WORKING DRAFT

HOUSE BILL NO.

School capital construction funding.

Sponsored by: Representative(s) HDRAFT

A BILL

for

AN ACT relating to school capital construction; imposing a statewide property tax; making the imposition of the tax contingent upon a vote of the people; providing for distribution of revenues; authorizing state general obligation bonds for school capital construction projects; making the bonding authority contingent upon a vote of the people to impose the statewide property tax and to authorize bonding; specifying requirements for the general obligation bonds; specifying ballot language; 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 property tax; use of funds.

(a) Effective January 1, 2003, there shall be assessed and levied each year a state tax of four (4) 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) Subject to W.S. 21-15-114, the funds that accrue and are collected under this section shall be deposited in the state mill school capital construction account created by W.S. 21-15-111(a)(v). Funds deposited into the account shall be held separate and apart from any other funds or monies of the state and shall be used in accordance with and exclusively for the purposes specified in W.S. 21-15-111(n)(i) and W.S. 21-15-114.

*** STAFF COMMENTS ***

At today's valuation 1 mill raises $10.5 million. This amount is projected to be between $9.4 and $10 million over the next three years. Since this mill levy is clearly authorized for school capital construction according to the Supreme Court (in addition to the 4 mill statewide levy for state purposes and the 12 mill levy for the support of public schools in the state), and it's not completely clear that all uses of the current school capcon account would be allowed, these funds are deposited in a separate account, and used only for school capital construction assistance and to fund capital lease payments for projects which have gone through the state review process. The funds would have to be appropriated by the legislature under the current W.S. 21-15-111(n)(i). The funds could also be used for general obligation bonds, should the next section be approved by the voters.

Section 2. W.S. 21-15-114 is created to read:

21-15-114. General obligation bonds for school capital construction; refunding bonds.

(a) The state loan and investment board may borrow money in a principal amount not to exceed the limitation prescribed by article 16, section 1 of the Wyoming constitution, by the issuance from time to time of one (1) or more series of general obligation bonds issued to provide state capital construction assistance under W.S. 21-15-111. The board may encumber revenues under subsection (e) of this section or other revenues of the state as necessary including revenues from the property tax authorized under W.S. 39-13-104(a)(iii), for payment of the bonds. The 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 from revenues as provided by subsection (e) of this section or other revenues of the state as necessary including revenues from the property tax authorized under W.S. 39-13-104(a)(iii), and the board may pledge the state's full faith and credit for payment of the bonds. The proceedings for the issuance and the form of the bonds shall be approved by the attorney general, and each bond shall have endorsed thereon a certificate signed by the auditor and secretary of state that the bond is issued pursuant to law and is within the debt limit. Except as otherwise provided bonds issued under this section shall be in a form, issued in a manner, at, above or below par at a discount not exceeding ten percent (10%) of the principal amount of the bonds, at public or private sale, and issued with recitals, terms, covenants, conditions and other provisions not contrary to other applicable statutes, as may be provided by the board in a resolution authorizing their issuance and in an indenture or other appropriate proceeding. No bond shall be issued under this section unless the issuance is approved by a vote of the people at an election held as provided by W.S. 22-21-201.

(b) At any election to authorize the issuance of bonds under this section, there shall be printed on the ballots in such form as the state loan and investment board shall determine and proclaim, the proposition to create such debt and to issue such bonds. Included on the ballot shall be the purpose of the bonds, the maximum principal amount thereof, the maximum number of years allowed for the indebtedness and the maximum rate of interest to be paid thereon. The ballot shall contain the words "For School Bonds" and the words "Against School Bonds".

(i) Shall be of denominations of five thousand dollars ($5,000.00) or multiples thereof;

(ii) Shall be fully negotiable within the meaning of and for all purposes of the Uniform Commercial Code, W.S. 34.1-1-101 through 34.1-10-104;

(iii) Shall mature at a time or times not exceeding thirty (30) years from their date;

(iv) Shall bear interest payable annually, semiannually or at other designated intervals, but the first interest payment date may be for interest accruing for any period not exceeding one (1) year;

(v) Shall be made payable in lawful money of the United States at the office of the state treasurer or by a trustee, registrar, paying agent, or transfer agent within or without the state of Wyoming;

(vi) May be additionally secured as determined by the state loan and investment board.

(d) The state loan and investment board may retain the services of a financial advisor and sell the bonds to an underwriter, either by competitive or negotiated bid. The terms of any contract including fees to be paid shall be available for public review and inspection.

(e) Before distribution to the state mill school construction account created by W.S. 21-15-111(a)(v), sufficient revenues for the purposes of this section shall be deducted from revenues under W.S. 21-15-113 and credited to a bond repayment account pursuant to the terms of the resolution, indenture or other appropriate proceeding authorizing the issuance of 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 state mill school capital construction account as provided by W.S. 21-15-113.

Section 3. 21-15-111(a)(v) and 39-13-104(a)(i) are amended to read:

21-15-111. State capital construction assistance.

(a) As used in this act:

(v) "State mill school capital construction account" means the account within the earmarked revenue fund into which revenues are deposited pursuant to W.S. 21-15-113;

~~(v)~~(vi) "This act" means W.S. 21-15-105 through ~~21-15-112~~ 21-15-114.

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:

(v) Four (4) mills for school capital construction purposes as provided by W.S. 21-15-113.

Section 4.(a) The secretary of state shall certify the following proposition on the 2002 general election ballot:

"Shall a tax of four (4) mills on the dollar of the assessed valuation of the property within the state be imposed, with all revenue from the tax to be used for state assistance for public school capital construction purposes?

For the tax...... Against the tax......."

(b) If the proposition set forth in subsection (a) of this section is approved by a majority of electors voting on the proposition, the secretary of state shall so certify and sections 1 and 3 of this act shall be effective January 1, 2003. If the proposition set forth in subsection (a) of this section is not passed by a majority of electors voting on the proposition, the secretary of state shall so certify and sections 1, 2 and 3 of this act shall be void. Notwithstanding any other provision of this act, no bond may be issued by the state loan and investment board under this act until the proposition set forth under subsection (a) of this section has been approved by a majority of electors voting on the proposition.

Section 5. Subject to the provisions of section 4 of this act, 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)