2002 Legislation
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SENATE BILL NO. 1475 – Bond levy equalization support prog

SENATE BILL NO. 1475

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S1475................................................by JUDICIARY AND RULES
BOND LEVY EQUALIZATION SUPPORT PROGRAM - Amends and adds to existing law to
revise the computation of bond and bond interest levies; to adopt a bond
levy equalization support program; to create the Bond Levy Equalization
Fund and specify purposes; to provide that the State Department of
Education shall establish a value index for each school district; and to
provide for criteria to be included in the value index calculation.
                                                                        
02/25    Senate intro - 1st rdg - to printing
02/26    Rpt prt - to Educ

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  Second Regular Session - 2002
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1475
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO BOND LEVY EQUALIZATION  SUPPORT  PROGRAM  FOR  SCHOOL  FACILITIES;
  3        AMENDING  SECTION  33-802A,  IDAHO CODE, TO REVISE THE COMPUTATION OF BOND
  4        AND BOND INTEREST LEVIES AND TO CORRECT A CODIFIER'S ERROR; AMENDING CHAP-
  5        TER 9, TITLE 33, IDAHO CODE, BY THE ADDITION  OF  A  NEW  SECTION  33-906,
  6        IDAHO  CODE,  TO  ADOPT A BOND LEVY EQUALIZATION SUPPORT PROGRAM; AMENDING
  7        CHAPTER 9, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-906A,
  8        IDAHO CODE, TO CREATE THE BOND LEVY EQUALIZATION  FUND  AND  SPECIFY  PUR-
  9        POSES;  AND AMENDING CHAPTER 9, TITLE 33, IDAHO CODE, BY THE ADDITION OF A
 10        NEW SECTION 33-906B, IDAHO CODE, TO PROVIDE THAT THE STATE  DEPARTMENT  OF
 11        EDUCATION  SHALL  ESTABLISH  A VALUE INDEX FOR EACH SCHOOL DISTRICT AND TO
 12        PROVIDE FOR CRITERIA TO BE INCLUDED IN THE VALUE INDEX CALCULATION.
                                                                        
 13    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 14        SECTION 1.  That Section 33-802A, Idaho Code, be, and the same  is  hereby
 15    amended to read as follows:
                                                                        
 16        33-802A.  COMPUTATION  OF BOND AND BOND INTEREST LEVIES. When the board of
 17    trustees of any school district determines and makes the levy required by sec-
 18    tion 33-802, Idaho Code, and incorporates such levy as a part  of  the  school
 19    district's  budget to service all maturing bond and bond interest payments for
 20    the ensuing fiscal year, it shall take into consideration any state bond  levy
 21    equalization  funds  provided  pursuant to section 33-906, Idaho Code, and any
 22    balances remaining or that may remain in its bond interest and redemption fund
 23    after meeting its bond and bond interest obligations for  its  current  fiscal
 24    year.  The  levy so made for the ensuing fiscal year shall be an amount which,
 25    together with any state bond levy equalization funds provided pursuant to sec-
 26    tion 33-906, Idaho Code, and the balance in its bond interest  and  redemption
 27    fund  remaining  after  meeting its current fiscal year bond and bond interest
 28    gations obligations, shall satisfy all maturing bond and  bond  interest  pay-
 29    ments for at least the ensuing twelve (12) months, and not to exceed the ensu-
 30    ing nineteen (19) months counted from July 1 of the current calendar year.
                                                                        
 31        SECTION  2.  That  Chapter  9,  Title  33, Idaho Code, be, and the same is
 32    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 33    ignated as Section 33-906, Idaho Code, and to read as follows:
                                                                        
 34        33-906.  BOND  LEVY  EQUALIZATION  SUPPORT  PROGRAM.  Pursuant  to section
 35    33-906B, Idaho Code, school districts with a value index below one  (1)  shall
 36    be  eligible  to receive additional state financial assistance for the cost of
 37    annual bond interest and redemption payments made on bonds passed on or  after
 38    September  15,  2002.  However, any school district shall receive no less than
 39    ten percent (10%) of the interest cost portion of the annual bond interest and
 40    redemption payment for bonds passed on or after September 15, 2002.  The state
 41    department of education shall disburse such funds  to  school  districts  from
                                                                        
