House Study Bill 108 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED GOVERNOR’S BILL) A BILL FOR An Act relating to school district funding by providing for 1 school district property tax replacement payments, making 2 appropriations, modifying terminology, and including 3 effective date and applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1484XL (7) 85 md/sc

S.F. _____ H.F. _____ Section 1. Section 256C.4, subsection 1, paragraph f, Code 1 2013, is amended to read as follows: 2 f. The receipt of funding by a school district for the 3 purposes of this chapter , the need for additional funding 4 for the purposes of this chapter , or the enrollment count of 5 eligible students under this chapter shall not be considered 6 to be unusual circumstances, create an unusual need for 7 additional funds, or qualify under any other circumstances that 8 may be used by the school budget review committee to grant 9 supplemental aid to or establish modified allowable growth 10 supplemental state aid for a school district under section 11 257.31 . 12 Sec. 2. Section 257.2, subsection 1, Code 2013, is amended 13 by striking the subsection. 14 Sec. 3. Section 257.2, subsection 9, Code 2013, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . d. Property tax replacement payments 17 received under section 257.16B. 18 Sec. 4. Section 257.2, subsection 12, Code 2013, is amended 19 to read as follows: 20 12. “State percent of growth” means the percent of growth 21 which is established by statute pursuant to section 257.8 , and 22 which is used in determining the allowable growth supplemental 23 state aid . 24 Sec. 5. Section 257.2, Code 2013, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 12A. “Supplemental state aid” means the 27 amount by which state cost per pupil and district cost per 28 pupil will increase from one budget year to the next. 29 Sec. 6. Section 257.4, subsection 1, paragraph a, Code 2013, 30 is amended by adding the following new subparagraph: 31 NEW SUBPARAGRAPH . (8) The amount of the school district 32 property tax replacement payment received by the school 33 district under section 257.16B. 34 Sec. 7. Section 257.4, subsection 1, paragraph b, Code 2013, 35 -1- LSB 1484XL (7) 85 md/sc 1/ 22

S.F. _____ H.F. _____ is amended to read as follows: 1 b. For the budget year beginning July 1, 2008, and 2 succeeding budget years, the department of management shall 3 annually determine an adjusted additional property tax levy and 4 a statewide maximum adjusted additional property tax levy rate, 5 not to exceed the statewide average additional property tax 6 levy rate, calculated by dividing the total adjusted additional 7 property tax levy dollars statewide by the statewide total 8 net taxable valuation. For purposes of this paragraph, the 9 adjusted additional property tax levy shall be that portion of 10 the additional property tax levy corresponding to the state 11 cost per pupil multiplied by a school district’s weighted 12 enrollment, and then multiplied by one hundred percent less 13 the regular program foundation base per pupil percentage 14 pursuant to section 257.1 , and then reduced by the amount of 15 property tax replacement received under section 257.16B . The 16 district shall receive adjusted additional property tax levy 17 aid in an amount equal to the difference between the adjusted 18 additional property tax levy rate and the statewide maximum 19 adjusted additional property tax levy rate, as applied per 20 thousand dollars of assessed valuation on all taxable property 21 in the district. The statewide maximum adjusted additional 22 property tax levy rate shall be annually determined by the 23 department taking into account amounts allocated pursuant to 24 section 257.15, subsection 4 . The statewide maximum adjusted 25 additional property tax levy rate shall be annually determined 26 by the department taking into account amounts allocated 27 pursuant to section 257.15, subsection 4 , and the balance of 28 the property tax equity and relief fund created in section 29 257.16A at the end of the calendar year. 30 Sec. 8. Section 257.6, subsection 1, paragraph a, 31 subparagraph (5), Code 2013, is amended to read as follows: 32 (5) Resident pupils receiving competent private instruction 33 from a licensed practitioner provided through a public 34 school district pursuant to chapter 299A shall be counted 35 -2- LSB 1484XL (7) 85 md/sc 2/ 22

