H-284

H0284...............................................by REVENUE AND TAXATION
SCHOOL DISTRICTS - Amends existing law to reduce the maximum maintenance
and operation levies for school districts by one-tenth of one percent
during tax year 2001 and thereafter; and to increase the property tax
replacement by one-tenth of one percent.

02/16    House intro - 1st rdg - to printing
02/19    Rpt prt - to Rev/Tax
03/14    Rpt out - rec d/p - to 2nd rdg
03/15    2nd rdg - to 3rd rdg
03/16    3rd rdg - PASSED - 40-25-5
      AYES -- Barraclough, Barrett, Bedke, Bell, Bolz, Bruneel, Callister,
      Chase, Cuddy, Denney, Ellis, Ellsworth, Eskridge, Field(20), Gagner,
      Gould, Hadley, Hammond, Harwood, Hornbeck, Jaquet, Langford,
      Loertscher, Mader, McKague, Moyle, Pearce, Raybould, Roberts, Sali,
      Schaefer, Shepherd, Smylie, Stevenson, Stone, Swan(Block), Tilman,
      Trail, Wood, Young
      NAYS -- Bieter, Black, Boe, Bradford, Collins, Crow, Deal, Higgins,
      Jones, Kellogg, Kendell, Kunz, Lake, Marley, Meyer, Montgomery,
      Mortensen, Moss, Pischner, Pomeroy, Ridinger, Robison, Sellman,
      Smith, Mr. Speaker
      Absent and excused -- Campbell, Clark, Field(13), Henbest, Wheeler
    Floor Sponsor -- Barrett
    Title apvd - to Senate
03/19    Senate intro - 1st rdg - to Loc Gov

Bill Text

||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-sixth Legislature                  First Regular Session - 2001

                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 284

                             BY REVENUE AND TAXATION COMMITTEE

1                                        AN ACT
2    RELATING TO PUBLIC SCHOOL LEVIES AND PROPERTY TAX REPLACEMENT; AMENDING SEC-
3        TION 33-802, IDAHO CODE, TO REDUCE THE MAXIMUM MAINTENANCE AND OPERATION
4        LEVIES FOR SCHOOL DISTRICTS BY ONE-TENTH OF ONE PERCENT DURING TAX YEAR
5        2001 AND THEREAFTER AND TO CORRECT A CODE REFERENCE; AMENDING SECTION
6        33-1002D, IDAHO CODE, TO REVISE PROPERTY TAX REPLACEMENT FORMULAS; DECLAR-
7        ING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.

8    Be It Enacted by the Legislature of the State of Idaho:

9        SECTION 1. That Section 33-802, Idaho Code, be, and the same is hereby
10    amended to read as follows:

11        33-802. SCHOOL LEVIES. Any tax levied for school purposes shall be a lien
12    on the property against which the tax is levied. The board of trustees shall
13    determine the levies upon each dollar of taxable property in the district for
14    the ensuing fiscal year as follows:
15        1. Bond, Interest and Judgment Obligation Levies. Such levies as shall be
16    required to satisfy all maturing bond, bond interest, and judgment obliga-
17    tions.
18        2. Maximum School Maintenance and Operation Levies. Such levies for main-
19    taining and operating the schools of the district and for the payment of
20    tuition and transportation, that do not exceed an amount equal to four-tenths
21    of one percent (.4%) during tax year 1994, and do not exceed an amount equal
22    to three-tenths of one percent (.3%) during tax year 1995, and do not exceed
23    an amount equal to two-tenths of one percent (.2%) during tax year 2001 and
24    thereafter, applied to the actual or adjusted market value for assessment pur-
25    poses of the district as such valuation existed on December 31 of the previous
26    year, but allowances necessary as a credit for prepaid taxes, as provided in
27    section 63-1607, Idaho Code, shall not be included in such maximum levies.
28        3. Authorized School Maintenance and Operation Levies. Such levies for
29    maintaining and operating the schools of the district and for the payment of
30    tuition and transportation that do not exceed one hundred eleven percent
31    (111%) of the local district's contribution authorized in subsection 23. of
32    section 33-1002, Idaho Code. Implementation of the provisions of this subsec-
33    tion shall be authorized only after approval by a majority of the district's
34    electors voting on the question. Levies otherwise authorized by law shall not
35    require an election.
36        4. Supplemental Maintenance and Operation Levies. No levy in excess of
37    the levy permitted by subsection 2. or 3. of this section shall be made by a
38    noncharter school district unless such a supplemental levy in a specified
39    amount and for a specified time not to exceed two (2) years be first autho-
40    rized through an election held pursuant to chapter 4, title 33, Idaho Code,
41    and approved by a majority of the district electors voting in such election. A
42    levy approved pursuant to this subsection may be reduced by a majority vote of
43    the board of trustees in the second year.

