(1) Beginning with fiscal year 2007-2008, school districts of this State must be reimbursed from the Homestead Exemption Fund in the manner provided in this subsection. The Comptroller General shall pay these reimbursements upon application of the school district and the reimbursements for fiscal year 2007-2008 shall be equal to the amount estimated to be collected or reimbursed in fiscal year 2007-2008 by the district from school operating millage imposed on owner-occupied residential property therein.
(2) Beginning in fiscal year 2008-2009 a school district shall receive in reimbursements what it received in fiscal year 2007-2008 plus the reimbursement increases provided for in item (3). The reimbursement increases of the several school districts as provided in item (3) for any year shall be aggregated and the reimbursement increase a particular school district shall receive for that year shall be equal to an amount that is the school district's proportionate share of such funds based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act. For purposes of the reimbursement increases school districts receive under this subsection based on weighted pupil units determined pursuant to the Education Finance Act, an additional add-on weighting for students in poverty of 0.20 shall be included in the weightings provided in Section 59-20-40(1)(c) of the 1976 Code. The weighting for poverty shall provide additional revenues for students in kindergarten through grade twelve who qualify for Medicaid or who qualify for reduced or free lunches, or both. Revenues generated by this weighting must be used by districts and schools to provide services and research-based strategies for addressing academic or health needs of these students to ensure their future academic success, to provide summer school, reduced class size, after school programs, extended day, instructional materials, or any other research-based educational strategy to improve student academic performance.
(3) Beginning with the fiscal year 2008-2009 reimbursements, these reimbursements must be increased on an annual basis by an inflation factor equal to the percentage increase in the previous year of the Consumer Price Index, Southeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics plus the percentage increase in the previous year in the population of the State as determined by the Office of Research and Statistics of the State Budget and Control Board. Distribution of these reimbursement increases shall be as provided in this subsection.
(4) The percentage of population growth in any year for any school district entitled to reimbursements from the Homestead Exemption Fund shall be based on estimates for such growth in the county wherein the school district is located as determined by the Office of Research and Statistics of the State Budget and Control Board. Where the school district encompasses areas in more than one county, the population growth in that entity shall be the average of the growth in each county weighted to reflect the existing population of the school district in that county as compared to the existing population of the school district as a whole.
(5) Upon the beginning of reimbursements for a particular year, the reimbursements must be paid to a school district on or after January first of that year.
(6) To the extent revenues in the Homestead Exemption Fund are insufficient to pay all reimbursements to a school district required by this subsection (A) and subsection (B), the difference must be paid from the state general fund.
(7) Operating millage levied in a county for alternative schools, career and technology centers, and county boards of education whether or not levied countywide or on a school district by school district basis in a county also is considered school operating millage to which the reimbursements provided for in this section apply.
(8) Reimbursements to a school district under this subsection shall be considered in the computation of the required Education Improvement Act maintenance of local effort.
(B)
(1) After the required reimbursements to school districts in a county have been made from the Homestead Exemption Fund for any year pursuant to subsection (A), a county, if the districts therein have not together received a total of at least two million five hundred thousand dollars in reimbursements, must receive an additional disbursement from the Homestead Exemption Fund to bring the total reimbursements to the districts in that county to at least two million five hundred thousand dollars. This additional disbursement shall be paid to the county for disbursement to the school districts located within that county. These distributions under this subsection to any district in the county shall be equal to the one hundred thirty-five day average daily membership of the district divided by the total average daily membership of all students in the districts in the county times the required amount of funds to bring the total reimbursements to the school districts in that county to at least two million five hundred thousand dollars.
(2) If a school district encompasses more than one county, the one hundred thirty-five day average daily membership of the students from that county attending schools of the district shall be used to compute the distributions required by this subsection.
(3) The distributions to a county and then to a school district under this subsection shall be considered to be outside of the Education Finance Act and shall not be considered when computing the maintenance of local effort required of that district under the Education Improvement Act.
(C) The balance in the Homestead Exemption Fund remaining after the payments to school districts and counties pursuant to subsections (A) and (B) of this section must be remitted to counties in the proportion that the population of the county is to the total population of the State. Population data must be as determined in the decennial United States Census and the most recent update to that data as determined by the Office of Research and Statistics of the State Budget and Control Board. Revenues received by the county must be used to provide a property tax credit against the property tax liability for county operations on owner-occupied residential property classified for property tax purposes pursuant to Section 12-43-220(c). The credit is an amount determined by dividing the total estimated revenues credited to the county during the applicable fiscal year by the number of parcels in the county eligible for the credit. Credit that exceeds the tax due on a parcel must be reallocated in a uniform amount to remaining parcels with a property tax liability for county operations. The distributions under this subsection are not an obligation of the state general fund if sufficient funds are not available to make such distributions from the Homestead Exemption Fund.
(D) Notwithstanding any other provision of this section, the reimbursements provided pursuant to this section for the property tax exemption allowed by Section 12-37-220(B)(47) must include full payment to each taxing entity for the incremental property tax that, in the absence of such exemption, would otherwise be payable to such taxing entity with respect to owner-occupied residential real property located in a redevelopment project area pursuant to the tax increment financing law for cities, counties, or redevelopment authorities. Such payment for incremental property taxes shall be calculated in accordance with the applicable tax increment financing law and shall be based on the assessed value of, and the school operating millage rate otherwise applicable to, the owner-occupied residential property in question.