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PAG LIN
1 1 Section 1. NEW SECTION. 16.152 ESSENTIAL SCHOOL REPAIR
1 2 AND CONSTRUCTION PROGRAM &endash; FUNDING &endash; BONDS AND NOTES.
1 3 1. The authority shall cooperate with the department of
1 4 education in the creation, administration, and financing of
1 5 the essential school repair and construction program
1 6 established in sections 297.41 through 297.46.
1 7 2. The authority may issue its bonds and notes for the
1 8 purpose of funding the revolving loan fund created under
1 9 section 297.43 and providing low-interest loans to school
1 10 districts to implement essential school repair and
1 11 construction plans approved by the department of education.
1 12 3. The authority may issue its bonds and notes for the
1 13 purposes established and may enter into one or more lending
1 14 agreements or purchase agreements with one or more bondholders
1 15 or noteholders containing the terms and conditions of the
1 16 repayment of and the security for the bonds or notes. The
1 17 authority and the bondholders or noteholders or a trustee
1 18 agent designated by the authority may enter into agreements to
1 19 provide for any of the following:
1 20 a. That the proceeds of the bonds and notes and the
1 21 investments of the proceeds may be received, held, and
1 22 disbursed by the authority or by a trustee or agent designated
1 23 by the authority.
1 24 b. That the bondholders or noteholders or a trustee or
1 25 agent designated by the authority may collect, invest, and
1 26 apply the amount payable under the loan agreements or any
1 27 other instruments securing the debt obligations under the loan
1 28 agreements.
1 29 c. That the bondholders or noteholders may enforce the
1 30 remedies provided in the loan agreements or other instruments
1 31 on their own behalf without the appointment or designation of
1 32 a trustee. If there is a default in the principal of or
1 33 interest on the bonds or notes or in the performance of any
1 34 agreement contained in the loan agreements or other
1 35 instruments, the payment or performance may be enforced in
2 1 accordance with the loan agreement or other instrument.
2 2 d. Other terms and conditions as deemed necessary or
2 3 appropriate by the authority.
2 4 4. The powers granted the authority under this section are
2 5 in addition to other powers contained in this chapter. All
2 6 other provisions of this chapter, except section 16.28,
2 7 subsection 4, apply to bonds or notes issued and powers
2 8 granted to the authority under this section except to the
2 9 extent they are inconsistent with this section.
2 10 5. All bonds or notes issued by the authority in
2 11 connection with the program are exempt from taxation by this
2 12 state and the interest on the bonds or notes is exempt from
2 13 state income tax.
2 14 Sec. 2. NEW SECTION. 16.153 SECURITY &endash; RESERVE FUNDS &endash;
2 15 PLEDGES &endash; NONLIABILITY &endash; IRREVOCABLE CONTRACTS.
2 16 1. The authority may provide in the resolution, trust
2 17 agreement, or other instrument authorizing the issuance of its
2 18 bonds or notes pursuant to section 16.152 that the principal
2 19 of, premium, and interest on the bonds or notes are payable
2 20 from any of the following and may pledge the same to its bonds
2 21 and notes:
2 22 a. The income and receipts or other money derived from the
2 23 projects financed with the proceeds of the bonds or notes.
2 24 b. The income and receipts or other money derived from
2 25 designated projects whether or not the projects are financed
2 26 in whole or in part with the proceeds of the bonds or notes.
2 27 c. The amounts on deposit in the revolving loan fund.
2 28 d. The amounts payable to the department of education by
2 29 school districts pursuant to loan agreements with school
2 30 districts.
2 31 e. Any other funds or accounts established by the
2 32 authority in connection with the program or the sale and
2 33 issuance of its bonds or notes.
2 34 2. The authority may establish reserve funds, to secure
2 35 one or more issues of its bonds or notes. The authority may
3 1 deposit in a reserve fund established under this subsection
3 2 the proceeds of the sale of its bonds or notes and other money
3 3 made available from any other source.
