2006 Legislation
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HOUSE BILL NO. 690 – School Facilities Improvement Act

HOUSE BILL NO. 690

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H0690..........................................................by EDUCATION
SCHOOL FACILITIES IMPROVEMENT ACT - Adds to and amends existing law
relating to the School Facilities Improvement Act to provide legislative
intent; to require use of payments from the School District Building
Account and to delete certain reporting requirements; to remove the
limitation on state financial assistance only for the interest cost portion
of the annual bond interest and redemption payment; to provide a Public
School Facilities Cooperative Funding Program; to create a Public School
Facilities Cooperative Fund; to provide for school building maintenance
matching funds; to require school districts to annually deposit an amount
equal to a minimum of 2% of the replacement value of school buildings to a
school building maintenance fund, less the amount deposited from state
funds; to provide for calculation of the state's appropriation; to provide
for a state appropriation; to provide for use of the fund moneys; to
provide definitions; to provide a condition under which the administrator
shall submit an application to the Public School Facilities Cooperative
Fund panel to abate an identified safety hazard; to provide that an amount
equal to the annual General Fund appropriation for bond levy equalization
shall be annually distributed to the General Fund; and to transfer and
appropriate $25,000,000 from the General Fund to the Public School
Facilities Cooperative Fund.
                                                                        
02/15    House intro - 1st rdg - to printing
02/16    Rpt prt - to Educ

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 690
                                                                        
                                   BY EDUCATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE SCHOOL FACILITIES IMPROVEMENT ACT; PROVIDING LEGISLATIVE FIND-
  3        INGS AND INTENT; AMENDING SECTION 6-2212, IDAHO CODE, TO PROVIDE A  REFER-
  4        ENCE  TO  THE  APPOINTING AUTHORITY OF THE STATE BOARD OF EDUCATION AND TO
  5        MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-905, IDAHO CODE, TO  PRO-
  6        VIDE  PROPER TERMINOLOGY, TO DELETE OBSOLETE LANGUAGE, TO PROVIDE FOR DIS-
  7        TRIBUTION OF ADDITIONAL MONEYS, TO REQUIRE USE OF PAYMENTS FROM THE SCHOOL
  8        DISTRICT BUILDING ACCOUNT AND TO DELETE  CERTAIN  REPORTING  REQUIREMENTS;
  9        AMENDING  SECTION  33-906,  IDAHO  CODE, TO REMOVE THE LIMITATION ON STATE
 10        FINANCIAL ASSISTANCE ONLY FOR THE INTEREST COST PORTION OF THE ANNUAL BOND
 11        INTEREST AND REDEMPTION PAYMENT; AMENDING SECTION 33-907, IDAHO  CODE,  TO
 12        PROVIDE  CODE REFERENCES; AMENDING CHAPTER 9, TITLE 33, IDAHO CODE, BY THE
 13        ADDITION OF A NEW SECTION 33-909, IDAHO CODE, TO PROVIDE A  PUBLIC  SCHOOL
 14        FACILITIES  COOPERATIVE  FUNDING  PROGRAM  AND  TO  CREATE A PUBLIC SCHOOL
 15        FACILITIES COOPERATIVE FUND; AMENDING CHAPTER 10, TITLE 33, IDAHO CODE, BY
 16        THE ADDITION OF A NEW SECTION 33-1018B, IDAHO CODE, TO PROVIDE FOR  SCHOOL
 17        BUILDING  MAINTENANCE MATCHING FUNDS; AMENDING CHAPTER 10, TITLE 33, IDAHO
 18        CODE, BY THE ADDITION OF A NEW SECTION 33-1019,  IDAHO  CODE,  TO  REQUIRE
 19        SCHOOL  DISTRICTS  TO ANNUALLY DEPOSIT AN AMOUNT EQUAL TO A MINIMUM OF TWO
 20        PERCENT OF THE REPLACEMENT VALUE OF SCHOOL BUILDINGS TO A SCHOOL  BUILDING
 21        MAINTENANCE  FUND  LESS  THE AMOUNT DEPOSITED FROM STATE FUNDS, TO PROVIDE
 22        FOR CALCULATION OF THE STATE'S  APPROPRIATION,  TO  PROVIDE  FOR  A  STATE
 23        APPROPRIATION,  TO PROVIDE FOR USE OF THE FUND MONEYS AND TO PROVIDE DEFI-
 24        NITIONS; AMENDING SECTION 39-8011, IDAHO  CODE,  TO  PROVIDE  A  CONDITION
 25        UNDER  WHICH  THE  ADMINISTRATOR SHALL SUBMIT AN APPLICATION TO THE PUBLIC
 26        SCHOOL FACILITIES COOPERATIVE FUND PANEL TO  ABATE  AN  IDENTIFIED  SAFETY
 27        HAZARD;  AMENDING  SECTION  63-2520, IDAHO CODE, TO PROVIDE THAT AN AMOUNT
 28        EQUAL TO THE ANNUAL GENERAL FUND APPROPRIATION FOR BOND LEVY  EQUALIZATION
 29        SHALL BE ANNUALLY DISTRIBUTED TO THE GENERAL FUND; TRANSFERRING AND APPRO-
 30        PRIATING $25,000,000 FROM THE GENERAL FUND TO THE PUBLIC SCHOOL FACILITIES
 31        COOPERATIVE FUND; AND PROVIDING NONSEVERABILITY WITH EXCEPTIONS.
                                                                        
