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2004 Legislative Session: 5th Session, 37th Parliament

FIRST READING

The following electronic version is for informational

purposes only.

The printed version remains the official version.

HONOURABLE TOM CHRISTENSEN

MINISTER OF EDUCATION

BILL 12 – 2004

EDUCATION STATUTES AMENDMENT ACT, 2004

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Independent School Act

Section 12 (1) of the Independent School Act, R.S.B.C. 1996, c. 216,

is amended by striking out "The Minister of Finance" and substituting

"The minister" .

Section 13 (1) is amended by striking out "On the recommendation

of the minister, the Minister of Finance" and substituting "The

minister" .

School Act

Section 1 (1) of the School Act, R.S.B.C. 1996, c. 412, is amended

(

a) by repealing the

definitions of "annual capital expense" ,

"annual capital grant " , "annual capital project" ,

"capital plan expense" and "local capital expense"

and substituting the following:

"annual facility expenditure" means an expenditure with respect to a project that is financed from the board's annual facility grant;

"annual facility grant" means a grant to a board under

section 115.1;

"annual facility project" means an undertaking to maintain or improve

(

a) a site, or

(

b) a building

that is owned or leased by a board;

"capital plan expenditure" means a capital expenditure with respect to a project that is included in a board's capital plan bylaw, and includes a capital expenditure that was a capital plan expense under this Act, as it read immediately before this definition was enacted, and was included in a capital plan;

"local capital expenditure" means a capital expenditure with respect to a project that is

(

a) financed from the board's local capital reserve, or

(

b) included in the annual budget of a board and financed from

(

i) local revenue,

(ii) school referendum taxes, or

(iii) the board's operating grant or other grants designated by the minister,

and includes a capital expenditure that was a local capital

expense under this Act as it read immediately before this definition was enacted;

(

b) by repealing the

definitions of "capital expenses" and

"operating expenses" ,

(

c) in the

definitions of "capital plan project" and

"local capital project" by striking out "expense"

and substituting "expenditure" , and

(

d) in the definition of "capital project" by striking

out "expenses" and substituting "expenditures" .

Section 98 (3) is repealed.

Section 100 is amended

(

a) in subsection (1) in the

definitions of "board's contribution"

and "minister's contribution" by striking out "expense"

wherever it appears and substituting "expenditure" ,

(

b) in subsection (1) by repealing the definition of "capital

expense" and substituting the following:

"capital expenditure" does not include an annual

facility expenditure; ,

(

c) in subsections (2) and (3) by striking out "expense"

wherever it appears and substituting "expenditure" , and

(

d) by repealing subsections (4) and (5) and substituting the following:

(4) Money allocated to the minister must be used by the board only

(

a) for capital projects, and

(

b) with the minister's approval.

(5) Money allocated to the board must be used by the board only for capital projects.

Section 100.1 is amended by striking out "to a capital reserve

or for operating expenses" and substituting "to either operating

or capital expenditures" .

7 Sections 101 (1) and (2) and 103 are repealed.

Section 105 is amended

(

a) by repealing subsections (1) and (4), and

(

b) by repealing subsection (2) and substituting the following:

(2) If a board provides housing accommodation for employees, the board must determine and set the rent to be charged in respect of each unit of housing accommodation by dividing the total estimated expenditures of the housing accommodation, including

(

a) amounts payable by the board for interest and principal,

(

b) taxes and other levies,

(

c) service charges,

(

d) repairs and maintenance, and

(

e) other expenditures,

by the number of units of housing accommodation, whether occupied or not.

Section 111 is repealed and the following substituted:

Preparation of annual budget

(1) In this section:

"estimated expenditures" means the estimated expenditures plus any operating deficit that the board must fund in the fiscal year;

"estimated revenues" means the estimated revenues plus appropriated operating reserves.

(2) The board must prepare an annual budget in the form and containing the content specified by the minister.

(3) Subject to subsection (4), estimated expenditures in the annual budget must not exceed estimated revenues.

(4) The estimated expenditures in the annual budget, other than the debt service expenses estimate referred to in

section 110, may exceed the estimated revenues if the board has held a referendum under

section 112 and the referendum approved the amount in excess of the estimated revenues.

Section 112 (2) is amended by striking out "referred to in

section 111 (1) (f)" .

11 Sections 114, 115 (2) and 116 are amended by striking out "the

minister of finance" wherever it appears and substituting "the

minister" .

12 Sections 115 (1), 115.1 and 117 (1) are amended by striking out "On

the recommendation of the minister, the minister of finance" and substituting

"The minister" .

Section 115.1 is amended by striking out "of a school district

an annual capital grant to be used for annual capital projects to maintain sites

and buildings owned or leased by the board." and substituting "an

annual facility grant to be used for annual facility projects."

14 Sections 116, 140 and 147 (3) are amended by striking out "expenses"

wherever it appears and substituting "expenditures" .

