HF 179 (LSB 1693YH (18) 85)

HOUSE FILE 179

BY  HALL, JORGENSEN, M. SMITH, HANUSA, COHOON, KEARNS, DAWSON, THOMAS, ABDUL-SAMAD, McCARTHY, HANSON, BERRY, R. OLSON, GASKILL, RUNNING-MARQUARDT, BEARINGER, ANDERSON, T. TAYLOR, HUNTER, KAJTAZOVIC, WOLFE, WOOD, MUHLBAUER, FORBES, RIDING, OLDSON, T. OLSON, PRICHARD, LYKAM, KRESSIG, RUFF, OURTH, DUNKEL, THEDE, KELLEY, and GAINES

A BILL FOR

An Act relating to school district funding from the taxpayers trust fund by making transfers to the property tax equity and relief fund, establishing a school district property tax replacement fund and making transfers to the fund, making appropriations, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 8.57E, subsection 2, Code 2013, is amended to read as follows:
   2.  Moneys in the taxpayers trust fund shall only be used pursuant to appropriations
 
or transfers made by the general assembly for tax relief.
    Sec. 2.  Section 257.2, subsection 9, Code 2013, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  Property tax replacement payments received under section 257.16B.
    Sec. 3.  Section 257.4, subsection 1, paragraph a, Code 2013, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (8)  The amount of the school district property tax replacement payment received by the school district under section 257.16B.
    Sec. 4.  Section 257.4, subsection 1, paragraph b, Code 2013, is amended to read as follows:
   b.  For the budget year beginning July 1, 2008, and succeeding budget years, the department of management shall annually determine an adjusted additional property tax levy and a statewide maximum adjusted additional property tax levy rate, not to exceed the statewide average additional property tax levy rate, calculated by dividing the total adjusted additional property tax levy dollars statewide by the statewide total net taxable valuation. For purposes of this paragraph, the adjusted additional property tax levy shall be that portion of the additional property tax levy corresponding to the state cost per pupil multiplied by a school district’s weighted enrollment, and then multiplied by one hundred percent less the regular program foundation base per pupil percentage pursuant to section 257.1, and then reduced by the amount of property tax replacement received under section 257.16B. The district shall receive adjusted additional property tax levy aid in an amount equal to the difference between the adjusted additional property tax levy rate and the statewide maximum adjusted additional property tax levy rate, as applied per thousand dollars of assessed valuation on all taxable property in the district. The statewide maximum adjusted additional property tax levy rate shall be annually determined by the department taking into account amounts allocated pursuant to section 257.15, subsection 4. The statewide maximum adjusted additional property tax levy rate shall be annually determined by the department taking into account amounts allocated pursuant to section 257.15, subsection 4, and the balance of the property tax equity and relief fund created in section 257.16A at the end of the calendar year.
    Sec. 5.  Section 257.15, subsection 4, paragraph b, Code 2013, is amended to read as follows:
   b.  After lowering all school district
 
