MISSISSIPPI LEGISLATURE
1998 Regular Session
To: Education; Appropriations
By: Representative Frierson
House Bill 1068
AN ACT TO AMEND SECTION 37-151-7, MISSISSIPPI CODE OF 1972, TO DELETE THE AUTHORITY OF LOCAL SCHOOL DISTRICTS TO ISSUE BONDS SECURED BY ADEQUATE EDUCATION PROGRAM FUNDS; TO AMEND SECTION 37-47-13, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT SCHOOL DISTRICTS HAVING ADEQUATE EDUCATION FUNDS ALLOCATED TO THE STATE PUBLIC SCHOOL BUILDING FUND TO THEIR CREDIT SHALL BE ISSUED CERTIFICATES OF CREDIT FOR SUCH ALLOCATIONS TO THE FUND; TO AMEND SECTIONS 37-47-23 AND 37-47-25, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO AMEND SECTIONS 37-47-33 AND 37-47-45, MISSISSIPPI CODE OF 1972, TO REVISE THE AMOUNT OF STATE SCHOOL BONDS THAT THE STATE BOND COMMISSION MAY ISSUE TO FUND THE PUBLIC SCHOOL BUILDING FUND AND TO DELETE THE FINAL MATURITY DATE OF SUCH BONDS; TO AMEND SECTION 37-47-61, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT LOANS MADE TO SCHOOL DISTRICTS FROM THE PUBLIC SCHOOL BUILDING FUND SHALL BE REPAID WITH ADEQUATE EDUCATION FUNDS ALLOCATED TO THE FUND TO THE CREDIT OF SUCH DISTRICTS AS WELL AS WITH SUCH DISTRICTS' ANNUAL GRANTS; TO BRING FORWARD SECTION 37-47-9, MISSISSIPPI CODE OF 1972, WHICH PROVIDES FOR ANNUAL GRANTS TO BE MADE BY THE STATE TO THE PUBLIC SCHOOL BUILDING FUND TO BE CREDITED TO THE SCHOOL DISTRICTS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 37-151-7, Mississippi Code of 1972, is amended as follows:
37-151-7. The annual allocation to each school district for the operation of the adequate education program shall be determined as follows:
(1) Computation of the basic amount to be included for current operation in the adequate education program. The following procedure shall be followed in determining the annual allocation to each school district:
(a) Determination of average daily attendance. During months two (2) and three (3) of the current school year, the average daily attendance of a school district shall be computed, or the average daily attendance for the prior school year shall be used, whichever is greater. The district's average daily attendance shall be computed and currently maintained in accordance with regulations promulgated by the State Board of Education.
(b) Determination of base student cost. The State Board of Education, on or before August 1, with adjusted estimate no later than January 2, shall annually submit to the Legislative Budget Office and the Governor a proposed base student cost adequate to provide the following cost components of educating a pupil in an average school district meeting Level III accreditation standards required by the Commission on School Accreditation: (i) Instructional Cost; (ii) Administrative Cost; (iii) Operation and Maintenance of Plant; and (iv) Ancillary Support Cost. The department shall utilize a statistical methodology which considers such factors as, but not limited to: (i) school size; (ii) assessed valuation per pupil; (iii) the percentage of students receiving free lunch; (iv) the local district maintenance tax levy; (v) other local school district revenues; and (vi) the district's accreditation level, in the selection of the representative Mississippi school districts for which cost information shall be obtained for each of the above listed cost areas.
For the instructional cost component, the department shall determine the instructional cost of each of the representative school districts selected above, excluding instructional cost of self-contained special education programs and vocational education programs, and the average daily attendance in the selected school districts. The instructional cost is then totalled and divided by the total average daily attendance for the selected school districts to yield the instructional cost component. For the administrative cost component, the department shall determine the administrative cost of each of the representative school districts selected above, excluding administrative cost of self-contained special education programs and vocational education programs, and the average daily attendance in the selected school districts. The administrative cost is then totalled and divided by the total average daily attendance for the selected school districts to yield the administrative cost component. For the plant and maintenance cost component, the department shall determine the plant and maintenance cost of each of the representative school districts selected above, excluding plant and maintenance cost of self-contained special education programs and vocational education programs, and the average daily attendance in the selected school districts. The plant and maintenance cost is then totalled and divided by the total average daily attendance for the selected school districts to yield the plant and maintenance cost component. For the ancillary support cost component, the department shall determine the ancillary support cost of each of the representative school districts selected above, excluding ancillary support cost of self-contained special education programs and vocational education programs, and the average daily attendance in the selected school districts. The ancillary support cost is then totalled and divided by the total average daily attendance for the selected school districts to yield the ancillary support cost component. The total base cost for each year shall be the sum of the instructional cost component, administrative cost component, plant and maintenance cost component and ancillary support cost component, and any estimated adjustments for additional state requirements as determined by the State Board of Education. * * * However, * * * the base student cost in fiscal year 1998 shall be Two Thousand Six Hundred Sixty-four Dollars ($2,664.00).
