S.F. 2140 Section 1. Section 257.1, subsection 2, paragraph b, Code 1 2009, is amended to read as follows: 2 b. For the budget year commencing July 1, 1999 2012 , and for 3 each succeeding budget year the regular program foundation base 4 per pupil is eighty-seven and five-tenths one hundred percent 5 of the regular program state cost per pupil. For the budget 6 year commencing July 1, 1991 2012 , and for each succeeding 7 budget year the special education support services foundation 8 base is seventy-nine one hundred percent of the special 9 education support services state cost per pupil. The combined 10 foundation base is the sum of the regular program foundation 11 base, the special education support services foundation base, 12 the total teacher salary supplement district cost, the total 13 professional development supplement district cost, the total 14 early intervention supplement district cost, the total area 15 education agency teacher salary supplement district cost, 16 and the total area education agency professional development 17 supplement district cost. 18 Sec. 2. Section 257.3, subsection 1, Code 2009, is amended 19 to read as follows: 20 1. Amount of tax. 21 a. Except as provided in subsections 2 and 3, a school 22 district shall cause to be levied each year, for the 23 school general fund, a foundation property tax equal to 24 five eight dollars and forty ninety-five cents per thousand 25 dollars of assessed valuation on all taxable property in the 26 district. The county auditor shall spread the foundation levy 27 over all taxable property in the district. 28 b. The amount paid to each school district for the tax 29 replacement claim for industrial machinery, equipment and 30 computers under section 427B.19A shall be regarded as property 31 tax. The portion of the payment which is foundation property 32 tax shall be determined by applying the foundation property tax 33 rate to the amount computed under section 427B.19, subsection 34 3, paragraph “a” , as adjusted by paragraph “d” , if any 35 -1- LSB 5281XS (6) 83 ak/sc 1/ 5

S.F. 2140 adjustment was made. 1 c. Replacement taxes under chapter 437A shall be regarded as 2 property taxes for purposes of this chapter. 3 Sec. 3. Section 257.3, subsection 2, paragraphs a and b, 4 Code 2009, are amended to read as follows: 5 a. Notwithstanding subsection 1, a reorganized 6 school district shall cause a foundation property tax of 7 four seven dollars and forty ninety-five cents per thousand 8 dollars of assessed valuation to be levied on all taxable 9 property which, in the year preceding a reorganization, 10 was within a school district affected by the reorganization 11 as defined in section 275.1, or in the year preceding a 12 dissolution was a part of a school district that dissolved if 13 the dissolution proposal has been approved by the director of 14 the department of education pursuant to section 275.55. 15 b. In succeeding school years, the foundation property 16 tax levy on that portion shall be increased to the rate of 17 four eight dollars and ninety forty-five cents per thousand 18 dollars of assessed valuation the first succeeding year, 19 five eight dollars and fifteen seventy cents per thousand 20 dollars of assessed valuation the second succeeding year, and 21 five eight dollars and forty ninety-five cents per thousand 22 dollars of assessed valuation the third succeeding year and 23 each year thereafter. 24 Sec. 4. Section 425A.3, subsection 1, Code 2009, is amended 25 to read as follows: 26 1. The family farm tax credit fund shall be apportioned 27 each year in the manner provided in this chapter so as to give 28 a credit against the tax on each eligible tract of agricultural 29 land within the several school districts of the state in which 30 the levy for the general school fund exceeds five eight dollars 31 and forty ninety-five cents per thousand dollars of assessed 32 value. The amount of the credit on each eligible tract of 33 agricultural land shall be the amount the tax levied for the 34 general school fund exceeds the amount of tax which would 35 -2- LSB 5281XS (6) 83 ak/sc 2/ 5

