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H0479...............................................by REVENUE AND TAXATION
PUBLIC SCHOOL FINANCING - Amends and adds to existing law to revise how
maximum school maintenance and operation levies are calculated for tax year
2006 and thereafter; to revise the local districts' contribution
calculation; to provide that charter school districts must reduce property
tax levies to be eligible to receive state funds; to provide that the
purpose of section 33-1002D, Idaho Code, is to provide ongoing property tax
relief; to provide that moneys in the fund shall be state discretionary
funds; to provide for transfer of excess revenues of the General Fund upon
certain circumstances occurring; and to provide for transfers to the Public
School Income Fund for property tax relief purposes.
01/26 House intro - 1st rdg - to printing
01/27 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. 479
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO FINANCING OF THE PUBLIC SCHOOLS; AMENDING SECTION 33-802, IDAHO
3 CODE, TO REVISE HOW MAXIMUM SCHOOL MAINTENANCE AND OPERATION LEVIES ARE
4 CALCULATED FOR TAX YEAR 2006 AND THEREAFTER; AMENDING SECTION 33-1002,
5 IDAHO CODE, TO REVISE THE LOCAL DISTRICTS' CONTRIBUTION CALCULATION AND TO
6 PROVIDE THAT CHARTER SCHOOL DISTRICTS MUST REDUCE PROPERTY TAX LEVIES TO
7 BE ELIGIBLE TO RECEIVE STATE FUNDS; AMENDING SECTION 33-1002D, IDAHO CODE,
8 TO PROVIDE THAT THE PURPOSE OF THE SECTION IS TO PROVIDE ONGOING PROPERTY
9 TAX RELIEF AND TO PROVIDE THAT MONEYS IN THE FUND SHALL BE STATE DISCRE-
10 TIONARY FUNDS; AND AMENDING CHAPTER 68, TITLE 67, IDAHO CODE, BY THE ADDI-
11 TION OF A NEW SECTION 67-6804, IDAHO CODE, TO PROVIDE FOR TRANSFER OF
12 EXCESS REVENUES OF THE GENERAL FUND UPON CERTAIN CIRCUMSTANCES OCCURRING
13 AND TO PROVIDE FOR TRANSFERS TO THE PUBLIC SCHOOL INCOME FUND.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Section 33-802, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 33-802. SCHOOL LEVIES. Any tax levied for school purposes shall be a lien
18 on the property against which the tax is levied. The board of trustees shall
19 determine the levies upon each dollar of taxable property in the district for
20 the ensuing fiscal year as follows:
21 1. Bond, Interest and Judgment Obligation Levies. Such levies as shall be
22 required to satisfy all maturing bond, bond interest, and judgment obliga-
23 tions.
24 2. Maximum School Maintenance and Operation Levies. Such levies for main-
25 taining and operating the schools of the district and for the payment of
26 tuition and transportation, that do not exceed an amount equal to four-tenths
27 of one percent (.4%) during tax year 1994, and do not exceed an amount equal
28 to three-tenths of one percent (.3%) during tax year 1995 and thereafter 2005,
29 applied to the actual or adjusted market value for assessment purposes of the
30 district as such valuation existed on December 31 of the previous year, but
31 allowances necessary as a credit for prepaid taxes, as provided in section
32 63-1607, Idaho Code, shall not be included in such maximum levies. Provided
33 however, that in the event property within a district's boundaries is con-
34 tained in a revenue allocation area established under chapter 29, title 50,
35 Idaho Code, and such revenue allocation area has given notice of termination
36 thereunder, then, only for the purpose of determining the levy described in
37 this subsection, the district may add the increment value, as defined in sec-
38 tion 50-2903, Idaho Code, to the actual or adjusted market value for assess-
39 ment purposes of the district as such value existed on December 31 of the pre-
40 vious year. For tax year 2006 and thereafter, the levy rate limitation of this
41 subsection shall be modified as follows:
42 (a) Multiply the amount of money raised statewide in the prior year, pur-
43 suant to this section, by 1.03;
2
1 (b) Subtract the value of any increase in statewide market value for
2 assessment purposes resulting from new construction or change of land use
3 classification as evidenced by the value shown on the new construction
4 roll compiled pursuant to section 63-301A, Idaho Code, from the actual or
5 adjusted statewide market value as such valuation existed on December 31
6 of the previous year;
7 (c) Divide the amount in subsection 2.(a) of this section by the amount
8 in subsection 2.(c) of this section;
9 (d) Reduce the rate resulting from the calculation in subsection 2.(c) of
10 this section by an amount equal to the moneys appropriated pursuant to
11 section 33-1002D, Idaho Code.
