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H0743.....................................................by WAYS AND MEANS
SCHOOL FACILITIES IMPROVEMENT - Adds to and amends existing law relating to
school facilities improvement to provide legislative intent; to provide
references to the appointing authority of the State Board of Education and
the Superintendent of Public Instruction; 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 application to school districts with an index value of
less than one and one-half; 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 two percent 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 direct
the Administrator of the Division of Building Safety and the State
Department of Education to draft a best practices maintenance plan for
school buildings; 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.
02/28 House intro - 1st rdg - to printing
03/01 Rpt prt - to Educ
03/02 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/08 3rd rdg - PASSED - 52-14-4
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
Bedke, Bell, Bilbao, Black, Block, Bolz, Brackett, Bradford, Cannon,
Chadderdon, Clark, Collins, Deal, Denney, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henderson,
Kemp, Lake, Loertscher, Mathews, McGeachin, McKague, Miller, Moyle,
Nielsen, Nonini, Raybould, Ring, Rydalch, Sali, Schaefer,
Shepherd(8), Shirley, Skippen, Smylie, Snodgrass, Stevenson, Wills,
Mr. Speaker
NAYS -- Boe, Henbest, Jaquet, LeFavour, Martinez, Mitchell,
Pasley-Stuart, Pence, Ringo, Rusche, Sayler, Shepherd(2), Smith(30),
Trail
Absent and excused -- Crow, Roberts, Smith(24), Wood
Floor Sponsors - Denney & Bedke
Title apvd - to Senate
03/09 Senate intro - 1st rdg - to Educ
03/15 Rpt out - Ref'd to St Aff
03/21 Rpt out - rec d/p - to 2nd rdg
03/22 2nd rdg - to 3rd rdg
03/23 3rd rdg - PASSED - 22-12-1
AYES -- Broadsword, Burtenshaw, Cameron, Coiner, Compton, Corder,
Darrington, Davis, Fulcher, Geddes, Goedde, Hill, Jorgenson, Keough,
Little, Lodge, McGee, McKenzie, Pearce, Richardson, Sweet, Williams
NAYS -- Andreason, Brandt, Burkett(Clark), Gannon, Kelly, Langhorst,
Malepeai, Marley, Schroeder, Stegner, Stennett, Werk
Absent and excused -- Bunderson
Floor Sponsors - McKenzie & Keough
Title apvd - to House
03/24 To enrol
03/27 Rpt enrol - Sp signed
03/28 Pres signed
03/29 To Governor
03/31 Governor signed
Session Law Chapter 311
Effective: 07/01/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 743
BY WAYS AND MEANS 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 REFER-
4 ENCES TO THE APPOINTING AUTHORITY OF THE STATE BOARD OF EDUCATION AND TO
5 THE SUPERINTENDENT OF PUBLIC INSTRUCTION AND TO MAKE TECHNICAL CHANGES;
6 AMENDING SECTION 33-905, IDAHO CODE, TO PROVIDE PROPER TERMINOLOGY, TO
7 DELETE OBSOLETE LANGUAGE, TO PROVIDE FOR DISTRIBUTION OF ADDITIONAL
8 MONEYS, TO REQUIRE USE OF PAYMENTS FROM THE SCHOOL DISTRICT BUILDING
9 ACCOUNT AND TO DELETE CERTAIN REPORTING REQUIREMENTS; AMENDING SECTION
10 33-906, IDAHO CODE, TO REMOVE THE LIMITATION ON STATE FINANCIAL ASSISTANCE
11 ONLY FOR THE INTEREST COST PORTION OF THE ANNUAL BOND INTEREST AND REDEMP-
12 TION PAYMENT AND TO PROVIDE FOR CERTAIN APPLICATION TO SCHOOL DISTRICTS
13 WITH AN INDEX VALUE OF LESS THAN ONE AND ONE-HALF; AMENDING SECTION
14 33-907, IDAHO CODE, TO PROVIDE CODE REFERENCES; AMENDING CHAPTER 9, TITLE
15 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-909, IDAHO CODE, TO
16 PROVIDE A PUBLIC SCHOOL FACILITIES COOPERATIVE FUNDING PROGRAM AND TO CRE-
17 ATE A PUBLIC SCHOOL FACILITIES COOPERATIVE FUND; AMENDING CHAPTER 10,
18 TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-1018B, IDAHO
19 CODE, TO PROVIDE FOR SCHOOL BUILDING MAINTENANCE MATCHING FUNDS; AMENDING
20 CHAPTER 10, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
21 33-1019, IDAHO CODE, TO REQUIRE SCHOOL DISTRICTS TO ANNUALLY DEPOSIT AN
22 AMOUNT EQUAL TO A MINIMUM OF TWO PERCENT OF THE REPLACEMENT VALUE OF
23 SCHOOL BUILDINGS TO A SCHOOL BUILDING MAINTENANCE FUND LESS THE AMOUNT
24 DEPOSITED FROM STATE FUNDS, TO PROVIDE FOR CALCULATION OF THE STATE'S
25 APPROPRIATION, TO PROVIDE FOR A STATE APPROPRIATION, TO PROVIDE FOR USE OF
