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HB 0760 - Elementary and secondary education; capital outlay funds replace exceptional growth program

Tracking Level: Hot
Sponsor: Coleman,Brooks 97th
Last Action: 4/16/2012 - House Date Signed by Governor
State Code Titles: 20
House Committee: Ed
Senate Committee: APPROP
Assigned To:
Finance - Capital OutlayNext Bill

Staff Analysis of the Legislation

            This bill would amend Part 10 of Article 6 of Chapter 2 of Title 20 of the O.C.G.A. to replace the exceptional growth program with an expansion of the maximum entitlement level for regular capital outlay earnings; to increase requirements for advance funding; to eliminate a non-binding referendum to close a school, to revise language on several items, to delete obsolete provisions; to prove for redirect requests due to fire or natural disaster; and to broaden eligibility for low-wealth capital outlay grants.

            It would change the determination of the property tax wealth factor and the sales tax wealth factor to the use of unweighted FTE’s.

            It would remove the exception for projects under supervision of the Georgia State Financing and Investment Commission regarding review and approval of all architectural and engineering drawings, and it would eliminate prototypical designs approved by the GSFIC.  By eliminating the GSFIC’s participation, it would remove the 2% reduction in required local participation of a GSFIC project, thereby requiring the no more than 20% nor less than 8% local participation in all projects.

            It would increase the maximum annual authorization level (depending on legislative action on the annual budget) from $200 million to $300 million.

            It would eliminate annual debt service payments as a factor in the calculation of total state facilities needs, as well as local system needs

It would remove local systems earning credit toward entitlement for state eligible projects based on contributions in excess of required local participation.  It does, however, grandfather in any entitlements that a system would have earned as of June 30, 2012.

It would increase “no more than 3” to” no more than 5” the number of years required to offset advance funding for consolidation projects across system lines and removes the automatic repeal of the subsection on advance funding for consolidation projects set for June 30, 2015.

It would remove all reference to exceptional growth provisions and the requirement for a non-binding referendum if a local board of education decides to close a school, but it would retain requirements for public hearings.

It would remove the provision that would allow any person to circulate and file a petition regarding school closure.

It would remove the provision that would prohibit a local board from receiving any funds for capital outlay for four school years if a bond election for school construction should fail.

It would remove the antiquated requirement regarding consolidation or reorganization plans submitted to the DOE by July 1, 1992.

It would allow school systems that have damage to buildings from fire or natural disaster, but have insufficient funds, to submit a request to the DOE with SBOE approval to redirect proceeds from a project not yet begun or one not yet fully reimbursed.  The GSFIC and OPB would have final say over the request.  The system could then apply for an equivalent amount of funds in the following year to replace the advance funds needed to cover the emergency.

It would remove consideration of per-capita income in regards to low-wealth systems’ ability to accrue funds necessary for capital expenditures.

It would require systems that receive a 1% sales tax for M&O to combine that revenue with property tax revenue to calculate an “equivalent millage rate” that would generate that amount of funds before the system could be considered a low-wealth system.  For low-wealth systems, for each mill over 12 levied by the LBOE (or the equivalent mills), the state board would authorize an additional 1% of the state eligible cost of the local systems’ first priority project in its five-year facilities plan, up to a maximum of 8 mills.

Eligibility for low-wealth capital outlay grants would be changed to consider those ranked in the bottom 25% of LEA’s for sales tax revenue, rather than 75% of the state-wide average sales tax revenue per FTE.  The property value per FTE would also have to be in the bottom 25% of LEA’s. 

Systems that meet the above requirements would be able to submit a request to the DOE for consideration for a low-wealth grant, provided a commitment to apply the revenue from the 1% that they do receive for the next five years (or its equivalent in dollars).  Criteria for the DOE’s consideration would include the system’s ability to manage the project on its own and the system’s needs.  It would require low-wealth systems to levy at least 12 mills (or “equivalent millage”) for M&O of the system.  The low-wealth system would have to use prototypical specifications as defined by the SBOE for its project.  No low-wealth system would be required to have a local contribution greater than the revenue generated by the 1% sales tax during the five year requirement.  If the local system would still run short of the state eligible cost of the project, the state would provide the difference, subject to repayment through future entitlements.

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