FISCAL NOTE Requested by Legislative Council 03/26/2019

19.0957.03000 FISCAL NOTE Requested by Legislative Council 03/26/2019

Amendment to: HB 1365

1 A. State fiscal effect: Identify the state fiscal effect and the fiscal effect on agency appropriations compared to funding levels and appropriations anticipated under current law. 2017-2019 Biennium 2019-2021 Biennium 2021-2023 Biennium

General Fund Other Funds General Fund Other Funds General Fund Other Funds

Revenues Expenditures $18,500,000 Appropriations

1 B. County, city, school district and township fiscal effect: Identify the fiscal effect on the appropriate political subdivision. 2017-2019 Biennium 2019-2021 Biennium 2021-2023 Biennium

Counties Cities School Districts $18,500,000 Townships

2 A. Bill and fiscal impact summary: Provide a brief summary of the measure, including description of the provisions having fiscal impact (limited to 300 characters).

HB 1365 affects how much money is deducted from the foundation aid formula for revenue in lieu of property taxes received by the school districts.

B. Fiscal impact sections: Identify and provide a brief description of the sections of the measure which have fiscal impact. Include any assumptions and comments relevant to the analysis.

HB 1365 changes the amount deducted from the foundation aid formula to 75% of all revenue in lieu of property taxes. The 75% is deducted from the percentage of mills that are not attributed to the sinking and interest levy.

3. State fiscal effect detail: For information shown under state fiscal effect in 1A, please:

A. Revenues: Explain the revenue amounts. Provide detail, when appropriate, for each revenue type and fund affected and any amounts included in the executive budget.

B. Expenditures: Explain the expenditure amounts. Provide detail, when appropriate, for each agency, line item, and fund affected and the number of FTE positions affected.

HB 1365 increases the expenditures in the integrated formula payments line by $18.5 million. School districts will be able to keep a higher percentage of the revenue they receive in lieu of property taxes. The amount will vary as school district and voters pass bond elections and increase the sinking and interest levy as well as when bonded indebtedness is paid off. C. Appropriations: Explain the appropriation amounts. Provide detail, when appropriate, for each agency and fund affected. Explain the relationship between the amounts shown for expenditures and appropriations. Indicate whether the appropriation or a part of the appropriation is included in the executive budget or relates to a continuing appropriation.

Name: Adam Tescher Agency: Department of Public Instruction Telephone: 701-328-3291 Date Prepared: 03/27/2019 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 01‐013 Hettinger 13 303,956 240,845 227,967 12,878 0% ‐ 93.78 02‐002 Valley City 2 148,582 140,216 111,436 28,780 0% ‐ 96.85 02‐007 Barnes County North 7 281,249 221,185 210,937 10,248 0% ‐ 73.22 02‐046 Litchville‐Marion 46 27,314 23,830 20,485 3,344 0% ‐ 63.55 03‐005 Minnewaukan 5 46,940 37,584 35,205 2,379 0% ‐ 59.16 03‐006 Leeds 6 24,278 22,610 16,035 6,575 12% 10.22 85.59 03‐009 Maddock 9 28,706 26,466 21,529 4,937 0% ‐ 91.64 03‐016 Oberon 16 7,744 7,454 5,808 1,646 0% ‐ 64.17 03‐029 Warwick 29 15,287 13,984 11,465 2,519 0% ‐ 69.87 03‐030 Ft Totten 30 14,517 13,736 10,887 2,849 0% ‐ 175.26 04‐001 Billings Co 1 1,890,100 1,422,880 1,417,575 5,305 0% ‐ 56.32 05‐001 Bottineau 1 788,044 591,057 591,033 24 0% ‐ 71.53 05‐017 Westhope 17 147,311 110,483 72,969 37,515 34% 38.04 112.03 05‐054 Newburg‐United 54 69,534 52,186 52,150 36 0% ‐ 61.79 06‐001 Bowman Co 1 1,764,585 1,331,244 1,323,439 7,805 0% ‐ 84.88 06‐033 Scranton 33 331,091 251,273 248,318 2,955 0% ‐ 88.22 07‐014 Bowbells 14 382,713 289,079 287,035 2,044 0% ‐ 65.20 07‐027 Powers Lake 27 902,733 680,805 548,975 131,830 19% 21.58 114.08 07‐036 Burke Central 36 544,619 412,102 408,464 3,638 0% ‐ 78.29 08‐001 Bismarck 1 2,731,062 2,430,993 1,622,751 808,242 21% 21.59 103.92 08‐025 Naughton 25 2,622 2,287 1,966 321 0% ‐ 67.02 08‐028 Wing 28 51,880 40,151 38,910 1,241 0% ‐ 73.77 08‐033 Menoken 33 15,593 13,194 11,695 1,500 0% ‐ 55.26 08‐035 Sterling 35 24,075 21,863 18,057 3,806 0% ‐ 54.52 08‐039 Apple Creek 39 21,933 20,281 16,450 3,831 0% ‐ 112.48 08‐045 Manning 45 13,988 13,405 10,491 2,914 0% ‐ 148.00 09‐001 Fargo 1 2,563,585 2,406,494 1,922,688 483,806 0% ‐ 154.13 09‐002 Kindred 2 120,649 107,920 61,892 46,028 32% 35.94 113.73 09‐004 Maple Valley 4 73,426 67,866 55,069 12,796 0% ‐ 81.90 09‐006 West Fargo 6 1,382,102 1,160,564 726,894 433,670 30% 38.62 129.27 09‐007 Mapleton 7 23,689 22,430 10,076 12,354 43% 57.21 132.16 09‐017 Central Cass 17 225,587 197,290 127,040 70,250 25% 24.99 100.31 09‐080 Page 80 26,737 23,849 20,053 3,796 0% ‐ 71.85 09‐097 Northern Cass 97 89,218 79,096 62,309 16,787 7% 7.02 102.02 10‐019 Munich 19 11,380 10,837 8,535 2,302 0% ‐ 65.88 10‐023 Langdon Area 23 54,636 52,428 40,977 11,451 0% ‐ 75.80 11‐040 Ellendale 40 55,976 51,756 32,772 18,984 22% 20.97 95.59 11‐041 Oakes 41 61,203 56,997 45,902 11,095 0% ‐ 79.91 12‐001 Divide County 1 1,992,141 1,502,049 1,287,300 214,749 14% 12.73 91.97 13‐016 Killdeer 16 2,601,871 1,958,683 1,951,403 7,280 0% ‐ 53.12 13‐019 Halliday 19 147,338 111,994 110,504 1,490 0% ‐ 63.83 13‐037 Twin Buttes 37 138,366 103,909 103,775 134 0% ‐ 0.00 14‐002 New Rockford‐Sheyenne 2 59,637 54,802 44,727 10,075 0% ‐ 85.73 15‐006 Hazelton‐Moffit‐Braddock 6 28,962 24,369 21,721 2,648 0% ‐ 65.50 15‐010 Bakker 10 5,009 3,961 3,757 204 0% ‐ 41.99 15‐015 Strasburg 15 49,165 38,972 24,529 14,443 33% 31.75 94.84 15‐036 Linton 36 41,515 38,306 31,136 7,170 0% ‐ 54.56 16‐049 Carrington 49 86,854 79,923 41,605 38,318 36% 48.78 135.01 17‐003 Beach 3 609,829 467,088 457,372 9,716 0% ‐ 45.07 17‐006 Lone Tree 6 82,219 63,365 61,665 1,701 0% ‐ 68.05 18‐001 Grand Forks 1 4,677,061 3,664,712 3,507,796 156,916 0% ‐ 97.36 18‐044 Larimore 44 124,105 108,941 90,340 18,601 3% 2.88 97.88 18‐061 Thompson 61 137,485 112,061 96,964 15,098 6% 5.25 88.02 18‐125 Manvel 125 41,649 39,157 31,237 7,920 0% ‐ 102.02 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 18‐127 Emerado 127 40,970 40,097 30,728 9,369 0% ‐ 141.98 18‐128 Midway 128 58,314 54,091 43,736 10,355 0% ‐ 87.69 18‐129 Northwood 129 39,815 36,363 23,057 13,305 23% 21.71 95.28 19‐018 Roosevelt 18 23,859 22,909 17,894 5,015 0% ‐ 80.66 19‐049 Elgin‐New Leipzig 49 47,119 45,483 35,339 10,144 0% ‐ 82.00 20‐007 Midkota 7 39,039 35,968 29,279 6,688 0% ‐ 70.00 20‐018 Griggs County Central 18 93,622 79,452 70,216 9,236 0% ‐ 98.26 21‐001 Mott‐Regent 1 46,477 43,594 24,829 18,765 29% 30.30 105.31 21‐009 New England 9 529,360 405,099 397,020 8,079 0% ‐ 76.42 22‐001 Kidder County 1 125,192 110,607 93,894 16,713 0% ‐ 86.64 23‐003 Edgeley 3 33,930 31,098 20,553 10,545 19% 19.91 103.52 23‐007 Kulm 7 27,805 24,760 15,533 9,227 26% 28.12 110.21 23‐008 LaMoure 8 38,498 34,840 28,873 5,967 0% ‐ 81.49 24‐002 Napoleon 2 27,411 24,914 20,558 4,356 0% ‐ 64.74 24‐056 Gackle‐Streeter 56 34,863 31,432 26,147 5,285 0% ‐ 81.95 25‐001 Velva 1 181,683 145,956 120,650 25,307 11% 10.88 94.96 25‐014 Anamoose 14 29,778 27,270 22,333 4,937 0% ‐ 48.66 25‐057 Drake 57 99,029 77,922 74,272 3,650 0% ‐ 44.27 25‐060 TGU 60 168,024 140,493 120,053 20,440 5% 4.78 100.99 26‐004 Zeeland 4 25,716 21,184 19,287 1,897 0% ‐ 75.94 26‐009 Ashley 9 32,176 30,131 24,132 6,000 0% ‐ 74.40 26‐019 Wishek 19 157,456 127,478 118,092 9,386 0% ‐ 68.25 27‐001 McKenzie Co 1 5,283,908 3,990,461 3,155,037 835,424 20% 11.40 55.92 27‐002 Alexander 2 1,392,724 1,060,277 653,293 406,984 37% 33.40 89.17 27‐014 Yellowstone 14 267,369 201,598 200,527 1,071 0% ‐ 46.83 27‐018 Earl 18 20,259 15,297 15,194 102 0% ‐ 11.67 27‐032 Horse Creek 32 70,506 53,148 52,879 269 0% ‐ 23.99 27‐036 Mandaree 36 522,478 392,382 391,858 524 0% ‐ 4.99 28‐001 Wilton 1 209,170 166,283 156,877 9,406 0% ‐ 80.75 28‐004 Washburn 4 302,172 233,473 226,629 6,844 0% ‐ 61.92 28‐008 Underwood 8 257,458 208,873 193,093 15,780 0% ‐ 84.36 28‐050 Max 50 131,578 103,363 98,684 4,679 0% ‐ 80.39 28‐051 Garrison 51 422,541 329,018 316,906 12,113 0% ‐ 91.34 28‐072 Turtle Lake‐Mercer 72 196,907 153,828 120,197 33,632 19% 13.42 72.11 28‐085 White Shield 85 126,885 96,624 95,164 1,461 0% ‐ 53.35 29‐003 Hazen 3 916,816 698,427 623,138 75,289 9% 5.76 61.43 29‐027 Beulah 27 1,231,702 942,435 923,776 18,658 0% ‐ 72.50 30‐001 Mandan 1 1,044,344 900,293 630,379 269,915 20% 20.10 102.98 30‐004 Little Heart 4 6,465 5,806 4,849 957 0% ‐ 46.44 30‐013 Hebron 13 177,260 136,357 132,945 3,412 0% ‐ 82.29 30‐017 Sweet Briar 17 1,453 1,394 1,090 305 0% ‐ 45.22 30‐039 Flasher 39 68,576 57,669 51,432 6,237 0% ‐ 121.83 30‐048 Glen Ullin 48 202,771 158,315 152,078 6,236 0% ‐ 66.50 30‐049 New Salem‐Almont 49 354,305 272,584 265,729 6,855 0% ‐ 66.91 31‐001 New Town 1 4,643,677 3,490,409 3,482,758 7,651 0% ‐ 38.19 31‐002 Stanley 2 1,089,419 836,052 807,562 28,490 1% 0.80 68.79 31‐003 Parshall 3 393,590 301,257 295,192 6,065 0% ‐ 69.15 32‐001 Dakota Prairie 1 105,714 92,441 79,286 13,155 0% ‐ 70.83 32‐066 Lakota 66 43,731 39,041 32,798 6,243 0% ‐ 89.08 33‐001 Center‐Stanton 1 457,097 352,364 342,823 9,541 0% ‐ 66.40 34‐006 Cavalier 6 130,877 110,719 88,144 22,575 10% 10.42 102.14 34‐019 Drayton 19 40,015 34,030 25,001 9,028 17% 21.00 125.80 34‐043 St Thomas 43 21,346 20,403 16,009 4,393 0% ‐ 96.85 34‐100 North Border 100 81,040 74,900 60,780 14,119 0% ‐ 65.76 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 34‐118 Valley‐Edinburg 118 51,323 43,868 38,492 5,376 0% ‐ 79.73 35‐001 Wolford 1 10,608 9,846 7,956 1,890 0% ‐ 95.00 35‐005 Rugby 5 153,107 143,064 87,663 55,401 24% 28.00 118.35 36‐001 Devils Lake 1 282,039 254,212 199,592 54,620 6% 5.30 93.92 36‐002 Edmore 2 87,580 70,982 65,685 5,296 0% ‐ 106.29 36‐044 Starkweather 44 13,890 13,126 10,418 2,708 0% ‐ 84.61 37‐006 Ft Ransom 6 2,976 2,974 2,232 742 0% ‐ 67.76 37‐019 Lisbon 19 39,360 39,360 29,044 10,316 2% 1.54 95.49 37‐024 Enderlin Area 24 70,501 67,479 52,876 14,603 0% ‐ 76.78 38‐001 Mohall‐Lansford‐Sherwood 1 406,341 316,243 284,518 31,725 7% 4.74 71.38 38‐026 Glenburn 26 325,939 265,644 209,532 56,112 14% 15.08 105.56 39‐008 Hankinson 8 133,120 128,510 88,998 39,512 11% 11.33 104.33 39‐018 Fairmount 18 24,476 22,721 18,357 4,364 0% ‐ 92.00 39‐028 Lidgerwood 28 32,996 31,232 22,938 8,294 7% 8.02 109.67 39‐037 Wahpeton 37 277,613 259,013 122,824 136,189 41% 55.58 135.53 39‐042 Wyndmere 42 26,450 24,641 19,838 4,803 0% ‐ 81.52 39‐044 Richland 44 37,204 33,063 16,299 16,764 42% 50.19 120.69 40‐001 Dunseith 1 32,938 29,947 24,703 5,244 0% ‐ 89.85 40‐003 St John 3 198,578 154,849 148,933 5,916 0% ‐ 89.51 40‐004 Mt Pleasant 4 463,983 356,920 347,987 8,933 0% ‐ 97.05 40‐007 Belcourt 7 ‐ ‐ ‐ ‐ 0% ‐ ‐ 40‐029 Rolette 29 35,735 30,952 26,801 4,151 0% ‐ 105.05 41‐002 Milnor 2 25,821 22,683 19,366 3,317 0% ‐ 95.00 41‐003 North Sargent 3 51,583 49,093 38,687 10,406 0% ‐ 72.86 41‐006 Sargent Central 6 57,944 50,620 36,170 14,450 17% 18.30 109.11 42‐016 Goodrich 16 21,234 20,147 15,926 4,221 0% ‐ 59.30 42‐019 McClusky 19 34,713 31,304 26,035 5,269 0% ‐ 72.98 43‐003 Solen 3 30,718 24,153 23,039 1,114 0% ‐ 52.10 43‐004 Ft Yates 4 13,040 9,901 9,780 121 0% ‐ 63.02 43‐008 Selfridge 8 6,210 4,832 4,657 175 0% ‐ 55.30 44‐012 Marmarth 12 83,318 62,805 62,488 317 0% ‐ 73.56 44‐032 Central Elem 32 55,310 41,855 41,483 373 0% ‐ 23.03 45‐001 Dickinson 1 2,808,673 2,144,571 1,532,673 611,898 27% 28.81 105.76 45‐009 South Heart 9 822,598 618,398 317,587 300,811 49% 37.12 76.50 45‐013 Belfield 13 578,187 434,625 433,640 985 0% ‐ 75.31 45‐034 Richardton‐Taylor 34 901,174 678,698 450,587 228,112 33% 46.00 138.00 46‐010 Hope 10 45,418 37,797 34,063 3,734 0% ‐ 57.68 46‐019 Finley‐Sharon 19 33,211 30,102 24,908 5,194 0% ‐ 85.00 47‐001 Jamestown 1 423,112 373,504 317,334 56,170 0% ‐ 99.01 47‐003 Medina 3 44,396 38,272 33,297 4,975 0% ‐ 87.80 47‐010 Pingree‐Buchanan 10 73,183 58,684 54,887 3,796 0% ‐ 91.96 47‐014 Montpelier 14 11,800 9,730 8,850 880 0% ‐ 73.31 47‐019 Kensal 19 35,521 28,112 26,641 1,472 0% ‐ 58.55 48‐010 North Star 10 22,581 21,784 16,936 4,848 0% ‐ 63.53 49‐003 Central Valley 3 90,478 74,090 67,858 6,232 0% ‐ 72.99 49‐007 Hatton Eielson 7 37,737 35,503 28,303 7,200 0% ‐ 83.66 49‐009 Hillsboro 9 115,186 96,752 79,104 17,648 8% 7.00 83.00 49‐014 May‐Port CG 14 86,985 79,095 65,239 13,856 0% ‐ 87.14 50‐003 Grafton 3 139,854 134,209 69,903 64,306 33% 48.00 143.90 50‐005 Fordville‐Lankin 5 15,102 13,575 11,326 2,248 0% ‐ 77.49 50‐008 Park River Area 8 88,991 83,551 42,095 41,456 37% 43.71 118.36 50‐020 Minto 20 28,866 26,198 10,687 15,511 51% 71.02 140.26 51‐001 Minot 1 7,133,543 5,536,295 4,279,644 1,256,651 20% 22.22 111.05 51‐004 Nedrose 4 75,329 71,793 30,120 41,672 47% 69.67 149.23 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 51‐007 United 7 128,079 111,145 96,059 15,085 0% ‐ 94.76 51‐016 Sawyer 16 38,806 35,778 26,457 9,321 9% 9.87 108.53 51‐028 Kenmare 28 173,335 136,611 130,001 6,610 0% ‐ 103.94 51‐041 Surrey 41 67,170 58,613 50,377 8,235 0% ‐ 106.24 51‐070 South Prairie 70 124,261 113,636 55,663 57,973 40% 55.29 137.29 51‐161 Lewis and Clark 161 237,750 188,579 131,011 57,568 27% 33.39 125.87 52‐025 Fessenden‐Bowdon 25 15,940 14,223 11,955 2,267 0% ‐ 74.94 52‐038 Harvey 38 91,567 87,044 68,676 18,368 0% ‐ 72.00 53‐001 Williston 1 5,088,970 3,865,992 3,235,908 630,084 15% 18.94 124.46 53‐002 Nesson 2 691,893 520,967 437,617 83,350 16% 11.45 73.08 53‐006 Eight Mile 6 493,299 372,186 369,974 2,212 0% ‐ 50.97 53‐008 New 8 1,386,092 1,049,608 1,039,569 10,039 0% ‐ 55.36 53‐015 Tioga 15 1,312,692 990,649 788,028 202,622 20% 9.53 47.75 53‐099 Grenora 99 564,181 425,033 278,688 146,345 34% 42.03 123.12 Grand Total 75,318,745 59,373,120 ‐ 9,223,481

Estimated Biennium Cost 18,446,962

** Changes all in lieu of property tax deductions to 75% ** Sinking and Interest Levies are not deducted 19.0957.02000 FISCAL NOTE Requested by Legislative Council 02/19/2019

Amendment to: HB 1365

General Fund Other Funds General Fund Other Funds General Fund Other Funds

Revenues Expenditures $(2,000,000) $(10,000,000) Appropriations

1 B. County, city, school district and township fiscal effect: Identify the fiscal effect on the appropriate political subdivision. 2017-2019 Biennium 2019-2021 Biennium 2021-2023 Biennium

Counties Cities School Districts $(2,000,000) $(17,000,000) Townships

2 A. Bill and fiscal impact summary: Provide a brief summary of the measure, including description of the provisions having fiscal impact (limited to 300 characters).

HB 1365 affects how much money is deducted from the foundation aid formula for revenue in lieu of property taxes and property taxes for school districts. B. Fiscal impact sections: Identify and provide a brief description of the sections of the measure which have fiscal impact. Include any assumptions and comments relevant to the analysis.

Subsection 6 of HB 1365 changes the amount deducted from the foundation aid formula to 75% of all revenue in lieu of property taxes. The 75% is deducted from the percentage of mills that are not attributed to the sinking and interest levy. This would increase the expenditures by $9.25 million per year ($18.5 million per biennium) and every year thereafter. These amounts may vary slightly when school districts pass bond elections and change their mill levies.

Subsection 4 of HB 1365 changes the amount deducted for property taxes beginning in the 2019-20 school year. Calculating the the contribution from property tax changes from a 12% increase in dollars capped a 60 mills, to either, what the school district is currently levying in general fund mills capped at 60 mills or a 12% increase in dollars deducted capped at 60 mills. The section would also not allow a school district's contribution from property tax to go down in mills from the 2018-19 school year if their taxable valuation growth is over 12%. DPI is not projecting any school districts to have a growth of more than 12%. Beginning in 2022-23 and each year thereafter, all school districts will be deducted at 60 mills in the integrated formula payment.

Changing the property tax deduction to what school districts are currently levying would decrease the integrated formula expenditures $10.7 million dollars in the 2019-20 payment year. In the current law, the estimated contribution from property tax is $532.3 million ($260.7 & $271.6) for the 2019-21 biennium. HB 1365 increases those projections to $552.8 million ($271.4 & $281.4) for the 2019-21 biennium. This bill does not change a school districts levying authority.

The deduction for the contribution from property taxes for the 2021-23 biennium increase from $571.5 million ($280.9 & $290.6) in current law to $600 million ($291.2 + 308.8)

In the 2022-23 school year, the formula will deduct 60 mills. DPI projects that several school districts will not be able to levy 60 mills due to the 12% cap. This accounts for the difference of $7 million for the effect on school districts.

3. State fiscal effect detail: For information shown under state fiscal effect in 1A, please:

A. Revenues: Explain the revenue amounts. Provide detail, when appropriate, for each revenue type and fund affected and any amounts included in the executive budget.

B. Expenditures: Explain the expenditure amounts. Provide detail, when appropriate, for each agency, line item, and fund affected and the number of FTE positions affected.