3 4 3. It is the intention of the general assembly that a
3 5 pledge made in respect of bonds or notes shall be valid and
3 6 binding from the time the pledge is made, that the money or
3 7 property so pledged and received after the pledge by the
3 8 authority shall immediately be subject to the lien of the
3 9 pledge without physical delivery or further act, and that the
3 10 lien of the pledge shall be valid and binding as against all
3 11 parties having claims of any kind in tort, contract, or
3 12 otherwise against the authority whether or not the parties
3 13 have notice of the lien. Neither the resolution, trust
3 14 agreement, nor any other instrument by which a pledge is
3 15 created needs to be recorded or filed under the Iowa uniform
3 16 commercial code to be valid, binding, or effective against the
3 17 parties.
3 18 4. Neither the members of the authority nor persons
3 19 executing the bonds or notes are liable personally on the
3 20 bonds or notes or are subject to personal liability or
3 21 accountability by reason of the issuance of the bonds or
3 22 notes.
3 23 5. The bonds or notes issued by the authority are not an
3 24 indebtedness or other liability of the state or of a political
3 25 subdivision of the state within the meaning of any
3 26 constitutional or statutory debt limitations but are special
3 27 obligations of the authority, and are payable solely from the
3 28 income and receipts or other funds or property of the
3 29 department of education, and the amounts on deposit in the
3 30 revolving loan fund, and the amounts payable to the department
3 31 under its loan agreements with the school districts to the
3 32 extent that the amounts are designated in the resolution,
3 33 trust agreement, or other instrument of the authority
3 34 authorizing the issuance of the bonds or notes as being
3 35 available as security for such bonds or notes. The authority
4 1 shall not pledge the faith or credit of the state or of a
4 2 political subdivision of the state to the payment of any bonds
4 3 or notes. The issuance of any bonds or notes by the authority
4 4 does not directly, indirectly, or contingently obligate the
4 5 state or a political subdivision of the state to apply money
4 6 from, or levy or pledge any form of taxation whatever to, the
4 7 payment of the bonds or notes.
4 8 6. The state pledges to and agrees with the holders of
4 9 bonds or notes issued under the essential school repair and
4 10 construction program that the state will not limit or alter
4 11 the rights and powers vested in the authority to fulfill the
4 12 terms of a contract made by the authority with respect to the
4 13 bonds or notes, or in any way impair the rights and remedies
4 14 of the holders until the bonds or notes, together with the
4 15 interest on them including interest on unpaid installments of
4 16 interest, and all costs and expenses in connection with an
4 17 action or proceeding by or on behalf of the holders, are fully
4 18 met and discharged. The authority is authorized to include
4 19 this pledge and agreement of the state, as it refers to
4 20 holders of bonds or notes of the authority, in a contract with
4 21 the holders.
4 22 Sec. 3. NEW SECTION. 16.154 ADOPTION OF RULES.
4 23 The authority shall adopt rules pursuant to chapter 17A to
4 24 implement sections 16.152 and 16.153.
4 25 Sec. 4. Section 256.9, Code 1995, is amended by adding the
4 26 following new subsection:
4 27 NEW SUBSECTION. 49. Develop a system to prioritize the
4 28 school building repair and construction needs of Iowa's school
4 29 districts pursuant to section 297.42 and based upon age of the
4 30 buildings and life safety factors. In addition, the
4 31 department shall establish criteria for evaluating school
4 32 district essential school repair and construction plans as
4 33 provided in section 297.42.
4 34 Sec. 5. NEW SECTION. 297.41 FINDINGS.
4 35 The general assembly finds and declares that safe, well-
5 1 maintained school buildings designed for efficiency are
5 2 essential for Iowa's continued educational success. The
5 3 general assembly further finds and declares that to meet
5 4 present and future school building needs, it is in the state's
5 5 best interest to encourage local school districts to maintain
5 6 and construct buildings to provide safe learning environments.
5 7 To assist school districts and communities in repairing or
5 8 replacing crumbling, deteriorating, and outdated school
5 9 buildings in the state, it is the intent of the general
5 10 assembly to establish a state-sponsored mechanism to provide
5 11 loans to school districts at the lowest reasonable rates.
5 12 Sec. 6. NEW SECTION. 297.42 ESSENTIAL SCHOOL REPAIR AND
5 13 CONSTRUCTION PROGRAM.
