Bill Summary – FastDemocracy

Enrolled Copy                                                                             H.B. 77
                          EDUCATION FUNDING AMENDMENTS
                                      2020 GENERAL SESSION
                                           STATE OF UTAH
                             Chief Sponsor: Norman K. Thurston
                             Senate Sponsor: Deidre M. Henderson
 6
 LONG TITLE
 General Description:
        This bill amends provisions regarding public education funding.
 Highlighted Provisions:
        This bill:
        < establishes a limit on the amount of an increase to the value of the weighted pupil
 unit funded through the weighted pupil unit value tax rate; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
 Utah Code Sections Affected:
 AMENDS:
        53F-2-301, as last amended by Laws of Utah 2018, Chapters 6, 456 and renumbered
 and amended by Laws of Utah 2018, Chapter 2
        53F-2-301.5, as last amended by Laws of Utah 2019, Chapter 408
24
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 53F-2-301 is amended to read:
        53F-2-301. Minimum basic tax rate for a fiscal year that begins after July 1, 2022.
        (1) The provisions of this section are not in effect for a fiscal year that begins on July 1,
 2018, 2019, 2020, 2021, or 2022.
       H.B. 77                                                                        Enrolled Copy
         (2) As used in this section:
         (a) "Basic levy increment rate" means a tax rate that will generate an amount of
 revenue equal to $75,000,000.
         (b) "Combined basic rate" means a rate that is the sum of:
         (i) the minimum basic tax rate; and
         (ii) the WPU value rate.
         (c) "Commission" means the State Tax Commission.
         (d) "Equity pupil tax rate" means the tax rate that will generate an amount of revenue
 equal to the amount generated by the equity pupil tax rate as defined in Section 53F-2-301.5 in
 the fiscal year that begins July 1, 2022.
         (e) "Minimum basic local amount" means an amount that is:
         (i) equal to the sum of:
         (A) the school districts' contribution to the basic school program the previous fiscal
 year;
         (B) the amount generated by the basic levy increment rate;
         (C) the amount generated by the equity pupil tax rate; and
         (D) the eligible new growth, as defined in Section 59-2-924 and rules of the State Tax
 Commission multiplied by the minimum basic rate; and
         (ii) set annually by the Legislature in Subsection (3)(a).
         (f) "Minimum basic tax rate" means a tax rate certified by the commission that will
 generate an amount of revenue equal to the minimum basic local amount described in
 Subsection (3)(a).
         (g) "Weighted pupil unit value" or "WPU value" means the amount established each
 year in the enacted public education budget that is multiplied by the number of weighted pupil
 units to yield the funding level for the basic school program.
         (h) "WPU value amount" means an amount:
         (i) that is equal to the product of:
         (A) [the total cost to the basic school program to increase the WPU value over] the
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       Enrolled Copy                                                                             H.B. 77
 WPU value [in the immediately preceding fiscal year] increase limit; and
         (B) the percentage share of local revenue to the cost of the basic school program in the
 immediately preceding fiscal year; and
         (ii) set annually by the Legislature in Subsection (4)(a).
         (i) "WPU value increase limit" means the lesser of:
         (i) the total cost to the basic school program to increase the WPU value over the WPU
 value in the prior fiscal year; or
         (ii) the total cost to the basic school program to increase the WPU value by 4% over
 the WPU value in the prior fiscal year.
         [(i)] (j) "WPU value rate" means a tax rate certified by the commission that will
 generate an amount of revenue equal to the WPU value amount described in Subsection (4)(a).
         (3) (a) The minimum basic local amount for the fiscal year that begins on July 1, 2018,
 is $408,073,800 in revenue statewide.
         (b) The preliminary estimate of the minimum basic tax rate for a fiscal year that begins
 on July 1, 2018, is .001498.
         (4) (a) The WPU value amount for the fiscal year that begins on July 1, 2018, is
 $18,650,000 in revenue statewide.
         (b) The preliminary estimate of the WPU value rate for the fiscal year that begins on
 July 1, 2018, is .000069.
         (5) (a) On or before June 22, the commission shall certify for the year:
         (i) the minimum basic tax rate; and
         (ii) the WPU value rate.