12 3. Authorized School Maintenance and Operation Levies. Such levies for
13 maintaining and operating the schools of the district and for the payment of
14 tuition and transportation that do not exceed one hundred eleven percent
15 (111%) of the local district's contribution authorized in subsection 2. of
16 section 33-1002, Idaho Code. Implementation of the provisions of this subsec-
17 tion shall be authorized only after approval by a majority of the district's
18 electors voting on the question. Levies otherwise authorized by law shall not
19 require an election.
20 4. Supplemental Maintenance and Operation Levies. No levy in excess of
21 the levy permitted by subsection 2. or 3. of this section shall be made by a
22 noncharter school district unless such a supplemental levy in a specified
23 amount and for a specified time not to exceed two (2) years be first autho-
24 rized through an election held pursuant to chapter 4, title 33, Idaho Code,
25 and approved by a majority of the district electors voting in such election. A
26 levy approved pursuant to this subsection may be reduced by a majority vote of
27 the board of trustees in the second year.
28 5. Charter District Supplemental Maintenance and Operation. Levies pursu-
29 ant to the respective charter of any such charter district shall be first
30 authorized through an election held pursuant to chapter 4, title 33, Idaho
31 Code, and approved by a majority of the district electors voting in such elec-
32 tion.
33 6. The Local District Contribution. The local school district contribu-
34 tion levy is the amount utilized for calculating local district participation
35 in the educational foundation program, which is applied to the adjusted market
36 value for assessment purposes, as such valuation existed on December 31 of the
37 previous year, together with the increment value, as defined in section
38 50-2903, Idaho Code, if applicable under the circumstance described in subsec-
39 tion 2. of this section, relating to termination of a revenue allocation area.
40 7. The board of trustees of any school district that has, for at least
41 seven (7) consecutive years, been authorized through an election held pursuant
42 to chapter 4, title 33, Idaho Code, to certify a supplemental levy that has
43 annually been equal to or greater than twenty percent (20%) of the total gen-
44 eral maintenance and operation fund, may submit the question of an indefinite
45 term supplemental levy to the electors of the school district. Such question
46 shall clearly state the dollar amount that will be certified annually and that
47 the levy will be for an indefinite number of years. The question must be
48 approved by a majority of the district electors voting on the question in an
49 election held pursuant to chapter 4, title 33, Idaho Code. The levy approved
50 pursuant to this subsection may be reduced by a majority vote of the board of
51 trustees during any fiscal year.
52 SECTION 2. That Section 33-1002, Idaho Code, be, and the same is hereby
53 amended to read as follows:
3
1 33-1002. EDUCATIONAL SUPPORT PROGRAM. The educational support program is
2 calculated as follows:
3 1. State Educational Support Funds. Add the state appropriation, includ-
4 ing the moneys available in the public school income fund, together with all
5 miscellaneous revenues to determine the total state funds.
