Senate Bill No. 345

Introduced By _______________________________________________________________________________



A Bill for an Act entitled: "AN ACT GRADUALLY REDUCING THE TAX RATE ON BUSINESS EQUIPMENT TO 3 PERCENT; PROVIDING THAT THE REDUCTION IN TAX RATES IS PHASED IN; REIMBURSING LOCAL TAXING JURISDICTIONS; PROGRESSIVELY REDUCING THE REIMBURSEMENTS; PROGRESSIVELY REDUCING THE CURRENT REMITTANCE TO COUNTY TREASURERS TO REIMBURSE LOCAL GOVERNMENTS FOR THE PREVIOUS REDUCTION IN PERSONAL PROPERTY TAX RATES; REVISING LOCAL GOVERNMENT DEBT AND INDEBTEDNESS LIMITATIONS TO OFFSET THE TAX REDUCTION; and amending sections 7-7-2101, 7-7-2203, 7-7-4201, 7-7-4202, 15-1-111, 15-1-112, 15-6-138, and 20-9-406, MCA."



Be it enacted by the Legislature of the State of Montana:



Section 1.  Section 7-7-2101, MCA, is amended to read:

"7-7-2101.   Limitation on amount of county indebtedness. (1) A county may not become indebted in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding 23% of the total of the taxable value of the property in the county subject to taxation, plus the value provided by the department of revenue in 15-36-324(10), as ascertained by the last assessment for state and county taxes previous to the incurring of the indebtedness, plus, for indebtedness to be incurred during fiscal year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, for indebtedness to be incurred during fiscal year 1998, an additional 22% of the taxable value of class eight property within the county for tax year 1995, and for indebtedness to be incurred during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for tax year 1995, for indebtedness to be incurred during fiscal year 2000, an additional 44% of the taxable value of class eight property within the county for tax year 1995, for indebtedness to be incurred during fiscal year 2001, an additional 55% of the taxable value of class eight property within the county for tax year 1995, and for indebtedness to be incurred during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the county for tax year 1995, in each case of class eight property, multiplied by 23%.

(2)  A county may not incur indebtedness or liability for any single purpose to an amount exceeding $500,000 without the approval of a majority of the electors of the county voting at an election to be provided by law, except as provided in 7-21-3413 and 7-21-3414.

(3)  This section does not apply to the acquisition of conservation easements as set forth in Title 76, chapter 6."



Section 2.  Section 7-7-2203, MCA, is amended to read:

"7-7-2203.   Limitation on amount of bonded indebtedness. (1) Except as provided in subsections (2) through (4), a county may not issue general obligation bonds for any purpose that, with all outstanding bonds and warrants except county high school bonds and emergency bonds, will exceed 11.25% of the total of the taxable value of the property in the county, plus the value provided by the department of revenue under 15-36-324(10), to be ascertained by the last assessment for state and county taxes prior to the proposed issuance of bonds, plus, for general obligation bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, for general obligation bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the county for tax year 1995, and for general obligation bonds to be issued during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for tax year 1995, for general obligation bonds to be issued during fiscal year 2000, an additional 44% of the taxable value of class eight property within the county for tax year 1995, for general obligation bonds to be issued during fiscal year 2001, an additional 55% of the taxable value of class eight property within the county for tax year 1995, and for general obligation bonds to be issued during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the county for tax year 1995, in each case of class eight property, multiplied by 11.25%.

(2)  In addition to the bonds allowed by subsection (1), a county may issue bonds that, with all outstanding bonds and warrants, will not exceed 27.75% of the total of the taxable value of the property in the county subject to taxation, plus the value provided by the department of revenue under 15-36-324(10), when necessary to do so, to be ascertained by the last assessment for state and county taxes, plus, for bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the county for tax year 1995, for bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the county for tax year 1995, and for bonds to be issued during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the county for tax year 1995, for bonds to be issued during fiscal year 2000, an additional 44% of the taxable value of class eight property within the county for tax year 1995, for bonds to be issued during fiscal year 2001, an additional 55% of the taxable value of class eight property within the county for tax year 1995, and for bonds to be issued during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the county for tax year 1995, in each case of class eight property, multiplied by 27.75%, for the purpose of acquiring land for a site for county high school buildings and for erecting or acquiring buildings on the site and furnishing and equipping the buildings for county high school purposes.

