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PAG LIN 1 1 Section 1. Section 8.57, subsection 5, paragraph e, Code 1 2 1999, is amended to read as follows: 1 3 e. Notwithstanding provisions to the contrary in sections 1 4 99D.17 and 99F.11,for the fiscal years beginning July 1,1 51995, and July 1, 1996,an amount, determined by the treasurer 1 6 of state, sufficient to make payments during the fiscal year 1 7 on the principal of, premium, if any, and interest on bonds 1 8 issued by the treasurer of state under section 12.71 shall be 1 9 deposited in the Iowa education infrastructure fund created in 1 10 section 256.24. Notwithstanding provisions to the contrary in 1 11 sections 99D.17 and 99F.11, after sufficient moneys are 1 12 deposited in the Iowa education infrastructure fund, not more 1 13 than a total of sixty million dollars; and for each fiscal1 14year thereafter;shall be deposited in the general fund of the 1 15 state in any fiscal year pursuant to sections 99D.17 and 1 16 99F.11. The total moneys in excess of the moneys deposited in 1 17 the Iowa education infrastructure fund and the general fund of 1 18 the state in a fiscal year shall be deposited in the rebuild 1 19 Iowa infrastructure fund and shall be used as provided in this 1 20 section, notwithstanding section 8.60. 1 21 Sec. 2. NEW SECTION. 12.71 EDUCATION INFRASTRUCTURE 1 22 BONDS. 1 23 1. The treasurer of state may issue bonds for the purpose 1 24 of funding the Iowa education infrastructure fund created in 1 25 section 256.24 and for the purpose of refunding any bonds 1 26 issued under this section. Excluding the issuance of 1 27 refunding bonds, the treasurer of state shall not issue bonds 1 28 which result in the deposit of bond proceeds of more than one 1 29 hundred million dollars credited to the Iowa education 1 30 infrastructure fund. Refunding bonds may be issued and 1 31 secured and subject to this section in the same manner as 1 32 other bonds issued pursuant to this section. 1 33 2. The bonds are investment securities and negotiable 1 34 instruments within the meaning of and for the purposes of the 1 35 uniform commercial code. 2 1 3. The treasurer of state is authorized to pledge amounts 2 2 deposited in the Iowa education infrastructure fund created in 2 3 section 256.24 as security for the payment of the principal 2 4 of, premium, if any, and interest on the bonds. Bonds issued 2 5 under this section are payable solely and only out of the 2 6 moneys, assets, or revenues of the Iowa education 2 7 infrastructure fund and any bond reserve funds established 2 8 pursuant to section 12.72, all of which may be deposited with 2 9 trustees or depositories in accordance with bond or security 2 10 documents, and are not an indebtedness of this state, or a 2 11 charge against the general credit or general fund of the 2 12 state, and the state shall not be liable for the bonds except 2 13 from amounts on deposit in the funds. Bonds issued under this 2 14 section shall contain a statement that the bonds do not 2 15 constitute an indebtedness of the state. 2 16 4. The bonds shall be: 2 17 a. In a form, issued in denominations, executed in a 2 18 manner, payable over terms and with rights of redemption, and 2 19 subject to such other terms and conditions as prescribed in 2 20 the trust indenture, resolution, or other instrument 2 21 authorizing their issuance. 2 22 b. Negotiable instruments under the laws of this state and 2 23 may be sold at prices, at public or private sale, and in a 2 24 manner, as prescribed by the treasurer of state. Chapters 2 25 73A, 74, 74A, and 75 do not apply to the sale or issuance of 2 26 the bonds. 2 27 c. Subject to the terms, conditions, and covenants 2 28 providing for the payment of the principal, redemption 2 29 premiums, if any, interest, and other terms, conditions, 2 30 covenants, and protective provisions safeguarding payment, not 2 31 inconsistent with this section and as determined by the trust 2 32 indenture, resolution, or other instrument authorizing their 2 33 issuance. 2 34 5. The bonds are securities in which public officers and 2 35 bodies of this state, political subdivisions of this state, 3 1 insurance companies and associations and other persons 3 2 carrying on an insurance business, banks, trust companies, 3 3 savings associations, savings and loan associations, and 3 4 investment companies, administrators, guardians, executors, 3 5 trustees, and other fiduciaries, and other persons authorized 3 6 to invest in bonds or other obligations of the state, may 3 7 properly and legally invest funds, including capital, in their 3 8 control or belonging to them. 3 9 6. Bonds must be authorized by a trust indenture, 3 10 resolution, or other instrument of the treasurer of state. 