NO. 130.  AN ACT RELATING TO FUNDING OF UNION AND UNIFIED UNION SCHOOL DISTRICTS.

(S.315)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  16 V.S.A. § 706j(a)(8) is amended to read:

(8)  The board of directors may be authorized to borrow money pending receipt of payments from the member districts as provided in this subchapter, education fund by the issuance of its notes or orders payable not later than one year from date;

Sec. 2.  16 V.S.A. § 706n(a) is amended to read:

(a)  Any specific condition or agreement adopted by the member districts at the vote held to establish the union, or any amendment subsequently adopted, may be amended only at a special or annual member union district meeting, provided that, if the proposed amendment concerns reducing the number of grades which the union is to operate the prior approval of the state board of education shall be secured.  The warning for the meeting shall contain each proposed amendment as a separate article.  The vote on each proposed amendment shall be by Australian ballot.  No Ballots shall be counted in each member district, and the clerks of each member district shall transmit the results of the vote in that district to the union school district clerk.  Results shall be reported to the public by member district; however, no amendment is effective unless approved by a majority of those voting.  Section 706w of this title notwithstanding, ballots shall be counted and results determined in each member district.  In any district formed before July 1, 1968, if the proposed amendment concerns the method of allocating capital and operating expenses of the union, the amendment must be adopted by each of the respective member districts by vote of a majority of the qualified voters of the districts voting on the question at annual or special meeting of the districts duly warned for that purpose.

Sec. 3.  16 V.S.A. § 711a is amended to read:

§ 711a.  ESTABLISHMENT OF UNION DISTRICT BUDGET

(a)  The board of directors of the union district shall at each annual meeting present an estimate of the expenses for the ensuing year and the district shall appropriate that sum which it deems necessary for the expenses, together with the amount required to pay any balance left unpaid from the preceding year, expressing the sum in dollars in its vote.  If a budget for the operation of the district is not approved, a subsequent meeting or meetings shall be called pursuant to section 706p of this title.  At its first annual meeting the district shall similarly vote a sum sufficient to pay any unpaid balance of expenses, as defined in section 706j of this title, which was incurred by or on behalf of the district since the date on which the vote was taken to form the union district.  Immediately following the annual meeting, the board of directors shall compute the share of each member district in the sums so voted and give notice of the amount thereof to the legislative branch of each district as defined in subdivision (2) of section 1751 of Title 24.  The board of directors of the union district may request the commissioner of education to supply any information needed to compute the share of each member district.

(b)  If a budget has not been approved on or before June 30 of any year, the school board may borrow funds pursuant to the authority granted under section 566 of this title.

(c)  Beginning in fiscal year 2006, for purposes of this subsection, equalized pupils shall be calculated for a union school district and its member districts by counting the full-time equivalent enrollment in the union school during the census period pursuant to subdivision 4001(1) of this title, weighting that count for elementary and secondary pupils pursuant to subsection 4010(b) of this title, and dividing the weighted count by the ratio of statewide long-term average daily membership to the statewide long-term weighted average daily membership as calculated pursuant to subdivision 4001(3) of this title. A budget proposed under subsection (a) of this section shall show:

(1)  the spending per equalized pupil for the union school district; and

(2)  the assessment that would be due from each member district if the assessment were based on the equalized pupils from the member district.

Sec. 4.  16 V.S.A. § 711d is amended to read:

§ 711d.  IMPROVEMENTS, INDEBTEDNESS, BONDS, EARLY OR

              ABSENTEE VOTERS

Improvements may be made by a union school district for the purposes for which the district is established as provided in this subchapter, and indebtedness may be incurred for the improvements as provided by sections 1751 to 1785 of Title 24.  Early or absentee voting in accordance with sections 121 to 147 of Title 17 shall be permitted on questions concerning bond issues of the union school district.  The debt limit of the union school district shall be ten times the sum total of the education grand lists of the member districts composing the union, without diminution for any obligation incurred by a member district alone.  The amount of indebtedness of a union school district incurred to finance any project approved under sections 3447 to 3456 of this title shall not be considered a part of the indebtedness of the union school district for purposes of determining its debt limit.  Obligations incurred under sections 1751 to 1785 of Title 24, or as otherwise authorized in this subchapter by a union school district, shall be the joint and several obligations of the district and of each of the member districts composing it.  However, as between the member districts, their share of such obligations shall be apportioned in the manner provided in this subchapter.  Any joint or several liability incurred by a member district under the provisions of this subchapter shall not be considered in determining its debt limit for its own separate purposes.