         (b) The estimate of the minimum basic tax rate provided in Subsection (3)(b) and the
 estimate of the WPU value rate provided in Subsection (4)(b) are based on a forecast for
 property values for the next calendar year.
         (c) The certified minimum basic tax rate described in Subsection (5)(a)(i) and the
 certified WPU value rate described in Subsection (5)(a)(ii) are based on property values as of
 January 1 of the current calendar year, except personal property, which is based on values from
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        H.B. 77                                                                        Enrolled Copy
 the previous calendar year.
        (6) (a) To qualify for receipt of the state contribution toward the basic school program
 and as a school district's contribution toward the cost of the basic school program for the school
 district, each local school board shall impose the combined basic rate.
        (b) (i) The state is not subject to the notice requirements of Section 59-2-926 before
 imposing the tax rates described in this Subsection (6).
        (ii) (A) Except as provided in Subsection (6)(b)(ii)(B), the state is subject to the notice
 requirements of Section 59-2-926 if the state authorizes a tax rate that exceeds the tax rates
 described in this Subsection (6).
        (B) For a calendar year that begins on January 1, 2018, the state is not subject to the
 notice and public hearing requirements of Section 59-2-926 if the state authorizes a combined
 basic rate that exceeds the tax rates authorized in this section.
        (7) (a) The state shall contribute to each school district toward the cost of the basic
 school program in the school district an amount of money that is the difference between the
 cost of the school district's basic school program and the sum of revenue generated by the
 school district by the following:
        (i) the combined basic rate;
        (ii) the basic levy increment rate; and
        (iii) the equity pupil tax rate.
        (b) (i) If the difference described in Subsection (7)(a) equals or exceeds the cost of the
 basic school program in a school district, no state contribution shall be made to the basic
 school program for the school district.
        (ii) The proceeds of the difference described in Subsection (7)(a) that exceed the cost
 of the basic school program shall be paid into the Uniform School Fund as provided by law and
 by the close of the fiscal year in which the proceeds were calculated.
        (8) Upon appropriation by the Legislature, the Division of Finance shall deposit an
 amount equal to the proceeds generated statewide:
        (a) by the basic levy increment rate into the Minimum Basic Growth Account created
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       Enrolled Copy                                                                               H.B. 77
 in Section 53F-9-302;
         (b) by the equity pupil tax rate into the Local Levy Growth Account created in Section
 53F-9-305; and
         (c) by the WPU value rate into the Teacher and Student Success Account created in
 Section 53F-9-306.
         (9) After July 1, 2022, but before November 30, 2022, the Public Education
 Appropriations Subcommittee:
         (a) shall review the WPU value rate, the impact of revenues generated by the WPU
 value rate on public education funding, and whether local school boards should continue to
 levy the WPU value rate; and
         (b) may recommend an increase, repeal, or continuance of the WPU value rate.
         Section 2. Section 53F-2-301.5 is amended to read:
         53F-2-301.5. Minimum basic tax rate for a fiscal year that begins on July 1, 2018,
 2019, 2020, 2021, or 2022.
         (1) The provisions of this section are in effect for a fiscal year that begins before July 1,
 2023.
         (2) As used in this section:
         (a) "Basic levy increment rate" means a tax rate that will generate an amount of
 revenue equal to $75,000,000.
         (b) "Combined basic rate" means a rate that is the sum of:
         (i) the rate floor; and
         (ii) the WPU value rate.
         (c) "Commission" means the State Tax Commission.
         (d) "Equity pupil tax rate" means the tax rate that is:
         (i) calculated by subtracting the minimum basic tax rate from the rate floor; or
         (ii) zero, if the rate calculated in accordance with Subsection (2)(d)(i) is zero or less.
         (e) "Minimum basic local amount" means an amount that is:
         (i) equal to the sum of:
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        H.B. 77                                                                        Enrolled Copy
         (A) the school districts' contribution to the basic school program the previous fiscal
 year;
         (B) the amount generated by the basic levy increment rate; and
         (C) the eligible new growth, as defined in Section 59-2-924 and rules of the State Tax
 Commission multiplied by the minimum basic tax rate; and
         (ii) set annually by the Legislature in Subsection (3)(a).
         (f) "Minimum basic tax rate" means a tax rate certified by the commission that will
 generate an amount of revenue equal to the minimum basic local amount described in
 Subsection (3)(a).