3 11 However, a trust indenture, resolution, or other instrument 3 12 authorizing the issuance of bonds may delegate to an officer 3 13 of the issuer the power to negotiate and fix the details of an 3 14 issuance of bonds. 3 15 7. Neither the resolution, trust agreement, or any other 3 16 instrument by which a pledge is created is required to be 3 17 recorded or filed under the uniform commercial code to be 3 18 valid, binding, or effective. 3 19 8. All bonds issued by the treasurer of state in 3 20 connection with the program are exempt from taxation by the 3 21 state of Iowa and the interest on the bonds is exempt from 3 22 state income taxes and state inheritance and estate taxes. 3 23 9. The treasurer of state shall cooperate with the 3 24 department of economic development in the implementation of 3 25 this section. 3 26 Sec. 3. NEW SECTION. 12.72 BOND RESERVE FUNDS. 3 27 1. The treasurer of state may create and establish one or 3 28 more special funds, to be known as bond reserve funds, and 3 29 shall pay into each bond reserve fund any moneys appropriated 3 30 and made available by the treasurer of state for the purpose 3 31 of the fund, any proceeds of sale of notes or bonds to the 3 32 extent provided in the trust indenture, resolution, or other 3 33 instrument of the treasurer of state authorizing their 3 34 issuance, and any other moneys which may be available to the 3 35 treasurer of state for the purpose of the fund from any other 4 1 sources. All moneys held in a bond reserve fund, except as 4 2 otherwise provided in this section, shall be used as required 4 3 solely for the payment of the principal of bonds secured in 4 4 whole or in part by the fund or of the sinking fund payments 4 5 with respect to the bonds, the purchase or redemption of the 4 6 bonds, the payment of interest on the bonds, or the payments 4 7 of any redemption premium required to be paid when the bonds 4 8 are redeemed prior to maturity. 4 9 2. Moneys in a bond reserve fund shall not be withdrawn 4 10 from the fund at any time in an amount that will reduce the 4 11 amount of the fund to less than the bond reserve fund 4 12 requirement established for the fund, as provided in this 4 13 section, except for the purpose of making, with respect to 4 14 bonds secured in whole or in part by the fund, payment when 4 15 due of principal, interest, redemption premiums, and the 4 16 sinking fund payments with respect to the bonds for the 4 17 payment of which other moneys are not available. Any income 4 18 or interest earned by, or incremental to, a bond reserve fund 4 19 due to the investment of moneys in the fund may be transferred 4 20 by the treasurer of state to reserve funds or the Iowa 4 21 education infrastructure fund to the extent the transfer does 4 22 not reduce the amount of that bond reserve fund below the bond 4 23 reserve fund requirement for the fund. 4 24 3. The treasurer of state shall not at any time issue 4 25 bonds, secured in whole or in part by a bond reserve fund, if, 4 26 upon the issuance of the bonds, the amount in the bond reserve 4 27 fund will be less than the bond reserve fund requirement for 4 28 the fund, unless the treasurer of state at the time of 4 29 issuance of the bonds deposits in the fund from the proceeds 4 30 of the bonds issued or from other sources an amount which, 4 31 together with the amount then in the fund, will not be less 4 32 than the bond reserve fund requirement for the fund. For the 4 33 purposes of this section, the term "bond reserve fund 4 34 requirement" means, as of any particular date of computation, 4 35 an amount of money, as provided in the trust indenture, 5 1 resolution, or other instrument of the treasurer of state 5 2 authorizing the bonds with respect to which the fund is 5 3 established, equal to not more than ten percent of the 5 4 outstanding principal amount of bonds secured in whole or in 5 5 part by the fund. 5 6 Sec. 4. NEW SECTION. 12.73 EDUCATION INFRASTRUCTURE 5 7 REVIEW COMMITTEE. 5 8 1. An education infrastructure review committee is 5 9 established to provide assistance to the department of 5 10 education regarding the Iowa education infrastructure program. 5 11 The committee shall consist of seven members, including the 5 12 treasurer of state and six members appointed by the governor 5 13 and subject to confirmation by the senate. The members 5 14 appointed by the governor shall possess an expertise in public 5 15 finance issues. 