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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
]]]] 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
7
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
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