S.F. 2153 Section 1. Section 257.1, subsection 2, paragraph b, Code 1 2009, is amended to read as follows: 2 b. (1) For the budget year commencing July 1, 1999 2012 , 3 and for each succeeding budget year , the regular program 4 foundation base per pupil is eighty-seven and five-tenths one 5 hundred percent of the regular program state cost per pupil. 6 For the budget year commencing July 1, 1991 2012 , and for 7 each succeeding budget year , the special education support 8 services foundation base is seventy-nine one hundred percent 9 of the special education support services state cost per 10 pupil. The combined foundation base is the sum of the regular 11 program foundation base, the special education support services 12 foundation base, the total teacher salary supplement district 13 cost, the total professional development supplement district 14 cost, the total early intervention supplement district cost, 15 the total area education agency teacher salary supplement 16 district cost, and the total area education agency professional 17 development supplement district cost. 18 (2) For the budget year commencing July 1, 2012, and each 19 succeeding budget year, the foundation property tax levy shall 20 be annually determined by the department of management in an 21 amount which maintains the same proportion of state foundation 22 aid and property taxation on a statewide basis as it existed 23 for the budget year beginning July 1, 2011. 24 Sec. 2. Section 257.3, subsection 1, Code 2009, is amended 25 to read as follows: 26 1. Amount of tax. 27 a. Except as provided in subsections 2 and 3, a school 28 district shall cause to be levied each year, for the school 29 general fund, a foundation property tax equal to five dollars 30 and forty cents as calculated in section 257.1, subsection 2, 31 paragraph “b” , per thousand dollars of assessed valuation on all 32 taxable property in the district. 33 b. The county auditor shall spread the foundation levy over 34 all taxable property in the district. 35 -1- LSB 5289XS (6) 83 ak/sc 1/ 6

S.F. 2153 c. The amount paid to each school district for the tax 1 replacement claim for industrial machinery, equipment and 2 computers under section 427B.19A shall be regarded as property 3 tax. The portion of the payment which is foundation property 4 tax shall be determined by applying the foundation property tax 5 rate to the amount computed under section 427B.19, subsection 6 3, paragraph “a” , as adjusted by paragraph “d” , if any 7 adjustment was made. 8 d. Replacement taxes under chapter 437A shall be regarded as 9 property taxes for purposes of this chapter. 10 Sec. 3. Section 257.3, subsection 2, paragraphs a and b, 11 Code 2009, are amended to read as follows: 12 a. Notwithstanding subsection 1, a reorganized school 13 district shall cause a reduced foundation property tax of 14 four dollars and forty cents per thousand dollars of assessed 15 valuation to be levied on all taxable property which, in the 16 year preceding a reorganization, was within a school district 17 affected by the reorganization as defined in section 275.1, 18 or in the year preceding a dissolution was a part of a school 19 district that dissolved if the dissolution proposal has 20 been approved by the director of the department of education 21 pursuant to section 275.55. 22 b. In succeeding school years, the foundation property 23 tax levy on that portion shall be increased to the rate of 24 four dollars and ninety cents per thousand dollars of assessed 25 valuation the first succeeding year, five dollars and fifteen 26 cents per thousand dollars of assessed valuation the second 27 succeeding year, and five dollars and forty cents per thousand 28 dollars of assessed valuation the third succeeding year and 29 each year thereafter. The amount of the reduction from the 30 foundation property tax shall be determined by the department 31 of management in an amount corresponding to one dollar per 32 thousand dollars of assessed valuation for the budget year in 33 which the reorganization or dissolution takes place, fifty 34 cents per thousand dollars of assessed valuation for the first 35 -2- LSB 5289XS (6) 83 ak/sc 2/ 6

S.F. 2153 succeeding year, and twenty-five cents per thousand dollars of 1 assessed valuation for the second succeeding year. Beginning 2 in the third succeeding year, the foundation property tax 3 shall be levied at the rate otherwise applicable had the 4 reorganization or dissolution not taken place. 5 Sec. 4. Section 425A.3, subsection 1, Code 2009, is amended 6 to read as follows: 7 1. The family farm tax credit fund shall be apportioned 8 each year in the manner provided in this chapter so as to give 9 a credit against the tax on each eligible tract of agricultural 10 land within the several school districts of the state in which 11 the levy for the general school fund exceeds five dollars and 12 forty cents per thousand dollars of assessed value the amount 13 specified in section 257.1, subsection 2, paragraph “b” . The 14 amount of the credit on each eligible tract of agricultural 15 land shall be the amount the tax levied for the general school 16 fund exceeds the amount of tax which would be levied on each 17 eligible tract of agricultural land were the levy for the 18 general school fund five dollars and forty cents per thousand 19 dollars of assessed value the amount specified in section 20 257.1, subsection 2, paragraph “b” , for the previous year. 21 However, in the case of a deficiency in the family farm tax 22 credit fund to pay the credits in full, the credit on each 23 eligible tract of agricultural land in the state shall be 24 proportionate and applied as provided in this chapter. 25 Sec. 5. Section 425A.5, Code 2009, is amended to read as 26 follows: 27 425A.5 Computation by county auditor. 28 The family farm tax credit allowed each year shall be 29 computed as follows: On or before April 1, the county auditor 30 shall list by school districts all tracts of agricultural 31 land which are entitled to credit, the taxable value for the 32 previous year, the budget from each school district for the 33 previous year, and the tax rate determined for the general fund 34 of the school district in the manner prescribed in section 35 -3- LSB 5289XS (6) 83 ak/sc 3/ 6

