2005 Legislation
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HOUSE BILL NO. 375 – Bond levy equilization, date

HOUSE BILL NO. 375

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Bill Status



H0375..........................................................by EDUCATION
SCHOOLS - BOND LEVY EQUALIZATION - Amends existing law relating to school
funds to provide a date by which bonds must be passed for purposes of
receiving the minimum of the interest cost portion in the Bond Levy
Equalization Support Program; to provide a reference to each qualifying
school district; and to revise provisions applicable to the Bond Levy
Equalization Fund.
                                                                        
03/23    House intro - 1st rdg - to printing
03/24    Rpt prt - to 2nd rdg
    Rls susp - PASSED - 63-3-4
      AYES -- Anderson, Andrus, Barraclough, Bastian, Bayer, Bedke, Bell,
      Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon, Chadderdon, Clark,
      Collins, Crow, Deal, Denney, Edmunson(Barker), Eskridge, Field(18),
      Field(23), Garrett, Hart, Harwood, Henbest, Henderson, Jaquet, Jones,
      Kemp, Lake, Loertscher, Martinez, Mathews, McGeachin, McKague,
      Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence,
      Raybould, Ring, Rusche, Rydalch, Sali, Sayler, Schaefer, Shepherd(2),
      Shepherd(8), Shirley, Skippen, Smith(30), Smith(24)(Frost), Smylie,
      Snodgrass, Stevenson, Wood, Mr. Speaker
      NAYS -- LeFavour, Ringo, Trail
      Absent and excused -- Barrett, Ellsworth, Roberts, Wills
    Floor Sponsor - Bedke
    Title apvd - to Senate
03/25    Senate intro - 1st rdg - to St Aff

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 375
                                                                        
                                   BY EDUCATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO SCHOOL FUNDS; AMENDING SECTION 33-906, IDAHO CODE,  TO  PROVIDE  A
  3        DATE  BY  WHICH BONDS MUST BE PASSED FOR PURPOSES OF RECEIVING THE MINIMUM
  4        OF THE INTEREST COST PORTION IN THE BOND LEVY EQUALIZATION SUPPORT PROGRAM
  5        AND TO PROVIDE A REFERENCE TO EACH QUALIFYING  SCHOOL  DISTRICT;  AMENDING
  6        SECTION  33-906A,  IDAHO CODE, TO REVISE PROVISIONS APPLICABLE TO THE BOND
  7        LEVY EQUALIZATION FUND; AND PROVIDING EFFECTIVE DATES.
                                                                        
  8    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  9        SECTION 1.  That Section 33-906, Idaho Code, be, and the  same  is  hereby
 10    amended to read as follows:
                                                                        
 11        33-906.  BOND  LEVY  EQUALIZATION SUPPORT PROGRAM. (1) Pursuant to section
 12    33-906B, Idaho Code, school districts with a value index below one  (1)  shall
 13    be  eligible  to receive additional state financial assistance for the cost of
 14    annual bond interest and redemption payments made on bonds passed on or  after
 15    September  15,  2002.  However, any school district shall receive no less than
 16    ten percent (10%) of the interest cost portion of the annual bond interest and
 17    redemption payment for bonds passed on or after September 15, 2002, and  prior
 18    to  January  1,  2006.  The  state department of education shall disburse such
 19    funds to school districts from moneys appropriated from the bond  levy  equal-
 20    ization fund. The department shall disburse the funds by no later than Septem-
 21    ber  1  of  each  year  for school districts in which voters have approved the
 22    issuance of qualifying bonds by no later than January 1 of that calendar year,
 23    and which are certifying a qualifying bond interest and redemption payment for
 24    the fiscal year in which the disbursement is made. For districts with a  value
 25    index  below  one (1), the percentage of each annual bond interest and redemp-
 26    tion payment that is paid by the state shall be  determined  by  dividing  the
 27    difference  between  one  (1) and the school district's value index by one (1)
 28    provided that the state shall pay for no more than  the interest cost  portion
 29    of the annual bond interest and redemption payment, and each qualifying school
 30    district  shall  receive  no  less than ten percent (10%) of the interest cost
 31    portion of the qualifying bond interest and redemption payment.
 32        (2)  For the purposes of  this  section,  the  annual  bond  interest  and
 33    redemption  payment  shall be determined by dividing the total payment amounts
 34    by the number of fiscal years in which payments are to be made.  The  interest
 35    cost  portion  of  the  annual  bond  interest and redemption payment shall be
 36    determined by dividing the total interest paid by the number of  fiscal  years
 37    in  which  payments  are to be made. For school districts not qualifying for a
 38    state payment in the first year of the bond interest  and  redemption  payment
 39    schedule,  due solely to the January 1 eligibility deadline, the state depart-
 40    ment of education shall distribute an additional payment in  the  next  fiscal
 41    year,  in  the amount of such funds that the school district would have other-
 42    wise qualified for in the current fiscal year.
 43        (3)  The provisions of this section  may  not  be  utilized  to  refinance
                                                                        
