House Bill 521 Advances to House Floor

House Bill 521 was sent to the floor this morning with a “do pass” recommendation. It will likely be voted on by the full House of Representatives later this week. It is an important bill for counties. While the bill itself is a tax relief bill that provides new and increased state funding for school facilities, the bill also includes sections that will benefit counties. Among the benefits to counties are:

– House Bill 521 provides an additional $3 million in funding for public defense. The additional funding will enable the state to provide legal representation to parents and children in child protective actions. This, combined with Senate Bill 1367, clarify that counties are no longer required to pay for representation in child protection proceedings.

– House Bill 521 eliminates the Additional Tax Relief (ATR) and dedicates up to an additional $50 million in state surplus funding for the Homeowner Tax Relief (HTR) program. The ATR program created a number of administrative challenges in implementing House Bill 292. Repealing ATR should improve the overall administration of House Bill 292.

– House Bill 521 allows the HTR amount to be calculated using the prior year levy rate. This will provide more transparency, ease of administration, and greater efficiency in meeting statutory deadlines in preparing and sending out property tax notices. Using the prior year levy rate to determine HTR will enable the State Tax Commission to provide county treasurers with HTR information by the end of September rather than having to wait until November.

– Elimination of the August election date for school bonds and supplemental levies. Eliminating the August election date for school bonds and levies will reduce the administrative burden of conducting elections for county clerks. As a result, school bond and levy elections will take place on one of two election dates: May and November. This should have the added benefit of increasing transparency and voter turnout.

Other items included in House Bill 521 include:

– Reducing the state income tax rate from 5.8% to 5.65%.

– Providing an additional $75 million annually to the School District Facility Fund (SDFF) which will further reduce school bonds and levies.

– Increasing the amount of sales tax dedicated to the SDFF from 2.25% to 3.25% which will further reduce school bonds and levies.

– Establishing a new School Modernization Facilities Fund (SMFF) which will allow the state to bond for over $1 billion which will then be distributed to school districts for modernizing existing facilities and building new facilities.

House Bill 521 is a major policy step forward for the state as it strives to address school facility funding needs around the state while at the same time reducing the overall property tax burden for current and future school bonds and levies. Please reach out to your legislators and encourage them to vote yes on House Bill 521.