26 THE FUND MONEYS AND TO PROVIDE DEFINITIONS; AMENDING CHAPTER 80, TITLE 39,
27 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 39-8006A, IDAHO CODE, TO
28 DIRECT THE ADMINISTRATOR OF THE DIVISION OF BUILDING SAFETY AND THE STATE
29 DEPARTMENT OF EDUCATION TO DRAFT A BEST PRACTICES MAINTENANCE PLAN FOR
30 SCHOOL BUILDINGS; AMENDING SECTION 39-8011, IDAHO CODE, TO PROVIDE A CON-
31 DITION UNDER WHICH THE ADMINISTRATOR SHALL SUBMIT AN APPLICATION TO THE
32 PUBLIC SCHOOL FACILITIES COOPERATIVE FUND PANEL TO ABATE AN IDENTIFIED
33 SAFETY HAZARD; AMENDING SECTION 63-2520, IDAHO CODE, TO PROVIDE THAT AN
34 AMOUNT EQUAL TO THE ANNUAL GENERAL FUND APPROPRIATION FOR BOND LEVY EQUAL-
35 IZATION SHALL BE ANNUALLY DISTRIBUTED TO THE GENERAL FUND; TRANSFERRING
36 AND APPROPRIATING $25,000,000 FROM THE GENERAL FUND TO THE PUBLIC SCHOOL
37 FACILITIES COOPERATIVE FUND; AND PROVIDING NONSEVERABILITY WITH EXCEP-
38 TIONS.
39 Be It Enacted by the Legislature of the State of Idaho:
40 SECTION 1. LEGISLATIVE FINDINGS AND INTENT. The Legislature hereby finds
41 that:
42 (1) Section 1, Article IX, of the Constitution of the state of Idaho pro-
43 vides that "it shall be the duty of the legislature of Idaho, to establish and
44 maintain a general, uniform and thorough system of public, free common
2
1 schools."
2 (2) In the case of Idaho Schools for Equal Educational Opportunity v.
3 Evans, 123 Idaho 573 (1993), the Idaho Supreme Court held that the then exist-
4 ing State Board of Education rules for school facilities, textbooks and cur-
5 riculum, and transportation systems were consistent with the thoroughness
6 requirements of Section 1, Article IX, of the Constitution of the state of
7 Idaho. The Supreme Court remanded the case for trial to determine if the sys-
8 tem of funding was providing such school facilities, textbooks and curriculum,
9 and transportation systems called for in the rules.
10 (3) In response to that action, the Legislature enacted Section 33-1612,
11 Idaho Code, which defined thoroughness and included "a safe environment condu-
12 cive to learning" among the statutory definitions of thoroughness.
13 (4) In a subsequent ruling in the same case, Idaho Schools for Equal Edu-
14 cational Opportunity v. State, 132 Idaho 559 (1999), the Idaho Supreme Court
15 held that the statutory requirement of "a safe environment conducive to learn-
16 ing" and the rules adopted pursuant to it were consistent with the thorough-
17 ness requirements of Section 1, Article IX, of the Constitution of the state
18 of Idaho, and that such a safe environment was inherently part of a thorough
19 system of public, free common schools required by Section 1, Article IX, of
20 the Constitution of the state of Idaho. The Supreme Court remanded the case to
21 the district court to determine whether the funding system was providing a
22 safe environment conducive to learning.
23 (5) On February 5, 2001, the Fourth Judicial District Court entered find-
24 ings of fact and conclusions of law that the system of school funding then in
25 existence was constitutionally deficient in its ability to repair or replace
26 dangerous or unsafe conditions in school buildings.
27 (6) On December 21, 2005, on appeal to the Supreme Court, the Idaho
28 Supreme Court affirmed the district court's February 5, 2001, decision and
29 said:
30 In sum, the evidence in the record clearly supports the district
31 court's 2001 Findings. We affirm the conclusion of the district court
32 that the current funding system is simply not sufficient to carry out
33 the Legislature's duty under the constitution. While the Legislature
34 has made laudable efforts to address the safety concerns of various
35 school districts, the task is not yet complete. The appropriate
36 remedy, however, must be fashioned by the Legislature and not this
37 Court. Quite simply, Article IX of our constitution means what it
38 says: "[I]t shall be the duty of the Legislature of Idaho, to estab-
39 lish and maintain a general, uniform and thorough system of public,
40 free common schools." Thus, it is the duty of the State, and not this
41 Court or the local school districts, to meet this constitutional man-
42 date.