5 16 2. All appointments shall comply with sections 69.16 and 5 17 69.16A. 5 18 3. The chairperson of the education infrastructure review 5 19 committee shall be elected by the committee from among its 5 20 membership for a term of one year. A vice chairperson may be 5 21 elected by the committee from among its membership for a one- 5 22 year term. In case of the absence or disability of the 5 23 chairperson and vice chairperson, the members of the committee 5 24 shall elect a temporary chairperson by a majority vote of 5 25 those members who are present and voting. 5 26 4. The members, except the treasurer of state, shall be 5 27 appointed to three-year staggered terms and the terms shall 5 28 commence and end as provided by section 69.19. If a vacancy 5 29 occurs, a successor shall be appointed to serve the unexpired 5 30 term. A successor shall be appointed in the same manner and 5 31 subject to the same qualifications as the original appointee. 5 32 5. The education infrastructure review committee shall 5 33 review applications submitted under the Iowa education 5 34 infrastructure program and make recommendations to the 5 35 department of education regarding the applications. 6 1 6. A majority of the members of the education 6 2 infrastructure review committee constitutes a quorum. 6 3 Sec. 5. NEW SECTION. 256.24 IOWA EDUCATION 6 4 INFRASTRUCTURE FUND. 6 5 1. The Iowa education infrastructure fund is created as a 6 6 separate and distinct fund in the state treasury. The Iowa 6 7 education infrastructure fund consists, in part, of moneys 6 8 deposited in the fund pursuant to section 8.57, subsection 5, 6 9 paragraph "e". The Iowa education infrastructure fund also 6 10 consists of any moneys appropriated to the fund by the general 6 11 assembly. Payments of interest or repayments of financial 6 12 assistance provided under the Iowa education infrastructure 6 13 program shall be deposited in the Iowa education 6 14 infrastructure fund. Moneys received by the treasurer of 6 15 state as a result of a bond issuance pursuant to section 12.71 6 16 shall be deposited in the Iowa education infrastructure fund 6 17 as provided in section 12.71. Notwithstanding section 12C.7, 6 18 subsection 2, interest and other income earned by the Iowa 6 19 education infrastructure fund shall be deposited in the Iowa 6 20 education infrastructure fund. 6 21 2. If the treasurer of state determines pursuant to 6 22 section 12.71 that bonds can be issued, the moneys in the Iowa 6 23 education infrastructure fund are appropriated to and for the 6 24 purpose of paying the principal of, premium, if any, and 6 25 interest on bonds issued by the treasurer of state under 6 26 section 12.71. Amounts in the Iowa education infrastructure 6 27 fund shall not be subject to appropriation for any purpose by 6 28 the general assembly, but shall be used only for the purposes 6 29 set forth in this section, section 12.71, and section 256.25. 6 30 The treasurer of state shall act as custodian of the Iowa 6 31 education infrastructure fund and disburse amounts contained 6 32 in the fund as directed by the department of education, 6 33 including the automatic disbursement of moneys pursuant to the 6 34 terms of bond indentures and documents and security provisions 6 35 to trustees and custodians. The treasurer of state may invest 7 1 the moneys deposited in the Iowa education infrastructure fund 7 2 subject to any limitations contained in any applicable bond 7 3 proceedings. Notwithstanding section 8.33, any balance in the 7 4 fund on June 30 of any fiscal year shall be transferred to the 7 5 rebuild Iowa infrastructure fund created in section 8.57, 7 6 subsection 5. 7 7 Sec. 6. NEW SECTION. 256.25 IOWA EDUCATION 7 8 INFRASTRUCTURE PROGRAM. 7 9 1. The department shall establish and administer an Iowa 7 10 education infrastructure program designed to assist school 7 11 districts with infrastructure needs. For purposes of this 7 12 section, "school infrastructure" means those activities for 7 13 which a school district is authorized to contract indebtedness 7 14 and issue general obligation bonds under section 296.1, except 7 15 those activities related to a teacher's or superintendent's 7 16 home or homes. 7 17 2. a. A school district may submit an application to the 7 18 department for financial assistance under the program if the 7 19 school district has secured a minimum of fifty percent of the 7 20 total capital investment in a project through one or more of 7 21 the following sources prior to applying for financial 7 22 assistance: 7 23 (1) The issuance of bonds. 7 24 (2) A physical plant and equipment levy under chapter 298. 7 25 (3) Other locally obtained moneys. 