S.F. _____ H.F. _____ as three-tenths of one pupil. Revenues received by a 1 school district attributed to a school district’s weighted 2 enrollment pursuant to this subparagraph shall be expended 3 for the purpose for which the weighting was assigned under 4 this subparagraph. If the school district determines that 5 the expenditures associated with providing competent private 6 instruction pursuant to chapter 299A are in excess of the 7 revenue attributed to the school district’s weighted enrollment 8 for such instruction in accordance with this subparagraph, 9 the school district may submit a request to the school budget 10 review committee for modified allowable growth supplemental 11 state aid in accordance with section 257.31, subsection 5 , 12 paragraph “n” . A home school assistance program shall not 13 provide moneys received pursuant to this subparagraph, nor 14 resources paid for with moneys received pursuant to this 15 subparagraph, to parents or students utilizing the program. 16 Moneys received by a school district pursuant to this 17 subparagraph shall be used as provided in section 299A.12 . 18 Sec. 9. Section 257.8, subsections 3, 6, and 7, Code 2013, 19 are amended to read as follows: 20 3. Allowable growth Supplemental state aid calculation. The 21 department of management shall calculate the regular program 22 allowable growth supplemental state aid for a budget year by 23 multiplying the state percent of growth for the budget year 24 by the regular program state cost per pupil for the base year 25 and shall calculate the special education support services 26 allowable growth supplemental state aid for the budget year by 27 multiplying the state percent of growth for the budget year by 28 the special education support services state cost per pupil for 29 the base year. 30 6. Combined allowable growth supplemental state aid . The 31 combined allowable growth supplemental state aid per pupil 32 for each school district is the sum of the regular program 33 allowable growth supplemental state aid per pupil and 34 the special education support services allowable growth 35 -3- LSB 1484XL (7) 85 md/sc 3/ 22

S.F. _____ H.F. _____ supplemental state aid per pupil for the budget year, which may 1 be modified as follows: 2 a. By the school budget review committee under section 3 257.31 . 4 b. By the department of management under section 257.36 . 5 7. Alternate allowable growth supplemental state aid —— 6 definitions. For budget years beginning July 1, 2000, and 7 subsequent budget years, references to the terms “allowable 8 growth” “supplemental state aid” , “regular program state cost 9 per pupil” , and “regular program district cost per pupil” shall 10 mean those terms as calculated for those school districts that 11 calculated regular program allowable growth supplemental state 12 aid for the school budget year beginning July 1, 1999, with the 13 additional thirty-eight dollars specified in section 257.8, 14 subsection 4, Code 2013 . 15 Sec. 10. Section 257.8, subsections 4 and 5, Code 2013, are 16 amended by striking the subsections. 17 Sec. 11. Section 257.9, subsection 1, paragraph b, Code 18 2013, is amended to read as follows: 19 b. The total calculated under this subsection shall 20 be divided by the total of the budget enrollments of all 21 school districts for the budget year beginning July 1, 1990, 22 calculated under section 257.6, subsection 4 , if section 23 257.6, subsection 4 , had been in effect for that budget 24 year. The regular program state cost per pupil for the budget 25 year beginning July 1, 1991, is the amount calculated by 26 the department of management under this subsection plus an 27 allowable growth a supplemental state aid amount , as defined 28 in this Act, that is equal to the state percent of growth for 29 the budget year multiplied by the amount calculated by the 30 department of management under this subsection . 31 Sec. 12. Section 257.9, subsections 2, 4, 6, 7, 8, 9, and 32 10, Code 2013, are amended to read as follows: 33 2. Regular program state cost per pupil for 1992-1993 and 34 succeeding years. For the budget year beginning July 1, 1992, 35 -4- LSB 1484XL (7) 85 md/sc 4/ 22