(c) Determination of the basic adequate education program cost. The basic amount for current operation to be included in the Mississippi Adequate Education Program for each school district shall be computed as follows:
Multiply the average daily attendance of the district by the base student cost as established by the Legislature, which yields the total base program cost for each school district.
(d) Adjustment to the base student cost for at-risk pupils. The amount to be included for at-risk pupil programs for each school district shall be computed as follows: Multiply the base student cost for the appropriate fiscal year as determined under paragraph (b) by five percent (5%), and multiply that product by the number of pupils participating in the federal free school lunch program in such school district, which yields the total adjustment for at-risk pupil programs for such school district.
(e) Add-on program cost. The amount to be allocated to school districts in addition to the adequate education program cost for add-on programs for each school district shall be computed as follows:
(i) Transportation cost shall be the amount allocated to such school district for the operational support of the district transportation system from state funds.
(ii) Vocational or technical education program cost shall be the amount allocated to such school district from state funds for the operational support of such programs.
(iii) Special education program cost shall be the amount allocated to such school district from state funds for the operational support of such programs.
(iv) Gifted education program cost shall be the amount allocated to such school district from state funds for the operational support of such programs.
(v) Alternative school program cost shall be the amount allocated to such school district from state funds for the operational support of such programs.
(vi) Extended school year programs shall be the amount allocated to school districts for those programs authorized by law which extend beyond the normal school year.
(vii) University-based programs shall be the amount allocated to school districts for those university-based programs for handicapped children as defined and provided for in Section 37-23-131 et seq.
(viii) Bus driver training programs shall be the amount provided for those driver training programs as provided for in Section 37-41-1.
The sum of the items listed above - (i) transportation, (ii) vocational or technical education, (iii) special education, (iv) gifted education, (v) alternative school programs, (vi) extended school year programs, and (vii) university-based programs - shall yield the add-on cost for each school district.
(f) Total projected adequate education program cost. The total Mississippi Adequate Education Program Cost shall be the sum of the total basic adequate education program cost (paragraph (c)), and the adjustment to the base student cost for at-risk pupils (paragraph (d)) for each school district.
(g) Supplemental grant to school districts. In addition to the adequate education program grant, the State Department of Education shall annually distribute an additional amount as follows: Multiply the base student cost for the appropriate fiscal year as determined under paragraph (b) by .13% and multiply that product by the average daily attendance of each school district. Such grant shall not be subject to the local revenue requirement provided in subsection (2).
(2) Computation of the required local revenue in support of the adequate education program. The amount that each district shall provide toward the cost of the adequate education program shall be calculated as follows:
(a) The State Board of Education shall certify to each school district that twenty-eight (28) mills, less the estimated amount of the yield of the School Ad Valorem Tax Reduction Fund grants as determined by the State Department of Education, is the millage rate required to provide the district required local effort for that year, or twenty-seven percent (27%) of the basic adequate education program cost for such school district as determined under subsection (c), whichever is a lesser amount. In the case of an agricultural high school the millage requirement shall be set at a level which generates an equitable amount per pupil to be determined by the State Board of Education.
(b) The State Board of Education shall determine: (i) the total assessed valuation of nonexempt property for school purposes in each school district; (ii) assessed value of exempt property owned by homeowners aged sixty-five (65) or older or disabled as defined in Section 27-33-67(2); (iii) the school district's tax loss from exemptions provided to applicants under the age of sixty-five (65) and not disabled as defined in Section 27-33-67(1); and (iv) the school district's homestead reimbursement revenues.
(c) The amount of the total adequate education program funding which shall be contributed by each school district shall be the sum of the ad valorem receipts generated by the millage required under this subsection plus the following local revenue sources for the appropriate fiscal year which are or may be available for current expenditure by the school district:
One hundred percent (100%) of Grand Gulf income as prescribed in Section 27-35-309.
(3) Computation of the required state effort in support of the adequate education program.