6 2. From the total state funds subtract the following amounts needed for
7 state support of special programs provided by a school district:
8 a. Pupil tuition-equivalency allowances as provided in section 33-1002B,
9 Idaho Code;
10 b. Transportation support program as provided in section 33-1006, Idaho
11 Code;
12 c. Feasibility studies allowance as provided in section 33-1007A, Idaho
13 Code;
14 d. The approved costs for border district allowance, provided in section
15 33-1403, Idaho Code, as determined by the state superintendent of public
16 instruction;
17 e. The approved costs for exceptional child approved contract allowance,
18 provided in subsection 2. of section 33-2004, Idaho Code, as determined by
19 the state superintendent of public instruction;
20 f. Certain expectant and delivered mothers allowance as provided in sec-
21 tion 33-2006, Idaho Code;
22 g. Salary-based apportionment calculated as provided in sections 33-1004
23 through 33-1004F, Idaho Code;
24 h. Unemployment insurance benefit payments according to the provisions of
25 section 72-1349A, Idaho Code;
26 i. For expenditure as provided by the public school technology program;
27 j. For the support of provisions that provide a safe environment condu-
28 cive to student learning and maintain classroom discipline, an allocation
29 of $300 per support unit; and
30 k. Any additional amounts as required by statute to effect administrative
31 adjustments or as specifically required by the provisions of any bill of
32 appropriation;
33 to secure the state educational support funds.
34 3. Local Districts' Contribution Calculation. Without including any
35 allowance as a credit for prepaid taxes as provided by section 63-1607, Idaho
36 Code, the local districts' contribution shall be the amount appropriated pur-
37 suant to section 33-1002D, Idaho Code, plus three-tenths percent (.3%) during
38 fiscal year 2003-04 and each year thereafter, a percentage of the total state
39 adjusted market value for assessment purposes for the previous year, with such
40 percentage being determined pursuant to section 33-802, Idaho Code, and with
41 such value being determined by the provisions of section 63-315, Idaho Code,
42 and four-tenths percent (.4%) during fiscal year 1994-95 and each year there-
43 after, of the cooperative electrical associations' property values that have
44 been derived from the taxes paid in lieu of ad valorem taxes for the previous
45 year as provided in section 63-3502, Idaho Code.
46 4. Educational Support Program Distribution Funds. Add the local dis-
47 tricts' contribution, subsection 3. of this section, and the state educational
48 support program funds, subsection 1. of this section, together to secure the
49 total educational support program distribution funds.
50 5. Average Daily Attendance. The total state average daily attendance
51 shall be the sum of the average daily attendance of all of the school dis-
52 tricts of the state. The state board of education shall establish rules set-
53 ting forth the procedure to determine average daily attendance and the time
54 for, and method of, submission of such report. Average daily attendance calcu-
55 lation shall be carried out to the nearest hundredth. Computation of average
4
1 daily attendance shall also be governed by the provisions of section 33-1003A,
2 Idaho Code.
3 6. Support Units. The total state support units shall be determined by
4 using the tables set out hereafter called computation of kindergarten support
5 units, computation of elementary support units, computation of secondary sup-
6 port units, computation of exceptional education support units, and computa-
7 tion of alternative school secondary support units. The sum of all of the
8 total support units of all school districts of the state shall be the total
9 state support units.
10 COMPUTATION OF KINDERGARTEN SUPPORT UNITS
11 Average Daily
12 Attendance Attendance Divisor Units Allowed
13 41 or more .... 40....................... 1 or more as computed
14 31 - 40.99 ADA.... -....................... 1
15 26 - 30.99 ADA.... -....................... .85
16 21 - 25.99 ADA.... -....................... .75
17 16 - 20.99 ADA.... -....................... .6
18 8 - 15.99 ADA.... -....................... .5
19 1 - 7.99 ADA.... -....................... count as elementary
20 COMPUTATION OF ELEMENTARY SUPPORT UNITS
21 Average Daily
22 Attendance Attendance Divisor Minimum Units Allowed
23 300 or more ADA........................................ 15
24 ..23...grades 4,5 & 6....
25 ..22...grades 1,2 & 3....1994-95
26 ..21...grades 1,2 & 3....1995-96
27 ..20...grades 1,2 & 3....1996-97
28 and each year thereafter.
