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S1535............................................................by FINANCE
SCHOOL FUNDING - Amends existing law to provide that the property tax
replacement in school funding shall be made by appropriation rather than by
an automatic distribution from the sales tax receipts.
03/04 Senate intro - 1st rdg - to printing
03/05 Rpt prt - to Fin
03/11 Rpt out - rec d/p - to 2nd rdg
03/12 Rls susp - PASSED - 29-4-2
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Deide, Frasure, Geddes, Ingram, Ipsen,
Keough, King, Lee, Noh, Parry, Richardson, Riggs, Risch, Sandy,
Sorensen, Sweeney, Thorne, Twiggs, Wheeler, Whitworth
NAYS--Dunklin, McLaughlin, Schroeder, Stennett
Absent and excused--Hansen, Hawkins
Floor Sponsor - Frasure
Title apvd - to House
03/13 House intro - 1st rdg - to Approp
03/18 Rpt out - rec d/p - to 2nd rdg
03/19 Rls susp - PASSED - 46-22-2
AYES -- Alltus, Barraclough, Bell, Black(15), Black(23), Bruneel,
Callister, Campbell, Clark, Crane, Crow, Deal, Denney, Field(20),
Gagner, Geddes, Gould, Hadley, Hornbeck, Jones(9), Jones(20),
Kellogg, Kempton, Kendell, Kunz, Lake, Linford, Loertscher, Mader,
McKague, Meyer, Mortensen, Newcomb, Reynolds, Richman, Sali,
Schaefer, Stevenson, Stubbs, Taylor, Tilman, Tippets, Wheeler, Wood,
Zimmermann, Mr Speaker
NAYS -- Barrett, Bieter, Bivens, Boe, Chase, Cuddy, Ellsworth,
Field(13), Henbest, Jaquet, Judd, Kjellander, Marley, Miller,
Pischner, Pomeroy, Ridinger, Robison, Stoicheff, Stone, Trail, Watson
Absent and excused -- Hansen, Jones(22),
Floor Sponsor - Black(23)
Title apvd - to Senate
03/20 To enrol - rpt enrol - Pres signed
03/23 Sp signed - to Governor
03/25 Governor signed
Session Law Chapter 362
Effective: 07/01/98
S1535|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE SENATE SENATE BILL NO. 1535 BY FINANCE COMMITTEE 1 AN ACT 2 RELATING TO PROPERTY TAX REPLACEMENT IN SCHOOL FUNDING; AMENDING SECTION 3 33-1002D, IDAHO CODE, TO STRIKE REFERENCE TO SALES TAX RECEIPTS AND PRO- 4 VIDE THAT APPROPRIATIONS SHALL BE MADE FOR PROPERTY TAX REPLACEMENT; AND 5 AMENDING SECTION 63-3638, IDAHO CODE, TO STRIKE DISTRIBUTION OF SALES TAX 6 RECEIPTS FOR THE PURPOSE OF PROPERTY TAX RELIEF AND TO MAKE TECHNICAL COR- 7 RECTIONS. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Section 33-1002D, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 33-1002D. PROPERTY TAX REPLACEMENT. The purpose of this section is to 12 replace a portion of the authorized school maintenance and operation property 13 tax levy with state sales tax receipts. As used in this section, the term 14 "property tax computation ratio" shall mean a ratio determined by dividing the 15 district's certified property tax maintenance and operation budget by the 16 actual or adjusted market value for assessment purposes as such values existed 17 on December 31 of the previous calendar year. 18 (1) (a) In the case of a school district that had a property tax computa- 19 tion ratio of not less than four-tenths of one percent (.4%) in tax year 20 1994, that school district shall receive from thesales tax receipts21transferred as provided in section 63-3638, Idaho Codeappro- 22 priations made for that purpose , an amount equal to the greater of 23 the district's actual or adjusted market value for assessment purposes as 24 such valuation existed on December 31 of the previous calendar year multi- 25 plied by one-tenth of one percent (.1%). 26 (b) In the case of a school district that had a property tax computation 27 ratio of less than four-tenths of one percent (.4%) in tax year 1994, the 28 greater of the 1992, 1993 or 1994 property tax computation ratio less 29 three-tenths of one percent (.3%) shall be designated the district's base 30 multiplier. In no case shall the base multiplier be less than zero (0). 31 Four-tenths of one percent (.4%) less the greater of the district's 1992, 32 1993 or 1994 property tax computation ratio shall be designated the 33 district's adjustment factor. In no case shall the adjustment factor be 34 greater than one-tenth of one percent (.1%) or less than zero (0). Each 35 school district's actual multiplier shall be the base multiplier plus one- 36 fifth (1/5) of the adjustment factor in tax year 1995, the base multiplier 37 plus two-fifths (2/5) of the adjustment factor in tax year 1996, the base 38 multiplier plus three-fifths (3/5) of the adjustment factor in tax year 39 1997, the base multiplier plus four-fifths (4/5) of the adjustment factor 40 in tax year 1998, and the base multiplier plus the adjustment factor in 41 tax year 1999 and beyond. Each school district shall receive, from the 42sales tax receipts transferred as provided in section 63-3638, Idaho43Codeappropriations made for that purpose , an amount 2 1 equal to the district's actual or adjusted market value for assessment 2 purposes as such valuation existed on December 31 of the previous calendar 3 year multiplied by the district's actual multiplier. 