5 14 1. An essential school repair and construction program
5 15 providing assistance to school districts for funding the
5 16 repair and construction of Iowa's school buildings is
5 17 established. A board of directors that wishes to consider
5 18 participating in the essential school repair and construction
5 19 program shall develop and submit by October 1 to the
5 20 department of education for review an essential school repair
5 21 and construction plan which shall specify funding needs and
5 22 meet the criteria established by the department pursuant to
5 23 section 256.9, subsection 49.
5 24 2. If the department approves of the district plan, the
5 25 department shall establish a priority level for the plan based
5 26 upon criteria developed pursuant to section 256.9, subsection
5 27 49, and shall consult with the Iowa finance authority about
5 28 the availability of funding for loans pursuant to the loan
5 29 program established in sections 16.152 through 16.154. The
5 30 department shall notify districts of their plan approval and
5 31 loan eligibility based upon the funds available through the
5 32 Iowa finance authority and the school district priority.
5 33 3. Upon notification of loan eligibility from the
5 34 department, the board of directors of a school district may
5 35 adopt a resolution to participate in the essential school
6 1 repair and construction program for a period not exceeding
6 2 five years. The resolution shall include authorization for
6 3 the board to levy the essential school repair and construction
6 4 property tax levy to repay the loans. The board shall certify
6 5 its action to the department, and the department shall notify
6 6 the Iowa finance authority to make loans available.
6 7 4. Districts which have approved plans but the priority
6 8 level of the district is too low to receive funding may adopt
6 9 the essential school repair and construction levy. The
6 10 procedure specified in section 257.18 for the instructional
6 11 support program, including, but not limited to, provisions
6 12 relating to a public hearing, publication of notice, adoption
6 13 of a resolution, election and petition for election shall be
6 14 used for the levy. The property tax shall be levied pursuant
6 15 to section 297.44.
6 16 5. Participation in the essential school repair and
6 17 construction program is not affected by a change in the
6 18 boundaries of the school district, except as otherwise
6 19 provided in this section. If each school district involved in
6 20 a school reorganization under chapter 275 has approved an
6 21 essential school repair and construction levy, the existing
6 22 essential school repair and construction program is in effect
6 23 for the reorganized district for the least amount and the
6 24 shortest time for which it is in effect in any of the
6 25 districts.
6 26 Sec. 7. NEW SECTION. 297.43 ESSENTIAL SCHOOL REPAIRS AND
6 27 CONSTRUCTION REVOLVING FUND.
6 28 1. An essential school repair and construction revolving
6 29 fund is created in the office of the treasurer of state under
6 30 the control of the Iowa finance authority. The revolving loan
6 31 fund shall include sums appropriated to the revolving loan
6 32 fund by the general assembly and all receipts received by the
6 33 revolving loan fund. All moneys appropriated to and deposited
6 34 in the revolving fund are appropriated and shall be used for
6 35 the sole purpose of making low-interest loans to school
7 1 districts to finance all or part of the cost of implementing
7 2 essential school repair and construction plans approved by the
7 3 department of education. The moneys in the revolving loan
7 4 fund are not considered part of the general fund of the state,
7 5 are not subject to appropriation for any other purpose by the
7 6 general assembly, and in determining a general fund balance at
7 7 the close of a fiscal year shall not be included in the
7 8 general fund of the state. Notwithstanding section 8.33,
7 9 moneys remaining in the revolving fund at the close of a
7 10 fiscal year shall remain in the revolving loan fund to be used
7 11 for purposes of the fund. The revolving loan fund is a
7 12 dedicated fund under the administration and control of the
7 13 authority and subject to section 16.31. Moneys on deposit in
7 14 the revolving loan fund shall be invested by the treasurer of
7 15 state in cooperation with the authority, and the income from
7 16 the investments shall be credited to and deposited in the
7 17 revolving loan fund.
7 18 2. The department and the authority may establish and
7 19 maintain other funds or accounts determined to be necessary to
7 20 carry out the purposes of this part and shall provide for the
7 21 funding, administration, investment, restrictions, and
7 22 disposition of the funds and accounts.