Sec. 5.  16 V.S.A. § 722 is amended to read:

§ 722.  UNIFIED UNION DISTRICTS

(a)  In the event a union school district is organized to operate grades kindergarten through 12 or grades one through 12, it shall be known as a unified union district.  On the date the unified union district becomes operative, it shall supplant all other school districts within its borders, and they shall cease to exist.  A unified union district shall be eligible for state aid.  State aid shall be awarded to the unified union district in an amount equal to the sum of the amounts that would be due each of the member districts, as those districts existed on the date of formation of the unified union district, as if those districts were members of a union school district.  The functions of the legislative branch of each pre-existing district in determining each taxpayer’s local share property tax amount of such district to pay the member district’s unified union school assessment shall be performed by the mayor and board of aldermen of a city, the board of selectmen of a town or the trustees of an incorporated district as the case may be.  

(b)  A unified union school district shall allocate expenses based on the proportion which the equalized pupils in a member district bear to the total equalized pupils from all member districts.

Sec. 6.  16 V.S.A. § 2961(a) is amended to read:

(a)  Each town school district, city school district, union school district, unified union school district and, incorporated school district, and the member school districts of an interstate school district shall be eligible to receive a standard mainstream block grant each school year.  The mainstream block grant shall be equal to the school district’s mainstream salary standard multiplied by 60 percent.

Sec. 7.  16 V.S.A. § 2962(a) is amended to read:

(a)  Except as otherwise provided in this subchapter, extraordinary services reimbursement shall be payable to each town school district, city school district, union school district, unified union school district and, incorporated school district, the member school districts of an interstate school district, and unorganized town or gore.

Sec. 8.  16 V.S.A. § 2963(a) is amended to read:

(a)  Each town school district, city school district, union school district, unified union school district and, incorporated school district, the member school districts of an interstate school district, and unorganized town or gore shall receive a special education expenditures reimbursement grant each school year.

Sec. 9.  16 V.S.A. § 2967(a) is amended to read:

(a)  On or before December 15, the commissioner shall publish an estimate, by town school district, city school district, union school district, unified union school district and, incorporated school district, and the member school districts of an interstate school district, of the amount of state assistance necessary to fully fund sections 2961 through 2963 of this title in the ensuing school year.

Sec. 10.  16 V.S.A. § 4001(1), (6), and (10) are amended to read:

(1)  “Average daily membership” of a school district in any year means:

(A)  the full-time equivalent enrollment of pupils, as defined by the state board by rule, who are legal residents of the district attending a school owned and operated by the district, attending a public school outside the district under an interdistrict agreement, or for whom the district pays union school assessment or tuition to one or more approved independent schools or public schools outside the district during the annual census period.  The census period consists of the first 40 days of the school year in which school is actually in session; and

(B)  the full-time equivalent enrollment in the year between the end of the last census period and the end of the current census period, of any state-placed students as defined in subdivision 11(a)(28) of this title.  The full-time equivalent enrollment of state-placed students attending a union school shall be divided among the member districts in the same proportions that the members divide assessment.  A school district which provides for the education of its students by paying tuition to an approved independent school or public school outside the district shall not count a state-placed student for whom it is paying tuition for purposes of determining average daily membership.  A school district which is receiving the full amount, as defined by the state board by rule, of the student’s education costs under subsection 2950(a) of this title, shall not count the student for purposes of determining average daily membership.  A state-placed student who is counted in average daily membership shall be counted as a student for the purposes of determining weighted student count.

(6)  “Education spending” means the amount of the school district budget, any assessment for a union school or joint contract school, technical center payments made on behalf of the district under subsection 1561(b) of this title, and any amount added to pay a deficit pursuant to 24 V.S.A. § 1523(b) which is paid for by the school district, but excluding any portion of the school budget paid for from any other sources such as endowments, parental fund raising, federal funds, nongovernmental grants, or other state funds such as special education funds paid under chapter 101 of this title.

(10)  “School district” means a town school district, city school district, incorporated school district, the member school districts of an interstate school district, the member towns of a union school district, a unified union district, or an unorganized town or gore.

