House File 337 - Introduced HOUSE FILE 337 BY SHEETS A BILL FOR An Act relating to public school funding by establishing a 1 transportation equity program to provide prioritized funding 2 for certain school districts based on average transportation 3 costs per pupil, providing for adjustments to regular 4 program state foundation aid amounts payable to school 5 districts, and making appropriations. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 1146YH (7) 87 md/sc

H.F. 337 Section 1. Section 257.7, subsection 1, Code 2017, is 1 amended to read as follows: 2 1. Budgets. School districts are subject to chapter 24 . 3 The authorized expenditures of a school district during a 4 base year shall not exceed the lesser of the budget for that 5 year certified under section 24.17 , including any adjustments 6 required by sections 257.17A and 257.17B, plus any allowable 7 amendments permitted in this section , or the authorized budget, 8 which is the sum of the combined district cost for that year, 9 the actual miscellaneous income received for that year, and the 10 actual unspent balance from the preceding year , including any 11 adjustments required by sections 257.17A and 257.17B . 12 Sec. 2. NEW SECTION . 257.17A Transportation equity program 13 —— fund —— appropriation. 14 1. In response to the transportation costs per pupil 15 inequity among school districts in this state, this section 16 and section 257.17B establish a transportation equity program 17 to provide prioritized funding for school districts based on 18 each school district’s average transportation costs per pupil 19 by modifying the allocation of the total amount of foundation 20 program aid growth among school districts using a methodology 21 based upon the proportional amount that each school district’s 22 transportation costs per pupil exceed or are less than the 23 average transportation costs per pupil. 24 2. a. For the budget year beginning July 1, 2018, and 25 each succeeding budget year for which the state percent 26 of growth is greater than zero, each school district shall 27 receive transportation equity aid in an amount calculated by 28 the department of management equal to the school district’s 29 budget enrollment multiplied by the school district’s adjusted 30 transportation equity amount for the budget year. The adjusted 31 transportation equity amount for each school district is an 32 amount equal to the state aid growth factor per pupil minus 33 eighty percent of the district transportation equity factor. 34 b. For purposes of this section: 35 -1- LSB 1146YH (7) 87 md/sc 1/ 5

H.F. 337 (1) “Average transportation costs per pupil” means the same 1 as calculated for districts under section 257.31, subsection 2 17. 3 (2) “Base year state aid” equals the product of eighty-seven 4 and five-tenths percent of the state cost per pupil for the 5 base year multiplied by the statewide budget enrollment for the 6 base year, minus the statewide foundation property tax for the 7 base year. 8 (3) “Budget year state aid” equals the product of 9 eighty-seven and five-tenths percent of the state cost per 10 pupil for the budget year multiplied by the statewide budget 11 enrollment for the budget year, minus the statewide foundation 12 property tax for the budget year. 13 (4) “District average transportation costs per pupil” means 14 the same as calculated under section 257.31, subsection 17. 15 (5) “District transportation costs per pupil differential” 16 means an amount equal to the state average transportation costs 17 per pupil minus the district average transportation costs per 18 pupil. 19 (6) “District transportation equity factor” means an amount 20 equal to the product of the district transportation costs per 21 pupil differential multiplied by the state aid growth factor 22 per pupil then divided by the state transportation costs per 23 pupil differential. 24 (7) “State aid growth factor” for a budget year is the 25 budget year state aid amount minus the base year state aid 26 amount, but not less than zero. 27 (8) “State aid growth factor per pupil” equals state aid 28 growth factor divided by the statewide budget enrollment for 29 the budget year. 30 (9) “State average transportation costs per pupil” means the 31 same as calculated under section 257.31, subsection 17. 32 (10) “State transportation costs per pupil differential” 33 means an amount equal to the difference between the state 34 average transportation costs per pupil and the statewide 35 -2- LSB 1146YH (7) 87 md/sc 2/ 5