43 (7) In response to the Supreme Court's 2005 decision, and mindful that
44 the Supreme Court has recognized the Legislature's efforts, following the dis-
45 trict court's decision in 2001, to provide a system of funding that provides
46 safe schools, it is the purpose of this Act to fulfill the Legislature's
47 responsibility under Section 1, Article IX, of the Constitution of the state
48 of Idaho, by establishing an ongoing, state-funded system for funding repair
49 or replacement of unsafe school facilities in a manner that fairly and equita-
50 bly balances the state and local contributions. It requires funds to be dedi-
51 cated to maintenance to arrest deterioration of schools before they become
52 unsafe.
53 (8) In proposing this Act, it is the intent of the Legislature to:
54 (a) Amend the statutes addressing the School District Building Account to
55 provide an ongoing means of providing funds from that account for the pur-
3
1 pose of assisting school districts to fund repair or replacement of unsafe
2 school facilities; and
3 (b) Remove all artificial limits on the functioning of the bond levy
4 equalization value index. The index measures a school district's relative
5 ability to pay, and provides a secure, ongoing revenue source for the bond
6 levy equalization program, enabling each school district's full share of
7 state lottery funds to be used for school building maintenance and
8 repairs; and
9 (c) Establish an ongoing School Facilities Cooperative Funding Program to
10 assist school districts to fund repair or replacement of unsafe school
11 buildings when school districts are unable to fund necessary repair or
12 replacement; and
13 (d) Provide ongoing, fair and equitable state assistance to school dis-
14 tricts under the School Facilities Cooperative Funding Program whereby the
15 state initially funds the total cost of repair and replacement that school
16 districts are unable to fund themselves. It creates the necessary taxing
17 authority to pay the school district's share of the cost of repair or
18 replacement, and establishes a statutory formula to annually determine the
19 school district's fair and equitable share of the costs of repair or
20 replacement that compares the school district's bonds and/or plant facili-
21 ties levy rates to the statewide average bond and/or facility levy rate;
22 and
23 (e) Require each school district to annually set aside an adequate amount
24 of moneys for the exclusive purpose of school building maintenance in
25 order to arrest deterioration in school facilities that have lead to
26 unsafe conditions and to provide a sliding scale of state match subsidies
27 for this amount based upon the school district's relative ability to pay.
28 SECTION 2. That Section 6-2212, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 6-2212. STATE SUPERVISION. When authorized in this chapter by law, the
31 district court, or the state board of education pursuant to section 33-909,
32 Idaho Code, may issue an order for state supervision of a local school dis-
33 trict. When an order for state supervision of a local school district is
34 entered by the district court, the superintendent of public instruction shall
35 within thirty-five (35) calendar days appoint, at local school district
36 expense, an officer to be known as a district supervisor. When an order for
37 state supervision of a local school district is entered by the state board of
38 education, the district supervisor shall be appointed pursuant to section
39 33-909, Idaho Code, at local school district expense. The district supervisor
40 shall have authority to approve or disapprove any actions of the board of the
41 local school district, to supervise or dismiss superintendents, assistance
42 assistant superintendents, and any other district administrative personnel,
43 and to take any actions necessary to further the local school district's obli-
44 gations to provide constitutionally required educational services. In the case
45 of appointment by the superintendent of public instruction, tThe district
46 supervisor shall serve at the pleasure of the superintendent of public
47 instruction until removed by the superintendent of public instruction or the
48 superintendent of public instruction reports to the district court that the
49 local school district is in substantial compliance with its obligations to
50 provide constitutionally required educational services, or until the district
51 court, upon its own motion or upon motion of any of the parties, orders state
52 supervision to end. In the case of appointment by the state board of educa-
53 tion, the district supervisor shall serve pursuant to section 33-909, Idaho
4
1 Code.
2 SECTION 3. That Section 33-905, Idaho Code, be, and the same is hereby
3 amended to read as follows:
4 33-905. SCHOOL DISTRICT BUILDING ACCOUNT -- PAYMENTS TO ACCOUNT -- MONEYS
5 APPROPRIATED TO STATE BOARD -- APPLICATION FOR MONEYS -- PAYMENTS TO DISTRICTS
6 -- REPORTS ON APPLICATIONS -- USES OF MONEYS. (1.) The state of Idaho, recog-
7 nizing in order to fulfill its responsibility to establish and maintain a gen-
8 eral, uniform and thorough system of public, free common schools, in an effort
9 to partially fulfill this responsibility, hereby creates and establishes the
10 school district building account in the state treasury. The school district
11 building account shall have paid into it such appropriations or revenues as
12 may be provided by law.
