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H0418...............................................by REVENUE AND TAXATION
SCHOOLS - Amends existing law to reduce the amount that may be levied for
school maintenance and operation levies; to revise the local school
district's contribution calculation for school formula purposes; to revise
how property tax replacement moneys are calculated; and to provide an
annual three percent growth factor.
01/19 House intro - 1st rdg - to printing
01/20 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 418
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY TAXATION; AMENDING SECTION 33-802, IDAHO CODE, TO REDUCE
3 THE AMOUNT THAT MAY BE LEVIED FOR SCHOOL MAINTENANCE AND OPERATION LEVIES;
4 AMENDING SECTION 33-1002, IDAHO CODE, TO REVISE THE LOCAL SCHOOL
5 DISTRICT'S CONTRIBUTION CALCULATION FOR SCHOOL FORMULA PURPOSES AND TO
6 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-1002D, IDAHO CODE, TO
7 REVISE HOW PROPERTY TAX REPLACEMENT MONEYS ARE CALCULATED AND TO PROVIDE
8 AN ANNUAL THREE PERCENT GROWTH FACTOR; TO PROVIDE SEVERABILITY; DECLARING
9 AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. That Section 33-802, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 33-802. SCHOOL LEVIES. Any tax levied for school purposes shall be a lien
14 on the property against which the tax is levied. The board of trustees shall
15 determine the levies upon each dollar of taxable property in the district for
16 the ensuing fiscal year as follows:
17 1. Bond, Interest and Judgment Obligation Levies. Such levies as shall be
18 required to satisfy all maturing bond, bond interest, and judgment obliga-
19 tions.
20 2. Maximum School Maintenance and Operation Levies. Such levies for main-
21 taining and operating the schools of the district and for the payment of
22 tuition and transportation, that do not exceed an amount equal to four-tenths
23 of one percent (.4%) during tax year 1994, and do not exceed an amount equal
24 to three-tenths fifteen hundredths of one percent (.315%) during tax year 1995
25 2006 and thereafter plus the percentage calculated in section 33-1002, Idaho
26 Code, applied to the actual or adjusted market value for assessment purposes
27 of the district as such valuation existed on December 31 of the previous year,
28 but allowances necessary as a credit for prepaid taxes, as provided in section
29 63-1607, Idaho Code, shall not be included in such maximum levies. Provided
30 however, that in the event property within a district's boundaries is con-
31 tained in a revenue allocation area established under chapter 29, title 50,
32 Idaho Code, and such revenue allocation area has given notice of termination
33 thereunder, then, only for the purpose of determining the levy described in
34 this subsection, the district may add the increment value, as defined in sec-
35 tion 50-2903, Idaho Code, to the actual or adjusted market value for assess-
36 ment purposes of the district as such value existed on December 31 of the pre-
37 vious year.
38 3. Authorized School Maintenance and Operation Levies. Such levies for
39 maintaining and operating the schools of the district and for the payment of
40 tuition and transportation that do not exceed one hundred eleven percent
41 (111%) of the local district's contribution authorized in subsection 2. of
42 section 33-1002, Idaho Code. Implementation of the provisions of this subsec-
43 tion shall be authorized only after approval by a majority of the district's
2
1 electors voting on the question. Levies otherwise authorized by law shall not
2 require an election.
3 4. Supplemental Maintenance and Operation Levies. No levy in excess of
4 the levy permitted by subsection 2. or 3. of this section shall be made by a
5 noncharter school district unless such a supplemental levy in a specified
6 amount and for a specified time not to exceed two (2) years be first autho-
7 rized through an election held pursuant to chapter 4, title 33, Idaho Code,
8 and approved by a majority of the district electors voting in such election. A
9 levy approved pursuant to this subsection may be reduced by a majority vote of
10 the board of trustees in the second year.
11 5. Charter District Supplemental Maintenance and Operation. Levies pursu-
12 ant to the respective charter of any such charter district shall be first
13 authorized through an election held pursuant to chapter 4, title 33, Idaho
14 Code, and approved by a majority of the district electors voting in such elec-
15 tion.
16 6. The Local District Contribution. The local school district contribu-
17 tion levy is the amount utilized for calculating local district participation
18 in the educational foundation program, which is applied to the adjusted market
19 value for assessment purposes, as such valuation existed on December 31 of the
20 previous year, together with the increment value, as defined in section
21 50-2903, Idaho Code, if applicable under the circumstance described in subsec-
22 tion 2. of this section, relating to termination of a revenue allocation area.