 32    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 33        SECTION  1.  LEGISLATIVE FINDINGS AND INTENT. The Legislature hereby finds
 34    that:
 35        (1)  Section 1, Article IX, of the Constitution of the state of Idaho pro-
 36    vides that "it shall be the duty of the legislature of Idaho, to establish and
 37    maintain a general,  uniform  and  thorough  system  of  public,  free  common
 38    schools."
 39        (2)  In  the  case  of  Idaho Schools for Equal Educational Opportunity v.
 40    Evans, 123 Idaho 573 (1993), the Idaho Supreme Court held that the then exist-
 41    ing State Board of Education rules for school facilities, textbooks  and  cur-
 42    riculum,  and  transportation  systems  were  consistent with the thoroughness
 43    requirements of Section 1, Article IX, of the Constitution  of  the  state  of
 44    Idaho.  The Supreme Court remanded the case for trial to determine if the sys-
                                                                        
                                           2
                                                                        
  1    tem of funding was providing such school facilities, textbooks and curriculum,
  2    and transportation systems called for in the rules.
  3        (3)  In response to that action, the Legislature enacted Section  33-1612,
  4    Idaho Code, which defined thoroughness and included "a safe environment condu-
  5    cive to learning" among the statutory definitions of thoroughness.
  6        (4)  In a subsequent ruling in the same case, Idaho Schools for Equal Edu-
  7    cational  Opportunity  v. State, 132 Idaho 559 (1999), the Idaho Supreme Court
  8    held that the statutory requirement of "a safe environment conducive to learn-
  9    ing" and the rules adopted pursuant to it were consistent with  the  thorough-
 10    ness  requirements  of Section 1, Article IX, of the Constitution of the state
 11    of Idaho, and that such a safe environment was inherently part of  a  thorough
 12    system  of  public,  free common schools required by Section 1, Article IX, of
 13    the Constitution of the state of Idaho. The Supreme Court remanded the case to
 14    the district court to determine whether the funding  system  was  providing  a
 15    safe environment conducive to learning.
 16        (5)  On February 5, 2001, the Fourth Judicial District Court entered find-
 17    ings  of fact and conclusions of law that the system of school funding then in
 18    existence was constitutionally deficient in its ability to repair  or  replace
 19    dangerous or unsafe conditions in school buildings.
 20        (6)  On  December  21,  2005,  on  appeal  to the Supreme Court, the Idaho
 21    Supreme Court affirmed the district court's February  5,  2001,  decision  and
 22    said:
 23        In  sum,  the  evidence  in  the record clearly supports the district
 24        court's 2001 Findings. We affirm the conclusion of the district court
 25        that the current funding system is simply not sufficient to carry out
 26        the Legislature's duty under the constitution. While the  Legislature
 27        has  made  laudable efforts to address the safety concerns of various
 28        school districts, the task  is  not  yet  complete.  The  appropriate
 29        remedy,  however,  must  be fashioned by the Legislature and not this
 30        Court. Quite simply, Article IX of our  constitution  means  what  it
 31        says:  "[I]t shall be the duty of the Legislature of Idaho, to estab-
 32        lish and maintain a general, uniform and thorough system  of  public,
 33        free common schools." Thus, it is the duty of the State, and not this
 34        Court or the local school districts, to meet this constitutional man-
 35        date.
 36        (7)  In  response  to  the Supreme Court's 2005 decision, and mindful that
 37    the Supreme Court has recognized the Legislature's efforts, following the dis-
 38    trict court's decision in 2001, to provide a system of funding  that  provides
 39    safe  schools,  it  is  the  purpose  of this Act to fulfill the Legislature's
 40    responsibility under Section 1, Article IX, of the Constitution of  the  state
 41    of  Idaho,  by establishing an ongoing, state-funded system for funding repair
 42    or replacement of unsafe school facilities in a manner that fairly and equita-
 43    bly balances the state and local contributions. It requires funds to be  dedi-
 44    cated  to  maintenance  to  arrest deterioration of schools before they become
 45    unsafe.
 46        (8)  In proposing this Act, it is the intent of the Legislature to:
 47        (a)  Amend the statutes addressing the School District Building Account to
 48        provide an ongoing means of providing funds from that account for the pur-
 49        pose of assisting school districts to fund repair or replacement of unsafe
 50        school facilities; and
 51        (b)  Remove all artificial limits on the  functioning  of  the  bond  levy
 52        equalization  value index. The index measures a school district's relative
 53        ability to pay, and provides a secure, ongoing revenue source for the bond
 54        levy equalization program, enabling each school district's full  share  of
 55        state  lottery  funds  to  be  used  for  school  building maintenance and
                                                                        
                                           3
                                                                        
  1        repairs; and
  2        (c)  Establish an ongoing School Facilities Cooperative Funding Program to
  3        assist school districts to fund repair or  replacement  of  unsafe  school
  4        buildings  when  school  districts  are unable to fund necessary repair or
  5        replacement; and
  6        (d)  Provide ongoing, fair and equitable state assistance to  school  dis-
  7        tricts under the School Facilities Cooperative Funding Program whereby the
  8        state initially funds the total cost of repair and replacement that school
  9        districts  are  unable to fund themselves. It creates the necessary taxing
 10        authority to pay the school district's share of  the  cost  of  repair  or
 11        replacement, and establishes a statutory formula to annually determine the
 12        school  district's  fair  and  equitable  share  of the costs of repair or
 13        replacement that compares the school district's bonds and/or plant facili-
 14        ties levy rates to the statewide average bond and/or facility  levy  rate;
 15        and
 16        (e)  Require each school district to annually set aside an adequate amount
 17        of  moneys  for  the  exclusive  purpose of school building maintenance in
 18        order to arrest deterioration in  school  facilities  that  have  lead  to
 19        unsafe  conditions and to provide a sliding scale of state match subsidies
 20        for this amount based upon the school district's relative ability to pay.
                                                                        