                                           2

1        5. Charter District Supplemental Maintenance and Operation. Levies pursu-
2    ant to the respective charter of any such charter district shall be first
3    authorized through an election held pursuant to chapter 4, title 33, Idaho
4    Code, and approved by a majority of the district electors voting in such elec-
5    tion.
6        6. The Local District Contribution. The local school district contribu-
7    tion levy is the amount utilized for calculating local district participation
8    in the educational foundation program, which is applied to the adjusted mar-
9    ket value for assessment purposes, as such valuation existed on December 31 of
10    the previous year.
11        7. The board of trustees of any school district that has, for at least
12    seven (7) consecutive years, been authorized through an election held pursuant
13    to chapter 4, title 33, Idaho Code, to certify a supplemental levy that has
14    annually been equal to or greater than twenty percent (20%) of the total gen-
15    eral maintenance and operation fund, may submit the question of an indefinite
16    term supplemental levy to the electors of the school district. Such question
17    shall clearly state the dollar amount that will be certified annually and that
18    the levy will be for an indefinite number of years. The question must be
19    approved by a majority of the district electors voting on the question in an
20    election held pursuant to chapter 4, title 33, Idaho Code. The levy approved
21    pursuant to this subsection may be reduced by a majority vote of the board of
22    trustees during any fiscal year.

23        SECTION 2. That Section 33-1002D, Idaho Code, be, and the same is hereby
24    amended to read as follows:

25        33-1002D. PROPERTY TAX REPLACEMENT. The purpose of this section is to
26    replace a portion of the authorized school maintenance and operation property
27    tax levy with state sales tax receipts. As used in this section, the term
28    "property tax computation ratio" shall mean a ratio determined by dividing the
29    district's certified property tax maintenance and operation budget by the
30    actual or adjusted market value for assessment purposes as such values existed
31    on December 31 of the previous calendar year.
32        (1) (a) In the case of a school district that had a property tax computa-
33        tion ratio of not less than four-tenths of one percent (.4%) in tax year
34        1994, that school district shall receive from the appropriations made for
35        that purpose, an amount equal to the greater of the district's actual or
36        adjusted market value for assessment purposes as such valuation existed on
37        December 31 of the previous calendar year multiplied by onetwo-tenths of
38        one percent (.12%).
39        (b) In the case of a school district that had a property tax computation
40        ratio of less than four-tenths of one percent (.4%) in tax year 1994, the
41        greater of the 1992, 1993 or 1994 property tax computation ratio   less
42        threetwo-tenths of one percent (.32%) shall be designated the district's
43        base multiplier. In no case shall the base multiplier be less than zero
44        (0). Four-tenths of one percent (.4%) less the greater of the district's
45        1992, 1993 or 1994 property tax computation ratio shall be designated the
46        district's adjustment factor. In no case shall the adjustment factor be
47        greater than onetwo-tenths of one percent (.12%) or less than zero (0).
48        Each school district's actual multiplier shall be the base multiplier plus
49        one-fifth (1/5) of the adjustment factor in tax year 1995, the base multi-
50        plier plus two-fifths (2/5) of the adjustment factor in tax year 1996, the
51        base multiplier plus three-fifths (3/5) of the adjustment factor in tax
52        year 1997, the base multiplier plus four-fifths (4/5) of the adjustment
53        factor in tax year 1998, and the base multiplier plus the adjustment fac-

                                           3

1        tor in tax year 1999 and beyond. Each school district shall receive, from
2        the appropriations made for that purpose, an amount equal to the
3        district's actual or adjusted market value for assessment purposes as such
4        valuation existed on December 31 of the previous calendar year multiplied
5        by the district's actual multiplier.
6        (2) (a) Participation in this property tax reduction program is voluntary
7        for a charter district. If a charter district participates, in addition to
8        the provisions of subsection (1) of this section it shall not have a
9        property tax computation ratio that is above threetwo-tenths of one per-
10        cent (.32%) or the district's property tax computation ratio in tax year
11        1994, less one-tenth of one percent (.1%), whichever is greater.
12        (b) If in any year the charter district's property tax computation ratio
13        used to calculate its maintenance and operation budget is increased above
14        the limit specified in this subsection the district shall not be eligible
15        for the distribution pursuant to subsection (1) of this section for that
16        year.
17        (3) Limitations imposed upon a school district's property tax computation
18    ratio under the provisions of this section do not apply to any levy approved
19    by electors of the school district as provided by law.
20        (4) Distributions calculated as provided in this section shall be made to
21    school districts of this state in two (2) equal installments on the due dates
22    as specified in section 63-903(1), Idaho Code, for the property taxes being
23    replaced.
24        (5) For purposes of section 33-1002, Idaho Code, moneys distributed pur-
25    suant to this section shall not be included in determining total state funds.

26        SECTION 3. An emergency existing therefor, which emergency is hereby
27    declared to exist, this act shall be in full force and effect on and after its
28    passage and approval, and retroactively to January 1, 2001.

Statement of Purpose / Fiscal Impact

STATEMENT OF PURPOSE

RS 10861

In 1995, the Idaho Legislature passed and the Governor signed
H156, the bill that, in part, lowered the public school property tax
M&O budget limit from 0.4 percent of the property tax value base to
0.3 percent. Revenue losses to school districts have been replaced
from the General Fund.

This bill lowers the public school property tax M&O budget limit
from the current 0.3 percent of the property tax value base to 0.2
percent beginning in tax year 2001. Accordingly, this bill revises the
property tax replacement formulas.

According to the Idaho State Tax Commission, approximately 38
percent of the taxable property values are classified as rural.

FISCAL IMPACT

The fiscal impact of the bill is estimated at $63.5 million from
the General Fund in FY2002. Historically, this impact has increased by
an average of 8.6 percent per year since 1995.

Contacts:
    Representatives Barrett, Langford, Chase, Wood, Wheeler, Pearce,
    McKague, Loertscher, Harwood, Young, Hornbeck, Roberts
      Phone: 332 1000

STATEMENT OF PURPOSE/FISCAL NOTE H 284