H.F. 337 minimum transportation costs per pupil for the same budget 1 year. 2 (11) “Statewide minimum transportation costs per pupil” means 3 the lowest district average transportation costs per pupil 4 among all school districts in the state. 5 3. a. A transportation equity fund is created as a separate 6 and distinct fund in the state treasury under the control of 7 the department of management. Moneys in the fund include 8 revenues credited to the fund, appropriations made to the 9 fund, and other moneys deposited in the fund. For each fiscal 10 year beginning on or after July 1, 2018, there is appropriated 11 all moneys in the fund to the department of management for 12 purposes of making transportation equity aid payments under 13 this section, as calculated under subsection 2. 14 b. For the budget year beginning July 1, 2018, and each 15 succeeding budget year for which the state percent of growth is 16 greater than zero, there is appropriated from the general fund 17 of the state to the department of management to be credited to 18 the transportation equity fund, an amount equal to the sum of 19 the budget enrollments for all school districts in the state 20 multiplied by the state aid growth factor per pupil for the 21 budget year. 22 4. Transportation equity aid payments shall be paid by 23 the department of management at the same time and in the same 24 manner as foundation aid is paid under section 257.16. 25 5. Transportation equity aid payments received under this 26 section are miscellaneous income and shall be deposited in the 27 general fund of the school district. Transportation equity 28 aid payments received under this section shall not affect the 29 receipt of transportation assistance aid received under section 30 257.31, subsection 17. 31 Sec. 3. NEW SECTION . 257.17B Regular program state 32 foundation aid reduction. 33 1. For the budget year beginning July 1, 2018, and 34 each succeeding budget year for which the state percent of 35 -3- LSB 1146YH (7) 87 md/sc 3/ 5

H.F. 337 growth is greater than zero, the department of management 1 shall, following the determination of the total amount of 2 state foundation aid payable to each school district under 3 section 257.16, subsection 1, and notwithstanding the minimum 4 foundation aid provisions in section 257.1, subsection 2, 5 reduce the total amount of regular program state foundation 6 aid payable to each school district by an amount equal to the 7 school district’s budget enrollment multiplied by the state aid 8 growth factor per pupil as defined in section 257.17A. 9 2. The department of management shall annually notify each 10 school district of the amount of the reduction in regular 11 program state foundation aid under this section. This section 12 shall not result in the recalculation of other state aid 13 amounts or the recalculation of any property tax levy rate for 14 the budget year. 15 3. The department of management shall adopt rules necessary 16 to implement this section, including rules that prescribe all 17 necessary reporting requirements for school districts. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill relates to public school funding by establishing 22 a transportation equity program and requiring reductions to 23 regular program state foundation aid amounts payable to school 24 districts. 25 The bill establishes a transportation equity program 26 to provide prioritized funding for school districts based 27 on each school district’s average transportation costs per 28 pupil. For the budget year beginning July 1, 2018, and 29 each succeeding budget year for which the state percent of 30 growth is greater than zero, each qualified school district 31 receives transportation equity aid in an amount equal to the 32 school district’s budget enrollment multiplied by the school 33 district’s adjusted transportation equity amount as calculated 34 in the bill. 35 -4- LSB 1146YH (7) 87 md/sc 4/ 5

H.F. 337 The bill creates a transportation equity fund under the 1 control of the department of management. For the budget year 2 beginning July 1, 2018, and each budget year thereafter, the 3 appropriation is equal to the sum of the budget enrollments for 4 all school districts in the state multiplied by the state aid 5 growth factor per pupil for the budget year. 6 Transportation equity aid payments received under the bill 7 are miscellaneous income and must be deposited in the general 8 fund of the school district. Transportation equity aid does 9 not affect the receipt or amount of transportation assistance 10 aid received by a school district from the school budget review 11 committee under Code section 257.31(17). 12 Under the bill, for budget years beginning on or after July 13 1, 2018, for which the state percent of growth is greater than 14 zero, the department of management is required to reduce the 15 total amount of regular program state foundation aid payable 16 to each school district under the school foundation funding 17 formula. The amount of the reduction is equal to the school 18 district’s budget enrollment multiplied by the state aid growth 19 factor per pupil as calculated in the bill. 20 The department of management is required to notify each 21 school district annually of the amount of the reduction to 22 regular program state foundation aid. The bill does not 23 permit the recalculation of other state aid amounts or the 24 recalculation of any property tax levy rate for the budget year 25 following the reductions imposed under the bill. 26 -5- LSB 1146YH (7) 87 md/sc 5/ 5