13 (2.) Moneys in the school district building account are hereby appropri-
14 ated to and may be expended by the state board of education at any time for
15 the purposes provided in this section, any provision of chapter 35, title 67,
16 Idaho Code, or chapter 36, title 67, Idaho Code, notwithstanding.
17 3. (a) As to any moneys in the account other than lottery dividends dis-
18 tributed pursuant to subsection 4. of this section, the board of trustees
19 of any school district may apply to the state board of education to
20 receive a payment or payments from the school district building account;
21 provided, a district demonstrates to the state board of education that it
22 has a substantial and serious need based upon the district's classroom
23 student-teacher ratios, past efforts to levy for such construction, physi-
24 cal condition of existing structures, and the total assessed market value
25 of the district, all of which shall be further defined by actual need cri-
26 teria established by the state board of education.
27 (b) When an application for moneys from the account is approved by the
28 state board of education, the state board shall inform the school district
29 that the application has been approved, citing the amount approved for
30 payment and an estimate of the time when the payment can actually be made
31 to the school district.
32 4. By not later than August 31, moneys in the account pursuant to distri-
33 bution from section 67-7434, Idaho Code, the lottery dividends and interest
34 earned thereon, shall be distributed to each of the several school districts,
35 in the proportion that the average daily attendance of that district for the
36 previous school year bears to the total average daily attendance of the state
37 during the previous school year. For the purposes of this subsection 4.(2)
38 only, the Idaho school for the deaf and blind shall be considered a school
39 district, and shall receive a distribution based upon the average daily atten-
40 dance of the school. Average daily attendance shall be calculated as provided
41 in section 33-1002 45., Idaho Code.
42 (3) Any other state moneys that may be made available shall be distrib-
43 uted to meet the requirements of section 33-1019, Idaho Code. If the amount of
44 such funds exceeds the amount needed to meet the provisions of section
45 33-1019, Idaho Code, then the excess balance shall be transferred to the pub-
46 lic education stabilization fund.
47 5.(4) All payments from the school district building account shall be
48 paid out directly to the school district in warrants drawn by the state con-
49 troller upon presentation of proper vouchers from the state board of educa-
50 tion. Pending payments out of the school district building account, the moneys
51 in the account shall be invested by the state treasurer in the same manner as
52 provided under section 67-1210, Idaho Code, with respect to other idle moneys
53 in the state treasury. Interest earned on the investments shall be returned to
5
1 the school district building account.
2 6.(5) Payments from the school district building account received by a
3 school district may shall be used by the school district for the purposes
4 authorized in section 33-11021019, Idaho Code, up to the level of the state
5 match so required. Any payments from the school district building account
6 received by a school district that are in excess of the state match require-
7 ments of section 33-1019, Idaho Code, may be used by the school district for
8 the purposes authorized in section 33-1102, Idaho Code.
9 7. (a) By not later than December 1, each school district shall report to
10 the state department of education the projects on which moneys received
11 from the school district building account were expended. The state depart-
12 ment of education shall transmit a summary of such reports to the legisla-
13 ture by not later than January 15 of the following year.
14 (b) By not later than December 1, each school district shall report to
15 the state department of education the planned uses for the moneys received
16 from the school district building account. The state department of educa-
17 tion shall transmit a summary of the reports to the legislature by not
18 later than January 15 of the following year.
19 SECTION 4. That Section 33-906, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 33-906. BOND LEVY EQUALIZATION SUPPORT PROGRAM. (1) Pursuant to section
22 33-906B, Idaho Code, school districts with a value index below one (1) shall
23 be eligible to receive additional state financial assistance for the cost of
24 annual bond interest and redemption payments made on bonds passed on or after
25 September 15, 2002. However, any school district with a value index of less
26 than one and one-half (1.5), shall receive no less than ten percent (10%) of
27 the interest cost portion of the annual bond interest and redemption payment
28 for bonds passed on or after September 15, 2002. The state department of edu-
29 cation shall disburse such funds to school districts from moneys appropriated
30 from the bond levy equalization fund. The department shall disburse the funds
31 by no later than September 1 of each year for school districts in which voters
32 have approved the issuance of qualifying bonds by no later than January 1 of
33 that calendar year, and which are certifying a qualifying bond interest and
34 redemption payment for the fiscal year in which the disbursement is made. For
35 districts with a value index below one (1), the percentage of each annual bond
36 interest and redemption payment that is paid by the state shall be determined
37 by dividing the difference between one (1) and the school district's value
38 index by one (1). provided that the state shall pay for no more than the
39 interest cost portion of the annual bond interest and redemption payment, and
40 each school district shall receive no less than ten percent (10%) of the
41 interest cost portion of the qualifying bond interest and redemption payment.
42 (2) For the purposes of this section, the annual bond interest and
43 redemption payment shall be determined by dividing the total payment amounts
44 by the number of fiscal years in which payments are to be made. The interest
45 cost portion of the annual bond interest and redemption payment shall be
46 determined by dividing the total interest paid by the number of fiscal years
47 in which payments are to be made. For school districts not qualifying for a
48 state payment in the first year of the bond interest and redemption payment
49 schedule, due solely to the January 1 eligibility deadline, the state depart-
50 ment of education shall distribute an additional payment in the next fiscal
51 year, in the amount of such funds that the school district would have other-
52 wise qualified for in the current fiscal year.
