K-12 and local government structural deficit repair act.

20LSO-0548
2020
STATE OF WYOMING
20LSO-0548
Numbered
2.0

HOUSE BILL NO. HB0186

K-12 and local government structural deficit repair act.

Sponsored by: House Appropriations Committee

A BILL

for

AN ACT relating to state revenues; providing for the transfer of funds; amending provisions governing the distribution of investment earnings; amending provisions governing the distribution of severance taxes; conditionally increasing the sales and use tax rate; providing for distribution of the additional tax revenue; and providing for an effective date.

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

Section 1
.

W.S. 9
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4
‑
219 by creating a new subsection (d), 9
‑
4
‑
719(q)(i), 39
‑
14
‑
801(b)(intro) and by creating new paragraphs (iv) through (vi),
39
‑
15
‑
104 by creating a new
subsection (h), 39
‑
15
‑
111(b)(i) and by creating new subsections (p) through (s), 39
‑
16
‑
104 by creating a new subsection (g) and 39
‑
16
‑
111(b)(i) are amended to read
:

9
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4
‑
219.

Legislative stabilization reserve account created; purposes; legislative deficit control account.

(d)

As soon as possible after the end of each of the fiscal years beginning on and after July 1, 2020, after all other appropriations or transfers from the legislative stabilization reserve account to be made on or prior to June 30 of the applicable fiscal year have been made including any transfers required pursuant to subsection (b) of this section, any unexpended, unobligated amounts in the legislative stabilization reserve account in excess of one billion seven hundred fifty million dollars ($1,750,000,000.00) shall be transferred to the permanent Wyoming mineral trust fund.

9
‑
4
‑
719.

Investment earnings spending policy permanent funds.

(q)

The earnings from the permanent Wyoming mineral trust fund under W.S. 9
‑
4
‑
204(u)(iii) during each fiscal year beginning July 1, 2016, which are less than the spending policy established in subsection (d) of this section are appropriated from the general fund subject to subsection (s) of this section and the following:

(i)

Except as provided in paragraph (iii) of this subsection, any earnings in excess of two and one
‑
half percent (2.5%) of the previous five (5) year average market value of the trust fund, calculated from the first day of the fiscal year and less than or equal to the spending policy amount specified in subsection (d) of this section shall be credited
as follows:

(A)

Twenty
‑
seven and one
‑
half percent (27.5%)
to the legislative stabilization reserve account created by W.S. 9
‑
4
‑
219
;

(B)

Twenty
‑
two and one
‑
half percent (22.5%) to the school foundation program account created by W.S. 21
‑
13
‑
306;
and

(C)

Fifty percent (50%) to
the strategic investments and projects account created by W.S. 9
‑
4
‑
220
.
in equal amounts;

39
‑
14
‑
801.

Severance tax distributions; distribution account created; formula.

(b)

Before making distributions from the severance tax distribution account under subsections (c) through (e) of this section, an amount equal to two
‑
thirds (2/3) of the amount of tax collected under W.S. 39
‑
14
‑
104(a)(i) and (b)(i) and 39
‑
14
‑
204(a)(i) for the same period shall be deposited
into the permanent Wyoming mineral trust fund, except for the period from March 15, 2016 through June 30, 2020 these funds shall be deposited
as follows:

(iv)

One
‑
third (1/3) of the amount into the legislative stabilization reserve account;

(v)

One
‑
third (1/3) of the amount into the school foundation program account; and

(vi)

One
‑
third (1/3) of the amount into the budget reserve account.

39
‑
15
‑
104.

Taxation rate.

(h)

Upon the effective date of this subsection, in addition to the sales tax under subsections (a) and (b) of this section there is imposed an additional sales tax of one percent (1%) which shall be administered as if the sales tax rate under subsections (a) and (b) of this section was increased from four percent (4%) to five percent (5%). This subsection is effective the first day of the month immediately following the date that the state auditor and the state treasurer first certify to the governor and the department of revenue, and the governor certifies the same to the secretary of state, that the unobligated, unencumbered balance in the legislative stabilization reserve account is less than five hundred million dollars ($500,000,000.00).

