FIRST REGULAR SESSION

SENATE BILL NO. 463

91ST GENERAL ASSEMBLY

INTRODUCED BY SENATORS WESTFALL AND CHILDERS.

Read 1st time February 12, 2001, and 1,000 copies ordered printed.

TERRY L. SPIELER, Secretary.

1912S.01I

AN ACT

To repeal sections 137.073, 143.011, 143.071, 144.020, 144.021, 144.440, 144.700, 144.701, 163.011, 163.021, 163.022, 163.031, 163.032, 163.087, 163.172, 164.011, 164.013 and 165.011, RSMo 2000, and to enact in lieu thereof fourteen new sections relating to school funds, with a referendum clause.

Section A.  Sections 137.073, 143.011, 143.071, 144.020, 144.021, 144.440, 144.700, 144.701, 163.011, 163.021, 163.022, 163.031, 163.032, 163.087, 163.172, 164.011, 164.013 and 165.011, RSMo 2000, are repealed and fourteen new sections enacted in lieu thereof, to be known as sections 137.073, 143.011, 143.071, 144.020, 144.021, 144.440, 144.700, 144.701, 163.011, 163.021, 163.031, 163.172, 164.011 and 165.011, to read as follows:

137.073.  1.  As used in this section, the following terms mean:

(1)  "General reassessment", changes in value, entered in the assessor's books, of a substantial portion of the parcels of real property within a county resulting wholly or partly from reappraisal of value or other actions of the assessor or county equalization body or ordered by the state tax commission or any court;

(2)  "Tax rate", "rate", or "rate of levy", singular or plural, includes the tax rate for each purpose of taxation of property a taxing authority is authorized to levy without a vote and any tax rate authorized by election, including bond interest and sinking fund;

(3)  "Tax rate ceiling", a tax rate as revised by the taxing authority to comply with the provisions of this section or when a court has determined the tax rate; except that, other provisions of law to the contrary notwithstanding, a school district may levy the operating levy for school purposes required for the current year pursuant to subsection 2 of section 163.021, RSMo, less all adjustments required pursuant to article X, section 22 of the Missouri Constitution, if such tax rate does not exceed the highest tax rate in effect subsequent to the 1980 tax year.  This is the maximum tax rate that may be levied, unless a higher tax rate ceiling is approved by voters of the political subdivision as provided in this section;

(4)  "Tax revenue", when referring to the previous year, means the actual receipts from ad valorem levies on all classes of property, including state-assessed property, in the immediately preceding fiscal year of the political subdivision, plus an allowance for taxes billed but not collected in the fiscal year and plus an additional allowance for the revenue which would have been collected from property which was annexed by such political subdivision but which was not previously used in determining tax revenue pursuant to this section.  The term "tax revenue" shall not include any receipts from ad valorem levies on any property of a railroad corporation or a public utility, as these terms are defined in section 386.020, RSMo, which were assessed by the assessor of a county or city in the previous year but are assessed by the state tax commission in the current year.  All school districts and those counties levying sales taxes pursuant to chapter 67, RSMo, shall include in the calculation of tax revenue an amount equivalent to that by which they reduced property tax levies as a result of sales tax pursuant to section 67.505, RSMo, [and section 164.013, RSMo,] in the immediately preceding fiscal year but not including any amount calculated to adjust for prior years.  For purposes of political subdivisions which were authorized to levy a tax in the prior year but which did not levy such tax or levied a reduced rate, the term "tax revenue", as used in relation to the revision of tax levies mandated by law, shall mean the revenues equal to the amount that would have been available if the voluntary rate reduction had not been made.

2.  Whenever changes in assessed valuation are entered in the assessor's books, the county clerk in all counties and the assessor of St. Louis City shall notify each political subdivision wholly or partially within the county or St. Louis City of the change in valuation, exclusive of new construction and improvements.  All political subdivisions shall immediately revise the rates of levy for each purpose for which taxes are levied to the extent necessary to produce from all taxable property, exclusive of new construction and improvements, substantially the same amount of tax revenue as was produced in the previous year, except that the rate may not exceed the greater of the rate in effect in the 1984 tax year or the most recent voter-approved rate.  As provided in section 22 of article X of the constitution, a political subdivision may also revise each levy to allow for inflationary assessment growth occurring within the political subdivision.  The inflationary growth factor shall be limited to the actual assessment growth within the political subdivision, exclusive of new construction and improvements, but not to exceed the consumer price index or five percent, whichever is lower.

3.  (1)  Where the taxing authority is a school district, it shall be required to revise the rates of levy to the extent necessary to produce from all taxable property, including state-assessed railroad and utility property, which shall be separately estimated in addition to other data required in complying with section 164.011, RSMo, substantially the amount of tax revenue permitted in this section.  In the year following tax rate reduction, the tax rate ceiling may be adjusted to offset such district's reduction in the apportionment of state school moneys due to its reduced tax rate.  However, in the event any school district, in calculating a tax rate ceiling pursuant to this section, requiring the estimating of effects of state-assessed railroad and utility valuation or loss of state aid, discovers that the estimates used result in receipt of excess revenues, which would have required a lower rate if the actual information had been known, the school district shall reduce the tax rate ceiling in the following year to compensate for the excess receipts, and the recalculated rate shall become the tax rate ceiling for purposes of this section.

(2)  For any political subdivision which experiences a reduction in the amount of assessed valuation relating to a prior year, due to decisions of the state tax commission or a court pursuant to sections 138.430 to 138.433, RSMo, or due to clerical errors or corrections in the calculation or recordation of any assessed valuation:

(a)  Such political subdivision may revise the tax rate ceiling for each purpose it levies taxes to compensate for the reduction in assessed value occurring after the political subdivision calculated the tax rate ceiling in the prior year.  Such revision by the political subdivision shall be made at the time of the next calculation of the tax rate after the reduction in assessed valuation has been determined and shall be calculated in a manner that results in the revised tax rate ceiling being the same as it would have been had the corrected or finalized assessment been available at the time of the prior calculation;

(b)  In addition, for up to three years following the determination of the reduction in assessed valuation as a result of circumstances defined in this subdivision, such political subdivision may levy a tax rate for each purpose it levies taxes above the revised tax rate ceiling provided in paragraph (a) of this subdivision to recoup any revenues it was entitled to receive for the three-year period preceding such determination.

4.  (1)  In order to implement the provisions of this section and section 22 of article X of the Constitution of Missouri, the term "improvements" shall apply to both real and personal property.  In order to determine the value of new construction and improvements, each county assessor shall maintain a record of real property valuations in such a manner as to identify each year the increase in valuation for each political subdivision in the county as a result of new construction and improvements.  The value of new construction and improvements shall include the additional assessed value of all improvements or additions to real property which were begun after and were not part of the prior year's assessment, except that the additional assessed value of all improvements or additions to real property which had been totally or partially exempt from ad valorem taxes pursuant to sections 99.800 to 99.865, RSMo, sections 135.200 to 135.255, RSMo, and section 353.110, RSMo, shall be included in the value of new construction and improvements when the property becomes totally or partially subject to assessment and payment of all ad valorem taxes.  The aggregate increase in valuation of personal property for the current year over that of the previous year is the equivalent of the new construction and improvements factor for personal property.  The assessor shall certify the amount of new construction and improvements for each political subdivision to the county clerk in order that political subdivisions shall have this information for the purpose of calculating tax rates pursuant to this section and section 22, article X, Constitution of Missouri.  In addition, the state tax commission shall certify each year to each county clerk the increase in the general price level as measured by the Consumer Price Index for All Urban Consumers for the United States, or its successor publications, as defined and officially reported by the United States Department of Labor, or its successor agency.  The state tax commission shall certify the increase in such index on the latest twelve-month basis available on June first of each year over the immediately preceding prior twelve-month period in order that political subdivisions shall have this information available in setting their tax rates according to law and section 22 of article X of the Constitution of Missouri.  For purposes of implementing the provisions of this section and section 22 of article X of the Missouri Constitution, the term "property" means all taxable property, including state assessed property.

(2)  Each political subdivision required to revise rates of levy pursuant to this section or section 22 of article X of the Constitution of Missouri shall calculate each tax rate it is authorized to levy and, in establishing each tax rate, shall consider each provision for tax rate revision provided in this section and section 22 of article X of the Constitution of Missouri, separately and without regard to annual tax rate reductions provided in section 67.505, RSMo[, and section 164.013, RSMo].  Each political subdivision shall set each tax rate it is authorized to levy using the calculation that produces the lowest tax rate ceiling.  It is further the intent of the general assembly, pursuant to the authority of section 10(c) of article X of the Constitution of Missouri, that the provisions of such section be applicable to tax rate revisions mandated pursuant to section 22 of article X of the Constitution of Missouri as to reestablishing tax rates as revised in subsequent years, enforcement provisions, and other provisions not in conflict with section 22 of article X of the Constitution of Missouri.  Annual tax rate reductions provided in section 67.505, RSMo, [and section 164.013, RSMo,] shall be applied to the tax rate as established pursuant to this section and section 22 of article X of the Constitution of Missouri, unless otherwise provided by law.

5.  (1)  In all political subdivisions, the tax rate ceiling established pursuant to this section shall not be increased unless approved by a vote of the people.  Approval of the higher tax rate shall be by at least a majority of votes cast.  When a proposed higher tax rate requires approval by more than a simple majority pursuant to any provision of law or the constitution, the tax rate increase must receive approval by at least the majority required.

(2)  When voters approve an increase in the tax rate, the amount of the increase shall be added to the tax rate ceiling as calculated pursuant to this section to the extent the total rate does not exceed any maximum rate prescribed by law.  If a ballot question presents a stated tax rate for approval rather than describing the amount of increase in the question, the stated tax rate approved shall be the current tax rate ceiling.  The increased tax rate ceiling as approved may be applied to the total assessed valuation of the political subdivision at the setting of the next tax rate.

(3)  The governing body of any political subdivision may levy a tax rate lower than its tax rate ceiling and may increase that lowered tax rate to a level not exceeding the tax rate ceiling without voter approval.

6.  Each taxing authority proposing to levy a tax rate in any year shall notify the clerk of the county commission in the county or counties where the tax rate applies of its tax rate ceiling and its proposed tax rate.  Each taxing authority shall express its proposed tax rate in a fraction equal to the nearest one/one hundredth of a cent.  A taxing authority shall round up a fraction greater than or equal to five/one thousandth of one cent to the next higher one/one hundredth of a cent.  Any taxing authority levying a property tax rate shall provide data, in such form as shall be prescribed by the state auditor by rule, substantiating such tax rate complies with Missouri law.  In addition, each taxing authority proposing to levy a tax rate for debt service shall provide data, in such form as shall be prescribed by the state auditor by rule, substantiating the tax rate for debt service complies with Missouri law.  A tax rate proposed for annual debt service requirements will be prima facie valid if, after making the payment for which the tax was levied, bonds remain outstanding and the debt fund reserves do not exceed the following year's payments.  The county clerk shall keep on file and available for public inspection all such information for a period of three years.  The clerk shall, within three days of receipt, forward a copy of the notice of a taxing authority's tax rate ceiling and proposed tax rate and any substantiating data to the state auditor.  The state auditor shall, within fifteen days of the date of receipt, examine such information and return to the county clerk his or her findings as to compliance of the tax rate ceiling with this section and as to compliance of any proposed tax rate for debt service with Missouri law.  If the state auditor believes that a taxing authority's proposed tax rate does not comply with Missouri law, then the state auditor's findings shall include a recalculated tax rate, and the state auditor may request a taxing authority to submit documentation supporting such taxing authority's proposed tax rate.  The county clerk shall immediately forward a copy of the auditor's findings to the taxing authority and shall file a copy of the findings with the information received from the taxing authority.  The taxing authority shall have fifteen days from the date of receipt from the county clerk of the state auditor's findings and any request for supporting documentation to accept or reject in writing the rate change certified by the state auditor and to submit all requested information to the state auditor.  A copy of the taxing authority's acceptance or rejection and any information submitted to the state auditor shall also be mailed to the county clerk.  If a taxing authority rejects a rate change certified by the state auditor and the state auditor does not receive supporting information which justifies the taxing authority's original or any subsequent proposed tax rate, then the state auditor shall refer the perceived violations of such taxing authority to the attorney general's office and the attorney general is authorized to obtain injunctive relief to prevent the taxing authority from levying a violative tax rate.

