUCATIONAL SUPPORT PROGRAM. The educational support program  is
 41    calculated as follows:
 42        (1.)  State  Educational  Support  Funds.  Add  the  state  appropriation,
 43    including  the  moneys  available  in the public school income fund,  together
 44    with all miscellaneous revenues to determine the total state funds.
 45        (2.)  From the total state funds subtract the following amounts needed for
 46    state support of special programs provided by a school district:
 47        (a.)  Pupil  tuition-equivalency  allowances  as   provided   in   section
 48        33-1002B, Idaho Code;
 49        (b.)  Transportation support program as provided in section 33-1006, Idaho
 50        Code;
 51        (c.)  Feasibility studies allowance as provided in section 33-1007A, Idaho
 52        Code;
 53        (d.)  The  approved  costs for border district allowance, provided in sec-
                                                                        
                                           8
                                                                        
  1        tion 33-1403, Idaho Code, as determined by  the  state  superintendent  of
  2        public instruction;
  3        (e.)  The  approved  costs  for exceptional child approved contract allow-
  4        ance, provided in subsection 2. of section 33-2004, Idaho Code, as  deter-
  5        mined by the state superintendent of public instruction;
  6        (f.)  Certain  expectant  and  delivered  mothers allowance as provided in
  7        section 33-2006, Idaho Code;
  8        (g.)  Salary-based  apportionment  calculated  as  provided  in   sections
  9        33-1004 through 33-1004F, Idaho Code;
 10        (h.)  Unemployment  insurance benefit payments according to the provisions
 11        of section 72-1349A, Idaho Code;
 12        (i.)  For expenditure as provided by the public school technology program;
 13        (j.)  For the support of provisions that provide a safe environment condu-
 14        cive to student learning and maintain classroom discipline, an  allocation
 15        of $300 per support unit; and
 16        (k.)  Any  additional amounts as required by statute to effect administra-
 17        tive adjustments or as specifically required by the provisions of any bill
 18        of appropriation;
 19    to secure the state total educational support distribution funds.
 20        (3.)  Local Districts' Contribution  Calculation.  Without  including  any
 21    allowance  as a credit for prepaid taxes as provided by section 63-1607, Idaho
 22    Code, the local districts' contribution shall be the amount appropriated  pur-
 23    suant  to section 33-1002D, Idaho Code, plus three-tenths percent (.3%) during
 24    fiscal year 2003-04 and each year thereafter, of the total state adjusted mar-
 25    ket value for assessment purposes for the previous year with such value  being
 26    determined  by  the  provisions of section 63-315, Idaho Code, and four-tenths
 27    percent (.4%) during fiscal year 1994-95 and  each  year  thereafter,  of  the
 28    cooperative  electrical  associations'  property values that have been derived
 29    from the taxes paid in lieu of ad valorem taxes for the previous year as  pro-
 30    vided in section 63-3502, Idaho Code.
 31        4.  Educational  Support  Program  Distribution  Funds. Add the local dis-
 32    tricts' contribution, subsection 3. of this section, and the state educational
 33    support program funds, subsection 1. of this section, together to  secure  the
 34    total educational support program distribution funds.
 35        5.  Average  Daily  Attendance.  The  total state average daily attendance
 36    shall be the sum of the average daily attendance of all  of  the  school  dis-
 37    tricts  of  the state. The state board of education shall establish rules set-
 38    ting forth the procedure to determine average daily attendance  and  the  time
 39    for, and method of, submission of such report. Average daily attendance calcu-
 40    lation  shall  be carried out to the nearest hundredth. Computation of average
 41    daily attendance shall also be governed by the provisions of section 33-1003A,
 42    Idaho Code.
 43        6.(4)  Support Units. The total state support units shall be determined by
 44    using the tables set out hereafter called computation of kindergarten  support
 45    units,  computation of elementary support units, computation of secondary sup-
 46    port units, computation of exceptional education support units,  and  computa-
 47    tion  of  alternative  school  secondary  support units. The sum of all of the
 48    total support units of all school districts of the state shall  be  the  total
 49    state support units.
                                                                        
                                           9
                                                                        
  1                      COMPUTATION OF KINDERGARTEN SUPPORT UNITS
  2    Average Daily
  3    Attendance            Attendance Divisor         Units Allowed
  4    41 or more     ....   40.......................  1 or more as computed
  5    31 -  40.99 ADA....    -.......................  1
  6    26 -  30.99 ADA....    -.......................   .85
  7    21 -  25.99 ADA....    -.......................   .75
  8    16 -  20.99 ADA....    -.......................   .6
  9     8 -  15.99 ADA....    -.......................   .5
 10     1 -   7.99 ADA....    -.......................  count as elementary
                                                                        
 11                       COMPUTATION OF ELEMENTARY SUPPORT UNITS
 12    Average Daily
 13    Attendance            Attendance Divisor         Minimum Units Allowed
 14    300 or more ADA........................................  15
 15                        ..23...grades 4,5 & 6....
 16                        ..22...grades 1,2 & 3....1994-95
 17                        ..21...grades 1,2 & 3....1995-96
 18                        ..20...grades 1,2 & 3....1996-97
 19                              and each year thereafter.
 20    160   to  299.99 ADA... 20.....................         8.4
 21    110   to  159.99 ADA... 19.....................         6.8
 22     71.1 to  109.99 ADA... 16.....................         4.7
 23     51.7 to   71.0  ADA... 15.....................         4.0
 24     33.6 to   51.6  ADA... 13.....................         2.8
 25     16.6 to   33.5  ADA... 12.....................         1.4
 26      1.0 to   16.5  ADA... n/a....................         1.0
                                                                        
 27                        COMPUTATION OF SECONDARY SUPPORT UNITS
 28    Average Daily
 29    Attendance            Attendance Divisor         Minimum Units Allowed
 30    750 or more      .... 18.5.....................        47
 31    400 -  749.99 ADA.... 16.......................        28
 32    300 -  399.99 ADA.... 14.5.....................        22
 33    200 -  299.99 ADA.... 13.5.....................        17
 34    100 -  199.99 ADA.... 12.......................         9
 35     99.99 or fewer       Units allowed as follows:
 36             Grades 7-12  .........................         8
 37             Grades 9-12  .........................         6
 38             Grades 7- 9  .........................         1 per 14 ADA
 39             Grades 7- 8  .........................         1 per 16 ADA
                                                                        
 40                  COMPUTATION OF EXCEPTIONAL EDUCATION SUPPORT UNITS
 41    Average Daily
 42    Attendance            Attendance Divisor         Minimum Units Allowed
 43    14 or more ....       14.5.....................  1 or more as computed
 44    12 -  13.99....        -.......................  1
 45     8 -  11.99....        -.......................   .75
 46     4 -   7.99....        -.......................   .5
 47     1 -   3.99....        -.......................   .25
                                                                        
 48              COMPUTATION OF ALTERNATIVE SCHOOL SECONDARY SUPPORT UNITS
 49    Pupils in Attendance  Attendance Divisor         Minimum Units Allowed
 50    12 or more..........  12......................   1 or more as computed
                                                                        