39
‑
15
‑
111.

Distribution.

(b)

Revenues earned under W.S. 39
‑
15
‑
104 during each fiscal year shall be recognized as revenue during that fiscal year for accounting purposes. For all revenue collected by the department under W.S. 39
‑
15
‑
104 the department shall:

(i)

Credit sixty
‑
nine percent (69%) to the state general fund for deposit by the state treasurer except as provided by subsections (c)
,

and
(d)
and (p)
of this section and less any credit allowed pursuant to W.S. 39
‑
15
‑
107(b)(xi);

(p)

The department shall separately account for the portion of sales and use tax revenue attributable to the sales tax imposed under W.S. 39
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15
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104(h) and 39
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16
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104(g). Thirty
‑
one percent (31%) of total revenue collected by the department pursuant to W.S. 39
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15
‑
104(h) and 39
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16
‑
104(g) in each fiscal year shall be transferred to a separate account and distributed by the office of state lands and investments as provided in this subsection. Sixty
‑
nine percent (69%) of total revenue collected in the fiscal year
pursuant to W.S. 39
‑
15
‑
104(h) and 39
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16
‑
104(g) shall be credited to the school foundation program account. Beginning July 1 of the year following the effective date of W.S. 39
‑
15
‑
104(h) from revenue deposited in a separate account as provided under this subsection during the preceding fiscal year, the office of state lands and investments shall:

(i)

Provide two
‑
thirds (2/3) of eighty
‑
nine percent (89%) of the total amount available for direct distribution to cities and towns as provided in subsection (q) of this section, provided that five percent (5%) of the amount available under this paragraph shall only be distributed for direct distributions to cities and towns as provided in paragraph (q)(ii) of this section;

(ii)

Provide one
‑
third (1/3) of eighty
‑
nine percent (89%) of the total amount available for direct distribution to counties as provided in subsection (r) of this section;

(iii)

Provide five and one
‑
half percent (5.5%) of the total amount available for direct distribution to cities and towns as provided in subsection (q) of this section, provided that five percent (5%) of the amount available under this paragraph shall only be distributed for direct distributions to cities and towns as provided in paragraph (q)(ii) of this section;

(iv)

Provide five and one
‑
half percent (5.5%) of the total amount available for direct distribution to counties as provided in subsection (r) of this section.

[CITY AND TOWN DIRECT DISTRIBUTION ALLOCATIONS]

(q)

Funds distributed for cities and towns under paragraphs (p)(i) and (iii) of this section shall be distributed to cities and towns as provided in this subsection. Distributions in each fiscal year shall be made in equal amounts on August 15 and January 15 of each fiscal year as calculated prior to the August 15 distribution, subject to the following:

(i)

From these distributions to the extent available each municipality with a population of thirty
‑
five (35) or less shall first receive five thousand dollars ($5,000.00) and each municipality with a population over thirty
‑
five (35) shall first receive ten thousand dollars ($10,000.00). From the remainder, each municipality shall receive amounts in accordance with the municipal supplemental funding formula provided in this paragraph. The municipal supplemental funding formula shall be calculated by the office of state lands and investments as follows:

(A)

For each fiscal year calculate the per capita sales and use tax revenues available to each municipality using the sales and use tax distributions to each county attributable to the fiscal year immediately preceding the most recently completed fiscal year, including distributions to each municipality within that county, under W.S. 39
‑
15
‑
111(b) and 39
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16
‑
111(b), but excluding the distribution exclusively to counties under W.S. 39
‑
15
‑
111(b)(iii) made from an amount equivalent to one percent (1%) of the tax collected under W.S. 39
‑
15
‑
104,
and excluding the distribution exclusively to counties under W.S. 39
‑
16
‑
111(b)(iii) made from an amount equivalent to one percent (1%) of the tax collected under W.S. 39
‑
16
‑
104;

(B)

Calculate the inverse by dividing one (1) by the per capita sales and use tax determined under subparagraph (A) of this paragraph for each municipality;