 21        SECTION 2.  That Section 6-2212, Idaho Code, be, and the  same  is  hereby
 22    amended to read as follows:
                                                                        
 23        6-2212.  STATE  SUPERVISION.  When  authorized in this chapter by law, the
 24    district court, or the state board of education pursuant  to  section  33-909,
 25    Idaho  Code,  may  issue an order for state supervision of a local school dis-
 26    trict. When an order for state supervision  of  a  local  school  district  is
 27    entered  by the district court, the superintendent of public instruction shall
 28    within thirty-five (35)  calendar  days  appoint,  at  local  school  district
 29    expense,  an officer to be known as a district supervisor. The district super-
 30    visor shall have authority to approve or disapprove any actions of  the  board
 31    of  the local school district, to supervise or dismiss superintendents, assis-
 32    tance assistant superintendents, and any other district administrative person-
 33    nel, and to take any actions necessary to further the local school  district's
 34    obligations  to  provide  constitutionally  required educational services. The
 35    district supervisor shall serve at the pleasure of the superintendent of  pub-
 36    lic  instruction  until removed by the superintendent of public instruction or
 37    the superintendent of public instruction reports to the  district  court  that
 38    the local school district is in substantial compliance with its obligations to
 39    provide  constitutionally required educational services, or until the district
 40    court, upon its own motion or upon motion of any of the parties, orders  state
 41    supervision to end.
                                                                        
 42        SECTION  3.  That  Section  33-905, Idaho Code, be, and the same is hereby
 43    amended to read as follows:
                                                                        
 44        33-905.  SCHOOL DISTRICT BUILDING ACCOUNT -- PAYMENTS TO ACCOUNT -- MONEYS
 45    APPROPRIATED TO STATE BOARD -- APPLICATION FOR MONEYS -- PAYMENTS TO DISTRICTS
 46    -- REPORTS ON APPLICATIONS -- USES OF MONEYS. (1.) The state of Idaho,  recog-
 47    nizing in order to fulfill its responsibility to establish and maintain a gen-
 48    eral, uniform and thorough system of public, free common schools, in an effort
 49    to  partially  fulfill this responsibility, hereby creates and establishes the
 50    school district building account in the state treasury.  The  school  district
 51    building  account  shall  have paid into it such appropriations or revenues as
                                                                        
                                           4
                                                                        
  1    may be provided by law.
  2        (2.)  Moneys in the school district building account are hereby  appropri-
  3    ated  to  and  may be expended by the state board of education at any time for
  4    the purposes provided in this section, any provision of chapter 35, title  67,
  5    Idaho Code, or chapter 36, title 67, Idaho Code, notwithstanding.
  6        3.  (a) As  to any moneys in the account other than lottery dividends dis-
  7        tributed pursuant to subsection 4. of this section, the board of  trustees
  8        of  any  school  district  may  apply  to  the state board of education to
  9        receive a payment or payments from the school district  building  account;
 10        provided,  a district demonstrates to the state board of education that it
 11        has a substantial and serious need based  upon  the  district's  classroom
 12        student-teacher ratios, past efforts to levy for such construction, physi-
 13        cal  condition of existing structures, and the total assessed market value
 14        of the district, all of which shall be further defined by actual need cri-
 15        teria established by the state board of education.
 16        (b)  When an application for moneys from the account is  approved  by  the
 17        state board of education, the state board shall inform the school district
 18        that  the  application  has  been approved, citing the amount approved for
 19        payment and an estimate of the time when the payment can actually be  made
 20        to the school district.
 21        4.  By not later than August 31, moneys in the account pursuant to distri-
 22    bution  from  section  67-7434, Idaho Code, the lottery dividends and interest
 23    earned thereon, shall be distributed to each of the several school  districts,
 24    in  the  proportion that the average daily attendance of that district for the
 25    previous school year bears to the total average daily attendance of the  state
 26    during the previous school year. For the purposes of this subsection 42. only,
 27    the Idaho school for the deaf and blind shall be considered a school district,
 28    and  shall  receive  a distribution based upon the average daily attendance of
 29    the school. Average daily attendance shall be calculated as provided  in  sec-
 30    tion 33-1002 45., Idaho Code.
 31        (3)  Any  other  state moneys that may be made available shall be distrib-
 32    uted to meet the requirements of section 33-1019, Idaho Code. If the amount of
 33    such funds exceeds the  amount  needed  to  meet  the  provisions  of  section
 34    33-1019,  Idaho Code, then the excess balance shall be transferred to the pub-
 35    lic education stabilization fund.
 36        5.(4)  All payments from the school district  building  account  shall  be
 37    paid  out  directly to the school district in warrants drawn by the state con-
 38    troller upon presentation of proper vouchers from the state  board  of  educa-
 39    tion. Pending payments out of the school district building account, the moneys
 40    in  the account shall be invested by the state treasurer in the same manner as
 41    provided under section 67-1210, Idaho Code, with respect to other idle  moneys
 42    in the state treasury. Interest earned on the investments shall be returned to
 43    the school district building account.
 44        6.(5)  Payments  from  the  school district building account received by a
 45    school district may shall be used by the  school  district  for  the  purposes
 46    authorized  in  section  33-11021019, Idaho Code, up to the level of the state
 47    match so required. Any payments from  the  school  district  building  account
 48    received  by  a school district that are in excess of the state match require-
 49    ments of section 33-1019, Idaho Code, may be used by the school  district  for
 50    the purposes authorized in section 33-1102, Idaho Code.
 51        7.  (a) By not later than December 1, each school district shall report to
 52        the  state  department  of education the projects on which moneys received
 53        from the school district building account were expended. The state depart-
 54        ment of education shall transmit a summary of such reports to the legisla-
 55        ture by not later than January 15 of the following year.
                                                                        