                                           10
                                                                        
  1        In  applying these tables to any given separate attendance unit, no school
  2    district shall receive less total money than it would  receive  if  it  had  a
  3    lesser  average daily attendance in such separate attendance unit. In applying
  4    the kindergarten table to a kindergarten program of  less  days  than  a  full
  5    school  year,  the  support  unit allowance shall be in ratio to the number of
  6    days of a full school year. The tables for exceptional education and  alterna-
  7    tive  school  secondary  support  units  shall be applicable only for programs
  8    approved by the state department of education following rules  established  by
  9    the  state  board  of  education. Moneys generated from computation of support
 10    units for alternative schools shall be utilized for  alternative  school  pro-
 11    grams.  School  district  administrative and facility costs may be included as
 12    part of the alternative school expenditures.
 13        7.(5)  State Distribution Factor per Support Unit. Divide educational sup-
 14    port program distribution funds, after subtracting the  amounts  necessary  to
 15    pay the obligations specified in subsection (2.) of this section, by the total
 16    state support units to secure the state distribution factor per support unit.
 17        8.(6)  District  Share  of  State  Funds  for Educational Support Program.
 18    Ascertain a district's share of state funds for the educational  support  pro-
 19    gram as follows:
 20        a.  District  Contribution Calculation. Without including any allowance as
 21        a credit for prepaid taxes, as provided in section  63-1607,  Idaho  Code,
 22        the  district  contribution calculation shall be the rate determined under
 23        subsection 3. of this section.
 24        b.  District Support Units. The number of support units  for  each  school
 25        district in the state shall be determined as follows:
 26        (a)  (1i)   Divide the actual average daily attendance, excluding students
 27             approved  for inclusion in the exceptional child educational program,
 28             for the administrative schools and each of the separate  schools  and
 29             attendance  units  by the appropriate divisor from the tables of sup-
 30             port units in this section, then add  the  quotients  to  obtain  the
 31             district's support units allowance for regular students, kindergarten
 32             through  grade  12  including  alternative school secondary students.
 33             Calculations in application of this subsection shall be  carried  out
 34             to the nearest tenth.
 35             (2ii)  Divide  the combined totals of the average daily attendance of
 36             all preschool, handicapped, kindergarten, elementary,  secondary  and
 37             juvenile  detention  center  students  approved  for inclusion in the
 38             exceptional child program of the district by the appropriate  divisor
 39             from the table for computation of exceptional education support units
 40             to  obtain  the  number  of  support units allowed for the district's
 41             approved exceptional child program. Calculations for this  subsection
 42             shall be carried out to the nearest tenth when more than one (1) unit
 43             is allowed.
 44             (3iii) The total number of support units of the district shall be the
 45             sum  of  the  total  support  units  for regular students, subsection
 46             8.b.(1) (6)(a)(i) of this section, and the  support  units  allowance
 47             for  the  approved  exceptional  child  program,  subsection  8.b.(2)
 48             (6)(a)(ii) of this section.
 49        c.(b)  Total   District   Allowance   Educational  Program.  Multiply  the
 50        district's total number of support  units,  carried  out  to  the  nearest
 51        tenth, by the state distribution factor per support unit and to this prod-
 52        uct  add  the approved amount of programs of the district provided in sub-
 53        section (2.) of this section to secure the district's total allowance  for
 54        the educational support program.
 55        d.(c)  District Share. To secure tThe district's share of state apportion-
                                                                        
                                           11
                                                                        
  1        ment,  subtract the amount of the local district contribution calculation,
  2        subsection 3. of this section, from is the amount of  the  total  district
  3        allowance, subsection 8.c. (6)(b) of this section.
  4        e.(d)  Adjustment  of District Share. The contract salary of every noncer-
  5        tificated teacher shall be subtracted from the district's share as  calcu-
  6        lated from the provisions of subsection 8.d. (6)(c) of this section.
  7        (7)  Property  Tax Computation Ratio. In order to receive state funds pur-
  8    suant to this section a charter district shall utilize  a  school  maintenance
  9    and  operation  property  tax computation ratio for the purpose of calculating
 10    its maintenance and operation levy, that is no greater than that which it uti-
 11    lized in tax year 1994, less four-tenths of one percent (.4%). As used herein,
 12    the term "property tax computation ratio" shall mean  a  ratio  determined  by
 13    dividing  the district's certified property tax maintenance and operation bud-
 14    get by the actual or adjusted market value for  assessment  purposes  as  such
 15    values existed on December 31, l993. Such maintenance and operation levy shall
 16    be  based  on  the  property tax computation ratio multiplied by the actual or
 17    adjusted market value for assessment purposes as such values existed on Decem-
 18    ber 31 of the prior calendar year.
                                                                        
 19        SECTION 7.  That Sections 33-1002A and 33-1002D, Idaho Code, be,  and  the
 20    same are hereby repealed.
                                                                        
 21        SECTION  8.  That  Section 33-1003, Idaho Code, be, and the same is hereby
 22    amended to read as follows:
                                                                        
 23        33-1003.  SPECIAL  APPLICATIONS  OF  EDUCATIONAL  SUPPORT  PROGRAM.   (1.)
 24    Decrease  in  Average  Daily  Attendance.  --  Any school district which has a
 25    decrease in total average daily attendance of one percent (1%) of its  average
 26    daily  attendance in the then current school year from the total average daily
 27    attendance used for determining the allowance in the educational support  pro-
 28    gram  for  the  school year immediately preceding, the allowance of funds from
 29    the educational support program may be based on the average  daily  attendance
 30    of  the  school  year  immediately preceding, less one percent (1%). When this
 31    provision is applied, the decrease in average daily attendance shall  be  pro-
 32    portionately  distributed  among  the various categories of support units that
 33    are appropriate for the district.
 34        (2.)  Application of Support Program to Separate Schools/Attendance  Units
 35    in District.
 36        (a.)  Separate  Elementary School. -- Any separate elementary school shall
 37        be allowed to participate in the educational support  program  as   though
 38        the school were the only elementary school operated by the district.
 39        (b.)  Hardship  Elementary  School.  --  Upon  application of the board of
 40        trustees of a school district, the state board of education  is  empowered
 41        to  determine  that a given elementary school or elementary schools within
 42        the school district, not  otherwise qualifying, are entitled to be counted
 43        as a separate elementary school as defined  in  section    33-1001,  Idaho
 44        Code,  when,  in  the  discretion of the state board of education, special
 45        conditions exist warranting the retention of  the  school  as  a  separate
 46        attendance  unit  and  the  retention results in a substantial increase in
 47        cost per pupil in average daily attendance  above  the  average  cost  per
 48        pupil  in average daily attendance of the remainder of the district's ele-
 49        mentary grade school pupils. An elementary school operating  as  a  previ-
 50        ously  approved hardship elementary school shall continue to be considered
 51        as a separate attendance unit, unless the hardship status of  the  elemen-
 52        tary school is rescinded by the state board of education.
                                                                        
                                           12
                                                                        
  1        (c.)  Separate Secondary School. -- Any separate secondary school shall be
  2        allowed  to  participate  in the educational support program as though the
  3        school were the only secondary school operated by the district.
  4        (d.)  Elementary/Secondary School Attendance Units. --  Elementary  grades
  5        in  an elementary/secondary school will be funded as a separate attendance
  6        unit if all elementary grades served are situated more than ten (10) miles
  7        distance from both the nearest like  elementary  grades  within  the  same
  8        school  district and from the location of the office of the superintendent
  9        of schools of such district, or from the office of the  chief  administra-
 10        tive officer of such district if the district employs no superintendent of
 11        schools. Secondary grades in an elementary/secondary school will be funded
 12        as  a  separate attendance unit if all secondary grades served are located
 13        more than fifteen (15) miles by an all-weather road from the nearest  like
 14        secondary grades operated by the district.
 15        (e.)  Hardship  Secondary  School.  -- Any district which operated two (2)
 16        secondary schools separated by less than fifteen  (15)  miles,  but  which
 17        district  was  created  through  consolidation  subsequent  to legislative
 18        action pursuant to chapter 111, laws of 1947, and which  school  buildings
 19        were  constructed prior to 1935, shall be entitled to count the schools as
 20        separate attendance units.
 21        (f.)  Minimum Pupils Required. -- Any elementary school having  less  than
 22        ten  (10)  pupils in average daily attendance shall not be allowed to par-
 23        ticipate in the state or county support program unless the school has been
 24        approved for operation by the state board of education.
 25        (3.)  Remote Schools. -- The board of trustees of any  Idaho  school  dis-
 26    trict  which operates and maintains a school which is remote and isolated from
 27    the other schools of the state because of geographical or topographical condi-
 28    tions may petition the state board of education to recognize and  approve  the
 29    school  as  a  remote  and necessary school. The petition shall be in form and
 30    content approved by the state board of education and shall provide such infor-
 31    mation as the state board of education may require. Petitions for the recogni-
 32    tion of a school as a remote and necessary school shall be filed  annually  at
 33    least ninety (90) days prior to the date of the annual meeting of the board of
 34    trustees as established in section 33-510, Idaho Code.
 35        Within forty-five (45) days after the receipt of a petition for the recog-
 36    nition  of  a  remote and necessary school, the state board of education shall
 37    either approve or disapprove the petition and notify the board of trustees  of
 38    its  decision.  Schools  which  the state board of education approves as being
 39    necessary and remote shall be allowed adequate funding within the support pro-
 40    gram for an acceptable educational program for the students of the school.  In
 41    the  case  of a remote and necessary secondary school, grades 7-12, the educa-
 42    tional program shall be deemed acceptable when, in the opinion  of  the  state
 43    board  of education, the accreditation standard relating to staff size, estab-
 44    lished in accordance with section 33-119, Idaho  Code, has been met. The final
 45    determination of an acceptable program and adequate funding in the case  of  a
 46    remote  and  necessary  elementary  school shall be made by the state board of
 47    education.
 48        (4.)  Support Program When District Boundaries are Changed.
 49        (a.)  In new districts formed by the division of a district,  the  support
 50        program  computed  for the district divided in its last year of operation,
 51        shall be apportioned to the new districts created by the division, in  the
 52        proportion  that  the  average  daily attendance of pupils, elementary and
 53        secondary combined, residing in the area of each new district so  created,
 54        is to the average daily attendance of all pupils, elementary and secondary
 55        combined, in the district divided in its last year of operation before the
                                                                        