Name: Adam Tescher Agency: Department of Public Instruction Telephone: 701-328-3291 Date Prepared: 02/20/2019 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 18‐127 Emerado 127 40,970 40,097 30,728 9,369 0% ‐ 141.98 18‐128 Midway 128 58,314 54,091 43,736 10,355 0% ‐ 87.69 18‐129 Northwood 129 39,815 36,363 23,057 13,305 23% 21.71 95.28 19‐018 Roosevelt 18 23,859 22,909 17,894 5,015 0% ‐ 80.66 19‐049 Elgin‐New Leipzig 49 47,119 45,483 35,339 10,144 0% ‐ 82.00 20‐007 Midkota 7 39,039 35,968 29,279 6,688 0% ‐ 70.00 20‐018 Griggs County Central 18 93,622 79,452 70,216 9,236 0% ‐ 98.26 21‐001 Mott‐Regent 1 46,477 43,594 24,829 18,765 29% 30.30 105.31 21‐009 New England 9 529,360 405,099 397,020 8,079 0% ‐ 76.42 22‐001 Kidder County 1 125,192 110,607 93,894 16,713 0% ‐ 86.64 23‐003 Edgeley 3 33,930 31,098 20,553 10,545 19% 19.91 103.52 23‐007 Kulm 7 27,805 24,760 15,533 9,227 26% 28.12 110.21 23‐008 LaMoure 8 38,498 34,840 28,873 5,967 0% ‐ 81.49 24‐002 Napoleon 2 27,411 24,914 20,558 4,356 0% ‐ 64.74 24‐056 Gackle‐Streeter 56 34,863 31,432 26,147 5,285 0% ‐ 81.95 25‐001 Velva 1 181,683 145,956 120,650 25,307 11% 10.88 94.96 25‐014 Anamoose 14 29,778 27,270 22,333 4,937 0% ‐ 48.66 25‐057 Drake 57 99,029 77,922 74,272 3,650 0% ‐ 44.27 25‐060 TGU 60 168,024 140,493 120,053 20,440 5% 4.78 100.99 26‐004 Zeeland 4 25,716 21,184 19,287 1,897 0% ‐ 75.94 26‐009 Ashley 9 32,176 30,131 24,132 6,000 0% ‐ 74.40 26‐019 Wishek 19 157,456 127,478 118,092 9,386 0% ‐ 68.25 27‐001 McKenzie Co 1 5,283,908 3,990,461 3,155,037 835,424 20% 11.40 55.92 27‐002 Alexander 2 1,392,724 1,060,277 653,293 406,984 37% 33.40 89.17 27‐014 Yellowstone 14 267,369 201,598 200,527 1,071 0% ‐ 46.83 27‐018 Earl 18 20,259 15,297 15,194 102 0% ‐ 11.67 27‐032 Horse Creek 32 70,506 53,148 52,879 269 0% ‐ 23.99 27‐036 Mandaree 36 522,478 392,382 391,858 524 0% ‐ 4.99 28‐001 Wilton 1 209,170 166,283 156,877 9,406 0% ‐ 80.75 28‐004 Washburn 4 302,172 233,473 226,629 6,844 0% ‐ 61.92 28‐008 Underwood 8 257,458 208,873 193,093 15,780 0% ‐ 84.36 28‐050 Max 50 131,578 103,363 98,684 4,679 0% ‐ 80.39 28‐051 Garrison 51 422,541 329,018 316,906 12,113 0% ‐ 91.34 28‐072 Turtle Lake‐Mercer 72 196,907 153,828 120,197 33,632 19% 13.42 72.11 28‐085 White Shield 85 126,885 96,624 95,164 1,461 0% ‐ 53.35 29‐003 Hazen 3 916,816 698,427 623,138 75,289 9% 5.76 61.43 29‐027 Beulah 27 1,231,702 942,435 923,776 18,658 0% ‐ 72.50 30‐001 Mandan 1 1,044,344 900,293 630,379 269,915 20% 20.10 102.98 30‐004 Little Heart 4 6,465 5,806 4,849 957 0% ‐ 46.44 30‐013 Hebron 13 177,260 136,357 132,945 3,412 0% ‐ 82.29 30‐017 Sweet Briar 17 1,453 1,394 1,090 305 0% ‐ 45.22 30‐039 Flasher 39 68,576 57,669 51,432 6,237 0% ‐ 121.83 30‐048 Glen Ullin 48 202,771 158,315 152,078 6,236 0% ‐ 66.50 30‐049 New Salem‐Almont 49 354,305 272,584 265,729 6,855 0% ‐ 66.91 31‐001 New Town 1 4,643,677 3,490,409 3,482,758 7,651 0% ‐ 38.19 31‐002 Stanley 2 1,089,419 836,052 807,562 28,490 1% 0.80 68.79 31‐003 Parshall 3 393,590 301,257 295,192 6,065 0% ‐ 69.15 32‐001 Dakota Prairie 1 105,714 92,441 79,286 13,155 0% ‐ 70.83 32‐066 Lakota 66 43,731 39,041 32,798 6,243 0% ‐ 89.08 33‐001 Center‐Stanton 1 457,097 352,364 342,823 9,541 0% ‐ 66.40 34‐006 Cavalier 6 130,877 110,719 88,144 22,575 10% 10.42 102.14 34‐019 Drayton 19 40,015 34,030 25,001 9,028 17% 21.00 125.80 34‐043 St Thomas 43 21,346 20,403 16,009 4,393 0% ‐ 96.85 34‐100 North Border 100 81,040 74,900 60,780 14,119 0% ‐ 65.76 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 34‐118 Valley‐Edinburg 118 51,323 43,868 38,492 5,376 0% ‐ 79.73 35‐001 Wolford 1 10,608 9,846 7,956 1,890 0% ‐ 95.00 35‐005 Rugby 5 153,107 143,064 87,663 55,401 24% 28.00 118.35 36‐001 Devils Lake 1 282,039 254,212 199,592 54,620 6% 5.30 93.92 36‐002 Edmore 2 87,580 70,982 65,685 5,296 0% ‐ 106.29 36‐044 Starkweather 44 13,890 13,126 10,418 2,708 0% ‐ 84.61 37‐006 Ft Ransom 6 2,976 2,974 2,232 742 0% ‐ 67.76 37‐019 Lisbon 19 39,360 39,360 29,044 10,316 2% 1.54 95.49 37‐024 Enderlin Area 24 70,501 67,479 52,876 14,603 0% ‐ 76.78 38‐001 Mohall‐Lansford‐Sherwood 1 406,341 316,243 284,518 31,725 7% 4.74 71.38 38‐026 Glenburn 26 325,939 265,644 209,532 56,112 14% 15.08 105.56 39‐008 Hankinson 8 133,120 128,510 88,998 39,512 11% 11.33 104.33 39‐018 Fairmount 18 24,476 22,721 18,357 4,364 0% ‐ 92.00 39‐028 Lidgerwood 28 32,996 31,232 22,938 8,294 7% 8.02 109.67 39‐037 Wahpeton 37 277,613 259,013 122,824 136,189 41% 55.58 135.53 39‐042 Wyndmere 42 26,450 24,641 19,838 4,803 0% ‐ 81.52 39‐044 Richland 44 37,204 33,063 16,299 16,764 42% 50.19 120.69 40‐001 Dunseith 1 32,938 29,947 24,703 5,244 0% ‐ 89.85 40‐003 St John 3 198,578 154,849 148,933 5,916 0% ‐ 89.51 40‐004 Mt Pleasant 4 463,983 356,920 347,987 8,933 0% ‐ 97.05 40‐007 Belcourt 7 ‐ ‐ ‐ ‐ 0% ‐ ‐ 40‐029 Rolette 29 35,735 30,952 26,801 4,151 0% ‐ 105.05 41‐002 Milnor 2 25,821 22,683 19,366 3,317 0% ‐ 95.00 41‐003 North Sargent 3 51,583 49,093 38,687 10,406 0% ‐ 72.86 41‐006 Sargent Central 6 57,944 50,620 36,170 14,450 17% 18.30 109.11 42‐016 Goodrich 16 21,234 20,147 15,926 4,221 0% ‐ 59.30 42‐019 McClusky 19 34,713 31,304 26,035 5,269 0% ‐ 72.98 43‐003 Solen 3 30,718 24,153 23,039 1,114 0% ‐ 52.10 43‐004 Ft Yates 4 13,040 9,901 9,780 121 0% ‐ 63.02 43‐008 Selfridge 8 6,210 4,832 4,657 175 0% ‐ 55.30 44‐012 Marmarth 12 83,318 62,805 62,488 317 0% ‐ 73.56 44‐032 Central Elem 32 55,310 41,855 41,483 373 0% ‐ 23.03 45‐001 Dickinson 1 2,808,673 2,144,571 1,532,673 611,898 27% 28.81 105.76 45‐009 South Heart 9 822,598 618,398 317,587 300,811 49% 37.12 76.50 45‐013 Belfield 13 578,187 434,625 433,640 985 0% ‐ 75.31 45‐034 Richardton‐Taylor 34 901,174 678,698 450,587 228,112 33% 46.00 138.00 46‐010 Hope 10 45,418 37,797 34,063 3,734 0% ‐ 57.68 46‐019 Finley‐Sharon 19 33,211 30,102 24,908 5,194 0% ‐ 85.00 47‐001 Jamestown 1 423,112 373,504 317,334 56,170 0% ‐ 99.01 47‐003 Medina 3 44,396 38,272 33,297 4,975 0% ‐ 87.80 47‐010 Pingree‐Buchanan 10 73,183 58,684 54,887 3,796 0% ‐ 91.96 47‐014 Montpelier 14 11,800 9,730 8,850 880 0% ‐ 73.31 47‐019 Kensal 19 35,521 28,112 26,641 1,472 0% ‐ 58.55 48‐010 North Star 10 22,581 21,784 16,936 4,848 0% ‐ 63.53 49‐003 Central Valley 3 90,478 74,090 67,858 6,232 0% ‐ 72.99 49‐007 Hatton Eielson 7 37,737 35,503 28,303 7,200 0% ‐ 83.66 49‐009 Hillsboro 9 115,186 96,752 79,104 17,648 8% 7.00 83.00 49‐014 May‐Port CG 14 86,985 79,095 65,239 13,856 0% ‐ 87.14 50‐003 Grafton 3 139,854 134,209 69,903 64,306 33% 48.00 143.90 50‐005 Fordville‐Lankin 5 15,102 13,575 11,326 2,248 0% ‐ 77.49 50‐008 Park River Area 8 88,991 83,551 42,095 41,456 37% 43.71 118.36 50‐020 Minto 20 28,866 26,198 10,687 15,511 51% 71.02 140.26 51‐001 Minot 1 7,133,543 5,536,295 4,279,644 1,256,651 20% 22.22 111.05 51‐004 Nedrose 4 75,329 71,793 30,120 41,672 47% 69.67 149.23 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 51‐007 United 7 128,079 111,145 96,059 15,085 0% ‐ 94.76 51‐016 Sawyer 16 38,806 35,778 26,457 9,321 9% 9.87 108.53 51‐028 Kenmare 28 173,335 136,611 130,001 6,610 0% ‐ 103.94 51‐041 Surrey 41 67,170 58,613 50,377 8,235 0% ‐ 106.24 51‐070 South Prairie 70 124,261 113,636 55,663 57,973 40% 55.29 137.29 51‐161 Lewis and Clark 161 237,750 188,579 131,011 57,568 27% 33.39 125.87 52‐025 Fessenden‐Bowdon 25 15,940 14,223 11,955 2,267 0% ‐ 74.94 52‐038 Harvey 38 91,567 87,044 68,676 18,368 0% ‐ 72.00 53‐001 Williston 1 5,088,970 3,865,992 3,235,908 630,084 15% 18.94 124.46 53‐002 Nesson 2 691,893 520,967 437,617 83,350 16% 11.45 73.08 53‐006 Eight Mile 6 493,299 372,186 369,974 2,212 0% ‐ 50.97 53‐008 New 8 1,386,092 1,049,608 1,039,569 10,039 0% ‐ 55.36 53‐015 Tioga 15 1,312,692 990,649 788,028 202,622 20% 9.53 47.75 53‐099 Grenora 99 564,181 425,033 278,688 146,345 34% 42.03 123.12 Grand Total 75,318,745 59,373,120 ‐ 9,223,481

Estimated Biennium Cost 18,446,962

** Changes all in lieu of property tax deductions to 75% ** Sinking and Interest Levies are not deducted 19.0957.01000 FISCAL NOTE Requested by Legislative Council 01/10/2019

Bill/Resolution No.: HB 1365

General Fund Other Funds General Fund Other Funds General Fund Other Funds

Revenues Expenditures $18,500,000 Appropriations $18,500,000

1 B. County, city, school district and township fiscal effect: Identify the fiscal effect on the appropriate political subdivision. 2017-2019 Biennium 2019-2021 Biennium 2021-2023 Biennium

Counties Cities School Districts $18,500,000 Townships

2 A. Bill and fiscal impact summary: Provide a brief summary of the measure, including description of the provisions having fiscal impact (limited to 300 characters).

HB 1365 affects how much money is deducted from the foundation aid formula for revenue in lieu of property taxes received by the school districts.

B. Fiscal impact sections: Identify and provide a brief description of the sections of the measure which have fiscal impact. Include any assumptions and comments relevant to the analysis.

3. State fiscal effect detail: For information shown under state fiscal effect in 1A, please:

A. Revenues: Explain the revenue amounts. Provide detail, when appropriate, for each revenue type and fund affected and any amounts included in the executive budget.

B. Expenditures: Explain the expenditure amounts. Provide detail, when appropriate, for each agency, line item, and fund affected and the number of FTE positions affected.

HB 1365 increases the expenditures in then integrated formula payments line by $18.5 million. School districts will be able to keep a higher percentage of the revenue they receive in lieu of property taxes. The amount could vary if a school district and voters pass an bond election and increase the sinking and interest levy.

C. Appropriations: Explain the appropriation amounts. Provide detail, when appropriate, for each agency and fund affected. Explain the relationship between the amounts shown for expenditures and appropriations. Indicate whether the appropriation or a part of the appropriation is included in the executive budget or relates to a continuing appropriation. Name: Adam Tescher Agency: Department of Public Instruction Telephone: 701-328-3291 Date Prepared: 01/15/2019 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 18‐127 Emerado 127 40,970 40,097 30,728 9,369 0% ‐ 141.98 18‐128 Midway 128 58,314 54,091 43,736 10,355 0% ‐ 87.69 18‐129 Northwood 129 39,815 36,363 23,057 13,305 23% 21.71 95.28 19‐018 Roosevelt 18 23,859 22,909 17,894 5,015 0% ‐ 80.66 19‐049 Elgin‐New Leipzig 49 47,119 45,483 35,339 10,144 0% ‐ 82.00 20‐007 Midkota 7 39,039 35,968 29,279 6,688 0% ‐ 70.00 20‐018 Griggs County Central 18 93,622 79,452 70,216 9,236 0% ‐ 98.26 21‐001 Mott‐Regent 1 46,477 43,594 24,829 18,765 29% 30.30 105.31 21‐009 New England 9 529,360 405,099 397,020 8,079 0% ‐ 76.42 22‐001 Kidder County 1 125,192 110,607 93,894 16,713 0% ‐ 86.64 23‐003 Edgeley 3 33,930 31,098 20,553 10,545 19% 19.91 103.52 23‐007 Kulm 7 27,805 24,760 15,533 9,227 26% 28.12 110.21 23‐008 LaMoure 8 38,498 34,840 28,873 5,967 0% ‐ 81.49 24‐002 Napoleon 2 27,411 24,914 20,558 4,356 0% ‐ 64.74 24‐056 Gackle‐Streeter 56 34,863 31,432 26,147 5,285 0% ‐ 81.95 25‐001 Velva 1 181,683 145,956 120,650 25,307 11% 10.88 94.96 25‐014 Anamoose 14 29,778 27,270 22,333 4,937 0% ‐ 48.66 25‐057 Drake 57 99,029 77,922 74,272 3,650 0% ‐ 44.27 25‐060 TGU 60 168,024 140,493 120,053 20,440 5% 4.78 100.99 26‐004 Zeeland 4 25,716 21,184 19,287 1,897 0% ‐ 75.94 26‐009 Ashley 9 32,176 30,131 24,132 6,000 0% ‐ 74.40 26‐019 Wishek 19 157,456 127,478 118,092 9,386 0% ‐ 68.25 27‐001 McKenzie Co 1 5,283,908 3,990,461 3,155,037 835,424 20% 11.40 55.92 27‐002 Alexander 2 1,392,724 1,060,277 653,293 406,984 37% 33.40 89.17 27‐014 Yellowstone 14 267,369 201,598 200,527 1,071 0% ‐ 46.83 27‐018 Earl 18 20,259 15,297 15,194 102 0% ‐ 11.67 27‐032 Horse Creek 32 70,506 53,148 52,879 269 0% ‐ 23.99 27‐036 Mandaree 36 522,478 392,382 391,858 524 0% ‐ 4.99 28‐001 Wilton 1 209,170 166,283 156,877 9,406 0% ‐ 80.75 28‐004 Washburn 4 302,172 233,473 226,629 6,844 0% ‐ 61.92 28‐008 Underwood 8 257,458 208,873 193,093 15,780 0% ‐ 84.36 28‐050 Max 50 131,578 103,363 98,684 4,679 0% ‐ 80.39 28‐051 Garrison 51 422,541 329,018 316,906 12,113 0% ‐ 91.34 28‐072 Turtle Lake‐Mercer 72 196,907 153,828 120,197 33,632 19% 13.42 72.11 28‐085 White Shield 85 126,885 96,624 95,164 1,461 0% ‐ 53.35 29‐003 Hazen 3 916,816 698,427 623,138 75,289 9% 5.76 61.43 29‐027 Beulah 27 1,231,702 942,435 923,776 18,658 0% ‐ 72.50 30‐001 Mandan 1 1,044,344 900,293 630,379 269,915 20% 20.10 102.98 30‐004 Little Heart 4 6,465 5,806 4,849 957 0% ‐ 46.44 30‐013 Hebron 13 177,260 136,357 132,945 3,412 0% ‐ 82.29 30‐017 Sweet Briar 17 1,453 1,394 1,090 305 0% ‐ 45.22 30‐039 Flasher 39 68,576 57,669 51,432 6,237 0% ‐ 121.83 30‐048 Glen Ullin 48 202,771 158,315 152,078 6,236 0% ‐ 66.50 30‐049 New Salem‐Almont 49 354,305 272,584 265,729 6,855 0% ‐ 66.91 31‐001 New Town 1 4,643,677 3,490,409 3,482,758 7,651 0% ‐ 38.19 31‐002 Stanley 2 1,089,419 836,052 807,562 28,490 1% 0.80 68.79 31‐003 Parshall 3 393,590 301,257 295,192 6,065 0% ‐ 69.15 32‐001 Dakota Prairie 1 105,714 92,441 79,286 13,155 0% ‐ 70.83 32‐066 Lakota 66 43,731 39,041 32,798 6,243 0% ‐ 89.08 33‐001 Center‐Stanton 1 457,097 352,364 342,823 9,541 0% ‐ 66.40 34‐006 Cavalier 6 130,877 110,719 88,144 22,575 10% 10.42 102.14 34‐019 Drayton 19 40,015 34,030 25,001 9,028 17% 21.00 125.80 34‐043 St Thomas 43 21,346 20,403 16,009 4,393 0% ‐ 96.85 34‐100 North Border 100 81,040 74,900 60,780 14,119 0% ‐ 65.76 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 34‐118 Valley‐Edinburg 118 51,323 43,868 38,492 5,376 0% ‐ 79.73 35‐001 Wolford 1 10,608 9,846 7,956 1,890 0% ‐ 95.00 35‐005 Rugby 5 153,107 143,064 87,663 55,401 24% 28.00 118.35 36‐001 Devils Lake 1 282,039 254,212 199,592 54,620 6% 5.30 93.92 36‐002 Edmore 2 87,580 70,982 65,685 5,296 0% ‐ 106.29 36‐044 Starkweather 44 13,890 13,126 10,418 2,708 0% ‐ 84.61 37‐006 Ft Ransom 6 2,976 2,974 2,232 742 0% ‐ 67.76 37‐019 Lisbon 19 39,360 39,360 29,044 10,316 2% 1.54 95.49 37‐024 Enderlin Area 24 70,501 67,479 52,876 14,603 0% ‐ 76.78 38‐001 Mohall‐Lansford‐Sherwood 1 406,341 316,243 284,518 31,725 7% 4.74 71.38 38‐026 Glenburn 26 325,939 265,644 209,532 56,112 14% 15.08 105.56 39‐008 Hankinson 8 133,120 128,510 88,998 39,512 11% 11.33 104.33 39‐018 Fairmount 18 24,476 22,721 18,357 4,364 0% ‐ 92.00 39‐028 Lidgerwood 28 32,996 31,232 22,938 8,294 7% 8.02 109.67 39‐037 Wahpeton 37 277,613 259,013 122,824 136,189 41% 55.58 135.53 39‐042 Wyndmere 42 26,450 24,641 19,838 4,803 0% ‐ 81.52 39‐044 Richland 44 37,204 33,063 16,299 16,764 42% 50.19 120.69 40‐001 Dunseith 1 32,938 29,947 24,703 5,244 0% ‐ 89.85 40‐003 St John 3 198,578 154,849 148,933 5,916 0% ‐ 89.51 40‐004 Mt Pleasant 4 463,983 356,920 347,987 8,933 0% ‐ 97.05 40‐007 Belcourt 7 ‐ ‐ ‐ ‐ 0% ‐ ‐ 40‐029 Rolette 29 35,735 30,952 26,801 4,151 0% ‐ 105.05 41‐002 Milnor 2 25,821 22,683 19,366 3,317 0% ‐ 95.00 41‐003 North Sargent 3 51,583 49,093 38,687 10,406 0% ‐ 72.86 41‐006 Sargent Central 6 57,944 50,620 36,170 14,450 17% 18.30 109.11 42‐016 Goodrich 16 21,234 20,147 15,926 4,221 0% ‐ 59.30 42‐019 McClusky 19 34,713 31,304 26,035 5,269 0% ‐ 72.98 43‐003 Solen 3 30,718 24,153 23,039 1,114 0% ‐ 52.10 43‐004 Ft Yates 4 13,040 9,901 9,780 121 0% ‐ 63.02 43‐008 Selfridge 8 6,210 4,832 4,657 175 0% ‐ 55.30 44‐012 Marmarth 12 83,318 62,805 62,488 317 0% ‐ 73.56 44‐032 Central Elem 32 55,310 41,855 41,483 373 0% ‐ 23.03 45‐001 Dickinson 1 2,808,673 2,144,571 1,532,673 611,898 27% 28.81 105.76 45‐009 South Heart 9 822,598 618,398 317,587 300,811 49% 37.12 76.50 45‐013 Belfield 13 578,187 434,625 433,640 985 0% ‐ 75.31 45‐034 Richardton‐Taylor 34 901,174 678,698 450,587 228,112 33% 46.00 138.00 46‐010 Hope 10 45,418 37,797 34,063 3,734 0% ‐ 57.68 46‐019 Finley‐Sharon 19 33,211 30,102 24,908 5,194 0% ‐ 85.00 47‐001 Jamestown 1 423,112 373,504 317,334 56,170 0% ‐ 99.01 47‐003 Medina 3 44,396 38,272 33,297 4,975 0% ‐ 87.80 47‐010 Pingree‐Buchanan 10 73,183 58,684 54,887 3,796 0% ‐ 91.96 47‐014 Montpelier 14 11,800 9,730 8,850 880 0% ‐ 73.31 47‐019 Kensal 19 35,521 28,112 26,641 1,472 0% ‐ 58.55 48‐010 North Star 10 22,581 21,784 16,936 4,848 0% ‐ 63.53 49‐003 Central Valley 3 90,478 74,090 67,858 6,232 0% ‐ 72.99 49‐007 Hatton Eielson 7 37,737 35,503 28,303 7,200 0% ‐ 83.66 49‐009 Hillsboro 9 115,186 96,752 79,104 17,648 8% 7.00 83.00 49‐014 May‐Port CG 14 86,985 79,095 65,239 13,856 0% ‐ 87.14 50‐003 Grafton 3 139,854 134,209 69,903 64,306 33% 48.00 143.90 50‐005 Fordville‐Lankin 5 15,102 13,575 11,326 2,248 0% ‐ 77.49 50‐008 Park River Area 8 88,991 83,551 42,095 41,456 37% 43.71 118.36 50‐020 Minto 20 28,866 26,198 10,687 15,511 51% 71.02 140.26 51‐001 Minot 1 7,133,543 5,536,295 4,279,644 1,256,651 20% 22.22 111.05 51‐004 Nedrose 4 75,329 71,793 30,120 41,672 47% 69.67 149.23 School District Payments In‐lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 51‐007 United 7 128,079 111,145 96,059 15,085 0% ‐ 94.76 51‐016 Sawyer 16 38,806 35,778 26,457 9,321 9% 9.87 108.53 51‐028 Kenmare 28 173,335 136,611 130,001 6,610 0% ‐ 103.94 51‐041 Surrey 41 67,170 58,613 50,377 8,235 0% ‐ 106.24 51‐070 South Prairie 70 124,261 113,636 55,663 57,973 40% 55.29 137.29 51‐161 Lewis and Clark 161 237,750 188,579 131,011 57,568 27% 33.39 125.87 52‐025 Fessenden‐Bowdon 25 15,940 14,223 11,955 2,267 0% ‐ 74.94 52‐038 Harvey 38 91,567 87,044 68,676 18,368 0% ‐ 72.00 53‐001 Williston 1 5,088,970 3,865,992 3,235,908 630,084 15% 18.94 124.46 53‐002 Nesson 2 691,893 520,967 437,617 83,350 16% 11.45 73.08 53‐006 Eight Mile 6 493,299 372,186 369,974 2,212 0% ‐ 50.97 53‐008 New 8 1,386,092 1,049,608 1,039,569 10,039 0% ‐ 55.36 53‐015 Tioga 15 1,312,692 990,649 788,028 202,622 20% 9.53 47.75 53‐099 Grenora 99 564,181 425,033 278,688 146,345 34% 42.03 123.12 Grand Total 75,318,745 59,373,120 ‐ 9,223,481

Estimated Biennium Cost 18,446,962

** Changes all in lieu of property tax deductions to 75% ** Sinking and Interest Levies are not deducted

2019 HOUSE EDUCATION COMMITTEE

HB 1365

2019 HOUSE STANDING COMMITTEE MINUTES

Education Committee Coteau Room, State Capitol

HB 1365 1/22/2019 31172

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Bev Monroe

Explanation or reason for introduction of bill/resolution:

Relating to state foundation aid payments to school districts

Minutes:

Vice Chairman Cynthia Schreiber-Beck: Opened the hearing on HB 1365.

