SUMMARY:  This bill would amend Article 3 of Chapter 8 of Title 48 of the O.C.G.A. by completely re-writing Section 2.  It includes allowing the 1% sales tax to be used for maintenance and operations and to roll back the millage rate to compensate.  It also adds some reporting requirements and the possible creation of special educational districts for the purpose of a referendum to approve the tax. 

REQUIREMENTS:

• Special tax districts would be established that consist of county school systems without independent systems; or for those that do, cooperative agreements among independent systems and county systems.
• The 1% sales tax would apply to motor fuels, food and beverages.
• All charter schools would be allowed to participate in projects (which could include maintenance and operations projects) specified in the ballot.
• All proceeds used on educational maintenance and operations would have to be rolled back from property tax.  Property tax bills would have to specify the amount rolled back as a result of the 1% sales tax collected in the previous year.  Boards would be allowed to provide for an alternative methods of computing a millage reduction that may result in a lesser reduction than outlined in the law, but they must show on the tax bills the dollar amount of reduction in property taxes as a result of the sales tax collection. The dollar amount on motor vehicles and trailers would not be calculated or shown on forms for registration of the vehicles.
• If sales taxes are paid in another district, those taxes could be credited toward the property tax owed in the home district.  If the taxes paid were less than they would have been in the home district, the difference would have to be paid in order to get the property tax credit. 
• The election superintendent would have to publish a notice of the election once a week for 4 weeks with specified contents of projects (which could include maintenance and operations) if general obligation debt is to be used, and the accustomed 5 year limit and dollar limit according to identified projects would remain.
• The proposal that would be included on the ballot (with or without general obligation debt) is included in the law, and those procedures would not change regarding payment of debt.
• The proposal would allow the state tax commissioner to take the state share off the top and then withhold sales tax from dealers who owe state taxes before disbursing the remainder to the boards of education.
• All tax returns would have to separately identify the location of each retail establishment and the amount collected at that site, which does not presently take place for large retailers such as Wal-Mart or chain drug stores.
• None of the proceeds can be used for a project bid or begun before the referendum.
• A separate record of every purpose for which the tax would be used and must be kept for auditors to verify that the funds were used as advertised according to specific directions in the bill.
• If any of the funds would be used for general debt obligation, that year’s installment of the debt must be met before the funds could be used for anything else.
• An annual report must be published to show each project in the referendum and the estimated cost for each project (original and current), amounts expended in prior years and those expended in the current year.  The report must also include plans for how underfunded or behind schedule projects will be addressed and a statement of surplus funds.
• All other requirements are like the 1% for capital outlay law currently in effect.
• A constitutional amendment would be required and would be scheduled for a state-wide general election in November, 2010.