1999 Legislation
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HOUSE BILL NO. 281 – School district income taxes

HOUSE BILL NO. 281

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Daily Data Tracking History



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

Bill Text


H0281


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999
                                                                        

                             IN 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 / Fiscal Impact


                          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