Senate File 2215 - Introduced SENATE FILE 2215 BY SMITH A BILL FOR An Act relating to interest earned on school district cash 1 reserves and including applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5736XS (2) 86 md/sc

S.F. 2215 Section 1. Section 257.34, Code 2016, is amended to read as 1 follows: 2 257.34 Cash reserve information. 3 1. If a school district receives less state school 4 foundation aid under section 257.1 than is due under that 5 section for a base year and the school district uses funds 6 from its cash reserve during the base year to make up for 7 the amount of state aid not paid, the board of directors of 8 the school district shall include in its general fund budget 9 document information about the amount of the cash reserve used 10 to replace state school foundation aid not paid. 11 2. If a board of directors of a school district designates 12 the interest earned on cash reserve funds during a budget year 13 as miscellaneous income under section 298A.2, subsection 2, the 14 board of directors of the school district shall include in its 15 general fund budget document information about the amount of 16 interest so designated. 17 Sec. 2. Section 298A.2, Code 2016, is amended to read as 18 follows: 19 298A.2 General fund. 20 1. All moneys received by a school corporation from taxes 21 and other sources must be accounted for in the general fund, 22 except moneys required by law to be accounted for in another 23 fund. 24 2. A school district’s cash reserve funds shall be deposited 25 and accounted for in the general fund. Any interest earned on 26 cash reserve funds during a budget year may be added to the 27 district’s existing cash reserve amount within the general fund 28 or may be designated by the school board to be miscellaneous 29 income and used for any general fund purpose during any 30 subsequent budget year. Amounts designated as miscellaneous 31 income shall not be included in district cost. 32 Sec. 3. APPLICABILITY. This Act applies to school budget 33 years beginning on or after July 1, 2016. 34 EXPLANATION 35 -1- LSB 5736XS (2) 86 md/sc 1/ 2

S.F. 2215 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 provides that school districts’ cash reserve funds 3 shall be deposited and accounted for in the school district’s 4 general fund. The bill also provides that any interest earned 5 on cash reserve funds during a budget year may be added to the 6 district’s existing cash reserve amount within the general fund 7 or may be designated by the school board to be miscellaneous 8 income and used for any general fund purpose during any 9 subsequent budget year. However, the amounts designated as 10 miscellaneous income shall not be included in district cost. 11 Under the bill, if a school board designates the interest 12 earned on cash reserve funds during a budget year as 13 miscellaneous income, the board of directors of the school 14 district shall include in its general fund budget document 15 information about the amount of interest so designated. 16 A school district’s miscellaneous income may affect the 17 district’s amount of authorized expenditures. Under current 18 Code section 257.7, the authorized expenditures of a school 19 district during a base year shall not exceed the lesser of the 20 certified budget for that year plus any allowable amendments, 21 or the authorized budget which is the sum of the combined 22 district cost for that year, the actual miscellaneous income 23 received for that year, and the actual unspent balance from the 24 preceding year. 25 The bill applies to school budget years beginning on or after 26 July 1, 2016. 27 -2- LSB 5736XS (2) 86 md/sc 2/ 2