7 23 3. There is appropriated to the essential school repairs
7 24 and construction fund for the fiscal year beginning July 1,
7 25 1995, and ending June 30, 1996, the sum of fifteen million
7 26 dollars from the general fund of the state. There is
7 27 appropriated to the essential school repairs and construction
7 28 fund for the fiscal year beginning July 1, 1996, and ending
7 29 June 30, 1997, the sum of thirty million dollars from the
7 30 general fund of the state. There is appropriated to the
7 31 essential school repairs and construction fund for the fiscal
7 32 year beginning July 1, 1997, and ending June 30, 1998, the sum
7 33 of forty-five million dollars from the general fund of the
7 34 state. There is appropriated to the essential school repairs
7 35 and construction fund for the fiscal year beginning July 1,
8 1 1998, and ending June 30, 1999, the sum of sixty million
8 2 dollars from the general fund of the state.
8 3 4. The department and the authority shall establish fiscal
8 4 controls and accounting procedures during appropriate
8 5 accounting periods for payments and disbursements received and
8 6 made by the revolving loan fund and other funds established
8 7 pursuant to subsection 3, and to fund balances at the
8 8 beginning and end of the accounting periods.
8 9 5. For purposes of sections 297.41 through 297.46,
8 10 "authority" means the Iowa finance authority established in
8 11 section 16.2.
8 12 Sec. 8. NEW SECTION. 297.44 ESSENTIAL SCHOOL REPAIRS AND
8 13 CONSTRUCTION PROPERTY TAX.
8 14 A school district may certify an essential school repair
8 15 and construction property tax levy in an amount not to exceed
8 16 one dollar per thousand dollars of taxable value in the
8 17 district each year. Moneys received by a district from the
8 18 property tax levy and from the revolving loan fund for the
8 19 essential school repair and construction program shall be
8 20 deposited in the district's capital projects fund under
8 21 section 298A.9.
8 22 Certification of a board's intent to participate for a
8 23 budget year, the method of funding, and the amount to be
8 24 raised shall be made to the department of management not later
8 25 than April 15 of the base year.
8 26 Sec. 9. NEW SECTION. 297.45 POWERS AND DUTIES OF THE
8 27 DIRECTOR OF THE DEPARTMENT OF EDUCATION.
8 28 The director of the department of education shall:
8 29 1. Process and review essential school repair and
8 30 construction plans submitted by school districts pursuant to
8 31 section 297.42.
8 32 2. Approve loan applications of school districts that
8 33 satisfy the rules adopted by the state board of education.
8 34 3. Process and review all documents relating to projects
8 35 and the extending of loans.
9 1 4. Prepare and process, in coordination with the
9 2 authority, documents relating to the extending of loans to
9 3 school districts, the sale and issuance of bonds, notes, or
9 4 other obligations of the authority relating to the program,
9 5 and the administration of the program.
9 6 5. Include in the budget prepared pursuant to section
9 7 256.9, subsection 6, an annual budget for the administration
9 8 of the program and the use and disposition of amounts on
9 9 deposit in the revolving fund.
9 10 6. Charge each school district receiving a loan from the
9 11 revolving loan fund a loan origination fee and an annual loan
9 12 servicing fee. The amount of the loan origination fees and
9 13 the loan servicing fees established shall be relative to the
9 14 amount of a loan made from the revolving loan fund.
9 15 Notwithstanding section 297.43, subsection 1, the director
9 16 shall deposit the receipts from the loan origination fees and
9 17 the loan servicing fees in a separate account within the
9 18 revolving fund for administration of the program.
9 19 7. Consult with and receive the approval of the authority
9 20 concerning the terms and conditions of loan agreements with
9 21 school districts as to the financial integrity of the loan.
9 22 8. Perform other acts and assume other duties and
9 23 responsibilities necessary for the operation of the program.
9 24 Sec. 10. NEW SECTION. 297.46 CONTINUATION OF ESSENTIAL
9 25 SCHOOL REPAIRS AND CONSTRUCTION PROGRAM.
9 26 At the expiration of the period for which the essential
9 27 school repair and construction program was adopted, the
9 28 program may be extended by a school district for a period not
9 29 exceeding five or ten years in the manner provided in section
9 30 297.42.
9 31 If an election is held on the adoption of the program, and
9 32 the voters do not approve adoption of the essential school
9 33 repair and construction program as provided in section 297.42,
9 34 the board shall wait at least one hundred twenty days
9 35 following the election before taking action to adopt the
10 1 program or resubmit the proposition.