29 160 to 299.99 ADA... 20..................... 8.4
30 110 to 159.99 ADA... 19..................... 6.8
31 71.1 to 109.99 ADA... 16..................... 4.7
32 51.7 to 71.0 ADA... 15..................... 4.0
33 33.6 to 51.6 ADA... 13..................... 2.8
34 16.6 to 33.5 ADA... 12..................... 1.4
35 1.0 to 16.5 ADA... n/a.................... 1.0
36 COMPUTATION OF SECONDARY SUPPORT UNITS
37 Average Daily
38 Attendance Attendance Divisor Minimum Units Allowed
39 750 or more .... 18.5..................... 47
40 400 - 749.99 ADA.... 16....................... 28
41 300 - 399.99 ADA.... 14.5..................... 22
42 200 - 299.99 ADA.... 13.5..................... 17
43 100 - 199.99 ADA.... 12....................... 9
44 99.99 or fewer Units allowed as follows:
45 Grades 7-12 ......................... 8
46 Grades 9-12 ......................... 6
47 Grades 7- 9 ......................... 1 per 14 ADA
48 Grades 7- 8 ......................... 1 per 16 ADA
5
1 COMPUTATION OF EXCEPTIONAL EDUCATION SUPPORT UNITS
2 Average Daily
3 Attendance Attendance Divisor Minimum Units Allowed
4 14 or more .... 14.5..................... 1 or more as computed
5 12 - 13.99.... -....................... 1
6 8 - 11.99.... -....................... .75
7 4 - 7.99.... -....................... .5
8 1 - 3.99.... -....................... .25
9 COMPUTATION OF ALTERNATIVE SCHOOL SECONDARY SUPPORT UNITS
10 Pupils in Attendance Attendance Divisor Minimum Units Allowed
11 12 or more.......... 12...................... 1 or more as computed
12 In applying these tables to any given separate attendance unit, no school
13 district shall receive less total money than it would receive if it had a
14 lesser average daily attendance in such separate attendance unit. In applying
15 the kindergarten table to a kindergarten program of less days than a full
16 school year, the support unit allowance shall be in ratio to the number of
17 days of a full school year. The tables for exceptional education and alterna-
18 tive school secondary support units shall be applicable only for programs
19 approved by the state department of education following rules established by
20 the state board of education. Moneys generated from computation of support
21 units for alternative schools shall be utilized for alternative school pro-
22 grams. School district administrative and facility costs may be included as
23 part of the alternative school expenditures.
24 7. State Distribution Factor per Support Unit. Divide educational support
25 program distribution funds, after subtracting the amounts necessary to pay the
26 obligations specified in subsection 2. of this section, by the total state
27 support units to secure the state distribution factor per support unit.
28 8. District Share of State Funds for Educational Support Program. Ascer-
29 tain a district's share of state funds for the educational support program as
30 follows:
31 a. District Contribution Calculation. Without including any allowance as
32 a credit for prepaid taxes, as provided in section 63-1607, Idaho Code,
33 the district contribution calculation shall be the rate determined under
34 subsection 3. of this section.
35 b. District Support Units. The number of support units for each school
36 district in the state shall be determined as follows:
37 (1) Divide the actual average daily attendance, excluding students
38 approved for inclusion in the exceptional child educational program,
39 for the administrative schools and each of the separate schools and
40 attendance units by the appropriate divisor from the tables of sup-
41 port units in this section, then add the quotients to obtain the
42 district's support units allowance for regular students, kindergarten
43 through grade 12 including alternative school secondary students.
44 Calculations in application of this subsection shall be carried out
45 to the nearest tenth.
46 (2) Divide the combined totals of the average daily attendance of
47 all preschool, handicapped, kindergarten, elementary, secondary and
48 juvenile detention center students approved for inclusion in the
49 exceptional child program of the district by the appropriate divisor
50 from the table for computation of exceptional education support units
51 to obtain the number of support units allowed for the district's
52 approved exceptional child program. Calculations for this subsection
53 shall be carried out to the nearest tenth when more than one (1) unit
6
1 is allowed.