S.F. _____ H.F. _____ and succeeding budget years, the regular program state cost 1 per pupil for a budget year is the regular program state cost 2 per pupil for the base year plus the regular program allowable 3 growth supplemental state aid for the budget year. 4 4. Special education support services state cost per pupil 5 for 1992-1993 and succeeding years. For the budget year 6 beginning July 1, 1992, and succeeding budget years, the 7 special education support services state cost per pupil for the 8 budget year is the special education support services state 9 cost per pupil for the base year plus the special education 10 support services allowable growth supplemental state aid for 11 the budget year. 12 6. Teacher salary supplement state cost per pupil. For the 13 budget year beginning July 1, 2009, for the teacher salary 14 supplement state cost per pupil, the department of management 15 shall add together the teacher compensation allocation made 16 to each district for the fiscal year beginning July 1, 2008, 17 pursuant to section 284.13, subsection 1, paragraph “h” , Code 18 2009 , and the phase II allocation made to each district for the 19 fiscal year beginning July 1, 2008, pursuant to section 294A.9 , 20 Code 2009, and divide that sum by the statewide total budget 21 enrollment for the fiscal year beginning July 1, 2009. The 22 teacher salary supplement state cost per pupil for the budget 23 year beginning July 1, 2010, and succeeding budget years, shall 24 be the amount calculated by the department of management under 25 this subsection for the base year plus an allowable growth a 26 supplemental state aid amount that is equal to the teacher 27 salary supplement categorical state percent of growth, pursuant 28 to section 257.8, subsection 2 , for the budget year, multiplied 29 by the amount calculated by the department of management under 30 this subsection for the base year. 31 7. Professional development supplement state cost per 32 pupil. For the budget year beginning July 1, 2009, for the 33 professional development supplement state cost per pupil, the 34 department of management shall add together the professional 35 -5- LSB 1484XL (7) 85 md/sc 5/ 22

S.F. _____ H.F. _____ development allocation made to each district for the fiscal 1 year beginning July 1, 2008, pursuant to section 284.13, 2 subsection 1, paragraph “d” , Code 2009 , and divide that sum 3 by the statewide total budget enrollment for the fiscal 4 year beginning July 1, 2009. The professional development 5 supplement state cost per pupil for the budget year beginning 6 July 1, 2010, and succeeding budget years, shall be the 7 amount calculated by the department of management under 8 this subsection for the base year plus an allowable growth a 9 supplemental state aid amount that is equal to the professional 10 development supplement categorical state percent of growth, 11 pursuant to section 257.8, subsection 2 , for the budget year, 12 multiplied by the amount calculated by the department of 13 management under this subsection for the base year. 14 8. Early intervention supplement state cost per pupil. For 15 the budget year beginning July 1, 2009, for the early 16 intervention supplement state cost per pupil, the department of 17 management shall add together the early intervention allocation 18 made to each district for the fiscal year beginning July 19 1, 2008, pursuant to section 256D.4, Code 2009, and divide 20 that sum by the statewide total budget enrollment for the 21 fiscal year beginning July 1, 2009. The early intervention 22 supplement state cost per pupil for the budget year beginning 23 July 1, 2010, and succeeding budget years, shall be the 24 amount calculated by the department of management under 25 this subsection for the base year plus an allowable growth 26 a supplemental state aid amount that is equal to the early 27 intervention supplement categorical state percent of growth, 28 pursuant to section 257.8, subsection 2 , for the budget year, 29 multiplied by the amount calculated by the department of 30 management under this subsection for the base year. 31 9. Area education agency teacher salary supplement state cost 32 per pupil. For the budget year beginning July 1, 2009, for 33 the area education agency teacher salary supplement state cost 34 per pupil, the department of management shall add together the 35 -6- LSB 1484XL (7) 85 md/sc 6/ 22

S.F. _____ H.F. _____ teacher compensation allocation made to each area education 1 agency for the fiscal year beginning July 1, 2008, pursuant to 2 section 284.13, subsection 1, paragraph “i” , Code 2009 , and 3 the phase II allocation made to each area education agency for 4 the fiscal year beginning July 1, 2008, pursuant to section 5 294A.9 , Code 2009, and divide that sum by the statewide special 6 education support services weighted enrollment for the fiscal 7 year beginning July 1, 2009. The area education agency teacher 8 salary supplement state cost per pupil for the budget year 9 beginning July 1, 2010, and succeeding budget years, shall be 10 the amount calculated by the department of management under 11 this subsection for the base year plus an allowable growth a 12 supplemental state aid amount that is equal to the teacher 13 salary supplement categorical state percent of growth, pursuant 14 to section 257.8, subsection 2 , for the budget year, multiplied 15 by the amount calculated by the department of management under 16 this subsection for the base year. 17 10. Area education agency professional development supplement 18 state cost per pupil. For the budget year beginning July 1, 19 2009, for the area education agency professional development 20 supplement state cost per pupil, the department of management 21 shall add together the professional development allocation made 22 to each area education agency for the fiscal year beginning 23 July 1, 2008, pursuant to section 284.13, subsection 1, 24 paragraph “d” , Code 2009 , and divide that sum by the statewide 25 special education support services weighted enrollment for the 26 fiscal year beginning July 1, 2009. The area education agency 27 professional development supplement state cost per pupil for 28 the budget year beginning July 1, 2010, and succeeding budget 29 years, shall be the amount calculated by the department of 30 management under this subsection for the base year plus an 31 allowable growth a supplemental state aid amount that is equal 32 to the professional development supplement categorical state 33 percent of growth, pursuant to section 257.8, subsection 2 , for 34 the budget year, multiplied by the amount calculated by the 35 -7- LSB 1484XL (7) 85 md/sc 7/ 22