Section 121 is amended by striking out "Minister of Finance."

and substituting "minister of revenue."

16 Sections 124 (2), (3) and (4), 125 (1) to (3) and 138 (1) (

e) are

amended by striking out "the minister of revenue" wherever it

appears and substituting "the minister of finance" .

Section 141 (1) (b) (ii) is repealed and the following substituted:

(ii) for an annual facility project, and .

Section 142 (3) (c) (ii) is repealed and the following substituted:

(ii) annual facility projects, .

Section 144 is amended

(

a) in subsections (1) and (5) by striking out "expense"

wherever it appears and substituting "expenditure" , and

(

b) by repealing subsection (6) and substituting the following:

(6) A board must not borrow money for capital expenditures unless the minister has, in writing, authorized the borrowing.

Section 156 is amended

(

a) in subsection (2) by striking out "trust accounts,"

and substituting "special purpose accounts," ,

(

b) by repealing subsections (3) and (7) to (9),

(

c) in subsection (4) by striking out "trust fund" and

"trust" and substituting "special purpose account"

in both places,

(

d) by repealing subsection (5) and substituting the following:

(5) A board that establishes a special purpose account under subsection (4) must spend and account for the money in the special purpose account in accordance with

(

a) the terms of the special purpose account, and

(

b) the directions of the minister. ,

(

e) by repealing subsection (10) and substituting the following:

(10) A surplus in respect of a capital plan project may be spent only

(

a) on capital expenditures, and

(

b) with the minister's approval. , and

(

f) by repealing subsection (12) and substituting the following:

(12) A board must not incur a deficit of any kind unless the board

(

a) has the approval of the minister, or

(

b) meets criteria prescribed by order of the minister.

Section 157 (2) is repealed and the following substituted:

(2) The financial statements required under subsection (1) must be prepared on or before September 15 of each year, in accordance with

(

a) subject to paragraph (b), generally accepted accounting principles, and

(

b) the directions of the minister.

22 The following

section is added:

Financial information

157.1 Without limiting

section 81, at the times and in the form required by the minister, a board must submit to the minister financial information necessary for the purpose of incorporating the financial information into the financial reports of the government reporting entity.

Section 161 (1) (

d) is repealed and the following substituted:

(

d) must submit a report to the board respecting the annual financial statements referred to in

section

Section 166.29 (1) is amended by striking out "sections 97

to 100 apply" and substituting "sections 97 to 100.1 apply" .

Section 166.31 is amended by striking out "111 (1), (2) and

(4)" and substituting "111 (1) to (3)" .

Section 168 (2) (

o) is amended by striking out "section 156

(1)," and substituting "sections 156 (1), 157 (2) and 157.1," .

Transitional – application of provisions

(1) Words used in this

section have the same meaning as given to them in the School Act .

(2) Despite this Act,

(

a) sections 3 to 10, 13 to 21 and 25 of this Act do not apply to a board or a francophone education authority for the purposes of

(

i) preparing or amending an annual budget,

(ii) accounting, and

(iii) having an audit conducted,

in respect of the 2003-2004 fiscal year, and

(

b) sections 1, 98 (3), 100, 100.1, 101 (1) and (2), 103, 105 (1), (2) and (4), 111, 112 (2), 115.1, 116, 140, 141 (1) (b) (ii), 142 (3) (c) (ii), 144 (1), (5) and (6), 147 (3), 156 (2) to (5), (7) to (10) and (12), 157 (2) and 166.31 of the School Act , as those sections read on January 31, 2004, continue to apply to a board or a francophone education authority for the purposes of

(

i) preparing or amending an annual budget,

(ii) accounting, and

(iii) having an audit conducted,

in respect of the 2003-2004 fiscal year.

Commencement

28 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table:

Item

Column 1

Provisions of Act

Column 2

Commencement

Anything not elsewhere

covered by this table

The date of Royal Assent.

Sections 1 and 2

By regulation of the Lieutenant Governor in Council.

Sections 9, 10 and 25

February 1, 2004, retroactive to the extent necessary

to give them effect on and after that date.

Explanatory Notes

Independent School Act

SECTIONS 1 AND 2: [Independent School Act, sections 12 and 13]

replaces references to the Minister of Finance with references to the Minister

of Education, to reflect current financial practice.

School Act

SECTION 3: [School Act,

section 1] repeals and substitutes

definitions

and updates terminology to accord with generally accepted accounting principles,

which would regard as capital expenses some of the expenses formerly listed

under "operating expenses" and would regard expenditures made from the annual

grant as either capital expenses or operating expenses, making use of the term

"capital expenses" inappropriate.

SECTION 4: [School Act,

section 98] removes a requirement to

account for expenses related to joint use agreements between school districts

and municipalities in a trust fund, since generally accepted accounting principles

require that expenses related to activities that occur in the normal course

of business be reported with other operating expenses.