(3)  In addition to the bonds allowed by subsections (1) and (2), a county may issue bonds for the construction or improvement of a jail that will not exceed 12.5% of the taxable value of the property in the county subject to taxation, plus the adjustments permitted by 7-7-2101.

(4)  The limitation in subsection (1) does not apply to refunding bonds issued for the purpose of paying or retiring county bonds lawfully issued prior to January 1, 1932, or to bonds issued for the repayment of tax protests lost by the county."



Section 3.  Section 7-7-4201, MCA, is amended to read:

"7-7-4201.   Limitation on amount of bonded indebtedness. (1) Except as otherwise provided, a city or town may not issue bonds or incur other indebtedness for any purpose in an amount that with all outstanding and unpaid indebtedness will exceed 28% of the taxable value of the property in the city or town subject to taxation, to be ascertained by the last assessment for state and county taxes, plus, for bonds to be issued or other indebtedness to be incurred during fiscal year 1997, an additional 11% of the taxable value of class eight property within the city or town for tax year 1995, for bonds to be issued or other indebtedness to be incurred during fiscal year 1998, an additional 22% of the taxable value of class eight property within the city or town for tax year 1995, and for bonds to be issued or other indebtedness to be incurred during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the city or town for tax year 1995, for bonds to be issued or other indebtedness to be incurred during fiscal year 2000, an additional 44% of the taxable value of class eight property within the city or town for tax year 1995, for bonds to be issued or other indebtedness to be incurred during fiscal year 2001, an additional 55% of the taxable value of class eight property within the city or town for tax year 1995, and for bonds to be issued or other indebtedness to be incurred during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the city or town for tax year 1995, in each case of class eight property, multiplied by 28%.

(2)  The issuing of bonds for the purpose of funding or refunding outstanding warrants or bonds is not the incurring of a new or additional indebtedness but is merely the changing of the evidence of outstanding indebtedness.

(3)  The limitation in subsection (1) does not apply to bonds issued for the repayment of tax protests lost by the city or town."



Section 4.  Section 7-7-4202, MCA, is amended to read:

"7-7-4202.   Special provisions relating to water and sewer systems. (1) Notwithstanding the provisions of 7-7-4201, for the purpose of constructing a sewer system, procuring a water supply, or constructing or acquiring a water system for a city or town that owns and controls the water supply and water system and devotes the revenue from the water supply and water system to the payment of the debt, a city or town may incur an additional indebtedness by borrowing money or issuing bonds.

(2)  The additional total indebtedness that may be incurred by borrowing money or issuing bonds for the construction of a sewer system, for the procurement of a water supply, or for both of the purposes, including all indebtedness that is contracted and that is unpaid or outstanding, may not in the aggregate exceed 55% over and above the 28%, referred to in 7-7-4201, of the taxable value of the property in the city or town subject to taxation to be ascertained by the last assessment for state and county taxes, plus, for indebtedness to be incurred during fiscal year 1997, an additional 11% of the taxable value of class eight property within the city or town for tax year 1995, for indebtedness to be incurred during fiscal year 1998, an additional 22% of the taxable value of class eight property within the city or town for tax year 1995, and for indebtedness to be incurred during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the city or town for tax year 1995, for indebtedness to be incurred during fiscal year 2000, an additional 44% of the taxable value of class eight property within the city or town for tax year 1995, for indebtedness to be incurred during fiscal year 2001, an additional 55% of the taxable value of class eight property within the city or town for tax year 1995, and for indebtedness to be incurred during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the city or town for tax year 1995, in each case of class eight property, multiplied by 55%."



Section 5.  Section 15-1-111, MCA, is amended to read:

"15-1-111.   Reimbursement to local governments and schools -- duties of department and county treasurer -- statutory appropriation. (1) Prior to September 1, 1990, the department's agent in the county shall supply the following information to the department for each taxing jurisdiction within the county:

(a)  the number of mills levied in the jurisdiction for tax year 1989;

(b)  the number of mills levied in the jurisdiction for tax year 1990;

(c)  the total taxable valuation for tax years 1989 and 1990, reported separately for each year, of all personal property not secured by real property; and

(d)  the total taxable valuation for tax years 1989 and 1990, reported separately for each year, of all personal property secured by real property.