The required state effort in support of the adequate education program shall be determined by subtracting the sum of the required local tax effort as set forth in subsection (2)(a) of this section and the other local revenue sources as set forth in subsection (2)(c) of this section in an amount not to exceed twenty-seven percent (27%) of the total projected adequate education program cost as set forth in subsection (1)(f) of this section from the total projected adequate education program cost as set forth in subsection (1)(f) of this section.
* * * However, * * * in fiscal year 1998 and in the fiscal year in which the adequate education program is fully funded by the Legislature, any increase in the * * * state contribution, including the supplemental grant to school districts provided under subsection (1)(g), to any district calculated under this section shall be not less than eight percent (8%) in excess of the amount received by that district from state funds for the fiscal year immediately preceding. For purposes of this section, state funds shall include minimum program funds less the add-on programs, state Uniform Millage Assistance Grant funds,
Education Enhancement Funds appropriated for Uniform Millage Assistance Grants and state textbook allocations, and State General Funds allocated for textbooks.
(4) The State Adequate Education Program Fund is hereby established in the State Treasury which shall be used to distribute any funds specifically appropriated by the Legislature to such fund, to school districts entitled to increased allocations of state funds under the adequate education program funding formula prescribed in Sections 37-151-3, 37-151-5 and 37-151-7 * * *. If the Legislature provides less funds than the total state funds needed for support of such increased allocations under the adequate education program, the State Department of Education shall reduce all elements of the cost of the adequate education program proportionately. Any such adequate education program funds shall be transferred to the school district maintenance fund of such district in the manner prescribed in Section 37-19-47, and shall be expended in the manner provided by law.
(5) The Interim School District Capital Expenditure Fund is hereby established in the State Treasury which shall be used to distribute any funds specifically appropriated by the Legislature to such fund to school districts entitled to increased allocations of state funds under the adequate education program funding formula prescribed in Sections 37-151-3 through 37-151-7 until such time as the * * * adequate education program is fully funded by the Legislature. The following percentages of the total state cost of increased allocations of funds under the adequate education program funding formula shall be appropriated by the Legislature into the Interim School District Capital Expenditure Fund to be distributed to all school districts under the formula: Nine and two-tenths percent (9.2%) shall be appropriated in fiscal year 1998; twenty percent (20%) shall be appropriated in fiscal year 1999; forty percent (40%) shall be appropriated in fiscal year 2000; sixty percent (60%) shall be appropriated in fiscal year 2001; eighty percent (80%) shall be appropriated in fiscal year 2002; and one hundred percent (100%) shall be appropriated in fiscal year 2003 into the State Adequate Education Program Fund created in subsection (4). Until such time as the adequate education program is fully funded by the Legislature, such money shall be used by school districts for the following purposes:
(a) Purchasing, erecting, repairing, equipping, remodeling and enlarging school buildings and related facilities, including gymnasiums, auditoriums, lunchrooms, vocational training buildings, libraries, school barns and garages for transportation vehicles, school athletic fields and necessary facilities connected therewith, and purchasing land therefor. Any such capital improvement project by a school district shall be approved by the State Board of Education, and based on an approved long-range plan. The State Board of Education shall promulgate minimum requirements for the approval of school district capital expenditure plans.
(b) Providing necessary water, light, heating, air conditioning, and sewerage facilities for school buildings, and purchasing land therefor.
(c) Paying debt service on existing capital improvement debt of the district or refinancing outstanding debt of a district if such refinancing will result in an interest cost savings to the district.
(d) From and after October 1, 1997, through June 30, 1998, pursuant to a school district capital expenditure plan approved by the State Department of Education, a school district may pledge such funds until July 1, 2002, plus funds provided for in paragraph (e) of this subsection * * * that are not otherwise permanently pledged under such paragraph (e) to pay all or a portion of the debt service on debt issued by the school district under Sections 37-59-1 through 37-59-45, 37-59-101 through 37-59-115, 37-7-351 through 37-7-359, 37-41-89 through 37-41-99, 37-7-301, 37-7-302 and 37-41-81, or debt issued by boards of supervisors for agricultural high schools pursuant to Section 37-27-65, or lease-purchase contracts entered into pursuant to Section 31-7-13, or to retire or refinance outstanding debt of a district, if such pledge is accomplished pursuant to a written contract or resolution approved and spread upon the minutes of an official meeting of the district's school board or board of supervisors. It is the intent of this provision to allow school districts to irrevocably pledge their Interim School District Capital Expenditure Fund allotments as a constant stream of revenue to secure a debt issued under the foregoing code sections. To allow school districts to make such an irrevocable pledge, the state shall take all action necessary to ensure that the amount of a district's Interim School District Capital Expenditure Fund allotments shall not be reduced below the amount certified by the department or the district's total allotment under the Interim Capital Expenditure Fund if fully funded, so long as such debt remains outstanding.
