Bill Summary – FastDemocracy

Enrolled Copy                                                                            H.B. 1
                  PUBLIC EDUCATION BASE BUDGET AMENDMENTS
                                      2022 GENERAL SESSION
                                          STATE OF UTAH
                                   Chief Sponsor: Steve Eliason
                                 Senate Sponsor: Lincoln Fillmore
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 LONG TITLE
 General Description:
        This bill supplements or reduces appropriations otherwise provided for the support and
 operation of public education for the fiscal year beginning July 1, 2021, and ending
 June 30, 2022, and appropriates funds for the support and operation of public education
 for the fiscal year beginning July 1, 2022, and ending June 30, 2023.
 Highlighted Provisions:
        This bill:
        < provides appropriations for the use and support of school districts, charter schools,
 and state education agencies;
        < sets the value of the weighted pupil unit (WPU) initially at $3,908 for fiscal year
 2022-2023;
        < adjusts the number of weighted pupil units to reflect anticipated student enrollment
 in fall 2022;
        < extends flexibility in the use of restricted stated funding through fiscal year 2023;
        < appropriates funds to the Uniform School Fund Restricted - Public Education
 Budget Stabilization Account;
        < makes an appropriation from the Uniform School Fund Restricted - Trust
 Distribution Account to the School LAND Trust Program to support educational
 programs in the public schools;
        < provides appropriations for other purposes as described; and
        < approves intent language.
 Money Appropriated in this Bill:
      H.B. 1                                                                            Enrolled Copy
         This bill appropriates ($29,433,600) in operating and capital budgets for fiscal year
 2022, including:
         < $3,630,500 from the Uniform School Fund; and
         < ($33,064,100) from various sources as detailed in this bill.
         This bill appropriates ($1,000,000) in expendable funds and accounts for fiscal year
 2022.
         This bill appropriates $23,400,000 in restricted fund and account transfers for fiscal
 year 2022.
         This bill appropriates ($4,000) in fiduciary funds for fiscal year 2022.
         This bill appropriates $6,328,636,000 in operating and capital budgets for fiscal year
 2023, including:
         < $8,294,800 from the General Fund;
         < $3,750,150,500 from the Uniform School Fund;
         < $182,459,700 from the Education Fund; and
         < $2,387,731,000 from various sources as detailed in this bill.
         This bill appropriates $3,327,000 in expendable funds and accounts for fiscal year
 2023.
         This bill appropriates $565,264,900 in restricted fund and account transfers for fiscal
 year 2023, including:
         < $248,100,000 from the Uniform School Fund;
         < $315,414,900 from the Education Fund; and
         < $1,750,000 from various sources as detailed in this bill.
         This bill appropriates $118,600 in fiduciary funds for fiscal year 2023.
 Other Special Clauses:
         This bill provides a special effective date.
 Utah Code Sections Affected:
 AMENDS:
         53F-2-208, as last amended by Laws of Utah 2021, Chapters 319 and 382
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       Enrolled Copy                                                                              H.B. 1
        53F-2-209, as enacted by Laws of Utah 2021, Chapter 341
        53F-2-301.5, as last amended by Laws of Utah 2021, Chapter 6
        53F-2-302.1, as enacted by Laws of Utah 2021, Chapter 6
 Uncodified Material Affected:
 ENACTS UNCODIFIED MATERIAL
63
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 53F-2-208 is amended to read:
        53F-2-208. Cost of adjustments for growth and inflation.
        (1) In accordance with Subsection (2), the Legislature shall annually determine:
        (a) the estimated state cost of adjusting for inflation in the next fiscal year, based on a
 rolling five-year average ending in the current fiscal year, ongoing state tax fund appropriations
 to the following programs:
        (i) education for youth in custody, described in Section 53E-3-503;
        (ii) the Basic Program, described in Title 53F, Chapter 2, Part 3, Basic Program
 (Weighted Pupil Units);
        (iii) the Adult Education Program, described in Section 53F-2-401;
        (iv) state support of pupil transportation, described in Section 53F-2-402;
        (v) the Enhancement for Accelerated Students Program, described in Section
 53F-2-408;
        [(v)] (vi) the Concurrent Enrollment Program, described in Section 53F-2-409; and
        [(vi)] (vii) the [Enhancement for At-Risk Students Program] gang prevention and
 intervention program, described in Section 53F-2-410; and
        (b) the estimated state cost of adjusting for enrollment growth, in the next fiscal year,
 the current fiscal year's ongoing state tax fund appropriations to the following programs:
        (i) a program described in Subsection (1)(a);
        (ii) educator salary adjustments, described in Section 53F-2-405;
        (iii) the Teacher Salary Supplement Program, described in Section 53F-2-504;
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        H.B. 1                                                                         Enrolled Copy
        (iv) the Voted and Board Local Levy Guarantee programs, described in Section
 53F-2-601; and
        (v) charter school local replacement funding, described in Section 53F-2-702.