                                           5
                                                                        
  1        (b)  By not later than December 1, each school district  shall  report  to
  2        the state department of education the planned uses for the moneys received
  3        from the school district building account.  The state department of educa-
  4        tion  shall  transmit  a  summary of the reports to the legislature by not
  5        later than January 15 of the following year.
                                                                        
  6        SECTION 4.  That Section 33-906, Idaho Code, be, and the  same  is  hereby
  7    amended to read as follows:
                                                                        
  8        33-906.  BOND  LEVY  EQUALIZATION SUPPORT PROGRAM. (1) Pursuant to section
  9    33-906B, Idaho Code, school districts with a value index below one  (1)  shall
 10    be  eligible  to receive additional state financial assistance for the cost of
 11    annual bond interest and redemption payments made on bonds passed on or  after
 12    September  15,  2002.  However, any school district shall receive no less than
 13    ten percent (10%) of the interest cost portion of the annual bond interest and
 14    redemption payment for bonds passed on or after September 15, 2002, and before
 15    July 1, 2006. The state department of education shall disburse such  funds  to
 16    school  districts  from  moneys  appropriated  from the bond levy equalization
 17    fund. The department shall disburse the funds by no later than September 1  of
 18    each  year  for school districts in which voters have approved the issuance of
 19    qualifying bonds by no later than January 1 of that calendar year,  and  which
 20    are  certifying a qualifying bond interest and redemption payment for the fis-
 21    cal year in which the disbursement is made. For districts with a  value  index
 22    below one (1), the percentage of each annual bond interest and redemption pay-
 23    ment  that is paid by the state shall be determined by dividing the difference
 24    between one (1) and the school district's value index  by  one  (1).  provided
 25    that  the  state  shall pay for no more than  the interest cost portion of the
 26    annual bond interest and redemption payment, and each  school  district  shall
 27    receive  no  less  than  ten percent (10%) of the interest cost portion of the
 28    qualifying bond interest and redemption payment.
 29        (2)  For the purposes of  this  section,  the  annual  bond  interest  and
 30    redemption  payment  shall be determined by dividing the total payment amounts
 31    by the number of fiscal years in which payments are to be made.  The  interest
 32    cost  portion  of  the  annual  bond  interest and redemption payment shall be
 33    determined by dividing the total interest paid by the number of  fiscal  years
 34    in  which  payments  are to be made. For school districts not qualifying for a
 35    state payment in the first year of the bond interest  and  redemption  payment
 36    schedule,  due solely to the January 1 eligibility deadline, the state depart-
 37    ment of education shall distribute an additional payment in  the  next  fiscal
 38    year,  in the amount of such funds that the school district would have  other-
 39    wise qualified for in the current fiscal year.
 40        (3)  The provisions of this section  may  not  be  utilized  to  refinance
 41    existing  debt  or  subsidize  projects previously subsidized by state grants;
 42    provided however, that any school district that has  issued  qualifying  bonds
 43    prior  to  June 30, 2004, in conformance with this section shall not be deemed
 44    to be refinancing existing debt when the  qualifying  bonds  are  utilized  to
 45    finance  the  acquisition  of  public  school  facilities previously leased or
 46    financed through means other than the issuance  of  general  obligation  bonds
 47    approved  by  a  two-thirds  (2/3) vote at an election called for that purpose
 48    subject to subsection (5) of this section.
 49        (4)  School districts shall annually report the status of  all  qualifying
 50    bonds  to the state department of education by January 1 of each year, includ-
 51    ing bonds approved by the voters, but not yet  issued.  Information  submitted
 52    shall include the following:
 53        (a)  The  actual  or estimated bond interest and redemption payment sched-
                                                                        
                                           6
                                                                        
  1        ule;
  2        (b)  Any qualifying bond that has been paid off;
  3        (c)  Other information as may be required by the state department of  edu-
  4        cation.
  5        (5)  No school district eligible for participation in the bond levy equal-
  6    ization  support  program  shall be deemed ineligible for participation due to
  7    that school district's eligibility and prior participation in the safe  school
  8    facilities loan and grant program or the Idaho safe schools facilities program
  9    under section 33-804A, 33-1017 or 33-1613, Idaho Code, provided that:
 10        (a)  Such  school  district  notifies the state department of education of
 11        its desire and eligibility to participate in the  bond  levy  equalization
 12        support program; and
 13        (b)  Such  school  district  shall  receive  no state financial assistance
 14        under the bond levy equalization support program until the amount to which
 15        it would otherwise have been entitled to receive shall equal  the  amounts
 16        received  by the school district under the safe school facilities loan and
 17        grant program or the Idaho safe schools facilities program  under  section
 18        33-804A, 33-1017 or 33-1613, Idaho Code.
                                                                        
 19        SECTION  5.  That  Section  33-907, Idaho Code, be, and the same is hereby
 20    amended to read as follows:
                                                                        
 21        33-907.  PUBLIC EDUCATION STABILIZATION FUND. There is hereby  created  in
 22    the  state  treasury  a fund to be known as the public education stabilization
 23    fund, which shall function as a fund detail of the public school income  fund.
 24    The fund shall consist of moneys transferred to the fund according to the pro-
 25    visions  of sections 33-905 and 33-1018, Idaho Code, and any other moneys made
 26    available through legislative transfers or appropriations. Moneys in the  fund
 27    are  hereby  continuously  appropriated  for  the  purposes stated in sections
 28    33-1018 and 33-1018B, Idaho Code, and shall only be expended for the  purposes
 29    stated in sections 33-1018, and 33-1018A and 33-1018B, Idaho Code. Any accumu-
 30    lated  balances  in the fund that are in excess of three five percent (35%) of
 31    the current fiscal year's total general fund appropriation for  public  school
 32    support  shall  be  transferred  to  the bond levy equalization fund. Interest
 33    earned from the investment of moneys in the fund shall be credited to the pub-
 34    lic school income fund.
                                                                        