S.F. _____ H.F. _____ department of management under this subsection for the base 1 year. 2 Sec. 13. Section 257.10, subsection 1, Code 2013, is amended 3 to read as follows: 4 1. Regular program district cost per pupil for 5 1991-1992. For the budget year beginning July 1, 1991, in order 6 to determine the regular program district cost per pupil for a 7 district, the department of management shall divide the product 8 of the regular program district cost per pupil of the district 9 for the base year, as regular program district cost per pupil 10 would have been calculated under section 442.9 , Code 1989, 11 multiplied by its budget enrollment for the base year as budget 12 enrollment would have been calculated under section 442.4 , 13 Code 1989, plus the amount added to district cost pursuant 14 to section 442.21 , Code 1989, for each school district, by 15 the budget enrollment of the school district for the budget 16 year beginning July 1, 1990, calculated under section 257.6, 17 subsection 4 , as if section 257.6, subsection 4 , had been in 18 effect for that budget year. The regular program district cost 19 per pupil for the budget year beginning July 1, 1991, is the 20 amount calculated by the department of management under this 21 subsection plus the allowable growth supplemental state aid 22 amount , as defined in this Act, calculated for regular program 23 state cost per pupil, except that if the regular program 24 district cost per pupil for the budget year calculated under 25 this subsection in any school district exceeds one hundred 26 ten percent of the regular program state cost per pupil for 27 the budget year, the department of management shall reduce 28 the regular program district cost per pupil of that district 29 for the budget year to an amount equal to one hundred ten 30 percent of the regular program state cost per pupil for the 31 budget year, and if the regular program district cost per pupil 32 for the budget year calculated under this subsection in any 33 school district is less than the regular program state cost per 34 pupil for the budget year, the department of management shall 35 -8- LSB 1484XL (7) 85 md/sc 8/ 22

S.F. _____ H.F. _____ increase the regular program district cost per pupil of that 1 district to an amount equal to the regular program state cost 2 per pupil for the budget year. 3 Sec. 14. Section 257.10, subsection 2, paragraph a, Code 4 2013, is amended to read as follows: 5 a. For the budget year beginning July 1, 1992, and 6 succeeding budget years, the regular program district cost per 7 pupil for each school district for a budget year is the regular 8 program district cost per pupil for the base year plus the 9 regular program allowable growth supplemental state aid for the 10 budget year except as otherwise provided in this subsection . 11 Sec. 15. Section 257.10, subsection 4, paragraph a, Code 12 2013, is amended to read as follows: 13 a. For the budget year beginning July 1, 1992, and 14 succeeding budget years, the special education support services 15 district cost per pupil for the budget year is the special 16 education support services district cost per pupil for the base 17 year plus the special education support services allowable 18 growth supplemental state aid for the budget year. 19 Sec. 16. Section 257.10, subsection 5, Code 2013, is amended 20 to read as follows: 21 5. Combined district cost per pupil. The combined district 22 cost per pupil for a school district is the sum of the regular 23 program district cost per pupil and the special education 24 support services district cost per pupil. Combined district 25 cost per pupil does not include modified allowable growth 26 supplemental state aid added for school districts that have 27 a negative balance of funds raised for special education 28 instruction programs, modified allowable growth supplemental 29 state aid granted by the school budget review committee for a 30 single school year, or modified allowable growth supplemental 31 state aid added for programs for dropout prevention. 32 Sec. 17. Section 257.10, subsection 9, paragraph a, Code 33 2013, is amended to read as follows: 34 a. For the budget year beginning July 1, 2009, the 35 -9- LSB 1484XL (7) 85 md/sc 9/ 22