2 (3) The total number of support units of the district shall be the
3 sum of the total support units for regular students, subsection
4 8.b.(1) of this section, and the support units allowance for the
5 approved exceptional child program, subsection 8.b.(2) of this sec-
6 tion.
7 c. Total District Allowance Educational Program. Multiply the district's
8 total number of support units, carried out to the nearest tenth, by the
9 state distribution factor per support unit and to this product add the
10 approved amount of programs of the district provided in subsection 2. of
11 this section to secure the district's total allowance for the educational
12 support program.
13 d. District Share. To secure the district's share of state apportionment,
14 subtract the amount of the local district contribution calculation, sub-
15 section 3. of this section, from the amount of the total district allow-
16 ance, subsection 8.c. of this section.
17 e. Adjustment of District Share. The contract salary of every noncertifi-
18 cated teacher shall be subtracted from the district's share as calculated
19 from the provisions of subsection 8.d. of this section.
20 9. In order to receive state funds, pursuant to this section, a charter
21 district shall utilize a school maintenance and operation property tax levy,
22 for the purposes of calculating the moneys to be raised, that is no greater
23 than that which it levied in tax year 1994, less the difference between the
24 maximum levy rate permitted by section 33-802, Idaho Code, and four-tenths of
25 one percent (.4%).
26 SECTION 3. That Section 33-1002D, Idaho Code, be, and the same is hereby
27 amended to read as follows:
28 33-1002D. PROPERTY TAX REPLACEMENT RELIEF. The purpose of this section is
29 to provide ongoing property tax relief. All moneys transferred to the public
30 school income fund, pursuant to section 67-6804, Idaho Code, shall be annually
31 appropriated by the legislature to the educational support program/division of
32 operations as state discretionary funds. replace a portion of the authorized
33 school maintenance and operation property tax levy with state sales tax
34 receipts. As used in this section, the term "property tax computation ratio"
35 shall mean a ratio determined by dividing the district's certified property
36 tax maintenance and operation budget by the actual or adjusted market value
37 for assessment purposes as such values existed on December 31 of the previous
38 calendar year, together with the increment value, as defined in section
39 50-2903, Idaho Code, if applicable under the circumstance described in section
40 33-802 2., Idaho Code, relating to termination of a revenue allocation area.
41 (1) (a) In the case of a school district that had a property tax computa-
42 tion ratio of not less than four-tenths of one percent (.4%) in tax year
43 1994, that school district shall receive from the appropriations made for
44 that purpose, an amount equal to the greater of the district's actual or
45 adjusted market value for assessment purposes as such valuation existed on
46 December 31 of the previous calendar year, together with the increment
47 value, as defined in section 50-2903, Idaho Code, if applicable under the
48 circumstance described in section 33-802 2., Idaho Code, relating to ter-
49 mination of a revenue allocation area, multiplied by one-tenth of one per-
50 cent (.1%).
51 (b) In the case of a school district that had a property tax computation
52 ratio of less than four-tenths of one percent (.4%) in tax year 1994, the
53 greater of the 1992, 1993 or 1994 property tax computation ratio less
7
1 three-tenths of one percent (.3%) shall be designated the district's base
2 multiplier. In no case shall the base multiplier be less than zero (0).
3 Four-tenths of one percent (.4%) less the greater of the district's 1992,
4 1993 or 1994 property tax computation ratio shall be designated the
5 district's adjustment factor. In no case shall the adjustment factor be
6 greater than one-tenth of one percent (.1%) or less than zero (0). Each
7 school district's actual multiplier shall be the base multiplier plus one-
8 fifth (1/5) of the adjustment factor in tax year 1995, the base multiplier
9 plus two-fifths (2/5) of the adjustment factor in tax year 1996, the base
10 multiplier plus three-fifths (3/5) of the adjustment factor in tax year
11 1997, the base multiplier plus four-fifths (4/5) of the adjustment factor
12 in tax year 1998, and the base multiplier plus the adjustment factor in
13 tax year 1999 and beyond. Each school district shall receive, from the
14 appropriations made for that purpose, an amount equal to the district's
15 actual or adjusted market value for assessment purposes as such valuation
16 existed on December 31 of the previous calendar year, together with the
17 increment value, as defined in section 50-2903, Idaho Code, if applicable
18 under the circumstance described in section 33-802 2., Idaho Code, relat-
19 ing to termination of a revenue allocation area, multiplied by the
20 district's actual multiplier.
