Senate File 2041 - Introduced SENATE FILE 2041 BY SINCLAIR , SCHULTZ , SHIPLEY , ROZENBOOM , KRAAYENBRINK , GUTH , BREITBACH , and ANDERSON A BILL FOR An Act relating to the establishment of the state percent of 1 growth and the categorical state percent of growth and 2 including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5002XS (3) 86 md/sc

S.F. 2041 Section 1. Section 257.2, subsection 11, Code 2016, is 1 amended to read as follows: 2 11. “State percent of growth” means the percent of growth 3 which is established by statute pursuant to section 257.8 , and 4 which is used in determining the supplemental state aid. 5 Sec. 2. Section 257.8, subsections 1 and 2, Code 2016, are 6 amended to read as follows: 7 1. State percent of growth. 8 a. The state percent of growth for the budget year beginning 9 July 1, 2013, is two percent. The state percent of growth for 10 the budget year beginning July 1, 2014, is four percent. The 11 state percent of growth for the budget year beginning July 1, 12 2015, is one and twenty-five hundredths percent. The state 13 percent of growth for each subsequent budget year shall be 14 established by statute which shall be enacted within thirty 15 days of the submission in the year preceding the base year 16 of the governor’s budget under section 8.21 or as otherwise 17 provided in paragraph “b” . The establishment of the state 18 percent of growth for a budget year shall be the only subject 19 matter of the bill which enacts the state percent of growth for 20 a budget year. 21 b. If a statute establishing the state percent of growth 22 for a budget year is not enacted by March 1 immediately 23 preceding the budget year, the state percent of growth for that 24 budget year shall be a percentage equal to the school finance 25 inflation factor as determined under subsection 6. 26 2. Categorical state percent of growth. 27 a. The categorical state percent of growth for the budget 28 year beginning July 1, 2013, is two percent. The categorical 29 state percent of growth for the budget year beginning July 30 1, 2014, is four percent. The categorical state percent of 31 growth for the budget year beginning July 1, 2015, is one and 32 twenty-five hundredths percent. The categorical state percent 33 of growth for each budget year shall be established by statute 34 which shall be enacted within thirty days of the submission in 35 -1- LSB 5002XS (3) 86 md/sc 1/ 3

S.F. 2041 the year preceding the base year of the governor’s budget under 1 section 8.21 or as otherwise provided in paragraph “b” . The 2 establishment of the categorical state percent of growth for a 3 budget year shall be the only subject matter of the bill which 4 enacts the categorical state percent of growth for a budget 5 year. The categorical state percent of growth may include 6 state percents of growth for the teacher salary supplement, the 7 professional development supplement, the early intervention 8 supplement, and the teacher leadership supplement. 9 b. If a statute establishing the categorical state 10 percent of growth for a budget year is not enacted by March 1 11 immediately preceding the budget year, the categorical state 12 percent of growth for that budget year shall be a percentage 13 equal to the school finance inflation factor as determined 14 under subsection 6. 15 Sec. 3. Section 257.8, Code 2016, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 6. “School finance inflation factor” is 18 an index, expressed as a percentage rounded to the nearest 19 one-hundredth of one percent, calculated by the department of 20 management, that is the average of the annual percentage change 21 in the consumer price index for all urban consumers as computed 22 by the federal department of labor, bureau of labor statistics, 23 for the three completed calendar years immediately preceding 24 the beginning of the budget year for which the school finance 25 inflation factor is being calculated. However, if the school 26 finance inflation factor for a budget year is less than zero 27 percent, the school finance inflation factor for that budget 28 year shall be zero percent, and if the school finance inflation 29 factor for a budget year is greater than three percent, the 30 school finance inflation factor for that budget year shall be 31 three percent. 32 Sec. 4. APPLICABILITY. This Act applies to school budget 33 years beginning on or after July 1, 2017. 34 EXPLANATION 35 -2- LSB 5002XS (3) 86 md/sc 2/ 3

S.F. 2041 The inclusion of this explanation does not constitute agreement with 1 the explanation’s substance by the members of the general assembly. 2 This bill modifies the statutory requirements for the 3 establishment of the state percent of growth and the 4 categorical state percent of growth for purposes of the school 5 funding formula. 6 Current law requires the state percent of growth and the 7 categorical state percent of growth to each be established by 8 statute within 30 days of the submission of the governor’s 9 budget in the year preceding the base year. 10 The bill provides that if the statute establishing the 11 state percent of growth is not enacted by March 1 immediately 12 preceding the budget year, the state percent of growth for 13 that budget year shall be the school finance inflation factor 14 as determined in the bill. The bill also establishes similar 15 requirements for establishing the categorical state percent of 16 growth for a budget year. 17 Under the bill, the school finance inflation factor for a 18 budget year is an index, expressed as a percentage rounded to 19 the nearest one-hundredth of 1 percent, that is the average 20 of the annual percentage change in the consumer price index 21 for all urban consumers for the three completed calendar years 22 immediately preceding the beginning of the budget year for 23 which the school finance inflation factor is being calculated. 24 However, if the school finance inflation factor for a budget 25 year is less than 0 percent, the school finance inflation 26 factor for that budget year shall be 0 percent, and if the 27 school finance inflation factor for a budget year is greater 28 than 3 percent, the school finance inflation factor for that 29 budget year shall be 3 percent. 30 The bill applies to school budget years beginning on or after 31 July 1, 2017. 32 -3- LSB 5002XS (3) 86 md/sc 3/ 3