53 (3) The provisions of this section may not be utilized to refinance
6
1 existing debt or subsidize projects previously subsidized by state grants;
2 provided however, that any school district that has issued qualifying bonds
3 prior to June 30, 2004, in conformance with this section shall not be deemed
4 to be refinancing existing debt when the qualifying bonds are utilized to
5 finance the acquisition of public school facilities previously leased or
6 financed through means other than the issuance of general obligation bonds
7 approved by a two-thirds (2/3) vote at an election called for that purpose
8 subject to subsection (5) of this section.
9 (4) School districts shall annually report the status of all qualifying
10 bonds to the state department of education by January 1 of each year, includ-
11 ing bonds approved by the voters, but not yet issued. Information submitted
12 shall include the following:
13 (a) The actual or estimated bond interest and redemption payment sched-
14 ule;
15 (b) Any qualifying bond that has been paid off;
16 (c) Other information as may be required by the state department of edu-
17 cation.
18 (5) No school district eligible for participation in the bond levy equal-
19 ization support program shall be deemed ineligible for participation due to
20 that school district's eligibility and prior participation in the safe school
21 facilities loan and grant program or the Idaho safe schools facilities program
22 under section 33-804A, 33-1017 or 33-1613, Idaho Code, provided that:
23 (a) Such school district notifies the state department of education of
24 its desire and eligibility to participate in the bond levy equalization
25 support program; and
26 (b) Such school district shall receive no state financial assistance
27 under the bond levy equalization support program until the amount to which
28 it would otherwise have been entitled to receive shall equal the amounts
29 received by the school district under the safe school facilities loan and
30 grant program or the Idaho safe schools facilities program under section
31 33-804A, 33-1017 or 33-1613, Idaho Code.
32 SECTION 5. That Section 33-907, Idaho Code, be, and the same is hereby
33 amended to read as follows:
34 33-907. PUBLIC EDUCATION STABILIZATION FUND. There is hereby created in
35 the state treasury a fund to be known as the public education stabilization
36 fund, which shall function as a fund detail of the public school income fund.
37 The fund shall consist of moneys transferred to the fund according to the pro-
38 visions of sections 33-905 and 33-1018, Idaho Code, and any other moneys made
39 available through legislative transfers or appropriations. Moneys in the fund
40 are hereby continuously appropriated for the purposes stated in sections
41 33-1018 and 33-1018B, Idaho Code, and shall only be expended for the purposes
42 stated in sections 33-1018, and 33-1018A and 33-1018B, Idaho Code. Any accumu-
43 lated balances in the fund that are in excess of three five percent (35%) of
44 the current fiscal year's total general fund appropriation for public school
45 support shall be transferred to the bond levy equalization fund. Interest
46 earned from the investment of moneys in the fund shall be credited to the pub-
47 lic school income fund.
48 SECTION 6. That Chapter 9, Title 33, Idaho Code, be, and the same is
49 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
50 ignated as Section 33-909, Idaho Code, and to read as follows:
51 33-909. PUBLIC SCHOOL FACILITIES COOPERATIVE FUNDING PROGRAM -- FUND CRE-
7
1 ATED. (1) In fulfillment of the constitutional requirement to provide a gen-
2 eral, uniform and thorough system of public, free common schools, it is the
3 intent of the state of Idaho to advance its responsibility for providing a
4 safe environment conducive to learning by providing a public school facilities
5 funding program to enable qualifying school districts to address unsafe facil-
6 ities identified as unsafe under the standards of the Idaho uniform school
7 building safety act.
8 (2) Participation in the program, for the purpose of obtaining state
9 financial support to abate identified school building safety hazards, requires
10 submission of an application to the public school facilities cooperative fund-
11 ing program panel. Application can be made by:
12 (a) Any school district that has failed to approve at least one (1) or
13 more bond levies for the repair, renovation or replacement of existing
14 unsafe facilities, within the two (2) year period immediately preceding
15 submission of the application; or
16 (b) The administrator of the division of building safety, for a school
17 district that has failed to address identified unsafe facilities as pro-
18 vided in chapter 80, title 39, Idaho Code.
19 (3) There is hereby created within the office of the state board of edu-
20 cation the Idaho public school facilities cooperative funding program panel,
21 hereafter referred to as the panel. The panel shall consist of the administra-
22 tor of the division of building safety, the administrator of the division of
23 public works and the executive director of the state board of education, or a
24 designee appointed by a panel member. It shall be the duty of the panel to
25 consider all applications made to it, and to either approve, modify or reject
26 an application based on the most economical solution to the problem, as ana-
27 lyzed within a projected twenty (20) year time frame.