 35        SECTION 6.  That Chapter 9, Title 33, Idaho Code,  be,  and  the  same  is
 36    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 37    ignated as Section 33-909, Idaho Code, and to read as follows:
                                                                        
 38        33-909.  PUBLIC SCHOOL FACILITIES COOPERATIVE FUNDING PROGRAM -- FUND CRE-
 39    ATED. (1) In fulfillment of the constitutional requirement to provide  a  gen-
 40    eral,  uniform  and  thorough system of public, free common schools, it is the
 41    intent of the state of Idaho to advance its  responsibility  for  providing  a
 42    safe environment conducive to learning by providing a public school facilities
 43    funding program to enable qualifying school districts to address unsafe facil-
 44    ities  identified  as  unsafe  under the standards of the Idaho uniform school
 45    building safety act.
 46        (2)  Participation in the program, for  the  purpose  of  obtaining  state
 47    financial support to abate identified school building safety hazards, requires
 48    submission of an application to the public school facilities cooperative fund-
 49    ing program panel. Application can be made by:
 50        (a)  Any  school  district  that has failed to approve at least one (1) or
 51        more bond levies for the repair, renovation  or  replacement  of  existing
                                                                        
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  1        unsafe  facilities,  within  the two (2) year period immediately preceding
  2        submission of the application; or
  3        (b)  The administrator of the division of building safety,  for  a  school
  4        district  that  has failed to address identified unsafe facilities as pro-
  5        vided in chapter 80, title 39, Idaho Code.
  6        (3)  There is hereby created within the office of the state board of  edu-
  7    cation  the  Idaho public school facilities cooperative funding program panel,
  8    hereafter referred to as the panel. The panel shall consist of the administra-
  9    tor of the division of building safety, the administrator of the  division  of
 10    public  works and the executive director of the state board of education, or a
 11    designee appointed by a panel member. It shall be the duty  of  the  panel  to
 12    consider  all applications made to it, and to either approve, modify or reject
 13    an application based on the most economical solution to the problem,  as  ana-
 14    lyzed within a projected twenty (20) year time frame.
 15        (4)  The application shall contain the following information:
 16        (a)  The identified school building safety hazards and such other informa-
 17        tion necessary to document the deficiencies;
 18        (b)  The  school  district's plan for abating the defects, including costs
 19        and sources and amounts of revenue available to the school district;
 20        (c)  The market value for assessment purposes of the school district; and
 21        (d)  A detailed accounting of all bond and plant facility  levies  of  the
 22        school district and the revenues raised by such levies.
 23    For  applications  initiated  by the administrator of the division of building
 24    safety pursuant to subsection (2)(b) of  this  section,  the  school  district
 25    shall provide the information required in this subsection (4) if such informa-
 26    tion is not available to the administrator.
 27        (5)  In  considering an application, the panel shall determine whether the
 28    plan as proposed is acceptable, or is acceptable with modifications as  deter-
 29    mined  by  the panel, or should be rejected. The panel shall notify the appli-
 30    cant of its decision, in writing, within sixty  (60)  days  of  receiving  the
 31    application.  At  the  same  time  the panel notifies the applicant, the panel
 32    shall send notification of an approved application or a  modified  application
 33    to the state board of education, along with the panel's specifications for the
 34    project and its cost.
 35        (6)  If an application received from a school district is accepted or mod-
 36    ified  by  the  panel, the local board of trustees of that school district, at
 37    the next election held pursuant to section 34-106, Idaho  Code,  shall  submit
 38    the  question  to  the qualified electors of the school district of whether to
 39    approve a bond in the amount of the cost of the project  as  approved  by  the
 40    panel.
 41        (7)  Within  thirty-five (35) calendar days of receiving notification from
 42    the panel that an application submitted by the administrator of  the  division
 43    of  building  safety  pursuant  to  subsection (2)(b) of this section has been
 44    approved or modified by the panel, or within thirty-five (35) calendar days of
 45    receiving certification from the panel that  the  question  submitted  to  the
 46    electorate  pursuant to subsection (6) of this section was not approved in the
 47    election, the state board of education shall appoint a district supervisor for
 48    interim state supervision of the local school district. The district  supervi-
 49    sor  shall  be responsible for ensuring the project, as approved by the panel,
 50    is completed and shall regularly report to the panel in a manner as determined
 51    by the panel upon approval of the project. The district supervisor shall  also
 52    have  the  authority  granted  to  said  position by the provisions of section
 53    6-2212, Idaho Code. A district supervisor's term of service shall continue for
 54    the duration of the project, and such person appointed as a district  supervi-
 55    sor shall serve at the pleasure of the state board of education.
                                                                        