adjusted additional property tax levy rates to the statewide maximum adjusted additional property tax levy rate under paragraph “a”, the department of management shall use any remaining funds at the end of the calendar year to further lower additional property taxes by increasing for the budget year beginning the following July 1, the state foundation base percentage. Moneys used pursuant to this paragraph shall supplant an equal amount of the appropriation made from the general fund of the state pursuant to section 257.16 that represents the increase in state foundation aid.
    Sec. 6.  Section 257.16A, Code 2013, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  For each fiscal year beginning on or after July 1, 2013, and after the transfer in section 257.16B, there is transferred from the taxpayers trust fund created in section 8.57E to the fund an amount necessary to lower all school district adjusted additional property tax levy rates to the statewide maximum adjusted additional property tax levy rate pursuant to section 257.15, subsection 4, after taking into account amounts allocated pursuant to section 257.15, subsection 4, and amounts deposited in the fund under section 423F.2, subsection 3.
    Sec. 7.  NEW SECTION.  257.16B  School district property tax replacement fund —— payments.
   1.
  a.  A school district property tax replacement fund is created in the state treasury under the authority of the department of management. For each fiscal year beginning on or after July 1, 2013, there is transferred from the taxpayers trust fund created in section 8.57E to the fund an amount necessary to make all school district property tax replacement payments under this section.
   b.  There is appropriated annually all moneys in the fund to the department of management for purposes of providing replacement payments to school districts pursuant to this section.
   2.  For each budget year beginning on or after July 1, 2013, the amount of money in the school district property tax replacement fund shall be used to provide school district replacement payments to each school district in the state as calculated in subsection 3, paragraph “c”, and subsection 4, if applicable.
   3.  For each budget year beginning on or after July 1, 2013, the department of management shall calculate for each school district all of the following:
   a.  The state cost per pupil for the budget year beginning July 1, 2012, multiplied by one hundred percent less the regular program foundation base per pupil percentage pursuant to section 257.1.
   b.  The state cost per pupil for the budget year beginning July 1, 2013, multiplied by one hundred percent less the regular program foundation base per pupil percentage pursuant to section 257.1.
   c.  The amount of each school district’s property tax replacement payment. Each school district’s property tax replacement payment equals the school district’s weighted enrollment for the budget year multiplied by the remainder of the amount calculated for the school district under paragraph “b” minus the amount calculated for the school district under paragraph “a”.
   4.  If an amount appropriated for a fiscal year is insufficient to pay all school district replacement payments for the budget year, the director of the department of management shall prorate the payments from the fund and shall notify the county auditors of the pro rata percentage on or before July 31.
   5.  Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund. Moneys in the fund are not subject to the provisions of section 8.33 and shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided in this section.
    Sec. 8.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 9.  APPLICABILITY.  This Act applies to school budget years beginning on or after July 1, 2013.
EXPLANATION
   This bill relates to school district funding by making certain transfers and appropriations and by providing for school district property tax replacement payments.
   For each fiscal year beginning on or after July 1, 2013, the bill transfers from the taxpayers trust fund created in Code section 8.57E an amount necessary to lower all school district adjusted additional property tax levy rates to the statewide maximum adjusted additional property tax levy rate as provided for in Code section 257.15(4)(a), after taking into account amounts currently allocated for that purpose pursuant to Code section 257.15, subsection 4, and amounts deposited in the fund from the secure an advanced vision for education fund under Code section 423F.2, subsection 3. The bill also modifies the method of calculating a school district’s adjusted additional property tax levy under Code section 257.4 to reflect property tax replacement payments received by the school district for the same budget year pursuant to new Code section 257.16B.
   The bill establishes a school district property tax replacement fund under the authority of the department of management. For each fiscal year beginning on or after July 1, 2013, and before the transfer of moneys to the property tax equity and relief fund, the bill transfers from the taxpayers trust fund under Code section 8.57E to the school district property tax replacement fund an amount necessary to make all school district property tax replacement payments under new Code section 257.16B. The bill appropriates the moneys in the replacement fund to the department of management for that purpose.
   Under the bill, for each budget year beginning on or after July 1, 2013, each school district’s property tax replacement payment amount is equal to the school district’s weighted enrollment for the budget year multiplied by the difference of the following: (1) the state cost per pupil for the budget year beginning July 1, 2013, multiplied by 100 percent less the regular program foundation base per pupil percentage pursuant to Code section 257.1; and (2) the state cost per pupil for the budget year beginning July 1, 2012, multiplied by 100 percent less the regular program foundation base per pupil percentage pursuant to Code section 257.1.
   The bill provides that if an amount appropriated for a fiscal year is insufficient to pay all school district replacement payments for the budget year, the director of the department of management shall prorate the payments from the fund.
   The bill amends Code section 8.57E to allow transfers by the general assembly from the taxpayers trust fund for tax relief in addition to appropriations which are already allowed under Iowa law.
   The bill modifies the definition of miscellaneous income under Code chapter 257 to exclude property tax replacement payments received by a school district under new Code section 257.16B. The bill also modifies the calculation for determining the amount of a school district’s additional property tax levy to reflect property tax replacement payment amounts received under new Code section 257.16B.
   The bill takes effect upon enactment. The bill applies to school budget years beginning on or after July 1, 2013.