SB 189: School District Funding Amendments - Utah

Substitute #1 → Substitute #2 · 9 edits

MAJOR

The bill was fundamentally restructured from a grant program into a revolving loan program. Instead of giving districts money they do not have to repay, it now creates a High Growth District Revolving Account within the Uniform School Fund that makes loans to eligible districts with terms up to 10 years and interest rates set by rule. Eligibility criteria were tightened with a new minimum 1.0% growth rate threshold and a ranking system based on both growth rate and building utilization, replacing the prior ratio-of-state-total method.

SCOPE

The entire mechanism changed from grants (no repayment required) to loans that must be repaid with interest over up to 10 years. A revolving account is created within the Uniform School Fund that is replenished by loan repayments and interest earned.

ELIGIBILITY

A new minimum threshold requires districts to have an average annual enrollment growth rate of at least 1.0% over three school years to be eligible, in addition to having a positive net enrollment increase.

The method for designating high growth districts changed from a ratio test (district's share of state total must be at least 10%) to a ranking system using a weighted formula that considers both average annual enrollment growth rate and building utilization rate, with the top 10% of qualifying districts designated as high growth.

DEFINITION

The definition of 'average annual net enrollment increase' changed from a simple sum of three years divided by three to an average percentage increase (each year's increase divided by the preceding year's ADM, then averaged).

FISCAL

Loan terms were added: maximum $15,000,000 in total loans per fiscal year, loan term capped at 10 years, interest rates set by the state board by rule considering cost of funds, administrative costs, and account sustainability.

Priority is given to loan applications from districts demonstrating urgent facility needs due to enrollment growth or limited financial capacity to meet capital needs through other sources.

REQUIREMENT

A formal loan agreement must be executed before any loan proceeds are disbursed, specifying the amount, interest rate, repayment schedule, permitted uses, reporting requirements, and remedies for default or misuse.

ENFORCEMENT

If property acquired with loan proceeds is sold or used for a non-educational purpose before the loan is fully repaid, sale proceeds must be applied to the outstanding loan balance first.

Penalties for non-compliance were expanded and strengthened: the state board can now accelerate repayment, demand immediate full repayment, pursue legal remedies, or bar a district from future loans for up to 5 years (previously 3 years).

Substitute #3 → Substitute #4 · 6 edits

MODERATE

This bill shifts from creating a state-run revolving loan fund to establishing a framework for school districts to voluntarily create their own loan arrangements when they split or reorganize. The primary change is removing the state's direct funding responsibility and replacing it with a system where successor districts can pool assets and lend to each other based on specific growth criteria.

Scope change

The bill's scope changed from a broad program for all high-growth districts to a specific mechanism addressing only enrollment disparities caused by school district reorganizations and splits.

FISCAL

Removed the $15,000,000 state appropriation and the creation of the 'High Growth District Revolving Account' managed by the State Board of Education.

DEFINITION

Removed the definition of 'High Growth District' based on top 10% enrollment rankings or absolute student increases.

Added new definitions for 'Allocation date,' 'Creation date,' 'Divided school district,' 'New school district,' 'Reorganization,' and 'Successor district' to clarify the context of splits and consolidations.

ELIGIBILITY

Added the new definition of 'High Growth Successor District,' which applies only to districts created through reorganization and requires either 3% actual growth after two years or 5% projected growth.

REQUIREMENT

Added authority for successor districts to enter interlocal agreements to pool assets and create voluntary transition loans to help high-growth districts acquire facilities.

ENFORCEMENT

Changed the State Board's role from approving and administering state loans to identifying high-growth successor districts and reporting on reorganization trends.

Substitute #2 → Substitute #3 · 3 edits

MINOR

This bill was revised to clarify how school districts qualify for funding, specifically adding alternative criteria for districts with small student populations and establishing a new threshold for districts with very high growth rates. The changes ensure that smaller districts are not automatically excluded from the program just because they don't meet a raw percentage target, while also capping the total number of eligible districts based on their share of total state growth.

Scope change

The bill's scope was expanded to include specific eligibility pathways for small school districts and to limit the total number of districts that can qualify based on their proportion of total enrollment growth.

ELIGIBILITY

The definition of a 'high growth district' was changed to include three distinct pathways: being in the top 10% of growth, having at least 100 new students (for small districts), or having growth equal to at least 2% of the district's size (for small districts).

A new provision was added to cap the number of eligible districts at 10% of the total number of districts with positive growth, or alternatively, those districts that represent at least 10% of the total state's enrollment growth.

DEFINITION

The definition of 'high growth district' was restructured to explicitly separate the standard top-10% ranking from the alternative thresholds for smaller districts.

Introduced → Substitute #1 · 3 edits

MINOR

The substitute bill significantly expands the scope of the High Growth District Grant Program by increasing the funding amount to $15 million for fiscal year 2027 and broadening allowable uses to include purchasing existing buildings and related construction or renovation. It also modifies the definition of eligible uses to explicitly cover acquiring land and facilities, whereas the original text was more limited to land acquisition and transportation infrastructure.

Scope change

The bill's scope expanded from a grant program limited to land acquisition and transportation to include funding for purchasing existing buildings and related construction or renovation to accommodate enrollment growth.

FISCAL

Added a specific appropriation of $15,000,000 in operating and capital budgets for fiscal year 2027.

SCOPE

Expanded allowable grant uses to include purchasing existing buildings and related construction or renovation, in addition to land acquisition and transportation infrastructure.

DEFINITION

Updated the definition of allowable uses in Section 2 to explicitly include 'acquiring land and facilities' and 'construction or renovation' alongside transportation expansion.

School District Funding Amendments

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