10 2 EXPLANATION
10 3 This bill provides that the Iowa finance authority shall
10 4 cooperate with the department of education in the creation,
10 5 administration, and financing of the essential school repair
10 6 and construction program. The program is created to provide
10 7 low-interest loans to school districts to implement essential
10 8 school repair and construction plans approved by the
10 9 department of education.
10 10 To participate in the program, the board of directors of a
10 11 school district must develop and submit to the department of
10 12 education for review an essential school repair and
10 13 construction plan. If the department approves of the district
10 14 plan, the department shall establish a priority level for the
10 15 plan and consult with the authority about the availability of
10 16 loans. If the priority level assigned to the district plan is
10 17 sufficient to qualify the district for an essential school
10 18 repair and construction loan and if the authority determines
10 19 that sufficient loan moneys are available to implement the
10 20 plan, the department shall notify the district of its plan
10 21 approval and loan eligibility and the board may adopt a
10 22 resolution to participate in the program for a period not
10 23 exceeding five years, certify its action to the department of
10 24 education, and participate in the program.
10 25 If the authority determines that loan moneys are
10 26 insufficient to implement an approved plan, the department
10 27 shall advise the district of the insufficiency of loan moneys.
10 28 If the board still wishes to consider participating in the
10 29 program it may provide for the levying of property taxes
10 30 through the same process used for the instructional support
10 31 plan, including, but not limited to, holding a public hearing,
10 32 publishing notice, adopting a resolution, petitioning for an
10 33 election, and placing the question before the voters.
10 34 The bill sets forth the procedure by which the authority
10 35 may issue bonds and notes secured by a property levy and
11 1 establishes an essential school repair and construction
11 2 revolving fund under the control of the authority. The
11 3 receipts from a loan origination fee and an annual loan
11 4 servicing fee the department charges districts receiving loans
11 5 under the program are deposited in a separate account within
11 6 the revolving fund for administration of the program.
11 7 All bonds or notes issued by the authority in connection
11 8 with the program are exempt from state taxes and the interest
11 9 generated by the bonds and notes is exempt from state income
11 10 tax.
11 11 The department is directed to develop a system to
11 12 prioritize the school building needs of Iowa's school
11 13 districts and to establish criteria for evaluating school
11 14 district essential school repair and construction plans.
11 15 The bill contains a standing appropriation that deposits
11 16 $15 million into the revolving fund in fiscal year 1996, $30
11 17 million in fiscal year 1997, $45 million in fiscal year 1998,
11 18 and $60 million in fiscal year 1999. All moneys appropriated
11 19 to and deposited in the revolving fund are to be used for the
11 20 sole purpose of making low-interest loans to school districts
11 21 to finance all or part of the cost of implementing essential
11 22 school repair and construction plans. Moneys on deposit in
11 23 the revolving loan fund shall be invested by the treasurer of
11 24 state in cooperation with the authority, and the income from
11 25 the investments shall be credited to and deposited in the
11 26 revolving loan fund.
11 27 A school district may certify taxes not to exceed $1 per
11 28 $1,000 of taxable value in the district each year to repay the
11 29 loans or to provide moneys for essential school repairs and
11 30 construction without using the revolving fund. Moneys
11 31 received by a district for the essential school repair and
11 32 construction program shall be deposited in the district's
11 33 capital projects fund under section 298A.9.
11 34 The bill sets forth the duties of the director of the
11 35 department of education relating to processing and reviewing
12 1 district plans and documents relating to projects and the
12 2 extending of loans; approving loan applications; preparing and
12 3 processing, in coordination with the authority, documents
12 4 relating to the extending of loans to school districts, the
12 5 sale and issuance of bonds, notes, or other obligations of the
12 6 authority relating to the program, and the administration of
12 7 the program; preparing an annual budget for the administration
12 8 of the program and the use and disposition of amounts on
12 9 deposit in the revolving fund; and consulting with and
12 10 receiving the approval of the authority concerning the terms
12 11 and conditions of loan agreements with school districts as to
12 12 the financial integrity of the loan.
12 13 At the expiration of the period for which the essential
12 14 school repair and construction program was adopted, the
12 15 program may be extended for a period of not exceeding five or
12 16 10 years.
12 17 LSB 2115YH 76
12 18 kh/jj/8
Text: HF00421 Text: HF00423 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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