(2)  After receipt of the information from its agent, the department shall calculate the amount of revenue lost to each taxing jurisdiction, using current year mill levies, due to the annual reduction in personal property tax rates set forth in 15-6-138, prior to 1994, and any reduction in taxes based upon recalculation of the effective tax rate for property in 15-6-145, prior to 1994. The department shall total the amounts for all taxing jurisdictions within the county.

(3)  (a) The department shall remit to the county treasurer 50% of the amount of revenue reimbursable, determined pursuant to subsection (1), on or before November 30 and the remaining 50% on or before May 31.

(b)  For tax year 1993 through tax year 1998, the department shall remit to the county treasurer of each county the same amount remitted to the county treasurer for the fiscal year 1991, as adjusted by the result of dissolved or combined taxing jurisdictions, as provided for in subsection (7). Fifty percent of the amount must be remitted on or before November 30 and the remaining 50% on or before May 31.

(c)  (i) For tax year 1999 through tax year 2008 and for subsequent tax years, the department shall remit to the county treasurer of each county the same amount remitted to the county treasurer for the fiscal year 1991, progressively reduced by 10% a percentage of the 1991 amount each year, in accordance with the following schedule:

Tax Year Percentage of 1991

Remittance Amount

1999 90

2000 80

2001 70

2002 60

2003 50

2004 40

2005 30

2006 20

2007 through 2010 10

2008 2011 and following years  0

(ii) The amount remitted must be adjusted by the result of dissolved or combined taxing jurisdictions, as provided for in subsection (7). Fifty percent of the amount must be remitted on or before November 30 and the remaining 50% on or before May 31.

(4)  Upon receipt of the reimbursement from the department, the county treasurer shall distribute the reimbursement to each taxing jurisdiction as calculated by the department.

(5)  For the purposes of this section and subject to subsection (7), "taxing jurisdiction" means a jurisdiction levying mills against personal property and includes but is not limited to a county, city, school district, tax increment financing district, and miscellaneous taxing district and the state of Montana.

(6)  The amounts necessary for the administration of this section are statutorily appropriated, as provided in 17-7-502, from the general fund to reimburse eligible taxing jurisdictions for reductions in tax rates on personal property.

(7)  The following apply to taxing jurisdictions that were altered after tax year 1989:

(a)  A taxing jurisdiction that existed in tax year 1989 and that no longer exists is not entitled to reimbursement under this section.

(b)  A taxing jurisdiction that existed in tax year 1989 and that is split into two or more taxing jurisdictions or that is annexed to or is consolidated with another taxing jurisdiction is entitled to reimbursement based on the portion of 1989 taxable value within each new taxing jurisdiction. The department shall determine the portion of 1989 taxable value located in each taxing jurisdiction.

(c)  A taxing jurisdiction that did not exist in tax year 1989 is not entitled to reimbursement under this section unless the jurisdiction was created as described in subsection (7)(b)."



Section 6.  Section 15-1-112, MCA, is amended to read:

"15-1-112.   Business equipment tax rate reduction reimbursement to local government taxing jurisdictions. (1) On or before January 1, 1996, for the reduction in payment under subsection (4) and by June 1 of 1996, 1997, and 1998, for all other reimbursements in this section, the department of revenue shall determine a reimbursement amount associated with reducing the tax rate in 15-6-138 and provide that information to each county treasurer. The reimbursement amount must be determined for each local government taxing jurisdiction that levied mills on the taxable value of property described in 15-6-138 in the corresponding tax year. However, the reimbursement does not apply to property described in 15-6-138 that has a reduced tax rate under 15-24-1402.

(2)  (a) The reimbursement amount to be used as the basis for the payment reduction under subsection (4) is the product of multiplying the tax year 1995 taxable value of property described in 15-6-138 for each local government taxing jurisdiction by the tax year 1995 mill levy for the jurisdiction and then multiplying by 1/9th.

(b)  (i) The reimbursement amount for each local government taxing jurisdiction for tax year 1996 is the amount determined under subsection (2)(a) unless the tax year 1996 market value of property described in 15-6-138, for the particular local government taxing jurisdiction, is more than the tax year 1995 market value for property described in 15-6-138 in the same jurisdiction.

