To repeal section 163.036, RSMo 1994, and sections 160.534, 163.011, 163.021, 165.011 and 166.300, RSMo Supp. 1996, relating to capital projects in school districts, and to enact in lieu thereof seven new sections relating to the same subject.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

     Section A. Section 163.036, RSMo 1994, and sections 160.534, 163.011, 163.021, 165.011 and 166.300, RSMo Supp. 1996, are repealed and seven new sections enacted in lieu thereof, to be known as sections 160.534, 163.011, 163.021, 163.036, 165.011, 166.300 and 1, to read as follows:

     160.534. For fiscal year 1996 and each subsequent fiscal year, any amount of the excursion gambling boat proceeds deposited in the gaming proceeds for education fund in excess of the amount transferred to the school district bond fund as provided in section 164.303, RSMo, shall be transferred according to the following priority:

     (1) The first fifty million shall be transferred to the state school moneys fund to the extent necessary to fully fund the district entitlements less deductions as established in lines 1 to 10 of the state school aid formula established pursuant to subsection 6 of section 163.031, RSMo;

     (2) The next ten million shall be transferred to the school building revolving fund; and

     (3) Any remainder shall be transferred to the state school moneys fund for distribution pursuant to section 163.031, RSMo. Such moneys shall be transferred on a monthly basis and shall be distributed in the manner provided in [section] sections 163.031 and 166.300, 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] third 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] third 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) "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 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 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;

     (3) "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;

     (4) "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;

     (5) "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;

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

     (7) "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 second and third preceding [year] years times two and one hundred and [sixty-seven] twelve thousandths. 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;

     (8) "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;

     (9) "Operating levy for school purposes" for districts making transfers pursuant to subsection 4 or 7 of section 165.011, RSMo, or making payments or expenditures related to obligations made pursuant to section 177.088, RSMo, or both, means the sum of tax rates levied for teachers and incidental funds in the payment year and shall be, after all adjustments and equalization of the operating levy, no less than the minimum value required in section 163.021 for eligibility for increases in state aid as calculated pursuant to section 163.031 [and no greater than a maximum value of four dollars and sixty cents per one hundred dollars assessed valuation.] , and, for other districts, means the sum of tax rates levied for incidental, teachers, debt service and capital projects funds with no more than twenty cents of the sum levied in the debt service and capital projects funds. 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, 1993, 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 bonds. In no case shall the operating levy for school purposes for use in section 163.031 be greater than a maximum value of four dollars and sixty cents per one hundred dollars assessed valuation. To equalize the operating levy, multiply the aggregate tax rates for teachers, incidental, and building 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 at least twice as large as the one originally used. 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 (5) 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 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] For the purposes of calculating state aid pursuant to section 163.031, for a 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 and deductions shall be no less than the largest operating levy for school purposes used pursuant to section 163.031, since and including property tax year 1994 or school year 1994-95; provided that the use of this largest tax rate shall be a result of the change in tax rate due to reassessment to some smaller rate of taxation during tax year 1995 or any year thereafter;

     (10) "School purposes" pertains to teachers and incidental funds;

     (11) "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;

     (12) "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;

     (13) "Current operating costs", all expenditures for instruction for grades kindergarten through twelve 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[.];

     (14) "Amounts received the previous year", for the purposes of section 163.031, means the average amount received from a particular revenue source during the second and third preceding years.

     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 school year next preceding the year in which such condition existed.

     2. [No school district shall receive more state aid, as calculated in section 163.031, for its education program than it received per eligible pupil for the school year 1990-91, unless it levies an operating levy for school purposes of not less than two dollars after all adjustments and reductions beginning with the tax year which commences January 1, 1993. For the 1994-95] Beginning with the tax year which commences January 1, 1997, and for the 1997-98 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 current school purposes] 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 [beginning with the tax year which commences January 1, 1994], 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. After making all reductions required under section 164.013, RSMo, and after increasing the district's current operating levy to the minimum operating levy required for that district under this section for the current year, a school district may reduce the district's current operating levy such that the difference between the current and previous year's operating levy is the same as the amount of adjustment to the operating levy specified for that year pursuant to article X, section 22 of the Missouri constitution. 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 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.

     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.

     163.036. 1. In computing the amount of state aid a school district is entitled to receive under section 163.031, a school district may use the average number of eligible pupils for the third and second preceding years, an estimate of the number of eligible pupils for the ensuing year or the number of eligible pupils for the immediately preceding year whichever is greater. Any error made in the apportionment of state aid because of a difference between the actual number of eligible pupils and the estimated number of eligible pupils shall be corrected as provided in section 163.091, except that if the amount paid to a district estimating eligible pupils exceeds the amount to which the district was actually entitled by more than five percent, interest at the rate of six percent shall be charged on the excess and shall be added to the amount to be deducted from the district's apportionment the next succeeding year.

     2. Notwithstanding the provisions of subsection 1 of this section or any other provision of law, the state board of education shall make an adjustment for the immediately preceding year for any increase in the actual number of eligible pupils above the number on which the state aid in section 163.031 was calculated. Said adjustment shall be made in the manner providing for correction of errors under subsection 1 of this section.

     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 of the tax rate in the debt service or capital projects funds, respectively, which is included in the operating levy for school purposes pursuant to section 163.011 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. 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 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 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 funds 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.

     9. On or before June 30, 1995, 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 teachers' and incidental fund unrestricted balances on June 30, 1995, are equal to or greater than eight percent of expenditures from the teachers' and incidental funds for the year ending June 30, 1995.

     10. Other provisions of law to the contrary notwithstanding, school districts with enrollment increases of at least fifteen percent from the third preceding year to the current year and which districts have bonded indebtedness which is at least nine percent of the assessed valuation of the district shall be eligible to transfer funds pursuant to subsection 4 of this section to fund payments authorized pursuant to section 177.088, RSMo, for obligations incurred after December 31, 1996.