* * *
(e) * * * A school district, in its discretion, may authorize the State Board of Education to withhold an amount of the district's adequate education program allotment equal to up to One Hundred Sixty Dollars ($160.00) per student in average daily attendance in the district to be allocated to the State Public School Building Fund to the credit of such school district. * * * In addition to the grants made by the state pursuant to Section 37-47-9, a school district shall be entitled to grants based on the allotments to the State Public School Building Fund credited to such school district under this paragraph. * * *
(f) The State Board of Education may authorize the school district to expend not more than twenty percent (20%) of its annual allotment of such funds or Twenty Thousand Dollars ($20,000.00), whichever is greater, for technology needs of the school district, including computers, software, telecommunications, cable television, interactive video, film low-power television, satellite communications, microwave communications, technology-based equipment installation and maintenance, and the training of staff in the use of such technology-based instruction. Any such technology expenditure shall be reflected in the local district technology plan approved by the State Board of Education under Section 37-151-17.
(g) To the extent a school district has not utilized twenty percent (20%) of its annual allotment for technology purposes under paragraph (g), a school district may expend not more than twenty percent (20%) of its annual allotment or Twenty Thousand Dollars ($20,000.00), whichever is greater, for instructional purposes. The State Board of Education may authorize a school district to expend more than * * * twenty percent (20%) of its annual allotment for instructional purposes if it determines that such expenditures are needed for accreditation purposes.
(h) The State Department of Education or the State Board of Education may require that any project commenced pursuant to this act with an estimated project cost of not less than Five Million Dollars ($5,000,000.00) shall be done only pursuant to program management of the process with respect to design and construction. Any individuals, partnerships, companies or other entities acting as a program manager on behalf of a local school district and performing program management services for projects covered under this subsection shall be approved by the State Department of Education.
Any interest accruing on any unexpended balance in the Interim School District Capital Expenditure Fund shall be invested by the State Treasurer and placed to the credit of each school district participating in such fund in its proportionate share.
The provisions of this subsection shall be cumulative and supplemental to any existing funding programs or other authority conferred upon school districts or school boards.
SECTION 2. Section 37-47-13, Mississippi Code of 1972, is amended as follows:
37-47-13. When the amounts of the annual grants to school districts have been computed as provided in Section 37-47-9, the State Department of Education shall credit each * * * school district with the amount of the annual grant to which it is entitled plus any amount of the school district's adequate education program allotment which the district has authorized the State Board of Education to allocate to the Public School Building Fund to the credit of that school district under Section 37-151-7(5)(e), and the department shall issue to each * * * school district a certificate of credit for the total amount of such annual grant and adequate education program allotment allocated to such fund to the credit of that school district. All * * * certificates of credit shall be signed by the Chairman of the State Department of Education and countersigned by the executive secretary thereof. Such certificates shall constitute an indebtedness of the State of Mississippi but shall be nontransferable and nonnegotiable and shall bear no interest. All such certificates so issued shall be held and retained by the school district to which same are issued until the expenditure of the funds to the credit of such school district shall be approved by the department as is otherwise provided in this chapter. Such certificates shall be surrendered to the department at the time the funds to which the school district is entitled are withdrawn from the Public School Building Fund and deposited to the credit of the school district entitled thereto.
SECTION 3. Section 37-47-23, Mississippi Code of 1972, is amended as follows:
37-47-23. When any school district holding certificates of credit * * * desires to expend funds which have accumulated to its credit in the State Public School Building Fund and the expenditure thereof has been approved by the State Department of Education but insufficient funds are available in the State Public School Building Fund because of loans or advances having been made to other school districts, the department shall forthwith transmit to the State Bond Commission its request for the issuance of state school bonds, as is otherwise provided in this chapter, in an amount sufficient to provide the funds to which the school district holding the certificates of credit is entitled, or such portion of such funds as such school district then desires to expend.