                                           13
                                                                        
  1        division.
  2        (b.)  When  boundaries  of districts are changed by excision or annexation
  3        of territory, the support program of any district from which territory  is
  4        excised  for  the  last  year  of  operation before such excision shall be
  5        divided, and apportioned among the districts involved,  as  prescribed  in
  6        subsection 4a. (4)(a) of this section.
  7        (c.)  In  new  districts  formed by consolidation of former districts, the
  8        support program allowance for a seven (7) year period following the forma-
  9        tion of the new district, shall not be less than the combined support pro-
 10        gram allowances of  the component districts in the last year of  operation
 11        before consolidation.
 12        5.  For the fiscal year which commences on July 1, 1986, and for each suc-
 13    ceeding  fiscal  year,  any  school  district  whose adjusted market value for
 14    assessment purposes decreases forty percent (40%) or more  from  the  previous
 15    year's adjusted market value for assessment purposes as such valuation existed
 16    on  December  31, is eligible to receive an adjustment to its educational sup-
 17    port program entitlement, subject to qualifications as follows:
 18        a.  The adjusted market value for assessment purposes has decreased  forty
 19        percent  (40%)  or more from the previous year's adjusted market value for
 20        assessment purposes as such valuation existed on December 31; and
 21        b.  The school levy to be certified for the general maintenance and opera-
 22        tion fund shall be no less than four-tenths of one percent (.4%); and
 23        c.  An eligible school district has made application to the state  depart-
 24        ment  of  education for an adjustment to entitlement from the state educa-
 25        tional support program on or before June 1 of the fiscal year. Such appli-
 26        cation must document the need for additional funds and must include a dis-
 27        trict plan to minimize impact of a reduced local tax base.
                                                                        
 28        SECTION 9.  The State Department of Education shall utilize the provisions
 29    of Sections 33-802, 33-1002, 33-1002A, 33-1002D and 33-1003,  Idaho  Code,  as
 30    they  existed  prior  to amendment or repeal by the provisions of this act for
 31    the purposes of funding public schools through the end of fiscal year 2006.
                                                                        
 32        SECTION 10.  That Section 33-1004, Idaho Code, be, and the same is  hereby
 33    amended to read as follows:
                                                                        
 34        33-1004.  STAFF  ALLOWANCE.  For  each  school district, a staff allowance
 35    shall be determined as follows:
 36        1.  Using the daily attendance reports that have been submitted  for  com-
 37    puting  the  February 15th apportionment of state funds as provided in section
 38    33-1009, Idaho Code, determine the total support units for the district in the
 39    manner provided in  section 33-1002 8.b. (6)(a), Idaho Code;
 40        2.  Determine the instructional staff allowance by multiplying the support
 41    units by 1.1. A district must demonstrate that it actually employs the  number
 42    of  certificated  instructional staff allowed. If the district does not employ
 43    the number allowed, the staff allowance shall be reduced to the actual  number
 44    employed;
 45        3.  Determine  the  administrative staff allowance by multiplying the sup-
 46    port units by .075;
 47        4.  Determine the classified staff allowance by  multiplying  the  support
 48    units by .375;
 49        5.  Additional conditions governing staff allowance:
 50        a.  In  determining  the  number  of staff in subsections 2., 3. and 4. of
 51        this section, a district may contract separately for services to  be  ren-
 52        dered  by  nondistrict  employees and such employees may be counted in the
                                                                        
                                           14
                                                                        
  1        staff allowance. A "nondistrict employee" means  a  person  for  whom  the
  2        school district does not pay the employer's obligations for employee bene-
  3        fits.  When  a  district  contracts  for  the  services  of  a nondistrict
  4        employee, only the salary portion of the contract shall be  allowable  for
  5        computations.
  6        b.  If  there are circumstances preventing eligible use of staff allowance
  7        to which a district is entitled as provided in subsections 2.  and  3.  of
  8        this  section,  an appeal may be filed with the state department of educa-
  9        tion outlining the reasons and proposed alternative use  of  these  funds,
 10        and a waiver may be granted.
 11        c.  For any district with less than forty (40) support units:
 12             (1)  The  instructional  staff allowance shall be calculated applying
 13             the actual number of support units. If the actual instructional staff
 14             employed in the school year is greater than the  instructional  staff
 15             allowance,  then the instructional staff allowance shall be increased
 16             by one-half (1/2) staff allowance; and
 17             (2)  The administrative staff allowance shall be calculated  applying
 18             the  actual  number  of  support  units. If the actual administrative
 19             staff employed in the school year is greater than the  administrative
 20             staff  allowance,  then  the  administrative staff allowance shall be
 21             increased by one-half (1/2) staff allowance.
 22             (3)  Additionally, for any district with less than twenty  (20)  sup-
 23             port  units,  the  instructional  staff allowance shall be calculated
 24             applying the actual  number  of  support  units.  If  the  number  of
 25             instructional  staff  employed in the school year is greater than the
 26             instructional staff allowance, the staff allowance shall be increased
 27             as provided in paragraphs (1) and (2) of this subsection, and  by  an
 28             additional one-half (1/2) instructional staff allowance.
 29        d.  Only  instructional,  administrative  and classified personnel compen-
 30        sated by the school district from the general  maintenance  and  operation
 31        fund  of the district shall be included in the calculation of staff allow-
 32        ance or in any other calculations based upon staff,  including  determina-
 33        tion  of  the  experience and education multiplier, the reporting require-
 34        ments, or the district's salary-based apportionment calculation.  No  food
 35        service  staff  or  transportation  staff  shall  be included in the staff
 36        allowance.
 37        6.  In the event that the staff allowance in any category is  insufficient
 38    to  meet  accreditation standards, a district may appeal to the state board of
 39    education, demonstrating the insufficiency, and the state board  may  grant  a
 40    waiver authorizing sufficient additional staff to be included within the staff
 41    allowance  to  meet accreditation standards. Such a waiver shall be limited to
 42    one (1) year, but may be renewed upon showing of continuing justification.
                                                                        
 43        SECTION 11.  That Section 33-1114, Idaho Code, be, and the same is  hereby
 44    amended to read as follows:
                                                                        
 45        33-1114.  LEVY  FOR  LIQUIDATION OF BONDED INDEBTEDNESS. Whenever it shall
 46    appear that the board of trustees of any school district has failed to certify
 47    to the board of county commissioners the  levy  required  in  section  33-802,
 48    Idaho  Code,  said The board of county commissioners shall, in addition to all
 49    other levies set by them, set levies sufficient to  meet  all  accruing  bond,
 50    bond  interest  and  judgment  obligations of the district maturing during the
 51    year when such levies shall be collected and paid.
                                                                        
 52        SECTION 12.  That Section 33-1408, Idaho Code, be, and the same is  hereby
                                                                        
                                           15
                                                                        
  1    amended to read as follows:
                                                                        
  2        33-1408.  SPECIAL  LEVY  FOR TUITION. Any school district is hereby autho-
  3    rized to make a levy above the maintenance and operation levy otherwise autho-
  4    rized by law for the purpose of paying tuition  costs  of  its  students  who,
  5    under authorization of the board of trustees of the district, attend school in
  6    another  district either in or out of Idaho, except for those costs reimbursed
  7    by the state under border contracts. Such levy shall be exempt from the provi-
  8    sions of section 63-802, Idaho Code.
                                                                        
