H.F. 153 Section 1. Section 257.2, subsection 2, Code 2017, is 1 amended by striking the subsection. 2 Sec. 2. NEW SECTION . 257.14A District cash reserve budget 3 adjustment. 4 1. The board of directors of a school district that wishes 5 to receive the budget adjustment under this section may adopt a 6 resolution approving the budget adjustment by May 15 preceding 7 the budget year and shall within ten days of adoption of the 8 resolution notify the department of management of the amount 9 of the budget adjustment approved, subject to the limitations 10 of subsection 2, paragraph “a” . 11 2. a. For budget years beginning on or after July 1, 12 2018, each school district that approved a budget adjustment 13 under subsection 1 shall receive a budget adjustment for that 14 budget year not to exceed an amount equal to the difference 15 between the school district’s cash reserve balance for the 16 year previous to the base year and five percent of the school 17 district’s general fund expenditures for the year previous to 18 the base year minus the unexpended fund balance, as defined 19 in section 257.2, for the year previous to the base year. 20 The resolution adopted under subsection 1 may specify a 21 budget adjustment amount that is less than the maximum amount 22 authorized under this paragraph. 23 b. The school district shall fund the budget adjustment 24 by using cash reserve funds. Amounts used to fund the budget 25 adjustment may be used by the school district for any school 26 general fund purpose. 27 3. A budget adjustment received under this section shall 28 not affect the eligibility for or amount of any other budget 29 adjustment authorized by law for the same budget year. In 30 addition, a budget adjustment under this section shall be 31 limited to the budget year for which the adjustment was 32 authorized and shall not be included in any computation of a 33 school district’s cost for any future budget year. 34 Sec. 3. Section 257.34, Code 2017, is amended to read as 35 -1- LSB 1821YH (4) 87 md/sc/jh 1/ 4

H.F. 153 follows: 1 257.34 Cash reserve information. 2 1. If a school district receives less state school 3 foundation aid under section 257.1 than is due under that 4 section for a base year and the school district uses funds 5 from its cash reserve during the base year to make up for 6 the amount of state aid not paid, the board of directors of 7 the school district shall include in its general fund budget 8 document information about the amount of the cash reserve used 9 to replace state school foundation aid not paid. 10 2. If a school district uses funds from its cash reserve 11 during the base year to fund a budget adjustment under section 12 257.14A, the board of directors of the school district shall 13 include in its general fund budget document information about 14 the amount of the cash reserve used for such purpose. 15 Sec. 4. Section 298.10, subsection 2, Code 2017, is amended 16 by striking the subsection and inserting in lieu thereof the 17 following: 18 2. For fiscal years beginning on or after July 1, 2012, if 19 the school budget review committee determines that a school 20 district’s unexpended fund balance is in excess of the amount 21 necessary for operations, the school budget review committee 22 shall direct the school district to use the unexpended fund 23 balance in lieu of levying property taxes and shall direct the 24 department of management to limit the school district’s cash 25 reserve levy to a level that is not excessive as determined by 26 the school budget review committee and does not exceed the cash 27 reserve limitation in subsection 3. 28 Sec. 5. Section 298.10, subsection 3, Code 2017, is amended 29 to read as follows: 30 3. a. For fiscal years beginning on or after July 1, 31 2012, but before July 1, 2017, the cash reserve levy for a 32 budget year shall not exceed twenty percent of the general fund 33 expenditures for the year previous to the base year minus the 34 unexpended fund balance, as defined in section 257.2 , for the 35 -2- LSB 1821YH (4) 87 md/sc/jh 2/ 4

H.F. 153 year previous to the base year. 1 b. For fiscal years beginning on or after July 1, 2017, 2 the cash reserve levy for a budget year shall not exceed ten 3 percent of the general fund expenditures for the year previous 4 to the base year minus the unexpended fund balance, as defined 5 in section 257.2, for the year previous to the base year. 6 Sec. 6. EFFECTIVE DATE. This Act, being deemed of immediate 7 importance, takes effect upon enactment. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill establishes a district cash reserve budget 12 adjustment and modifies limitations on the amount of allowable 13 school district cash reserves. The board of directors of a 14 school district may annually adopt a resolution to receive 15 the budget adjustment authorized in the bill. Within 10 days 16 of adoption of the resolution, the board of directors must 17 notify the department of management of the amount of the budget 18 adjustment requested. 19 For budget years beginning on or after July 1, 2018, each 20 school district that approved a budget adjustment for that 21 budget year shall receive an adjustment in an amount not to 22 exceed the difference between the school district’s cash 23 reserve balance for the year previous to the base year and 24 5 percent of the school district’s general fund expenditures 25 for the year previous to the base year minus the unexpended 26 fund balance for the year previous to the base year. The 27 budget adjustment amount may be less than the maximum amount 28 authorized under the bill. The bill requires the school 29 district to fund the budget adjustment using cash reserve 30 funds. 31 The bill specifies that the budget adjustment received does 32 not affect the eligibility for or amount of any other budget 33 adjustment authorized by law for the same budget year and that 34 the budget adjustment under the bill is limited to the budget 35 -3- LSB 1821YH (4) 87 md/sc/jh 3/ 4

H.F. 153 year for which the adjustment was authorized and shall not be 1 included in any computation of a school district’s cost for any 2 future budget year. 3 Under the bill, if a school district uses funds from its 4 cash reserve during the base year to fund a budget adjustment 5 authorized in the bill, the board of directors of the school 6 district shall include in its general fund budget document 7 information about the amount of the cash reserve used for such 8 purpose. 9 Currently, Code section 298.10 directs the department of 10 management to limit the school district’s cash reserve levy to 11 a level that is not in excess of 20 percent of the general fund 12 expenditures for the year previous to the base year minus the 13 unexpended fund balance for the year previous to the base year. 14 The bill provides that for fiscal years beginning on or after 15 July 1, 2017, the cash reserve levy for a budget year shall not 16 exceed 10 percent of the general fund expenditures for the year 17 previous to the base year minus the unexpended fund balance for 18 the year previous to the base year. 19 The bill takes effect upon enactment. 20 -4- LSB 1821YH (4) 87 md/sc/jh 4/ 4