S.F. _____ H.F. _____ department of management shall add together the teacher 1 compensation allocation made to each district for the fiscal 2 year beginning July 1, 2008, pursuant to section 284.13, 3 subsection 1, paragraph “h” , Code 2009 , and the phase II 4 allocation made to each district for the fiscal year beginning 5 July 1, 2008, pursuant to section 294A.9 , Code 2009, and 6 divide that sum by the district’s budget enrollment in the 7 fiscal year beginning July 1, 2009, to determine the teacher 8 salary supplement district cost per pupil. For the budget 9 year beginning July 1, 2010, and succeeding budget years, 10 the teacher salary supplement district cost per pupil for 11 each school district for a budget year is the teacher salary 12 supplement program district cost per pupil for the base year 13 plus the teacher salary supplement state allowable growth 14 supplemental state aid amount for the budget year. 15 Sec. 18. Section 257.10, subsection 10, paragraph a, Code 16 2013, is amended to read as follows: 17 a. For the budget year beginning July 1, 2009, the 18 department of management shall divide the professional 19 development allocation made to each district for the fiscal 20 year beginning July 1, 2008, pursuant to section 284.13, 21 subsection 1, paragraph “d” , Code 2009 , by the district’s 22 budget enrollment in the fiscal year beginning July 1, 2009, 23 to determine the professional development supplement cost 24 per pupil. For the budget year beginning July 1, 2010, 25 and succeeding budget years, the professional development 26 supplement district cost per pupil for each school district 27 for a budget year is the professional development supplement 28 district cost per pupil for the base year plus the professional 29 development supplement state allowable growth supplemental 30 state aid amount for the budget year. 31 Sec. 19. Section 257.10, subsection 11, paragraph a, Code 32 2013, is amended to read as follows: 33 a. For the budget year beginning July 1, 2009, the 34 department of management shall divide the early intervention 35 -10- LSB 1484XL (7) 85 md/sc 10/ 22

S.F. _____ H.F. _____ allocation made to each district for the fiscal year beginning 1 July 1, 2008, pursuant to section 256D.4 , Code 2009, by the 2 district’s budget enrollment in the fiscal year beginning July 3 1, 2009, to determine the early intervention supplement cost 4 per pupil. For the budget year beginning July 1, 2010, and 5 succeeding budget years, the early intervention supplement 6 district cost per pupil for each school district for a budget 7 year is the early intervention supplement district cost per 8 pupil for the base year plus the early development supplement 9 state allowable growth supplemental state aid amount for the 10 budget year. 11 Sec. 20. Section 257.13, subsections 2 and 3, Code 2013, are 12 amended to read as follows: 13 2. The board of directors of a school district that wishes 14 to receive an on-time funding budget adjustment shall adopt 15 a resolution to receive the adjustment and notify the school 16 budget review committee annually, but not earlier than November 17 1, as determined by the department of education. The school 18 budget review committee shall establish a modified allowable 19 growth supplemental state aid in an amount determined pursuant 20 to subsection 1 . 21 3. If the board of directors of a school district 22 determines that a need exists for additional funds exceeding 23 the authorized budget adjustment for on-time funding pursuant 24 to this section , a request for modified allowable growth 25 supplemental state aid based upon increased enrollment may be 26 submitted to the school budget review committee as provided in 27 section 257.31 . 28 Sec. 21. Section 257.15, subsection 4, paragraph b, Code 29 2013, is amended to read as follows: 30 b. After lowering all school district adjusted additional 31 property tax levy rates to the statewide maximum adjusted 32 additional property tax levy rate under paragraph “a” , the 33 department of management shall use any remaining funds at the 34 end of the calendar year to further lower additional property 35 -11- LSB 1484XL (7) 85 md/sc 11/ 22