        (2) (a) In or before December each year, the Executive Appropriations Committee shall
 determine:
        (i) the cost of the inflation adjustment described in Subsection (1)(a); and
        (ii) the cost of the enrollment growth adjustment described in Subsection (1)(b).
        (b) The Executive Appropriations Committee shall make the determinations described
 in Subsection (2)(a) based on recommendations developed by the Office of the Legislative
 Fiscal Analyst, in consultation with the state board and the Governor's Office of Planning and
 Budget.
        Section 2. Section 53F-2-209 is amended to read:
        53F-2-209. Limited LEA budgetary flexibility.
        (1) Notwithstanding any other provision of the Utah Code, for fiscal [year 2021] years
 2021, 2022, and 2023:
        (a) except as provided in Subsection (1)(b), an LEA may:
        (i) use up to 35% of the LEA's state restricted funding for each formula-based program
 to flexibly and without restriction respond to changing circumstances and student needs
 resulting from the COVID-19 emergency, as that term is defined in Section 53-2c-102;
        (ii) transfer fund balances between funds as necessary to flexibly expend funds as
 described in Subsection (1)(a)(i); and
        (b) an LEA may not:
        (i) transfer funds under Subsection (1)(a)(i) related to the school LAND Trust Program,
 established in Section 53G-7-1206, or a qualified grant program; or
        (ii) expend the transferred funds for capital projects or improvements.
        (2) Notwithstanding any other provision of the Utah Code, for any funds for which the
 state imposes restrictions on the use of the funds:
        (a) any expenditure that would have been required to be made before the end of fiscal
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        Enrolled Copy                                                                                H.B. 1
 year 2021 without the application of this section is extended to fiscal year 2022; and
         (b) any expenditure that would have been required to be made before the end of fiscal
 year 2022 without the application of this section is extended to fiscal year 2023[.]; and
         (c) any expenditure that would have been required to be made before the end of fiscal
 year 2023 without the application of this section is extended to fiscal year 2024.
         (3) (a) Nothing in this section authorizes an LEA to violate federal law or federal
 restrictions on the LEA's funds.
         (b) An LEA that takes an action that this section authorizes shall ensure that the LEA
 continues to meet federal maintenance of effort requirements.
         Section 3. 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:
         (A) the school districts' contribution to the basic school program the previous fiscal
 year;
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        H.B. 1                                                                        Enrolled Copy
         (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 WPU value 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.
         (k) "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,
 [2021, is $575,931,800] 2022, is $645,921,400 in revenue statewide.
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        Enrolled Copy                                                                                H.B. 1
        (b) The preliminary estimate for the minimum basic tax rate for the fiscal year that
 begins on July 1, [2021, is .001554] 2022, is .001579.
        (4) (a) The WPU value amount for the fiscal year that begins on July 1, [2021, is
 $22,484,800] 2022, is $16,218,800 in revenue statewide.
        (b) The preliminary estimate for the WPU value rate for the fiscal year that begins on
 July 1, [2021, is .000063] 2022, is .000040.
        (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
 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;
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        H.B. 1                                                                         Enrolled Copy
        (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.
        Section 4. Section 53F-2-302.1 is amended to read:
        53F-2-302.1. Enrollment Growth Contingency Program.
        (1) As used in this section:
        (a) "Program funds" means money appropriated under the Enrollment Growth
 Contingency Program.
        (b) "Student enrollment count" means the enrollment count on the first school day of
 October, as described in Subsection 53F-2-302(3).
        (2) There is created the Enrollment Growth Contingency Program to mitigate funding
 impacts on an LEA resulting from student enrollment irregularities during fiscal years 2021
 [and], 2022, and 2023.
        (3) Subject to legislative appropriations, the state board, in consultation with the Office
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        Enrolled Copy                                                                              H.B. 1
 of the Legislative Fiscal Analyst and the Governor's Office of Planning and Budget, shall use
 program funds to:
         (a) for fiscal years 2021 [and], 2022, and 2023 and for an LEA that has declining
 enrollment, pay costs associated with Subsection 53F-2-302(3) to hold LEA funding
 distributions at the prior year's average daily membership; [and]
         (b) for fiscal year 2022, fund ongoing impacts of student enrollment changes in the
 2021-2022 academic year, including:
         (i) assigning additional weighted pupil units to an LEA experiencing a net growth in
 weighted pupil units over the fiscal year 2022 base allocations associated with student
 enrollment increases following the student enrollment count; and
         (ii) at the request of an LEA that experienced a significant decline in student
 enrollment during the 2020-2021 academic year, pre-fund significantly higher anticipated
 student enrollment growth before the student enrollment count; and
         [(iii)] (c) for fiscal years 2022 and 2023, with any remaining weighted pupil units, pay
 other weighted pupil unit related costs in accordance with Section 53F-2-205.
         (4) If the state board pre-funds anticipated student enrollment growth under Subsection
 (3)(b)(ii), the state board shall:
         (a) verify the LEA's enrollment after the student enrollment count; and
         (b) balance f