SENATE FILE 51

BY  KETTERING

A BILL FOR

An Act directing state aid funding for special education support services, media services, educational services, area education agency professional development supplement, and area education agency teacher salary supplement to the applicable school districts, allowing area education agencies and other organizations to bid to provide the services the funding supports, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 257.35, subsection 1, Code 2011, is amended to read as follows:
   1.  The For school budget years ending prior to July 1, 2012, the department of management shall deduct the amounts calculated for special education support services, media services, area education agency teacher salary supplement district cost, area education agency professional development supplement district cost, and educational services for each school district from the state aid due to the district pursuant to this chapter and shall pay the amounts to the respective area education agencies on a monthly basis from September 15 through June 15 during each school year. The department of management shall notify each school district of the amount of state aid deducted for these purposes and the balance of state aid shall be paid to the district. If a district does not qualify for state aid under this chapter in an amount sufficient to cover its amount due to the area education agency as calculated by the department of management, the school district shall pay the deficiency to the area education agency from other moneys received by the district, on a quarterly basis during each school year.
   Sec. 2.  NEW SECTION.  257.35A  Area education agencies —— state funding redirected.
   1.  Notwithstanding any provision of this chapter to the contrary, for school budget years beginning on and after July 1, 2012, the state aid funding for special education support services, media services, and educational services, as calculated by this chapter, shall be paid directly to the applicable school district.
   2.  A school district receiving funding under subsection 1 shall choose one of the following options:
   a.  A school district may provide its own special education services, media services, and educational services, as those services are described in chapter 273. However, the school district shall not receive funding for its costs that exceeds the amount determined under subsection 1, except for funds received from another school district for providing special education services, media services, or educational services to such other school district.
   b.  A school district may solicit bids from organizations, including other school districts and area education agencies, to provide special education services, media services, and educational services, as those services are described in chapter 273. However, the school district soliciting bids shall not receive funding for its costs that exceeds the amount determined under subsection 1.
   3.  The department of education shall distribute the appropriate amount of area education agency professional development supplement and area education agency teacher salary supplement funding to a school district if an area education agency successfully bids to provide the services.
   Sec. 3.  Section 273.9, subsection 1, Code 2011, is amended to read as follows:
   1.  School For school budget years ending prior to July 1, 2012, school districts shall pay for the programs and services provided through the area education agency and shall include expenditures for the programs and services in their budgets, in accordance with this section.
   Sec. 4.  NEW SECTION.  273.9A  Funding from school districts —— state and local funds.
   Notwithstanding any provision of this chapter to the contrary, for school budget years beginning on and after July 1, 2012, an area education agency or other organization shall receive state aid funding for providing special education support services, media services, and educational services from the applicable school district. Area education agencies and other organizations may submit bids for providing special education support services, media services, and educational services in a process to be determined by the department of education by rule under chapter 17A.
   Sec. 5.  APPLICABILITY DATE.  This Act applies to school budget years beginning on and after July 1, 2012.
EXPLANATION
   This bill enacts new Code section 257.35A, which directs state aid funding for special education support services, media services, educational services, area education agency professional development supplement, and area education agency teacher salary supplement to the applicable school districts.
   The bill allows a school district to provide its own services. A school district may also bid to provide services to other school districts. A school district may also solicit bids from organizations to receive these services. If a school district provides its own special education support services, media services, or educational services, it shall not receive funding that exceeds the amount determined under new Code section 257.35A. The bill requires area education agencies (AEAs) and other organizations to bid to provide special education support services, media services, and educational services. An AEA or organization that successfully bids to provide these services to a school district will receive the appropriate amount of funding. The department of education is tasked with developing the bid process by rule.
   Currently, area education agency funding operates pursuant to a “flow-through” concept. With no direct taxing authority, AEAs rely on local school districts to generate funds for their operation. While AEA funding is included within a school district’s budget, the district does not actually receive AEA-related state aid payments. Instead, funds generated by the districts through the operation of the school finance formula and earmarked for AEAs are subtracted by the department of management from the state aid otherwise due to the district and are paid directly to each AEA.
   The bill applies to school budget years beginning on and after July 1, 2012.