28 (4) The application shall contain the following information:
29 (a) The identified school building safety hazards and such other informa-
30 tion necessary to document the deficiencies;
31 (b) The school district's plan for abating the defects, including costs
32 and sources and amounts of revenue available to the school district;
33 (c) The market value for assessment purposes of the school district; and
34 (d) A detailed accounting of all bond and plant facility levies of the
35 school district and the revenues raised by such levies.
36 For applications initiated by the administrator of the division of building
37 safety pursuant to subsection (2)(b) of this section, the school district
38 shall provide the information required in this subsection (4) if such informa-
39 tion is not available to the administrator.
40 (5) In considering an application, the panel shall determine whether the
41 plan as proposed is acceptable, or is acceptable with modifications as deter-
42 mined by the panel, or should be rejected. The panel shall notify the appli-
43 cant of its decision, in writing, within sixty (60) days of receiving the
44 application. At the same time the panel notifies the applicant, the panel
45 shall send notification of an approved application or a modified application
46 to the state board of education, along with the panel's specifications for the
47 project and its cost.
48 (6) If an application received from a school district is accepted or mod-
49 ified by the panel, the local board of trustees of that school district, at
50 the next election held pursuant to section 34-106, Idaho Code, shall submit
51 the question to the qualified electors of the school district of whether to
52 approve a bond in the amount of the cost of the project as approved by the
53 panel.
54 (7) Within thirty-five (35) calendar days of receiving notification from
55 the panel that an application submitted by the administrator of the division
8
1 of building safety pursuant to subsection (2)(b) of this section has been
2 approved or modified by the panel, or within thirty-five (35) calendar days of
3 receiving certification from the panel that the question submitted to the
4 electorate pursuant to subsection (6) of this section was not approved in the
5 election, the state board of education shall appoint a district supervisor for
6 interim state supervision of the local school district. The district supervi-
7 sor shall be responsible for ensuring that the project, as approved by the
8 panel, is completed and shall regularly report to the panel in a manner as
9 determined by the panel upon approval of the project. The district supervisor
10 shall also have the authority granted to said position by the provisions of
11 section 6-2212, Idaho Code. A district supervisor's term of service shall con-
12 tinue for the duration of the project, and such person appointed as a district
13 supervisor shall serve at the pleasure of the state board of education.
14 (8) Upon approval of an application or a modified application submitted
15 by the administrator of the division of building safety pursuant to subsection
16 (2)(b) of this section, or upon receipt of certification from the county that
17 the question submitted to the electorate pursuant to subsection (6) of this
18 section was not approved in the election, the panel shall certify the cost of
19 the project, as approved by the panel, to the state department of education.
20 (a) The total cost of the project shall initially be paid by the state
21 from the public school facilities cooperative fund.
22 (b) The district's share of costs that may be repaid through the levy
23 provisions of this section shall not exceed the district's share of bond
24 payment costs as calculated for the bond levy equalization support program
25 in the fiscal year in which the application is made. Interest shall be
26 charged on the unpaid balance of the district's share of costs, as such
27 balance exists at the end of each fiscal year, at the rate of interest
28 earned by the state treasurer on the investment of idle funds in that fis-
29 cal year.
30 (c) It shall be the responsibility of the state department of education
31 to calculate a state-authorized plant facilities levy rate in accordance
32 with the provisions of subsection (9) of this section, which, when imposed
33 over a maximum period not to exceed twenty (20) years, may yield the reve-
34 nues needed to repay the school district's share of the cost of the proj-
35 ect.
36 (d) The levy rate calculated by the state department of education shall
37 be certified by the department to the county or counties wherein the
38 boundaries of the school district are contained, for assessment of the
39 levy and collection of the revenues by such county or counties in the man-
40 ner provided by law. The revenues collected by imposition of the state-
41 authorized plant facilities levy shall be remitted to the state treasurer
42 for deposit to the public school facilities cooperative fund.
43 (9) The annual state-authorized plant facilities levy rate shall be lim-
44 ited to the greater of:
45 (a) The difference between the school district's combined bond and plant
46 facilities levy rates, and the statewide average bond and plant facility
47 levy rates; or
48 (b) The statewide average plant facility levy rate.
49 The initial levy rate so calculated shall be established as the minimum levy
50 rate that shall be imposed for the amount of time required to reimburse the
51 state for the school district's share of the project cost, but not to exceed
52 twenty (20) years, even if this period would not provide reimbursement of the
53 entire amount of the school district's share of the cost of the project. The
54 state department of education is authorized and directed to recalculate the
55 levy rate on an annual basis, and is authorized to increase or decrease the
9
1 levy rate according to the scheduled payback, but the levy rate shall not be
2 less than the levy rate initially imposed. Provided however, if the levy rate
3 calculated is estimated to raise more money than would be necessary to repay
4 the district's share of costs, then the state department of education shall
5 certify to the county or counties wherein the boundaries of the school dis-
6 trict are contained, the moneys necessary to repay the district's share of
7 costs.