7.  No tax rate shall be extended on the tax rolls by the county clerk unless the political subdivision has complied with the foregoing provisions of this section.

8.  Whenever a taxpayer has cause to believe that a taxing authority has not complied with the provisions of this section, the taxpayer may make a formal complaint with the prosecuting attorney of the county.  Where the prosecuting attorney fails to bring an action within ten days of the filing of the complaint, the taxpayer may bring a civil action pursuant to this section and institute an action as representative of a class of all taxpayers within a taxing authority if the class is so numerous that joinder of all members is impracticable, if there are questions of law or fact common to the class, if the claims or defenses of the representative parties are typical of the claims or defenses of the class, and if the representative parties will fairly and adequately protect the interests of the class.  In any class action maintained pursuant to this section, the court may direct to the members of the class a notice to be published at least once each week for four consecutive weeks in a newspaper of general circulation published in the county where the civil action is commenced and in other counties within the jurisdiction of a taxing authority.  The notice shall advise each member that the court will exclude him or her from the class if he or she so requests by a specified date, that the judgment, whether favorable or not, will include all members who do not request exclusion, and that any member who does not request exclusion may, if he or she desires, enter an appearance.  In any class action brought pursuant to this section, the court, in addition to the relief requested, shall assess against the taxing authority found to be in violation of this section the reasonable costs of bringing the action, including reasonable attorney's fees, provided no attorney's fees shall be awarded any attorney or association of attorneys who receive public funds from any source for their services.  Any action brought pursuant to this section shall be set for hearing as soon as practicable after the cause is at issue.

9.  If in any action, including a class action, the court issues an order requiring a taxing authority to revise the tax rates as provided in this section or enjoins a taxing authority from the collection of a tax because of its failure to revise the rate of levy as provided in this section, any taxpayer paying his or her taxes when an improper rate is applied has erroneously paid his or her taxes in part, whether or not the taxes are paid under protest as provided in section 139.031, RSMo.  The part of the taxes paid erroneously is the difference in the amount produced by the original levy and the amount produced by the revised levy.  The township or county collector of taxes or the collector of taxes in any city shall refund the amount of the tax erroneously paid.  The taxing authority refusing to revise the rate of levy as provided in this section shall make available to the collector all funds necessary to make refunds pursuant to this subsection.  No taxpayer shall receive any interest on any money erroneously paid by him or her pursuant to this subsection.  Effective in the 1994 tax year, nothing in this section shall be construed to require a taxing authority to refund any tax erroneously paid prior to or during the third tax year preceding the current tax year.

10.  A taxing authority, including but not limited to a township, county collector, or collector of taxes, responsible for determining and collecting the amount of residential real property tax levied in its jurisdiction, shall report such amount of tax collected by December thirty-first of each year such property is assessed, to the state tax commission.  The state tax commission shall compile the tax data by county or taxing jurisdiction and submit a report to the general assembly no later than January thirty-first of the following year.

143.011.  1.  A tax is hereby imposed for every taxable year on the Missouri taxable income of every resident.  The tax shall be determined by applying the tax table or the rate provided in section 143.021, which is based upon the following rates:

If the Missouri taxable income is:    The tax is:

Not over $1,000.00 [1 1/2%] 2 1/2% of the

Missouri taxable

income               

Over $1,000 but not over $2,000 [$15 plus 2%] $25 plus

3% of excess over

$1,000               

Over $2,000 but not over $3,000 [$35 plus 2 1/2%] $55

plus 3 1/2% of

excess over $2,000

Over $3,000 but not over $4,000 [$60 plus 3%] $80 plus

4% of excess over

$3,000

Over $4,000 but not over $5,000 [$90 plus 3 1/2%] $120

plus 4 1/2% of

excess over$4,000

Over $5,000 but not over $6,000 [$125 plus 4%] $165

plus 5% of excess over $5,000

Over $6,000 but not over $7,000 [$165 plus 4 1/2%] $215

plus 5 1/2% of

excess over $6,000

Over $7,000 but not over $8,000 [$210 plus 5%] $270

plus 6% of excess over $7,000

Over $8,000 but not over $9,000 [$260 plus 5 1/2%] $330

plus 6 1/2% of

excess over [$8,000] $9,000

Over $9,000 [$315 plus 6%] $395

plus 7% of excess

over $9,000

2.  The tax rates established in subsection 1 of this section shall apply on and after January 1, 2003.

143.071.  1.  For all tax years beginning before September 1, 1993, a tax is hereby imposed upon the Missouri taxable income of corporations in an amount equal to five percent of Missouri taxable income.

2.  For all tax years beginning on or after September 1, 1993, but before January 1, 2003, a tax is hereby imposed upon the Missouri taxable income of corporations in an amount equal to six and one-fourth percent of Missouri taxable income.  For all tax years beginning on or after January 1, 2003, the tax imposed shall equal seven and one-fourth percent of Missouri taxable income.

144.020.  1.  A tax is hereby levied and imposed upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.  The rate of tax shall be as follows:

(1)  Upon every retail sale in this state of tangible personal property, a tax equivalent to [four] five percent of the purchase price paid or charged, or in case such sale involves the exchange of property, a tax equivalent to [four] five percent of the consideration paid or charged, including the fair market value of the property exchanged at the time and place of the exchange, except as otherwise provided in section 144.025;

(2)  A tax equivalent to [four] five percent of the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation, games and athletic events;

(3)  A tax equivalent to [four] five percent of the basic rate paid or charged on all sales of electricity or electrical current, water and gas, natural or artificial, to domestic, commercial or industrial consumers;

(4)  A tax equivalent to [four] five percent on the basic rate paid or charged on all sales of local and long distance telecommunications service to telecommunications subscribers and to others through equipment of telecommunications subscribers for the transmission of messages and conversations and upon the sale, rental or leasing of all equipment or services pertaining or incidental thereto; except that, the payment made by telecommunications subscribers or others, pursuant to section 144.060, and any amounts paid for access to the Internet or interactive computer services shall not be considered as amounts paid for telecommunications services;

(5)  A tax equivalent to [four] five percent of the basic rate paid or charged for all sales of services for transmission of messages of telegraph companies;

(6)  A tax equivalent to [four] five percent on the amount of sales or charges for all rooms, meals and drinks furnished at any hotel, motel, tavern, inn, restaurant, eating house, drugstore, dining car, tourist cabin, tourist camp or other place in which rooms, meals or drinks are regularly served to the public;

(7)  A tax equivalent to [four] five percent of the amount paid or charged for intrastate tickets by every person operating a railroad, sleeping car, dining car, express car, boat, airplane and such buses and trucks as are licensed by the division of motor carrier and railroad safety of the department of economic development of Missouri, engaged in the transportation of persons for hire;

(8)  A tax equivalent to [four] five percent of the amount paid or charged for rental or lease of tangible personal property, provided that if the lessor or renter of any tangible personal property had previously purchased the property under the conditions of "sale at retail" as defined in subdivision (8) of section 144.010 or leased or rented the property and the tax was paid at the time of purchase, lease or rental, the lessor, sublessor, renter or subrenter shall not apply or collect the tax on the subsequent lease, sublease, rental or subrental receipts from that property.  The purchase or use of motor vehicles, trailers, boats, and outboard motors shall be taxed and the tax paid as provided in sections 144.070 and 144.440.  No tax shall be collected on the rental or lease of motor vehicles, trailers, boats, and outboard motors, except as provided in sections 144.070 and 144.440.  In no event shall the rental or lease of boats and outboard motors be considered a sale, charge, or fee to, for or in places of amusement, entertainment or recreation nor shall any such rental or lease be subject to any tax imposed to, for, or in such places of amusement, entertainment or recreation.  Rental and leased boats or outboard motors shall be taxed under the provisions of the sales tax laws as provided under such laws for motor vehicles and trailers.  Tangible personal property which is exempt from the sales or use tax under section 144.030 upon a sale thereof is likewise exempt from the sales or use tax upon the lease or rental thereof.

2.  All tickets sold which are sold under the provisions of sections 144.010 to 144.525 which are subject to the sales tax shall have printed, stamped or otherwise endorsed thereon, the words "This ticket is subject to a sales tax.".

144.021.  The purpose and intent of sections 144.010 to 144.510 is to impose a tax upon the privilege of engaging in the business, in this state, of selling tangible personal property and those services listed in section 144.020.  The primary tax burden is placed upon the seller making the taxable sales of property or service and is levied at the rate provided for in section 144.020.  Excluding sections 144.070, 144.440 and 144.450, the extent to which a seller is required to collect the tax from the purchaser of the taxable property or service is governed by section 144.285 and in no way affects sections 144.080 and 144.100, which require all sellers to report to the director of revenue their "gross receipts", defined herein to mean the aggregate amount of the sales price of all sales at retail, and remit tax at [four] five percent of their gross receipts.

144.440.  1.  In addition to all other taxes now or hereafter levied and imposed upon every person for the privilege of using the highways or waterways of this state, there is hereby levied and imposed a tax equivalent to [four] five percent of the purchase price, as defined in section 144.070, which is paid or charged on new and used motor vehicles, trailers, boats, and outboard motors purchased or acquired for use on the highways or waters of this state which are required to be registered under the laws of the state of Missouri.

2.  At the time the owner of any such motor vehicle, trailer, boat, or outboard motor makes application to the director of revenue for an official certificate of title and the registration of the same as otherwise provided by law, he shall present to the director of revenue evidence satisfactory to the director showing the purchase price paid by or charged to the applicant in the acquisition of the motor vehicle, trailer, boat, or outboard motor, or that the motor vehicle, trailer, boat, or outboard motor is not subject to the tax herein provided and, if the motor vehicle, trailer, boat, or outboard motor is subject to the tax herein provided, the applicant shall pay or cause to be paid to the director of revenue the tax provided herein.

3.  In the event that the purchase price is unknown or undisclosed, or that the evidence thereof is not satisfactory to the director of revenue, the same shall be fixed by appraisement by the director.

4.  No certificate of title shall be issued for such motor vehicle, trailer, boat, or outboard motor unless the tax for the privilege of using the highways or waters of this state has been paid or the vehicle, trailer, boat, or outboard motor is registered under the provisions of subsection 5 of this section.

5.  The owner of any motor vehicle, trailer, boat, or outboard motor which is to be used exclusively for rental or lease purposes may pay the tax due thereon required in section 144.020 at the time of registration or in lieu thereof may pay a use tax as provided in sections 144.010, 144.020, 144.070 and 144.440.  A use tax shall be charged and paid on the amount charged for each rental or lease agreement while the motor vehicle, trailer, boat, or outboard motor is domiciled in the state.  If the owner elects to pay upon each rental or lease, he shall make an affidavit to that effect in such form as the director of revenue shall require and shall remit the tax due at such times as the director of revenue shall require.

6.  In the event that any leasing company which rents or leases motor vehicles, trailers, boats, or outboard motors elects to collect a use tax, all of its lease receipt would be subject to the use tax, regardless of whether or not the leasing company previously paid a sales tax when the vehicle, trailer, boat, or outboard motor was originally purchased.

