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H0281...............................................by REVENUE AND TAXATION SCHOOL DISTRICTS - INCOME TAX - Adds to existing law to provide for a school district income tax, upon voter approval, with the moneys to be used to replace the property tax for maintenance and operations purposes. 02/19 House intro - 1st rdg - to printing 02/22 Rpt prt - to Rev/Tax
H0281|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 281 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO SCHOOL DISTRICT INCOME TAXES; AMENDING CHAPTER 8, TITLE 33, IDAHO 3 CODE, BY THE ADDITION OF NEW SECTIONS 33-808, 33-809, 33-810, 33-811, 4 33-812, 33-813 AND 33-814, IDAHO CODE, TO PROVIDE AUTHORITY FOR VOTERS OF 5 A SCHOOL DISTRICT TO APPROVE SCHOOL DISTRICT INCOME TAXES, TO PROVIDE FOR 6 CERTIFICATION OF ADDITIONAL TAX RATE, TO CREATE A SCHOOL DISTRICT TAX 7 FUND, TO PROVIDE DISTRIBUTIONS OF SCHOOL DISTRICT INCOME TAXES, TO PROVIDE 8 FOR REPEAL OF SCHOOL DISTRICT INCOME TAXES, TO PROVIDE FOR AN EMERGENCY 9 PROPERTY TAX LEVY AND TO PROVIDE FOR THE ISSUANCE OF REVENUE BONDS BY A 10 SCHOOL DISTRICT. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Chapter 8, Title 33, Idaho Code, be, and the same is 13 hereby amended by the addition thereto of NEW SECTIONS , to be 14 known and designated as Sections 33-808, 33-809, 33-810, 33-811, 33-812, 15 33-813 and 33-814, Idaho Code, and to read as follows: 16 33-808. AUTHORITY FOR VOTERS TO APPROVE SCHOOL DISTRICT INCOME TAXES. The 17 voters of a school district, including specially chartered districts may 18 authorize their school district to adopt, implement and collect a school dis- 19 trict income tax. No school district income tax shall exceed twenty percent 20 (20%) of Idaho income tax liability calculated as required in chapter 30, 21 title 63, Idaho Code. A school district income tax shall apply to all resident 22 individuals of the school district at the time of filing a state income tax 23 return, and the address of the taxpayer used on the return shall be conclusive 24 evidence of residency. The authorization to adopt, implement and collect a 25 school district income tax must be made and approved by two-thirds (2/3) of 26 school district electors voting in an election held pursuant to chapter 4, 27 title 33, Idaho Code. The amount of money that may be raised by the imposition 28 of a school district income tax or by the combination of the income tax and 29 supplemental levy may not exceed the amount that could lawfully be permitted 30 to be raised as allowed by law. If no school district or residence is indi- 31 cated on the state income tax return, the state tax commission shall assign it 32 to a school district for the purposes of this section; and a penalty of one 33 hundred dollars ($100) or ten percent (10%) of the state income tax liability 34 of the taxpayer, whichever is greater, may be assessed by the tax commission. 35 33-809. CERTIFICATION OF ADDITIONAL TAX RATE. If the voters of a school 36 district, including a specially chartered district, approve a school district 37 income tax pursuant to section 33-808, Idaho Code, the board of trustees shall 38 fix a rate, which rate shall be a percentage of the state income tax for indi- 39 viduals to whom the income tax imposed in this chapter would apply. The dis- 40 trict shall certify the rate to the state tax commission and indicate the time 41 periods when the rate will be in effect. Unless a later date is specifically 42 stated by the board of trustees, school district income taxes that are 2 1 approved shall be in full force and effect on and after January 1 next follow- 2 ing the election. 3 33-810. SCHOOL DISTRICT TAX FUND. An amount of money necessary to pay 4 costs incurred by the state tax commission in conjunction with the administra- 5 tion and enforcement of school district income taxes shall be appropriated 6 annually from the school district tax fund which is hereby created in the ded- 7 icated fund of the state treasury for the purpose of administering school dis- 8 trict income taxes. An amount shall be retained in this fund as a school dis- 9 trict refund fund for the purpose of repaying overpayments made under this 10 chapter and for the purpose of paying any other erroneous receipts illegally 11 assessed or collected, penalties collected without authority and taxes and 12 other amounts unjustly assessed, collected or which are excessive in amount, 13 and there is hereby appropriated from this fund so much thereof as may be nec- 14 essary for the payment of refunds. 15 33-811. DISTRIBUTION OF SCHOOL DISTRICT INCOME TAX REVENUES. (1) After 16 the deduction provided for in section 33-810, Idaho Code, all net revenues 17 generated by the school district income tax shall be paid to the school dis- 18 trict which imposed the tax. Payments required under this subsection shall be 19 made no less frequently than quarterly. 