                                           8
                                                                        
  1        (8)  Upon  approval  of an application or a modified application submitted
  2    by the administrator of the division of building safety pursuant to subsection
  3    (2)(b) of this section, or upon receipt of certification from the county  that
  4    the  question  submitted  to the electorate pursuant to subsection (6) of this
  5    section was not approved in the election, the panel shall certify the cost  of
  6    the project, as approved by the panel, to the state department of education.
  7        (a)  The  total  cost  of the project shall initially be paid by the state
  8        from the public school facilities cooperative fund.
  9        (b)  The district's share of costs that may be  repaid  through  the  levy
 10        provisions  of  this section shall not exceed the district's share of bond
 11        payment costs as calculated for the bond levy equalization support program
 12        in the fiscal year in which the application is  made.  Interest  shall  be
 13        charged  on  the  unpaid balance of the district's share of costs, as such
 14        balance exists at the end of each fiscal year, at  the  rate  of  interest
 15        earned by the state treasurer on the investment of idle funds in that fis-
 16        cal year.
 17        (c)  It  shall  be the responsibility of the state department of education
 18        to calculate a state-authorized plant facilities levy rate  in  accordance
 19        with the provisions of subsection (9) of this section, which, when imposed
 20        over a maximum period not to exceed twenty (20) years, may yield the reve-
 21        nues  needed to repay the school district's share of the cost of the proj-
 22        ect.
 23        (d)  The levy rate calculated by the state department of  education  shall
 24        be  certified  by  the  department  to  the county or counties wherein the
 25        boundaries of the school district are contained,  for  assessment  of  the
 26        levy and collection of the revenues by such county or counties in the man-
 27        ner  provided  by  law. The revenues collected by imposition of the state-
 28        authorized plant facilities levy shall be remitted to the state  treasurer
 29        for deposit to the public school facilities cooperative fund.
 30        (9)  The  annual state-authorized plant facilities levy rate shall be lim-
 31    ited to the greater of:
 32        (a)  The difference between the school district's combined bond and  plant
 33        facilities  levy  rates, and the statewide average bond and plant facility
 34        levy rates; or
 35        (b)  The statewide average plant facility levy rate.
 36    The initial levy rate so calculated shall be established as the  minimum  levy
 37    rate  that  shall  be imposed for the amount of time required to reimburse the
 38    state for the school district's share of the project cost, but not  to  exceed
 39    twenty  (20) years, even if this period would not provide reimbursement of the
 40    entire amount of the school district's share of the cost of the  project.  The
 41    state  department  of  education is authorized and directed to recalculate the
 42    levy rate on an annual basis, and is authorized to increase  or  decrease  the
 43    levy  rate  according to the scheduled payback, but the levy rate shall not be
 44    less than the levy rate initially imposed. Provided however, if the levy  rate
 45    calculated  is  estimated to raise more money than would be necessary to repay
 46    the district's share of costs, then the state department  of  education  shall
 47    certify  to  the  county or counties wherein the boundaries of the school dis-
 48    trict are contained, the moneys necessary to repay  the  district's  share  of
 49    costs.
 50        (10) There is hereby created in the state treasury a public school facili-
 51    ties  cooperative  fund. The fund shall contain such moneys as may be directed
 52    pursuant to appropriation. Moneys in the fund shall  be  used  exclusively  to
 53    finance  the  public  school  facilities  cooperative funding program, and are
 54    hereby continuously appropriated for such purposes as authorized by this  sec-
 55    tion.  Moneys in the fund shall be invested by the state treasurer in the same
                                                                        
                                           9
                                                                        
  1    manner as provided under section 67-1210, Idaho Code, with  respect  to  other
  2    idle moneys in the state treasury. Interest earned on the investments shall be
  3    credited to the school district building account.
                                                                        
  4        SECTION  7.  That  Chapter  10,  Title 33, Idaho Code, be, and the same is
  5    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
  6    ignated as Section 33-1018B, Idaho Code, and to read as follows:
                                                                        
  7        33-1018B.  SCHOOL  BUILDING  MAINTENANCE  MATCHING FUNDS. If the amount of
  8    money appropriated from the school district building account created  in  sec-
  9    tion  33-905,  Idaho  Code,  is  insufficient  to meet the state matching fund
 10    requirements of section 33-1019, Idaho Code, then such insufficiency shall  be
 11    made  up with a distribution from the public education stabilization fund cre-
 12    ated in section 33-907, Idaho Code.
                                                                        
 13        SECTION 8.  That Chapter 10, Title 33, Idaho Code, be,  and  the  same  is
 14    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 15    ignated as Section 33-1019, Idaho Code, and to read as follows:
                                                                        
 16        33-1019.  ALLOCATION FOR SCHOOL BUILDING MAINTENANCE REQUIRED. (1)  School
 17    districts  shall annually deposit to a school building maintenance fund moneys
 18    from any source available to the district equal to at least two  percent  (2%)
 19    of  the replacement value of school buildings, less the deposit of state funds
 20    as provided in this section. The state shall  annually  provide  funds  to  be
 21    deposited into the school building maintenance fund as follows:
 22        (a)  Divide  one  (1)  by the school district's value index for the fiscal
 23        year, as calculated pursuant to section 33-906B, Idaho Code; and
 24        (b)  Multiply the result by one-half of one percent (0.5%) of the replace-
 25        ment value of school buildings.
 26        (c)  For purposes of  the  calculation  in  this  subsection  (1),  public
 27        charter schools shall be assigned a value index of one (1).
 28        (2)  State  funds  shall  be  appropriated through the educational support
 29    program/division of facilities, and disbursed from the school district  build-
 30    ing  account.  The  order  of  funding  sources used to meet the state funding
 31    requirements of this section shall be as follows:
 32        (a)  State lottery funds distributed pursuant to section 33-905(2),  Idaho
 33        Code;
 34        (b)  If  state  lottery  funds  are insufficient to meet the state funding
 35        requirements of this section, then other state funds available pursuant to
 36        section 33-905(3), Idaho Code, shall be utilized; and
 37        (c)  If the funds in paragraphs (a) and (b) of  this  subsection  (2)  are
 38        insufficient  to meet the state funding requirements of this section, then
 39        funds available pursuant to section 33-1018B, Idaho Code,  shall  be  uti-
 40        lized.
 41        (3)  Moneys  in a school district's school building maintenance fund shall
 42    be used exclusively for the maintenance and repair of  school  buildings,  and
 43    shall  be  utilized,  first,  to  abate serious or imminent safety hazards, as
 44    identified pursuant to chapter 80, title 39, Idaho Code. Unexpended moneys  in
 45    a  school  district's  school  building maintenance fund shall be carried over
 46    from year to year. The replacement value of school buildings shall  be  deter-
 47    mined  by  multiplying  the  number  of square feet of building floor space in
 48    school buildings by eighty dollars ($80.00). The joint  finance-appropriations
 49    committee  shall  annually  review  the replacement value per square foot when
 50    setting appropriations for the  educational  support  program,  and  may  make
 51    adjustments  to  this  figure  as necessary. School districts shall submit the
                                                                        