                                           2
                                                                        
  1    existing  debt  or  subsidize  projects previously subsidized by state grants;
  2    provided however, that any school district that has  issued  qualifying  bonds
  3    prior  to  June 30, 2004, in conformance with this section shall not be deemed
  4    to be refinancing existing debt when the  qualifying  bonds  are  utilized  to
  5    finance  the  acquisition  of  public  school  facilities previously leased or
  6    financed through means other than the issuance  of  general  obligation  bonds
  7    approved  by  a  two-thirds  (2/3) vote at an election called for that purpose
  8    subject to subsection (5) of this section.
  9        (4)  School districts shall annually report the status of  all  qualifying
 10    bonds  to the state department of education by January 1 of each year, includ-
 11    ing bonds approved by the voters, but not yet  issued.  Information  submitted
 12    shall include the following:
 13        (a)  The  actual  or estimated bond interest and redemption payment sched-
 14        ule;
 15        (b)  Any qualifying bond that has been paid off;
 16        (c)  Other information as may be required by the state department of  edu-
 17        cation.
 18        (5)  No school district eligible for participation in the bond levy equal-
 19    ization  support  program  shall be deemed ineligible for participation due to
 20    that school district's eligibility and prior participation in the safe  school
 21    facilities loan and grant program or the Idaho safe schools facilities program
 22    under section 33-804A, 33-1017 or 33-1613, Idaho Code, provided that:
 23        (a)  Such  school  district  notifies the state department of education of
 24        its desire and eligibility to participate in the  bond  levy  equalization
 25        support program; and
 26        (b)  Such  school  district  shall  receive  no state financial assistance
 27        under the bond levy equalization support program until the amount to which
 28        it would otherwise have been entitled to receive shall equal  the  amounts
 29        received  by the school district under the safe school facilities loan and
 30        grant program or the Idaho safe schools facilities program  under  section
 31        33-804A, 33-1017 or 33-1613, Idaho Code.
                                                                        
 32        SECTION  2.  That  Section 33-906A, Idaho Code, be, and the same is hereby
 33    amended to read as follows:
                                                                        
 34        33-906A.  BOND LEVY EQUALIZATION FUND. There  is  hereby  created  in  the
 35    state  treasury  a  bond  levy equalization fund. This fund shall contain such
 36    moneys as may be directed pursuant to appropriation The state controller shall
 37    annually transfer such moneys as are required to make the payments  authorized
 38    by the bond levy equalization support program created in section 33-906, Idaho
 39    Code,  from  the  permanent  building fund to the bond levy equalization fund.
 40    Moneys in the fund shall be used exclusively are hereby continuously appropri-
 41    ated to make the payments authorized by the  bond  levy  equalization  support
 42    program created in section 33-906, Idaho Code.
                                                                        
 43        SECTION 3.  Section 1 of this act shall be in full force and effect on and
 44    after July 1, 2005; Section 2 of this act shall be in full force and effect on
 45    and after July 1, 2006.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 15197C1

The purpose of this legislation is to remove the requirement that the
state's Bond Levy Equalization program must provide a minimum 10%
interest subsidy on school bonds passed by the school districts ranked
as most prosperous on a "value index" that takes into account property
values, personal income, and unemployment rates. It will not impact
current or future subsidies for prosperous school districts that have
already passed bonds, or pass bonds prior to January 1, 2006, nor will
it impact the over two-thirds of school districts whose low value
indices cause them to qualify for larger interest subsidies. This
legislation also shifts the future costs of the Bond Levy Equalization
program from Lottery funds to the Permanent Building Fund, beginning
in FY2007.                 



                             FISCAL NOTE

Future state costs avoided, under the Bond Levy equalization program,
will be approximately $25 million over the period from FY07 to FY26,
with annual cost avoidance rising to approximately $2.4 million by
FY26. Costs to the Permanent Building Fund are projected to be $5.6
million in FY2007.



Contact
Name:  Rep. Scott Bedke, Rep. Ann Rydalch, Rep. Donna Boe 
Phone: 332-1000




STATEMENT OF PURPOSE/FISCAL NOTE                          H 375