20 (2) Any revenues received by a school district that are in excess of the 21 amount stated for the purpose for which imposed shall be held in reserve by 22 the school district and shall be utilized as provided in section 33-814, Idaho 23 Code. 24 33-812. REPEAL OF SCHOOL DISTRICT INCOME TAXES. The board of trustees of 25 a school district, including specially chartered districts, may repeal a 26 school district income tax prior to the date of the expiration of the tax if 27 the board of trustees finds that the anticipated revenue will be in excess of 28 the amount originally estimated to the voters. Any repeal authorized under the 29 provisions of this section shall be effective at the end of the calendar year 30 specified in the order of the board of trustees of the school district. 31 33-813. EMERGENCY LEVY. In the event that a school district income tax 32 authorized pursuant to the provisions of this chapter will not raise the 33 moneys anticipated, the board of trustees of the district may levy a tax on 34 taxable real and personal property within the district to make up the differ- 35 ence between the amount of money that was anticipated being raised from the 36 school district income tax and the amount of money that is projected to be 37 raised. The amount of money raised by the emergency levy pursuant to this sec- 38 tion added to moneys raised pursuant to section 33-802, Idaho Code, may not 39 exceed the amount of money that could be lawfully raised pursuant to that sec- 40 tion. 41 33-814. REVENUE BONDS -- ISSUANCE. (1) In order to carry out the provi- 42 sions of this act, the board of trustees is authorized to contract indebted- 43 ness and issue revenue bonds evidencing such indebtedness in conformity with 44 the provisions of this section. All revenue bonds authorized under the terms 45 in this section may be issued and sold from time to time and in such amounts 46 as is deemed necessary to provide sufficient funds for carrying out the provi- 47 sions of this section, and without limiting the generality thereof shall 48 include the following: fiscal and legal expenses, the cost of issuance of 49 bonds including printing and advertising expenses, the establishment of bond 50 reserves and payment of interest on the bonds. Revenue bonds shall bear such 3 1 date or dates, mature at such time or times, bear interest at a rate or rates, 2 be payable at such place or places, be in such form, either coupon or regis- 3 tered or both, carry such registration privileges and be subject to such terms 4 of redemption as the board of trustees shall by resolution determine. Bonds 5 issued under the provisions of this section shall be payable solely out of 6 revenues the board of trustees has received pursuant to sections 33-808 7 through 33-813, Idaho Code, or otherwise by law. The bonds shall be authorized 8 by resolution, which resolution shall create a special fund or funds into 9 which the board of trustees shall obligate and bind the board of trustees to 10 set aside any payment, any part or parts of, or all of, or a fixed proportion 11 of, or a fixed amount of the available revenue of the board of trustees suffi- 12 cient to pay the principal of and interest on such bonds as the same shall 13 become due, and if deemed necessary to maintain adequate reserves therefor. 14 Such fund or funds shall be drawn upon for the sole purpose of paying the 15 principal of and interest on bonds issued pursuant to this section. The bonds 16 shall be negotiable instruments within the provisions and intent of the nego- 17 tiable instrument laws of this state even though they shall be payable solely 18 from such special fund or funds. The bonds and any coupons attached thereto 19 shall state upon their face that they are payable solely from such special 20 fund or funds. If the board of trustees fails to set aside and pay into such 21 fund or funds, the payment provided for in such resolution, the holder of such 22 bonds may bring suit to compel compliance with the provisions of the resolu- 23 tion. 24 (2) The board of trustees may provide such covenants as it may deem nec- 25 essary to secure and guarantee the payment of the principal of and interest on 26 such bonds including, but not limited to, covenants to create reserve accounts 27 and to authorize the deposit of certain moneys therein for the purpose of 28 securing and guaranteeing the payment of such principal and interest, to 29 appoint a state or national bank or trust company as trustee for the bondhold- 30 ers to hold, invest and disburse moneys set aside and pledged to pay and guar- 31 antee the payment of such bonds and/or as a trustee for safeguarding the dis- 32 bursing of the proceeds of the sale of such bonds, to fix such powers and 33 duties of such trustee or trustees as may be found necessary to carry out the 34 purpose of this act, and to make any and all other covenants not inconsistent 35 with the provisions of this act which, in the judgment of the board of 36 trustees, will increase the marketability of such bonds. The board of trustees 37 may also provide that revenue bonds payable out of the same source or sources 38 may be later issued on a parity with any revenue bonds being issued and sold. 39 The provisions of this act and any resolution or resolutions providing for the 40 authorization, issuance and sale of such bonds shall constitute a contract 41 with the holders of such bonds and the provisions thereof shall be enforceable 42 by any owner or holder of such bonds by any appropriate suit, action or pro- 43 ceeding in any court of competent jurisdiction. 