Rep. Owens: HB 1365 is the first of several bills in the first and second half designed to begin the process of making slight and small incremental adjustments to the per-pupil- payment(PPP) formula. The PPP formula was designed to balance equity and adequacy among the rich counties and poor counties. There will be a number of these bills, some of them take from the rich counties and give to the poor counties and it sends us back into an imbalanced situation if we passed it and the other one lowers it. This takes a different step. Some of this bill is merely administrative in the way they have done it. At the bottom of page 7 where it originally listed everything individually at 75%, it now lists all the following at 75%. This is the in lieu of we are working with. In the beginning this was batted back and forth when they were designing the new formula and it was discussed 50%,100%, 75% - it was all over the board and they settled at 75% for some and 100% for others. The trick has always been that it’s an in lieu of property tax. If property tax was collected in these scenarios, a portion would go to the school, a portion to the county, to the park board, city, township, etc. Instead, when we deduct 100% on some of these what it essentially does is that they wouldn’t get 100% anyway. It is not a situation of dollar for dollar when we deduct that from the PPP. The school districts are missing out on some money and we are lowering our 96-46. We are not giving them that, we are causing that to be less at the state level. As property values go up, the 80% we took over is now down to 72%. It will continue to deteriorate. It is also affected by minimums and maximums seen in another bill. This is just one of many that are going to start the process of adjusting it.

The theory is that this money is used to educate children and it is the local share. That is why it is being deducting out of the state’s share of the PPP, so that the locality is contributing as well. There is one area where it doesn’t go to educate children, it is simply for paying back education related debt and bond indentures that they have gotten approved by the voters. That is the sinking and interest fund. All of them are 75%: the last ones (mobile home taxes/telecommunications taxes and Homestead Credit) are taken down to 75% from House Education Committee HB 1365 1-22-19 Page 2

100%. First it’s equalized and it will be done in incremental steps so that it’s not something we go past. One study will be done and then there will be another study on in lieu of. We took the 100% down to 75%, passed it out of here and appropriations took care of it. The other issue is that the sinking and interest fund equivalent to the number of mills approved by the district voters will not be at 100% or 75%, it will be at 0%. We will not deduct it from the PPP to directly educating children and it won’t be deducted in this bill from the state’s share of education. This will result in a bit of a boon and a flexibility in the way they deal with their money. Now they can take this if it is approved by the voters and pay their debt and hopefully pay it off sooner and give them the ability to handle other issues they may have. That is the purpose of the bill.

Vice Chairman Cynthia Schreiber-Beck: Any questions of Rep. Owens? There is a fiscal note.

Rep. Owens: We know from last time just the 75% was about $5.7M. I’m sure that has gone up as property taxes have risen. The sinking and interest fund will add to that.

Vice Chairman Cynthia Schreiber-Beck: Questions from the committee? Any others in support of HB 1365? Any opposition? Neutral testimony? Closed the hearing on HB 1365.

2019 HOUSE STANDING COMMITTEE MINUTES

Education Committee Coteau A Room, State Capitol

HB 1365 1/23/2019 31342

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Bev Monroe

Explanation or reason for introduction of bill/resolution:

Relating to state foundation aid payments to school districts

Minutes:

Chairman Owens: Opened the meeting on HB 1365.

Vice Chairman Cynthia Schreiber-Beck: I have an amendment to offer on HB 1365. On page 4, line 16 after district insert ‘and shall be utilized toward debt service’, then renumber accordingly.

Chairman Owens: That is making sure that the…

Vice Chairman Cynthia Schreiber-Beck: Page 4, line 16, basically after the word district insert and shall be utilized toward debt service.

Chairman Owens: That is insuring that the change to the in lieu of for the sinking and interest is only used for debt service, for the purpose of which it was intended. Is there a second?

Rep. Longmuir: I’ll second it.

Chairman Owens: Any questions from the committee?

Representative Zubke: That section can only be used for sinking and interest?

Chairman Owens: What this bill does is it relieves the sinking and interest fund from being discounted 75% toward the per pupil payment (PPP) only to the extent of the number of mills that the public has already voted on for sinking and interest. The fact that it was taking 75% out of sinking and interest of the PPP equal to that is a curiosity since the sinking and interest is only used to pay debt anyway. It is not used to educate children. It was used to lower the PPP going to the schools for education of students. It seems odd that we would do that.

House Education Committee HB 1365 1-23-19 Page 2

Rep. Dennis Johnson: If there is a large wind farm in that school district and you take the 75% out, how does that change it?

Chairman Owens: When taking the 3 100%’s down to 75%, that made all the in lieu of 75%. They redesigned the English. At the beginning of F on page 1, line 21, they put 75% of the revenue received by the school districts in the following revenue types and they deleted in each one of the lines going forward. It is still 75%, they just rearranged the English. On telecommunications and mobile home revenue tax and Homestead Credit and Disabled Veterans Credit they took that from 100% to 75%. Last session we changed those three and appropriations took them back. We are at $18.5M because rather than 75% being in a claw back for the sinking and interest fund which is not used to educate children, we are moving that one to zero so that can keep it and use it to pay their bond debt. Those things help with construction and repairs, etc. and gives them more flexibility in that area. I don’t want to vote on the bill today. There is more time to think about it after we do the amendment. I would like to do this one with the other two that we have all at once. Any further discussion? There will be a voice vote – motion carried. We have an amended bill we will hold as amended and let you think about it.

The committee work on HB 1365 ended.

2019 HOUSE STANDING COMMITTEE MINUTES

Education Committee Coteau A Room, State Capitol

HB 1365 1/30/2019 31749

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Bev Monroe

Explanation or reason for introduction of bill/resolution:

Relating to state foundation aid payments to school districts

Committee Work

Chairman Owens: Williston levies 21 mills for sinking and interest and 75% of that is pulled out of PPP. With this bill they keep it all and pay their debt. With this construction loan and monies, they are looking at redoing their buildings and they have some flexibility to do that. The superintendents I have talked to see that there is a bit of flexibility.

Representative Denton Zubke: I’ll move a Do Pass on HB 1365 and Rerefer it to Appropriations.

Vice Chairman Cynthia Schreiber-Beck: I’ll second that motion.

Chairman Owens: We did adopt an amendment before it was sent down, so we will need to make a motion to reconsider our actions on this bill.

Representative Denton Zubke: I will withdraw my motion.

Vice Chairman Cynthia Schreiber-Beck: I will withdraw my second.

Chairman Owens: I will entertain a motion whereby we reconsider our actions on HB 1365.

Rep. Mary Johnson: I’ll make a motion to reconsider.

Vice Chairman Cynthia Schreiber-Beck: I will second that motion.

Chairman Owens: We will do a voice vote. 4:25 Motion carried.

Chairman Owens: I will now entertain a motion to remove the amendment.

Representative Denton Zubke: I will make a motion to adopt an amendment which House Education Committee HB 1365 1-30-19 Page 2 will remove the language from before.

Vice Chairman Cynthia Schreiber-Beck: I’ll second that motion.

Chairman Owens: The amendment is to delete what we amended. We have a motion on HB 1365 to amend it to remove what we amended before. A Voice Vote was taken. Motion carried.

Chairman Owens: We have a bill HB 1365 before us.

Representative Denton Zubke: I will move we give HB 1365 a Do Pass and Rereferred to Appropriations.

Vice Chairman Cynthia Schreiber-Beck: I will second that motion.

Chairman Owens: Seeing no discussion, we will do a Roll Call Vote on HB 1365, a Do Pass and rereferred to Appropriations. Yes 13, No 0, Absent 1. Rep. Longmuir will carry this bill.

Date: I � ?3 ' ('1 Roll Call Vote#: _I _

2019 HOUSE STANDING COMMITTEE ROLL CALL VOTES BILL/RESOLUTION NO. i 3 0 5

House Education Committee

D Subcommittee

Amendment LC# or Description: ------

Recommendation: @ Adopt Amendment D Do Pass D Do Not Pass D Without Committee Recommendation D As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Motion Made By {Jp.j fvifJJVV- 1Je. · econded By

Representatives Yes No Representatives Yes No Chairman M. Owens Rep. Guooisberq V. Chair. Schreiber-Beck Rep. Haqer Rep. Heinert Rep. Hoverson Rep. D. Johnson Rep. M. Johnson Rep. Johnston Rep. Langmuir Rep. Marschall Rep. Pyle Rep. Strinden Rep.Zubke

Total (Yes) ------No ------Absent

Floor Assignment

If the vote is on an amendment, briefly indicate intent: ��e...A I ;ne..,, Uo af-1-e.r the.. war-cl'd;�{y,.c-l' tn�t · (}!)6s�all be d1l, ucl-towav-d Jc:,�i �vic,e:. Re nu.MW �cc-orJin� I y, Date: 1-90-/9 Roll Call Vote#: =L

2019 HOUSE STANDING COMMITTEE ROLL CALL VOTES BILURESOLUTION NO. ----=\�GIJ.a- -'---- House Education Committee

0 Subcommittee Amendment LC# or Description: ------Recommendation: O Adopt Amendment lg Do Pass D Do Not Pass 0 Without Committee Recommendation 0 As Amended ijl Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Representatives Yes No Representatives Yes No Chairman M. Owens Rep. Guggisberg V. Chair. Schreiber-Beck Reo. Haoer Rep. Heinert Rep. Hoverson Rep. D. Johnson Rep. M. Johnson Reo. Johnston Rep. Lonomuir Rep. Marschall Rep. Pyle Rep. Strinden Rep. Zubke

Total (Yes) ------No ------Absent Floor Assignment W /1HDRAWN If the vote is on an amendment, briefly indicate intent: ,. Date: J -/1 Roll Call Vote#:30

2019 HOUSE STANDING COMMITTEE ROLL CALL VOTES BILURESOLUTION NO. --=:..=-=�---l¼ House Education Committee

D Subcommittee Amendment LC# or Description: ------

Recommendation: D Adopt Amendment D Do Pass D Do Not Pass D Without Committee Recommendation D As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: � Reconsider D

Motion Made By Re-o. fv1'--', 1e hn2on

Representatives Yes No Representatives Yes No Chairman M. Owens Rep. Guaaisberg V. Chair. Schreiber-Beck Rep. Haaer Reo. Heinert Reo. Hoverson Reo. D. Johnson Reo. M. Johnson Reo. Johnston Rep. Lonamuir - Reo. Marschall Reo. Pvle Reo. Strinden Reo. Zubke

Total (Yes) ------No ------Absent

Floor Assignment

If the vote is on an amendment, briefly indicate intent: M OT1cnJ Cf.F� lfD Date: 1..- '3o - / Roll Call Vote #:

2019 HOUSE STANDING COMMITTEE ROLL CALL VOTES BILURESOLUTION NO. f 1 fof> House Education Committee

D Subcommittee Amendment LC# or Description: ------

Recommendation: · Adopt Amendment D Do Pass D Do Not Pass D Without Committee Recommendation D As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Representatives Yes No Representatives Yes No Chairman M. Owens Rep. Guggisberg V. Chair. Schreiber-Beck Rep. Haaer Rep. Heinert Reo. Hoverson Rep. D. Johnson Rep. M. Johnson Rep. Johnston Rep. Langmuir Reo. Marschall Rep. Pyle Rep. Strinden Reo. Zubke

Total (Yes) ------No ------Absent

Floor Assignment

If the vote is on an amendment, briefly indicate intent: ----(eJt'l)en{ , -to rernwe.., vJ b{ l.v 5 pr.RVI O VcJ'f -t'Y'tP-WJ-ed . Date: 9 Roll Call /Vote#:-3()-J

2019 HOUSE STANDING COMMITTEE ROLL CALL VO ES BILURESOLUTION NO. --=-�:;..:;;...._l S __ _ House Education Committee

0 Subcommittee Amendment LC# or Description: ------

Recommendation: O Adopt Amendment Do Pass D Do Not Pass 0 Without Committee Recommendation 0 As Amended 2SRerefer to Appropriations D Place on Consent Calendar Other Actions: 0 Reconsider 0

Representatives Yes No Representatives Yes/ No Chairman M. Owens v Rep. Guaaisbera V V. Chair. Schreiber-Beck Rep. Hager v Rep. Heinert i/v Rep. Hoverson .µ, Rep. D. Johnson Rep. M. Johnson v Rep. Johnston v Rep. Longmuir v Rep. Marschall v Rep. Pyle v Rep. Strinden v Rep. Zubke v

Total (Yes) ------l 3 No ------C) ---- Absent 1 Floor Assignment u If the vote is on an amendment, briefly indicate intent: Com Standing Committee Report Module ID: h_stcomrep_18_034 January 30, 2019 4:41PM Carrier: Longmuir

REPORT OF STANDING COMMITTEE HB 1365: Education Committee (Rep. Owens, Chairman) recommends DO PASS and BE REREFERRED to the Appropriations Committee (13 YEAS, 0 NAYS, 1 ABSENT AND NOT VOTING). HB 1365 was rereferred to the Appropriations Committee.

Page 1 (1) DESK (3) COMMITTEE h_stcomrep_1 8_034

2019 HOUSE APPROPRIATIONS

HB 1365

2019 HOUSE STANDING COMMITTEE MINUTES

Appropriations Committee Roughrider Room, State Capitol

HB 1365 2/7/2019 32357

☐ Subcommittee ☐ Conference Committee

Committee Clerk Signature Risa Bergquist and Parker Oswald

Explanation or reason for introduction of bill/resolution:

A BILL for an Act to amend and reenact section 15.1-27-04.1 of the North Dakota Century Code, relating to state foundation aid payments to school districts.

Minutes:

Chairman Delzer: HB 1365 came out of the education committee and was regarded as a do pass.

Representative Owens: It is $7 in perpetuity and this bill is designed to get more schools ready. It involves school building projects. Currently there are 7 in lieu of at 75% and 3 in lieu of at 100%. This bill takes the 100% in lieu of that is imputed, which is the mobile home tax revenue, the telecommunications tax and home state credit reimbursement and takes them from 100% and turns them into 75%. The second part takes a portion of the in lieu of tax that is specifically used for building bonds and goes to paying the debt and interest of the bonds. The bill takes the sinking and interest bonds and uses the levied amount set aside to reduce it down to 0 for the amount of mills voted on by the public.

(3:10) Chairman Delzer: It the issue there to try and incentivize bonding because it would not be imputed?

Representative Owens: The public still has to approve it, which does not happen often. The taxpayer was not approving the bonding issues.

Chairman Delzer: If the tax payers still pay it, why does this cost us money?

Representative Owens: Currently we are 75% when we take that down to zero it will come to 12 million dollars and it will be a one-time funding method.

Chairman Delzer: It give the schools another $12M, but it does not relieve the burden.

House Appropriations Committee HB 1365 Feb. 7th 2019 Page 2

Representative Owens: It’s designed so the money that is being taxed is going to the right place. What is happening now is the public is being told to vote for this bond issue for maintenance. Then we take 75% of that and use it to educate the kids and it’s not being used for what we are saying. To do a tax, you have to state the purpose and use it for that.

Representative Kempenich: What represents a school fund?

Representative Owens: It would depend on the total amount of the bond. To the point you made, you’re right and now they have to use the money that they collected to actually use it for its intended purpose.

Chairman Delzer: How does this get you any closer?

Representative Owens: This is only one of the process it’s only the first part of the 75%.

(7:50) Chairman Delzer: It helps the schools but it doesn’t help get people on the formula.

Representative Owens: I keep trying to move the 12% mark for the per people payment to the 18%. This limit does not let them reach 60 mills in many cases.

Chairman Delzer: The $12M you are taking away are what?

Representative Owens: There is a number of situations where the schools get money from mills. They can put money from other locations in the sinking interest fund. That money would still be imputed. Only the amount that they have gone to the people and asked for would be imputed.

(9:50) Representative Kempenich: How did they come up with the fiscal note?

Representative Brandenburg: Someone raises a bond and raises 2 million dollars and then they raise $2M in bonding authority and is imputed into the formula. What this bill does is instead of imputing $2M, it would impute $1.5M into the formula, correct?

Representative Owens: No. Right now it’s out of the 2 million and imputes 75% for $1.75M. This bill imputes zero and takes it down to zero. If they have levied over and above the mills, that is imputed and they deduct the number of mills approved.

(12:00) Chairman Delzer: The issue is most of these are over the 60 mills, where do they fit in; Garrison is at 92? This is the vote of the people so there isn’t any limit. It shouldn’t fall into the 12% cap either.

Representative Owens: Once they vote for bonding, which does not happen often, it doesn’t affect the 12%.

(13:20) Representative Monson: I am still trying to figure out why this is costing the state.

Representative Owens: The state doesn’t pay them.

House Appropriations Committee HB 1365 Feb. 7th 2019 Page 3

Representative Brandenburg: If you run a bond and you have 2 million dollars you are going to have $1.5M imputed into the funding formula and you will get a lower payment because you imputed higher property value. You would really have to bond for much higher.

Chairman Delzer: That’s the way the formula was set up in 2013, what does this do to the equity side of the formula?

(15:40) Representative Owens: Yes. This would need to change and this would maintain the equity. The other 2 bills alter the equity. One of the bills took money away from districts in order to fund smaller districts. This goes across the board to everyone and remains even.

Chairman Delzer: It still costs us 18 million.

Representative Owens: There is not really a cheaper way. I ask for $66M every year.

Chairman Delzer: Further questions?

(17:40) Representative Monson: I would have an easier time understanding this if we killed this bill and then dealt with it in the formula bill when it comes.

Representative Owens: This is such an important bill for the buildings and it would affect others when they are out going for a bond. I urge you if you kill this bill please put it the way it’s written in to another bill. The $12M is a small amount, but effective. Construction and maintenance is not part of educating and should not be taken out of per people payment.

Chairman Delzer: Isn’t having a place to meet part of the education?

Representative Owens: Well, then we need to revisit the commons trust fund.

Representative Monson: What if we amended it so we take it down to the $6M and took all the imputed to 75% and got rid of 100%? That would help bonding and make the formula more fluent.

Representative Owens: That is exactly the bill that was before you two years ago and you voted it down. All we are focusing on is equalizing the 75% and what belongs to the taxpayers and doing it exactly how they were told.

Chairman Delzer: I believe we are hoping to meet with senate and talk about their bills to some degree.

(21:50) Representative Sanford: Are you aware of the range of bills that are effecting the formula?

Chairman Delzer: The governor’s proposal was to go to the midterm on the numbers and he also wants to take away the hold harmless and wanted to take the 12% and not stand for any new property.

House Appropriations Committee HB 1365 Feb. 7th 2019 Page 4

Representative Owens I am not aware of those changes; we are looking at how we can give the schools some flexibly without costing the state a ton of money. The immediate elimination of minimums and maximums. The Governor said to cut 5% a year and I am not sure what the senate had settled on. It needs to be 2% and 2% with a focus on the second year.

(23:45) Representative Brandenburg: What is the education budget? With a budget like that this is wrong and needs to be fixed.

Representative Owens: There is a lot of money being wasted. There is no reason for a small school to close based on the per people payment.

Chairman Delzer: Further discussion? Closes meeting on HB 1365.

2019 HOUSE STANDING COMMITTEE MINUTES

Appropriations Committee Roughrider Room, State Capitol

HB 1365 2/7/2019 32360

☐ Subcommittee ☐ Conference Committee

Committee Clerk Signature: Risa Bergquist by Caitlin Fleck

Explanation or reason for introduction of bill/resolution:

Relating to state foundation aid payments to school districts.

Minutes: A

Chairman Delzer: Opened the hearing. One of the issues that is out there on the whole list of who wins and losses on the 18 million, and a number of those schools are under the 16 mill limit and I think there will be some discussion of what is coming over from the Senate. We will try to get a little more information on that. One of the key things is to get the schools that are under that, they will not be getting the 16 mill limit.

Representative Nelson: In that second to last column, what is that equate to?

Chairman Delzer: We didn’t actually go through that, but I would be guessing that the ones that didn’t have anything in there would be the ones that anything that would fall under this equity, but we will have to ask for that. And they don’t have any issues that would agree with that.

Representative Nelson: Is that what you think it is?

Chairman Delzer: That would be the 12 million, the 12% part. It would be the 75% that almost everyone has, that would be my guess, but we will try to straighten that out. While we are waiting for Representative Keiser, let’s move on to another bill.

Hearing closed. 2019 HOUSE STANDING COMMITTEE MINUTES

Appropriations Committee Roughrider Room, State Capitol

HB 1365 2/15/2019 32841

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Parker Oswald

Explanation or reason for introduction of bill/resolution:

A BILL for an Act to amend and reenact section 15.1-27-04.1 of the North Dakota Century Code, relating to state foundation aid payments to school districts.

Minutes:

Chairman Jeff Delzer: Opens meeting on HB 1365.

Representative Mark Owens: Thanks committee and asked for a moment to make copies.

Chairman Jeff Delzer: We had a discussion before about the funding of schools involving this and in a lot of cases we are paying more than what they have levied.