7.  The provisions of this section, and the tax imposed by this section, shall not apply to manufactured homes.

144.700.  1.  All revenue received by the director of revenue from the tax imposed by sections 144.010 to 144.430 and 144.600 to 144.745, except that revenue derived from the rate of [one cent] two cents on the dollar of the tax which shall be held and distributed in the manner provided in sections 144.701 and 163.031, RSMo, shall be deposited in the state general revenue fund, including any payments of the taxes made under protest.

2.  The director of revenue shall keep accurate records of any payment of the tax made under protest.  In the event any payment shall be made under protest:

(1)  A protest affidavit shall be submitted to the director of revenue within thirty days after the payment is made; and

(2)  An appeal shall be taken in the manner provided in section 144.261 from any decision of the director of revenue disallowing the making of the payment under protest or an application shall be filed by a protesting taxpayer with the director of revenue for a stay of the period for appeal on the ground that a case is presently pending in the courts involving the same question, with an agreement by the taxpayer to be bound by the final decision in the pending case.

3.  Nothing in this section shall be construed to apply to any refund to which the taxpayer would be entitled under any applicable provision of law.

4.  All payments deposited in the state general revenue fund that are made under protest shall be retained in the state treasury if the taxpayer does not prevail.  If the taxpayer prevails, then taxes paid under protest shall be refunded to the taxpayer, with all interest income derived therefrom, from funds appropriated by the general assembly for such purpose.

144.701.  The revenue derived from the rate of [one cent] two cents on the dollar of the tax imposed by sections 144.010 to 144.430 and sections 144.600 to 144.745 [which shall be deemed to be local tax revenue,] shall be deposited by the state treasurer in a special trust fund, which is hereby created, to be known as the "School District Trust Fund".  The money in the fund shall be transferred to the state school moneys fund and distributed to the public school districts of the state in the manner provided in [sections] section 163.031 [and 163.087], RSMo, and shall be appropriated and used for no other purpose; except that, of all refunds made of taxes collected under the provisions of sections 144.010 to 144.430 and sections 144.600 to 144.745, the appropriate percentage of any refund shall be paid from the school district trust fund[,] and except that the state may retain a fee as a charge for collecting and disbursing moneys so deposited[, and transfers may be made from the fund as provided in section 164.013, RSMo].  The state collection fee shall not exceed two and one-half million dollars or one percent of the amount deposited in the fund, whichever is less.  The fee shall be negotiated annually through the appropriation process.  Any balance remaining in the fund at the end of an appropriation period shall not be transferred to general revenue, and the provisions of section 33.080, RSMo, shall not apply to the fund.  Moneys in the trust fund shall be invested by the state treasurer in the same deposits and obligations in which state funds are authorized by law to be invested, except that the deposits and obligations shall mature and become payable in time for distribution of the funds as provided in [sections] section 163.031 [and 163.087], RSMo.

163.011.  As used in this chapter unless the context requires otherwise:

(1)  "Adjusted gross income":

(a)  "District adjusted gross income per return" shall be the total Missouri individual adjusted gross income in a school district divided by the total number of Missouri income tax returns filed from the school district as reported by the state department of revenue for the second preceding year;

(b)  "State adjusted gross income per return" shall be the total Missouri individual adjusted gross income divided by the total number of Missouri individual income tax returns, of those returns designating school districts, as reported by the state department of revenue for the second preceding year;

(c)  "District income factor" shall be one plus thirty percent of the difference of the district income ratio minus one, except that the district income factor [applied to the portion of the assessed valuation corresponding to any increase in assessed valuation above the assessed valuation of a district as of December 31, 1994,] shall not exceed a value of one;

(d)  "District income ratio" shall be the ratio of the district adjusted gross income per return divided by the state adjusted gross income per return;

(2)  "Adjusted operating levy", the sum of tax rates for the current year for teachers' and incidental funds for a school district as reported to the proper officer of each county pursuant to section 164.011, RSMo;

(3)  "Average daily attendance" means the quotient or the sum of the quotients obtained by dividing the total number of hours attended in a term by resident pupils between the ages of five and twenty-one by the actual number of hours school was in session in that term.  To the average daily attendance of the following school term shall be added the full-time equivalent average daily attendance of summer school students.  "Full-time equivalent average daily attendance of summer school students" shall be computed by dividing the total number of hours attended by all summer school pupils by the number of hours required in section 160.011, RSMo, in the school term.  For purposes of determining average daily attendance under this subdivision, the term "resident pupil" shall include all children between the ages of five and twenty-one who are residents of the school district and who are attending kindergarten through grade twelve in such district.  If a child is attending school in a district other than the district of residence and the child's parent is teaching in the school district or is a regular employee of the school district which the child is attending, then such child shall be considered a resident pupil of the school district which the child is attending for such period of time when the district of residence is not otherwise liable for tuition.  Average daily attendance for students below the age of five years for which a school district may receive state aid based on such attendance shall be computed as regular school term attendance unless otherwise provided by law.  For the purpose of determining a district's eligible pupil count, attendance based upon the first one hundred pupils in attendance of a single school site in a single grade level at a site serving either kindergarten or twelfth grade and serving at least four consecutive grade levels shall be weighted at one hundred five percent;

(4)  "Current operating costs", all expenditures for instruction and support services excluding capital outlay and debt service expenditures less the revenue from federal categorical sources, food service, student activities and payments from other districts;

(5)  ["District's target rate", the district's average percentage of pupils from fiscal years 2000 to 2005 scoring at or above the proficiency level on the statewide assessment system on either mathematics or reading/communication arts plus one percentage point for each year after fiscal year 2005 except that the district's target rate shall not exceed the statewide average percentage from fiscal year 2000 to fiscal year 2005 scoring at or above the proficiency level on the statewide assessment system on either mathematics or reading/communication arts;

(6)]  "District's tax rate ceiling", the highest tax rate ceiling in effect subsequent to the 1980 tax year or any subsequent year.  Such tax rate ceiling shall not contain any tax levy for debt service;

[(7)]  (6)  "Eligible pupils" shall be the sum of the average daily attendance of the school term plus [the product of two times] the average daily attendance for summer school;

[(8)]  (7)  "Equalized assessed valuation of the property of a school district" shall be determined by multiplying the assessed valuation of the real property subclasses specified in section 137.115, RSMo, times the percent of true value as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent and dividing by either the percent of true value as determined by the state tax commission on or before March fifteenth preceding the fiscal year in which the valuation will be effective as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent or the average percent of true value for the highest three of the last four years as determined and certified by the state tax commission, whichever is greater.  To the equalized locally assessed valuation of each district shall be added the assessed valuation of tangible personal property.  The assessed valuation of property which has previously been excluded from the tax rolls, which is being contested as not being taxable and which increases the total assessed valuation of the school district by fifty percent or more, shall not be included in the calculation of equalized assessed valuation under this subdivision;

[(9)]  (8)  "Fiscal instructional ratio of efficiency", the quotient of the sum of the district's current operating costs for all kindergarten through grade twelve direct instructional and direct pupil support service functions plus the costs of improvement of instruction and the cost of purchased services and supplies for operation of the facilities housing those programs, excluding student activities, divided by the sum of the district's current operating cost for kindergarten through grade twelve, plus all tuition revenue received from other districts minus all noncapital transportation costs;

(9)  "Formula base amount per eligible pupil", the amount of entitlement per pupil established pursuant to subsection 1 of section 163.031 and shall be, prior to proration, no less than five thousand three hundred dollars during the 2002-03 school year and shall be adjusted annually by the same percentage as the percentage change in the state average equalized assessed valuation per eligible pupil from the third to the second preceding year based upon appropriations, proration and local deductions made pursuant to subsection 2 of section 163.031;

(10)  "Free and reduced lunch eligible pupil count", the number of pupils eligible for free and reduced lunch on the last Wednesday in January for the preceding school year who were enrolled as students of the district, as approved by the department in accordance with applicable federal regulations;

(11)  ["Guaranteed tax base" means the amount of equalized assessed valuation per eligible pupil guaranteed each school district by the state in the computation of state aid.  To compute the guaranteed tax base, school districts shall be ranked annually from lowest to highest according to the amount of equalized assessed valuation per pupil.  The guaranteed tax base shall be based upon the amount of equalized assessed valuation per pupil of the school district in which the ninety-fifth percentile of the state aggregate number of pupils falls during the third preceding year and shall be equal to the state average equalized assessed valuation per eligible pupil for the third preceding year times two and one hundred and sixty-seven thousandths; except that, for the purposes of line 14(b) the guaranteed tax base shall be no greater than the guaranteed tax base used for the 1998-99 payment year.  The average equalized assessed valuation per pupil shall be the quotient of the total equalized assessed valuation of the state divided by the number of eligible pupils;

(12)]  "Membership" shall be the average of (1) the number of resident full-time students and the full-time equivalent number of part-time students who were enrolled in the public schools of the district on the last Wednesday in September of the previous year and who were in attendance one day or more during the preceding ten school days and (2) the number of resident full-time students and the full-time equivalent number of part-time students who were enrolled in the public schools of the district on the last Wednesday in January of the previous year and who were in attendance one day or more during the preceding ten school days, plus the full-time equivalent number of summer school pupils.  "Full-time equivalent number of part-time students" is determined by dividing the total number of hours for which all part-time students are enrolled by the number of hours in the school term.  "Full-time equivalent number of summer school pupils" is determined by dividing the total number of hours for which all summer school pupils were enrolled by the number of hours required pursuant to section 160.011, RSMo, in the school term.  Only students eligible to be counted for average daily attendance shall be counted for membership;

[(13)]  (12)  "Operating levy for school purposes" [for districts making transfers pursuant to subsection 4 of section 165.011, RSMo, based upon amounts multiplied by the guaranteed tax base, or making payments or expenditures related to obligations made pursuant to section 177.088, RSMo, or any combination of such transfers, payments or expenditures, means the sum of tax rates levied for teachers' and incidental funds plus the operating levy or sales tax equivalent pursuant to section 162.1100, RSMo, of any transitional school district containing the school district, in the payment year, and, for other districts,] means the sum of tax rates levied for incidental, teachers', debt service and capital projects funds plus the operating levy or sales tax equivalent pursuant to section 162.1100, RSMo, of any transitional school district containing the school district, with no more than [eighteen] twelve and one-half cents of the sum levied in the debt service and capital projects funds in the payment year.  [Any portion of the operating levy for school purposes levied in the debt service and capital projects funds in excess of a sum of ten cents must be authorized by a vote of the people, after August 28, 1998, approving an increase in the operating levy, or a full waiver of the rollback pursuant to section 164.013, RSMo, with a tax rate ceiling in excess of the minimum tax rate or an issuance of general obligation bond.  The operating levy shall be, after all adjustments and equalization of the operating levy, no greater than a maximum value of four dollars and ninety-five cents per one hundred dollars assessed valuation, except that the operating levy shall be no greater than a maximum value of four dollars and seventy cents per one hundred dollars assessed valuation for the purposes of line 2 of subsection 6 of section 163.031.] To equalize the operating levy, multiply the aggregate tax rates for teachers' and incidental funds by either the percent of true value, as determined by the state tax commission on or before March fifteenth preceding the fiscal year in which the evaluation will be effective as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent, or the average percent of true value for the highest three of the last four years as determined and certified by the state tax commission, whichever is greater, and divide by the percent of true value as adjusted by the department of elementary and secondary education to an equivalent sales ratio of thirty-three and one-third percent, provided that for any district for which the equivalent sales ratio is equal to or greater than thirty-three and one-third percent, the equalized operating levy shall be the adjusted operating levy.  For any county in which the equivalent sales ratio is less than thirty-one and two-thirds percent, the state tax commission shall conduct a second study in that county and shall use a sample consisting of the parcels used as a sample in the original study combined with an equal number of newly selected parcels.  If the new ratio is higher than the original ratio provided by this subdivision, the new ratio shall be used for the purposes of this subdivision and for determining equalized assessed valuation pursuant to subdivision (8) of this section[.  For the purposes of calculating state aid pursuant to section 163.031, for any district which has not enacted a voluntary tax rate rollback nor increased the amount of a voluntary tax rate rollback from the previous year's amount, the tax rate used to determine a district's entitlement shall be adjusted so that any decrease in the entitlement due to a decrease in the tax rate resulting from the reassessment shall equal the decrease in the deduction for the assessed valuation of the district as a result of the change in the tax rate due to reassessment.  The tax rate adjustments required under this subdivision due to reassessment shall be cumulative and shall be applied each year to determine the tax rate used to calculate the entitlement; except that whenever the actual current operating levy equals or exceeds the tax rate calculated pursuant to this subdivision for the purpose of determining the district's entitlement, then the prior tax rate adjustments required under this subdivision due to reassessment shall be eliminated and shall not be applied in determining the tax rate used to calculate the district entitlement, except that whenever the actual current operating levy is increased by school board action prior to January 1, 2000, or by district voter approval at any time, to a level which equals or exceeds the tax rate calculated pursuant to this subdivision for the purpose of determining the districts entitlement, then the prior tax rate adjustments required under this subdivision due to reassessment shall be eliminated after five years and shall not thereafter be applied in determining the tax rate used to calculate the district entitlement];

[(14)]  (13)  "School purposes" pertains to teachers' and incidental funds except as otherwise provided in this chapter;

[(15)]  (14)  "Teacher" means any teacher, teacher-secretary, substitute teacher, supervisor, principal, supervising principal, superintendent or assistant superintendent, school nurse, social worker, counselor or librarian who shall, regularly, teach or be employed for no higher than grade twelve more than one-half time in the public schools and who is certified under the laws governing the certification of teachers in Missouri.