4 (2) (a) Participation in this property tax reduction program is voluntary 5 for a charter district. If a charter district participates, in addition to 6 the provisions of subsection (1) of this section it shall not have a prop- 7 erty tax computation ratio that is above three-tenths of one percent 8 (.3%) or the district's property tax computation ratio in tax year 1994, 9 less one-tenth of one percent (.1%), whichever is greater. 10 (b) If in any year the charter district's property tax computation ratio 11 used to calculate its maintenance and operation budget is increased above 12 the limit specified in this subsection the district shall not be eligible 13 for the distribution pursuant to subsection (1) of this section for that 14 year. 15 (3) Limitations imposed upon a school district's property tax computation 16 ratio under the provisions of this section do not apply to any levy approved 17 by electors of the school district as provided by law. 18 (4) Distributions calculated as provided in this section shall be made to 19 school districts of this state in two (2) equal installments on the due dates 20 as specified in section 63-903(1), Idaho Code, for the property taxes being 21 replaced. 22 (5) For purposes of section 33-1002, Idaho Code, moneys distributed pur- 23 suant to this section shall not be included in determining total state funds. 24 SECTION 2. That Section 63-3638, Idaho Code, be, and the same is hereby 25 amended to read as follows: 26 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap- 27 ter, except as may otherwise be required in section 63-3203, Idaho Code, shall 28 be distributed by the tax commission as follows: 29 (a) An amount of money shall be distributed to the state refund account 30 sufficient to pay current refund claims. All refunds authorized under this 31 chapter by the commission shall be paid through the state refund account, and 32 those moneys are continuously appropriated. 33 (b) Five hundred thousand dollars ($500,000) per year is continuously 34 appropriated and shall be distributed to the permanent building account, pro- 35 vided by section 57-1108, Idaho Code. 36 (c) Four million eight hundred thousand dollars ($4,800,000) per year is 37 continuously appropriated and shall be distributed to the water pollution con- 38 trol account established by section 39-3605, Idaho Code. 39 (d) (1) An amount equal to the sum required to be certified by the chair- 40 man of the Idaho housing and finance association to the state tax commis- 41 sion pursuant to section 67-6211, Idaho Code, in each year is continuously 42 appropriated and shall be paid to any capital reserve fund, established by 43 the Idaho housing and finance association pursuant to section 67-6211, 44 Idaho Code. Such amounts, if any, as may be appropriated hereunder to the 45 capital reserve fund of the Idaho housing and finance association shall be 46 repaid for distribution under the provisions of this section, subject to 47 the provisions of section 67-6215, Idaho Code, by the Idaho housing and 48 finance association, as soon as possible, from any moneys available there- 49 for and in excess of the amounts which the association determines will 50 keep it self-supporting. 51 (2) An amount equal to the sum required by the provisions of section 52 63-709, Idaho Code, is continuously appropriated and shall be paid as pro- 53 vided by section 63-709, Idaho Code. 3 1(3) An amount required by the provisions of section 33-1002D, Idaho2Code.3 (e) Sixper centpercent (6%) is hereby appro- 4 priated and shall be paid to the county treasurer of each county in amounts 5 to be determined as follows: 6 (1) Each taxing district other than school districts shall be entitled to 7 a base share of sales tax moneys equal to the amount distributed to that 8 district for the fourth calendar quarter of 1979. The computation shall 9 not include any distributions made to the credit of either the former 10 county school levy or the state water pollution control levy. The percent- 11 age so determined for each taxing district shall be applied each quarter 12 to the above percentage of sales tax. The resulting sums shall be paid to 13 the county treasurer of each county for distribution to each taxing dis- 14 trict, except school districts, which received sales tax moneys in 1979. 15 Whenever a taxing district is dissolved, the dissolved district's share of 16 sales moneys shall be credited continuously to the county current expense 17 fund. 18 (2) Whenever the amount of nonschool district sales tax moneys distrib- 19 uted exceeds in any quarter the total amount of moneys distributed to non- 20 school districts for the base quarter, which is the fourth calendar quar- 21 ter of 1979, by tenper centpercent (10%), or 22 more, the excess of the base quarter shall be paid to the county treasurer 23 of each county for distribution to each taxing district in the county, 24 except school districts, in the following manner. 