(1:25) Representative Mark Owens: That is correct. Hands out amendment 19.0957.01004.

Chairman Jeff Delzer: As fair warning since you are bringing amendments, you will have to enlighten us.

(3:00) Representative Mark Owens: There are 24 being deducted at 60 mills, but they are levying less than 60. Amendment 19.0957.01004 creates a scenario of moving people up at 12% property tax, we can move them up to the tune of $18M of the $29M. This will affect the formula and the amount of state money going to K-12. We will just take it in this biennium instead of 4 years. This creates a floor and this is what they are levying now. The classic example is levying 30 mills and that deducts on 16 mills. That causes us to subsidize the 60 mills and we have to give them more money. This amendment would force them to begin the levy at what they are currently levying and it will go up if they levy more. The state is levying exactly what we are levying and that will be defeated.

(5:40) Representative Mark Owens: Item 1 on amendment 19.0957.01004 keeps them from going up and item 3 is what keeps increasing not to exceed the 60 mills.

Chairman Jeff Delzer: A good share of affected schools will be affected by the sinking interest. House Appropriations Committee HB 1365 2/15/2019 Page 2

(6:20) Representative Mark Owens: The sinking fund will help some of the schools as well. I do not have the exact number.

Chairman Jeff Delzer: Part of the reason for this is keep the discussion alive and it keeps growing and we have to keep adding to the cost of K-12 and equity in the formula.

Representative Mark Owens: They are being overpaid by equity by not levying the 60 mills.

(7:25) Chairman Jeff Delzer: The fiscal note will end up being even then.

Representative Mike Schatz: In those 57 districts, it will be a property tax increase?

Chairman Jeff Delzer: Only the ones we are paying extra for.

Representative Mark Owens: Yes, it will be a property tax increase because they found a way around it.

(8:20) Representative Larry Bellew: Is this supplanting local control?

Representative Mark Owens: No.

Chairman Jeff Delzer: With a vote of the people, they can go over the 60 mills.

Representative Mark Owens: If you want to do 30 mills, you can, but we are going to deduct the 60 mills. You have multiple pots where the money is coming and it sets how much comes from each pot. It eliminates the rich county poor county and keeps everyone at 60 mills and even. If they want to charge differently and want to levy differently, we need to deduct 60 mills.

(9:55) Representative David Monson: He hit it pretty well. These really rich districts with huge increases in taxable valuation are doing well because we are overpaying them from the state. Their mill levy stays down and it is still local control.

Chairman Jeff Delzer: Minot is actually paying some others.

Representative Mike Nathe: This is meant to get everyone on the formula?

(10:55) Representative Mark Owens: It will get all but 10. Then we will see what the tweaks in the formula will do. It is estimated at $9.4M that will still be subsidized and then we will be back in here. We can then talk about 12% increase and even moving it to 18%. It would be a big hit to them and we want it at 12% so it is not a huge hit.

Representative Mike Nathe: I am happy to see that we are addressing this.

Representative Mark Owens: We would have a little bit smaller problem with some of them.

(12:20) Representative Larry Bellew: Does this have anything to do with hold harmless? House Appropriations Committee HB 1365 2/15/2019 Page 3

Representative Mark Owens: No, it does not. That is what I referred to as a minimum and maximum.

Chairman Jeff Delzer: This keeps the conversation alive and makes it more palatable to do the sinking in interest. Further questions?

(13:10) Representative Keith Kempenich: How can you locally control this?

Chairman Jeff Delzer: Some of them will be very difficult to do.

Representative Mark Owens: We will reduce what they are doing now. They will not catch everyone, but I put it in to end in 2023 so we can adjust it next session as needed. The minimums and maximums in the senate can be adjusted too.

(14:30) Representative Mark Sanford: This is a good initial step. It is important to remember that when we made this transition, the mill levy could be 185 mills without going to the public. Now we are at 60 mills. There has been a significant reduction in property tax with this. The issue is not about taxes going up, but it is when you get to the new formula, everyone levies 60 mills, the lower levied ones do not contribute fairly. If the basis is all taxpayers contributing the same amount, then this needs to happen.

(16:15) Representative Mark Sanford: There was two parts; a significant reduction and equity issues. It is a big equity issue for taxpayers. What this meant is the state really stepped up with significant dollars to supplant the hundred and some mills that was reduced.

(17:05) Representative David Monson: Moves to adopt amendment 19.0957.01004, seconded by Representative Mike Nathe.

Chairman Jeff Delzer: Voice vote to adopt amendment 19.0957.01004. Motion carries.

(17:45) Representative David Monson: Makes a motion of do pass as amended on HB 1365, seconded by Representative Mike Nathe.

Representative Larry Bellew: Does this lower the fiscal note?

Chairman Jeff Delzer: It will lower the fiscal note to $600,000.

Representative Larry Bellew: If the districts have to go to 60 mills, can they do that with the building fund?

(18:40) Representative Mark Owens: No, that is the general fund and they can use it for whatever they want to.

House Appropriations Committee HB 1365 2/15/2019 Page 4

(19:50) Representative David Monson: To answer Representative Bellew, the school districts could always use their general funds for new projects if they want. Some have a building fund of 10 mills and that is for deferred maintenance. If you are going to build a new school, I do not think many could build it using the general fund. They get 10 mills for their building fund if the public votes it that way.

Chairman Jeff Delzer: The building fund was voted on.

Representative Mark Owens: We lost two boilers in Grand Forks and they are doing it out of reserves and general funds.

(21:35) Chairman Jeff Delzer: Their reserves are larger than some of the smaller ones. Roll call vote taken on motion of do pass HB 1365 as amended. Motion carries with 20 yes, 1 nay and 0 absent. Representative Mark Owens will carry HB 1365. 19.0957.01004 Prepared by the Legislative Council stafffor Title.02000 Representative Owens February 14, 2019

PROPOSED AMENDMENTS TO HOUSE BILL NO. 1365 Page 4, line 5, overstrike "Subtract" and insert immediately thereafter "For school years ending before 2023, subtract" Page 4, line 5, overstrike "sixty mills multiplied by the taxable valuation of the" Page 4, overstrike lines 6 through 8 and insert immediately thereafter: "the greatest of: ill An amount equal to the number of mills deducted pursuant to this subdivision for school year 2018-19 multiplied by the taxable valuation of the school district: ill An amount equal to one hundred twelve percent multiplied by the amount subtracted for purposes of this subdivision in the previous year in dollars, not to exceed an amount equal to sixty mills multiplied by the taxable valuation of the school district: or .@l An amount equal to the number of mills levied by the school district pursuant to subsection 1 of section 57-15-14.2 multiplied by the taxable valuation of the school district, not to exceed an amount equal to sixty mills multiplied by the taxable valuation of the school district." Page 4, line 9, after the "b." insert: "For the 2022-23 school year and each school year thereafter, subtract an amount equal to sixty mills multiplied by the taxable valuation of the school district. c." Renumber accordingly

Page No. 1 19.0957.01004 Date: 2/15/2019 Roll Call Vote #: I

2019 HOUSE STANDING COMMITTEE ROLL CALL VOTES BILL/RESOLUTION NO. 1365

House Appropriations Committee

D Subcommittee

Amendment LC# or Description: /9. 09$7. O!Q:2l/

Recommendation: � Adopt Amendment D Do Pass D Do Not Pass D Without Committee Recommendation D As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Motion Made By _R_,ep..__r_e_se_n_t_at_iv_e_M_o_n_ s_on_ ____ Seconded By Representative Nathe

Representatives Yes No Representatives Yes No Chairman Delzer Representative Kempenich Representative Anderson Representative Schobinger Representative Beadle Representative Vigesaa Representative Bellew Representative BrandenburQ Representative Howe Representative Boe Representative Kreidt Representative Holman Representative Martinson Representative Mock Representative Meier Representative Monson Representative Nathe Representative J. Nelson Representative Sanford Representative Schatz Representative Schmidt

Total (Yes) ------No ------Absent

Floor Assignment

Voice Vote/Motion Carries Date: 2/15/2019 Roll Call Vote #: 2

2019 HOUSE STANDING COMMITTEE ROLL CALL VOTES BILL/RESOLUTION NO. HB 1365

House Appropriations Committee

D Subcommittee

Amendment LC# or Description: ------

Recommendation: D Adopt Amendment � Do Pass D Do Not Pass D Without Committee Recommendation � As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Motion Made By -�------Representative Monson Seconded By ___Representative_,______Nathe _

Representatives Yes No Representatives Yes No Chairman Delzer X Representative Kempenich X Representative Anderson X Representative Schobinger X Representative Beadle X Representative Vigesaa X Representative Bellew X Representative BrandenburQ X Representative Howe X Representative Boe X Representative Kreidt X Representative Holman X Representative Martinson X Representative Mock X Representative Meier X Representative Monson X Representative Nathe X Representative J. Nelson X Representative Sanford X Representative Schatz X Representative Schmidt X

Total (Yes) ------20 No ------1 Absent ------O Floor Assignment Representative Owens Motion Carries Com Standing Committee Report Module ID: h_stcomrep_31_015 February 18, 2019 3:35PM Carrier: Owens Insert LC: 19.0957.01004 Title: 02000

REPORT OF STANDING COMMITTEE HB 1365: Appropriations Committee (Rep. Delzer, Chairman) recommends AMENDMENTS AS FOLLOWS and when so amended, recommends DO PASS (20 YEAS, 1 NAYS, 0 ABSENT AND NOT VOTING). HB 1365 was placed on the Sixth order on the calendar.

Page 4, line 5, overstrike "Subtract" and insert immediately thereafter "For school years ending before 2023. subtract"

Page 4, line 5, overstrike "sixty mills multiplied by the taxable valuation of the"

Page 4, overstrike lines 6 through 8 and insert immediately thereafter: "the greatest of:

ill An amount equal to the number of mills deducted pursuant to this subdivision for school year 2018-19 multiplied by the taxable valuation of the school district:

0 An amount equal to one hundred twelve percent multiplied by the amount subtracted for purposes of this subdivision in the previous year in dollars, not to exceed an amount equal to sixty mills multiplied by the taxable valuation of the school district: or

.Ql An amount equal to the number of mills levied by the school district pursuant to subsection 1 of section 57-15-14.2 multiplied by the taxable valuation of the school district. not to exceed an amount equal to sixty mills multiplied by the taxable valuation of the school district."

Page 4, line 9, after the "b." insert: "For the 2022-23 school year and each school year thereafter, subtract an amount equal to sixty mills multiplied by the taxable valuation of the school district.

Renumber accordingly

Page 1 (1) DESK (3) COMMITTEE h_stcomrep_31_015

2019 SENATE EDUCATION

HB 1365

2019 SENATE STANDING COMMITTEE MINUTES

Education Committee Sheyenne River Room, State Capitol

HB 1365 3/13/2019 33675 (52:30)

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Lynn Wolf

Explanation or reason for introduction of bill/resolution:

A bill relating to state foundation aid payments to school districts.

Minutes: Att. #1-Holman; Att. #2-Copas; Att. #3-Holen

Chairman Schaible: Committee we will open the hearing on HB 1365.

Representative Owens, Dist 17: I am here to explain 1365. The bill is deals with K12 funding dealing with in lieu of dollars. Currently, we have out of 10 options of in lieu of catagories, seven of them are deducted at 75%, and three of them are deducted at 100% against the per pupil payment. The bill changes all of them to 75% and then turns around and redacts all of the mill deduct for the Sinking and Interest fund because we are deducting 75% of the Sinking and Interest fund from the dollars used to educate children, when, the reality of the Sinking and Interest fund is to pay the debt to insure that the children have a safe and healthy and clean place to learn – but it doesn’t have anything to do with their education. It has to do with the building and the structures. Finally, and that comes out to about – and that comes out to about $18 million or $16 million – I forget which it is. Never the less, $17.5 million for the biennium? But anyway, then there was an amendment in Appropriations added that seeks to ensure that out of the 57 schools not currently on the formula, there are 24 that are not experiencing mill deducts at 60 mills, but at their existing mills which means that the state is subsidizing the rest of those 24. This bill creates that portion of the amendment it has three steps, the greater of which – three options – and it is always the greater of which. It works to bring these on board over, quite frankly, it brings all but eight of them on in the first four years and the other eight would have to be revisited for the next biennium – but it should only be two years after that or four years, depending on exactly how that would work, but I think it was rapid – it maybe even one-year after that. It was designed to first create all of them at the mill deduct that they are currently at that they are levying because some of them are levying below what their – or their mill deduct is much lower than what they are actually levying. One example is 16 mills is the mill deduct, but they are actually levying 30 mills. That’s not even equal. That would automatically bring that one up to 30 mills and then it would advance according to the tax structure right now – 12% of the dollars it would advance in that each year until they either were at 60 mills or it would just continue to take them to 60 years after year at 12% a shot. The third item in that amendment states, at no time because it is the greater of, if for some reason the district decided, well, we don’t want to be at 6 mills, Senate Education Committee HB 1365 3/13/2019 Page 2 we are just going to arbritarily only level 38.5 mills, let’s say. They are going to choose to levy less than 60 mills – the third one does not let them drop down to that – the whole section maintains them at the greater of the three, which means they would get to 60 mill deduct and they would stay at 60 mill deduct because in reality, the funding formula just says they will be deducted at 60 mills. It doesn’t say that they have to levy 60 mills. That is the bill the way it stands right now. The bill passed out of committee without that last amendment – the last amendment was added in appropriations in an effort – the sole purpose – two purposes – first to bring those 24 into the formula and second to cost neutral the bill as close as possible. That was just one suggestion on how to do it. I personally, am open to any suggestion in that arena in how to adjudicate the issue of bringing people onto the formula – bringing those remaining schools on to the formula. That is my testimony and I will be willing to stand for any questions.

Senator Rust: Were you in the entire Appropriations Committee when they discussed this?

Representative Owens: Yes.

Senator Rust: Did they discuss those school districts that they were talking about that they want to move over – have been for all of the years since the formula has been in existence – I would bet almost every one of them has increased their taxes by 12% - the maximum allowed by law – to try to get to formula, but can’t get there because in so many cases their property tax valuation is rising more rapidly than the 12% allows them to. I think those school districts have been trying to get on formula by doing the maximum amount, but yet can’t get there. Did they talk about that at all?

Representative Owens: Yes, they did talk about that and the reality was that there was some on the committee that wanted to set item 2 of that amendment not at 12%, but at 24% to rapidly put them on to the formula. Quite frankly, though, since I went and did the amendment, I took it out of their hands because I didn’t want 24% because I viewed that as a method to try to kill the bill, because certain people on the committee recognized that once the Appropriations members realized that the Sinking and Interest fund was going against the per pupil payment and it wasn’t being allowed for buildings, they didn’t that, so they were going to pass the bill as is – I believe. This was added to either try to kill it or avoid that from happening number one, so I didn’t let it go to 24 – I kept it at 12.

Senator Rust: Did they talk about taxpayer protection in here? One of the considerations in the House and Senate – or the Senate at least – is that of the protection of the taxpayer. I believe they limited us to that 12% and obviously, this would be – in order for the school district to make up the money that would be lost by that amendment would be a huge hit on the taxpayers. Did they – evidently had no feeling for the taxpayer – do you know?

Representative Owens: There was one individual that talked about that and I believe a couple of them just heed and hawed in agreement. But, the point being, that’s why the 24% was just outrageous. It was never going to work. The idea was to go get an amendment that included the 24% and what I said immediately when I heard that, I said, I’ll take care of the amendment for you – so I could get rid of that 24% - at least limit it to 12% I did that with the full confidence of this body here.

Senate Education Committee HB 1365 3/13/2019 Page 3

Senator Rust: Thank you.

Chairman Schaible: Other questions?

Senator Marcellais: In looking at this school district payments in lieu of property tax, I see district seven doesn’t have anything. Why is that?

Representative Owens: I would have to see their individual money –

Senator Marcellais: It is on the table. There is nothing in there – you have just dashes.

Chairman Schaible: That is because they have very little property tax base and they don’t have a bond issue that creates debt.

Senator Marcellais: They do have taxes, I know that. What about the Minot Air Force Base and Grand Forks then?

Chairman Schaible: Same thing it is not a bond issue.

Senator Marcellais: But, where are they on the schedule? I don’t see them on there.

Chairman Schaible: That just shows the in Lieu of stuff on there. On the state category.

Representative Owens: The in lieu of is those ten items, but not everybody has those ten items. They have bits and pieces. It is possible to not to have any of those ten items. It is very rare. We can certainly have Adam – who I don’t see in the room today.

Chairman Schaible: It is basically two different items, but we can certainly have him come down and clarify that.

Representative Owens: I can certainly ask him about that, but that was that the in lieu of items. The ten items, it is not the Sinking and Interest fund going to zero. It is just the ten items. The Sinking and Interest fund really comes from property tax going into the Sinking and Interest account.

Chairman Schaible: Other questions? Seeing no other questions, thank you.

(10:45) Representative Richard Holman, Dist 20. See Att. #1

Chairman Schaible: Just for clarification, we talked about this for quite a while. Representative Holman ask me about how we should do this and I suggested that he submit a bill. The reason was that even if we added it as an amendment on the Senate side, I wanted to have a hearing on the House side to say that this was heard. That is the rational for that. It is something that we need to look at and I think there is some work that we can do on this –

Representative Holman: I am on Appropriations, so I was going to do – what we get accused of once in a while – is I was going to do some policy on Appropriations. Thanks to Senate Education Committee HB 1365 3/13/2019 Page 4

Senator Schaible and Representative Owens, it was decided that we would at least have a hearing on this so that it becomes public information because it should be and it should be talked about.

Chairman Schaible: I’ll add just one clarification – you can see if my logic in this is correct. Tuition is also an in lieu of factor. Most of the in lieu factors is – right now we have bills that say they will all be at 75%, but in all of the in lieu of cases, it is a shift of – 75% goes to the state, 25% goes to the school. It is just – when we changed those in lieu factors, it is money that goes from either one to the other. In this case, there is tuition, but the state isn’t getting it, so it is not just a shift of this, it is that there is no money accounted for these out of state kids. That is the correction we are looking to fix.

Chairman Schaible: Other testimony in favor of the bill.

(19:51) Amiee Copas, Exec. Director of the ND Council of Educational Leaders (NDCEL): See Att. #2.

(22:44) Chairman Schaible: You said tuition is negotiated. We also have several compacts that we are in – one of them being South Dakota. Is that negotiated in that compact?

Amiee Copas: The tuition with the South Dakota compact is negotiated and it has to do with numbers that go back and forth and counting those numbers. Adam is much better at explaining that than I, but it is in that compact.

Chairman Schaible: There is no legislative action that we can take to increase or decrease that tuition amount.

Amiee Copas: For the Minnesota students? That was an agreement that Hillsboro had made with Ada and of course if there was legislative action about what type of tuition you would need to require from an out of state student, that would be a legislative choice.

Chairman Schaible: Tuition in state that is charged. For example, Williston. Tuition is based on a state average? Could you explain that.

Amiee Copas: That is correct. There is – when we do our budget worksheets, there is a capital outlay factor. That factor is weighted – creates a state average – at which tuition should be paid from K8 to a high school. That creates what is the amount - and anyone behind me can correct me if I am wrong, but I have heard this a few times – that is what creates the level at which those dollars are collected for tuition and then those tuitions and then those tuition dollars are eligible then for the in lieu of transfer of dollars. So, 75% of any collected tuition. That collect tuition isn’t just that factor as well, but it also comes with when we place students out of our district for particular reasons – special education, residency placements – the Department of Public Instruction is very good and very active often times with helping to determine who is responsible for that tuition – is it the home district, is the resident district, is it the state – some of those areas get complicated, but I am not sure if I provided an adequate enough explanation for you, but if you need a little more detain about that, I could have that to you by tomorrow.

Senate Education Committee HB 1365 3/13/2019 Page 5

Chairman Schaible: Tuition is assessed state average rather than locally.

Amiee Copas: That is correct.

Chairman Schaible: The other thing is even if we do in lieu of switch for tuition, if we wanted to do that there again it is shifting from the state share to the local share does not affect the actual cost of tuition for where those kids come from.

Amiee Copas: That tuition cost would not change, what would change is who keeps the money.

Chairman Schaible: I wanted to clarify that because I probably will introduce an amendment that does something a little different than that, but I need you to understand this first.

Senator Davison: Mapleton sends their kids to West Fargo. West Fargo gets the per pupil payment for that eighth grader.

Amiee Copas: That is correct.

Senator Davison: Then Mapleton charges – they set their mill levy based – for the column for tuition. There is a number that comes out from Mark Lamer to Mapleton. They put that money in that mill levy to pay off. When you are saying that in addition to the per pupil payment, West Fargo is going to keep 25% of that tuition that was in Mapleton’s bucket.

Amiee Copas: That is correct.

Chairman Schaible: That tuition is about- around the $4000 mark.

Amiee Copas: I am not sure. Perhaps Steve knows.

Chairman Schaible: I believe a portion of that – like what you were saying on that – you get the per pupil payment and that is kind of the basis of the cost of educating the kid. This part is to cover the fixed assets. That is why they are different and that is why there are discrepancies on why it happens.

Amiee Copas: This is where much of our conversation has happened this session with regard to New Eight and Williston in that, the question of whether or not that tuition that comes from those students coming into the high school is adequate to cover the cost that it is to create those fixed assets to educate the student.

Chairman Schaible: The other part of that is most of that is because if you are outside a high school district that is why your mill levies are so much lower because you don’t have those costs of educating high school kids and is that fair for the state to supplement that?

Amiee Copas: In addition to that, those taxpayers outside of the district are not obligated to pay the bonded indebtedness of the physical structure of the building that may be educating their high school student.

Senate Education Committee HB 1365 3/13/2019 Page 6

Senator Rust: HB 1365 – part of the reason for that was to kind of help out Williston. When you redact is the word Representative Owens used – the Sinking and Interest portion. So that would give Williston extra dollars to help pay for the buildings that they had to build. But, the amendment immediately then subtracted more than what they would have benefitted by the bill. Isn’t that correct?

Amiee Copas: You are correct. It kind of reminded me of one of those movies when you slip on the ice – and fall on your back. Because exactly what the bill tried to do, the amendment –

Senator Rust: Did the very opposite and made it worse.

Amiee Copas: That is exactly correct Senator Rust. I think it was purposeful thought because I think there is a belief set that there can be some really good things done in this body to –

Senator Rust: One other thing – when I was superintendent, the county superintendent used to provide to all the schools in the county a worksheet on tuition. Which did various steps include the pieces with capital outlay. Do they still do that and if they do, can we get one of those because it is really helpful in understanding then how that process works assessing tuition. At one time, it was very, very lucrative to have students come into your school district. I mean you could get as much as $10,000 -$12,000 a kid in tuition, but that was when the state did not contribute as much towards the cost of education. Now, with the funding formula changed in 2013-14, it became a whole lot less lucrative to do that. Do you know if I am correct in that?

Amiee Copas: To the first part of your questions whether or not the county superintendents do that, we are down to very few county superintendents left in the state. As they have been retiring, counties have not generally been replacing them.

Senator Rust: That means Mark Lemer would probably – I wonder if he doesn’t do one of those.

Amiee Copas: The worksheets? I think many of our superintendents do – I would probably impress upon you that I would be Superintendent Holen does.

Senator Rust: Can you find one of those?

Amiee Copas: Absolutely I am sure we can find one of those.

Chairman Schaible: Thank you. Other testimony in favor of the bill.

Steve Holen, Superintendent of McKenzie County Public School District #1: See Att. #3.

Chairman Schaible: What is your actual general fund mill?

Steve Holen: 34.7.