         (g) "Rate floor" means a rate that is the greater of:
         (i) a .0016 tax rate; or
         (ii) the minimum basic tax rate.
         (h) "Weighted pupil unit value" or "WPU value" means the amount established each
 year in the enacted public education budget that is multiplied by the number of weighted pupil
 units to yield the funding level for the basic school program.
         (i) "WPU value amount" means an amount that is:
         (i) equal to the product of:
         (A) [the total cost to the basic school program to increase the WPU value over] the
 WPU value [in the prior fiscal year] increase limit; and
         (B) the percentage share of local revenue to the cost of the basic school program in the
 prior fiscal year; and
         (ii) set annually by the Legislature in Subsection (4)(a).
         (j) "WPU value increase limit" means the lesser of:
         (i) the total cost to the basic school program to increase the WPU value over the WPU
 value in the prior fiscal year; or
         (ii) the total cost to the basic school program to increase the WPU value by 4% over
 the WPU value in the prior fiscal year.
         [(j)] (k) "WPU value rate" means a tax rate certified by the commission that will
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        Enrolled Copy                                                                            H.B. 77
 generate an amount of revenue equal to the WPU value amount described in Subsection (4)(a).
        (3) (a) The minimum basic local amount for the fiscal year that begins on July 1, 2019,
 is $490,684,600 in revenue statewide.
        (b) The preliminary estimate for the minimum basic tax rate for the fiscal year that
 begins on July 1, 2019, is .001588.
        (4) (a) The WPU value amount for the fiscal year that begins on July 1, 2019, is
 $18,800,000 in revenue statewide.
        (b) The preliminary estimate for the WPU value rate for the fiscal year that begins on
 July 1, 2019, is .000061.
        (5) (a) On or before June 22, the commission shall certify for the year:
        (i) the minimum basic tax rate; and
        (ii) the WPU value rate.
        (b) The estimate of the minimum basic tax rate provided in Subsection (3)(b) and the
 estimate of the WPU value rate provided in Subsection (4)(b) is based on a forecast for
 property values for the next calendar year.
        (c) The certified minimum basic tax rate described in Subsection (5)(a)(i) and the
 certified WPU value rate described in Subsection (5)(a)(ii) are based on property values as of
 January 1 of the current calendar year, except personal property, which is based on values from
 the previous calendar year.
        (6) (a) To qualify for receipt of the state contribution toward the basic school program
 and as a school district's contribution toward the cost of the basic school program for the school
 district, a local school board shall impose the combined basic rate.
        (b) (i) The state is not subject to the notice requirements of Section 59-2-926 before
 imposing the tax rates described in this Subsection (6).
        (ii) The state is subject to the notice requirements of Section 59-2-926 if the state
 authorizes a tax rate that exceeds the tax rates described in this Subsection (6).
        (7) (a) The state shall contribute to each school district toward the cost of the basic
 school program in the school district an amount of money that is the difference between the
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        H.B. 77                                                                        Enrolled Copy
 cost of the school district's basic school program and the sum of the revenue generated by the
 school district by the following:
        (i) the minimum basic tax rate;
        (ii) the basic levy increment rate;
        (iii) the equity pupil tax rate; and
        (iv) the WPU value rate.
        (b) (i) If the difference described in Subsection (7)(a) equals or exceeds the cost of the
 basic school program in a school district, no state contribution shall be made to the basic
 school program for the school district.
        (ii) The proceeds of the difference described in Subsection (7)(a) that exceed the cost
 of the basic school program shall be paid into the Uniform School Fund as provided by law and
 by the close of the fiscal year in which the proceeds were calculated.
        (8) Upon appropriation by the Legislature, the Division of Finance shall deposit an
 amount equal to the proceeds generated statewide:
        (a) by the basic levy increment rate into the Minimum Basic Growth Account created
 in Section 53F-9-302;
        (b) by the equity pupil tax rate into the Local Levy Growth Account created in Section
 53F-9-305; and
        (c) by the WPU value rate into the Teacher and Student Success Account created in
 Section 53F-9-306.
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Statutes affected: 
Introduced: 53F-2-301, 53F-2-301.5
Enrolled: 53F-2-301, 53F-2-301.5