163.021.  1.  A school district shall receive state aid for its education program only if it:

(1)  Provides for a minimum of one hundred seventy-four days and one thousand forty-four hours of actual pupil attendance in a term scheduled by the board pursuant to section 160.041, RSMo, for each pupil or group of pupils, except that the board shall provide a minimum of one hundred seventy-four days and five hundred twenty-two hours of actual pupil attendance in a term for kindergarten pupils.  If any school is dismissed because of inclement weather after school has been in session for three hours, that day shall count as a school day including afternoon session kindergarten students.  When the aggregate hours lost in a term due to inclement weather decreases the total hours of the school term below the required minimum number of hours by more than twelve hours for all-day students or six hours for one-half-day kindergarten students, all such hours below the minimum must be made up in one-half day or full day additions to the term, except as provided in section 171.033, RSMo;

(2)  Maintains adequate and accurate records of attendance, personnel and finances, as required by the state board of education, which shall include the preparation of a financial statement which shall be submitted to the state board of education the same as required by the provisions of section 165.111, RSMo, for districts;

(3)  Levies an operating levy for school purposes of not less than one dollar and twenty-five cents after all adjustments and reductions on each one hundred dollars assessed valuation of the district;

(4)  Computes average daily attendance as defined in subdivision (2) of section 163.011 as modified by section 171.031, RSMo.  Whenever there has existed within the district an infectious disease, contagion, epidemic, plague or similar condition whereby the school attendance is substantially reduced for an extended period in any school year, the apportionment of school funds and all other distribution of school moneys shall be made on the basis of the attendance during the school year next preceding the year in which such condition existed.

2.  [Beginning with the tax year which commences January 1, 1998, and for the 1998-99 school year and subsequent tax and school years, no school district shall receive more state aid, as calculated under section 163.031 for its education program, exclusive of categorical add-ons, than it received per eligible pupil for the school year 1993-94, unless it has an operating levy for school purposes, as determined pursuant to section 163.011, of not less than two dollars and seventy-five cents after all adjustments and reductions, with no more than ten cents of this tax rate levied in the debt service and capital projects funds and eligible for entry on line 1 of the state school aid formula contained in subsection 6 of section 163.031; except that, beginning in the 1997-98 school year, any district which is required, pursuant to article X, section 22 of the Missouri Constitution, to reduce its operating levy below the minimum tax rate otherwise required under this subsection shall not be construed to be in violation of this subsection for making such tax rate reduction.  Pursuant to section 10(c) of article X of the state constitution, a school district may levy the operating levy for school purposes required by this subsection less all adjustments required pursuant to article X, section 22 of the Missouri Constitution if such rate does not exceed the highest tax rate in effect subsequent to the 1980 tax year.  Nothing in this section shall be construed to mean that a school district is guaranteed to receive an amount not less than the amount the school district received per eligible pupil for the school year 1990-91.] The provisions of [this] subsection 3 of this section shall not apply to any school district located in a county of the second classification which has a nuclear power plant located in such district or to any school district located in a county of the third classification which has an electric power generation unit with a rated generating capacity of more than one hundred fifty megawatts which is owned or operated or both by a rural electric cooperative [except that such school districts may levy for current school purposes and capital projects an operating levy not to exceed two dollars and seventy-five cents less all adjustments required pursuant to article X, section 22 of the Missouri Constitution].

3.  No school district shall receive more state aid, as calculated in section 163.031, for its education program, exclusive of categorical add-ons, than it received per eligible pupil for the school year 1993-1994, if the state board of education determines that the district was not in compliance in the preceding school year with the requirements of section 163.172, until such time as the board determines that the district is again in compliance with the requirements of section 163.172.

4.  The department of elementary and secondary education shall evaluate the correlation between district tax rates and district assessed valuation per pupil following each biennial property tax reassessment and shall report its findings to the governor and the general assembly by December first of the year following each reassessment.  The findings shall include a calculation of the minimum required property tax rate necessary to maintain a correlation of zero or less between district property tax rate and district assessed valuation per pupil and a report of assessed valuation per pupil and district property tax rate for all districts.

5.  No school district shall receive state aid, pursuant to section 163.031, if such district was not in compliance, during the preceding school year, with the requirement, established pursuant to section 160.530, RSMo, to allocate revenue to the professional development committee of the district.

6.  No school district shall receive more state aid, as calculated in section 163.031, for its education program, exclusive of categorical add-ons, than it received per eligible pupil for the school year 1993-1994, if the district did not comply in the preceding school year with the requirements of subsection 7 of section 163.031.

7.  No school district shall receive state aid, pursuant to section 163.031, if the district failed to make a required payment in the preceding year to the school building revolving fund pursuant to section 166.300, RSMo.

[163.022.  Provisions of other law to the contrary notwithstanding, the provisions of subsection 2 of section 163.021 shall not apply to any elementary school district located in a county with a population of between thirty-five thousand and thirty-six thousand residents that contains the majority of at least five school districts.]

[163.031.  1.  School districts which meet the requirements of section 163.021 shall be entitled to an amount computed as follows: an amount determined by multiplying the number of eligible pupils by the lesser of the district's equalized operating levy for school purposes as defined in section 163.011 or two dollars and seventy-five cents per one hundred dollars assessed valuation multiplied by the guaranteed tax base per eligible pupil times the proration factor plus an amount determined by multiplying the number of eligible pupils by the greater of zero or the district's equalized operating levy for school purposes as defined in section 163.011 minus two dollars and seventy-five cents per one hundred dollars assessed valuation multiplied by the guaranteed tax base per eligible pupil times the proration factor.  For the purposes of this section, the proration factor shall be equal to the sum of the total appropriation for distribution under subsections 1 and 2 of this section; and the state total of the deductions as calculated in subsection 2 of this section which do not exceed the district entitlements as adjusted by the same proration factor; divided by the amount of the state total of district entitlements before proration as calculated pursuant to this subsection; provided that, if the proration factor so calculated is greater than one, the proration factor for line 1(b) shall be the greater of one or the proration factor for line 1(a) minus five hundredths, and provided that if the proration factor so calculated is less than one, the proration factor for line 1(a) shall be the lesser of one or the proration factor for line 1(b) plus five hundredths.

2.  From the district entitlement for each district there shall be deducted the following amounts: an amount determined by multiplying the district equalized assessed valuation by the district's equalized operating levy for school purposes times the district income factor plus ninety percent of any payment received the current year of protested taxes due in prior years no earlier than the 1997 tax year minus the amount of any protested taxes due in the current year and for which notice of protest was received during the current year; one hundred percent of the amount received the previous year for school purposes from intangible taxes, fines, forfeitures and escheats, payments in lieu of taxes and receipts from state assessed railroad and utility tax, except that any penalty paid after July 1, 1995, by a concentrated animal feeding operation as defined by the department of natural resources rule shall not be included; one hundred percent of the amounts received the previous year for school purposes from federal properties pursuant to sections 12.070 and 12.080, RSMo; federal impact aid received the previous year for school purposes pursuant to P.L. 81-874 less fifty thousand dollars multiplied by ninety percent or the maximum percentage allowed by federal regulation if that percentage is less than ninety; fifty percent, or the percentage otherwise provided in section 163.087 of Proposition C revenues received the previous year for school purposes from the school district trust fund pursuant to section 163.087; one hundred percent of the amount received the previous year for school purposes from the fair share fund pursuant to section 149.015, RSMo; and one hundred percent of the amount received the previous year for school purposes from the free textbook fund, pursuant to section 148.360, RSMo.

3.  School districts which meet the requirements of section 163.021 shall receive categorical add-on revenue as provided in this subsection.  There shall be individual proration factors for each categorical entitlement provided for in this subsection, and each proration factor shall be determined by annual appropriations, but no categorical proration factor shall exceed the entitlement proration factor established pursuant to subsection 1 of this section, except that the vocational education entitlement proration factor established pursuant to line 16 of subsection 6 of this section and the educational and screening program entitlements proration factor established pursuant to line 17 of subsection 6 of this section may exceed the entitlement proration factor established pursuant to subsection 1 of this section.  The categorical add-on for the district shall be the sum of: seventy-five percent of the costs of adopting and providing a violence prevention program pursuant to section 161.650, RSMo, multiplied by the proration factor; seventy-five percent of the district allowable transportation costs pursuant to section 163.161 multiplied by the proration factor; the special education approved or allowed cost entitlement for the district, provided for by section 162.975, RSMo, multiplied by the proration factor; seventy-five percent of the district gifted education approved or allowable cost entitlement as determined pursuant to section 162.975, RSMo, multiplied by the proration factor; the free and reduced lunch eligible pupil count for the district, as defined in section 163.011, multiplied by twenty percent, for a district with an operating levy in excess of two dollars and seventy-five cents per one hundred dollars assessed valuation, or twenty-two percent, otherwise times the guaranteed tax base per eligible pupil times two dollars and seventy-five cents per one hundred dollars assessed valuation times the proration factor plus the free and reduced lunch eligible pupil count for the district, as defined in section 163.011, times thirty percent times the guaranteed tax base per eligible pupil times the following quantity: ((the greater of zero or the district's operating levy for school purposes minus two dollars and seventy-five cents per one hundred dollars assessed valuation) times one or, beginning in the fifth year following the effective date of this section, the quotient of the district's fiscal instructional ratio of efficiency for the prior year divided by the fiscal year 1998 statewide average fiscal instructional ratio of efficiency, if the district's prior year fiscal instructional ratio of efficiency is at least five percent below the fiscal year 1998 statewide average) times the proration factor, minus court-ordered state desegregation aid received by the district for operating purposes; the career ladder entitlement for the district, as provided for in sections 168.500 to 168.515, RSMo, multiplied by the proration factor; the vocational education entitlement for the district, as provided for in section 167.332, RSMo, multiplied by the proration factor and the district educational and screening program entitlements as provided for in sections 178.691 to 178.699, RSMo, times the proration factor.

4.  Each district's apportionment shall be the prorated categorical add-ons plus the greater of the district's prorated entitlement minus the total deductions for the district or zero.