23 7. The board of trustees of any school district that has, for at least
24 seven (7) consecutive years, been authorized through an election held pursuant
25 to chapter 4, title 33, Idaho Code, to certify a supplemental levy that has
26 annually been equal to or greater than twenty percent (20%) of the total gen-
27 eral maintenance and operation fund, may submit the question of an indefinite
28 term supplemental levy to the electors of the school district. Such question
29 shall clearly state the dollar amount that will be certified annually and that
30 the levy will be for an indefinite number of years. The question must be
31 approved by a majority of the district electors voting on the question in an
32 election held pursuant to chapter 4, title 33, Idaho Code. The levy approved
33 pursuant to this subsection may be reduced by a majority vote of the board of
34 trustees during any fiscal year.
35 SECTION 2. That Section 33-1002, Idaho Code, be, and the same is hereby
36 amended to read as follows:
37 33-1002. EDUCATIONAL SUPPORT PROGRAM. The educational support program is
38 calculated as follows:
39 1. State Educational Support Funds. Add the state appropriation, includ-
40 ing the moneys available in the public school income fund, together with all
41 miscellaneous revenues to determine the total state funds.
42 2. From the total state funds subtract the following amounts needed for
43 state support of special programs provided by a school district:
44 a. Pupil tuition-equivalency allowances as provided in section 33-1002B,
45 Idaho Code;
46 b. Transportation support program as provided in section 33-1006, Idaho
47 Code;
48 c. Feasibility studies allowance as provided in section 33-1007A, Idaho
49 Code;
50 d. The approved costs for border district allowance, provided in section
51 33-1403, Idaho Code, as determined by the state superintendent of public
52 instruction;
53 e. The approved costs for exceptional child approved contract allowance,
3
1 provided in subsection 2. of section 33-2004, Idaho Code, as determined by
2 the state superintendent of public instruction;
3 f. Certain expectant and delivered mothers allowance as provided in sec-
4 tion 33-2006, Idaho Code;
5 g. Salary-based apportionment calculated as provided in sections 33-1004
6 through 33-1004F, Idaho Code;
7 h. Unemployment insurance benefit payments according to the provisions of
8 section 72-1349A, Idaho Code;
9 i. For expenditure as provided by the public school technology program;
10 j. For the support of provisions that provide a safe environment condu-
11 cive to student learning and maintain classroom discipline, an allocation
12 of $300 per support unit; and
13 k. Any additional amounts as required by statute to effect administrative
14 adjustments or as specifically required by the provisions of any bill of
15 appropriation;
16 to secure the state educational support funds.
17 3. Local Districts' Contribution Calculation. Without including any
18 allowance as a credit for prepaid taxes as provided by section 63-1607, Idaho
19 Code, the local districts' contribution shall be the amount appropriated pur-
20 suant to section 33-1002D, Idaho Code, plus three-tenths fifteen hundredths
21 percent (.315%) during fiscal year 20036-047 and each year thereafter, of
22 plus an amount calculated as follows: A percentage multiplied by the total
23 state adjusted market value for assessment purposes for the previous year with
24 such value being determined by the provisions of section 63-315, Idaho Code,
25 which shall raise an amount that is one hundred three percent (103%) of the
26 amount raised statewide the previous fiscal year by applying the maintenance
27 and operation levy to the total state adjusted market value for assessment
28 purposes for the previous year with such value being determined by the provi-
29 sions of section 63-315, Idaho Code, and four-tenths percent (.4%) during fis-
30 cal year 1994-95 and each year thereafter, of the cooperative electrical asso-
31 ciations' property values that have been derived from the taxes paid in lieu
32 of ad valorem property taxes for the previous year as provided in section
33 63-3502, Idaho Code.
34 4. Educational Support Program Distribution Funds. Add the local dis-
35 tricts' contribution, subsection 3. of this section, and the state educational
36 support program funds, subsection 1. of this section, together to secure the
37 total educational support program distribution funds.