SECTION 5: [School Act,

section 100]

updates language, consequential to the amendments to

section 3;

removes references to a "capital reserve" and a "local capital reserve",

since these terms are not appropriate in the context of generally accepted

accounting principles;

requires the minister's approval for use of funds that are allocated to

the minister.

SECTION 6: [School Act,

section 100.1] removes a reference to

a "capital reserve", since this term is not appropriate in the context of generally

accepted accounting principles.

SECTION 7: [School Act, sections 101 and 103]

removes a requirement to deposit money received under the Local Government

Act in a land capital reserve trust fund, since, under generally accepted

accounting principles, these transactions should be recorded as a deferred

capital contribution;

removes a requirement to account for housing accommodation expenditures

as a local capital expense, since some of these expenditures, under generally

accepted accounting principles, would be considered operating expenses.

SECTION 8: [School Act,

section 105]

removes a requirement to account for expenses and revenue in respect of

housing accommodation for employees in a trust fund, since generally accepted

accounting principles require that expenses related to activities that occur

in the normal course of business be reported with other operating revenues

and expenses;

removes a requirement to report a loss that is now redundant, since losses

from the operation of housing accommodation will be included in district operations

and thus in the annual operating budget estimates.

SECTION 9: [School Act,

section 111]

removes a detailed list of the contents of an annual budget, giving discretion

over content to the minister;

removes a provision regarding trust funds;

clarifies the expenses that must not exceed revenues, except when approved

by a referendum.

SECTION 10: [School Act,

section 112] is consequential to the

re-enactment of

section 111 of the Act by this Bill.

SECTION 11: [School Act, sections 114, 115 and 116] replaces

references to the Minister of Finance with references to the Minister of Education,

to reflect current financial practice.

SECTION 12: [School Act, sections 115, 115.1 and 117] replaces

references to the Minister of Finance with references to the Minister of Education,

to reflect current financial practice.

SECTION 13: [School Act,

section 115.1] is consequential to the

replacement of

definitions of "annual capital grant" and "annual capital project"

section 3 of the Act by this Bill.

SECTION 14: [School Act, sections 116, 140 and 147] updates terminology.

SECTION 15: [School Act,

section 121] replaces a reference to

the Minister of Finance with a reference to the Minister of Revenue, to reflect

current financial practice.

SECTION 16: [School Act, sections 124, 125 and 138] replaces

references to the Minister of Revenue with references to the Minister of Finance,

to reflect current financial practice.

SECTION 17: [School Act,

section 141] is consequential to the

replacement of the definition of "annual capital project" in

section 3 of the

Act by this Bill.

SECTION 18: [School Act,

section 142] is consequential to the

replacement of the definition of "annual capital project" in

section 3 of the

Act by this Bill.

SECTION 19: [School Act,

section 144]

updates terminology;

is consequential to the replacement of the definition of "annual capital

expense" in

section 3 of the Act by this Bill.

SECTION 20: [School Act,

section 156]

replaces references to "trust" accounts with references to "special purpose"

accounts, since generally accepted accounting principles would not treat these

types of accounts as true trusts;

removes a board's power to arbitrarily establish trust funds for specific

purposes, since, under generally accepted accounting principles, a trust fund

or special purpose account can only be established where an external party

provides a contribution with a restricted use;

removes a number of accounting directions regarding surpluses that are

unnecessary given directions under generally accepted accounting principles;

removes a reference to "capital reserve", which is inappropriate in the

context of generally accepted accounting principles;

adds a power to incur a deficit in circumstances prescribed by the minister.

SECTION 21: [School Act,

section 157] removes document references

that are obsolete in the context of generally accepted accounting principles,

and expressly requires that financial statements be prepared in accordance with

generally accepted accounting principles and the minister's directions.

SECTION 22: [School Act,

section 157.1] requires school boards

to submit financial information to the minister for inclusion in the financial

reports of the government reporting entity.

SECTION 23: [School Act,

section 161] removes unnecessary requirements

respecting specific language in an auditor's report.

SECTION 24: [School Act,

section 166.29] adds

section 100.1 [disposition

of proceeds from a lease] to the sections that are applicable to francophone

school authorities, making financial requirements parallel between francophone

and non-francophone school districts.

SECTION 25: [School Act,

section 166.31] is consequential to

the re-enactment of

section 111 of the Act by this Bill.

SECTION 26: [School Act,

section 168] is consequential to the

re-enactment of

section 157 (2) and the addition of

section 157.1 of the Act

by this Bill.

SECTION 27: [Transitional – application of provisions] provides

that certain sections of this Bill and of the Act as amended by this Bill, although

in force, will not apply to budgets, accounts and audits that are made in respect

of the 2003-2004 fiscal year.

Copyright (c) 2004: Queen's Printer, Victoria, British Columbia, Canada