  9        SECTION 13.  That Section 33-5208, Idaho Code, be, and the same is  hereby
 10    amended to read as follows:
                                                                        
 11        33-5208.  PUBLIC  CHARTER  SCHOOL FINANCIAL SUPPORT. Except as provided in
 12    subsection (8) of this section, from the state educational support program the
 13    state department of education shall make the following apportionment  to  each
 14    public charter school for each fiscal year based on attendance figures submit-
 15    ted in a manner and time as required by the department of education:
 16        (1)  Per  student  support.  Computation  of support units for each public
 17    charter school shall be calculated as if it were a separate  school  according
 18    to  the  schedules  in  section  33-1002 6.(4), Idaho Code, except that public
 19    charter schools with fewer than one hundred (100) secondary ADA  shall  use  a
 20    divisor  of  twelve  (12) and the minimum units shall not apply, and no public
 21    charter school shall receive an increase in support  units  that  exceeds  the
 22    support  units it received in the prior year by more than twenty (20). Funding
 23    from the state educational support program shall be equal to the total distri-
 24    bution factor, plus the salary-based apportionment  provided  in  chapter  10,
 25    title  33,  Idaho  Code.  Provided  however, any public charter school that is
 26    formed by the conversion of an existing traditional  public  school  shall  be
 27    assigned  divisors, pursuant to section 33-1002, Idaho Code, that are no lower
 28    than the divisors of the school  district  in  which  the  traditional  public
 29    school is located, for each category of pupils listed.
 30        (2)  Special  education.  For  each student enrolled in the public charter
 31    school who is entitled to special education services, the  state  and  federal
 32    funds from the exceptional child education program for that student that would
 33    have  been  apportioned  for  that student to the school district in which the
 34    public charter school is located.
 35        (3)  Alternative school support. Public charter schools may qualify  under
 36    the provisions of sections 33-1002 and 33-1002C, Idaho Code, provided the pub-
 37    lic  charter  school  meets the necessary statutory requirements, and students
 38    qualify for attendance at an alternative school as provided  by  rule  of  the
 39    state board of education.
 40        (4)  Transportation  support.  Support shall be paid to the public charter
 41    school as provided in chapter 15, title 33, Idaho Code, and  section  33-1006,
 42    Idaho  Code.  Each  public charter school shall furnish the department with an
 43    enrollment count as of the first Friday in November, of public charter  school
 44    students  living more than one and one-half (1 1/2) miles from the school. For
 45    charter schools in the initial year of operation, the petition shall include a
 46    proposal for transportation services with an estimated first  year  cost.  The
 47    state department of education is authorized to include in the annual appropri-
 48    ation  to the charter school eighty percent (80%) of the estimated transporta-
 49    tion cost. The final appropriation payment in July shall  reflect  eighty-five
 50    percent (85%) of the actual cost.
 51        (5)  Payment  schedule. The state department of education is authorized to
 52    make an advance payment of twenty-five  percent  (25%)  of  a  public  charter
                                                                        
                                           16
                                                                        
  1    school's  estimated  annual apportionment for its first year of operation, and
  2    each year thereafter, provided the public charter school has  an  increase  of
  3    student  population  in  any  given  year  of twenty (20) students or more, to
  4    assist the school with initial start-up costs or payroll obligations.
  5        (a)  For a state public charter school to receive the advance payment, the
  6        school shall submit its anticipated fall membership for each  grade  level
  7        to the state department of education by June 1.
  8        (b)  Using  the  figures  provided by the public charter school, the state
  9        department of education shall determine an estimated annual  apportionment
 10        from  which the amount of the advance payment shall be calculated. Advance
 11        payment shall be made to the school on or after July 1 but no  later  than
 12        July 31.
 13        (c)  All  subsequent  payments,  taking  into account the one-time advance
 14        payment made for the first year of operation, shall be made to the  public
 15        charter  school  in the same manner as other traditional public schools in
 16        accordance with the provisions of section 33-1009, Idaho Code.
 17    A public charter school shall comply with all applicable  fiscal  requirements
 18    of law, except that the following provisions shall not be applicable to public
 19    charter  schools: section 33-1003B, Idaho Code, relating to guaranteed minimum
 20    support; that portion of section 33-1004, Idaho Code, relating to reduction of
 21    the administrative and instructional staff allowance when there is a  discrep-
 22    ancy  between the number allowed and the number actually employed; and section
 23    33-1004E, Idaho Code, for calculation of district staff indices.
 24        (6)  Nothing in this chapter shall be construed to  prohibit  any  private
 25    person or organization from providing funding or other financial assistance to
 26    the establishment or operation of a public charter school.
 27        (7)  Nothing  in  this  chapter shall prevent a public charter school from
 28    applying for federal grant moneys.
 29        (8)  (a) For the period July 1, 2003, through June 30,  2005,  all  public
 30        virtual  schools  shall be assigned divisors, pursuant to section 33-1002,
 31        Idaho Code, that are no higher than the  median  divisor  shown  for  each
 32        respective  category  of  pupils,  among the possible divisors listed, for
 33        each respective category of pupils that contains more than one  (1)  divi-
 34        sor. If there is an even number of possible divisors listed for a particu-
 35        lar  category  of  pupils,  then the lesser of the two (2) median divisors
 36        shall be used. For the period July 1, 2005, through  June  30,  2007,  all
 37        public  virtual  schools  shall be assigned divisors,  pursuant to section
 38        33-1002, Idaho Code, that are no higher than the  second  highest  divisor
 39        shown, among the possible divisors listed, for each respective category of
 40        pupils  that  contains  more  than one (1) divisor. The divisor provisions
 41        contained herein shall only be applicable to the number of pupils in aver-
 42        age daily attendance in such public virtual schools for the period July 1,
 43        2003, through June 30, 2004. If the number  of  pupils  in  average  daily
 44        attendance  in  any  particular  category  of pupils increases, during the
 45        period July 1, 2004, through June 30, 2005, to a number above  that  which
 46        existed  in the prior fiscal year, then those additional pupils in average
 47        daily attendance shall  be  assigned  the  divisor,  pursuant  to  section
 48        33-1002, Idaho Code, that would have otherwise been assigned to the school
 49        district or public charter school had this section not been in force.
 50        (b)  Each student in attendance at a public virtual school shall be funded
 51        based  upon  either  the  actual hours of attendance in the public virtual
 52        school on a flexible schedule, or the percentage of coursework  completed,
 53        whichever is more advantageous to the school, up to the maximum of one (1)
 54        full-time equivalent student.
 55        (c)  All  federal  educational funds shall be administered and distributed
                                                                        
                                           17
                                                                        
  1        to public charter schools, including public  virtual  schools,  that  have
  2        been  designated  by  the  state  board  of education as a local education
  3        agency (LEA), as provided in section 33-5203(7), Idaho Code.
  4        (9)  Nothing in this  section  prohibits  separate  face-to-face  learning
  5    activities or services.
                                                                        