Senate Education Committee HB 1365 3/13/2019 Page 7

Chairman Schaible: What is it deducted at?

Steve Holen: It is being deducted at – according to the worksheet at 16.

Chairman Schaible: We have two scenarios that are causing trouble. Schools that are below sixty and schools that have their general mills and are assessed at a different part. There are actually two fixes in that and both of them are very complicated. That is what the amendment was trying to do is force that issue. The idea with the in lieu of with the Sinking and Interest Fund was to make sure that we were addressing the problem – which in this case we thought it was school construction and debt. That seems to be a pretty good fit for that, but is there a way that the scare is that by shifting funds or doing that, can they manipulate using this to an advantage the school district that wasn’t intended for?

Steve Holen: Good questions. As far as the manipulation of the formula, not that I could see – I mean the beauty of the Sinking and Interest Fund is that it is very closed in its nature. The ony way you can get money into it is to have an election and pass at 60%. As far as the manipulation, it would be possibly an incentive to go out and pass a bond referendum if you can get more debt in your Sinking and Interest, it would be a benefit in some ways to how you can use your in lieu of funds. But, I can’t imagine a school district wanting to tempt itself going out for a referendum it didn’t need simply to –

Chairman Schaible: At a 60% vote.

Steve Holen: Right, so it is a – the concern of the other levies was obviously, you could argue manipulation of some level, but Sinking and Interest is one I – as an administrator, I don’t foresee any –

Chairman Schaible: I asked that purposely because that was the idea that we have been working on that we – there has been a lot of discussion of in lieu of and my thought if you are going to mess with in lieu of it should address the specific problem. That is what this does and I wanted to confirm the questions our colleagues are going to ask us when we ask them to vote on this. You are shifting state money to local, if the problem is debt and construction, then this would be a reasonable solution.

Steve Holen: There is no way you could use these funds for general operating – teacher salaries otherwise this is a clear direction to school construction which is indirectly a property tax.

Chairman Schaible: Would you like to address that tuition formula that we were talking about earlier.

Steve Holen: Senator Rust is exactly right. When the formula changed, the amount involved with tuition payments dramatically decreased. There is a calculation formula that is very similar to what it was before. That is an easy part of it. Those numbers are pretty accurate, but we don’t have out of state tuition. I understand that issue and I do believe there is a fix needed for that. But as far as between neighboring schools and tuition agreements we see this a lot, especially when it involves special education students. The district that is going to accept that student is very – there isn’t much incentive for them to do so because whatever Senate Education Committee HB 1365 3/13/2019 Page 8 they are going to collect in tuition – which is dramatically less then what it used to be is now also going to be deducted at 75%. To accept a tuition agreement really isn’t in the best interests of the acceptance in any way.

Chairman Schaible: Calculations of how tuition is calculated – the amount. Is it at $4000 and where did they come up with that?

Steve Holen: It is roughly at $4000 and it is based on every individual school district that is based on what your local property tax and state share. For some of us, the state share of our funding – because of in lieu of is slightly different than other places. Ours is going to be typically a little bit lower than the average. But, I believe you are right I think that $3,000- 4,000 is a typical tuition payment. It would be a little bit lower in some parts of western ND.

Senator Rust: I see according to the school district finance facts book, which has been updated, I see that you have 10.18 mills levied for Sinking and Interest. Also, I know that you folks just passed a bond issue for how many dollars?

Steve Holen: It was for $35 million which is equivalent of about 13 mills.

Senator Rust: So next year or thereafter; it is going to up another 13?

Steve Holen: Approximately 25 mills in Sinking and Interest.

Senator Rust: You spoke of leveraging gross production tax dollars to pay for buildings because we passed a law at one time that you could do that. You could take your gross production tax dollars and basically build and then have the money sent directly from there to pay off those bonds. Is that reflected in your – are you still doing that or have you paided that building off?

Steve Holen: Yes, we are still doing that. We did end up refinancing because the BND financing was a – not a fixed rate. It became advantageous to refinance that, but yes, we are still paying that. It was part of our high school.

Senator Rust: Out of your leveraged GPT dollars?

Steve Holen: Yes, we leveraged our GPT dollars so we had a bond rating based on what that – you know the backing of the GPT dollars which lowers your bond rating a little bit because they clearing mark on that rating that these dollars are for flex at the legislative discretion or whatever might be, but so when we say we leveraged it, it was a funding source we could at least identify because we couldn’t go out to the taxpayer and get any more authority, but we could levy that in lieu of revenue because it is kind of a property to make those payments.

Senator Rust: I am driving at it from a different angle. 10.18 is not your indebtedness. Your indebtedness is 10.18 plus the GPT dollars that you have leveraged to pay. Maybe you should impute – we like that word here, by the way – nobody uses the word subtract – I am trying to train them – I am going to have to use shock treatment, because I can’t get them away from impute - it is subtracting which is a lot different – you and I have talked about this Senate Education Committee HB 1365 3/13/2019 Page 9 often how we loved impute, but we hate subtract because it is a whole lot of difference. Maybe we should impute the amount of dollars that you are leveraging on your GPT and add that to your Sinking and Interest amount.

Steve Holen: Actually, that is a great point. You are correct, that is not showing up on Sinking and Interest because that is leveraged through a different source which ends up being more of the general fund. It is the collection of the gross production tax and is going right out to a payment of that. In essence, it is about a million dollars, it is probably 5 or 6 mills that you would have to add to that. When we did our elementary project, we did release revenue bonds – back when we had authority to do that – before that was taken away.

Senator Rust: That is not on here either?

Steve Holen: That is not on there either. If you think of those things, we could be up to 30 - 30 some mills of Sinking and Interest if you put it all together.

Senator Rust: We need to notate that. Because sometimes we look at that Sinking and Interest levy and think well, that is their debt. Well, no, it may not be their debt. Their debt may be substantially more because of those other things that you were able to do previously in the law to not have to levy, but rather, use those dollars.

Chairman Schaible: Those other things you were able to do with those dollars, were those voted on by the public?

Steve Holen: For the leveraging of the BND and so forth? Yes, they were, so when we went out for the bond referendum, we knew we couldn’t – we used part of what we were asking for in the public, but then the other part we knew we would have to finance in other ways. The only part that wasn’t, was the lease revenue bond. That is one of the reasons it was taken out of law as far as not being able to be used anymore up to $4 million. Now only because you didn’t have to vote on it – that was a school board vote.

Chairman Schaible: Other questions? Thank you.

Amy DeKok, ND School Boards Association: We echo the comments made by NDCEL as well as the comments of Doctor Holen. We support 1365 but we also have some of the concerns with respect to some of the amendments that were passed out of the House Appropriations Committee.

Chairman Schaible: Thank you. Other testimony in favor of the bill? Agency testimony? Testimony in opposition to the bill? With that, we will close the hearing for HB 1365. 2019 SENATE STANDING COMMITTEE MINUTES

Education Committee Sheyenne River Room, State Capitol

HB 1365 3/25/2019 34207 (5:50)

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Lynn Wolf

Explanation or reason for introduction of bill/resolution:

A bill relating to state foundation aid payments to school districts.

Minutes: Att. #1-Schaible

Chairman Schaible: See Att. #1. Senator Schaible explained the amendment and the bill.

Motion by Davison, second by Rust adopt amendment 19.0957.02003.

Roll Call Vote: 7 Yeas; 0 Nays; 0 Absent.

Amendment 19.0957.02003 is adopted.

Motion by Davison, second by Rust to Do Pass as Amended HB 1365 and refer to Appropriations.

Roll Call Vote: 7 Yeas; 0 Nays; 0 Absent.

Motion carries. Senator Rust will carry the bill.

19.0957.02003 Prepared by the Legislative Council stafffor Title.03000 Senator Schaible March 19, 2019

PROPOSED AMENDMENTS TO ENGROSSED HOUSE BILL NO. 1365 Page 4, line 5, remove the overstrike over "Subtract" Page 4, line 5, remove "For school years ending before 2023, subtract" Page 4, line 5, remove the overstrike over "sooy" Page 4, remove the overstrike over lines 6 through 8 Page 4, line 9, remove the overstrike over "tv,•elve percent; and" Page 4, line 9, remove "the greatest of:" Page 4, remove lines 10 through 20 Page 4, line 21, remove "For the 2022-23 school year and each school year thereafter, subtract an amount" Page 4, remove line 22 Page 4, line 23, remove "c." Renumber accordingly

Page No. 1 19. 0957.02003 Date: 3-ZS-J� Roll Call Vote #: ------

2019 SENATE STANDING COMMITTEE ROLL CALL VOTES BILL/RESOLUTION NO. 1+8 l](S

Senate Education Committee

D Subcommittee

Amendment LC# or Description: ------/Cf. rP,57,()'Lb03 Recommendation: $Adopt Amendment D Do Pass D Do Not Pass D Without Committee Recommendation 0 As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Motion Made By ------� �i� Seconded By

Senators Yes No Senators Yes No Chairman Schaible: v Senator Marcellais: L.i Vice-Chairman Fors: ./ Senator Oban: Senator Davison t/ v Senator Elkin: v Senator Rust: v

Total (Yes) 7 No 0

Absent D

Floor Assignment

If the vote is on an amendment, briefly indicate intent: � 1¥ict1'./J Date: ?-ZS-/'j Roll Call Vote #: 2---

2019 SENATE STANDING COMMITTEE ROLL CALL VOTES BILL/RESOLUTION NO. I j f,£"

Senate Education Committee

D Subcommittee Amendment LC# or Description: ------

Recommendation: D AdoptAmend ment �o Pass D Do Not Pass D �ithout Committee Recommendation �sAmended .,rtrRerefer toAppropriations D Place on Consent Calendar Other Actions: D Reconsider D

Motion Made By _-""'-7½!__t_�------Seconded By

Senators Yes/ No Senators Yes No Chairman Schaible: V Senator Marcellais: Vice-Chairman Fors: i/ Senator Oban: Senator Davison Senator Elkin: Senator Rust: V

�

Total (Yes) I No V Absent

Floor Assignment

If the vote is on an amendment, briefly indicate intent:

.,,,---, Com Standing Committee Report Module ID: s_stcomrep_52_009 March 26, 2019 7:43AM Carrier: Rust InsertLC: 19.0957.02003 Title: 03000

REPORT OF STANDING COMMITTEE HB 1365, as engrossed: Education Committee (Sen. Schaible, Chairman) recommends AMENDMENTS AS FOLLOWS and when so amended, recommends DO PASS and BE REREFERRED to the Appropriations Committee (7 YEAS, 0 NAYS, 0 ABSENT AND NOT VOTING). Engrossed HB 1365 was placed on the Sixth order on the calendar.

Page 4, line 5, remove the overstrike over "Subtraot"

Page 4, line 5, remove "For school years ending before 2023, subtract" Page 4, line 5, remove the overstrike over "sooy" Page 4, remove the overstrike over lines 6 through 8

Page 4, line 9, remove the overstrike over "twelveperoent; and"

Page 4, line 9, remove "the greatest of:"

Page 4, remove lines 10 through 20

Page 4, line 21, remove "For the 2022-23 school year and each school year thereafter, subtract an amount"

Page 4, remove line 22

Page 4, line 23, remove "c."

Renumber accordingly

(1) DESK (3) COMMITTEE Page 1 s_stcomrep_52_009

2019 SENATE APPROPRIATIONS

HB 1365

2019 SENATE STANDING COMMITTEE MINUTES

Appropriations Committee Harvest Room, State Capitol

HB 1365 4/1/2019 Job # 34394

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Rose Laning / Lynn Wolf

Explanation or reason for introduction of bill/resolution:

A BILL for an Act to amend and reenact section 15.1-27-04.1 of the North Dakota Century Code, relating to state foundation aid payments to school districts.

Minutes: Testimony # 1 – 2.

Legislative Council: Alex Cronquist OMB: Becky Deichert

Chairman Holmberg called the committee to order on HB 1365. All committee members were present.

Senator Don Schaible, District 31, Bill Sponsor: State Aid to Schools Payment Worksheet - Attached # 1. I am stepping in for Representative Owens. HB 1365 is some duplicate language that we have on SB 2265. I am going to explain the bill to you because we do have some figures and the sheets to review. The bill does two things – when we have an in lieu of category on our payment sheets for school districts, in lieu of is in lieu of property tax so school districts or political subdivisions get paid money in lieu of property tax. There is a category for that. There were two categories in there were at 100% which meant the state kept 100% of it. The school district or political subdivisions got 0%. The rest of them are at 75%. That meant the state kept 75% and the school district got 25%. This bill suggests that all the categories will now be on 75%. The rationale is that we looked back over the years to study what the rational was of it and since it is in lieu of property tax, there is an argument about what percentage should the local political subs keep and what the state should get by being imputed and what is fair for the state. We – looking back at how these figures were done, figured if 75% seemed to be the magic number that seemed to float to the top, so this bill suggests that all will be at 75%. The second part of the bill which is on page four lines 12- 16 also suggests what it does is let the school district – it they have a Sinking and Interest mill levy, - that is levies that they have put on for debt for bond issues. When a school district votes on a bond issue, they create Sinking and Interest fund that collects mill levies to pay debt on the bond issue. This bill asks that out of their in lieu of tax money, which they don’t get a mill levy for, is that they would keep the same proportion of what their Sinking and Interest is against all the rest of their mill levies. They get to keep 100% of that. In this case, and I will go over a couple of sheets that will kind of explain that much better. In the case of Senate Appropriations Committee HB 1365 April 1, 2019 Page 2

– well, let’s just go to the first sheet that I passed out. All these sheets are different sheets for different schools. I prepared them so they hit some of your home districts. I have only pulled out the second sheet for most schools, but the first one on there is Williston #1. If you go to the second page of that, go to the top of the page, section B – it is contribution for all other revenues. These are all the in lieu of tax categories. You have tuition, county, US Flood, Electric Generation, Mobile Homes, Telecommunications, and Contribution from other local revenue. Every one of them is what is in lieu of property tax. For Williston, as you see on the side there, if we would change those bottom two categories – Telecommunications and contributions from other local revenue, - those would be changed to 75% and in this case, Williston would collect – get to keep – more of the portion. They would get $94,662 for Mobile Homes. Telecommunications they would get keep an additional $53,132. This is just by changing the 100% to 75%. If you look to the bottom of the table where it says 15%, and I think you have a sheet attached to your fiscal note it lists for every one of those schools – you will notice that Williston #1 has 15% of their total mills is in lieu of property tax. This bill suggests that they be able to keep 100% of the in lieu of portion so as you see, it says 15% times 75% - and the reason is that they already got 25% of all the in lieu of of what was figured on there already. So if we take 75%, just by the Sinking and Interest amount, they would keep $572,508 more dollars. The reason this is duplicate stuff and we have heard about this and this gives you an easier explanation and it is easier to understand. The rest of the sheets are different schools. that pertain to the people sitting in this room. I thought it would be easier to show how that affects that. As you look at some of these schools, they have 0% for their Sinking and Interest. They are not levying any mill levies to address bond issues. The rational we picked for picking in lieu of Sinking and Interest – we get a lot of questions that first of this in lieu of should be handled like property tax and the schools should get that. We also hear that part of the issue is expanding of students, the ability to build schools and the ability to pay that debt. So, we figure if we were going to make an adjustment in this, that it had to be targeted to the problem which we considered building and debt. That is why we targeted Sinking and Interest funds so that if we were going to make this adjustment, that it targets a problem. We think we accomplished that. The other thing is if their Sinking and Interest fund goes away, they pay off their debt, this percentage also goes away and they no longer get that benefit. This only pertains only to debt. The other thing is that this debt was actually voted on by the people and it had to be a majority of 60% to pass. We think that – can they manipulate this and schools change things to do that – they still have to take it to the vote of the people. Property taxes are going to go up and that is the problem we were trying to solve. Two things we did is change them all to 75% and every time we change that percentage means the school gets to keep more, the state gets less. The other thing is we are asking forgiveness of the in lieu of for the Sinking and Interest funds – they would get 100% of that. If we were going to be more generous to schools and help with their construction issues, this is what we are asking for in this bill. Like I said, this is duplicate language. It is in 2265, which is the K12 funding bill. I think it was important enough that it was in both and this is a bill until we see what happens with 2265, we ask that you take a long time and consider this until we know what happens with that one. With that, I would try to answer any questions.

(7:12) Senator Dever: How is this revenue distributed? How is it determined who is in lieu of taxes – I understand that WSI pays in lieu of taxes, but the Bank of ND does not.

Senate Appropriations Committee HB 1365 April 1, 2019 Page 3

Senator Schaible: The answer to the first question is right now, where on the sheets where it says 75% and 100% that is what is given now. So, if you look on a sheet and you take Williston for example, you go across this $3,865,000 – that is the amount that is deducted from their state payment. If you go back to the first page of that to line 31, you can see that it’s contribution from other local revenue sources, that is deducted. As you notice that they get to keep 25% of that, so basically, they keep 25% the rest is deducted from their payment. They are getting paid that much now. What I have added to those sheets, is changing that from 100% to 75% shows the amount that they would now be able to keep also. The second part of your question, I do not who determines what is in lieu of and how that is calculated.

(8:72) Senator Bekkedahl: In response Senator Dever’s question is, Senator Schaible, line one for Williston contribution for local revenue from line 39, that $3.8 million, is that the 75% of the in lieu of taxes they currently get from oil and gas production? Or is that other local taxes- local property tax? It seems to be larger for Williston #1 than other ones other than Minot has a larger number there I think, but -

Senator Schaible: I think it is – one of the things that changes that is if you look at the tuition which is also an in lieu of – and the thing is the amount of tuition that they get and I would guess for Minot it would be a large amount of tuition for the Air Force Base. Tuition is also - is basically the state average of what it costs to educate a student – I believe it is $4,000 is kind of the state average. So, tuition kind of skews that because that is basically the number of kids that come in – that is also at 75%.

Senator Bekkedahl: Williston has about 200+ students from District 8 attending their high school. The total tuition payments they get to keep, because of the current formula, for those 200+ students is about $80,000 a year. It is a very, very low number, plus those students pay nothing towards the mill levies to help build extra schools to accommodate them, so that is part of the dilemma as well and I know you are familiar with that.

Senator Schaible: Mr. Chairman, with your indulgence, I can go into that a little bit about – it is in the category of in lieu of and tuition, but it is a caveat in a different bill. Would you like me to explain that a little bit, Mr. Chairman?

Chairman Holmberg: Yes.

Senator Schaible: What we are looking at in another bill, that pertains to – I would guess it would be the Williston example – but Williston’s example is that they are in a unique situation being surrounded by a K8 district. There is a caveat in SB 2265 that will – you are exactly right; it is on the state average – it is not a real reflection of what these students are costing the district by adding a huge amount of enrollment in addition to that school district. What the amendment in SB 2265 does is if we have a scenario like that, where a school is actually getting hurt by the influx of new students from a K8 district, we will put on a factor of 200% - so they will pay twice the amount of tuition and they will also be able to keep 100% of that tuition so that – but that is just if those schools rely on that caveat. It is not in this bill, but it is easier to explain when you are in this area and kind of caveat for that. I know it is not in this bill, but if you are talking in lieu of and tuition and property taxes, it is easier to explain. That is in 2265. Senate Appropriations Committee HB 1365 April 1, 2019 Page 4

Chairman Holmberg: Is there anyone else that wants to talk to us today?

(12:15) Adam Tescher, Director of School Finance and Organization, Dept. of Public Instruction: One request that the department has with this bill is on page four, line 14. It would be to replace previous calendar year with 2018. What this would do is provide more stability for our funding formula budget. The intent would be to then update 2018 when the next biennium 2020 going forward so it does update, but the percentage would be good for two years. The reason – we have seen a large number of construction approval requests come in that are reliant on this bond issue. If several of these bond issues do get passed, it will increase the impact of this fiscal note fairly significantly. It is very hard to determine whether these bond elections are going to be passed at the local level at this point. So, it would provide a little more stability. They would still see that reflection, but not until next biennium if they do pass that bond election. We have seen several changes that have come through on our funding formula that are being considered in this session, so this would help us provide a little more stability with our budget numbers.

Senator G. Lee: Does this mean that in lieu of, the districts always keep 75% of that money?

Adam Tescher: When we do our deduction, we are actually deducting 75% of that money. They get to keep 25% outside of the formula. Currently, we do have some that are at 75%, some that are at 100% - they are not really treated consistently this moving to 75% will make sure that all in lieu taxes are treated the same. And, if they have a Sinking and Interest they would actually be able to keep a little bit more depending on that percentage.

Chairman Holmberg: Closed the hearing on HB 1365. Put it in nest and sit on it awhile. 2019 SENATE STANDING COMMITTEE MINUTES

Appropriations Committee Harvest Room, State Capitol

HB 1365 4/10/2019 JOB # 34664

☐ Subcommittee ☐ Conference Committee

Committee Clerk: Alice Delzer

Explanation or reason for introduction of bill/resolution:

A BILL for an Act to amend and reenact section 15.1-27-04.1 of the NDCC, relating to state foundation aid payments to school districts. (Do Pass)

Minutes: No testimony submitted

Chairman Holmberg: called the Committee to order on HB 1365. All committee members were present. Adam Mathiak, Legislative Council and Becky Deichert, OMB were also present.

Chairman Holmberg: The House just a few minutes ago passed that bill (SB 2265) 74 to 19. And the message I have from our chairman here is that although this bill is no longer needed, the proper way for us to dispose of it, because we had the hearing, put a Do Pass on the bill, because we haven’t heard any testimony against it, pass it up and they will carry it and they will carry it to kill it, because it’s no longer needed. Is there a motion?

Senator Bekkedahl: I would move a Do Pass on HB 1365. 2nd by Senator Robinson.

Chairman Holmberg: Would you call the roll on a Do Pass on 1365?

A Roll Call vote was taken. Yea: 14; Nay: 0; Absent: 0. This goes back to the Education Committee. Senator Rust will carry the bill.

The hearing was closed on HB 1365. Date:

2019 SENATE STANDING COMMITTEE ROLL CALL VOTES BILURESOLUTION NO. / 3 ½'_5 Senate Appropriations Committee

D Subcommittee Amendment LC# or Description: ------

Recommendation: D Adopt Amendment JdDo Pass D Do Not Pass D Without Committee Recommendation D As Amended D Rerefer to Appropriations D Place on Consent Calendar Other Actions: D Reconsider D

Motion Made By -:-Be KKe dJ / Seconded By

Senators Yes No Senators Yes.. No Senator Holmberg � Senator Mathern , Senator Krebsbach v ,, Senator Grabinger / Senator Wanzek ,/ Senator Robinson � Senator Erbele y Senator Poelman r Senator Bekkedahl r Senator G. Lee _j,,/",, Senator Dever / Senator Sorvaag ,,,,-; Senator Oehlke r Senator Hogue /

Total (Yes) 14 No D Absent 0 Floor Assignment If the vote is on an amendment, briefl� indicak)te intentp Com Standing Committee Report Module ID: s_stcomrep_64_002 April 10, 2019 2:27PM Carrier: Rust

REPORT OF STANDING COMMITTEE HB 1365, as engrossed and amended: Appropriations Committee (Sen. Holmberg, Chairman) recommends DO PASS (14 YEAS, 0 NAYS, 0 ABSENT AND NOT VOTING). Engrossed HB 1365, as amended, was placed on the Fourteenth order on the calendar.