5.  (1)  In the 1993-94 school year and all subsequent school years, pursuant to section 10(c) of article X of the state constitution, a school district shall adjust upward its operating levy for school purposes to the extent necessary for the district to at least maintain the current operating expenditures per pupil received by the district from all sources in the 1992-93 school year, except that its operating levy for school purposes shall not exceed the highest tax rate in effect subsequent to the 1980 tax year, or the minimum rate required by subsection 2 of section 163.021, whichever is less.

(2)  The revenue per eligible pupil received by a district from the following sources: line 1 minus line 10, or zero if line 1 minus line 10 is less than zero, plus line 14 of subsection 6 of this section, shall not be less than the revenue per eligible pupil received by a district in the 1992-93 school year from the foundation formula entitlement payment amount plus the amount of line 14 per eligible pupil that exceeds the line 14 per pupil amount from the 1997-98 school year, or the revenue per eligible pupil received by a district in the 1992-93 school year from the foundation formula entitlement payment amount plus the amount of line 14(a) per eligible pupil times the quotient of line 1 minus line 10, divided by the number of eligible pupils, or zero if line 1 minus line 10 is less than zero, divided by the revenue per eligible pupil received by the district in the 1992-93 school year from the foundation formula entitlement payment amount, whichever is greater.  The department of elementary and secondary education shall make an addition in the payment amount of line 19 of subsection 6 of this section to assure compliance with the provisions contained in this section.

(3)  For any school district which meets the eligibility criteria for state aid as established in section 163.021, but which under subsections 1 to 4 of this section, receives no state aid for two successive school years, other than categorical add-ons, by August first following the second such school year, the commissioner of education shall present a plan to the superintendent of the school district for the waiver of rules and the duration of said waivers, in order to promote flexibility in the operations of the district and to enhance and encourage efficiency in the delivery of instructional services.  The provisions of other law to the contrary notwithstanding, the plan presented to the superintendent shall provide a summary waiver, with no conditions, for the pupil testing requirements pursuant to section 160.257, RSMo.  Further, the provisions of other law to the contrary notwithstanding, the plan shall detail a means for the waiver of requirements otherwise imposed on the school district related to the authority of the state board of education to classify school districts pursuant to section 161.092, RSMo, and such other rules as determined by the commissioner of education, except that such waivers shall not include the provisions established pursuant to sections 160.514 and 160.518, RSMo.

(4)  In the 1993-94 school year and each school year thereafter for two years, those districts which are entitled to receive state aid under subsections 1 to 4 of this section, shall receive state aid in an amount per eligible pupil as provided in this subsection.  For the 1993-94 school year, the amount per eligible pupil shall be twenty-five percent of the amount of state aid per eligible pupil calculated for the district for the 1993-94 school year pursuant to subsections 1 to 4 of this section plus seventy-five percent of the total amount of state aid received by the district from all sources for the 1992-93 school year for which the district is entitled and which are distributed in the 1993-94 school year pursuant to subsections 1 to 4 of this section.  For the 1994-95 school year, the amount per eligible pupil shall be fifty percent of the amount of state aid per eligible pupil calculated for the district for the 1994-95 school year pursuant to subsections 1 to 4 of this section plus fifty percent of the total amount of state aid received by the district from all sources for the 1992-93 school year for which the district is entitled and which are distributed in the 1994-95 school year pursuant to subsections 1 to 4 of this section.  For the 1995-96 school year, the amount of state aid per eligible pupil shall be seventy-five percent of the amount of state aid per eligible pupil calculated for the district for the 1995-96 school year pursuant to subsections 1 to 4 of this section plus twenty-five percent of the total amount of state aid received by the district from all sources for the 1992-93 school year for which the district is entitled and which are distributed in the 1995-96 school year pursuant to subsections 1 to 4 of this section.  Nothing in this subdivision shall be construed to limit the authority of a school district to raise its district operating levy pursuant to subdivision (1) of this subsection.

(5)  If the total of state aid apportionments to all districts pursuant to subdivision (3) of this subsection is less than the total of state aid apportionments calculated pursuant to subsections 1 to 4 of this section, then the difference shall be deposited in the outstanding schools trust fund.  If the total of state aid apportionments to all districts pursuant to subdivision (1) of this subsection is greater than the total of state aid apportionments calculated pursuant to subsections 1 to 4 of this section, then funds shall be transferred from the outstanding schools trust fund to the state school moneys fund to the extent necessary to fund the district entitlements as modified by subdivision (4) of this subsection for that school year with a district entitlement proration factor no less than one and such transfer shall be given priority over all other uses for the outstanding schools trust fund as otherwise provided by law.

6.  State aid shall be determined as follows:

District Entitlement

1(a). Number of eligible pupils x (lesser

of district's equalized operating levy

for school purposes or two dollars and

seventy-five cents per one

hundred dollars assessed valuation)

x (proration x GTB per EP)    $. . . . .

1(b). Number of eligible pupils x

(greater of: 0, or district's equalized

operating levy for school purposes minus

two dollars and seventy-five cents

per one hundred dollars assessed

valuation) x (proration x GTB

per EP)    $. . . . .

Deductions

2. District equalized assessed

valuation x district income factor x

district's equalized operating levy

for school purposes plus ninety percent

of any payment received the current

year of protested taxes due in prior

years no earlier than the 1997 tax year

minus the amount of any protested

taxes due in the current year and for

which notice of protest was received

during the current year    $. . . . .

3. Intangible taxes, fines, forfeitures,

escheats, payments in lieu of

taxes, etc. (100% of the amount

received the previous year for

school purposes)    $. . . . .

4. Receipts from state assessed

railroad and utility tax (100% of

the amount received the previous

year for school purposes)    $. . . . .

5. Receipts from federal properties pursuant

to sections 12.070 and 12.080, RSMo (100%

of the amount received the previous year for

school purposes)    $. . . . .

6. (Federal impact aid received the previous

year for school purposes pursuant to P.L.

81-874 less $50,000) x 90% or the maximum

percentage allowed by federal regulations

if less than 90%    $. . . . .

7. Fifty percent or the percentage otherwise

provided in section 163.087 of Proposition C

receipts from the school district trust fund

received the previous year for school purposes

pursuant to section 163.087    $. . . . .

8. One hundred percent of the amount received

the previous year for school purposes from the

fair share fund pursuant to section 149.015,

RSMo    $. . . . .

9. One hundred percent of the amount received

the previous year for school purposes from the

free textbook fund pursuant to section 148.360,

RSMo    $. . . . .

10. Total deductions (sum of

lines 2-9)    $. . . . .

Categorical Add-ons

11. The amount distributed pursuant to

section 163.161 x proration    $. . . . .

12. Special education approved or

allowed cost entitlement for the

district pursuant to section 162.975,

RSMo, x proration    $. . . . .

13. Seventy-five percent of the

gifted education approved or

allowable cost entitlement as

determined pursuant to section

162.975, RSMo, x proration    $. . . . .

14(a). Free and reduced lunch eligible

pupil count for the district, as defined

in section 163.011, x .20, if operating

levy in excess of $2.75, or .22, otherwise

x GTB per EP x $2.75 per $100 AV x

proration    $. . . . .

14(b). Free and reduced lunch eligible

pupil count for the district, as

defined in section 163.011 x .30 x GTB x

((the greater of zero or the district's

adjusted operating levy minus $2.75 per

$100 AV) x (1.0 or, beginning in the

fifth year following the effective date

of this section, the district's FIRE for

the prior year/statewide average FIRE

for FY 1998, if the district's prior

year FIRE is at least five percent below

the FY 1998 statewide average FIRE)

x proration) - court-ordered state

desegregation aid received by

the district for operating

purposes    $. . . . .

15. Career ladder entitlement for

the district as provided for in

sections 168.500 to 168.515, RSMo,

x proration    $. . . . .

16. Vocational education entitlements

for the district as provided in

section 167.332, RSMo, x

proration    $. . . . .

17. Educational and screening program

entitlements for the district as provided

in sections 178.691 to 178.699, RSMo,

x proration    $. . . . .

18. Sum of categorical add-ons for

the district (sum of lines

11-17)    $. . . . .

19. District apportionment (line 18

plus the greater of line 1 minus line

10 or zero)    $. . . . .

7.  Revenue received for school purposes by each school district pursuant to this section shall be placed in each of the incidental and teachers' funds based on the ratio of the property tax rate in the district for that fund to the total tax rate in the district for the two funds.

8.  In addition to the penalty for line 14 described in subsection 6 of this section, beginning in school year 2004-05, any increase in a school district's funds received pursuant to line 14 of subsection 6 of this section over the 1997-98 school year shall be reduced by one percent for each full percentage point the percentage of the district's pupils scoring at or above five percent below the statewide average level on either mathematics or reading is less than sixty-five percent.

9.  If a school district's annual audit discloses that students were inappropriately identified as eligible for free or reduced-price lunch and the district does not resolve the audit finding, the department of elementary and secondary education shall require that the amount of line 14 aid paid on the inappropriately identified pupils be repaid by the district in the next school year and shall additionally impose a penalty of one hundred percent of the line 14 aid paid on such pupils, which penalty shall also be paid within the next school year.  Such amounts may be repaid by the district through the withholding of the amount of state aid.]163.031.  1.  School districts which meet the requirements of section 163.021 shall be entitled to an amount computed as follows: an amount determined by multiplying the number of eligible pupils by the formula base amount per eligible pupil times the proration factor.  For the purposes of this section, the proration factor shall be equal to the sum of the total appropriation for distribution under subsections 1 and 2 of this section plus the state total of the deductions as calculated in subsection 2 of this section which do not exceed the district entitlements as adjusted by the same proration factor divided by the amount of the state total of district entitlements before proration as calculated pursuant to this subsection.

2.  From the district entitlement for each district there shall be deducted the following amounts: the district's equalized assessed valuation times one dollar twenty-five cents per one hundred dollars assessed valuation; the greater of zero or fifty percent of the following amount: the amount of current taxes received by the district the previous school year for school purposes plus any payment received the current year of protested taxes due in prior years no earlier than the 1997 tax year minus the amount of any protested taxes due in the current year and for which notice of protest was received during the current year minus ten percent of the formula base amount per eligible pupil times the district's number of eligible pupils minus the district's equalized assessed valuation times one dollar twenty-five cents per one hundred dollars assessed valuation; one hundred percent of the amount received the previous year for school purposes from payments in lieu of taxes and receipts from state assessed railroad and utility tax; one hundred percent of the amounts received the previous year for school purposes from federal properties pursuant to sections 12.070 and 12.080, RSMo; federal impact aid received the previous year for school purposes pursuant to P.L. 81-874 less fifty thousand dollars multiplied by ninety percent or the maximum percentage allowed by federal regulation if that percentage is less than ninety; one hundred percent of the amount received the previous year for school purposes from intangible taxes; one hundred percent of the amount received the previous year for school purposes from the fair share fund pursuant to section 149.015, RSMo; and one hundred percent of the amount received the previous year for school purposes from the free textbook fund, pursuant to section 148.360, RSMo.

3.  School districts which meet the requirements of section 163.021 shall receive categorical add-on revenue as provided in this subsection.  There shall be individual proration factors for each categorical entitlement provided for in this subsection, and each proration factor shall be determined by annual appropriations.  The categorical add-on for the district shall be the sum of: transportation aid pursuant to section 163.161 multiplied by the proration factor; the special education approved or allowed extraordinary cost entitlement for the district, provided for by section 162.975, RSMo, multiplied by the proration factor; the free and reduced lunch eligible pupil count for the district multiplied by fifteen percent times the formula base amount per eligible pupil times the proration factor; the career ladder entitlement for the district, as provided for in sections 168.500 to 168.515, RSMo, multiplied by the proration factor; the vocational education entitlement for the district, as provided for in section 167.332, RSMo, multiplied by the proration factor; the district educational and screening program entitlements as provided for in sections 178.691 to 178.699, RSMo, times the proration factor and the experienced teacher entitlement for the district as provided in section 163.172 times the proration factor.

