HF 124 (LSB 1093YH (5) 87)

HOUSE FILE 124

BY  THEDE, HUNTER, GASKILL, BENNETT, HANSON, KACENA, ANDERSON, KEARNS, BEARINGER, OURTH, T. TAYLOR, R. SMITH, and MEYER

A BILL FOR

An Act relating to school district funding by establishing a district cost per pupil equity budget adjustment for certain budget years, requiring property tax rate reductions for school districts using the district cost per pupil equity budget adjustment, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 257.2, subsection 2, Code 2017, is amended by striking the subsection.
    Sec. 2.  NEW SECTION.  257.14A  District cost per pupil equity —— budget adjustment.
   1.  The board of directors of a school district with a regular program district cost per pupil that is less than the highest regular program district cost per pupil among all school districts in the state for the same budget year that wishes to receive the budget adjustment under this section may adopt a resolution by May 15 preceding the budget year and shall within ten days of adoption of the resolution notify the department of management of the amount of the budget adjustment to be received. The resolution adopted by the board of directors shall specify the board’s intent to use such funds authorized under subsection 2, paragraph “b”, without any corresponding increase to the school district’s cash reserve levy or other property tax levy of the school district for the current budget year or any future budget year to replenish such amounts.
   2.  a.  For budget years beginning on or after July 1, 2017, but before July 1, 2020, each school district that satisfies the requirements of subsection 1 shall be eligible for a budget adjustment for that budget year in an amount not to exceed the difference between the school district’s regular program district cost per pupil and the highest regular program district cost per pupil among all school districts in the state multiplied by the district’s budget enrollment. The resolution adopted under subsection 1 may specify a budget adjustment amount that is less than the maximum amount authorized under this paragraph “a”.
   b.  The school district shall fund the budget adjustment either by using moneys from its unexpended fund balance or by using cash reserve moneys.
   3.  A budget adjustment received under this section shall not affect the eligibility for or amount of any other budget adjustment authorized by law for the same budget year. In addition, a budget adjustment under this section shall be limited to the budget year for which the adjustment was authorized and shall not be included in any computation of a school district’s cost for any future budget year.
   4.  For each budget year that a school district authorizes a budget adjustment under this section, the department of management shall, following property tax levy rate calculations and state foundation aid amount calculations under this chapter or any other applicable provision of law, reduce each of the following property tax levy rates imposed by the school district for that budget year by one percent:
   a.  The foundation property tax levy rate under section 257.3.
   b.  The additional property tax levy rate under section 257.4.
   c.  The instructional support property tax levy rate under section 257.19.
   d.  The educational improvement property tax levy rate under section 257.29.
   e.  The cash reserve levy rate under section 298.10.
    Sec. 3.  Section 257.34, Code 2017, is amended to read as follows:
   257.34  Cash reserve information.

   1.  If a school district receives less state school foundation aid under section 257.1 than is due under that section for a base year and the school district uses funds from its cash reserve during the base year to make up for the amount of state aid not paid, the board of directors of the school district shall include in its general fund budget document information about the amount of the cash reserve used to replace state school foundation aid not paid.
   2.  If a school district uses funds from its cash reserve during the base year to fund a budget adjustment under section 257.14A, the board of directors of the school district shall include in its general fund budget document information about the amount of the cash reserve used for such purpose.
    Sec. 4.  IMPLEMENTATION.  Notwithstanding the deadline for adopting a resolution to approve the budget adjustment in section 257.14A, subsection 1, for the school budget year beginning July 1, 2017, the resolution of the board of directors of a school district shall be approved not later than June 10, 2017.
    Sec. 5.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes a district cost per pupil equity budget adjustment. The board of directors of a school district with a regular program district cost per pupil that is less than the highest regular program district cost per pupil among all school districts in the state for the same budget year may annually adopt a resolution to receive the budget adjustment authorized in the bill. Following adoption of the resolution the board of directors must within 10 days notify the department of management of the amount of the budget adjustment to be received. The bill requires the resolution adopted by the board of directors to specify the board’s intent to use the authorized funding sources without any corresponding increase to the school district’s cash reserve levy or other property tax levy of the school district for the current budget year or any future budget year to replenish the funding sources used.
   For budget years beginning on or after July 1, 2017, but before July 1, 2020, each eligible school district is eligible for a budget adjustment for that budget year in an amount equal to the difference between the school district’s regular program district cost per pupil and the highest regular program district cost per pupil among all school districts in the state multiplied by the district’s budget enrollment. The resolution authorizing the budget adjustment may specify a budget adjustment amount that is less than the maximum amount authorized under the bill. The bill requires the school district to fund the budget adjustment either by using moneys from its unexpended fund balance or by using cash reserve moneys.
   The bill specifies that the budget adjustment received does not affect the eligibility for or amount of any other budget adjustment authorized by law for the same budget year and that the budget adjustment under the bill is limited to the budget year for which the adjustment was authorized and shall not be included in any computation of a school district’s cost for any future budget year.
   For each budget year that a school district authorizes a budget adjustment under the bill, the department of management is required to, following property tax levy rate calculations and state foundation aid amount calculations under Code chapter 257 or any other applicable provision of law, reduce each of the following property tax levy rates imposed by the school district for that budget year by 1 percent: (1) foundation property tax levy rate under Code section 257.3; (2) additional property tax levy rate under Code section 257.4; (3) instructional support property tax levy rate under Code section 257.19; (4) educational improvement property tax levy rate under Code section 257.29; and (5) school district levy rate for cash reserve under Code section 298.10.
   Under the bill, if a school district uses funds from its cash reserve during the base year to fund a budget adjustment authorized in the bill, the board of directors of the school district shall include in its general fund budget document information about the amount of the cash reserve used for such purpose.
   Notwithstanding the May 15 deadline for adopting a resolution to approve the budget adjustment provided for in the bill, for the school budget year beginning July 1, 2017, the resolution of the board of directors of a school district must be approved not later than June 10, 2017.
   The bill takes effect upon enactment.