S.F. 2153 444.3 for the previous year, and if the tax rate is in excess of 1 five dollars and forty cents per thousand dollars of assessed 2 value the amount specified in section 257.1, subsection 2, 3 paragraph “b” , the auditor shall multiply the tax levy which is 4 in excess of five dollars and forty cents per thousand dollars 5 of assessed value the amount specified in section 257.1, 6 subsection 2, paragraph “b” , by the total taxable value of the 7 agricultural land entitled to credit in the school district, 8 and on or before April 1, certify the total amount of credit 9 and the total number of acres entitled to the credit to the 10 department of revenue. 11 Sec. 6. Section 426.3, Code 2009, is amended to read as 12 follows: 13 426.3 Where credit given. 14 The agricultural land credit fund shall be apportioned each 15 year in the manner hereinafter provided so as to give a credit 16 against the tax on each tract of agricultural lands within the 17 several school districts of the state in which the levy for the 18 general school fund exceeds five dollars and forty cents per 19 thousand dollars of assessed value; the amount specified in 20 section 257.1, subsection 2, paragraph “b” . The amount of such 21 credit on each tract of such lands shall be the amount the tax 22 levied for the general school fund exceeds the amount of tax 23 which would be levied on said tract of such lands were the levy 24 for the general school fund five dollars and forty cents per 25 thousand dollars of assessed value for the previous year the 26 amount specified in section 257.1, subsection 2, paragraph “b” , 27 except in the case of a deficiency in the agricultural land 28 credit fund to pay said credits in full, in which case the 29 credit on each eligible tract of such lands in the state shall 30 be proportionate and shall be applied as hereinafter provided. 31 Sec. 7. Section 426.6, unnumbered paragraph 1, Code 2009, 32 is amended to read as follows: 33 The agricultural land tax credit allowed each year shall be 34 computed as follows: On or before April 1, the county auditor 35 -4- LSB 5289XS (6) 83 ak/sc 4/ 6

S.F. 2153 shall list by school districts all tracts of agricultural 1 lands which are entitled to credit, together with the taxable 2 value for the previous year, together with the budget from 3 each school district for the previous year, and the tax rate 4 determined for the general fund of the district in the manner 5 prescribed in section 444.3 for the previous year, and if such 6 tax rate is in excess of five dollars and forty cents per 7 thousand dollars of assessed value the amount specified in 8 section 257.1, subsection 2, paragraph “b” , the auditor shall 9 multiply the tax levy which is in excess of five dollars and 10 forty cents per thousand dollars of assessed value the amount 11 specified in section 257.1, subsection 2, paragraph “b” , by 12 the total taxable value of the agricultural lands entitled to 13 credit in the district, and on or before April 1, certify the 14 amount to the department of revenue. 15 Sec. 8. EFFECTIVE DATE AND APPLICABILITY. The sections of 16 this Act amending sections 257.1 and 257.3 take effect January 17 1, 2012, and apply to school budget years beginning on or after 18 July 1, 2012. 19 Sec. 9. EFFECTIVE DATE AND APPLICABILITY. The sections of 20 this Act amending sections 425A.3, 425A.5, 426.3, and 426.6 21 take effect January 1, 2013, and apply to taxes due and payable 22 in fiscal years beginning on or after July 1, 2013. 23 EXPLANATION 24 This bill increases and modifies the levels and methods of 25 computation of the foundation property tax levy and the regular 26 program foundation base within the school finance formula. 27 With each budget year, beginning with the budget year 28 commencing July 1, 2012, the department of management shall 29 determine the foundation property tax levy in an amount which 30 maintains the same proportion of state foundation aid and 31 property taxation on a statewide basis as it existed for the 32 budget year beginning July 1, 2011. 33 The bill provides for an increase in the regular program 34 foundation base and the special education support services 35 -5- LSB 5289XS (6) 83 ak/sc 5/ 6

S.F. 2153 foundation base under the state school foundation program from 1 the current foundation bases of 87.5 percent and 70 percent, 2 respectively, to 100 percent. The foundation base is the 3 specified percentage of the state cost per pupil calculation 4 which is paid as state aid to school districts, above the 5 foundation property tax. 6 Currently, a district which reorganizes or dissolves 7 qualifies for a reduced foundation property tax level, which 8 gradually increases over the next succeeding budget years 9 following the reorganization or dissolution. The bill modifies 10 these provisions such that the amount of the reduction shall 11 be determined annually by the department of management in an 12 amount corresponding to $1 per thousand dollars of assessed 13 valuation in the initial year of the reorganization or 14 dissolution, 50 cents in the first succeeding year, and 25 15 cents in the second succeeding year, after which the level 16 shall be increased to the level which would otherwise be 17 applicable in the event that a reorganization or dissolution 18 had not occurred. 19 The bill makes conforming changes to provisions of the 20 family farm property tax credit and the agricultural land 21 property tax credit contained in Code chapters 425A and 426, 22 relating to the change in the computation of the foundation 23 property tax levy. 24 The bill provides that provisions increasing the regular 25 program foundation base and the special education support 26 services foundation base, and providing for computation of the 27 foundation property tax levy, take effect January 1, 2012, and 28 apply to school budget years beginning on or after July 1, 29 2012. 30 The bill provides that the sections of the bill amending 31 provisions relating to the family farm tax credit and the 32 agricultural land tax credit take effect January 1, 2013, for 33 taxes due and payable in fiscal years beginning on or after 34 July 1, 2013. 35 -6- LSB 5289XS (6) 83 ak/sc 6/ 6