Page 1 (1) DESK (3) COMMITTEE s_stcomrep_64_002 2019 TESTIMONY

HB 1365

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• School District Payments In-lieu of Property Taxes Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 01-013 Hettinger 13 303,956 240,845 227,967 12,878 0% - 93.78 02-002 Valley City 2 148,582 140,216 111,436 28,780 0% - 96.85 02-007 Barnes County North 7 281,249 221,185 210,937 10,248 0% - 73.22 02-046 Litchville-Marion 46 27,314 23,830 20,485 3,344 0% - 63.55 03-005 Minnewaukan 5 46,940 37,584 35,205 2,379 0% - 59.16 03-006 Leeds 6 24,278 22,610 16,035 6,575 12% 10.22 85.59 03-009 Maddock 9 28,706 26,466 21,529 4,937 0% - 91.64 03-016 Oberon 16 7,744 7,454 5,808 1,646 0% - 64.17 03-029 Warwick 29 15,287 13,984 11,465 2,519 0% - 69.87 03-030 Ft Totten 30 14,517 13,736 10,887 2,849 0% - 175.26 04-001 Billings Co 1 1,890,100 1,422,880 1,417,575 5,305 0% - 56.32 05-001 Bottineau 1 788,044 591,057 591,033 24 0% - 71.53 05-017 Westhope 17 147,311 110,483 72,969 37,515 34% 38.04 112.03 05-054 Newburg-United 54 69,534 52,186 52,150 36 0% - 61.79 06-001 Bowman Co 1 1,764,585 1,331,244 1,323,439 7,805 0% - 84.88 06-033 Scranton 33 331,091 251,273 248,318 2,955 0% - 88.22 07-014 Bowbells 14 382,713 289,079 287,035 2,044 0% - 65.20 07-027 Powers Lake 27 902,733 680,805 548,975 131,830 19% 21.58 114.08 07-036 Burke Central 36 544,619 412,102 408,464 3,638 0% - 78.29 08-001 Bismarck 1 2,731,062 2,430,993 1,622,751 808,242 21% 21.59 103.92 08-025 Naughton 25 2,622 2,287 1,966 321 0% - 67.02 08-028 Wing 28 51,880 40,151 38,910 1,241 0% - 73.77 08-033 Menoken 33 15,593 13,194 11,695 1,500 0% - 55.26 08-035 Sterling 35 24,075 21,863 18,057 3,806 0% - 54.52 08-039 Apple Creek 39 21,933 20,281 16,450 3,831 0% - 112.48 08-045 Manning 45 13,988 13,405 10,491 2,914 0% - 148.00 09-001 Fargo 1 2,563,585 2,406,494 1,922,688 483,806 0% - 154.13 09-002 Kindred 2 120,649 107,920 61,892 46,028 32% 35.94 113.73 09-004 Maple Valley 4 73,426 67,866 55,069 12,796 0% - 81.90 09-006 West Fargo 6 1,382,102 1,160,564 726,894 433,670 30% 38.62 129.27 09-007 Mapleton 7 23,689 22,430 10,076 12,354 43% 57.21 132.16 09-017 Central Cass 17 225,587 197,290 127,040 70,250 25% 24.99 100.31 09-080 Page 80 26,737 23,849 20,053 3,796 0% - 71.85 09-097 Northern Cass 97 89,218 79,096 62,309 16,787 7% 7.02 102.02 10-019 Munich 19 11,380 10,837 8,535 2,302 0% - 65.88 10-023 Langdon Area 23 54,636 52,428 40,977 11,451 0% - 75.80 11-040 Ellendale 40 55,976 51,756 32,772 18,984 22% 20.97 95.59 11-041 Oakes 41 61,203 56,997 45,902 11,095 0% - 79.91 12-001 Divide County 1 1,992,141 1,502,049 1,287,300 214,749 14% 12.73 91.97 13-016 Killdeer 16 2,601,871 1,958,683 1,951,403 7,280 0% - 53.12 13-019 Halliday 19 147,338 111,994 110,504 1,490 0% - 63.83 13-037 Twin Buttes37 138,366 103,909 103,775 134 0% - 0.00 14-002 New Rockford-Sheyenne 2 59,637 54,802 44,727 10,075 0% - 85.73 15-006 Hazelton-Moffit-Braddock 6 28,962 24,369 21,721 2,648 0% - 65.50 15-010 Bakker 10 5,009 3,961 3,757 204 0% - 41.99 15-015 Strasburg 15 49,165 38,972 24,529 14,443 33% 31.75 94.84 15-036 Linton 36 41,515 38,306 31,136 7,170 0% - 54.56 16-049 Carrington 49 86,854 79,923 41,605 38,318 36% 48.78 135.01 17-003 Beach 3 609,829 467,088 457,372 9,716 0% - 45.07 17-006 Lone Tree 6 82,219 63,365 61,665 1,701 0% - 68.05 18-001 Grand Forks 1 4,677,061 3,664,712 3,507,796 156,916 0% - 97.36 18-044 Larimore 44 124,105 108,941 90,340 18,601 3% 2.88 97.88 18-061 Thompson 61 137,485 112,061 96,964 15,098 6% 5.25 88.02 18-125 Manvel 125 41,649 39,157 31,237 7,920 0% - 102.02

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School District Payments In-lieu of PropertyTaxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 18-127 Emerado 127 40,970 40,097 30,728 9,369 0% - 141.98 18-128 Midway 128 58,314 54,091 43,736 10,355 0% - 87.69 18-129 Northwood 129 39,815 36,363 23,057 13,305 23% 21.71 95.28 19-018 Roosevelt 18 23,859 22,909 17,894 5,015 0% - 80.66 19-049 Elgin-New Leipzig 49 47,119 45,483 35,339 10,144 0% - 82.00 20-007 Midkota 7 39,039 35,968 29,279 6,688 0% - 70.00 20-018 Griggs County Central 18 93,622 79,452 70,216 9,236 0% - 98.26 21-001 Mott-Regent 1 46,477 43,594 24,829 18,765 29% 30.30 105.31 21-009 New England 9 529,360 405,099 397,020 8,079 0% - 76.42 22-001 Kidder County 1 125,192 110,607 93,894 16,713 0% - 86.64 23-003 Edgeley 3 33,930 31,098 20,553 10,545 19% 19.91 103.52 23-007 Kulm 7 27,805 24,760 15,533 9,227 26% 28.12 110.21 23-008 LaMoure 8 38,498 34,840 28,873 5,967 0% - 81.49 24-002 Napoleon 2 27,411 24,914 20,558 4,356 0% - 64.74 24-056 Gackle-Streeter 56 34,863 31,432 26,147 5,285 0% - 81.95 25-001 Velva 1 181,683 145,956 120,650 25,307 11% 10.88 94.96 25-014 Anamoose 14 29,778 27,270 22,333 4,937 0% - 48.66 25-057 Drake 57 99,029 77,922 74,272 3,650 0% - 44.27 25-060 TGU 60 168,024 140,493 120,053 20,440 5% 4.78 100.99 26-004 Zeeland 4 25,716 21,184 19,287 1,897 0% - 75.94 26-009 Ashley 9 32,176 30,131 24,132 6,000 0% - 74.40 26-019 Wishek 19 157,456 127,478 118,092 9,386 0% - 68.25 27-001 McKenzie Co 1 5,283,908 3,990,461 3,155,037 835,424 20% 11.40 55.92 27-002 Alexander 2 1,392,724 1,060,277 653,293 406,984 37% 33.40 89.17 27-014 Yellowstone 14 267,369 201,598 200,527 1,071 0% - 46.83 • 27-018 Earl 18 20,259 15,297 15,194 102 0% - 11.67 27-032 Horse Creek 32 70,506 53,148 52,879 269 0% - 23.99 27-036 Mandaree 36 522,478 392,382 391,858 524 0% - 4.99 28-001 Wilton 1 209,170 166,283 156,877 9,406 0% - 80.75 28-004 Washburn 4 302,172 233,473 226,629 6,844 0% - 61.92 28-008 Underwood 8 257,458 208,873 193,093 15,780 0% - 84.36 28-050 Max 50 131,578 103,363 98,684 4,679 0% - 80.39 28-051 Garrison 51 422,541 329,018 316,906 12,113 0% - 91.34 28-072 TurtleLa ke-Mercer 72 196,907 153,828 120,197 33,632 19% 13.42 72.11 28-085 White Shield 85 126,885 96,624 95,164 1,461 0% - 53.35 29-003 Hazen 3 916,816 698,427 623,138 75,289 9% 5.76 61.43 29-027 Beulah 27 1,231,702 942,435 923,776 18,658 0% - 72.50 30-001 Mandan 1 1,044,344 900,293 630,379 269,915 20% 20.10 102.98 30-004 Little Heart 4 6,465 5,806 4,849 957 0% - 46.44 30-013 Hebron 13 177,260 136,357 132,945 3,412 0% - 82.29 30-017 Sweet Briar 17 1,453 1,394 1,090 305 0% - 45.22 30-039 Flasher 39 68,576 57,669 51,432 6,237 0% - 121.83 30-048 Glen Ullin 48 202,771 158,315 152,078 6,236 0% - 66.50 30-049 New Salem-Almont 49 354,305 272,584 265,729 6,855 0% - 66.91 31-001 New Town 1 4,643,677 3,490,409 3,482,758 7,651 0% - 38.19 31-002 Stanley 2 1,089,419 836,052 807,562 28,490 1% 0.80 68.79 31-003 Parshall 3 393,590 301,257 295,192 6,065 0% - 69.15 32-001 Dakota Prairie 1 105,714 92,441 79,286 13,155 0% - 70.83 32-066 Lakota 66 43,731 39,041 32,798 6,243 0% - 89.08 33-001 Center-Stanton 1 457,097 352,364 342,823 9,541 0% - 66.40 34-006 Cavalier 6 130,877 110,719 88,144 22,575 10% 10.42 102.14 34-019 Drayton 19 40,015 34,030 25,001 9,028 17% 21.00 125.80 34-043 St Thomas 43 21,346 20,403 16,009 4,393 0% - 96.85 34-100 North Border 100 81,040 74,900 60,780 14,119 0% - 65.76 2. l-f/3 130 5 ;;l/ 7/Z I? 4

School District Payments In-lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 34-118 Valley-Edinburg 118 51,323 43,868 38,492 5,376 0% - 79.73 35-001 Wolford 1 10,608 9,846 7,956 1,890 0% - 95.00 35-005 Rugby 5 153,107 143,064 87,663 55,401 24% 28.00 118.35 36-001 Devils Lake 1 282,039 254,212 199,592 54,620 6% 5.30 93.92 36-002 Edmore 2 87,580 70,982 65,685 5,296 0% - 106.29 36-044 Starkweather 44 13,890 13,126 10,418 2,708 0% - 84.61 37-006 Ft Ransom 6 2,976 2,974 2,232 742 0% - 67.76 37-019 Lisbon 19 39,360 39,360 29,044 10,316 2% 1.54 95.49 37-024 Enderlin Area 24 70,501 67,479 52,876 14,603 0% - 76.78 38-001 Mohall-Lansford-Sherwood 1 406,341 316,243 284,518 31,725 7% 4.74 71.38 38-026 Glenburn 26 325,939 265,644 209,532 56,112 14% 15.08 105.56 39-008 Hankinson 8 133,120 128,510 88,998 39,512 11% 11.33 104.33 39-018 Fairmount 18 24,476 22,721 18,357 4,364 0% - 92.00 39-028 Lidgerwood 28 32,996 31,232 22,938 8,294 7% 8.02 109.67 39-037 Wahpeton 37 277,613 259,013 122,824 136,189 41% 55.58 135.53 39-042 Wyndmere 42 26,450 24,641 19,838 4,803 0% - 81.52 39-044 Richland 44 37,204 33,063 16,299 16,764 42% 50.19 120.69 40-001 Dunseith 1 32,938 29,947 24,703 5,244 0% - 89.85 40-003 St John 3 198,578 154,849 148,933 5,916 0% - 89.51 40-004 Mt Pleasant 4 463,983 356,920 347,987 8,933 0% - 97.05 40-007 Belcourt 7 - - - - 0% - - 40-029 Rolette 29 35,735 30,952 26,801 4,151 0% - 105.05 41-002 Milnor 2 25,821 22,683 19,366 3,317 0% - 95.00 41-003 North Sargent 3 51,583 49,093 38,687 10,406 0% - 72.86 41-006 Sargent Central 6 57,944 50,620 36,170 14,450 17% 18.30 109.11 42-016 Goodrich 16 21,234 20,147 15,926 4,221 0% - 59.30 42-019 McClusky 19 34,713 31,304 26,035 5,269 0% - 72.98 43-003 Solen 3 30,718 24,153 23,039 1,114 0% - 52.10 43-004 Ft Yates 4 13,040 9,901 9,780 121 0% - 63.02 43-008 Selfridge 8 6,210 4,832 4,657 175 0% - 55.30 44-012 Marmarth 12 83,318 62,805 62,488 317 0% - 73.56 44-032 Central Elem 32 55,310 41,855 41,483 373 0% - 23.03 45-001 Dickinson 1 2,808,673 2,144,571 1,532,673 611,898 27% 28.81 105.76 45-009 South Heart 9 822,598 618,398 317,587 300,811 49% 37.12 76.50 45-013 Belfield 13 578,187 434,625 433,640 985 0% - 75.31 45-034 Richardton-Taylor 34 901,174 678,698 450,587 228,112 33% 46.00 138.00 46-010 Hope 10 45,418 37,797 34,063 3,734 0% - 57.68 46-019 Finley-Sharon 19 33,211 30,102 24,908 5,194 0% - 85.00 47-001 Jamestown 1 423,112 373,504 317,334 56,170 0% - 99.01 47-003 Medina 3 44,396 38,272 33,297 4,975 0% - 87.80 47-010 Pingree-Buchanan 10 73,183 58,684 54,887 3,796 0% - 91.96 47-014 Montpelier 14 11,800 9,730 8,850 880 0% - 73.31 47-019 Kensal 19 35,521 28,112 26,641 1,472 0% - 58.55 48-010 North Star 10 22,581 21,784 16,936 4,848 0% - 63.53 49-003 Central Valley 3 90,478 74,090 67,858 6,232 0% - 72.99 49-007 Hatton Eielson 7 37,737 35,503 28,303 7,200 0% - 83.66 49-009 Hillsboro 9 115,186 96,752 79,104 17,648 8% 7.00 83.00 49-014 May-Port CG 14 86,985 79,095 65,239 13,856 0% - 87.14 50-003 Grafton 3 139,854 134,209 69,903 64,306 33% 48.00 143.90 50-005 Fordville-Lankin 5 15,102 13,575 11,326 2,248 0% - 77.49 50-008 Park River Area 8 88,991 83,551 42,095 41,456 37% 43.71 118.36 50-020 Minto 20 28,866 26,198 10,687 15,511 51% 71.02 140.26 51-001 Minot 1 7,133,543 5,536,295 4,279,644 1,256,651 20% 22.22 111.05 51-004 Nedrose 4 75,329 71,793 30,120 41,672 47% 69.67 149.23

3 /18136 5 ;;!J 7 J:zo1 y f4

School District Payments In-lieu of Property Taxes

Mill Levy County Deducted From District Deducted From Formula HB One Year Sinking and Number School District In Lieu Revenue Formula Current 1370 Estimated Cost Interest Levy Total Levy 51-007 United 7 128,079 111,145 96,059 15,085 0% - 94.76 51-016 Sawyer 16 38,806 35,778 26,457 9,321 9% 9.87 108.53 51-028 Kenmare 28 173,335 136,611 130,001 6,610 0% - 103.94 51-041 Surrey 41 67,170 58,613 50,377 8,235 0% - 106.24 51-070 South Prairie 70 124,261 113,636 55,663 57,973 40% 55.29 137.29 51-161 Lewis and Clark 161 237,750 188,579 131,011 57,568 27% 33.39 125.87 52-025 Fessenden-Bowdon 25 15,940 14,223 11,955 2,267 0% - 74.94 52-038 Harvey 38 91,567 87,044 68,676 18,368 0% - 72.00 53-001 Williston 1 5,088,970 3,865,992 3,235,908 630,084 15% 18.94 124.46 53-002 Nesson 2 691,893 520,967 437,617 83,350 16% 11.45 73.08 53-006 Eight Mile 6 493,299 372,186 369,974 2,212 0% - 50.97 53-008 New s 1,386,092 1,049,608 1,039,569 10,039 0% - 55.36 53-015 Tioga 15 1,312,692 990,649 788,028 202,622 20% 9.53 47.75 53-099 Grenora 99 564,181 425,033 278,688 146,345 34% 42.03 123.12 Grand Total 75,318,745 59,373,120 - 9,223,481

Estimated Biennium Cost 18,446,962

•• Changes all in lieu of propertytax deductions to 75% •• Sinking and Interest Levies are not deducted

L-\ /f3 )365° 3-/3- /1 #I 031319 Senate Education Committee Senator Don Schaible, Chair. -/tft oP 2- Rep. Rick Holman, ND District 20, Mayville. 11.1 Mr. Chairman and Members of the House Education Committee. I wish to request a change to a section of HB1365. The Public-School Foundation Aid funding bill has an unintended consequence that reduces the funding for North Dakota schools that receive tuition from out-of-state students. This came to my attention when the Norman Co. MN West High School in Halstad MN decided to close and combine with Norman Co. East in Ada, MN. Several students attending school in Halstad chose to attend the closer school in Hillsboro, ND and pay tuition to the Hillsboro school district. Because of a line in the funding formula there is a reduction in the state funding for the school district even though, because the students are not ND residents, the school receives no foundation payment for non-resident students. The out-of-state tuition is multiplied by 75% and that amount is subtracted from the Foundation Aid payment in the line Contribution from other in-lieu of revenue. Here's the problem. This was set up to deal with school districts such as those in air base schools at Minot and Grand Forks and Tribal schools that receive funding from other sources and educate in-state students. These students are residents of North Dakota and because of that, generate a foundation aid payment. The in lieu of part of the bill reduces the state payment with the intent of treating all school equally, so the schools do not receive significantly more than the intended state aid. The reason for the other payments to these schools is that Tribal schools and Air Base schools do not have significant property tax backing the students. Out of state students can be asked to pay tuition, usually from a local agreement, but different from those who are residents in Tribal schools or air base schools, not being residents of North Dakota, they do not generate a ND foundation aid payment. The purpose of the 75% deduction is to avoid paying a school district twice for the same student. The unintended consequence of this that there is a deduction of money from the school's foundation aid payment even though there has not been a state payment for that student. This amendment to the funding legislation corrects this for that specific situation. Mr. Adam Tescher with the Department Public Instruction found three schools that reported tuition income from out-of-state students. This legislation will remove the penalty of reduced funding for those situations where the school district does not receive foundation aid for those students. Here's a simplified example. For a fictional school district, assume a state payment of 10 thousand dollars for each student. If the school has 100 students, the payment would be 1 million dollars from state aid. However, if ten of those students are out-of-state, there is no North Dakota payment for those students meaning that the school receives payment for 90 students or 900 thousand dollars. If ten out-of-state students pay tuition and the school receives tuition for each of those students, the school must report the amount received from tuition for those students. Here's the problem. The current worksheet and current law remove an amount equal to 75% of the tuition dollars received from the foundation aid payment even though the school did not receive any foundation aid for those students. The intent of the North Dakota statute as written is to make sure that there is not a duplicate payment of foundation aid and tuition support for students in schools that generate other types of support. Out-of-state students, such as those at North Border, Drayton or Hillsboro do not generate a state payment. The law as written places an undue penalty for schools who choose to accept tuition support for out-of-state students and do not generate a foundation aid payment. I submitted a HB1370 to the House Education Committee with an amendment to correct the problem. HB 1370 was given a Do Not Pass and failed in the House. With the intent to continue working on this in the Senate with HB 1365. My intent is to have an amendment added to this bill before it is finalized either here or in conference . Thank you for your time. • I will answer any questions. Rep. Rick Holman, 701-238-1124, [email protected] ;+8/3. 'G> '3-13-19' North Dakota K-12 School Funding Formula -M * I p2df 2-

In 2013, the state implemented a K-12 funding Shift in State and LocalGeneral Fund Sources formula tied to the cost of providing an adequate education and funded it with a combination of 100% state and local taxes. Local property tax levy / authority was decreased significantly with 80%

statewide taxes making up the difference. / -' ; Statewide taxes are now funding approximately 60% f. 75% of the cost of education. I/,, 40% ;-

J The local share is 60 mills on taxable valuation and l .,/ 20% f/ 75%-100% of other local in-lieu of property tax / l ,/ / / revenue. The state funds the remainder up to the 0% I,

adequate amount. Local/County 53% State 47% The fo rmula is student driven and uses various weights to account for the increased costs associated with school district size and servingst udents with special needs. A base per student funding rate is set by the legislature designed to generate the resources necessary to educate students to state standards. In addition, there are transitional adjustments included to minimize budget impacts that inevitably occur when making major changes. K-12_ ?choo_l_Fu nding Formula. Part(!ne: __ Ca_lcu/at'! !Jas'! f_um !fn__g_ Amount Example _· S_!�,d�nt,M 'crob.ers_hip_(J\l?M) 300 In the end, North Dakota's K-12 funding formula + _ - C.t�-e� �_ro�_ra_� :"'eightedAD M 30 provides a base of financial support per student . Weighted ADM 330 1 sufficient to provide an adequate education by X S�hool Di;tri-�t Size Factor 1.13 · Y.J�_g_�tedSt ud1:ntUnits 373 school districts, regardless of where the student x Per Student Rate 9,092 lives or what the taxable valuation is of the Total Formula Amount 3,391,316 +/- · ��si�� Adjus_t�e-�� _ district. Total Adjust�d Fo�mula Amount 3,391,316 The Legislature, through the interim Education _PartTwa : D':term,ine�!D tf!_ l)id_ Pa_yment Funding Committee, contracted with Picus- �ca! Share _, 6_()_ _!11i!.�s_ ti"'!es!3 xabl� valuation 600,000 75%-100% of other local in-lieu revenue 60,000 Odden and Associates to conduct a recalibration ·state Share Difference is state Aid Pa ment 2,731,316 study to confirm the adequacy of that base level of support.

The consultants use an evidenced - based (EB) model to determine the resources necessary to educate students to college and career ready proficiency. Included in the model are all of the components necessary to meet the standards. This includes core staffing, administration, operations, professional development, technology and instruction materials. Their report was presented to the Interim Education Funding Committee in June, 2014. The report can be foundin the meeting minutes at http://www.legis.nd.gov/assembly/63-2013/interim/1S-5088-03000-meeting minutes.pdf?20141016152129.

North Dakota Department of Public Instruction - School Finance 12/09/2014 ffo 1365 3-13---19 Atf-#-2- p I " f2 '2----

HB 1365 - Testimony in Support - In-Lieu adjustment - Sinking and Interest

NDCEL

Good morning House Education Committee, I stand beforeyo u to testify in support of HB 1365 forthe NorthDa kota Council of Educational Leaders which is the organization that serves our school Superintendents, Principals, CTE Directors, Technology Directors, AD's, County Superintendents, Business Officials and truly every school leader with the exception of teachers and school board members.

We stand beforeyo u today in support to the suggested adjustment to the in-lieu of deductions to schools. It should be noted that this support does not come lightly. The in-lieu conversation is not a new conversation - has been discussed as early as 1998 when referencing school funding- but with no legislative action, however until 2005. In the past 25 years the state has been sued 2 times regarding the fundingfor mula and the need to arrive at adequacy and equity. In fact, the ND Supreme court recommended in 1994 as a result of 1994 lawsuit Bismarck Public School District No 1 v. State of North Dakota, that there were three principle areas that needed to be addressed - in-lieu of revenues, equalization factors, and transportation payments. Coming fromtha t recommendation came 27 pieces oflegislation

In the 2005 legislative session, intense discussions took place as the first real steps toward adequacy and equity began to take place in our state. The bedrock foundation of our per-pupil based fundingfor mula were being built. A piece of the equity issue resided in the in-lieu of property tax dollars and how they were being used as well as how different sides of the issue.