                                           10
                                                                        
  1    following to the state department of education by not later than December 1:
  2        (a)  The number of square feet of school building floor space; and
  3        (b)  The funds and fund  sources  deposited  into  the  school  district's
  4        school building maintenance fund and the fund balance carried forward from
  5        the prior fiscal year; and
  6        (c)  The projects on which moneys from the school district's school build-
  7        ing  maintenance  fund  were  expended,  and  the amount and categories of
  8        expenditures from the fund; and
  9        (d)  The planned uses of moneys in the school district's  school  building
 10        maintenance fund.
 11    The  state department of education shall transmit a summary of such reports to
 12    the legislature by not later than January 15 of the following year.
 13        (4)  For the purposes of this section:
 14        (a)  "School building" means buildings that are owned by the  school  dis-
 15        trict  or leased by the school district through a lease-purchase agreement
 16        and are occupied by students.
 17        (b)  "School district" means a school district or public charter school.
                                                                        
 18        SECTION 9.  That Section 39-8011, Idaho Code, be, and the same  is  hereby
 19    amended to read as follows:
                                                                        
 20        39-8011.  VIOLATIONS.  (1) If a school district, the district superintend-
 21    ent, principal, board of trustees, or other person in  charge  willfully  vio-
 22    lates  the  provisions  of  this  chapter,  the state superintendent of public
 23    instruction shall withhold such ensuing apportionments  as  are  necessary  to
 24    make  repairs to abate the identified imminent safety hazard or serious safety
 25    hazard. Withheld funds, not to exceed one and one-half percent (1 1/2%) of the
 26    district's appropriation, shall be disbursed only to pay for such repairs.
 27        (2)  If the funds that would be raised over  two  (2)  fiscal  years  from
 28    applying the provisions of subsection (1) of this section are insufficient, in
 29    combination  with  all  moneys that will be available in the district's school
 30    building maintenance fund for the same period, to provide sufficient moneys to
 31    abate the identified imminent or serious safety hazard, then the administrator
 32    shall submit an application to abate said hazard to the  Idaho  public  school
 33    facilities cooperative funding program panel pursuant to section 33-909, Idaho
 34    Code.
 35        (3)  It  is a misdemeanor to remove, without permission of the administra-
 36    tor, a notice or order posted pursuant to this chapter.
                                                                        
 37        SECTION 10.  That Section 63-2520, Idaho Code, be, and the same is  hereby
 38    amended to read as follows:
                                                                        
 39        63-2520.  DISTRIBUTION  OF  MONEYS  COLLECTED.  Revenues received from the
 40    taxes imposed by this chapter, and any revenues received from  licenses,  per-
 41    mits,  penalties,  interest,  or deficiency additions, shall be distributed by
 42    the tax commission as follows:
 43        (a)  An amount of money shall be distributed to the state  refund  account
 44    sufficient  to  pay  current  refund claims. All refunds authorized under this
 45    chapter by the commission shall be paid through the state refund account,  and
 46    those moneys are continuously appropriated.
 47        (b)  On and after July 1, 2005, the balance remaining with the state trea-
 48    surer  after  deducting the amount described in subsection (a) of this section
 49    shall be distributed as follows:
 50        (1)  17.3% of such balance shall be distributed to the permanent  building
 51        fund created by section 57-1108, Idaho Code.
                                                                        
                                           11
                                                                        
  1        (2)  0.4% of such balance shall be distributed to the central tumor regis-
  2        try  account. The amount of money so distributed to the central tumor reg-
  3        istry account shall not exceed the fiscal  year's  appropriation,  and  at
  4        such  time  as the appropriation has been distributed to the central tumor
  5        registry account during any fiscal year, all such distributions in  excess
  6        of  the  appropriation  shall  be  made instead to the general fund of the
  7        state of Idaho.
  8        (3)  1% of such balance shall be distributed to the cancer control account
  9        created by section 57-1702, Idaho Code. Revenues received  in  the  cancer
 10        control account shall be paid over to the state treasurer by the state tax
 11        commission to be distributed as follows:
 12             (i)   Such amounts as are appropriated for purposes specified in sec-
 13             tion 57-1702, Idaho Code, shall be expended as appropriated;
 14             (ii)  Any  balance remaining in the cancer control account on June 30
 15             of any fiscal year after the amounts withdrawn by appropriation  have
 16             been  deducted, shall be reserved for transfer to the general fund on
 17             July 1 and the state controller shall order such transfer.
 18        (4)  21.25% of such balance An amount equal to  the  annual  general  fund
 19        appropriation  for  bond  levy  equalization,  pursuant to section 33-906,
 20        Idaho Code, shall be annually distributed to  the  general  fund.  of  the
 21        state  of  Idaho  for the fiscal year commencing July 1, 2005 through June
 22        30, 2006.
 23        (5)  All remaining moneys shall be distributed as follows: For the  fiscal
 24        year  commencing  July 1, 2005, and ending June 30, 2006, all moneys shall
 25        be distributed to the economic recovery reserve fund  created  by  section
 26        67-3520,  Idaho  Code.  For  fiscal  years  on and after July 1, 2006, all
 27        moneys shall be distributed to the permanent building fund with the moneys
 28        to be used for the repair, remodel and restoration of  the  state  capitol
 29        building  and state facilities pertaining to the capitol restoration until
 30        such time as the capitol restoration is adequately funded as certified  by
 31        the  director  of  the department of administration. Thereafter all moneys
 32        shall be distributed to the economic recovery reserve fund created by sec-
 33        tion 67-3520, Idaho Code.
                                                                        
