SSB 1254 (LSB 2574XC (3) 86)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON EDUCATION BILL BY CHAIRPERSON QUIRMBACH)

A BILL FOR

An Act relating to school district funding by establishing a district cost per pupil equity budget adjustment, modifying limitations on the cash reserve levy, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 257.2, subsection 2, Code 2015, is amended by striking the subsection.
    Sec. 2.  NEW SECTION.  257.14A  District cost per pupil equity —— budget adjustment.
   1.  The board of directors of a school district with a regular program district cost per pupil that is less than the highest regular program district cost per pupil among all school districts in the state for the same budget year that wishes to receive the budget adjustment under this section may adopt a resolution by May 15 preceding the budget year and shall notify the department of management of the adoption of the resolution and the amount of the budget adjustment to be received.
   2.  a.  For budget years beginning on or after July 1, 2015, each school district that satisfies the requirements of subsection 1 shall be eligible for a budget adjustment for that budget year in an amount not to exceed the difference between the school district’s regular program district cost per pupil and the highest regular program district cost per pupil among all school districts in the state multiplied by the district’s budget enrollment. The resolution adopted under subsection 1 may specify a budget adjustment amount that is less than the maximum amount authorized under this paragraph.
   b.  The school district shall fund the budget adjustment increase either by using moneys from its unexpended fund balance or by using cash reserve moneys.
   3.  A budget adjustment received under this section shall not affect the eligibility for or amount of any other budget adjustment authorized by law for the same budget year. In addition, a budget adjustment under this section shall be limited to the budget year for which the adjustment was authorized and shall not be included in any computation of a school district’s cost for any future budget year.
    Sec. 3.  Section 257.34, Code 2015, is amended to read as follows:
   257.34  Cash reserve information.
   1.  If a school district receives less state school foundation aid under section 257.1 than is due under that section for a base year and the school district uses funds from its cash reserve during the base year to make up for the amount of state aid not paid, the board of directors of the school district shall include in its general fund budget document information about the amount of the cash reserve used to replace state school foundation aid not paid.
   2.  If a school district uses funds from its cash reserve during the base year to fund a budget adjustment under section 257.14A, the board of directors of the school district shall include in its general fund budget document information about the amount of the cash reserve used for such purpose.
    Sec. 4.  Section 298.10, subsection 3, Code 2015, is amended to read as follows:
   3.  a.  For Except as provided in paragraph “b”, for fiscal years beginning on or after July 1, 2012, the cash reserve levy for a budget year shall not exceed twenty percent of the general fund expenditures for the year previous to the base year minus the unexpended fund balance, as defined in section 257.2, for the year previous to the base year.
   b.  For fiscal years beginning on or after July 1, 2015, the cash reserve levy for a school district that received a budget adjustment under section 257.14A, shall not exceed the lesser of the amount determined under paragraph “a” and the amount levied under this section in the year previous to the base year, excluding any amount levied to fund a modified supplemental amount established under section 257.31.
    Sec. 5.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill establishes a district cost per pupil equity budget adjustment. The board of directors of a school district with a regular program district cost per pupil that is less than the highest regular program district cost per pupil among all school districts in the state for the same budget year may annually adopt a resolution to receive the budget adjustment authorized in the bill. Following adoption of the resolution the board of directors must notify the department of management of the adoption of the resolution and the amount of the budget adjustment to be received.
   For budget years beginning on or after July 1, 2015, each eligible school district is eligible for a budget adjustment for that budget year in an amount equal to the difference between the school district’s regular program district cost per pupil and the highest regular program district cost per pupil among all school districts in the state multiplied by the district’s budget enrollment. The resolution authorizing the budget adjustment may specify a budget adjustment amount that is less than the maximum amount authorized under the bill. The bill requires the school district to fund the budget adjustment increase either by using moneys from its unexpended fund balance or by using cash reserve moneys.
   The bill specifies that the budget adjustment received does not affect the eligibility for or amount of any other budget adjustment authorized by law for the same budget year and that the budget adjustment under the bill is limited to the budget year for which the adjustment was authorized and shall not be included in any computation of a school district’s cost for any future budget year.
   Under the bill, if a school district uses funds from its cash reserve during the base year to fund a budget adjustment authorized in the bill, the board of directors of the school district shall include in its general fund budget document information about the amount of the cash reserve used for such purpose.
   Code section 298.10 directs the department of management to limit the school district’s cash reserve levy to a level that is not in excess of 20 percent of the general fund expenditures for the year previous to the base year minus the unexpended fund balance for the year previous to the base year. The bill provides that for fiscal years beginning on or after July 1, 2015, the cash reserve levy for a school district that received a budget adjustment under the bill, shall not exceed the lesser of the amount determined under the current law limitation and the amount levied for cash reserve in the year previous to the base year, excluding any amount levied to fund a modified supplemental amount established under Code section 257.31.
   The bill takes effect upon enactment.