25 The state tax commission shall compute the percentage that the aver- 26 age amount of taxes collected from assessments for the years 1965, 1966 27 and 1967 on the personal property described as business inventory in sub- 28 sections (1) and (2) of section 63-602W, Idaho Code, for each county bears 29 to the average total amount of taxes collected from assessments for said 30 years on the personal property described as business inventory in subsec- 31 tions (1) and (2) of section 63-602W, Idaho Code, for all counties in the 32 state. The percentage so determined for each county shall be applied to 33 the sales tax distributed under this subsection and the resulting sum 34 shall be paid to the county treasurer of each county for distribution to 35 each taxing district, except school districts, in the county as follows: 36 (i) Each year the county commissioners in each county shall take 37 the tax charge, applicable to the current property roll equalized by 38 county commissioners sitting as a board of equalization, of each tax- 39 ing district within the county, except school districts, and divide 40 it by the total current tax charges applicable to the current prop- 41 erty roll of all taxing districts, except school districts, within 42 said county and the resulting percentages shall be applied to the 43 county's proportionate share of said sales tax account and the 44 resulting amount shall be distributed to each taxing district in the 45 county periodically but not less frequently than quarterly by the 46 county auditor and applied by such taxing districts in the same man- 47 ner and in the same proportions as revenues from property taxation. 48 (ii) The moneys set aside and appropriated to the county treasurer 49 out of the sales tax account above may be considered by the counties 50 and other taxing districts and budgeted against at the same time, in 51 the same manner and in the same year as revenues from taxation on all 52 classes of personal property which these moneys replace. 53 (3) All moneys distributed pursuant to subsection (e) shall be subject to 54 the redistribution provisions of section 40-801, Idaho Code, where appli- 55 cable. 4 1 (f) One dollar ($1.00) on each application for certificate of title to a 2 motor vehicle, or initial application for registration processed by the county 3 assessor or the Idaho transportation department excepting those applications 4 in which any sales or use taxes due have been previously collected by a 5 retailer, shall be a fee for the services of the assessor of the county or the 6 Idaho transportation department in collecting such taxes, and shall be paid 7 into the current expense fund of the county or state highway account estab- 8 lished in section 40-702, Idaho Code. 9 (g) Seven and three-quartersper centpercent 10 (7.75%) is continuously appropriated and shall be distributed to the revenue 11 sharing account which is created in the state operating fund, and the moneys 12 in the revenue sharing account will be paid by the tax commission as follows: 13 (1) One-half (1/2) shall be paid to the various cities as follows: 14 (i) Fiftyper centpercent (50%) of such 15 amount shall be paid to the various cities, and each city shall be 16 entitled to an amount in the proportion that the population of that 17 city bears to the population of all cities within the state; and 18 (ii) Fiftyper centpercent (50%) of such 19 amount shall be paid to the various cities, and each city shall be 20 entitled to an amount in the proportion that the preceding year's 21 market value for assessment purposes for that city bears to the pre- 22 ceding year's market value for assessment purposes for all cities 23 within the state. 24 (2) One-half (1/2) shall be paid to the state's general account or to the 25 various counties as follows: 26 (i) One million three hundred twenty thousand dollars ($1,320,000) 27 shall be distributed one forty-fourth (1/44) to each of the various 28 counties; and 29 (ii) The balance of such amount shall be paid to the various coun- 30 ties, and each county shall be entitled to an amount in the propor- 31 tion that the population of that county bears to the population of 32 the state. 33 (h) Any moneys remaining over and above those necessary to meet and 34 reserve for payments under other subsections of this section shall be distrib- 35 uted to the general account.
STATEMENT OF PURPOSE
RS 08111
This legislation is an accounting change that amends the Idaho Code with respect to the public
school property tax replacement that is diverted from the sales tax collections. The change
proposed here will allow the sales tax receipts to be deposited into the General Fund and then
the appropriate amount will be included in the public school budget. Currently, the property tax
replacement is paid directly to the school districts without ever going through the budgeting and
appropriations process. As a result of this direct payment, various reports of the amount of state
General Funds supporting the public schools are understated by over $50 million. (The public
school percentage share of the General Fund is also understated.)
FISCAL NOTE
There would be no impact on the General Fund. The sales tax receipts to the General Fund
would increase by the amount being paid directly to the school districts to replace property taxes
(approximately $50 million) and the appropriation of General Funds to the public schools would
increase by the same amount.
Contact: Sen. Evan Frasure 332-1326
Gordon Fisher 334-4738
Budget & Policy Analysis
S 1535