1998 Legislation
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SENATE BILL NO. 1535 – School funding/property tax replcmt

SENATE BILL NO. 1535

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Daily Data Tracking History



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

Bill Text


S1535


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fourth Legislature                 Second Regular Session - 1998
                                                                        

                                      IN 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 the  sales tax receipts
21        transferred as provided in section 63-3638, Idaho Code   appro-
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
42         sales tax receipts transferred as provided in section 63-3638, Idaho
43        Code   appropriations 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, Idaho
 2        Code. 
 3        (e)  Six   per cent   percent  (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 ten  per cent   percent  (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-quarters  per cent   percent 
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)   Fifty  per cent   percent  (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)  Fifty   per cent   percent  (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 / Fiscal Impact


    





                         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