Sec. 11.  16 V.S.A. § 4010(e) is amended and (g) is added to read:

(e)  The weighted long-term membership calculated under subsection (c) of this section shall be further increased by 0.2 for each pupil in average daily membership for whom English is not the pupil’s primary language.  The state board of education shall adopt rules which will enable clear and consistent identification of pupils to be counted under this subsection.

(g)  The commissioner shall adopt rules as necessary to enable clear and consistent identification of pupils to be counted under this section.

Sec. 12.  [DELETED]

Sec. 13.  32 V.S.A. § 5402(a) is amended and (e) is added to read:

(a)  A statewide education tax is imposed on all nonresidential and homestead property at the following rates:

(1)  the tax rate for nonresidential property shall be $1.54 per $100.00,; and

(2)  the tax rate for homestead property shall be $1.05 multiplied by the district spending adjustment for the municipality, per $100.00, of equalized education property value as most recently determined under section 5405 of this title.  The homestead property tax rate for each municipality which is a member of a union or unified union school district shall be calculated as required under subsection (e) of this section.

* * *

(e)  The commissioner of taxes shall determine a homestead education tax rate for each municipality which is a member of a union or unified union school district as follows:

(1)  For a municipality which is a member of a unified union school district, use the base rate determined under subdivision (a)(2) of this section and a district spending adjustment based upon the education spending per equalized pupil of the unified union. 

(2)  For a municipality which is a member of a union school district:

(A)  determine the municipal district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a district spending adjustment based on the education spending per total equalized pupil in the municipality who attends a school other than the union school;

(B)  determine the union district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a district spending adjustment based on the education spending per equalized pupil of the union school district; and

(C)  determine a combined homestead tax rate by calculating the weighted average of the rates determined under subdivisions (A) and (B) of this subdivision (2), with weighting based upon the ratio of union school equalized pupils to total equalized pupils of the member municipality; and the ratio of equalized pupils attending a school other than the union school to total equalized pupils of the member municipality.  Total equalized pupils of the member municipality is based on the number of pupils who are legal residents of the municipality and attending school at public expense.  If necessary, the commissioner may adopt a rule to clarify and facilitate implementation of this subsection.

Sec. 14.  INCONSISTENT PROVISIONS OF UNION AND UNIFIED                     UNION SCHOOL DISTRICT AGREEMENTS

In the event of a conflict between the provisions of this act and the provisions of any union or unified union school district agreement, the provisions of this act shall control.

Sec. 15.  REPEAL

The following are repealed:

(1)  16 V.S.A. § 706b(8), relating to allocation of expenses of the union among member districts of a union school district.

(2)  16 V.S.A. §706f(c), relating to apportionment of expenses among member districts of a union school district.

(3)  16 V.S.A. § 711, relating to apportionment of expenses among members districts of a union school district.

(4)  16 V.S.A. § 711b, relating to assessment and payment to support a union school district.

(5)  16 V.S.A. § 4011(d), relating to expenditure of funds attributable to the poverty ratio of the district.

Sec. 16.  TRANSITIONAL PROVISIONS; REPORT; REPEAL; EFFECTIVE

               DATES

(a)  In fiscal year 2006, the commissioner of education shall provide education funding, and municipalities shall be taxed under the system in effect prior to passage of this act.  However, the commissioner of education shall gather data and calculate state aid and tax rates as though this act were in full effect and shall provide this information to school districts and to the general assembly by March 15, 2005.

(b)  In fiscal year 2007, tax rates in municipalities shall be calculated pursuant to the provisions of this act.

(c)  By March 15, 2005, the commissioner of education shall report to the general assembly on whether the excess spending adjustment, as defined in 32 V.S.A. § 5401(12), should be applied at the municipal or school district level for a municipality with a combined municipal and union school tax rate.

(d)  The following are repealed:

(1)  16 V.S.A. § 711a(c), relating to calculation of equalized pupils for a union school district is repealed.

(2)  Sec. 23(c) of No. 76 of the Acts of the 2003 Adj. Sess. (2004), regarding a review of the advisability of extending a rule for allocation of costs to union and joint contract school districts, is repealed.

(e)  Except as provided in subsection (a) of this section, this act shall take effect on July 1, 2004.

Approved:  May 24, 2004