8 (10) There is hereby created in the state treasury a public school facili-
9 ties cooperative fund. The fund shall contain such moneys as may be directed
10 pursuant to appropriation. Moneys in the fund shall be used exclusively to
11 finance the public school facilities cooperative funding program, and are
12 hereby continuously appropriated for such purposes as authorized by this sec-
13 tion. Moneys in the fund shall be invested by the state treasurer in the same
14 manner as provided under section 67-1210, Idaho Code, with respect to other
15 idle moneys in the state treasury. Interest earned on the investments shall be
16 credited to the school district building account.
17 SECTION 7. That Chapter 10, Title 33, Idaho Code, be, and the same is
18 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
19 ignated as Section 33-1018B, Idaho Code, and to read as follows:
20 33-1018B. SCHOOL BUILDING MAINTENANCE MATCHING FUNDS. If the amount of
21 money appropriated from the school district building account created in sec-
22 tion 33-905, Idaho Code, is insufficient to meet the state matching fund
23 requirements of section 33-1019, Idaho Code, then such insufficiency shall be
24 made up with a distribution from the public education stabilization fund cre-
25 ated in section 33-907, Idaho Code.
26 SECTION 8. That Chapter 10, Title 33, Idaho Code, be, and the same is
27 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
28 ignated as Section 33-1019, Idaho Code, and to read as follows:
29 33-1019. ALLOCATION FOR SCHOOL BUILDING MAINTENANCE REQUIRED. (1) School
30 districts shall annually deposit to a school building maintenance fund moneys
31 from any source available to the district equal to at least two percent (2%)
32 of the replacement value of school buildings, less the deposit of state funds
33 as provided in this section. The state shall annually provide funds to be
34 deposited into the school building maintenance fund as follows:
35 (a) Divide one (1) by the school district's value index for the fiscal
36 year, as calculated pursuant to section 33-906B, Idaho Code; and
37 (b) Multiply the result by one-half of one percent (0.5%) of the replace-
38 ment value of school buildings.
39 (c) For purposes of the calculation in this subsection (1), public
40 charter schools shall be assigned a value index of one (1).
41 (2) State funds shall be appropriated through the educational support
42 program/division of facilities, and disbursed from the school district build-
43 ing account. The order of funding sources used to meet the state funding
44 requirements of this section shall be as follows:
45 (a) State lottery funds distributed pursuant to section 33-905(2), Idaho
46 Code;
47 (b) If state lottery funds are insufficient to meet the state funding
48 requirements of this section, then other state funds available pursuant to
49 section 33-905(3), Idaho Code, shall be utilized; and
50 (c) If the funds in paragraphs (a) and (b) of this subsection (2) are
51 insufficient to meet the state funding requirements of this section, then
10
1 funds available pursuant to section 33-1018B, Idaho Code, shall be uti-
2 lized.
3 (3) Moneys in a school district's school building maintenance fund shall
4 be used exclusively for the maintenance and repair of school buildings, and
5 shall be utilized, first, to abate serious or imminent safety hazards, as
6 identified pursuant to chapter 80, title 39, Idaho Code. Unexpended moneys in
7 a school district's school building maintenance fund shall be carried over
8 from year to year. The replacement value of school buildings shall be deter-
9 mined by multiplying the number of square feet of building floor space in
10 school buildings by eighty dollars ($80.00). The joint finance-appropriations
11 committee shall annually review the replacement value per square foot when
12 setting appropriations for the educational support program, and may make
13 adjustments to this figure as necessary. School districts shall submit the
14 following to the state department of education by not later than December 1:
15 (a) The number of square feet of school building floor space; and
16 (b) The funds and fund sources deposited into the school district's
17 school building maintenance fund and the fund balance carried forward from
18 the prior fiscal year; and
19 (c) The projects on which moneys from the school district's school build-
20 ing maintenance fund were expended, and the amount and categories of
21 expenditures from the fund; and
22 (d) The planned uses of moneys in the school district's school building
23 maintenance fund.
24 The state department of education shall transmit a summary of such reports to
25 the legislature by not later than January 15 of the following year.
26 (4) For the purposes of this section:
27 (a) "School building" means buildings that are owned by the school dis-
28 trict or leased by the school district through a lease-purchase agreement
29 and are occupied by students.
30 (b) "School district" means a school district or public charter school.
31 SECTION 9. That Chapter 80, Title 39, Idaho Code, be, and the same is
32 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
33 ignated as Section 39-8006A, Idaho Code, and to read as follows:
34 39-8006A. BEST PRACTICES MAINTENANCE PLAN FOR SCHOOL BUILDINGS. The
35 administrator of the division of building safety and the state department of
36 education shall consult and shall draft a best practices maintenance plan for
37 school buildings which shall be supplied to the superintendent of each school
38 district. Based on the best practices maintenance plan, each school district
39 shall develop a ten (10) year plan and submit it to the state department of
40 education for approval. Annually thereafter, the school district shall submit
41 a report to the state department of education detailing the work completed
42 pursuant to the maintenance plan and any revisions to that plan.