The numbers arrived upon at 75% forsome of the in-lieu areas were a "negotiation" of sorts to softenthe blow of dollars being removed from some of our schools. In that negotiation the agreement was based on that the schools could survive because there would continue to be at least an inflationary adjustment consi stently to the per pupil payment.

Since that time, we've experienced a myriad of challenges with blessings, ups and downs in our economy, rapid growth, a need forbuildings - when compared with eras past - really pretty

'N'DCEL is tliestron 3est 1mifytn3 voice nyresentin3 and suyyortin3 adininistmton and ed11cationaI feaden in yursuit efq uali:ry eaiuation for all' students in 'Nil1-rfi 'Dakota. #Z l36S" '3-13-1'1 _LA� /4.-H- .±fZ "f.7NDCEL r.2. �P2- good problems to have. So, then the question has become - how do we deal with these challenges and keep it equitable?? As we've discussed several in-lieu of potential solutions, the NDCEL Legislative Focus group is very carefulto look at whether shiftsto the in-lieu formula create significant "haves" vs "have nots" or if we create a larger disparity than already exists.

As we discussed options, one that would significantly help schools and would keep this as fair as possible is to deal with real struggles that most or at least many of our schools have and that is in debt-service payments - or otherwise known as what we assess mills toward the sinking and interest funds in schools. The opportunity for schools to be able to retain the in-lieu of dollars that appropriately land in the debt service bucket not only allows those districts to pay down their debt quicker - it provides a form of tax relief to the citizens in those areas. This is really a win-win forlo cal and forstate .

We would indicate that the amendment offered and accepted in House Appropriations has consequences to a number of districts that NDCEL would indicate to be aggressive and potentially harmful to the districts in question. To further complicate the matter, those districts do not have the taxing authority to recoup those dollars in any way. We would as an alternative • offer that perhaps a more equitable approach would be to finda resolution to get the districts who are currently deducted at a rate below the 60 mill deduct, can get back to that deduct over time thereby correcting what some have perceived to be some taxpayer inequity and certainly would provide a scenario that would create a venue where more dollars would come into the bucket of money forfo undation aid. It is importantto recognize that process by which we might get there is neither easy or immediate, but never the less, has been discussed to be a priority.

With those adjustments to the bill in mind, we recommend a DO Pass ofHB1365.

u • V'IJ CEL is trie stro113e.1t u 11ifytn3 V()fcer ,y1·esenti113 and spyortin3 adrninistrat,, rs anledi1wtion a( (e adei-s in y11i-s11 it ,f 1 1111/ity edi,cation fora (( st11dents in 'North 'IJakota. /1--.8 1365 .3-/3-19 ,4-/1 #3

HB 1365 f?l4'f- ..3 Senate Education Committee • Chairman Schiable March 13th, 2019

Good morning. Chairman Schiable, members of the Senate Education Committee. For the record, my name is Steven Holen and [ currently serve as the Superintendent of Schools for the McKenzie County Public School District #1 in Watford City. I am here today to testify in support of HB 1365 in its original form and in opposition to the amendments placed on it from its original draft.

The intent of HB 1365, as I understand it, it to provide an opportunity for in lieu revenue received by a school district to be used for sinking and interest debt obligations and avoid a subtraction in the current foundation aid funding formulain an effo rt to address in lieu revenue in a manner similar to actual property tax revenue and how it is distributed to the various levies of a school district. The current foundation aide formula and its subtraction of in lieu revenue does not incentivize use of these fu nds other than General Fund without the standard 75% subtraction; even though use of the funds for such expenditures as debt or building infrastructure should generally be covered by other funds and levies. [n essence, the current funding formula was not allowing or promoting use of in lieu revenues for other purposes outside General Fund expenditures and in the same manner a general property tax allows for uses and distribution to the other levies and for varied expenditures outside of General Fund operating. [fa school district choose to • use in lieu revenue for debt repayments; the formula is assuming it to be General Fund expenditure regardless with the subtraction factor. HB 1365 does not address all aspects of in lieu revenue being treated as "normal" property tax, however, it does provide a step in the right direction to allow other uses of these funds (sinking and interest debt) that may serve in the best interests of the school district and local tax payer based on the intent of the in lieu revenue. HB 1365 also provides some consistency within the various fo rms of in lieu revenue and moves the subtraction to 75% for all funds; which again accounts with the limitations in how these funds can be used and assimilate them more closely to the use of general property tax revenue.

An amendment to HB 1365 attempts to address two different concepts and current issues within the foundation aid formula that can be complex and need further discussion and review before being placed in a bill that is not addressing those concepts in any manner. The first item is a discrepancy in the formula that was created when the new funding fo rmula was implemented in 2013 and 2012 tax year was used as the baseline year regarding the funding formula. As noted in the list of school affected by this discrepancy; the issue revolves around the 12% cap on local mill levy increases and school districts that were likely already being impacted by the cap and mill levies being driven lower than 60 mills of which the local school districts have no control in 2012. The first year of the new formula allowed for • school districts to levy up to the 60 mills plus the 10 mill discretionary (67.2 mills ffl lsl>S 3-15-17 ,411-. .,l=-3 ,,_:ioF.3 total) as a one year recapture and allow all school districts to start at the same levy position and go above the 12% cap as a one-time reset. MCPSD #1 had levied 53.15 • mills fo r 2012 because of taxable valuation increases occurring at that time; however, the local school board decided to increase its general fund levy to 67.2 mills as a one-time opportunity to recapture lost mills and understanding the ability to maintain the optimal 60 mills would be a significant challenge in the future. This emphasizes again the local school district attempting to maintain a higher levy and increasing local taxes significantly in one year to do so. It is important to note the 67.2 mills included 7.2 mills of discretionary that is NOT subtracted in the formula and was never intended to be subtracted. Once that levy is established in dollars, the following year has the 12% limit on that dollar amount and with subsequent taxable valuation increases the mill levy has dropped over several years to current levels and for our school district to 34.77 mills. The issue with the formula begins with the use of the baseline year of 2012 in regards to the 60 mill subtraction and the 2013 actual levy. The substantial increase in levy coupled with taxable valuation increases for that year created a significant difference in current levy amounts and those used in the baseline due to the transitions within a new formula. In each subsequent year; the 12% cap is in place, however, the initial gap created between the baseline and the actual year is maintained within the formula and ongoing. Again, this was created unintentionally with the new fo rmula implementation and affected school districts in some cases, in good faith, attempting to raise their mill levies to the preferred 60 mills when it was nearly impossible to do with the 12% cap in place.

• However, it is important to note that in our school district's case; a portion of the valuation that was determined to be actual and needs to be subtracted from the formula was initially discretionary mills and not intended to be subtracted (slightly more than 50% of that initial increase). Going above the 60 mills is not to be subtracted in the formula and extracting that amount from what is determined to be the appropriate subtraction should be considered with legislation to address the issue. Fundamentally, the other issue is the facta school district, in good faith, raising 12% each year and having their mill levy driven down to higher taxable valuations does not have access to the 10 mill discretionary mills available to those districts at the 60 mills. There are several school districts that have higher levies and not all of their levies are subtracted from the fo rmula and they potentially have 10 mills of un-subtracted levies that a school district being driven down by valuations does not have access to. In essence, the school districts on the list are not the only ones is levies not being accounted for in the formula and the 12% cap can create "penalties" for school districts that are doing everything in their power to maintain a levy the formula wants everyone at, but is unable to occur with restrictions in place.

This is indeed an issue within the calculations of the formula if it was intending to deduct the exact amount of which a school district is levying up to the 60 mill amount. However, much in the same line as the minimum payments, it should be • addressed with cautions and some discussion to ensure the impact on a school tl-B t3b5 3-�-/°J It-ff #3 3 o f- 3' district is addressed over time and allow for the lost revenue to be recaptured t'· • through other means if possible. The concept of getting all school districts to 60 mills is understood in terms of property tax equity, however, it may not be in the best interest of all taxpayers_in terms of what is needed by a school district and if less than 60 mills is required based on local decision making or external factors. One of those factorsincludes in lieu revenue and its classification as local revenue. In lieu revenue is a replacement for lost property tax capacity by a local subdivision and represents a value for its lost capacity to generate tax revenue. With that in mind; the GPT and Flood Control revenue received by a school district is local tax revenue and should be represented with discussion of local levies and 60 mills. If the in lieu revenue received by MCPSD #1 in 2017-2018 was converted to a mill levy - it would represent 28.15 mills and adding to the 34.77 general fund mills would equate to a 62.92 local mill levy and exceed the 60 mill minimum. To force a school district such as ours to 60 mills is not accounting for or acknowledging the tax authority removed by the state of ND and the revenue to replace it as local tax revenue. Because we are forced to receive our revenue through a different mechanism - we should be lower than 60 mills to account for this other revenue and to be fair to the local tax payer. In considering the 60 mills in the future; I recommend the in lieu revenue be treated in a manner to represent local contribution as it is the local industry members that are paying that tax for the purpose of local school and subdivision infrastructure and operations .

HB 1365 attempts to address one particular issue that was discussed at a high level • during the interim session. Addressing other issues with the current foundation aid formula is required at some point and will take some extensive conversations and actions to correct. Whether it is the minimum payment that doesn't affect our school district or the discrepancies in the mill levy subtractions that does; several items need to be addressed and will likely be addressed in the next interim session. Corrections to a complex fo rmula require time to ensure there are no unintended consequences with tweaks that are done without thought as to impacts on other aspects of the formula. I support HB 1365 without amendments and the idea of addressing multiple issues with the current formula in a comprehensive manner in this upcoming interim session.

Thank you for your time. I would be happy to answer any questions.

Dr. Steven Holen Superintendent of Schools McKenzie County Public School District #1 - Watford City • !-113 131,5 3-25-1 9 Atf #( 19.0957.02003 Prepared by the Legislative Council staff for I "F( Title. Senator Schaible F March 19, 2019

PROPOSED AMENDMENTS TO ENGROSSED HOUSE BILL NO. 1365 Page 4, line 5, remove the overstrike over "Subtract" Page 4, line 5, remove "For school years ending before 2023, subtract" Page 4, line 5, remove the overstrike over "sooy" Page 4, remove the overstrike over lines 6 through 8 Page 4, line 9, remove the overstrike over "twelve percent;and" Page 4, line 9, remove "the greatest of:" Page 4, remove lines 1 O through 20 Page 4, line 21, remove "For the 2022-23 school year and each school year thereafter, subtract an amount" Page 4, remove line 22 Page 4, line 23, remove "c." Renumber accordingly •

• Page No. 1 19.0957.02003 STATE AID TO SCHOOLS PAYMENT WORKSHEET NorthDa kota Department of Public Instruction �I Office of School Finance and Organization

District Name County District Number Payment Month School Year Williston 1 53-001 November 2018-2019

A STATE AID FORMULA: Student membership includes regular school year average daily membership (ADM). ADM for students attending school in Montana and Minnesota (NDCC 15.1-29.01 ), South Dakota students attending school in North Dakota (NDCC 15.1-29-02.1) under cross border attendance agreements, and students in private or out-of-state placements for purposes other than education (NDCC 15.1-29-14) are also included. Student Membership ADM . Weighting Factor Weighted ADM. 1 Pk Special Education 1.000 2 Kindergarten 370.38 1.000 370.38 3 Grade 1-6 1 ,959.56 1.000 1,959.56 4 Grade 7-8 580.36 1 .000 580.36 5 Grade 9-12 1,1 40.82 1 .000 1,140.82 6 Alternative High School 24.06 1 .000 24.06 7 Total Average Daily Membership (ADM) 4,075.18

Other Program Membership 8 Alt High School (from line 6) 24.06 0.250 6.02 9 Special Ed ADM (from line 7) 4,075-. 18 0.082 334.. 16 1 O PK Special Ed ADM (from line 1) 0.170 11 Regional Education Association (if member from line 7) 4,075.18 0.002 8.15 12 ELL Level 1 2 1 .75 0.400 8.70 13 ELL Level 2 23.97 0.280 6.71 14 ELL Level 3 81.78 0.070 5.72 15 At Risk 1 ,373.34 0.025 34.33 16 Home-Education (district supervised) 0.0. 5 0.200 0.01- 17 Alt Middle School 0.1 50 Summer Programs 53.31 0.600 18 Summer School 1 19 Special Ed ESY 1.000 Isolated School District 0.100 20 >275 sq miles and <100 ADM 1 21 >600 sq miles and <50 ADM 1.100

22 Total Weighted Average Daily Membership (add lines 7 through 21) 4,510.97 23 School District Size Weighting Factor 1.0000 24 Total Weighted Student Units 4,510.97 25 Per Student Payment Rate $9,646.00 26 Total Formula Payment 43,512,816.62

Formula Adjustments - 27 Transition Maximum Adjustment (from line 65) I 55,845,068.80 . 28 Transition Minimum Adjustment (from line 70) I 43,080,481.65 29 Total Adjusted Formula Amount (total lines 26, 27 and 28) 43,512,816.62 30 Contribution from PropertyTax (from line 45) 5,725,604.38 31 Contribution from Other Local Revenue (from line 39) 3,865,992.0-4 II 32 State Aid Payment (line 29 minus lines 30 and 31) 33,921 ,220.20

State School Aid Summary Entitlement EFB Offset. Net Entitlement 1 State Aid Formula Payment (from line 32) 33,921 ,220.20 . 33,921 ,220.20 2 Transportation (from line 61) 26,748.78 - 26,748.78 3 State Child Placement 5,267.55. . 5,267.55- 4 Special Education Contracts - Agency . - . 5 Special Education Contracts - School Placed - - . 6 Special Education Contracts - Boarding . - - 7 Special Education - Gifted and Talented - Total State Aid 33,953,236.53 33,953,236.53

Excess Fund Balance Offset(from line 49)

ND Department of Public Instruction Page 1 of 2 Revenue Worksheet 2018 11.xlsm 10/31 /2018 AJT {-(.i /..3G,S SUPPORTING CALCU LATIONS Jt/ 2018-2019 _ l'1 '{- ( l'J J... B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 33 1300 Tuition 196,052.12 75% 147,039.09 34 2999 County 4,625,497.53 75% 3,469,123.15 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 70,360.70 75% 52,770.53 37 Mobile Home and Other In-Lieu Taxes 1 26,21 6.28 100% 126,216.28 9'166� 38 Telecommunications 70,842.99 100% 3,865,992.070,842.994 s J;J � 39 Contribution from Other Local Revenue S-o/n Y.. 7 5 °lo � �J&r 1 So rv --- .....i-.....i..... ____ -1--:.i...;;:,;,¥,11-�Milll�1-- - 5 8 -c -c �o�NT�R�1 B�u.... T�1 o� N�FR�o�M�PR�o�P�E�R"!!!�TAX_..------40 District Taxable Valuation 113,861,121 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) - 6,831,667.26- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) I 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 5,725,604.38 (1 ,106,062.88) 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 5,725,604.38

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 1 1 ,049,036.64 47 General Fund Expenditures 44,737,244.34 48 35% of General Fund Expenditures + $50,000 15,708,035.52 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total - 50 Small Bus Miles 0.520 0.0 xxxxx 51 Large Bus Miles 1. 110 23,688.0 xxxxx 26,293.68 52 Rural Rides 0.300 xxxxx 1,517 455.10 xxxxx 53 Small In-City Miles 0.520 0.0 - xxxxx 54 Large In-City Miles 1.110 0.0 - xxxxx 55 In-City Rides 0.300 xxxxx 0 - 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.2-50 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 26,748.78 60 Reimbursement Cap --- 90% of transportation expen ditures 642,900.43 61 Transportation Grant Total (lesser of 90% cap or tota I) 26,748.78

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 25,729,891.95 63 Baseline Weighted Student Units (2012-13) 2,909.72 64 Baseline Funding Rate $8,842.74

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units I 65 Maximum Increase Amount 1 $8,842.74 I 140%1 4,510.97 55,845,068.80 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $8,842.74 I 108% 1 4,510.97 43,080,481 .65 67 Baseline Funding (from line 62) 25,729,891.95 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 25,729,891.95 70 Minimum Increase Amount (greater of line 66 or line 69) 43,080,481 .65

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 11.xlsm 10/31/2018 AJT /jt ""l /}Jrf!C A I '* � /3(-,5 SUPPORTING CALCU LATIONS 2018-2019 -()o/ l/--1 ·/'} j B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent " 33 1300 Tuition 1 , 115,072.20 75% 836,304.-15 34 2999 County - 75% - 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 85,204.76 75% 63,903.57 J).8b 9SJ 37 Mobile Home and Other In-Lieu Taxes 1,147,814.10 100% 1,147,814.10 38 Telecommunications 382,971.37 100% 382,971.37 c;s?iJ 39 Contribution from Other Local Revenue 2,430,993.19 d / eJ;0 YL /0--:?o J-1 J�o,1) 1-f!JO=- Jtd--:-- C CONTRIBUTION FROM PROPERTY TAX 40 District Taxable Valuation 469,440,642 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) - 28,1 66,438.52- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 29,459,129.10 45 Adjusted Contribution from PropertyTax (total lines 42, 43 and 44) 28,166,438.52

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 18,739,287.42 47 General Fund Expenditures 1 57,260,058.26 48 35% of General Fund Expenditures + $50,000 55,091,020.39 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0.520 6,374.2 xxxxx 3,314.59 51 Large Bus Miles 1.110 442,885.4 xxxxx 491,602.83 52 Rural Rides 0.300 xxxxx 554,570 166,371.00 53 Small In-City Miles 0.520 887.2 xxxxx 461 .33 54 Large In-City Miles 1.110 339,571 .0 xxxxx 376,923.82 55 In-City Rides 0.300 xxxxx 578,977 173,693.10 xxxxx 56 Family - To School 0.250 6,514.7 xxxxx 1,628-.68 57 Family - To Bus 0.250- 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 1,213,995.35 60 Reimbursement Cap --- 90% of transportation expen ditures 4,107,496.65 61 TransportationGr ant Total (lesser of 90% cap or tota I) 1,213,995.35

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 103, 1 20,773.57 63 Baseline Weighted Student Units (2012-13) 12,400.35 64 Baseline Funding Rate $8,315.96

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units 65 Maximum Increase Amount 1 $8,315.96 I 140%1 14,464.35 1 168,398,938.44 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student $8,315.96 1 108%7 14,464.35 129,907,752.51 67 Baseline Funding (from line 62) 103,120,773.57 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 103,120,773.57 70 Minimum Increase Amount (greater of line 66 or line 69) 129,907,752.51

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 1 1.xlsm 10/3 1/2018 AJT SUPPORTING CALCULATIONS I: ( 2018-201 9 HB 13 '/·t-1re1s B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent fJ tf 33 1300 Tuition 1 1,650-.00 75% 8,737.50- 34 2999 County 75% 35 us Flood 579. 1 3 75% 434.35 36 Electric Generation, Distribution and Transmission Tax 21 ,233.98 75% 15,925.49 37 Mobile Home and Other In-Lieu Taxes 68,626.69 100% 68,626.69 38 Telecommunications 46,492.03 100% 46,492.03 I11 I C,:J.1stJ 39 Contribution from Other Local Revenue 140,216.06 0% t) C CONTRIBUTION FROM PROPERTY TAX

40 District Taxable Valuation 36,755,058 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) I - 2,205,303.48- 43 Minimum Local Effort Adjustment (NDCC 15. 1-27-04.2) - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 2,401 ,316.20 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 2,205,303.48

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 1 ,939,474.66 47 General Fund Expenditures 1 2,1 09,397.68 48 35% of General Fund Expenditures + $50,000 4,288,289.19 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

TRANSPORTATION WORKSHEET E

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0.520 6,370.0 xxxxx 3,312.40 51 Large Bus Miles 1.110 71,400.0 xxxxx 79,254.00 xxxxx 52 Rural Rides 0.300 67,550 20,265.00- 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1. 110 14,000.0 xxxxx 15,540.00 xxxxx 55 In-City Rides 0.300 77,000 23,1 00.00- xxxxx 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.2-50 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 141,471 .40 60 Reimbursement Cap --- 90% of transportation expen ditures 297,895.12 61 Transportation Grant Total (lesser of 90% cap or tota I) 141,471 .40

F BASELINE FUNDING - MINIMUM AN D MAXIMUM PAYMENTS

62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 10,599,612.20 63 Baseline Weighted Student Units (2012-13) 1,241.66 64 Baseline Funding Rate $8,536.65

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units I 65 Maximum Increase Amount 1 $8,536.65 1 140%1 1,191.23 14,236,759.01

Baseline Weighted Student Adjustment for Minimum I Funding Rate Minimum Percent Units 66 Minimum Increase Per Student $8,536.65 I 108%1 1,191.23 10,982,642.67 67 Baseline Funding (from line 62) 10,599,612.20 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 10,599,612.20 70 Minimum Increase Amount (greater of line 66 or line 69) 10,982,642.67

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 11.xlsm 10/31/2018 AJT SUPPORTING CALCULATIONS dt I 2018-2019

B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 33 1300 Tuition 114,619-.59 75% 85,964-.69 34 2999 County - 75% - 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 5,292.38 75% 3,969.29 37 Mobile Home and Other In-Lieu Taxes 12,029.00 100% 12,029.00 J067 38 Telecommunications 25,514.90 100% 25,514.90 39 Contribution from Other Local Revenue 127,477.88 0378 t)

C CONTRIBUTION FROM PROPERTY TAX

40 District Taxable Valuation 8,967,785 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) I - 538,067.-10 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 590,146.97 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 538,067.10

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 957,928.54 47 General Fund Expenditures 3, 1 7 1 ,073.59 48 35% of General Fund Expenditures + $50,000 1,1 59,875.76 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

TransportationStatistics Rate Miles Rides Total - 50 Small Bus Miles 0.520 0.0 xxxxx 51 Large Bus Miles 1 . 110 96,600.0 xxxxx 107,226.00 xxxxx 52 Rural Rides 0.300 21,602 6,480.60- xxxxx 53 Small In-City Miles 0.520 0.0 - 54 Large In-City Miles 1.110 0.0 xxxxx xxxxx 55 In-City Rides 0.300 xxxxx 70 21-.00 56 Family - To School 0.250 0.0 - xxxxx 57 Family - To Bus 0.250- 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 113,727.60 60 Reimbursement Cap --- 90% of transportation expen ditures 180, 1 15.35 61 Transportation Grant Total (lesser of 90% cap or tota I) 113,727.60

BASELINE FUNDING MINIMUM AND MAXIMUM PAYMENTS F - 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 2,147,758.17 63 Baseline Weighted Student Units (2012-13) 273.66 64 Baseline Funding Rate $7,848.27

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units 65 Maximum Increase Amount 1 $7,848.21 1 140%1 259.43 I 2,85o,5o7.36 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $7,848.27 I 108%1 259.43 2,198,962.82 67 Baseline Funding (from line 62) 2,1 47,758.17 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 2,147,758.17 70 Minimum Increase Amount (greater of line 66 or line 69) 2,198,962.82

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 1 1.xlsm 10/31/2018 AJT Jf/ SUPPORTING CALCULATIONS 2018-2019

B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 33 1300 Tuition 167,647.97 75% 125,735.98 34 2999 County 12,208.07- 75% 9,156.05- 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 18,574.05 75% 13,930.54 37 Mobile Home and Other In-Lieu Taxes 1 32,476.97 100% 132,476.97 J 3 J/9 38 Telecommunications 92,204.54 100% 92,204.54 ().Josl 39 Contribution from Other Local Revenue 373,504.08 0