S.F. _____ H.F. _____ taxes by increasing for the budget year beginning the following 1 July 1, the state foundation base percentage. Moneys used 2 pursuant to this paragraph shall supplant an equal amount of 3 the appropriation made from the general fund of the state 4 pursuant to section 257.16 that represents the increase in 5 state foundation aid. 6 Sec. 22. NEW SECTION . 257.16B School district property tax 7 replacement payments. 8 1. For each fiscal year beginning on or after July 1, 2013, 9 there is appropriated from the general fund of the state to the 10 department of education an amount necessary to make all school 11 district property tax replacement payments under this section, 12 as calculated in subsection 2, paragraph “c” . 13 2. For each budget year beginning on or after July 1, 2013, 14 the department of management shall calculate for each school 15 district all of the following: 16 a. The state cost per pupil for the budget year beginning 17 July 1, 2012, multiplied by one hundred percent less the 18 regular program foundation base per pupil percentage pursuant 19 to section 257.1. 20 b. The state cost per pupil for the budget year multiplied 21 by one hundred percent less the regular program foundation base 22 per pupil percentage pursuant to section 257.1. 23 c. The amount of each school district’s property tax 24 replacement payment. Each school district’s property tax 25 replacement payment equals the school district’s weighted 26 enrollment for the budget year multiplied by the remainder of 27 the amount calculated for the school district under paragraph 28 “b” minus the amount calculated for the school district under 29 paragraph “a” . 30 3. School district property tax replacement payments under 31 this section shall be paid by the department of education at 32 the same time and in the same manner as foundation aid is paid 33 and may be included in the monthly payment of state aid under 34 section 257.16, subsection 2. 35 -12- LSB 1484XL (7) 85 md/sc 12/ 22

S.F. _____ H.F. _____ Sec. 23. Section 257.31, subsection 5, unnumbered paragraph 1 1, Code 2013, is amended to read as follows: 2 If a district has unusual circumstances, creating an unusual 3 need for additional funds, including but not limited to the 4 circumstances enumerated in paragraphs “a” through “n” , the 5 committee may grant supplemental aid to the district from any 6 funds appropriated to the department of education for the use 7 of the school budget review committee for the purposes of 8 this subsection . The school budget review committee shall 9 review a school district’s unexpended fund balance prior to 10 any decision regarding unusual finance circumstances. Such 11 aid shall be miscellaneous income and shall not be included in 12 district cost. In addition to or as an alternative to granting 13 supplemental aid the committee may establish a modified 14 allowable growth supplemental state aid for the district by 15 increasing its allowable growth supplemental state aid . The 16 school budget review committee shall review a school district’s 17 unspent balance prior to any decision to increase modified 18 allowable growth supplemental state aid under this subsection . 19 Sec. 24. Section 257.31, subsection 6, paragraph a, Code 20 2013, is amended to read as follows: 21 a. The committee shall establish a modified allowable 22 growth supplemental state aid for a district by increasing 23 its allowable growth supplemental state aid when the district 24 submits evidence that it requires additional funding for 25 removal, management, or abatement of environmental hazards due 26 to a state or federal requirement. Environmental hazards shall 27 include but are not limited to the presence of asbestos, radon, 28 or the presence of any other hazardous material dangerous to 29 health and safety. 30 Sec. 25. Section 257.31, subsection 7, paragraph b, Code 31 2013, is amended to read as follows: 32 b. Other expenditures, including but not limited to 33 expenditures for salaries or recurring costs, are not 34 authorized under this subsection . Expenditures authorized 35 -13- LSB 1484XL (7) 85 md/sc 13/ 22