(ii) If the tax year 1996 market value is greater than the tax year 1995 market value for a particular jurisdiction, then the reimbursement amount for tax year 1996 is the result of subtracting the simulated 1996 tax from the 1995 tax. The 1995 tax is the tax for the particular jurisdiction, determined by multiplying the actual taxable valuation of property described in 15-6-138, for tax year 1995, by the tax year 1995 mill levy for the jurisdiction. The simulated 1996 tax for the particular jurisdiction is the actual tax year 1996 taxable value of property described in 15-6-138 multiplied by the tax year 1995 mill levy for the particular jurisdiction. If the simulated 1996 tax is greater than the 1995 tax, the reimbursement amount is zero.

(c)  (i) The reimbursement amount for each local government taxing jurisdiction for tax year 1997 is the amount determined under subsection (2)(a) multiplied by two unless the tax year 1997 market value of property described in 15-6-138, for the particular local government taxing jurisdiction, is more than the tax year 1995 market value for property described in 15-6-138 in the same jurisdiction.

(ii) If the tax year 1997 market value is greater than the tax year 1995 market value for a particular jurisdiction, then the reimbursement amount for tax year 1997 is the result of subtracting the simulated 1997 tax from the 1995 tax. The 1995 tax is the tax for the particular jurisdiction, determined by multiplying the actual taxable valuation of property described in 15-6-138, for tax year 1995, by the tax year 1995 mill levy for the jurisdiction. The simulated 1997 tax for the particular jurisdiction is the actual tax year 1997 taxable value of property described in 15-6-138 multiplied by the tax year 1995 mill levy for the particular jurisdiction. If the simulated 1997 tax is greater than the 1995 tax, the reimbursement amount is zero.

(d)  (i) The reimbursement amount for each local government taxing jurisdiction for tax year 1998 is the amount determined under subsection (2)(a) multiplied by three unless the tax year 1998 market value of property described in 15-6-138, for the particular local government taxing jurisdiction, is more than the tax year 1995 market value for property described in 15-6-138 in the same jurisdiction.

(ii) If the tax year 1998 market value is greater than the tax year 1995 market value for a particular jurisdiction, then the reimbursement amount for tax year 1998 is the result of subtracting the simulated 1998 tax from the 1995 tax. The 1995 tax is the tax for the particular jurisdiction, determined by multiplying the actual taxable valuation of property described in 15-6-138, for tax year 1995, by the tax year 1995 mill levy for the jurisdiction. The simulated 1998 tax for the particular jurisdiction is the actual tax year 1998 taxable value of property described in 15-6-138 multiplied by the tax year 1995 mill levy for the particular jurisdiction. If the simulated 1998 tax is greater than the 1995 tax, the reimbursement amount is zero.

(3)  (a) For purposes of this section, "local government taxing jurisdiction" means a local government rather than a state taxing jurisdiction that levied mills against property described in 15-6-138, including county governments, incorporated city and town governments, consolidated county and city governments, tax increment financing districts, local elementary and high school districts, local community college districts, miscellaneous districts, and special districts. The term includes countywide mills levied for equalization of school retirement or transportation.

(b)  The term does not include county or state school equalization levies provided for in 20-9-331, 20-9-333, and 20-9-360 or the university levy provided for in 15-10-106. It also does not include any state levy for welfare programs provided for in 53-2-813.

(c)  Each tax increment financing district must receive the benefit of the state mill on the incremental taxable value of the district.

(4)  County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in June of 1996 by an amount equal to 38% of the reimbursement amount determined under subsection (2)(a) for all of the local government taxing jurisdictions in the county.