4.  Each district's apportionment shall be the prorated categorical add-ons plus the greater of the district's prorated entitlement minus the total deductions for the district or zero.

5.  School districts shall receive per pupil aid pursuant to this section as follows:

(1)  For the 2002-03 school year, state aid shall be one-half of the per pupil amount calculated pursuant to subsection 6 of this section plus one-half of the per pupil amount received pursuant to this section for the 2001-2002 school year; and

(2)  For the 2003-04 school year and thereafter, state aid shall be the per pupil amount calculated pursuant to subsection 6 of this section.

6.  State aid shall be determined as follows:

District Entitlement

1. Number of eligible pupils x base formula

amount per eligible pupil x proration    $. . . . . . .

Deductions

2. (District's equalized assessed valuation x

$1.25 per $100 assessed valuation) + Greater

of: zero, or 50% x ((current taxes received

for school purposes plus any payment received

the current year of protested taxes due in

prior years no earlier than the 1997

tax year minus the amount of any

protested taxes due in the current year

and for which notice of protest was

received during the current year) minus (10%

x formula base amount per EP x number of

eligible pupils) minus (district's equalized

assessed valuation x $1.25 per $100 assessed

valuation))    $. . . . . . .

3. Payments in lieu of taxes, etc. (100% of the

amount received the previous year

for school purposes)    $. . . . . . .

4. Receipts from state assessed railroad and

utility tax (100% of the amount received

the previous year for school purposes)    $. . . . . . .

5. Receipts from federal properties pursuant

to sections 12.070 and 12.080, RSMo

(100% of the amount received the previous

year for school purposes)    $. . . . . . .

6. (Federal impact aid received the previous

year for school purposes pursuant to

P.L. 81-874 less $50,000) x 90% or the

maximum percentage allowed by federal

regulations if less than 90%    $. . . . . . .

7. Intangible taxes and merchant's and manufacturer's

replacement taxes (100% of the amount received

the previous year for school purposes

pursuant to chapter 150, RSMo)    $. . . . . . .

8. One hundred percent of the amount received

the previous year for school purposes from

the fair share fund pursuant to section

149.015, RSMo    $. . . . . . .

9. One hundred percent of the amount received

the previous year for school purposes from

the free textbook fund pursuant to section

148.360, RSMo    $. . . . . . .

10. Total deductions (sum of lines 2-9)    $. . . . . . .

Categorical Add-ons

11. The amount distributed pursuant to section

163.161 x proration    $. . . . . . .

12. Special education approved or allowed

entitlement for the district pursuant

to section 162.975, RSMo, x proration    $. . . . . . .

13. Educational and screening program

entitlements for the district as provided in

sections 178.691 to 178.699, RSMo, x

proration    $. . . . . . .

14. District's free and reduced price

lunch eligible enrollment

.15 x formula base amount per eligible pupil

x proration    $. . . . . . .

15. Career ladder entitlement for the district

as provided for in sections 168.500 to

168.515, RSMo, x proration    $. . . . . . .

16. Vocational education entitlements for the

district as provided in section 167.332,

RSMo, x proration    $. . . . . . .

17. Experienced teacher entitlement for

the district as provided in section

163.172 x proration    $. . . . . . .

18. Sum of categorical add-ons for the district

(sum of lines 11-17)    $. . . . . . .

19. District apportionment (line 18 plus the

greater of line 1 minus line 10 or zero)    $. . . . . . .

[163.032.  Other provisions of law to the contrary notwithstanding, beginning with the 1994-95 school year, the revenue per eligible pupil received by a district from the following sources under subsection 6 of section 163.031: line one minus line ten, or zero if line one minus line ten is less than zero, plus line fourteen; plus the product of the current assessed valuation of the district multiplied by the following tax rate - the greater of zero or the minimum rate required for the current year by subsection 2 of section 163.021, minus the sum of the district's equalized operating levy for school purposes of 1993 and any equalized operating levy for school purposes levied for 1993 by a special school district in which the district is located, shall not be less than the revenue per eligible pupil received by a district in the 1992-93 school year from the foundation formula entitlement payment amount.  The department of elementary and secondary education shall make an addition in the payment amount of line nineteen of subsection 6 of section 163.031 to assure compliance with the provisions contained in this section.  For all purposes of law, a school district's equalized operating levy for school purposes does not include any equalized operating levy for school purposes levied by a special school district in which the district is located.]

[163.087.  1.  Money in the school district trust fund shall be distributed to each school district in the state in the same ratio that the number of eligible pupils in the district bears to the total number of eligible pupils in all such school districts for the preceding year, except as otherwise provided in section 163.031.  As used in the preceding sentence, the term "eligible pupils" has the meaning ascribed to it in section 163.011.  In addition, each such district which is providing an approved program for pupils residing on federal lands shall receive an amount which shall be determined as follows: An eligible pupil count for pupils residing on federal lands shall be calculated separately for the district in the manner provided in section 163.011, treating such pupils as residents of the district for this purpose.  Such eligible student count shall be multiplied by one-half of the amount to be received by the district, pursuant to this subsection, per eligible pupil not residing on federal lands.

2.  Money in the fund shall be distributed monthly on or before the fifteenth day of each month.  The state board of education shall certify the amounts to be distributed to the several school districts to the commissioner of administration who shall issue the warrants therefor.

3.  Money received by a school district from the school district trust fund shall be deemed to be local tax revenue derived for the same fiscal year in which the money is received, for the teachers' and incidental funds, and shall be deposited to such funds of the district in proportion to operating levies for the teachers' and incidental funds.  The reduction in the operating levy pursuant to section 164.013, RSMo, shall be made proportionally in the funds where the remaining one-half of the money from the school district trust fund is deposited.  In the calculation of state aid for the district under the provisions of section 163.031, one-half the amount received by the district in the first preceding year shall be deducted from the district's entitlement as provided in section 163.031.]

163.172.  1.  In school year [1994-95 and thereafter] 2002-2003, the minimum teacher's salary shall be eighteen thousand dollars.  [Beginning] In [the] school year [1996-97] 2002-2003, for any full-time teacher with a master's degree and at least ten years teaching experience in a public school or combination of public schools, the minimum salary shall be twenty-four thousand dollars.

2.  [Beginning with the budget requests for fiscal year 1991, the commissioner of education shall present to the appropriate committees of the general assembly information on the average Missouri teacher's salary, regional average salary data, and national average salary data.

3.]  As used in this section, the following terms mean:

(1)  "Full-time teacher", a teacher working under school district contract for all school days and hours eligible for attendance of students;

(2)  "Master's degree or its equivalent", at a minimum, a bachelor's degree plus at least thirty-two additional hours of course work which results in at least one additional certification;

(3)  "Regular school term", a minimum of one hundred seventy-four days and one thousand forty-four hours of pupil attendance possible for students;

(4)  "Salary", the salary and minimum salary supplement amounts which appear on the teacher's contract for the regular school term.  Such term does not include supplements for extra duties, summer school, career ladder, or extensions of the contract year;

(5)  "Teacher", all certificated school district personnel paid pursuant to the school district teacher salary schedule.

3.  All school district employee salary and personnel policy information shall be public information.

4.  [As used in this section, the term "salary" shall be defined as the salary figure which appears on the teacher's contract and as determined by the local school district's basic salary schedule and does not include supplements for extra duties.

5.]  The minimum salary for any fully certificated teacher employed on a less than full-time basis by a school district, state school for the severely handicapped, the Missouri School for the Deaf, or the Missouri School for the Blind shall be prorated to reflect the amounts provided in [subsections] subsection 1 [and 2] of this section.

[6.  Beginning with the 1996-97 school year, the general assembly shall make an annual appropriation to the excellence in education fund established in section 160.268, RSMo, for the purpose of fulfilling the minimum salary requirements for public school teachers in those districts meeting the qualifications established in subsection 7 of this section.  The appropriation shall be sufficient to ensure that all qualifying districts are able to comply with the minimum salary requirements of this section.  The department of elementary and secondary education shall determine, prior to each school year, those districts which shall be eligible to receive funds in this subsection during the school year.  A qualifying district shall be eligible to receive funds appropriated in this subsection only during the first three years following the district's qualifying for such funds.

7.  To qualify to begin receiving funds in subsection 6 of this section, a school district shall meet all of the following criteria:

(1)  A portion of the real property of the district shall have been removed from the tax rolls due to the impact of state or federal government action;

(2)  The district shall have received no more state aid on a per pupil basis for each of the last three school years, exclusive of categorical funding, than the district received for the 1992-93 school year;

(3)  The salaries paid to all teachers in the district for the school year prior to qualification shall be totally compacted at the eighteen thousand dollar per year minimum established in this section;

(4)  The district shall have in its employ for the school year prior to qualification one or more teachers with a master's degree and at least ten years' teaching experience in a public school or a combination of public schools;

(5)  The district shall be financially distressed or have a history of deficit spending which, if continued, will cause the district to become financially distressed within three years;

(6)  The district had an enrollment of no greater than four hundred pupils for the preceding school year; and

(7)  The district shall have levied an operating levy for school purposes of not less than two dollars seventy-five cents per one hundred dollars of assessed valuation for the previous year and shall continue to levy at no less than that rate.

8.  For any school year in which a school district receives funds pursuant to subsections 6 and 7 of this section, such school district shall continue to expend on teacher salaries no less than the amount it expended on teacher salaries in the school year immediately prior to the school year in which it first receives such funds.

9.  No school district receiving funds pursuant to subsections 6 and 7 of this section shall receive additional funds pursuant to subsection 6 of this section by virtue of the annexation of another school district to such school district during or after the school year immediately prior to the school year in which the annexing district first receives such funds; nor shall any school district annexed to a school district receiving funds pursuant to subsections 6 and 7 of this section also receive funds pursuant to subsection 6 of this section by virtue of such annexation if such annexation occurred during or after the school year immediately prior to the school year in which the annexing school district first receives such funds.]

5.  Beginning with the 2003-2004 school year, the minimum salary for a full-time teacher shall be at least twenty-five thousand dollars, the minimum salary for the full-time teacher with at least five years of previous experience shall be at least thirty thousand dollars, the minimum salary for a full-time teacher with at least nineteen years of previous experience or a full-time teacher with at least a master's degree or its equivalent and at least ten years previous experience shall be at least thirty-five thousand dollars, the minimum salary for a full-time teacher with at least a master's degree or its equivalent and at least nineteen years of previous experience shall be at least forty thousand dollars, and the minimum salary for a full-time teacher with at least a master's degree or its equivalent and at least twenty-nine years of previous experience shall be at least forty-five thousand dollars.

6.  Beginning with the 2003-2004 school year, the general assembly shall make an annual appropriation to the excellence in education fund established in section 160.268, RSMo, for the purpose of providing experienced teacher entitlement payments as provided in this subsection to those districts meeting the qualifications established in subsection 7 of this section.  If the appropriation of the general assembly is insufficient to pay the total cost of all experienced teacher entitlements, the entitlement amounts pursuant to this subsection shall be uniformly prorated until the amount appropriated is sufficient to make the payments to all eligible school districts.  The amount of a district's experienced teacher entitlement shall be equal to the product of the district's total number of years of public school experience for all employees employed in positions requiring a certificate from the state board of education, as reported to the department for the preceding year times six hundred seventy dollars times the proration factor.