     166.300. 1. As used in this section, the following words and phrases shall mean:

     (1) "Capital improvement projects", expenditures for lands or existing buildings, improvements of grounds, construction of buildings, additions to buildings, remodeling of buildings and initial equipment purchases;

     (2) "School facility", a structure dedicated primarily to housing teachers and students in the instructional process, but shall not include buildings dedicated primarily to administrative and support functions within the school.

     2. There is hereby created a revolving fund to be known as the "School Building Revolving Fund". All riverboat gaming revenues transferred to the school building revolving fund pursuant to section 160.534, RSMo, and such moneys as may be appropriated to the fund shall be deposited into the school building revolving fund. After a fund balance has been established by prior years' deposits and interest, school districts may submit requests for loans [and grants] from the revolving fund for specific projects consistent with rules and regulations of the state board of education and subsection 3 of this section, except that no school district may be permitted to receive a loan from the school building revolving fund without first submitting a long-range capital improvements plan.

     3. To be eligible for loans [or grants] authorized by this section:

     (1) A school district shall meet the minimum criteria for state aid and for increases in state aid established pursuant to section 163.021, RSMo;

     (2) A school district shall provide a program which is accredited by the state board of education for grades kindergarten through twelve; [and]

     (3) The sum of the school district's current bonded indebtedness plus the school district's loan request shall be greater than ten percent of the assessed valuation of the district; and

     (4) A school district shall not incur a total debt, including short-term debt, lease purchases authorized by section 177.088, RSMo, obligations to the school building revolving fund, and bonded indebtedness in excess of ten percent of the guaranteed tax base for the current payment year multiplied by the number of eligible pupils in the district in the preceding year.

     4. If the balance in the school building revolving fund is insufficient to fund all project plans for capital improvements, applications shall be funded based upon a priority ranking. Ranking of [the] allowable projects for offering of credit shall be [based upon the following variables] done in the following order with the highest ranking district served first:

     [(1) A rating of provisionally accredited or unaccredited as determined by the state board of education pursuant to section 161.092, RSMo, based upon the condition and adequacy of facilities pursuant to section 163.023, RSMo, and section 160.538, RSMo;

     (2) Equalized assessed valuation per eligible pupil;

     (3) Increasing enrollment;

     (4) Age or condition of facility; and

     (5) Building destruction due to fire or natural disaster.]      (1) Districts with capital replacement costs in excess of insurance proceeds due to facility destruction caused by fire or natural disaster shall be ranked on the basis of percentage of bonding capacity;

     (2) Districts shall be rank ordered based on their percentage growth in fall membership for the fifth through the third preceding years beginning with the highest percentage district and ending with the lowest percentage district in excess of twelve percent;

     (3) Districts shall be rank ordered based on their percentage growth in fall membership during the twelfth through the third preceding years beginning with the largest percentage district and ending with the lowest percentage district in excess of twenty percent; and

     (4) For all other districts not qualifying under subdivision (1), (2) or (3), school buildings in active student use shall be rank ordered based on date of construction or last renovation beginning with the earliest date.

Any ties in rank orders based on subdivision (2), (3) or (4) shall be broken with higher ranks given to districts with higher percentages of bonding capacity obligated.

     5. The state board of education shall promulgate, by rule, the methodology for prioritizing projects based upon [these variables.] subsection 4 of this section. When building replacement is caused by fire or natural disaster the requirement for a school district to have a long-range capital improvements plan may be waived by the state board of education.

     6. Each school district receiving a loan from the school building revolving fund shall repay such loan, with interest, if required, in no more than ten annual payments made on or before June thirtieth of the first full fiscal year after receipt of loan proceeds. School districts shall make loan payments from revenues raised in the debt service fund to the department of elementary and secondary education after the board of education has placed sufficient tax rate in that fund. Loan payments shall be immediately deposited to the school building revolving fund by the department.

     7. Any school district which fails to obligate the full amount of a loan from the school building revolving fund for the allowable project must return the unobligated amount plus interest earned to the department no later than June thirtieth of the second full fiscal year after receipt of loan proceeds.

     8. If a school district fails to make an annual payment to the school building revolving fund after notice of nonpayment by the department, members of the board of education and the school district's superintendent shall have violated section 162.091, RSMo, and the attorney general of the state of Missouri shall be notified by the state board of education to begin prosecution procedures.

     9. All property purchased with loans from the school building revolving fund shall remain the property of the state until such time as the loan has been fully repaid pursuant to this section. If a school district fails to make an annual payment to the school building revolving fund after notice of non-payment by the department, the state board of education may, if the delinquency exceeds one hundred and eighty days, take possession of the property.

     10. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, moneys in the school building revolving fund shall not be transferred to the credit of the general revenue fund at the end of the biennium. All yield, interest, income, increment or gain received from time deposit of moneys in the state treasury to the credit of the fund shall be credited by the state treasurer to the fund.

     Section 1. Other provisions of law to the contrary notwithstanding, in addition to the payments for school purposes received by an eligible school district pursuant to subdivision (2) of subsection 5 of section 163.031, RSMo, an eligible school district shall receive an additional amount based upon the portion of the tax rate in the debt service or capital projects funds, respectively, which is included in the operating levy for school purposes pursuant to section 163.011, RSMo, which payment amount shall be placed to the credit of the debt service fund or capital projects fund, respectively. Such additional amount shall be equal to the amount received by the eligible school district pursuant to subdivision (2) of subsection 5 of section 163.031, RSMo, times the quotient 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 the sum of the tax rates in the teacher's and incidental funds.