S.F. 2140 be levied on each eligible tract of agricultural land were 1 the levy for the general school fund five eight dollars and 2 forty ninety-five cents per thousand dollars of assessed value 3 for the previous year. However, in the case of a deficiency in 4 the family farm tax credit fund to pay the credits in full, the 5 credit on each eligible tract of agricultural land in the state 6 shall be proportionate and applied as provided in this chapter. 7 Sec. 5. Section 425A.5, Code 2009, is amended to read as 8 follows: 9 425A.5 Computation by county auditor. 10 The family farm tax credit allowed each year shall be 11 computed as follows: On or before April 1, the county auditor 12 shall list by school districts all tracts of agricultural 13 land which are entitled to credit, the taxable value for the 14 previous year, the budget from each school district for the 15 previous year, and the tax rate determined for the general 16 fund of the school district in the manner prescribed in 17 section 444.3 for the previous year, and if the tax rate is in 18 excess of five eight dollars and forty ninety-five cents per 19 thousand dollars of assessed value, the auditor shall multiply 20 the tax levy which is in excess of five eight dollars and 21 forty ninety-five cents per thousand dollars of assessed value 22 by the total taxable value of the agricultural land entitled 23 to credit in the school district, and on or before April 1, 24 certify the total amount of credit and the total number of 25 acres entitled to the credit to the department of revenue. 26 Sec. 6. Section 426.3, Code 2009, is amended to read as 27 follows: 28 426.3 Where credit given. 29 The agricultural land credit fund shall be apportioned 30 each year in the manner hereinafter provided so as to give 31 a credit against the tax on each tract of agricultural lands 32 within the several school districts of the state in which the 33 levy for the general school fund exceeds five eight dollars 34 and forty ninety-five cents per thousand dollars of assessed 35 -3- LSB 5281XS (6) 83 ak/sc 3/ 5

S.F. 2140 value; the amount of such credit on each tract of such lands 1 shall be the amount the tax levied for the general school 2 fund exceeds the amount of tax which would be levied on said 3 tract of such lands were the levy for the general school fund 4 five eight dollars and forty ninety-five cents per thousand 5 dollars of assessed value for the previous year, except in 6 the case of a deficiency in the agricultural land credit 7 fund to pay said credits in full, in which case the credit 8 on each eligible tract of such lands in the state shall be 9 proportionate and shall be applied as hereinafter provided. 10 Sec. 7. Section 426.6, unnumbered paragraph 1, Code 2009, 11 is amended to read as follows: 12 The agricultural land tax credit allowed each year shall be 13 computed as follows: On or before April 1, the county auditor 14 shall list by school districts all tracts of agricultural 15 lands which are entitled to credit, together with the taxable 16 value for the previous year, together with the budget from 17 each school district for the previous year, and the tax 18 rate determined for the general fund of the district in the 19 manner prescribed in section 444.3 for the previous year, 20 and if such tax rate is in excess of five eight dollars and 21 forty ninety-five cents per thousand dollars of assessed value, 22 the auditor shall multiply the tax levy which is in excess of 23 five eight dollars and forty ninety-five cents per thousand 24 dollars of assessed value by the total taxable value of the 25 agricultural lands entitled to credit in the district, and on 26 or before April 1, certify the amount to the department of 27 revenue. 28 Sec. 8. EFFECTIVE DATE AND APPLICABILITY. 29 1. The sections of this Act, amending sections 257.1 and 30 257.3, increasing the regular program foundation base and 31 the special education support services foundation base, and 32 increasing the foundation property tax, take effect January 1, 33 2012, and apply to the school budget year beginning July 1, 34 2012, and succeeding school budget years. 35 -4- LSB 5281XS (6) 83 ak/sc 4/ 5

S.F. 2140 2. The sections of this Act amending provisions in chapters 1 425A and 426 relating to the family farm tax credit and the 2 agricultural land tax credit take effect January 1, 2013, for 3 taxes payable in fiscal years beginning on or after July 1, 4 2013. 5 EXPLANATION 6 This bill provides for an increase in the foundation 7 property tax imposed under the state school foundation program 8 pursuant to Code section 257.3, from the current level of 9 $5.40 to $8.95 per $1,000 of assessed valuation on all taxable 10 property in a school district. 11 The bill also provides for an increase in the regular program 12 foundation base and the special education support services 13 foundation base under the state school foundation program 14 from the current foundation base levels of 87.5 percent and 15 79 percent, respectively, to 100 percent. The foundation 16 base is the specified percentage of the state cost per pupil 17 calculation which is paid as state aid to school districts, 18 above the foundation property tax. 19 The bill provides conforming changes to provisions of the 20 family farm tax credit and the agricultural land tax credit 21 contained in Code chapters 425A and 426, relating to the 22 increase in the level of the foundation property tax. 23 The bill provides that provisions increasing the regular 24 program foundation base and the special education support 25 services foundation base, and increasing the foundation 26 property tax, take effect January 1, 2012, and apply to the 27 school budget year beginning July 1, 2012, and succeeding 28 school budget years. The bill provides that the provisions 29 amending the family farm tax credit and the agricultural land 30 tax credit take effect January 1, 2013, for taxes payable in 31 fiscal years beginning on or after July 1, 2013. 32 -5- LSB 5281XS (6) 83 ak/sc 5/ 5