7.  To qualify to receive funds pursuant to subsection 6 of this section, a school district shall meet all of the following criteria:

(1)  Meet all eligibility requirements for receipt of state aid pursuant to section 163.021;

(2)  Make no transfer of revenue or balance from either incidental or teachers funds to either debt service or capital projects funds in excess of statutory authority;

(3)  Make no reduction in any salary amount in the district's teacher salary schedule compared to the district's 2002-2003 teacher salary schedule unless the district is financially stressed as identified by the department of elementary and secondary education;

(4)  Beginning with school year 2003-2004, determine the salary of any teacher who is a new employee to a school district by placement on the district's salary schedule using all of the teacher's previous years of public school teaching experience; and

(5)  Beginning with school year 2003-2004, for any school district which is not financially stressed, pay each returning teacher a salary for the regular school term which is no less than the salary paid that teacher during the previous school term on a full-time employee equivalent basis.

8.  Reductions or penalties to state aid payments to school districts pursuant to subsection 6 of this section paying minimum salary supplements to teachers shall occur under the following conditions:

(1)  Annually the amount by which total supplemental assignment and extra duty salaries, not including career ladder supplements, paid teachers by a district exceed eight and one-half percent of total salaries for the regular school term plus minimum salary supplements shall be subtracted from state payments made the following year pursuant to subsection 6 of this section;

(2)  The amount of end-of-year fund balance in incidental and teachers funds combined in excess of the greater of fifteen percent of expenditures in these funds or the 2002-2003 end-of-year fund balance in these funds shall be subtracted the following year from state payments paid pursuant to subsection 6 of this section and if necessary from state aid paid pursuant to section 163.031.

9.  The state board of education shall issue rules and regulations as necessary for the efficient and effective implementation of this section.  All such rules shall be promulgated pursuant to chapter 536, RSMo.

164.011.  1.  The school board of each district annually shall prepare an estimate of the amount of money to be raised by taxation for the ensuing school year, the rate required to produce the amount, and the rate necessary to sustain the school or schools of the district for the ensuing school year, to meet principal and interest payments on the bonded debt of the district and to provide the funds to meet other legitimate district purposes.  In preparing the estimate, the board shall have sole authority in determining what part of the total authorized rate shall be used to provide revenue for each of the funds as authorized by section 165.011, RSMo.  [Except as provided in subsection 3 of this section, for the 1996-97 school year and thereafter, prior to setting tax rates for the teachers' and incidental funds,] The school board of each school district annually shall set the tax rate for the capital projects fund [as necessary to meet the expenditures of the capital projects fund after all transfers allowed pursuant to subsection 7 of section 165.011, RSMo, for expenditures authorized by section 177.088, RSMo, and after the following transfers if needed: in the 1996-97 school year, one-twelfth of the maximum transfer allowed by section 165.011, RSMo; in the 1997-98 school year, one-sixth of the maximum transfer allowed by section 165.011, RSMo; in the 1998-99 school year, one-half of the maximum transfer allowed by section 165.011, RSMo; and in the 1999-2000 school year and thereafter, one hundred percent of the transfers allowed by section 165.011, RSMo.  Furthermore, except that the tax rate set in the capital projects fund shall not require the reduction of the equalized combined tax rates for the teachers' and incidental funds to be less than the greater of the minimum operating levy for the current year for school purposes established under subsection 2 of section 163.021, RSMo, or the 1993 tax rate as used for state aid purposes in section 163.031, RSMo, plus that portion of the full amount of any voter-approved increase in the tax rate ceiling as defined in section 137.073, RSMo, approved after the first day of January, 1994, and before the thirtieth day of March, 1994, as levied in the current year, in any school district located in a county of the fourth classification that had an existing lease purchase arrangement for capital project purposes at the time of the election].

2.  The school board of each district shall forward the estimate to the county clerk on or before September first.  In school districts divided by county lines, the estimate shall be forwarded to the proper officer of each county in which any part of the district lies.

[3.  (1)  For the 1997-98 school year and thereafter, prior to setting tax rates for the teachers' and incidental funds, the school board of each school district meeting the criteria specified in subdivision (2) of this subsection annually shall set the tax rate for the capital projects fund as necessary to meet the expenditures of the capital projects fund after all transfers allowed pursuant to subsection 7 of section 165.011, RSMo, for expenditures authorized by section 177.088, RSMo, and after one hundred percent of the transfers allowed by section 165.011, RSMo.

(2)  Subdivision (1) of this subsection shall apply to each district which satisfies all of the following criteria:

(a)  The district has a membership count for school year 1997-98 which is at least sixteen percent greater than the district's membership count for the 1991-92 school year; and

(b)  The district passed a full waiver of Proposition C tax rate rollback pursuant to section 164.013, or approved an increase to the district's tax rate ceiling on or after June 1, 1994;

(c)  The district is in compliance with or has paid all penalties required pursuant to section 165.016, RSMo, for the 1994-95, 1995-96 and 1996-97 school years without waiver or adjustment of the base school year certificated salary percentage; and

(d)  The district approves, prior to July 1, 1998, a proposal to issue general obligation bonds which will cause the district's bonded indebtedness to be no less than eighty-five percent of the maximum bonded indebtedness of the district.]

[164.013.  1.  When the revenue from the rate of one cent on the dollar of the state sales is collected for distribution under the provisions of section 163.087, RSMo, the school board of each seven-director, including special districts, urban and metropolitan school districts, after determining its budget for the school year and the rate of levy needed to produce the required revenue as provided in section 164.011, and after making any other adjustments to the levy that may be required by any other law, shall, unless at least a simple majority of district voters voting thereon have approved a proposal to forego all or part of a reduction in the total operating levy for school purposes as provided for in this section, reduce the total operating levy for school purposes in an amount sufficient to decrease the revenue it would have received therefrom by an amount equal to fifty percent of the previous fiscal year's sales tax receipts excluding the sales tax revenue estimated to be received by the district attributable to pupils residing on federal lands and excluding the amount of sales tax revenue estimated to be necessary to offset the loss of property tax revenue to the school district under the provisions of section 50.338, RSMo, except that the provision of this section shall not require a school board to reduce its total operating levy for school purposes below an amount which is equal to the highest amount specified in subsection 2 of section 163.021, RSMo, as an eligibility requirement for state aid or increased state aid pursuant to section 163.031, RSMo.  Loss of revenue, due to a decrease in the assessed valuation of real property located within the school district as a result of general reassessment, and from state-assessed railroad and utility distributable property based upon the previous fiscal year's receipts shall be considered in lowering the rate of levy to comply with this section in the year of general reassessment and in each subsequent year.  For any district for which the total assessed valuation of the district is reduced as a result of a natural disaster for which the county or counties containing the district were designated a disaster area, the reduction of the total operating levy for school purposes pursuant to this section may, at the district's discretion, be calculated either on the district's current assessed valuation or upon the district's assessed valuation for the year preceding the natural disaster, until the fifth year following the designation as a disaster area or until the district's assessed valuation equals or exceeds the district's assessed valuation for the year preceding the disaster, whichever first occurs.  In the event that in the immediately preceding year the school district actually received more or less sales tax revenue than estimated, the school board shall adjust its operating levy for the current year to reflect such increase or decrease.  Adjustments in the tax rate of a school district pursuant to the provisions of this section shall in no way affect the eligibility of claimants for benefits, or the amount of claimants' benefits, under the provisions of sections 135.010 to 135.035, RSMo.  Such claimants shall, if they are otherwise qualified, receive the benefits to which they were or would have been entitled in the year prior to March 3, 1983.  There shall be transferred from the school district trust fund to the general revenue fund an amount equal to the difference in the amount paid or credited or which would have been paid or credited to individuals qualifying under sections 135.010 to 135.035, RSMo, in the year prior to March 3, 1983, and the amount paid or credited under the provisions of such sections each year thereafter.  The director of revenue shall certify the amount payable from the school district trust fund to the general revenue fund to the state treasurer, the commissioner of administration and the state board of education on or before the first day of each month.  Any school district required to reduce its total operating levy under the provisions of this section shall not become ineligible for state aid under the provisions of section 163.021, RSMo, because of such required reduction.  In the event a district fails to reduce its operating levy in compliance with this section, an amount equivalent to the amount by which the district fails to reduce its levy shall be deducted from the district's apportionment of state aid under the provisions of section 163.031, RSMo, for the following year.

2.  In a year of general reassessment, as defined by section 137.073, RSMo, or assessment maintenance as defined by section 137.115, RSMo, in which a school district in reliance upon the information then available to it relating to the total assessed valuation of such school district revises its property tax levy pursuant to section 137.073 or 137.115, RSMo, and it is subsequently determined by decisions of the state tax commission or a court pursuant to sections 138.430 to 138.433, RSMo, or due to clerical errors or corrections in the calculation or recordation of assessed valuations that the assessed valuation of such school district has been changed, and but for such change the school district would have adopted a different levy on the date of its original action, then the school district may adjust its levy to an amount to reflect such change in assessed valuation, including, if necessary, a change in the levy reduction required by this section to the amount it would have levied had the correct assessed valuation been known to it on the date of its original action, provided:

(1)  The school district first levies the maximum levy allowed without a vote of the people by article X, section 11(b) of the constitution; and

(2)  The school district first adopts the tax rate ceiling otherwise authorized by other laws of this state; and

(3)  The levy adjustment or reduction may include a one-time correction to recoup lost revenues the school district was entitled to receive during the prior year.]

165.011.  1.  The following funds are created for the accounting of all school moneys: teachers' fund, incidental fund, free textbook fund, capital projects fund and debt service fund.  The treasurer of the school district shall open an account for each fund specified in this section, and all moneys received from the county school fund and all moneys derived from taxation for teachers' wages shall be placed to the credit of the teachers' fund.  All tuition fees, state moneys received under sections 162.975, RSMo, and 163.031, RSMo, and all other moneys received from the state except as herein provided shall be placed to the credit of the teachers' and incidental funds at the discretion of the district board of education.  The portion of state aid received by the district pursuant to section 163.031, RSMo, based upon the [portion] ratio of the tax rate in the debt service or capital projects fund, respectively, which is included in the operating levy for school purposes pursuant to section 163.011, RSMo, divided by one dollar and twenty-five cents per one hundred dollars assessed valuation shall be placed to the credit of the debt service fund or capital projects fund, respectively.  Money received from other districts for transportation and money derived from taxation for incidental expenses shall be credited to the incidental fund.  Money apportioned for free textbooks shall be credited to the free textbook fund.  All money derived from taxation or received from any other source for the erection of buildings or additions thereto and the remodeling or reconstruction of buildings and the furnishing thereof, for the payment of lease-purchase obligations, for the purchase of real estate, or from sale of real estate, schoolhouses or other buildings of any kind, or school furniture, from insurance, from sale of bonds other than refunding bonds shall be placed to the credit of the capital projects fund.  All moneys derived from the sale or lease of sites, buildings, facilities, furnishings and equipment by a school district as authorized under section 177.088, RSMo, shall be credited to the capital projects fund.  Money derived from taxation for the retirement of bonds and the payment of interest thereon shall be credited to the debt service fund which shall be maintained as a separate bank account.  Receipts from delinquent taxes shall be allocated to the several funds on the same basis as receipts from current taxes, except that where the previous years' obligations of the district would be affected by such distribution, the delinquent taxes shall be distributed according to the tax levies made for the years in which the obligations were incurred.  All refunds received shall be placed to the credit of the fund from which the original expenditures were made.  Money donated to the school districts shall be placed to the credit of the fund where it can be expended to meet the purpose for which it was donated and accepted.  Money received from any other source whatsoever shall be placed to the credit of the fund or funds designated by the board.