SECTION 4. Section 37-47-25, Mississippi Code of 1972, is amended as follows:
37-47-25. Whenever the State Department of Education * * * determines that any school district is in need of capital improvements to an extent in excess of that which may be financed by the credit then due such school district by the department, the department shall be empowered to advance or lend the school district such sums as in the opinion of the department are necessary to be expended for capital improvements by the school district. Such loans or advances shall be evidenced by appropriate agreements, and shall be repayable in principal by the school district from the annual grants to which the school district shall become entitled, any amounts of the school district's adequate education program allotment which the district has authorized the State Board of Education to allocate to the State Public School Building Fund to the credit of that school district and from such other funds as may be available. Such loans or advances shall not constitute a debt of the school district within the meaning of any provision or limitation of the Constitution or statutes of the State of Mississippi. The department shall not advance or lend to any school district any sum in excess of seventy-five percent (75%) of the estimated total sum which will accrue to the * * * school district on account of grants to be made to the * * * school district within the twenty (20) years next following the date of the loan or advance plus any amounts of the school district's adequate education program allotment which is allocated to the public School Building Fund to the credit of that school district under Section 37-151-7(5)(e). In determining the maximum allowable advance or loan, the department shall assume that the average daily attendance in the schools of the school district for the past preceding scholastic year as confirmed by the audit of average daily attendance made by the State Department of Audit will continue for the period during which the loan is to be repaid.
SECTION 5. Section 37-47-33, Mississippi Code of 1972, is amended as follows:
37-47-33. For the purpose of providing funds to enable the State Department of Education to make loans or advances to school districts as provided by Section 37-47-25, and for the purpose of providing funds for the payment and redemption of certificates of credit issued to school districts under Section 37-47-23, when such funds are not otherwise available, or for either or both of such purposes, the State Bond Commission is * * * authorized and empowered to issue state school bonds under the conditions prescribed in this chapter. The aggregate principal amount of such bonds outstanding at any one time, after deducting the amount of the sinking fund provided for the retirement of bonds issued for such purposes, shall never exceed a sum equal to the total amount of the certificates of credit issued by the department to all school districts which have not been surrendered to the department for the expenditure of funds. Within such limits, however, state school bonds may be issued from time to time under the conditions prescribed in this chapter. * * *
SECTION 6. Section 37-47-45, Mississippi Code of 1972, is amended as follows:
37-47-45. All bonds issued under the authority of this chapter shall mature annually. None of such bonds shall have a final maturity date of more than twenty (20) years from the date of the issuance thereof * * *. In issuing such bonds, the State Bond Commission shall be authorized and empowered to provide maturities therefor in such amounts and at such times as the State Bond Commission shall deem appropriate, proper and feasible. No bonds shall be issued and sold under the provisions of this chapter for less than par and accrued interest.
SECTION 7. Section 37-47-61, Mississippi Code of 1972, is amended as follows:
37-47-61. For the purpose of providing for the payment of the principal of and interest upon bonds issued under the provisions of this chapter according to the terms thereof, * * * there is * * * established in the State Treasury a sinking fund for such payment. The sinking fund shall consist of the premiums and accrued interest paid upon any such bonds so issued and of such other amount as shall be paid into such fund by appropriation or other authorization by the Legislature. In cases where the loan or advance to a school district was made from the proceeds of bonds issued under the provisions of this chapter, the State Department of Education shall annually pay into the sinking fund the amounts of annual grants to which any school district is entitled, plus any amounts of the school district's adequate education program allotment allocated to the Public School Building Fund to the credit of that school district, which are used for the repayment of the principal of and interest upon a loan or grant made to such school district under the authority of Section 37-47-25. However, where the loan or advance was made from accumulations in the State Public School Building Fund, the amounts of the annual grants to which the school districts are entitled, plus any amounts of the school district's adequate education program allotment allocated to the Public School Building Fund to the credit of that school district, which are used for the repayment of principal of and interest upon such loan or grant shall be paid into the State Public School Building Fund and not into the bond and interest sinking fund.
SECTION 8. Section 37-47-9, Mississippi Code of 1972, is brought forward as follows:
37-47-9. It is found and determined that the state should make an annual grant of Twenty-four Dollars ($24.00) for each child in average daily attendance in the public schools of this state during each school year, and that such monies should be applied for the purpose of establishing and maintaining adequate physical facilities for the public school system and/or the payment of existing debt therefor.
The grant to which a public school is entitled under the provisions of this section shall be credited to the school district of which such school is part. If any change is made in the operation or boundaries of any such school district, equitable reallocations shall be made by the commission of all balances to the credit of such school district, and all debits charged against the districts affected by the change in the boundaries or system of operation. The obligation of the state to make remittance of the sums appropriated or otherwise provided to make the annual grants provided by this section shall be subordinate to the pledge made to secure the state school bonds authorized under this chapter and the sinking fund created for their retirement. The grants shall be computed annually as soon as practicable after the end of the school year, and shall be based on the average daily attendance for such school year in all of the public schools operated by each school district as determined by the State Department of Education.
SECTION 9. This act shall take effect and be in force from and after its passage.