WORKING DRAFT

HOUSE BILL NO.

State mill levy for school capital construction.

Sponsored by: Representative(s) HDRAFT

A BILL

for

AN ACT relating to school capital construction; imposing a statewide property tax; depositing funds into the school foundation account; reallocating specified federal mineral royalty revenue distributions relating to schools; expanding state school capital construction bonding authority and revenues available for bonding; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1. W.S. 21-15-113 is created to read:

21-15-113. Levy of state tax; disposition of funds.

(a) Effective January 1, 2003, pursuant to Article XV, Section 4 of the Wyoming Constitution, there shall be assessed and levied each year a state tax of four mills on the dollar of the assessed valuation of the property within the state as certified on August 10 under W.S. 39-11-102.1(c)(v). The tax is in addition to any and all other taxes authorized by law.

(b) The funds that accrue and are collected under this section shall be deposited in the public school foundation program account created by W.S. 21-13-306.

*** STAFF COMMENTS ***

The taxes are deposited to the school foundation account. A "swap" is made with FMR streams for reasons explained after the next section. At today's valuation 1 mill raises $10.5 million.

Section 2. W.S. 9-4-601(a)(ii) and (vii), 21-15-108(a) and (b) and 39-13-104(a)(i) are amended to read:

9-4-601. Distribution and use; funds, accounts, cities and towns benefited; exception for bonus payments.

(a) All monies received by the state of Wyoming from the secretary of the treasury of the United States under the provisions of the act of congress of February 25, 1920 (41 Stat. 437, 450; 30 U.S.C. §§ 181, 191), as amended, or from lessees or authorized mine operators and all monies received by the state from its sale of production from federal mineral leases subject to the act of congress of February 25, 1920 (41 Stat. 437, 450; 30 U.S.C. §§ 181, 191) as amended, except as provided by subsection (b) of this section, shall be deposited in the trust and agency fund and the first two hundred million dollars ($200,000,000.00) of revenues received in any fiscal year shall be distributed by the state treasurer as provided in this subsection. One percent (1%) of these revenues shall be credited to the general fund as an administrative fee, and the remainder shall be distributed as follows:

(ii) ~~Forty-four and eight-tenths percent (44.8%)~~ Twenty-three and eight-tenths percent (23.8%) to the public school foundation program account subject to allocations under W.S. 9-4-605;

(vii) ~~Two and seven-tenths percent (2.7%)~~ Twenty-three and seven-tenths percent (23.7%) to the public school capital construction account created by W.S. 21-15-111(a)(i);

*** STAFF COMMENTS ***

This change in FMR flow is an amount approximately equal to the $42 million raised by the 4 mill levy at today's valuation. The reason for placing the property tax money in the school foundation program, rather than the capital construction account is to allow bonding against the capital construction account without a vote (i.e., since the pledged funds are not taxes, but FMRs, no debt is created and no vote required).

It should be noted that the FMRs to the school foundation program (along with 26.25% of the first $200 million in FMRs earmarked for the highway fund) are first allocated to state bonding allowed under 9-4-605. That allocation is reduced by (ii) above (from a total of 71.05% to 50.05%). Historically those funds have not been needed because other appropriations have always been made and used to support any bonding under 9-4-605. (Bonding has been used to take advantage of investment income being greater than the cost of issuing bonds).

21-15-108. Revenue bonds for grants and loans; refunding revenue bonds.

(a) Before distribution to the public school capital construction account under W.S. 9-4-305(b) and 9-4-601(a)(vii), sufficient revenues for the purposes of this section shall be deducted therefrom and credited to a bond repayment account pursuant to the terms of the resolution, indenture or other appropriate proceeding authorizing the issuance of revenue bonds under this section. The revenues deducted shall be used as provided by this section. The balance of the revenues shall be credited to the public school capital construction account as provided under W.S. 9-4-305(b) and 9-4-601(a)(vii). After available revenues under W.S. 9-4-305(b) have been used, revenues under W.S. 9-4-601(a)(vii) and then revenues under 21-13-301 shall also be credited, as necessary, to the bond repayment account and shall be used as provided by this section.

(b) The state loan and investment board may borrow money in a principal amount not to exceed ~~one hundred million dollars ($100,000,000.00)~~ two hundred million dollars ($200,000,000.00) by the issuance from time to time of one (1) or more series of revenue bonds. The board may encumber revenues under subsection (a) of this section for bonds in total amounts not to exceed ~~one hundred million dollars ($100,000,000.00)~~ two hundred million dollars ($200,000,000.00) issued for state capital construction assistance under W.S. 21-15-111. The state loan and investment board may issue these bonds only to provide funding for school capital construction projects in accordance with a budget recommendation submitted by the state superintendent under W.S. 21-15-111. Any bonds issued under this section, together with any interest accruing thereon and any prior redemption premiums due in connection therewith, are payable and collectible solely out of revenues authorized under this section. The bondholders may not look to any general or other fund for payment of the bonds except the revenues pledged therefor. The bonds shall not constitute an indebtedness or a debt within the meaning of any constitutional or statutory provision or limitation. The bonds shall not be considered or held to be general obligations of the state but shall constitute its special obligations and the board shall not pledge the state's full faith and credit for payment of the bonds.

*** STAFF COMMENTS ***

With increased flows into the capital construction account, the bonding authority for school construction is increased. The amount inserted is completely arbitrary at this time.

39-13-104. Taxation rate.

(a) Authorized mill levies. There shall be annually levied and assessed upon the taxable value of property within Wyoming the following state taxes when applicable:

(i) ~~Not to exceed~~ Four (4) mills as certified by the board to be credited to the ~~state general fund~~ public school foundation program account created by W.S. 21-13-306;

Section 3. This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)