2.  The school board may expend from the incidental fund the sum that is necessary for the ordinary repairs of school property [and an amount not to exceed the sum of expenditures for classroom instructional capital outlay, as defined by the department of elementary and secondary education by rule, in state-approved area vocational-technical schools and .06 dollars per one hundred dollars equalized assessed valuation multiplied by the guaranteed tax base for the second preceding year multiplied by the number of resident and nonresident eligible pupils educated in the district for the second preceding year for classroom instructional capital outlay, including but not limited to payments authorized pursuant to section 177.088, RSMo].  Any and all payments [authorized under section 177.088, RSMo, except as otherwise provided in this subsection,] for the purchase or lease of sites, buildings, facilities, furnishings and equipment and all other expenditures for capital outlay shall be made from the capital projects fund.  If a balance remains in the free textbook fund after books are furnished to pupils as provided in section 170.051, RSMo, it shall be transferred to the teachers' fund.  The board may transfer the portion of the balance remaining in the incidental fund to the teachers' fund that is necessary for the total payment of all contracted obligations to teachers.  If a balance remains in the debt service fund, after the total outstanding indebtedness for which the fund was levied is paid, the board may transfer the unexpended balance to the capital projects fund.  If a balance remains in the bond proceeds after completion of the project for which the bonds were issued, the balance shall be transferred from the incidental or capital projects fund to the debt service fund.  After making all placements of interest otherwise provided by law, a school district may transfer from the capital projects fund to the incidental fund the interest earned from undesignated balances in the capital projects fund.  All other sections of the law notwithstanding, a school district may transfer from the incidental fund to the capital projects fund an amount equal to the capital expenditures for school safety and security purposes.  A school district may borrow from one of the following funds: teachers' fund, incidental fund or capital projects fund, as necessary to meet obligations in another of those funds; provided that the full amount is repaid to the lending fund within the same fiscal year.

3.  Tuition shall be paid from either the teachers' or incidental funds.

4.  Other provisions of law to the contrary notwithstanding, the school board of a school district that satisfies the criteria specified in subsection 5 of this section may transfer from the incidental fund to the capital projects fund [an amount not to exceed the greater of zero or the sum of .18 dollars per one hundred dollars equalized assessed valuation multiplied by the guaranteed tax base for the second preceding year multiplied by the number of resident and nonresident eligible pupils educated in the district for the second preceding year and] the amount to be expended for transportation equipment that is considered an allowable cost under state board of education rules for transportation reimbursements during the current year and any amount necessary to satisfy obligations of the capital projects fund for state-approved area vocational-technical schools [and an amount not to exceed .06 dollars per one hundred dollars equalized assessed valuation multiplied by the guaranteed tax base for the second preceding year multiplied by the number of resident and nonresident eligible pupils educated in the district for the second preceding year less any amount transferred pursuant to subsection 7 of this section, provided that any amount transferred pursuant to this subsection shall only be transferred as necessary to satisfy obligations of the capital projects fund less any amount expended from the incidental fund for classroom instructional capital outlay pursuant to subsection 2 of this section.  For the purposes of this subsection, the guaranteed tax base and a district's count of resident and nonresident eligible pupils educated in the district shall not be less than their respective values calculated from data for the 1992-93 school year].

5.  In order to transfer funds pursuant to subsection 4 of this section, a school district shall:

(1)  Meet the minimum criteria for state aid and for increases in state aid for the current year established pursuant to section 163.021, RSMo;

(2)  Not incur a total debt, including short-term debt and bonded indebtedness in excess of [ten] fifteen percent of the guaranteed tax base for the preceding payment year multiplied by the number of resident and nonresident eligible pupils educated in the district in the preceding year;

(3)  Set tax rates pursuant to section 164.011, RSMo;

(4)  First apply any voluntary rollbacks or reductions to the total tax rate levied to the teachers' and incidental funds;

(5)  In order to be eligible to transfer funds for paying lease purchase obligations:

(a)  Incur such obligations, except for obligations for lease purchase for school buses, prior to January 1, 1997;

(b)  Limit the term of such obligations to no more than twenty years;

(c)  Limit annual installment payments on such obligations to an amount no greater than the amount of the payment for the first full year of the obligation, including all payments of principal and interest, except that the amount of the final payment shall be limited to an amount no greater than two times the amount of such first-year payment;

(d)  Limit such payments to leasing nonathletic, classroom, instructional facilities as defined by the state board of education through rule; and

(e)  Not offer instruction at a higher grade level than was offered by the district on July 12, 1994.

6.  A school district shall be eligible to transfer funds pursuant to subsection 7 of this section if:

(1)  Prior to August 28, 1993:

(a)  The school district incurred an obligation for the purpose of funding payments under a lease purchase contract authorized under section 177.088, RSMo;

(b)  The school district notified the appropriate local election official to place an issue before the voters of the district for the purpose of funding payments under a lease purchase contract authorized under section 177.088, RSMo; or

(c)  An issue for funding payments under a lease purchase contract authorized under section 177.088, RSMo, was approved by the voters of the district; or

(2)  Prior to November 1, 1993, a school board adopted a resolution authorizing an action necessary to comply with subsection 9 of section 177.088, RSMo.  Any increase in the operating levy of a district above the 1993 tax rate resulting from passage of an issue described in paragraph (b) of subdivision (1) of this subsection shall be considered as part of the 1993 tax rate for the purposes of subsection 1 of section 164.011, RSMo.

7.  Prior to transferring funds pursuant to subsection 4 of this section, a school district may transfer, pursuant to this subsection, from the incidental fund to the capital projects fund an amount as necessary to satisfy an obligation of the capital projects fund that satisfies at least one of the conditions specified in subsection 6 of this section, but not to exceed its payments authorized under section 177.088, RSMo, for the purchase or lease of sites, buildings, facilities, furnishings, equipment, and all other expenditures for capital outlay, plus the amount to be expended for transportation equipment that is considered an allowable cost under state board of education rules for transportation reimbursements during the current year plus any amount necessary to satisfy obligations of the capital projects fund for state-approved area vocational-technical schools.  A school district with a levy for school purposes no greater than the minimum levy specified in section 163.021, RSMo, and an obligation in the capital projects fund that satisfies at least one of the conditions specified in subsection 6 of this section, may transfer from the incidental fund to the capital projects fund the amount necessary to meet the obligation plus the transfers pursuant to subsection 4 of this section.

8.  Beginning in the 1995-96 school year, the department of elementary and secondary education shall deduct from a school district's state aid calculated pursuant to section 163.031, RSMo, an amount equal to the amount of any transfer of funds from the incidental fund to the capital projects fund performed during the previous year in violation of this section; except that the state aid shall be deducted in equal amounts over the five school years following the school year of an unlawful transfer provided that:

(1)  The district shall provide written notice to the state board of education, no later than June first of the first school year following the school year of the unlawful transfer, stating the district's intention to comply with the provisions of subdivisions (1) to (4) of this subsection and have state aid deducted for that unlawful transfer over a five-year period;

(2)  On or before September first of the second school year following the school year of the unlawful transfer, the district shall approve an increase to the district's operating levy for school purposes to the greater of: two dollars and seventy-five cents per one hundred dollars assessed valuation or the levy which produces an increase in total state and local revenues, as determined by the department, in comparison to the first school year following the school year of the unlawful transfer which is equal to or greater than the amount of state aid to be deducted pursuant to this subsection each school year for such unlawful transfer, provided that increases required pursuant to this subdivision for subsequent unlawful transfers shall be made in comparison to the latter tax rate described in this subdivision;

(3)  During each school year after the school year in which the operating levy is increased pursuant to subdivision (2) of this subsection and in which state aid is deducted pursuant to subdivisions (1) to (4) of this subsection, the district shall maintain an operating levy for school purposes which produces total state and local revenues for the district which are no less than the total state and local revenues produced by the levy required pursuant to subdivision (2) of this subsection;

(4)  During each school year state aid is deducted pursuant to subdivisions (1) to (4) of this subsection except for the 1998-99 school year, the district shall maintain compliance with the requirements of section 165.016 without any recourse to waivers or base-year adjustments and without the option to demonstrate compliance based upon the district's fund balances; and

(5)  If, in any school year state aid is deducted pursuant to subdivisions (1) to (4) of this subsection, the district fails to comply with any requirement of subdivisions (1) to (4) of this subsection, the full, remaining amount of state aid to be deducted pursuant to this subsection shall be deducted from the district's state aid payments by the department during such school year.

9.  On or before June 30, 1999, a school district may transfer to the capital projects fund from the balances of the teachers' and incidental funds any amount, but only to the extent that the amount transferred is equal to or less than the amount that the teachers' and incidental funds' unrestricted balances on June 30, 1995, exceeded eight percent of expenditures from the teachers' and incidental funds for the year ending June 30, 1995.

10.  (1)  Other provisions of law to the contrary notwithstanding, a school district which satisfies all conditions specified in subdivision (2) of this subsection may make the transfer allowed in subdivision (3) of this subsection.

(2)  To make the transfer allowed under subdivision (3) of this subsection, a school district shall:

(a)  Have a membership count for school year 1997-98 which is at least sixteen percent greater than the district's membership count for the 1991-92 school year; and

(b)  Have passed a full waiver of Proposition C tax rate rollback pursuant to section 164.013, RSMo, or approved an increase to the district's tax rate ceiling on or after June 1, 1994; and

(c)  Be in compliance or have paid all penalties required pursuant to section 165.016 for the 1994-95, 1995-96 and 1996-97 school years without waiver or adjustment of the base school year certificated salary percentage; and

(d)  After all transfers, have a remaining balance on June 30, 1998, in the combined teachers' and incidental funds which is no less than ten percent of the combined expenditures from those funds for the 1997-98 school year.

(3)  A district which satisfies all of the criteria specified in paragraphs (a) to (d) of subdivision (2) of this subsection may, on or before June 30, 1998, make a one-time combined transfer from the teachers' and incidental funds to the capital projects fund of an amount no greater than the sum of the following amounts:

(a)  The product of the district's equalized assessed valuation for 1994 times the difference of the district's equalized operating levy for school purposes for 1994 minus the district's equalized operating levy for school purposes for 1993;

(b)  The product of the district's equalized assessed valuation for 1995 times the difference of the district's equalized operating levy for school purposes for 1995 minus the district's equalized operating levy for school purposes for 1993;

(c)  The product of the district's equalized assessed valuation for 1996 times the difference of the district's equalized operating levy for school purposes for 1996 minus the district's equalized operating levy for school purposes for 1993;

(d)  The product of the district's equalized assessed valuation for 1997 times the difference of the district's equalized operating levy for school purposes for 1997 minus the district's equalized operating levy for school purposes for 1993; provided that the remaining balance in the incidental fund shall be no less than twelve percent of the total expenditures during that fiscal year from the incidental fund.

(4)  A district which makes a transfer pursuant to subdivision (3) of this subsection shall be subject to compliance with the requirements of section 165.016 for fiscal years 1999, 2000 and 2001, without the option to request a waiver or an adjustment of the base school year certificated salary percentage.

(5)  Other provisions of section 165.016 to the contrary notwithstanding, the transfer of an amount of funds from either the teachers' or incidental funds to the capital projects fund pursuant to subdivision (3) of this subsection shall not be considered an expenditure from the teachers' or incidental fund for the purpose of determining compliance with the provisions of subsections 1 and 2 of section 165.016.

11.  In addition to other transfers authorized under subsections 1 to 9 of this section, a district may transfer from the teachers' and incidental funds to the capital projects fund the amount necessary to repay costs of one or more guaranteed energy savings performance contracts to renovate buildings in the school district; provided that the contract is only for energy conservation measures, as defined in section 640.651, RSMo, and provided that the contract specifies that no payment or total of payments shall be required from the school district until at least an equal total amount of energy and energy-related operating savings and payments from the vendor pursuant to the contract have been realized by the school district.

Section B.  This act is hereby submitted to the qualified voters of this state for approval or rejection at a special election which is hereby ordered and which shall be held and conducted on the first Tuesday in November, 2002, pursuant to the laws and constitutional provisions of this state applicable to general elections and the submission of referendum measures by initiative petitions, and this act shall become effective when approved by a majority of the votes cast thereon at such election and not otherwise.

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