43 SECTION 10. That Section 39-8011, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 39-8011. VIOLATIONS. (1) If a school district, the district superintend-
46 ent, principal, board of trustees, or other person in charge willfully vio-
47 lates the provisions of this chapter, the state superintendent of public
48 instruction shall withhold such ensuing apportionments as are necessary to
49 make repairs to abate the identified imminent safety hazard or serious safety
50 hazard. Withheld funds, not to exceed one and one-half percent (1 1/2%) of the
51 district's appropriation, shall be disbursed only to pay for such repairs.
11
1 (2) If the funds that would be raised over two (2) fiscal years from
2 applying the provisions of subsection (1) of this section are insufficient, in
3 combination with all moneys that will be available in the district's school
4 building maintenance fund for the same period, to provide sufficient moneys to
5 abate the identified imminent or serious safety hazard, then the administrator
6 shall submit an application to abate said hazard to the Idaho public school
7 facilities cooperative funding program panel pursuant to section 33-909, Idaho
8 Code.
9 (3) It is a misdemeanor to remove, without permission of the administra-
10 tor, a notice or order posted pursuant to this chapter.
11 SECTION 11. That Section 63-2520, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 63-2520. DISTRIBUTION OF MONEYS COLLECTED. Revenues received from the
14 taxes imposed by this chapter, and any revenues received from licenses, per-
15 mits, penalties, interest, or deficiency additions, shall be distributed by
16 the tax commission as follows:
17 (a) An amount of money shall be distributed to the state refund account
18 sufficient to pay current refund claims. All refunds authorized under this
19 chapter by the commission shall be paid through the state refund account, and
20 those moneys are continuously appropriated.
21 (b) On and after July 1, 2005, the balance remaining with the state trea-
22 surer after deducting the amount described in subsection (a) of this section
23 shall be distributed as follows:
24 (1) 17.3% of such balance shall be distributed to the permanent building
25 fund created by section 57-1108, Idaho Code.
26 (2) 0.4% of such balance shall be distributed to the central tumor regis-
27 try account. The amount of money so distributed to the central tumor reg-
28 istry account shall not exceed the fiscal year's appropriation, and at
29 such time as the appropriation has been distributed to the central tumor
30 registry account during any fiscal year, all such distributions in excess
31 of the appropriation shall be made instead to the general fund of the
32 state of Idaho.
33 (3) 1% of such balance shall be distributed to the cancer control account
34 created by section 57-1702, Idaho Code. Revenues received in the cancer
35 control account shall be paid over to the state treasurer by the state tax
36 commission to be distributed as follows:
37 (i) Such amounts as are appropriated for purposes specified in sec-
38 tion 57-1702, Idaho Code, shall be expended as appropriated;
39 (ii) Any balance remaining in the cancer control account on June 30
40 of any fiscal year after the amounts withdrawn by appropriation have
41 been deducted, shall be reserved for transfer to the general fund on
42 July 1 and the state controller shall order such transfer.
43 (4) 21.25% of such balance An amount equal to the annual general fund
44 appropriation for bond levy equalization, pursuant to section 33-906,
45 Idaho Code, shall be annually distributed to the general fund. of the
46 state of Idaho for the fiscal year commencing July 1, 2005 through June
47 30, 2006.
48 (5) All remaining moneys shall be distributed as follows: For the fiscal
49 year commencing July 1, 2005, and ending June 30, 2006, all moneys shall
50 be distributed to the economic recovery reserve fund created by section
51 67-3520, Idaho Code. For fiscal years on and after July 1, 2006, all
52 moneys shall be distributed to the permanent building fund with the moneys
53 to be used for the repair, remodel and restoration of the state capitol
12
1 building and state facilities pertaining to the capitol restoration until
2 such time as the capitol restoration is adequately funded as certified by
3 the director of the department of administration. Thereafter all moneys
4 shall be distributed to the economic recovery reserve fund created by sec-
5 tion 67-3520, Idaho Code.
6 SECTION 12. There is hereby transferred and appropriated $25,000,000 from
7 the General Fund to the Public School Facilities Cooperative Fund.
8 SECTION 13. NONSEVERABILITY. With the exception of Sections 4, 11 and 12
9 of this act, the remaining provisions of this act are hereby declared to be
10 nonseverable and if any provision of the remaining portions of this act or the
11 application of such provision to any person or circumstance is declared
12 invalid for any reason, such declaration shall render all such remaining por-
13 tions of this act null, void and of no force or effect.
STATEMENT OF PURPOSE
RS 16178
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
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 directs 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 one hundred percent (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 IMPACT
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: Speaker Bruce Newcomb, Representatives Lawerence Denney,
Mike Moyle, Julie Ellsworth, Scott Bedke
Senators Curt McKenzie, Shawn Keough
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 743