44 (3) Such bonds shall be signed on behalf of the board of trustees by the 45 chairman of the board of trustees and shall be attested by the secretary of 46 the board of trustees, one (1) of which signatures may be a facsimile signa- 47 ture, and shall have the seal or facsimile seal of the board of trustees 48 impressed or imprinted thereon. All interest coupons attached thereto may be 49 signed with the facsimile signatures of such officials. Such bonds shall be 50 sold in the manner and at such price as the board of trustees shall deem 51 advisable, either at public or private sale. 52 (4) The board of trustees may also issue revenue warrants for the same 53 purposes for which they may issue revenue bonds and the provisions of this act 54 relating to the terms, conditions, covenants, issuance and sale of revenue 55 bonds shall be applicable to such revenue warrants. 4 1 (5) The board of trustees may by resolution, from time to time, provide 2 for the issuance of funding or refunding revenue bonds to fund or refund any 3 outstanding revenue or other warrants or bonds, and any premiums thereon, and 4 coupons evidencing interest upon any such bonds at or before the maturity or 5 first optional redemption date of such coupons, warrants or bonds, and may 6 combine various outstanding revenue warrants and parts or all of various 7 series and issues of outstanding revenue bonds and matured coupons in the 8 amount thereof to be funded or refunded. Revenue bonds may be refunded only at 9 maturity, upon call for redemption in accordance with their terms or with con- 10 sent of the holder. 11 The board of trustees shall create a special fund or funds for the sole 12 purpose of paying the principal of and interest on such funding or refunding 13 revenue bonds, into which fund the board of trustees shall obligate and bind 14 the board of trustees to set aside and pay any part or parts of, or all of, or 15 a fixed proportion of, or a fixed amount of the available revenue of the board 16 of trustees sufficient to pay such principal and interest as the same shall 17 become due, and if deemed necessary to maintain adequate reserves therefor. 18 Such funding or refunding bonds shall be negotiable instruments within the 19 provisions and intent of the negotiable instrument laws of this state. 20 The board of trustees may exchange such funding or refunding bonds for the 21 warrants, bonds, and coupons being funded or refunded, or it may sell such 22 funding or refunding bonds in the manner and at such price as the board of 23 trustees shall deem to be in the best interest of the school district, either 24 at public or private sale, or may both exchange and sell. 25 The provisions of this section relating to the terms, conditions, cove- 26 nants, issuance, and sale of revenue bonds shall be applicable to such funding 27 or refunding bonds except as may be otherwise specifically provided in this 28 section. 29 (6) Bonds issued pursuant to the authority contained in this section 30 shall be exempt from taxation under the Idaho income tax law. 31 (7) This section shall be authority for the issuance of the bonds and 32 warrants hereby authorized, and shall be liberally construed to accomplish its 33 purposes. Any restrictions, limitations or regulations relative to the issu- 34 ance of such bonds or warrants contained in any other act shall not apply to 35 the bonds or warrants issued under this act. Any act inconsistent herewith 36 shall be deemed modified to conform with the provisions of this act for the 37 purpose of this act only. 38 (8) In the event that any official required to participate in any act 39 leading to the issuance of such bonds shall refuse to perform such act alleg- 40 ing as his reason illegality of the bonds to be issued, the board of trustees 41 may institute judicial proceedings to compel such step to be taken and legal- 42 ity of the bonds to be determined.
STATEMENT OF PURPOSE
RS 08740
This legislation would create an alternative method of repaying bonds
passed by a school district. This would be in the form of a surcharge on
personal income tax to the residents of the district. This legislation
would not eliminate the use of a property tax to repay bonds but
provides a second choice that a school board could use when approaching
their patrons with a bond proposal.
FISCAL NOTE
There would be some additional expense to the Tax Commission to collect
these taxes. The cost in any one year would depend on how many school
districts choose to use this method. There would also be a one time
expense to the Tax Commission to create the computer program to manage
these collections.
CONTACT: Representative Doug Jones (22)
332-1000
STATEMENT OF PURPOSE/ FISCAL NOTE Bill No. H 281