21 (c) The preceding provisions of this subsection notwithstanding, appro-
22 priations from the state for the value of one-tenth of one percent (.1%)
23 of the greater of the district's actual or adjusted market value for
24 assessment purposes as such valuation existed on December 31 of the previ-
25 ous calendar year, together with the increment value, as defined in sec-
26 tion 50-2903, Idaho Code, if applicable under the circumstance described
27 in section 33-802 2., Idaho Code, relating to termination of a revenue
28 allocation area, shall not exceed seventy-five million dollars
29 ($75,000,000) in any fiscal year. If the amount school districts would
30 otherwise be entitled to receive pursuant to the preceding provisions of
31 this subsection exceeds seventy-five million dollars ($75,000,000), then
32 each school district shall receive its share of seventy-five million dol-
33 lars ($75,000,000) based on the formulas contained in this section.
34 (2) (a) Participation in this property tax reduction program is voluntary
35 for a charter district. If a charter district participates, in addition to
36 the provisions of subsection (1) of this section it shall not have a prop-
37 erty tax computation ratio that is above three-tenths of one percent (.3%)
38 or the district's property tax computation ratio in tax year 1994, less
39 one-tenth of one percent (.1%), whichever is greater.
40 (b) If in any year the charter district's property tax computation ratio
41 used to calculate its maintenance and operation budget is increased above
42 the limit specified in this subsection the district shall not be eligible
43 for the distribution pursuant to subsection (1) of this section for that
44 year.
45 (3) Limitations imposed upon a school district's property tax computation
46 ratio under the provisions of this section do not apply to any levy approved
47 by electors of the school district as provided by law.
48 (4) Distributions calculated as provided in this section shall be made to
49 school districts of this state in two (2) equal installments on the due dates
50 as specified in section 63-903(1), Idaho Code, for the property taxes being
51 replaced.
52 (5) For purposes of section 33-1002, Idaho Code, moneys distributed pur-
53 suant to this section shall not be included in determining total state funds.
54 SECTION 4. That Chapter 68, Title 67, Idaho Code, be, and the same is
8
1 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
2 ignated as Section 67-6804, Idaho Code, and to read as follows:
3 67-6804. TRANSFER OF EXCESS REVENUES. (1) The legislature finds that it
4 is in the best interest of the taxpayers of the state of Idaho to establish a
5 state budget system that captures surplus revenues for the purposes described
6 herein.
7 (2) If the state controller certifies that the receipts to the general
8 fund for the fiscal year just ending have exceeded the receipts of the previ-
9 ous fiscal year by more than eight percent (8%), then the state controller
10 shall transfer all general fund collection in excess of said eight percent
11 (8%) increase to the public school income fund.
12 (3) Once a transfer has been made, pursuant to this section, the state
13 controller shall transfer the same dollar amount to the public school income
14 fund in each subsequent fiscal year. If the provisions of subsection (2) of
15 this section cause further transfers to be made, then the annual transfer made
16 by the state controller shall be increased by a like amount.
17 (4) All transfers to the public school income fund authorized by this
18 section shall be expended pursuant to the provisions of section 33-1002D,
19 Idaho Code.
STATEMENT OF PURPOSE
RS 15817
The legislation allows for M&O to grow at three percent (3%) per
year and replaces all M&O property taxes with any state-generated
revenues over eight percent (8%) growth per year.
FISCAL NOTE
There is no fiscal impact.
Contact
Name: Rep. Mike Moyle
Rep. Dolores Crow
Rep. Jim Clark
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 479