7 26 b. A school district may submit an application for 7 27 conditional approval to the department for financial 7 28 assistance under the program if the school district submits a 7 29 plan for securing the fifty percent of the total capital 7 30 investment in a project as required under paragraph "a". If a 7 31 school district does not meet the requirements of paragraph 7 32 "a" within six months of receiving conditional approval from 7 33 the department, the application for financial assistance shall 7 34 be denied by the department. 7 35 c. A school district that receives any local sales and 8 1 services tax moneys as allowed under chapter 422E shall not be 8 2 eligible to apply for financial assistance under the program. 8 3 3. The application shall include, but not be limited to, 8 4 the following: 8 5 a. The total capital investment of the project. 8 6 b. The amount and percentage of moneys which the school 8 7 district will be providing for the project. 8 8 c. The need of the school district for the project and for 8 9 the financial assistance. 8 10 d. Evidence that the school district meets the criteria 8 11 listed in subsection 2. 8 12 4. The financial assistance under the program shall be in 8 13 the form of grants, loans, forgivable loans, and loan 8 14 guarantees. A school district shall not receive more than one 8 15 million dollars of financial assistance under the program. 8 16 Financial assistance under the program shall be allocated in 8 17 the following manner: 8 18 a. Twenty-five percent of the financial assistance shall 8 19 be awarded to school districts with an enrollment of two 8 20 thousand students or less. 8 21 b. Twenty-five percent of the financial assistance shall 8 22 be awarded to school districts with an enrollment of more than 8 23 two thousand students but not more than five thousand 8 24 students. 8 25 c. Twenty-five percent of the financial assistance shall 8 26 be awarded to school districts with an enrollment of more than 8 27 five thousand students. 8 28 d. Twenty-five percent of the financial assistance shall 8 29 be awarded to school districts with any size of enrollment. 8 30 5. The education infrastructure review committee 8 31 established in section 12.72 shall make an initial review of 8 32 all applications submitted under the Iowa education 8 33 infrastructure program and make recommendations to the 8 34 department regarding each application. Upon review of the 8 35 recommendation by the review committee, the department shall 9 1 approve, deny, or defer each application. In reviewing the 9 2 applications, the department and review committee shall 9 3 consider, at a minimum, all of the following: 9 4 a. The district property tax valuation per pupil. The 9 5 review committee and department shall give preference to 9 6 school districts with lower property tax valuations per pupil. 9 7 b. Any previous effort by a school district to secure 9 8 infrastructure funding. 9 9 c. The ability of the school district to secure at least 9 10 fifty percent of the total capital investment in the project 9 11 by means other than the issuance of bonds. 9 12 d. The extent to which the project would allow the school 9 13 district to meet the infrastructure needs of the school 9 14 district on a long-term basis. 9 15 e. The degree of necessity regarding the need of the 9 16 financial assistance and infrastructure. 9 17 EXPLANATION 9 18 This bill creates an Iowa education infrastructure program 9 19 and fund designed to assist certain school districts with 9 20 infrastructure needs. 9 21 The bill provides that a school district may apply to the 9 22 department of education for assistance under the Iowa 9 23 education infrastructure program and the financial assistance 9 24 shall be used for school infrastructure needs. The bill 9 25 provides that a school district must otherwise secure a 9 26 minimum of 50 percent of the total capital investment in the 9 27 project and that a school district that receives any local 9 28 sales and services tax moneys shall not be eligible under the 9 29 program. The bill provides that a school district may apply 9 30 for conditional approval with final approval being contingent 9 31 on the school district securing the 50 percent requirement 9 32 within six months of receiving conditional approval. The bill 9 33 provides that a school district shall not receive more than $1 9 34 million of financial assistance under the program. The bill 9 35 provides that 25 percent of the financial assistance shall be 10 1 awarded to school districts with an enrollment of 2,000 10 2 students or less, 25 percent to school districts with an 10 3 enrollment of more than 2,000 students but not more than 5,000 10 4 students, 25 percent to school districts with an enrollment of 10 5 more than 5,000 students, and 25 percent to school districts 10 6 with any size of enrollment. The bill provides that the 10 7 education infrastructure review committee shall make an 10 8 initial review of all applications and make recommendations to 10 9 the department. The department shall approve, deny, or defer 10 10 each application. The bill provides that the applications 10 11 shall be considered based on certain criteria relating to the 10 12 district property tax valuation per pupil, previous efforts by 10 13 a school district to secure infrastructure funding, the 10 14 ability of a school district to secure at least 50 percent of 10 15 the total capital investment, the project meeting the long- 10 16 term infrastructure needs of the school district, and the 10 17 degree of necessity regarding the need of the financial 10 18 assistance and infrastructure. 