2003 Legislation
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HOUSE BILL NO. 311 – School dist, value index calculatn

HOUSE BILL NO. 311

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H0311.............................................................by EDUCATION
SCHOOL DISTRICTS - Amends and adds to existing law to provide an alternative
as to how a school district's value index is calculated based on the school
district's free and reduced lunch rate; and to allow the board of trustees of
the school district the option of utilizing the value index calculation that
is most advantageous to that district.
                                                                        
02/27    House intro - 1st rdg - to printing
02/28    Rpt prt - to Educ

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-seventh Legislature                 First Regular Session - 2003
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 311
                                                                        
                                   BY EDUCATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE VALUE INDEX CALCULATION FOR SCHOOL DISTRICTS; AMENDING SECTION
  3        33-906, IDAHO CODE, TO PROVIDE A SCHOOL WITH AN ALTERNATIVE AS TO HOW  ITS
  4        VALUE  INDEX  IS  CALCULATED; AMENDING CHAPTER 9, TITLE 33, IDAHO CODE, BY
  5        THE ADDITION OF A NEW SECTION 33-906C, IDAHO CODE, TO PROVIDE AN  ALTERNA-
  6        TIVE  AS TO HOW A SCHOOL DISTRICT'S VALUE INDEX IS CALCULATED BASED ON THE
  7        SCHOOL DISTRICT'S FREE AND REDUCED LUNCH RATE AND TO ALLOW  THE  BOARD  OF
  8        TRUSTEES  THE OPTION OF UTILIZING THE VALUE INDEX CALCULATION THAT IS MOST
  9        ADVANTAGEOUS TO THAT DISTRICT; AND PROVIDING AN EFFECTIVE DATE.
                                                                        
 10    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 11        SECTION 1.  That Section 33-906, Idaho Code, be, and the  same  is  hereby
 12    amended to read as follows:
                                                                        
 13        33-906.  BOND  LEVY  EQUALIZATION  SUPPORT  PROGRAM.  Pursuant  to section
 14    33-906B or 33-906C, Idaho Code, school districts with a value index below  one
 15    (1) shall be eligible to receive additional state financial assistance for the
 16    cost  of  annual bond interest and redemption payments made on bonds passed on
 17    or after September 15, 2002, pursuant to either section  33-906B  or  33-906C,
 18    Idaho  Code,  as  determined  by the board of trustees of the school district.
 19    However, any school district shall receive no less than ten percent  (10%)  of
 20    the  interest  cost portion of the annual bond interest and redemption payment
 21    for bonds passed on or after September 15, 2002. The state department of  edu-
 22    cation  shall disburse such funds to school districts from moneys appropriated
 23    from the bond levy equalization fund. The department shall disburse the  funds
 24    by  no  later  than September 1 of each year for school districts certifying a
 25    qualifying bond interest and redemption payment for the fiscal year  in  which
 26    the  disbursement is made. For districts with a value index below one (1), the
 27    percentage of each annual bond interest and redemption payment that is paid by
 28    the state shall be determined by dividing the difference between one  (1)  and
 29    the school district's value index by one (1) provided that the state shall pay
 30    for  no  more  than the  interest cost portion of the annual bond interest and
 31    redemption payment, and each school district shall receive no  less  than  ten
 32    percent (10%) of the interest cost portion of the qualifying bond interest and
 33    redemption payment.
 34        For  the purposes of this section, the annual bond interest and redemption
 35    payment shall be determined by dividing the total payment amounts by the  num-
 36    ber  of  fiscal years in which payments are to be made. The interest cost por-
 37    tion of the annual bond  interest and redemption payment shall  be  determined
 38    by  dividing  the  total  interest paid by the number of fiscal years in which
 39    payments are to be made.
 40        The provisions of this section may not be utilized to  refinance  existing
 41    debt.
                                                                        
 42        SECTION  2.  That  Chapter  9,  Title  33, Idaho Code, be, and the same is
                                                                        
                                           2
                                                                        
  1    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
  2    ignated as Section 33-906C, Idaho Code, and to read as follows:
                                                                        
  3        33-906C.  ALTERNATIVE  VALUE  INDEX CALCULATION. As an alternative to sec-
  4    tion 33-906B, Idaho Code, the state department of education shall establish  a
  5    value  index  for each school district, based on each school district's market
  6    value per support unit for equalization purposes, the  free and reduced  lunch
  7    rate   in the  school district and the state average of free and reduced lunch
  8    rates. The value index for each school district shall be calculated as the sum
  9    of the following  two (2) components:
 10        (1)  The state department of education shall annually calculate the market
 11    value per support unit that is used to equalize school funding for each school
 12    district in the state, and the statewide average. The  first  portion  of  the
 13    value index shall be calculated by dividing the school district's market value
 14    for  equalization  purposes  per  support unit by the statewide average market
 15    value for equalization per support unit and dividing the result of this calcu-
 16    lation by two (2).
 17        (2)  The second portion of the value index shall be calculated by dividing
 18    the statewide  free  and  reduced  lunch  rate  average  rate  by  the  school
 19    district's free and reduced lunch rate, and dividing the result of this calcu-
 20    lation  by  four (4). For the purposes of this subsection, the statewide  free
 21    and reduced lunch rate and  school district free and reduced lunch rates shall
 22    be calculated annually by the state department of education when such  figures
 23    are available.
 24        (3)  The  board  of trustees of a school district shall have the option of
 25    utilizing the value index calculation, in this section or in section  33-906B,
 26    Idaho  Code,  that is most advantageous to that district via adopted motion by
 27    the board of trustees.
                                                                        
 28        SECTION 3.  This act shall be in full force and effect on and after  Janu-
 29    ary 1, 2005.

Statement of Purpose / Fiscal Impact


                         STATEMENT OF PURPOSE
                             RS 13060C1                             
The purpose of this legislation is to amend the value index
calculation in Section 33-906B, Idaho Code, providing a subsidy to
school districts passing bond issues after September 15, 2002. Each
school district's free and reduced lunch rates will replace the
county unemployment rate data reported by the U.S. Department of
Labor and the county per capita income as determined by the U.S.
Department of Commerce in determining the value index calculation.
The second component in the market value per support unit
determined by the State Department of Education is used to equalize
school funding for each school district in the state, and the
statewide average. This change ensures that all data used in
calculating the value index is school district specific. This
second option will not be available to school board trustees until
July 1, 2005. 
                          FISCAL IMPACT
The original legislation, SB1474, estimated that in FY '04 the impact
will be approximately $1,000,000, in FY '05 $1,500,000, and escalating
each year for 20 years reaching a maximum plateau in 20 years. It is
estimated that the option with the change in the value index will yield
an economic impact about 20 percent higher. It is very hard to make a
prediction of how many bond issues will be passed in the future.



Contact
Name: Representative Tom Trail 
Phone: 208-332-1000




STATEMENT OF PURPOSE/FISCAL NOTE      H 311