  6        SECTION  14.  That Section 50-2908, Idaho Code, be, and the same is hereby
  7    amended to read as follows:
                                                                        
  8        50-2908.  DETERMINATION OF TAX LEVIES -- CREATION OF SPECIAL FUND. (1) For
  9    purposes of calculating the rate at which taxes shall be levied by or for each
 10    taxing district in which a revenue allocation area is located, the county com-
 11    missioners shall, with respect to the taxable property located in such revenue
 12    allocation area, use the equalized assessed value of such taxable property  as
 13    shown  on  the  base  assessment  roll  rather  than  on the current equalized
 14    assessed valuation of such taxable property.
 15        (2)  With respect to each such taxing district, the  tax  rate  calculated
 16    under subsection (1) of this section shall be applied to the current equalized
 17    assessed  valuation  of all taxable property in the taxing district, including
 18    the taxable property in the revenue allocation area. The tax revenues  thereby
 19    produced shall be allocated as  follows:
 20        (a)  To  the  taxing  district shall be allocated and shall be paid by the
 21        county treasurer:
 22             (i)   All taxes levied by the taxing district or  on  its  behalf  on
 23             taxable  property  located within the taxing district but outside the
 24             revenue allocation area;
 25             (ii)  A portion of the taxes levied by the taxing district or on  its
 26             behalf  on the taxable property located within the revenue allocation
 27             area, which portion is the amount produced  by  applying  the  taxing
 28             district's  tax  rate determined under subsection (1) of this section
 29             to the equalized assessed valuation, as shown on the base  assessment
 30             roll,  of  the taxable property located within the revenue allocation
 31             area; and
 32             (iii) If such taxing district is a school district, a further portion
 33             of the taxes levied by such district or on its behalf on the  taxable
 34             property located within the revenue allocation area, which portion is
 35             the   amount   equal   to   the   percentage   specified  in  section
 36             33-1002(7)(a), Idaho Code, multiplied by the difference  between  the
 37             current equalized assessed valuation of such taxable property and the
 38             equalized assessed valuation of such taxable property as shown on the
 39             base assessment roll.
 40        (b)  To  the  urban renewal agency shall be allocated the balance, if any,
 41        of the taxes levied on the taxable property  located  within  the  revenue
 42        allocation area.
 43        (3)  Upon  enactment of an ordinance adopting a revenue allocation financ-
 44    ing provision as part of an urban renewal plan, the urban renewal agency shall
 45    create a special fund or funds to be used for the purposes enumerated in  this
 46    chapter.   The revenues allocated to the urban renewal agency pursuant to this
 47    chapter, shall be paid to the agency by the treasurer of the county  in  which
 48    the  revenue  allocation  district  is  located  and shall be deposited by the
 49    agency into one (1) or more of such special funds. The agency  may,  in  addi-
 50    tion,  deposit  into  such  special fund or funds such other income, proceeds,
 51    revenues and funds it may receive from sources other than the  revenues  allo-
 52    cated to it under subsection (2)(b) of this section.
 53        (4)  For  the  purposes  of  section 63-803, Idaho Code, during the period
                                                                        
                                           18
                                                                        
  1    when revenue allocation under this chapter  is  in  effect,  and  solely  with
  2    respect  to any taxing district in which a revenue allocation area is located,
  3    the county commissioners shall, in fixing any tax levy,  take  into  consider-
  4    ation the equalized assessed valuation of the taxable property situated in the
  5    revenue  allocation area as shown in the base assessment roll, rather than the
  6    current equalized assessed value of such taxable property.
  7        (5)  For all other purposes, including, without limitation,  for  purposes
  8    of  sections  33-802,  33-1002 and 63-1313, Idaho Code, reference in the Idaho
  9    Code to the term "market value for assessment purposes"  (or  any  other  such
 10    similar  term)  shall  mean market value for assessment purposes as defined in
 11    section 63-208, Idaho Code.
                                                                        
 12        SECTION 15.  That Section 63-315, Idaho Code, be, and the same  is  hereby
 13    amended to read as follows:
                                                                        
 14        63-315.  ASSESSMENT  RATIOS AND THE DETERMINATION OF ADJUSTED MARKET VALUE
 15    FOR ASSESSMENT PURPOSES FOR SCHOOL DISTRICTS. (1) The provisions of this  sec-
 16    tion  shall  apply  only to charter school districts levying a maintenance and
 17    operation levy in the prior calendar year.  For the purpose of  this  section,
 18    adjusted  market  value  for  assessment purposes shall be the adjusted market
 19    value for assessment purposes of all property assessed for property  tax  pur-
 20    poses for the year referred to in sections 33-802 and 33-1002, Idaho Code.
 21        (2)  The  state  tax  commission  shall  conduct a ratio study to annually
 22    ascertain the ratio between the  assessed  value  and  the  market  value  for
 23    assessment  purposes  of all property assessed for property tax purposes. Said
 24    ratio study shall be conducted in accordance with nationally  accepted  proce-
 25    dures.  From  the  ratio so ascertained the state tax commission shall compute
 26    the adjusted market value of all property assessed for property tax purposes.
 27        (3)  The ratio shall be computed in each school district  and  applied  to
 28    the market value for assessment purposes within each school district.
 29        (4)  Sales used in determining the ratio required by this section shall be
 30    arm's  length,  market value property sales occurring in the year beginning on
 31    October 1 of the year preceding the year for which the adjusted  market  value
 32    is  to  be determined. The state tax commission may, at its discretion, modify
 33    the sales period when doing so produces provably better representativeness  of
 34    the actual ratio in any school district. The state tax commission may also add
 35    independently  conducted  appraisals  when  the  state tax commission believes
 36    that this procedure will improve the representativeness and reliability of the
 37    ratio.
 38        (5)  Whenever the state tax commission is unable to determine with reason-
 39    able statistical certainty that the assessed value within any school  district
 40    differs  from  the market value for assessment purposes, the state tax commis-
 41    sion may certify the assessed value to be the adjusted  market  value  of  any
 42    school district.
 43        (6)  The  state  tax commission shall certify the adjusted market value of
 44    each school district to the state department  of  education  and  each  county
 45    auditor  no later than the first Monday in April each year. The state tax com-
 46    mission shall prepare a report indicating procedures  used  in  computing  the
 47    adjusted  market  value and showing statistical measures computed in the ratio
 48    study. This report shall be submitted to the state department of education  at
 49    the same time as the certification of adjusted market value. The report of the
 50    state tax commission shall also be made available for public inspection in the
 51    office of the county auditor.
 52        (7)  The  state  tax  commission  shall  promulgate rules to implement the
 53    ratio study described in this section.
                                                                        
                                           19
                                                                        
  1        SECTION 16.  That Section 63-802A, Idaho Code, be, and the same is  hereby
  2    amended to read as follows:
                                                                        
  3        63-802A.  NOTICE  OF  BUDGET  HEARING. (1) Not later than April 30 of each
  4    year, each taxing district shall set and notify the county clerk of  the  date
  5    and  location set for the budget hearing of the district. If no budget hearing
  6    is required by law, the county clerk shall be so notified.
  7        (2)  Beginning in 2003, a nonschool taxing district that fails  to  comply
  8    with  subsection (1) of this section shall be prohibited from including in its
  9    budget any budget increase otherwise permitted by either subsection (1)(a)  or
 10    (1)(e) of section 63-802, Idaho Code.
 11        (3)  Beginning  in  2003, a school district that fails to comply with sub-
 12    section (1) of this section shall be prohibited, in the year of such  failure,
 13    from  increasing  the  portion of its property tax budget raised under section
 14    33-802 2., Idaho Code, over the amount of the immediately preceding year.
 15        (4)  If a taxing district wishes to change the time and location  of  such
 16    budget  hearing as stated on the assessment notice, they it shall publish such
 17    change of time and location in advance of such hearing as provided by law.
                                                                        
 18        SECTION 17.  That Section 63-811, Idaho Code, be, and the same  is  hereby
 19    amended to read as follows:
                                                                        
 20        63-811.  COMPUTATION  OF PROPERTY TAXES -- DUTY OF COUNTY AUDITOR. (1) The
 21    county auditor must cause to be computed the  amount  of  the  local  property
 22    taxes  levied on the total of the taxable value as entered on the property and
 23    operating property rolls, and must deliver the property and operating property
 24    rolls to the tax collector on or before the first Monday of November.
 25        (2)  The county auditor must cause to be computed the amount of the  local
 26    property taxes levied on the total of the taxable value as entered on the sub-
 27    sequent  property  roll,  and must deliver the subsequent property roll to the
 28    tax collector as soon as possible, without delay, after the  first  Monday  of
 29    December.
 30        (3)  The  county auditor must cause to be computed the amount of the state
 31    property tax and the amount of the local property taxes levied  on  the  total
 32    taxable  value  as  entered  on the missed property roll, and must deliver the
 33    missed property roll to the tax collector as soon as possible, without  delay,
 34    after  the  first  Monday of March of the year following the year in which the
 35    assessment was entered on the missed property roll.
 36        (4)  For the purpose of this section, "taxable value" shall mean the  por-
 37    tion  of  the equalized assessed value, less any exemptions and the value that
 38    exceeds the value of the base assessment roll for the portion  of  any  taxing
 39    district  within  a  revenue  allocation  area  of  an urban renewal district,
 40    located within each taxing district which certifies a budget to be raised from
 41    a property tax levy. When the portion of the property tax to be  allocated  to
 42    school  districts  as required in sections 33-1002 and 50-2908, Idaho Code, is
 43    calculated, the taxable value must include the value that exceeds the value of
 44    the base assessment roll.
 45        (5)  The county auditor, at the time of delivery to the county tax collec-
 46    tor of the property roll, subsequent property roll,  missed property  roll  or
 47    operating  property  roll  with all property taxes computed, must subscribe an
 48    affidavit to such roll that he has to the best of his  knowledge  and  ability
 49    computed  the proper amount of property taxes due, and recorded such orders of
 50    the board of equalization as have been made and have made no other changes.
 51        (6)  Failure of the auditor to make the affidavit  shall  not  affect  the
 52    validity  of  any entry on the roll. The making of such affidavit, however, is
                                                                        