10 19 The bill creates an education infrastructure review 10 20 committee to make an initial review of applications received 10 21 under the Iowa education infrastructure program and to make 10 22 recommendations regarding the applications to the department 10 23 of education. The committee shall consist of seven members, 10 24 including the treasurer of state and six members appointed by 10 25 the governor. The members appointed by the governor shall 10 26 possess an expertise in public finance issues. 10 27 The bill creates an Iowa education infrastructure fund as a 10 28 separate and distinct fund in the state treasury. The bill 10 29 provides that the fund, beginning July 1, 2000, shall receive 10 30 moneys each fiscal year from taxes on gaming receipts under 10 31 Code chapters 99D and 99F in an amount sufficient to make 10 32 payments on the principal of, premium, if any, and interest on 10 33 bonds issued by the treasurer of state. The bill provides 10 34 that the fund shall also consist of any moneys appropriated to 10 35 the fund by the general assembly, payments of interest or 11 1 repayments of financial assistance under the program, and 11 2 moneys received by the treasurer of state pursuant to the 11 3 issuance of education infrastructure bonds. The bill provides 11 4 that, if education infrastructure bonds are issued by the 11 5 treasurer of state, moneys in the fund are appropriated to and 11 6 for the purpose of paying the principal of, premium, if any, 11 7 and interest on the bonds. 11 8 The bill provides the treasurer of state with the authority 11 9 to issue education infrastructure bonds. The bill provides 11 10 that, excluding refunding bonds, the treasurer of state shall 11 11 not issue bonds which result in the deposit of bond proceeds 11 12 of more than $100 million credited to the Iowa education 11 13 infrastructure fund. The bill provides that the treasurer of 11 14 state may issue refunding bonds. The bill provides that bonds 11 15 are investment securities and negotiable instruments. The 11 16 bill provides that the treasurer of state is authorized to 11 17 pledge amounts deposited in the Iowa education infrastructure 11 18 fund as security for the payment of the principal, premium, if 11 19 any, and interest on the bonds. The bill provides that the 11 20 bonds are payable solely and only out of the moneys, assets, 11 21 or revenues of the Iowa education infrastructure fund and any 11 22 bond reserve funds established by the treasurer of state. The 11 23 bill provides that the bonds are not an indebtedness of the 11 24 state, or a charge against the general credit or general fund 11 25 of the state, and the state shall not be liable for the bonds 11 26 except from amounts on deposit in the fund. The bill provides 11 27 certain requirements relating to the actual issuance of the 11 28 bonds, authorization for the issuance of the bonds, and tax 11 29 exemption status of the bonds. 11 30 The bill provides that the treasurer of state may create 11 31 and establish one or more bond reserve funds. The bill 11 32 provides that moneys in the bond reserve fund shall be used as 11 33 required solely for the payment of the principal of bonds 11 34 secured in whole or in part by the fund or of the sinking fund 11 35 payments with respect to the bonds, the purchase or redemption 12 1 of the bonds, the payment of interest on the bonds, or the 12 2 payments of any redemption premium required to be paid when 12 3 the bonds are redeemed prior to maturity. The bill provides 12 4 restrictions on when moneys may be withdrawn from the bond 12 5 reserve funds. The bill provides limitations on when the 12 6 treasurer of state may issue bonds in relation to the bond 12 7 reserve fund requirement, which is the amount of money, on any 12 8 particular date, as provided in the instruments of the 12 9 treasurer authorizing the bonds with respect to which the fund 12 10 is established. 12 11 LSB 5435XS 78 12 12 tm/as/5
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