S.F. _____ H.F. _____ under this subsection shall not be included in allowable growth 1 supplemental state aid or district cost, and the portion of the 2 unexpended fund balance which is authorized to be spent shall 3 be regarded as if it were miscellaneous income. Any part of 4 the amount not actually spent for the authorized purpose shall 5 revert to its former status as part of the unexpended fund 6 balance. 7 Sec. 26. Section 257.31, subsection 14, paragraph b, 8 subparagraph (3), Code 2013, is amended to read as follows: 9 (3) A school district is only eligible to receive 10 supplemental aid payments during the budget year if the school 11 district certifies to the school budget review committee that 12 for the year following the budget year it will notify the 13 school budget review committee to instruct the director of the 14 department of management to increase the district’s allowable 15 growth supplemental state aid and will fund the allowable 16 growth supplemental state aid increase either by using moneys 17 from its unexpended fund balance to reduce the district’s 18 property tax levy or by using cash reserve moneys to equal the 19 amount of the deficit that would have been property taxes and 20 any part of the state aid portion of the deficit not received 21 as supplemental aid under this subsection . The director of the 22 department of management shall make the necessary adjustments 23 to the school district’s budget to provide the modified 24 allowable growth supplemental state aid and shall make the 25 supplemental aid payments. 26 Sec. 27. Section 257.32, subsection 1, paragraph a, Code 27 2013, is amended to read as follows: 28 a. An area education agency budget review procedure is 29 established for the school budget review committee created 30 in section 257.30 . The school budget review committee, in 31 addition to its duties under section 257.31 , shall meet and 32 hold hearings each year to review unusual circumstances of area 33 education agencies, either upon the committee’s motion or upon 34 the request of an area education agency. The committee may 35 -14- LSB 1484XL (7) 85 md/sc 14/ 22

S.F. _____ H.F. _____ grant supplemental aid to the area education agency from funds 1 appropriated to the department of education for area education 2 agency budget review purposes, or an amount may be added to 3 the area education agency special education support services 4 allowable growth supplemental state aid for districts in an 5 area or an additional amount may be added to district cost for 6 media services or educational services for all districts in an 7 area for the budget year either on a temporary or permanent 8 basis, or both. 9 Sec. 28. Section 257.37, subsections 1 and 3, Code 2013, are 10 amended to read as follows: 11 1. For the budget year beginning July 1, 1991, and 12 succeeding budget years, the total amount funded in each area 13 for media services shall be computed as provided in this 14 subsection . For the budget year beginning July 1, 1991, the 15 total amount funded in each area for media services in the 16 base year shall be divided by the enrollment served in the 17 base year to provide an area media services cost per pupil in 18 the base year, and the department of management shall compute 19 the state media services cost per pupil in the base year which 20 is equal to the average of the area media services costs per 21 pupil in the base year. For the budget year beginning July 1, 22 1991, and succeeding budget years, the department of management 23 shall compute the allowable growth supplemental state aid for 24 media services in the budget year by multiplying the state 25 media services cost per pupil in the base year times the state 26 percent of growth for the budget year, and the total amount 27 funded in each area for media services cost in the budget year 28 equals the area media services cost per pupil in the base year 29 plus the allowable growth supplemental state aid for media 30 services in the budget year times the enrollment served in the 31 budget year. Funds shall be paid to area education agencies 32 as provided in section 257.35 . 33 3. For the budget year beginning July 1, 1991, and 34 succeeding budget years, the total amount funded in each area 35 -15- LSB 1484XL (7) 85 md/sc 15/ 22

S.F. _____ H.F. _____ for educational services shall be computed as provided in this 1 subsection . For the budget year beginning July 1, 1991, the 2 total amount funded in each area for educational services 3 in the base year shall be divided by the enrollment served 4 in the area in the base year to provide an area educational 5 services cost per pupil in the base year, and the department of 6 management shall compute the state educational services cost 7 per pupil in the base year, which is equal to the average of 8 the area educational services costs per pupil in the base year. 9 For the budget year beginning July 1, 1991, and succeeding 10 budget years, the department of management shall compute 11 the allowable growth supplemental state aid for educational 12 services by multiplying the state educational services cost 13 per pupil in the base year times the state percent of growth 14 for the budget year, and the total amount funded in each area 15 for educational services for the budget year equals the area 16 educational services cost per pupil for the base year plus 17 the allowable growth supplemental state aid for educational 18 services in the budget year times the enrollment served in the 19 area in the budget year. Funds shall be paid to area education 20 agencies as provided in section 257.35 . 21 Sec. 29. Section 257.37A, subsection 1, paragraph a, Code 22 2013, is amended to read as follows: 23 a. For the budget year beginning July 1, 2009, the 24 department of management shall add together the teacher 25 compensation allocation made to each area education agency for 26 the fiscal year beginning July 1, 2008, pursuant to section 27 284.13, subsection 1, paragraph “i” , Code 2009 , and the phase II 28 allocation made to each area education agency for the fiscal 29 year beginning July 1, 2008, pursuant to section 294A.9, Code 30 2009 , and divide that sum by the special education support 31 services weighted enrollment in the fiscal year beginning July 32 1, 2009, to determine the area education agency teacher salary 33 supplement cost per pupil. For the budget year beginning July 34 1, 2010, and succeeding budget years, the area education agency 35 -16- LSB 1484XL (7) 85 md/sc 16/ 22