                                           20
                                                                        
  1    declared to be a duty pertaining to the office of the county auditor. In every
  2    case where the said affidavit is omitted from  the  real  property  assessment
  3    roll,  completed and delivered as aforesaid, the board of county commissioners
  4    must require the county auditor to make the same, and upon refusal or  neglect
  5    of  such county auditor to make and subscribe to such affidavit forthwith, the
  6    chairman of the said board must immediately file in the district court in  the
  7    county,  an information in writing, verified by his oath, charging such county
  8    auditor with refusal or neglect to perform the official duties  pertaining  to
  9    his  office,  and thereupon he must be proceeded against as in such cases pro-
 10    vided by law.
                                                                        
 11        SECTION 18.  That Section 63-3619, Idaho Code, be, and the same is  hereby
 12    amended to read as follows:
                                                                        
 13        63-3619.  IMPOSITION  AND  RATE  OF THE SALES TAX. An excise tax is hereby
 14    imposed upon each sale at retail at the rate of five six percent (56%) of  the
 15    sales  price  of  all  retail sales subject to taxation under this chapter and
 16    such amount shall be computed monthly on all sales at retail within  the  pre-
 17    ceding month.
 18        (a)  The tax shall apply to, be computed on, and collected for all credit,
 19    installment,  conditional  or similar sales at the time of the sale or, in the
 20    case of rentals, at the time the rental is charged.
 21        (b)  The tax hereby imposed shall be collected by the  retailer  from  the
 22    consumer.
 23        (c)  The  state  tax  commission shall provide schedules for collection of
 24    the tax on sales which involve a fraction of a dollar. The retailer shall cal-
 25    culate the tax upon the entire amount of the purchases of the consumer made at
 26    a particular time and not separately upon each item  purchased.  The  retailer
 27    may  retain  any amount collected under the bracket system prescribed which is
 28    in excess of the amount of tax for which he is liable to the state during  the
 29    period as compensation for the work of collecting the tax.
 30        (d)  It  is unlawful for any retailer to advertise or hold out or state to
 31    the public or to any customer, directly or indirectly, that  the  tax  or  any
 32    part  thereof  will be assumed or absorbed by the retailer or that it will not
 33    be added to the selling price of the property sold or that if added it or  any
 34    part thereof will be refunded. Any person violating any provision of this sec-
 35    tion is guilty of a misdemeanor.
 36        (e)  The  tax  commission may by rule provide that the amount collected by
 37    the retailer from the customer in reimbursement of the tax be displayed  sepa-
 38    rately  from  the list price, the price advertised on the premises, the marked
 39    price, or other price on the sales slip or other proof of sale.
 40        (f)  The taxes imposed by this chapter shall apply to the  sales  to  con-
 41    tractors  purchasing  for  use in the performance of contracts with the United
 42    States.
                                                                        
 43        SECTION 19.  That Section 63-3621, Idaho Code, be, and the same is  hereby
 44    amended to read as follows:
                                                                        
 45        63-3621.  IMPOSITION  AND RATE OF THE USE TAX -- EXEMPTIONS. An excise tax
 46    is hereby imposed on the storage, use, or other consumption in this  state  of
 47    tangible  personal property acquired on or after July June 1, 20056, for stor-
 48    age, use, or other consumption in this state at the rate of five  six  percent
 49    (56%) of the value of the property, and a recent sales price shall be presump-
 50    tive  evidence  of  the  value of the property unless the property is wireless
 51    telecommunications equipment, in which case a recent sales price shall be con-
                                                                        
                                           21
                                                                        
  1    clusive evidence of the value of the property.
  2        (a)  Every person storing, using, or otherwise consuming, in  this  state,
  3    tangible  personal property is liable for the tax. His liability is not extin-
  4    guished until the tax has been paid to this state except that a receipt from a
  5    retailer maintaining a place of business in this state or engaged in  business
  6    in  this  state  given to the purchaser is sufficient to relieve the purchaser
  7    from further liability for the tax to which the  receipt  refers.  A  retailer
  8    shall  not be  considered to have stored, used or consumed wireless telecommu-
  9    nications equipment by virtue of giving,  selling  or  otherwise  transferring
 10    such  equipment  at  a  discount as an inducement to a consumer to commence or
 11    continue a contract for telecommunications service.
 12        (b)  Every retailer engaged in business in this state, and making sales of
 13    tangible personal property for the storage, use, or other consumption in  this
 14    state,  not  exempted under section 63-3622, Idaho Code, shall, at the time of
 15    making the sales or, if storage, use or other consumption of the tangible per-
 16    sonal property is not then taxable hereunder, at the time the storage, use  or
 17    other consumption becomes taxable, collect the tax from the purchaser and give
 18    to  the  purchaser a receipt therefor in the manner and form prescribed by the
 19    state tax commission.
 20        (c)  The provisions of this section shall not apply when the retailer pays
 21    sales tax on the transaction and collects reimbursement  for  such  sales  tax
 22    from the customer.
 23        (d)  Every  retailer  engaged  in  business in this state or maintaining a
 24    place of business in this state shall register with the state  tax  commission
 25    and give the name and address of all agents operating in this state, the loca-
 26    tion  of all distributions or sales houses or offices or other places of busi-
 27    ness in this state, and such other information as the state tax commission may
 28    require.
 29        (e)  For the purpose of the proper administration of this act and to  pre-
 30    vent  evasion  of the use tax and the duty to collect the use tax, it shall be
 31    presumed that tangible personal property sold by any person  for  delivery  in
 32    this  state  is sold for storage, use, or other consumption in this state. The
 33    burden of proving the sale is tax exempt is upon the person who makes the sale
 34    unless he obtains from the purchaser a resale certificate to the  effect  that
 35    the  property  is  purchased  for  resale or rental. It shall be presumed that
 36    sales made to a person who has completed a resale certificate for the seller's
 37    records are not taxable and the seller need not collect  sales  or  use  taxes
 38    unless the tangible personal property purchased is taxable to the purchaser as
 39    a matter of law in the particular instance claimed on the resale certificate.
 40        A  seller  may  accept  a resale certificate from a purchaser prior to the
 41    time of sale, at the time of sale, or at any reasonable time  after  the  sale
 42    when necessary to establish the privilege of the exemption. The resale certif-
 43    icate  relieves  the person selling the property from the burden of proof only
 44    if taken from a person who is engaged in the business of  selling  or  renting
 45    tangible  personal  property  and who holds the permit provided for by section
 46    63-3620, Idaho Code, or who is a retailer not  engaged  in  business  in  this
 47    state,  and  who,  at  the  time of purchasing the tangible personal property,
 48    intends to sell or rent it in the regular course of business or is  unable  to
 49    ascertain at the time of purchase whether the property will be sold or will be
 50    used for some other purpose. Other than as provided elsewhere in this section,
 51    when  a resale certificate, properly executed, is presented to the seller, the
 52    seller has no duty or obligation to collect sales or use taxes  in  regard  to
 53    any  sales transaction so documented regardless of whether the purchaser prop-
 54    erly or improperly claimed an exemption. A seller so relieved of  the  obliga-
 55    tion  to  collect  tax  is also relieved of any liability to the purchaser for
                                                                        