 34        SECTION 11.  There is hereby transferred and appropriated $25,000,000 from
 35    the General Fund to the Public School Facilities Cooperative Fund.
                                                                        
 36        SECTION 12.  NONSEVERABILITY.  With the exception of Sections 4, 10 and 11
 37    of this act, the remaining provisions of this act are hereby  declared  to  be
 38    nonseverable and if any provision of the remaining portions of this act or the
 39    application  of  such  provision  to  any  person  or circumstance is declared
 40    invalid for any reason, such declaration shall render all such remaining  por-
 41    tions of this act null, void and of no force or effect.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 16029C1

The purpose of the School Facilities Improvement Act is to meet
the Legislature's responsibility to provide a general, uniform
and thorough system of public, free common schools.  The Idaho
Supreme Court has ruled that this responsibility requires that
the Legislature provide for a system that guarantees that
students will attend safe facilities.  This legislation provides
for such a system through the following three-part approach:

Bond Levy Equalization   The system of using bonded indebtedness
as the primary tool for school districts to address major
facility needs creates certain inequities, insofar as some school
districts have higher property values than others.  To address
this issue, this legislation provides for a fully-indexed,
securely-funded Bond Levy Equalization program.  This program
uses a similar approach as has been used, and found to be
constitutional, in the funding of school district operational
costs.  Specifically, the program ensures that poorer school
districts are provided with larger state subsidies, using a value
index that measures relative property values, local unemployment
rates, and local per capita income figures, as compared to the
state average.  This legislation removes artificial maximum and
minimum subsidy amounts, allowing additional subsidies to flow to
the poorest districts.  It also provides the program with an
adequate and sustainable funding source from current Cigarette
Tax revenues that are not needed for Capitol restoration costs. 
While one-time appropriations of Lottery funds can be used to
cover FY07 costs, beginning in FY07, all ongoing appropriations
of school Lottery funds will again flow to school districts, for
school building maintenance.

School Facilities Maintenance Fund   The current system lacks an
absolute requirement that school districts allocate funds for
building maintenance.  Many of today's dilapidated school
buildings would not have deteriorated to such a point had
adequate building maintenance been performed.  This legislation
will help avert such future problems by requiring that 2% of the
replacement value of school buildings be deposited in a school
building maintenance fund each year.  While there is no
requirement that all of these moneys be spent each year, they
must at least be deposited in the fund, to accumulate against the
day when they will be needed.  This 2% allocation requirement
also includes an equalized state funding match, which averages
0.5%, but which currently would range from 0.1% in the wealthiest
district to over 1% in the poorest district.


Public School Facilities Cooperative Funding Program   The
current system lacks a robust, failsafe mechanism for addressing
school facility safety issues, in the event that a school
district is simply unable or unwilling to correct the problem. 
Existing statutes provide authority to the Division of Building
Safety to close an unsafe school.  This does not address,
however, what to do with the children who would be without a
school.  This legislation provides for a $25 million Public
School Facilities Cooperative Fund to remediate unsafe school
facilities, as a last resort, if the school district has been
unable or unwilling to solve the problem.  A school district can
apply to use the fund if they have attempted to pass a bond levy
to address the problem and failed.  The ultimate safeguard,
however, is that the Division of Building Safety can apply on
behalf of a school  district, if the district cannot or will not
act.  State approval of a project, or a modified version of it,
automatically refers the approved project to the voters in the
school district, for one last attempt at bond passage.  Failure
of the bond then triggers  up-front state funding of the project,
and direct state supervision of the school district, to last
until the project is completed.  State funding of a project will
also trigger a property tax levy in the school district, the
proceeds of which will be deposited back in the Public School
Facilities Cooperative Fund.  The amount that school district
taxpayers would pay into the fund would vary, depending on the
levy rate, which is recalculated each year, and the district's
relative wealth.  Wealthier districts with low levy rates would
likely pay 100% of the project cost into the fund, while poorer
districts with high levy rates would pay less.  The levy could
run for no more than 20 years, even if the school district share
of costs has not been fully paid within that time period.



                           FISCAL NOTE

In addition to the $25 million in one-time surplus funds that are
transferred from the General Fund to the Public School Facilities
Cooperative Fund, FY 2007 ongoing expenditures for Bond Levy
Equalization would increase from an original estimate of $5.3
million to $5.8 million.  Also, ongoing state funding for school
facilities maintenance would increase from $8.9 million in FY
2006 to $16.4 million.  Ongoing funding increases would be funded
by a mix of dedicated and General Funds.



Contact
Name: Representatives: Lawerence Denney, Scott Bedke 
      Senators Curt McKenzie, Shawn Keough 
Phone: 332-1000



STATEMENT OF PURPOSE/FISCAL NOTE                       H 690