S.F. _____ H.F. _____ teacher salary supplement district cost per pupil for each area 1 education agency for a budget year is the area education agency 2 teacher salary supplement district cost per pupil for the base 3 year plus the area education agency teacher salary supplement 4 state allowable growth supplemental state aid amount for the 5 budget year. 6 Sec. 30. Section 257.37A, subsection 2, paragraph a, Code 7 2013, is amended to read as follows: 8 a. For the budget year beginning July 1, 2009, the 9 department of management shall divide the area education 10 agency professional development supplement made to each 11 area education agency for the fiscal year beginning July 1, 12 2008, pursuant to section 284.13, subsection 1, paragraph 13 “d” , Code 2009 , by the special education support services 14 weighted enrollment in the fiscal year beginning July 1, 2009, 15 to determine the professional development supplement cost 16 per pupil. For the budget year beginning July 1, 2010, and 17 succeeding budget years, the area education agency professional 18 development supplement district cost per pupil for each area 19 education agency for a budget year is the area education agency 20 professional development supplement district cost per pupil 21 for the base year plus the area education agency professional 22 development supplement state allowable growth supplemental 23 state aid amount for the budget year. 24 Sec. 31. Section 257.38, subsection 1, unnumbered paragraph 25 1, Code 2013, is amended to read as follows: 26 Boards of school districts, individually or jointly with 27 boards of other school districts, requesting to use modified 28 allowable growth supplemental state aid for programs for 29 returning dropouts and dropout prevention, shall submit 30 comprehensive program plans for the programs and budget 31 costs, including annual requests for modified allowable 32 growth supplemental state aid for funding the programs, to the 33 department of education as a component of the comprehensive 34 school improvement plan submitted to the department pursuant to 35 -17- LSB 1484XL (7) 85 md/sc 17/ 22

S.F. _____ H.F. _____ section 256.7, subsection 21 . The program plans shall include: 1 Sec. 32. Section 257.38, subsection 2, Code 2013, is amended 2 to read as follows: 3 2. Program plans shall identify the parts of the plan that 4 will be implemented first upon approval of the request. If 5 a district is requesting to use modified allowable growth 6 supplemental state aid to finance the program, the school 7 district shall not identify more than five percent of its 8 budget enrollment for the budget year as returning dropouts and 9 potential dropouts. 10 Sec. 33. Section 257.40, Code 2013, is amended to read as 11 follows: 12 257.40 Approval of programs for returning dropouts and 13 dropout prevention —— annual report. 14 1. The board of directors of a school district requesting 15 to use modified allowable growth supplemental state aid 16 for programs for returning dropouts and dropout prevention 17 shall submit requests for modified at-risk allowable growth 18 supplemental state aid , including budget costs, to the 19 department not later than December 15 of the year preceding 20 the budget year during which the program will be offered. 21 The department shall review the request and shall prior to 22 January 15 either grant approval for the request or return the 23 request for approval with comments of the department included. 24 An unapproved request for a program may be resubmitted with 25 modifications to the department not later than February 1. 26 Not later than February 15, the department shall notify the 27 department of management and the school budget review committee 28 of the names of the school districts for which programs using 29 modified allowable growth supplemental state aid for funding 30 have been approved and the approved budget of each program 31 listed separately for each school district having an approved 32 request. 33 2. Beginning January 15, 2007, the department shall submit 34 an annual report to the chairpersons and ranking members 35 -18- LSB 1484XL (7) 85 md/sc 18/ 22