(C)

Calculate the normalized per capita sales and use tax number for each municipality by dividing the number determined under subparagraph (B) of this paragraph for the municipality by the total of all inverse per capita sales and use tax numbers calculated under subparagraph (B) of this paragraph;

(D)

Multiply the normalized per capita sales and use tax number for each municipality by seventy
‑
five percent (75%);

(E)

For each fiscal year calculate the per capita assessed value for the prior tax year corresponding
to the most recently completed calendar year for each municipality by dividing the total assessed valuation within the municipality by the population of the municipality;

(F)

Calculate the inverse by dividing one (1) by the per capita assessed value determined under subparagraph (E) of this paragraph for each municipality;

(G)

Calculate the normalized per capita assessed value number for each municipality by dividing the number determined under subparagraph (F) of this paragraph for the municipality by the total of all inverse per capita assessed value numbers calculated under subparagraph (F) of this paragraph;

(H)

Multiply the normalized per capita assessed value number for each municipality by twenty
‑
five percent (25%);

(J)

Multiply the sum of subparagraphs (D) and (H) of this paragraph by the population of the municipality;

(K)

Calculate the normalized index for each municipality by dividing the number determined under subparagraph (J) of this paragraph for the municipality by the sum of all numbers calculated under subparagraph (J) of this paragraph;

(M)

Determine the amount to distribute to each municipality by multiplying the normalized index number determined under subparagraph (K) of this paragraph by the amount remaining available for distribution under this paragraph.

(ii)

From the amounts available as provided in paragraphs (p)(i) and (iii) of this section, each city or town shall receive amounts in accordance with a city and town revenue challenged formula as provided in this paragraph. The revenue challenged formula shall be
calculated by the office of state lands and investments as follows:

(A)

For each fiscal year, calculate the lowest quartile amount received by cities and towns on a per capita basis using amounts received under this subsection plus amounts distributed to each city and town using the sales and use tax distributions to each county attributable to the fiscal year immediately preceding the most recently completed fiscal year, including distributions to each municipality within that county, under W.S. 39
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15
‑
111(b) and 39
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16
‑
111(b), but excluding the distribution exclusively to counties under W.S. 39
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15
‑
111(b)(iii) made from an amount equivalent to one percent (1%) of the tax collected under W.S. 39
‑
15
‑
104 and excluding the distribution exclusively to counties under W.S. 39
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16
‑
111(b)(iii) made from an amount equivalent to one percent (1%) of the tax collected under W.S. 39
‑
16
‑
104;

(B)

Determine each city or town that received a per capita amount that is less than the lowest
quartile amount determined under subparagraph (A) of this paragraph;

(C)

For each city or town that received a per capita amount that is less than the lowest quartile amount as provided in subparagraph (B) of this paragraph, determine the amount that would be necessary to increase the per capita amount distributed to that city or town to the lowest quartile amount determined under subparagraph (A) of this paragraph;

(D)

Determine the amount to distribute to each city or town that received an amount that is less than the lowest quartile amount determined under subparagraph (A) of this paragraph by distributing the amount available under this paragraph on a pro rata basis, up to the lowest quartile amount, based on the amounts determined under subparagraph (C) of this paragraph.

[COUNTY DIRECT DISTRIBUTION ALLOCATIONS]

(r)

Funds distributed for counties in paragraphs (p)(ii) and (iv) of this section shall be distributed to counties as provided in this subsection. Distributions in each fiscal year shall be made in equal amounts on August 15 and January 15 of each fiscal year as calculated prior to the August 15 distribution. From these distributions each county shall receive the following:

(i)

From these distributions to the extent available, each county with an assessed value for the prior tax year corresponding to the most recently completed calendar year of less than three hundred thousand dollars ($300,000.00) per mill shall first receive an amount equal to three (3) times the difference between three hundred thousand dollars ($300,000.00) and the actual value of one (1) mill within the county. From the remainder, each county shall receive amounts in accordance with a county supplemental funding formula as provided in this paragraph. The county supplemental funding formula shall be calculated by the office of state lands and investments as follows:

(A)

For each fiscal year calculate the per capita sales and use tax revenues available to each county using the sales and use tax distributions to each county attributable to the fiscal year immediately preceding the most recently completed fiscal year, excluding distributions to each municipality within that county, under W.S. 39
‑
15
‑
111(b) and 39
‑
16
‑
111(b);

(B)

Calculate the inverse by dividing one (1) by the per capita sales and use tax determined under subparagraph (A) of this paragraph for each county;

(C)

Calculate the normalized per capita sales and use tax number for each county by dividing the number determined under subparagraph (B) of this paragraph for the county by the total of all inverse per capita sales and use tax numbers calculated under subparagraph (B) of this paragraph;

(D)

Multiply the normalized per capita sales and use tax number determined under subparagraph (C)
of this paragraph for each county by twenty
‑
four percent (24%);

(E)

For each fiscal year calculate the per capita assessed value for each county by dividing the total assessed valuation within the county for the prior tax year corresponding to the most recently completed calendar year by the population of the county;

(F)

Calculate the inverse by dividing one (1) by the per capita assessed value determined under subparagraph (E) of this paragraph for each county;

(G)

Calculate the normalized per capita assessed value number for each county by dividing the number determined under subparagraph (F) of this paragraph for the county by the total of all inverse per capita assessed value numbers calculated under subparagraph (F) of this paragraph;

(H)

Multiply the normalized per capita assessed value number determined under subparagraph (G) of
this paragraph for each county by seventy
‑
six percent (76%);

(J)

Calculate a cost of government index for each county, which shall be determined by multiplying six hundred twenty
‑
eight (628) by the population of the county and then adding nine million nine hundred thousand (9,900,000) to the result;

(K)

Calculate the normalized cost of government index number for each county by dividing the number determined under subparagraph (J) of this paragraph for the county by the total of all cost of government index numbers calculated under subparagraph (J) of this paragraph;

(M)

Multiply the sum of subparagraphs (D) and (H) of this paragraph by the normalized cost of government index number determined in subparagraph (K) of this paragraph for each county;

(N)

Calculate the normalized index for each county by dividing the number determined under subparagraph (M) of this paragraph for the county by the total of all numbers calculated under subparagraph (M) of this paragraph;

(O)

Determine the amount to distribute to each county by multiplying the normalized index number determined under subparagraph (N) of this paragraph by the amount remaining available for distribution under this paragraph.

(s)

For purposes of subsections (p) through (r) of this section, population is to be determined by resort to the most recent decennial federal census as reported by the economic analysis division within the department of administration and information and as defined in W.S. 8
‑
1
‑
102(a)(xv).

39
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16
‑
104.

Taxation rate.

(g)

Upon the effective date of this subsection, in addition to the use tax under subsections (a) and (b) of this section there is imposed an additional use tax of one percent (1%) which shall be administered as if the use tax rate under subsections (a) and (b) of this section was increased from four percent (4%) to five percent (5%). This subsection is effective the first day of the month immediately following the date that the state auditor and the state treasurer first certify to the governor and the department of revenue, and the governor certifies the same to the secretary of state, that the unobligated, unencumbered balance in the legislative stabilization reserve account is less than five hundred million dollars ($500,000,000.00).

39
‑
16
‑
111.

Distribution.

(b)

Revenues earned under this article during each fiscal year shall be recognized as revenue during that fiscal year for accounting purposes. Revenue collected by the department from the taxes imposed by this article shall
be transferred to the state treasurer who shall, as specified by the department:

(i)

Credit sixty
‑
nine percent (69%) for deposit by the state treasurer to the general fund except as provided by subsections (d) and (e) of this section
and W.S. 39
‑
15
‑
111(p)
and less any credit allowed pursuant to W.S. 39
‑
16
‑
107(b)(viii);

Section 2.

W.S. 39
‑
14
‑
801(b)(i) through (iii) is repealed.

Section 3.

This act is effective July 1, 2020
.

(END)

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HB0186