38 5. Average Daily Attendance. The total state average daily attendance
39 shall be the sum of the average daily attendance of all of the school dis-
40 tricts of the state. The state board of education shall establish rules set-
41 ting forth the procedure to determine average daily attendance and the time
42 for, and method of, submission of such report. Average daily attendance calcu-
43 lation shall be carried out to the nearest hundredth. Computation of average
44 daily attendance shall also be governed by the provisions of section 33-1003A,
45 Idaho Code.
46 6. Support Units. The total state support units shall be determined by
47 using the tables set out hereafter called computation of kindergarten support
48 units, computation of elementary support units, computation of secondary sup-
49 port units, computation of exceptional education support units, and computa-
50 tion of alternative school secondary support units. The sum of all of the
51 total support units of all school districts of the state shall be the total
52 state support units.
4
1 COMPUTATION OF KINDERGARTEN SUPPORT UNITS
2 Average Daily
3 Attendance Attendance Divisor Units Allowed
4 41 or more .... 40....................... 1 or more as computed
5 31 - 40.99 ADA.... -....................... 1
6 26 - 30.99 ADA.... -....................... .85
7 21 - 25.99 ADA.... -....................... .75
8 16 - 20.99 ADA.... -....................... .6
9 8 - 15.99 ADA.... -....................... .5
10 1 - 7.99 ADA.... -....................... count as elementary
11 COMPUTATION OF ELEMENTARY SUPPORT UNITS
12 Average Daily
13 Attendance Attendance Divisor Minimum Units Allowed
14 300 or more ADA........................................ 15
15 ..23...grades 4,5 & 6....
16 ..22...grades 1,2 & 3....1994-95
17 ..21...grades 1,2 & 3....1995-96
18 ..20...grades 1,2 & 3....1996-97
19 and each year thereafter.
20 160 to 299.99 ADA... 20..................... 8.4
21 110 to 159.99 ADA... 19..................... 6.8
22 71.1 to 109.99 ADA... 16..................... 4.7
23 51.7 to 71.0 ADA... 15..................... 4.0
24 33.6 to 51.6 ADA... 13..................... 2.8
25 16.6 to 33.5 ADA... 12..................... 1.4
26 1.0 to 16.5 ADA... n/a.................... 1.0
27 COMPUTATION OF SECONDARY SUPPORT UNITS
28 Average Daily
29 Attendance Attendance Divisor Minimum Units Allowed
30 750 or more .... 18.5..................... 47
31 400 - 749.99 ADA.... 16....................... 28
32 300 - 399.99 ADA.... 14.5..................... 22
33 200 - 299.99 ADA.... 13.5..................... 17
34 100 - 199.99 ADA.... 12....................... 9
35 99.99 or fewer Units allowed as follows:
36 Grades 7-12 ......................... 8
37 Grades 9-12 ......................... 6
38 Grades 7- 9 ......................... 1 per 14 ADA
39 Grades 7- 8 ......................... 1 per 16 ADA
40 COMPUTATION OF EXCEPTIONAL EDUCATION SUPPORT UNITS
41 Average Daily
42 Attendance Attendance Divisor Minimum Units Allowed
43 14 or more .... 14.5..................... 1 or more as computed
44 12 - 13.99.... -....................... 1
45 8 - 11.99.... -....................... .75
46 4 - 7.99.... -....................... .5
47 1 - 3.99.... -....................... .25
48 COMPUTATION OF ALTERNATIVE SCHOOL SECONDARY SUPPORT UNITS
49 Pupils in Attendance Attendance Divisor Minimum Units Allowed
50 12 or more.......... 12...................... 1 or more as computed
5
1 In applying these tables to any given separate attendance unit, no school
2 district shall receive less total money than it would receive if it had a
3 lesser average daily attendance in such separate attendance unit. In applying
4 the kindergarten table to a kindergarten program of less days than a full
5 school year, the support unit allowance shall be in ratio to the number of
6 days of a full school year. The tables for exceptional education and alterna-
7 tive school secondary support units shall be applicable only for programs
8 approved by the state department of education following rules established by
9 the state board of education. Moneys generated from computation of support
10 units for alternative schools shall be utilized for alternative school pro-
11 grams. School district administrative and facility costs may be included as
12 part of the alternative school expenditures.
13 7. State Distribution Factor per Support Unit. Divide educational support
14 program distribution funds, after subtracting the amounts necessary to pay the
15 obligations specified in subsection 2. of this section, by the total state
16 support units to secure the state distribution factor per support unit.