C CONTRIBUTION FROM PROPERTY TAX S-6 /70 40 District Taxable Valuation 65,860,383 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) I - 3,951,622.98- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 4,220,925.34 45 Adjusted Contribution from PropertyTax (total lines 42, 43 and 44) 3,951,622.98

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 3, 1 66,1 1 7.66 47 General Fund Expenditures 28,681 ,533.18 48 35% of General Fund Expenditures + $50,000 10,088,536.61 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

TransportationStatistics Rate Miles Rides Total - 50 Small Bus Miles 0.520 0.0 xxxxx 51 Large Bus Miles 1.110 283,256.0 xxxxx 314,414.16 xxxxx 52 Rural Rides 0.300 92,470 27,741-.00 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1.110 46,200.0 xxxxx 51,282.00 xxxxx 55 In-City Rides 0.300 68,250 20,475.00- xxxxx 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.2-50 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 413,912.16 60 Reimbursement Cap --- 90% of transportationexpen ditures 556,445.56 61 Transportation Grant Total (lesser of 90% cap or tota I) 413,912.16

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 20,040,436.33 63 Baseline Weighted Student Units (2012-13) 2,401.51 64 Baseline Funding Rate $8,344.93

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units 65 Maximum Increase Amount I $8,344.93 1 140%1 2,396.37 I 21,996,555.87 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $8,344.93 I 108%1 2,396.37 21,597,343.10 67 Baseline Funding (from line 62) 20,040,436.33 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 20,040,436.33 70 Minimum Increase Amount (greater of line 66 or line 69) 21,597,343.10

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 1 1.xlsm 10/31 /2018 AJT Ce(// t/JL <'Q J� /7 SUPPORTING CALCULATIONS 201a-2019 J:I & � ve I ;b,,v J{B I 3L.S 1-I 7 t/-1-11 B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 33 1300 Tuition 87, 158.8- 2 75% 65,369.-12 fj 7 34 2999 County - 75% - 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 26,029.09 75% 19,521 .82 37 Mobile Home and Other In-Lieu Taxes 12,647.67 100% 12,647.67 38 Telecommunications 99,751 .67 100% 99,751.67 39 Contribution from Other Local Revenue r}S '7o K ( 7scz x ;;c2s1l;s�8) C CONTRIBUTION FROM PROPERTY TAX 40 District Taxable Valuation 27,050,715 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) I - 1,623,042.90- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) - 44 Maximum Contribution increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 1,773,059.70 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 1,623,042.90

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 1 ,561 ,905.31 47 General Fund Expenditures 9,891,829.99 48 35% of General Fund Expenditures + $50,000 3,512,140.50 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Ridesxxxxx Total 50 Small Bus Miles 0.520 11 ,900.0 6,188.00 51 Large Bus Miles 1.110 122,500.0 xxxxx 135,975.00 xxxxx 52 Rural Rides 0.300 128,450 38,535-.00 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1.110 5,600.0 xxxxx 6,216.00 xxxxx 55 In-City Rides 0.300 68,250 20,475.00- xxxxx 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.2-50 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 207,389.00 60 Reimbursement Cap --- 90% of transportation expenditur es 438,338.58 61 Transportation Grant Total (lesser of 90% cap or tota I) 207,389.00

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 6,971,238.26 63 Baseline Weighted Student Units (2012-13) 897.23 64 Baseline Funding Rate $7,769.73

Baseline Weighted Student Adjustment for Maximum Funding Rate j Maximum Percent Units 65 Maximum Increase Amount 1 $7,769.73 140%1 991.93 ! 10,789,839.59 !

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $7,769.73 I 108% 1 991 .93 8,323,590.54 67 Baseline Funding (from line 62) 6,971,238.26 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 6,971,238.26 70 Minimum Increase Amount (greater of line 66 or line 69) 8,323,590.54

ND Departmentof Public Instruction Page 2 of 2 Revenue Worksheet 2018 1 1.xlsm 10/3 1 /2018 AJT *I 2018- SUPPORTING CALCULATIONS 2019 l-li3 f 3(c.S 'f-1-1 1 B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 3 3 3 3 1 00 Tuition 5,704,7 9.24 75% 4,278,554.43 Pji 9 9 34 2 9 County 645,833.38 75% 484,375.04 5 - 3 US Flood - 75% 2 36 Electric Generation, Distribution and Transmission Tax 38,419.92 75% 8,814.94 5 37 Mobile Home and Other In-Lieu Taxes 522,779.08 100% 22,779.08 2 38 Telecommunications 221,771 .58 100% 21,771.58 3 295 39 Contribution from Other Local Revenue , .07 ; ,;Joi

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 17.582,440. 1 6 47 General Fund Expenditures 100,1 75,1 24.25 9 48 35% of General Fund Expenditures + $50,000 35,111,2 3.49 9 4 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0 520 1 ,147.6 xxxxx 596.75 5 . 1 Large Bus Miles 1.110 231 ,844.3 xxxxx 257,347.12 xxxxx 52 Rural Rides 0.300 185,686 55,705.8- 0 53 Smail In-City Miles 0.520 0.0 xxxxx 5 5 4 Large In-City Miles 1.110 1 3,405.0 xxxxx 5 14,879. 5 5 In-City Rides 0.300 xxxxx 94,887 28,466.10 xxxxx 5 56 Family - To School 0.250 11,661.0 2,91 .25 5 xxxxx - 7 Family - To Bus 0.250 0.0 5 - 8 Not Reimbursable 0.0 0 5 9 9 Total Transportation Reimbursement 9 359, 10.57 60 Reimbursement Cap --- 0% of transportation expen ditures 1,380,193.38 5 61 Transportation Grant Total (lesser of 90% cap or tota I) 3 9,910.57

F BASELINE FUNDING - MINIMUM AN D MAXIMUM PAYMENTS 3 5 62 Baseline Funding (2012-1 State Aid Formula Payment, MLRG, GF levies and 7 %-100% In-lieu) 65,450,494.50 63 Baseline Weighted Student Units (2012-13) 7,841.95 64 Baseline Funding Rate $8,346.20

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units I I 9 65 Maximum Increase Amount $8,346.20 140%1 8,387.23 ! 8,002,090.64 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $8,346.20 I 108% 1 8,387.23 75,601,618.95 5 67 Baseline Funding (from line 62) 65,4 0,494.50 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 65,450,494.50 5 70 Minimum Increase Amount (greater of line 66 or line 69) 7 ,601,618.95

2 ND Department of Public Instruction Page of 2 Revenue Worksheet 2018 11.xlsm 10/31 12018 AJT Jt I 201 8-20 SUPPORTING CALCULATIONS 1 9 JU 3 l3 t,,s '1-/-/'j B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 33 1300 Tuition 74;-43I 1.-72 75% 55,823-.79 Pji 34 2999 County 75% - 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 36,874.64 75% 27,655.98 �l oC?& 84,273.00 100% 37 Mobile Home and Other In-Lieu Taxes 84,273.00 Jl bf$_ 38 Telecommunications 86,459.28 100% 86,459.28 39 Contribution from Other Local Revenue 254,212.05 )- {1 r°fu X J8J ()J ) ) I J.&1 1 6% / C CONTRIBUTION FROM PROPERTY TAX 40 District Taxable Valuation 41,674,747 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) - 2,500,484.82- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) I - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 2,579,301 .24 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 2,500,484.82

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 3 ,923,379.93 47 General Fund Expenditures 2 1 ,617,058.78 48 35% of General Fund Expenditures + $50,000 7,615,970.57 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total - 50 Small Bus Miles 0.520 0.0 xxxxx 51 Large Bus Miles 1.1 10 340,772.0 xxxxx 378,256.92 xxxxx 52 Rural Rides 0.300 312,448 93,734.40- 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1.110 1 2,640.0 xxxxx 14,030.40 xxxxx 55 In-City Rides 0.300 xxxxx261 ,096 78,328.80- 56 Family - To School 0.250 0.0 - xxxxx 57 Family - To Bus 0.250- 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 564,350.52 60 Reimbursement Cap --- 90% of transportation expenditur es 81 1 ,203.81 61 Transportation Grant Total (lesser of 90% cap or tota I) 564,350.52

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 15,083,069.83 63 Baseline Weighted Student Units (2012-13) 1,802.76 64 Baseline Funding Rate $8,366.65

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units 65 Maximum Increase Amount 1 $8,366.65 I 140%1 1 ,863.67 I 21,829,744.45 I

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $8,366.65 I 108%1 1,863.67 16,840,088.57 67 Baseline Funding (from line 62) 15,083,069.83 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 15,083,069.83 70 Minimum Increase Amount (greater of line 66 or line 69) 16,840,088.57

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 11.xlsm 10/31 /2018 AJT ·'- , SUPPORTING CALCULATIONS 2018-2019 Jo -60 I f/813 4.S '-f_ / - / ----___---______...... ______,.._ ..,__..,______-""--______-r --!"'""______1 B33 C3ONTRIBUTION FROM OTH E R LOCAL R EVENUE Total Revenue Pe cent 3 1 00 Tuition 311 ,220.36 75% 23 ,415.273 /D 334 2999 County 1 21 ,749-. 11 75% 91,311.8- fJ 35 US Flood 75% 6 Electric Generation, Distribution and Transmission Tax 143,231 .98 75% 107,423.99 b � � 37 Mobile Home and Other In-Lieu Taxes 370,594.85 100% 370,594.85 q;;. 38 Telecommunications 97,547.34 100% 97,547.3493 ;p -, J�7 39 Contribution from Other Local Revenue .28 ()0 °lo X ( 7 r °lo X J O�! ¼ ."\:�·\ /!JG - ./ C CONTRIBUTION FROM PROPERTY TAX isl 40 District Taxable Valuation 124,574,242 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) I - 7,474,454.52- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) I 3 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) 7,193, 51.61 (2813,102.91) 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 7,19 ,351.61

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 5,777,950.60 47 General Fund Expenditures 43,474,309.3 1 48 35% of General Fund Expenditures + $50,000 15,266,008.26 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Ridesxxxxx Total - 50 Small Bus Miles 0.520 0.0 9 51 Large Bus Miles 1.110 236,593.7 xxxxx 262,61 .01 xxxxx 52 Rural Rides 0.300 257,963 77,388-.90 xxxxx 53 Small In-City Miles 0.520 0.0 3 54 Large In-City Miles 1.110 71,137.5 xxxxx 78,962.6 • xxxxx 3 55 In-City Rides 0.300 66,450 109,935.00- xxxxx 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.250- 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 528,905.54 60 Reimbursement Cap --- 90% of transportation expen ditures 1 ,488,61 4.64 61 Transportation Grant Total (lesser of 90% cap or tota I) 528,905.54

F BASELINE FUNDING - MINIMUM3 AND MAXIMUM PAYMENTS 62 Baseline Funding (201 2-1 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 31,014,434.44 63 Baseline Weighted Student Units (2012-13) 3,714.32 64 Baseline Funding Rate $8,349.96

Baseline Weighted Student Adjustment for Maximum I Funding Rate I Maximum Percent Units I 3 65 Maximum Increase Amount $8,349.96 140%1 4,178.10 48,841,755.0 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 3 66 Minimum Increase Per Student I $8,349.96 I 108% 1 4,178.10 37,677,925.31 67 Baseline Funding (from line 62) 1,014,434.44 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 31,014 ,434.443 70 Minimum Increase Amount (greater of line 66 or line 69) 7,677,925. 1

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 11.xlsm 10/31 /2018 AJT /G jY/ t-((eN J l :It- I SUPPORTING CALCU LATIONS 2018-2019 /4)e, -ffc- rj) C 1 "fJ / �f> l 3 l.,.S-

B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 1/ -I - / 1 6 7,500.00 75% 5, 25.00 33 1300 Tuition 1 3,127,891.35 75% 2,345,9 8.51 fj I/ 34 2999 County 49 35 US Flood 1 ,399,091.03 75% 1,0 ,318.27 4 6 36 Electric Generation, Distribution and Transmission Tax 639,304.84 75% 479, 78. 3 84,038.00 100% 84,038.00 ;;).Ior/ o 37 Mobile Home and Other In-Lieu Taxes 6 38 Telecommunications 26,082.67 100% 26,082. 7 990 46 1 b'J.d-0. 39 Contribution from Other Local Revenue 3, , .08 :)6 o/t) 7 7S6-lo! r;Jt' J 9nc; \ 79)58'� ( .,/ C CONTRIBUTION FROM PROPERTY TAX 64 40 District Taxable Valuation 188, 1,150 41 Contribution Mill Rate 60 4 42 Contribution from Property Tax (line 0 times line 41 divided by 1000) 11,318,469 00 4 - -. 3 Minimum Local EffortAd justment (NDCC 15.1-27-04.2) 1 4 I 4 1 44 Maximum Contribution Increase Adjustment (NDCC 15. -27-04.1. .a.) 3,17 ,54 .74 (8,143,927.26) 4 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 4) 3,174,541.74

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 4,291,034.66 47 General Fund Expenditures 2 1 ,757,998.04 48 35% of General Fund Expenditures + $50,000 7,665,299.31 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0.520 1 8,707.5 xxxxx 9,727.90 6 51 Large Bus Miles 1.110 237, 60.5 xxxxx 263,803.16 xxxxx 52 Rural Rides 0.300 197.857 59,357.-10 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1.110 1 2,176.5 xxxxx 13,515.92 0 xxxxx 55 In-City Rides 0.3 0 29,499 8,849.7- 0 xxxxx 56 Family - To School 0.250 0.0 - xxxxx 57 Family - To Bus 0.2-50 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 355,253.78 60 Reimbursement Cap --- 90% of transportation expen ditures 1,567,39 1 .80 61 TransportationGr ant Total (lesser of 90% cap or tota I) 355,253.78

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 9 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 6,617,973 4 6 1 . 3 Baseline Weighted Student Units (2012- 3) 803.26 64 Baseline Funding Rate $8,238.89

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units I I ! 4 65 Maximum Increase Amount $8,238.89 140%1 1,711.27 19,73a,s51. 1 1

Baseline Weighted Student Adjustment for Minimum Funding Rate Minimum Percent Units 66 Minimum Increase Per Student I $8,238.89 I 108%1 1,71 1.27 15,226,882.51 6 6 67 Baseline Funding (from line 2) 6, 17,973.49 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 6,617,973.49 6 6 6 70 Minimum Increase Amount (greater of line 6 or line 9) 15,22 ,882.51

1 ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 1 .xlsm 10/31 /2018 AJT _,,.- µ es/- fa�0 dJ I SUPPORTING CALCULATIONS 1-oo(o 2018-201 9 ,Hf, /3/p5 B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent J./ -J-11 33 1300 Tuition 733,688-.73 75% 550,266.55- I� 34 2999 County 75% - IJ 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 152,460.80 75% 114,345.60 ?JO 37 Mobile Home and Other In-Lieu Taxes 379,229.84 100% 379,229.84 C/'-f g 38 Telecommunications 116,722.28 100% 116,722.28 ;).1t g-o 39 Contribution from other Local Revenue 1,1 60,564.27 J/0 y7?-. X- l75°7a X I JqJ o91..,,) C CONTRIBUTION FROM PROPERTY TAX ]6% 40 District Taxable Valuation 349,521,152 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) - 20,971,269.-12 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) I 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 19,214,831.89 (1.756,437.23) 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 19,214,831.89

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 1 1 ,699,374. 18 47 General Fund Expenditures 126,485,657.39 48 35% of General Fund Expenditures + $50,000 44,319,980.09 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0.520 7,885.7 xxxxx 4,100.55 51 Large Bus Miles 1.110 503,925.2 xxxxx 559,356.97 xxxxx 52 Rural Rides 0.300 838,228 251,468.40- 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1.110 133,204.0 xxxxx 147,856.40 xxxxx 55 In-City Rides 0.300 xxxxx413,14 2 123,942.60 56 Family - To School 0.250 5,146.9 xxxxx 1,286.73 57 Family - To Bus 0.250- 15.2 3.80 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 1,088,015.45 60 Reimbursement Cap --- 90% of transportation expenditur I) es 4,157,346.73 61 Transportation Grant Total (lesser of 90% cap or tota 1,088,015.45

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 71,805,703.49 63 Baseline Weighted Student Units (2012-13) 8,438.83 64 Baseline Funding Rate $8,508.96

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units I 65 Maximum Increase Amount 1 s8.5o8.96 j 140%1 11,829.41 1 140,918,367.12

Baseline Weighted Student Adjustment for Minimum I Funding Rate Minimum Percent Units 66 Minimum Increase Per Student $8,508.96 I 108% 1 11,829.41 108,708,454.63 67 Baseline Funding (from line 62) 71,805,703.49 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 71 ,805,703.49 70 Minimum Increase Amount (greater of line 66 or line 69) 108,708,454.63

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 1 1.xlsm 10/31/2018 AJT =1* SUPPORTING CALCULATIONS 2018-2019 I ,Hi, 1 3 "5 B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 1-1-1'( 33 1300 Tuition 552,489-.25 75% 414,366.94 pJ l3 34 2999 County 75% - 35 US Flood - 75% 36 Electric Generation, Distribution and Transmission Tax 75,872.13 75% 56,904.10 37 Mobile Home and Other In-Lieu Taxes 1 ,276,928.78 100% 1,276,928.78 :Ji9JJ ;;_ 38 Telecommunications 658,294.45 100% 658,294.45 flj'-/ S7 J 39 Contribution from Other Local Revenue 2,406,494.27 0

C CONTRIBUTION FROM PROPERTY TAX 40 District Taxable Valuation 373,326,181 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) I - 22,399,570.86- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 23,535,399.62 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 22,399,570.86

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 31,936,277.69 47 General Fund Expenditures 1 60,408,942.39 48 35% of General Fund Expenditures + $50,000 56,193,129.84 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0.520 4,200.0 xxxxx 2,184.00 51 Large Bus Miles 1.110 353,425.0 xxxxx 392,301.75 xxxxx 52 Rural Rides 0.300 181,312 54,393.60- 53 Small In-City Miles 0.520 0 .0 xxxxx xxxxx 54 Large In-City Miles 1.110 xxxxx289,817.5 321,697.43 55 In-City Rides 0.300 xxxxx1 ,025, 375 307,612-.50 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.250- 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 1,078,189.28 60 Reimbursement Cap --- 90% of transportationexpen ditures 4,806,872.44 61 Transportation Grant Total (lesser of 90% cap or tota I) 1,078,189.28

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 99,386,387.08 63 Baseline Weighted Student Units (2012-13) 11,947.21 64 Baseline Funding Rate $8,318.79

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units 65 Maximum Increase Amount 1 $8,318.79 I 140%1 12,196.99 1 149,037,661.42 I

Baseline Weighted Student Adjustment for Minimum I Funding Rate Minimum Percent Units 66 Minimum Increase Per Student $8,318.79 I 108%1 12,796.99 114,971,910.24 67 Baseline Funding (from line 62) 99,386,387.08 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 99,386,387.08 70 Minimum Increase Amount (greater of line 66 or line 69) 114,971,910.24

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 11.xlsm 10/31/2018 AJT Ja114.,I fo,/{f Jt I SUPPORTING CALCU LATIONS 201a-2019 3(...5 /f-ou 1 (48 { 4-1-l'1 B CONTRIBUTION FROM OTHER LOCAL REVENUE Total Revenue Percent 33 1300 Tuition 4,010,829.54 75% 3,008,122.-16 fJ li 34 2999 County - 75%, - 35 US Flood 75% 36 Electric Generation, Distribution and Transmission Tax 38,566.48 75% 28,924.86 37 Mobile Home and Other In-Lieu Taxes 407,830.39 100% 407,830.39 38 Telecommunications 219,834.41 100% 219,834.41 39 Contribution from Other Local Revenue 3,664,711 .82

C CONTRIBUTION FROM PROPERTY TAX 40 District Taxable Valuation 232,965,412 41 Contribution Mill Rate 60 42 Contribution from Property Tax (line 40 times line 41 divided by 1000) - 13,977,924.72- 43 Minimum Local Effort Adjustment (NDCC 15.1-27-04.2) I - 44 Maximum Contribution Increase Adjustment (NDCC 15.1-27-04.1.4.a.) I 14,902,875.12 45 Adjusted Contribution from Property Tax (total lines 42, 43 and 44) 13,977,924.72

D EXCESS FUND BALANCE OFFSET 46 General Fund Ending Balance 1 8,902,958.96 47 General Fund Expenditures 101,784,094.81 48 35% of General Fund Expenditures + $50,000 35,674,433.18 49 Excess Fund Balance Offset (line 46 minus line 48, if less than zero enter zero)

E TRANSPORTATION WORKSHEET

Transportation Statistics Rate Miles Rides Total 50 Small Bus Miles 0.520 17,510.4 xxxxx 9,105.41 51 Large Bus Miles 1.110 361 ,972.0 xxxxx 401,788.92 xxxxx 52 Rural Rides 0.300 81,030 24,309.00- 53 Small In-City Miles 0.520 0.0 xxxxx 54 Large In-City Miles 1.110 110,425.0 xxxxx 122,571.75 xxxxx 55 In-City Rides 0.300 xxxxx115 ,414 34,624.20- 56 Family - To School 0.250 0.0 xxxxx - 57 Family - To Bus 0.2-50 0.0 58 Not Reimbursable 0.0 0 59 Total Transportation Reimbursement 592,399.28 60 Reimbursement Cap --- 90% of transportation expen ditures 1,347,478.06 61 Transportation Grant Total (lesser of 90% cap or tota I) 592,399.28

F BASELINE FUNDING - MINIMUM AND MAXIMUM PAYMENTS 62 Baseline Funding (2012-13 State Aid Formula Payment, MLRG, GF levies and 75%-100% In-lieu) 64,1 54,643.46 63 Baseline Weighted Student Units (2012-13) 7,772.99 64 Baseline Funding Rate $8,253.53

Baseline Weighted Student Adjustment for Maximum Funding Rate Maximum Percent Units I 65 Maximum Increase Amount 1 $8,253.53 1 140%1 8,480.60 1 97,992,841.13

Baseline Weighted Student Adjustment for Minimum I Funding Rate Minimum Percent Units 66 Minimum Increase Per Student $8,253.53 I 108%1 8,480.60 75,594,477.44 67 Baseline Funding (from line 62) 64,154,643.46 68 Minimum Funding Percentage 100% 69 Minimum Funding Amount 64,154,643.46 70 Minimum Increase Amount (greater of line 66 or line 69) 75,594,477.44

ND Department of Public Instruction Page 2 of 2 Revenue Worksheet 2018 11.xlsm 10/31 /2018 AJT JIB !3�s i..J,- I - I Cf TESTIMONY ON HB 1365 J I APPROPRIATIONS COMMITTEE f' 4/1/19 By: Adam Tescher, Director of School Finance and Organization 701-328-3291 Department of Public Instruction

Mr. Chairman and Members of the Committee:

My name is Adam Tescher and I am the Director of School Finance and

Organization with the Department of Public Instruction.

One request that the department has is on page 4 line 14 is to replace previous calendar year with 2018. The intent would then be to update 2018 with 2020 next session and update the year going forward. There are several changes being considered to the school fundingformu la this session, this change would provide more stability in the budget forthe integrated formula payment. We have also seen several construction loan approval requests which would increase the fiscal impact of this bill if the voters approve their bond referendums.

Mr. Chairman and Members of the Committee that concludes my prepared testimony and I will stand forany questions that you may have.

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