                                           22
                                                                        
  1    failure to collect tax or for making any report or disclosure  of  information
  2    required or permitted under this chapter.
  3        The  resale  certificate shall bear the name and address of the purchaser,
  4    shall be signed by the purchaser or his agent, shall indicate  the  number  of
  5    the  permit  issued to the purchaser, or that the purchaser is an out-of-state
  6    retailer, and shall indicate the general character of  the  tangible  personal
  7    property sold by the purchaser in the regular course of business. The certifi-
  8    cate  shall be substantially in such form as the state tax commission may pre-
  9    scribe.
 10        (f)  If a purchaser who gives a resale certificate makes  any  storage  or
 11    use of the property other than retention, demonstration or display while hold-
 12    ing it for sale in  the regular course of business, the storage or use is tax-
 13    able as of the time the property is first so stored or used.
 14        (g)  Any  person  violating  any  provision of this section is guilty of a
 15    misdemeanor and punishable by a fine not in  excess  of  one  hundred  dollars
 16    ($100), and each violation shall constitute a separate offense.
 17        (h)  It  shall  be  presumed  that  tangible  personal property shipped or
 18    brought to this state by the purchaser was  purchased  from  a  retailer,  for
 19    storage, use or other consumption in this state.
 20        (i)  It  shall  be presumed that tangible personal property delivered out-
 21    side this state to a purchaser known by the retailer to be a resident of  this
 22    state  was purchased from a retailer for storage, use, or other consumption in
 23    this state. This presumption may be controverted by evidence  satisfactory  to
 24    the state tax commission that the property was not purchased for storage, use,
 25    or other consumption in this state.
 26        (j)  When  the tangible personal property subject to use tax has been sub-
 27    jected to a general retail sales or use tax by another  state  of  the  United
 28    States  in an amount equal to or greater than the amount of the Idaho tax, and
 29    evidence can be given of such payment, the property will  not  be  subject  to
 30    Idaho  use tax. If the amount paid the other state was less, the property will
 31    be subject to use tax to the extent that the Idaho tax exceeds the tax paid to
 32    the other state. For the purposes of this subsection, a registration  certifi-
 33    cate  or title issued by another state or subdivision thereof for a vehicle or
 34    trailer or a vessel as defined in section 67-7003, Idaho Code, shall be suffi-
 35    cient evidence of payment of a general retail sales or use tax.
 36        (k)  The use tax herein imposed shall not apply to the use by  a  nonresi-
 37    dent  of  this  state of a motor vehicle which is registered or licensed under
 38    the laws of the state of his residence and is not used in this state more than
 39    a cumulative period of time totaling  ninety  (90)  days  in  any  consecutive
 40    twelve  (12)  months,  and  which is not required to be registered or licensed
 41    under the laws of this state.
 42        (l)  The use tax herein imposed shall not apply to the  use  of  household
 43    goods,  personal  effects and personally owned motor vehicles by a resident of
 44    this state, if such articles were acquired by such  person  in  another  state
 45    while a resident of that state and primarily for use outside this state and if
 46    such  use was actual and substantial, but if an article was acquired less than
 47    three (3) months prior to the time he entered this state, it will be  presumed
 48    that  the  article was acquired for use in this state and that its use outside
 49    this state was not actual and substantial. For purposes  of  this  subsection,
 50    "resident" shall be as defined in section 63-3013 or 63-3013A, Idaho Code.
 51        (m)  The  use  tax  herein  imposed shall not apply to the storage, use or
 52    other consumption of tangible personal property which is or will  be  incorpo-
 53    rated  into  real  property  and  which has been donated to and has become the
 54    property of:
 55        (1)  A nonprofit organization as defined in section 63-3622O, Idaho  Code;
                                                                        
                                           23
                                                                        
  1        or
  2        (2)  The state of Idaho; or
  3        (3)  Any political subdivision of the state.
  4    This  exemption applies whether the tangible personal property is incorporated
  5    in real property by the donee, a contractor or subcontractor of the donee,  or
  6    any other person.
                                                                        
  7        SECTION  20.  That Section 63-3638, Idaho Code, be, and the same is hereby
  8    amended to read as follows:
                                                                        
  9        63-3638.  SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
 10    ter, except as may otherwise be required  in  sections  63-3203  and  63-3709,
 11    Idaho Code, shall be distributed by the tax commission as follows:
 12        (1)  An  amount  of money shall be distributed to the state refund account
 13    sufficient to pay current refund claims. All  refunds  authorized  under  this
 14    chapter  by the commission shall be paid through the state refund account, and
 15    those moneys are continuously appropriated.
 16        (2)  Five million dollars ($5,000,000) per year is continuously  appropri-
 17    ated and shall be distributed to the permanent building fund, provided by sec-
 18    tion 57-1108, Idaho Code.
 19        (3)  Four  million eight hundred thousand dollars ($4,800,000) per year is
 20    continuously appropriated and shall be distributed to the water pollution con-
 21    trol account established by section 39-3605, Idaho Code.
 22        (4)  An amount equal to the sum required to be certified by  the  chairman
 23    of  the Idaho housing and finance association to the state tax commission pur-
 24    suant to section 67-6211, Idaho Code, in each year is  continuously  appropri-
 25    ated  and  shall be paid to any capital reserve fund, established by the Idaho
 26    housing and finance association pursuant to section 67-6211, Idaho Code.  Such
 27    amounts,  if any, as may be appropriated hereunder to the capital reserve fund
 28    of the Idaho housing and finance association shall be repaid for  distribution
 29    under  the  provisions  of  this section, subject to the provisions of section
 30    67-6215, Idaho Code, by the Idaho housing and finance association, as soon  as
 31    possible,  from  any  moneys  available  therefor and in excess of the amounts
 32    which the association determines will keep it self-supporting.
 33        (5)  An amount equal to the sum required  by  the  provisions  of  section
 34    63-709, Idaho Code, is continuously appropriated and shall be paid as provided
 35    by section 63-709, Idaho Code.
 36        (6)  An  amount  required by the provisions of chapter 53, title 33, Idaho
 37    Code.
 38        (7)  An amount required by the provisions of chapter 87, title  67,  Idaho
 39    Code.
 40        (8)  One  dollar  ($1.00)  on each application for certificate of title or
 41    initial application for registration of  a  motor  vehicle,  snowmobile,  all-
 42    terrain vehicle or other vehicle processed by the county assessor or the Idaho
 43    transportation  department  excepting those applications in which any sales or
 44    use taxes due have been previously collected by a retailer, shall be a fee for
 45    the services of the assessor of the county or the Idaho transportation depart-
 46    ment in collecting such taxes, and shall be paid into the current expense fund
 47    of the county or state highway account established in  section  40-702,  Idaho
 48    Code.
 49        (9)  Thirteen  Eleven  and three-quarters five-tenths percent (13.7511.5%)
 50    is continuously appropriated and shall be distributed to the  revenue  sharing
 51    account  which is created in the state treasury, and the moneys in the revenue
 52    sharing account will be paid in installments each calendar quarter by the  tax
 53    commission as follows:
                                                                        
                                           24
                                                                        
  1        (a)  Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
  2        ious cities as follows:
  3             (i)   Fifty percent (50%) of such amount shall be paid to the various
  4             cities,  and  each city shall be entitled to an amount in the propor-
  5             tion that the population of that city bears to the population of  all
  6             cities within the state; and
  7             (ii)  Fifty percent (50%) of such amount shall be paid to the various
  8             cities,  and  each city shall be entitled to an amount in the propor-
  9             tion that the preceding year's market value for  assessment  purposes
 10             for  that city bears to the preceding year's market value for assess-
 11             ment purposes for all cities within the state.
 12        (b)  Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
 13        ious counties as follows:
 14             (i)   One million three hundred twenty thousand dollars  ($1,320,000)
 15             annually  shall be distributed one forty-fourth (1/44) to each of the
 16             various counties; and
 17             (ii)  The balance of such amount shall be paid to the  various  coun-
 18             ties,  and  each county shall be entitled to an amount in the propor-
 19             tion that the population of that county bears to  the  population  of
 20             the state;
 21        (c)  Thirty-five  and  nine-tenths percent (35.9%) of the amount appropri-
 22        ated in this subsection (9) shall be paid to the several counties for dis-
 23        tribution to the cities and counties as follows:
 24             (i)   Each city and county which received a payment under the  provi-
 25             sions of section 63-3638(e), Idaho Code, during the fourth quarter of
 26             calendar  year  1999,  shall be entitled to a like amount during suc-
 27             ceeding calendar quarters.
 28             (ii)  If the dollar amount of money available under  this  subsection
 29             (9)(c)  in  any  quarter does not equal the amount paid in the fourth
 30             quarter of calendar year 1999, each city's and county's payment shall
 31             be reduced proportionately.
 32             (iii) If the dollar amount of money available under  this  subsection
 33             (9)(c)  in  any quarter exceeds the amount paid in the fourth quarter
 34             of calendar year 1999, each city and county shall be  entitled  to  a
 35             proportionately increased payment, but such increase shall not exceed
 36             one  hundred  five  percent  (105%)  of the total payment made in the
 37             fourth quarter of calendar year 1999.
 38             (iv)  If the dollar amount of money available under  this  subsection
 39             (9)(c)  in any quarter exceeds one hundred five percent (105%) of the
 40             total payment made in the fourth quarter of calendar year  1999,  any
 41             amount  over  and above such one hundred five percent (105%) shall be
 42             paid fifty percent (50%) to the various cities in the proportion that
 43             the population of the city bears to  the  population  of  all  cities
 44             within  the state, and fifty percent (50%) to the various counties in
 45             the proportion that the population of a county bears to  the  popula-
 46             tion of the state; and
 47        (d)  Seven  and  seven-tenths percent (7.7%) of the amount appropriated in
 48        this subsection (9) shall be paid to the several counties for distribution
 49        to special purpose taxing districts as follows:
 50             (i)   Each such district which received a payment  under  the  provi-
 51             sions of section 63-3638(e), Idaho Code, during the fourth quarter of
 52             calendar  year  1999,  shall be entitled to a like amount during suc-
 53             ceeding calendar quarters.
 54             (ii)  If the dollar amount of money available under  this  subsection
 55             (9)(d)  in  any  quarter does not equal the amount paid in the fourth
                                                                        