17 8. District Share of State Funds for Educational Support Program. Ascer-
18 tain a district's share of state funds for the educational support program as
19 follows:
20 a. District Contribution Calculation. Without including any allowance as
21 a credit for prepaid taxes, as provided in section 63-1607, Idaho Code,
22 the district contribution calculation shall be the rate determined under
23 subsection 3. of this section.
24 b. District Support Units. The number of support units for each school
25 district in the state shall be determined as follows:
26 (1) Divide the actual average daily attendance, excluding students
27 approved for inclusion in the exceptional child educational program,
28 for the administrative schools and each of the separate schools and
29 attendance units by the appropriate divisor from the tables of sup-
30 port units in this section, then add the quotients to obtain the
31 district's support units allowance for regular students, kindergarten
32 through grade 12 including alternative school secondary students.
33 Calculations in application of this subsection shall be carried out
34 to the nearest tenth.
35 (2) Divide the combined totals of the average daily attendance of
36 all preschool, handicapped, kindergarten, elementary, secondary and
37 juvenile detention center students approved for inclusion in the
38 exceptional child program of the district by the appropriate divisor
39 from the table for computation of exceptional education support units
40 to obtain the number of support units allowed for the district's
41 approved exceptional child program. Calculations for this subsection
42 shall be carried out to the nearest tenth when more than one (1) unit
43 is allowed.
44 (3) The total number of support units of the district shall be the
45 sum of the total support units for regular students, subsection
46 8.b.(1) of this section, and the support units allowance for the
47 approved exceptional child program, subsection 8.b.(2) of this sec-
48 tion.
49 c. Total District Allowance Educational Program. Multiply the district's
50 total number of support units, carried out to the nearest tenth, by the
51 state distribution factor per support unit and to this product add the
52 approved amount of programs of the district provided in subsection 2. of
53 this section to secure the district's total allowance for the educational
54 support program.
55 d. District Share. To secure the district's share of state apportionment,
6
1 subtract the amount of the local district contribution calculation, sub-
2 section 3. of this section, from the amount of the total district allow-
3 ance, subsection 8.c. of this section.
4 e. Adjustment of District Share. The contract salary of every noncertifi-
5 cated teacher shall be subtracted from the district's share as calculated
6 from the provisions of subsection 8.d. of this section.
7 SECTION 3. That Section 33-1002D, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 33-1002D. PROPERTY TAX REPLACEMENT. The purpose of this section is to
10 replace a portion of the authorized school maintenance and operation property
11 tax levy with state sales tax receipts. As used in this section, the term
12 "property tax computation ratio" shall mean a ratio determined by dividing the
13 district's certified property tax maintenance and operation budget by the
14 actual or adjusted market value for assessment purposes as such values existed
15 on December 31 of the previous calendar year, together with the increment
16 value, as defined in section 50-2903, Idaho Code, if applicable under the cir-
17 cumstance described in section 33-802 2., Idaho Code, relating to termination
18 of a revenue allocation area.
19 (1) (a) In the case of a school district that had a property tax computa-
20 tion ratio of not less than four-tenths of one percent (.4%) in tax year
21 1994, that school district shall receive from the appropriations made for
22 that purpose, an amount equal to the greater of the district's actual or
23 adjusted market value for assessment purposes as such valuation existed on
24 December 31 of the previous calendar year, together with the increment
25 value, as defined in section 50-2903, Idaho Code, if applicable under the
26 circumstance described in section 33-802 2., Idaho Code, relating to ter-
27 mination of a revenue allocation area, multiplied by one-tenth twenty-five
28 hundredths of one percent (.125%).
29 (b) In the case of a school district that had a property tax computation
30 ratio of less than four-tenths of one percent (.4%) in tax year 1994, the
31 greater of the 1992, 1993 or 1994 property tax computation ratio less
32 three-tenths fifteen hundredths of one percent (.315%) shall be designated
33 the district's base multiplier. In no case shall the base multiplier be
34 less than zero (0). Four-tenths of one percent (.4%) less the greater of
35 the district's 1992, 1993 or 1994 property tax computation ratio shall be
36 designated the district's adjustment factor. In no case shall the adjust-
37 ment factor be greater than one-tenth twenty-five hundredths of one per-
38 cent (.125%) or less than zero (0). Each school district's actual multi-
39 plier shall be the base multiplier plus one-fifth (1/5) of the adjustment
40 factor in tax year 1995, the base multiplier plus two-fifths (2/5) of the
41 adjustment factor in tax year 1996, the base multiplier plus three-fifths
42 (3/5) of the adjustment factor in tax year 1997, the base multiplier plus
43 four-fifths (4/5) of the adjustment factor in tax year 1998, and the base
44 multiplier plus the adjustment factor in tax year 1999 2006 and beyond.