(5)  County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in December of 1996 by an amount equal to 31% of the reimbursement amount for tax year 1996 for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(6)  County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in June of 1997 by an amount equal to 31% of the reimbursement amount for tax year 1996 for all of the local government taxing jurisdictions in the county and by an amount equal to 38% of the reimbursement amount for tax year 1997 for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(7)  County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in December of 1997 by an amount equal to 31% of the reimbursement amount for tax year 1997 for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(8)  County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in June of 1998 by an amount equal to 31% of the reimbursement amount for tax year 1997 for all of the local government taxing jurisdictions in the county and by an amount equal to 38% of the reimbursement amount for tax year 1998 for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(9)  County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in December of 1998 by an amount equal to 31% of the reimbursement amount for tax year 1998 for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(10) County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in June of 1999 by an amount equal to 69% of the reimbursement amount for tax year 1998 for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(11) County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in December of the years 1999 through 2007 by an amount equal to 31% of the reimbursement amount determined in subsection (13) for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(12) County treasurers shall reduce the county payment to the state for the levy imposed under 20-9-360 in June of the years 2000 through 2008 by an amount equal to 69% of the reimbursement amount determined in subsection (13) for all of the local government taxing jurisdictions in the county, as determined by the department under subsection (2).

(13)  (a) The reimbursement amount for tax year 1999 and each for subsequent tax year for 9 years must be progressively reduced each year by 10% a percentage of the reimbursement amount for tax year 1999, according to the following schedule:

Tax Year Percentage of 1999

Reimbursement Amount

1999 90

2000 80

2001 70

2002 60

2003 50

2004 40

2005 30

2006 20

2007 through 2010 10

2008 2011 and following years  0

(b)  The reimbursement amount for each tax year must be the basis for reducing the amount remitted to the state for the levy imposed under 20-9-360 in December of the same year and June of the following year.

(14) The county treasurer shall use the funds from the reduced payment to the state for the levy imposed under 20-9-360 to reimburse each local government taxing jurisdiction in the amount determined by the department under subsection (2). The reimbursement must be distributed to funds within local government taxing jurisdictions in the same manner as taxes on property described in 15-6-138 are distributed. The reimbursement in June must be distributed based on the prior year's mill levy, and the reimbursement in December must be based on the current year's mill levy.

(15) Each local government taxing jurisdiction receiving reimbursements shall consider the amount of reimbursement that will be received and lower the mill levy otherwise necessary to fund the budget by the amount that would otherwise have to be raised by the mill levy.

(16) A local government taxing jurisdiction that ceases to exist after October 1, 1995, will no longer be considered for revenue loss or reimbursement purposes. A local government taxing jurisdiction that is created after January 1, 1996, will not be considered for revenue loss or reimbursement purposes. If a local government taxing jurisdiction that existed prior to January of 1996 is split between two or more taxing jurisdictions or is annexed to or is consolidated with another taxing jurisdiction, the department shall determine how much of the revenue loss and reimbursement is attributed to the new jurisdictions."



Section 7.  Section 15-6-138, MCA, is amended to read:

"15-6-138.   Class eight property -- description -- taxable percentage. (1) Class eight property includes:

(a)  all agricultural implements and equipment;

(b)  all mining machinery, fixtures, equipment, tools that are not exempt under 15-6-201(1)(r), and supplies except those included in class five;

(c)  all manufacturing machinery, fixtures, equipment, tools that are not exempt under 15-6-201(1)(r), and supplies except those included in class five;

(d)  all trailers and semitrailers, including those prorated under 15-24-102, except those subject to taxation under 61-3-504(2) or exempt under 15-6-201(1)(v);

(e)  all goods and equipment intended for rent or lease, except goods and equipment specifically included and taxed in another class;

(f)  buses and trucks having a rated capacity of more than 1 ton, including those prorated under 15-24-102;

(g)  truck toppers weighing more than 300 pounds;

(h)  furniture, fixtures, and equipment, except that specifically included in another class, used in commercial establishments as defined in this section;

(i)  x-ray and medical and dental equipment;

(j)  citizens' band radios and mobile telephones;

(k)  radio and television broadcasting and transmitting equipment;

(l)  cable television systems;

(m)  coal and ore haulers;

(n)  theater projectors and sound equipment; and

(o)  all other property not included in any other class in this part, except that property subject to a fee in lieu of a property tax.

(2)  As used in this section, "coal and ore haulers" means nonhighway vehicles that exceed 18,000 pounds per axle and that are primarily designed and used to transport coal, ore, or other earthen material in a mining or quarrying environment.

(3)  "Commercial establishment" includes any hotel; motel; office; petroleum marketing station; or service, wholesale, retail, or food-handling business.