                                           2
                                                                        
  1    moneys appropriated from the bond levy equalization fund. The department shall
  2    disburse  the  funds by no later than September 1 of each year for school dis-
  3    tricts certifying a qualifying bond interest and redemption  payment  for  the
  4    fiscal  year  in  which  the disbursement is made.  For districts with a value
  5    index below one (1), the percentage of each annual bond interest  and  redemp-
  6    tion  payment  that  is paid  by the state shall be determined by dividing the
  7    difference between one (1) and the school district's value index  by  one  (1)
  8    provided that the state shall pay for no more than  the  interest cost portion
  9    of  the  annual bond interest and redemption payment, and each school district
 10    shall receive no less than ten percent (10%) of the interest cost  portion  of
 11    the qualifying bond interest and redemption payment.
 12        For  the purposes of this section, the annual bond interest and redemption
 13    payment shall be determined by dividing the total payment amounts by the  num-
 14    ber  of  fiscal years in which payments are to be made. The interest cost por-
 15    tion of the annual bond  interest and redemption payment shall  be  determined
 16    by  dividing  the  total  interest paid by the number of fiscal years in which
 17    payments are to be made.
                                                                        
 18        SECTION 3.  That Chapter 9, Title 33, Idaho Code,  be,  and  the  same  is
 19    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 20    ignated as Section 33-906A, Idaho Code, and to read as follows:
                                                                        
 21        33-906A.  BOND LEVY EQUALIZATION FUND. There  is  hereby  created  in  the
 22    state  treasury  a  bond  levy equalization fund. This fund shall contain such
 23    moneys as may be directed pursuant to appropriation. Moneys in the fund  shall
 24    be used exclusively to make the payments authorized by the bond levy equaliza-
 25    tion program created in section 33-906, Idaho Code.
                                                                        
 26        SECTION  4.  That  Chapter  9,  Title  33, Idaho Code, be, and the same is
 27    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 28    ignated as Section 33-906B, Idaho Code, and to read as follows:
                                                                        
 29        33-906B.  VALUE INDEX CALCULATION. The state department of education shall
 30    establish  a  value  index  for  each  school  district,  based on each school
 31    district's market value per support unit for equalization purposes, the  aver-
 32    age annual seasonally-adjusted unemployment rate in the county in which a plu-
 33    rality  of the school district's market value  for assessment purposes of tax-
 34    able property is located and the per capita income in the county  in  which  a
 35    plurality  of  the  school  district's market value for assessment purposes is
 36    located.  The value index for each school district shall be calculated as  the
 37    sum of the following three (3) components:
 38        (1)  The state department of education shall annually calculate the market
 39    value per support unit that is used to equalize school funding for each school
 40    district  in  the  state, and the statewide average.  The first portion of the
 41    value index shall be calculated by dividing the school district's market value
 42    for equalization purposes per support unit by one hundred twenty-five  percent
 43    (125%) of the statewide average market value for equalization per support unit
 44    and dividing the result of this calculation by two (2).
 45        (2)  The second portion of the value index shall be calculated by dividing
 46    the  statewide  unemployment  rate  by  the unemployment rate in the county in
 47    which a plurality of the school district's market value  for  assessment  pur-
 48    poses of taxable property is located, and dividing the result of this calcula-
 49    tion by four (4). For the purposes of this subsection, the statewide unemploy-
 50    ment  rate  and  county  unemployment  rates shall be based on the most recent
 51    average annual seasonally-adjusted unemployment  rate  data  reported  by  the
                                                                        
                                           3
                                                                        
  1    United States department of labor, for which there is a complete calendar year
  2    of data.
  3        (3)  The  third portion of the value index shall be calculated by dividing
  4    the county per capita income in the county in which a plurality of the  school
  5    district's  market    value  for  assessment  purposes  of taxable property is
  6    located by the statewide per capita income, and dividing the  result  of  this
  7    calculation  by  four  (4). For the purposes of this subsection, the statewide
  8    per capita income and county per capita income shall  be  based  on  the  most
  9    recent  data  reported  by the United States department of commerce, for which
 10    there is a complete calendar year of data.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                            RS 12134

The purpose of this legislation is to provide a subsidy to school
districts passing bond issues after September 15, 2002.  This
subsidy is based on a formula that provides greater subsidy to
the poorer districts and decreasing as the fiscal abilities of
the school district increases.  Provides that the determiners of
fiscal ability will be market value per support unit as well as
unemployment rate and per capita income.

                          FISCAL IMPACT

It is estimated that in FY'04, the impact will be approximately
$1.2 million and in FY'05 $2.1 million and escalating each year
to $22-$25 million in 20 years.

Contact
Name: Senator Darrel Deide 
Phone: 332-1328
Rep. Lawerence Denney 332-1244



STATEMENT OF PURPOSE/FISCAL NOTE                   S 1475