45 Each school district shall receive, from the appropriations made for that
46 purpose, an amount equal to the district's actual or adjusted market value
47 for assessment purposes as such valuation existed on December 31 of the
48 previous calendar year, together with the increment value, as defined in
49 section 50-2903, Idaho Code, if applicable under the circumstance
50 described in section 33-802 2., Idaho Code, relating to termination of a
51 revenue allocation area, multiplied by the district's actual multiplier.
52 (c) The preceding provisions of this subsection notwithstanding, appro-
53 priations from the state for the value of one-tenth of one percent (.1%)
7
1 of the greater of the district's actual or adjusted market value for
2 assessment purposes as such valuation existed on December 31 of the previ-
3 ous calendar year, together with the increment value, as defined in sec-
4 tion 50-2903, Idaho Code, if applicable under the circumstance described
5 in section 33-802 2., Idaho Code, relating to termination of a revenue
6 allocation area, shall not exceed seventy-five two hundred four million
7 dollars ($75204,000,000) in any fiscal year and such amount shall be
8 increased by a growth factor of three percent (3%) per year over the
9 amount a district received the previous fiscal year. If the amount school
10 districts would otherwise be entitled to receive pursuant to the preceding
11 provisions of this subsection exceeds seventy-five million dollars
12 ($75,000,000), then each school district shall receive its share of seven-
13 ty-five million dollars ($75,000,000) based on the formulas contained in
14 this section.
15 (2) (a) Participation in this property tax reduction program is voluntary
16 for a charter district. If a charter district participates, in addition to
17 the provisions of subsection (1) of this section it shall not have a prop-
18 erty tax computation ratio that is above three-tenths fifteen hundredths
19 of one percent (.315%) or the district's property tax computation ratio in
20 tax year 1994 2006, less one-tenth of one percent (.1%), whichever is
21 greater.
22 (b) If in any year the charter district's property tax computation ratio
23 used to calculate its maintenance and operation budget is increased above
24 the limit specified in this subsection the district shall not be eligible
25 for the distribution pursuant to subsection (1) of this section for that
26 year.
27 (3) Limitations imposed upon a school district's property tax computation
28 ratio under the provisions of this section do not apply to any levy approved
29 by electors of the school district as provided by law.
30 (4) Distributions calculated as provided in this section shall be made to
31 school districts of this state in two (2) equal installments on the due dates
32 as specified in section 63-903(1), Idaho Code, for the property taxes being
33 replaced.
34 (5) For purposes of section 33-1002, Idaho Code, moneys distributed pur-
35 suant to this section shall not be included in determining total state funds.
36 SECTION 4. SEVERABILITY. The provisions of this act are hereby declared
37 to be severable and if any provision of this act or the application of such
38 provision to any person or circumstance is declared invalid for any reason,
39 such declaration shall not affect the validity of the remaining portions of
40 this act.
41 SECTION 5. An emergency existing therefor, which emergency is hereby
42 declared to exist, this act shall be in full force and effect on and after its
43 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
RS 15497
This legislation lowers the public school property tax
Maintenance & Operations (M&O) budget limit from 0.3 percent of
the property tax value base to 1.5 percent of the property tax
value beginning in property tax year 2006. Revenue losses to the
school districts under this change will be paid from the general
fund. Also, a budget growth cap is applied that limits non-voter
approved school property tax budgets to 3% plus the value of new
construction. This legislation provides a 3% cap statewide for
school property taxes and would provide that property tax
replacement would grow at a rate of 3 percent each year.
FISCAL NOTE
This legislation costs an estimated $204 million in revenue from
the General Fund in FY 2007, $204 million plus 3% in FY 2008 and
the additional 3% growth rate will be added to each FY in
perpetuity.
Contact
Name: Rep. Dolores Crow
Phone: 332-1000
Rep. Jim Clark
Rep. Mike Moyle
STATEMENT OF PURPOSE/FISCAL NOTE H 418