(4)  Class eight property is taxed at:

(a)  9% of its market value for tax years ending on or before December 31, 1995;

(b)  8% of its market value for tax year 1996;

(c)  7% of its market value for tax year 1997; and

(d)  6% of its market value for tax years beginning after December 31, 1997 1998 and 1999;

(e) 5% of its market value for tax year 2000;

(f) 4% of its market value for tax year 2001; and

(g) 3% of its market value for tax years beginning after December 31, 2001."



Section 8.  Section 20-9-406, MCA, is amended to read:

"20-9-406.   Limitations on amount of bond issue. (1)  (a)  Except as provided in subsection (1)(c), the maximum amount for which an elementary district or a high school district may become indebted by the issuance of bonds, including all indebtedness represented by outstanding bonds of previous issues and registered warrants, is 45% of the taxable value of the property subject to taxation to be ascertained by the last-completed assessment for state, county, and school taxes previous to the incurring of the indebtedness, plus, for bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the district for tax year 1995, and for bonds to be issued during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 2000, an additional 44% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 2001, an additional 55% of the taxable value of class eight property within the district for tax year 1995, and for bonds to be issued during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the district for tax year 1995, in each case of class eight property, multiplied by 45%.

(b)  Except as provided in subsection (1)(c), the maximum amount for which a K-12 school district, as formed pursuant to 20-6-701, may become indebted by the issuance of bonds, including all indebtedness represented by outstanding bonds of previous issues and registered warrants, is up to 90% of the taxable value of the property subject to taxation to be ascertained by the last-completed assessment for state, county, and school taxes previous to the incurring of the indebtedness, plus, for bonds to be issued during fiscal year 1997, an additional 11% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 1998, an additional 22% of the taxable value of class eight property within the district for tax year 1995, and for bonds to be issued during fiscal years year 1999 through 2008, an additional 33% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 2000, an additional 44% of the taxable value of class eight property within the district for tax year 1995, for bonds to be issued during fiscal year 2001, an additional 55% of the taxable value of class eight property within the district for tax year 1995, and for bonds to be issued during fiscal years 2002 through 2011, an additional 66% of the taxable value of class eight property within the district for tax year 1995, in each case of class eight property, multiplied by 90%. The total indebtedness of the high school district with an attached elementary district must be limited to the sum of 45% of the taxable value of the property for elementary school program purposes and 45% of the taxable value of the property for high school program purposes, adjusted as provided in this section.

(c)  (i) The maximum amount for which an elementary district or a high school district with a district mill value per elementary ANB or per high school ANB that is less than the corresponding statewide mill value per elementary ANB or per high school ANB may become indebted by the issuance of bonds, including all indebtedness represented by outstanding bonds of previous issues and registered warrants, is 45% of the corresponding statewide mill value per ANB times 1,000 times the ANB of the district. For a K-12 district, the maximum amount for which the district may become indebted is 45% of the sum of the statewide mill value per elementary ANB times 1,000 times the elementary ANB of the district and the statewide mill value per high school ANB times 1,000 times the high school ANB of the district.

(ii) If mutually agreed upon by the affected districts, for the purpose of calculating its maximum bonded indebtedness under this subsection (1)(c), a district may include the ANB of the district plus the number of students residing within the district for which the district or county pays tuition for attendance at a school in an adjacent district. The receiving district may not use out-of-district ANB for the purpose of calculating its maximum indebtedness if the out-of-district ANB has been included in the ANB of the sending district pursuant to the mutual agreement.

(2)  The maximum amounts determined in subsection (1), however, may not pertain to indebtedness imposed by special improvement district obligations or assessments against the school district or to bonds issued for the repayment of tax protests lost by the district. All bonds issued in excess of the amount are void, except as provided in this section.

(3)  When the total indebtedness of a school district has reached the limitations prescribed in this section, the school district may pay all reasonable and necessary expenses of the school district on a cash basis in accordance with the financial administration provisions of this chapter.

(4)  Whenever bonds are issued for the purpose of refunding bonds, any money to the credit of the debt service fund for the payment of the bonds to be refunded is applied toward the payment of the bonds and the refunding bond issue is decreased accordingly."

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