                                           25
                                                                        
  1             quarter of calendar year 1999, each special purpose taxing district's
  2             payment shall be reduced proportionately.
  3             (iii) If the dollar amount of money available under  this  subsection
  4             (9)(d)  in any quarter exceeds the amount distributed under paragraph
  5             (i) of this subsection (9)(d), each special purpose  taxing  district
  6             shall  be  entitled  to a share of the excess based on the proportion
  7             each such district's current property tax budget bears to the sum  of
  8             the  current property tax budgets of all such districts in the state.
  9             The state tax commission shall calculate  district  current  property
 10             tax budgets to include any unrecovered foregone amounts as determined
 11             under section 63-802(1)(e), Idaho Code. When a special purpose taxing
 12             district  is situated in more than one (1) county, the tax commission
 13             shall determine the portion attributable to the special purpose  tax-
 14             ing district from each county in which it is situated.
 15             (iv)  If  special  purpose  taxing  districts  are  consolidated, the
 16             resulting district is entitled to a base amount equal to the  sum  of
 17             the  base amounts which were received in the last calendar quarter by
 18             each district prior to the consolidation.
 19             (v)   If  a  special  purpose  taxing  district   is   dissolved   or
 20             disincorporated, the state tax commission shall continuously distrib-
 21             ute  to the board of county commissioners an amount equal to the last
 22             quarter's distribution prior to dissolution or disincorporation.  The
 23             board  of  county commissioners shall determine any redistribution of
 24             moneys so received.
 25             (vi)  Taxing districts formed after January 1, 2001, are not entitled
 26             to a payment under the provisions of this subsection (9)(d).
 27             (vii) For purposes of this subsection (9)(d), a special purpose  tax-
 28             ing  district is any taxing district which is not a city, a county or
 29             a school district.
 30        (10) Amounts calculated in accordance with section 2, chapter  356,  Llaws
 31    of 2001, for annual distribution to counties and other taxing districts begin-
 32    ning  in  October  2001  for replacement of property tax on farm machinery and
 33    equipment exempted pursuant to section 63-602EE,  Idaho  Code.  For  nonschool
 34    districts,  the state tax commission shall distribute one-fourth (1/4) of this
 35    amount certified quarterly to each county. For school districts, the state tax
 36    commission shall distribute one-fourth (1/4) of the amount certified quarterly
 37    to each school district. For nonschool districts,  the  county  auditor  shall
 38    distribute  to  each district within thirty (30) calendar days from receipt of
 39    moneys from the tax commission. Moneys received by each  taxing  district  for
 40    replacement  shall  be utilized in the same manner and in the same proportions
 41    as revenues from property taxation. The moneys remitted to  the  county  trea-
 42    surer  for  replacement  of  property exempt from taxation pursuant to section
 43    63-602EE, Idaho Code, may be considered by the counties and other taxing  dis-
 44    tricts  and budgeted at the same time, in the same manner and in the same year
 45    as revenues from taxation on personal property which these moneys replace.  If
 46    taxing  districts  are  consolidated, the resulting district is entitled to an
 47    amount equal to the sum of the amounts which were received in the last  calen-
 48    dar quarter by each district pursuant to this subsection prior to the consoli-
 49    dation.  If  a  taxing district is dissolved or disincorporated, the state tax
 50    commission shall continuously distribute to the board of county  commissioners
 51    an  amount  equal  to  the last quarter's distribution prior to dissolution or
 52    disincorporation. The board of county commissioners shall determine any redis-
 53    tribution of moneys so received.  If a taxing district annexes territory,  the
 54    distribution  of  moneys  received  pursuant to this subsection shall be unaf-
 55    fected. Taxing districts formed after January 1, 2001, are not entitled  to  a
                                                                        
                                           26
                                                                        
  1    payment  under  the  provisions  of  this  subsection.  School districts shall
  2    receive an amount determined by multiplying the sum of the  year  2000  school
  3    district  levy  plus  .001  minus  .004 times the market value on December 31,
  4    2000, in the district of the property exempt from taxation pursuant to section
  5    63-602EE, Idaho Code.  For school districts, beginning January 1,  2002,  only
  6    the  portion  of  property tax replacement received to replace property exempt
  7    from taxation pursuant to section 63-602EE, Idaho Code, based on the tax  year
  8    2000  tax  charges for maintenance and operation as limited by sections 33-802
  9    2. and 33-1002D, Idaho Code, shall not be subtracted from the  maximum  school
 10    district maintenance and operation property taxes permitted in accordance with
 11    section 33-802 2., Idaho Code. For purposes of the limitation provided by sec-
 12    tion  63-802, Idaho Code, moneys received pursuant to this section as property
 13    tax  replacement  for  property  exempt  from  taxation  pursuant  to  section
 14    63-602EE, Idaho Code, shall be treated as property tax revenues.
 15        (11) Any moneys remaining over and  above  those  necessary  to  meet  and
 16    reserve for payments under other subsections of this section shall be distrib-
 17    uted to the general fund.
                                                                        
 18        SECTION  21.  SEVERABILITY. The provisions of this act are hereby declared
 19    to be severable and if any provision of this act or the  application  of  such
 20    provision  to  any  person or circumstance is declared invalid for any reason,
 21    such declaration shall not affect the validity of the  remaining  portions  of
 22    this act.
                                                                        
 23        SECTION  22.  An  emergency  existing  therefor, which emergency is hereby
 24    declared to exist, Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
 25    16, 17 and 21 of this act shall be in full force and effect on and after  pas-
 26    sage  and  approval  and  retroactively to January 1, 2006. Sections 18 and 19
 27    shall be in full force and effect on and after June 1, 2006. Section 20  shall
 28    be in full force and effect on and after July 1, 2006.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 16302

The purpose of this legislation is to provide meaningful and
substantial property tax relief to all Idaho property owners by
repealing the school maintenance and operations (M&O) levy. 
These funds would be replaced, up to the equalized funding level,
by an increased General Fund appropriation to public schools. 
The source of such additional general funds would be provided by
an increase in the state sales tax rate from 5% to 6%.



                           FISCAL NOTE

This legislation would have no impact on 110 of the state's 114
school districts, as well as no impact on charter schools.  It
removes nearly $297 million in FY 2007 School M&O property taxes. 
Of this, the state would replace approximately $250.7 million, up
to the equalized funding level provided to 110 of the state's 114
school districts, assuming that funding is provided for a 3%
increase in per support unit discretionary funds for school
districts.

The legislation provides the state's four wealthiest school
districts with the ability to levy the difference between what
they are receiving now from their M&O levy and what the state
will provide in equalized funding.  (They currently receive no
state equalization funding.)

The $250.7 million state cost would be mostly covered through the
$210 million raised by increasing the sales tax from 5% to 6%,
with the balance to be covered by additional appropriations.




Contact
Name: Rep. Ken Roberts 
Phone: (208) 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                         H 859